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Ae Owner L.L.C. v. City of East Cleveland

Court of Appeals of Ohio, Eighth District, Cuyahoga

June 6, 2019

AE OWNER L.L.C., ET AL., Plaintiffs-Appellees,
v.
CITY OF EAST CLEVELAND, ET AL., Defendants-Appellants.

          Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-17-890113

          Berns, Ockner & Greenberger, L.L.C., Sheldon Berns, and Majeed G. Makhlouf, for appellees.

          Willa M. Hemmons, East Cleveland Law Director, for appellants.

          JOURNAL ENTRY AND OPINION

          RAYMOND C. HEADEN, JUDGE.

         {¶ 1} Defendants-appellants, the city of East Cleveland, Salondra Wallace (Housing Administrator), Anthony Bumbalis (Building Inspector), Anthony Dizdar (Building Inspector), and Kimberly Lanum (Housing Inspector), [1] appeal from the trial court's order granting plaintiffs-appellees AE Owner L.L.C., Crystal Spires, Ltd., and KB Owner L.L.C.'s ("property owners") motion for summary judgment and enjoining defendants-appellants from enforcing East Cleveland Codified Ordinances 1349.05(a).[2] For the reasons that follow, we affirm.

         Procedural and Substantive History

         {¶ 2} Property owners own rental properties within the city of East Cleveland. On June 6, 2017, the city of East Cleveland increased its occupancy fee on rental properties from $10 to $100 per unit. On December 7, 2017, property owners filed a complaint against East Cleveland. Pursuant to R.C. 2723.01 et seq., the action sought to enjoin East Cleveland from enforcing East Cleveland Codified Ordinances 1349.05(a) and collecting occupancy fees under that section. On June 1, 2018, competing motions for summary judgment were filed on behalf of property owners and East Cleveland. Property owners filed a combined memorandum in opposition to East Cleveland's motion for summary judgment and objections to inadmissible evidence in East Cleveland's motion for summary judgment on July 2, 2018. East Cleveland filed a reply to that motion on July 9, 2018, but did not respond to property owners' motion for summary judgment. On July 23, 2018, the trial court granted property owners' motion for summary judgment and denied East Cleveland's motion. East Cleveland filed a timely notice of appeal on July 24, 2018.

         {¶ 3} Property owners' motion for summary judgment did not question East Cleveland's ability to impose an occupancy fee. Property owners challenged the amount and application of the occupancy fee stating it was an illegal tax disguised as a fee. East Cleveland did not file a brief in opposition to property owners' motion for summary judgment; hence, the court relied exclusively on the property owners' motion when making its determination. The evidence presented a fee whose value was not tied to the cost of an inspection program. The amount of the fee was determined based upon a comparison of similar fees charged by neighboring communities. The funds collected in accordance with the fee were not segregated exclusively for inspection related activities, but were deposited in the city's general fund. Based upon the evidence, the trial court determined the fee as applied to the property owners was unconstitutional because it was an illegal tax disguised as a fee. The trial court permanently enjoined East Cleveland from enforcing East Cleveland Codified Ordinances 1349.05(A) against the property owners.

         {¶ 4} East Cleveland appeals, presenting the following assignments of error for our review: "The Trial Court erred in granting Plaintiffs' Summary Judgment Permanently Enjoining the City's enforcement of its Occupancy Fee Ord. 1345.05. The Trial Court violated the City's right to Equal Protection when it struck down its law that is permitted by Other Inner Ring Cities in Cuyahoga County. The Trial Court violated the City's Due Process When it denied its right to raise the resources required to support and maintain a rental unit oversight program. The Trial Court violated the City's Home Rule Authority when it declared its Occupancy Fee Law unconstitutional."

         Law and Analysis

         Motion for Summary Judgment

         {¶ 5} Generally, a trial court's decision to grant summary judgment is reviewed de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 1996-Ohio-336, 671 N.E.2d 241. The reviewing court conducts an independent review of the record to determine whether summary judgment is appropriate.

         {¶ 6} Summary judgment is appropriate under Civ.R. 56 when "(1) no genuine issue as to any material fact exists; (2) the party moving for summary judgment is entitled to judgment as a matter of law; and (3) viewing the evidence most strongly in favor of the nonmoving party, reasonable minds can only reach one conclusion which is adverse to the nonmoving party." Hull v. Sawchyn, 145 Ohio App.3d 193, 196, 762 N.E.2d 416 (8th Dist.2001). "The moving party bears the initial burden of demonstrating that there are no genuine issues of material fact concerning an essential element of the opponent's case." (Emphasis omitted.) Dresher v. Burt, 75 Ohio St.3d 280, 292, 1996-Ohio-107, 662 N.E.2d 264. If the moving party fails to satisfy this burden, the motion for summary judgment must be denied. Id. at 293. If the moving party satisfies its initial burden, the nonmoving party must then set forth specific facts showing that there is a genuine issue for trial. Id.

         {¶ 7} In its first assignment of error, East Cleveland argues the trial court erred in granting property owners' motion for summary judgment finding the city's occupancy fee unconstitutional and therefore enjoining the city from enforcing the ordinance. We find the occupancy fee is a ...


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