[Cite as E. Ohio Gas Co. v. Youngstown , 2020-Ohio-731.]



## IN THE COURT OF APPEALS OF OHIO

SEVENTH APPELLATE DISTRICT MAHONING COUNTY

EAST OHIO GAS COMPANY DBA DOMINION ENERGY OHIO,
Plaintiff-Appellant,

v. CITY OF YOUNGSTOWN,
Defendant-Appellee.

OPINION AND JUDGMENT ENTRY Case No. 19 MA 0007

Civil Appeal from the Court of Common Pleas of Mahoning County, Ohio Case No. 2017 CV 02750

BEFORE: Gene Donofrio, Cher y

L. Waite, Carol Ann Robb, Jud g es.

JUDGMENT: Affirmed.

Atty. Richard Cline and Atty. Adam Smith, McDonald Hopkins LLC, 600 Superior Avenue, East, Suite 2100, Cleveland, Ohio 44114, for Plaintiff- Appellant, and– 2 –

Case No. 19 MA 0007

Atty. Eugene Fehr , Deputy Law Director, 26 South Phelps Street, Fourth Floor, La w Department, Youn g stown, Ohio 44503, for Defendant-Appellee.

Dated: Februar y

26, 2020
Donofrio, J.
{¶1} Plaintiff-appellant, the East Ohio Gas Company d/b/a Dominion Energy Ohio (Dominion), appeals from a Mahoning County Common Pleas Co urt judgment awarding summary judgment in favor of defendant-appellee, the C ity of Youngstown (the City), on appellant’s declaratory judgment action regarding whi ch party is to bear the cost of relocating Dominion’s natural gas pipeline. {¶2} At the center of this case is a 400-foot section of sanitary s ewer pipeline that runs under Phelps Street in Youngstown between Federal Str eet and Commerce
Street. {¶3} On February 17, 2010, Youngstown City Council passed Ordinance No. 10-54, authorizing the City’s Board of Control to take bids and enter into a contract for the Phelps Street Combined Sewer Replacement Project (Sewer Replace ment Project). The ordinance provided:

The project will entail replacing an existing 24” combined bric k sewer located on Phelps Street between Lincoln Avenue and Federal Str eet with a new combined sewer. The existing sewer is in poor condition and full replacement is warranted and recommended.

{¶4} In January 2011, the City hired MS Consultants, Inc. (MS Cons ultants) to provide design services for the Sewer Replacement Project. MS Consultants requested information from Dominion, AT&T Transmission (AT&T), and Ohio E dison Company (Ohio Edison) as to the locati on of their underground utility l ines on Phelps Street. Dominion’s natural gas pipeline was located beneath the sidewal k on Phelps Street. {¶5} The City awarded the bid on the excavation work to Marucci and Gaffney Excavating (M&G). When M&G began work on the project on Februa ry 4, 2013, workers discovered that AT&T’s and Ohio Edison’s duct banks and vaults, which housed their– 3 –

Case No. 19 MA 0007 utility lines, had not been proper ly identified on the plans. Consequently, M&G could not proceed with the project. {¶6} Once the City obtained information on the location of the AT&T and Ohio Edison duct banks and vaults, it was determined that those util ities would have to be completely relocated in order to replace and repair the sewer p ipeline. It was further
determined that the AT&T and Ohio Edison duct banks would be re located to the northern sidewalk along Phelps Street. Dominion claimed this would inte rfere with its pipeline. Dominion too was required to relocate its pipeline. According to Dominion, it was forced to move its pipeline to accommodate AT&T’s and Ohio Edison’s du ct banks and vaults. According to the City, Dominion had to relocate its pipeline be cause it was in direct conflict with the sewer pipeline replacement. {¶7} Dominion and the City subsequently entered into the Cooperatio n Agreement for Relocation of Ut ilities (Cooperation Agreement) i n order to avoid delaying the Sewer Replacement Project. Under the terms of the Cooperat ion Agreement, Dominion agreed to advance the cost of relocating its pipeline and the City agreed to deposit $150,000 in escrow. The parties agreed to then litigat e who would be responsible for the cost of relocating Dominion’s pipeline. {¶8} Dominion filed a complaint for declaratory judgment against th e City on October 16, 2017, pursuant to the Cooperation Agreement. The c omplaint asserted that the City’s maintenance, operation, and upkeep of a sewer system is a proprietary function. It further asserted that Dominion’s pipeline was not in conflict with the anticipated repair and maintenance of the sewer pipeline and th at Dominion was forced to relocate its pipeline only because the City directed that AT &T’s duct bank be relocated to the same location Dominion’s pipeline was already occupying. Therefore, Dominion sought a declaratory judgment that the City was required to rei mburse it for its relocation costs. The City filed a counterclaim seeking a declaration tha t Dominion had a common law duty to relocate its pipeline at its own cost to make way f or public improvements. {¶9} The City subsequently awarded the bid on the Sewer Replacement Project to M&G and work commenced. Dominion paid $170,838.03 to reloca te its pipeline. {¶10} Dominion filed a motion for summary judgment. It argued that the City’s actions were an improper exercise of municipal authority. The City filed a competing– 4 –

