COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 60930 and 60943 : CLEVELAND ELECTRIC ILLUMINATING : COMPANY : : JOURNAL ENTRY Plaintiff-Appellee : and Cross Appellant : (Case No. 60930) : and : -vs- : : OPINION : CITY OF CLEVELAND, ET AL. : : Defendants-Appellants : and Cross-Appellees : (Case No. 60943) DATE OF ANNOUNCEMENT OCTOBER 8, 1992 OF DECISION: CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court Case No. 078605 JUDGMENT: Affirmed. DATE OF JOURNALIZATION: __________________________ APPEARANCES: FOR PLAINTIFF-APPELLEE/ FOR DEFENDANTS-APPELLANTS/ CROSS-APPELLANT: CROSS-APPELLEES (See next page) -2- -2- FOR PLAINTIFF-APPELLEE FOR DEFENDANT-APPELLANTS/ CROSS-APPELLANT: CROSS-APPELLEES: DANIEL J. O'LOUGHLIN MARK J. VALPONI MARIA J. CODINACH Kelley, McCann & Livingstone Squires, Sanders & Dempsey BP America Building 4900 Society Center 35th Floor 127 Public Square 200 Public Square Cleveland, Ohio 44114-1304 Cleveland, Ohio 44114-2302 DAVID W. WHITEHEAD DANNY R. WILLIAMS General Counsel Director of Law The Cleveland Electric JUNE W. WIENER Illuminating Company Chief Asst. Director of Law 55 Public Square 601 Lakeside Avenue Cleveland, Ohio 44113 Cleveland, Ohio 44114PATRICIA A. BLACKMON, J.: City of Cleveland, et al., defendants-appellants, cross- appellees hereinafter Appellants timely appeal the manner in which the Cuyahoga County Court of Common Pleas implemented a Supreme Court mandate which instructed the trial court to fashion a repayment plan for payment of monies owed to the General Fund of the City of Cleveland by Cleveland Public Power. Having reviewed the record and the applicable legal principles involved, we affirm the trial court's order outlining the repayment plan. Cleveland Electric Illuminating Company, plaintiff-appellee, cross-appellants hereinafter Appellee initiated a taxpayer's cause of action in August of 1984 pursuant to R.C. 733.56 and R.C. 733.59. The basis of the lawsuit was an allegation that the use of tax revenues from the City of Cleveland General Fund to finance the operation of the Division of Light and Power violated certain provisions of the City's -3- Charter. Appellants filed a timely answer to the lawsuit and asserted various defenses, among them was the defense that such support through tax revenues was in fact permitted. The two legislative enactments, underlying this cause of 1 action, were City of Cleveland Ordinances 1200-71 and 578-84. The two principal City of Cleveland Charter provisions involved are Section 41 entitled Transfer of Appropriations and Section 111 entitled General Powers and Duties. During the pretrial phase of the lawsuit filed in August, 1984, Appellants moved for summary judgment on the grounds that utilization of tax revenues in the manner which the City had used them did not violate the Charter. The trial court granted Appel- lant's motion for summary judgment and this court affirmed that judgment. Cleveland Electric Illuminating Co. v. City of Cleveland (March 26, 1987), Cuyahoga App. No. 51951, unreported. In May, 1988, the Ohio Supreme Court reversed this court's ruling holding that "[a] municipality may not support a municipally owned public utility with monies derived from tax generated revenue where the City Charter provides that such utilities are to be "non-tax supported." Where a city charter declares that municipally owned public utilities are to be "non- tax supported," that prohibition extends to advancements from a tax-generated fund to such public utilities where there is no expectation of prompt and complete repayment." Cleveland 1 The text of these two Ordinances are attached as Appendices. -4- Electric Illuminating Company v. City of Cleveland (1988), 37 Ohio St.3d 50, 54, reh. denied, 38 Ohio St.3d 704. In addition, the Ohio Supreme Court went on to issue a mandate which stated that "money advanced by the City to Muni 2 Light without provision for prompt and full repayment is an act in violation of the City Charter. Therefore, the advanced sums remaining unpaid must be promptly and fully reimbursed by Muni Light to the General Fund of the City in accordance with a repay- ment plan to be approved by the trial court." Id. On June 18, 1990, the trial court executed an opinion that was received for filing by the Cuyahoga County Court of Common Pleas on June 19, 1990. This opinion outlined a plan for repayment of a stipulated amount; this amount was approximately $26.1 million dollars and the stipulation included the fact that this entire amount was from tax-generated sources. The trial court went on to state that it was required to decide three issues. The first was the amount of money that Cleveland Public Power should repay the General Fund. The second decision was what rate of interest, if any, should be imputed to these transactions. The third was a realistic repayment plan of the amounts advanced. In this regard, the trial court fashioned a comprehensive repayment plan categorizing the nature of all the payments. With respect to payments made by the City of Cleveland, on behalf of 2 The Muni Light is now named Cleveland Public Power. -5- Cleveland Public Power, in the amount of approximately $10.6 million dollars for a judgment on a counterclaim in the renowned antitrust litigation between these same two parties, the trial court ordered Cleveland Public Power to repay this sum to the General Fund. Regarding funds advanced to finance street lighting improvements, the trial court recognized that such services are normally purchased by municipalities and paid for with tax- generated monies. Based upon this recognition, the trial court concluded that such payments did not constitute tax generated support for Cleveland Public Power but were funds spent for the benefit of all residents of the City and, thus, a proper expend- iture of tax monies. Accordingly, the trial court concluded that there was not a requirement to repay this amount. The trial court also ordered the repayment of funds advanced for improvement in Cleveland Public Power's Generating Plant in the amount of approximately $4.2 million dollars. In addition, the trial court ordered Cleveland Public Power to pay for internal services, which were services provided to Cleveland Public Power by various service divisions of the