Centofanti. v. Wayne Homes ( 2012 )

[Cite as Centofanti. v. Wayne Homes, 2012-Ohio-4116.]
STATE OF OHIO, MAHONING COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
LUDOVICO CENTOFANTI ) CASE NO. 10 MA 180
)
PLAINTIFF-APPELLEE )
)
VS. ) OPINION
)
WAYNE HOMES )
)
DEFENDANT-APPELLANT )
CHARACTER OF PROCEEDINGS: Civil Appeal from the Court of Common
Pleas of Mahoning County, Ohio
Case No. 08 CV 4572
JUDGMENT: Affirmed. Remanded.
APPEARANCES:
For Plaintiff-Appellee: Atty. Matthew C. Giannini
10404 South Commons Place
Suite 200
Youngstown, Ohio 44514
For Defendant-Appellant: Atty. Michael S. Gruber
Atty. M. Dean Dahl
Zollinger, Gruber, Thomas & Co.
P.O. Box 2985
6370 Mt. Pleasant Street, N.W.
North Canton, Ohio 44720-0985
JUDGES:
Hon. Cheryl L. Waite
Hon. Gene Donofrio
Hon. Mary DeGenaro
Dated: September 5, 2012
[Cite as Centofanti. v. Wayne Homes, 2012-Ohio-4116.]
WAITE, P.J.
Summary
{¶1} In 2007, Appellee Ludovico Centofanti hired Appellant, Wayne Homes,
to build a house. Less than a year later the building was not complete and Appellee
informed Appellant that a variety of defects existed in construction. Appellee also
informed Appellant that Appellant’s failure to comply with applicable building codes
was making financing the remainder of the project difficult. When the parties could
not resolve their differences, Appellee filed a breach of contract suit in the Mahoning
County Common Pleas Court. Within a week of that filing, Appellant initiated a
private arbitration proceeding. Appellant received service of the complaint, but did
not respond until February of the following year when Appellant filed a hybrid
Civ.R.12(B)(6) motion and motion for stay pending the outcome of arbitration.
Appellant and the private arbitration firm exchanged correspondence concerning the
arbitration proceeding with Appellee, who consistently and unambiguously informed
Appellant and the arbitration firm of his refusal to participate unless ordered to do so
by the trial court. Although Appellee never voluntarily participated in arbitration and
the trial court never ordered participation or ruled on the motion for stay, Appellant
continued with arbitration unilaterally, receiving an award from the arbitrator which
Appellant then submitted to the trial court for enforcement.
{¶2} Appellee, who had both opposed arbitration and sought, in the
alternative, a court-appointed arbitrator rather than a private firm, filed a motion to
stay the arbitration decision, an appeal of the decision and a motion for hearing on all
pending motions. A hearing was held on the cross motions, and the magistrate
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ordered Appellant to provide additional information identifying the source of the
arbitrator’s authority to proceed with arbitration in the absence of a court order. At
this point, Appellee filed a motion to vacate the arbitration award. The trial court
ultimately vacated the award and Appellant filed the instant appeal from that order.
{¶3} An arbitrator’s authority to arbitrate, in the absence of a court order,
comes from the voluntary participation of the parties. The trial court’s decision to
vacate the award obtained by Appellant without Appellee’s participation was
appropriate and was not an abuse of discretion. The judgment of the trial court is
affirmed and the matter remanded for further proceedings in accordance with this
Court’s Opinion.
Factual and Procedural History
{¶4} Appellant, Wayne Homes, L.L.C., was hired by Appellee, Ludovico
Centofanti, for the construction of a house. On November 20, 2008, before the
completion of construction, Appellee filed a complaint alleging breach of contract,
breach of implied warranty to deliver the home free from defect, negligent
construction and violations of the Ohio Consumer Sales Practices Act (“CSPA”).
Appellee alleged Appellant had failed to perform in a workmanlike manner and
provided specific examples, including: improper installation of the footers on the
home and garage units, improper installation of post pads, beams and the foundation
of the furnace as well as failure to comply with local and state ordinances,
regulations, and building codes, resulting in adverse action by Mahoning County
which impaired Appellee’s ability to maintain financing. Appellee sought release from
the construction contract or compensatory damages in the amount of $233,840.00
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(the full value of the contract), in addition to treble his actual damages for violations of
the CSPA, punitive damages, costs, and attorney fees. Appellee attached a copy of
a partially executed construction contract to the complaint.
