Supportive Solutions Training Academy L.L.C. v. Electronic Classroom of Tomorrow , 2013 Ohio 3910 ( 2013 )

[Cite as Supportive Solutions Training Academy L.L.C. v. Electronic Classroom of Tomorrow, 2013-Ohio-3910.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
Nos. 95022 and 95287
SUPPORTIVE SOLUTIONS TRAINING ACADEMY
L.L.C.
PLAINTIFF-APPELLEE
vs.
ELECTRONIC CLASSROOM OF TOMORROW
DEFENDANT-APPELLANT
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-652873
BEFORE: Keough, J., Jones, P.J., and S. Gallagher, J.
RELEASED AND JOURNALIZED: September 12, 2013
ATTORNEYS FOR APPELLANT
Paul W. Flowers
Paul W. Flowers Co., L.P.A.
Terminal Tower, 35th Floor
50 Public Square
Cleveland, Ohio 44113
John A. Demer
James A. Marniella
Demer & Marniella, L.L.C.
2 Berea Commons, Suite 200
Berea, Ohio 44017
Deena M. Giordano
3700 High Street
Columbus, Ohio 43207
ATTORNEYS FOR APPELLEE
Maureen Connors
6625 Pearl Road
Parma Hts., Ohio 44130
Ann S. Vaughn
6140 West Creek Road, Suite 204
Independence, Ohio 44131
KATHLEEN ANN KEOUGH, J.:
{¶1} This cause is before this court on remand from the Supreme Court of Ohio.
In Supportive Solutions Training Academy v. Electronic Classroom of Tomorrow, 8th
Dist. Cuyahoga Nos. 95022 and 95287, 2012-Ohio-1185 (“ECOT II”), this court
considered a consolidated appeal, by defendant-appellant, Electronic Classroom of
Tomorrow (“ECOT”), that appealed various rulings by the trial court and the jury’s award
of monetary damages in favor of plaintiff-appellee, Supportive Solutions Training
Academy, L.L.C. (“Supportive Solutions”). Included in those rulings was the trial
court’s decision denying ECOT leave to file its amended answer to assert the affirmative
defense of political-subdivision immunity.
{¶2} In ECOT II, we determined that denial of leave to file an amended answer to
assert immunity was not a final appealable order and thus dismissed the assignment of
error. We also concluded in that opinion that we lacked jurisdiction to consider the other
assignments of error raised in light of the Supreme Court’s ruling in State ex rel.
Electronic Classroom of Tomorrow v. Cuyahoga Cty. Court of Common Pleas, 129 Ohio
St.3d 30, 2011-Ohio-626, 950 N.E.2d 149 (“ECOT I”), which reverted the case to a
procedural point prior to trial and therefore all other orders that ECOT appealed from
were interlocutory. See ECOT II at ¶ 5-7.
{¶3} ECOT appealed our decision to the Ohio Supreme Court, and the court
accepted the discretionary appeal to consider the following proposition of law: “Any
order that denies the benefit of an alleged immunity to a political subdivision is
immediately appealable pursuant to R.C. 2744.02(C), including the denial of a motion to
amend the answer to include the defense.” Supportive Solutions, L.L.C. v. Electronic
Classroom of Tomorrow, Slip Opinion No. 2013-Ohio-2410, ¶ 9 (“ECOT III”).
{¶4} In reversing our decision, the Supreme Court reasoned that “the trial court’s
denial of ECOT’s motion for leave to file an amended answer to raise the affirmative
defense of political-subdivision immunity precluded ECOT from enjoying the benefits of
the alleged immunity.” ECOT III at ¶ 23. Accordingly, the court held that the trial
court’s denial of leave was a final appealable order under R.C. 2977.04(C) and this court
had jurisdiction to consider ECOT’s appeal of that judgment. Id. The case was
remanded to this court to consider the merits of ECOT’s appeals.
I. Facts and Procedural History
{¶5} A detailed case history was set forth by the Ohio Supreme Court in ECOT I.
Accordingly, we discuss only the relevant facts pertaining to the resolution of this
appeal.
{¶6} In March 2008, Supportive Solutions filed a suit for damages against ECOT
and others based on a series of service contracts between the parties. ECOT and the
other defendants filed an answer in which they did not raise the affirmative defense of
political-subdivision immunity. In December 2008, Supportive Solutions filed an
amended complaint to raise an additional cause of action against a new defendant, Lucas
County Educational Service Center (“Service Center”). In ECOT’s answer to the
amended complaint, it again did not raise political-subdivision immunity as an affirmative
defense; rather, it reincorporated its original answer.
{¶7} In January 2009, Service Center moved to dismiss Supportive Solutions’
claim against it based on, among other things, political-subdivision immunity. Shortly
thereafter, Service Center was dismissed from the case. In January 2010, nearly a year
later and after discovery was completed, ECOT raised for the first time the defense of
political-subdivision immunity in its motion for partial summary judgment. After
Supportive Solutions claimed that ECOT had waived this affirmative defense by failing to
raise it in the answer, ECOT filed a motion for leave to file an amended answer to assert
the immunity defense. This motion was filed in March 2010, approximately eight weeks
prior to trial. The trial court summarily denied ECOT’s motion.
