Schneider v. Cuyahoga Cty. Bd. of Commrs.

[Cite as Schneider v. Cuyahoga Cty. Bd. of Commrs., 2017-Ohio-1278.]

Court of Appeals of Ohio

EIGHTH APPELLATE DISTRICT

COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION

No. 103647

WILLIAM D. SCHNEIDER, ET AL.

PLAINTIFFS-APPELLANTS

vs.

CUYAHOGA COUNTY BOARD OF COUNTY

COMMISSIONERS, ET AL.

DEFENDANTS-APPELLEES

JUDGMENT:

AFFIRMED

Civil Appeal from the

Cuyahoga County Court of Common Pleas

Case No. CV-10-717610

BEFORE: E.T. Gallagher, J., Kilbane, P.J., and Blackmon, J.

RELEASED AND JOURNALIZED: April 6, 2017

ATTORNEY FOR APPELLANTS

Avery S. Friedman

Avery S. Friedman & Associates

701 The City Club Building

850 Euclid Avenue

Cleveland, Ohio 44114

ATTORNEYS FOR APPELLEES

Michael C. O’Malley

Cuyahoga County Prosecutor

BY: Dale F. Pelsozy

Jennifer Meyer

Assistant Prosecuting Attorney

The Justice Center, 8th Floor

1200 Ontario Street

Cleveland, Ohio 44113

EILEEN T. GALLAGHER, J.:

{¶1} Plaintiffs-appellants, William D. Schneider, et al. (collectively “appellants”),

appeal from the judgment of the Cuyahoga County Court of Common Pleas granting

summary judgment in favor of defendants-appellees, the Cuyahoga County Board of

County Commissioners, et al. 1 (“collectively the “BOCC”). Appellants raise the

following assignments of error for our review:

1. The exhaustion of administrative remedies by the plaintiffs became a

futile act in that the decision-makers were participants in the reversal of

granting early retirement benefits to all county workers except the plaintiffs

who were originally granted benefits by the defendants.

2. The trial court committed reversible error in granting summary

judgment to defendant-appellees when evidence established a multitude of

genuine issues of material fact.

3. The trial court committed reversible error in granting summary

judgment by apparently disregarding the fact that defendants-appellees

reversed themselves by first granting ERIP benefits, then denying ERIP

benefits. The reversal establishes an issue of material fact.

4. The trial court committed reversible error in granting summary

judgment by apparently disregarding the fact of historical grants of senior

SED employee participation in ERIP benefits prior to their complaining

about corruption by county officials.

We note that the BOCC has since been replaced by the Cuyahoga County Council. At

1

oral arguments, the parties were notified that a current member of the Council is related to a panel

judge. The panel judge disclosed, pursuant to Ohio Code of Judicial Conduct Rule 2.11(C), her

relationship with the Council member and stated that she could perform an independent, fair, and

impartial review of the legal issues presented in this case. Counsel for appellants and the BOCC each

indicated that they waived disqualification and had no objection to the panel member’s participation in

the proceeding.

5. The trial court committed reversible error in granting summary judgment by relying

on an affidavit of the attorney for defendants-appellees in determining that no genuine

issues of material fact existed even though plaintiffs-appellants submitted evidence to the

contrary.

6. The trial court committed reversible error in granting summary judgment by

apparently relying on an excerpt of a different proceeding which included the partial

testimony of an OPERS employee unrelated to the factual information and controversy

involved in this case.

{¶2} After careful review of the record and relevant case law, we affirm the trial

court’s judgment.

I. Procedural History

{¶3} On November 6, 2008, the BOCC passed a resolution establishing a

county-wide Early Retirement Incentive Program (“ERIP”) in an effort to combat

budgetary concerns. As written, the ERIP excluded only one county agency, the Sanitary

Engineering Division (“SED”). The SED is a subdivision of the BOCC, created and

maintained by the BOCC as an operating division of the County Engineer’s Office. But

the BOCC created a separate employing unit called the “BOCC, excluding the SED”

specifically for the ERIP.

{¶4} Pursuant to the ERIP’s grievance procedure, SED employees, including

appellants, filed a grievance on behalf of all SED employees regarding the BOCC’s

decision to exclude them from participation in the ERIP. SED employees suggested that

the BOCC’s decision to “revoke” SED’s participation in the ERIP was made in retaliation

to certain complaints raised by SED employees about workplace conditions. On January

9, 2009, the county administrator held a hearing on the grievance. Approximately 15

SED employees attended the hearing and were given an opportunity to be heard. On

January 20, 2009, the county administrator issued a decision denying the grievance

request and concluding that the SED would not be allowed to participate in the ERIP. In

a letter to plaintiffs, the administrator explained that Cuyahoga County “is facing a very

critical financial situation” and “an ERIP in the Sanitary Engineer agency would not have

been a cost savings.” Following the administrator’s decision, none of the SED

employees attempted to file an administrative appeal pursuant to R.C. 2506.01.

