Case Title: Cincinnati City Sch. Dist. Bd. of Educ. v. Conners

Citation: 2012-Ohio-2447

Docket Number: 2011-0673

State: ohio

Court: Ohio Supreme Court

Date: 2012-06-06T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Cincinnati City School Dist. Bd. of Edn. v. Conners, Slip Opinion No. 2012-Ohio-2447.] 
 
 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2012-OHIO-2447 
CINCINNATI CITY SCHOOL DISTRICT BOARD OF EDUCATION, APPELLANT, v. 
CONNERS ET AL., APPELLEES. 
[Until this opinion appears in the Ohio Official Reports advance sheets,  
it may be cited as Cincinnati City School Dist. Bd. of Edn. v. Conners,  
Slip Opinion No. 2012-Ohio-2447.] 
Contracts—Violation of public policy—R.C. 3313.41—A deed restriction in the 
contract for sale of an unused school building that prevents the use of the 
property for school purposes is unenforceable as against public policy—
Judgment affirmed. 
(No. 2011-0673—Submitted February 7, 2012—Decided June 6, 2012.) 
APPEAL from the Court of Appeals for Hamilton County, 
No. C-100399, 2011-Ohio-1084. 
__________________ 
SYLLABUS OF THE COURT 
The inclusion of a deed restriction preventing the use of property for school 
purposes in the contract for sale of an unused school building is 
unenforceable as against public policy. 
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__________________ 
LANZINGER, J. 
{¶ 1} In this action, the Cincinnati City School District Board of 
Education (“CPS”) asks us to rule on the validity of a deed restriction it placed on 
school property that it offered for sale at public auction.  The issue is whether the 
deed restriction contravenes public policy by preventing an unused school 
building from being used by a public charter school.  While recognizing that the 
freedom to contract is a broad right, we hold that the inclusion of a deed 
restriction preventing the use of property for school purposes in the contract for 
sale of an unused school building is unenforceable as against public policy. 
I. Procedural History of Case 
{¶ 2} In June 2009, CPS conducted a public auction for nine of its vacant 
school buildings.  The promotional materials for the auction advised that the 
auctioned buildings “may not be used as any type of educational facility.”  In the 
June 9, 2009 Purchase and Sale Agreement, the buyer agreed to “use the Property 
for ‘commercial development’ ” and “not to use the Property for school 
purposes.”  The buyer further agreed “that the deeds to the Property will be 
restricted to prohibit future use of the Property for school purposes,” but the 
agreement added that this provision does not apply to CPS, which would be 
allowed to repurchase the property “for school purposes.”  Because CPS had 
decided that the school buildings were “not suitable for use as classroom space” 
pursuant to former R.C. 3313.41(G), 151 Ohio Laws, Part V, 8764, 8788-8789, 
CPS did not offer them for sale to community schools before auction. 
{¶ 3} The appellees, Dr. Roger Conners and his mother, Deborah 
Conners, were the only purchasers to bid at auction on the former Roosevelt 
School located on Tremont Street in Cincinnati.  They bid $30,000 for the 
property and on June 9, 2009, entered into the Purchase and Sale Agreement 
containing the deed restriction.  On an exhibit attached to the purchase agreement 
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entitled “Intended use,” appellees were asked to describe how they would use the 
property.  They responded, “Not sure” and “possible re-sale to another interest 
buyer.”  Title was conveyed by a quitclaim deed on June 30, 2009.  On October 8, 
2009, the appellees received conditional use approval from Cincinnati’s Office of 
the Zoning Hearing Examiner to “reopen the school as a charter school.”  The 
following January, appellees, through counsel, notified the CPS school board and 
its chief legal counsel that the deed restriction was void as against public policy 
and that they intended to open a charter school in August 2010. 
{¶ 4} CPS filed a complaint for declaratory judgment and injunctive 
relief, seeking a declaration that the deed restriction prohibiting the use of the 
property as a school was valid and enforceable and seeking to enjoin the appellees 
from taking any action toward opening a school on the property.  At the time that 
CPS filed suit, appellees had moved forward with the school renovation pursuant 
to the zoning approval, investing $60,000 in rehabilitation of the building and 
purchasing $10,000 of school furniture, among other expenditures. Appellees 
sought and were granted judgment on the pleadings, and CPS’s complaint was 
dismissed.  In its order, the trial court stated that the deed restriction at issue was 
void as against public policy. 
{¶ 5} The Court of Appeals for Hamilton County affirmed, holding that 
the deed restriction was void as against public policy embodied in former R.C. 
3313.41(G), 151 Ohio Laws, Part V, at 8788-8789, which required public school 
districts to give charter school operators the first option to purchase vacant school 
buildings if they were “suitable for use as classroom space.”  Cincinnati City 
School Dist. Bd. of Edn. v. Conners, 1st Dist. No. C-100399, 2011-Ohio-1084.  
The statute was amended to delete “suitable for use as classroom space” in 2011.  
Am.Sub.H.B. No. 153. 
{¶ 6} In reaching its decision, the court of appeals concluded that 
“community schools having access to classroom space [is] clear Ohio public 
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policy.  And the deed restriction that sought to prevent the use of the property for 
educational purposes was void as against this clear policy.”  Id. at ¶ 9. 
{¶ 7} We accepted CPS’s appeal on the following proposition of law:    
 
