FRC Project, L.L.C. v. Canepa Media Solutions, Inc. , 2013 Ohio 259 ( 2013 )

[Cite as FRC Project, L.L.C. v. Canepa Media Solutions, Inc., 2013-Ohio-259.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 97845
FRC PROJECT, L.L.C.
PLAINTIFF-APPELLANT
vs.
CANEPA MEDIA SOLUTIONS, INC., ET AL.
DEFENDANTS-APPELLEES
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-763900
BEFORE: Celebrezze, J., Boyle, P.J., and S. Gallagher, J.
RELEASED AND JOURNALIZED: January 31, 2013
ATTORNEY FOR APPELLANT
Orville E. Stifel, II
5310 Franklin Boulevard
P.O. Box 602780
Cleveland, Ohio 44102
ATTORNEY FOR APPELLEES
Daniel Thiel
75 Public Square
Suite 650
Cleveland, Ohio 44113
FRANK D. CELEBREZZE, JR., J.:
{¶1} Plaintiff-appellant, FRC Project, L.L.C. (“FRC”), appeals the dismissal of
its declaratory judgment action seeking to enjoin the enforcement efforts by Canepa
Media Solutions, Inc. (“Canepa”) for a judgment Canepa obtained against a third party.
FRC argues that its complaint adequately stated a claim for relief and that the trial court
erred in dismissing it based on Civ.R. 12(B)(6). After a thorough review of the record
and law, we affirm.
I. Factual and Procedural History
{¶2} Canepa filed an action in Rocky River Municipal Court that resulted in a
judgment against Peneventures, Inc. (“Peneventures”) for $15,000. Penny Dixon is the
corporation’s sole officer and shareholder. In July 2011, just short of two years after
obtaining this judgment, Canepa transferred it to the Cuyahoga County Common Pleas
Court and obtained a writ of execution directing the sheriff to levy upon and seize all
property located at 19102 Old River Road in Rocky River, Ohio. This was the business
location of Peneventures, now being operated by FRC. FRC asserts that it is the owner
of all property and inventory at this location. FRC is an Ohio limited liability company
formed in 2004, and its sole member is Debra Dixon, Penny Dixon’s daughter. FRC also
obtained a license to use the “Pen-E-Ventures” trade name from Peneventures. FRC was
notified of the writ of execution by Canepa and asserted that the property Canepa was
attempting to seize was not owned by Peneventures. FRC informed Canepa’s attorney,
Daniel Thiel, that Canepa had no judgment against FRC and that any seizure of its
property would be illegal. According to FRC, Thiel indicated the writ of execution would
still be carried out.
{¶3} Rather than filing a motion to quash the writ or availing itself of statutory
provisions for the protection of property of third parties wrongly seized by the sheriff, on
September 8, 2011, FRC filed a complaint seeking declaratory judgment, damages, and
injunctive relief against Attorney Thiel and Canepa. The action alleged attempted trespass
and conversion as well as civil rights actions under 42 U.S.C. 1983 and 1988. It sought
an injunction, compensatory and punitive damages, and attorney fees.1 Canepa filed a
motion to dismiss for failure to state a claim on September 28, 2011. We note that as a
result of FRC’s declaratory complaint, Canepa filed a separate action in the Cuyahoga
County Common Pleas Court alleging fraudulent transfer of assets against Peneventures
and FRC. The writ of execution was returned by the sheriff unfulfilled, and Canepa filed
a second motion to dismiss FRC’s declaratory judgment action as moot.
{¶4} On December 20, 2011, the trial court granted Canepa’s first motion to
dismiss, finding:
There is no basis in law or equity to award the relief sought against
defendant Daniel Thiel, Esq., who is alleged to have acted solely in his
capacity as attorney for defendant Canepa Media Solutions Inc.
Furthermore, Plaintiff’s allegations of “threatened” trespass and conversion
do not state a claim for trespass and conversion; and there is neither state
action nor a state actor against whom an action under 42 U.S.C. 1983 and
42 U.S.C. 1988 allows a successful plaintiff asserting a cause of action under 42 U.S.C.
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1983 and other similar sections to recover attorney fees.
1988 can lie. Finally, to the extent that a claim for declaratory relief is
deemed to have been raised, the court dismisses such claim: “[D]eclaratory
judgment is inappropriate when, as in the instant matter, a resolution of the
controversy depends greatly upon a determination of the facts of the case *
* * especially when the same facts are at issue in a pending action.”
