Court Opinion

ID: 4299822
Source: CourtListenerOpinion
Date Created: 2018-08-01 13:49:12.315678+00
Date Added: 2024-06-11T14:42:30.244367
License: Public Domain

[Cite as Banker's Choice, L.L.C. v. Zoning Bd. of Appeals & Cincinnati, 2018-Ohio-3030.]
                 IN THE COURT OF APPEALS
             FIRST APPELLATE DISTRICT OF OHIO
                  HAMILTON COUNTY, OHIO

BANKER’S CHOICE, LLC,                             :         APPEAL NO. C-170280
                                                            TRIAL NO. A-1501964
   and                                            :

STOUGH DEVELOPMENT                                :             O P I N I O N.
CORPORATION,
                                                  :
     Plaintiffs-Appellees,
                                                  :
   vs.
                                                  :
ZONING BOARD OF APPEALS OF
THE CITY OF CINCINNATI,                           :

    Defendant,                                    :

   and                                            :

CITY OF CINCINNATI,                               :

    Defendant-Appellant.                          :

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed from is: Affirmed in Part, Reversed in Part, and Cause
                           Remanded

Date of Judgment Entry on Appeal: July 31, 2018

Barrett & Weber, C. Francis Barrett and Joshua L. Goode, for Plaintiffs-Appellees,

Paula Boggs Muething, City Solicitor, and Marion E. Haynes, III, Terrance A.
Nestor and Kevin M. Todd, for Defendant-Appellant,

Squire Patton Boggs LLP, Scott A. Kane and Larisa M. Vaysman, for Amicus Curiae
Cincinnati Center City Development Corporation.
                        OHIO FIRST DISTRICT COURT OF APPEALS

C UNNINGHAM , Judge.

       {¶1}   Defendant-appellant the city of Cincinnati appeals the trial court’s

adoption of a magistrate’s decision ordering the issuance of a certificate of

appropriateness    to    plaintiffs-appellees       Banker’s   Choice,   LLC,   and   Stough

Development Corporation (“Banker’s Choice”), to demolish the Davis Furniture

Building, a historic structure located at 1119-1123 Main Street. Because the trial

court erred as a matter of law in its application of the historic-preservation

provisions of the zoning code, we reverse, in part.

       {¶2}   Banker’s Choice, an experienced developer of urban properties in

Cincinnati, had purchased and renovated properties on Main Street known as the

Hanke Building. The Davis Furniture Building stood immediately across Main Street

from the Hanke Building. For more than a decade the Davis Furniture Building had

been permitted to deteriorate.       As the trial court later found, Banker’s Choice

purchased the Davis Furniture Building at a sheriff’s sale for $125,000 “to alleviate

the ‘eyesore’ * * * the building had become and to protect the economic well-being of

their property across the street.”

       {¶3}   After purchasing the Davis Furniture Building, Banker’s Choice sought

a certificate of appropriateness for demolition from the Historic Conservation Board

pursuant to the Cincinnati Zoning Code. See Cincinnati Municipal Code 1435-01-C

and 1435-09-01. The historic-preservation provisions of the zoning code seek to

“maintain and enhance the distinctive character of historic buildings and areas,” to

“safeguard the heritage of the city,” and to “maintain the historic urban fabric of the

city.” Cincinnati Municipal Code 1435-03(f), 1435-03(g), and 1435-03(l).

       {¶4}   To avoid the demolition of the Davis Furniture Building and to save it

for renovation, three local entities with extensive urban redevelopment experience

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                     OHIO FIRST DISTRICT COURT OF APPEALS

stepped forward to purchase the building. The Cincinnati Center City Development

Corporation (“3CDC”) offered to purchase the property for $125,000 plus costs and

expenses up to $200,000.       Grandin Properties offered $218,240.        And Tender

Mercies offered $350,000. Not only were these offers above the Banker’s Choice

purchase price, the latter two offers were well above the $155,220 assessed value of

the property.

       {¶5}     On December 4, 2014, after holding three hearings and reviewing a

voluminous record, the Historic Conservation Board adopted the recommendation of

the city’s Urban Conservator, and denied Banker’s Choice’s request. Banker’s Choice

appealed to the Zoning Board of Appeals of Cincinnati (“the Zoning Board”), which

affirmed the Historical Conservation Board’s determination.         The Zoning Board

reviewed the Historical Conservation Board’s decision pursuant to Cincinnati

Municipal Code 1435-09-2, which guides the determination of when a property

owner is entitled to a certificate of appropriateness for demolition. The Zoning

Board concluded that the preponderance of the substantial, reliable, and probative

evidence confirmed that Banker’s Choice had failed to demonstrate that it would be

deprived of “all economically viable use[s] of the property * * * without approval” of

the certificate of appropriateness for demolition.

