Scot Lad Foods, Inc. v. Secretary of State

Holmes, J. First, we will address the issue of whether the Court of Common Pleas had jurisdiction over the Secretary of State and the insurance company which wrote his surety bond. The plaintiffs’ complaint relative to the jurisdiction of the Court of Common Pleas over the civil action filed against the Secretary of State was based upon the alleged negligent performance by the Secretary of State in his official capacity of the statutory duty imposed upon him by R. C. 1309.40(H).2 As stated above, the complainant also named Buckeye Union as a party defendant, seeking to recover on the surety bond of the Secretary of State. R. C. 1309.40(H), in pertinent part, provides that: “Upon request of any person, the filing officer shall issue his certificate showing whether there is on file on the date and hour stated therein, any presently effective financing statement* * *.” The Secretary of State, under R. C. 1309.38, is a “filing officer” and as such must examine the indices and files of his office, and issue a written certificate as to the existence of any presently effective financing statements naming a particular debtor. Plaintiffs alleged in their complaint that the failure of the Secretary of State to properly report the existence of a financing statement naming Curry Foods as debtor was a breach of a ministerial duty mandated by law upon the Secretary of State, which breach resulted in damages in the amount of $65,517.36. It first must be determined whether the act as performed here, or more specifically the nonperformance of the act of — 6 — proper record search, was indeed an actionable wrong, either against the individual officer of the state of Ohio, or against the state. If an actionable wrong is found to exist, the question becomes whether either by virtue of the common law or by statute a forum has been provided within which the cause may be brought. * It is clear that the act mandated of the Secretary of State here does not require an exercise by that officer of any degree of discretion or judgment, nor does it require the exercise of authority of a quasi-judicial nature. It may be reasonably concluded that the acts mandated by R. C. 1309.40(H) are ministerial in nature, and that the nonperformance or misperformance of such acts can give rise to a cause of action in negligence against the state officer, subject, however, to any applicable common law defenses. In like manner, the negligent performance by one of the state’s officers of his ministerial duty may have, even prior to the Court of Claims Act, technically subjected the state to liability even though not actionable by virtue of the doctrine of sovereign immunity. The state, while it is a sovereignty, is also a corporation, and as such is capable of wrongdoing. For these wrongs the state is liable as are any of its citizens. However, the liability and the remedy are not one and the same, inasmuch as the state is not subject to suit without its own consent. Overholser v. National Home (1903), 68 Ohio St. 236; Bd. of Education v. Volk (1905), 72 Ohio St. 469; 49 Ohio Jurisprudence 2d, 679, State of Ohio, Section 26. It is this doctrine of sovereign immunity which has historically prevented the bringing of such actions against the state for wrongs alleged to have been occasioned by its officers, agents, or servants in the performance of their ministerial duties. Further, it has been held repeatedly that Section 16 of Article I of the Ohio Constitution (suits against the state) is not self-executing. Palumbo v. Indus. Comm. (1942), 140 Ohio St. 54; Raudabaugh v. State (1917), 96 Ohio St. 513; Wolf v. Ohio State Univ. Hospital (1959), 170 Ohio St. 49. The Palumbo, Raudabaugh and Wolf case law, to the effect that the state cannot be sued without its consent, was reviewed and reaffirmed in Krause v. State (1972), 31 Ohio St. 2d 132. — 7 — There is an additional rule of law that has threaded its way through all the major cases in this area of sovereign immunity. Basically, such rule is that, when a civil action was brought against a state officer, which action was in essence one against the state, the latter could effectively raise the defense of sovereign immunity on the basis that the state was the real party in interest. See Wolf v. Ohio State Univ. Hospital, supra; State, ex rel. Wilson, v. Preston (1962), 173 Ohio St. 203; and Thacker v. Bd. of Trustees of Ohio State Univ. (1973), 35 Ohio St. 2d 49. See, also, 72 American Jurisprudence 2d, States, Section 110. This rule was set forth in State, ex rel. Williams, v. Glander (1947), 148 Ohio St. 188, wherein the Court of Appeals dismissed an original action in mandamus against the Tax Commissioner, which action sought the levy and assessment of personal property taxes on all property used by the Department of Liquor Control. The court, in Glander, supra, at page 193, quoted from 37 Ohio Jurisprudence, 268, Section 44, as follows: “ ‘In accordance with the general rule that the state cannot be sued without its consent, suits against officers of the state, as representing the state in action and liability where the state, though not a party to the record, is the real party against which relief is sought and where a judgment for the plaintiff, though nominally against the defendant as an individual, could operate to control the action of the state or subject it to liability, are treated as suits against the state.’ ” The question we must determine is whether this action brought in the Court of Common Pleas was, in essence, one against the state of Ohio. As noted above, this civil action was one brought against the Secretary of State, seeking damages for alleged negligence in the performance of his ministerial duties. The complainant also named Buckeye Union as a defendant, seeking to recover upon the official bond of the Secretary of State. The state of Ohio was not named in such action as a party defendant, nor are any state funds sought to be recovered in the action. Further, the action in the Court of Common Pleas did not seek to control state action, nor did it seek to subject the state to liability. Based upon all the above, — 8 — we construe that action not to have been one primarily against the state of Ohio. Generally, as to the civil liability of a public officer for acts and functions carried out while in office, it is well settled that a public officer acting within the scope of his authority is not liable individually, in the absence of bad faith or a corrupt motive, for failure properly to perform a duty involving judgment and discretion. Scovil v. Geddings (1836), 7 Ohio pt. 2, 211; Jeffries v. Ankeny (1842), 11 Ohio 372; Ramsey v. Riley (1844), 13 Ohio 157; Stewart v. Southard (1848), 17 Ohio 402; Gregory v. Small (1883), 39 Ohio St. 346; Thomas v. Wilton (1884), 40 Ohio St. 516; State v. Bair (1905), 71 Ohio St. 410. See, also, 44 Ohio Jurisprudence 2d, 570, Public Officers, Section 78. However, it has also generally been the common law in Ohio that the rule that officers may not be held accountable for errors of judgment does not apply to ministerial acts except as such may be of a quasi-judicial nature. Prior to any enactment to the contrary, a public officer could have been liable to an individual for damages for a violation or neglect of the officer’s duty. Commrs. of Brown County v. Butt (1826), 2 Ohio 348; Western College v. Cleveland (1861), 12 Ohio St. 375; Kepler v. Barker (1862), 13 Ohio St. 177; Graham v. Newton (1843), 12 Ohio 210. See, also, Annotations, 94 A.L.R. 1303, and 153 A.L.R. 109. Historically, suits were brought in the Court of Common Pleas, the court of general jurisdiction, against public officers in their individual capacity for the nonfeasance, misfeasance or malfeasance of their ministerial acts, and for recovery upon an alleged breach of their official bond. Ohio, ex rel. Story, v. Jennings (1854), 4 Ohio St. 418; State, ex rel. Story, v. Jennings (1862), 14 Ohio St. 73, action against constable; United States Fid. & Guar. Co. v. Samuels (1927), 116 Ohio St. 586, action against police officer; American Guar. Co. v. McNiece (1924), 111 Ohio St. 532, action against mayor, chief of police, and safety director; Drolesbaugh v. Hill (1901), 64 Ohio St. 257, action against city marshal; Peabody v. Ohio, ex rel. Hydorn (1854), 4 Ohio St. 387, action against justice of the peace; Greenville v. Anderson (1898), 58 Ohio St. 463, action against city clerk; State, ex rel. Commrs. of Knox Co., v. Blake (1853), 2 Ohio St. 147, action against county auditor; — 9 — Conwell v. Vorhees (1844), 13 Ohio 523, action against public mail carrier; Maddox v. Astro Investments (1975), 45 Ohio App. 2d 203, clerk of common pleas court; Dalton v. Hysell (1978), 56 Ohio App. 2d 109, clerk of municipal court. Although there is sparsity of case law in point, we see no compelling reason why such actions, in the absence of any applicable statutory immunity, could not have been brought in like manner in the Court of Common Pleas against a state public officer in his official capacity and against his surety company upon the bond where the allegation of the complaint was that the officer misperformed a ministerial duty. Again, as stated above, all the common law defenses would have been available to the officer. To complete the composite picture of the issues presented here, we must now refer to another link in the chain of the law of civil immunity of public officers and employees, which has recently been added by the General Assembly. The immunity of state officers and employees has, by the enactment of R. C. 9.86,3 in Am. Sub. S. B. No. 76, effective March 13,1980, been broadened to cover any performance of their duties, other than the operation of a motor vehicle, unless the actions are found to be “manifestly outside the scope of*** [their] employment or official responsibilities, or unless the officer or employee acted with malicious purpose, in bad faith, or in wanton or reckless manner.” It is to be noted that R. C. 9.86 specifically states that, “This section does not affect the liability of the state in an action filed against the state in the court of claims pursuant to Chapter 2743 of the Revised Code.” — 10 — Thus, civil actions against state officials alleging damages for the misperformance of their ministerial duties may no longer be brought