Summary
In Gannon v. Perk, 46 Ohio St. 2d 301 (1976), policemen and firefighters sought a declaration that a city could not legally lay off any police officers and firefighters until all temporary employees had been removed from the city's payroll.
Summary of this case from Superior Beverage Group, Ltd. v. Wine Group, Inc.Opinion
Nos. 75-247 and 75-248
Decided June 2, 1976.
Declaratory judgments — To prevent layoff of city's safety forces — Action maintainable, when — Necessary parties — Municipal corporations — Layoffs — Safety forces not given priority, when — Judgments — Final for purposes of appeal, when.
APPEALS from the Court of Appeals for Cuyahoga County.
On September 1, 1974, the city of Cleveland, one of the appellants herein, received from the Cuyahoga County Budget Commission the amended official certificate of estimated resources available to the city for general fund expenditure in 1975. The certificate indicated that approximately $110,000,000 would be so available, which sum included income anticipated to be forthcoming from federal revenue sharing funds.
Upon consideration of separate studies prepared by Cleveland's fiscal officers and by a firm of independent certified public accountants which concluded that if Cleveland's 1975 expenditures were maintained at 1974 levels a deficit of at least $16,000,000 would ensue, the city of Cleveland, on November 21, 1974, announced that 1,118 city employees, supported by general fund income, would be laid off effective January 1, 1975, in order to avoid the impending deficit. Approximately 119 firemen and 169 policemen were among the employees scheduled for layoff.
In November 1974, and at all pertinent times thereafter, there were approximately 1,000 "temporary employees" on the payroll of the city of Cleveland. These temporary employees were appointed by various city officials to serve in diverse capacities within the structure of the city government. All such temporary employees had one characteristic in common: none of these persons had been tested by the city of Cleveland's civil service commission. Prior to the January 1, 1975, layoff, there were 440 temporary employees compensated through the city of Cleveland's general fund. After the layoff, 304 such temporary employees remained on the general fund payroll. The remainder of the temporary employees were employed and compensated through self-supporting and special funds created for a specific purpose.
On November 21, 1974, the date the impending layoffs were announced, the International Association of Firefighters, Local 93, and its President, Jack Gannon, filed a "Complaint for Declaratory Judgment, Preliminary and Permanent Injunctions and Temporary Restraining Order" in the Court of Common Pleas of Cuyahoga County. The complaint prayed for a judgment declaring:
"1. That no firefighter can be laid-off by the defendant, Ralph J. Perk, Mayor of the city of Cleveland; and
"2. That no firefighter can be laid-off until the temporarily employed workers, illegally on the payroll, are removed from the city payroll; and
"3. The defendants be enjoined temporarily and permanently from paying or issuing vouchers for the payment of any salary or compensation or emolient [ sic] of any kind to any person holding a position in the classified service contrary to law and court order; and
"4. That the defendants be enjoined from laying-off any firefighter of the Department of Safety, Division of Fire; and
"5. In the alternative, that defendants be enjoined from laying-off any firefighter of the Department of Public Safety, Division of Fire, until all persons holding a position in the classified service contrary to law and court order are laid-off * * *."
On November 26, 1974, defendants Ralph J. Perk, Mayor of the city of Cleveland, and the city of Cleveland, filed a motion to dismiss the complaint pursuant to Civ. R. 12(B).
The Cleveland Fraternal Order of Police, Lodge No. 8, on November 27, 1974, and the Cleveland Police Patrolmen's Association, on December 17, 1974, moved to intervene in the action on behalf of the policemen involved. Both motions were granted by the court.
On December 17, 1974, the Cleveland Police Patrolmen's Association moved the court to consolidate the action with a dormant case entitled Cleveland Police Patrolmen's Association v. City of Cleveland et al. (Common Pleas Case No. 895,536). The dormant case, commenced, determined, and neglected in 1971, involved substantially identical issues and parties as the 1974 cause of action. In the 1971 case, the Court of Common Pleas refused to enjoin the layoff of policemen, and additionally ordered the Cleveland Civil Service Commission to administer tests, pursuant to a schedule set by the court, to 2,252 temporary employees then on the payroll of the city of Cleveland. The Court of Common Pleas retained jurisdiction over the action, but no further proceedings of significance occurred until the court ordered the case consolidated with the instant cause.
