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City of Dublin v. Friedman

Court of Appeals of Ohio, Tenth District

December 19, 2017

City of Dublin, Plaintiff-Appellee,
v.
Karen Michelle R. Friedman et al., Defendants-Appellees, CHKRS, LLC, Defendant-Appellant.

         APPEAL from the Franklin County Court of Common Pleas No. 15CV-8664

         On brief:

          Frost Brown Todd, LLC, Philip K Hartmann, Scott D. Phillips, and Yazan S. Ashrawi, for City of Dublin.

          Karen Edwards-Smith; Warner Mendenhall, for appellant.

         Argued:

          Yazan S. Ashrawi.

          Karen Edwards-Smith.

          DECISION

          BROWN, J.

         {¶ 1} Defendant-appellant, CHKRS, LLC, appeals from a judgment of the Franklin County Court of Common Pleas, granting the motion of defendant-appellee, Karen Michelle R. Friedman, to withdraw funds deposited by plaintiff-appellee, city of Dublin, and holding that Dublin properly exercised its quick-take condemnation authority. Because (1) CHKRS did not procure on the purchase option pursuant to the lease, (2) CHKRS's challenge to Dublin's exercise of its quick-take authority is moot, and (3) the trial court did not abuse its discretion in denying CHKRS's motion for leave to amend its answer, we affirm.

         {¶ 2} On September 30, 2015, Dublin filed a complaint for appropriation of an interest in Friedman's property. Dublin is a municipal corporation, and Friedman is the owner of real property located at 6310 Riverside Drive, Dublin, Ohio. On February 9, 2015, Dublin City Council passed a resolution declaring Dublin's intent to acquire a 0.100-acre permanent easement and a 0.096-acre temporary easement in Friedman's property, "for the public purpose of constructing a roundabout at the intersection of State Route 161 and Riverside Drive and a shared-use path adjacent to Riverside Drive." (Compl., Ex. A.) The easements on Friedman's property concern the shared-use path portion of the project; the description of the permanent easement states that it is a "0.100 ACRE PERMANENT BIKE PATH EASEMENT." (Emphasis sic.) (Compl., Ex. D.) On February 23, 2015, Dublin City Council passed an "emergency" ordinance, authorizing Dublin's law director to "file a petition for appropriation" of Friedman's property. (Compl., Ex. B.)

         {¶ 3} Dublin asserted in the complaint that it intended "to take immediate possession of the property interest appropriated." Dublin stated that its independent appraiser found the value of the easements to be $25, 080, and that it had deposited the $25, 080 "in accordance with Chapter 163 of the Ohio Revised Code and the Ohio Constitution." (Compl., at ¶ 11.)

         {¶ 4} After filing the original complaint, Dublin learned that CHKRS had a leasehold interest in the property pursuant to an unrecorded lease with Friedman. Dublin filed an amended complaint on October 21, 2015, adding CHKRS as a defendant to the action.

         {¶ 5} On November 20, 2015, Friedman filed an answer to the complaint, denying that Dublin sought the easements "for roadway purposes." Friedman alleged that Dublin sought the easements "solely and only to construct a bike path and sidewalk, " and that Dublin did not have the "right to take immediate possession" of the property for such uses. (Friedman Answer at ¶ 8, 11.)

         {¶ 6} On November 23, 2015, CHKRS filed an answer alleging Dublin had already taken possession of the property, "taken down numerous trees in the permanent and temporary easement areas, " and "destroyed the natural beauty of a rocky ravine." (CHKRS's Answer at ¶ 5.) CHKRS asserted that Dublin's "appropriation of interests in and portions of Defendant's property to improve a public road [were] not necessary." (CHKRS's Answer at ¶ 8.)

         {¶ 7} On November 30, 2015, Friedman filed a motion for distribution of the $25, 080 deposit. CHKRS filed a brief in response to Friedman's motion for disbursement, noting it had an "interest in the property" and asking the court to "make distribution of the deposit accordingly." (CHKRS's Response at 3.) The court scheduled the matter for a March 4, 2016 pretrial conference.

         {¶ 8} On March 9, 2016, the court issued a journal entry regarding the March 4 pretrial conference. The court noted that the conference "was held on the record, " and that counsel "for all parties were present, as were representatives of the parties." The court noted that, although both defendants challenged "whether the Project qualifies for 'quick take' treatment under the Ohio Constitution, " neither defendant "sought an injunction." (Mar. 9, 2016 Entry at 1.) Friedman and Dublin informed the court they had "agreed upon a final settlement, " if the court ruled that the condemnation award belonged to Friedman. (Mar. 9, 2016 Entry at 2.) The court concluded, over CHKRS's objection, that it should "first address which defendant is entitled to the deposit." (Mar. 9, 2016 Entry at 1.)

