106923993
06923993

IN THE COURT OF COMMON PLEAS
CUYAHOGA COUNTY, OHIO
CLINT YOBY
Plaintiff

Case No: CV-15-852708
Judge: JANET R BURNSIDE

CITY OF CLEVELAND, ET AL
Defendant

JOURNAL ENTRY
85 DISP.PRE-TRL - FINAL
01/07/2019: PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT PURSUANT TO CIVIL RULE 56(A), FILED
01/15/2018, IS DENIED FOR THE REASONS SET FORTH IN THE FINAL JUDGMENT ENTRY ANNEXED HERETO AND
MADE A PART THEREOF.
DEFENDANT'S MOTION FOR SUMMARY JUDGMENT, FILED 01/11/2018, IS GRANTED. JUDGMENT IS ENTERED IN
FAVOR OF THE DEFENDANT CITY OF CLEVELAND AS MORE FULLY EXPLAINED IN THE FINAL JUDGMENT ENTRY
ANNEXED HERETO AND MADE A PART THEREOF.
THIS IS A FINAL JUDGMENT UNDER R.C. 2505.02. FINAL.
COURT COST ASSESSED TO THE PLAINTIFF(S).
PURSUANT TO CIV.R. 58(B), THE CLERK OF COURTS IS DIRECTED TO SERVE THIS JUDGMENT IN A MANNER
PRESCRIBED BY CIV.R. 5(B). THE CLERK MUST INDICATE ON THE DOCKET THE NAMES AND ADDRESSES OF ALL
PARTIES, THE METHOD OF SERVICE, AND THE COSTS ASSOCIATED WITH^HIS SERWI0J

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 STATE OF OHIO

)

IN THE COURT OF COMMON PLEAS
) SS:

CUYAHOGA COUNTY

)

CASE NO. CV-15-852708
JUDGE JANET R. BURNSIDE

CLINT YOBY, et al,

)
)

PLAINTIFFS

)
v.

)

)
)
CITY OF CLEVELAND, et al,

>

FINAL JUDGMENT ENTRY

)
)

DEFENDANTS

)

Plaintiff Clint Yoby and added parties, Tremont Scoops LLC, 2362 Professor
Avenue LLC, and Tymex Plastics, Inc., are the certified class representatives of this
class action (“Plaintiffs”). The class members are residential and commercial customers
of Defendant City of Cleveland’s division, Cleveland Public Power (“CPP"). See
Stipulated Class Certification Order of 8/2/17.
Under their Fourth Consolidated Amended Complaint filed 6/30/17, Plaintiffs
assert claims for (1) breach of contract; (2) fraud; (3) declaratory judgment; (4)
restitution and (5) injunctive relief. In its Amended Answer, remaining Defendant City of
Cleveland generally denied the allegations of the complaint and asserted certain
affirmative defenses. For simplicity, Defendant is referred to as CPP below.
This matter comes on for decision upon two summary judgment motions. CPP
filed a motion seeking summary judgment on each of Plaintiffs’ claims with evidentiary
materials; Plaintiffs opposed CPP’s motion with evidentiary materials; and CPP filed a
reply. Plaintiffs filed a motion for partial summary judgment on the issue of breach of
contract only with evidentiary materials; CPP filed its opposition with evidence and

l

 Plaintiffs filed a reply. The Court held an oral argument on the parties’ motions on
4/17/18, and the parties filed factual stipulations on 5/16/18.
The Court has now reviewed and considered all the arguments and the evidence
qualifying for consideration tinder Civ.R. 56(C). For the reasons that follow, the Court
grants CPP’s motion for summary judgment, denies Plaintiffs' motion for partial
summary judgment, and enters final judgment on all claims of the complaint.
BACKGROUND
The City of Cleveland is a municipal corporation and political subdivision under
R.C. 2744.01(F). The City’s municipally-owned utility CPP sells electric power to
customers in Cleveland, including residential and commercial customers such as
I .
Plaintiffs.
Under the class definition Plaintiffs are all CPP customers who at any time paid a
bill for electricity that included the line item “Energy Adjustment Charge” (EAC) during a
time when CPP included in that charge an additional amount known as the
“Environmental and Ecological Adjustment” (EEA). The “Energy Adjustment Charge”
provided in Cleveland ordinances adjusts customer rates based on the cost of electricity
and it is not itself at issue here. At issue is the propriety of adding an “Environmental
and Ecological Adjustment” amount to customer billings and doing so by imbedding the
amount inside the Energy Adjustment Charge on billings.
I.

PLAINTIFFS’ BREACH OF CONTRACT CLAIM
CPP moves for summary judgment in its favor upon Plaintiffs’ breach of contract

claim.