by virtue of this specific action taken by the General Assembly. The common law in this respect has been amended by legislative enactment. We shall now apply the applicable law to the matter before us, recognizing that the original action was brought here in the Court of Common Pleas on October 12,1976, and that the effective date of R. C. 9.86 was subsequent thereto, i.e., March 13, 1980. R. C. 1309.38(A)(3) provides the proper places to file a security interest, if subdivisions (A)(1) and (A)(2) of the statute are inapplicable, as follows: “***in the office of the secretary of state and, in addition, if the debtor has a place of business in only one county of this state, also in the office of the county recorder of such county, or if the debtor has no place of business in this state, but resides in the state, also in the office of the county recorder of the county in which he resides.” Thus, both the Secretary of State and the County Recorder are filing officers under R. C. Chapter 1309. R. C. 1309.40(H) affirmatively requires a filing officer, whether County Recorder or the Secretary of State, to transmit copies of his file search to requesting parties, as follows: “Upon request of any person, the filing officer shall issue his certificate showing whether there is on file on the date and hour stated therein, any presently effective financing statement naming a particular debtor, owner, lessee, and any statement of assignment thereof and if there is, giving the date and hour of filing of each such statement and the names and addresses of each secured party therein. The uniform fee for such a certificate shall be two dollars plus one dollar for each financing statement and for each statement of assignment reported therein. Upon request the filing officer shall furnish a copy of any filed financing statement or statement of assignment for a uniform fee of one dollar per page.” Failure to comply with the above provision could, if appropriate proof is offered, render the filing officer and his surety liable to the injured party for damages resulting from his failure to list all requested financing statements. — 11 — R. C. 1309.40(H) does not require or permit the Secretary of State to give his interpretation or opinion. There is no discretion involved in the required act. As such, his duties are purely ministerial, and it follows that a filing officer who failed to give a complete certificate as required by R. C. 1309.40(H) would, prior to the enactment of R. C. 9.86, and in the absence of well asserted defenses, have been accountable for damages to an injured party. Since the bond required by R. C. 111.02 is conditioned upon the faithful discharge of the duties of the office of the Secretary of State, the surety would also have been held accountable for such misperformance in office. As stated above, actions alleging negligence in the performance of official duties have historically been brought against public officials in the Court of Common Pleas, the court of general jurisdiction. In like manner, actions against bonding companies upon the official bonds of public officials have also been brought in the Court of Common Pleas. Neither the initial enactment of R. C. Chapter 2743, nor the amendments in force at the time of these matters, obviated this method of asserting these causes of action against the individual officer, or against the bonding company. The specific section of law which, on a limited basis, has waived the state’s immunity and established the Court of Claims on January 1, 1975, is R. C. 2743.02(A). R. C. 2743.02(A),4 as amended effective February 7, 1978, stated as follows: — 12 — “The state hereby waives, in exchange for the complainant’s waiver of his cause of action against state officers or employees, its immunity from liability and consents to be sued, and have its.liability determined, in the court of claims created in this chapter in accordance with the same rules of law applicable to suits between private parties, subject to the limitations set forth in this chapter. To the extent that the state has previously consented to be sued, this chapter has no applicability. “Except in the case of a civil action filed by the state, filing a civil action in the court of claims results in a complete waiver of any cause of action, based on the same act or omission, which the filing party has against any state officer or employee. The waiver shall be void if the court determines that the act or omission was not within the scope of the officer’s or employee’s office or employment.” We hold that the enactment of the Court of Claims Act as amended at the time this action was originally filed did not change the general law that the Court of Common Pleas was an appropriate forum in which to being a civil action against a public officer and to seek a recovery on his official bond alleging the improper performance of his official duties. However, insofar as the state of Ohio could formerly have raised the defense of sovereign immunity in any action brought against it, or nominally against state officers or agents in their official capacities, the Court of Common Pleas was not the appropriate forum for