Court Opinion

ID: 8077284
Source: CourtListenerOpinion
Date Created: 2022-09-09 13:08:35.273218+00
Date Added: 2024-06-11T13:26:01.514393
License: Public Domain

[Cite as Vandercar, L.L.C. v. Port of Greater Cincinnati Dev. Auth., 2022-Ohio-3148.]

                          IN THE COURT OF APPEALS
                FIRST APPELLATE DISTRICT OF OHIO
                          HAMILTON COUNTY, OHIO

VANDERCAR, LLC,                                  :          APPEAL NOS. C-210643
                                                                         C-210665
       Plaintiff-Appellee/Cross-                 :                       C-220130
       Appellant,                                           TRIAL NO. A-200900
                                                 :
 vs.
                                                 :              O P I N I O N.
THE PORT OF GREATER
CINCINNATI DEVELOPMENT                           :
AUTHORITY,
                                                 :
       Defendant-Appellant/Cross-
       Appellee.                                 :

Civil Appeals From: Hamilton County Court of Common Pleas

Judgments Appealed From Are: Affirmed in Part, Reversed in Part, and Cause
                             Remanded

Date of Judgment Entry on Appeal: September 9, 2022

Taft Stettinius & Hollister LLP, W. Stuart Dornette, Russell S. Sayre and Beth A.
Bryan, for Plaintiff-Appellee/Cross-Appellant,

Calfee, Halter & Griswold LLP, Mitchell G. Blair, Matthew A. Chiricosta and David
T. Bules, for Defendant-Appellant/Cross-Appellee.
                     OHIO FIRST DISTRICT COURT OF APPEALS

MYERS, Presiding Judge.

       {¶1}   The deterioration of the Millennium Hotel in downtown Cincinnati had

long been an obstacle to the city’s efforts to attract convention business. In 2019,

Vandercar, LLC, entered into a $36 million purchase contract with the hotel’s former

owners in order to facilitate the redevelopment of the hotel “as a four-star (or better)

convention center hotel.” Several months later, Vandercar assigned its interest in the

contract to the Port of Greater Cincinnati Development Authority (“the Port”) in

exchange for two potential fees totaling $7.5 million. The Port acquired the hotel

property and paid Vandercar one of its potential fees, in the amount of $2.5 million.

However, although demolition on the Millennium Hotel was completed in 2022, the

dust has not yet settled on the parties’ dispute over the Port’s obligation to pay

Vandercar the second fee of $5 million.

       {¶2}   Vandercar sued the Port for breach of contract and bad faith, claiming

it was owed additional fees when the Port issued revenue bonds that included funds

for demolition of the hotel and other activities that Vandercar claimed were for

redevelopment. The trial court granted summary judgment in Vandercar’s favor on

its breach-of-contract claim in the amount of $5 million, but denied its motion for

prejudgment interest. The court granted the Port’s motion for partial judgment on

the pleadings on Vandercar’s bad-faith claim. Both parties have appealed.

       {¶3}   Because we find that the contract is clear and unambiguous in requiring

the Port to pay Vandercar its $5 million fee, we affirm the trial court’s grant of

summary judgment in favor of Vandercar on its breach-of-contract claim.            And

because prejudgment interest cannot be assessed against the Port as an arm of the

state in the absence of statutory or contractual authority, we affirm the trial court’s

denial of Vandercar’s motion for prejudgment interest. Finally, because Vandercar’s

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                     OHIO FIRST DISTRICT COURT OF APPEALS

bad-faith claim was subsumed in its breach-of-contract claim, we hold that the trial

court properly dismissed the bad-faith claim as a separate, stand-alone cause of action.

However, because we find that Vandercar has alleged that the Port acted in bad faith,

we reverse the trial court’s granting of judgment on the pleadings as to the recovery of

attorney fees and remand for further proceedings.

                               Factual Background
       {¶4}    On July 1, 2019, Vandercar entered into a Purchase and Sale

Agreement (“the Purchase Contract”) with Cincinnati S.I. Co., the owner of the

Millennium Hotel, to purchase the property for $36 million. The Purchase Contract

was amended on August 27, 2019, and on September 13, 2019.

       {¶5}   On October 4, 2019, Vandercar assigned its rights under the Purchase

Contract to the Port in an Assignment and Assumption Agreement, and the parties

entered into an Agreement Regarding Assignment (“the Agreement”). The Agreement

provided:

       THIS AGREEMENT REGARDING ASSIGNMENT (the “Agreement”) is

       entered into effective as of the 4th day of October, 2019 (the “Effective

       Date”), by and between VANDERCAR, LLC, an Ohio limited liability

       company (“Vandercar”), and THE PORT OF GREATER CINCINNATI

       DEVELOPMENT AUTHORITY, a port authority and political

       subdivision and body corporate and politic duly organized and validly

       existing under the laws of the State of Ohio (“Port”), under the following

       circumstances:

       A. Vandercar is a party to that certain Purchase and Sale Agreement

       with Cincinnati S.I. Co., an Ohio limited partnership (“Seller”) dated as

       of July 1, 2019, as amended by that certain First Amendment to

       Purchase and Sale Agreement dated as of August 27, 2019, and as

       further amended by that Second Amendment to Purchase and Sale

                                               3
                      OHIO FIRST DISTRICT COURT OF APPEALS

       Agreement dated as of September 13, 2019 (as so amended, and as may

       be further amended and/or supplemented from time to time, together,

       the “Contract”). A true, correct, and complete copy of the Contract is

       attached hereto as Exhibit A and incorporated herein.

       B. Under the Contract, among other things, Vandercar has agreed to

       purchase, and Seller has agreed to sell, certain Real Property (as such

       term is defined in the Contract)1 located in the City of Cincinnati,

       Hamilton County, Ohio, on which is located the Millennium Hotel

       Cincinnati.

       C. Port wishes to acquire the Real Property in order to redevelop, or

       cause to be redeveloped, the Real Property for a new hotel (the

       “Project”), which such acquisition of the Real Property may be financed

       with the proceeds of revenue bonds issued by the Port Authority (the

       “Property Acquisition Bonds”), and such redevelopment will be

       financed with the proceeds of revenue bonds issued by the Port

       Authority (the “Redevelopment Bonds”). The Property Acquisition

       Bonds and the Redevelopment Bonds may be issued at the same time as

       part of one issuance of bonds or, alternatively, may be issued on

       separate dates as determined by the Port.

       {¶6}    After setting forth certain obligations of the parties, the Agreement

provided for certain payments to Vandercar. One of these was to occur upon the

closing of the property (“Development Fee”), and another was to be paid upon the

issuance of Redevelopment Bonds (“Redevelopment Fee”).                 Specifically, the

Agreement provided in relevant part:

1The “Real Property” referred to in the Agreement was defined in the July 1, 2019 Purchase
Contract to include the Land and Improvements at the Millennium Hotel site.

