Summary
holding that savings statute does not apply when parties in original action differ from those in new action
Summary of this case from Smallwood v. Cent. Peninsula Gen. Hosp.Opinion
No. 81-357
Decided March 3, 1982.
Court of Claims — Recovery of money wrongfully withheld — Limitation of actions — Saving statute — Applicability — Action accrues, when.
1. R.C. 2305.19, the one-year saving statute, does not apply when the parties and relief sought in the new action are different from those in the original action.
2. A cause of action to recover money wrongfully withheld from payments due accrues when the money is actually withheld, not when an entry on an account is made in anticipation of the withholding.
APPEAL from the Court of Appeals for Franklin County.
This case arises out of a dispute over the amount paid to appellee, Children's Hospital, for services rendered to Medicaid patients during the period of July 1, 1967 to December 31, 1969. Appellant, the Ohio Department of Public Welfare, upon completing an audit in 1972, determined it had made overpayments to appellee for services rendered by appellee during the above-stated period. Appellee's appeal of this audit was administratively pursued with appellant until August 23, 1976, the date of appellant's final decision on the matter, when appellant demanded payment of $169,866, the amount of the alleged overpayments. On September 27, 1976, appellant notified appellee the account was being turned over to the Attorney General of Ohio for collection. Appellee filed suit in the United States District Court for the Southern District of Ohio on July 6, 1977, after receiving notice that the Attorney General recommended the overpayments be withheld from unspecified payments owing to appellee. Appellee sued to enjoin the threatened withholding of the $169,866 from amounts owing to appellee for an unrelated period. In this action in federal court for injunctive and declaratory relief, appellee joined as defendants the Governor of Ohio, the Director of the Ohio Department of Public Welfare and the Secretary of the United States Department of Health, Education and Welfare.
While the suit in federal court was pending, appellant adjusted its books, on September 20, 1977, by making an entry indicating part of the overpayments would be deducted from the next payment made to appellee. On October 28, 1977, appellant made a payment to appellee from which it withheld a portion of the overpayments.
On September 21, 1977, the injunctive relief sought by appellee in federal court was denied. The suit in federal court for equitable relief was subsequently dismissed for lack of jurisdiction on September 25, 1979. On October 10, 1979, appellee commenced suit in the Court of Claims of Ohio, naming as the only defendant the Ohio Department of Public Welfare and praying for money damages in the amount of $403,193.78. The Court of Claims, on January 25, 1980, rendered summary judgment in favor of appellant, holding (1) appellee's complaint was barred by the two-year statute of limitations for actions filed in the Court of Claims, and (2) the one-year saving statute was inapplicable to actions filed in the Court of Claims. The Court of Appeals reversed, finding, inter alia, the saving statute was properly invoked in this case and a portion of appellee's claim accrued within two years of filing in the Court of Claims, irrespective of the saving statute.
Pursuant to the United States Supreme Court decision in Edelman v. Jordan (1974), 415 U.S. 651, a federal district court may entertain an action against a state for injunctive or declaratory relief, but a suit in federal court against a state for money damages is impermissible by virtue of the Eleventh Amendment to the United States Constitution. Thus, while the federal district court had jurisdiction over the suit for injunctive relief to enjoin the withholding, it lost jurisdiction when the overpayments were actually withheld because the relief sought was no longer equitable in nature.
R.C. 2743.16 provides in relevant part:
"Civil actions against the state permitted by sections 2743.01 to 2743.20 of the Revised Code [Court of Claims Act, State Liability] shall be commenced no later than two years after the date of accrual of the cause of action * * *."
The one-year saving statute, R.C. 2305.19 provides in relevant part:
"In an action commenced, or attempted to be commenced, if in due time a judgment for the plaintiff is reversed, or if the plaintiff fails otherwise than upon the merits, and the time limited for the commencement of such action at the date of reversal or failure has expired, the plaintiff, or, if he dies and the cause of action survives, his representatives may commence a new action within one year after such date. * * *"
This cause is now before this court pursuant to the allowance of a motion to certify the record.
Messrs. Vorys, Sater, Seymour Pease, Mr. Robert E. Leach and Mr. James H. Hedden, for appellee.
