Patriot Water Treatment, L.L.C. v. Ohio Dept. of Natural Resources

[Cite as Patriot Water Treatment, L.L.C. v. Ohio Dept. of Natural Resources, 2013-Ohio-5398.]

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

Patriot Water Treatment, LLC, :

Plaintiff-Appellant, :

No. 13AP-370

v. : (C.C. No. 2012-07951)

Ohio Department of Natural Resources, : (ACCELERATED CALENDAR)

Defendant-Appellee. :

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D E C I S I O N

Rendered on December 10, 2013

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Bott Law Group LLC, April R. Bott, Sarah L. Herbert, and

MacDonald W. Taylor, for appellant.

Michael DeWine, Attorney General, Randall W. Knutti and

Emily M. Simmons, for appellee.

APPEAL from the Court of Claims of Ohio

DORRIAN, J.

{¶ 1} Plaintiff-appellant, Patriot Water Treatment, LLC ("Patriot"), appeals from

a judgment entered by the Court of Claims of Ohio. The court granted a motion to dismiss

Patriot's complaint that had been filed by defendant-appellee, Ohio Department of

Natural Resources ("ODNR"), pursuant to Civ.R. 12(B)(1) and (6). The court dismissed

the complaint based on its conclusion that: (1) Patriot had failed to state a spoliation

claim, and (2) the Court of Claims lacked jurisdiction over Patriot's claim that ODNR

violated R.C. 149.351, Ohio's public records retention statute.

{¶ 2} Patriot raises two assignments of error, as follows:

[1.] The Court of Claims erred in granting Appellee's

Motion to Dismiss Count I of Appellant's Complaint.

No. 13AP-370 2

[2.] The Court of Claims erred in granting Appellee's

Motion to Dismiss Count II of Appellant's Complaint.

{¶ 3} For the following reasons, we affirm in part and reverse in part.

I. Case History

{¶ 4} Patriot initiated this action on November 2, 2012, when it filed a complaint

alleging "spoliation of evidence" and "unlawful disposition or destruction of public

records." (Complaint, ¶ 1.) It sought $3.5 million in damages based on its spoliation

claim and injunctive relief, monetary damages, and attorney's fees based on the alleged

violation of the public records retention statute.

{¶ 5} The complaint alleged that, on August 10, 2010, the Ohio Environmental

Protection Agency ("OEPA"), had issued Patriot a permit to install and operate a water

treatment facility that was designed to treat solid-containing waters emanating from the

oil and gas industry. Patriot's permit, in conjunction with an OEPA permit issued to the

city of Warren, allowed Patriot to send the water after treatment to Warren's water

treatment facility for further processing. The complaint alleged that OEPA and ODNR

had corresponded prior to OEPA's issuance of the permit concerning whether the

proposed facility would comply with Ohio statutes, and specifically R.C. 1509.22.1 Patriot

further alleged that, after receiving the 2010 permit, it invested millions of dollars to build

its treatment facility, which began operating in 2011.

{¶ 6} In addition, the complaint alleged that, in December 2010, new directors of

both OEPA and ODNR were appointed and that these officials disagreed with their

agencies' prior interpretation of R.C. 1509.22. On May 16, 2011, the new OEPA Director,

Scott Nally, wrote a letter to the new ODNR director, David Mustine, in which Nally

memorialized their discussions concerning interpretation of R.C. 1509.22 and stated that

" 'moving forward' ODRN will not authorize discharges of gas well wastewater through

[publically owned treatment works]," such as that operated by the city of Warren.

(Complaint, ¶ 14.)

{¶ 7} The complaint further alleged that the next day, May 17, 2011, Patriot sent a

letter to both directors expressing the company's concern that the state had "decid[ed] to

take away Patriot's right to [do] business in Ohio." (Complaint, ¶ 18.) The complaint

1R.C. 1509.22 regulates the placement in surface or ground water of brine or other fluids associated with the

development of oil and gas resources.