Case No. 19 MA 0007 motion for summary judgment. It argued that a municipality can require a public utility to relocate it facilities at the utility’s expense in order to acc ommodate the governmental utility operations of th e municipality, incl uding the reconstru ction or replacement of a sanitary sewer. {¶11} The trial court granted the City’s motion for summary judgment and denied Dominion’s motion. In so doing, the court noted that in accord ance with common law, utilities are required to relocate their facilities within a pu blic right-of-way at their own expense when requested to do so by a municipality in order to r econstruct a sewer. It found that sewer reconstruction is a governmental activity in t he interest of the public health and welfare and is an appropriate exercise of the munici pality’s police power. Therefore, the court declared that Dominion was to bear the cos t of relocating its pipeline and that the City was not responsible for payment of any of the relocation costs. {¶12} Dominion filed a timely notice of appeal on January 8, 2019. It now raises two assignments of error asserting the trial court erred in gra nting the City’s motion for summary judgment. {¶13} An appellate court reviews a summary judgment ruling de novo. Comer v.
Risko , 106 Ohio St.3d 185, 2005-Ohio-4559, 833 N.E.2d 712, ¶ 8. Thu s, we shall apply the same test as the trial court in determining whether summary judgment was proper. {¶14} A court may grant summary judgment only when (1) no genuine is sue of material fact exists; (2) the moving party is entitled to judgm ent as a matter of law; and (3) the evidence can only produce a finding that is contrary to the non-moving party.
Mercer v. Halmbacher , 9th Dist. Summit No. 27799, 2015-Ohio-4167, ¶ 8; Civ.R. 56(C)

. The initial burden is on the party moving for summary judgment to demonstrate the absence of a genuine issue of material fact as to the essential elements of the case with evidence of the type listed in Civ.R. 56(C). Dresher v. Burt , 75 Ohio St.3d 280, 292, 662 N.E.2d 264 (1996). If the moving party meets its burden, the b urden shifts to the nonmoving party to set forth specific facts to show that there is a genuine issue of material
fact. Id .; Civ.R. 56(E). “Trial courts should award summary judgment w ith caution, being
careful to resolve doubts and construe evidence in favor of the nonmoving party.” Welco Industries, Inc. v. Applied Cos ., 67 Ohio St.3d 344, 346, 617 N.E.2d 1129 (1993). {¶15} Dominion’s first assignment of error states:– 5 –

Case No. 19 MA 0007 THE TRIAL COURT ERRED IN FINDING PLAINTIFF/APPELLANT THE EAST OHIO GAS COMPANY, D/B/A DOMINION ENERGY OHIO (“DEO”), RESPONSIBLE FOR THE COSTS OF RELOCATING ITS NATURAL GAS PIPELINE AND IMPACTED SERVICES (“DEO’S PIPELINE”) WHERE SUCH RELOCATION WAS ORDERED BY DEFENDANT/APPELLEE THE CITY OF YOUNGSTOWN (“COY”) BOTH (A) TO PERMIT ANOTHER PUBLIC UTILITY TO MOVE INTO THE SAME LOCATION PREVIOUSLY OCCUPIED BY DEO’S PIPELINE AND (B) TO ENGAGE IN THE PROPRIETARY FUNCTION OF REPAIRING AN OLD,
RAPIDLY DETERIORATING SECTION OF SEWER PIPELINE IN THE COURSE OF ORDINARY, ONGOING MAINTENANCE.

