[Cite as Deem v. Fairview Park, 2011-Ohio-5836.]


         Court of Appeals of Ohio
                                EIGHTH APPELLATE DISTRICT
                                   COUNTY OF CUYAHOGA


                           JOURNAL ENTRY AND OPINION
                                    No. 96843




                                RICHARD M. DEEM
                                                         PLAINTIFF-APPELLANT

                                                   vs.

                CITY OF FAIRVIEW PARK, ET AL.
                                                         DEFENDANTS-APPELLEES




                                         JUDGMENT:
                                          AFFIRMED


                                 Civil Appeal from the
                        Cuyahoga County Court of Common Pleas
                                 Case No. CV-735823

        BEFORE:           Cooney, J., Blackmon, P.J., and Keough, J.

    RELEASED AND JOURNALIZED: November 10, 2011
ATTORNEY FOR APPELLANT
                                      2

Daniel J. Ryan
2000 Standard Building
1370 Ontario Street
Cleveland, Ohio 44113


ATTORNEY FOR APPELLEES

Sara J. Fagnilli
Director of Law
City of Fairview Park
20777 Lorain Road
Fairview Park, Ohio 44126
COLLEEN CONWAY COONEY, J.:

      {¶ 1} Plaintiff-appellant, Richard Deem (“Deem”), appeals the trial

court’s judgment affirming the Fairview Park Civil Service Commission’s

decision finding that defendant-appellee, city of Fairview Park (“Fairview” or

“the City”), could legally reduce his pay rate pursuant to R.C. 124.37. We

find no merit to the appeal and affirm.

      {¶ 2} Deem held the position of police captain in the classified service of

the City from 1997 until the City abolished the position on April 17, 2006, as

a cost-cutting measure.    At the time, the City’s projected revenues were

approximately $1.2 million below its projected expenses.        In an effort to

balance the City’s budget, Mayor Eileen Patton (“Patton”) asked each

department to cut its budget by 11% through non-personnel related cuts.

Mayor Patton testified that she did not want any employees to lose their jobs

because layoffs not only affect personnel, but they affect the quality of the
                                              3

City’s services. She was particularly concerned with maintaining adequately

staffed police and fire departments to ensure the City’s safety.

       {¶ 3} At a hearing before the civil service commission, Mayor Patton

testified that she met with the three unions representing the police, fire, and

service departments, and asked for concessions.                  She asked the unions to

eliminate longevity and the uniform allowance, and to move to a less

expensive health care plan. Believing that Mayor Patton was blaming them

for the shortfall, the unions rejected these proposals and asked the Mayor to

present another plan that would apply equally to both union and non-union

employees.      Accordingly, Patton proposed an across-the-board 5% pay cut,

including her own salary, and a less expensive health care plan.                            This

proposal along with the line item cuts by the department heads would have

achieved the goal of a balanced budget without reducing the police force.

However, the unions also rejected the 5% across-the-board pay cut.

       {¶ 4} Mayor Patton researched how other cities coped with budget

problems and learned that none of the surrounding cities of similar size have

a captain position in their police departments or an assistant fire chief in

their fire departments.1 Patton proposed the idea of eliminating the captain


           The City ultimately eliminated the assistant fire chief position along with the captain
       1


position in the police department. Some employees in the service department were laid off and
several hourly employees had their hours reduced. The City’s restructuring affected 28 City
                                      4

position to the Police Negotiating Team, as well as to Randy Weltman, the

union representative, before introducing it as an ordinance to the city council.

  She testified that she did not receive any written objection letters from

anyone in the police department even though she communicated the proposal

to the police chief through memoranda.

       {¶ 5} Shortly thereafter, Patton addressed a letter to then-Captain

Deem advising him that because of decreases in revenues and increases in

expenditures, the police department was being restructured by eliminating

the captain position.   The captain position was abolished, and Deem was

demoted to the position of lieutenant and paid the lieutenant rate set forth in

the collective bargaining agreement between the City and the Union.

       {¶ 6} The Fairview City Council enacted the ordinance eliminating the

captain position on April 17, 2006.     Deem alleged that he never received

notice of his demotion and pay reduction. Yet he continued to perform the

same duties as well as the additional duties as lieutenant and received

reduced compensation.

       {¶ 7} On December 7, 2007, Deem requested a hearing before the

Fairview Park Civil Service Commission, appealing the abolishment of the

captain position.   The Commission denied the request as untimely, and


employees.
                                     5

Deem appealed. On appeal, this court reversed the trial court’s judgment

affirming the denial and found that because there was no evidence that Deem

received notice of the demotion and attendant pay reduction, the City violated

his right to due process. Deem v. Fairview Park, Cuyahoga App. No. 93135,

2009-Ohio-6314.

      {¶ 8} On remand, the civil service commission held a hearing and

concluded that the City was permitted to reduce his pay rate pursuant to R.C.

