Brown v. Carlton Harley-Davidson, Inc. , 2013 Ohio 4047 ( 2013 )

[Cite as Brown v. Carlton Harley-Davidson, Inc., 2013-Ohio-4047.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 99761
BRUCE ANDREW BROWN, ET AL.
PLAINTIFFS-APPELLEES
vs.
CARLTON HARLEY-DAVIDSON, INC., ET AL.
DEFENDANTS-APPELLANTS
JUDGMENT:
REVERSED AND REMANDED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-780833
BEFORE: Boyle, P.J., Rocco, J., and E.A. Gallagher, J.
RELEASED AND JOURNALIZED: September 19, 2013
ATTORNEYS FOR APPELLANTS
John R. Conley
Christina J. Marshall
Lawrence A. Sutter
Sutter O’Connell
3600 Erieview Tower
1301 East 9th Street
Cleveland, Ohio 44114
ATTORNEYS FOR APPELLEES
Bruce Andrew Brown, pro se
B. Andrew Brown & Associates, L.L.C.
820 West Superior Avenue
Suite 840
Cleveland, Ohio 44113
Robert Smith, III
75 Public Square
Suite 1111
Cleveland, Ohio 44113
MARY J. BOYLE, P.J.:
{¶1} Defendants-appellants, Carlton Harley-Davidson, Inc., and Jane Carlton
(“Carlton”) (collectively “appellants”), appeal the judgment of the Cuyahoga County
Court of Common Pleas that granted the Civ.R. 12(B)(6) motion to dismiss of
plaintiffs-appellees, Bruce Andrew Brown (“Brown”) and B. Andrew Brown &
Associates, L.L.C. (“BABLLC”) (collectively “appellees”). After a careful review of
the record and relevant case law, we reverse the judgment of the trial court.
I. Factual and Procedural History
{¶2} Since April 2010, appellees have filed three separate and overlapping
complaints in the common pleas court that named appellants as defendants. The first suit
filed by appellees against appellants was captioned Bruce Andrew Brown v. Suzanne
Charlton, et al., Cuyahoga C.P. No. CV-724016 (filed Apr. 13, 2010). The claims set
forth in the first suit stemmed from the allegedly improper sale of a 2008
Harley-Davidson motorcycle to Carlton Harley-Davidson, Inc. The complaint
specifically alleged that Carlton acted in concert with Brown’s former wife, Suzanne
Charlton, and wantonly, recklessly, and negligently tendered the proceeds from the sale of
the motorcycle to his former wife instead of to BABLLC, the titled and legal owner of the
motorcycle.
{¶3} On September 8, 2010, appellants filed a motion for summary judgment
asserting res judicata as a bar to appellees’ complaint, which was granted by the trial
court on February 4, 2011. However, on appeal, this court reversed the judgment of the
trial court, concluding that the doctrine of res judicata did not apply and that issues of
material fact remained as to whether Brown’s former wife could act under the authority of
Brown’s power of attorney to sell the motorcycle because it was the property of
BABLLC. Brown v. Charlton, 8th Dist. Cuyahoga No. 96430, 2011-Ohio-4958, ¶ 15.
Further, this court found that it was unclear and disputed as to whom the check proceeds
should have been made payable. Id.{¶4} While CV-724016 was on appeal to the Ohio Supreme Court, appellees
inappropriately filed a second complaint in the common pleas court on October 5, 2011,
which was designated Cuyahoga C.P. No. CV-766002. In their second complaint,
appellees again named appellants as defendants and set forth allegations rooted in the
same transaction at issue in the first complaint.
{¶5} Once CV-724016 was remanded to the trial court, appellants moved for
consolidation of the first and second complaints, so as not to be forced to defend against
the same lawsuit in two separate courts. The relevant trial courts agreed, and the cases
were consolidated on February 17, 2012. After a thorough review of the facts and
circumstances of these consolidated cases, the trial court determined that Brown, in his
personal capacity, lacked standing to assert any of the causes of actions set forth in either
complaint. As such, by April 17, 2012, the trial court had dismissed all claims brought
against appellants by Brown in his personal capacity.1
The remaining claims brought by BABLLC proceeded to trial on December 12, 2012. At
1
the conclusion of the trial, the jury found in favor of appellants.
{¶6} Nevertheless, on April 19, 2012, appellees filed a third complaint in the
common pleas court, which was designated Cuyahoga C.P. No. CV-780833. In their third
complaint, appellees again attempted to set forth causes of action rooted in the same
transaction on which the first two complaints were premised. In response to the filing of
CV-780833, appellants filed a counterclaim requesting the trial court to designate
appellees as vexatious litigators and award appellants appropriate relief, including
attorney fees.
