2022 Ohio 4345
Ohio2022Background
- The dispute concerns the Octagon Earthworks (part of the Newark Earthworks), a nationally significant prehistoric site owned by the Ohio History Connection (History Connection) but leased to Moundbuilders Country Club (Moundbuilders) since 1910.
- History Connection sought to terminate Moundbuilders’ lease and convert the site into a public park to preserve the earthworks and support nomination for UNESCO World Heritage status.
- History Connection obtained two appraisals (one showing $500,000, one $795,000); its CEO misread the $500,000 figure (which was a leased-fee number) and made a written offer of $800,000 based on the $795,000 appraisal. Moundbuilders did not accept.
- History Connection passed a resolution declaring necessity and filed an appropriation (eminent domain) action; Moundbuilders contested necessity and whether the prefiling purchase offer was made in good faith.
- Trial court held (1) the taking was necessary for a public use (public park/preservation) and (2) the purchase offer was made in good faith; the Fifth District affirmed. The Supreme Court of Ohio affirmed and remanded for trial on compensation.
Issues
| Issue | History Connection (plaintiff) | Moundbuilders (defendant) | Held |
|---|---|---|---|
| Standard for a “good-faith offer” under R.C. 163.04(B) | Compliance with statute and support by an independent appraisal establishes good faith. | "Good faith" is more than absence of dishonesty; requires affirmative objective proof of reasonable conduct. | Court adopts objective-reasonableness standard (Kalain/Worth): good faith can be shown by reasonable conduct, not only by lack of subjective bad intent. |
| Application to the History Connection’s offer | The offer was based on a qualified appraisal and a reasonable (albeit mistaken) reading of reports; therefore it was made in good faith. | History Connection hid a low appraisal, shopped for a low value, failed to disclose the second appraisal, and did not consult counsel—showing lack of good faith. | Court upholds factual finding that History Connection acted reasonably and honestly here; offer was in good faith. |
| Necessity and public use under R.C. 163.021(A) | Taking a leasehold to create a public park is a presumptively public use and appropriation is necessary because public use cannot be realized while private lease remains. | The public benefit is speculative (World Heritage nomination uncertain) and Moundbuilders’ present use provides greater public benefit; necessity must weigh competing public interests. | Court rejects weighing-for-best-interest test; public-park use is presumptively a public use and court defers to trial court’s finding that appropriation was necessary. |
Key Cases Cited
- Kalain v. Smith, 25 Ohio St.3d 157 (1986) (good-faith inquiry may be satisfied by objective, reasonable conduct)
- Worth v. Huntington Bancshares, Inc., 43 Ohio St.3d 192 (1989) (unreasonable or irrational behavior may show lack of good faith)
- Hoskins v. Aetna Life Ins. Co., 6 Ohio St.3d 272 (1983) (lack of good faith equated with bad faith in insurance-settlement context)
- Zoppo v. Homestead Ins. Co., 71 Ohio St.3d 552 (1994) (defining failure to exercise good faith by unreasonable conduct)
- Norwood v. Horney, 110 Ohio St.3d 353 (2006) (eminent-domain use cannot be speculative; limits on appropriating for contingent future public use)
- Shoemaker v. United States, 147 U.S. 282 (1893) (taking for a public park is a valid public use)
- Rindge Co. v. Los Angeles Cty., 262 U.S. 700 (1923) (acquisition for public park recognized as public use)
- Penn Cent. Transp. Co. v. New York, 438 U.S. 104 (1978) (land-use and historic-preservation principles)
- Pontiac Improvement Co. v. Cleveland Metro. Park Dist., 104 Ohio St. 447 (1922) (delegation of eminent-domain power must be strictly construed)
- United States v. Bestfoods, 524 U.S. 51 (1998) (interpret statutory terms by ordinary meaning and context)