Texaus Investment Corp. v. Haendiges

761 F.2d 252
CourtCourt of Appeals for the Sixth Circuit
DecidedApril 26, 1985
Docket84-3119
StatusPublished
Cited by1 cases

This text of 761 F.2d 252 (Texaus Investment Corp. v. Haendiges) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Texaus Investment Corp. v. Haendiges, 761 F.2d 252 (6th Cir. 1985).

Opinion

761 F.2d 252

53 USLW 2551

TEXAUS INVESTMENT CORP., N.V., Plaintiff-Appellant,
v.
Roger M. HAENDIGES; Lee Haendiges; Hayes Corp.; The City
of Cleveland; Building Commissioner, City of
Cleveland; and Chief Building
Inspector, City of Cleveland,
Defendants-Appellees.

No. 84-3119.

United States Court of Appeals,
Sixth Circuit.

Argued Feb. 14, 1985.
Decided April 26, 1985.

Morton Q. Levin (argued), Mark Ross Greenfield, Levin & Associates, Co., L.P.A., Cleveland, Ohio, for plaintiff-appellant.

Janet Burney (argued), Michael F. Waiwood, Donald P. McFadden, Cleveland, Ohio, for defendants-appellees.

Before LIVELY, Chief Judge, KEITH, Circuit Judge; and BROWN, Senior Circuit Judge.

BAILEY BROWN, Senior Circuit Judge.

In this diversity action we are asked to determine whether, under the circumstances presented here, the courts of Ohio would impose liability on a municipality based on its building inspectors' negligent failure to properly inspect a building site. The district court held that, since there was no special relationship creating a municipal duty to exercise care for the benefit of plaintiffs, Ohio courts would hold that no liability may be imposed on a municipality for its employees' failure to enforce building ordinances. We affirm.

Facts

Plaintiffs Texaus Investment Corporation, N.V. and 331562 Ontario Limited (hereinafter "Texaus") filed this diversity action against private defendants Roger M. Haendiges, Lee Haendiges, Hayes Corporation (hereinafter "Haendiges"), and against municipal defendants City of Cleveland, Cleveland's building commissioner and Cleveland's chief building inspector (hereinafter "city defendants").

An abbreviated version of the facts is sufficient for purposes of this appeal. The action arose out of Texaus' 1976 purchase from Haendiges of the Sony Building, a one story warehouse built in 1973 by Haendiges and located in Cleveland. Texaus alleged, among other things, that Haendiges had negligently failed to comply with the approved plans and specifications for the building, had failed to properly test the soil at the building site, had failed to see that the foundation was properly constructed, and had failed to comply with the city building codes. According to Texaus, Haendiges intentionally concealed these factors from Texaus, and subsequent to Texaus' purchase of the building, the building developed serious structural problems, causing extensive damages to the building and necessitating expensive repairs.

Texaus also alleged that the city, along with its building commissioner and chief building inspector, negligently and in violation of city ordinances failed to review the building plans submitted by Haendiges, failed to conduct proper inspections during construction, failed to maintain proper records and reports, failed to keep permanent, accurate records, failed to withhold issuance of a certificate of occupancy and failed to require soil tests prior to the issuance of the building permit. Texaus contended the city's failure to comply with the building code constituted negligence per se and was a proximate cause of Texaus' injuries.

The city defendants moved for summary judgment. The city reasoned that even if the facts as alleged by Texaus were true, the city had violated no duty to Texaus that would give rise to a cause of action. Contending that the city building code was a general welfare provision enacted for the protection of the public at large, the city argued that it had no special relationship to plaintiffs and that the building code did not create a municipal duty to plaintiffs the violation of which would create a cause of action. The city contended that under this public duty doctrine the city was entitled to summary judgment as a matter of law.1

Opposing the city's motion for summary judgment, Texaus argued the public duty/private duty dichotomy was an artificial distinction that had been repudiated by many jurisdictions and that was inapplicable to the case at bar. Texaus also pointed out that in a series of cases the Ohio Supreme Court had recently abolished municipal sovereign immunity and in none of those cases had the supreme court acknowledged the existence of the public duty/private duty dichotomy. From this, Texaus inferred that the Ohio courts had abandoned the private duty/public duty doctrine.

In considering the city's summary judgment motion, the district court stated the issue as "whether a municipality, which has enacted ordinances setting out a program of building inspection, is liable to a private citizen for damages arising from the municipality's failure to comply with the ordinances." Noting there was no Ohio case law on point, the district court, in its unpublished opinion, examined the law in other states and concluded that Ohio courts would impose no duty or liability on the city defendants.2 The court based its holding on the public duty/special duty3 principle that, absent a special relationship creating a municipal duty to exercise care for the benefit of a particular class of individuals, no liability may be imposed upon a municipality for failure to enforce a statute or regulation.

This case is before us on plaintiff's appeal of the district court's grant of summary judgment for the city defendants; the district judge directed the entry of a final judgment as to the city defendants pursuant to Fed.R.Civ.P. 54(b). Liability of the non-city defendants remains to be determined.

Analysis

When reviewing a grant of summary judgment, an appellate court applies the same standard as was employed by the district court under Fed.R.Civ.P. 56(c): summary judgment is proper when it appears there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. 10 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure Sec. 2716 at 643 (1983). See Adams v. Union Carbide Corp., 737 F.2d 1453, 1455-56 (6th Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 545, 83 L.Ed.2d 432 (1984). In this diversity action Ohio law creates the substantive rights under which plaintiff seeks to prevail; our task is to adjudicate those substantive rights as would the courts of Ohio. See Hartford Fire Insurance v. Lawrence, Dykes, Goodenberger, Bower & Clancy, 740 F.2d 1362, 1365 (6th Cir.1984) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)).

At the time the district court ruled on the motion for summary judgment, there was little relevant Ohio case law.

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761 F.2d 252, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texaus-investment-corp-v-haendiges-ca6-1985.