2

 Cleveland Codified Ordinance Chapter 523 governs the rules and rates for
electricity sales to CPP customers. It includes an electric sales agreement by which
customers are charged monthly for receipt of electric services.
The parties agree that a binding contract exists between Plaintiffs and CPP and
that contract is an electric services agreement established by Cleveland Codified
Ordinance 523.19(a) having the general terms provided in CCO 523.19(b) including this
provision labelled Article 3:
For the electric service furnished under this contract, the Consumer agrees to
pay the City in accordance with the terms, conditions and applicable rate
schedule established by or as may be amended from, time to time by the City and
approved by City Council, and said rates, terms and conditions are hereby made
a part of this contract the same as if incorporated herein.
The ordinance on its terms incorporates into the parties’ electric service agreement
other ordinances containing the “the terms, conditions and applicable rate schedule...
approved by City Council.”
Plaintiffs claim CPP violated its contract (the electric services agreement) with
customers in the following ways:
A. by charging an EEA rate adjustment that was not authorized by CCO 523.17
(see paragraphs 73-77 of the complaint)
B. by charging the EEA adjustment amount on customer billings as an
undisclosed part of the EAC amount
C. by failing to prorate the EEA on a cents per kilowatt-hour basis as required by
CCO 523.17(a) equally across all rate schedules
D. by certain other failures.
The Court will address each allegation of breach of contract in this order.

3

 I.A.

EEA charges not authorized by CCO 523.17
Plaintiffs allege CPP charged amounts as environmental and ecological

adjustments to recover costs that were not environmental and ecological costs as
required by city ordinances. CPP denies that EEA adjustments to customer billings are
limited to those recovering environmental and ecological costs and claims city
ordinances authorize the EEA adjustments in its rate calculation.
The broad language of Article 3 of the electric services agreement for residential
customers, quoted above, is the basis for Plaintiffs’ argument that CPP is required to
strictly follow the terms of enacted ordinances governing rate calculations. (Similarly,
CCO 523.196 governs agreements with commercial customers and all Plaintiffs’
/

contentions are made with equal force there.) That said, the essential dispute between
the parties here is one of interpretation of a specific ordinance, CCO 523.17, about EEA
rate adjustments to CPP customers.

)

The title of CCO 523.17 is “Environmental and Ecological Adjustment”. Plaintiffs
argue that any adjustment to customer billing under this ordinance must necessarily be
one for environmental and ecological costs as spelled out in that section. Accordingly,
Plaintiffs argue, no other costs can support an adjustment to customer billing under this
section. CPP points out Cleveland’s ordinances do not permit themselves to be read in
this way. CCO 101.01 provides that section headings do not constitute part of the law
but are present for convenience only. So, in truth, in this litigation the parties should
not—and in this decision, the Court should not—be speaking of an “Environmental and
Ecological Adjustment” because that is only the title of the ordinance. The parties’
dispute here is different; it is “what costs are properly the subject of adjustments to

4

 customer billing under the ordinance so titled, i.e., CCO 523.17”. The Court will use the
term “Environmental and Ecological Adjustment” or “EEA” neutrally, as an adjustment
made under CCO 523.17. At least use of the term EEA distinguishes it from the other
adjustment clearly permitted by a separate ordinance for energy costs known as “EAC".
CPP uses three revenue streams to operate as an electrical supplier: base
rates, EAC and EEA. Base rates are set by separate ordinances. The parties agree
that rates for residential customers are typically lower than those for commercial
customers and Cleveland ordinances have long maintained a host of different rate
classifications.
The rate adjustment ordinance at issue is CCO 523.17:
(a) The costs of special apparatus and equipment required for compliance with
Federal, State or City environmental protection laws and directives as have
been or may be installed and operated from time to time or on a continuing
basis shall be prorated on a 0/KW.-hr. basis and assessed against the
appropriate rate schedule. The provisions of this section may be applied to
rate schedules described in Sections 523.02 to 523.06 or any other rate
schedules as may later be enacted and approved.
(b) The costs for which an adjustment can be incurred shall include but are not
limited to voluntary or involuntary research and development charges,
purchase and installation of emission control equipment for Sulphur, nitrogen
and particulate emissions, purchase and installation of control equipment for
protection of the natural water supply, purchase and installation of power
supply apparatus and power from remote sources and any other charges
levied on the Division of Light and Power in lieu of precise compliance with
statutes and directives.
The parties in substance agree to the following. CCO 523.17, the ordinance
titled “Environmental and Ecological Adjustment”, became effective in 1974, but CPP
did not begin to bill customers EEA amounts until 1984. By 1984, CPP no longer
generated electricity except for a very small amount; rather, CPP bought electricity
elsewhere and distributed it to its customers. In so doing, it competes door-to-door with
5

