Helfrich v. Madison , 2012 Ohio 3701 ( 2012 )

[Cite as Helfrich v. Madison, 2012-Ohio-3701.]
COURT OF APPEALS
LICKING COUNTY, OHIO
FIFTH APPELLATE DISTRICT
: JUDGES:
JAMES HELFRICH : Patricia A. Delaney, P.J.
: John W. Wise, J.
Plaintiff-Appellant : Julie A. Edwards, J.
:
-vs- : Case No. 2011-CA-89
:
:
TIMOTHY G. MADISON, et al., : OPINION
Defendant-Appellee
CHARACTER OF PROCEEDING: Civil Appeal from Licking County
Court of Common Pleas Case No.
07-CV-394
JUDGMENT: Affirmed In Part and Reversed
and Remanded In Part
DATE OF JUDGMENT ENTRY: August 13, 2012
APPEARANCES:
For Plaintiff-Appellant For Defendant-Appellee
CHRISTOPHER M. CORRIGAN TIMOTHY MADISON
19041 Lake Road KRISTIN E. ROSAN
Rocky River, Ohio 44116 Madison & Rosan, LLP
39 East Whittier Street
Columbus, Ohio 43206
[Cite as Helfrich v. Madison, 2012-Ohio-3701.]
Edwards, J.
{¶1} Appellant, James Helfrich, appeals a judgment of the Licking County
Common Pleas Court awarding appellees Timothy Madison and Madison & Rosan, LLP
(the lawyer defendants) and Carol Strickland, David Garner and N.R.T. Columbus Inc.
d.b.a. Coldwell Banker King Thompson Realty (the real estate defendants) attorney’s
fees and costs in the amount of $118,451.05.
STATEMENT OF FACTS AND CASE
{¶2} In February of 2004, Appellant filed suit in the Licking County Municipal
Court against appellees Strickland, Garner and Coldwell Banker over the sale of a
home to appellant. Appellant dismissed the municipal court case and brought suit for
the same claims in Licking County Common Pleas Court (Case No. 05 CV 00120) in
January of 2005, seeking $27,000.00 in damages. Appellees were granted summary
judgment when appellant failed to present any evidence of damages. In that case,
Appellant sought to amend to join the defendants' counsel, Timothy Madison, as a
defendant. The motion was denied.
{¶3} On March 16, 2007, appellant filed a pro se complaint in the instant case
alleging tortious interference with a business relationship, abuse of process and fraud
against the real estate defendants, whom he had sued in the prior two cases, and
against the lawyer defendants, who had represented the real estate defendants in the
prior cases. On April 13, 2007, appellees filed a motion to dismiss the complaint, or in
the alternative for summary judgment, and a counterclaim asserting that appellant is a
vexatious litigator as defined by R.C. 2323.52.
Licking County App. Case No. 2011-CA-89 3
{¶4} The trial court granted summary judgment on the vexatious litigator
counterclaim in favor of appellees without addressing the motion to dismiss the
complaint. This Court reversed the summary judgment and remanded for further
proceedings in Helfrich v. Madison, 5th Dist. No. 08-CA-150, 2009-Ohio-5140.
{¶5} Following our remand, the trial judge recused himself and a visiting judge
was assigned to conduct all further proceedings in this case. Appellant amended his
complaint on February 16, 2010, adding Mark Serrott as an additional defendant.
Appellees moved to strike the amended complaint. Before ruling on the motion to
strike, the trial court stayed all proceedings in order to rule on the counterclaim.
Following a bench trial, the court found that appellant is a vexatious litigator who must
obtain leave of court to file or pursue a claim in any Ohio trial court. Appellant appealed
this judgment, and this Court affirmed. Helfrich v. Madison, 5th Dist. No. 11-CA-26,
2012-Ohio-551.
{¶6} On March 14, 2011, appellant voluntarily dismissed all claims against
appellees. Appellees filed a timely post-judgment motion for attorney fees and
expenses for frivolous conduct pursuant to R.C. 2323.51. The trial court held an
evidentiary hearing on the motion. Following the hearing, the trial court found that
appellant had engaged in frivolous conduct as defined by R.C. 2323.51 and ordered him
to pay appellees’ attorney fees and expenses in the amount of $118,451.05. Appellant
assigns the following errors on appeal:
{¶7} “I. AS A MATTER OF LAW, THE EVIDENCE PRESENTED AT THE
HEARING ESTABLISHED THAT HELFRICH’S ACTIONS IN THIS MATTER WERE
NOT FRIVOLOUS.
