829 N.E.2d 706 | Ohio Ct. App. | 2005
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *86
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *87 {¶ 1} Appellant, CommuniCare, Inc. ("CommuniCare"), appeals from a judgment by the Wood County Court of Common Pleas, granting summary judgment in favor of appellee, Wood County Board of Commissioners ("Wood County"). For the reasons that follow, we affirm.
{¶ 2} On November 21, 1995, CommuniCare and Wood County entered into a written contract, under whose terms CommuniCare agreed to provide day-to-day-operation and management services to the Wood County Nursing Home. This three-year agreement (which was the third such agreement by the parties since they had begun their relationship in 1987) self-renewed for additional two-year periods unless either party gave 90 days' notice of intent not to renew.
{¶ 3} The contract was renewed twice, first in November 1998, and again in November 2000. On May 16, 2001, six months after the contract was renewed for the second time, Wood County sent CommuniCare a written notice of breach and intent to terminate the contract. On August 19, 2002, CommuniCare filed a breach-of-contract action against Wood County.
{¶ 4} Wood County filed its original answer and counterclaim on September 30, 2002. Trial was originally scheduled for June 25, 2003, but after two continuances was ultimately scheduled for July 26, 2004.
{¶ 5} In early June 2004, less than two months before the last scheduled trial date, Wood County moved to amend its answer and assert new defenses. Those defenses included (1) that the agreement was void because it was not competitively bid and (2) that the agreement contravened Ohio law by improperly delegating duties to operate and manage the county nursing home. CommuniCare filed an opposition to the motion. After considering the motion and CommuniCare's opposition, the trial court granted the motion to amend on June 14, 2004.
{¶ 6} On June 16, 2004, Wood County filed its amended answer and requested leave to file a motion for summary judgment on the newly pleaded defenses. The court granted the motion for leave, and on June 25, 2004, Wood County filed its motion and supporting memorandum.
{¶ 7} On July 2, CommuniCare requested an extension of time until July 15, 2004, to respond to the motion for summary judgment. The court granted this request on July 7, 2004. The following morning, Wood County filed a reply brief.
{¶ 8} On July 20, 2004, the court granted Wood County's motion for summary judgment. The court based its decision on a finding that the agreement was void *89
because it had not been competitively bid pursuant to R.C.
{¶ 9} CommuniCare timely appealed both the entry of summary judgment and the entry granting Wood County leave to amend its answer and counterclaim.
{¶ 10} CommuniCare raises the following assignments of error:
{¶ 11} "Assignment of Error No. 1: The court erred by granting the request of defendant appellee Wood County for leave of court to amend its answer (Judgment Entry granting leave, filed June 11, 2004)."
{¶ 12} "Assignment of Error No. 2: The court erred by granting defendant-appellee Wood County's motion for summary judgment (Decision, Order, and Judgment Entry on defendant's motion for summary judgment rendered July 19, 2004)."
{¶ 13} "Assignment of Error No. 3: The court erred by failing to find that the county was estopped from and/or waived its right to raise new affirmative defenses (Decision, Order and Judgment Entry on the county's motion for summary judgment rendered July 19, 2004)."
{¶ 14} In addition to the foregoing assignments of error raised by CommuniCare, there is a cross-assignment of error raised by Wood County:
{¶ 15} "Cross-Assignment of Error No. 1: The trial court erred when it held that the Management Agreement did not impermissibly delegate to a private corporation the Board's statutory duties under O.R.C. §
{¶ 16} We begin by addressing CommuniCare's first assignment of error, wherein CommuniCare alleges that it was error for the trial court to grant Wood County's request for leave to amend its answer.
{¶ 17} Under Ohio law, an affirmative defense is waived unless it is presented (1) by motion before pleading pursuant to Civ.R. 12(B), (2) affirmatively in a responsive pleading under Civ.R. 8(C), or by amendment under Civ.R. 15. Jim's Steak House, Inc.v. Cleveland (1998),
{¶ 18} An appellate court will not reverse a trial court's decision on a motion to amend absent an abuse of discretion.Wilmington Steel Prod., Inc. v. Cleveland Elec. Illum. Co.
