Lead Opinion
{¶ 1} Appellant, the city of Hillsboro, appeals the trial court’s judgment entered in favor of appellee, the Union Stock Yards Company. The trial court determined that a binding contract existed under which appellant agreed to purchase property from appellee for the price of $325,000. The court awarded appellee $140,000 in damages. Appellant argues that the trial court should have entered summary judgment in its favor. Appellant raises several subarguments in support of its assertion, but appellant’s essential argument is that no valid contract exists between the parties. We agree. The undisputed evidence shows that as a matter of law, no valid contract existed. Accordingly, we sustain appellant’s first assignment of error and reverse the trial court’s judgment. The remaining assignments of error are moot and we need not address them.
FACTS
{¶ 2} In the fall of 2007, the Hillsboro city council passed a resolution that authorized the mayor to enter into an agreement to purchase appellee’s real estate for a price not to exceed $325,000. The resolution stated: “The Mayor is hereby authorized and directed to enter into a purchase agreement for the real property located in the City of Hillsboro * * * from the Union Stockyards [sic, Stock Yards] Company for the purchase price not to exceed $325,000, upon the following conditions: (1) the purchase must be completed before the end of 2007 calendar year; (2) property must pass an environmental study and (3) if a new survey is required, the Seller will pay for the cost of the survey.” Although an agreement was prepared and appellee signed it, the mayor never executed an agreement to purchase the real estate.
{¶ 3} On February 7, 2008, appellee filed a complaint against appellant for breach of contract. Appellant subsequently filed a motion for judgment on the pleadings and later filed a summary-judgment motion. Appellant asserted that no contract existed because it did not execute the agreement and thus the purported contract does not comply with the statute of frauds. Appellant further argued that the contract is invalid for failing to comply with certain statutory provisions governing municipal contracts. Appellant also contended that even if the city council’s resolution could be construed as a contract, the contract contained three conditions, at least one of which remained unfulfilled. Appellant additionally argued that any promissory-estoppel or equitable-estoppel claim must fail because these doctrines are inapplicable against a political subdivision when the political subdivision is engaged in a governmental function.
{¶ 4} The trial court overruled both of appellant’s motions. At the trial, council member Charles Walker testified that he believed that the city had agreed to purchase the property but for whatever reason, the mayor decided in December that he wanted an appraisal. The mayor testified that the appraisal was conducted after the city council passed the resolution and that the property appraised at $185,000.
{¶ 5} On June 19, 2009, the trial court entered judgment in appellee’s favor. The court determined that the parties reached an oral agreement and that the resolution constituted “a sufficient writing signed by the city to be charged to remove this contract from the [statute of frauds].” The court awarded appellee $140,000 in damages.
II
ASSIGNMENTS OF ERROR
{¶ 6} Appellant timely appealed and raises the following assignments of error:
*568 First Assignment of Error:
The trial [court] erred in overruling appellant’s motion for summary judgment.
Second Assignment of Error:
The trial court erred in its determination that a valid real estate purchase contract existed between appellant and appellee even though appellant, the purchaser, did not execute said contract.
Third Assignment of Error:
The court erred in determining that plaintiff was ready, willing and able to close the transaction and that therefore, specific performance was appropriate.
Fourth Assignment of Error:
The decision of the court is against the manifest weight of the evidence in that requirements of Title 7 of the Ohio Revised Code which lists various formalities that are prerequisites in order to bind a municipal corporation to a contract were not met.
Ill
ANALYSIS
{¶ 7} In its first assignment of error, appellant argues that the trial court erred by denying its summary-judgment motion. The crux of this assignment of error is that a valid contract does not exist.
