Opinion
Nos. 79-630 and 79-716
Decided July 9, 1980.
Municipal corporations — Concession contracts — Properly terminated, when — Actions — Voluntary dismissal ineffectual, when — Civ. R. 41(A)(1)(a), construed — Appeal — Order not appealable, when.
APPEALS from the Court of Appeals for Cuyahoga County.
On August 24, 1970, the city of Cleveland and Refreshment Services Company, Inc., entered into a contract wherein the city granted Refreshment Services an exclusive ten-year license to operate the food and beverage concessions in the city's public auditorium. The contract provided, under Article XXVIII, that the concession agreement was terminable if the city's board of control found such termination to be in the public interest.
The facts most pertinent to case No. 79-630 are as follows: On January 18, 1978, the board of control, subsequent to an investigation by the director of public properties, passed a resolution terminating the concession contract with Refreshment Services, effective February 20, 1978. Thereafter, on February 16, 1978, Refreshment Services filed a complaint and a motion for a temporary restraining order in the Court of Common Pleas of Cuyahoga County to bar the termination of the contract and to prevent the issuance of a contract to another concessionaire. On the same day, a complaint was filed by the city requesting preliminary and permanent injunctions enforcing its termination resolution, and compensatory and punitive damages amounting to $1,000,000 and $2,000,000, respectively.
The trial court, on March 7, 1978, granted the city's motion to consolidate the claims for injunctive relief, and retained jurisdiction of the claim for damages. A hearing was conducted on the consolidated claims for injunctive relief, and the court found that the city, prior to the termination of the concession contract, did not make "a good faith determination of public interest," and ruled that the "basic standards of due process***were not adhered to." The court held further that the purported termination of the contract was a nullity and denied the injunctive relief requested by the city. Thereafter, on March 8, 1978, the city voluntarily dismissed its pending claim for damages.
On March 21, 1978, Refreshment Services filed a supplemental complaint and counterclaim seeking, inter alia, compensatory and punitive damages for the alleged interference with its rights and privileges under the concession contract. The city filed a motion to strike the supplemental complaint and counterclaim, arguing that because "final judgment has been entered in this action***except [for] those issues which were dismissed by the Notice of Dismissal filed on March 8, 1978***there is***no pending***action in which the Supplemental Complaint***may be filed." The trial court granted the motion to strike.
Upon appeal, the Court of Appeals affirmed the denial of the city's request for an injunction to enforce the termination of the concession agreement. In addition, the court reversed the ruling on the motion to strike, finding that the city was unable to unilaterally dismiss its pending damage claim because the "trial" in that cause had commenced within the meaning of Civ. R. 41(A)(1)(a).
The facts pertinent to case No. 79-716 are as follows: On March 8, 1978, subsequent to the trial court's denial in case No. 79-630 of the city's request for a temporary and permanent injunction to enforce its termination resolution of January 18, 1978, the city enacted resolution No. 85-78 which again terminated its concession agreement with Refreshment Services. Prior to the passage of the resolution, Refreshment Services' counsel received a bill of complaints which served as the foundation for the termination of the contract, and a hearing was conducted on the matter. On March 21, 1978, the city instituted an action in the Court of Common Pleas of Cuyahoga County to enforce its termination resolution and to obtain damages for alleged overcharges to customers and underpayments of rental fees during Refreshment Services' tenure as concessionaire. On April 3, 1978, Refreshment Services filed an answer, third party complaint, and a counterclaim seeking, inter alia, injunctive relief and compensatory and punitive damages amounting to $50,000 and $150,000, respectively. By judgment entry dated April 13, 1978, the trial court upheld the city's termination of the concession contract and found that it properly exercised its discretion in the public interest. Accordingly, the city's request for injunctive relief was granted. The court expressly provided, however, that it would retain jurisdiction to resolve the remaining claims in the complaint.
On April 13, 1978, Refreshment Services filed a notice of appeal with the Court of Appeals for Cuyahoga County. By judgment entry dated March 8, 1979, the appeal was dismissed for the reason that because the monetary claims of the parties were unresolved in the trial court, the order appealed from was not a final one.
This consolidated appeal is now before this court pursuant to the allowance of motions to certify the record.
Bernard Haffey Co., L.P.A., and Mr. J. Ross Haffey, Jr., for appellee and appellant Refreshment Services Company, Inc.
Mr. Thomas E. Wagner, director of law, and Mr. Mark J. Valponi, for appellant and appellee city of Cleveland.
I.
The fundamental issue presented by case No. 79-630 is whether the city of Cleveland terminated its concession contract with Refreshment Services in accordance with the termination procedure set forth in that agreement. Article XXVIII of the contract provides that the "city shall have the right to terminate this concession agreement at any time on thirty (30) days written notice to concessionaire if and when by resolution of the board of control the city determines such termination is in the public interest."
It was the Court of Appeals' conclusion that the city's termination of the contract was invalid primarily because the evidence failed to indicate that a good faith termination was made in the public interest. The city argues that the termination of the contract was a discretionary act by the city, expressly authorized by the contract, which is entitled to a presumption of good faith.
Paragraph one of the syllabus in Cincinnati v. Wegehoft (1928), 119 Ohio St. 136, 162 N.E. 389, states:
"The courts will not restrain, by injunction, the duly elected or appointed officials of a municipality, who are duly empowered by the municipality to select and acquire sites for and to erect thereon municipal buildings, from carrying out such conferred power where there is no gross abuse of discretion or bad faith on the part of such officers, claimed or established."
