Case Title: Hubbard ex rel. Creed v. Sauline

Citation: 1996-Ohio-174

Docket Number: 19941962

State: ohio

Court: Ohio Supreme Court

Date: 1996-01-31T00:00:00Z

Document:
City of Hubbard ex rel.  Creed, Admr., Appellant, v.  Sauline, Mayor, et al., 
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Appellees. 
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[Cite as Hubbard ex rel. Creed v. Sauline (1996),    Ohio St.3d   .] 
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Public officials -- Compensation -- Public official who accepts 
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compensation contrary to statute is under no legal duty to repay the 
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compensation, when. 
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A public official who accepts compensation contrary to statute is under  
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no legal duty to repay the compensation where it is subsequently 
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determined that the official received the compensation in good faith 
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and under color of law.  (State ex rel. Parsons v. Ferguson [1976], 46 
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Ohio St.2d 389, 75 O.O.2d 457, 348 N.E.2d 692; State ex rel. Gillie v. 
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Warren [1973], 36 Ohio St.2d 89, 65 O.O.2d 241, 304 N.E.2d 242, 
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affirmed, and followed.) 
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(No. 94-1962 -- Submitted December 5, 1995 -- Decided January 31, 
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1996.) 
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Appeal from the Court of Appeals for Trumbull County, No. 93-T-
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4977. 
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2
 
Defendant-appellee, Albert J. Sauline, Jr.,  assumed the office of 
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mayor of the city of Hubbard, a non-chartered city, on January 1, 1988.  The 
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mayor's salary at that time was $20,900 annually.  On July 17, 1989 the 
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Hubbard City Council adopted Ordinance No. 29-89 which, effective 
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September 1989, increased the mayor's salary to $25,900 for calendar year 
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1989, and to $26,900 for calendar year 1990 and thereafter. 
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On May 16, 1990, Thomas Creed1 initiated a declaratory judgment 
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action in which he sought to invalidate the "in-term" salary increase granted 
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to Mayor Sauline, and named as defendants Sauline, the city of Hubbard, 
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and the city auditor and its treasurer.  Creed claimed that the salary increase 
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violated R.C. 731.07, which provides, in part, that "[t]he salary of any officer 
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of a city shall not be increased or diminished during the term for which he 
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was elected or appointed."  He also alleged that the mayor had accepted 
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increased compensation under the ordinance while believing that it was 
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illegal for mayors of non-charter cities like himself to accept in-term salary 
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increases.   
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3
 