Although in both the 1971 and 1974 actions the plaintiffs sought to enjoin the payment and continued employment of Cleveland's temporary employees, in neither case were any of such temporary employees joined as parties, either individually or as a class, to the actions.
The aforementioned consolidated actions proceeded to trial before the Court of Common Pleas on December 19, 1974, together with a separate and independent action brought by the waste collection drivers of the city of Cleveland in an attempt to enjoin the impending layoff of personnel in the city of Cleveland's Division of Waste Collection, which was also consolidated for trial.
At the conclusion of the trial, the Court of Common Pleas, on December 31, 1974, in three separate orders, held:
(1) that the layoffs by the executive branch of the government of the city of Cleveland, being in violation of the provisions of the Charter of the city of Cleveland which requires action by city council in order to effectuate a layoff of safety personnel, are contrary to law;
(2) that the temporary employees on the payroll of the city of Cleveland for any period exceeding 90 days but less than two years who have not qualified for civil service classification through examination are being paid in direct contravention of the Charter of the city of Cleveland; and
(3) that the injunction sought by the waste collection drivers must be denied.
Pursuant to the above rulings, the Court of Common Pleas enjoined the layoff of policemen and firemen, and further enjoined the continued payment of Cleveland's temporary employees.
On January 6, 1975, appellants filed notices of appeal to the Court of Appeals for Cuyahoga County with respect to rulings (1) and (2) above. Thereafter, the International Association of Firefighters and the Fraternal Order of Police filed cross-appeals. No appeal was filed by either the city of Cleveland or the waste collection drivers with respect to ruling (3) above.
On January 9, 1975, the Court of Appeals stayed the order of the Court of Common Pleas enjoining the payment of Cleveland's temporary employees, but refused to stay the order of the Court of Common Pleas enjoining the layoff of police and fire personnel. On January 20 and 27, 1975, the City Council of Cleveland enacted ordinances authorizing the layoff of Cleveland policemen and firemen, respectively. On January 24, 1975, the Court of Common Pleas issued a new order enjoining the layoff of policemen and firemen, and, later that same day, the Court of Appeals reversed the order upon the basis that the lodging of appeals from the December 31, 1974, orders of the Court of Common Pleas divested that court of all jurisdiction in the matter. On January 30, 1975, the Court of Appeals issued an order superseding its January 9, 1975 order staying in part the December 31, 1974, judgment of the Court of Common Pleas, the effect of which was to stay that judgment in its entirety.
On February 20, 1975, the Court of Appeals rendered its decision affirming in part aand reversing in part the judgment of the Court of Common Pleas, and remanded the cause to the trial court for further proceedings. The Court of Appeals held:
(1) that an action in declaratory judgment seeking a declaration regarding the legality of layoffs by the city of Cleveland of policemen and firemen may be maintained notwithstanding the existence of an alternative remedy by way of appeal to the civil service commission and to the courts pursuant to R.C. Chapter 2506;
(2) that the mayor of the city of Cleveland has the discretion to temporarily lay off civil service employees, including policemen and firemen, in times of financial crisis, so long as such layoffs are made in conformity with the charter and ordinances of the city of Cleveland, and with the rules of the civil service commission;
(3) that pursuant to Sections 130 and 135 of the Charter of the city of Cleveland, all temporary employees on the payroll of the city for more than 90 days without being tested and certified by the civil service commission are illegally on such payroll, and are being paid contrary to law; and
(4) that R.C. 124.271 is not applicable to a charter city such as the city of Cleveland; therefore, any temporary employee on the payroll of the city of Cleveland for more than two years without being tested and certified does not attain permanent civil service status.