II. Motion for Leave to File an Amended Answer
{¶8} ECOT contends in its fourth assignment of error in App. No. 95022, and its
first assigned error in App. No. 95287, that the trial court abused its discretion in denying
its motion for leave to file an amended answer to assert the affirmative defense of
political-subdivision immunity.
{¶9} Civ.R. 8(C) requires that in a responsive pleading, a party must “set forth
affirmatively * * * any other matter constituting an avoidance or affirmative defense.”
Accordingly, the affirmative defense of political-subdivision immunity must be asserted
in a responsive pleading. Spence v. Liberty Twp. Trustees, 109 Ohio App.3d 357, 360,
672 N.E.2d 213 (4th Dist.1996). Although failure to adhere to this requirement exposes
the party to forfeiture of the defense, “[i]n the real world * * * failure to plead an
affirmative defense will rarely result in [forfeiture]” because of the protection of Civ.R.
15(A). Hoover v. Sumlin, 12 Ohio St.3d 1, 5, 465 N.E.2d 377 (1984), quoting Bobbitt v.
Victorian House, Inc., 532 F.Supp. 734, 736 (N.D.Ill. 1982). Civ.R. 15(A), which allows
for amendment of pleadings by leave of court or by written consent of the other party
after a responsive pleading has been made, expressly provides that “[l]eave of court shall
be freely given when justice so requires.”
{¶10} Although the grant or denial of leave to amend a pleading is within the
sound discretion of the trial court, this discretion is not unfettered. “A motion for leave
to amend should be granted absent a finding of bad faith, undue delay, or undue prejudice
to the opposing party.” Hoover at 6. Accordingly, an appellate court applies an
abuse-of-discretion standard of review to a trial court’s decision to grant or deny a party
leave to amend a pleading. Wilmington Steel Prods. Inc. v. Cleveland Elec. Illum. Co., 60
Ohio St.3d 120, 122, 573 N.E.2d 622 (1991). “This court’s role is to determine whether
the trial judge’s decision was an abuse of discretion, not whether it was the same decision
we might have made.” Id. An abuse of discretion connotes more than an error of law or
of judgment; it implies that the court’s attitude is unreasonable, arbitrary, or
unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140(1983), citing State v. Adams, 62 Ohio St.2d 151, 157, 404 N.E.2d 144 (1980).
{¶11} This court has previously acknowledged that the abuse-of-discretion
standard is a very high standard and “‘evidences not the exercise of will but perversity of
will, not the exercise of judgment but defiance thereof * * *.’” Aponte v. Aponte, 8th
Dist. Cuyahoga Nos. 77394 and 78090, 2001 Ohio App. LEXIS 529, *4 (Feb. 15, 2001),
quoting State v. Jenkins, 15 Ohio St.3d 164, 222, 473 N.E.2d 264 (1984).
{¶12} In this case, the trial court summarily denied ECOT’s motion for leave to
amend its answer. ECOT contends that because the trial court gave no justification for
denying its motion for leave to amend, this is in and of itself an abuse of discretion.
ECOT cites to Hoover for support, wherein the Supreme Court stated that “where the
[affirmative] defense is tendered timely and in good faith, and no reason is apparent or
disclosed for denying leave, the denial of leave to file such an amended pleading * * * is
an abuse of discretion.” Hoover, 12 Ohio St.3d at 5, citing Peterson v. Teodosio, 34
Ohio St.2d 161, 175, 297 N.E.2d 113 (1973). However, the court’s threshold inquiry is
whether the defense is “tendered timely and in good faith.” Our reading of Hoover is
that only after the movant satisfies this inquiry must a court justify its reason for denying
the motion for leave, given that “leave shall be freely given.”
{¶13} In this case, the record reveals that ECOT failed to demonstrate, at the very
least, that its motion was timely. Although ECOT attempted to explain in its motion for
leave to amend why the immunity defense could not be raised in a motion to dismiss,
ECOT provided no explanation why the immunity defense could not be or was not
asserted in its answer. Rather, ECOT contended that its purpose in obtaining leave to
amend was to “clarify beyond dispute * * * that political subdivision immunity has been
raised as an affirmative defense.” But a review of ECOT’s responsive pleadings shows
that immunity was not raised as an affirmative defense pursuant to Civ.R. 8(C).
Therefore, ECOT’s purpose was not for clarification, but for remediation.
{¶14} In Turner v. Cent. Local School Dist., 85 Ohio St.3d 95, 1999-Ohio-207,
706 N.E.2d 1261, the Ohio Supreme Court concluded that a political subdivision waived
its right to assert the statutory immunity defense by failing to timely assert it in its answer;
thus, the trial court abused its discretion in granting the school district leave to amend its
answer. Id. at 99-100. In Turner, the school district did not move to amend its answer
to assert the affirmative defense of political-subdivision immunity until after the trial date
was scheduled, which was almost three years after the complaint was filed. Id. The
Turner court characterized the immunity defense as an “obvious defense,” “which most
likely would have terminated the litigation in the first instance, or at the very least, would
have narrowed the issues remaining for resolution.” Id. The court was also “troubled
by the fact that [the school district’s] motion did not give a rationale for its failure to
properly assert this affirmative defense in its answer to its original complaint or for its
failure to do so in the ensuing two years and ten months.” Id. This absence of an
explanation by the school district contributed to the court’s conclusion that the trial court
had abused its discretion in allowing the school district to amend its answer. Id.