{¶5} On December 30, 2009, Teamsters Local Union No. 436 and union member

Kevin Lesh (collectively “the union”), filed a taxpayer action against the BOCC, on

behalf of all union-member SED employees, seeking injunctive and declaratory relief.

Specifically, the union sought a declaration that the commissioners violated R.C. 145.297

when they authorized the ERIP for all board employees excluding the SED. In addition,

the union sought an order compelling the BOCC to include the SED in the ERIP. The

union sought similar relief in a separate cause of action for declaratory judgment and in

a request for a writ of mandamus in its January 7, 2010 amended complaint. In addition

to denying the merits of the union’s claims, the BOCC asserted that the union did not

have standing to bring its taxpayer action and that it was otherwise barred from requesting

equitable remedies because the SED employees had failed to exhaust their administrative

remedies.

{¶6} Noting that the union had brought the present action mere days before the

ERIP was due to terminate, the trial court denied the union’s request for injunctive relief

and its action in mandamus, in an entry issued on January 22, 2010. However, the trial

court granted the union’s prayer for declaratory relief and held that the BOCC’s failure to

include the SED as part of the “employing unit” that was eligible for the ERIP did not

comply with the definition of “employing unit” in R.C. 145.297 and that the

commissioners were therefore in violation of the statute.

{¶7} The commissioners appealed to the this court, which, in a split decision,

affirmed the trial court’s judgment, finding (1) the union had standing to bring the

taxpayer action, (2) the BOCC failed to comply with R.C. 145.297 when it designated

“Cuyahoga County, excluding Sanitary Engineering” as the subordinate employing unit,

and (3) the union was “not required to exhaust administrative remedies because the [SED

employees] were excluded from participating in the ERIP; thus, any attempt to go through

an administrative remedy process would have been futile.” State ex rel. Teamsters Local

Union No. 436 v. Cuyahoga Cty. Bd. of Commrs., 194 Ohio App.3d 258, 2011-Ohio-820,

955 N.E.2d 1020 (8th Dist.) (“Teamsters I”).

{¶8} Subsequently, the Ohio Supreme Court accepted discretionary jurisdiction to

hear the BOCC’s appeal. State ex rel. Teamsters Local Union No. 436 v. Bd. of County

Commrs, 132 Ohio St.3d 47, 2012-Ohio-1861, 969 N.E.2d 244 (“Teamsters II”). On

May 1, 2012, the Ohio Supreme Court reversed this court’s decision, finding (1) the union

lacked standing to bring a taxpayer action because it sought a remedy solely for its own

benefit, and (2) “the union and the [SED] employees” failed to exhaust their

administrative remedies by taking no further action after the county administrator denied

the grievance. Id. at ¶ 17-24.

{¶9} During the pendency of Teamster I, appellants, a group of sanitary engineers

led by plaintiff William Schneider, filed the instant case in their personal capacities on

February 5, 2010. Appellants’ complaint sought equitable relief, monetary damages, and

a declaration that the BOCC violated R.C. 145.297 when it excluded the SED from the

group of employees permitted to participate in the ERIP. The BOCC sought dismissal of

the complaint because, as in Teamsters II, appellants failed to exhaust their administrative

remedies. The trial court stayed the matter pending the resolution of Teamsters I and II.

Upon issuance of Teamsters II, the trial court dismissed appellants’ complaint pursuant to

Civ.R. 12(B)(6). Appellants timely appealed the trial court’s judgment.

{¶10} On May 9, 2013, this court reversed the trial court’s judgment, finding that a

Civ.R. 12(B)(6) dismissal on grounds that appellants failed to exhaust their administrative

remedies was “premature” because it required the trial court to go beyond the four corners

of the complaint. Schneider v. Cuyahoga County Bd. of County Commrs, 8th Dist.

Cuyahoga No. 98936, 2013-Ohio-1900, ¶ 12. This court explained:

Although [the language of Teamsters II] suggests that the Supreme Court

thought it unlikely that both the union members and the other employees

would be able to prove that an administrative appeal would have been a

vain act, the fact remains that they were not offered the opportunity to do

so.