Licking County App. Case No. 2011-CA-89 4
{¶8} “II. THE COURT ERRED AS A MATTER OF LAW BY SHIFTING THE
BURDEN OF PROOF TO THE NON-MOVING PARTY.
{¶9} “III. THE COURT’S AWARD WAS EXCESSIVE AND BEYOND THE
AUTHORITY PROVIDED BY THE STATUTE.
{¶10} “IV. THE TRIAL COURT ERRED BY AWARDING ATTORNEY FEES FOR
MADISON & ROSAN IN REPRESENTING THEMSELVES.
{¶11} “V. THE CLIENTS AND FIRM ARE SECONDARILY RESPONSIBLE FOR
THE EGREGIOUS ACTIONS OF TIMOTHY MADISON.
I
{¶12} In his first assignment of error, appellant argues that the court erred as a
matter of law in finding that his conduct in filing the original complaint was frivolous.
{¶13} The trial court found that appellant’s conduct was frivolous as defined by
R.C. 2323.51(A)(2):
{¶14} “(2) ‘Frivolous conduct’ means either of the following:
{¶15} “(a) Conduct of an inmate or other party to a civil action, of an inmate who
has filed an appeal of the type described in division (A)(1)(b) of this section, or of the
inmate's or other party's counsel of record that satisfies any of the following:
{¶16} “(i) It obviously serves merely to harass or maliciously injure another party
to the civil action or appeal or is for another improper purpose, including, but not limited
to, causing unnecessary delay or a needless increase in the cost of litigation.
{¶17} “(ii) It is not warranted under existing law, cannot be supported by a good
faith argument for an extension, modification, or reversal of existing law, or cannot be
supported by a good faith argument for the establishment of new law.
Licking County App. Case No. 2011-CA-89 5
{¶18} “(iii) The conduct consists of allegations or other factual contentions that
have no evidentiary support or, if specifically so identified, are not likely to have
evidentiary support after a reasonable opportunity for further investigation or discovery.
{¶19} “(iv) The conduct consists of denials or factual contentions that are not
warranted by the evidence or, if specifically so identified, are not reasonably based on a
lack of information or belief.”
{¶20} This Court outlined the standard of review on a determination of frivolous
conduct in Kinnison v. Advance Stores Company, Richland App. No. 2005CA0011,
2006-Ohio-222, ¶ 19-21:
{¶21} “R.C. 2323.51 provides that a court may award court costs, reasonable
attorney fees, and other reasonable expenses incurred in connection with the civil
action or appeal to any party to the civil action or appeal that was adversely affected by
frivolous conduct. ‘Frivolous conduct,’ as defined in R.C. 2323.51(A)(2)(a)(i), includes
conduct that ‘obviously serves merely to harass or maliciously injure another party to
the civil action or appeal or is for another improper purpose, including, but not limited to,
causing unnecessary delay or a needless increase in the cost of litigation’.
{¶22} “As the court found in Wiltberger v. Davis (1996), 110 Ohio App.3d 46,
673 N.E.2d 628, no single standard of review applies in R.C. 2323.51 cases, and the
inquiry necessarily must be one of mixed questions of law and fact. With respect to
purely legal issues, we follow a de novo standard of review and need not defer to the
judgment of the trial court. Wiltberger, supra, at 51-52, 673 N.E.2d 628. ‘When an
inquiry is purely a question of law, clearly an appellate court need not defer to the
judgment of the trial court. Id. However, we do find some degree of deference
Licking County App. Case No. 2011-CA-89 6
appropriate in reviewing a trial court's factual determinations; accordingly, we will not
disturb a trial court's findings of fact where the record contains competent, credible
evidence to support such findings. Id. This standard of review of factual determinations
is akin to that employed in a review of the manifest weight of the evidence in civil cases
generally, as approved in C.E. Morris Co. v. Foley Constr. Co. (1978), 54 Ohio St.2d
279, 376 N.E.2d 578.’ Id. at 51-52, 376 N.E.2d 578.