On March 19, 1975, the Court of Common Pleas, acting pursuant to the mandate of the Court of Appeals upon remand, ordered the immediate removal from the payroll of the city of Cleveland of all untested temporary employees, and further ordered that 75 percent of the persons so removed be rehired pending further litigation.
Appellants applied for a stay of execution of the mandate of the Court of Appeals, and of all proceedings in the Court of Common Pleas pursuant to that mandate. On March 24, 1975, all proceedings below were stayed by order of this court, which stay remains in effect at this time.
The cause is now before the court upon the allowance of both appellants' motion and appellees' cross-motion to certify the record.
Mr. Thomas J. Friel, for appellees and cross-appellants Gannon and the International Association of Firefighters, Local 93.
Mr. James B. Davis, director of law, and Mr. Malcolm C. Douglas, for appellants (case No. 75-248) and cross-appellees (case No. 75-247).
Messrs. Climaco, Goldberg Boukalik, Mr. John R. Climaco and Mr. Paul S. Lefkowitz, for appellee Fraternal Order of Police, Lodge No. 8.
Mr. James L. Oakar, for appellee Cleveland Police Patrolmen's Association.
The various parties have presented numerous assignments of error in the prosecution of the instant appeal and cross-appeal. The propositions of law asserted to support the assignments of error so alleged will be discussed gradatim in the context of this opinion.
I.
Appellants maintain that the Court of Appeals erred in holding that an action in declaratory judgment seeking a declaration regarding the legality of layoffs of policemen and firemen by the city of Cleveland may be instituted notwithstanding the availability of an alternative remedy by way of appeal to the civil service commission and to the courts. R.C. 2721.02, Civ. R. 57 and numerous prior decisions of this court dictate rejection of appellant's assertion.
Section 121 of the Charter of the city of Cleveland.
R.C. Chapter 2506.
R.C. 2721.02 provides:
"Courts of record may declare rights, status, and other legal relations whether or not further relief is or could be claimed. No action or proceeding is open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect. Such declaration has the effect of a final judgment or decree."
Civ. R. 57 provides, in pertinent part:
"The procedure for obtaining a declaratory judgment pursuant to Sections 2721.01 to 2721.15, inclusive, of the Revised Code, shall be in accordance with these rules. The existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate. * * *"
In Schaefer v. First National Bank of Findlay (1938), 134 Ohio St. 511, the court, in paragraphs three and four of the syllabus, stated:
"An action for a declaratory judgment may be alternative to other remedies in those cases in which the court, in the exercise of sound discretion, finds that the action is within the spirit of the Uniform Declaratory Judgments Act and a real controversy between adverse parties exists which is justiciable in character and speedy relief is necessary to the preservation of rights that may be otherwise impaired or lost.
"While a granting of a declaratory judgment is within the sound discretion of the court, the jurisdiction to grant such a judgment is not limited by the terms of the statutes to those cases in which no remedy is available either at law or in equity."
See, also, Herrick v. Kosydar (1975), 44 Ohio St.2d 128; Driscoll v. Austintown Associates (1975), 42 Ohio St.2d 263; Burger Brewing Co. v. Liquor Control Comm. (1973), 34 Ohio St.2d 93; American Life Accident Ins. Co. v. Jones (1949), 152 Ohio St. 287; and Radaszewski v. Keating (1943), 141 Ohio St. 489.
The present cause seeks a declaration as to the legality of the layoffs of policemen and firemen by the mayor of the city of Cleveland. Stated another way, in the instant cause appellees contest the power of the mayor to effect the contested layoffs.
It is apparent that the cause is within both the letter and spirit of R.C. 2721.02, for the complaint seeks a declaration as to the rights of both parties regarding the matter at issue.
Secondly, it is undisputed that a real controversy exists between the parties herein which is justiciable in character.