{¶7} On June 5, 2012, appellees filed a motion to dismiss appellants’ counterclaim
pursuant to Civ.R. 12(B)(6), arguing that the counterclaim failed to state a cognizable
claim. While appellees’ motion to dismiss was pending, appellants filed a motion for
partial judgment on the pleadings, arguing again that Brown lacked standing to assert any
of the causes of action set forth in the third complaint. On August 31, 2012, the trial
court granted appellants’ motion for partial judgment on the pleadings and dismissed all
claims brought by Brown in his personal capacity. As a result of the trial court’s
judgment, appellees’ only remaining claims in CV-780833 were those asserted by
BABLLC. On September 17, 2012, BABLLC filed a voluntary dismissal of all
remaining claims.
{¶8} On March 20, 2013, the trial court granted appellees’ motion to dismiss
appellants’ counterclaim stating,
[appellees’] motion to dismiss for failure to state a claim for which relief
can be granted, is granted because [appellants] failed to state allegations in
their counterclaim which satisfy the statutory requirements of R.C. 2323.52.
* * * This matter is hereby dismissed with prejudice.
{¶9} Appellants now bring this timely appeal, raising one assignment of error for
review:
I. The trial court committed reversible error in granting plaintiffs/appellees’
Civ.R. 12(B)(6) Motion to Dismiss for Failure to State a Claim, after
appellants sufficiently pled their counterclaim for vexatious litigation,
pursuant to Ohio Revised Code 2323.52.
II. Law and Analysis
{¶10} In their sole assignment of error, appellants argue that the trial court
committed reversible error in granting appellees’ Civ.R. 12(B)(6) motion to dismiss for
failure to state a claim.
A. Civ.R. 12(B)(6)
{¶11} When reviewing a judgment on a Civ.R. 12(B)(6) motion to dismiss for
failure to state a claim upon which relief can be granted, an appellate court’s standard of
review is de novo. Perrysburg Twp. v. Rossford, 103 Ohio St.3d 79, 2004-Ohio-4362,
814 N.E.2d 44, ¶ 5.
{¶12} A Civ.R. 12(B)(6) motion to dismiss for failure to state a claim is procedural
and tests the sufficiency of the complaint. State ex rel. Hanson v. Guernsey Cty. Bd. of
Commrs., 65 Ohio St.3d 545, 548, 605 N.E.2d 378 (1992), citing Assn. for the Defense of
the Washington Local School Dist. v. Kiger, 42 Ohio St.3d 116, 117, 537 N.E.2d 1292(1989). A trial court must presume all factual allegations contained in the complaint to
be true and must make all reasonable inferences in favor of the nonmoving party.
Garofalo v. Chicago Title Ins. Co., 104 Ohio App.3d 95, 104, 661 N.E.2d 218 (8th
Dist.1995), citing Perez v. Cleveland, 66 Ohio St.3d 397, 613 N.E.2d 199 (1993);
Mitchell v. Lawson Milk Co., 40 Ohio St.3d 190, 532 N.E.2d 753 (1988); Phung v. Waste
Mgt., Inc., 23 Ohio St.3d 100, 491 N.E.2d 1114 (1986).
{¶13} Thus, in order for a court to grant a motion to dismiss for failure to state a
claim, it must appear “beyond a doubt that the plaintiff can prove no set of facts in
support of his claim which would entitle him to relief.” (Citations omitted in original.)
O’Brien v. Univ. Community Tenants Union, Inc., 42 Ohio St.2d 242, 245, 327 N.E.2d
753 (1975).
B. Vexatious Litigator Statute
{¶14} Ohio’s vexatious litigator statute, codified under R.C. 2323.52, expressly
creates a cause of action by which
a person * * * who has defended against habitual and persistent vexatious
conduct * * * may commence a civil action in a court of common pleas with
jurisdiction over the person who allegedly engaged in the habitual and
persistent vexatious conduct to have that person declared a vexatious
litigator.
R.C. 2323.52(B).
{¶15} Before a court can designate a person a vexatious litigator, it must find that
person has
habitually, persistently, and without reasonable grounds engaged in
vexatious conduct in a civil action or actions, * * * whether the person or
another person instituted the civil action or actions, and whether the
vexatious conduct was against the same party or against different parties in
the civil action or actions.
R.C. 2323.52(A)(3).