The Ohio legislature has not expressed a public policy in 
favor of community schools over public schools with regard to a 
public school district’s disposal of real property; to the extent any 
public policy has been established, it is expressly stated in R.C. 
3313.41(G) and does not permit a court of law to unilaterally 
abridge a public school district’s statutory authority to negotiate 
arm’s-length contract terms, including deed restrictions in a 
contract to sell real property to private citizens. 
 
Cincinnati City School Dist. Bd. of Edn. v. Conners, 129 Ohio St.3d 1449, 2011-
Ohio-4217, 951 N.E.2d 1046. 
II. Legal Analysis 
A. Legislative enactments: R.C. Chapters 3313 and 3314   
{¶ 8} Ohio’s school districts were created by Article VI, Section 3 of the 
Ohio Constitution, which requires the General Assembly to provide for “the 
organization, administration, and control of the public school system of the state 
supported by public funds.”  The General Assembly has provided for Ohio’s 
boards of education under R.C. Chapter 3313.  Accordingly, the board of 
education of each school district derives its authority to contract, and therefore, its 
authority to dispose of real property, from the statute.  R.C. 3313.17 (“Corporate 
powers of board”) states, “The board of education of each school district shall be 
a body politic and corporate, and, as such, capable of * * * contracting and being 
contracted with, acquiring, holding possessing, and disposing of real and personal 
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property * * *.”  The statute, in other words, grants boards of education the power 
to enter into contracts and to dispose of real property. 
{¶ 9} Ohio boards of education are creations of statute, and their 
authority is derived from and strictly limited to powers that are expressly granted 
by statute or clearly implied therefrom. Schwing v. McClure, 120 Ohio St. 335, 
166 N.E. 230 (1929), syllabus.  A board of education is “a mere instrumentality of 
the state to accomplish its purpose in establishing and carrying forward a system 
of common schools throughout the state.”  Cincinnati Bd. of Edn. v. Volk, 72 Ohio 
St. 469, 485, 74 N.E. 646 (1905). 
{¶ 10} In enacting R.C. 3313.17, the General Assembly gave boards of 
education the discretionary authority to contract with other parties in order to 
administer Ohio’s system of education.  When a board of education is vested with 
discretion, that discretion should not be disturbed by the courts as long as the 
exercise of it is reasonable, in good faith, and not clearly shown to be an abuse of 
discretion.  Greco v. Roper, 145 Ohio St. 243, 250, 61 N.E.2d 307 (1945).  A 
board of education, however, also has a duty “to manage the schools in the public 
interest.”  Xenia City Bd. of Edn. v. Xenia Edn. Assn., 52 Ohio App.2d 373, 377, 
370 N.E.2d 756 (2d Dist.1977).  Thus, while a board of education has the 
authority to contract, it must do so with the public in mind. 
{¶ 11} The General Assembly also enacted legislation that placed 
restrictions on a board of education’s authority to dispose of property.  R.C. 
3313.41 governs school districts’ discretionary sale or donation of school 
buildings.  The statute in effect at the time this suit was filed, former R.C. 
3313.41(G)(1), 151 Ohio Laws, at 8788-8789, required that before a school 
district sells a school building “suitable for use as classroom space, prior to 
disposing of that property under divisions (A) to (F) of this section [“Disposal of 
real of personal property; exchange or acquisition of real property”], it shall first 
offer that property for sale to the governing authorities of the start-up community 
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schools established under Chapter 3314 * * * at a price that is not higher than the 
appraised fair market value of that property.”  This same section allowed the 
school district to sell the school building to parties other than a community school 
only “if no community school governing authority accepts the offer within sixty 
days * * *.”  When this section was amended in 2011, the amendment deleted the 
“suitable for use as classroom space” requirement. Am.Sub.H.B. No. 153.  Under 
former 3313.41(G)(2), which has since been deleted,  the same first offer 
requirement was required  for similar property that has not been used for a year:  
 
When a school district board of education has not used real 
property suitable for classroom space * * * for one full school year 
* * * it shall offer that property for sale to the governing 
authorities of the start-up community schools * * * located within 
the territory of the school district* * *. 
 