City for which Cleveland Public Power had not paid. The parties stipulated that the amount of these "internal services" totaled approximately $5.4 million dollars. Because the trial court reasoned that these expenditures were from tax revenues and therefore tax- generated support from the City for the benefit of Cleveland -6- Public Power, the $5.4 million dollars had to be repaid to the General Fund by Cleveland Public Power. The trial court also concluded that all of the funds required to be repaid had to be reimbursed with an imputed simple fixed interest rate, which would have been the applicable type of interest had the funds been secured through the issuance of long- term municipal finance bonds. Finally, the trial court found, given the circumstances, that a time period of ten years complied with the Ohio Supreme Court's mandate demanding a prompt repayment. In support of this term for repayment, the trial court cited three considerations. The first was the period of time from the first transaction to the issuance of its order. The second was the large amount of money involved. Thirdly, the amount of interest that had to be repaid. Assignments of error one and two in support of Appellants' direct appeal will be addressed together. They state: THE TRIAL COURT ERRED IN OVERRULING THE CITY'S MOTION FOR SUMMARY JUDGMENT BECAUSE THE STATUTE OF LIMITATIONS FOR BRINGING THIS TAXPAYER'S ACTION EXPIRED LONG BEFORE THE ACTION WAS FILED. THE TRIAL COURT ERRED IN FAILING TO APPLY SPECIFIC LIMITATIONS ON TAXPAYER'S ACTION CHALLENGING BOND PAYMENTS. [sic] The resolution of the issue of whether this taxpayer's action should have been barred by the one year statute of limitations embodied in R.C. 733.60 is obfuscated by the unclear procedural evolution of this particular issue, as well as the -7- fact that both parties have diametrically opposed views on whether the question was ever litigated. The dilemma is compounded by the fact that the opinion of Cleveland Electric Illuminating Co., supra, does not expressly offer an answer to the statute of limitations question. Appellants argue that the statute of limitations was raised in their Answer to the Complaint. However, Appellants also contend that the issue was never litigated, adjudicated or resolved by any court prior to this appeal. Appellee raises two contentions pertaining to the statute of limitations question. The first is that this court is without jurisdiction to review the propriety of the trial court's ruling on summary judgment because the actual judgment entry of the trial court was not included in Appellants' Notice of Appeal. The second contention is that because the Ohio Supreme Court determined liability in favor of the taxpayer there exists an implied overruling of the statute of limitations argument. Additionally, Appellee represents that Appellants' motion for rehearing which was denied by the Ohio Supreme Court, contained a request to the Supreme Court to modify its holding to allow the trial court to fully explore Appellants' unaddressed defenses, one of them presumably being the statute of limitations defense. Because of the nebulous way in which this issue has been previously handled, this court will address the substantive facets of the statute of limitations argument in the hope that such an opinion will be dispositive. -8- City of Cleveland Ordinance 1200-71, in Section One, expressly provides for a deferment of payments from Cleveland Public Power revenues to the Sinking Funding Commission for such principal and interest which would otherwise be required to be paid but for the provisions of 1200-71. Section Two of 1200-71 requires the Sinking Fund Commission to keep an accounting of amounts paid by it on general obligations bonds of the City of Cleveland issued for Cleveland Public Power capital improvements for street lighting and expansion. Section Two also expressly states an obligation on the part of Cleveland Public Power to reimburse the Sinking Fund Commission for its payments, whenever the Fund determines that the revenues derived from the operation of Cleveland Public Power are sufficient to permit such repayment. Section Three of 1200-71 requires the preservation of the economic viability of Cleveland Public Power prior to the payment of any revenues back to the Sinking Fund. The other City of Cleveland Ordinance at issue is 578-84, Paragraph One of its Preamble specifies that a total of approx- imately $36.2 million dollars was expended for the benefit of the City's Division of Light and Power, Cleveland Public Power, from the City of Cleveland General Fund and other funds of the City. Paragraph Two of its Preamble specifies that approximately $6.8 million dollars was advanced by the City of Cleveland for legal and other services in the antitrust litigation between the same parties to this appeal. Paragraph Three of its Preamble acknowledges that the amounts spent served the proper public -9- municipal purpose of enabling Cleveland Public Power to continue to operate. Paragraph Four of its Preamble provides that, with the exception of the advances for legal and other services in the amount of approximately $6.8 million dollars, the amounts expended from the General Fund for the benefit of Cleveland Public Power are not subject to any requirement of reimbursement which might be lawfully effected to the General Fund and other City funds from which such Expended Amounts were expended. Section One of 578-84 expressly repeals Ordinance 1200-71 and discharges Cleveland Public Power from any obligation to repay the $36.2 million dollars, minus the approximately $6.8 million dollars for legal services which Cleveland Public Power was still obligated to pay back to the General Fund. Appellants' position with respect to the statute of limitations is that Appellee's cause of action was barred by the statute of limitations contained in R.C. 733.60, which requires that any taxpayer's action must be brought within one year of the date that the cause of action accrues. In essence, Appellants argue that the facts demonstrate without question that the expenditure of tax revenues used to support Cleveland Public Power were made without provisions for prompt and full repayment and were, therefore, illegal when made. Therefore, the