No. 13AP-370 3

alleged that, on June 10, 2011, Patriot representatives met with ODNR staff, including the

in-house legal counsel, and informed ODNR that litigation involving ODNR was probable.

Patriot further alleged that, on March 19, 2012, OEPA issued modified permits to Patriot

and also to the city of Warren that precluded Warren from accepting water from Patriot

on or after April 1, 2012, prompting Patriot to discontinue its water-treatment operations

and initiate litigation against both OEPA and ODNR.

{¶ 8} The complaint alleged additional facts relative to public records requests

made by Patriot. Patriot claimed that its first public records request to ODNR was made

on May 17, 2011, through counsel, and sought "specifically identified records from

January 1, 2009 to May 17, 2011." (Complaint, ¶ 25.) Patriot alleged that ODNR provided

records in response but that the production was incomplete. Patriot asserted that it later,

on April 10, 2012, became aware during the deposition of a retired ODNR official, John

Husted, that at least one additional record responsive to their public records request

existed but had not been provided to it. That record was an e-mail written by Husted

dated July 21, 2009. Patriot asserted in its complaint that timely disclosure of the Husted

e-mail in response to its public records request would have prevented or limited Patriot's

involvement in subsequent litigation and would also have prevented a three-month

cessation of Patriot's business activities.

{¶ 9} Patriot's complaint also alleged that, on April 19 and May 1, 2012, ODNR

delivered to Patriot additional records dated during or after April 2010. It alleged that

"upon Patriot's information and belief, ODNR has concealed and/or destroyed public

documents that are both responsive to the May 17 Request and inculpatory evidence

against ODNR." (Complaint, ¶ 42.) It alleged that "ODNR willfully concealed, interfered

with and/or destroyed relevant public records, with knowledge of pending and probable

litigation * * * [and] was designed to disrupt Patriot's legal cases." (Complaint, ¶ 59.) That

litigation included a declaratory judgment action filed in the Trumbull County Court of

Common Pleas and appeals to the Ohio Environmental Review Appeals Commission

("ERAC"), of the modified permits issued to Patriot and the city of Warren. Patriot

asserted that, on July 3, 2012, ERAC issued its decision, which allowed Patriot to resume

its former operations at its facility. It alleged that the common pleas court dismissed the

declaratory judgment action on March 30, 2012.

No. 13AP-370 4

{¶ 10} Patriot further alleged that, "[w]ithout the records concealed, interfered

with and/or destroyed by ODNR, Patriot's litigation options were substantially disrupted,

which directly or proximately resulted in damages to Patriot." (Complaint, ¶ 61.)

{¶ 11} In response to the complaint, ODNR filed a motion to dismiss Patriot's

complaint pursuant to Civ.R. 12(B)(1) and (6). It asserted that Patriot's spoliation claim

rested on a single document—Husted's July 21, 2009 e-mail—and that the document

could not, as a matter of law, have disrupted Patriot's litigation before the ERAC or the

Trumbull County Court of Common Pleas. It argued that Patriot had, therefore, failed to

state a claim of spoliation. It additionally asserted that the Court of Claims lacks subject-

matter jurisdiction over claims based on Ohio's public records statute, and that Count II

should therefore be dismissed. Patriot did not provide evidentiary materials with its

Civ.R. 12(B)(6) motion.

{¶ 12} In its decision, the Court of Claims concluded that Patriot had failed to state

a claim of spoliation in Count I of the complaint. It reasoned that Patriot became aware

of the Husted e-mail prior to the conclusion of the ERAC appeal and that, therefore,

pursuant to Davis v. Wal-Mart Stores, Inc., 93 Ohio St.3d 488 (2001), Patriot should

have pursued its claim that evidence had been spoliated during the pendency of the ERAC

proceedings. The court further agreed with ODNR that the Court of Claims lacked

jurisdiction to consider the public records claims asserted in Count II of the complaint.

{¶ 13} Patriot timely appealed the judgment of the Court of Claims, and the case is

now before us for disposition.

