[Cite as Case Leasing & Rental, Inc. v. Ohio Dept. of Natural Resources, 2011-Ohio-1417.]

Court of Claims of Ohio

The Ohio Judicial Center 

65 South Front Street, Third Floor 

Columbus, OH 43215 

614.387.9800 or 1.800.824.8263 

www.cco.state.oh.us

CASE LEASING & RENTAL, INC. 

 Plaintiff 

 v. 

OHIO DEPARTMENT OF NATURAL 

RESOURCES 

 Defendant 

Case No. 2005-08034 

Judge Joseph T. Clark 

DECISION

{¶ 1} On June 19, 2008, this court issued a liability determination in favor of 

plaintiff,1 an Ohio corporation and owner of an 87,500 square foot facility known as the 

Lake Front Racquet and Health Club (the RecPlex) in Celina, Ohio. 

{¶ 2} In July 2003, the RecPlex sustained extensive damage as a result of 

flooding that occurred after a severe storm passed through the area. The court found 

that defendant, the Ohio Department of Natural Resources (ODNR), was liable for such 

damage as a result of its negligent construction and maintenance of a spillway located 

near the RecPlex property. 

{¶ 3} On February 11, 2009, following the damages portion of the bifurcated 

trial, a magistrate of the court recommended judgment in the amount of $4,235,444, 

 

1

References to “plaintiff” in this decision are to Tom Case, owner of plaintiff corporation, an entity 

separate from the Recplex.
which consisted of $2,735,000 for diminution in value of the real property, $551,119 in 

personal property loss, $949,300 in interest costs on bank loans associated with 

restoration and repair of the property, and $25 for reimbursement of the court’s filing 

fee. The recommendation regarding the loss of market value was based upon a finding 

that plaintiff’s loss was permanent in nature inasmuch as neither the design nor the 

structure of the spillway were reasonably likely to change in the near future and 

continued intermittent flooding of the property was inevitable. 

{¶ 4} The parties filed timely objections to the magistrate’s recommendation. 

The court thereafter issued a decision, dated April 16, 2009, wherein it adopted the 

magistrate’s decision that the damage to plaintiff’s property was permanent, but 

disallowed the award of $949,300 in interest costs. The court reasoned that plaintiff’s 

decision to repair and reopen the RecPlex was at his own risk and expense, and that 

any award of interest charged upon sums borrowed to finance the repair of the RecPlex 

was in error. The court summarized that the loss of market value of the property was 

the extent of defendant’s liability and the limit of plaintiff’s recovery. Accordingly, the 

court entered judgment in the reduced amount of $3,286,144. 

{¶ 5} The parties then filed cross-appeals to the Tenth District Court of Appeals. 

On December 15, 2009, the appeals court affirmed this court’s decision on liability, but 

reversed and remanded the case for further determination on the issue of damages. 

The court held that the damage to plaintiff’s property should have been deemed to be 

temporary because, in order to prevent or minimize future flooding events, plaintiff had 

built an approximately six-foot-high dike around the property after the 2003 flood. The 

court explained that “[t]he injury to [plaintiff’s] property was temporary because it was 

repairable, and the owners took measures to alleviate the risk of further flooding.” Case 

Leasing & Rental, Inc. v. Ohio Dept. of Natural Resources, Franklin App. No. 09AP-498, 

2009-Ohio-6573, ¶40. Therefore, the appeals court concluded that the proper measure 

of damages was “the reasonable cost of repair, plus reasonable compensation for the 

loss of the use of the property” and remanded the case “for a determination of damages 

for a temporary injury to the property.” Id. at ¶41. 

{¶ 6} Upon review of the evidence, testimony, and the arguments of counsel, 

the court makes the following determination. 
{¶ 7} Plaintiff is now claiming damages in the total amount of $5,201,911. 

Defendant asserts that plaintiff’s damages are minimal, if any, and puts forth essentially 

one argument in support of that proposition: a reassertion of its previous contention that 

plaintiff lacks standing to assert its damages claims. Those arguments were presented 

at the liability trial and were rejected in the court’s subsequent written decision.2 The 

determination of that issue was not assigned as error in ODNR’s appeal to the Tenth 

District, nor was it addressed in that court’s decision. To the contrary, the appeals court 

held that plaintiff was “entitled” to damages. Thus, in accordance with the law of the 

case doctrine, the court again rejects defendant’s arguments as to any alleged lack of 

standing. It is well-settled 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 in the 

case at both the trial and reviewing levels.” Nolan v. Nolan (1984), 11 Ohio St.3d 1, 3. 

