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Alternatives Unlimited-Special, Inc. v. Ohio Dep't of Education

December 9, 2008

ALTERNATIVES UNLIMITED-SPECIAL, INC. ET AL., PLAINTIFFS-APPELLANTS,
v.
OHIO DEPARTMENT OF EDUCATION, DEFENDANT-APPELLEE.



APPEAL from the Ohio Court of Claims. (C.C. No. 2002-04682).

The opinion of the court was delivered by: Brown, J.

(ACCELERATED CALENDAR)

OPINION

{¶1} Plaintiffs-appellants, Alternatives Unlimited-Special, Inc. (individually "AU-Special"), and Alternatives Unlimited, Inc. (individually "AU, Inc.") (collectively referred to as "appellants"), appeal from a judgment of the Ohio Court of Claims, in which the court granted partial summary judgment to defendant-appellee, Ohio Department of Education ("ODE").

{¶2} AU, Inc. is a for-profit Maryland corporation. AU-Special is a non-profit corporation. Both AU, Inc. and AU-Special were engaged in activities relating to the formation of community schools. One month before AU-Special was formally incorporated, representatives from AU-Special faxed ODE a proposal to create a community school, the Cleveland Alternative Learning Academy ("CALA"). The proposal identified various individuals as the principal developers of CALA. AU-Special and ODE eventually agreed that the state board of education, through ODE would sponsor CALA. ODE executed a five-year contract beginning September 1, 1999, and ending June 30, 2004, to operate the school for students enrolled in grades three, four, five, and six.

{¶3} Parents of enrolled and prospective students expressed a desire to have younger and older students attend CALA, and CALA subsequently also enrolled children in grades two, seven, and eight for the 1999-2000 school year. On October 18, 1999, appellants sent ODE a letter requesting approval of the expanded enrollment, but CALA did not wait for approval before enrolling the students in grades two, seven, and eight for the 1999-2000 and 2000-2001 academic years. ODE refused to modify the contract and provide funds for students in the additional grades until certain actions were taken by AU-Special. The contract was never modified, and ODE provided no funding for the students enrolled in grades two, seven, and eight. Due to funding problems related to students enrolled in grades two, seven, and eight, as well as other funding issues, CALA closed during the 2001 school year.

{¶4} On May 7, 2002, appellants filed suit against ODE in the Court of Claims, asserting two causes of action for breach of contract, which included claims for promissory estoppel and unjust enrichment. Appellants generally sought declaratory judgment and monetary damages for ODE's failure to pay for all of the students actually enrolled and taught at CALA, as well as the alleged invalid, unilateral rescission of the contract. ODE countered that it owed no obligation to provide funding for students improperly enrolled in grades two, seven, and eight, and that certain individuals associated with appellants were entitled to rescind the contract as the governing authority. ODE also asserted that appellants lacked standing to bring suit on the contract.

{¶5} The issues of liability and damages were bifurcated, and the case eventually proceeded to trial regarding liability only on July 12, 2004. On September 15, 2005, the trial court issued its judgment in favor of ODE, concluding that neither AU-Special nor AU, Inc. was a party to the contract as the governing authority for CALA, and, thus, they lacked standing to pursue their claims for breach of contract. Appellants appealed, and in Alternatives Unlimited-Special, Inc. v. Ohio Dept. of Edn., 168 Ohio App.3d 592, 2006-Ohio-4779 ("Alternatives I"), this court reversed the judgment of the trial court, finding ODE was estopped from denying appellants' standing based upon an unrelated case in another appellate jurisdiction, in which the state and appellants agreed that appellants were the "governing authority" for CALA, and, thus, were the proper party in the present case. This court remanded the matter to the Court of Claims.

{¶6} Upon remand, prior to trial, ODE moved for partial summary judgment, arguing that the contract between the parties was never modified to include funding for grades two, seven, and eight. After an oral hearing on ODE's motion for partial summary judgment, at which appellants did not appear, the trial court granted ODE's motion. On April 23, 2008, appellants moved to amend their complaint to dismiss without prejudice all remaining claims not related to the funding for grades two, seven, and eight. On May 2, 2008, the trial court entered judgment for ODE. Appellants appeal, asserting the following assignments of error:

[I.] The trial court erred by refusing a new trial as remanded expressly by the Court of Appeals.

[II.] The trial court erred by concluding that the State may deny per-pupil public funding for students actually taught at a community school[.]

{¶7} In their first assignment of error, appellants argue that the trial court erred when it refused to proceed to a new trial upon remand as this court expressly ordered in Alternatives I. Specifically, appellants argue that the trial court erred when it granted ODE partial summary judgment on its breach of contract claims because this court's decision in Alternatives I required the trial court to hold a new trial. We disagree. In Alternatives I, we found that "appellants' breach-of-contract claims have not yet been meaningfully addressed or determined." Alternatives I, at ¶52. We then concluded that "[h]aving determined that the state is estopped from denying appellants' standing, we reverse the decision of the trial court and remand this cause to the trial court for determination of appellants' asserted breach of contract claims." Id., at ¶53. We did not indicate that the trial court had to resolve the breach of contract claims pursuant to a trial. Rather, the trial court was free to address appellants' breach of contract claims upon motion for summary judgment, as it did. In Alternatives I, we required only that the trial court make a "determination" of appellants' breach-of-contract claims, and it is clear that "summary judgment is a determination as a matter of law." Yo-Can, Inc. v. The Yogurt Exchange, Inc., 149 Ohio App.3d 513, 2002-Ohio-5194, at ¶13.

{¶8} Furthermore, it is well-established that remand does not inherently require a new hearing. Webb v. Webb (Sept. 2, 1999), Marion App. No. 9-98-66. When a judgment is reversed and remanded for further proceedings, the trial court may take up the matter at the point where the first error was committed. Miller v. Miller (1960), 114 Ohio App. 234. Where there are no specific instructions given by the appellate court for the trial court to take new evidence before rendering another judgment, no new hearing is required upon remand. See Webb, supra. Also, where the evidence taken in the original action prior to appeal is sufficient evidence upon which to make the findings required by the remand, the trial court may decide the matter based upon the prior evidence without a new hearing. See id.

{ΒΆ9} In the present case, the error found on appeal regarded the standing of appellants. No error was found with regard to the funding for grades two, seven, and eight. The trial court committed the error regarding standing after holding a full liability trial. Given our remand did not direct the trial court to hold a new hearing and take new evidence, it was permitted to determine the remaining issues as of the point it committed the error, which was after all of the evidence had been submitted at the full hearing. The trial court believed the evidence taken in the original hearing was adequate ...


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