Case Leasing & Rental, Inc. v. Ohio Dept. of Natural Resources
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[Cite as Case Leasing & Rental, Inc. v. Ohio Dept. of Natural Resources, 2008-Ohio-3411.]
Court of Claims of Ohio
The Ohio Judicial Center
65 South Front Street, Third Floor
Columbus, OH 43215
614.387.9800 or 1.800.824.8263
www.cco.state.oh.us
CASE LEASING & RENTAL, INC.
Plaintiff
v.
OHIO DEPARTMENT OF NATURAL RESOURCES
Defendant
Case No. 2005-08034
Judge J. Craig Wright
DECISION
{¶ 1} Plaintiff filed this case alleging claims of negligence, nuisance, absolute
nuisance/ nuisance per se, trespass, and unconstitutional taking without just
compensation.
The issues of liability and damages were bifurcated and the case
proceeded to trial on the issue of liability.1
{¶ 2} Plaintiff, Case Leasing and Rental, Inc., is an Ohio corporation and owner of
21 acres of land in Mercer County, Celina, Ohio. The property is located adjacent to
Beaver Creek and several hundred yards downstream from the intersection of Beaver
Creek and the western shoreline of Grand Lake St. Marys (GLSM). In 1976, plaintiff
completed construction of, and opened, the Lake Front Racquet and Health Club
(RecPlex) on that property.
The RecPlex was an 87,500 square foot facility that
provided a wide variety of indoor and outdoor fitness and recreational activities for the
Case No. 2005-08034
general public.
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DECISION
Plaintiff owned the RecPlex continuously, except for a period from
October 2001 to September 2003.2 In early July 2003, a severe storm passed through
the GLSM area. As a result, an extensive amount of water was discharged from the
lake into Beaver Creek, flooding plaintiff’s property and thousands of other acres along
the creek. The first floor of the RecPlex flooded to a depth of approximately three feet.
The lower level facilities were completely submerged.
{¶ 3} Since 1949, both GLSM and approximately 500 surrounding acres have
been owned and operated as a state park by defendant, the Ohio Department of Natural
Resources (ODNR).
The lake was created in the mid-1800s
by damming the
headwaters of the Wabash and St. Marys rivers and flooding the area between. The
earthen dam is approximately 5,540 feet long and 22 feet high. GLSM is 8.2 miles long
and has a surface area of approximately 13,500 acres extending through both Mercer
and Auglaize Counties. The lake has two outlets for the discharge of water. One is a
spillway discharging into Beaver Creek, which was constructed in 1914; it is located on
the western shoreline. There is also an eastern-outlet structure that discharges into a
feeder canal. From the time that it obtained control of the lake in 1945, ODNR has used
the western spillway as the outlet for virtually all water flow out of GLSM.
{¶ 4} The central issue in this case involves the replacement of the 39.4-foot
1
The trial adjourned on the second day, then reconvened at a later date to allow the parties to redepose their expert witnesses regarding lake-level data that was not revealed until the day of trial and to
submit supplements to the expert reports.
2
Defendant has argued that plaintiff lacks standing to assert its claims because it did not own the
property at the time of the July 2003 flood. The court finds that argument to be without merit inasmuch as
plaintiff financed the purchase and received a mortgage on the property as security. Ohio law permits
mortgagees to sue third parties for damage to their security interest. City of Toledo v. Brown (1936), 130
Ohio St. 513, 519. See also Trip Agency, Inc. v. R. G. Akkihal (Nov. 4, 1991), Lawrence App. No. 1790;
RFC Capital Corp. v. Earthlink, Inc., Franklin App. No. 03AP-375, 2004-Ohio-7046. Moreover, at the time
of the flood, the purchasers had made only one payment of $100,000 on the $3,000,000 they financed,
and they had no insurance on the property. They threatened to file bankruptcy if plaintiff pursued them
for the balance of the mortgage. Plaintiff never released the mortgage and the property was conveyed
back to it on September 1, 2003.
Case No. 2005-08034
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DECISION
western spillway with a 500-foot spillway that was completed in 1997. ODNR approved
the design for, and both directed and oversaw the construction of, the replacement
spillway.
{¶ 5} Plaintiff contends, among other things, that ODNR was negligent in the
design and management of the 500-foot spillway, that it did not comply with accepted
engineering practices, and that it failed to consider other economically feasible designs.
Plaintiff further maintains that, based upon data that was available at the time, ODNR
knew or should have known that the installation of the replacement spillway would result
in more frequent and more severe flooding
to downstream
landowners, including
plaintiff. Plaintiff asserts that the damage that occurred in July 2003 would not have
happened if the 1914 spillway were still in existence. Although plaintiff has asserted
other claims, the focus of its evidence and post-trial memorandum is upon its claim of
negligence.