cause of action accrued at the time that each of the challenged expenditures were made. It is the position of Appellee, on the statute of limitations issue, that Ordinance 578-84 created the cause of -10- action when it specifically repealed Ordinance 1200-71 and forgave all of Cleveland Public Power's debt to the General Fund with the exception of $6.8 million dollars for legal services. Furthermore, Appellee asserts that the Supreme Court's determination of liability in favor of the taxpayer was an inherent overruling of the statute of limitations argument. Finally, Appellee points out the fact that Appellants filed a motion for rehearing requesting that the Ohio Supreme Court modify its holding to allow the trial court to fully explore unaddressed City defenses, presumably among them the statute of limitations, and the motion was denied. Section 41 of the City of Cleveland Charter entitled Transfer of Appropriations states that no such transfer of revenues or earnings of any non-tax supported public utility to any other purpose shall be made. In Cleveland Electric Illuminating Company, supra at 52, the Ohio Supreme Court acknowledged the City's argument that there was an absence from the Charter of a specific provision prohibiting municipally owned public utilities from receiving support from tax monies. The Ohio Supreme Court went on to state at page 54 that "in our view, however, this prohibition is proclaimed by the very use of the words 'non-tax supported public utility.' Appellees proposed conclusion can only be sustained by a disregard for that phrase as it is used throughout the Cleveland Charter." -11- Interestingly, based on this excerpt, it appears that the City was one of the first to argue that there was no specific provision prohibiting municipally owned public utilities from receiving support from tax monies. They now argue that such a prohibition should have been readily apparent to Appellee at the time that each expenditure was made, even though it was not readily apparent to the municipality whose legislative body enacted the Charter provisions. The Ohio Supreme Court, at page 54, went on to state that "our review of the relevant Charter provisions compels us to conclude that the words 'non-tax supported' were intended to establish that municipally owned and operated utilities shall be self-supporting enterprises independent of public subsidies." This direction did not come from the Ohio Supreme Court until May, 1988. At the time of the expenditures in question, this direction was not available to the parties. Instead, the Charter provisions, and specifically Section 41, contemplated outright transfers of appropriations and not loans or advancements. It is obvious that Ordinance 1200-71 treated the expended amounts as loans or advances, as opposed to outright transfers because of the express language contained in Ordinance 1200-71 contemplating repayment. Ordinance 1200-71, even though the terms were vague, did contemplate repayment of the amounts expended. Section One of 1200-71 provided for a deferment of the obligation to repay and the remainder of the Ordinance directs -12- the Sinking Fund Commission and the City's Finance Department to maintain appropriate records with respect to the economic viability of the City's Division on Light and Power for purposes of eventual repayment. The obligation to repay embodied in Ordinance 1200-71 makes it clear that the expended amounts were not transfers used to support the utility but loans or advances used to assist the utility with every expectation of repayment at some point in time. (Emphasis added.) Nevertheless, the enactment of Ordinance 578-84 unequivocally forgave Cleveland Public Power's obligation to repay the loans or advances. It is at this point that the expended amounts became outright transfers of appropriations. Furthermore, Ordinance 578-84 specifically repealed Ordinance 1200-71 as inconsistent with the new prohibition contained in 578-84. It appears fairly obvious to this court that the repeal was included because of the recognition of the obligation to repay the expended amounts contained in Ordinance 1200-71. The language contained in the Ohio Supreme Court's holding which states, "where a city charter declares that municipally owned public utilities are to be 'non-tax supported,' that prohibition extends to advancements from a tax-generated fund to such public utilities where there is no expectation of prompt and complete repayment," is a direct reference to Ordinance 1200-71. Based upon this language, it is apparent that the Ohio Supreme Court viewed the expended amounts referred to in Ordinance 1200- 71 as advancements and not outright transfers. -13- Ordinance 1200-71 did contain within its provisions an obligation to repay; the terms and conditions of repayment were just unclear. Nevertheless, there is clearly an underlying requirement of repayment imposed on the City's Division of Light and Power in Ordinance 1200-71. If, as Appellants argue, there was no outstanding obligation on the part of Cleveland Public Power to reimburse the General Fund the entire amount of $36.2 million dollars acknowledged in Ordinance 578-84; there undoubtedly would have been no need to forgive $29.4 million dollars of the obligation by repealing Ordinance 1200-71, which was originally passed to defer Cleveland Public Power's obligation. Finally, until the Ohio Supreme Court's decision in 1988, there was no legal directive that the repayment had to be both prompt and complete. Consequently, Ordinance 1200-71 could not be deemed illegal at the time of its enactment because of its failure to expressly include terms and conditions for prompt and complete repayment. Finally, Appellants rely heavily on Westbrook v. Prudential Ins. Co. of America (1988), 37 Ohio St.3d 166 in an effort to substantiate their statute of limitations argument. However, this authority is not persuasive because Westbrook is readily distinguishable from the instant case. The issue in Westbrook was whether the City had the authority to execute a contract that provided for an assignment of leasehold interest when the City had consented to such an -14- assignment in advance. The Ohio Supreme Court was quick to point out that "a plain reading