Id. at ¶ 12.

{¶11} On remand, the BOCC filed a motion for summary judgment, arguing it was

entitled to judgment as a matter of law pursuant to the Ohio Supreme Court’s decision in

Teamsters II. In July 2014, appellants filed a motion in opposition, arguing that

Teamsters II did not resolve the remaining issues of material fact concerning the BOCC’s

pretextual basis for excluding the SED from participation in the ERIP. In August 2014,

the trial court granted summary judgment in favor of the BOCC.

{¶12} Appellants appealed the trial court’s judgment on September 19, 2014. On

May 12, 2015, this court dismissed the appeal for lack of a final, appealable order

pursuant to R.C. 2505.02, stating:

The complaint in its first demand for judgment seeks declaratory relief, but the judgment

entry merely recites the formula for summary judgment and grants judgment for the

defendants without making a declaration. Klocker v. Zeiger, 8th Dist. Cuyahoga No.

92044, 2009-Ohio-3102.

{¶13} On remand, the trial court granted the BOCC’s motion for summary

judgment for a second time, stating:

Pursuant to the remand by the Eighth District Court of Appeals, this Court’s grant of

defendants’ motion for summary judgment stands as plaintiffs failed to exhaust their

administrative remedies. As plaintiffs’ continued participation in the grievance process

would not have been a vain act, plaintiffs may not pursue a declaratory judgment action

without exhausting the available administrative remedies. See State ex rel. Teamsters

Local Union No. 436 v. Bd. of County Commrs, 132 Ohio St.3d 47, 2012-Ohio-1861, 969

N.E.2d 244. This order is final and appealable.

{¶14} Appellants now appeal from the trial court’s judgment.

II. Law and Analysis

{¶15} Within their six assignments of error, appellants’ collectively argue the trial

court committed reversible error in granting summary judgment in favor of the BOCC.

A. Standard of Review

{¶16} An appellate court reviews a trial court’s decision to grant summary

judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241

(1996). De novo review means that this court “uses the same standard that the trial court

should have used, and we examine the evidence to determine if as a matter of law no

genuine issues exist for trial.” Brewer v. Cleveland Bd. of Edn., 122 Ohio App.3d 378,

383, 701 N.E.2d 1023 (8th Dist.1997), citing Dupler v. Mansfield Journal, 64 Ohio St.2d

116, 119-120, 413 N.E.2d 1187 (1980). In other words, we review the trial court’s

decision without according the trial court any deference. Brown v. Scioto Cty. Bd. of

Commrs., 87 Ohio App.3d 704, 711, 622 N.E.2d 1153 (4th Dist.1993).

{¶17} Under Civ.R. 56(C), summary judgment is properly granted when (1) there

is no genuine issue as to any material fact; (2) the moving party is entitled to judgment as

a matter of law; and (3) reasonable minds can come to but one conclusion, and that

conclusion is adverse to the party against whom the motion for summary judgment is

made. Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64, 66, 375 N.E.2d 46

(1976). If the moving party fails to satisfy its initial burden, “the motion for summary

judgment must be denied.” Dresher v. Burt, 75 Ohio St.3d 280, 293, 662 N.E.2d 264

(1996). But if the moving party satisfies “its initial burden, the nonmoving party then

has a reciprocal burden outlined in Civ.R. 56(E) to set forth specific facts showing that

there is a genuine issue for trial and, if the nonmovant does not so respond, summary

judgment, if appropriate, shall be entered against the nonmoving party.” Id.

B. Exhaustion of Administrative Remedies

{¶18} Initially, appellants argue the trial court erred in concluding that their

continued participation in the grievance process would not have been a vain or futile act.

Appellants contend that an administrative appeal would have been futile because “the

administrative remedy involved the very county officials that [excluded the SED from the

ERIP] once plaintiffs-appellants complained of the political cronyism” in Cuyahoga

County. Appellants’ position relies extensively on allegations raised throughout their

appellate brief that the BOCC’s decision to revoke the SED’s participation in the ERIP

was made “in retaliation to [SED employees’] complaints about workplace conditions”

and “corruption by county officials.”

{¶19} After careful review, we find a similar futility argument was originally

raised by the plaintiffs in Teamsters I. At that time, this court agreed with the argument

currently raised by appellants, stating:

In this case, we find that the [union was] not required to exhaust

administrative remedies because the [union was] excluded from

participating in the ERIP; thus, any attempt to go through an administrative

remedy process would have been futile.