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               OHIO FIRST DISTRICT COURT OF APPEALS

D. Port desires to assume Vandercar’s rights and obligations under the

Contract, and Vandercar desires to assign such rights and obligations to

Port, subject, however, to the terms, conditions, and provisions of this

Agreement.

1. Development Fee and Expenses in Connection with the Property

     Acquisition and the Contract.

a. On the Closing Date of the acquisition of the Real Property, Port

     shall pay Vandercar:

        i.     a “Development Fee” of $2,500,000.00;

        ii.    An amount of $250,000.00 to reimburse Vandercar for

               its payment to the Seller of the Initial Deposit required

               under the Contract;

        iii.   An amount not to exceed $175,000.00 to reimburse

               Vandercar for the fees and expenses incurred by

               Vandercar in connection with the initial due diligence

               with respect to the Contract, such amount to be paid to be

               evidenced by invoices provided to the Port with sufficient

               detail as to the work performed; and

        iv.    An amount not to exceed $47,500.00 to reimburse

               Vandercar for the fees and expenses of Government

               Solutions in connection with the Contract.

                                     ***

2.      Additional Vandercar Redevelopment Fee. The Port shall use

commercially reasonable efforts to issue the Redevelopment Bonds

within one year from the date of the closing of the purchase of the Real

Property[.] * * * The Port shall not use or allow to be used any other

method of financing the development of the Project unless such

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                        OHIO FIRST DISTRICT COURT OF APPEALS

        financing causes and allows for the payment of the $5,000,000.00

        redevelopment fee described below. If the closing of the Redevelopment

        Bonds occurs within that one-year period (as may be extend (sic) due to

        force majeure event), on such date of closing of the Redevelopment

        Bonds[,] the Port shall pay Vandercar an additional amount of

        $5,000,000.00.

(Emphasis sic.)

        {¶7}    On January 15, 2020, the Port adopted Resolution No. 2020-04 (“the

January Resolution”), authorizing the issuance and sale of revenue bonds. The

January Resolution provided:

        WHEREAS, the Port of Greater Cincinnati Development Authority (the

        “Port”), * * *, authorized and empowered * * * (1) to issue revenue bonds

        in one or more series for the purpose of financing costs of acquiring,

        constructing, installing, equipping or improving “port authority

        facilities,” as defined in Section 4582.21, Ohio Revised Code

                                               ***

        WHEREAS, pursuant to Board Resolution No. 2019-26 adopted on

        September 27, 2019, the Port entered into an Agreement Regarding

        Assignment dated as of October 4, 2019, with Vandercar, LLC

        (“Vandercar”), under which the Port accepted an assignment of

        Vandercar’s rights, interests and obligations under a Purchase and Sale

        Agreement dated as of July 1, 2019 (the “PSA”) with Cincinnati, S.I. Co.,

        as amended, and pursuant thereto, the Port intends to acquire and

        demolish2 (i) the Millennium Hotel, Cincinnati, Hamilton County, Ohio

2We note that “acquire and demolish” does not modify the second phrase of this sentence and have
interpreted the plain language to be: the Port intends (1) to acquire and demolish the Millennium
Hotel and (ii) to evaluate the timing, scope and size of new convention facilities, including a new
hotel. This is consistent with both parties’ arguments.

                                                     6
                       OHIO FIRST DISTRICT COURT OF APPEALS

        and certain other buildings and improvements located upon the Project

        Site (defined herein), and (ii) to evaluate the timing, scope and size of

        the construction of new convention facilities, including a new hotel, and

        an expansion of the convention center on all or a portion of the Project

        Site (collectively, the “Project”); and

        WHEREAS, upon advice from the Port’s staff, this Board has

        determined that it is necessary and proper and in the best interest of the

        Port to issue revenue bonds in one or more series in the maximum

        aggregate principal amount of $59,000,000 (“Bonds”) in anticipation

        of the issuance of additional revenue bonds to pay for the costs of the

        Project[.]

        {¶8}   The January Resolution then authorized the issuance of the bonds. In

it, the Port agreed to use the bond proceeds to pay a portion of the Project’s costs. The

Project is defined in the January Resolution as acquisition, demolition, and evaluation

of the site.

        {¶9}   Specifically, the January Resolution provided:

        The Port will use the proceeds of the Bonds to pay a portion of the costs

        of the Project and pay or reimburse related costs, to pay certain costs of

        issuance of the Bonds, to make the capitalized interest deposit, if any,

        and to fund a debt service fund if required by the Original Purchaser.

        {¶10} On February 12, 2020, the Port adopted Resolution No. 2020-11 (“the

February Resolution”) authorizing its president to enter into contracts for the

remediation, demolition, and preconstruction at the Millennium Hotel site and for the

development and construction of new convention facilities, including a convention

center hotel, at the site. The February Resolution reiterated that the revenue bonds

authorized by the January Resolution would be used to “pay the cost of acquiring the

Project Site and demolishing the Millennium Hotel and evaluating the timing, scope

                                                  7
                     OHIO FIRST DISTRICT COURT OF APPEALS

and size of the construction of new convention facilities, including a new hotel, and an

expansion of the convention center[.]”

       {¶11} On February 13, 2020, the Port issued revenue bonds (“the February

revenue bonds”) in the amount of $52.855 million, which were titled “Port of Greater

Cincinnati Development Authority Revenue Bonds, Series 2020 (Convention Center

Hotel Acquisition and Demolition Project).”

       {¶12} On February 14, 2020, the Port closed on its acquisition of the real

property and paid Vandercar its $2.5 million Development Fee (plus expenses),

pursuant to Paragraph D(4) of the Agreement.

       {¶13} On February 18, 2020, Vandercar submitted an invoice to the Port for

the $5 million Additional Vandercar Redevelopment Fee described in Paragraph D(5)

of the Agreement. In its letter accompanying the invoice, Vandercar asserted that the

February revenue bonds were issued for purposes other than simply property

acquisition and were Redevelopment Bonds issued within one year of closing, which

triggered the Port’s obligation to pay Vandercar’s Redevelopment Fee.

       {¶14} On February 24, 2020, Vandercar sued the Port after it did not pay the

Redevelopment Fee.

                                Procedural History
       {¶15} In its complaint, Vandercar alleged two causes of action: breach of

contract and bad faith. Vandercar alleged that the $52.855 million February revenue

bonds issued by the Port included approximately $39 million to acquire the Project

site and to pay Vandercar’s $2.5 million Development Fee, and the balance to begin

redevelopment activities, including demolition of the Millennium Hotel. It alleged

that the Port breached the Agreement when it failed to pay the $5 million

Redevelopment Fee owed to Vandercar when the Port issued “Redevelopment Bonds,

as defined under the Agreement,” as part of the February revenue bond issuance.

