The Supreme Court of Ohio today ruled that an appellate court reviewing a declaratory judgment matter should apply a deferential “abuse of discretion” standard in reviewing the trial court’s determination of whether the case is appropriate for declaratory judgment, but should apply a non-deferential “de novo” standard in reviewing the trial court’s determinations of legal issues in the case.

Applying that analysis to a Highland County case, the court voted 7-0 to affirm the Fourth District Court of Appeals’ application of a “de novo” standard when it reviewed a trial court’s ruling in a declaratory judgment action interpreting the language of a trust agreement.

Writing for the court, Justice Paul E. Pfeifer indicated that today’s ruling offered the justices an opportunity to clarify a 2007 Supreme Court decision, Mid-American Fire & Causalty v. Heasley, that has been interpreted by some of the state’s appellate courts as requiring them to apply an “abuse of discretion” standard in reviewing all issues in declaratory judgment cases.

Justice Pfeifer explained that, while R.C. Chapter 2721 authorizes Ohio’s common pleas courts to issue declaratory judgments, it limits that authority to cases in which there is an actual, justiciable dispute between the parties. He wrote: “(I)n keeping with the long-standing tradition that a court does not render advisory opinions, (the laws) allow the filing of a declaratory judgment only to decide ‘an actual controversy, the resolution of which will confer certain rights or status upon the litigants.’ ... Not every conceivable controversy is an actual one. As the First District aptly noted (in League for Preservation of Civil Rights v. Cincinnati, 1940), in order for a justiciable question to exist, ‘[t]he danger or dilemma of the plaintiff must be present, not contingent on the happening of hypothetical future events ... and the threat to his position must be actual and genuine and not merely possible or remote.’”

While the syllabus of the Supreme Court’s decision in Mid-American held that “(d)ismissal of a declaratory judgment action is reviewed under an abuse-of-discretion standard,”  Justice Pfeifer noted that the only issue before the court in Mid-American was whether the dispute between the parties met the threshold test of presenting a justiciable question.

“(T)he procedural posture of Mid-American, (and) its syllabus language ... make clear that the abuse-of-discretion standard applies to dismissals of declaratory judgment actions as not justiciable; the case does not suggest that legal issues in a declaratory judgment action should be reviewed by an abuse-of-discretion standard,” wrote Justice Pfeifer. “Still, some courts have interpreted Mid-American as establishing an abuse-of-discretion standard to all aspects of a declaratory judgment action. ... Today, we reiterate that the abuse-of-discretion standard applies to the review of a trial court’s holding regarding justiciability; once a trial court determines that a matter is appropriate for declaratory judgment, its holdings regarding questions of law are reviewed on a de novo basis.”

“(T)he de novo standard of review is the proper standard for appellate review of purely legal issues that must be resolved after the trial court has decided that a complaint for declaratory judgment presents a justiciable question under R.C. Chapter 2721. Accordingly, we affirm the judgment of the Fourth District Court of Appeals.”

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2010-2180.  Arnott v. Arnott, Slip Opinion No. 2012-Ohio-3208.
Highland App. No. 09CA25, 190 Ohio App.3d 493, 2010-Ohio-5392.  Certified question answered and judgment affirmed.
O’Connor, C.J., and Pfeifer, Lundberg Stratton, O’Donnell, Lanzinger, Cupp, and McGee Brown, JJ., concur.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2012/2012-Ohio-3208.pdf

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