{¶16} In this assignment of error, Dominion argues that the Sewer Re placement Project is a proprietary, as opposed to a governmental, functio n. It goes on to argue that utility relocation necessitated by proprietary operations must be paid for by the municipality. Dominion asserts that while the construction of a sewer system is a governmental function, the operation and upkeep of the sewers i s a proprietary function. It contends that maintenance problems are those that are remedi ed by repairs and attention to general deterioration. {¶17} Dominion asserts the evidence demonstrates that the sewer pipe line was rapidly deteriorating due to a lack of maintenance and upkeep, which resulted in the City initiating the Sewer Replacement Project. It argues that when a municipality is engaging in normal, ongoing maintenance, even when the municipality has allowed the facility to reach a deteriorating condition, the municipality is engaging i n a proprietary function as a matter of law. Because the Sewer Replacement Project is propri etary in nature, Dominion contends, it is entitled to its relocation costs of $170,838.03

. {¶18} The determinative issue in this assignment of error is whether the Sewer Replacement Project constituted a governmental function or a pr oprietary function. {¶19} A municipality cannot require public utilities using public st reets to relocate their facilities at their own expense to accommodate the munici pality’s proprietary
function. State ex rel. Speeth v. Carney , 163 Ohio St. 159, 177-178, 126 N.E.2d 449– 6 –

Case No. 19 MA 0007 (1955). “A governmental subdivision in the exercise of its pro prietary functions is in the same position as a private utility attempting to force such rel ocation.” Id. at 178. {¶20} But a municipality can require public utilities to relocate th eir lines at their own expense in order to accommodate the municipality’s governme ntal function. Duke Energy Ohio, Inc. v. Cincinnati , 1st Dist. Hamilton No. C-140763, 2015-Ohio-4844, ¶ 24. The United States Supreme Court has long held, “when a utility company makes use of the public right of way, the municipality may require the compa ny to relocate its equipment at its own cost when the public welfare so requires.” Perrysburg v. Toledo Edison Co
., 171 Ohio App.3d 174, 2007-Ohio-1327, 870 N.E.2d 189 (6th Dist.) ¶ 16, quoting New Orleans Gaslight Co. v. Drainage Commission of New Orleans , 197 U.S. 453, 462, 25 S.Ct. 471, 49 L.Ed. 831 (1905). {¶21} R.C. 2744.01 defines “governmental function” and “proprietary f unction” in the context of sovereign immunity. The definitions are instruc tive in this case as well. {¶22} A “governmental function” is a function of a political subdivi sion that is specified in R.C. 2744.01(C)(2) or that satisfies any of the fo llowing:

(a) A function that is imposed upon the state as an obligation of sovereignty and that is performed by a political subdivision voluntarily or pursuant to legislative requirement;
(b) A function that is for the common good of all citizens of t he state;
(c) A function that promotes or preserves the public peace, hea lth, safety, or welfare; that involves activities that are not engaged in or not customarily engaged in by nongovernmental persons; and that is not specifie d in division (G)(2) of this section as a proprietary function.
R.C. 2744.01(C)(1). A “governmental function” includes “[t]he provision or nonprovision, planning or design, construction, or reconstruction of a public improvement, including, but not limited to, a sewer system[.]” R.C. 2744.01(C)(2)(l).

{¶23} A “proprietary function” is a function of a political subdivis ion that is specified in R.C. 2744.01(G)(2) or that satisfies both of the f ollowing:– 7 –

Case No. 19 MA 0007 (a) The function is not one described in division (C)(1)(a) or (b) of this section and is not one specified in division (C)(2) of this sec tion;
(b) The function is one that promotes or preserves the public p eace, health, safety, or welfare and that involves activities that are custom arily engaged in by nongovernmental persons.
R.C. 2744.01(G)(1). A “proprietary function” includes “[t]he m aintenance, destruction, operation, and upkeep of a sewer system[.]” R.C. 2744.01(G)(2) (d).