{¶23} “Where a trial court has found the existence of frivolous conduct, the
decision whether or not to assess a penalty lies within the sound discretion of the trial
court. Id. at 52, 376 N.E.2d 578, 110 Ohio App.3d 46, 673 N.E.2d 628. Abuse of
discretion requires more than simply an error of law or judgment, implying instead that
the court's attitude is unreasonable, arbitrary or unconscionable. Tracy v. Merrell-Dow
Pharmaceuticals, Inc. (1991), 58 Ohio St.3d 147, 152, 569 N.E.2d 875. Furthermore,
R.C. 2323.51 employs an objective standard in determining whether sanctions may be
imposed against either counsel or a party for frivolous conduct. Stone v. House of Day
Funeral Serv., Inc. (2000), 140 Ohio App.3d 713, 748 N.E.2d 1200.”
{¶24} Appellant filed the instant case asserting claims of tortious interference
with a business relationship, abuse of process and fraud. The claims arose in
connection with a prior case concerning a residence appellant had purchased as rental
property. In essence, appellant argued that because of the harassing techniques
employed by the appellees during the discovery process in the prior case, appellant’s
tenant moved out of the residence.
{¶25} The trial court made extensive findings of fact concerning his conclusion
that appellant’s pleadings demonstrate no possible claim against the appellees:
Licking County App. Case No. 2011-CA-89 7
{¶26} “The plaintiff’s pleadings assert claims for interference with business
relations and abuse of process with no factual support. Evidence at the frivolous
conduct hearing made clear that the plaintiff had no possible claim against the lawyer
defendants on either of these legal theories.
{¶27} “In order to establish tortious interference with a business relationship or
contract, a party must demonstrate: (1) a business relationship or contract; (2) the
wrongdoer’s knowledge of the relationship or contract; (3) the wrongdoer’s intentional
and improper action taken to prevent a contract formation, procure a contractual breach,
or terminate a business relationship; (4) a lack of privilege; and (5) resulting damages.
Norris v. Philander Chase Co., 2010-Ohio-6653, 10-CA-04 (5th Dist.) at ¶’s 9-10
(reversing denial of frivolous conduct sanctions where evidence fails to support this
claim). Fred Siegel Co., L.P.A. v. Arter & Hadden, 1999-Ohio-260, 85 Ohio St.3d 171,
707 N.E.2d 853 (Ohio 1999); Kenry v. Transamerica Premium Ins. Co., 72 Ohio St.3d
415, 1995-Ohio-61.
{¶28} “There was no basis for a finding, or a likelihood that further investigation
or discovery would support a finding, that any of the defendants sought to cause or
even encourage the termination of the relevant tenancy. There was no evidence that
any of the defendants would benefit from the tenant’s relocation. Further, the evidence
unquestionably established the lawyers’ privilege to conduct discovery pursuant to the
Civil Rules and subsequent court approval. In this case, the plaintiff made no effort to
explain why the lawyers’ qualified immunity does not apply here, and his refusal to
testify impliedly admits that he had no basis for such claim.
Licking County App. Case No. 2011-CA-89 8
{¶29} “Likewise, the plaintiff’s claim for abuse of process is totally conclusory
with no factual support. To support a claim for abuse of process, a plaintiff must show:
(1) that a legal proceeding has been set in motion in proper form and with probable
cause; (2) that the proceeding has been perverted to attempt to accomplish an ulterior
purpose for which it was not designed; and (3) that direct damage has resulted from the
wrongful use of process. Dever v. Lucas, 2008-Ohio-332, No. 2007CAE060030 (5th
Dist.): Yaklevich v. Kemp Schaeffer and Rose Co., L.P.A., 68 Ohio St.3d 294, 298,
1994-Ohio-503.
{¶30} “Without any factual support, the plaintiff asserted that those lawyers
misused these two discovery procedures in order to harass the tenant. In this case the
defendant lawyers did not set a legal proceeding in motion. They defended against the
plaintiff’s claims by attempting to inspect the subject property and by attempting to
depose the occupant.