Creed sought an injunction precluding Hubbard's fiscal officers from 
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paying the mayor increased amounts resulting from passage of Ordinance 
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No. 29-89,  and ordering  Sauline to repay the city of Hubbard an amount 
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equaling the total of the increases he had received.  Creed further alleged 
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that he had first requested the Law Director of the city of Hubbard to file a 
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similar action pursuant to R.C. 733.59,  which provides: 
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"If the village solicitor or city director of law fails, upon the written 
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request of any taxpayer of the municipal corporation, to make any 
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application provided for in sections 733.56 to 733.58 of the Revised Code, 
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the taxpayer may institute suit in his own name, on behalf of the municipal 
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corporation.  Any taxpayer of any municipal corporation in which there is no 
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village solicitor or city director of law may bring such suit on behalf of the 
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municipal corporation. No such suit or proceeding shall be entertained by 
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any court until the taxpayer gives security for the cost of the proceeding." 
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Creed alleged that the law director had failed to bring suit as 
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requested.  Creed also sought an award of reasonable attorney fees and 
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costs. 
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The parties filed cross-motions for summary judgment.  On December 
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26, 1990, the court granted the motion of the city and its officials for 
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summary judgment, and dismissed the case.  The court found that, pursuant 
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to Sections 2 and 3, Article XVIII of the Ohio Constitution,  the city of 
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Hubbard could legally grant an in-term salary increase to its mayor, even 
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though that action might be deemed to conflict with R.C. 731.07. 
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The court of appeals reversed and remanded, holding that R.C. 
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731.07 prevailed over Ordinance No. 29-89.  The court stated, "[w]hen a city 
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determines that its officers' compensation should be increased, that is a 
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matter of local concern.  However, the time for payment of that increase is a 
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procedural matter and is governed by general laws, namely R.C. 731.07.  
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This section prohibits in-term pay increases for a city official, as took place in 
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this case."  Creed v. Hubbard (1992), 78 Ohio App.3d 461, 605 N.E.2d 415 
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(“Creed I.”)   
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The court also found that the action, although identifying Creed as the 
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plaintiff, had been brought as a taxpayer action on behalf of the municipality 
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of Hubbard, and advised that, upon remand, Creed should be allowed to 
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amend the caption of his complaint consistent with the provisions of R.C. 
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Chapter 733.  
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This court overruled defendant's jurisdictional motion seeking an order 
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to certify the record on August 12, 1992.  Creed v. Hubbard (1992), 64 Ohio 
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St.3d 1443, 596 N.E.2d 472. 
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On remand, Creed amended the caption of his complaint to "City of 
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Hubbard ex rel. Creed v. Sauline, et al."  Defendants filed an amended 
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answer with leave of court asserting the affirmative defense that "[p]ayments 
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have been made to and received by defendant Sauline in good faith and 
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under color of law."   The trial court denied cross-motions for summary 
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judgment filed by both parties. 
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Upon a trial to the court, judgment was entered in accordance with 
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Creed I declaring the in-term pay raise to be illegal.  The court found, 
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however, that the mayor was under no legal obligation to refund the 
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increased amounts he had received prior to the court of appeals’ decision in 
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Creed I,  in that he had received them in good faith and under color of state 
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law.  The court did not grant an award of attorney fees to Creed's 
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administrator.  The costs of the action were assessed against the city of 
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Hubbard.  The court of appeals affirmed. 
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The cause is before this court pursuant to the allowance of a 
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discretionary appeal.  
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Stuart J. Banks and James A. Denney, for appellant. 
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Richards & Meola and Charles L. Richards, for appellee Sauline, 
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Mayor. 
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H. Kenneth Inskeep,. Hubbard City Law Director, for appellees 
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Joshua, City Auditor, and Madeline, City Treasurer. 
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Moyer, C.J.     We affirm the judgment of the court of appeals. 
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Law of the Case 
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In Nolan v. Nolan (1984), 11 Ohio St. 3d 1, 3-4, 11 OBR 1, 2-3, 462 
4 
N.E. 2d 410, 412-413, we summarized the doctrine of the law of the case: 
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"***  [T]he decision of a reviewing court in a case remains the law of 
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that case on the legal questions involved for all subsequent proceedings in 
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the case at both the trial and reviewing levels.*** 
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"The doctrine is considered to be a rule of practice rather than a 
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binding rule of substantive law and will not be applied so as to achieve 
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unjust results. Gohman [v. St. Bernard (1924)], supra, 111 Ohio St. [726] at 
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730-731, [146 N.E. 291 at 292].  However, the rule is necessary to ensure 
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consistency of results in a case, to avoid endless litigation by settling the 
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issues, and to preserve the structure of superior and inferior courts as 
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designed by the Ohio Constitution. See State, ex rel. Potain, v. Mathews 
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(1979), 59 Ohio St. 2d 29, 32 [13 O.O. 3d 17, 18-19, 391 N.E.2d 343, 345]. 
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"In pursuit of these goals, the doctrine functions to compel trial courts 
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to follow the mandates of reviewing courts.  *** [Citations omitted.]  Thus, 
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where at a rehearing following remand a trial court is confronted with 
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substantially the same facts and issues as were involved in the prior appeal, 
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the court is bound to adhere to the appellate court's determination of the 
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applicable law. *** [Citations omitted.]  Moreover, the trial court is without 
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authority to extend or vary the mandate given.  *** [Citations omitted.]"  
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(Emphasis added.) 
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We have further held that the doctrine of law of the case precludes a 
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litigant from attempting to rely on arguments at a retrial which were fully 
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pursued, or available to be pursued, in a first appeal.  New arguments are 
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subject to issue preclusion, and are barred.  Beifuss v. Westerville Bd. of 
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Edn., (1988), 37 Ohio St.3d 187, 191, 525 N.E.2d 20, 24.  See, also, Hawley 
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v. Ritley (1988), 35 Ohio St.3d 157, 519 N.E.2d 390.  Where this court 
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refuses jurisdiction following the issuance of an opinion by a court of 
15 
appeals, the court of appeals opinion becomes the law of the case.  See 
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Transamerica Ins. Co. v. Nolan (1995), 72 Ohio St.3d 320, 649 N.E.2d 
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1229.  
2 
 