{¶15} Much like the political subdivision in Turner, ECOT provided no
justification for the delay in asserting the “obvious” political-subdivision immunity
defense. Therefore, because ECOT failed to establish the threshold inquiry of timeliness
and provided no explanation for its delay in asserting the affirmative defense, the trial
court’s decision summarily denying ECOT’s motion was not in and of itself an abuse of
discretion.
{¶16} By the time that ECOT realized that either by inadvertence, mistake, or
neglect that it had not asserted the affirmative defense of immunity, trial was eight weeks
away, discovery was complete, and the dispositive motion deadline had passed.
Therefore, the record demonstrates that ECOT’s motion for leave to file its amended
answer was untimely. Allowing ECOT leave to amend its answer to assert an immunity
defense at this stage in litigation would have caused additional delay, especially when the
timely assertion of the defense would have possibly resolved a majority of Supportive
Solution’s claims from the outset without expending considerable time and resources.
See, e.g., Turner at 99; ECOT II, 8th Dist. Cuyahoga Nos. 95022 and 95287,
2012-Ohio-1185 at ¶ 17 (“A political subdivision should timely assert its immunity
defense so that the other litigant does not devote its time and resources in litigating a
lawsuit that could be barred by immunity”); see also Hubbell v. Xenia, 115 Ohio St.3d 77,
2007-Ohio-4839, 873 N.E.2d 878, ¶ 26, quoting Burger v. Cleveland Hts., 87 Ohio St.3d
188, 199-200, 1999-Ohio-319, 718 N.E.2d 912 (Lundberg Stratton, J., dissenting) (“‘As
the General Assembly envisioned, the determination of immunity could be made prior to
investing the time, effort, and expense of the courts, attorneys, parties, and witnesses * *
*’”).
{¶17} Finally, we note that ECOT knew that Service Center had asserted the
immunity defense and been dismissed from the lawsuit in 2009 because it was immune.
Clearly this should have apprised ECOT of the available defense, considering that ECOT
claimed in its counterclaim that it was “a charter school funded by the state of Ohio.”
{¶18} In light of the foregoing discussion, we cannot say that the trial court
abused its discretion in denying ECOT leave to amend its answer to assert the
political-subdivision immunity defense. ECOT’s fourth assignment of error in App. No.
95022 and its first assigned error in App. No. 95287 are overruled.
III. Other Assignments of Error
{¶19} The other assignments of error raised by ECOT were dismissed by this
court in ECOT II for lack of jurisdiction.1 The issues raised in those assignments of error
The remaining assignments of error are:
1
Appeal No. 95022
I. The trial judge erred, as a matter of law, in failing to grant
summary judgment upon [Supportive Solutions’] claims of implied
contract [because the merits of the case warranted summary judgment
or breach of implied contracts do not apply to political subdivisions].
II. Summary judgment was improperly denied, as a matter of law,
upon [Supportive Solutions’] unsubstantiated claim of defamation
[because the merits of the case warranted summary judgment or the
claim of defamation is barred by political subdivision immunity].
III. Summary judgment was warranted, as a matter of law, on the
claims of negligent misrepresentation [because the merits of the case
warranted summary judgment or political subdivisions are immune
from claims of negligent misrepresentation].
Appeal No. 95287
II. The trial judge erred, as a matter of law, in failing to grant
summary judgment upon [Supportive Solutions’] claims of implied
contract [because the merits of the case warranted summary judgment
or breach of implied contracts do not apply to political subdivisions].
were not accepted on appeal or addressed by the Ohio Supreme Court in ECOT III. Our
decision today finding that the trial court did not abuse its discretion in denying ECOT
leave to file its amended answer does not affect our prior decision in ECOT II. For the
reasons previously stated in ECOT II, ECOT’s other assignments of error remain
dismissed for lack of jurisdiction.
{¶20} Affirmed.
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.
III. Summary judgment was improperly denied, as a matter of law,
upon [Supportive Solutions’] claim of defamation [because the merits of
the case warranted summary judgment or the claim of defamation is
barred by political subdivision immunity].
IV. Summary judgment was warranted, as a matter of law, on the
claims of negligent misrepresentation [because the merits of the
case warranted summary judgment or political subdivisions are
immune from claims of negligent misrepresentation].
V. [ECOT] was entitled to either a directed verdict or a new trial upon
the claim of breach of express contract.
VI. The trial judge abused his discretion by granting pre-judgment
interest in favor of [Supportive Solutions] under R.C. 1343.03.
KATHLEEN ANN KEOUGH, JUDGE
LARRY A. JONES, SR., P.J., and
SEAN C. GALLAGHER, J., CONCUR