Shampton v. City of Springboro

786 N.E.2d 883, 98 Ohio St. 3d 457
CourtOhio Supreme Court
DecidedApril 30, 2003
DocketNo. 2001-2251
StatusPublished
Cited by54 cases

This text of 786 N.E.2d 883 (Shampton v. City of Springboro) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shampton v. City of Springboro, 786 N.E.2d 883, 98 Ohio St. 3d 457 (Ohio 2003).

Opinions

Francis E. Sweeney, Sr., J.

{¶ 1} In 1995, appellant, the city of Springboro, owned and operated the Heatherwoode Golf Course. The city leased a restaurant on the golf course grounds to a private operator. In January 1995, the city commenced a search to replace the departing restaurant operator and eventually selected Michael [458]*458Shampton. Shampton formed Two Victor Company, Ltd. (“Two Victor”), to lease and run the restaurant.

{¶ 2} In early April 1995, Springboro City Manager Edward Doczy began negotiating with Shampton for a long-term lease agreement between Two Victor and the city. After much negotiation, Doczy created a document titled “Heatherwoode Clubhouse Restaurant Negotiation Issues.” This document addressed a number of long-term lease issues and listed a “[p]roposed lease” term of “15 years with 3-year re-negotiation provisions.” The document contained 30 numbered paragraphs detailing the terms of a long-term lease. This document was not signed and, in fact, does not contain signature lines. Paragraph 21 of the document states the following:

{¶ 3} “Property tax issues will be further discussed with the benefit of legal counsel.”

{¶ 4} Likewise, paragraph 22 of the document states:

{¶ 5} “Property and liability insurance will be further discussed with the benefit of legal counsel.”

{¶ 6} Finally, paragraph 29 reads:

{¶ 7} “Implementation schedule: It is the intent of the City and the Operator to enter into a temporary agreement on or about April 21, 1995. The Operator would take over existing food and beverage operations at the golf course and clubhouse on or before May 1, 1995. The main restaurant would be open with lunch or diner [sic] menu and table service during the week of May 21,1995. The City and Operator will develop completion dates for renovations and remodeling prior to the signing of a long-term lease. The long-term lease is to be created and signed no later than_

{¶ 8} Unable to quickly complete a long-term agreement with Shampton, Doczy asked the Springboro City Council to issue a resolution authorizing him to enter into a temporary lease with Two Victor so that Two Victor could begin operating the restaurant before the start of the summer golf season. In response, the city council passed Resolution No. R-95-32, which provided:

{¶ 9} “A RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A TEMPORARY LEASE AGREEMENT WITH THE SELECTED OPERATOR OF THE GREENS RESTAURANT

{¶ 10} “WHEREAS, after considering numerous applicants, the City Manager has tentatively selected an operator for the Greens Restaurant; and

{¶ 11} “WHEREAS, negotiations are ongoing for a long-term lease with such operator; and

{¶ 12} “WHEREAS, it is the desire of the City and the operator that the operator be permitted to enter upon the premises and commence restaurant [459]*459operations, subject to the rental amounts shown on the attached Schedule of Rents, and in accord with other interim arrangements as determined by the City Manager;

{¶ 13} “* * *

{¶ 14} “The City Manager is hereby authorized to enter into a temporary lease agreement with the operator tentatively selected under such terms and conditions as he sees fit, monthly rental payments to be in accord with the attached Schedule of Rents.

{¶ 15} “* * *

{¶ 16} “The City Manager shall proceed as expeditiously as possible toward the completion of negotiations for a long-term lease agreement.” (Capitalization sic.)

{¶ 17} Pursuant to the authority given to him under the resolution, Doczy, on behalf of the city, executed a temporary lease with Two Victor. It provided that either party could terminate the lease without cause by giving 30 days’ notice, and stated that “[t]he parties specifically intend that this Lease Agreement shall continue in effect only until a long-term lease containing more detailed terms and conditions can be negotiated and executed.” Despite this provision, no long-term lease was ever executed.

{¶ 18} Shampton closed a restaurant that he had been operating elsewhere and, as the manager of Two Victor, began running the restaurant at Heatherwoode, making substantial financial investments in that facility. In the summer of 1996, the city was apprised that the restaurant would probably not be exempt from property taxes if it were run by a private party under a lease. Under the terms of the temporary lease, Two Victor was obligated to pay any taxes incurred by the restaurant, but when Doczy told Shampton that the restaurant would not be exempt from property taxes, Shampton told Doczy that he wanted a contract under which Two Victor would not be responsible for the property taxes.

{¶ 19} On October 25, 1996, Doczy sent a letter to Shampton notifying him that the city was terminating its temporary lease with Two Victor as of December 31, 1996, and would not enter into a long-term lease. The letter presented Shampton with the option of entering into an agreement whereby the company managing the golf course would supervise Shampton. It also stated that Doczy was willing to consider any alternate proposal that Shampton would make by November 15, 1996. Shampton informed the city that he was not interested in running the restaurant under the supervision of the company managing the golf course operator, and Two Victor vacated the restaurant facilities in January 1997.

{¶ 20} Shortly thereafter, Shampton and Two Victor, appellees herein, filed suit against the city, alleging breach of contract and promissory estoppel. A jury [460]*460returned a verdict in favor of appellees and awarded them $85,000 on their breach-of-contract claim and $120,000 on their claim of promissory estoppel. The court of appeals upheld the trial court’s judgment. This court accepted jurisdiction upon the city’s discretionary appeal.

{¶21} The dispute at hand requires us to determine whether the city manager, Doczy, had authority under the Springboro Municipal Charter and Resolution No. R-95-32 to bind the city to a long-term lease. The city asserts that the lower courts erred in failing to recognize the contracting limitations that the charter and the resolution imposed on its city manager.

{¶ 22} As a starting point, we look to Section 6.02 of the Springboro Charter, which states:

{¶ 23} “The Manager shall have the following powers and duties:

{¶ 24} “* * *

{¶25} “(i) To arrange, prepare and sign contracts, franchises and agreements, in cooperation with the Village Solicitor/City Attorney, but no such contracts, franchises or agreements shall be legal until ratified or authorized by ordinance or resolution of the Council * *

{¶ 26} In Lathrop Co. v. Toledo (1966), 5 Ohio St.2d 165, 172-173, 34 O.O.2d 278, 214 N.E.2d 408, we stated:

{¶ 27} “Many times this court has held that no recovery can be had on a contract that is entered into contrary to one or more of the legislated requirements. * * *

{¶ 28} “A thread running throughout the many cases the court has reviewed is that the contractor must ascertain whether the contract complies with the Constitution, statutes, charters, and ordinances so far as they are applicable. If he does not, he performs at his peril.”

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Cite This Page — Counsel Stack

Bluebook (online)
786 N.E.2d 883, 98 Ohio St. 3d 457, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shampton-v-city-of-springboro-ohio-2003.