2021 Ohio 2929
Ohio Ct. App.2021Background
- Westlake and Cleveland entered a Water Services Agreement (WSA): initial 10‑year term then automatic year‑to‑year renewals so long as Cleveland supplied water.
- WSA contained a five‑year notice provision to terminate and a purported perpetual annual renewal mechanism after the first term.
- Westlake sued for declaratory and injunctive relief seeking, among other things, a ruling that it could obtain a secondary water source and that the five‑year notice provision was unenforceable against annual renewals.
- Trial court initially found the WSA terminated in 2015, allowed secondary sourcing, and barred Cleveland from recovering stranded costs; this was reversed and remanded by this court for a single remaining issue: what constitutes "reasonable" notice to terminate the annually renewing WSA.
- After remand and limited proceedings, the trial court concluded it was "constrained by the law" to set the reasonable notice period at one year; Cleveland appealed.
Issues
| Issue | Plaintiff's Argument (Westlake) | Defendant's Argument (Cleveland) | Held |
|---|---|---|---|
| Whether a five‑year notice provision is enforceable against a contract that renews year‑to‑year | Five‑year notice is irreconcilable with an annually renewed contract; Westlake may secure secondary water during notice period | WSA renews automatically and the parties intended a multi‑year notice to allow orderly transition | Prior panel held annual renewals create a new one‑year contract each year; five‑year notice is irreconcilable, so notice cannot exceed the contract term (one year) |
| Whether trial court erred by fixing reasonable notice at one year despite evidence that physical disconnect could take longer | Trial court correctly applied law‑of‑the‑case and prior appellate rulings that each renewal is a new one‑year contract | Practical realities justify a longer, multi‑year reasonable notice period to allow system separation | Affirmed: trial court bound by prior appellate decisions (law‑of‑the‑case); reasonable notice limited to one year |
Key Cases Cited
- Westlake v. Cleveland, 2017-Ohio-4064 (8th Dist.) (held five‑year notice irreconcilable with year‑to‑year renewals)
- State ex rel. Cleveland v. Shaughnessy, 2018-Ohio-4797 (8th Dist.) (extraordinary‑writ panel enforced remand to decide reasonable notice)
- Westlake v. Cleveland, 2019-Ohio-1435 (8th Dist.) (reversed trial court decision on remand issues)
- Gill v. Guru Gobind Sikh Soc. of Cleveland, 2017-Ohio-7163 (8th Dist.) (standard of review for declaratory judgment and mixed questions of law/fact)