II. Legal Analysis

A. Spoliation Claim—Civ.R. 12(B)(6)

{¶ 14} We begin our analysis by recounting the framework by which we review a

trial court's ruling on a motion to dismiss for failure to state a claim:

A motion to dismiss under Civ.R. 12(B)(6) for failure to state a

claim is procedural and tests the sufficiency of the complaint.

* * * Dismissal for failure to state a claim upon which relief

can be granted is proper if, after all factual allegations are

presumed to be true and all reasonable inferences are made in

favor of the non-moving party, it appears beyond doubt from

the complaint that the plaintiff could prove no set of facts

warranting the requested relief. * * * A court of appeals

No. 13AP-370 5

reviews the dismissal of a complaint pursuant to Civ.R.

12(B)(6) under a de novo standard.

(Citations omitted.) Modern Office Methods, Inc. v. Ohio State Univ., 10th Dist. No.

11AP-1012, 2012-Ohio-3587, ¶ 9.

{¶ 15} Moreover, " 'whether a complaint states a claim upon which relief can be

granted is not dependent upon whether potential defenses are available.' * * * Rather, '[a]s

long as there is a set of facts consistent with the complaint that would allow the plaintiff to

recover, dismissal under Civ.R. 12(B)(6) is not proper.' " Columbus Green Bldg. Forum v.

State, 10th Dist. No. 12AP-66, 2012-Ohio-4244, ¶ 28, quoting Jones v. Goodyear Tire &

Rubber Co., 9th Dist. No. 21724, 2004-Ohio-2821, ¶ 12.

{¶ 16} Ohio is one of a minority of states that recognizes spoliation of evidence as a

tort. Davis (Cook, J., dissenting). Recovery on a spoliation claim in Ohio is dependent

upon proof of all of the following elements: "(1) pending or probable litigation involving

the plaintiff, (2) knowledge on the part of defendant that litigation exists or is probable,

(3) willful destruction of evidence by defendant designed to disrupt the plaintiff's case, (4)

disruption of the plaintiff's case, and (5) damages proximately caused by the defendant's

acts." Smith v. Howard Johnson Co., Inc., 67 Ohio St.3d 28, 29 (1993).

{¶ 17} Accordingly, we review Patriot's complaint as to the spoliation claim to

determine whether Patriot alleged facts that would, if proven true, satisfy the five Smith

elements of spoliation. We conclude that it did.

{¶ 18} Patriot clearly alleged the first and second Smith elements; i.e., that pending

or probable litigation involving Patriot existed and that ODNR had knowledge of the

existence or probability of that litigation. Moreover, Patriot pled the third element of the

cause of action by alleging that "ODNR willfully concealed, interfered with and/or

destroyed relevant public records * * * [and] such * * * destruction of * * * public

records was designed to disrupt Patriot's legal cases." (Emphasis added.) (Complaint,

¶ 59.) In addition, Patriot alleged that, without those records, "Patriot's litigation options

were substantially disrupted," which "directly or proximately resulted in damages to

Patriot." (Complaint ¶ 61.) Patriot thus pled the fourth and fifth elements of the tort of

spoliation as established in Smith.

No. 13AP-370 6

{¶ 19} Patriot further stated specific facts, rather than mere unsupported

conclusions, that would, when presumed to be true and in light of reasonable inferences

in Patriot's favor, state a claim in spoliation. It alleged the existence of at least one specific

document that ODNR had failed to disclose in response to Patriot's public records

request—the Husted e-mail. Compare, White v. Equity, Inc., 191 Ohio App.3d 141, 2010-

Ohio-4743 (10th Dist.) (reversing a Civ.R. 12(B)(6) dismissal of a spoliation claim where

plaintiff asserted that, "on information and belief," the defendants willfully redacted an

original document, copied it, and then destroyed the original). Patriot argues that only

through discovery will it be able to determine the full scope of ODNR's actions relative to

the disposition of other e-mails and public records, including possible destruction of

them. We agree.

