587 N.E.2d 889 | Ohio Ct. App. | 1990
This is an appeal by plaintiff from a judgment of the Franklin County Court of Common Pleas dismissing plaintiff's complaint for failure to exhaust administrative remedies and for failure to state a claim upon which relief could be granted. The trial court granted defendant's Civ.R. 12(B)(6) motion to dismiss plaintiff's action for declaratory relief on the basis that a pending administrative remedy was available to adequately determine the issues set forth in plaintiff's complaint.
On October 11, 1988, defendant, Ohio Department of Commerce, Division of Securities, issued a letter to plaintiff, AEI Group, Inc., pursuant to Ohio Adm. Code
Subsequently, on February 23, 1989, plaintiff filed a complaint for declaratory and injunctive relief against defendant. Plaintiff filed its complaint pursuant to R.C.
On appeal, plaintiff asserts but one assignment of error for this court's review: "The trial court abused its discretion in dismissing appellant's complaint." *549
Plaintiff argues that the trial court erred in granting defendant's motion to dismiss since there exists no question that in the present case there is a very real controversy, as plaintiff has challenged the very existence of the Ohio Department of Commerce, Division of Securities itself as well as various administrative rules and selective enforcement of those rules. Furthermore, plaintiff insists that speedy relief is required due to the nature of the world of investments and securities where rumor and speculation play a major role in the decisions of investors. While defendant argues that plaintiff should have exhausted its administrative remedies before resorting to the courts, plaintiff contends that its complaint demonstrates that there is more involved than plaintiff's failure to comply with an edict of defendant. Rather, plaintiff challenges the legitimacy of defendant's order as well as defendant's authority to make rules and the constitutionality of those rules. Since defendant lacks jurisdiction to decide those issues, plaintiff insists that an appeal to the courts is necessary.
In Burger Brewing Co. v. Liquor Control Comm. (1973),
"An action for a declaratory judgment to determine the validity of an administrative agency regulation may be entertained by a court, in the exercise of its sound discretion, where the action is within the spirit of the Declaratory Judgment Act, a justiciable controversy exists between adverse parties, and speedy relief is necessary to the preservation of rights which may otherwise be impaired or lost. (Paragraph two of the syllabus in American Life Accident Ins. Co. v. Jones,
[1949],
Accordingly, the granting of declaratory relief is a matter of judicial discretion and, absent an abuse of discretion by the trial court, an appellate court is not permitted to question the trial court's decision to deny or grant such relief. Bilyeu v.Motorists Mutual Ins. Co. (1973),
However, we note that a trial court does not have unbridled discretion in its decision as to whether or not to dismiss a complaint for declaratory judgment. Civ.R. 57 provides in part:
"The procedure for obtaining a declaratory judgment pursuant to Sections
As the court held in Fioresi v. State Farm Mut. Auto Ins.Co. (1985),
While the trial court found that dismissal was appropriate on the basis that plaintiff had failed to exhaust its administrative remedies, which the trial court believed could potentially remedy plaintiff's complaints, no such exhaustion of administrative remedies is required if the administrative agency has no power to afford the relief sought. See Kaufman v.Newburgh Heights (1971),
In the present case, we agree with plaintiff that the trial court abused its discretion in dismissing its complaint for declaratory relief to the extent that plaintiff challenged the constitutionality of various administrative rules being enforced by defendant. It is well established that an action for declaratory relief is a valid manner in which a court may exercise jurisdiction since constitutional arguments are not within an administrative agency's jurisdiction. RooseveltProperties Co. v. Kinney (1984),
Since plaintiff was required by defendant to show cause why its license should not be revoked in light of the enforcement of defendant's rules, plaintiff could assert as a defense the unconstitutionality of those rules. Thus, plaintiff's complaint for declaratory relief should have been entertained by the trial court on this basis. However, we find no abuse of discretion by the trial court in dismissing plaintiff's complaint for declaratory relief with regard to the alleged selective enforcement of those rules since the trial court could find that defendant may more appropriately make such a determination.
Defendant has cited this court's decision in Arbor HealthCare Co. v. Jackson (1987),
However, in the present case, plaintiff specifically challenges the constitutional validity of the rules themselves as well as the constitutionality of defendant's own existence. R.C.
"Any person * * * whose rights, status, or other legal relations are affected by a * * * rule as defined in section
Accordingly, on the constitutional issues presented in this case, we find that the trial court erred in dismissing plaintiff's complaint in declaratory judgment. However, with regard to that portion of plaintiff's complaint which seeks declaratory relief with regard to the selective enforcement of defendant's rules, we find that there was no abuse of discretion by the trial court in dismissing plaintiff's complaint since this involves the application of those rules.
Based on the foregoing, plaintiff's assignment of error is well taken and is sustained to the extent that the trial court should not have dismissed plaintiff's complaint seeking declaratory relief with regard to the constitutionality of the administrative rules of defendant as well as the constitutionality of defendant's existence. However, as to those issues not involving a question of construction or validity, we find that it was within the trial court's discretion to dismiss plaintiff's complaint. Therefore, the judgment of the trial court is affirmed in part, reversed in part, and the cause is remanded for further proceedings consistent with this opinion.
Judgment affirmed in part,reversed in partand cause remanded.
WHITESIDE and CACIOPPO, JJ., concur.
MARY CACIOPPO, J., of the Ninth Appellate District, sitting by assignment. *552