2012 Ohio 3434
Ohio Ct. App.2012Background
- Developers of Inwood Village sought to build a residential project adjacent to Christ Hospital in Mt. Auburn, Cincinnati.
- City funding was preliminarily promised in a March 2005 funding-commitment letter signed by the city and developers.
- June 2005 ordinance approved funding; a formal funding agreement was drafted but not signed, and the city failed to issue a corrected agreement.
- The city delayed performance for years, even as developers incurred costs and built a model condo at the city's request.
- On May 20, 2010 the city refused to proceed, with the withdrawal tied to Christ Hospital’s expansion plans.
- The developers sued the city and Christ Hospital for tortious interference with express/implied contracts and promissory estoppel; the trial court granted Christ Hospital’s Civ.R. 12(B)(6) motion and dismissed all claims, which the appellate court affirmed on de novo review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a valid express contract existed. | Inwood/ Dorian argue there were binding documents forming a contract. | Christ Hospital contends no signed contract existed. | No express contract existed; dismissal upheld. |
| Whether an implied-in-fact contract bound the city. | Ordinance 208-2005 and unsigned funding agreement together form an implied contract. | Municipalities are not bound by contracts implied in fact. | Municipality cannot be bound by implied contract; dismissal upheld. |
| Whether Christ Hospital tortiously interfered with promissory-estoppel-based rights. | Christ Hospital interfered with promised city funding. | No recognized Ohio claim for interference with promissory estoppel; if any, privileged. | Claims treated as interference with a business relationship and stayed privileged; dismissal upheld. |
| Whether Christ Hospital's conduct was privileged to defeat interference claims. | Hospital acted to acquire land for expansion harming developers. | Actions pursued in protection of hospital interests; privileged. | Interference with a business relationship was privileged; dismissal upheld. |
Key Cases Cited
- Fred Siegel Co., L.P.A. v. Arter & Hadden, 85 Ohio St.3d 171 (1999) (tortious-interference elements; contract required for interference claim)
- Wellston v. Morgan, 65 Ohio St.3d 219 (1901) (municipality cannot be bound by implied contract absent express agreement)
- Hortman v. City of Miamisburg, 110 Ohio St.3d 194 (2006) (reviewed to assess contract formation against municipal entities)
- A & B- Abell Elevator Co., Inc. v. Columbus/Central Ohio Bldg. and Constr. Trades Council, 73 Ohio St.3d 1 (1995) (interference with a business relationship; privilege/reasonableness inquiry)
- Mitchell v. Lawson Milk Co., 40 Ohio St.3d 190 (1988) (set framework for reviewing Civ.R.12(B)(6) de novo standard)
- O’Brien v. Univ. Community Tenants Union, Inc., 42 Ohio St.2d 242 (1975) (syllabus on standard for dismissals and factual inferences)