{¶ 6} In response, ODNR contends that the replacement spillway met with all
applicable standards.
Furthermore, ODNR argues
that plaintiff’s focus on the
differences between the 1914 spillway and the 1997 spillway is misguided inasmuch as
there is no dispute either that the old spillway structure did not meet prevailing safety
standards, or that a failure of the dam could have had catastrophic consequences,
including loss of life and flooding of the city of Celina. ODNR maintains that the 1997
spillway design was reasonable under the circumstances, and that its duty to prevent a
dam failure outweighed any potential risk of increased flooding to downstream
landowners.
{¶ 7} In order to prevail upon a claim of negligence, plaintiff must prove by a
preponderance of the evidence that defendant owed it a duty, that defendant’s acts or
omissions resulted in a breach of that duty, and that the breach proximately caused its
injuries. Armstrong v. Best Buy Company, Inc., 99 Ohio St.3d 79, 81, 2003-Ohio-2573,
Case No. 2005-08034
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DECISION
citing Menifee v. Ohio Welding Products, Inc. (1984), 15 Ohio St.3d 75, 77.
{¶ 8} Upon review of the evidence, arguments, stipulations, and proposed
findings of fact and conclusions of law, the court finds for the following reasons that
plaintiff has proved its claim of negligence by a preponderance of the evidence.
{¶ 9} In resolving surface water disputes, Ohio courts apply the “reasonable use”
rule. McGlashan v. Spade Rockledge Terrace Condo Dev. Corp. (1980), 62 Ohio St.2d
55, paragraph one of the syllabus.
Thus, a
breach of duty can be found only if
defendant’s interference with surface water flow is unreasonable, which is determined
by “balancing the gravity of the harm caused by the interference against the utility of the
[defendant’s] conduct.” Ringel v. Ohio Dept. of Transp., Ct. of Cl. No. 2006-02081AD,
2006-Ohio-7279 quoting McGlashan, supra, at 60, adopting 4 Restatement on Torts 2d
(1979), 146, Section 833.
{¶ 10}
ODNR’s Division of Water is charged with enforcement of Ohio’s dam
safety statutes as set forth under R.C. 1521.06-1521.99. Both newly constructed and
existing dams must conform to such law with the goal of ensuring the stability of dams
and their ability to withstand certain design floods. The dam at GLSM is classified as a
Class I dam and, as such, must be able to pass 100 percent of the volume of water
generated by a “probable maximum flood (PMF).”
{¶ 11}
A PMF is the flood that may be expected from the most severe
combination of critical meteorological and hydrologic conditions that are reasonably
possible in a particular drainage area. In order to meet the PMF standard, rainwater
must flow entirely through a spillway rather than over the top of the dam. The purpose
of such requirement is to prevent destruction of the earthen dam and catastrophic
flooding.
{¶ 12}
In 1978, the United States Army Corp of Engineers (ACE) performed
an inspection of GLSM and determined that if a PMF were to occur, GLSM would likely
overtop its western embankment and flood the city of Celina. The ACE issued a report
recommending that ODNR develop and implement a plan to safely convey the PMF
Case No. 2005-08034
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DECISION
through GLSM. (Plaintiff’s Exhibit 44.)
{¶ 13}
Funds for replacement of the western spillway were not allocated until
the 1990s and construction did not begin until 1996.
{¶ 14}
However, in 1987-1988, ODNR did receive a fund allocation and did
make modifications to an eastern outlet structure.
Although ODNR’s consultant
recommended that the structure and the feeder canal into which it discharged be
modified to permit the discharge of flood waters during significant storms, ODNR opted
for a structure that had no flood management capability. (Parties’ Stipulations ¶11;
Plaintiff’s Exhibit 45.)
{¶ 15}
In the early 1990s, ODNR’s design plans for replacement of the
western spillway became known to the public. From the outset of the project, concern
was expressed by federal and local agencies, as well as local land owners, regarding
the possibility of greater flooding downstream along Beaver Creek.
(Parties’
Stipulations ¶20, Plaintiff’s Exhibits 6, 12, 23, 27.)
{¶ 16}
Keith Earley, the Mercer County Engineer, was among the most
strident of concerned parties. In addition to other activities, Earley sent letters dated
November 19, 1991; February 12, 1992; September 24, 1993; and February 15, 1994 to
ODNR warning that the proposed 500-foot spillway would cause increased and
extensive flooding along Beaver Creek. (Plaintiff’s Exhibits 7, 11, 17, 21.) At least two
of those communications, the February 12, 1992 and September 24, 1993 letters
mentioned plaintiff’s RecPlex structure as one that would likely be flooded as a result of
the new spillway.
