COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 60669 LANDCO DEVELOPERS, INC. : : : JOURNAL ENTRY Plaintiff-Appellant : : AND vs. : : OPINION : CITY OF CLEVELAND, ET AL. : : : Defendant-Appellees : : DATE OF ANNOUNCEMENT OF DECISION: MAY 28, 1992 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court No. 174529 JUDGMENT: AFFIRMED. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellant: PATRICK T. RYAN Wiles & Richards 35000 Kaiser Court, Suite 202 Willoughby, Ohio 44094 For Defendant-Appellees: CRAIG S. MILLER Director of Law MALCOLM C. DOUGLAS Assistant Director of Law KENNETH G. SILLIMAN Chief Assistant Director of Law Room 106- City Hall 601 Lakeside Avenue Cleveland, Ohio 44114 - 2 - KRUPANSKY, J.: Plaintiff-appellant Landco Developers, Inc., ("Landco") appeals from an order of the trial court granting a motion for judgment on the pleadings in favor of defendants-appellees City of Cleveland ("City"); the City Department of Parks, Recreation and Properties ("Department of Parks") and its director W. Lawrence Bicking; the City Council; the City Board of Control and the City Division of Parks and Urban Forestry in an action involving a proposed municipal improvement project. Plaintiff commenced the action against the six defendants August 15, 1989 alleging that it suffered damages due to defendants "joint and several actions in failing and refusing to enter into a contract" with plaintiff after accepting plaintiff's bid for certain improvements at the Highland Park Golf course. Plaintiff subsequently filed an Amended Complaint containing the following allegations. Plaintiff's Amended Complaint alleged the City Council passed Ordinance No. 1414-84 June 19, 1984 authorizing the Director of the Department of Parks to enter into the golf course improvement contract. The Amended Complaint stated that this ordinance was subsequently modified by Ordinance 71-89 to change the source of funding for the proposed project. The Amended Complaint alleged that on or about August 19, 1988 James Ziemnik, an employee of the Department of Parks Division of Research, Planning and Development, conducted a pre- - 3 - bid meeting at the golf course. According to the allegations in Plaintiff's Amended Complaint, the City Board of Control adopted Resolution No. 0802-88 on September 14, 1988 which "affirmed and approved" plaintiff's bid as the lowest responsible bid and authorized the Director of the Department of Parks to enter into a contract for the improvements. Plaintiff's Amended Complaint stated that the commissioner of the Finance Department's Division of Purchases and Supplies subsequently sent plaintiff a letter describing various conditions to finalize "the enclosed contract which was recently awarded to you." Plaintiff alleged that Ziemnik thereafter directed plaintiff to begin performing the improvement contract. The Amended Complaint alleged upon information and belief that the Finance Department executed a funding certificate and initially debited plaintiff's accounts with the City but subsequently rescinded those debits. According to the allegations in the Amended Complaint, these events conformed to the customary procedure for awarding public improvement contracts based upon plaintiff's prior experience with the City. Notably absent from plaintiff's Amended Complaint was any allegation that the Director of the Division of Parks or the Law Director signed any written contract with plaintiff concerning the golf course improvement project. However, the Amended Complaint stated the Board of Control adopted Resolution No. 01115-89 February 8, 1989 to rescind its prior resolution - 4 - authorizing the Director of the Division of Parks to enter into the improvement contract with plaintiff. Finally, plaintiff alleged that it had expended $15,000 for material and labor to perform the golf course improvement project and had lost the $144,820 in profits that it would have earned in connection with the project. Plaintiff also claimed various other damages from declining to bid on other contracts. Defendants answered the original and amended complaints by denying that anyone entered into a contract with plaintiff concerning the project and subsequently filed motions for judgment on the pleadings. The trial court granted judgment on the pleadings in favor of defendants September 18, 1990 and plaintiff timely appeals raising the following sole assignment of error: THE TRIAL COURT ERRED BY GRANTING A MOTION FOR JUDGMENT ON THE PLEADINGS FOR THE REASON THAT MATERIAL ISSUES OF FACT ARE RAISED BY THE PLEADINGS AND DEFENDANTS ARE NOT ENTITLED TO JUDGMENT AS A MATTER OF LAW. Plaintiff's sole assignment of error lacks merit. Plaintiff contends the trial court failed to accept the truth of its allegations in the Amended Complaint since the complaint contains sufficient allegations to warrant recovery from defendants based upon (1) the existence of a valid contract, and (2) wilful and wanton misrepresentations in the absence of such a contract. Both contentions lack merit. - 5 - A reviewing court may affirm a trial court's award of a judgment on the pleadings only if, after viewing all material allegations in the pleadings and all reasonable inferences therefrom in the light most favorable to the nonmoving party, the moving party is entitled to judgment as a matter of law. Walters v. First National Bank of Newark (1982), 69 Ohio St. 2d 677, 679 (citing Peterson v. Teodosio (1973), 34 Ohio St. 2d 161); Fisher v. Morales (1987), 38 Ohio App. 3d 110, 112. Plaintiff's original and amended complaints both specifically admit the parties did not enter into a contract as follows: *** [D]efendants joint and several actions in failing and refusing to enter into a contract after the award of bid *** Complaint, paragraph 16; Amended Complaint, paragraph 23 (Emphasis added). It is well-established that a contractor's failure to ensure that at all steps necessary to forming a contract with a municipality are properly completed precludes recovery. Seven Hills v. Cleveland (1988), 47 Ohio App. 3d 159, 