{¶ 8} When reviewing a trial court’s decision regarding a motion for summary judgment, appellate courts must conduct a de novo review. Doe v. Shaffer (2000),
{¶ 9} A trial court may grant a motion for summary judgment only when (1) the moving party demonstrates there is no genuine issue of material fact, (2) reasonable minds can come to only one conclusion, after the evidence is construed most strongly in the nonmoving party’s favor, and that conclusion is adverse to the opposing party, and (3) the moving party is entitled to judgment as a matter of law. Civ.R. 56; see also Bostic v. Connor (1988),
{¶ 11} In a case bearing facts similar to those in the case at bar, the Supreme Court of Ohio considered whether a city manager possessed authority to bind the city to a long-term lease. See Shampton v. Springboro,
{¶ 12} The court also rejected the plaintiffs promissory estoppel claim. The court explained:
To be successful on a claim of promissory estoppel, “[t]he party claiming the estoppel must have relied on conduct of an adversary in such a manner as to change his position for the worse and that reliance must have been reasonable in that the party claiming estoppel did not know and could not have known that its adversary’s conduct was misleading.” Ohio State Bd. of Pharmacy v. Frantz (1990),51 Ohio St.3d 143 , 145,555 N.E.2d 630 , citing Heckler v. Community Health Sew. (1984),467 U.S. 51 , 59,104 S.Ct. 2218 ,81 L.Ed.2d 42 . Persons seeking to enter into a contractual relationship with a governmental*570 entity are on constructive notice of the statutory limitations on the power of the entity’s agent to contract. Bohach v. Advery, Mahoning App. No. 00-CA-265,2002-Ohio-3202 ,2002 WL 1396744 . Since state and local laws are readily available for public review, it is a simple matter for a party to educate itself as to the procedural formalities with which government officials must comply before they may bind a governmental entity to a contract. Here, as noted previously, the charter and Resolution No. R-95-32 clearly did not grant Doczy the authority to enter into a long-term lease. As a result, even if Doczy did make any promises regarding the long-term lease, appellees could not have reasonably relied upon them. Liability does not attach to the city based on appellees’ mistaken interpretation of the resolution. Thus, appellees’ claim of promissory estoppel is without merit.
Our decision in this case is consistent with long-held principles of this court.
“ ‘An occasional hardship may accrue to one who negligently fails to ascertain the authority vested in public agencies with whom he deals. In such instances, the loss should be ascribed to its true cause, the want of vigilance on the part of the sufferer, and statutes designed to protect the public should not be annulled for his benefit.’ ” Lathrop Co. v. Toledo (1966),5 Ohio St.2d 165 , 173,34 O.O.2d 278 ,214 N.E.2d 408 , quoting McCloud & Geigle v. Columbus (1896),54 Ohio St. 439 , 452-453,44 N.E. 95 . Accord Lancaster v. Miller (1898),58 Ohio St. 558 ,51 N.E. 52 . Protection of the public’s resources in this context sometimes comes with a cost to misinformed parties.
Id. at ¶ 34-35.
{¶ 13} Similarly, in the case at bar, a plain reading of the city council’s l-esolution reveals not that the city council entered into a contract with appellee but that the city council authorized and delegated the authority to enter into the contract to the mayor. Because the mayor never entered into a contract with appellee, there is no valid contract upon which appellee can base its breach of contract claim.
{¶ 14} Moreover, even if one could construe the council’s resolution as a contract, the contract did not define the purchase price, but apparently left it open to further negotiation. There is no evidence that the city council consented, by its resolution, to purchase the property for $325,000. Instead, the evidence shows that the council’s resolution authorizes the purchase as long as the price does not exceed $325,000. No evidence exists that the mayor, the person to whom council gave the authority to contract, ever agreed to purchase the property for any price, let alone $325,000. Because there was no meeting of the minds regarding the purchase price, no valid contract exists.
{¶ 16} We further find the instant case similar to the facts presented in Asbury v. Hugh L. Bates Lodge No. 686 (1939),
[A] resolution to accept is not an acceptance * * *. It is not a memorandum of a promise, or acceptance of an offer, made to the lodge. It is evidence that the members of the lodge, or some of them, had agreed among themselves that the lodge would accept — not that it did accept. It was not itself a purchase. The members were not dealing with the offerors in passing this resolution. They were acting inter sese, and conferring authority upon their officers. It was an authorization to the master and wardens to act for the lodge in its dealings with the offerors. * * *
The fact that the offerors as members of the lodge were present and participated in the deliberations and actions, and, therefore, knew that the lodge, or certain members had concluded to accept, does not change the essential character of what was done.
Mere statements of intention, promissory expressions, or statements made to third persons are not sufficient, in themselves, to create contractual obligations. Such expressions, even though promissory in form, must be construed in the light of the surrounding circumstances, and as a normally constituted person would understand them.
(Citations omitted.) Id. at 433-434.
