Pavlovich v. National City Bank ( 2006 )

NOT RECOMMENDED FOR PUBLICATION
File Name: 06a0242n.06
Filed: April 5, 2006
No. 05-4037
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
Lauren M. Pavlovich, )
)
Plaintiff-Appellant, )
)
v. ) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR THE
National City Bank, ) NORTHERN DISTRICT OF OHIO
)
Defendant-Appellee. )
)
)
BEFORE: MERRITT, MARTIN, and COLE, Circuit Judges.
MERRITT, Circuit Judge. The sole issue before us is whether the District Court abused
its discretion in awarding attorney’s fees and costs pursuant to Ohio’s applicable civil RICO statute,
Ohio Rev. Code Ann. § 2923.34(H). We hold that the District Court did not abuse its discretion and
affirm the award.
I. Background
The underlying facts of this case are recounted in our previous opinion, Pavlovich v. Nat’l
City Bank, 435 F.3d 560 (6th Cir. 2006). In short, Ms. Pavlovich sued National City Bank (“the
Bank”) to recover funds lost through failed investments that the Bank administered but did not
direct. Two years later, with the Bank’s written consent, Ms. Pavlovich amended her complaint
under Fed. R. Civ. P. 15(a) to dismiss voluntarily two of her seven counts –– both of which
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Pavlovich v. National City Bank
apparently were identical and alleged violations of Ohio’s civil RICO provisions.1 The District
Court subsequently granted the Bank’s motion for summary judgment as to all remaining claims,
and we affirmed in our aforementioned decision. The Bank filed a motion for attorney’s fees and
costs pursuant to § 2923.34(H). The District Court granted that motion, awarded $36,908.15, and
Ms. Pavlovich now appeals that award.
II. Standard of Review
Applying Ohio law, we review a district court’s grant of attorney’s fees and costs under §
2923.34(H) for abuse of discretion. Patton v. Wilson, No. 82079, 2003 WL 21473566, at *5 (Ohio
Ct. App. June 26, 2003) (unpublished); Sheets v. Carmel Farms, Inc., Nos. 96APE09-1224 &
96APE09-1225, 1997 WL 303760, at *10 (Ohio Ct. App. June 5, 1997) (unpublished). The Ohio
Supreme Court has described a particularly strong form of discretion, as follows:
An abuse of discretion involves far more than a difference in opinion. The term
discretion itself involves the idea of choice, of an exercise of the will, of a
determination made between competing considerations. In order to have an “abuse”
in reaching such determination, the result must be so palpably and grossly violative
of fact and logic that it evidences not the exercise of will but perversity of will, not
the exercise of judgment but defiance thereof, not the exercise of reason but rather
1
In a footnote in her final brief, Ms. Pavlovich asserts that equating the voluntarily
dismissed counts, Count Five (“Participation in an Enterprise Through a Pattern of Corrupt
Activity”) and Count Six (“Participation in a Civil Conspiracy”), is “obvious error.” (Pavlovich
Final Brief at 4 n.1.) The District Court found the two claims to be identical, and it is far from
obvious to us that this characterization was erroneous. Count Five alleged that the Bank
participated in “a pattern of corrupt activity” for several nefarious purposes, while Count Six
similarly asserted that the Bank acted and conspired with various others to participate “in a
pattern of related activities” for what appear to be the same aims. Moreover, § 2923.34(B)
authorizes a civil action for conspiracy to violate the Ohio RICO provisions. Accordingly, Ms.
Pavlovich has fallen short of convincing us that the District Court abused its discretion in
equating Counts Five and Six.
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of passion or bias.
Huffman v. Hair Surgeon, Inc., 482 N.E.2d 1248, 1252 (Ohio 1985) quoted in Patton, 2003 WL
21473566, at *5.
III. Analysis
Section 2923.34(H) allows a trial court to grant a prevailing defendant attorney’s fees and
costs in an Ohio civil RICO action:
Upon application, based on the evidence presented in the case by the plaintiff, as the
interests of justice may require, the trial court may grant a defendant who prevails
in a civil action brought pursuant to this section all or part of the defendant’s costs,
including the costs of investigation and litigation reasonably incurred, and all or part
of the defendant’s reasonable attorney fees, unless the court finds that special
circumstances, including the relative economic position of the parties, make an
award unjust.
Ms. Pavlovich offers various reasons why the District Court abused its discretion in awarding
attorney’s fees and costs. We address each of her contentions in turn.
A. “Prevailing Party”
Ms. Pavlovich’s most compelling, but ultimately unpersuasive, argument is that the
voluntary withdrawal of her Ohio RICO claim prevents the Bank from being considered a
“prevailing party” within the meaning of the statute. According to her, the Ohio RICO claim was
dismissed without prejudice and, therefore, without an adjudication on the merits, the Bank cannot
be considered a prevailing party.
In rejecting this theory, the District Court first determined that her Rule 15(a) amendment
operates similarly to a Rule 41(a)(1) voluntary dismissal without prejudice. It then addressed
whether its grant of summary judgment to the Bank on all remaining claims barred as a matter of
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res judicata subsequent litigation of her RICO claim, and applied our Court’s four-factor test:
A claim is barred by the res judicata effect of prior litigation if all of the following
elements are present: “(1) a final decision on the merits by a court of competent
jurisdiction; (2) a subsequent action between the same parties or their ‘privies’; (3)
an issue in the subsequent action which was litigated or which should have been
litigated in the prior action; and (4) an identity of the causes of action.”
