Spellman Outdoor Advertising Servs, L.L.C. v. Ohio Dept. of Transp.
2017 Ohio 950
| Ohio Ct. App. | 2017Background
- In 1953 the Mullets deeded a strip ("Turnpike Property") to the Ohio Turnpike Commission; the recorded deed included a restrictive covenant (the "Mullet Restriction") prohibiting new billboards visible from the Turnpike and provided it "shall run with the land."
- The original Mullet tract was subdivided; a 7.6‑acre parcel (the "Spellman Property") south of the Turnpike changed hands several times and no subsequent deed in the Spellman chain referenced the 1953 restriction.
- In 2007 Spellman leased the Spellman Property, obtained title search reports showing no restrictions of record, applied for and received ODOT permits for several billboards (one was built); unbuilt permits were renewed through 2011.
- In 2012 Spellman applied to renew additional permits; ODOT denied the 2012 applications in 2014 after OTIC alerted ODOT to the 1953 restriction and questioned Spellman’s "site control."
- Spellman administratively appealed; ODOT’s hearing officer declined to resolve whether the Mullet Restriction actually encumbered the Spellman Property and recommended affirming denial based on perceived lack of site control. The director affirmed. Separately, Spellman won a Portage County quiet‑title/ declaratory‑judgment ruling that the restriction did not encumber the Spellman Property; that decision was affirmed by the Eleventh District and is pending at the Ohio Supreme Court.
- The Franklin County Common Pleas court affirmed ODOT’s denial; Spellman appealed to this court. The Tenth District reverses, holding ODOT lacked statutory authority to deny permits based on a third party’s allegation of lack of site control absent a court determination affecting legal possession or control.
Issues
| Issue | Spellman’s Argument | ODOT/OTIC’s Argument | Held |
|---|---|---|---|
| Whether R.C. 5516.10 authorizes ODOT to deny permits for alleged lack of "site control" based on a third‑party deed‑restriction claim | Statute only requires an acknowledgment of control; ODOT cannot refuse permits for third‑party allegations or adjudicate property rights | R.C. 5516.10 permits ODOT to require "site control" evidence and deny permits when control is unreliable; ODOT may look beyond acknowledgments | ODOT lacks authority to deny permits solely because a third party alleges lack of site control; adjudication of substantive property rights belongs to courts |
| Whether ODOT may resolve substantive real property questions (e.g., enforceability of deed restrictions) in permitting proceedings | Such questions fall to courts via quiet title/declaratory actions, not ODOT | ODOT contends it must ensure lawful possession/control when issuing permits and may rely on evidence presented by intervenors | Agency may not decide substantive property rights; courts have exclusive jurisdiction to determine title/encumbrances |
| Whether R.C. 5516.12 authorizes cancellation/revocation absent court adjudication | Revocation power applies after a court has determined loss of legal use or if application contained materially false information | ODOT says it can cancel if it concludes legal use is terminated due to enforceable covenant | ODOT may revoke permits after a court determines loss of legal use or upon finding materially false/misleading application, but not preemptively decide legal use in permitting stage |
| Whether the Franklin C.P. abused discretion by affirming ODOT’s denial based on perceived ambiguity about the restriction | Court erred by upholding an order that exceeded ODOT’s statutory authority | Court relied on hearing officer’s deference and ODOT’s statutory reading | Tenth Dist. finds abuse of discretion in affirming denial; remands for ODOT to reevaluate permits in light of this decision and Eleventh Dist. ruling |
Key Cases Cited
- Univ. of Cincinnati v. Conrad, 63 Ohio St.2d 108 (standard for common pleas review of administrative record)
- Pons v. Ohio State Med. Bd., 66 Ohio St.3d 619 (appellate review scope for administrative decisions)
- Univ. Hosp., Univ. of Cincinnati College Of Medicine v. State Emp. Relations Bd., 63 Ohio St.3d 339 (plenary review of legal questions on appeal)
- Big Bob's Inc. v. Ohio Liquor Control Comm., 151 Ohio App.3d 498 (agency power limits; standard cited)
- Ohio Fresh Eggs, LLC v. Boggs, 183 Ohio App.3d 511 (administrative agencies have no authority beyond statute)
- Burger Brewing Co. v. Thomas, 42 Ohio St.2d 377 (statutory grants to agencies cannot be extended by agency)
- State ex rel. A. Bentley & Sons Co. v. Pierce, 96 Ohio St. 44 (implied agency powers limited to what’s necessary to effectuate express powers)