[Cite as Rid-All Exterminating Corp. v. Cuyahoga Metro. Hous. Auth., 2012-Ohio-5074.]



                Court of Appeals of Ohio
                              EIGHTH APPELLATE DISTRICT
                                 COUNTY OF CUYAHOGA



                             JOURNAL ENTRY AND OPINION
                                      No. 98174


           RID-ALL EXTERMINATING CORP., ET AL.

                                                          PLAINTIFFS-APPELLEES

                                                    vs.

             CUYAHOGA METROPOLITAN HOUSING
                       AUTHORITY
                                                          DEFENDANT-APPELLANT




                                  JUDGMENT:
                            REVERSED AND REMANDED


                                     Civil Appeal from the
                            Cuyahoga County Court of Common Pleas
                                     Case No. CV-774506

        BEFORE: Stewart, P.J., Sweeney, J., and Rocco, J.

        RELEASED AND JOURNALIZED:                         November 1, 2012
ATTORNEYS FOR APPELLANT

Kathryn M. Miley
Ernest L. Wilkerson, Jr.
Wilkerson & Associates Co., LPA
1422 Euclid Avenue, Suite 248
Cleveland, OH 44115


ATTORNEY FOR APPELLEE

Ann S. Vaughn
6140 West Creek Road, Suite 204
Independence, OH 44131
MELODY J. STEWART, P.J.:

       {¶1} Plaintiff-appellee Rid-All Exterminating Corporation filed this action against

defendant-appellant Cuyahoga Metropolitan Housing Authority (“CMHA”), asserting

claims for breach of contract, promissory estoppel, defamation, fraud, and disparate

treatment. CMHA sought dismissal of all but the contract claim on grounds that it was

immune to suit. The court denied the motion to dismiss without opinion. This appeal is

taken pursuant to R.C. 2744.02(C) and the sole assignment of error is that the court erred

by denying the motion to dismiss.

                                              I

       {¶2} We use a de novo standard of review for motions to dismiss filed pursuant to

Civ.R. 12(B)(6), Greeley v. Miami Valley Maintenance Contrs., Inc., 49 Ohio St.3d 228,

551 N.E.2d 981 (1990), and accept all factual allegations of the complaint as true and

draw all reasonable inferences in favor of the nonmoving party. Byrd v. Faber, 57 Ohio

St.3d 56, 565 N.E.2d 584 (1991). A motion to dismiss for failure to state a claim upon

which relief can be granted can only be granted when it appears beyond doubt from the

complaint that the plaintiff can prove no set of facts entitling it to relief. LeRoy v. Allen,

Yurasek & Merklin, 114 Ohio St.3d 323, 2007-Ohio-3608, 872 N.E.2d 254, ¶ 14.

       {¶3} There is a three-tiered analysis to determine whether a political subdivision is

entitled to immunity from civil liability pursuant to R.C. Chapter 2744. Hubbard v.
Canton City School Bd. of Edn., 97 Ohio St.3d 451, 2002-Ohio-6718, 780 N.E.2d 54, ¶

10. We first determine whether the entity claiming immunity is a political subdivision

and whether the alleged harm occurred in connection with a governmental or a propriety

function. If the political subdivision is entitled to immunity, we next consider whether

the plaintiff has shown that there are any exceptions to immunity under R.C. 2744.02(B).

If there are exceptions to immunity, we then consider whether the political subdivision

can assert one of the defenses to liability under R.C. 2744.03.     Cater v. Cleveland, 83

Ohio St.3d 24, 28, 1998-Ohio-421, 697 N.E.2d 610.

                                             II

       {¶4} It is undisputed that CMHA is a political subdivision. R.C. 2744.01(F).

Although Rid-All contends that the function of contracting with exterminating companies

to perform extermination services is a proprietary function, the Ohio Supreme Court has

held that the “operation” of a public housing authority is the performance of a

governmental function.     Moore v. Lorain Metro. Hous. Auth., 121 Ohio St.3d 455,

2009-Ohio-1250, 905 N.E.2d 606, syllabus. Day-to-day maintenance of public housing

facilities, including the extermination of insects or pests, relates to the “operation” of a

housing facility and so constitutes a governmental function that qualifies for immunity

under R.C. 2744.02(A)(1).

       {¶5} In Hortman v. Miamisburg, 110 Ohio St.3d 194, 199, 2006-Ohio-4251, 852

N.E.2d 716, the syllabus states: “The doctrines of equitable estoppel and promissory

estoppel are inapplicable against a political subdivision when the political subdivision is
engaged in a governmental function.”              Having found that the employment of

extermination services falls within the operation of a public housing authority as a

governmental function, Hortman makes the city immune to any claim of promissory

estoppel. CMHA was entitled to immunity on the promissory estoppel claim contained

in the second count of the complaint and the court erred by refusing to dismiss that claim.



                                            III

       {¶6} In the third count of its complaint, Rid-All alleged that CMHA defamed

Rid-All’s reputation by maligning it in emails sent to CMHA residents. Rid-All did not,

however, provide the substance of the alleged defamatory statements.

       {¶7} As previously noted, a public housing authority’s use of extermination

services relates to a governmental function. None of the exceptions to governmental

immunity apply to defamation claims stemming from the performance of a governmental

function, regardless of whether the defamation is alleged to be intentional or negligent.