of the complaint reveals that Appellee is not alleging that the contract was breached when the assignment was effectuated. Rather, he is alleging that the contract was void ab initio for permitting the assignment." Id. at 169. The instant case is readily distinguishable on its facts. Appellee did not challenge the initial expenditures contemplated in Ordinance 1200-71, like the plaintiff in Westbrook challenged the authority of the City to enter into a contract that provided for an assignment of a leasehold interest involving tax abatement. The Ohio Supreme Court, in Westbrook, was clear to point out that the plaintiff was not alleging that the breach occurred when the assignment was effectuated. (Emphasis added.) Id. In this case, Appellee is challenging the fact that the debt was forgiven by the enactment of 578-84 in violation of the City Charter, not that the expenditures were illegal at the time they were made. It is Appellants who desire to have the expenditures declared illegal when made, not Appellees, and this court has previously stated that the expenditures were not illegal when made because it is clear that repayment was contemplated. For all of the aforementioned reasons, Appellants' assignments of error one and two are overruled. Appellant's third assignment of error states: THE TRIAL COURT ERRED IN FAILING TO APPLY THE DOCTRINES OF RES JUDICATA, COLLATERAL ESTOPPEL AND JUDICIAL ESTOPPEL TO BAR CEI FROM CHALLENGING THE LEGALITY OF -15- PAYMENTS THE CITY MADE TO CEI TO COMPLY WITH A MANDAMUS ORDER FROM THE FEDERAL DISTRICT COURT. As a result of a judgment for the counterclaim filed in the federal district court antitrust litigation, the federal district court issued a mandamus order requiring the City of Cleveland to pay Cleveland Electric Illuminating Company monies owed by Cleveland Public Power for the purchase of power, pursuant to a contract between the two. Appellants argue that the trial court should have applied the legal principles of res judicata, collateral estoppel, and Ohio law on adverse positions to preclude Appellee from challenging the legality of these specific payments that Appellants made to Appellee to comply with the mandamus order of the federal district court. Appellee takes the position that the issues litigated in the federal antitrust case are not identical to the issues in this case and, therefore, collateral estoppel, res judicata, and judicial estoppel are inapplicable to this set of circumstances. The issue raised by this assignment of error is whether Cleveland Public Power is required to reimburse the General Fund approximately $10.6 million dollars paid from the General Fund to Appellee in the federal district court antitrust litigation. In Rogers v. City of Whitehall (1986), 25 Ohio St.3d 67, in the Syllabus, the Ohio Supreme court held that a claim litigated to finality in the United States District Court cannot be reliti- gated in a state court when the state claim involves the -16- identical subject matter previously litigated in the federal court, and there is present no issue of party or privity. (Emphasis added.) A judgment rendered in a mandamus action may operate as res judicata in a subsequent action which seeks to relitigate the issues decided in the mandamus action. Lakewood, Ohio Congregation of Jehovah's Witnesses, Inc. v. Lakewood (1984), 20 Ohio App.3d 338 at Syllabus. The essential elements of a claim asserting collateral estoppel are pronounced in the Hamilton County Court of Appeals case, Monohan v. Eagle Picher Industries, Inc. (1984), 21 Ohio App. 3d 179. The first element is that the party against whom estoppel is sought was a party or in privity with a party to the prior action. The second essential element is that there was a final judgment on the merits in the previous case after a full and fair opportunity to litigate the issue. The third essential element of collateral estoppel is that the issue must have been admitted or actually tried and decided and must be necessary to the final judgment. The fourth and final element is that the issue must have been identical to the issue involved in the prior suit. The question raised by this assignment of error is two- fold. The first aspect of the question is whether the issue, in the federal antitrust litigation, is identical to the issue in the instant case. The second aspect of the question is whether Appellee took a position in the instant case that was directly -17- contrary to or inconsistent with the position it previously assumed in the federal antitrust litigation. With respect to the first aspect of the question, the issue in the federal antitrust litigation was the source from which Appellee would be paid its judgment on a counterclaim in the amount of approximately $10.6 million dollars. The issue in the lower court, in this case, was whether Ordinance 578-84 violated the Charter of the City of Cleveland when it forgave Cleveland Public Power's obligation to pay back amounts advanced and expended on its behalf from the General Fund of the City of Cleveland, one of those expended amounts being the approximate $10.6 million dollars paid on the counterclaim. In this court's view, these issues are not identical, making Appellants unable to establish the fourth essential element of a claim of collateral estoppel. The issue of what source the payment is coming from, even though related to whether that source has to be reimbursed by another, is not identical to whether reimbursement for that payment is legally required. For this reason, the issue litigated in the federal antitrust case is not identical to the one litigated in this lower court case. The more difficult issue to resolve is the second aspect of the question raised by this assignment of error, whether Appellee took a position in the instant case that was directly contrary to or inconsistent with the position it previously assumed in the federal antitrust litigation. -18- It is a well recognized rule in Ohio that a party cannot be permitted to occupy inconsistent positions or to take a position in regard to a matter which is directly contrary to or inconsistent with one previously assumed by him. Van Dyne v. Fidelity - Phenix Insurance Co. (1969), 17 Ohio App.2d 116, 127 citing Darke County v. Mercer