Browning v. Levy, 283 F.3d 761, 771 (6th Cir. 2002) (quoting Bittinger v. Tecumseh Prods. Co., 123
F.3d 877, 880 (6th Cir.1997)). The District Court found (1) its grant of summary judgment to be
a final decision on the merits, (2) a subsequent RICO action would be between the same two parties,
(3) the RICO claim should (or could) have been brought in the earlier lawsuit, and (4) there would
be an identity of the causes of action because they seek recovery for the same injury based on the
same facts. The Court concluded that res judicata barred later litigation of the RICO claim and,
therefore, treated Ms. Pavlovich’s withdrawal of the claim as having been dismissed with prejudice.
It distinguished Sturm v. Sturm, 590 N.E.2d 1214, 1217 (Ohio 1992), which stated that “there is no
prevailing party, since a voluntary dismissal without prejudice is not an ‘adjudication upon the
merits’ pursuant to Civ. R. 41(A)(1),” on the grounds that the res judicata effect of summary
judgment in the instant case rendered the voluntary dismissal a dismissal with prejudice, and Sturm
involved voluntary dismissal of an entire action not simply of one of several claims. It noted that,
in Schultz v. Hembree, 975 F.2d 572 (9th Cir. 1992), the Ninth Circuit implicitly considered a
similarly situated defendant to be a prevailing party under Ohio Rev. Code Ann. § 2923.34(H). The
District Court concluded that the Bank was a prevailing party within the meaning of the statute.
We find no abuse of discretion in the District Court’s analysis or conclusion.
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B. “Evidence Presented by the Plaintiff”
Ms. Pavlovich next argues that § 2923.34(H) requires an award to be made “based on the
evidence presented in the case by the plaintiff,” and, because she presented no evidence on her
RICO claim and in fact withdrew it, the award was improper. In effect, she posits that § 2923.34(H)
immunizes from an award all plaintiffs who fail to present any evidence whatsoever to support their
RICO claim. This argument is palpably nonsensical, and we wholly concur with the District Court’s
statement that, “under any reasonable interpretation, Plaintiff’s argument is without merit.”
C. Other Arguments
Ms. Pavlovich suggests that the Bank’s motion for fees and costs was not timely because the
motion was not filed within fourteen days of the voluntary dismissal of that claim. Fed. R. Civ. P.
54(d)(2)(B) provides that such a motion “must be filed no later than 14 days after entry of
judgment.” Rule 54(a) defines “judgment” as including “any order from which an appeal lies” and
“posits a relationship between a judgment and its appealability.” Castro County, Texas v. Crespin,
101 F.3d 121, 128 (D.C. Cir. 1996). “A voluntary dismissal without prejudice is ordinarily not a
final judgment from which the plaintiff may appeal.” Concha v. London, 62 F.3d 1493, 1507 (9th
Cir. 1995) (emphasis in original). In Crespin, 101 F.3d at 128, the D.C. Circuit held that a voluntary
dismissal without prejudice was not a “judgment” triggering the fourteen-day filing requirement.
The District Court in the instant case reached the same conclusion and determined that the Bank was
required to file its motion for attorney’s fees within fourteen days from the date of the Court’s order
granting summary judgment. Since the Bank did so, the District Court held that the Bank’s motion
was timely. The District Court did not abuse its discretion on this issue.
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Ms. Pavlovich also argues that her good faith in bringing the RICO claim and the relative
economic position of the parties make the award unjust. Section 2923.34(H) allows a court to find
that “special circumstances, including the relative economic position of the parties, make an award
unjust.” The District Court noted, however, that § 2923.34(H) does not require a plaintiff’s bad faith
and that Ms. Pavlovich, though a retired school teacher, is apparently a millionaire. The Court
concluded that requiring Ms. Pavlovich to pay the pro rata share of fees attributable to the RICO
claim would not be unjust. That conclusion was not an abuse of discretion.
The final argument espoused by her is that the District Court unfairly inflated the amount
of the award. She claims that the Bank’s “counsel spent only a combined total of 17 hours of time
addressing the [RICO] claim in both” her case and her sister’s companion case, totaling $2,860.00.
(Pavlovich Final Brief at 25 n.7.) The District Court arrived at its award by first calculating the total
number of attorney’s fees and costs incurred by the Bank as of the date of the withdrawal of the
RICO claim –– $221,448.93. It then divided that sum by six, the total number of counts brought by
Ms. Pavlovich if Counts Five and Six are considered to be identical RICO claims, and awarded the
Bank $36,908.15. The District Court justified this amount by relying on the Ninth Circuit’s
interpretation of § 2923.34(H) that “the prevailing party may recover that amount in fees it would
have incurred had the shifting claims been litigated by themselves.” Schultz v. Hembree, 975 F.2d
572, 577 (9th Cir. 1992). The District Court did not abuse its discretion in awarding this sum.
Having found that the District Court did not abuse its discretion in awarding attorney’s fees
and costs under § 2923.34(H), we affirm the judgment of the District Court.
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