{¶31} “There was no basis for a finding, or reason to believe that further
investigation or discovery would support a finding, that any defendant pursued any
disputed discovery procedure for a perverted purpose or any ulterior purpose for which
it was not designed. Indeed, the court in the Strickland [case] expressly approved some
of those discovery requests when the plaintiff and his tenant challenged them. Rather
than co-operating [sic] with lawful discovery attempts the plaintiff and his tenant
aggressively obstructed them. The lawyers never succeeded in inspecting the interior
of the house until the tenant moved and never obtained her deposition. The plaintiff’s
refusal to testify and subject himself to cross-examination demonstrates his lack of any
basis for that assertion.”
Licking County App. Case No. 2011-CA-89 9
{¶32} The trial court’s findings were supported by the evidence presented at the
hearing. The trial court specifically found that the testimony of the tenant was not
credible. The court called the tenant as its own witness to testify at the hearing. She
testified that she terminated her tenancy because she was distressed by the appellees’
unsuccessful efforts to inspect the home she rented from appellant, and she was
distressed by the ongoing efforts of appellees to interview her or take her deposition as
a witness. However, as noted by the trial court, most of the alleged harassment
occurred after she began to search for a new place to live, and she avoided efforts to
allow appellees to conduct discovery concerning the property even knowing the court
supported these efforts. Her testimony reflects that she blamed appellees for the
lawsuit, although it was appellant who filed the case. Further, she claimed she filed a
motion for a protective order in that case without anyone’s assistance, yet at the time of
the instant hearing she had no understanding of the terms and arguments it contains.
The evidence presented at the hearing demonstrated that appellees did not engage in
malicious or harassing conduct in attempting to inspect the house in conjunction with
appellant’s lawsuit against them, but were merely trying to obtain their discovery rights
to inspection of the property. At most, appellant’s evidence arguably demonstrated that
the lawyer defendants failed to comply with appropriate discovery procedures, but there
is no evidence of improper motive or purpose.
{¶33} In addition, as noted by the court, appellant filed these same claims
against these same appellees three times. He first filed these same claims against the
real estate agents and their corporate broker in Licking County Common Pleas No. 05-
CV-0120. Then after voluntarily dismissing the claims in the instant case on March 14,
Licking County App. Case No. 2011-CA-89 10
2011, he filed an application as a vexatious litigator to refile the same claims against the
same defendants on August 1, 2011.
{¶34} The trial court did not err in finding that appellant’s conduct in filing and
pursuing the complaint constituted frivolous conduct as defined by R.C. 2323.51. The
first assignment of error is overruled.
II
{¶35} In his second assignment of error, appellant argues that the court erred in
placing the burden of proof on him, as the non-moving party. He argues the court
sought to have appellant testify and explain his reasons for filing the suit.
{¶36} The judge’s lengthy opinion does not reflect that he shifted the burden of
proof to appellant. The court carefully examined the evidence presented at the hearing
and determined that appellant’s conduct was frivolous. While the court does in several
places comment on appellant’s failure to testify and explain his actions, the court did not
shift the burden of proof to appellant. Rather, the court took note that there was no
evidence presented by appellant to successfully contradict the evidence presented by
appellees that his conduct in filing and pursuing the complaint was frivolous.
{¶37} The second assignment of error is overruled.
III
{¶38} In his third assignment of error, appellant argues that the court erred in
awarding fees for his defense of the vexatious litigator counterclaim.
{¶39} Appellees argue that because the fee award was in conjunction with the
same civil action as appellant’s original claim, they are entitled to an award of fees,
citing Mid-Ohio Mechanical v. Eisenmann, 5th Dist. No. 07 CA 000035, 08 CA 00012,
Licking County App. Case No. 2011-CA-89 11
2009-Ohio-5804. In that case, Eisenmann argued that the court erred in awarding fees
for frivolous conduct without a specific showing that Mid-Ohio incurred additional
attorney fees as a direct, identifiable result of defending the particular frivolous conduct.
We disagreed, holding:
{¶40} “Eisenmann cites several cases in support of its proposition that Mid-Ohio
was required to prove attorney fees directly linked to the frivolous conduct found by the
trial court. The cases cited by Eisenmann all cite or link through another cite to
Wiltberger v. Davis (1996), 110 Ohio App.3d 46, 54, 673 N.E.2d 628. In Wiltberger, the
10th District Court of Appeals held that where a determination of frivolous conduct has
been made, the party seeking R.C. 2323.51 attorney's fees must affirmatively
demonstrate that he or she incurred additional attorney's fees as a direct, identifiable
result of defending the frivolous conduct in particular. Id. The court noted that the statute
itself speaks to this requirement and disallows an award in excess of fees “reasonably
incurred and necessitated by the frivolous conduct.” Id., citing R.C. 2323.51(B)(3).
