Plumbers & Steamfitters Local Union 83 v. Union Local School Dist. Bd. of Edn.

[This opinion has been published in Ohio Official Reports at 86 Ohio St.3d 318.]

PLUMBERS & STEAMFITTERS LOCAL UNION 83, APPELLANT, v. UNION LOCAL

SCHOOL DISTRICT BOARD OF EDUCATION, APPELLEE.

[Cite as Plumbers & Steamfitters Local Union 83 v. Union Local School Dist.

Bd. of Edn., 1999-Ohio-109.]

Civil procedure—Declaratory judgment action—When not all interested persons

have been made parties, party seeking relief may join the absent party by

amending its pleading in accordance with Civ.R. 15.

In an action for declaratory judgment in which it becomes apparent that not all

interested persons have been made parties, the party seeking relief may join

the absent party by amending its pleading in accordance with Civ.R. 15.

(No. 98-1855—Submitted June 8, 1999—Decided September 8, 1999.)

APPEAL from the Court of Appeals for Belmont County, No. 97-BA-40.

__________________

{¶ 1} On March 17, 1997, plaintiff-appellant, Plumbers & Steamfitters

Local Union 83, filed a complaint for declaratory judgment in the Belmont County

Court of Common Pleas against defendant-appellee, Union Local School District

Board of Education. The complaint alleges that in 1996, appellee decided to

construct and/or renovate several school buildings in the Union Local School

District and that in soliciting and accepting bids for the project, appellee violated

its duties and obligations under Ohio’s competitive-bidding statute applicable to

school districts, R.C. 153.50 et seq. The complaint also alleges that appellee’s

failure to comply with these provisions deprived appellant’s members of

employment opportunities that would otherwise have been available to them.

{¶ 2} On April 11, 1997, appellee filed an answer and a motion to dismiss.

In its answer, appellee alleged the following defense:

“The plaintiff has failed to join parties indispensable to this action in accord

SUPREME COURT OF OHIO

with Rule 19(A) of the Ohio Rules of Civil Procedure. The indispensable parties

are the State of Ohio, State Board of Education * * * and the architects who

prepared the plans and the specifications for the State of Ohio, State Board of

Education and the Union Local School District to-wit: Fanning/Howey Associates,

Inc., Architects, Engineers, Consultants * * *.”

{¶ 3} In its motion to dismiss, appellee sought dismissal “in accord with the

defense raised” and argued that “[i]f the Court joins the State of Ohio, State Board

of Education, this matter cannot be heard in the Court of Common Pleas of Belmont

County, Ohio, but * * * must be brought in the Court of Claims.”

{¶ 4} On May 5, 1997, appellant filed a motion to strike appellee’s motion

to dismiss or, alternatively, for leave to file an amended complaint joining the State

of Ohio, State Board of Education as a party. Appellant argued that the state board

and architectural firm were not necessary parties, but that if the court determined

them to be such, it should either order them joined pursuant to Civ.R. 19(A) or grant

appellant leave to file an amended complaint. Appellant attached an amended

complaint to its motion adding the state board as a defendant, and argued further

that joinder of the state would not deprive the court of jurisdiction.

{¶ 5} Following a hearing and the submission of posthearing briefs, the trial

court entered judgment dismissing the action without prejudice. The court found

that under the provisions of R.C. Chapter 3318, governing the funding of school

facilities, appellee was acting as an agent of the state and, therefore, the state, as the

contracting party, “is the correct party defendant.” Accordingly, the trial court held

that Civ.R. 3(B)(4) “requires that such action be venued, commenced and decided

by the Court in the county in which a public officer (superintendent of public

construction), maintains his principle [sic] office[,] * * * the Franklin County

Common Pleas Court.”

{¶ 6} The court of appeals affirmed, finding that “[a]s an agent for this

disclosed principal [the state], appellee is not liable for any contracts it makes on

2

January Term, 1999

its behalf, and consequently, is not the real party in this litigation.” The appellate

court also held that “[t]he trial court did not abuse its discretion in overruling

appellant’s motion for leave to amend its complaint or in failing to order joinder of

the State which the trial court found to be an indispensable party.” This holding

appears to be based on a finding that the application of Civ.R. 15 and/or Civ.R.

19(A) would operate to abridge, enlarge, or modify that portion of R.C. 2721.12

providing that “[w]hen declaratory relief is sought, all persons shall be made parties

who have or claim any interest which would be affected by the declaration.”

{¶ 7} The cause is now before this court pursuant to the allowance of a

discretionary appeal.

__________________

Green, Haines, Sgambati, Murphy & Macala Co., L.P.A., and Ronald G.

Macala, for appellant.

Thomas, Fregiato, Myser, Hanson & Davies and Rodney D. Hanson, for

appellee.

Benesch, Friedlander, Coplan & Aronoff, L.L.P., N. Victor Goodman and

Mark D. Tucker, urging reversal for amicus curiae, Ohio State Building and

Construction Trades Council, AFL-CIO.

__________________

ALICE ROBIE RESNICK, J.