Thirdly, since the layoffs were announced on November 21, 1974, and were to become effective on January 1, 1975, it need hardly be stated that "speedy relief is [was] necessary to the preservation of rights which may be otherwise impaired or lost." Schaefer v. First National Bank of Findlay supra; American Life Accident Ins. Co. v. Jones, supra.
Appellants maintain, however, that the decision in Haught v. Dayton (1973), 34 Ohio St.2d 32, compels reversal herein. In Haught, firefighters of the city of Dayton filed a complaint in the Court of Common Pleas of Montgomery County, seeking an injunction restraining the city from laying-off or removing them from employment. The Court of Common Pleas dismissed the cause "`for the reason that there exists an adequate remedy at law.'" The "adequate remedy at law" referred to by the Court of Common Pleas was afforded by Section 101 of the Charter of the city of Dayton. Section 101 provided an employee a right of appeal to the Dayton Civil Service Board from a dismissal, reduction or suspension by certain appointing authorities.
In affirming the trial court's dismissal of the action, this court, at pages 35-36, stated "that the prayer for a temporary and permanent injunction was properly denied." In an accompanying footnote, this court emphasized that injunction is an extraordinary remedy, equitable in nature, which will not lie so long as there is an adequate remedy in the ordinary course of the law. State, ex rel. Pressley, v. Indus. Comm. (1967), 11 Ohio St.2d 141.
Comparison of Haught with the cause at bar reveals its inapplicability herein. Haught was an equitable action seeking a remedy by way of injunction; the instant cause is an action in declaratory judgment seeking a remedy afforded in the ordinary course of the law. See Burt Realty Corp. v. Columbus (1970), 21 Ohio St.2d 265, and Sessions v. Skelton (1955), 163 Ohio St. 409.
In Sessions v. Skelton, supra, the court, in paragraph three of the syllabus, stated:
"An action for a declaratory judgment is sui genesis in the sense that it is neither one strictly in equity nor one strictly at law; it is purely a procedural remedy wherein the court having jurisdiction may apply such principles of equity or of law as may be necessary to adjudicate the issues presented."
An action in declaratory judgment is not purely equitable in nature, as is an action in injunction. On the contrary, a declaratory judgment action traverses both equity and law, and the principles of law pertinent to purely equitable actions should not always be applied with equal force to declaratory judgment actions. Otherwise, the intent and purpose of the General Assembly in enacting the Declaratory Judgment Act would be subverted. Accordingly, the decision in Haught is not controlling herein.
Appellants contend further that before an action in declaratory judgment may be maintained, all available administrative remedies must be exhausted. Although such contention is distinct from the assertion that a declaratory judgment action does not lie where an alternative remedy is available, the parties apparently treated the issues together in their respective briefs, and we shall respond accordingly.
In Driscoll v. Austintown Associates, supra ( 42 Ohio St.2d 263), the court, at page 276, stated:
"Failure to exhaust administrative remedies is not a jurisdictional defect, and such a failure will not justify a collateral attack on an otherwise valid and final judgment. Failure to exhaust administrative remedies is an affirmative defense which must be timely asserted in an action or it is waived. Civ. R. 8(C) and 12(H)."
The record before this court does not disclose timely assertion by the appellants of the affirmative defense of failure to exhaust administrative remedies. Therefore, pursuant to Driscoll, that defense is no longer available to appellants.
Finally, appellants contend that the instant cause should not be considered an action in declaratory judgment, as the central purpose of the action is to secure injunctive relief. We disagree. R.C. 2721.09 clearly provides that "[w]henever necessary or proper, further relief based on a declaratory judgment or decree previously granted may be given. * * *" Moreover, in Herrick v. Kosydar, supra ( 44 Ohio St.2d 128), the court, at page 131, stated:
"* * * Whether an injunction is available is a question of proper relief, and does not affect the court's jurisdiction. `Courts of record may declare rights, status, and other legal relations whether or not further relief is or could be claimed. * * *' R.C. 2721.02."
Upon the foregoing review of authorities, we conclude that the instant cause presents a real and justiciable controversy capable of resolution by way of an action in declaratory judgment.