County (1915), 93 Ohio St.37; Hoffman v. Fleming (1902), 66 Ohio St.143. Appellee argued, in the federal antitrust litigation, that the City of Cleveland failed to fully consider potential sources of City money which could be used to pay it. Appellee advocated for prompt and full payment of its judgment in the amount of approximately $10.6 million dollars, irrespective of whether the monies came from the General Fund or other sources of the City of Cleveland. This is not an inconsistent position from the one Appellee now takes. An inconsistent position would be if Appellee argued that the payment of the judgment in the federal case from the General Fund would not have to be reimbursed by Cleveland Public Power. From the record, Appellee never addressed the issue of whether the General Fund should be reimbursed for the approximate $10.6 million dollar payment. Lastly, Appellee never took the position that such an advancement from the General Fund was illegal when made. In fact, in one of Appellee's documents submitted in the federal case, Appellee recognizes the fact that Cleveland Public Power had been subsidized by the General Fund and makes no characterizations of the subsidies being illegal. -19- For the aforementioned reasons, Appellants' assignment of error three is overruled. Because of the fact that Appellant's assignments of error four, five, and six are all related to the trial court's assessment of interest on the expended amounts, assignments of error four, five, and six will be addressed together. They respectively state: THE TRIAL COURT ERRED IN ORDER CPP TO PAY INTEREST ON THE EXPENDED AMOUNTS IN THE ABSENCE OF ANY LEGAL OR EQUITABLE BASIS. [sic] THE TRIAL COURT ERRED IN ASSESSING INTEREST ON THE REIMBURSED LEGAL EXPENSES. THE TRIAL COURT ERRED IN ITS JUDGMENT BECAUSE THE TRIAL COURT'S ASSESSMENT OF INTEREST CAN- NOT BE RECONCILED WITH THE COURT'S RULING ON THE STATUTE OF LIMITATIONS. The first issue raised by these assignments of error is whether there was a legal or equitable basis for the trial court to order Cleveland Public Power to pay interest in conjunction with the repayment of expended amounts. In Cleveland Electric Illuminating Co., supra, the Ohio Supreme Court delineated some examples of what constitutes support from tax revenue in forms that are forbidden. The first two examples given by the court are dispositive, as a matter of equity or law, of why the imposition of interest was not an error on the part of the trial court. The Ohio Supreme Court, as its first example, stated that "any money advanced to Muni Light from the general fund or other -20- tax-generated source on terms substantially more favorable than those generally available in the commercial market constitutes 'support' to the extent that Muni Light enjoys a benefit therefrom." Id. at 54. The second example given by the Ohio Supreme Court of forbidden support is "where a non-tax supported" utility receives an advancement from a tax-generated fund on terms which call for, as an example, interest payments far lower than the prevailing rate, or which set forth an unrealistically lengthy repayment schedule ***" Id. (Emphasis added.) The failure of the trial court to require the payment of interest by Cleveland Public Power would surely render the advancement one with terms substantially more favorable than those generally available in the commercial market. Consequently, by definition, the failure of the trial court to assess interest and require the payment of same by Cleveland Public Power would perpetuate the utility being tax-supported in violation of the City of Cleveland Charter. In addition, the utilization of the example of interest payments far lower than the prevailing rate being an example of forbidden support, implies in this court's opinion that the payment of interest is presumed as part of such a large advancement. Consequently, the Ohio Supreme Court has provided the legal basis for the trial court's imposition of interest as part of Cleveland Public Power's repayment obligation. The absence of an interest payment is by implication, in the Ohio -21- Supreme Court's opinion, a definition of what would constitute support to a non-tax supported utility. From an equitable perspective, the imposition of an interest payment as part of Cleveland Public Power's repayment obligation is just, fair, and to borrow the trial court's words, part of economic reality. If the advancements to Cleveland Public Power had been financed through some type of a public finance mechanism (e.g. municipal finance bonds, commercial lending, etc.), it is difficult to imagine that such a public finance mechanism would not have included an interest payment as part of the borrower's repayment obligation. Thus, it is not an inequity to require the utility to repay interest on the advancements it received. The second issue raised by these assignments of error is whether there was an equitable or legal foundation for the trial court's supplemental order assessing interest on legal fees already reimbursed to the General Fund. In Cleveland Electric Illuminating Company, supra, the Ohio Supreme Court stated "our review of the relevant Charter provisions compels us to conclude that the words "non-tax supported" were intended to establish that municipally owned and operated utilities shall be self-supporting enterprises independent of public subsidies. Id. at 52. (Emphasis added.) A self-supporting enterprise is one that is able to conduct its operations without outside assistance. As it pertains to this case, the outside assistance was in the form of public subsidization from the City of Cleveland's General Fund. The -22- conducting of business operations includes many costs, one of which may be the payment of legal expenses. Appellants argue that the payment of legal expenses did not constitute support for Cleveland Public Power operations. We do not agree, particularly, when the Ohio Supreme Court has stated that "support in any form is forbidden where such support is derived from tax revenue." Id. at 54. The funds utilized for the initial payment of Cleveland Public Power's legal expenses in the prosecution of the federal antitrust case were monies advanced from tax revenue contained in the General Fund. The trial court