{¶ 20} In granting ODNR's motion to dismiss, the Court of Claims cited Davis. In

that case, the Supreme Court of Ohio stated that "claims for spoliation of evidence may be

brought after the primary action has been concluded only when evidence of spoliation is

not discovered until after the conclusion of the primary action." Davis at 491. The Court

of Claims concluded that the allegations in Patriot's complaint established that Patriot

became aware of the Husted e-mail during the pendency of litigation at ERAC. It deemed

the ERAC appeal to be the "primary action" for purposes of Davis and concluded that

Patriot could not, therefore, assert a tort claim of spoliation after the conclusion of the

ERAC administrative appeals.

{¶ 21} Davis involved an employer intentional tort wrongful-death action. The

plaintiff, the worker's widow, asserted that she had discovered during post-trial

proceedings that the employer, Wal-Mart, had withheld evidence and documents during

the course of the litigation. She claimed that, had she been aware of the evidence, she

would not have dismissed a survivor claim seeking additional compensatory and punitive

damages.

{¶ 22} The plaintiff in Davis asserted her spoliation claim in a separate and new

action. Wal-Mart argued that the spoliation claim was barred by res judicata in that the

wrongful-death action had already concluded. Wal-Mart sought to establish a legal

proposition that "[c]laims for spoliation of evidence should be brought at the same time

as, or as an amendment to, the primary action." Id. at 491.

No. 13AP-370 7

{¶ 23} The Supreme Court of Ohio rejected Wal-Mart's arguments. It stated in its

syllabus the premise upon which the Court of Claims relied in the case now before us, i.e.,

that spoliation claims may be brought "after the primary action has been concluded only

when evidence of spoliation is not discovered until after the conclusion of the primary

action." Id.

{¶ 24} In her dissent, Justice Cook observed that the majority opinion had not

explained "when a 'primary action' 'concludes' for purposes of its syllabus and/or res

judicata." (Emphasis sic.) Id. at 494. She warned that "[b]ecause the majority opinion

never actually applies the syllabus to the specific evidence alleged to have been spoliated

in this case, the spoliation tort will remain as unexplained to the bench and bar as it was

after its cursory recognition in Smith. Id.

{¶ 25} Construing Davis in view of the facts then before the Supreme Court, we

conclude that Davis supports the premise that, if spoliation is discovered after an action

between the same parties has concluded, res judicata does not bar a subsequent claim

against an alleged spoliation tortfeasor. But in the case before us, the disposition of the

ERAC appeals could not constitute a res judicata bar of a spoliation claim, regardless of

the time at which the spoliation was discovered, as ERAC lacks subject-matter jurisdiction

to adjudicate tort claims against the state, and a spoliation claim therefore could not have

been adjudicated by ERAC. See R.C. 3745.04(B) establishing that ERAC has "exclusive

original jurisdiction over any matter that may, under this section, be brought before it.")

Patriot could not, therefore, have successfully asserted a spoliation claim in the ERAC

proceedings.

{¶ 26} It is true that common pleas courts have subject-matter jurisdiction over

claims asserting the tort of spoliation and that Patriot acknowledged in its complaint that

an action in which both Patriot and ODNR were parties was pending in a common pleas

court at the time Patriot became aware of ODNR's failure to produce the Husted e-mail.

However, had Patriot attempted to amend its complaint to include the spoliation claim in

the pending Trumbull County Court of Common Pleas declaratory judgment action, that

claim would have been subject to summary dismissal based on its nature as a tort claim

for monetary damages that could only be tried in the Court of Claims. See R.C. 2743.02

No. 13AP-370 8

(Court of Claims has exclusive, original jurisdiction over civil suits for money damages

brought against the state); see also Columbus Green Bldg. Forum, at ¶ 15-16.

