JONES, APPELLANT, v. VILLAGE OF CHAGRIN FALLS, APPELLEE.
No. 95-1458
SUPREME COURT OF OHIO
February 19, 1997
77 Ohio St.3d 456 | 1997-Ohio-253
Submitted September 24, 1996 | APPEAL from the Court of Appeals for Cuyahoga County, No. 67416.
[Cite as Jones v. Chagrin Falls, 1997-Ohio-253.]
Civil procedure—Doctrine of failure to exhaust administrative remedies is not a jurisdictional defect to a declaratory judgment action, but an affirmative defense that may be waived if not timely asserted and maintained.
The doctrine of failure to exhaust administrative remedies is not a jurisdictional defect to a declaratory judgment action; it is an affirmative defense that may be waived if not timely asserted and maintained. (Driscoll v. Austintown Assoc. [1975], 42 Ohio St.2d 263, 71 O.O.2d 247, 328 N.E.2d 395, clarified and followed.)
{¶ 1} Appellant David R. Jones is the owner of real property located in the village of Chagrin Falls and situated within the village‘s Office District zone. In June 1993, Jones granted National City Bank (“NCB“) an option to purchase and develop the property. NCB, in turn, approached Chagrin Falls’ Chief Administrative Officer, Robert McKay, with a plan to develop the property for use as a branch bank.
{¶ 2} McKay informed NCB that under his interpretation, the zoning laws precluded use of property in the Offiсe District as a branch bank. Though Chagrin Falls Zoning Code 1135.02 permits use of Office District land as a “financial office,” McKay determined that a branch bank did not qualify as a financial office and was not a permitted use in the Office District.
{¶ 3} The matter was placed on the agenda for the October 4, 1993 meeting of the Chagrin Falls Board of Zoning Appeals (“BZA“). At the meeting, after
{¶ 4} At its next regular meeting, the Chagrin Falls Village Council considered and affirmed the BZA ruling. NCB was represented at the meeting by counsel who spoke on its behalf prior to council‘s vote adopting an ordinance approving the action of the BZA.
{¶ 5} Appellant Jones was not present and did not participate in any of the aforementioned proceedings.
{¶ 6} NCB did not pursue an appeal of the village‘s determination.
{¶ 7} Following the decision of the village council, Jones, who had not sought a use variance from the village, filed an action under
{¶ 8} The trial court granted summary judgment to Jones, holding that, as a matter of law, a bank is a financial office and therefore a permitted use in the Office District. The village timely appealed the decision to the Cuyahoga County Court of Appeals.
{¶ 9} The only issues briefed and argued to the court of appeals concerned the interpretation of the village zoning code and the trial court determination that a branch bank is a financial office. At oral argument, however, the court raised the issue of subject matter jurisdiction sua sponte and requested supplemental briefs addressing the question. Upon consideration of the briefs, the court of appeals reversed and vacated the judgment of the trial court, holding that the trial court
Kahn, Kleinman, Yanowitz & Arnson Co., L.P.A., Sheldon Berns and Benjamin J. Ockner, for appellant.
Joseph W. Diemert, Jr., Chagrin Falls Director of Law, and Laura J. Gentilcore, Assistant Director of Law, for appellee.
MOYER, C.J.
{¶ 10} The issue presented in this case is whether failure to exhaust administrative remedies is a jurisdictional defect, or an affirmative defense that may be waived. The issue is of central importance under the facts of this case because Chagrin Falls did not raise the defense on summary judgment and therefore must be held to have waived it if the defect is not jurisdictional. For the reasons that follow, we reaffirm our established precedent that failure to еxhaust administrative remedies is a waivable affirmative defense, and we therefore reverse the judgment of the court of appeals.
{¶ 11} Ohio‘s Declaratory Judgment Act sets out in
{¶ 12}
“Courts of record may declare rights, status, and othеr legal relations whether or not further relief is or could be claimed. No action or proceeding is open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect. Such declaration has the effect of a final judgment or decree.”
{¶ 13}
“Any person interested under a deed, will, written contract, or other writing constituting a contract, or whose rights, status, or other legal relations are affected by a constitutional provision, statute, rule as defined in section 119.01 of the Revised Code, municipal ordinance, township resolution, contract, or franchise, may have determined any question of construction or validity arising under such instrument, constitutional provision, statute, rule, ordinance, resolution, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder.”