{¶5} On February 13, 2009 Appellant, then several months in default of filing
an answer, filed a Civ.R. 12(B)(6) motion to dismiss for failure to state a claim and in
the alternative, a motion for stay pending resolution by arbitration. Appellant did not
attach any evidence that an arbitration agreement existed to this hybrid motion. On
February 23, 2009, in response to Appellant’s motion for stay, Appellee filed a motion
to strike Appellant’s February 13, 2009 motion and a counter motion seeking a court
appointed arbitrator, citing cost savings as a reason for preferring to use the court’s
arbitration services, if necessary. Appellee indicated that although a copy of the fully
executed contract had been repeatedly requested, no copy had been provided to
Appellee by Appellant.
{¶6} On March 6, 2009 Appellant filed a copy of the construction contract
with an affidavit in support of the February 13, 2009 motion to dismiss or for a stay
pending arbitration. Appellant’s copy of the agreement has a second, illegible,
signature, dated November 29, 2007, on the space provided for Wayne Homes as
contractor. The Wayne Homes representative is not identified. The document was
stamped “received by Court Room No. 1” on March 18, 2009.
{¶7} The record is then conspicuously silent until Appellee’s May 15, 2009
notice of appeal of arbitration; motion to stay decision; and request for hearing; which
was docketed by the court on June 2, 2009. Between the filing of the competing
motions in February of 2009 along with the Civ.R. 12(B)(6) motion, and the May 15,
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2009 notice by Appellee, the record contains no ruling by the court on any of the
pending motions.
{¶8} Appellee’s May 15, 2009 notice and motion described Appellant’s
unilateral decision to pursue commercial arbitration absent a court order on the
pending motions and Appellee’s unambiguous refusal to participate absent a court
order. Without Appellee’s participation, Appellant obtained an arbitration award. As
a result, Appellee asked that the court stay execution of the award and instead
schedule a hearing and rule on the outstanding motions as well as his appeal of the
arbitration award. On May 20, 2009 Appellant filed an application for an order
confirming the arbitration award. Appellant’s motion requested confirmation of “a
written Award of Arbitrator in the sum of $29,725.00, plus interest at the statutory rate
per annum from April 30, 2009, rendered as a result of an arbitration proceeding
between Plaintiff and Defendant. Defendant was further awarded $900.00 for
reimbursement of arbitration [fees] and expenses.” (5/29/09 Application for Order
Confirming Arbitration Award.)
{¶9} On June 3, 2009 Appellant filed a response opposing Appellee’s notice
of appeal and motion for stay. Appellant acknowledged that the court never ruled on
the pending motions, and that Appellant obtained the arbitration’s award without
Appellee’s participation in the process. Appellant nevertheless asserted the validity
of the arbitration decision and maintained that it was Appellee’s responsibility to
obtain an injunction halting arbitration or asserting that Appellee must abide by the
decision even where there was no court order to participate. Appellant refers to a
change in the case status in the electronic docket summary as a “February 24, 2009
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Order” that “stayed the case pending arbitration.” (6/3/09 Defendant Wayne Homes’
Response to Plaintiff’s Notice of Appeal and Motion to Stay Decision, p. 5.) No such
order appears in the record, however, the docket summary information provided by
the clerk appears to list the case disposition as “(A) DIVERSION OR ARBITRATION”
as of February 24, 2009. (Docket Sheet, p. 1.) Appellee filed a reply to the response
and accompanying exhibits on June 5, 2009, detailing consistent communication with
both Appellant and various employees of the private arbitration firm concerning the
failure of the court to order arbitration and Appellee’s consequent refusal to arbitrate.
In his reply, Appellee argued that the arbitration award obtained in the absence of
one party and without a ruling by the court ordering arbitration was unenforceable.
The matter was set for a hearing on June 16, 2009. No transcript or other evidence
concerning the hearing was transmitted with the record.
{¶10} A post-hearing magistrate’s decision was filed on July 1, 2009. The
magistrate found that six days after Appellee filed suit, Appellant had filed a demand
for arbitration with the American Arbitration Association (“AAA”) and that subsequent
motions to dismiss and for stays were filed in the common pleas court but that no
motion for stay was decided prior to Appellant’s May 20, 2009 motion seeking
confirmation of the arbitration award. The magistrate noted that Appellee’s May 15,
2009 filing included objections to the arbitration process, but that Appellee had not
expressly requested to vacate the award. The magistrate ordered both parties to
provide “legal authority pertaining to the jurisdiction of the AAA to proceed with
arbitration of a contractual dispute * * * before a ruling by this Court upon
Defendant’s motion to dismiss or stay and before a ruling on Plaintiff’s motion
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to strike or request for binding arbitration” by July 27, 2009, and a second
hearing was set.