{¶ 17} A similar rationale applies in the case at bar. The city council, similar to the lodge members, passed a resolution authorizing the mayor to act for the city in its dealings with appellee. The council’s resolution did not constitute an acceptance of appellee’s offer to sell. The resolution contemplated that the mayor would take further action to complete the contract formation. The resolution authorized the mayor to purchase the property for a price not to
{¶ 18} In addition to basic contract formation requirements, a municipality may enter into a contract only as provided by statute. See Pugh v. Ned Peppers, Montgomery App. No. 22939,
Whatever the rule may be elsewhere, in this state the public policy, as indicated by our constitution, statutes and decided cases, is that, to bind the state, a county, or city for supplies of any kind, the purchase must be substantially in conformity to the statute on that subject, and that contracts made in violation or disregard of such statutes are void, not merely voidable, and that courts will not lend their aid to enforce such a contract, directly or indirectly, but will leave the parties where they have placed themselves. If the contract is executory, no action can be maintained to enforce it; and, if executed on one side, no recovery can be had against the party on the other side.
Id. at 419-420,
{¶ 19} For example, in Enviro-Flow Cos. Ltd. v. Chauncey, Athens App. No. 07CA5,
R.C. 731.141 requires both the Village Administrator and the Village Clerk to sign the contract. In addition, the contract does not appear to conform to R.C. 705.11 (Village Solicitor is required to approve the contract as to form.). “ [‘JWe think there is no hardship in requiring [contractors], and all other parties who undertake to deal with a municipal body in respect of public improvements, to investigate the subject, and ascertain at their peril whether the preliminary steps leading up to contract, and prescribed by statute, have been taken}’] ” * * * Lathrop Co. v. City of Toledo (1966),5 Ohio St.2d 165 , 173[,34 O.O.2d 278 ,214 N.E.2d 408 , quoting McCloud & Geigle v. Columbus (1896),54 Ohio St. 439 , 452,44 N.E. 95 ].
Id. at ¶ 15. We further determined that Enviro-Flow could not maintain an unjust-enrichment action against the village. We noted that the unjust-enrichment claim “sound[ed] in promissory estoppel” and that this doctrine does not apply “ ‘against a political subdivision when the political subdivision is engaged in a governmental function.’ ” Id. at ¶ 16, quoting Hortman v. Miamisburg,
{¶ 20} Other than the applicable statute, we find Enviro-Flow indistinguishable from the case at bar. In both cases, the contract fails to comply with the statute specifying the requirements for a municipal contract. R.C. 705.11, which is similar to the statute we considered in Enviro-Flow, states that “[n]o contract with the municipal corporation shall take effect until the approval of the village solicitor or city director of law is indorsed thereon.” Here, there is absolutely no dispute that the director of law failed to indorse his approval on the alleged contract. Therefore, in accordance with our Enviro-Flow decision, we agree with appellee that the alleged contract is null and void due to noncompliance with proper statutory procedures, i.e., R.C. 705.11. See Wright v. Dayton,
{¶ 21} Furthermore, we observe that R.C. 731.05 governs the powers of a city council and states: “All contracts requiring the authority of the legislative authority for their execution shall be entered into and conducted to performance by the board or officers having charge of the matters to which they relate. After the authority to make such contracts has been given and the necessary appropriation made, the legislative authority shall take no further action thereon.” This statute apparently does not give the city council the authority to execute a contract. Rather, that duty belongs to the mayor. See Coyne v. Salvatore, Cuyahoga App. Nos. 79507, 79509, and 79510,
{¶ 22} Moreover, appellee’s estoppel claim must fail because appellee cannot prove that it justifiably relied on the city council’s resolution when that resolution constituted only an authorization for the mayor to enter into a contract.
{¶ 23} Accordingly, because the undisputed evidence shows that the mayor did not enter into a contract with appellee, no valid contract exists. Additionally, any alleged contract is null and void due to noncompliance with statutory procedures. Thus, the trial court erroneously denied appellant’s summary-judgment motion. Consequently, we sustain appellant’s first assignment of error and reverse the trial court’s judgment. The remaining assignments of error are moot, and we need not address them. See App.R. 12(A)(1)(c).
Judgment reversed.
Notes
. We observe that the Supreme Court of Ohio held in Hortman,
Concurrence Opinion
concurring.
{¶ 24} I concur in judgment and opinion with one exception. That is, I believe that purchasing real estate for the construction of a fire station is a governmental function. Under R.C. 2744.01(C)(2)(a), “[a] ‘governmental function’ includes * * * [t]he provision or nonprovision of police, fire, emergency medical, ambulance, and rescue services or protection.” (Emphasis added.) And in my view,