Vandercar also alleged that the Port acted in bad faith by refusing to pay the

                                              8
                        OHIO FIRST DISTRICT COURT OF APPEALS

Redevelopment Fee and by structuring the bond issue to disguise the demolition and

other redevelopment activity as something other than redevelopment.

          {¶16} After the Port filed its Answer, Vandercar moved for judgment on the

pleadings, seeking judgment in its favor on both its breach-of-contract and bad-faith

claims. Vandercar asked the court to award it $5 million in damages as well as its

attorney fees. The trial court denied the motion, finding that genuine issues of

material fact remained to be determined.

          {¶17} The Port then moved for partial judgment on the pleadings as to

Vandercar’s bad-faith claim, arguing that the claim was not a legally cognizable, free-

standing cause of action under Ohio law.

          {¶18} Before the court ruled on the Port’s motion, and following discovery,

Vandercar moved for summary judgment on its breach-of-contract claim. Then the

Port moved for summary judgment on both the breach-of-contract and bad-faith

claims.     Both parties argued that the Agreement was clear and unambiguous.

Vandercar argued that it was entitled to its $5 million Redevelopment Fee because the

February      revenue   bonds   included   both   Property   Acquisition   Bonds   and

Redevelopment Bonds. The Port argued that the February revenue bonds consisted

only of Property Acquisition Bonds, and that it was not obligated to pay the

Redevelopment Fee because it did not issue Redevelopment Bonds to construct a new

hotel. In addition, the Port argued that Vandercar’s bad-faith claim failed as a matter

of law because there was no evidence of bad faith.

          {¶19} The trial court heard arguments on the Port’s motion for partial

judgment on the pleadings and on both motions for summary judgment. At the end

of the hearing, the trial court orally announced its decision granting summary

judgment in favor of Vandercar on its breach-of-contract claim and awarding

Vandercar its $5 million Redevelopment Fee, denying the Port’s motion for summary

judgment, and granting the Port’s motion for partial judgment on the pleadings as to

                                              9
                       OHIO FIRST DISTRICT COURT OF APPEALS

Vandercar’s bad-faith claim. Before the court issued a judgment entry, Vandercar filed

a motion for prejudgment interest.

         {¶20} The trial court then issued a judgment entry disposing of the motions.

In granting summary judgment in favor of Vandercar on its breach-of-contract claim,

and denying summary judgment to the Port on that claim, the trial court stated:

         The Court finds that there is no disputed issue of material fact that the

         Port issued revenue bonds to acquire the property, and also redevelop

         the property by beginning demolition of the Millennium Hotel. As such,

         Vandercar is entitled to judgment as a matter of law on Count One of

         the Complaint. The $5-Million-Dollar Redevelopment Fee defined in

         the contract was triggered, and is owed.

         {¶21} The court rejected the Port’s contention that demolition of the

Millennium Hotel “was paid for by issuance of Property Acquisition Bonds, which

would not trigger the Redevelopment Fee.” The court explained that it considered no

extrinsic evidence in reaching its decision, and it found that the language in the

Agreement was unambiguous.           After looking to the dictionary definitions of

“acquisition” and “redevelopment” to find the plain meaning of the terms used in the

Agreement, the court stated:

         The Court reads acquisition to refer solely to the gaining possession of

         the property. The term Redevelopment would be applied to everything

         else after acquisition leading up to construction of a new hotel. This

         includes demolition of the previous building.

         {¶19} In dismissing Vandercar’s bad-faith claim, the court stated that,

although it was clear that the parties disagreed as to whether the Redevelopment Fee

was owed, “a dispute with regard to contract interpretation is not bad faith in this

case.”

                                               10
                      OHIO FIRST DISTRICT COURT OF APPEALS

       {¶20} After the court issued its judgment entry disposing of the motions, the

Port appealed in the case numbered C-210643. Vandercar filed a cross-appeal in the

case numbered C-210665, but asserted that the Port’s appeal was premature under

App.R. 4(B)(2)(f) because Vandercar’s motion for prejudgment interest remained

pending in the trial court.

       {¶21} This court stayed the appeals and remanded this case to the trial court

to resolve the prejudgment-interest motion. The trial court denied the motion. The

court found that prejudgment interest could not be levied upon the state in the absence

of a statute requiring it. The court found that the Port was an arm or instrumentality

of the state because it was created by, and its powers and authorities are defined by,

the Revised Code. Because the court found that no statute required the imposition of

prejudgment interest on an arm or instrumentality of the state, the court refused to

award prejudgment interest against the Port.

       {¶22} Following the trial court’s denial of the motion for prejudgment

interest, Vandercar filed the appeal in the case numbered C-220130.

                                   The Port’s Appeal
       {¶23} In two assignments of error, the Port challenges the trial court’s

granting of summary judgment in Vandercar’s favor on the breach-of-contract claim

and denying the Port’s summary-judgment motion on the same claim. The Port argues

that it did not breach the Agreement with Vandercar by not paying the $5 million

Redevelopment Fee. According to the Port, it did not issue Redevelopment Bonds that

would trigger its obligation to pay the Redevelopment Fee, because the Agreement

defined “Redevelopment Bonds” as revenue bonds issued to construct a new hotel.

       {¶24} We review a trial court’s ruling on a motion for summary judgment de

novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996).

Summary judgment is appropriately granted when there exists no genuine issue of

material fact, the party moving for summary judgment is entitled to judgment as a

                                               11
                     OHIO FIRST DISTRICT COURT OF APPEALS

matter of law, and the evidence, when viewed in favor of the nonmoving party, permits

only one reasonable conclusion that is adverse to that party. State ex rel. Howard v.

Ferreri, 70 Ohio St.3d 587, 589, 639 N.E.2d 1189 (1994).

       {¶25} In interpreting a contract, our role is “to give effect to the intent of the

parties to the agreement.” Motorists Mut. Ins. Co. v. Ironics, Inc., Slip Opinion No.

2022-Ohio-841, ¶ 8, quoting Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-

Ohio-5849, 797 N.E.2d 1256, ¶ 11. We must “examine the contract as a whole and

presume that the intent of the parties is reflected in the language of the contract.”

Sunoco, Inc. (R&M) v. Toledo Edison Co., 129 Ohio St.3d 397, 2011-Ohio-2720, 953

N.E.2d 285, ¶ 37. Contract terms that are clear and unambiguous “should be applied

as written.” Sutton Bank v. Progressive Polymers, L.L.C., 161 Ohio St.3d 387, 2020-

Ohio-5101, 163 N.E.3d 546, ¶ 18. “[C]ommon words appearing in a written instrument

will be given their ordinary meaning unless manifest absurdity results, or unless some

other meaning is clearly evidenced from the face or overall contents of the

instrument.” Id. at ¶ 15, quoting Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d

241, 374 N.E.2d 146 (1978), paragraph two of the syllabus.