 Cleveland Electric Illuminating Company. This switch from production to distribution
meant fewer environmental protection laws applied to CPP’s operations. From among
the items listed in CCO 523.17, all EEA adjustment amounts charged by CPP over the
years were for “purchase and installation of power supply apparatus”: The latter is text
found only in 523.17(b). As a result, the parties’ arguments focus on that particular
justification for EEA amounts on customer bills.
Plaintiffs argue CCO 523.17 limits EEA adjustments to only those required to
comply with environmental protection laws. CPP argues that the ordinance permits
adjustments set forth in subdivision (b) without regard to the contents of subdivision (a).
In other words, Plaintiffs argue the term “costs” of 523.17(b) refers to costs as defined in
523.17(a). CPP argues that the term “costs” of 523.17(b) is not limited to the costs
described by 523.17(a).
From January 1, 1984 to May 31, 2013, CPP billed its customers EEA amounts
totaling $188,076,337.00. It is undisputed that EEA amounts totaling $188,076,337.00
were not limited to those required by environmental protection laws, i.e., were not costs
defined in 523.17(a). It is undisputed that all EEA adjustments were justified by CPP
under the “power supply apparatus" language of 523.17(b).
CPP argues the two paragraphs of CCO 523.17 are to be read independently of
each other. Therefore, the argument proceeds, any costs listed in CCO 523.17(b)
justify an EEA rate adjustment without regard to the description of costs in CCO
523.17(a).
The chief disagreement here is one of statutory interpretation. The Court rejects
Plaintiffs’ reading of CCO 523.17 as no. language in the ordinance supports it. The
~\
6

 ordinance’s language is not ambiguous and therefore Ohio law requires that it be
enforced as written. The ordinance clearly permits adjustments beyond those required
for environmental protection compliance. CCO 523.17(b) allows recovery of costs that
are not described in CCO 523.17(a). For example, CCO 523.17(b) allows adjustments
which are not “special apparatus and equipment” or which are not environmentally
related.
The second sentence of CCO 523.17(a) clearly permits CPP to choose whether
it will apply any adjustments to any of the rate schedules. This is the apparent structure
created by Cleveland’s legislative authority and it invests CPP with considerable
discretion in its application and use of rate adjustments under CCO 523.17. CCO
523.17 governing EAC adjustments also permits CPP to choose whether to apply EAC
adjustments to any of the rate schedules.
The Court concludes that the adjustments made by CPP justified solely under
CCO 523.17(b) did not violate the ordinances and therefore did not violate the electric
services agreement with its customers.
I.B.

EEA adjustments were not separately identified on billings
Plaintiffs also argue CPP was in violation of its contractual duties by not listing

separately the amount for the EEA adjustment from the Energy Adjustment Charge
(EAC) on customer bills. When CPP charged an EEA amount, it was simply included
as part of the EAC amount. The consumer has no way of knowing that an item other
than EAC was involved.
There is no requirement in any ordinance to separately list and describe in
different line items amounts on customer bills. No ordinance required a separate line

7

 for EEA charges from EAC charges. Sound government policy and transparency might
be served by doing so, but it is not required by current ordinances.
As will be discussed below, under Ohio law this Court has no power to impose
such changes. More significantly, no city ordinance requires use of separate line items
on billing statements.
I.C.

Pro ration
Plaintiffs also claim that CPP was in breach of its contract with customers by

applying the EEA adjustment unequally among rate classes. The Court rejects this
contention. This argument assumes that the cents-per kilowatt-hour proration spelled
out in CCO 523.17(a) applies to all adjustments authorized by the ordinance. As
discussed above, the only tenable interpretation of CCO 523.17 is that 523.17(b)
authorizes adjustments independently of those authorized by 523.17(a). As a result, the
cents-per kilowatt-hour proration applies only to adjustments made under the first
sentence of 523.17(a) and not to adjustments made under the first sentence of
523.17(b). CPP’s failure to prorate its EEA adjustments equally among all rate classes
is not a violation of the electric services agreement because under the literal terms of
523.17(b) no such proration was required.
Plaintiffs question the legality of giving different rate classes different EEA rate
adjustments. CPP admits that for any billing period the amount of the EEA adjustment
and indeed, the cents-per kilowatt-hour proration was not necessarily equal among all
customer rate classes. However, the rate adjustment was equal for all customers within
;

a given rate class. Plaintiffs offer no evidence to the contrary.

8

 Plaintiffs argue that the proration should have been equal among all customer
rate classes, but the ordinance does not require this equality. CPP argues the plain
language of CCO 523.17 gives them the discretion to charge different adjustments (i.e.,
different cents-per kilowatt-hour prorations) for different rate classes. This follows from
the section’s language: “The provisions of this section may be applied to rate schedules
described in Sections 523.02 to 523.06 or any other rate schedules as may later be
enacted and approved.” CCO 523.17(a) (emphasis added). Use of the term “section”
in this statutory language is a reference to section 523.17 and not to its paragraph
523.17(a) alone. This is an express grant of discretion to CPP for adjustments it makes
whether authorized under 523.17(a) or under 523.17(b).

Other failures alleged to be in breach of contract

I.D.

Plaintiffs’ complaint also describes other conduct as constituting a breach of
contract by CPP with its customers. CPP’s summary judgment motion seeks judgment
in its favor on all theories that CPP acted in violation of its contractual duties.
I.D.1.