{¶24} Specifically as to sewer systems, the Ohio Supreme Court has s tated:

The weight of authority holds that the construction and institu tion of a sewer system is a governmental matter, and that there is no liability for mere failure to construct sewers. However, the weight of authority is equall y decisive in holding that the operation and upkeep of sewers is not a govern mental function, but is a ministerial or proprietary function of the c ity.
Portsmouth v. Mitchell Mfg. Co ., 113 Ohio St. 250, 255, 148 N.E. 846 (1925). The Court has elaborated on why sewer construction is a governmental func tion:
The function of public drainage, then, arises under the police power, and certainly the power to construct public sewers constitutes a pa rt of the police power, for such sewers are established for the express purpose of preserving the public health. This being the case, the function is purely governmental.

Hutchinson v. City of Lakewood , 125 Ohio St. 100, 104, 180 N.E. 643 (1932). {¶25} In this case, Dominion argues that the Sewer Replacement Proje ct was a maintenance project to remedy deterioration and, therefore, was a proprietary rather than a governmental function. {¶26} The more discretion and work involved, the more likely the sew er issue is to be considered a governmental function:– 8 –

Case No. 19 MA 0007 [W]hen remedying the sewer problem would involve little discret ion but, instead, would be a matter of routine maintenance, inspection, repair, removal of obstructions, or general repair of deterioration, th en the complaint is properly characterized as a maintenance, operation , or upkeep issue. * * * When remedying a problem would require a city to, in essence, redesign or reconstruct the sewer system, then the complaint pr esents a design or construction issue.

(Internal citations omitted); Essman v. City of Portsmouth , 4th Dist. Scioto No. 09CA3325, 2010-Ohio-4837, ¶ 32. {¶27} Dominion relies in part on two statements the City made in its answer and counterclaim. In its answer, the City stated: “The Phelps Str eet Sewer is a 24 inch brick culvert that is over 100 years old and is rapidly deteriorating , threatening to collapse all of the infrastructure, including the roadway, above it.” (Coun terclaim ¶ 4). The City also referred to the Sewer Replacement Project as “replacement or ma intenance.” (Counterclaim ¶ 5). Dominion argues that these “admissions” make clear that the Sewer Replacement Project is one of maintenance and upkeep, thus maki ng it a proprietary
function. {¶28} But given the vast scope of the Sewer Replacement Project and the fact that the sewer had to be completely replaced and reconstructed, it constituted a governmental function. {¶29} In proceeding with the Sewer Replacement Project, the City pas sed two ordinances. Youngstown City Ordinance No. 10-54 recognized tha t the sewer pipeline was in poor condition and that “full replacement is warranted a nd recommended.” Youngstown City Ordinance No. 15-25 likewise stated that the se wer pipeline was in severe disrepair “must be replaced.” Thus, the City viewed the Sewer Replacement Project as a means to completely replace the existing sewer pip eline, not to simply maintain or repair it. {¶30} Dominion also points to superintendent of the wastewater treatm ent plant, Thomas Mirante III’s deposition testimony that repairing the se wer pipeline is part of “normal ongoing maintenance.” (Mirante Dep. 39). But Dominion fails to point out that– 9 –

Case No. 19 MA 0007 Mirante further stated that the maintenance was to assess which sewers need to be replaced . (Mirante Dep. 39). {¶31} Dominion further contends that the City characterized the repai r and maintenance of the sewer pipeline as a proprietary function for accounting purposes. (Mirante Dep. 46-48; Bozanich Dep. 27-28). {¶32} But again Dominion fails to follow up with the rest of the dep osition testimony. David Bozanich was the City’s finance director at t he relevant time. He explained that for accounting purposes, the City categorizes pr oprietary or enterprise activities separate from governmental activities. (Bozanich De p. 27). The difference, Bozanich explained, was how the activity was funded. (Bozanich Dep. 27). An enterprise or proprietary activity is funded by a user fee whereas a gover nment activity is funded by a tax. (Bozanich Dep. 27-28). Bozanich stated that anything h aving to do with water operations, waste water operations, and sanitation operations i s paid by enterprise funds. (Bozanich Dep. 28). Thus, how the City categorized the funding for the Sewer Replacement Project for accounting purposes has no bearing on w hether it actually constituted a governmental or proprietary function. If it did, then anything having to do with waste water and sanitation, including the new construction of a sanitary sewer, could never constitute a governmental function. {¶33} Next, Dominion points to the General Notes contained in the pro ject plans approved by the City. It claims the General Notes provided tha t in the event of a direct conflict with a utility, the contractor was to coordinate the r elocation with the utility company and that compensation would be provided to the utility company. (Pierko Dep. Ex.2). {¶34} But once again, Dominion fails to read the entire testimony. The General Notes specifically provide:

The contractor must support and protect all existing utilities encountered during construction. The cost shall be included in the unit bi d price for
installation of the sewer. In the event a direct conflict occu rs with a utility, as pre-determined by the engineer, the contractor shall coordin ate the relocation or replacement with the utility company. Compensati on shall be provided under the terms of the agreement.– 10 –

Case No. 19 MA 0007 (Pierko Dep. 77-78, Ex. 2). Dominion’s attorney asked MS proje ct manager John Pierko if this provision meant that the contractor would compensate th e utility company. (Pierko Dep. 78). Pierko stated that it did not. (Pierko Dep. 78). P ierko stated that the entire paragraph had to be read, which led to the conclusion that if t he contractor were to
encounter an unforeseen relocation that was not shown on the dr awings then it was agreed that the contractor would be entitled to additional comp ensation. (Pierko Dep. 79- 80).

{¶35} In addressing an immunity issue this court was faced with whet her certain drainage sewer work was a governmental or proprietary function. We determined that “when Austintown covered the drainage ditch and installed the p ipe and catch basin, it had provided/redesigned/constructed a new sewer, not maintained it.” Ivory v. Austintown Twp ., 7th Dist. Mahoning No. 10 MA 106, 2011-Ohio-3171, ¶ 19. We concluded that sewer design and construction is a governmental, not proprietary,
function. Id

. {¶36} The Tenth District, also while analyzing an immunity question, determined: “The replacement of a storm sewer line constitutes the construc tion or reconstruction of a sewer system, not the maintenance and upkeep of a sewer syste m nor the maintenance of a water supply system. Therefore, this work constituted a go vernmental function.” Repasky v. Upper Arlington , 10th Dist. Franklin No. 12AP-752, 2013-Ohio-2516, ¶ 13. {¶37} The evidence in this case is uncontroverted that the Sewer Rep lacement Project was more than ordinary maintenance or upkeep. Instead, the entire 100-year-old sewer had to be replaced and reconstructed. Thus, the trial co urt was correct in finding that the Sewer Replacement Project was a governmental function. As such, summary judgment in the City’s favor was proper since the utility compa ny (in this case Dominion) was required to pay for the relocation of its gas line that occ upied the public right-of-way. {¶38} Accordingly, Dominion’s first assignment of error is without m erit and is
overruled. {¶39} Dominion’s second assignment of error states:

THE TRIAL COURT ERRED IN FAILING TO FIND, OR EVEN ADDRESS, THAT COY DISCRIMINATED AGAINST AND DISPARATELY– 11 –

Case No. 19 MA 0007 TREATED DEO IN VIOLATION OF R.C. 4939.04(A) AND OHIO COMMON LAW BY (A) DIRECTING AND ALLOWING ONE PUBLIC UTILITY TO
OCCUPY THE EXACT SAME LOCATION DEO WAS LAWFULLY OCCUPYING WITH DEO’S PIPELINE AND (B) BY PAYING BETWEEN $900,000.00 AND $1,000,000.00 FOR RELOCATING DUCT BANKS AND VAULTS OF TWO OTHER PUBLIC UTILITIES, YET REFUSING TO PAY DEO’S RELOCATION COSTS IN THE AMOUNT OF $170,838.03.