       {¶26} Where the terms in a contract are clear and unambiguous, courts

“cannot in effect create a new contract by finding an intent not expressed in the clear

language employed by the parties.” Alexander at 246. Where terms are not defined

in the contract, courts rely upon dictionary definitions of the terms to determine their

plain and ordinary meaning.      Id. at 247-248 (applying dictionary definitions of

unambiguous contract terms); Mr. Pulpstone, LLC v. Shops on 58, LLC, 9th Dist.

Lorain No. 21CA011718, 2021-Ohio-4467, ¶ 11; Sunoco at ¶ 38-39 (court looked to

dictionary definitions of “arrangement” because the term was not defined in the

parties’ agreement); Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm, 73 Ohio

St.3d 107, 109, 652 N.E.2d 684 (1995) (court applied Black’s Law Dictionary

definition of “employee” where the term was not defined in parties’ contract).

                                              12
                        OHIO FIRST DISTRICT COURT OF APPEALS

         {¶27} In this case, both parties assert that the Agreement’s terms are clear and

unambiguous, and that the Agreement contemplated two types of revenue bonds:

Property Acquisition Bonds and Redevelopment Bonds. They agree that, pursuant to

Paragraph D(4) of the Agreement, the Port paid Vandercar’s $2.5 million

Development Fee on the closing date of the acquisition of the Real Property. They

disagree, however, on the meaning of the term “Redevelopment Bonds” in the

Agreement and whether the February revenue bond issuance included Redevelopment

Bonds.

         {¶28} The Port argues that the February revenue bonds were solely Property

Acquisition Bonds, which it issued to finance acquisition, site studies, and demolition

of the old Millennium Hotel. Vandercar argues that the February revenue bonds

consisted of both Property Acquisition Bonds and Redevelopment Bonds. In support

of their respective positions, both parties point to Paragraph C of the Agreement,

which we set forth again:

         C. Port wishes to acquire the Real Property3 in order to redevelop, or

         cause to be redeveloped, the Real Property for a new hotel (the

         “Project”), which such acquisition of the Real Property may be financed

         with the proceeds of revenue bonds issued by the Port Authority (the

         “Property Acquisition Bonds”), and such redevelopment will be

         financed with the proceeds of revenue bonds issued by the Port

         Authority (the “Redevelopment Bonds”). The Property Acquisition

         Bonds and the Redevelopment Bonds may be issued at the same time as

         part of one issuance of bonds or, alternatively, may be issued on

         separate dates as determined by the Port.

(Emphasis sic.)

3The Real Property referred to in the Agreement was defined in the July 1, 2019 Purchase Contract
to include the Land and Improvements at the Millennium Hotel site.

                                                   13
                     OHIO FIRST DISTRICT COURT OF APPEALS

       {¶29} The Agreement is clear and unambiguous. It provides for Property

Acquisition Bonds to acquire the property and Redevelopment Bonds to redevelop the

property. The only remaining question is whether demolition and site studies are part

of “acquisition” or “redevelopment.”

       {¶30} Vandercar argues that “acquisition” means what it says, and does not

include demolition. Rather, demolition and site studies are part of “redevelopment.”

       {¶31} The Port claims that demolition is part of acquisition, and not

redevelopment. The Port contends that the only reasonable construction of “such

redevelopment” in the context of the Agreement is “redevelop[ing] the Real Property

for a new hotel”—the explicit antecedent in the first clause of the sentence. The Port

contends that Redevelopment Bonds can only be those issued to finance “a new hotel,”

and do not include bonds issued for acquisition, demolition of the old hotel, or other

activities that do not result directly in “a new hotel.” The Port claims that nothing in

Paragraph C prevented its use of Property Acquisition Bonds to finance both

acquisition and what it calls “pre-development activities,” such as site studies and

demolition, without triggering the Redevelopment Fee.

       {¶32} The Port also argues that the final sentence of Paragraph C means that

the parties intended either one issuance of bonds to pay for everything from

acquisition to new hotel construction, or two separate issuances of bonds in amounts

sufficient to cover acquisition and construction of a new hotel, respectively. This

sentence provided that “The Property Acquisition Bonds and the Redevelopment

Bonds may be issued at the same time as part of one issuance of bonds or, alternatively,

may be issued on separate dates as determined by the Port.” However, nothing in the

final sentence limits the Port to a single issuance of Redevelopment Bonds. Under the

clear language of the contract, the Port could issue Property Acquisition Bonds and

Redevelopment Bonds “at the same time as part of one issuance of bonds,” or “on

                                              14
                      OHIO FIRST DISTRICT COURT OF APPEALS

separate dates.” So, as Vandercar correctly asserts, a single bond issuance could

include only Property Acquisition Bonds, only Redevelopment Bonds, or some of each.

       {¶33} The Agreement did not define “acquisition” or “redevelopment,” and

defined “Property Acquisition Bonds” only as bonds issued to acquire the Real

Property and “Redevelopment Bonds” as those issued for redevelopment of the Real

Property. Because the Agreement did not define the terms “Property Acquisition

Bonds” or “Redevelopment Bonds” beyond this general description, we turn, as the

trial court did, to dictionary definitions of the terms to determine their plain and

ordinary meaning. The Agreement allowed the proceeds of Property Acquisition

Bonds to finance “such acquisition of the Real Property.” The word “such” refers back

to the opening clause’s reference to the Port’s wish to “acquire the Real Property.” The

plain and ordinary meaning of “acquisition” is “[t]he gaining of possession or control

over something; esp., the act of getting land, power, money, etc.” Black’s Law

Dictionary (11th Ed.2019). Thus, the Property Acquisition Bonds are limited to the

acquiring of the property and nothing more.

       {¶34} That leads us then to what is a Redevelopment Bond. The Agreement

provided that the proceeds of Redevelopment Bonds were to be used to finance “such

redevelopment,” referring to the introductory clause “Port wishes to acquire the Real

Property in order to redevelop, or cause to be redeveloped, the Real Property for a new

hotel[.]”   The plain and ordinary meaning of “Redevelopment” refers to

“[r]ehabilitation of an urban-residential or commercial section that is subject to blight

or in decline, esp. by erecting new buildings or renovating the old ones, often with

public financing or tax-increment financing.” Black’s Law Dictionary (11th Ed.2019).

       {¶35}   Applying these dictionary definitions, we agree with the trial court

that, as used in the Agreement, “acquisition” refers only to the Port’s gaining of

possession or control of the Real Property.         We find that redevelopment and

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                       OHIO FIRST DISTRICT COURT OF APPEALS

rehabilitation include demolition, site studies, and the like. Thus, the revenue bonds

were issued by the Port for both acquisition and redevelopment of the site.

       {¶36} Our conclusion is bolstered by the Port’s own description of the bonds.

The issuance was described as “Convention Center Hotel Acquisition and Demolition

Project.” The Port itself made a distinction between “Acquisition” and “Demolition.”