Double Recovery
It is undisputed that CPP based its EEA charges on costs incurred for “power

supply apparatus”, a cost listed in CCO 523.17(b). Plaintiffs contend that CPP is
obligated to recover its cost for power supply apparatus through its base rates and
therefore, its use of EEA amounts to recover for such expenses amounts to a double
recovery. No evidence supports the existence of any actual double recovery for any
expense. No evidence or legal authority supports the contention that CPP is obligated
to recover its cost for power supply apparatus through its base rates alone.
/

9

 i

This contention is unworkable and unrealistic. Since City Council sets the base
rates, CPP is powerless to determine the base rates or enact an ordinance adjusting
base rates. The undisputed evidence before the Court indicated that City Council has
not increased the base rates for a great number of years. CPP must operate the utility
using the three revenue streams provided to it. Viewed in this light, use of CCO
523.17(b) to impose an upward consumer billing adjustment makes sense. It places the
director of CPP in the same position as other business operators. When costs increase,
CPP may pass some of that cost on to'the consumer to insure continuation and
improvement of service. The record evidence showed CPP did just that but limited the
adjustment amount to insure its total electricity charges remained competitive with the
rates charged by Cleveland Electric Illuminating Company. It should also be noted that
CCO 523.17 imposes no amortization schedule; this leaves discretion in CPP to recoup
costs over a long or short time period as business and competition circumstances
dictate.
The Plaintiffs’ argument is based on a good government motive or policy for
transparency with consumers. As laudable as those goals are, no ordinance or legal
principle supports it. In addition, as discussed below, Ohio law does not permit Courts
to interfere with municipal utility ratemaking. Plaintiffs’ arguments thrust this Court into
exactly that form of interference.
I.D.2.

Accounting of EEA funds
Plaintiffs also argue that any amounts recovered under the EEA adjustment must

be placed in specially segregated funds and use of the funds for the permitted 523.17

10

 purpose strictly accounted for. Again, such a practice would be sound government
policy and transparent, but no ordinance or statute requires any such reconciliation.
II.

LAW & ANALYSIS ON BREACH OF CONTRACT CLAIM
The above analysis focuses on the parties’ statutory interpretation dispute and

the Court agrees with CPP’s interpretation of the subject ordinance because basic legal
principles of statutory interpretation require it. The Court finds no breach of contract by
CPP in implementing the EEA rate adjustment. That could be the end of the inquiry, but
the Court is obligated to consider whether, if any technical violation of the ordinances
involved in CPP ratemaking was found, the Court would be compelled to conclude an
actionable breach of contract was established. This obligation arises because the
parties disagree about the legal standard under which this Court must review CPP’s
conduct in implementing the EEA. Plaintiffs argue in favor of a traditional breach of
contract standard, requiring CPP to comply strictly with city ordinances:
“[A] breach of contract occurs when a party demonstrates the existence of a
binding contract or agreement; the non-breaching party performed its contractual
obligations; the other party failed to fulfill its contractual obligations without legal
excuse; and the non-breaching party suffered damages as a result of the breach.
Upon demonstration of breach of contract, damages should place the injured
party in as good a position as it would have been absent the breach.”

Garofalo v. Chicago Title Ins. Co., 104 Ohio App. 3d 95, 108 (8th Dist. 1995) (citations
omitted).
Conversely, CPP argues that this Court must apply the Ohio Supreme Court’s
holdings when considering the contractual relationship between a municipality’s utility
company and its customers. That Supreme Court precedent is summarized by this
quote,

t

ll

 “The only restraint imposed by law upon a municipality’s proprietary undertaking
of providing electrical energy is ‘that the rates charged be reasonable and that
there be no unjust discrimination among the customers served, taking into
account their situation and classification.’”

OrrFelt Co. v. Piqua, 2 Ohio St. 3d 166, 170-71 (1983) (citation omitted).
This difference of opinion between the parties compels the Court to address the
legal principle of long-standing Ohio law that generally courts will not involve
themselves in utility ratemaking but will instead defer to the municipal actors. Even if it
could be said that CPP did not strictly follow the requirements of CCO 523.17 or related
ordinances, Ohio law holds that this Court may not step in and require strict adherence
to the ordinances but instead must re-focus the inquiry to what the law considers the
bottom line: whether the rates are reasonable and whether customers suffer any unjust
discrimination in those rates.
The Ohio Constitution authorizes municipal corporations “to establish, maintain
and operate municipal lighting, power, and heating plants, for the generation,
transmission and supplying of electricity to the municipal corporation and its
inhabitants." Orr Felt Co., supra. “[Tjhe General Assembly is without authority to
impose restrictions or limitations upon that power.”

Swank v. Shiloh, 166 Ohio St. 415

(1957), paragraph one of the syllabus. In the Orr Felt decision, the Ohio Supreme Court
extended the

Swank v Shiloh concept, holding that Ohio courts were without authority to

subject municipal utilities to a “common law" of ratemaking.

