582 N.E.2d 1071 | Ohio Ct. App. | 1990
Defendant, state of Ohio, Department of Administrative Services, Division of Public Works ("state"), appeals from a judgment of the Franklin County Common Pleas Court awarding plaintiff, Judith Ann Poenisch, Trustee of the Barbara M. Brant Trust, money pursuant to a lien plaintiff filed on public funds. Defendant-state raises the following assignments of error:
"1. The trial judge improperly ruled that, pursuant to Chapter 1311 of the Ohio Revised Code, liens attached to the original appropriation for construction contracts regardless of whether any funds are due the principal contractor.
"2. The trial judge improperly ruled that, pursuant to Chapter 153 of the Ohio Revised Code, payment under a state construction contract is due the principal contractor before such funds are requested and the request has been approved by the State of Ohio.
"3. The trial judge improperly ruled that, the court of common pleas has jurisdiction over money damages against the State of Ohio."
The other defendants named by plaintiffs in this action are: Kingsley-Dunbar, Inc., a general contractor who entered into a contract with the state for the construction of the Franklin County Reintegration Center; Allied Fidelity Insurance Co., and Century Surety Co., who issued performance bonds for defendant Kingsley-Dunbar.
The construction site abutted property owned by plaintiffs, trustees of the Barbara M. Brant Trust. Plaintiffs' property contained gravel which defendant *702
Kingsley-Dunbar sought for use in its construction project. Defendant Kingsley-Dunbar agreed to pay plaintiffs for the excavation of gravel from their property. When payment was not received by plaintiffs, they filed a lien against public funds held by the state pursuant to R.C.
Not receiving what plaintiffs felt was due them, they filed a complaint against the above-named defendants. After many pleadings, a settlement was reached, and an agreed entry was filed which provides in pertinent part:
"6. Poenisch/Barbee, Trustees have filed a lien against certain funds (hereinafter, the `Funds') otherwise payable to Kingsley-Dunbar by Ohio concerning the construction project which is the subject of the plaintiffs' Complaint. This Poenisch/Barbee, Trustees' lien is a valid lien against the Funds, pursuant to the provisions of the Ohio Revised Code, and, accordingly, Ohio shall pay to Poenisch/Barbee, Trustees theappropriate amount of such Funds payable under Chapter 1311 ofthe Ohio Revised Code. The Kingsley-Dunbar portion of the construction project in question is completed. All subcontractors and materialmen who have furnished materials or performed labor under contract with Kingsley-Dunbar for the construction of the Franklin County Reintegration Center have been paid in full. There are no outstanding liens against funds payable to Kingsley-Dunbar except as reflected in the files of the Department of Administrative Services, Division of Public Works. Kingsley-Dunbar shall prepare and submit to Ohio anappropriate final pay request as expeditiously as possible." (Emphasis added.)
Several months after the agreed entry was filed, plaintiffs filed a motion to enforce the settlement agreement with regard to defendant state's obligations. Plaintiffs requested that the state pay interest on funds previously held by the state, relying upon R.C.
Defendant state's assignments of error will be addressed by examining the third assignment of error first as it raises a threshold jurisdictional question. Following that determination, defendant state's first and second assignments of error will be discussed together.
Defendant state contends in its third assignment of error that the court of common pleas did not have jurisdiction to order the defendant state to pay interest. Rather, the defendant state contends that such an action is for money damages against the defendant state and, as such, only the Court of Claims has jurisdiction. *703
Pursuant to R.C.
"The state hereby waives its immunity from liability and consents to be sued, and have its liability determined, in the court of claims created in this chapter in accordance with the same rules of law applicable to suits between private parties * * *. To the extent that the state has previously consented to besued, this chapter has no applicability." (Emphasis added.)
Insofar as the issue raised in this case is concerned, the important sentence of that provision is the one emphasized above.
As reasoned by the Ohio Supreme Court in Racing Guild ofOhio, Local 304 v. State Racing Comm. (1986),
"Thus, to the extent that any actions were permitted against state * * * agencies in a court of common pleas prior to the enactment of R.C. Chapter 2743, those actions may be maintained against the state in a court of common pleas subsequent to the enactment of R.C. Chapter 2743. R.C.