And it also did so in the January Resolution where it used the separate terms of

“acquisition” and “demolition.”

       {¶37} If we were to adopt the Port’s position as to the meanings of “Property

Acquisition Bonds” and “Redevelopment Bonds,” we would effectively be rewriting the

parties’ agreement, which we will not do. See Beverage Holdings, L.L.C. v. 5701

Lombardo, L.L.C., 159 Ohio St.3d 194, 2019-Ohio-4716, 150 N.E.3d 28, ¶ 25, quoting

Foster Wheeler Enviresponse, Inc. v. Franklin Cty. Convention Facilities Auth., 78

Ohio St.3d 353, 362, 678 N.E.2d 519 (1997) (“To the extent that [one of the parties]

may be dissatisfied with the purchase price that resulted from the plain language

agreed to by the parties, ‘[i]t is not the responsibility or function of this court to rewrite

the parties’ contract in order to provide for a more equitable result’ ”).

       {¶38} We hold that the trial court properly entered summary judgment in

favor of Vandercar on its breach-of-contract claim (and denied summary judgment to

the Port on the same claim) because no genuine issue of fact remained—under the

plain meaning of the terms used in the parties’ Agreement, the February revenue

bonds included Redevelopment Bonds which triggered the Port’s obligation to pay

Vandercar’s $5 million Redevelopment Fee. Therefore, we overrule the Port’s first and

second assignments of error.

                                     Vandercar’s Appeal
       {¶39} In two assignments of error, Vandercar argues that the trial court erred

by granting the Port’s Civ.R. 12(C) motion for judgment on the pleadings on its bad-

                                                 16
                       OHIO FIRST DISTRICT COURT OF APPEALS

faith claim and by denying its motion for prejudgment interest on its award for the

breach-of-contract claim.

                                   A.      Bad-Faith Claim
       {¶40} Dismissal on a Civ.R. 12(C) motion for judgment on the pleadings is

proper when a court construes as true the material allegations in the complaint, along

with all reasonable inferences to be drawn therefrom, and finds, beyond doubt, that

the plaintiff can prove no set of facts that would entitle the plaintiff to relief. Reister

v. Gardner, 164 Ohio St.3d 546, 2020-Ohio-5484, 174 N.E.3d 713, ¶ 17, citing State ex

rel. Midwest Pride IV, Inc. v. Pontious, 75 Ohio St.3d 565, 570, 664 N.E.2d 931 (1996).

A Civ.R. 12(C) motion permits the court to consider the complaint and the answer in

deciding whether the movant is entitled to judgment as a matter of law. State ex rel.

Fire Rock, Ltd. v. Ohio Dept. of Commerce, 163 Ohio St.3d 277, 2021-Ohio-673, 169

N.E.3d 665, ¶ 6, citing Pontious at 569. We review a trial court’s ruling on a Civ.R.

12(C) motion for judgment on the pleadings de novo. Reister at ¶ 17.

       {¶41} Vandercar alleged in its complaint that the Port was liable for

Vandercar’s attorney fees because the Port acted in bad faith by refusing to pay the

Redevelopment Fee and by structuring the February revenue bonds to make it appear

that they were not issued for redevelopment to avoid having to pay the fee. Vandercar

pled this as a separate cause of action in its complaint.

       {¶42} We address the bad-faith attorney-fee issue both as a separate cause of

action and as a request to include an award of attorney fees as costs. As to the former,

we affirm the trial court’s determination that no separate claim exists. But as to the

latter, we return the case to the trial court.

                            i. Bad Faith as a Separate Claim
       {¶43} Ohio recognizes that implied in every contract is a duty of good faith and

fair dealing. Lucarell v. Nationwide Mut. Ins. Co., 152 Ohio St.3d 453, 2018-Ohio-15,

97 N.E.3d 458, ¶ 42. However, Ohio law is clear that it does not give rise to a stand-

                                                 17
                      OHIO FIRST DISTRICT COURT OF APPEALS

alone claim. “[T]he duty of good faith and fair dealing does not stand alone from the

contract but is a part of it.” Great Water Capital Partners, LLC v. Down-Lite

Internatl., Inc., 1st Dist. Hamilton Nos. C-150015 and C-150023, 2015-Ohio-4877, ¶

14. Therefore, a breach-of-contract claim subsumes an accompanying claim for the

breach of the duty of good faith and fair dealing. Shertok v. Wallace Group Gen.

Dentistry for Today, Inc., 1st Dist. Hamilton Nos. C-190457 and C-190464, 2020-

Ohio-4369, ¶ 40. As a result, there is no independent cause of action for a breach of

the duty of good faith separate from the underlying breach-of-contract claim. Id.

          ii. Bad Faith as Basis for Award of Attorney Fees as Costs
       {¶44} But Vandercar does not simply claim that it is entitled to attorney fees

under the doctrine of good faith and fair dealing. Rather, it relies on our decision in

SST Bearing Corp. v. Twin City Fan Cos., 1st Dist. Hamilton No. C-110611, 2012-Ohio-

2490, which permits the recovery of attorney fees in a breach-of-contract case where

a plaintiff can establish bad faith by the breaching party.

       {¶45} Ohio courts generally follow the “American rule” with respect to

attorney fees: “a prevailing party in a civil action may not recover attorney fees as part

of the costs of litigation.” Wilborn v. Bank One Corp., 121 Ohio St.3d 546, 2009-Ohio-

306, 906 N.E.2d 396, ¶ 7, citing Nottingdale Homeowners’ Assn., Inc. v. Darby, 33

Ohio St.3d 32, 33-34, 514 N.E.2d 702 (1987), and State ex rel. Beebe v. Cowley, 116

Ohio St. 377, 382, 156 N.E. 214 (1927). But there are three well-recognized exceptions

to this rule: (1) where a statute specifically provides that a prevailing party may recover

attorney fees; (2) where the parties’ contract provides for fee shifting; and (3) where

there has been a finding of bad faith. SST Bearing at ¶ 28, citing Keal v. Day, 164 Ohio

App.3d 21, 2005-Ohio-5551, 840 N.E.2d 1139, ¶ 5 (1st Dist.).

       {¶46} “A party seeking attorney fees based on the bad-faith exception to the

American rule ‘must be the prevailing party in the litigation, and then must prove that

his opponent acted in bad faith.’ ” Covenant Dove Holding Co., LLC v. Mariner Health

                                                18
                      OHIO FIRST DISTRICT COURT OF APPEALS

Care, Inc., 1st Dist. Hamilton No. C-120878, 2013-Ohio-3824, ¶ 7, quoting Strum v.