Teamsters I, 194 Ohio App.3d 258, 2011-Ohio-820, 955 N.E.2d 1020, at ¶ 32.

{¶20} However, in Teamsters II, the Ohio Supreme Court reversed this court’s

decision regarding the exhaustion of administrative remedies, finding:

Because we hold that the union did not have standing to pursue its

taxpayer action, the issue of exhaustion of administrative remedies is moot

as to the taxpayer action. However, to the extent that the union’s complaint

sought relief that was separate from the taxpayer cause of action, we

examine whether the union and the Sanitary Engineering Division

employees were required to exhaust administrative remedies prior to

initiating a declaratory-judgment action.

It is a “long-settled rule of judicial administration that no one is entitled to judicial

relief for a supposed or threatened injury until the prescribed administrative remedy has

been exhausted.” Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51, 58 S.Ct.

459, 82 L.Ed. 638 (1938). Thus, a “party must exhaust the available avenues of

administrative relief through administrative appeal” before seeking separate judicial

intervention. Noernberg v. Brook Park, 63 Ohio St.2d 26, 29, 406 N.E.2d 1095 (1980).

“Exhaustion is generally required as a matter of preventing premature interference with

agency processes, so that the agency may function efficiently and so that it may have an

opportunity to correct its own errors, to afford the parties and the courts the benefit of its

experience and expertise, and to compile a record which is adequate for judicial review.”

Weinberger v. Salfi, 422 U.S. 749, 765, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975). Where a

party fails to exhaust available administrative remedies, allowing declaratory relief would

serve “only to circumvent an adverse decision of an administrative agency and to bypass

the legislative scheme.” Fairview Gen. Hosp. v. Fletcher, 63 Ohio St.3d 146, 152, 586

N.E.2d 80 (1992).

We first look to what administrative remedies were available to the

union-represented Sanitary Engineering Division employees. When a board of county

commissioners adopts regulations that allow parties to request review from an

administrative authority, the decision of that authority constitutes a final order that is

appealable, under R.C. 2506.01, to an applicable court of common pleas. R.C. 307.56.

Pursuant to R.C. 145.297(B), “[e]very retirement incentive plan shall include provisions

for the timely and impartial resolution of grievances and disputes arising under the plan.”

The ERIP in question complied with the above statutory requirements by

providing: “Any employee determined to be ineligible to participate in this early

retirement incentive plan may file a grievance * * *. Such grievances shall be heard

and decided by the Cuyahoga County Administrator * * *. The decision of the

Cuyahoga County Administrator shall be final.” Although the ERIP was made available

only to employees in an “Employing Unit” defined to exclude the Sanitary Engineering

Division, the ERIP did not define “Employee” to exclude any division’s employees, and

thus the grievance process was made available to all employees under the board’s

supervision. Accordingly, the Sanitary Engineering Division employees were required

to file a grievance with the administrator and to file an R.C. 2506.01 administrative

appeal from the administrator’s decision, in order to exhaust their administrative

remedies.

Although none of the union-represented employees was named in the grievance

that was filed on behalf of all of the Sanitary Engineering Division employees, some of

the union-represented employees availed themselves of the grievance process by

participating in the hearing with the administrator. After the administrator issued a final

order denying the grievance, none of the Sanitary Engineering Division employees filed

an administrative appeal. Accordingly, the employees failed to exhaust all of their

administrative remedies.

It is well settled that “[a] person entitled under R.C. Chapter 2506 to appeal [an

administrative order] is not entitled to a declaratory judgment where failure to exhaust

administrative remedies is asserted and maintained.” Schomaeker v. First Natl. Bank of

Ottawa, 66 Ohio St.2d 304, 421 N.E.2d 530 (1981), paragraph three of the syllabus.

Under this general rule, the union was not entitled to pursue its action for declaratory

judgment, because it filed the action almost one year after the final order of the

administrator without first attempting a timely R.C. 2506.01 appeal from the order.

However, in line with the Eighth District’s holding below, the union asserts that an

exception to the general rule applies and that the Sanitary Engineering Division

employees were not required to exhaust their administrative remedies, because continuing

to participate in the grievance process would have been futile.

It is true that parties need not pursue their administrative remedies if doing so

would be futile or a vain act. Driscoll v. Austintown Assocs., 42 Ohio St.2d 263, 275, 328

N.E.2d 395 (1975). However,

a “vain act” occurs when an administrative body lacks the authority to grant the relief

sought; a vain act does not entail the petitioner’s probability of receiving the remedy. The

focus is on the power of the administrative body to afford the requested relief, and not on

the happenstance of the relief being granted.