The issue before this court then becomes whether this type of action (for payment pursuant to R.C.
This court recently addressed this issue in BasicConstruction Materials v. Seiter (June 6, 1989), Nos. 88AP-796 and 88AP-812, unreported, 1989 WL 61758. Relying upon the Ohio Supreme Court's holding in State, ex rel. Nixon, v. Merrell
(1933),
Furthermore, in Merrell, the court reasoned at 244,
As an action for the enforcement of mechanic's liens against a public fund held by the state as a mere stakeholder existed prior to the enactment of R.C. Chapter 2743, R.C.
Having determined that the trial court properly had jurisdiction to make its determination, we now turn to the propriety of that determination. Defendant state contends in its first and second assignments of error that the trial court incorrectly ruled that the defendant state owed interest upon the funds paid plaintiffs. Defendant state's underlying contention is that while interest in some cases may be properly payable pursuant to R.C.
R.C.
R.C.
After detaining the appropriate amount of money from subsequent payments of the contractor, these funds are placed into an escrow account until the dispute regarding to whom the funds belong is resolved. In other words, such an account protects all involved parties until priorities are established and disputes resolved.
R.C.
Pursuant to this statutory framework, a materialman who is owed money by the general contractor only may retain a lien upon payments that are due the principal contractor. It follows that the lien, although properly filed, does not attach to the funds until those funds are due the principal contractor. *705
This court has reached a similar conclusion in two recent cases, L.E. Myers Co. v. Jordano Electric Co. (1988),
In Jordano, we held that if the principal contractor has been fully paid, thus with no more payments due it, the subcontractor is not entitled to recover on liens filed against the owner. In reaching such a conclusion we relied upon Lee TurzilloContracting Co. v. Cincinnati Metro. Housing Auth. (1967),
"Compliance with Section
As the lien may attach only to subsequent payments, and there were no such payments in Jordano, the subcontractor had no right to payment by virtue of its lien.
A close reading of the statutes and the purposes underlying them lead us to a similar conclusion here. While R.C.
Furthermore, the underlying principle of R.C.
"Section
Even if the lien does not attach until the money is owed the contractor, the subcontractor or materialman is still protected.
Plaintiffs rely upon the recent Supreme Court case ofState, ex rel. Dinneen Excavating Co., v. Sykes (1988),
Having determined that there is no duty upon the owner to place the funds into escrow until they are "due" the principal contractor and a dispute arises regarding the proper payment of them, we turn now to the facts of this case.
The agreed entry of judgment is of little help as it merely states that defendant state agrees to pay plaintiffs, pursuant to their valid lien, "* * * the appropriate amount of such Funds payable under Chapter 1311 of the Ohio Revised Code. * * *" Furthermore, it was agreed by all parties that the principal contractor would submit a final pay request to the defendant state.
Although the trial court held a hearing to determine "the appropriate amount," no decision was reached. Instead, when asked if it was ordering the defendant-state to pay interest, the court replied: "I'm directing you to observe to the letter the judgment entered May 9th, 1988. You fellows made that entry, and if you don't know what it means, I don't."
Obviously, the parties did not know or more appropriately could not agree as to the meaning of the "appropriate amount," which was the reason for asking the court to make the determination. Accordingly, we sustain defendant state's first and second assignments of error and remand this action for factual determinations consistent with the law as set forth in this opinion. Upon remand, the trial court should restrict its inquiry to the date the money became properly payable to the principal contractor. It is that date which will determine whether interest is owed plaintiffs.
For the foregoing reasons, defendant state's first and second assignments of error are sustained while defendant state's third assignment of error is overruled. The judgment of the Franklin County Court of Common Pleas is *707 reversed and this cause is remanded for further consideration consistent with this opinion.
Judgment reversedand cause remanded.
REILLY and BOWMAN, JJ., concur.
JOSEPH D. KERNS, J., retired, of the Second Appellate District, was assigned to active duty under authority of Section