(1991),
{¶ 19} CommuniCare argues that it was an abuse of discretion for the trial court to allow Wood County's amendment because the factors of bad faith, undue delay, and prejudice to CommuniCare are all manifest in this case.
{¶ 20} CommuniCare specifically argues that the trial court erred in overlooking bad faith, undue delay, and prejudice attendant to the county's proposed amendment to a "waived defense." In support of its claim that Wood County waived the competitive-bidding/illegality defense, CommuniCare (1) points to the fact that Wood County's original and amended responsive pleading both assert that CommuniCare's breach of the contract caused termination of the agreement and (2) represents that Wood County "admitted the validity of the contract." Addressing these points, Wood County acknowledges the former, stating that its counterclaim supported its reasons for termination by asserting that CommuniCare's failure to perform resulted in damages to the county. Regarding the latter point, Wood County admits only that the attached copy of the contract (drafted by CommuniCare) contains language representing that the agreement had been "validly assented to."
{¶ 21} To the extent that Wood County's responsive pleadings may be read to contain statements inconsistent with the competitive-bidding/illegality defense, this court notes that alternative pleading is permitted under the Civ.R. 8(E)(2).1 In our opinion, neither the timing of the pleading of the competitive-bidding/illegality *91 defense nor the existence of claims potentially inconsistent with that defense compels a finding of waiver in this case.
{¶ 22} CommuniCare next argues that the county's amended answer unfairly prejudiced CommuniCare because it prevented CommuniCare from conducting discovery in a manner that permitted discovery on all of the county's defenses concurrently. This court is unaware of a right entitling a party to conduct discovery on all of an opponent's defenses simultaneously. In addition, CommuniCare itself states in its appellate brief that the competitive-bidding/illegality defense, if applicable, should have been obvious from the outset and, as such, did not require any discovery. Moreover, CommuniCare was not prevented from obtaining the discovery it sought in connection with the competitive-bidding/illegality defense. As pointed out by Wood County in its appellate brief, the county, after filing its motion for summary judgment, agreed to the deposition of Wood County fiscal manager Darcy Wilhelm, the individual who executed the affidavit filed with the motion for summary judgment and who had been listed as a witness for the county for more than a year and a half.
{¶ 23} CommuniCare also states that it was prejudiced because it was not given an adequate opportunity to respond to the motion for summary judgment. In fact, as indicated above, the trial court granted CommuniCare's request for an extension of time to file its memorandum in opposition to the motion until July 15, 2004.
{¶ 24} CommuniCare next asserts that Wood County waived the illegality defense until it became clear to the county that it was unlikely to prevail on its claims against CommuniCare and could not escape liability to CommuniCare on its breach-of-contract claim. That assertion, presumably made in support of CommuniCare's claim of bad faith, is unsupported by the facts contained in the record and is therefore found to be meritless.
{¶ 25} For all of the foregoing reasons, CommuniCare's first assignment of error is found not well taken.
{¶ 26} CommuniCare argues in its second assignment of error that the trial court erred in granting Wood County's motion for summary judgment.
{¶ 27} An appellate court reviewing a trial court's granting of summary judgment does so de novo, applying the same standard used by the trial court. Grafton v. Ohio Edison Co. (1996),
{¶ 28} "Summary judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence, and written stipulations of fact, if any, timely filed in the action, show that there is no genuine issue as to any material fact and that the moving party is *92 entitled to judgment as a matter of law. No evidence or stipulation may be considered except as stated in this rule."
{¶ 29} Summary judgment is proper where (1) no genuine issue of material fact remains to be litigated, (2) the moving party is entitled to judgment as a matter of law, and (3) when the evidence is viewed most strongly in favor of the nonmoving party, reasonable minds can come to but one conclusion, a conclusion adverse to the nonmoving party. Ryberg v. Allstate Ins. Co.