Orr Felt’s summary reference “to a common law of ratemaking” was possible
because the appellate decision it was affirming dealt in detail with the permissible limits
of court oversight when utility customers complain of overcharging for fuel adjustments
by the municipal utility. The OrrFelt Co. v. Piqua, 1981 Ohio App. LEXIS 13097 (2nd
12

 Dist. 1981). The appellate decision in Orr Felt explicitly addressed the fact that Piqua’s
municipal utility passed along certain costs to consumers in a fuel adjustment in a
manner not expressly authorized by the governing ordinance. Notwithstanding this fact,
the appellate court ruled in favor of the City of Piqua and against the utility customers.
In doing this, the appellate court relied upon Consumers’ Counsel v. Pub. Util. Comm.,
56 Ohio St. 2d 319 (1978), which upheld a fuel adjustment to Ohio Edison customers
that was not expressly authorized by statute. The Consumers’ Counsel decision
pointed out the statute at issue did not on its terms expressly prohibit or limit
adjustments and therefore other adjustments were apparently permitted. The Supreme
Court in Orr Felt affirmed the Second District Court of Appeals in all respects.
The Supreme Court’s approach to oversight of municipal utilities had its
beginning in Butler v. Karb, 96 Ohio St. 472 (1917). Butler v. Karb considered whether
the municipality engaged in unjust discrimination among its customers when no
ordinances or systems were in place setting rate schedules and instead, rates were
arbitrarily set by municipal officers and rates differed among users. The failure of the
city council to establish any rate schedule was an abuse of power subject to correction
by the court but otherwise,
N

“[t]he manner in which the authority conferred by statute is to be exercised is left
to the discretion of the officials of the municipality. * * * Surely the Court cannot
be called upon to determine the extent to which current should be used for street
lighting and what portion of the current generated may properly be furnished
private consumers, nor to ascertain and fix by judicial decree the precise burden
that may be placed upon the plant. A mere departure from the exercise of sound
judgment does not warrant the interposition of the Court and the control and
guidance of its mandate.”

Butler v. Karb, 96 Ohio St. 472, 480-481. The Supreme Court’s approach to oversight
of municipal utilities in Butler v. Karb continued in State ex rel Mt. Sinai Hospital v.
13

 Hickey, 137 Ohio St. 474 (1940) (refusing to interfere with Cleveland ordinance directing
its water utility to provide free water to hospitals and like institutions against a challenge
that the ordinance improperly gave away municipal property).
Plaintiffs argue that the OrrFelt holding is not dispositive of this case because
the Supreme Court decided that case under a theory of rates set by law, and not
contract. The Court cannot agree because the present dispute involves similar issues
to those present in OrrFelt Co. v. Piqua, that is, complaints of overcharging consumers
for electrical service by a municipal utility. It brings into question this Court's authority to
interfere with CPP rate making. OrrFelt evolved from a line of cases requiring judicial
deference to the operators of municipal utilities. This deference is built into the Ohio
Constitution Article XVIII’s grant of authority to municipalities to operate public utilities.

Swank v. Shiloh, supra.
The cases relied on by Plaintiffs involve non-residents with specifically negotiated
rate contracts and are distinguishable. In Rispo Inv. Co. v. City of Cleveland, 2009Ohio-2250, U 15-16 (8th Dist. 2009), plaintiff owned an apartment building in Parma.
Parma had entered into a Water Service Agreement with the City of Cleveland that
granted Cleveland the exclusive authority to set the rates Parma water users would pay,
for the Cleveland-supplied water. Plaintiff argued the rates were unreasonable,
unrelated to costs of service, and discriminated against apartment building owners. The
Court of Appeals applied the Supreme Court of Ohio’s holding in Fairway Manor, Inc. v.

Board of Comm’rs, 36 Ohio St. 3d 85, 90 (1988), that when rates are the result of a
negotiated contract, courts are without authority to review the reasonableness of the
bargain. Fairway Manor also held that when rates from a municipal utility are set forth

 in such a contract, the rates will not be struck down as discriminatory even where no
factor exists justifying the rate discrimination between customers. In other words, the
parties are left to live with their bargain. Fairway Manor Inc., supra (paragraph two of
syllabus).
In the Fairway Manor decision as in the Rispo decision, the Ohio Supreme Court
considered rates charged by a municipal utility to an extraterritorial purchaser after
usage rates were established by a negotiated contract between the parties. In each of
the cases, there was evidence of a specific negotiated contract between the municipal
utility and a non-resident of that municipality. In the present action, Plaintiffs are
residents of the City of Cleveland. Their contract is established by operation of law and
Plaintiffs did not present any evidence to this Court that any of the rates in the present
action were the result of a bargained-for or negotiated contract.
As a result, the Court reviews Plaintiffs’ claims that CPP overcharged its
customers and violated their electrical service agreements under the OrrFelt v. Piqua
standard. OrrFelt dealt with a dispute between city residents and their municipal utility,
as does the dispute between our present parties; it applies to this action.
Under the OrrFelt analysis, the Court must now address the parties’ arguments
about reasonableness of rates and whether customers were unjustly discriminated
against in rates.
II.A.