The Supreme Court of Ohio has further explained that “ the rule is necessary to ensure 

consistency of results in a case, to avoid endless litigation by settling the issues, and to 

preserve the structure of superior and inferior courts as designed by the Ohio 

Constitution.” Id. citing State ex rel. Potain v. Mathews (1979), 59 Ohio St.2d 29, 32. 

Nonetheless, the doctrine is not a substantive rule of law, but rather, is a rule of 

practice that should not be applied to achieve unjust results. Id. citing Gohman v. St. 

Bernard (1924), 111 Ohio St. 726, 730, reversed on other grounds. (Additional citations 

omitted.) 

{¶ 8} Based upon the foregoing, the court accepts as settled that plaintiff has 

standing to pursue his damages claims. However, the second branch of defendant’s 

argument is that, even if plaintiff’s standing is established, his recovery is limited to the 

 

2

Specifically, the court held that: “[d]efendant has argued that plaintiff lacks standing to assert its claims 

because it did not own the property at the time of the July 2003 flood. The court finds that argument to be 

without merit inasmuch as plaintiff financed the purchase and received a mortgage on the property as 

security. Ohio law permits mortgagees to sue third parties for damage to their security interest. City of 

Toledo v. Brown (1936), 130 Ohio St. 513, 519. See also Trip Agency, Inc. v. R. G. Akkihal (Nov. 4, 

1991), Lawrence App. No. 1790; RFC Capital Corp. v. Earthlink, Inc., Franklin App. No. 03AP-375, 2004-

Ohio-7046. Moreover, at the time of the flood, the purchasers had made only one payment of $100,000 

on the $3,000,000 they financed, and they had no insurance on the property. They threatened to file 

bankruptcy if plaintiff pursued them for the balance of the mortgage. Plaintiff never released the 

mortgage and the property was conveyed back to it on September 1, 2003.” Case Leasing & Rental, Inc. 

v. Ohio Dept. of Natural Resources, Ct. of Cl. No. 2005-08034, 2008-Ohio-3411, fn.2. 
amount that his mortgage interest was impaired. Again, that issue was not assigned as 

error to the Court of Appeals nor addressed in its decision. To the contrary, the appeals 

court specifically defined the measure of damages for temporary injury to property. 

Thus, the law of the case precludes further review of the issue and the court finds that 

application of the doctrine does not achieve an unjust result in this case. 

{¶ 9} Accordingly, the court turns to analysis of plaintiff’s damages claims as 

directed by the Court of Appeals. It is axiomatic that plaintiff bears the burden of proof 

on damages. Henderson v. Spring Run Allotment (1994), 99 Ohio App.3d 633, 641. In 

making its determination, the court’s “essential inquiry is whether the damages sought 

are reasonable.” Martin v. Design Const. Servs., Inc., 121 Ohio St.3d 66, 2009-Ohio-1, 

¶25. 

I. REPAIR AND RESTORATION 

{¶ 10} As discussed in this court’s liability and damages decisions, the 2003 flood 

devastated plaintiff’s property. Plaintiff contracted with Shinn Brothers, Inc. for the 

majority of the labor involved in repairing and restoring the RecPlex to its pre-flood 

condition. The cost for those services was $1,446,675.61. Plaintiff also alleges that he 

paid an additional $89,607 to other vendors for restoration services and expenses. All 

of the expenses were documented in Plaintiff’s Exhibit 10, which was prepared by 

plaintiff’s daughter, Cheri Kraska. There was no credible testimony or other evidence to 

contradict the documented amounts. The court concludes that plaintiff has proven by a 

preponderance of the evidence that he incurred $1,536,282.61 ($1,446,675.61 + 

$89,607) for this portion of the repair and restoration efforts. The court finds that the 

costs are reasonable in light of both the extent of the damage sustained to the property 

and the intensive labor involved in its reconstruction. Accordingly, plaintiff is entitled to 

compensation for the requested amount. 

