2018 Ohio 1430
Ohio Ct. App.2018Background
- Village council passed Emergency Ordinance 10-12 (April 18, 2012) authorizing the mayor to contract with Aquatic Renovations Systems, Inc. (ARS) to install a pool liner for $52,720.08.
- ARS and the mayor executed a Contract Agreement Form (May 2, 2012); ARS received a partial payment of $15,763.30 in July 2012 after submitting materials and submittals.
- ARS later submitted a second quotation/contract (April 12, 2013) for the remaining balance; the mayor signed/initialed it but the village administrator and clerk did not sign.
- ARS completed installation June 2013; the liner failed soon after. ARS performed some remedial work and sought payment for $36,956.78, which the village refused.
- ARS sued for breach of the second contract, quantum meruit, and unjust enrichment; village counterclaimed for breach of the first contract. The trial court granted summary judgment to the village on ARS’s claims and to ARS on the village’s counterclaim. ARS appealed only the adverse rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of the April 12, 2013 agreement ("second contract") | ARS: The second agreement was a new, binding contract (and ratified by village actions); enforceable under ordinance 10-12 and applicable law. | Village: The second document was not a new contract; it lacked required statutory signatures (village administrator and clerk) per R.C. 731.141, so it is invalid. | The second contract is invalid because it was not signed by the village administrator and clerk as required by R.C. 731.141; the ordinance does not override the statutory signature requirement. |
| Waiver/affirmative defense pleading | ARS: Village raised the statutory-execution argument for first time in summary judgment and waived it by not pleading it as an affirmative defense. | Village: Denied the existence of a second contract in its answer (so statutory-execution argument was a substantive denial, not an affirmative defense). | Court: Village’s answer denied a second contract; the statutory-execution issue was not an affirmative defense that had to be pleaded. |
| Ratification of mayor’s actions (to validate the second contract) | ARS: The village’s conduct (payments, communications) ratified the mayor’s agreement and substituted/confirmed the second contract. | Village: Denied that a binding second contract existed and maintained the first contract governed; no ratification of a valid second contract occurred. | ARS failed to cite controlling authority or develop the argument adequately; court rejects ratification claim. |
| Recovery under quantum meruit / unjust enrichment despite invalid contract | ARS: Even if the second contract was void, ARS acted in good faith and incurred substantial expenses and should recover under equitable doctrines. | Village: Municipalities cannot be held liable on quasi-contract theories when statutory contract-formation rules are mandatory. | Court: Quantum meruit / unjust enrichment claims against the village fail because a municipality cannot be bound by an informal/quasi-contract that violates the statutorily prescribed contracting procedure. |
Key Cases Cited
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (1996) (standard of review for summary judgment is de novo)
- Buchanan Bridge Co. v. Campbell, 60 Ohio St. (1899) (contracts made in violation of statute are void and courts will not enforce them)
- Shampton v. Springboro, 98 Ohio St.3d 457 (2003) (parties contracting with municipalities must ensure statutory compliance; perform at their peril)
- Wilson Bennett, Inc. v. Greater Cleveland Regional Transit Auth., 67 Ohio App.3d 812 (1990) (equity may allow recovery for work under a void public contract made in good faith and involving substantial expenses)
- CommuniCare, Inc. v. Wood Cty. Bd. of Commrs., 161 Ohio App.3d 84 (2005) (contracts violating statutory requirements are void and unenforceable)