(July 12, 2001), 10th Dist. No. 00AP-1243, 2001 WL 777121, citingTokles Son, Inc. v. Midwestern Indemn. Co. (1992),
{¶ 30} The moving party bears the initial burden of informing the trial court of the basis for the motion and identifying those portions of the record that demonstrate the absence of a genuine issue of fact as to an essential element of one or more of the nonmoving party's claims. Dresher v. Burt (1996),
{¶ 31} In challenging the summary judgment entry, CommuniCare specifically disputes the trial court's conclusion that the management agreement is subject to competitive bidding pursuant to R.C.
{¶ 32} The relevant version of R.C.
{¶ 33} "Anything to be purchased, leased, leased with an option or agreement to purchase, or constructed, including, but not limited to, any product, structure, construction, reconstruction, improvement, maintenance, repair, or service, except the services of an accountant, architect, attorney at law, physician, professional engineer, construction project manager, consultant, surveyor, or appraiser, by or on behalf of the county or contracting authority, as defined in Section
{¶ 34} (The only difference in the quoted portion of the statute in the current version is the current limit of $25,000.)
{¶ 35} According to CommuniCare, the management agreement is exempt from the requirements of R.C.
1. Whether the agreement was for the services of a consultant.
{¶ 36} In arguing that the agreement was exempt from competitive bidding because it engaged the services of a consultant, CommuniCare cites deposition testimony by Wood County fiscal manager Wilhelm wherein she admits that the county had previously considered the agreement exempt as a consultant agreement.
{¶ 37} Unfortunately for CommuniCare, what the county representatives may have believed at the time the contract was executed is not determinative in this analysis. Statutory requirements for competitive bidding on contracts are mandatory. See Benefit Serv. of Ohio, Inc. v. Trumbull Cty. Commrs.,
supra,
{¶ 38} Contracts made in violation of state statute or in disregard of such statutes are void, not merely voidable, and courts will not lend their aid to enforce such contracts directly or indirectly but will leave the parties where they have placed themselves. Benefit Serv. of Ohio, Inc. v. Trumbull Cty.Commrs., supra,
{¶ 39} The primary objective of a court when construing the terms of a written contract is to give effect to the intent of the parties; the intent is presumed to rest in the language that the parties have chosen to employ. Saunders v. Mortensen,
{¶ 40} Review of the plain language of the agreement reveals that Wood County overwhelmingly sought CommuniCare's management, not consultant, services. Although the contract contains some mention of consulting work, consultant services were to be provided "[i]n addition to management services" and were to be reviewed with the county prior to initiation. The agreement further provided that consultant services would be provided "over and above management services * * * and only with prior approval by the county." Any consulting services that were to be provided under the contract were clearly secondary to the fundamental purpose of the contract, which was to obtain management services for the day-to-day operation of the nursing home.
{¶ 41} Because the agreement in this case was fundamentally for management, and not consultant, services, we find that the exemption for consultant services that is set forth at R.C.
2. Whether the agreement was for personal services of a specialized nature.
{¶ 42} Citing State ex rel. Doria v. Ferguson (1945),
{¶ 43} The statute at issue in the current case, R.C.
{¶ 44} Courts have long recognized the principle of expressio unius est exclusio alterius — that is, "the expression of one thing implies the exclusion of another." Newbury Twp. Bd. ofTrustees v. Lomak Petroleum, Inc. (1992),
3. Whether the existence of alternative methods to protect the public interest eliminates the competitive-bidding requirement in this case.
{¶ 45} CommuniCare next points to Danis Clarkco Landfill Co.v. Clark Cty. Solid Waste Mgt. Dist. (1995),
{¶ 46} A reading of the court's discussion of alternative methods to protect the public interest makes clear that the existence of those alternative methods was in no way used as a basis for circumventing the competitive-bidding requirement in that case; as indicated above, the competitive-bidding requirement was found inapplicable. It appears, instead, that the court made mention of those alternative methods to demonstrate that although the General Assembly had not enacted a competitive-bidding requirement that reached designations of privately owned and operated solid waste disposal facilities, the General Assembly had taken other measures designed to protect the public interest that did.