(Emphasis sic.) Nemazee v. Mt. Sinai Med. Ctr., 56 Ohio St.3d 109, 115, 564 N.E.2d

477 (1990). Neither the decision below nor the appellees explain why it would have

been impossible to obtain relief through an administrative appeal, apart from merely

stating that the Sanitary Engineering Division employees were excluded from

participating in the ERIP. As noted above, the board’s ERIP made the grievance process

available to the employees, and union-represented employees were given an opportunity

to be heard during the grievance hearing. Nothing would have prevented the union from

attacking the validity of the ERIP in an administrative appeal. Therefore, we hold that the

Sanitary Engineering Division employees’ continued participation in the grievance

process would not have been a vain act, and we reverse the Eighth District’s decision

allowing the union to pursue the declaratory-judgment action without exhausting the

available administrative remedies.

Teamsters II, 132 Ohio St.3d 47, 2012-Ohio-1861, 969 N.E.2d 244, at ¶ 18-24.

{¶21} In this case, the non-union employees who filed and signed the grievance

referred to in Teamsters II are the appellants in this appeal. As the Ohio Supreme Court

stated in its opinion, no SED employee, whether union or non-union, sought further

review after receiving an adverse decision on their grievance. In our view, this fact is

dispositive.

{¶22} While we recognize that the non-union members of the SED were not

parties in the Teamsters case, the Ohio Supreme Court’s holding applies equally to all

employees of the SED. In short, the original grievance was filed and argued on behalf

of all SED employees, including appellants, and those SED employees failed to exhaust

their administrative remedies by not filing an administrative appeal pursuant to R.C.

2506.01 after the grievance was denied. Moreover, analogous to the holding in

Teamsters II, beyond appellants’ contention that their appeal was unlikely to be

successful, there is nothing in the record to suggest appellants “would have [been]

prevented * * * from attacking the validity of the ERIP in an administrative appeal.”

See Teamsters II at ¶ 24. As stated, arguments concerning the probability of success on

appeal is not an appropriate basis for a finding of futility. Id.

{¶23} In addition, we find no merit to appellants’ contention that the available

administrative remedy in this case “involved the very county officials that [excluded the

SED from the ERIP] when they learned plaintiffs-appellants complained of the political

cronyism” in Cuyahoga County. As articulated in Teamsters II, the decision of the

county administrator constituted a final order that was appealable, under R.C. 2506.01, to

the applicable court of common pleas. Thus, appellants “continued participation in the

grievance process” would have involved an appeal to the fair and impartial Cuyahoga

County Court of Common Pleas.

{¶24} Based on the foregoing, we find appellants have not presented issues of

material fact concerning whether their continued participation in the grievance process

would have been a vain or futile act. Despite this court’s position regarding the

exhaustion of administrative remedies, as reflected in this court’s holding in Teamsters I,

194 Ohio App.3d 258, 2011-Ohio-820, 955 N.E.2d 1020 (8th Dist.), at ¶ 32, we are

bound to follow the precedent of the Ohio Supreme Court. Accordingly, the trial court

did not err in granting summary judgment in favor of the BOCC. See Schomaeker, 66

Ohio St. 2d 304, 421 N.E.2d 530, at paragraph three of the syllabus (It is well settled that

“[a] person entitled under R.C. Chapter 2506 to appeal [an administrative order] is not

entitled to a declaratory judgment where failure to exhaust administrative remedies is

asserted and maintained.”).

{¶25} Appellants’ first assignment of error is overruled. Based on our resolution

of appellant’s first assignment of error, the remaining assignments of error are moot.

See App.R. 12(A)(1)(c).

{¶26} Judgment affirmed.

It is ordered that appellee recover from appellant costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to the common pleas court to carry this

judgment into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of

the Rules of Appellate Procedure.

EILEEN T. GALLAGHER, JUDGE

PATRICIA ANN BLACKMON, J., CONCURS;

MARY EILEEN KILBANE, P.J., CONCURS (WITH SEPARATE OPINION

ATTACHED)

MARY EILEEN KILBANE, P.J., CONCURRING WITH SEPARATE OPINION:

{¶27} I concur in the judgment, but I write separately to recapitulate this court’s

holding in Teamsters I. Appellants maintain that the ERIP was offered to them in

October 2008 and then later modified in November 2009 to solely exclude senior SED

employees. While we are bound to follow the precedent of the Ohio Supreme Court, I

would find that appellants had a viable cause of action had the appellants properly

exhausted their administrative remedies.