{¶16} “Vexatious conduct” means conduct of a party in a civil action that satisfies
any of the following:
(a) The conduct obviously serves merely to harass or maliciously injure
another party to the civil action.
(b) The conduct is not warranted under existing law and cannot be
supported by a good faith argument for an extension, modification, or
reversal of existing law.
(c) The conduct is imposed solely for delay.
R.C. 2323.52(A)(2).
The purpose of the vexatious litigator statute is clear. It seeks to prevent
abuse of the system by those persons who persistently and habitually file
lawsuits without reasonable grounds and/or otherwise engage in frivolous
conduct in the trial courts of this state. Such conduct clogs the court
dockets, results in increased costs, and oftentimes is a waste of judicial
resources — resources that are supported by the taxpayers of this state.
The unreasonable burden placed upon courts by such baseless litigation
prevents the speedy consideration of proper litigation.
Mayer v. Bristow, 91 Ohio St.3d 3, 13, 740 N.E.2d 656 (2000), quoting Cent. Ohio
Transit Auth. v. Timson, 132 Ohio App.3d 41, 50, 724 N.E.2d 458 (10th Dist.1998).
{¶17} Applying a de novo standard of review, we turn to the critical issue on
appeal — whether appellants’ counterclaim stated a claim upon which relief can be
granted.
C. Allegations of the Counterclaim
{¶18} In this case, we find that the trial court erred in dismissing appellants’
counterclaim pursuant to Civ.R. 12(B)(6) for failure to state a claim upon which relief
could be granted. Our review of the complaint reveals that appellants set forth the basis
of their allegations of vexatious litigation by outlining the procedural history of the
multiple overlapping lawsuits filed against them by appellees since April 2010.
Specifically, the counterclaim highlights appellees’ act of filing the second complaint
while the first complaint was still pending and filing the third complaint just two days
after the trial court dismissed Brown in his personal capacity for lack of standing. In
addressing the express elements of R.C. 2323.52, appellants’ counterclaim alleged the
following:
26. Bruce Andrew Brown and B. Andrew Brown & Associates
LLC habitually, persistently and without reasonable grounds engaged in
vexatious conduct in civil actions * * * filed against Jane Carlton and
Carlton Harley-Davidson.
27. Mr. Brown’s conduct obviously serves to harass or maliciously
injure * * * Jane Carlton and Carlton Harley-Davidson.
28. Mr. Brown’s conduct is not warranted under existing law and
cannot be supported by a good faith argument for extension, modification,
or reversal of existing law.
29. * * * Jane Carlton and Carlton Harley-Davidson * * * have
suffered severe mental anguish and distress.
30. [Jane Carlton and Carlton Harley-Davidson] were forced to go
through with the expensive, cumbersome, and troubling process of
defending themselves in a lawsuit, brought for no other purpose than to
continually harass, intimidate, and cause emotional distress * * *.
{¶19} We note that the pleadings also set forth numerous examples of Brown’s
vexatious conduct against unrelated parties in Ohio civil and criminal trial courts,
appellate courts, and federal courts. However, those portions of the counterclaim do not
impact our analysis of whether appellees’ conduct against appellants constituted
vexatious litigation.
{¶20} Nevertheless, accepting appellants’ allegations as true, and making all
reasonable inferences in favor of appellants, we find that the counterclaim presented a set
of facts that could result in a ruling in appellants’ favor. Contrary to the trial court’s
finding, the complaint sets forth the elements of a vexatious litigator, as defined under
R.C. 2323.52, and presents facts, i.e., appellees’ series of repetitive, and allegedly
unwarranted, complaints filed against appellants, to demonstrate that those elements were
met in this case. Accordingly, appellant’s complaint was sufficient to withstand a Civ.R.
12(B)(6) motion.
{¶21} We again emphasize that in our analysis we are obligated to presume the
truth of all facts alleged in the complaint. Thus, we note that our holding here does not,
in any manner, express our view with respect to the merits of appellants’ counterclaim,
but only expresses our view that the Civ.R. 12(B)(6) dismissal was improper.
{¶22} Based on the foregoing reasons, we sustain appellants’ assignment of error,
reverse the trial court’s judgment, and remand for further proceedings necessary to
address the substantive merits of the appellant’s vexatious litigation claim.
{¶23} This cause is reversed and remanded to the lower court for further
proceedings consistent with this opinion.
It is ordered that appellants recover of said appellees costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the common
pleas court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
MARY J. BOYLE, PRESIDING JUDGE
KENNETH A. ROCCO, J., and
EILEEN A. GALLAGHER, J., CONCUR