Strum, 63 Ohio St.3d 671, 675, 590 N.E.2d 1214 (1991). “Bad faith” generally implies

“a dishonest purpose, moral obliquity, conscious wrongdoing, breach of a known duty

due to ulterior motive, ill will comparable to fraud, or an actual intent to mislead or

deceive another.” Id. at ¶ 7. Although an award of attorney fees may be granted in a

contract action upon a finding by the trial court of bad-faith conduct, a trial court errs

by awarding attorney fees where it has made no finding of bad faith. Id. at ¶ 8; Wright

v. Fleming, 1st Dist. Hamilton No. C-070121, 2008-Ohio-1435, ¶ 5. We emphasize

that an award of attorney fees is generally not available in contract actions and will be

warranted only in an exceptional case.

       {¶47} In SST Bearing, we held that the trial court was within its discretion to

award attorney fees in a breach-of-contract action when it made an explicit finding

that the breaching party acted in bad faith. In that case, the trial court found that the

buyer had used the seller’s price to obtain leverage with other competitors, had tried

to obtain trade-secret information from the seller, had canceled the entire contract

with the seller prior to testing any of the seller’s products and had canceled orders for

products for which the buyer could find no fault, and refused to give the seller an

opportunity to cure any potential defects. SST Bearing, 1st Dist. Hamilton No. C-

110611, 2012-Ohio-2490, at ¶ 29.

       {¶48} Thereafter, we granted the buyer’s motion to certify a conflict between

our decision and the decisions of two other appellate districts on the following

question:

       The “American Rule” does not permit the prevailing party to recover

       attorneys[] fees in the absence of a statutory authorization. Does Ohio

       recognize an exception to the American Rule for “bad faith” breach of

       contract in absence of an award of punitive damages?

                                               19
                     OHIO FIRST DISTRICT COURT OF APPEALS

       The buyer appealed to the Supreme Court of Ohio, which declined jurisdiction.

SST Bearing Corp. v. Twin City Fan Cos., Ltd., 133 Ohio St.3d 1413, 2012-Ohio-4650,

975 N.E.2d 1031. On review of the order certifying a conflict, the Supreme Court

“determined that no conflict exists,” and dismissed the matter. SST Bearing Corp. v.

Twin City Fan Cos., Ltd., 133 Ohio St.3d 1408, 2012-Ohio-4650, 975 N.E.2d 1027. The

Supreme Court denied a subsequent motion for reconsideration. SST Bearing Corp.

v. Twin City Fan Cos., Ltd., 133 Ohio St.3d 1494, 2012-Ohio-5459, 978 N.E.2d 912.

       {¶49} In examining Ohio law in a contract action where the plaintiffs’

complaints included counts seeking attorney fees based on the defendant’s bad-faith

conduct, the United States District Court for the Southern District of Ohio explained

the difference between a stand-alone claim and a recovery of attorney fees for bad-

faith conduct. In Avis Rent a Car Sys., LLC v. City of Dayton, S.D.Ohio Nos. 3:12-cv-

399 and 3:12-cv-405, 2013 U.S. Dist. LEXIS 119597, *7-8 (Aug. 22, 2013) (“Avis I”),

the court stated:

       [I]n breach of contract cases, Ohio courts that award attorneys’ fees

       after a showing of bad faith conduct do so as an award of costs to the

       prevailing party, not as an element of damages. [(citing SST Bearing

       and Columbus Med. Equip. Co. v. Watters, 13 Ohio App.3d 149, 468

       N.E.2d 343 (10th Dist.1983)] * * * Even though the Plaintiffs have pled

       a separate count for attorneys’ fees based on allegations of bad faith

       conduct, such a claim is not cognizable under Ohio law as a free-

       standing cause of action, as “good faith is part of a contract claim and

       does not stand alone.” Lakota Local Sch. Dist. v. Brickner, 108 Ohio

       App.3d 637, 671 N.E.2d 578, 584 (Ohio Ct. App. 1996). Thus, the issue

       of whether to award attorneys’ fees to Plaintiffs is entirely appropriate

       to award post-judgment, or even post-appeal, after a complete and final

       resolution of the merits of their case.

                                                 20
                      OHIO FIRST DISTRICT COURT OF APPEALS

       {¶50} The court noted that before it entered summary judgment in favor of the

plaintiffs on their motions for summary judgment on their contract claims, the

plaintiffs had amended their complaints to include counts seeking attorney fees, based

on alleged “bad faith” conduct by the defendant. Id. at *3-4. Because Ohio does not

recognize a stand-alone cause of action for bad faith in a contract claim, the court

dismissed the bad-faith counts in the plaintiffs’ complaints and ordered the plaintiffs

to file postjudgment motions for attorney fees to preserve their rights to request

attorney fees, should the court’s summary-judgment rulings be affirmed. Id. at *10-

11.

       {¶51} Then the plaintiffs filed their motions for attorney fees, the defendant

appealed the court’s decision, and the Sixth Circuit Court of Appeals affirmed the

decision. See Avis Rent A Car Sys., LLC v. City of Dayton, S.D.Ohio No. 3:12-cv-399,

2015 U.S. Dist. LEXIS 129516, *16 (Sept. 25, 2015) (“Avis II”). Thereafter, the district

court addressed the plaintiffs’ motions for attorney fees, applying Ohio law. Id. at *17.

       {¶52} The defendant argued that the court should deny the motions for

attorney fees because the Supreme Court of Ohio had never held that attorney fees are

recoverable for a bad-faith breach of contract. Id. at *22. However, the district court

“believe[d] that the Ohio Supreme Court would recognize the exception to the

American Rule for attorneys’ fees based on bad-faith conduct giving rise to a breach-

of-contract claim” for several reasons. Id.

       {¶53} First, the district court pointed to our decision in SST Bearing and other

Ohio decisions affirming such awards in contract cases where no tort or punitive

damages provided the basis for attorney fees. See id. at *25-32, citing SST Bearing,

1st Dist. Hamilton No. C-110611, 2012-Ohio-2490; Dodson v. Maines, 6th Dist.

Sandusky No. S-11-012, 2012-Ohio-2548 (upholding award of attorney fees for bad-

faith conduct in an unjust-enrichment action sounding in contract); Hall v. Frantz,

9th Dist. Summit No. 19630, 2000 Ohio App. LEXIS 2186 (May 24, 2000) (upholding

                                               21
                      OHIO FIRST DISTRICT COURT OF APPEALS

attorney-fee award for bad-faith conduct in an action to enforce a settlement

agreement); and LEH Properties, Inc. v. Pheasant Run Assn., 9th Dist. Lorain No.

10CA009780, 2011-Ohio-516 (affirming attorney-fee award for a party’s bad-faith

noncompliance with a settlement agreement).

       {¶54} Second, the district court viewed as persuasive the Supreme Court of

Ohio’s determination that our decision in SST Bearing was not in conflict with

decisions of other appellate districts. Avis II at *32-34. The court stated that the ruling

“provide[d] an addition reason to believe that [the Supreme Court of Ohio] might

recognize the exception to the American Rule affirmed in that case.” Id. at *34.

