Helbling v. Ward , 2014 Ohio 1513 ( 2014 )

[Cite as Helbling v. Ward, 2014-Ohio-1513.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 99991
LAUREN A. HELBLING, TRUSTEE
PLAINTIFF-APPELLEE
vs.
LLOYD WARD, P.C., ET AL.
DEFENDANTS-APPELLANTS
JUDGMENT:
AFFIRMED IN PART, DISMISSED IN PART
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-12-797787
BEFORE: Keough, J., Boyle, A.J., and Stewart, J.
RELEASED AND JOURNALIZED: April 10, 2014
FOR APPELLANTS
Lloyd Ward, pro se
12655 N. Central Expressway
Suite 1000
Dallas, Texas 75243
ATTORNEYS FOR APPELLEE
Jeremiah E. Heck
Katherine L. Keenan
Luftman, Heck & Associates
580 East Rich Street
Columbus, Ohio 43215
Brian M. Garvine
Law Office of Brian M. Garvine, L.L.C.
5 East Long Street, Suite 1100
Columbus, Ohio 43215
KATHLEEN ANN KEOUGH, J.:
{¶1} Defendant-appellant Lloyd Ward 1 appeals the trial court’s judgment
denying his motions to compel arbitration and for change of venue. For the reasons that
follow, we affirm in part, dismiss in part.
I. Background
{¶2} On August 2, 2010, plaintiff-appellee Benjamin Pulliam contracted with
Lloyd Ward Group P.C. for debt settlement services. The contract, called a “Client
Services Agreement,” contained a forum selection clause that provided for venue and
jurisdiction in Texas. It also contained an arbitration clause.
{¶3} In December 2012, plaintiff-appellee, Laura A. Helbling, trustee for the
bankruptcy estate of Benjamin and Dianne Pulliam, filed suit against Lloyd Ward, P.C.,
d.b.a. Lloyd Ward Group, L.L.C.; Lloyd Ward & Associates, P.C.; Lloyd Ward Group,
P.C., a.k.a. Lloyd Ward Group, II; and Lloyd E. Ward, individually and as
director/officer/owner of the Ward entities; as well as Silverleaf Debt Solutions, L.L.C.
In her complaint, Helbling alleged that the various Ward defendants, in a joint venture
with Silverleaf, advertised their debt settlement services in Ohio and engaged in
fraudulent, abusive, deceptive, and unfair practices in Ohio in violation of the Debt
Adjustment Act, R.C. 4710.01 et seq. and the Ohio Consumer Sales Practices Act, R.C.
After appellants’ counsel withdrew, Ward filed a notice of appearance indicating that he
1
would be representing his interests pro se. This court subsequently granted Helbling’s motion to
dismiss the appeal of all appellants other than Ward individually because the other appellants failed to
file an appellate brief.
1345.01 et seq.
{¶4} The Ward defendants subsequently filed motions to (1) dismiss Count 3 of
the complaint, (2) change venue or dismiss the complaint, and (3) compel arbitration and
stay the proceedings. Thereafter, Helbling voluntarily dismissed Count 3 of the
complaint, and the trial court denied the motions for change of venue and to compel
arbitration. This appeal followed.
II. Analysis
{¶5} The arbitration clause at issue provided in pertinent part:
We encourage you to discuss with the principal attorney or assistant
providing legal services to you any problems you may have with our
attorneys, accounting department, paralegal personnel, secretarial staff or
other matters that may arise in connection with our representation. If, after
giving LWG [Lloyd Ward Group P.C.] thirty (30) days’ notice of any
complaint, you remain unsatisfied with LWG’s response to your complaint,
you hereby agree to mediate and/or arbitrate any complaint against LWG
prior to the initiation of any public or private complaints or claims of any
kind against LWG or any of its attorneys. You agree to submit any dispute
over the amount of fees charged to you to the Fee Dispute Committee of the
Collin County Bar Association, State Bar of Texas. * * * The parties will
submit all disputes arising under or related to this Agreement to binding
arbitration according to the then-prevailing rules and procedures of the
American Arbitration Association. * * * The arbitrator’s award will be final
and binding and judgment may be entered in any court of competent
jurisdiction.
{¶6} The trial court found that the agreement was an attorney-client agreement
and, therefore, controlled by the Ohio Rules of Professional Conduct. The court found
that Prof.Cond.R. 1.8(h) mandates that an attorney-client agreement may not require
arbitration of a claim against the lawyer unless the client is independently represented
when making the agreement, and that agreements made contrary to the rule are
unenforceable. Because there was no evidence that Pulliam was independently
represented by counsel in executing the agreement, the trial court denied the motion to
compel arbitration.
{¶7} In his first assignment of error, Ward contends that the trial court erred in
not enforcing the arbitration clause. We disagree.
{¶8} In Thornton v. Haggins, 8th Dist. Cuyahoga No. 83055, 2003-Ohio-7078,
this court recognized that Ohio courts encourage arbitration to settle disputes between
parties. Id. at ¶ 7. Nevertheless, with regard to whether an attorney-client agreement
may contain an agreement to arbitrate attorney-client disputes, this court noted that the
Ohio Supreme Court Board of Commissioners on Grievances and Discipline Opinion
96-9 “advised that an engagement letter between an attorney and client should not
contain language requiring a client to prospectively agree to arbitrate legal malpractice
disputes.” Id. at ¶ 8. This court noted further that although the Board did not conclude
that such provisions constitute a per se attempt to limit attorney liability in violation of the
disciplinary rules, it indicated that before entering into such prospective agreements, most
clients would benefit from the advice of separate counsel. Accordingly, this court
concluded that “the best interests of the client require consultation with an independent
attorney in order to determine whether to prospectively agree to arbitrate attorney-client
disputes.” Id. at ¶ 10. It held that “[s]uch agreements are therefore not knowingly and
voluntarily made absent such independent consultation.” Id.