Therapy Partners of Am., Inc. v. Health Providers, Inc., 129 Ohio App.3d
572, 578 (1998); accord Baker v. Miller, 33 Ohio App.2d 248, 249 (1972),
quoting Smith v. Civil Service Comm., 158 Ohio St. 401, 402 (“‘Where the
resolution of the controversy involved in an action for declaratory judgment
depends largely on a determination of facts * * * the trial court, in the
exercise of sound discretion, may either entertain or not entertain such an
action.’”). * * * Furthermore, plaintiff is not a “prevailing party” for
purposes of attorneys’ fees.
{¶5} FRC then timely appealed the dismissal to this court assigning two errors:
I. The trial court erred in dismissing this case for failure to state a claim
upon which relief can be granted, [where] the complaint alleged good
causes of action under both state and federal law.
II. The trial court erred in dismissing FRC’s complaint with prejudice.
II. Law and Analysis
A. Motion To Dismiss
{¶6} FRC’s action was dismissed for failure to state a claim on which relief could
be granted pursuant to Civ.R. 12(B)(6). A motion to dismiss for failure to state a claim
on which relief can be granted is procedural and tests the sufficiency of the complaint.
State ex rel. Hanson v. Guernsey Cty. Bd. of Commrs., 65 Ohio St.3d 545, 1992-Ohio-73,
605 N.E.2d 378. It is well settled that “when a party files a motion to dismiss for failure
to state a claim, all factual allegations of the complaint must be taken as true and all
reasonable inferences must be drawn in favor of the nonmoving party.” Byrd v. Faber,
57 Ohio St.3d 56, 60, 565 N.E.2d 584 (1991).
{¶7} While the factual allegations of the complaint are taken as true,
“[u]nsupported conclusions of a complaint are not considered admitted * * * and are not
sufficient to withstand a motion to dismiss.” State ex rel. Hickman v. Capots, 45 Ohio
St.3d 324, 544 N.E.2d 639 (1989). In light of these guidelines, in order for a court to
grant a motion to dismiss for failure to state a claim, it must appear “beyond doubt that
the plaintiff can prove no set of facts in support of his claim which would entitle him to
relief.” O’Brien v. Univ. Community Tenants Union, 42 Ohio St.2d 242, 245, 327
N.E.2d 753 (1975).
{¶8} Normally, because factual allegations in the complaint are presumed true,
only the legal issues are presented, and an entry of dismissal on the pleadings will be
reviewed de novo. Hunt v. Marksman Prods., 101 Ohio App.3d 760, 762, 656 N.E.2d
726 (9th Dist.1995). A de novo standard of review affords no deference to the trial
court’s decision, and we independently review the record. Gilchrist v. Gonsor, 8th Dist.
No. 88609, 2007-Ohio-3903, ¶16. However, Ohio’s declaratory judgment statutes give
the trial court discretion to reject a plea for declaratory relief where a ruling “would not
terminate the uncertainty or controversy giving rise to the action.” R.C. 2721.07.
{¶9} A proper claim for declaratory judgment must set forth sufficient facts to
show “(1) a real controversy between the parties; (2) a controversy which is justiciable in
character; and (3) a situation in which speedy relief is necessary to preserve the rights of
the parties.” Peat Marwick Main & Co. v. Elliott, 10th Dist. No. 90AP-921, 1991 Ohio
App. LEXIS 101, *4-5 (Jan. 10, 1991), citing Burger Brewing Co. v. Liquor Control
Comm., 34 Ohio St.2d 93, 97, 296 N.E.2d 261 (1973); Buckeye Quality Care Ctrs., Inc. v.
Fletcher, 48 Ohio App.3d 150, 154, 548 N.E.2d 973 (10th Dist.1988). However,
there are only two reasons for dismissing a complaint for declaratory
judgment pursuant to Civ.R. 12(B)(6): (1) where there is no real
controversy or justiciable issue between the parties, or (2) where the
declaratory judgment will not terminate the uncertainty or controversy,
under R.C. 2721.07.