{¶ 47} The Danis case is clearly inapposite to the matter at hand. CommuniCare's argument to the contrary is therefore not well taken. *96
4. Whether the fact that other counties do not competitively bid this type of agreement eliminates the competitive-bidding requirement in this case.
{¶ 48} Next, CommuniCare asks this court to consider the practice of other counties in determining the applicability of the competitive-bidding requirement. Specifically, CommuniCare points to its management agreements with Franklin and Cuyahoga Counties, which were not competitively bid under R.C.
5. Whether county funds are at issue.
{¶ 49} CommuniCare next argues that competitive bidding is not required because county funds are not at issue. As indicated above, in order to trigger the competitive-bidding requirement under the applicable version of R.C.
{¶ 50} Where a county derives the revenues it uses to pay contract costs is wholly irrelevant to the question of the applicability of R.C.
{¶ 51} Arguing to the contrary, CommuniCare cites Medcorp v.York Twp., 6th Dist. No. F-02-019, 2002-Ohio-7308, 2002 WL 31888214. Medcorp involved the interpretation of a phrase set forth at R.C.
{¶ 52} Fundamentally, Medcorp involves the question of how to characterize certain income for purposes of determining the applicability of R.C.
{¶ 53} For the foregoing reasons, CommuniCare's argument that competitive bidding is not required because county funds are not at issue is not well taken.
6. Whether another statute controls the operation of a county nursing home.
{¶ 54} Finally, CommuniCare asserts that competitive bidding pursuant to R.C.
{¶ 55} CommuniCare also points to R.C.
{¶ 56} "The board of county commissioners shall make all contracts for new buildings and for additions to existing buildings necessary for the county home, and shall prescribe rules for the management and good government of such home and to promote sobriety, morality, and industry among residents."
{¶ 57} Thus, under R.C.
{¶ 58} CommuniCare argues that because R.C. Chapter 5155 does not require competitive bidding except upon specified circumstances, the Ohio General Assembly has made clear its intent that competitive bidding is not required.
{¶ 59} R.C.
{¶ 60} "If a general provision conflicts with a special or local provision, they shall be construed, if possible, so that effect is given to both. If the conflict between the provisions is irreconcilable, the special or local provision prevails as an exception to the general provision, unless the general provision is the later adoption and the manifest intent is that the general provision prevail."
{¶ 61} Reading the provisions in pari materia, as required by R.C.
{¶ 62} On the basis of the foregoing, we find that competitive bidding controls county purchases of goods and services used in the operation of a county nursing home. Therefore, CommuniCare's second assignment of error is found not well taken.
{¶ 63} CommuniCare asserts in its third and final assignment of error that the trial court erred in failing to find that Wood County was estopped from and/or waived its right to raise the new affirmative defenses. Specifically, CommuniCare claims that because Wood County has entered into three contracts and two renewals with CommuniCare, the doctrines of estoppel and waiver bar the county's defense of failure to competitively bid the agreement.
{¶ 64} As indicated above, the statutory requirements for competitive bidding for county contracts are mandatory and cannot be waived. See Buchanan Bridge Co. v. Campbell,
{¶ 65} Applying the above-stated principles to the instant case, it is clear that waiver and estoppel should not be employed to allow public officials and private companies to avoid the statutory duty to competitively bid contracts pursuant to R.C.
{¶ 66} We now turn to Wood County's cross-assignment of error, wherein Wood County argues that the trial court erred when it held that the management agreement properly delegated to a private corporation the board's statutory duties under R.C.
{¶ 67} For the foregoing reasons, the judgment of the trial court is affirmed. Pursuant to App.R. 24, costs are assessed to the appellant.
Judgment affirmed.
HANDWORK and PIETRYKOWSKI, JJ., concur.