was correct to conclude that these advancements were tax generated support from the City of Cleveland's General Fund to Cleveland Public Power for its benefit. For reasons previously stated, it was not improper for the trial court to assess interest on monies advanced from tax revenue. The third and final issue arising from these assignments of error is whether the trial court's assessment of interest can be reconciled with a ruling that the statute of limitations is not a bar to this taxpayer action. Appellants, in support of their position that the trial court's assessment of interest is irreconcilable with an overruling of the statute of limitations arguments, rely on the case of Personal Income Consultants, Inc. v. Mamone (1984), 20 Ohio App. 3d 273. In Mamone, the Franklin County Court of Appeals held that the trial court's granting of pre-judgment -23- interest to the plaintiff was improper because there was no agreement between the parties with respect to the payment of interest. The instant case is readily distinguishable from Mamone because there exists no contractual arrangement between Cleveland Public Power and the General Fund of the City of Cleveland. The obligation of Cleveland Public Power to the General Fund is derived from legislative enactments and the City of Cleveland Charter not by operation of a contractual agreement. The Ohio Supreme Court, in Cleveland Electric Illuminating, supra, has defined what constitutes support to a utility that is required by the City of Cleveland Charter to be non-tax supported. An advancement on terms substantially more favorable than those available in the commercial market constitutes forbidden support. Id. The reasonable conclusion for reasons stated previously under these assignments of error, is that the absence of an interest payment is by implication, in the Ohio Supreme Court's opinion, a definition of what would constitute forbidden support to a non-tax support utility. Assignments of error four, five and six are accordingly overruled. Appellee, as it is entitled, has asserted five assignments of error in support of their cross-appeal. The first assignment of error states: UNDER THE MANDATE OF THE SUPREME COURT IN THIS CASE, THE TRIAL COURT ERRED TO THE PREJUDICE OF THE TAXPAYERS OF THE CITY OF -24- CLEVELAND (THE "CITY" IN ORDERING REPAYMENT OF THE SUMS DUE TO THE CITY'S GENERAL FUND ("GENERAL FUND") OVER A PERIOD OF TEN (10) YEARS, SUCH PERIOD BEING ARBITRARY AND CONTRARY TO THE MANDATE THAT THE TAX MONEYS ADVANCED TO THE CITY'S DIVISION OF LIGHT & POWER ("MUNI" OR "CPP") "MUST BE PROMPTLY AND FULLY REIMBURSED BY MUNI LIGHT." The issue presented by this assignment of error is whether the trial court abused its discretion in ordering Cleveland Public Power to repay the amounts owed to the General Fund over a period of ten years when the Ohio Supreme Court mandate required the monies to be "promptly and fully reimbursed by Muni Light to the general fund of the city in accordance with a repayment plan to be approved by the trial court." Id. at 54. The trial court, in reaching a decision on a ten year term, cited three reasons for its decision. The first was the period of time from the first transaction to the issuance of this order. The second reason was the large amount of money involved. The third reason was the interest which has to be repaid both before and after judgment. We are prepared to give sincere deference to the trial court as the fact finder, who was presented in this very difficult case with all of the expert economic testimony. Therefore, we hold that a ten year repayment period is not arbitrary or an abuse of the trial court's discretion in fashioning a viable repayment plan. This court is well aware of the economic competition of the parties and the underlying ramifications of that competition. In light of this awareness, it is not the intention of this -25- court, nor is it our belief that the Ohio Supreme Court intended, to put Cleveland Public Power in a position of financial destitution or threaten its ability to continue operations. It is entirely possible that a shorter repayment plan could pose such a threat. Therefore, Appellee's assignment of error one of its cross- appeal is overruled. Appellee's second assignment of error in support of its cross-appeal states: UNDER THE MANDATE OF THE SUPREME COURT IN THIS CASE, THE TRIAL COURT ERRED TO THE PREJUDICE OF THE TAXPAYERS OF THE CITY IN FAILING TO INCLUDE IN THE PRINCIPAL SUM TO BE REPAID TO THE GENERAL FUND THE AMOUNT OF $5,775,243.51 ADVANCED TO MUNI FOR PAYMENTS TO STREET LIGHTING IMPROVEMENT BONDHOLDERS AND FOR CAPITAL IMPROVEMENTS TO THE CITY'S STREET LIGHTING SYSTEM WHEN THE FORGIVENESS OF MUNI'S OBLIGATION TO REPAY SUCH SUM CONSTITUTES FORBIDDEN TAX SUPPORT UNDER SAID MANDATE. This second assignment of error raises the issue of whether funds advanced to finance street lighting improvements constitute forbidden tax support as it is defined in Cleveland Electric Illuminating Company, supra. The trial court held that these advanced funds did not constitute tax-generated support for Cleveland Public Power, but were funds spent for the benefit of all residents of the City and, therefore, a proper expenditure of tax revenues. -26- Appellee, on cross-appeal, argues that Cleveland Public Power has been paid twice from the General Fund for the improvements in street lighting. The initial payment from the General Fund to Cleveland Public Power was to pay for the capital improvements. The second payment, according to Appellee, was received through its rate structure because such capital improvements are to be included in the rate which Cleveland Public Power charges the General Fund for the purchase of power. The trial court was not prepared, as the trier of the facts, to conclude based on the evidence that Cleveland Public Power was somehow overpaid from tax generated funds for the provision of street lighting improvements. This court is not prepared to make the assumption that the capital improvements were inherently paid for in Cleveland Public Power's rate structure rendering the payments excessive, based on testimony of Appellee's expert witness and the language of Ordinance 913-68 and Ordinance 1060- 71. It was not an abuse of discretion for the