Reasonableness of CPP’s Rates
In obedience to Orr Felt’s holding, the Court is required to consider the

reasonableness of CPP’s rates and whether those rates unjustly discriminated against
customers. The Court does not evaluate specific application of individual adjustments,
such as the EAC or EEA, but rather evaluates CPP’s rates in totality.
15

 A municipality engaged in the operation of a public utility acts within its
proprietary capacity, and is entitled to a fair profit. Niles v. Union Ice Corp., 133 Ohio St.
169 (1938). “So long as the rate is reasonable, the Courts cannot prohibit a municipality
from making a profit on the operation of its electric light and power system, in the
absence of any restriction in the statute which enables it to operate such system.” Id. at
182.
CPP relies on evidence that generally its rates are at or below those charged by
its competitor Cleveland Electric Illuminating Company to show their reasonableness.
While CPP produced evidence that it did not establish unreasonable rates and that it
has expanded its customer basis and modernized its distribution system, Plaintiffs failed
to produce evidence establishing that CPP’s rates in totality were unreasonable.
Plaintiffs did not produce evidence that CPP’s aggregate revenues exceeded what CPP
could lawfully collect under all the ordinances.
CPP points out the same rates could have been charged by the simple
expediency of increasing the base rates and not using any EEA adjustment. That the
rates were determined using EEA adjustments supports the argument that City Council
intended in its ordinances to use stabilized base rates and to permit CPP administrators
to apply rate adjustments from time to time to fund operations and remain profitable as
well as competitive.
The Court has reviewed all of the Civ.R. 56(C) evidence submitted by the parties,
and determines that (a) CPP met its burden to affirmatively demonstrate that Plaintiffs
do not have evidence to support their claims that CPP’s rates were unreasonable or that
it generated unreasonable profits, and (b) Plaintiffs failed to contradict that evidence by

16

 its evidentiary submissions. Based on the undisputed evidence and even though
construing it most strongly in favor of the non-moving party, reasonable minds can
come to but one conclusion and that is that CPP is entitled to summary judgment on the
issue of reasonableness of rates.
11. B.

Unjust Discrimination
The evidence established that Cleveland City Ordinances have long maintained

multiple rate classes based on customer situations and electricity consumption. Multiple
rate classes means different base rates are established by ordinance for differently
situated customers. The evidence established that city ordinances’ base rates have
generally been lower for residential consumers than commercial users. No argument
was made and no evidence established that such rate structures were unjustly
discriminatory. Industry-wide it is customary for utilities to charge different rates among
different customer classes and rate variances are built into the rate schedules.
No argument was made here that any customers within a given customer rate
classification suffered different rates or adjustment charges. Plaintiffs’ argument of
unjust discrimination was limited to the fact that in a given time period EEA adjustments
were different for customers in one rate classification than for customers in a different
rate classification. No evidence supported the conclusion that practice was unjustly
discriminatory. Such discretion was expressly placed in CPP’s hands by City Council’s
ordinance language that adjustments “may be applied to rate schedules”, CCO
523.17(a). Uniformity in applying adjustments was not mandated by the ordinances. As
a result, this Court is left with enforcing the existing ordinance language.

17

 The Court has reviewed all of the admissible Civ.R. 56(C) evidence submitted by
the parties, and determines that (a) CPP met its burden to affirmatively demonstrate
that Plaintiffs do not have evidence to support their claims that CPP’s rates were
unjustly discriminatory and (b) Plaintiffs failed to contradict that evidence by its
evidentiary submissions. Based on the undisputed evidence and even though
construing it most strongly in favor of the non-moving party, reasonable minds could to
but one conclusion and that is that CPP is entitled to summary judgment on the issue of
unjust discrimination in rates.
III.

CPP’S DEFENSES TO THE BREACH OF CONTRACT CLAIM
CPP raises two defenses on Plaintiffs’ breach of contract claim and urges they serve

as an independent basis to grant summary judgment.
III.A.

Plaintiffs suffered no damages
CPP claims the evidence is undisputed that Plaintiffs have suffered no damages

and Plaintiffs can produce no evidence of damages. The Court agrees. CPP’s use of
EEA increases to customer billings did not cause damage to Plaintiffs. Plaintiffs paid
the amounts properly determined and imposed by CPP under CCO 523.17 in keeping
with their electric services agreement. CPP presented evidence of its use of income
from customer billing and the necessary dollars that EEA charges supplied. Plaintiffs
presented no evidence of any large cash surplus or other fund that would represent
CPP hoarding dollars beyond their need for operating funds. CPP could have raised
the same income dollars by increasing base rates and Plaintiffs agree to that fact. That
admission shows CPP customers have suffered no damages. Business income to CPP
was used for business expenses of CPP.

18

 Statute of Limitations on Contract Claim

III.B.

Whether the statute of limitations has expired on a given claim is generally a
question of fact for the trier of fact. Here the material facts are undisputed and Ohio law
permits of several contradictory conclusions. Having reviewed the parties’ arguments
and legal authority, the Court concludes electricity in the context of this action is a
“good” under Ohio law and subject to a four-year period of limitations under R.C.
1302.98.
IV.