On remand from the first decision of the court of appeals in Creed I, 
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the appellees filed a cross-motion for summary judgment in their favor.  The 
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city officials did not contest appellant's claim that she was entitled to 
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judgment on the issue of the invalidity of Ordinance No. 29-89.  They 
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claimed that they were nevertheless entitled to judgment on the issues of 
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damages and attorney fees, stating, "[t]he only issues remaining to be 
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litigated are whether Mayor Sauline must repay the monies spent under 
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Ordinance 29-89 and whether the plaintiff may recover attorney fees from 
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either the City of Hubbard or the officers and councilmen who took part in 
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the passing of the ordinance."  We find this acknowledgment to be in full 
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accord with the doctrine of the law of the case.   
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In her first proposition of law, Creed's administrator contends that 
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Mayor Sauline's state of mind as to the legality of the in-term pay raise 
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ordinance at the time he accepted its benefits is irrelevant, thereby 
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challenging the precedent of this court established in State ex rel. Parsons 
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v. Ferguson (1976), 46 Ohio St.2d 389, 75 O.O.2d 457, 348 N.E.2d 692, 
2 
and State ex rel. Gillie v. Warren (1973), 36 Ohio St.2d 89, 65 O.O.2d 241, 
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304 N.E.2d 242.    
4 
 
In opposition to this proposition the appellee city officials first argue 
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that application of R.C. 731.07 to invalidate the pay-raise ordinance violates 
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Section 3, Article XVIII of the Ohio Constitution, the Home Rule Amendment. 
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 We are precluded, however, from considering this argument, as to do so 
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would violate the law-of-the-case doctrine.  The finding of the court of 
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appeals that R.C. 731.07 invalidated Ordinance No. 29-89 became the law 
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of this case when this court refused to accept jurisdiction of the first appeal 
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in 1992.   We conclude that only two issues are properly before us:  (1) 
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whether Mayor Sauline should be required to reimburse amounts he had 
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received as a result of Ordinance No. 29-89 through the end of his first term, 
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and (2) whether relator Creed should have been awarded judgment in his 
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favor on the issues of damages and attorney fees. 
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Reimbursement 
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In Parsons, supra, and Gillie, supra, this court recognized that 
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payments of compensation made to public officials, even if made 
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erroneously or unconstitutionally, cannot ordinarily be recovered if made in 
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good faith and under color of law.  We today affirm this long-standing rule of 
5 
law set forth in those cases and hold that a public official who accepts 
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compensation contrary to statute is under no legal duty to repay the 
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compensation where it is subsequently determined that the official received 
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the compensation in good faith and under color of law. 
9 
 
Following remand, the trial court heard evidence to determine the 
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factual issue whether the mayor's receipt of increased salary benefits 
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beginning in September 1989 and ending at the time of Creed I was “in good 
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faith and under color of law,” and found that it was. 
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This court should not substitute its judgment for that of the trial court 
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where the record contains competent and credible evidence supporting the 
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findings of fact and conclusions of law rendered by a trial court judge.  
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12
Gerijo, Inc. v. Fairfield (1994), 70 Ohio St.3d 223, 638 N.E.2d 533; Seasons 
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Coal Co. v. Cleveland (1984), 10 Ohio St. 3d 77, 80, 10 OBR 408, 411, 461 
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N.E.2d 1273, 1276; C. E. Morris Co. v. Foley Constr. Co. (1978), 54 Ohio St. 
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2d 279, 8 O.O. 3d 261, 376 N.E.2d 578.  In the case at bar we find evidence 
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in the record sufficient to support the trial court's judgment.  
5 
 
The appellant's evidence included the facts that from 1985 until at 
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least 1987, while serving as a city councilman, Sauline had believed it to be 
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illegal for the mayor to receive an in-term pay increase, and  that Sauline 
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nevertheless supported the city council's decision to adopt Ordinance No. 
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29-89. Appellant further points to Ohio Ethics Commission Advisory Opinion 
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No. 91-008, in which the commission has determined (1) that R.C. 
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102.03(D) prohibits a city mayor from approving the enactment of an 
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ordinance which grants the mayor an increase in compensation, or from 
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otherwise using his or her authority or influence, formally or informally, to 
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secure an increase in compensation; and (2) that R.C. 102.03(E) prohibits a 
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city mayor from accepting an in-term increase in compensation.  We 
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observe, however, that this opinion was issued in December 1991, after 
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Mayor Sauline had received the greatest portion of the salary increase 
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provided by Ordinance No. 29-89, and at the very end of the mayor's first 
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term. Quite obviously that advisory opinion could have had no effect on 
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Mayor Sauline's analysis of the legality of the pay raise ordinance before the 
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opinion was rendered, and the record lacks any evidence as to when Mayor 
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Sauline in fact first learned of its existence. 
7 
 