{¶ 14}
“The procedure for obtaining a declaratory judgment pursuant to Sections 2721.01 to 2721.15, inclusive, of the Revised Code, shall be in accordance with these rules. The existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate. * * * ”
{¶ 16} The village directs our attention to several of our own cases and urges us to rely on them to uphold the determination of the court of appeals that the doctrine of failure to exhaust administrative remedies is a jurisdictional defect depriving the trial court of the рower to hear and decide the question before it. We do not agree. Indeed, neither our case law nor that of other jurisdictions supports so sweeping a response to the issue before us.
{¶ 17} In Driscoll v. Austintown Assoc. (1975), 42 Ohio St.2d 263, 71 O.O.2d 247, 328 N.E.2d 395, Driscoll and others sought to collaterally attack, on grounds of failure to exhaust administrative remedies, a two-year-old declaratory judgment holding that a zoning ordinance prohibiting certain landowners from constructing multifamily housing units on their property was unconstitutional. We upheld thе validity of the declaratory judgment stating: “Failure to exhaust administrative remedies is not a jurisdictional defect, and such a failure will not justify a collateral attack on an otherwise valid and final judgment. Failure to exhaust administrative remedies is an affirmative defense which must be timely asserted in an action or it is waived.
{¶ 18} The village of Chagrin Falls correctly observes that the issue in Driscoll was whether a zoning ordinance was constitutional; this case presents no constitutional issue. The village also emphasizes that this court has in the past treated constitutional questions differently from those of simple statutory interpretation when considering the propriety of declaratory judgment actions. See, e.g., Fairview Gen. Hosp. v. Fletcher (1992), 63 Ohio St.3d 146, 586 N.E.2d 80. For these reasons, the village argues, we should distinguish between Driscoll and the present case in determining the applicability of the Driscoll holding.
{¶ 19} In Gannon v. Perk (1976), 46 Ohio St.2d 301, 75 O.O.2d 358, 348 N.E.2d 342, however, we applied the same reasoning to a case in which no constitutional question was raised. Gannon involved a declaratory judgment actiоn brought by Cleveland‘s police and fire fighters seeking a declaration that the mayor was without power under the city charter to place them on layoff. We held that
{¶ 20} In contrast to these unequivocal statements of Ohio law, we have found no Ohio Supreme Court precedent supporting the court of appeals’ conclusion that failure to exhaust administrative remedies is a jurisdictional defect.
{¶ 21} Whether a constitutional question is raised such that exhaustion of administrative remediеs should not be required is an inquiry wholly separate from the affirmative-defense-versus-jurisdictional-defect issue posed by the present case. We have long held that failure to exhaust administrative remedies is not a necessary prerequisite to an action challenging the constitutionality of a statute, ordinance, or administrative rule. Driscoll v. Austintown Assoc., supra, 42 Ohio St.2d 263, 71 O.O.2d 247, 328 N.E.2d 395, paragraph two of the syllabus; Karches v. Cincinnati (1988), 38 Ohio St.3d 12, 17, 526 N.E.2d 1350, 1355; Fairview Gen. Hosp. v. Fletcher, supra, 63 Ohio St.3d 146, 149, 586 N.E.2d 80, 82.
{¶ 22} The policy interest underlying the rule distinguishing between cases presenting constitutional issues and others is simply the conservation of public resources. Because administrative bodies have no authority to interpret the Constitution, requiring litigants to assert constitutional arguments administratively would be a waste of time and effort for all involved. “[I]f resort to administrative remedies would be wholly futile, exhaustion is not required.” Karches v. Cincinnati, 38 Ohio St.3d 12, 17, 526 N.E.2d 1350, 1355 (citing Glover v. St. Louis-San Francisco Ry. Co. [1969], 393 U.S. 324, 89 S.Ct. 548, 21 L.Ed.2d 519); Driscoll v. Austintown Assoc., 42 Ohio St.2d 263, 275, 71 O.O.2d 247, 253-254, 328 N.E.2d 395, 403.
{¶ 23} The village relies on Schomaeker v. First Natl. Bank of Ottawa (1981), 66 Ohio St.2d 304, 20 O.O.3d 285, 421 N.E.2d 530, and Fairview Gen. Hosp. v. Fletcher, supra, 63 Ohio St.3d 146, 586 N.E.2d 80, for the proposition that failure to exhaust administrative remedies deprives the trial court of subject matter jurisdiction to consider a declaratory judgment action. However, we agree with appellant Jones that neither case is apposite.