Former R.C. 3313.41(G)(2), 151 Ohio Laws, Part V, at 8789. 
{¶ 12} These statutes show that the General Assembly did not intend that 
a board of education have an unfettered right to dispose of its property.  They also 
indicate a legislative preference for giving charter schools the opportunity to 
operate out of unused public school buildings, a rational choice because charter 
schools are themselves “public schools * * * and ‘part of the state’s program of 
education.’ ” State ex rel. Ohio Congress of Parents & Teachers v. State Bd. of 
Edn., 111 Ohio St.3d 568, 2006-Ohio-5512, 857 N.E.2d 1148, ¶ 26, quoting R.C. 
3314.01(B). 
{¶ 13} Legislation on charter schools was adopted when the General 
Assembly enacted R.C. Chapter 3314 in 1997, titled “The Community Schools 
Act.”  Am.Sub.H.B. No. 215, 147 Ohio Laws, Part I, 909, 1187.  In enacting R.C. 
Chapter 3314, the General Assembly declared that its purposes included 
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“providing parents a choice of academic environments for their children and 
providing the education community with the opportunity to establish limited 
experimental educational programs in a deregulated setting.” Am.Sub.H.B. No. 
215, Section 50.52, Subsection 2(B), 147 Ohio Laws, Part I, 2043.  The General 
Assembly defined what it meant by community schools and explained, “A 
community school created under this chapter is a public school, independent of 
any school district, and is part of the state’s program of education.”  R.C. 
3314.01(B). 
{¶ 14} Because we acknowledge that the General Assembly has expressed 
a strong interest in community schools, we now turn to the deed restriction to 
determine whether including it in CPS’s contracts violates a stated public policy. 
B. Common law of contracts and public policy  
{¶ 15} The sole issue before us is the validity of a deed restriction 
imposed by a political subdivision that sought to prevent the use of property for 
educational purposes.  Under well-established contract law, we recognize that 
contracts entered into freely and “ ‘fairly made will be held valid and enforced in 
the courts.’ ”  Lamont Bldg. Co. v. Court, 147 Ohio St. 183, 184, 70 N.E.2d 447 
(1946), quoting 12 American Jurisprudence, Section 149, at 641.  We have 
reiterated the importance of this concept as it applies to education, stating, “ ‘The 
right to contract freely with the expectation that the contract shall endure 
according to its terms is as fundamental to our society as the right to write and to 
speak without restraint.’ ”  Lake Ridge Academy v. Carney, 66 Ohio St.3d 376, 
381, 613 N.E.2d 183 (1993), quoting Blount v. Smith, 12 Ohio St.2d 41, 47, 231 
N.E.2d 301 (1967).  The freedom to contract is a deep-seated right that is given 
deference by the courts. 
{¶ 16} This deference, however, is not absolute.  We have observed that 
the “ ‘liberty of contract is not an absolute and unlimited right, but upon the 
contrary is always subservient to the public welfare. * * * The public welfare is 
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safeguarded, not only by Constitutions, statutes, and judicial decisions, but by 
sound and substantial public policies underlying all of them.’ ”  J.F. v. D.B., 116 
Ohio St.3d 363, 2007-Ohio-6750, 879 N.E.2d 740, ¶ 5, quoting Pittsburgh, 
Cincinnati, Chicago & St. Louis Ry. Co. v. Kinney, 95 Ohio St. 64, 115 N.E. 505 
(1916), syllabus.  In fact, this court explained almost 200 years ago that “the right 
of making contracts at pleasure is a personal privilege of great value, and ought 
not to be slightly restrained; but it must be restrained when contracts are 
attempted against the public law, general policy, or public justice.”  Key v. 
Vattier, 1 Ohio 132, 147 (1823).  The question becomes, when is it appropriate to 
apply the principle of the public policy exception so as not to infringe on the 
parties’ rights to make contracts?   
{¶ 17} While the public policy exception has existed for over a hundred 
years, courts applying it have struggled to determine what public policy is. 
“ ‘Public policy’ is the community common sense and common conscience 
extended and applied throughout the state to matters of public morals, public 
health, public safety, public welfare, and the like.”  Kinney, 95 Ohio St. at 64, 