{¶11} In its court ordered response, filed one day late, Appellant
acknowledged that the arbitration provisions governing the proceedings allow
motions for stay and motions to compel a party to participate in arbitration. Appellant
also recognized that these provisions do not provide for or require that the party
opposing arbitration has the burden to file some protective motion to stop arbitration.
The magistrate’s March 16, 2010 decision denied Appellant’s motion to confirm the
arbitration award, granted Appellee’s motion to vacate the award, and set an April 14,
2010 hearing to determine whether an executed contract between the parties
included a binding and enforceable arbitration clause. Appellant filed timely
objections to the decision but made no request for findings of fact or conclusions of
law. Appellee filed a motion in support of the decision and Appellant, without seeking
leave, filed a sur reply.
{¶12} The trial court adopted the magistrate’s decision in its entirety. The
court denied Appellant’s application for an order confirming the arbitration award, and
instead vacated the award and taxed costs to Appellant in a judgment entry dated
November 2, 2010. Appellant filed a timely notice of appeal of this judgment entry.
Interestingly, on November 10, 2010 the magistrate granted Appellant’s motion for
stay pending arbitration. This November 10, 2010 determination has no bearing on
the issues before us, which involves the trial court’s decision to vacate the unilateral
award.
Argument and Law
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ASSIGNMENT OF ERROR
THE TRIAL COURT’S RULING DENYING DEFENDANT’S
APPLICATION FOR ORDER CONFIRMING ARBITRATION AWARD
AND VACATING THE ARBITRATION AWARD IS ERRONEOUS AS A
MATTER OF LAW.
{¶13} The issue before us is the propriety of a trial court’s decision to vacate
an arbitration award gained without the participation of a party and in the absence of
a court order, while the matter was pending in court. The alleged right to arbitrate in
lieu of litigation at issue here is based in contract. Because “arbitration is a matter of
contract * * * a party cannot be required to submit to arbitration any dispute which he
has not agreed so to submit. * * * This axiom recognizes the fact that arbitrators
derive their authority to resolve disputes only because the parties have agreed to
submit such grievances to arbitration.” Council of Smaller Ents. v. Gates, McDonald
& Co., 80 Ohio St.3d 661, 665, 687 N.E.2d 1352 (1998) quoting AT&T Technologies,
Inc. v. Communications Workers of America, 475 U.S. 643, 648-649, 106 S.Ct. 1415,
89 L.Ed.2d 648 (1986). Although the arbitrator’s authority to decide an issue is
created by contract, without a party’s voluntary participation the arbitrator has no
authority to compel participation. Where a party seeks to enforce a contractual right
to arbitrate, the mechanism for enforcement is a court order. R.C. 2711.03.
Similarly, although Ohio law gives an arbitrator the power to issue subpoenas, if an
individual does not respond to the subpoena, the parties must petition the court for
enforcement. R.C. 2711.06.
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{¶14} When a claim is brought in court and a party to the suit seeks to end or
stay the proceeding by claiming that the matter should instead be submitted to
arbitration, “prior to making any determination regarding the arbitrability of any issue
raised by the parties’ claims, a court must first determine whether the written
arbitration agreement being invoked is in fact enforceable under basic contract
precepts.” Benjamin v. Pipoly, 155 Ohio App.3d 171, 2003-Ohio-5666, 800 N.E.2d
50, ¶31. “This determination must begin with application of fundamental principles of
state contract law.” Id. Before transferring jurisdiction over the case to an arbitration
panel, “the statute clearly mandates the trial court to decide” several preliminary
issues: (1) whether an agreement to arbitrate exists, (1) whether the agreement is
enforceable, and (3) whether an enforceable arbitration agreement actually binds the
specific parties involved in the suit. Bradley Dev. Co., Inc. v. Northern Ohio Sewer
Contracting, Inc., 9th Dist. No. 03CA008249, 2003-Ohio 6123, ¶10.
{¶15} In Council of Smaller Ents., supra, the Ohio Supreme Court set forth
parameters to determine the arbitrability of a given dispute. We have once before
condensed these parameters into a set of guidelines that courts must follow: “(1)
arbitration is a matter of contract and a party cannot be required to submit to
arbitration any dispute which he has not agreed to submit; (2) the question whether a
particular claim is arbitrable is one of law for the court to decide; (3) when deciding
whether the parties have agreed to submit a particular claim to arbitration, a court
may not rule on the potential merits of the underlying claim; and, importantly, (4)
when a contract contains an arbitration provision, there is a presumption of
arbitrability in the sense that an order to arbitrate the particular grievance should not
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be denied unless it may be said with positive assurance that the arbitration clause is
not susceptible of an interpretation that covers the asserted dispute.” Hoppel v.