{¶ 17}
The Board of Supervisors for Mercer County Soil and Water
Conservation District (MCSWCD) also expressed a number of concerns to ODNR,
beginning November 1991. (Plaintiff’s Exhibits 6 and 12.) In a November 1991 letter,
the MCSWCD noted “much heated discussion on the proposed west bank spillway”
and “[m]uch of the heat comes from the fact that the Division of Water has not had a
good answer or any answer to questions the landowners along Beaver [Creek] have.”
Case No. 2005-08034
{¶ 18}
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DECISION
The GLSM Lake Improvement Association also expressed concerns
regarding the proposed spillway and ODNR’s potential plans for lake level
management. In a letter to ODNR dated August 15, 1994, the association questioned
whether ODNR intended to lower lake levels to satisfy the concerns of property owners
west of the spillway, to the detriment of local businesses such as marinas, restaurants,
and lodging facilities that depended on sufficiently high lake levels to attract recreational
users, boaters and sportsmen. (Plaintiff’s Exhibit 23.)
{¶ 19}
Shortly before construction began in 1996, the ACE communicated to
ODNR that there were continuing concerns regarding the proposed spillway design and
instructed
ODNR
that it needed
“either calculations to show there would be no
additional flooding in Beaver Creek or agreements from the property owners along the
creek saying they accept additional flooding.” (Plaintiff’s Exhibit 26.) ODNR did not
comply with either of those options.
{¶ 20}
However, ODNR did respond to all of the public and private concerns
expressed in connection with the proposed spillway. ODNR held public meetings, wrote
response letters, and considered the input it received. Although ODNR did not deviate
from its plans, it did consistently explain and support the reasons for its decisions and
frequently reiterated that it had “attempted to balance the concerns of all the local
interests in the planning and design for the spillway, but necessarily, dam safety [had]
remained the most important concern.” (See, e.g., Plaintiff’s Exhibits 8, 13, 20.)
{¶ 21}
With regard to plaintiff’s property, ODNR stated in a December 10,
1992 memo that: “[a] tennis/racquetball business is in the floodplain downstream but
there’s not much justification to modify the design or our operations * * * just to satisfy
this one business which knowingly built in a flood prone area * * *.” (Plaintiff’s Exhibit
15.) However, the evidence demonstrates that plaintiff’s property was not identified as
being situated in a designated floodplain until 2004, after the spillway was replaced, and
after the 2003 flood. Rather, on March 18, 1986, plaintiff’s property was designated as
being within “Zone C, i.e., located in an area of minimal flooding.” (Plaintiff’s Exhibit 1,
Case No. 2005-08034
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DECISION
48.)
{¶ 22}
In the end, ODNR considered only two potential replacement spillway
designs, both 500-foot spillways. (Plaintiff’s Exhibit 4.) The design that was ultimately
selected was a 500-foot long spillway, at 450 feet of elevation and 871.5 feet above
mean sea level (msl), with a 50-foot notch at the center at an elevation of 870.6 feet
above msl, and two 60-inch diameter outlets near the bottom of the structure, which
could be opened to lower the level of GLSM by releasing water into Beaver Creek.
(Parties’ Stipulations, ¶¶15, 17.)
{¶ 23}
Prior to 1997, ODNR regulated GLSM by periodically lowering lake
levels, thereby minimizing the frequency and severity of flooding that GLSM could
otherwise cause.
Since 1997, GLSM has been considered a “self-regulating lake”;
neither of the 60-inch outlets has been opened for management of lake levels.3
(Parties’ Stipulations ¶19.)
{¶ 24}
Both parties presented expert testimony regarding ODNR’s spillway
design choice and lake-level maintenance decisions. Plaintiff presented the testimony
of Pressley Campbell, PhD, P.E., with
Conestoga Rovers & Associates (CRA).
Defendant presented the testimony of Doyle Hartman, P.E. Both experts were highly
qualified and presented detailed analyses of the issues. However, the court found the
testimony of Dr. Campbell to be better reasoned. In addition, the court is persuaded by
the data that Dr. Campbell relied upon as well as the conclusions set forth in his
testimony and written reports. (Plaintiff’s Exhibits 1, 1A.)
following facts, which were established
Of significance were the
through Dr. Campbell’s trial testimony and
written analysis, and which were not contradicted by ODNR:
1)
ODNR did not investigate, examine or evaluate historical storm events in
the GLSM watershed to determine the potential flooding impact that
Case No. 2005-08034
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DECISION
would be caused by a 500-foot spillway. (See Plaintiff’s Exhibit 1.);
2)
ODNR did not examine actual historical lake levels to determine the
potential flooding impact of a 500-foot spillway design. (See Plaintiff’s
Exhibit 1.);
3)
ODNR conducted only simulations of the effect of the 500-foot spillway
using hypothetical events, and did not use its model to predict the impact
of the spillway during such hypothetical storms along the first several of
miles of Beaver Creek. Had it done so, it would have learned that the
effect was substantial. (Plaintiff’s Exhibit 1A.);
4)
CRA's analysis of the historical lake levels and historical storm events
demonstrated that, during the entire period of record for which data is
available, the RecPlex would not have flooded had the 1914 spillway
been in place, not even during the most severe historical-storm events.