1115 N.E.2d 505.  “ ‘Again, public policy is that principle of law which holds that 
no one can lawfully do that which has a tendency to be injurious to the public or 
against the public good.  Accordingly, contracts which bring about results which 
the law seeks to prevent are unenforceable as against public policy.’ ”  Eagle v. 
Fred Martin Motor Co. 157 Ohio App.3d 150, 2004-Ohio-829, 809 N.E.2d 1161, 
¶ 64, quoting Ohio Jurisprudence 3d, Contracts, Section 94, at 528 (1980).  We 
have succinctly described public policy as “at best, an uncertain and indefinite 
term.”  Lamont Bldg. Co., 147 Ohio St. at 185, 70 N.E.2d 740.  The United States 
Supreme Court, weighing in on the matter, has stated that “the public’s interest in 
confining the scope of private agreements to which it is not a party will go 
unrepresented unless the judiciary takes account of those interests when it 
considers whether to enforce such agreements.”  United Paperworkers Internatl. 
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Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 42, 108 S.Ct. 364, 98 L.Ed.2d 286 
(1987), citing W.R. Grace & Co. v. Rubber Workers, 461 U.S. 757, 766, 103 S. 
Ct. 2177, 76 L.Ed.2d 298 (1983).  Our duty is to determine when the public policy 
exception must be recognized, but it is the “legislative branch [that] ‘is the 
ultimate arbiter of public policy.’ ”  Arbino v. Johnson & Johnson, 116 Ohio St. 
3d 468, 472, 2007-Ohio-6948, 880 N.E.2d 420, ¶ 21, quoting State ex rel. 
Cincinnati Enquirer, Div. of Gannett Satellite Information Network v. Dupuis, 98 
Ohio St.3d 126, 2002-Ohio-7041, 781 N.E.2d 163, ¶ 21.  We therefore must 
examine whether the deed restriction accomplishes a result that the state has 
sought to prevent, or whether it accomplishes something that the state seeks to 
facilitate. 
C. The parties’ arguments 
{¶ 18} CPS argues that the public policy exception is a narrow doctrine, 
not to be overused by courts and applicable only when rooted in well-established 
law.  The board  also asserts that the deed restriction does not hinder statutory 
benefits given to charter schools and notes that this specific sale was made to 
private citizens who only later decided to create a charter school and declared that 
they would not abide by the deed restriction. CPS states that R.C. 3313.41(G) 
does not apply to this case because the property had already passed the first-offer 
phase and proceeded to public auction.  The board contends that the deed 
restriction should be upheld, and if there is to be a public policy favoring the 
disposal of property to charter schools, the legislature should revise the statutes to 
that effect.  It points to the amendments to the Community Schools Act as 
evidence that the General Assembly’s approach to community schools has been 
one of measured caution. 
{¶ 19} In response, appellees argue that the deed restriction imposed by 
CPS is void because it hinders and impedes the public policy expressed in 
R.C.3313.41, favoring the transfer of school buildings to community schools.  
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Appellees urge rejection of any contract term that frustrates this purpose.  
Furthermore, in advocating for application of the doctrine of public policy, 
appellees suggest that the public’s interest in striking the deed restriction is 
heightened when the contract is not between private parties.  Although appellees 
did not purchase as representatives of a charter school, they argue that their status 
does not matter.  They rely on CPS’s status as a political subdivision to trigger 
heightened scrutiny.  They also argue that the General Assembly has expressed a 
clear public policy in favor of facilitating community schools’ acquisition of 
public school buildings and in favor of  allowing parental choice and educational 
opportunity through these schools. 
{¶ 20} Deed restrictions are generally disfavored and will be “strictly 
construed against limitations upon * * * use, and that all doubts should be 
resolved against a possible construction thereof which would increase the 
restriction upon the use of such real estate.”  Loblaw, Inc. v. Warren Plaza, Inc., 
163 Ohio St. 581, 127 N.E.2d 754 (1955), paragraph two of the syllabus.  The 
restriction in Section 8 of the Purchase and Sale Agreement states:   
 