{¶ 24} In Schomaeker, a landowner sought a declaratory judgment stating that a use variance granted to a contiguous property owner for the construction of a parking lot was void. The Schomaeker plaintiff had participated in the administrative process from the beginning in an attempt to block the undesired use.
{¶ 25} The village‘s reliance on Schomaeker, however, is misplaced for two important reasons. First, appellant Jones is not situated similarly to the Schomaeker plaintiff, whose status was essential to the holding of that case. See Schomaeker at paragraph two of the syllabus. In Schomaeker, the plaintiff was a “person owning property contiguous to the proposed use who ha[d] previously indicated an interest in the matter by a prior court action challenging the use, and who [had] attend[ed] a hearing on the variance together with counsel * * * .” Id. Appellant Jones does not share any of the cited attributes.
{¶ 26} Second, the Schomaeker syllabus is inconsistent with the conclusion that failure to exhaust administrative remedies is a jurisdictional defect, but consistent with the conclusion that it is an affirmative defense. This is evidenced by the language of the third paragraph of the syllabus which does not mention subject matter jurisdiction, but does state that a person in Schomaeker‘s position “is not entitled to a declaratory judgment where failure to exhaust administrative remedies is asserted and maintained.” (Emphasis added.) Id. at paragraph three of the syllabus. If failure to exhaust remedies deprived the trial court of subject matter jurisdiction, the “asserted and maintained” language would amount to mere surplussage.
{¶ 27} Fairview Gen. Hosp. v. Fletcher is equally unavailing to the village‘s position. That case involved a declaratory judgment action filed by a hospital seeking a declaration that Ohio‘s certificate of need laws were inapplicable to the hospital‘s request for redesignation of the level of its neonatal intensive care unit. The Ohio Department of Health (“ODH“) argued for dismissal on the grounds that the hospital had failed to exhaust its administrative remedies before the Certificate of Need Review Board. We held that the declaratory judgment action should have been dismissed because it was “unavailable” under the failure-to-exhaust doctrine. Fairview Gen. Hosp. v. Fletcher, 63 Ohio St.3d at 152, 586 N.E.2d at 85.
{¶ 28} We did not, however, specifically state or even imply that failure to exhaust administrative remedies is a jurisdictional defect or that our opinion was based on such a rule. We merely affirmed the court of appeals’ holding that thе trial court erred in rejecting on summary judgment ODH‘s “affirmative defenses of exhaustion of remedies and res judicata.” Id., 63 Ohio St.3d at 147-148, 586 N.E.2d at 82.
{¶ 29} We therefore hold that the doctrine of failure to exhaust administrative remedies is not a jurisdictional defect to a declaratory judgment action; it is an affirmative defense that may be waived if not timely asserted and
{¶ 30} We observe that our holding is not to be read as a rejection of the force of the doctrine requiring exhaustion of administrative remedies in general. We agree with the United States Supreme Court and the courts of the many jurisdictions that have echoed the words of Myers v. Bethlehem Shipbuilding Corp. (1938), 303 U.S. 41, 50-51, 58 S.Ct. 459, 463, 82 L.Ed. 638, 644: “[It is] the long settled rule of judicial administration that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted.” (Footnote omitted.)
{¶ 31} Our decision today simply clarifies that under our adversarial system of justice it is the responsibility of the party seeking to benefit from the doctrine to raise and argue it. Once raised, it beсomes the duty of the trial court to determine upon consideration of the affirmative defenses and the elements of a declaratory judgment action, whether such action is proper. We do not perceive the obligation of arguing an affirmative defense to be unduly burdensome; it is consistent with the adversarial system of justice, and it protects the judiciary from the erosion of its authority represented by a holding that courts are without fundamental power to hear casеs expressly placed within their purview by the General Assembly through
{¶ 32} Accordingly, the judgment of the court of appeals is reversed, and the cause is remanded to the court of appeals to decide the issue presented for review by the parties, i.e., the proper interpretation of the village zoning ordinance.
Judgment reversed and cause remanded.
F.E. SWEENEY, PFEIFER and LUNDBERG STRATTON, JJ., concur.
DOUGLAS and RESNICK, JJ., concur in part and dissent in part.
COOK, J., dissents.
DOUGLAS, J., concurring in part and dissenting in part.
{¶ 33} I concur with the majority in reversing the judgment of the court of appeals. I dissent from the remand to the court of appeals.