trial court to conclude that the lighting of the City streets and facilities are a benefit to all the residents of the City of Cleveland and that such service is normally purchased by municipalities and paid for with tax generated money. The payment for such services is not tax generated support for Cleveland Public Power. Instead, it is payment for the provision of services for the benefit of all City of Cleveland residents and as such a proper expenditure of tax -27- monies, where no unreasonable profit or diversion of funds is proven. Assignment of error two is overruled. Because assignments of error three, four, and five of the cross-appeal are all related to the manner in which the trial court calculated the interest owed to Appellee, they will be discussed together. They state respectively as follows: UNDER THE MANDATE OF THE SUPREME COURT IN THIS CASE, THE TRIAL COURT ERRED TO THE PREJUDICE OF THE TAXPAYERS OF THE CITY IN FAILING TO COMPOUND INTEREST SEMIANNUALLY ON THE SUMS DUE TO THE GENERAL FUND WHEN INTEREST IN THE COMMERCIAL MARKET IS COMPUTED ON A COMPOUND BASIS UNLESS IT IS PAID PERIODICALLY AND ANY REPAYMENT TO THE GENERAL FUND ON TERMS SUBSTANTIALLY MORE FAVORABLE THAN THOSE GENERALLY AVAILABLE IN THE COMMERCIAL MARKET CONSTITUTES FORBIDDEN TAX SUPPORT UNDER SAID MANDATE. BECAUSE OF THE PROHIBITION OF OHIO REVISED CODE ("R.C.") SECTION 133.24 AGAINST THE USE OF TAX-EXEMPT BOND MONEY FOR CURRENT OPERATING EXPENSES OF A MUNICIPAL CORPORATION, THE TRIAL COURT ERRED TO THE PREJUDICE OF THE TAXPAYERS OF THE CITY IN USING THE BOND BUYER INDEX RATE INSTEAD OF THE T-BILL RATE TO COMPUTE THE INTEREST DUE TO THE GENERAL FUND ON THE ADVANCED TAX MONEYS USED FOR CURRENT OPERATING EXPENSES. THE TRIAL COURT ERRED TO THE PREJUDICE OF THE TAXPAYERS OF THE CITY IN FAILING TO COMPUTE POST-JUDGMENT INTEREST ON ALL AMOUNTS DUE TO THE GENERAL FUND AT THE STATUTORY RATE OF TEN PERCENT WHEN R.C. SECTION 1343.03(A) SO REQUIRES. The first issue raised by these assignments of error is whether the trial court abused its discretion in not ordering Cleveland Public Power to pay compound interest, as opposed to an imputed simple fixed interest rate in accordance with the Bond -28- Buyer Index Rate, which is the rate and form of interest that the trial court did order. The trial court recognized its obligation to invoke its equitable powers and impose repayment terms consistent with fairness and economic reality. The trial court then went on to rely on expert testimony presented by Appellants to conclude that if Cleveland Public Power had obtained the funding in the customary marketplace, it likely would have been obtained through the issuance of long-term bonds. Further, the trial court concluded that the interest rate would have been fixed over the term of the bonds at the rate in effect at the time of the issuance of the debt. Given the trier of fact's reliance on expert testimony presented and the recognition of the necessity for the invocation of equitable principles consistent with fairness and economic reality, it was not an abuse of discretion for the trial court to order a simple fixed interest rate to be imputed to the debt. Thus, assignment of error three of the cross-appeal, is overruled. The issue raised by the fourth assignment of error is whether R.C. 133.24 is applicable to the instant case and whether the trial court erred by not using the T-Bill rate to compute interest. At the outset, the question of whether the trial court should have utilized the T-Bill rate to compute interest has already been addressed in this court's previous discussion of the -29- manner in which the trial court evaluated the expert testimony and involved its equitable powers consistent with fairness and economic reality. Appellee desires to have Cleveland Public Power pay the highest interest rate possible to the General Fund. This does not comport with the trial court's assessment of the equitable principles involved, in particular fairness and economic reality. Lastly, Appellee presented an expert whose testimony was a recommendation that the Bond Buyer Index provides a reasonable estimate of interest rates to be employed in calculating the interest owed in this case. R.C. 133.24 is not applicable to the instant case and the manner in which Appellee attempts in its cross-appeal to apply it to the calculation of interest is spurious at best. The trial court was presented with expert testimony on the issuance of municipal finance bonds. This court will not substitute its judgment for that of the trier of fact. Assigned error four, of the cross-appeal is overruled With respect to Appellee's fifth assignment of error on the cross-appeal, it is overruled. The trial court's opinion ratifies a repayment plan that orders periodic payments from Cleveland Public Power to the City of Cleveland General Fund. This court agrees with Appellants that statutory post-judgment interest should only be considered in the event that Cleveland Public Power fails to meet a periodic payment obligation. Judgment affirmed. -30- It is ordered that Appellees recover of Appellants their 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. Exceptions. DYKE, P.J., CONCURS IN JUDGMENT ONLY. ANN MCMANAMON, J., CONCURS IN JUDGEMENT IN ONLY (SEE ATTACHED CONCURRING OPINION) PATRICIA A. BLACKMON JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement 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. COURT OF APPEALS OF OHIO EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 60930 and 60943 CLEVELAND ELECTRIC ILLUMINATING : COMPANY : : Plaintiff-Appellee : and Cross-Appellant : : : C O N C U R R I N G vs. : : O P I N I O N CITY OF CLEVELAND, ET AL. : : Defendants-Appellants : and Cross-Appellees : : : DATE: OCTOBER 8, 1992 ANN MCMANAMON, J., CONCURRING: I respectfully concur in the judgment only. While I agree that the first and second assignments of error must be overruled, I do so for different reasons. The City's statute of limitations defense flies in the face of the Cleveland Elec. Illum. Co. v. Cleveland (1988), 37 Ohio St.3d 50; reh. denied (1988), 38 Ohio St.3d 704, holding. The supreme court definitively answered the question of liability when it held: "*** [W]e find that money advanced by the city to Muni Light without