{¶ 11} In addition to the work provided by Shinn Brothers, Inc., plaintiff alleges 

that he also utilized services provided by RecPlex employees, Case Leasing, Inc. 

employees, and independent contractors. Plaintiff alleges that from July 1, 2003 

through September 2003, RecPlex employees were solely engaged in repair and 

restoration activities; however, in October 2003, portions of the RecPlex reopened and 
some employees returned to their usual duties while continuing to assist with restoration 

work. Plaintiff and Kraska then began a process whereby they estimated the 

percentage of the employees’ work week spent on restoration activities and followed-up 

by interviewing the respective employees to confirm the accuracy of the estimates. 

The results of that process are documented in Plaintiff’s Exhibit 12, also generated by 

Kraska, which shows that RecPlex employees were paid $104,229.90 for their 

continued restoration services. The work performed by the independent contractors 

and employees of Case Leasing, Inc., was calculated in the same manner as the 

RecPlex employees’ services, and was documented as $302,932.66.3

 Plaintiff is 

seeking compensation in the total amount of $381,540 for these expenses. 

{¶ 12} The court finds that plaintiff failed to prove by a preponderance of the 

evidence that he is entitled to compensation for the total amount claimed for these 

additional labor expenses. There is no documentary evidence as to the services 

provided, the hourly rate of the RecPlex or Case Leasing employees, the type of work 

that they ordinarily performed for their employers, or how their talents or the cost of their 

services would compare to the cost of hiring outside labor for the various tasks 

performed. Likewise, there is no documentary evidence as to the amount of work 

performed by the independent contractors or why their work was necessary in addition 

to that provided by Shinn Brothers, Inc. and the others previously discussed. The court 

finds that neither the documentation nor the testimony presented provide a reasonably 

certain basis for an award of the claimed amount. Accordingly, the court shall award 

compensation only for the RecPlex employees’ labor expense in the amount of 

$5,503.47, for the period from July 2003 to September 30, 2003, when the facility was 

completely closed and there was no work other than repair and restoration to perform. 

{¶ 13} Plaintiff also seeks an award of $500,000 for repair of the nine-hole golf 

course that previously existed on the property. Plaintiff concedes that he did not rebuild 

the course and that, even though a dike was constructed around the RecPlex property, 

it does not protect the entire 21 acres upon which the facility is situated. As a result, 

 

3

Although the total of the two amounts equals $407,162.56, plaintiff asserts that he arrived at the 

requested amount after deducting $19,200 of labor expenses that were also included in the $1,536,283 
plaintiff cannot prevent future flooding to the golf course portion of his property. The 

court finds that it would be unreasonable to award damages for a restoration that has 

not actually been performed, and for which it would make little economic sense to 

pursue. Therefore, no award shall be granted for future repair of the golf course. 

{¶ 14} Finally in this category, plaintiff seeks damages in the amount of $551,119 

for personal property inside the RecPlex that was repaired and put back into use. This 

court’s previous award for that amount was not assigned as error on appeal. However, 

defendant now contests an award for such damages, based upon its lack of standing 

arguments and the documentation offered to support those contentions. Again, the law 

of the case doctrine precludes further debate of the issue, and there was no testimony 

or other evidence that persuades the court that application of the doctrine would 

achieve an unjust result. Accordingly, the court concludes that plaintiff is entitled to 

compensation for the claimed amount of $551,119.4

{¶ 15} In summary, judgment shall entered in the total amount of $2,092,905.08 

($1,536,282.61 + $5,503.47 + $551,119) for plaintiff’s costs of repair and restoration. 

As noted by the Court of Appeals on remand, “evidence of diminution of the market 

value is relevant in deciding whether the actual costs of repair and restoration are 

reasonable.” Case Leasing, supra, at ¶43. The court concludes that the amount 

awarded is reasonable based upon its previous finding that the diminution of market 

value for the property was $2,735,000. 

II. INTEREST ON LOANS 

{¶ 16} Plaintiff is seeking recovery for the cost of interest paid on $5,000,000 in 

loans, all of which were allegedly obtained to restore and repair the RecPlex to its preflood operating conditions. The amount of those loans and the interest associated with 

each is set forth in Plaintiff’s Exhibits 2 and 13. As stated by the Court of Appeals on 

 

amount documented in Plaintiff’s Exhibit 10. According to the court’s calculations, $407,162.56 - $19,200 

equals $387,962.56.