{¶40} Pursuant to R.C. 4939.04(A)(1): “A municipal corporation shal l provide public utilities or cable operator s with open, comparable, nond iscriminatory, and competitively neutral access to its public ways.” {¶41} Dominion contends it is undisputed that its pipeline was not i n direct conflict with the sewer pipeline. (Shasho Dep. 82-83). It further clai ms it is undisputed that the only reasons AT&T and Ohio Edison had to relocate their duct ba nks and vaults was because (1) they were in direct conflict with the sewer pipelin e and (2) the City had allowed the sewer pipeline to fall into such a state of disrepa ir that it could not use a CIP liner to simply repair the sewer pipeline. Due to AT&T’s and O hio Edison’s conflicts and deterioration of the sewer pipeline, the City relocated AT&T’s duct bank to the location that Dominion was lawfully occupying forcing Dominion to reloca te its pipeline to a less favorable location. Based on these fact, Dominion argues, the trial court should have concluded that the City discriminated against it. What makes t he situation more egregious, Dominion asserts, is that the City paid between $900 ,000 and $1,000,000 to
relocate AT&T’s and Ohio Edison’s duct banks and vaults. {¶42} The City, however, states it did not incur AT&T’s and Ohio Edi son’s relocation costs. Therefore, the City argues it did not discri minate against Dominion. {¶43} Pursuant to R.C. 4939.04(A):

(1) A municipal corporation shall provide public utilities or cable operators with open, comparable, nondiscriminatory, and competi tively neutral access to its public ways.– 12 –

Case No. 19 MA 0007 (2) Nothing in division (A)(1) of this section prohibits a mun icipal corporation from establishing priorities for access to or occup ancy or use of a public way by a public utility or cable operator when the pub lic way cannot accommodate all public way occupants or users, which priorities as applied to public utilities or cable operators shall not be unduly disc riminatory and shall be competitively neutral.

{¶44} Thus, the City was required to provide Dominion with open, nondiscriminatory, and competitively neutral access to its publ ic ways. {¶45} Dominion relied on statements by the deputy director of public works for the City, Charles Shasho, to support its claim that it was undi sputed that its pipeline was not in direct conflict with the sewer pipeline. (Shasho Dep. 8 2-83). But while Shasho did make a statement to that effect, that was not the entirety of h is deposition testimony. {¶46} Shasho stated that once it was determined that the AT&T and Oh io Edison
duct banks would have to be relocated to excavate the sewer thi s “partially” gave rise to the conflict with Dominion. (Shasho Dep. 34). Shasho stated t hat also the excavation of the sewer as well as the roadway improvements that went along w ith it would necessitate Dominion to relocate its pipeline. (Shasho Dep. 34). He state d that the sewer that needed to be replaced ran at a lower depth than the Dominion gas pipel ine. (Shasho Dep. 35- 36). And in order to excavate to reach the sewer there would b e a lack of support of the gas pipeline, which could potentially collapse. (Shasho Dep. 3 7). So while there was no direct conflict between the new sewer and Dominion’s pipeline, the sewer work could not proceed without Dominion relo cating its pipeline. {¶47} Moreover, as the City points out, while it initially funded th e installation of the AT&T duct bank, this was just to get the project moving for ward. (Shasho Dep. 102). The City never agreed that it would not seek reimbursement from AT&T. (Shasho Dep. 95-97; Maynard Dep. 93). And AT&T paid for relocation and plac ement of its cable, splicing, and construction of a new manhole, which exceeded $35 0,000. (Maynard Dep. 41-42, 77-78, 87-88). Thus, AT&T incurred significantly more c osts than Dominion. Additionally, Youngstown Thermal was required to relocate its s team lines, which it did at its own cost. (Mulichak Dep. 83-84). And there is no evidence in the record as to what the cost was to relocate the Ohio Edison line or who paid it.– 13 –

Case No. 19 MA 0007 {¶48} Thus, the record does not contain any evidence that the City f ailed to provide Dominion with open, nondiscriminatory, and competitivel y neutral access to its public ways. {¶49} Accordingly, Dominion’s second assignment of error is without merit and is
overruled. {¶50} For the reasons stated above, the trial court’s judgment is he reby affirmed.

Waite, P. J., concurs.
Robb, J., concurs.[Cite as E. Ohio Gas Co. v. Youngstown , 2020-Ohio-731.]

For the reasons stated in the Opinion rendered herein, the assi gnments of error are overruled and it is the final judgment and order of this Co urt that the judgment of the Court of Common Pleas of Mahoning County, Ohio, is affirmed. Costs to be taxed against the Appellant. A certified copy of this opinion and judgment entry shall const itute the mandate in this case pursuant to Rule 27 of the Rules of Appellate Proc edure. It is ordered that a certified copy be sent by the clerk to the trial court to car ry this judgment into
execution.

NOTICE TO COUNSEL
This document constitutes a final judgment entry.