Sauline testified that, at the time the pay-increase ordinance was 
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presented to him as mayor, the state of the law supported the conclusion 
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that enactment of such a pay raise would be legal.  He acknowledged that 
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he had  at times during the past believed it illegal for an in-term mayor to 
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receive a pay increase.  His evidence tended to show, however, that he had 
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discussed the legality of the proposed pay increase with the city of Hubbard 
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law director on several occasions in 1989 prior to enactment of the 
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ordinance, and that the law director advised him that such an in-term pay 
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increase was legal.  Other evidence showed that legal research performed 
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by the law director prior to the enactment of the ordinance disclosed both a 
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Trumbull County Common Pleas Court decision  (State ex rel. Hamilton v. 
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Madeline  [Mar. 23, 1987], Trumbull C.P. No. 86-CV-1755, unreported) and 
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an Ohio Attorney General Opinion (1983 Ohio Atty.Gen.Ops. No. 83-036, at 
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2-137) supporting the conclusion that the proposed pay raise would be legal. 
5 
  Moreover,  the evidence showed that both Mayor Sauline and the law 
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director spoke with examiners from the state Auditor's Office, and that the 
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law director thereafter received a letter confirming that the auditor's office no 
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longer sought to recover funds received by non-charter city mayors resulting 
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from in-term salary increases.  
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The record before this court contains sufficient evidence to support the 
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trial court's factual finding of good faith on the part of the appellees in 
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implementing Ordinance No. 29-89, and we therefore affirm its judgment..  
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Attorney Fees 
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The trial court failed to award attorney fees to Creed's administrator for 
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the reason that "the court finds the Plaintiff is not entitled thereto" and 
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because it found that the litigation resulted in "no benefit *** to the residents 
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and taxpayers of Hubbard, Ohio.” 
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As an additional reason for denying attorney fees, the court cited the 
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plaintiff's failure to post security for the costs of the action as required by 
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R.C. 733.59, although it is agreed the plaintiff had given $65 as a deposit for 
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costs as required by Trumbull C.P. Loc.R. 17.01 upon the filing of any civil 
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suit.  The court inferred that the failure to deposit additional funds precluded 
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a finding that the suit was indeed an R.C. Chapter 733 taxpayer suit, citing 
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State ex rel. Citizens for a Better Portsmouth v. Sydnor (1991), 61 Ohio 
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St.3d 49, 572 N.E.2d 649.  We find, however, that pursuant to the law-of-
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the-case doctrine, the court exceeded its authority in making that 
14 
determination.  The clear import of Creed I was that Creed had indeed 
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brought his action as an R.C. Chapter 733 taxpayer action.  As such, the 
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court was required to entertain appellant's motion filed pursuant to R.C. 
1 
733.61, which provides:  
2 
 
"If the court hearing a case under section 733.59 of the Revised Code 
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is satisfied that the taxpayer had good cause to believe that his allegations 
4 
were well founded, or if they are sufficient in law, it shall make such order as 
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the equity of the case demands. In such case the taxpayer shall be allowed 
6 
his costs, and, if judgment is finally ordered in his favor, he may be allowed, 
7 
as part of the costs, a reasonable compensation for his attorney." 
8 
 
However, the trial court was not required to make an award of attorney 
9 
fees.  While R.C. 733.61 specifically provides that a successful plaintiff in a 
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taxpayer suit shall be allowed his costs, it provides in contrast that an award 
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of attorney fees may be allowed.  Use of the word "may" in the statute 
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implies that the decision to award attorney fees to a successful plaintiff in an 
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R.C. Chapter 733 taxpayer suit  lies entirely within the trial court's discretion. 
14 
  State ex rel. Hirshler v. Frazier (1980), 63 Ohio St.2d 333, 335, 17 O.O.3d 
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418, 419, 410 N.E.2d 1253, 1254.   Having reviewed the numerous reasons 
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cited by the trial court in denying an award of attorney fees in this case, we 
1 
do not find that the denial constituted an abuse of discretion. Cf. Kent v. 
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Cent. Benefits Mut. Ins. Co. (1990), 67 Ohio App.3d 142, 586 N.E.2d 207. 
3 
 
For the foregoing reasons, the judgment of the court of appeals is 
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affirmed.  
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Judgment affirmed. 
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DOUGLAS, WRIGHT, F.E. SWEENEY, PFEIFER and COOK, JJ., concur. 
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RESNICK, J., dissents. 
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1 
Thomas Creed died on July 23, 1993.  The suit was continued 
10 
after his death by the administrator of his estate, Beverly A. Creed. 
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