4

As a result of such determination, both plaintiff’s August 23,2010 “motion to certify a partial judgment” 

and defendant’s September 9, 2010 “motion for relief from judgment” are DENIED as moot. Additionally, 

plaintiff’s September 17, 2010 motion for leave to file a reply in support of its motion to certify a partial 

judgment, defendant’s October 7, 2010 motion for leave to file a reply in support of its motion for relief 
remand, “interest on loans taken out to restore the property can be a reasonable cost of 

repair.” Id. at ¶46. (Emphasis added.) 

{¶ 17} Plaintiff’s first loan was obtained from Markle Bank in the form of a 

$1,000,000 note which was later increased (in March 2004) to $2,500,000. Following 

the first damages trial, the magistrate recommended an award of $949,300 for interest 

accrued on that loan from its inception to February 11, 2009, the date of decision.5

 

Plaintiff is now seeking an award of $952,561 for interest that has continued to accrue 

on the loan through the date of the second trial, plus $74 per day thereafter. Further, 

plaintiff seeks an award of $260,000, for interest that his brother would have earned on 

a $1.9 million certificate of deposit (CD) that was used to pay down the principal of this 

loan. 

{¶ 18} Plaintiff has submitted evidence detailing the interest and principal 

payments made over time and the various interest rates that have been applied. 

Defendant has not refuted those amounts, but rather the extent to which the proceeds 

were used for restoration. What is problematic for the court is that plaintiff chose not 

just to restore the facility to a condition suitable for sale, but to reopen the RecPlex 

business and to incur continued expenses for that purpose. It is undisputed that the 

business was not profitable for at least the two years before the flood, and generated 

only $22,099 in net income in the months prior to the July 2003 flood. (Defendant’s 

Exhibits K, L, M, N, and Q.) It is apparent from the evidence that plaintiff eventually 

began to struggle to repay the loan, to the extent that the bank allowed “interest only” 

payments for a period of time, charged frequent late fees, and eventually cashed the 

CD that plaintiff’s brother had pledged to secure the loan. 

{¶ 19} Upon review of the evidence submitted, the court is unable to reconcile 

what amount of interest is attributable to proceeds of the loan used solely for 

restoration, what amount is attributable to plaintiff’s efforts to keep the business in 

operation, and what amount is attributable to plaintiff’s inability to make timely 

 

from judgment, and plaintiff’s October 13, 2010 motion to strike defendant’s reply memorandum are 

DENIED as moot.

5

As noted previously, the court modified the magistrate’s recommendation to disallow an award for 

interest costs; it did not comment on the reasonableness of the amount or the manner in which it was 

calculated. 
payments on the loan. In short, the court is forced to conclude that the total amount of 

interest sought for repayment of this loan is unreasonable, and that defendant cannot 

be held liable for interest incurred as a result of plaintiff’s decision to reopen a nonprofitable business, or his inability to meet his obligations. Therefore, based upon 

plaintiff’s failure of proof, and his lack of credibility on this issue, the court shall award 

only the amount of interest paid through July 9, 2007, when regular payments were 

being made. Using the figures contained in Plaintiff’s Exhibit 13, the court calculates 

that amount to be $520,603.44.6

 For these same reasons, no award shall be granted 

for the $260,000 claimed for reimbursement of interest owed to plaintiff’s brother. 

{¶ 20} As to the remaining loans, the court also finds that plaintiff failed to prove 

by a preponderance of the evidence that the proceeds of the additional loans were 

utilized for restoration efforts, or that the amount of the loans was reasonable as 

compared to the cost of restoration or the diminution of the property’s market value. 

Therefore, no award shall be granted for the claimed interest on the additional loans. 

III. LOSS OF USE OF THE RECPLEX

{¶ 21} According to the testimony, plaintiff calculated this element of damages by 

relying upon a net income figure of $56,164 for the year 2008, when he asserts that the 

RecPlex had returned to a level of operation comparable to pre-flood business 

conditions. Based upon audited financial statements, plaintiff then applied that figure in 

calculating the net income that the RecPlex would have earned in the years from 2003 

through 2007, but for the flood. For example, plaintiff contends that for the four months 

of the last quarter of 2003, the RecPlex should have received a net revenue of $14,041 

($56,164/4). However, because the business lost $49,000, plaintiff calculated the loss 

of use for those months as $63,041 ($14,041 + $49,000). The same method was used 

to calculate a loss of use for the years 2004 through 2007. The total amount sought for 

this element of damages is $348,198. All of the calculations and supporting 

documentation are set forth in Plaintiff’s Exhibit 14. 