Fioresi v. State Farm Mut. Auto. Ins. Co., 26 Ohio App.3d 203, 499 N.E.2d 5 (1st
Dist.1985), syllabus. If neither is satisfied, then “the court is required to issue a
judgment declaring the rights or legal relations, or both, of the parties, and the court errs
when it dismisses the complaint for failure to state a claim under Civ.R. 12(B)(6).” Id.{¶10} Turning to FRC’s complaint, the trial court ruled that FRC failed to
demonstrate why attorney Thiel could be sued individually. “‘An attorney is immune
from liability to third persons arising from his performance as an attorney in good faith on
behalf of, and with the knowledge of his client, unless such third person is in privity with
the client or the attorney acts maliciously.’” Petrey v. Simon, 19 Ohio App.3d 285,
287-288, 484 N.E.2d 257 (1st Dist.1984), quoting Scholler v. Scholler, 10 Ohio St.3d 98,
462 N.E.2d 158 (1984), paragraph one of the syllabus. Malicious conduct has been
defined in the governmental immunity context as the “‘willful and intentional design to
do injury, or the intention or desire to harm another, usually seriously, through conduct
which is unlawful or unjustified.’” Hicks v. Leffler, 119 Ohio App.3d 424, 428-429, 695
N.E.2d 777 (10th Dist.1997), quoting Jackson v. Butler Cty. Bd. of Cty. Commrs., 76
Ohio App.3d 448, 453-454, 602 N.E.2d 363 (12th Dist.1991).
{¶11} Here, attorney Thiel filed a writ of judgment with the common pleas court
attempting to enforce his client’s rights seeking the attachment of property belonging to
Peneventures. FRC’s complaint fails to allege any malicious actions that would expose
Thiel to suit individually. Thiel was attempting to satisfy a validly obtained judgment by
causing a writ of execution to be issued on the former business location of the judgment
debtor where the same business appeared to be operating and to seize property belonging
to Peneventures only. Therefore, the trial court did not err in granting Thiel’s motion to
dismiss.
{¶12} The trial court also dismissed FRC’s 42 U.S.C. 1983 claim. This action
was premised on the use of the courts and the local sheriff to enforce a judgment.
{¶13} In order “‘[t]o state a claim for relief in an action brought under [Section]
1983, respondents must establish that they were deprived of a right secured by the
Constitution or laws of the United States, and that the alleged deprivation was committed
under color of state law.’” Grybosky v. Ohio Civ. Rights Comm., 11th Dist. No.
2010-A-0047, 2011-Ohio-6843, ¶ 36, quoting Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526
U.S. 40, 49-50, 119 S.Ct. 977, 143 L.Ed.2d 130 (1999).
{¶14} Here, there has been no deprivation of any right. Therefore, there can be no
successful Section 1983 action. There has been no action, by the state or otherwise.
While a writ had been issued to the sheriff’s office and execution proceedings were
imminent, that does not give rise to a Section 1983 action, which requires such a
deprivation in order to succeed. Likewise, there has been no trespass or conversion. As
the trial court recognized, there is no justiciable claim for threatened trespass or
threatened conversion.
{¶15} In terms of the injunction FRC also seeks, “[t]he party seeking a permanent
injunction must demonstrate by clear and convincing evidence that they are entitled to
relief under applicable statutory law, that an injunction is necessary to prevent irreparable
harm, and that no adequate remedy at law exists.” Acacia on the Green Condominium
Assn. v. Gottlieb, 8th Dist. No. 92145, 2009-Ohio-4878, ¶ 18, citing Proctor & Gamble
Co. v. Stoneham, 140 Ohio App.3d 260, 268, 747 N.E.2d 268 (1st Dist.2000).2 That is
not the case here.
{¶16} FRC possessed adequate, alternate means of protecting its rights. It could
have filed a motion to intervene and quash the writ of execution. It could have also
availed itself of the provisions of R.C. 2329.84. FRC now argues that similar statutes
have been held unconstitutional and it should not be required to rely on this
unconstitutional remedy. However, no controlling case has held that R.C. 2329.84 is
unconstitutional. In fact, both the Ohio Supreme Court and a federal district court for
Ohio have examined the statute and found it constitutional. Ryan v. Carter, 67 Ohio
St.3d 568, 1993-Ohio-168, 621 N.E.2d 399; Planned Parenthood of the
Columbia/Willamette, Inc. v. Am. Coalition of Life Activists, S.D. Ohio No.
2:05-MC-0002, 2006 U.S. Dist. LEXIS 74894 (Oct. 16, 2006). FRC cites to case law
Also, “in the exercise of its discretion, the court may refuse a declaratory judgment when it
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deems that rights may be fully protected through other available remedies.” Schaefer v. First Natl.