       {¶55} Finally, the district court pointed to the Supreme Court of Ohio’s

decision in State ex rel. Chapnick v. East Cleveland City School Dist., 93 Ohio St.3d

449, 755 N.E.2d 883 (2001), which could “be read to implicitly assume that the

plaintiff might have been entitled to attorneys’ fees based on bad faith” where “the

conduct in question occurred entirely before he filed suit.” Avis II at *34-35.

       {¶56} In following our prior decision in SST Bearing, we also agree with the

district court’s analysis in Avis II. We hold that in an exceptional case, a party may

recover attorney fees if it can establish bad faith on the part of the breaching party.

And the bad faith need not involve only conduct occurring during litigation. See id. It

can involve conduct giving rise to a party’s claim. See SST Bearing, 1st Dist. Hamilton

No. C-110611, 2012-Ohio-2490, at ¶ 29; Cleveland Fire Fighters, Local 93 of the

I.A.F.F. v. City of Cleveland, 8th Dist. Cuyahoga No. 109136, 2020-Ohio-4751, ¶ 37

(finding no abuse of discretion in trial court’s denial of attorney fees upon its finding

that defendant did not act in bad faith). “If a trial court makes a finding that the losing

party had acted in bad faith, and if that finding is supported by the record, an award

of attorney fees is warranted.” Covenant Dove, 1st Dist. Hamilton No. C-120878,

2013-Ohio-3824, at ¶ 7. Again, we note that this will generally not be available in a

breach-of-contract action.

                                               22
                      OHIO FIRST DISTRICT COURT OF APPEALS

       {¶57} In this case, the trial court determined on the face of the complaint that

“there is no indication of bad faith in the present action.” However, taking the

allegations of the complaint as true, we cannot conclude that there is no set of facts

under which Vandercar could recover. We thus sustain Vandercar’s first assignment

of error, reverse the trial court’s decision in this regard, and return this matter to the

court for a determination of whether the Port acted in bad faith.

                                B.    Prejudgment Interest
       {¶58} In its second assignment of error, Vandercar argues that the trial court

erred by denying its motion for prejudgment interest. It asserts that prejudgment

interest is mandated by R.C. 1343.03(A), and that the trial court erred by finding that

prejudgment interest could not be imposed upon the Port because it was an arm or

instrumentality of the state.

       {¶59} Generally, a party granted judgment on an underlying contract claim is

entitled to prejudgment interest as a matter of law, pursuant to R.C. 1343.03(A).

Ronald J. Solomon, D.D.S., Inc. v. Davisson, 2018-Ohio-2011, 113 N.E.3d 1003, ¶ 7

(1st Dist.). R.C. 1343.03(A) provides:

       In cases other than those provided for in sections 1343.01 and 1343.02

       of the Revised Code, when money becomes due and payable upon any

       bond, bill, note, or other instrument of writing, upon any book account,

       upon any settlement between parties, upon all verbal contracts entered

       into, and upon all judgments, decrees, and orders of any judicial

       tribunal for the payment of money arising out of tortious conduct or a

       contract or other transaction, the creditor is entitled to interest at the

       rate per annum determined pursuant to section 5703.47 of the Revised

       Code, unless a written contract provides a different rate of interest in

       relation to the money that becomes due and payable, in which case the

       creditor is entitled to interest at the rate provided in that contract.

                                               23
                        OHIO FIRST DISTRICT COURT OF APPEALS

        {¶60} Nevertheless, R.C. 1343.03(A) does not require the payment of

prejudgment interest by an arm or instrumentality of the state in a contract action.

See Beifuss v. Westerville Bd. of Edn., 37 Ohio St.3d 187, 190, 525 N.E.2d 20 (1988)

(in the absence of statutory authority, a public school board cannot be held liable for

prejudgment interest on damages assessed in a contract action). As the Supreme

Court of Ohio explained in Beifuss, “[i]t is well-established that ‘[i]n the absence of a

statute requiring it, or a promise to pay it, interest cannot be adjudged against the state

for delay in the payment of money.’ ”4 Id. at 188-189, quoting State ex rel. Parrott v.

Bd. of Pub. Works, 36 Ohio St. 409 (1881), paragraph four of the syllabus. The court

held that this “interest rule” applied “to public school boards as it has been applied to

the state and its agencies.” Id. at 189.

        {¶61} The Beifuss court stated that it refused “to abandon our long-standing

rule in contract actions that, in the absence of a statute requiring it, or a promise to

pay it, interest cannot be assessed against the state for delay in the payment of money.”

(Emphasis sic.) Id. at 190. The court noted that in its prior cases, “we refused to

abandon the interest rule despite the fact that prejudgment interest was allowable in

cases filed against the state in the Court of Claims under R.C. 2743.18.” Id. at 190,

citing State ex rel. Home Care Pharmacy, Inc. v. Creasy, 67 Ohio St.2d 342, 423

N.E.2d 482 (1981), and State ex rel. Montrie Nursing Home v. Creasy, 5 Ohio St.3d

124, 449 N.E.2d 763 (1983). In construing R.C. 1343.03(A), the court determined that

the statutory provision did not “clearly express any intention of the legislature to

assess prejudgment interest against a public school board in this type of action.” Id.

at fn. 1.; State ex rel. Stacy v. Batavia Local School Dist. Bd. of Edn., 105 Ohio St.3d

476, 2005-Ohio-2974, 829 N.E.2d 298, ¶ 62. The court found that any expansion of a

4 We note that a rule that the state is not liable for prejudgment interest in a case where it has
delayed payment (i.e., slow pay) makes sense due to the bureaucracy and paperwork that may be
involved when the state makes payment. The cases, however, go well beyond simply delayed
payments and included, as did Beifuss, cases where the state disclaims liability altogether.

                                                   24
                      OHIO FIRST DISTRICT COURT OF APPEALS

public school board’s contractual liability to allow prejudgment interest “should be

created through clearly expressed legislation by the General Assembly or by the parties

themselves at the bargaining table.” Id. at 190.

       {¶62} The court held that a public school board is an arm of the state because

its duties and powers are defined extensively in R.C. Title 33 and it is “ultimately

managed and controlled by the dictates of the General Assembly.” Id. at 189, quoting

Thaxton v. Medina City Bd. of Edn., 21 Ohio St.3d 56, 57, 488 N.E.2d 136 (1986). The

court held that a public school board was not liable for the payment of prejudgment

interest on an award of back pay because there was no statute or contractual provision

requiring it. Id. at 190.

       {¶63} The Supreme Court has also declined to award prejudgment interest on

an employee’s award of back pay against a county sheriff’s department. See State ex

rel. Carver v. Hull, 70 Ohio St.3d 570, 579, 639 N.E.2d 1175 (1994). In Carver, the

Supreme Court rejected the employee’s argument that she was entitled to prejudgment

interest on an award of back pay under R.C. 1343.03(A), because the provision “d[id]

not specifically establish that a county can be held liable for interest on a judgment at

all, much less for prejudgment interest.” Id. at fn. 3.