CONCLUSION AS TO BREACH OF CONTRACT CLAIM
The Court has reviewed all of the admissible Civ.R. 56(C) evidence submitted by

the parties and determines that CPP met its burden to affirmatively demonstrate that
Plaintiffs do not have evidence to support their claim that CPP acted in breach of its
contract with its customers and Plaintiffs failed to contradict that conclusion by
producing evidence of acts in violation of the electric services agreement. Based upon
the undisputed material facts and after construing the evidence most strongly in favor of
Plaintiffs, the Court concludes that reasonable minds could come to but one conclusion
and that is that CPP is entitled to judgment as a matter of law on Plaintiffs’ claim for
breach of contract. Defendant’s motion for summary judgment is granted on this claim
and Plaintiffs’ motion for partial summary judgment is denied.
V.

PLAINTIFFS’ FRAUD CLAIM
CPP moves for summary judgment upon Plaintiff’s fraud claim. A claim of

common law fraud requires proof of the following factual elements:
“(a) a representation or, where there is a duty to disclose, concealment of a fact,
(b) which is material to the transaction at hand, (c) made falsely, with knowledge
of its falsity, or with such utter disregard and recklessness as to whether it is true
or false that knowledge may be inferred, (d) with the intent of misleading another
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 into relying upon it, (e) justifiable reliance upon the representation or
concealment, and (f) a resulting injury proximately caused by the reliance."

Cohen v. Lamko, Inc., 10 Ohio St. 3d 167, 169 (1984) (quoting from Friedland v.
Lipman, 68 Ohio App. 2d 255 (8th Dist. 1980)).
In briefs opposing summary judgment, Plaintiffs state they do not seek money
damages under their fraud claim. No language of their Fourth Consolidated Amended
Complaint makes that clear, so the Court analyzes the fraud count with and without
money damages.
The Court has reviewed all of the Civ.R. 56(C) evidence submitted by the parties,
and determines that CPP met its burden to demonstrate affirmatively that Plaintiffs do
not have evidence to support their fraud claim, and that Plaintiffs failed to contradict that
evidence with proof of the contrary as required to avoid summary judgment. Separate
analyses produce the same conclusion.
To the extent money damages are sought here, CPP is entitled to sovereign
immunity under R.C. Chapter 2744 and Plaintiffs produced no evidence to negate the
presumption of immunity and permit a fraud claim against the defendant municipality
and its utility. Immunity would not protect CPP under claims for other recovery based
on fraud, as discussed below.
In addition, Plaintiffs did not produce evidence that there is an independent basis
for their fraud claim.
“Generally, the existence of a contract action * * * excludes the opportunity to
present the same case as a tort claim. A tort claim based upon the same actions
as those upon which a claim of contract breach is based will exist independently
of the contract action only if the breaching party also breaches a duty owed
separately from that created by the contract, that is, a duty owed even if no
contract existed.”

20

 Textron Fin. Corp. v. Nationwide Mut. Ins. Co., 115 Ohio App. 3d 137, 151 (8th Dist.
1995); see also,

Mohan Jain v. Omni Publishing, Inc., 8th Dist. Cuyahoga No. 92121,

2009-0hio-5221,27. The Court concludes that Plaintiffs’ fraud claim is based upon
the same actions as those alleged in the breach of contract.
Based on the foregoing the Court grants CPP’s summary judgment motion as a
matter of law on Plaintiffs’ claim for money damages based on fraud. Based upon the
undisputed material facts and after construing the evidence most strongly in favor of
Plaintiffs, the Court concludes that reasonable minds could come to but one conclusion
and that is that CPP is entitled to judgment as a matter of law on Plaintiffs’ fraud claim
seeking money damages.
Next, the Court addresses Plaintiffs’ claim that CPP’s fraudulent billings warrant
remedies including restitution, injunctive relief and declaratory judgment. The fraudulent
billings Plaintiffs describe include imbedding EEA amounts inside a billing’s line item for
EAC charges as well as what Plaintiffs term unorthodox and unsupported practices in
arriving at EEA charges and failing to reconcile them with costs. CPP produced
evidence that it does not have a duty to provide to its customers line-item billing
statements that separate EEA charges from EAC charges or from charges based on
base rates. CPP produced evidence of its authority under the ordinances to implement
EEA charges and the Court has determined that CPP did not violate ordinance
provisions with EEA charges. Plaintiffs’ only evidence suggests there may be a best
practice that CPP should follow; however, best practices do not create an affirmative
duty. Moreover, CPP produced evidence that Plaintiffs have not been injured by relying

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 on CPPs billing statements that do not separate EAC and EEA adjustment charges, and
Plaintiffs’ evidence did not contradict this conclusion.
Based on the foregoing the Court grants CPP’s summary judgment motion as a
matter of law on Plaintiffs’ claim for fraud as a justification for equitable and other relief
as discussed below. Based upon the undisputed material facts and after construing the
evidence most strongly in favor of Plaintiffs, the Court concludes that reasonable minds
could come to but one conclusion and that is that CPP is entitled to judgment as a
matter of law on Plaintiffs’ fraud claim.
IV.