However, had the 500-foot spillway been in existence during that time,
plaintiff’s property and substantial additional areas would have flooded
multiple times. (Plaintiff’s Exhibit 1A.)
{¶ 25}
As noted above, and as confirmed by Hartman’s testimony, ODNR's
primary objective was safely passing the PMF through GLSM so as to avoid the western
embankment overtopping and the flooding of the city of Celina. However, there were
several feasible alternatives available to achieve such objective
without causing
increased flooding of the RecPlex and other downstream property. For example: 1) by
employing a different, less destructive, spillway design; 2) by modestly raising the height
of the western embankment; 3) by instituting a manual lake level draw down policy; 4)
by widening/deepening Beaver Creek near the spillway; and 5) by using the eastern
outlet structure to discharge flood waters during significant storm events. According to
3
The only exception is that, on several occasions after the replacement spillway was completed,
the 60-inch outlets were opened in order to clear away masses of dead fish that had flowed over the
Case No. 2005-08034
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DECISION
Dr. Campbell, each of those alternatives would have been cost-effective, but none was
properly
considered by ODNR.
( Plaintiff’s Exhibit 1.)
Moreover, Dr. Campbell
established that if any of those alternatives had been implemented, the RecPlex would
not have flooded in July 2003.
{¶ 26}
Applying the “reasonable use” analysis to the facts established in this
case, the court does not dispute utility of ODNR’s dam safety objective; however,
balanced against the gravity of the foreseeable and avoidable harm caused, the court
finds that the manner in which ODNR implemented its objective was unreasonable and
negligent.
{¶ 27}
Specifically, the court finds that standard
hydrologic-engineering
practices required that ODNR undertake a thorough investigation of the historical storm
and lake-level data before designing and installing the replacement spillway. ODNR’s
failure to do so, or to require its consultants to do so was unreasonable. In addition, the
court finds that standard hydrologic-engineering practices required that ODNR perform
a sensitivity analysis to determine the best spillway design. ODNR’s failure to conduct
such an analysis was unreasonable. Further, the court finds that ODNR’s failure to
adequately consider cost-effective alternative measures that would also have met its
safety objectives was unreasonable in light of the known potential for increased flooding
and significant
property damage that could have been avoided had it done so.
Similarly, the court finds that ODNR’s post-1997 management of lake levels was
unreasonable in light of the foreseeable damage that could have been avoided had it
utilized manual draw-down alternatives.
{¶ 28}
In short, the court concludes that, based upon the data that was
available to it at the time, ODNR knew or should have known that the installation of the
replacement spillway as designed would result in more frequent and more severe
flooding to downstream landowners. Therefore, its design choice and subsequent lake
spillway into Beaver Creek and had accumulated at the base, in water that lacked sufficient oxygenation.
Case No. 2005-08034
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DECISION
level management were unreasonable. Accordingly, judgment will be rendered in favor
of plaintiff on its claim of negligence.
ite as Case Leasing & Rental, Inc. v. Ohio Dept. of Natural Resources, 2008-Ohio-3411.]
[Cite as Case Leasing & Rental, Inc. v. Ohio Dept. of Natural Resources, 2008-Ohio-3411.]
Court of Claims of Ohio
The Ohio Judicial Center
65 South Front Street, Third Floor
Columbus, OH 43215
614.387.9800 or 1.800.824.8263
www.cco.state.oh.us
CASE LEASING & RENTAL, INC.
Case No. 2005-08034
Plaintiff
Judge J. Craig Wright
v.
JUDGMENT ENTRY
OHIO DEPARTMENT OF NATURAL
RESOURCES
Defendant
[Cite as Case Leasing & Rental, Inc. v. Ohio Dept. of Natural Resources, 2008-Ohio-3411.]
[Cite as Case Leasing & Rental, Inc. v. Ohio Dept. of Natural Resources, 2008-Ohio-3411.]
This case was tried to the court on the issue of liability. The court has considered the
evidence and, for the reasons set forth in the decision filed concurrently herewith,
judgment is rendered in favor of plaintiff. The case will be set for trial on the issue of
damages.
_____________________________________
J. CRAIG WRIGHT
Judge
cc:
Jeremy M. Grayem
Matthew T. Green
Stephen P. Samuels
250 West Street
P.O. Box 165020
Columbus, Ohio 43216-5020
LH/mdw/cmd
Filed June 19, 2008
To S.C. reporter June 30, 2008
Randall W. Knutti
Assistant Attorney General
150 East Gay Street, 23rd Floor
Columbus, Ohio 43215-3130
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