Mr. William J. Brown, attorney general, and Mr. Steven L. Gardner, for appellant.
The judgment of the Court of Appeals is reversed in part and affirmed in part for the reasons set forth herein.
Appellant contends the savings statute was not properly invoked in this case. We agree. The savings statute applies when the original suit and the new action are substantially the same. Kittredge v. Miller (1896), 12 C.C. 128, 131, affirmed without opinion 56 Ohio St. 779; Burgoyne v. Moore (1890), 12 C.C. 31, affirmed without opinion 51 Ohio St. 626. The actions are not substantially the same, however, when the parties in the original action and those in the new action are different. Larwill v. Burke (1900), 19 C.C. 449, affirmed without opinion 66 Ohio St. 683; National Fire Ins. Co. v. Joslyn Mfg. Co. (1971), 25 Ohio App.2d 13, 15.
In the case sub judice, not only are the parties in the new action before the Court of Claims different from those in the original federal court suit, but the relief sought is also different. Appellee's original suit before the federal district court named the Governor of Ohio, the Director of the Ohio Department of Public Welfare and the Secretary of the United States Department of Health, Education and Welfare as defendants and sought declaratory and injunctive relief. The new action before the Court of Claims named the Ohio Department of Public Welfare as the sole defendant and demanded money damages. To further illustrate the difference between the two actions, it is noteworthy that appellee could not have brought its suit for money damages in the federal court since federal courts are forbidden by the Eleventh Amendment to the United States Constitution from hearing a suit for monetary relief against a state without its consent. See Edelman v. Jordan (1974), 415 U.S. 651, 663. We hold the saving statute inapplicable in a case where the parties and relief sought in the new action are different from those in the original action.
In view of our disposition of this issue, we find it unnecessary to address appellant's argument that the Court of Appeals erred in holding the saving statute applicable to actions in the Court of Claims.
A portion of appellee's claim, however, accrued within the two-year limitations period, regardless of the saving statute. Appellee's cause of action for the recovery of $169,866, which it alleges appellant wrongfully withheld, accrued on October 28, 1977, the date appellant made a payment to appellee from which it withheld part of the alleged overpayment. We affirm the Court of Appeals holding that this portion of appellee's claim was timely filed on October 10, 1979 in the Court of Claims.
Appellant argues the claim for recovery of amounts wrongfully withheld accrued on September 20, 1977, when appellant made an entry in its books indicating a portion of the overpayment would be withheld from the next payment made to appellee. Ordinarily, a cause of action does not accrue until actual damage occurs; when one's conduct becomes presently injurious, the statute of limitations begins to run. State, ex rel. Teamsters Local Union 377, v. Youngstown (1977), 50 Ohio St.2d 200. The alleged wrongful act of which appellee complains is the withholding of money from payments made to appellee and not the entry made in appellant's books of account on September 20, 1977, which produced no immediate injury or damage to appellee. Appellee's cause of action for recovery of amounts wrongfully withheld, therefore, did not accrue until the money was actually withheld, viz., October 28, 1977. Appellee's filing of this cause of action on October 10, 1979 was well within the two-year statute of limitations.
See, also, Bd. of Edn. v. Civil Rights Comm. (1981), 66 Ohio St.2d 252, where, in an Ohio Civil Rights case, we held the cause of action for a charge of sexual discrimination in the nonrenewal of public school teachers' limited contracts accrues not when the teachers are informed of their contract non-renewals, but when the teaching contracts actually expire.
Insofar as it is consistent with this opinion, the judgment of the Court of Appeals is affirmed. The portion of the Court of Appeals' judgment which held the saving statute applicable in this case because the actions were substantially the same is reversed.
Judgment accordingly.
W. BROWN, SWEENEY, LOCHER and C. BROWN, JJ., concur.
CELEBREZZE, C.J., and HOLMES, J., concur in the judgment.
I concur in the judgment. However, I do so on the basis of my belief that R.C. 2305.19 does not apply to actions brought in the Court of Claims. Rather, these are controlled solely by R.C. 2743.16.