164-165. Plaintiff's admissions that defendant's never entered into a contract precludes recovery from defendants on the basis of a "contract" as a matter of law. Plaintiff seeks to circumvent these principles by arguing that various Sections of the Cleveland Codified Ordinances ("C.C.O.") dispense with the requirement for formal execution of public improvement contracts. However, even if the trial court - 6 - construed plaintiff's allegations in the case sub judice to state that defendants failed to formally "execute" a contract with plaintiff as it contends on appeal rather than to originally "enter" into such a contract, defendants were entitled to judgment on the pleadings as a matter of law. Plaintiff contends that C.C.O. Sections 185.19 and 185.20 make formal execution of written contract documents unnecessary and establish a valid alternative method to award public improvement contracts not recognized by the City Charter. Section 185.19 provides as follows: 185.19 Contract Documents for Public Improvements. The following shall constitute the contract documents and shall be deemed the contract for the public improvement: (a) The ordinance or ordinances authorizing the making of the public improve- ment; (b) The invitation to bid, general conditions, supplemental general conditions and detail specifications; (c) The contract drawings; (d) All addenda issued by the city prior to receipt of bids; (e) The affidavit of noncollusion; (f) The bid; (g) The resolution of the Board of Control awarding the contract; (h) The agreement; - 7 - (i) All required bonds and policies of insurance; (j) All provisions required by law, Charter or ordinance to be inserted in the contract, whether actually inserted or not. (Emphasis added). Section 185.20 in turn defines "contract" and "contract documents" as follows: (c) "Contract" or "contract documents" means each of the various parts of the contract referred to in Section 185.19, both as a whole and severally, and includes subsidiary agreements, if any. Plaintiff contends that each individual item listed in C.C.O. Section 185.19 constitutes a "contract" under the definition in C.C.O. Section 185.20(c) and that any required signatures are "deemed to be part of the contract whether actually inserted or not" pursuant to C.C.O. Section 185.19(j). However, plaintiff's argument ignores several contrary C.C.O. and Charter provisions and is unpersuasive. C.C.O. Section 185.16 specifically governs the execution of public improvement contracts and provides as follows: 185.16 Requirements for Contract Execution. A contract shall be deemed executed when signed by the parties thereto, certified by the Director of Finance as required by Charter Section 106, secured by the required performance bond, and when approved by the Director of Law as required by Charter Section 83. (Emphasis added). Moreover, C.C.O. Section 186 specifically mandates that public improvement contracts contain all provisions required by the City - 8 - Charter, ordinances and applicable law. C.C.O. Section 185.19(j) cited by plaintiff merely provides that such provisions are deemed to be "inserted" into otherwise validly executed public improvement contracts even if not expressly contained therein. Contrary to plaintiff's argument C.C.O. Section 185.19(j) does not override the express execution requirements mandated by C.C.O. Section 185.16. Plaintiff's argument the City Charter authorizes the creation of such an "alternative method" for awarding public improvement contracts is erroneous. When the Charter provisions governing public contracts are read in pari materia, it is clear the Charter contemplates execution of written contracts by appropriate public officials involving expenditures exceeding $3,500 and expressly prohibits awarding contracts by any other means. See Ress Realty Co. v. Hennosy (Aug. 29, 1991), Cuyahoga App. No. 59002, unreported (outlining and applying the principles of statutory construction). Charter Section 108 mandates the director of the particular department, such as the Department of Parks in the case sub judice, enter into a contract pursuant to authorization by ordinance as follows: 108 Authorization of Contracts. All contracts involving any expenditure in excess of three thousand five hundred dollars ($3,500.00) shall be authorized and directed by ordinance of Council. When so authorized and directed, the director of the department involved shall make a written contract with the lowest and best bidder, after advertise- ment once a week for two consecutive weeks in - 9 - the City Record. There shall be no splitting of orders to avoid the effect of this section, and any contract made contrary to or in evasion of the foregoing provisions of this section, shall be illegal and void. (Emphasis added.) Charter Section 106 mandates certification of necessary funding prior to entering into such contracts as follows: 106 Contracts Certified. No contract, agreement, or other obli- gation, involving the expenditure of money, shall be entered into, nor shall any ordinance, resolution, or order for the expenditure of money be passed by the Council, or be authorized by any officer of the City, unless the Director of Finance first certifies to the Council or to the proper officer, as the case may be, that the money required for such contract, agreement, obligation, or expenditure, is in the Treasury, to the credit of the fund from which it is to be drawn, and not appropriated for any other purpose, which certificate shall be filed and immediately recorded. The sum so certified shall not thereafter be considered unappropriated until the City is discharged from the contract, agreement or obligation. Finally, Charter Section 83 requires the City Director of Law to draft all such contracts and expressly states that such contracts are not effective until endorsed accordingly as follows: 83 Director of Law; Qualifications and Duties. The Director of Law *** shall prepare all contracts, bonds and other instruments in writing in which the City is concerned and shall endorse