124.37. Deem appealed to the common pleas court pursuant to R.C. Chapter

2506, which governs administrative appeals.       The trial court upheld the

commission’s ruling.     Deem now appeals to this court, raising two

assignments of error.

      {¶ 9} In Henley v. Youngstown Bd. of Zoning Appeals, 90 Ohio St.3d 142,

147-148, 2000-Ohio-493, 735 N.E.2d 433, the Ohio Supreme Court explained

the standard of review appellate courts should apply when reviewing R.C.

Chapter 2506 administrative appeals:

         “Construing the language of R.C. 2506.04, we have distinguished the
      standard of review to be applied by common pleas courts and courts of
      appeals in R.C. Chapter 2506 administrative appeals. The common
      pleas court considers the ‘whole record,’ including any new or additional
      evidence admitted under R.C. 2506.03, and determines whether the
      administrative order is unconstitutional, illegal, arbitrary, capricious,
      unreasonable, or unsupported by the preponderance of substantial,
      reliable, and probative evidence. (Citations omitted.)
                                       6

         “The standard of review to be applied by the court of appeals in an
      R.C. 2506.04 appeal is ‘more limited in scope.’ (Emphasis added.) Kisil
      v. Sandusky (1984), 12 Ohio St.3d 30, 34, 30, 465 N.E.2d 848, 852.
      ‘This statute grants a more limited power to the court of appeals to
      review the judgment of the common pleas court only on “questions of
      law,” which 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.’” (Citation omitted.)

      {¶ 10} Thus, we review the trial court’s judgment to determine if the

lower court abused its discretion in deciding that a preponderance of reliable,

probative, and substantial evidence supported the administrative decision.

                              Reduction in Pay

      {¶ 11} In his first assignment of error, Deem argues the Fairview Park

Civil Service Commission erroneously failed to apply R.C. 124.34(A) and find

that the City demoted him without justification.            He contends the

commission should have applied R.C. 124.34 because it governs the reduction

of pay for classified civil servants and no other statutes permit involuntary

reductions in pay rate. We disagree.

      {¶ 12} R.C. 124.34 governs the reduction, suspension, removal, or

demotion of a civil service employee for disciplinary reasons.       Smith v.

Cincinnati (1993), 85 Ohio App.3d 13, 20, 619 N.E.2d 46, fn.2. R.C. 124.37,

however, permits such reductions by demotion when “it becomes necessary * *

* through lack of work or funds * * * to reduce the force.” McAlpin v. Shirey
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(1997), 121 Ohio App.3d 68, 75, 698 N.E.2d 1051. R.C. 124.37(A) provides, in

pertinent part:

         “When it becomes necessary in a police or fire department, through a
      lack of work or funds, or for causes other than those outlined in Section
      124.34 of the Revised Code, to reduce the force in such department, the
      youngest employee in point of service shall be laid off first. * * * When
      a position above the rank of patrolman in the police department and
      above the rank of regular fireman in the fire department is abolished,
      and the incumbent has been permanently appointed, he shall be
      demoted to the next lower rank and the youngest officer in point of
      service in the next lower rank shall be demoted, and so on down until
      the youngest person in point of service has been reached, who shall be
      laid off.”

      {¶ 13} R.C. 124.321 also allows municipalities to lay off employees or

abolish positions for a variety of reasons including a “lack of funds.” R.C.

124.321(B); Penrod v. Ohio Dept. of Adm. Servs., 113 Ohio St.3d 239,

2007-Ohio-1688, 864 N.E.2d 79, ¶15-16. R.C. 124.321(B)(2) provides that “a

‘lack of funds’ means an appointing authority has a current or projected

deficiency of funding to maintain current, or to sustain projected, levels of

staffing and operations.” Further, R.C. 124.321(D) provides:

         “(D)(1) Employees may be laid off as a result of abolishment of
      positions. As used in this division, ‘abolishment’ means the deletion of
      a position or positions from the organization or structure of an
      appointing authority.

         “For purposes of this division, an appointing authority may abolish
      positions for any one or any combination of the following reasons: as a
      result of a reorganization for the efficient operation of the appointing
      authority, for reasons of economy, or for lack of work.
                                     8

          “(2)(a) Reasons of economy permitting an appointing authority to
      abolish a position and to lay off the holder of that position under this
      division shall be determined at the time the appointing authority
      proposes to abolish the position. The reasons of economy shall be based
      on the appointing authority’s estimated amount of savings with respect
      to salary, benefits, and other matters associated with the abolishment
      of the position, except that the reasons of economy associated with the
      position’s abolishment instead may be based on the appointing
      authority’s estimated amount of savings with respect to salary and
      benefits only, if:

         “(i) Either the appointing authority’s operating appropriation has
      been reduced by an executive or legislative action, or the appointing
      authority has a current or projected deficiency in funding to maintain
      current or projected levels of staffing and operations[.]”

