Opinion ID: 612543
Heading Depth: 3
Heading Rank: 1

Heading: Relators Boggs and Rachid

Text: The relators argue the 2002 Action was not dismissed on the merits as to Boggs and Rachid because their claims were dismissed for lack of standing. [1] Indeed, under Ohio law, dismissals for want of standing do not have preclusive effect because they are not decided on the merits. State ex rel. Coles v. Granville, 116 Ohio St.3d 231, 877 N.E.2d 968, 977 (2007) (citations omitted); Asher v. City of Cincinnati, No. C-990345, 2000 WL 955617, at  (Ohio Ct.App. Dec. 23, 1999) (finding a prior suit was not decided on the merits because it was dismissed for lack of standing); A-1 Nursing Care of Cleveland, Inc. v. Florence Nightingale Nursing, Inc., 97 Ohio App.3d 623, 647 N.E.2d 222, 225 (1994) (noting that a motion to dismiss for lack of standing terminates the action other than on the merits and affords proper parties the opportunity to refile without fear of the effects of res judicata ). The City, however, contends that because the relators failed to appeal the trial court's second order, which included the language dismissed with prejudice, Boggs and Rachid acquiesced to the finality of that judgment, thus triggering the application of res judicata. Although the City's argument is not without support under Ohio law, see, e.g., Mason v. GFS Leasing and Mgmt., No. 79536, 2002 WL 192097, at  (Ohio Ct. App. Feb. 7, 2002) (applying res judicata where appellant failed to appeal the trial court's erroneous, final judgment applying res judicata in a prior case), we cannot find that the 2002 Action was dismissed on the merits with respect to Boggs and Rachid in light of Superior Piping Contractors, Inc. v. Reilly Industries, Inc., No. 84871, 2005 WL 678987 (Ohio Ct.App. Mar. 24, 2005). [2] In Superior Piping, Superior Piping Contractors, Inc. (Superior) filed a complaint against Reilly Industries, Inc. (Reilly), asserting that Reilly breached its contract with Superior. 2005 WL 678987, at . The trial court dismissed the complaint with prejudice, finding Superior did not have standing. Id. On appeal, Superior asserted that the trial court erred in dismissing the complaint on the basis that it lacked standing, but the court of appeals affirmed the trial court's decision. Id. Superior subsequently moved the court of appeals for reconsideration and clarification, arguing for the first time that the trial court's dismissal should read `without prejudice' rather than `with prejudice' because it was based on Superior's `lack of standing.' Id. The court of appeals denied the motion because Superior failed to raise the issue before the trial court or on appeal. Id. Two years later, Superior filed another complaint against Reilly, alleging virtually identical claims as those in the prior action. Id. Reilly moved for summary judgment on the ground that Superior's claims were barred by res judicata, and the trial court granted the motion. Id. Superior appealed again, arguing that the trial court erred in dismissing on the basis of res judicata. Id. Recognizing that a dismissal for lack of standing is not an adjudication on the merits for purposes of res judicata, the court of appeals reversed. Id. at . It found that it was erroneous for the trial court to dismiss Superior's claims with prejudice in the prior action, when the basis for the dismissal  that Superior lacked standing to sue  was purely procedural and did not concern the substance of the case. Id. Further, the court of appeals found: While Superior waived this error by raising it for the first time with this court on a motion for re-consideration, to preclude Superior's second action only continues the error from the prior action without Superior's claims ever adjudicated on the merits. Because adjudication on the merits is a prerequisite to the application of res judicata, the trial court erred in granting summary judgment to Reilly, as there has never been a valid, final judgment on the merits of Superior's claims. Id. Here, in the 2002 Action, the City moved to dismiss Boggs and Rachid for lack of standing. The trial court granted the City's motion, stating only: Plaintiff's [sic] motion to dismiss complaint for failure to state a claim upon which relief can be granted filed on 11-21-02, is granted. Final. Appellant Br. 7; see also Appellee Br. 8. The relators appealed the decision, but the court of appeals dismissed the appeal, concluding the trial court's order was not a final, appealable order because it dismissed the complaint without prejudice. In response, the trial court issued an order stating: Plaintiff's [sic] motion to dismiss complaint for failure to state a claim upon which relief can be granted filed 11-21-02, is granted. Complaint is dismissed with prejudice. Final. Appellant Br. 7; see also Appellant Br. 8-9. The relators, however, did not appeal this order. Given that Ohio law instructs that dismissals for lack of standing do not trigger res judicata, the state trial court appears to have erred in dismissing the 2002 Action with prejudice with respect to Boggs and Rachid in response to the state court of appeals dismissing the relators' appeal. Although the relators did not appeal that erroneous order, the state court's dismissal of the 2002 Action with prejudice with respect to Boggs and Rachid was purely procedural. Superior Piping, 2005 WL 678987, at . No court has considered the merits of Boggs's and Rachid's claims; thus, res judicata cannot preclude Boggs and Rachid from asserting them. Moreover, a principle advanced in Ohio case law, that [t]he binding effect of res judicata has been held not to apply when fairness and justice would not support it, Builders Dev. Group, L.L.C., v. Smith, No. 23846, 2010 WL 3448574, at  (Ohio Ct.App. Sept. 3, 2010) (alteration in original and citations omitted), compels us to find that res judicata does not apply to Boggs's and Rachid's claims. Even assuming that Ohio law treats Boggs's and Rachid's failure to appeal as triggering the application of res judicata  as the City argues  their claims have never been decided on the merits, and [u]nder [such] circumstances, rigid application of res judicata would defeat the ends of justice. 2010 WL 3448574, at -4 (discussing situations where application of res judicata is manifestly unjust). Accordingly, the district court erred in finding that the City established the second element of claim preclusion  that there was a prior final, valid decision on the merits  with respect to Boggs and Rachid.