{¶41} “The statute at the time Wiltberger was decided provided in pertinent part:
{¶42} “‘(B)(1) Subject to division (B)(2) and (3), (C), and (D) of this section, at
any time prior to the commencement of the trial in a civil action or within twenty-one
days after the entry of judgment in a civil action, the court may award reasonable
attorney's fees to any party to that action adversely affected by frivolous conduct. The
award may be assessed as provided in division (B)(4) of this section.
{¶43} “’(3) The amount of an award that is made pursuant to division (B)(1) of
this section shall not exceed, and may be equal to or less than, whichever of the
following is applicable:
Licking County App. Case No. 2011-CA-89 12
{¶44} “‘(b) In all situations other than that described in division (B)(3)(a) of this
section, the attorney's fees that were both reasonably incurred by a party and
necessitated by the frivolous conduct.’
{¶45} “However, the statute was amended in 1996 to change the language
concerning the necessity of fees being reasonably incurred and necessitated by the
frivolous conduct. The current version of the statute provides in pertinent part:
{¶46} “(B)(1) Subject to divisions (B)(2) and (3), (C), and (D) of this section and
except as otherwise provided in division (E)(2)(b) of section 101.15 or division (I)(2)(b)
of section 121.22 of the Revised Code, at any time not more than thirty days after the
entry of final judgment in a civil action or appeal, any party adversely affected by
frivolous conduct may file a motion for an award of court costs, reasonable attorney's
fees, and other reasonable expenses incurred in connection with the civil action or
appeal ...
{¶47} “3) The amount of an award made pursuant to division (B)(1) of this
section that represents reasonable attorney's fees shall not exceed, and may be equal
to or less than, whichever of the following is applicable:
{¶48} “b) In all situations other than that described in division (B)(3)(a) of this
section, the attorney's fees that were reasonably incurred by a party.’ R.C.
2323.51(B)(1), (3)(b).
{¶49} “We find that based on the revision of the statute, Eisenmann's reliance on
Wiltberger and its progeny is misplaced. The amendment to the statute clearly removed
the requirement that fees be necessitated by the frivolous conduct, and replaced it with
Licking County App. Case No. 2011-CA-89 13
language allowing a party to recover attorney's fees ‘reasonably incurred’ by a party in a
civil action.
{¶50} “While not expressly discussing Wiltberger or the revision to the statute,
the 10th District revisited the issue in Neubauer v. Ohio Remcon, Inc., Franklin App. No.
05AP-946, 2006-Ohio-1481. In that case the appellant argued that the court should not
have awarded sanctions for payment of attorney fees associated with appellee's
counterclaim. The court held that R.C. 2323.51 did not limit the award of fees to those
incurred as a result of appellant's filings only, but allowed an award of fees “incurred in
connection with the civil action.” Id. at ¶ 50. The court concluded that based on the
evidence of fees incurred in connection with the action, the trial court did not abuse its
discretion in awarding an amount equal to appellee's fees and court costs. Id.
{¶51} “Based on the wording of the statute, we find no abuse of discretion in the
court's award of attorney fees for frivolous conduct. As discussed earlier, there was
abundant evidence to support the court's findings that the fees incurred by Mid-Ohio
were reasonably incurred in the action. The court did not abuse its discretion in
awarding attorney fees beyond those paid from the cash deposit pursuant to R.C.
1311.16 for Eisenmann's frivolous conduct.” Id. at ¶148-159.
{¶52} However, we do not read our decision in Mid-Ohio so broadly as to
encompass a counterclaim that is in effect a separate action from the underlying
complaint. A party seeking to have a person declared a vexatious litigator must do so
in a civil action pursuant to R.C. 2323.52. This statute has been interpreted to require
the filing of a separate action or a counterclaim. A party seeking to have a person
declared a vexatious litigator may not do so merely by motion filed in the underlying
Licking County App. Case No. 2011-CA-89 14
case. Kinstle v. Union County Sheriff’s Office, 3rd Dist. No. 14-07-16, 2007-Ohio-6024,
¶9. Therefore, although the filing of the instant complaint was a part of appellees’ claim
that appellant is a vexatious litigator, the counterclaim seeking to have appellant
declared a vexatious litigator is a separate action and appellees must show frivolous
conduct in the defense of the counterclaim in order to be entitled to fees.