B.  Buyer agrees not to use the Property for school purposes, and 
that the deed to the Property will be restricted to prohibit future use 
of the Property for school purposes.  Such deed restriction will not 
apply to the Seller, and will not prevent the Seller from 
repurchasing any portion of the Property in the future and using the 
Property for school purposes. 
 
{¶ 21} The restriction, on its face, prevents the free use of the property for 
educational purposes.  The language thus directly frustrates the state’s intention to 
make classroom space available to community schools, as evidenced by R.C. 
3313.41(G).  Furthermore, the restriction is not neutral; it seeks to thwart 
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competition by providing that the restriction applies to all buyers except CPS 
itself.  This consequence hinders the results that the General Assembly has 
created under R.C. 3313.41, 3318.08, 3318.50, 3318.52, and the Ohio Community 
Schools Act—that is, allowing unused school buildings to be transferred to 
community schools that will use the building to provide school choice. 
{¶ 22} In 2001, the state established the “Community School Classroom 
Facilities Loan Guarantee Program” and the “Community School Classroom 
Facilities Loan Guarantee Fund” to help charter schools acquire buildings at a 
lower cost.  R.C. 3318.50 and 3318.52.  The program supplies funds to charter 
schools to assist them with “acquiring, improving, or replacing classroom 
facilities for the community school by lease, purchase, remodeling of existing 
facilities, or any other means including new construction.”  R.C. 3318.50(B). 
{¶ 23} In our view, the statutes reflect the General Assembly’s purpose of 
requiring boards of education to sell unused school buildings to community 
schools by giving them first refusal ensuring that the price is fair, and financially 
assisting them through a loan program to purchase adequate classroom space.  
The General Assembly continues to clarify its intent that unused public school 
buildings should be offered to community schools without restriction, as 
evidenced by the recent changes to the language of R.C. 3313.41(G), where the 
General Assembly removed the term “suitable for classroom space” from the law.  
The deed restriction in this case is at odds with these statutes. The restriction 
effectively adds barriers to building purchases that the legislature seeks to 
prevent. 
III.  Conclusion 
{¶ 24} We emphasize that we continue to uphold the importance of the 
freedom to contract and recognize the narrowness of the doctrine on public 
policy. In this case, however, involving a contract between a private party and a 
political subdivision, there is a compelling reason to support the application of the 
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doctrine.  We therefore hold that the inclusion of a deed restriction preventing the 
use of property for school purposes in the contract for sale of an unused school 
building is unenforceable as against public policy. 
{¶ 25} The judgment of the court of appeals is affirmed. 
Judgment affirmed. 
O’CONNOR, C.J., and LUNDBERG STRATTON, O’DONNELL, CUPP, and 
MCGEE BROWN, JJ., concur. 
PFEIFER, J., concurs in syllabus and concurs in part and dissents in part. 
__________________ 
PFEIFER, J., concurring in part and dissenting in part. 
{¶ 26} I concur in the syllabus and the bulk of the majority opinion.  I 
would, however, order that the opinion apply only prospectively. 
{¶ 27} In this case, the school board sold property with a deed restriction.  
Although no evidence on this issue was presented, based on logic and a 
rudimentary understanding of how real estate is valued, I am willing to presume 
that the deed restriction caused some diminution in the sales price.  It strikes me 
as unfair that the buyer should be able to buy at a reduced rate because of a deed 
restriction and then realize full value by having this court declare the deed 
restriction against public policy.  Essentially, the buyer has received a windfall, 
and the school district has not received the full value for its property. 
{¶ 28} There are at least two ways to address this inequity.  We could 
order the transaction rescinded and allow the school district to sell the property 
unencumbered by the deed restriction.  Because the buyer may have already made 
improvements or other changes to the property, this option is not preferred.  The 
second option is to require the buyer to pay the school district the difference 
between the purchase price and the fair market value of the property without a 
deed restriction at the time of the sale. 
__________________ 
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Frost Brown Todd L.L.C., Douglas R. Dennis, Scott D. Phillips, and 
Austin W. Musser, for appellant. 
1851 Center for Constitutional Law and Maurice A. Thompson, for 
appellees. 
Isaac, Brant, Ledman & Teetor, L.L.P., Mark Landes, and Patrick M. 
Pickett, urging reversal for amicus curiae Ohio School Boards Association. 
Jones Day and Chad Readler, urging affirmance for amicus curiae Ohio 
Alliance for Public Charter Schools, School Choice Ohio, The Black Alliance for 
Educational Options, National Association for Public Charter Schools, and Ohio 
Coalition for Quality Education. 
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