       {¶6}     Pursuant to R.C. 2506.01 and 2506.04, Banker’s Choice appealed to

the Hamilton County Common Pleas Court. The matter was referred to a magistrate.

The parties presented additional evidence before the magistrate. The magistrate

vacated the decision of the Zoning Board and the Historic Conservation Board. In

reaching his decision, the magistrate found that the Historic Conservation Board’s

procedures were “deeply flawed and violated [Banker’s Choice’s] due process rights,”

that the Davis Furniture Building was not a “historical asset” or a “historic structure”

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                     OHIO FIRST DISTRICT COURT OF APPEALS

as those terms are defined in the code, and that the three offers to purchase the

building were “illusory” and “not bona fide offers.” See Cincinnati Municipal Code

1435-01-H and 1435-01-H5.       It also held as a matter of law that the standard,

identified in Cincinnati Municipal Code 1435-09-2, for determining when the

Historic Conservation Board may issue a certificate of appropriateness is

“unconstitutional and contrary to Ohio law.” The magistrate found that Banker’s

Choice had proven that it was not economically viable to rehabilitate the property.

Accordingly, it ordered the Historical Conservation Board to issue a certificate of

appropriateness for demolition to Banker’s Choice. The city filed timely objections to

the magistrate’s decision on each of these matters.

       {¶7}   The trial court took additional evidence and held extensive hearings on

the city’s objections before making its own finding that Banker’s Choice was not

denied due process in the administrative proceedings, that the Davis Furniture

Building was “part of a group of buildings that may be deemed to be of an historically

significant area and era,” and that “at least one and perhaps all three” offers to

purchase the property were made “in good faith.” The trial court also did not

“question or decide the constitutionality of the City ordinances that find the Davis

Buildings to be historic assets.” Without reaching an “[a]ssessment of fault” for the

failure to reach an agreement of sale, the trial court treated the “fact that no one

purchased the building” as “substantial evidence that any real or perceived economic

hardship * * * was not relieved” by the purchase offers. On this basis, the trial court

overruled the objections, adopted the magistrate’s decision, and ordered the issuance

of a certificate of appropriateness for the building’s demolition.

       {¶8}   The trial court also granted, in part, the city’s motion for a preliminary

injunction directing Banker’s Choice to provide the minimum repairs and

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                          OHIO FIRST DISTRICT COURT OF APPEALS

maintenance to the building necessary for public safety. But in light of its ruling that

the building was to be demolished, the court denied that portion of the city’s motion,

which would have required additional efforts to restore the building to compliance

with other aspects of the city’s building code.

          {¶9}     The city appealed. We permitted 3CDC to appear as amicus curiae.1

          {¶10} In its first assignment of error, the city contends that the trial court

erred in vacating the decision of the Zoning Board and finding that a certificate of

appropriateness for the demolition of the Davis Furniture Building should issue. The

city’s principal argument is that the trial court substituted its judgment for that of

the Zoning Board and thus exceeded the scope of its limited and deferential review of

the administrative body’s actions.

          {¶11} But our review of an administrative appeal under R.C. 2506.04 is a

limited one focused on the existence of legal error in the trial court. See Weitzel v.

Cincinnati, 1st Dist. Hamilton No. C-150415, 2016-Ohio-1322, ¶ 10-11; see also

Lohman v. Cincinnati, 1st Dist. Hamilton No. C-170242, 2018-Ohio-2505, ¶ 23.

Under R.C. 2506.04, the common pleas court may determine whether the

administrative decision of the Zoning Board was “unconstitutional, illegal, arbitrary,

capricious, unreasonable, or unsupported by the preponderance of substantial,

reliable, and probative evidence on the whole record.” It may make factual and legal

determinations and, as here, provide for the introduction of new or additional

evidence. See Cleveland Clinic Found. v. Cleveland Bd. of Zoning Appeals, 141 Ohio

St.3d 318, 2014-Ohio-4809, 23 N.E.3d 1161, ¶ 23, citing Kisil v. Sandusky, 12 Ohio

St.3d 30, 34, 465 N.E.2d 848 (1984).

1   3CDC’s motion to intervene in the trial court pursuant to Civ.R. 24 had been denied.

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                        OHIO FIRST DISTRICT COURT OF APPEALS

       {¶12} But the focus of this court’s inquiry is not the Zoning Board’s ruling. It

is the common pleas court’s decision. See Cleveland Clinic at ¶ 27. Under R.C.