         {¶ 9} The court stated the parties had stipulated to certain "undisputed facts the court may consider in issuing a ruling on the distribution motion, and to the extent necessary on the meaning of ¶ 31 of the lease." The parties "stipulated * * * that CHKRS is current on their rent; and that CHKRS has not exercised the option to purchase." (Mar. 9, 2016 Entry at 2.) Paragraph 31 of the lease, titled "Funds Issued From City of Dublin and/or ODOT, " states that "[a]ny monies dispersed by the City of Dublin or ODOT are payable to Karen Michelle Friedman until the Lessee has procured on the purchase option." (CHKRS's Answer, Ex. A ("Lease") at ¶ 31.)

         {¶ 10} On March 11, 2016, Friedman filed a brief stating that, as CHKRS had not "procured on its option to purchase the Property, " the lease required that "all of the monies associated with Dublin's appropriation must be distributed to Friedman." (Friedman's Brief at 2.)

         {¶ 11} CHKRS filed a brief in opposition to Friedman's brief on March 18, 2016, stating that, "on March 7, 2016 CHKRS, LLC exercised the option to purchase the property." (Emphasis sic.) (CHKRS's Brief in Opposition at 1.) CHKRS asserted that it now had "a contract to purchase the property, " and that Friedman could not convey the easements to Dublin, as she had "promised to transfer all of the property to CHKRS upon its exercise of the option." (CHKRS's Brief in Opposition at 1-2.) CHKRS attached the affidavit of Robert G. Smith to its brief, in which Smith averred that he was "a member of CHKRS, LLC" and had "exercised CHKRS, LLC's option to purchase 6310 Riverside Drive." (Smith Aff. at ¶ 1, 2.) A copy of the March 7 e-mail from Smith to Friedman was attached to Smith's affidavit. The e-mail states, "[l]et this serve as 30 day notice per the Lease Agreement * * * that CHKRS, LLC, is exercising its option to purchase said property." (Smith Aff, Ex. 1.)

         {¶ 12} On March 31, 2016, CHKRS filed a motion for leave to amend its answer. CHKRS asserted that, as it had "exercised its option to purchase the property, " it had counterclaims and cross-claims which "matured after the City filed its amended complaint." (CHKRS's Mot. to Amend Answer at 1.)

         {¶ 13} On June 3, 2016, the court issued a journal entry denying CHKRS's motion for leave to amend its answer, granting Friedman's motion to withdraw the deposit, and holding that Dublin properly exercised its quick-take authority. Regarding the motion to withdraw, the court concluded that CHKRS had "not 'procured' the property" pursuant to ¶ 31 of the lease, as "there was never a closing." The court also noted that CHKRS had stipulated at the March 4, 2016 conference "that the Option had never been exercised and more importantly asked for no additional time to consider exercising the Option. (Mar. 4, 2016 Tr. at 19)."[1] (Decision at 9.)

         {¶ 14} Regarding the quick-take, the court observed that an agency is entitled to quick-take property to make or repair public roads, and that through the project Dublin was "making or repairing one of the largest and busiest public highway intersections in this County." The court concluded that the shared-use path was a "meaningful appurtenance to the 'ordinary' roadway, " as it would enhance "safety for motorists and users of bicycles" by "getting bicycles and other vehicles * * * completely off the motorized vehicle portion" of the road. (Decision at 12.)

         {¶ 15} On June 16, 2016, the court issued a final judgment entry reciting its findings from the June 3, 2016 entry. The court noted that, pursuant to the settlement agreement, Dublin had agreed to pay Friedman $47, 500 for the easements. The court ordered Dublin to pay Friedman the additional $22, 420 after she received the $25, 080 deposit, and ordered Friedman to "convey, transfer, and forever grant a 0.100-acre permanent easement and a 0.096-acre temporary easement" to Dublin. The court instructed Dublin to "file a certified copy of this Entry with the [Franklin County] Recorder at Dublin's cost." (Final Jgmt. Entry at 2.) The entry stated that it was "a final, appealable order for which there is no just cause for delay." (Final Jgmt. Entry at 4.)

         {¶ 16} CHKRS appeals, assigning the following errors for our review:

[I.] The trial court erred in holding that CHKRS, LLC did not exercise its option to purchase the property under the lease agreement.
[II.] The trial court erred in construing paragraph 31 of the lease between Friedman and CHKRS, LLC so as [to] entitle Friedman to the funds on deposit, to permit her to convey easements to the City, to settle the eminent domain litigation and terminate the case.
[III.] The trial court erred in ruling that the City of Dublin has the authority to utilize the 'quick take' provision of Chapter 163 of [the] Ohio Revised Code to acquire land for a shared use path as the City does not have the power to appropriate property for a shared use path; as it is not appropriating the property for the purpose of making or repairing a road; and as the City Council's resolution ...

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