{¶ 27} In short, we conclude that Davis, in contrast to the case before us,

concerned a case in which the application of res judicata was at issue. Res judicata does

not appear to be relevant in the case before us. We therefore find that Davis does not

apply in this case, as the doctrine of res judicata is not implicated. Accord Tate v. Adena

Regional Med. Ctr., 155 Ohio App.3d 524, 2003-Ohio-7042 (4th Dist.), ¶ 26 (observing

that "the issue in Davis was whether a spoliation claim was barred by the doctrine of res

judicata" and that "the spoliation claim itself was not at issue"); Monroe v. Forum

Health, 11th Dist. No. 2012-T-0026, 2012-Ohio-6133.

{¶ 28} Accordingly, we find that the trial court erred in granting ODNR's motion to

dismiss the spoliation claim in reliance on Davis. We therefore sustain Patriot's first

assignment of error.

B. Public Records Claim—Civ.R. 12(B)(1) (Lack of Subject-Matter

Jurisdiction)

{¶ 29} "Civ.R. 12(B)(1) permits dismissal where the trial court lacks jurisdiction

over the subject matter of the litigation. The standard of review for a dismissal pursuant

to Civ.R. 12(B)(1) is whether any cause of action cognizable by the forum has been raised

in the complaint. * * * We review an appeal of a dismissal for lack of subject-matter

jurisdiction under Civ.R. 12(B)(1) de novo." (Citation omitted.) PNC Bank, Natl. Assn. v.

Botts, 10th Dist. No. 12AP-256, 2012-Ohio-5383, ¶ 21.

{¶ 30} In reviewing de novo ODNR's motion to dismiss Count II, we are cognizant

that "[t]he Court of Claims is a court of limited jurisdiction." Windsor House, Inc. v. Ohio

Dept. of Job and Family Servs., 10th Dist. No. 11AP-367, 2011-Ohio-6459, ¶ 15. Modern

Office Methods, Inc., ¶ 10. It has exclusive, original jurisdiction over civil suits for money

damages brought against the state as a result of the waiver of immunity reflected in R.C.

2743.02. Columbus Green Bldg. Forum at ¶ 15-16. Not every claim seeking monetary

relief, however, is a claim for money damages. Id. at ¶ 18.

{¶ 31} In this appeal, the parties have focused on the allegations in Count II of

Patriot's complaint relative to its Ohio's record retention statute, R.C. 149.351, rather than

No. 13AP-370 9

Ohio's public records statute, R.C. 149.43. The record retention statute provides in part

as follows:

All records are the property of the public office concerned and

shall not be removed, destroyed, mutilated, transferred, or

otherwise damaged or disposed of, in whole or in part, except

as provided by law * * * Those records shall be delivered by

outgoing officials and employees to their successors and shall

not be otherwise removed, destroyed, mutilated, or

transferred unlawfully.

(Emphasis added.) R.C. 149.351(A).

{¶ 32} Accordingly, public servants may only destroy public records "as provided

by law." Pursuant to R.C. 149.351, a public office may "dispos[e] of items, including

transient and other documents (e.g., e‐mail messages) that are no longer of

administrative value and are not otherwise required to be kept, in accordance with the

office's properly adopted policy for records retention and disposal." State ex rel.

Glasgow v. Jones, 119 Ohio St.3d 391, 2008‐Ohio‐4788, ¶ 21, fn. 1. R.C. 149.331

provides that the state records program of the department of administrative services has

the authority to approve retention schedules submitted to it by state agencies. R.C.

149.333 provides that state agencies must submit proposed records retention schedule

to the state records program under the director of administrative services for approval,

rejection, or modification). Ohio law, thus, permits a public servant to dispose of public

records in accord with a valid retention schedule.

{¶ 33} R.C. 149.351(B) expressly provides a specific statutory remedy for violation

of the obligation imposed by R.C. 149.351(A) and also specifies the court in which that

remedy may be pursued. That court is not the Court of Claims:

Any person who is aggrieved by the removal, destruction,

mutilation, or transfer of, or by other damage to or disposition

of a record in violation of division (A) of this section, or by

threat of such removal, destruction, mutilation, transfer, or

other damage to or disposition of such a record, may

commence either or both of the following in the court of

common pleas of the county in which division (A) of this

section allegedly was violated or is threatened to be violated:

(1) A civil action for injunctive relief to compel compliance

with division (A) of this section, and to obtain an award of the

No. 13AP-370 10

reasonable attorney's fees incurred by the person in the civil

action;

(2) A civil action to recover a forfeiture in the amount of one

thousand dollars for each violation, but not to exceed a

cumulative total of ten thousand dollars, regardless of the

number of violations, and to obtain an award of the

reasonable attorney's fees incurred by the person in the civil

action not to exceed the forfeiture amount recovered.