provision for prompt and full repayment is an act in violation of the city charter. - 2 - Therefore, the advanced sums remaining unpaid must be promptly and fully reimbursed by Muni Light to the general fund of the city in accordance with a repayment plan to be approved by the trial court. The judgment of the court of appeals is hereby reversed, and the cause is remanded to the trial court for further proceedings consistent with this opinion." Id. at 54. The court's remand instructions were clear: the only issue to be resolved by the trial court was the repayment plan. I believe the City attempts to circumvent the court's express holding by re-litigating the issue of liability. Even if consideration of the statute of limitations argument were properly raised, I would disagree with the majority's reasoning on its merits. In the City's motion for summary judgment it posited that CEI's action was barred by the one year statute of limitations because the action challenged expenditures made between 1970 and 1980. R.C. 733.60 provides: "No action to enjoin the performance of a contract entered into or the payment of any bonds issued by a municipal corporation shall be brought or maintained unless commenced within one year from the date of such contract or bonds." The City also relies on Westbrook v. Prudential Ins. Co. of America (1988), 37 Ohio St.3d 166 which holds that, "any action predicated upon R.C. 733.56 and 733.59 must be instituted within - 3 - the limitation period prescribed by R.C. 733.60 ***" Id. at 169. It is undisputed that CEI's complaint was brought pursuant to R.C. 733.56 and 733.59. Contrary to the majority opinion, I believe that both R.C. 733.60 and Westbrook, supra are applicable. I also believe that CEI's cause of action, which arose in 1984 and was filed in the same year, was timely. Again, examination of the supreme court mandate in Cleveland Elec. Illum. Co., supra, demonstrates that CEI's cause of action arose in 1984, when Ordinance No. 578-84 was enacted excusing the "Expended Amounts." I agree that the third assignment of error should be overruled, but for the reason that the federal court mandamus issue is not reviewable since it is not properly before this court. Upon remand from an appellate court, a lower court must proceed from the point at which the error occurred. State, ex rel. Stevenson v. Murray (1982), 69 Ohio St.2d 112. Furthermore, when a case is remanded for limited purposes, the trial court is obliged to accept all issues previously adjudicated as finally settled. Blackwell v. International Union, U.A.W. (1984), 21 Ohio App.3d 110. The city initially raised this issue in the 1984 motion for summary judgment, but failed to raise it in this court. The city later resurrected the issue in the supreme court, which rejected the argument. As noted, after the supreme court issued its - 4 - ruling on liability, that court's ruling became the law of the case. Nolan v. Nolan (1984), 11 Ohio St.3d 1, 3-4. The doctrine of the "law of the case" provides that the decision of a reviewing court in a case remains the law of that case on the legal questions involved for all subsequent proceedings at both the trial and reviewing levels. Gohman v. St. Bernard (1924), 111 Ohio St. 726, 730. The supreme court's instruction for remand was limited and specific. Its sole provision was to devise "a repayment plan to be approved by the trial court." Cleveland Elect. Illum. Co., supra at 54. For these reasons, I believe the trial court did not err in failing to consider the City's claims concerning the 1977 mandamus order by the U.S. District Court. I agree that the fourth assignment of error must be overruled, but I would do so on the basis that the award of interest did not constitute an abuse of discretion. Upon remand, a court is bound to adhere to the appellate court's determination of the applicable law. Nolan, supra at 3. Moreover, the trial court is without authority to extend or vary the mandate given. Briggs v. Pennsylvania R.R. Co. (1948), 334 U.S. 304, 306; Dougherty v. Torrence (1984), 10 Ohio St.3d 139, 141. - 5 - The court's award of interest on the expended amounts was within the scope and spirit of the supreme court's holding. The award neither extended nor varied the mandate of the court Briggs, supra; Dougherty, supra; but was within the court's sound discretion. I also agree that the fifth assignment of error should be overruled, but I would do so based on the express language of Cleveland Codified Ordinance Section 578-84. That ordinance provided that the legal fees incurred in the Federal Court case were to be reimbursed by Muni Light and paid to the General Fund. The ordinance also provided that these legal fees, in contrast to other expended amounts, were advancements requiring reimbursement. Therefore, the trial court properly assessed interest on them. Finally, I agree that the sixth assignment of error must be overruled. I would posit, however, that the City's argument is based upon a fallacious premise. The City urges in its brief: "Assuming arguendo, that this Court affirms the trial court's denial of the City's motion for summary judgment based upon the statute of limitations, then this court must determine that the expenditures made between 1970 and 1980 were legal transactions that - 6 - could not have been challenged at the time they were made." City's brief at 33. Although CEI's cause of action accrued in 1984, the expenditures made during 1970 and 1984 could have been challenged at any time during this period. The triggering event, however, was the passage of the ordinance which forgave these debts. The supreme court observed that advancements from tax- generated funds to public utilities is prohibited "where there is no expectation of prompt and complete payment." Cleveland Elec. Illum. Co. at 54. As previously noted, it was only upon passage of the ordinance that the city expressed it had "no expectation of prompt and complete payment" for the expenditures made. As to the cross-appeal, while I agree that its fourth assignment of error must be overruled, my reason would be the fact that, since this issue was never raised below, CEI is precluded from raising it on appeal. Center Ridge Ganley, Inc. v. Stinn (1987), 31 Ohio St.3d 310, 313. .