on each his approval of the form and correctness thereof. No such bond, contract or instrument shall become effective without such endorsement by the Director of Law thereon. - 10 - Charter Section 109 expressly deprives the City of authority to enter into agreements without complying with these provisions as follows: 109 When Contracts Void. All contracts, agreements, or other obligations entered into and all ordinances passed, resolutions and orders adopted, contrary to the provisions of the preceding sections, shall be void, and no person whatever shall have any claim or demand against the City thereunder, nor shall the Council, or any officer of the City, waiver or qualify the limits fixed by any ordinance, resolution or order, as provided in Section 106, or fasten upon the City any liability whatever, in excess of such limits, or release or relieve any party from an exact compliance with his contract under such ordinance, resolution, or order. Charter Section 167 makes no exception for public improvement 1 contracts. 1 167 Public Improvements by Contract or Direct Labor. Public improvements of all kinds may be made by the appropriate department, either by direct employment of the necessary labor and the purchase of the necessary supplies and materials, with separate accounting as to each improvement so made, or by contract duly let to the lowest responsible bidder after competitive bidding, either for a gross price, or upon a unit basis for the improvement, or by contract containing a guaranteed maximum and stipulating that the City shall pay within such maximum the cost of labor and materials, plus a fixed percentage of profit to the contractor. The Council shall by ordinance determine by which of the foregoing methods any improvement shall be made. Contracts may provide a bonus per day for completion of the contract prior - 11 - Plaintiff's reliance on Charter Sections 1 and 2 governing the general powers of the City in support of its argument to the contrary are misplaced. Neither provision authorizes City Council to adopt alternative methods of awarding public improvement contracts overriding these express requirements. Charter Section 1 expressly denies City Council authority to override such Charter requirements as in the case sub judice: *** The City shall have all powers that now are, or hereafter may be granted to munici- palities by the Constitution or laws of Ohio; and all such powers whether expressed or implied, shall be exercised and enforced in the manner prescribed by this Charter, or when not prescribed herein, in such manner as shall be provided by ordinance or resolution of the Council. (Emphasis added). Charter Section 2 merely provides that the enumeration of certain powers shall not be deemed to limit other powers, but does not grant authority to override express charter requirements relating to public contracts as follows: 2 Enumeration of Powers Not Exclusive. The enumeration of particular powers by this Charter shall not be held or deemed to be exclusive but, in addition to the powers enumerated herein, implied thereby or appropriate to the exercise thereof, the City shall have, and may exercise all other powers which, under the Constitution and laws of Ohio, it would be competent for this Charter specifically to enumerate. to a specified data, and liquidated damages to the City to be exacted in like sum for every day of delay beyond a specified date. - 12 - Plaintiff's failure to ensure that all steps necessary to forming the golf course public improvement contract were properly completed prior to undertaking to perform the contract precludes recovery in the case sub judice. Seven Hills v. Cleveland, supra. Plaintiff's reliance upon Burr v. Stark Cty. Bd. of Commissioners (1986), 23 Ohio St. 3d 69, which recognized a fraud exception in the context of sovereign immunity, to circumvent these well-established principles by characterizing defendants' actions as "wilful and wanton misrepresentations" is unavailing. This Court stated the reasons for denying recovery against a municipality in this context in Seven Hills v. Cleveland, supra as follows: It has long been the law of Ohio that persons dealing with municipal corporations are charged with notice of all statutory limitations on the power of such corporations and their agents, and must, at their peril, ascertain whether all necessary statutory formalities have been met. See Welch v. Lima Stone Co. (1944), 73 Ohio App. 557 [29 O.O. 187]. Those who deal with the agents of a municipality must assume the risk that all necessary steps have been taken requisite to a legal contract. Id. at 563. Kimbrell [v. Seven Mile (1984), 13 Ohio App. 3d 443] at 445; 13 OBR at 535, 469 N.E. 2d at 957-958. In addition, the Ohio Supreme Court has stated: 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 - 13 - the statutes designed to protect the public should not be annulled for his benefit. *** McCloud & Geigle v. Columbus (1896), 54 Ohio St. 439, 453, 44 N.E. 95, 97; see, also, Rua v. Shillman (1985), 28 Ohio App. 3d 63, 64- 65, 28 OBR 104, 105, 502 N.E. 2d 220, 221. Id. at 164-165. "[P]ersons dealing with municipal corporations are charged with notice of all statutory limitations on the power of such corporations and their agents." Seven Hills v. Cleveland, supra at 164. Notice of the applicable limitations on such authority precludes justifiable reliance on any alleged "misrepresentations" to the contrary as a matter of law. Accordingly, plaintiff's sole assignment of error is overruled. Judgment affirmed. - 14 - It is ordered that appellee(s) recover of appellant(s) costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Common Pleas Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. NAHRA, P.J., and ANN McMANAMON, J., CONCUR JUDGE BLANCHE KRUPANSKY N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announce- ment of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journaliza- tion, at which time it will become the judgment and order of the court and time period for review will begin to run. .