 

6

The calculation began at $13,020.83 paid on April 3, 2004, and ended with the $13,937.52 paid on July 

9, 2007. 
{¶ 22} Defendant counters that plaintiff is not entitled to any loss-of-use 

damages, again based largely upon its lack of standing arguments. Those arguments 

were previously addressed and rejected. Defendant further contends that, based upon 

the reported net operating losses for the RecPlex in the years prior to and following the 

flood (Defendant’s Exhibits K, L, M, N, and Q), plaintiff has not suffered any 

compensable loss of use. 

{¶ 23} Neither party has offered any case law in support of the method used in 

the evaluation of these damages. However, it has consistently been held that: “‘[t]he 

value of the use of the property is measured according to the purpose for which the 

property is held. If the injured property is held for rental purposes, then the “value of the 

use” is the diminution in the property’s rental value.’ Reeser v. Weaver Bros., Inc. 

(1992), 78 Ohio App.3d 681, 686, 605 N.E.2d 1271, citing Klein v. Garrison (1951), 91 

Ohio App. 418, 420-427, 108 N.E.2d 381. Loss or decrease in rental value would not 

be a reliable basis upon which to estimate damages if the property is not held for rental 

purposes, rather, loss of the value of use would be the measure of damages. Id.” 

Weber v. Obuch, Medina App. No. C.A.05CA0048-M, 2005-Ohio- 6993, ¶25. 

(Emphasis added.) The case law provides no guidance as to how to determine a value 

of use for a multi-dimensional business such as the RecPlex. Nonetheless, Ohio law 

makes clear that a party cannot recover purely speculative damages. Id. at ¶28. 

(Additional citations omitted.) 

{¶ 24} Based upon the evidence and the available case law, the court finds that 

plaintiff’s loss of revenue calculations are a purely speculative means upon which to 

base an award for any loss of value of use. In light of the minimal profitability of the 

business, and as a result of the lack of credible evidence, the court concludes that 

plaintiff failed to prove by a preponderance of the evidence that he sustained a 

compensable loss of use of the property. Therefore, no award shall be granted for this 

component of plaintiff’s alleged damages. 

{¶ 25} In conclusion, the court finds that plaintiff is entitled to damages in the 

amount of $2,613,508.52, consisting of $2,092,905.08 ($1,536,282.61 + $5,503.47 + 

$551,119) for repair and restoration, and $520,603.44 for interest costs. Judgment shall 

be entered in that amount plus $25 for reimbursement of the filing fee. 
Court of Claims of Ohio

The Ohio Judicial Center 

65 South Front Street, Third Floor 

Columbus, OH 43215 

614.387.9800 or 1.800.824.8263 

www.cco.state.oh.us 

CASE LEASING & RENTAL, INC. 

 Plaintiff 

 v. 

OHIO DEPARTMENT OF NATURAL 

RESOURCES 

 Defendant

 

Case No. 2005-08034 

Judge Joseph T. Clark 

JUDGMENT ENTRY

 This case was tried to the court on the issue of plaintiff’s damages. The court 

has considered the evidence and, for the reasons set forth in the decision filed 

concurrently herewith, judgment is rendered in favor of plaintiff in the amount of 

$2,613,533.52, which includes the filing fee paid by plaintiff. Court costs are assessed 

against defendant. The clerk shall serve upon all parties notice of this judgment and its 

date of entry upon the journal. 

 _____________________________________ 

 JOSEPH T. CLARK 
 Judge 

cc: 

 

Jeremy M. Grayem 

250 West Street, 7th Floor 

Columbus, Ohio 43215 

Kevin L. Murch 

Matthew T. Green 

Stephen P. Samuels 

250 West Street 

Columbus, Ohio 43215 

Randall W. Knutti 

Assistant Attorney General 

150 East Gay Street, 18th Floor 

Columbus, Ohio 43215-3130 

LH/cmd

Filed March 3, 2011 

To S.C. reporter March 22, 2011