such action. The Court of Claims was, and still is, the appropriate forum. Accordingly, the Court of Appeals erred in affirming the trial court’s dismissal of the action against the Secretary of State. Although the Court of Appeals based its determination upon other grounds in finding that the action could proceed against the bonding company, we must affirm that portion of — 13 — its judgment in the appeal of the case from the common pleas court. Because we hold that the Court of Common Pleas had jurisdiction over the Secretary of State and his bonding company, we also hold that the Court of Claims was correct in dismissing the action filed therein. R. C. 2743.16 provides, in part, that an action against the state in the Court of Claims “ * * * shall be commenced no later than two years after the date of accrual of the cause of action***.” Here, the action was commenced in the Court of Claims nearly four years after the cause of action accrued. However, Scot Lad argues, and the Court of Appeals held, that the saving statute, R. C. 2305.19, extends the time limitation in R. C. 2743.16. R. C. 2305.19 provides, in part, that when there has been a dismissal, “otherwise than upon the merits,” the plaintiff may initiate a new action within-one year of the dismissal. Since we have determined that the claims against the Secretary of State and his bonding company were improperly dismissed in the Court of Common Pleas, there is no dismissal otherwise than upon the merits occasioning a need to apply R. C. 2305.19. Therefore, we need not consider whether R. C. 2305.19 can ever be applied to extend the time for actions filed in the Court of Claims, nor do we need decide whether the bonding company could have been joined as a defendant in the Court of Claims. Thus, as to both cases herein, we affirm in part and reverse in part, on different grounds, the judgment of the Court of Appeals. The action within the Court of Claims, case No. 80-380, is hereby dismissed, and the action originating in the Court of Common Pleas of Franklin County, case No. 80-629, is hereby remanded to such court for further proceedings according to law. Judgment accordingly. Celebrezze, C. J., W. Brown, Sweeney, Locher and C. Brown, JJ., concur. Rutherford, J., concurring in judgment in part. Rutherford, J., of the Fifth Appellate District, sitting for P. Brown, J. Footnotes [2] Effective January 1, 1979, R. C. 1309.40(G) became R. C. 1309.40(H). [3] R. C. 9.86 reads in its entirety: “Except for civil actions that arise out of the operation of a motor vehicle and civil actions in which the state is the plaintiff, no officer or employee shall be liable in any civil action that arises under the law of this state for damage or injury caused in the performance of his duties, unless the officer’s or employee’s actions were manifestly outside the scope of his employment or official responsibilities, or unless the officer or employee acted with malicious purpose, in bad faith, or in a wanton or reckless manner. “This section does not eliminate, limit, or reduce any immunity from civil liability that is conferred upon an officer or employee by any other provision of the Revised Code or by case law. This section does not affect the liability of the state in an action filed against the state in the court of claims pursuant to Chapter 2743. of the Revised Code.” [4] R. C. 2743.02(A) was substantially revised by Am. Sub. S. B. No. 76, effective March 13, 1980. It now reads: “(1) The state hereby waives its immunity from liability and consents to be sued, and have its liability determined, in the court of claims created in this chapter in accordance with the same rules of law applicable to suits between private parties, except that the determination of liability is subject to the limitations set forth in this chapter and except as provided in division (A)(2) of this section. To the extent that the state has previously consented to be sued, this chapter has no applicability. “Except in the case of a civil action filed by the state, filing a civil action in the court of claims results in a complete waiver of any cause of action, based on the same act or omission, which the filing party has against any state officer or employee. The waiver shall be void if the court determines that the act or omission was manifestly outside the scope of the officer’s or employee’s office or employment or that the officer or employee acted with malicious purpose, in bad faith, or in a wanton or reckless manner. “(2) In any circumstance in which a claimant proves in the court of claims that an — 12 — officer or employee, as defined in division (A) of section 109.36 of the Revised Code, would have personal liability for his acts or omissions but for the fact that the officer or employee has personal immunity under section 9.86 of the Revised Code, the state shall be held liable in the court of claims in any action that is timely filed pursuant to section 2743.16 of the Revised Code and that is based upon the acts or omissions.” Like R. C. 9.86, the revised version of R. C. 2743.02(A) is not applicable to this dispute since it became effective subsequent to the filing of the action.