{¶53} Appellees failed to present evidence that appellant acted in a frivolous
manner in his defense of the counterclaim. Certainly appellant is entitled to defend
himself when a counterclaim is filed against him. Appellant prevailed on his first appeal
of the summary judgment finding him to be a vexatious litigator because the court had
based its judgment on material that was not of evidentiary quality as required by Civ. R.
56. Further, appellee Madison specifically testified that appellant was not frivolous in
choosing to defend himself. Tr. (II) 97. While Madison testified that appellant filed
things that he would deem frivolous, there was no specific evidence presented
concerning what documents appellant filed in defense of the counterclaim that were
frivolous, nor did the trial court make specific findings of frivolous conduct in conjunction
with the counterclaim. The trial court found that the counterclaim sought to show
“vexatious conduct,” which is tantamount to “frivolous conduct.” While the two statutes
share similar definitions, the issue is not whether appellant engaged in frivolous conduct
in his past lawsuits so as to meet the definition of a vexatious litigator, but whether he
engaged in frivolous conduct specifically in relation to his defense of the vexatious
litigator complaint. Further, the trial court found that appellees should recover fees and
expenses “for a public service beyond their own interests by restraining a vexatious
litigator’s future imposition on the courts and other potential defendants.” Judgment
Licking County App. Case No. 2011-CA-89 15
Entry, August 19, 2011, p. 15. However, there is no statutory or legal authority for the
award of fees on this basis.
{¶54} The third assignment of error is sustained.
IV
{¶55} Appellant argues that the trial court erred in awarding fees to attorneys
who represented themselves. Appellant cites State ex rel Thomas v. Ohio State
University, 71 Ohio St.3d 245, 251, 643 N.E.2d 126, 131(1994), in which the Ohio
Supreme Court held that a pro se litigant, in that case an attorney representing himself,
cannot obtain attorney fees.
{¶56} In the instant case, Madison and Madison & Rosan were not merely
representing themselves, but were representing the real estate defendants. The
evidence presented at the hearing reflected that the fees were invoiced to Coldwell
Banker. The fees would have been the same regardless of whether the lawyer
defendants were named in the lawsuit, as the claims were filed against all parties
including the real estate defendants.
{¶57} The fourth assignment of error is overruled.
V
{¶58} In his final assignment of error, appellant argues that the real estate
defendants were liable for the actions of the lawyer defendants in the manner in which
they conducted discovery in the municipal court case on a theory of respondeat
superior. As we found in the first assignment of error that the court did not err in finding
appellant’s claims against the lawyer defendants to be frivolous, this assignment of error
is moot.
Licking County App. Case No. 2011-CA-89 16
{¶59} The fifth assignment of error is overruled.
{¶60} The judgment of the Licking County Common Pleas Court is affirmed in
part and reversed in part. This cause is remanded to the court with instructions to
calculate the amount of fees and expenses incurred in conjunction solely with the
complaint filed by appellant and not including fees and expenses incurred in pursuit of
appellees’ counterclaim. Costs split evenly between the parties.
By: Edwards, J.
Delaney, P.J. and
Wise, J. concur
______________________________
______________________________
______________________________
JUDGES
JAE/r0604
[Cite as Helfrich v. Madison, 2012-Ohio-3701.]
IN THE COURT OF APPEALS FOR LICKING COUNTY, OHIO
FIFTH APPELLATE DISTRICT
JAMES HELFRICH :
:
Plaintiff-Appellant :
:
:
-vs- : JUDGMENT ENTRY
:
TIMOTHY G. MADISON, et al., :
:
Defendant-Appellee : CASE NO. 2011-CA-89
For the reasons stated in our accompanying Memorandum-Opinion on file, the
judgment of the Licking County Court of Common Pleas is affirmed in part and reversed
in part. This cause is remanded to the court with instructions to calculate the amount
of fees and expenses incurred in conjunction solely with the complaint filed by appellant
and not including fees and expenses incurred in pursuit of appellees’ counterclaim.
Costs split evenly between the parties.
_________________________________
_________________________________
_________________________________
JUDGES