In State, ex rel. Shafer, v. Ohio Turnpike Comm. (1953), 159 Ohio St. 581, 590, 113 N.E.2d 14, this court acknowledged that "***in the absence of evidence to the contrary, public officers, administrative officers and public boards, within the limits of the jurisdiction conferred by law, will be presumed to have properly performed their duties and not to have acted illegally but regularly and in a lawful manner. All legal intendments are in favor of the administrative action. 42 American Jurisprudence, 680, Section 240; Bloch v. Glander, Tax Commr., 151 Ohio St. 381, 86 N.E.2d 318; State, ex rel. Gerspacher, v. Coffinberry et al., Industrial Commission, 157 Ohio St. 32, 104 N.E.2d 1; Wheeling Steel Corp. v. Evatt, Tax Commr., 143 Ohio St. 71, 54 N.E.2d 132."
Article XXVIII of the concession contract conferred upon the city's board of control the discretion to terminate the agreement when the board, by resolution, determined that the contract was no longer in the public interest. In accordance with Article XXVIII of the contract, the board of control determined that it was in the public interest to terminate the concession agreement and approved a resolution to that effect. A review of the four corners of the contract does not demonstrate that Refreshment Services' rights were abridged by this administrative action. Furthermore, the presumption that the discretionary action by the board was in good faith has not been rebutted. Under such circumstances, a court will not substitute its judgment for that of the administrative officials. E.g., Cincinnati v. Wegehoft, supra; State, ex rel. Shafer, v. Ohio Turnpike Comm., supra; State, ex rel. Christman, v. Skinner (1933), 127 Ohio St. 55, 186 N.E. 738.
The city contends that, under Civ. R. 41(A)(1)(a), the trial and resolution of one count of a multiple count action does not preclude a plaintiff from voluntarily dismissing the remaining counts prior to the commencement of trial thereon. Thus, it is argued that the trial court did not err when it granted the city's motion to strike the supplemental complaint and counterclaim filed by Refreshment Services, as such filing occurred after the remaining claims in that action had been properly dismissed.
In our judgment, the city's voluntary dismissal of the remaining counts of its action against Refreshment Services was ineffectual, and the trial court should not have granted the city's motion to strike. Civ. R. 41(A)(1)(a) permits the voluntary dismissal of an action if the plaintiff files "a notice of dismissal at any time before the commencement of the trial." The city's voluntary dismissal was filed after the trial court had consolidated the claims for injunctive relief, conducted a hearing on these claims, and denied the city's request for an injunction. In its judgment entry of March 7, 1978, the trial court expressly retained jurisdiction of the cause to dispose of the unresolved claims for damages. Therefore, on March 8, 1978, when the city filed its purported dismissal of its pending damage claims, a trial on the city's action had already commenced within the meaning of Civ. R. 41(A)(1)(a). The fact that the trial court bifurcated the action for resolution does not in and by itself warrant the treatment of each count as a separate action. See R.C. 2307.01 and 2307.02; R.C. 2311.01; Civ. R. 2; 24 American Jurisprudence 2d 4, 5, Section 1.
Accordingly, the judgment of the Court of Appeals in case No. 79-630 is reversed in part and affirmed in part. The cause is remanded for further proceedings not inconsistent with this opinion.
II.
In case No. 79-716, Refreshment Services asserts that the Court of Appeals erroneously held that the trial court's issuance of the preliminary injunction was not a final appealable order. It is argued that the determination of appealability is governed by R.C. 2505.02, and because the decision of the trial court affected a substantial right and determined the action, the court's entry was a final appealable order.
R.C. 2505.02 provides, in part:
"An order affecting a substantial right in an action which in effect determines the action and prevents a judgment, an order affecting a substantial right made in a special proceeding or upon a summary application in an action after judgment, or an order vacating or setting aside a judgment and ordering a new trial is a final order which may be reviewed, affirmed, modified, or reversed, with or without retrial."
A review of the judgment of the trial court demonstrates that the court did not determine the action so as to prevent a judgment within the meaning of R.C. 2505.02. To the contrary, the court in its judgment entry stated, "[t]he court retains jurisdiction of the remaining claims of the complaint and counterclaim." In its memorandum of opinion, the court stated also that the other portions of the case would be decided at subsequent hearings. During these hearings, the court possessed the right, under Civ. R. 54(B), to revise its judgment entry "at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties." Thus, the Court of Appeals properly dismissed the appeal as it is clear that the action was not determined so as to prevent a judgment but was in actuality still pending in the lower court.
Civ. R. 54(B) provides:
"When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim or third-party claim, or when multiple parties are involved, the court may enter final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay. In the absence of such determination, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties."
Accordingly, the judgment of the Court of Appeals in case No. 79-716 is affirmed.
Judgment affirmed in part and reversed in part in case No. 79-630.
Judgment affirmed in case No. 79-716.
CELEBREZZE, C.J., HERBERT, BELL, P. BROWN, SWEENEY and LOCHER, JJ., concur.
HOLMES, J., dissents in case No. 79-630 and concurs in case No. 79-716.
BELL, J., of the Ninth Appellate District, sitting for W. BROWN, J.