      {¶ 14} Evidence introduced at the hearing, through both testimony and

exhibits, established that when the City eliminated the captain position, it

was confronting a substantial decrease in revenues as a result of the

demolition of a shopping mall, layoffs at the NASA Glenn facility, and layoffs

of employees of the Fairview Park Board of Education, the three largest

employers in the City. The Mayor explained that State taxes and personal

property taxes were also diminished, and interest income the City was

receiving from banks had decreased. As a result, the City had projected a

$1.2 million shortfall in revenue.

      {¶ 15} Furthermore, concurrent with Deem’s demotion, the least senior

lieutenant was demoted to the position of sergeant, and the least senior

sergeant was demoted to patrolman pursuant to R.C. 124.37(A). Although
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no member of the police department was laid off, one patrolman was cut from

the payroll when he was called to active duty in the Army Reserves in

September 2006, and one lieutenant retired in August 2006.       The fact that

no patrolman was laid off, does not invalidate the City’s actions with regard

to Deem. The City also abolished the assistant chief position in the fire

department, laid off two employees in the service department, laid off

part-time employees, and reduced other employees’ hours as part of the

overall restructuring of all City departments.

      {¶ 16} Deem argues that R.C. 124.34 should control the commission’s

decision and that, because none of the reasons enumerated in that statute

justify his demotion and reduction in pay, his demotion was illegal.

However, to accept this argument would render R.C. 124.37 meaningless. If

a municipality could not legally demote a police officer without disciplinary

action of the type contemplated in R.C. 124.34, the City would be powerless to

cope with problems posed by insufficient funds or lack of work that warrant a

reduction in force in its police and fire departments.

      {¶ 17} There is no dispute that the City followed the proper demotion

and layoff procedures set forth in R.C. 124.37 and 124.321. The evidence in

the record establishes not only that the City followed the applicable law to

abolish the captain position, but the evidence also demonstrates that it did so
                                       10

in good faith. Accordingly, we find no abuse of discretion in the trial court’s

judgment affirming the Fairview Park Civil Service Commission’s decision.

      {¶ 18} The first assignment of error is overruled.

                                    Back Pay

      {¶ 19} In his second assignment of error, Deem contends the civil service

commission erred when it denied him back pay. He claims he is entitled to

compensation for the difference in salary from the captain’s pay rate to the

lieutenant’s pay rate. Deem argues that the removal of a position in the

police force “in no way changes [his] rank and compensation.”

      {¶ 20} However, R.C. 124.37 and 124.321 authorize the layoffs and

demotions of civil servants when there is a “lack of funds.” Obviously, the

layoffs and demotions are intended to reflect a corresponding reduction in pay

as a money saving measure. Once again, to accept Deem’s argument, would

render these statutes meaningless.      The City must have some way to reduce

its expenditures in the face of a financial shortfall.

      {¶ 21} Deem suggests that involuntary demotions and pay reductions in

the absence of an offense on the employee’s part renders the civil service

system meaningless. We agree that the civil service system is intended to

protect public employees from unfair employment practices.          The Ohio

Supreme Court has said that: “[t]he purpose of the civil service system is to
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provide a ‘stable framework of public offices upon which a workable civil

service system may be constructed’ while ‘avoiding the traditional spoils

system * * * and * * * providing a method of fair employee selection and

promotion based upon merit and fitness.’” Hungler v. Cincinnati (1986), 25

Ohio St.3d 338, 344, 496 N.E.2d 912, quoting McCarter v. Cincinnati (1981), 3

Ohio App.3d 244, 248, 444 N.E.2d 1053.

      {¶ 22} However, R.C. 124.37 and 124.321 are part of the civil service

framework and protect civil servants from arbitrary demotions, layoffs, and

pay cuts. The City could not demote Deem, abolish the captain position, and

reduce his pay except for either one of the disciplinary reasons set forth in

R.C. 124.34, or one of the economic reasons set forth in R.C. 124.321 and

124.37. Moreover, the City must provide competent, credible evidence to

support its action, and Deem has the right to a review of the City’s actions

through the civil service commission, the common pleas court, and this court.

Having reviewed the record, we find Deem’s demotion and corresponding

reduction in pay to be justified and supported by a preponderance of

competent, credible evidence. Therefore, he is not entitled to back pay.

      {¶ 23} The second assignment of error is overruled.

                                                            Judgment affirmed.

      It is ordered that appellee recover of appellant costs herein taxed.
                                    12

     The court finds there were reasonable grounds for this appeal.

     It is ordered that a special mandate issue out of this court directing the

common pleas court to carry this judgment into execution.

     A certified copy of this entry shall constitute the mandate pursuant to

Rule 27 of the Rules of Appellate Procedure.


______________________________________________
COLLEEN CONWAY COONEY, JUDGE

PATRICIA ANN BLACKMON, P.J., and
KATHLEEN ANN KEOUGH, J., CONCUR