(Emphasis added.) R.C. 149.351(B).

{¶ 34} Accordingly, a claim based on an alleged violation of R.C. 149.351(A) and

seeking the statutorily authorized remedy of injunctive relief, a "forfeiture" in the amount

of $1,000 per violation, or attorney's fees, may only be brought in "the court of common

pleas of the county in which division (A) of this section allegedly was violated or is

threatened to be violated."

{¶ 35} Patriot observes that the Court of Claims has exclusive jurisdiction over civil

actions against the state for monetary damages pursuant to R.C. 2743.03(A)(1). But that

statute is general in nature while R.C. 149.351 is a specific statute governing claims for

violations of the public records retention statute. As such, R.C. 149.351 prevails over the

general provision in the Court of Claims Act cited by Patriot. Compare State Fraternal

Order of Police Grand Lodge Number 1 v. State, 10th Dist. No. 80AP-744 (Dec. 31, 1981),

citing State ex rel. Myers v. Chiaramonte, 46 Ohio St.2d 230 (1976) (status of state

highway patrol officers governed by R.C. 5503.03 because the specific legislation provided

in R.C. Chapter 5503 controls over the general civil service provisions of R.C. Chapter

124). Moreover, Patriot has provided no authority to support the proposition that it may

assert a claim for "monetary damages" beyond the statutory monetary recovery

authorized by R.C. 149.351(B), i.e., reasonable attorney's fees and a forfeiture penalty in

the amount of $1,000 per violation. A recovery of the forfeiture penalty authorized by

R.C. 149.351(B) does not constitute "monetary damages," as that term is used to describe

the exclusive original jurisdiction of the Court of Claims.

{¶ 36} Similarly, the public records statute, as opposed to the public records

retention statute, expressly provides that a person who believes he or she was aggrieved

by the failure of a public office to comply with its obligation to promptly produce

requested public records, may "commence a mandamus action to obtain a judgment that

No. 13AP-370 11

orders the public office * * * to comply with [R.C. 149.43(B)], that awards court costs and

reasonable attorney's fees * * * and, if applicable, * * * statutory damages under [R.C.

149.43(C)(1)]." (Emphasis added.) R.C. 149.43(C)(1). A mandamus action filed by such

an individual may be commenced in one of only three courts: "the court of common pleas

of the county in which division (B) of this section allegedly was not complied with, in the

supreme court pursuant to its original jurisdiction under Section 2 of Article IV, Ohio

Constitution, or in the court of appeals for the appellate district in which division (B) of

this section allegedly was not complied with pursuant to its original jurisdiction

under Section 3 of Article IV, Ohio Constitution." R.C. 149.43(C)(1). Accordingly, the

Court of Claims did not have subject-matter jurisdiction over any claims asserted by

Patriot to the extent its complaint is construed as asserting violations of R.C. 149.43.

{¶ 37} The Court of Claims therefore did not err in sustaining ODNR's Civ.R.

12(B)(1) motion to dismiss Count II of Patriot's complaint for lack of subject-matter

jurisdiction. Accordingly, we overrule Patriot's second assignment of error.

III. Conclusion

{¶ 38} For the foregoing reasons, we sustain Patriot's first assignment of error,

and overrule its second assignment of error. The judgment of the Court of Claims is

affirmed in part and reversed in part, and this case is remanded to that court for further

proceedings to adjudicate Count I of Patriot's complaint.

Judgment affirmed in part, reversed in part,

and cause remanded with instructions.

TYACK and CONNOR, JJ., concur.

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