{¶ 8} The broad issue is whether the trial court abused its discretion in

dismissing this declaratory judgment action without prejudice for appellant’s

failure to join the State of Ohio, State Board of Education as a party.

{¶ 9} The positions of the parties have shifted during the litigation.

Appellee no longer advances any argument with respect to the architectural firm,

arguing instead that the state board is the sole party with any interest in the

procedures created under R.C. Chapter 3318. Appellant now concedes that the state

is a necessary party, but maintains that appellee is also a necessary party under R.C.

3

SUPREME COURT OF OHIO

Chapters 153 and 3318. Also, what began as a successful motion to dismiss in

accordance with Civ.R. 19(A) is now defended by appellee on the basis that Civ.R.

19 and other Civil Rules relating to the joinder or addition of parties are

inapplicable to these proceedings. Thus, there are several questions that need to be

addressed in order to determine the propriety of dismissal in this case.

{¶ 10} The first question is whether appellee has any interest in this

litigation under R.C. Chapter 3318. Despite the lengthy arguments of the parties

and amicus curiae, Ohio State Building and Construction Trades Council, AFL-

CIO, this issue is easily resolved. “Under the provisions of Chapter 3318, Revised

Code, * * * joinder of the [local school district] board and the superintendent

should be made for a complete determination of the action.” State ex rel. Riley

Constr. Co. v. E. Liverpool City School Dist. Bd. of Edn. (1967), 10 Ohio St.2d 25,

28, 39 O.O.2d 15, 17, 225 N.E.2d 246, 248-249.

{¶ 11} The second question is whether joinder of the state board would

render Belmont County an improper forum for this lawsuit. Since appellee’s

argument, which is that proper venue lies only in Franklin County, is based on the

assertion that the state board is the only interested party, this question need not

detain us long either.

{¶ 12} Venue is clearly proper in Belmont County as to appellee under any

of the provisions of Civ.R. 3(B)(1)-(6). Under Civ.R. 3(E), if venue is proper as to

one defendant, it is proper as to all defendants. Thus, the joinder of the state board

would not render Belmont County an improper forum, and the action is still

properly venued in the Belmont County Court of Common Pleas despite the joinder

of the state board.

{¶ 13} The third question is whether, in an action for declaratory judgment

in which it becomes apparent that not all interested persons have been made parties,

the party seeking relief may join the absent party by amending its pleading.

{¶ 14} Generally, a declaratory judgment action proceeds in accordance

4

January Term, 1999

with the Ohio Rules of Civil Procedure, as does any civil action. Civ.R. 57 provides

that “[t]he procedure for obtaining a declaratory judgment pursuant to Sections

2721.01 to 2721.15, inclusive, of the Revised Code, shall be in accordance with

these rules.”

{¶ 15} Under the Civil Rules, the absence of a necessary party alone would

not justify the dismissal of an action. “Ohio courts have eschewed the harsh result

of dismissing an action because an indispensable party was not joined, electing

instead to order that the party be joined pursuant to Civ.R. 19(A) (joinder if

feasible) or that leave to amend the complaint be granted. Moreover, Civ.R. 21 *

* * allows parties to be added or dropped at any stage of the proceeding, as justice

requires.” (Citations omitted.) State ex rel. Bush v. Spurlock (1989), 42 Ohio St.3d

77, 81, 537 N.E.2d 641, 645.

{¶ 16} However, appellee argues that R.C. 2721.12’s requirement that all

interested persons be made parties precludes the application of the Civil Rules to

join or add parties. According to appellee, “the application of the Rules to add

parties to the action would abridge or enlarge the substantive rights under the statute

and must be inapplicable.”

{¶ 17} In support, appellee relies on several cases in which this court held

that the absence of a necessary party constitutes a jurisdictional defect that

precludes a court of common pleas from properly rendering a declaratory judgment,

and argues that since R.C. 2721.12 is a special statutory provision, jurisdictional in

nature, it is deemed a substantive law and cannot be abridged, enlarged, or modified

by the Ohio Rules of Civil Procedure. Malloy v. Westlake (1977), 52 Ohio St.2d

103, 6 O.O.3d 329, 370 N.E.2d 457; Cincinnati v. Whitman (1975), 44 Ohio St.2d

58, 73 O.O.2d 283, 337 N.E.2d 773, paragraph one of the syllabus; Zanesville v.

Zanesville Canal & Mfg. Co. (1953), 159 Ohio St. 203, 50 O.O. 254, 111 N.E.2d

922, paragraph three of the syllabus. See, also, Gannon v. Perk (1976), 46 Ohio

St.2d 301, 310-311, 75 O.O.2d 358, 363-364, 348 N.E.2d 342, 348.

5

SUPREME COURT OF OHIO

{¶ 18} However, none of these cases holds, as appellee suggests, that R.C.

2721.12 would be abridged, enlarged, or modified by the application of those Civil

Rules that allow necessary parties to be added or joined subsequent to the initial

pleading. In none of these cases did any party request leave to amend its complaint.

The question of whether a party seeking relief may join a necessary party by

amendment was simply not an issue in any of these cases.