       {¶64} In White v. Summit Cty. Dept. of Human Servs., 9th Dist. Summit Nos.
23740 and 23741, 2008-Ohio-176, the Ninth District followed the approach taken by

the Beifuss court and determined that a county department of job and family services,

like a public school board, is an arm of the state because it is “ultimately managed and

controlled by the dictates of the General Assembly.” White at ¶ 14, quoting Beifuss, 37

Ohio St.3d at 189, 525 N.E.2d 20. The court noted that the county department was

created under R.C. Chapter 329, which extensively detailed the department’s duties

and powers. Id. at ¶ 13. The court held that prejudgment interest may not accrue

against the department in the absence of a statute authorizing it. Id. at ¶ 14.

                                               25
                     OHIO FIRST DISTRICT COURT OF APPEALS

       {¶65} And in State ex rel. Mendez v. Pub. School Emp. Retirement Sys., 10th

Dist. Franklin No. 88AP-458, 1989 Ohio App. LEXIS 1934, *10-11 (May 23, 1989), the

Tenth District held that a school employees retirement board, which was a creature of

statute and could act only in accordance with its enabling statutory scheme, was an

instrumentality of the state. The court held that no general statute, including R.C.

1343.03, provided for interest to be ordered against the state in actions other than

those brought in the Court of Claims, and therefore, prejudgment interest could not

be assessed against the retirement board. Id. at *12-13.

       {¶66} As relevant here, a port authority is a political subdivision of the state of

Ohio created under R.C. Chapter 4582. State ex rel. Toledo Blade Co. v. Toledo-Lucas

Cty. Port Auth., 121 Ohio St.3d 537, 2009-Ohio-1767, 905 N.E.2d 1221, ¶ 11. R.C.

4582.21(A) defines a “port authority” as “a body corporate and politic created pursuant

to the authority of section 4582.22 of the Revised Code.” R.C. 4582.22, in turn,

provides that port authorities exercise essential governmental functions of the state.

That statute provides in relevant part:

       A port authority created pursuant to this section is a body corporate and

       politic which may sue and be sued, plead and be impleaded, and has the

       powers and jurisdiction enumerated in sections 4582.21 to 4582.59 of

       the Revised Code. The exercise by such port authority of the powers

       conferred upon it shall be considered to be essential governmental

       functions of this state, but no port authority is immune from liability by

       reason thereof.

R.C. 4582.22(A). A port authority’s powers are detailed in R.C. 4582.31(A)(1)-(27).

       {¶67} Like the public school board in Beifuss, the county department of

human services in White, and the retirement board in Mendez, a port authority is an

arm of the state because it is a creature of statute and its powers are extensively

detailed by statute. Therefore, a port authority cannot be held liable for prejudgment

                                               26
                      OHIO FIRST DISTRICT COURT OF APPEALS

interest on damages assessed in a contract action in the absence of a statutory or

contractual provision requiring it. See Beifuss, 37 Ohio St.3d at 188-189, 525 N.E.2d

20. And R.C. 1343.03(A), relied on by Vandercar, does not provide statutory authority

to assess prejudgment interest against the state or an arm of the state in a contract

action. See Beifuss at 190; Mendez at *12-13.

       {¶68} Vandercar seizes on the last clause of the last sentence of the statutory

provision in R.C. 4582.22(A)—“no port authority is immune from liability by reason

of” its performance of “essential governmental functions”—and argues that “when the

General Assembly created this new form of public entity, it gave port authorities

governmental powers but denied them any form of sovereign immunity.” (Emphasis

deleted.) Contrary to Vandercar’s assertion, however, the Port never claimed that it

was entitled to total sovereign immunity from Vandercar’s contract claim. Instead,

the Port relied on the well-established interest rule, reiterated in Beifuss, that the state

is not liable for prejudgment interest in the absence of a statute requiring it or a

promise to pay it.

       {¶69} Moreover, unlike R.C. 2743.18(A), which provides a statutory right to

prejudgment interest in suits against the state brought in the Court of Claims

(“[p]rejudgment interest shall be allowed with respect to any civil action on which a

judgment or determination is rendered against the state”), R.C. 4582.22(A) makes no

mention of prejudgment interest. As the Supreme Court held long ago, “The state is

not bound by the terms of a general statute, unless it be so expressly enacted.” State

ex rel. Parrott v. Bd. of Pub. Works, 36 Ohio St. 409 (1881), paragraph three of the

syllabus.

       {¶70} Rather, like the Supreme Court’s description of R.C. 1343.03(A), the

cited clause from R.C. 4582.22(A) does “not clearly express any intention of the

legislature to assess prejudgment interest” against an arm of the state. See Beifuss, 37

Ohio St.3d at 191, fn. 1, 525 N.E.2d 20. Therefore, we decline to read into the phrase

                                                27
                       OHIO FIRST DISTRICT COURT OF APPEALS

“no port authority is immune from liability by reason [of its governmental functions]”

a statutory requirement to assess prejudgment interest against a port authority. See

In re Icebreaker Windpower, Inc., Slip Opinion No. 2022-Ohio-2742, ¶ 56 (“We may

not add words to a statute to achieve a desired construction.”). If the legislature

intended to assess prejudgment interest against a port authority in a contract action,

it could have done so.

       {¶71} In the absence of statutory authority allowing prejudgment interest to

be assessed against the Port in this action, or an agreement by the parties to pay it, we

hold that prejudgment interest cannot be assessed against it on the contract award

because it is an arm of the state. Therefore, we hold that the trial court properly denied

Vandercar’s motion for prejudgment interest.          We overrule Vandercar’s second

assignment of error.

                                      Conclusion
       {¶72} In summary, we hold that the trial court properly granted summary

judgment in favor of Vandercar, and denied summary judgment in favor of the Port,

on Vandercar’s breach-of-contract claim.        We hold that the trial court properly

dismissed Vandercar’s bad-faith claim as a stand-alone claim and denied its motion

for prejudgment interest. We hold, however, that the trial court erred in granting

judgment on the pleadings as to Vandercar’s claimed entitlement to attorney fees as a

result of claimed bad faith on the part of the Port. Therefore, we affirm the trial court’s

entry of summary judgment in favor of Vandercar on its breach-of-contract claim and

its entry denying prejudgment interest. We reverse the trial court’s judgment on the

pleadings on Vandercar’s bad-faith claim and remand the matter to the trial court for

a determination of whether the Port acted in bad faith, and, if so, whether an award of

attorney fees in favor of Vandercar is warranted.

                                                                  Judgment accordingly.

                                               28
                      OHIO FIRST DISTRICT COURT OF APPEALS

BERGERON and BOCK, JJ., concur.

Please note:

       The court has recorded its own entry this date.

                                               29