RESTITUTION, INJUNCTIVE RELIEF, AND DECLARATORY JUDGMENT
CLAIMS
CPP moves for summary judgment in its favor upon the Plaintiffs' three

remaining causes of action. The conclusions under the summary judgment proceedings
for the breach of contract claim apply here with equal force. Those conclusions
preclude Plaintiffs from pursuing these three causes of action.
The parties have litigated this action under the claim of breach of contract and
agreed to the existence of a contract between the plaintiff consumers and defendant
utility. If viewed as one based on unjust enrichment, Plaintiffs’ claim for restitution must
fail. No such claim can arise given the existence of the parties’ undisputed contractual
relationship. If viewed as a claim for equitable relief, CPP argues that recovery of such
amounts from CPP would be money coming from the Plaintiff class and other
customers. CPP is not a private corporation with retained earnings. Based on the
undisputed evidence, CPP has no claim on the City’s General Fund and the City has no
legal obligation to disgorge a judgment against CPP from the General Fund. Such a

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t

 recovery would require CPP to raise money to pay the restitution from their customers,
that is, the Plaintiff class.
In addition, such a claim must fail because the undisputed evidence that shows
that CPP’s implementation and use of EEA increases to customer billings was lawful
and permitted by ordinance and in any event, did not cause damage to Plaintiffs. CPP’s
conduct was not fraudulent. Plaintiffs paid the amounts properly determined and
imposed by CPP under CCO 523.17 in keeping with their electric services agreement.
Based on the undisputed evidence, judgment must be granted to CPP upon Plaintiffs’
request for restitution because after construing the evidence most strongly in favor of
Plaintiffs, the Court concludes that reasonable minds could come to but one conclusion
and that is that CPP is entitled to judgment as a matter of law on Plaintiffs’ restitution
claim.
The Plaintiffs’ request for declaratory judgment at paragraph 52 of the complaint
seeks a declaration that
“Plaintiffs’...bills were improperly calculated because they included improper
Environmental Adjustments, or were based upon unaccounted-for costs
fabricated by CPP as unrecovered Environmental Adjustment costs, and that all
accounts must be re-calculated.”
In the above analysis, the Court found that Plaintiffs’ bills were not charged improperly
due to improper Environmental Adjustments. Customer accounts need not be recalculated. Based on the undisputed evidence, judgment must be granted to CPP upon
Plaintiffs’ request for this declaratory judgment.
The Plaintiffs’ claim for injunctive relief seeks a permanent injunction
“to prevent CPP from from billing customers for an Environmental Adjustment
without expressly disclosing the charge on customer’s bills and without
correlating the amounts charged to qualified expenses incurred.”
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 As above analyzed, Plaintiffs are not entitled to prevail on the merits of their contract
claim and therefore Plaintiffs have not demonstrated irreparable harm or lack of a
remedy at law. They are not entitled to injunctive relief and judgment must be entered
in summary fashion in favor of CPP.
CPP is entitled to summary judgment on Plaintiffs’ restitution, injunctive relief and
declaratory judgment claims based on the undisputed material facts and the Court’s
analysis that although construing the evidence most strongly in favor of Plaintiffs,
reasonable minds could come to but one conclusion and that is that CPP is entitled to
judgment as a matter of law on these of Plaintiffs’ claims.
VI.

CONCLUSION
For all the forgoing reasons, the Court grants Defendant City of Cleveland’s

motion for summary judgment in all respects. Judgment is entered in the City’s favor
and against Plaintiffs on all counts of Plaintiffs’ Fourth Consolidated Amended
Complaint. Accordingly, the Court denies Plaintiffs’ request for restitution, declaratory,
and injunctive relief. Plaintiffs’ partial summary judgment motion is denied. While the
material facts are not in dispute, the Court cannot conclude that on those facts
reasonable minds would come to the conclusion that plaintiffs are entitled to judgment
as a matter of law on their breach of contract claim, even though the undisputed facts
were most strongly construed in favor of Plaintiffs. Costs are assessed to Plaintiffs.
This is a final judgment under R.C. 2505.02.
As required by Civ.R.23, the Court finds class members bound by this judgment
to be those class members described by this Court’s 8/2/17 order but excluding
therefrom the 590 persons identified in the Trammel affidavit filed 5/25/18 who timely
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 opted-out of the class after receiving the class notice and also excluding therefrom the
Court and its staff, all counsel of record, and employees of the City of Cleveland and the
immediate family members of the latter three (3) groups.
IT IS SO ORDERED.
PURSUANT TO CIV.R. 58(B) THE CLERK OF COURT SHALL SERVE A COPY OF
THE FOREGOING JOURNAL ENTRY AND OPINION ON ALL COUNSEL OF
RECORD AT THE ADDRESS LISTED ON THE COURT DOCKET.
DATED:

Janet R. EMnside, Judge

A copy of this Judgment Entry was sent by email to counsel this 7 day of January, 2019.

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