{¶ 34} As I read the majority opinion, the trial court had jurisdiction to consider this matter. That being so, the trial court heard, decided, and entered judgment. Absent an abuse of discretion of the trial court in its definitional determination, a highly unlikely finding, the judgment of the trial court should be upheld.
RESNICK, J., concurs in the foregoing opinion.
COOK, J., dissenting.
{¶ 36} Because I believe the administrative remedy available to Jones is exclusive, I respectfully dissent.
{¶ 37} The majority states that it clarifies and follows Driscoll v. Austintown Assoc. (1975), 42 Ohio St.2d 263, 71 O.O.2d 247, 328 N.E.2d 395, in arriving at its conclusion. In Driscoll, this court held that constitutional challenges to a zoning ordinance may be brought in a declaratory judgment action provided that available administrative remedies are exhausted or the affirmative defense stemming from a failure to do so is waived. Driscoll, however, does not endorse declaratory judgment as an appropriate remedy for nonconstitutional review of zoning issues. In fact, thе Driscoll court noted, “It is quite possible that
{¶ 38} The sounder legal approach, I think, is to treat the administrative remedy available to Jones as his exclusive remedy. “This court has previously recognized that where the General Assembly has enacted a complete, comprehensive and adequate statutory scheme governing review by an administrative аgency, exclusive jurisdiction may be held to lie with such an agency.” State ex rel. Geauga Cty. Budget Comm. v. Geauga Cty. Court of Appeals (1982), 1 Ohio St.3d 110, 113, 1 OBR 143, 146, 438 N.E.2d 428, 431.
{¶ 39}
{¶ 40} Having expressed my opinion regarding the impropriety of bringing nonconstitutional challenges to zoning determinations in a declaratory judgment
{¶ 41} In dicta, the majority suggests that a landowner may immediately pursue a declaratory judgment when raising a constitutional challenge to a zoning determination.3 The rationale underlying the majority‘s conclusion is that resort to the administrative remedy would be futile, because administrative bodies are powerless to interpret the Constitution.
{¶ 42} While it is true that zoning boards have no power to interpret the Constitution, the administrative remedy available to Jones included an
{¶ 43} Driscoll validated a landowner‘s declaratory judgment action challenging the constitutionality of a township board of trustеes’ denial of a rezoning application. Such an action challenges a legislative function, and cannot be reviewed pursuant to
{¶ 44} The question in Driscoll, then, was whether the landowner‘s failure to utilize the variance procedure established by municipal ordinance and an
{¶ 45} In deciding that the landowner‘s administrative remedy was not exclusive, the Driscoll court failed to note specifically that
{¶ 46} In Karches v. Cincinnati (1988), 38 Ohio St.3d 12, 526 N.E.2d 1350,
{¶ 47} “The distinction between the two actions is important because in an
{¶ 48} Victory in an as-applied challenge to a zoning ordinance requires landowners to demonstrate that the ordinance denies them any economically viable use of their property and that the zoning, as applied to their property, does not advance a legitimate government interest. Karches, 38 Ohio St.3d at 19, 526 N.E.2d at 1357. An as-applied constitutional challenge to an administrative determination requires a landowner to demonstrate only that the ordinance, in proscribing the landowner‘s proposed use, bears no reasonable relationship to the legitimate exercise of police power by the municipality. Valley Auto Lease of Chagrin Falls, Inc. v. Auburn Twp. Bd. of Zoning Appeals (1988), 38 Ohio St.3d 184, 185, 527 N.E.2d 825, 827. “[The] test is not * * * whether any legal justification exists for a holding of the Board of Zoning Appeals, but rather whether the ordinance, in proscribing the landowner‘s proposed use of his land, bears a reasonable relationship to the public health, safety, welfare, or morals.” (Emphasis sic.) Cincinnati Bell, Inc. v. Glendale (1975), 42 Ohio St.2d 368, 370, 71 O.O.2d 331, 332, 328 N.E.2d 808, 809. Accordingly, a legitimate government interest for retaining the zoning classification will defeat an as-applied constitutional attack on an administrative determination and an as-applied constitutional attack on the zoning ordinance itself. Thus, there appears no reason to permit a declaratory judgment action for any as-applied constitutional challenge.
{¶ 49} The only other authority cited by the Driscoll and Karches courts for holding
{¶ 50} To date, this court has failed tо provide a proper analysis of whether, and to what extent,
{¶ 51} In my opinion, only those constitutional issues that cannot be reached in an