See Hubbard v. Cleveland Metro. School Dist. Bd. of Edn., 195 Ohio App.3d 708,

2011-Ohio-5398, 961 N.E.2d 722 (8th Dist.); Price v. Austintown Local School Dist. Bd.

of Edn., 178 Ohio App.3d 256, 2008-Ohio-4514, 897 N.E.2d 700, ¶ 32 (7th Dist.). The

court erred by refusing to dismiss the defamation claim contained in the third count of the

complaint because CMHA was immune.

                                            IV
       {¶8} The fraud claim contained in the fourth count of the complaint alleged that

CMHA failed to provide Rid-All with “monthly periodicals” that would detail how much

of its yearly contract amount was expended and how much it had available under each

contract, thus allowing CMHA to “shortchange” it on the contract price.

       {¶9} The court erred by denying CMHA’s motion to dismiss the fraud claim

because “there are no exceptions to immunity for the intentional tort[ ] of fraud * * *.”

Wilson v. Stark Cty. Dept. of Human Servs., 70 Ohio St.3d 450, 452, 1994-Ohio-394, 639

N.E.2d 105 (1994); see also Charles Gruenspan Co., LPA v. Thompson, 8th Dist. No.

80748, 2003-Ohio-3641, ¶ 48 (“As a general principle, political subdivisions are not

liable in damages unless a specific exception to that immunity exists. This applies

particularly to intentional tort claims of fraud and intentional infliction of emotional

distress.”).

       {¶10} Rid-All’s citation to Sampson v. Cuyahoga Metro. Hous. Auth., 188 Ohio

App.3d 250, 2010-Ohio-3415, 935 N.E.2d 98, aff’d, 131 Ohio St.3d 418, 2012-Ohio-570,

966 N.E.2d 247, as authority for the proposition that an exception exists to immunity for

fraud claims is not on point. Sampson addressed the issue whether R.C. 2744.09(B),

containing exceptions to political subdivision immunity from tort liability, applies in a

civil action for damages filed by an employee who alleges that his political subdivision

employer committed an intentional tort against him and engaged in negligent conduct.

Rid-All was not a CMHA employee, so the law set forth in Sampson does not apply.

                                           V
       {¶11} The fifth count of the complaint sets forth two claims of disparate treatment:

 (1) that CMHA intentionally refused to provide Rid-All with an accounting of shortages

paid for services and (2) that as a minority business enterprise, it was entitled to be paid

on a 15-day-net period as opposed to other contractors who were paid on a 30-day-net

period, and that CMHA’s failure to pay within the 15-day period meant that nonminority

business enterprises “received systematically better treatment” than Rid-All received.

       {¶12} Ordinarily, political subdivisions lose their immunity from “[c]ivil claims

based upon alleged violations of the constitution or statutes of the United States, except

that the provisions of section 2744.07 of the Revised Code shall apply to such claims or

related civil actions.” R.C. 2744.09(E). Rid-All’s claim of “disparate treatment” is that

its status as a minority business enterprise “is a motivating factor in [CMHA’s] treatment

toward [Rid-All].”    Nowhere in the complaint does Rid-All state what statutes or

constitutional provisions were allegedly violated by CMHA. On this basis alone, Rid-All

cannot invoke R.C. 2744.09(E) and CMHA’s immunity remains intact.

       {¶13} Rid-All argues on appeal that its reference to “disparate treatment” was an

attempt to claim that CMHA engaged in racial discrimination under the Equal Protection

Clause to the Fourteenth Amendment to the United States Constitution. The Equal

Protection Clause requires that all similarly situated individuals be treated in a similar

manner. Discount Cellular, Inc. v. Pub. Util. Comm. of Ohio, 112 Ohio St.3d 360,

2007-Ohio-53, 859 N.E.2d 957, at ¶ 31, citing McCrone v. Bank One Corp., 107 Ohio

St.3d 272, 2005-Ohio-6505, 839 N.E.2d 1, at ¶ 6.
       {¶14} Rid-All did not allege that it was similarly situated to other exterminating

contractors working for CMHA. To the contrary, it alleged that as a minority business

enterprise it was entitled to be treated more favorably than other contractors and should

have been paid within 15 days of submitting its invoices instead of the 30 days used for

nonminority business enterprises. This is not a discrimination claim based on unequal

treatment. It is a contract claim based upon CMHA’s alleged promise to pay minority

business enterprise invoices more quickly than invoices submitted by nonminority

business enterprises.

       {¶15} It follows that the exception to immunity set forth in R.C. 2744.09(E) does

not apply. The court erred by failing to dismiss the fifth count of the complaint.

                                             VI

       {¶16} In conclusion, we find that the court erred by denying CMHA’s motion to

dismiss counts two through five of the complaint because CMHA was entitled to

immunity on those claims and there were no exceptions to immunity. The assigned error

is sustained.

       {¶17} This cause is reversed and remanded for proceedings consistent with this

opinion.

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

       The court finds there were reasonable grounds for this appeal.

       It is ordered that a special mandate be sent to the Cuyahoga County Court of

Common Pleas 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.




MELODY J. STEWART, PRESIDING JUDGE

JAMES J. SWEENEY, J., and
KENNETH A. ROCCO, J., CONCUR