2506.04, this court’s authority is limited to reviewing the common pleas court’s

decision on “questions of law” only, and does not encompass that court’s power to

weigh the evidence. Id. at ¶ 25, citing Henley v. Youngstown Bd. of Zoning Appeals,

90 Ohio St.3d 142, 147, 735 N.E.2d 433 (2000); see also Cincinnati Bengals, Inc. v.

Papania, 92 Ohio App.3d 785, 787, 637 N.E.2d 330 (1st Dist.1993) (“Subsequent

appeals to this court are limited to questions of law.”). Thus our standard of review

“permits reversal only when the court of common pleas errs in its application or

interpretation of the law or its decision is unsupported by a preponderance of the

evidence as a matter of law.” Cleveland Clinic at ¶ 30.

       {¶13} In its written decision, the trial court correctly identified the law

governing its approval or denial of Banker’s Choice’s application for a certificate of

appropriateness. Cincinnati Municipal Code 1435-09-2(b) provides that a certificate

of appropriateness should issue if the property owner has demonstrated by credible

evidence that it would suffer economic hardship if the certificate were not approved.

The trial court further noted that in reaching a determination of whether Banker’s

Choice had demonstrated an economic hardship, it was required to consider three

factors:

                 (i)    Will all economically viable use of the property be

           deprived without approval of a Certificate of Appropriateness;

                 (ii)   Will the reasonable investment-backed expectations of

           the property owner be maintained without approval of a Certificate of

           Appropriateness; and

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                     OHIO FIRST DISTRICT COURT OF APPEALS

               (iii) Whether the economic hardship was created or

         exacerbated by the property owner.

Cincinnati Municipal Code 1435-09-2(b).

       {¶14} In evaluating these factors for the existence of an economic hardship,

the trial court was permitted to consider, among other matters, “[a]ny listing of

property for sale or rent, price asked, and offers received, if any, within the previous

two years, including testimony and relevant documents * * * .” Cincinnati Municipal

Code 1435-09-2(bb).

       {¶15} But the trial court’s analysis quickly focused not on the three inquiries

mandated by Cincinnati Municipal Code 1435-09-2(b), but on the failure of the

parties to consummate a sale of the property. The trial court found that the “fact that

no one purchased the building” was “substantial evidence that any real or perceived

economic hardship * * * was not relieved” by the purchase offers.          The court’s

determination that the “inability to sell” the building constituted evidence of

economic hardship truncated its analysis. Its failure to continue on and to determine

whether Banker’s Choice had been denied all economically viable use of the Davis

Furniture Building, whether it could have maintained its reasonable investment-

backed expectations, and whether it had created or exacerbated its own economic

hardship before approving a certificate of appropriateness was error. See Cincinnati

Municipal Code 1435-09-2(b); see also Cleveland Clinic, 141 Ohio St.3d 318, 2014-

Ohio-4809, 23 N.E.3d 1161, at ¶ 30.

       {¶16} Moreover, in applying Cincinnati Municipal Code 1435-09-2(b), the

findings necessary to approve a certificate, particularly of the property owner’s

expectations, must be based upon objective standards, and not upon the subjective

perceptions of the property owner. The owner’s expectations must be “reasonable”

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                     OHIO FIRST DISTRICT COURT OF APPEALS

ones based upon the owner’s interests in the property sought to be demolished and

not solely upon its expectations for nearby properties.

       {¶17} When a trial court rules on objections to a magistrate’s decision, the

court “shall undertake an independent review as to the objected matters to ascertain

that the magistrate has properly determined the factual issues and appropriately

applied the law.”    (Emphasis added.) Civ.R. 53(D)(4)(d).       When, as here, in

exercising its independent review, the trial court’s judgment has modified the

magistrate’s decision and conflicts with it to such a degree by rejecting important

factual findings that underpin the magistrate’s decision, by employing its new factual

findings in its analysis, and by choosing not to reach the magistrate’s legal holding

regarding constitutional issues, we cannot say that the magistrate’s decision and the

trial court’s judgment can be read together.       The first assignment of error is

sustained.

       {¶18} The city’s second assignment of error, in which it asserts that the trial

court erred in denying that portion of its motion for a preliminary injunction

directing Banker’s Choice to effect repairs and improvements to the building to bring

it into compliance with the building code, is overruled. The grant or denial of an

injunction is consigned to the sound discretion of the trial court. See Garono v.

State, 37 Ohio St.3d 171, 173, 524 N.E.2d 496 (1988); see also Faber v. Queen City

Terminals, Inc., 93 Ohio App.3d 197, 202, 638 N.E.2d 115 (1st Dist.1994).