II.
Appellants, in their first proposition of law, contend that both the Court of Common Pleas and the Court of Appeals erred in adjudicating the question of the legality of the temporary employees' employment in the absence of such affected employees as parties to the proceedings. Appellants maintain that the failure to join the temporary employees as parties to the action constitutes a jurisdictional defect which may not be waived. For the reasons which follow, we agree, and reverse the Court of Appeals on this point.
R.C. 2721.12 provides, in pertinent part:
"When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration. No declaration shall prejudice the rights of persons not parties to the proceeding. * * *"
In Cincinnati v. Whitman (1975), 44 Ohio St.2d 58, the court, in paragraph one of the syllabus, stated:
"The absence of a necessary party constitutes a jurisdictional defect which precludes a Court of Common Pleas from properly rendering a declaratory judgment. ( Zanesville v. Zanesville Canal Mfg. Co., 159 Ohio St. 203, followed.)"
In the context of the instant cause, the issue becomes whether the temporary employees were "necessary parties" such as to preclude issuance of a declaratory judgment affecting them.
Appellees seek a declaration that the temporary employees on the payroll of the city of Cleveland for more than 90 days but less than two years without qualifying, through competitive examination, for civil service classification are being paid in contravention of the charter of the city. It is obvious that any such declaration would adversely affect the interest of the temporary employees involved in keeping their jobs. The interest of the temporary employees in the instant litigation is thus readily apparent. Equally apparent is the prejudice which has ensued to these temporary employees in their absence as parties to the instant action. All such temporary employees were effectively "laid-off" by order of the Court of Common Pleas.
Appellees contend, however, that (1) persons who are on the payroll of the city of Cleveland in obvious violation of the city charter cannot claim to have a legal interest in litigation, the object of which is to declare further payments to such persons illegal; and (2) the law department of the city adequately protected the interests of the temporary employees in the lower courts.
With respect to appellees' first contention, whether the temporary employees were employed and compensated in violation of the Charter of the city of Cleveland is a legal question, resolution of which does not precede institution of an appropriate action. Accordingly, appellees' position in this regard is totally without merit.
With regard to appellees' second assertion, it is apparent that counsel for the appellant did not represent the interests of the temporary employees either primarily or vicariously. Cf. Babin v. Ashland (1953), 160 Ohio St. 328. Rather, counsel for the appellant sought only to protect the interest of the city of Cleveland in maintaining an effective flow of governmental functions and services.
We hold, therefore, that the temporary employees were interested and necessary parties to the proceeding, and the failure to so join them as parties deprived the court of jurisdiction to render an enforceable declaratory judgment affecting their interests.
Because we reverse the judgment of the Court of Appeals with regard to the ouster of the temporary employees from their jobs, we need not decide the other issues presented by the various parties concerning the temporary employees. These other issues include (1) whether the courts of this state must consider the requirements imposed upon municipal corporations by the Civil Rights Act of 1964, Section 2000a, Title 42, U.S. Code, and by the Fourteenth Amendment to the Constitution of the United States; (2) whether R.C. 124.271 is applicable to all cities, including those which have adopted a charter; and (3) whether employment of the temporary employees in the circumstances of this case violated the provisions of the Charter of the city of Cleveland.
III.
Appellees, in effect, contend, in their cross-appeal, that the Court of Appeals erred in determining that the mayor of the city of Cleveland possessed the authority to lay off municipal employees, including policemen and firemen, for reasons of economy. We disagree, and affirm the judgment of the Court of Appeals in this regard.
In State, ex rel. Buckman, v. Munson (1943), 141 Ohio St. 319, 326, the court concluded that public employees may be laid-off for reasons of economy "notwithstanding statutory or charter provisions to the effect that no employee in the classified service shall be removed except for cause * * *, the view * * * being that such statutory or charter provisions * * * are not intended to restrict the public authorities in their efforts to effect necessary or desirable economies."