{¶9} Recently, in Guay v. Lloyd Ward, P.C., 5th Dist. Fairfield No. 13 CA 42,
2014-Ohio-190, the Fifth District adopted the reasoning of this court in Thornton.
Because the Fifth District found that the relationship between Guay and Ward was that of
attorney-client, but found no evidence that Guay was independently represented before
she signed a Client Services Agreement that included an arbitration clause identical to
that signed by appellee in this case, the Fifth District held that the trial court did not err in
denying Ward’s motion to enforce the arbitration agreement.
{¶10} Likewise, in this case there can be no dispute that the agreement at issue
was one for legal services and, therefore, that the Ohio Rules of Professional Conduct
regarding attorney-client relationships apply. Because there was no evidence that
Pulliam was independently represented by counsel in prospectively agreeing to arbitrate
any claims against Ward, in violation of Rule 1.8(h), the trial court did not err in denying
Ward’s motion to compel arbitration.
{¶11} Ward contends, however, that Rule 1.8(h) of the Ohio Rules of
Professional Conduct is pre-empted by the Federal Arbitration Act (“FAA”), and cites
AT&T Mobility LLC v. Concepcion, 563 U.S.__, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011),
as support for this proposition. Specifically, Ward contends that in Concepcion, the
United States Supreme Court recognized that “when state law prohibits outright the
arbitration of a particular type of claim, the analysis is straightforward: the conflicting
rule is displaced by the FAA.” Accordingly, he contends that Rule 1.8(h) is preempted
by the FAA.
{¶12} Ward’s argument is without merit. Rule 1.8(h) does not “prohibit
outright” the arbitration of claims relating to a legal services agreement. In fact, it allows
arbitration of such claims on the condition that a client be represented by independent
counsel before prospectively agreeing to arbitrate his or her claims. Accordingly,
Concepcion is not on point.
{¶13} Ward also argues that if the agreement at issue in this case is indeed one for
legal services, he is exempt from the provisions of Ohio’s Debt Adjustment and
Consumer Sales Practices Acts under the exception for attorneys practicing in the state of
Ohio, and Helbling’s claims should be dismissed. This issue is not ripe for review,
however. It was not presented to nor decided by the trial court and is not the subject of
this appeal.
{¶14} The first assignment of error is therefore overruled.
{¶15} In his second assignment of error, Ward argues that the trial court erred in
denying his motion to transfer venue. We dismiss this assignment of error for lack of
jurisdiction.
{¶16} This court has jurisdiction to review, affirm, modify, or reverse “final
orders” as provided by R.C. 2505.02. An order granting or denying a motion to change
venue, however, is interlocutory and not a “final order” subject to appellate review under
any provision of R.C. 2505.02. State ex rel. Allied Chem. Co. v. Aurelius, 16 Ohio
App.3d 69, 474 N.E.2d 618 (8th Dist.1984), citing Snell v. The Cincinnati St. Ry. Co., 60
Ohio St. 256, 272, 54 N.E. 270. See also Guay, 5th Dist. Fairfield No. 13 CA 42,
2013-Ohio-190, ¶ 41; Mansfield Family Restaurant v. CGS Worldwide, Inc., 5th Dist.
Richland No. 00-CA-3, 2000 Ohio App. LEXIS 6187 (Dec. 28, 2000); Rogers Sales, Inc.
v. Analog Devices, 10th Dist. Franklin No. 88AP-475, 1988 Ohio App. LEXIS 3497(Aug. 25, 1988).
{¶17} The fact that Ward’s motion relied on a Texas forum selection clause for
change of venue does not change our judgment that the trial court’s order is not final and
subject to immediate appeal. In Overhead v. Standen Contracting, 6th Dist. Lucas No.
L-01-1397, 2002-Ohio-1191, the Sixth District held that an order enforcing a forum
selection clause and staying the case for 60 days prior to its dismissal until it could be
refiled in Massachusetts was a final, appealable order under R.C. 2505.02(B)(a) and (b).
{¶18} These provisions provide that an order is final if it grants or denies a
provisional remedy and (a) the order determines the action with respect to the provisional
remedy and prevents a judgment in the action in favor of the appealing party with respect
to the provisional remedy, and (b) the appealing party would not be afforded a meaningful
or effective remedy by an appeal following final judgment. The Overhead court
reasoned that because the Ohio case was to be dismissed, if Overhead could not
immediately appeal the court’s decision that the dispute must be litigated in
Massachusetts, there would be no forum after final judgment that would have authority to
review the decision enforcing the forum selection clause. Id. at *10. A Massachusetts
appellate court would not have jurisdiction to review an Ohio court’s decision, and it
would be too late to file an appeal in the Ohio appellate court since the Ohio case would
have been dismissed. Id. Accordingly, the court found that the order was final and
appealable.
{¶19} In this case, however, unlike in Overhead, Ward will be afforded a
meaningful and effective remedy by appeal following final judgment as to all proceedings
in Ohio. Therefore, the trial court’s order denying the motion to change venue does not
meet the requirements of R.C. 2505.02(4). The second assignment of error is dismissed
for lack of jurisdiction.
{¶20} Affirmed in part; dismissed in part.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said 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.
KATHLEEN ANN KEOUGH, JUDGE
MARY J. BOYLE, A.J., and
MELODY J. STEWART, J., CONCUR