{¶ 19} Essentially, appellee is asking this court to hold that, in an action for

declaratory judgment, the initial pleading is the only means by which an interested

person can be made a party. To do this, we would have to write into R.C. 2721.12

a clause that does not appear: “When declaratory relief is sought, all persons shall

be made parties [in the initial pleading] who have or claim any interest which would

be affected by the declaration.” R.C. 2721.12 provides the substantive requirement

that all interested persons be made parties; it does not purport to govern the

procedural method by which this is accomplished, and it certainly does not limit

parties to their initial pleadings.

{¶ 20} Thus, as explained in 22A American Jurisprudence 2d (1988) 860,

Declaratory Judgments, Section 221:

“The procedure and practice with respect to amendments in declaratory

judgment actions is similar to that prevailing in ordinary actions at law and suits in

equity. It has been said that a court should not refuse relief on the ground of lack

of jurisdiction, without giving leave to amend. And while the court has

discretionary power to refuse to enter a declaratory judgment which does not

terminate the uncertainty or controversy giving rise to the proceeding, amendment

rather than dismissal of the complaint has been held to be preferable where the

entire controversy between the parties can thus be brought before the court for

complete and final disposition.” (Footnotes omitted.)

{¶ 21} Appellee also argues that “the various courts of appeal in Ohio *

* * have consistently held that the application of the rules permitting additional

6

January Term, 1999

parties to be added is a substantive change of the statute and, as a result, cannot be

accepted under these circumstances.” In support, appellee relies on Bretton Ridge

Homeowners Club v. DeAngelis (1988), 51 Ohio App.3d 183, 555 N.E.2d 663, and

Copeland v. Tracy (1996), 111 Ohio App.3d 648, 676 N.E.2d 1214. We disagree,

finding that appellee’s reliance on these cases is misplaced.

{¶ 22} In DeAngelis, the court held that “[a]lthough Civ.R. 57 states that the

procedure for obtaining a declaratory judgment is in accordance with the Civil

Rules, Civ.R. 19, 12(G) and 12(H) are not applicable. * * * The defense of failure

to join a party in a declaratory judgment action cannot be waived.” Id., 51 Ohio

App.3d at 185, 555 N.E.2d at 666. We agree, but this adds nothing to our inquiry.

In Gannon, supra, 46 Ohio St.2d at 310-311, 75 O.O.2d at 363-364, 348 N.E.2d at

348, this court held that the failure to join a necessary party in an action for

declaratory judgment constitutes a jurisdictional defect that cannot be waived. Like

Gannon, DeAngelis does not hold that R.C. 2721.12 would be altered by the

application of those Civil Rules that permit necessary parties to be added or joined

subsequent to the initial pleading.

{¶ 23} In addition, in Zanesville, supra, 159 Ohio St. at 209, 50 O.O. at 256,

111 N.E.2d at 925, we relied in part on Holland v. Flinn (1940), 239 Ala. 390, 195

So. 265, for the proposition that in a declaratory judgment action the presence of

necessary parties is jurisdictional. In Holland, no issue was raised regarding the

absence of necessary parties until the Supreme Court of Alabama raised the issue

on its own. After finding that certain absent persons should have been made parties,

the court reversed the declaration below and ordered “the cause remanded that

necessary parties may be brought in by amendment, if plaintiff so desires.” Id., 239

Ala. at 392, 195 So. at 267. Clearly, the fact that the requirement for joining all

necessary parties is jurisdictional and cannot be waived does not preclude joinder

by amendment in a declaratory judgment action.

{¶ 24} In Copeland, the court, relying on DeAngelis, held that joinder

7

SUPREME COURT OF OHIO

“pursuant to Civ.R. 19 and 19.1 was not an option.” Id., 111 Ohio App.3d at 656,

676 N.E.2d at 1219. It is unclear whether this means that a court is precluded from

or merely not obligated to join the absent parties on its own motion. See, generally,

Annotation (1960), 71 A.L.R.2d 723, 738-739, Section 8. In any event, we need

not determine whether a court may order absent but necessary parties joined on its

own motion, since leave to amend was requested in the case sub judice. Even the

court in Copeland felt compelled to note that “appellants never filed a motion to

amend their complaint.” Id., 111 Ohio App.3d at 656, 676 N.E.2d at 1219. The

court was apparently of the view that the issue of joinder under Civ.R. 19 and 19.1

is separate and distinct from the issue of amendment. Thus, appellee’s reliance on

Copeland is also misplaced.

{¶ 25} We hold that in an action for declaratory judgment in which it

becomes apparent that not all interested persons have been made parties, the party

seeking relief may join the absent party by amending its pleading in accordance

with Civ.R. 15.

{¶ 26} Since no legitimate reason remains as to why this cause should have

been dismissed, we must conclude that the trial court abused its discretion in this

regard. Therefore, we reverse the judgment of the court of appeals and remand the

cause to the trial court for further proceedings consistent with this decision.

Judgment reversed

and cause remanded.

MOYER, C.J., DOUGLAS, F.E. SWEENEY, PFEIFER, COOK and LUNDBERG

STRATTON, JJ., concur.

__________________

8