Bank, 134 Ohio St. 511, 518, 18 N.E.2d 263 (1938).
dealing with prejudgment attachment statutes, but these cases are not applicable here.
This is not a prejudgment attachment situation, but, according to FRC’s complaint, an
attachment of property that may belong to a third party according to a valid judgment.
The attachment statute contemplates that occurrence and provides a remedy. FRC could
also move to quash the writ prior to any attachment. FRC has various alternative and
adequate remedies making the argument that injunctive relief is necessary all the weaker.
{¶17} Further, the trial court may decline to entertain a declaratory judgment
action where a ruling “would not terminate the uncertainty or controversy giving rise to
the action.” R.C. 2721.07. At oral arguments, FRC indicated that the declaratory
judgment action in this case relates to the constitutionality of R.C. 2329.84, even though
that statute is not found in its complaint. The constitutionality of R.C. 2329.84 is not
determinative in this case because FRC has additional remedies at law cited above.
Therefore, the trial court did not err when it declined to address this issue, even if such
arguments were contained in FRC’s complaint.
{¶18} The trial court did not err in dismissing FRC’s declaratory judgment
action.
B. Dismissal with Prejudice
{¶19} FRC next argues that the trial court erred when it dismissed the action with
prejudice. “[A] ruling on a Civ.R. 12(B)(6) motion can be an adjudication of the merits
of the claim.” Hutcheson v. Ohio Auto. Dealers Assn., 8th Dist. No. 97394,
2012-Ohio-3685, ¶ 19, citing Civ.R. 41(B). Civ.R. 41(B) provides a limited category of
involuntary dismissals that are otherwise than on the merits.
{¶20} Civ.R. 41(B)(3) provides that a dismissal under Civ.R. 41(B) and any
dismissal not provided for in Civ.R. 41, except as set forth in Civ.R. 41(B)(4), lack of
subject matter jurisdiction or failure to join a party, operates as an adjudication on the
merits unless the court, in its order for dismissal, otherwise specifies.
A dismissal under Civ.R. 12(B)(6) for failure to state a claim is a dismissal
under Civ.R. 41(B)(1) for failure to comply with the civil rules.
Customized Solutions, Inc. [v. Yurchyk & Davis, CPA’s, Inc., 7th Dist. No.
03 MA 38], 2003-Ohio-4881 at ¶ 23. Therefore, a dismissal under Civ.R.
12(B)(6) operates as an adjudication on the merits and properly results in a
dismissal with prejudice. See Reasoner v. City of Columbus, 10th Dist.
No. 04AP-800, 2005-Ohio-468, ¶ 8-10; Collins v. Natl. City Bank, 2nd Dist.
No. 19884, 2003-Ohio-6893, ¶ 51; Cairns v. Ohio Sav. Bank, 109 Ohio
App.3d 644, 650, 672 N.E.2d 1058 (8th Dist.1996); Birgel v. Bd. of
Commrs., 12th Dist. No. CA94-02-042, 1995 Ohio App. LEXIS 160, *4
(Jan. 23, 1995); Mayrides v. Franklin Cty. Prosecutor’s Office, 71 Ohio
App.3d 381, 594 N.E.2d 48 (10th Dist.1991); City of Euclid v. Weir, 10th
Dist. No. 77AP-958, 1978 Ohio App. LEXIS 10727, *4 (June 27, 1978).
Yet, even if a dismissal under Civ.R. 12(B)(6) were not a dismissal under
Civ.R. 41(B)(1), “it would at least fall under Civ.R. 41(B)(3)’s catch-all
provision, ‘and any dismissal not provided for in this rule.’” Customized
Solutions, Inc., at ¶ 23.
Grippi v. Cantagallo, 11th Dist. No. 2011-A-0054, 2012-Ohio-5589, ¶ 13-14.
Accordingly, the trial court did not err and abuse its discretion by dismissing FRC’s
action with prejudice.
III. Conclusion
{¶21} FRC’s declaratory judgment action was properly dismissed by the trial court
where causes of action had not arisen and injunctive relief was not appropriate because
adequate alternative remedies existed to fully protect FRC’s rights. Further, that
dismissal was appropriately with prejudice, according to Civ.R. 41(B).
{¶22} Judgment affirmed.
It is ordered that appellees 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.
FRANK D. CELEBREZZE, JR., JUDGE
MARY J. BOYLE, P.J., and
SEAN C. GALLAGHER, J., CONCUR