The reasoning of the court in Munson applies as well to the cause at bar. Lack of funds induced when projected income falls below anticipated expenses is a legitimate basis for laying off civil service employees, including safety personnel, so long as such layoffs are made in conformity with law. In the instant case, then, the issue becomes whether the layoff of policemen and firemen was made in conformity with the ordinances, charter provisions, and civil service rules of the city of Cleveland.
The charter and ordinances of the city do not establish a mandatory priority for layoffs of municipal employees due to reasons of economy. Therefore, the power to lay off municipal employees must repose within the sound discretion of the mayor of the city, as its chief executive officer, to be exercised in accordance with law.
Appellees argue, however, that Sections 116 and 118 of the Charter of the city of Cleveland confer upon police and fire personnel, respectively, a special status immunizing them from layoff for economic reasons. Those sections provide that the police and fire forces of Cleveland "shall consists of a chief and such other officers, patrolmen [firemen] and employees as may be provided by ordinance or resolution of the council." Nowhere in those sections, or for that matter, in any other section of the charter, except in Section 127, is the subject of layoff mentioned. Section 127 provides, in pertinent part, that:
"[t]he civil service commission shall make * * * rules for the * * * lay-off * * * of city officials and employees in the classified service. * * *" However, no such "rules" have been promulgated. Therefore, that section of the charter does not support appellees' position.
Accordingly, we hold that the Charter of the city of Cleveland does not confer upon its safety forces a preferred priority over other civil service employees in the event layoffs are necessitated by reasons of economy. The record in the instant cause clearly reveals that the layoffs at issue herein were necessitated due to lack of funds. Appellees have not shown that such layoffs were so excessive as to jeopardize the health, safety and welfare of the city and its inhabitants. Therefore, the judgment of the Court of Appeals with regard to the issue of the legality of the layoffs of safety forces in the city of Cleveland is affirmed.
IV.
The final contention of appellees in their cross-appeal is that the Court of Appeals did not have jurisdiction to consider the instant cause, in that Civ. R. 54(B) precludes an appeal until all claims for relief have been determined by the Court of Common Pleas, and all claims were not so determined in the trial court.
The basis of this contention is that in its December 31, 1974, rulings, the Court of Common Pleas did not determine appellees' prayer for a declaration "[t]hat no firefighter can be laid-off until the temporarily employed workers, illegally on the payroll, are removed from the city payroll by the city of Cleveland * * *."
On January 24, 1975, the trial judge, at the request of the plaintiffs-appellees, entered another order attempting to redefine his prior ruling enjoining the layoff of police and fire personnel, and claimed that he had withheld ruling earlier upon the claim that no policemen or firemen could be laid-off until all temporary employees had been ousted from the payroll or qualified by examination.
Civ. R. 54(B) provides:
"When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim or third-party claim, or when multiple parties are involved, the court may enter final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay. In the absence of such determination, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties."
This court concludes that the instant cause does not fall within the parameters of Civ. R. 54(B). Although the complaint filed herein consists of several issues, basically, only one claim for relief was presented. The various issues urged in support of the claim for relief were merged into the December 31, 1974, judgments of the trial court. Moreover, the three separate opinions issued by the trial court on December 31, 1974, contained no cross-reference to each other, and indeed, were confusing in that regard.
Accordingly, we hold that the December 31, 1974, judgments of the Court of Common Pleas were final for purposes of appeal, and, therefore, the order of the trial court dated January 24, 1975, was void for lack of jurisdiction, jurisdiction having already been conferred upon the Court of Appeals by virtue of the filing of the notices of appeal therein.
For the foregoing reasons, the judgment of the Court of Appeals is affirmed in part and reversed in part, consistent with the opinion herein.
Judgment affirmed in part and reversed in part.
O'NEILL, C.J., HERBERT, COLE, STERN, CELEBREZZE, W. BROWN and P. BROWN, JJ., concur.
COLE, J., of the Third Appellate District, sitting for CORRIGAN, J.