       {¶19} The trial court carefully considered the motion and had granted that

part of the city’s motion requiring repairs and maintenance to the building necessary

for public safety. Since the trial court’s decision was well supported by a sound

reasoning process, we will not disturb its decision as to the preliminary injunction.

See AAAA Ents., Inc. v. River Place Community Urban Redev. Corp., 50 Ohio St.3d

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                       OHIO FIRST DISTRICT COURT OF APPEALS

157, 161, 553 N.E.2d 597 (1990); see also Faber at 202-03. The second assignment of

error is overruled.

       {¶20} Therefore, the trial court’s judgment ordering the issuance of a

certificate of appropriateness for demolition is reversed, and the cause is remanded

to the trial court for the application of the proper standard consistent with law and

this opinion. That portion of the trial court’s judgment denying, in part, the city’s

motion for a preliminary injunction is affirmed.

                      Judgment affirmed in part, reversed in part, and cause remanded.

ZAYAS, J., concurs.
Mock, P.J., concurs in part and dissents in part.

Mock, P.J., concurring in part and dissenting in part.

       {¶21} While I concur with the majority’s determination of appellant’s second

assignment of error, I would reach a different result on the first. The majority

concluded that the trial court failed to apply the proper test when making the

determination that Banker’s Choice had been denied all economically viable use of

the Davis Furniture Building, whether it could have maintained its reasonable

investment-backed expectations, and whether it had created or exacerbated its own

economic hardship before approving a certificate of appropriateness. I disagree.

       {¶22} This court’s review of the decision of the trial court on administrative

appeals is strictly limited. “The standard of review for courts of appeals, however, is

limited to questions of law and ‘does not include the same extensive power to weigh

the preponderance of substantial, reliable and probative evidence,’ as is granted to

the common pleas court.’ ” Henley, 90 Ohio St.3d at 147, 735 N.E.2d 433, quoting

Kisil, 12 Ohio St.3d at 34, 465 N.E.2d 848, fn. 4; see R.C. 2506.04.

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                     OHIO FIRST DISTRICT COURT OF APPEALS

       {¶23} I begin with the proposition that the trial court set forth the proper

factors to consider. The majority agrees on this point, stating that “the trial court

correctly identified the law governing its approval or denial of Banker’s Choice’s

application for a certificate of appropriateness,” citing the three factors listed in

Cincinnati Municipal Code 1435-09-2(b). Agreeing as we do that the trial court cited

the appropriate criteria, we next consider whether the trial court considered this

criteria in making its decision.

       {¶24} In its analysis, the trial court discussed the inability of Banker’s Choice

to sell the property as an alternative to seeking the demolition of the buildings. The

trial court concluded that “the fact * * * that no one purchased the building is

substantial evidence that any real or perceived economic hardship as to Appellants

was not relieved.”      The majority indicates that this statement “truncated” its

analysis, and that the trial court did not consider the appropriate factors under

Cincinnati Municipal Code 1435-09-02(b).        But the trial court did not limit its

analysis to this consideration.

       {¶25} The trial court also concluded that the decision issued by the

magistrate on this point was “appropriate, fair, and [a] just finding.” The trial court

also concluded that the magistrate “followed the law on the economic hardship

aspect” of the analysis.    In his decision, the magistrate set forth in detail how

Banker’s Choice met its burden, by a preponderance of the evidence, to show that the

factors set forth in Cincinnati Municipal Code 1435-09-2(b) point to issuance of the

certificate of appropriateness. In eight pages of his 25-page decision, the magistrate

set forth the testimony that demonstrated that Banker’s Choice had proven it was not

economically feasible to rehabilitate the building. The analysis, much of which was

summarized by the trial court, was sufficient to support the decision below.

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                     OHIO FIRST DISTRICT COURT OF APPEALS

       {¶26} The ability of this court to reverse the decision of a trial court in an

administrative appeal is limited to situations where the trial court misapplied the

law. See R.C. 2506.04. In this case, the trial court cited the proper factors to

consider when deciding whether the issuance of a certificate of appropriateness is

warranted. The trial court cited the proper standard of review that it is to apply

when both considering the decision of the administrative agency, and the decision of

its magistrate. The trial court based its decision in part on its own analysis and in

part on its agreement with the substantial analysis already conducted by the

magistrate. When read together, the magistrate’s analysis and the trial court’s own

review of the record render the trial court’s judgment sufficiently complete to permit

this court to affirm under the limited legal-error analysis provided by R.C. 2506.04.

I would overrule the first assignment of error.

Please note:
       The court has recorded its own entry on the date of the release of this opinion.

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