Feldman, 7th Dist. No. 09 CO 34, 2011-Ohio-1183, ¶27 citing Council at 665-666.
Only after review of an existing arbitration agreement between the two parties that
covers the subject matter of the dispute may a trial court stay a court proceeding and
transfer jurisdiction to arbitration. On the other hand, if the court finds that no valid
arbitration agreement exists between the parties, the matter remains with the court.
If the court finds a defect in what purports to be an arbitration agreement, the matter
remains with the court. Even where the court finds a valid agreement, if that
agreement does not cover the subject matter of the dispute, the matter remains with
the court.
{¶16} When a party, generally plaintiff, has waived the contractual right to
arbitrate by filing suit and the other party seeks to enforce it, the “party seeking to
enforce an arbitration provision may choose to move for a stay under R.C. 2711.02,
or to petition for an order for the parties to proceed to arbitration under R.C. 2711.03,
or to seek orders under both statutes.” Maestle v. Best Buy Co., 100 Ohio St.3d 330,
2003-Ohio-6465, 800 N.E.2d 7, ¶18. Revised Code section 2711.02 provides:
(B) If any action is brought upon any issue referable to arbitration under
an agreement in writing for arbitration, the court in which the action is
pending, upon being satisfied that the issue involved in the action is
referable to arbitration under an agreement in writing for arbitration,
shall on application of one of the parties stay the trial of the action until
the arbitration of the issue has been had in accordance with the
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agreement, provided the applicant for stay is not in default in
proceeding with arbitration.
(C) * * * an order under division (B) of this section that grants or denies
a stay of a trial of any action pending arbitration, including, but not
limited to, an order that is based upon a determination of the court that
a party has waived arbitration under the arbitration agreement, is a final
order and may be reviewed, affirmed, modified or reversed on appeal.
{¶17} Revised Code section 2711.03 provides:
The party aggrieved by the alleged failure of another to perform under a
written agreement for arbitration may petition any court of common
pleas having jurisdiction of the party so failing to perform for an order
directing that the arbitration proceed in the manner provided for in the
written agreement. * * * The court shall hear the parties, and, upon
being satisfied that the making of the agreement for arbitration or the
failure to comply with the agreement is not in issue, the court shall
make an order directing the parties to proceed to arbitration in
accordance with the agreement.
If the making of the arbitration agreement or the failure to perform it is in
issue in a petition filed under division (A) of this section, the court shall
proceed summarily to the trial of that issue. * * * [E]ither party * * * may
demand a jury trial of that issue.
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{¶18} Action under either provision triggers the trial court’s duty to “determine
ultimately whether an arbitration provision is enforceable (and to be ‘satisfied’ that the
relief sought is appropriate before issuing the order).” Maestle, supra at ¶17-18. But
the “statutes are separate and distinct provisions and serve different purposes.”
When a party seeks to enforce an arbitration agreement, action under both provisions
may be necessary. Id. at ¶17.
{¶19} As we explained in Hoppel: “As a general rule, either party to a
contract of arbitration may waive the contractual right to arbitrate. For instance, a
plaintiff waives the right to arbitrate by filing a complaint. For the defendant, the right
to arbitrate can be preserved by seeking enforcement of the arbitration clause.
Failure to move for a stay pursuant to R.C. 2711.02, coupled with responsive
pleadings, will constitute a defendant's waiver.” (Internal citations omitted). Hoppel
at ¶44. “R.C. 2711.03 provides that a party cannot actually be compelled to arbitrate
in the absence of a court order. Thus, a party who volunteers to submit a claim to
arbitration is generally estopped from denying the arbitrator’s authority after an
adverse award has been issued.” E.S. Gallon Co., L.P.A. v. Deutsch, 142 Ohio
App.3d 137, 141, 754 N.E.2d 291 (2001). Various Ohio courts, including this one,
have held that a party who voluntarily submits to arbitration and acknowledges the
authority of the arbitrator is estopped from raising lack of authority or lack of
jurisdiction at a later date. Creatore v. Robert W. Baird & Co., 154 Ohio App.3d 316,
2003-Ohio-5009, 797 N.E.2d 127, ¶12, also Jefferson Cty. Sheriff v. Ohio
Patrolmen’s Benevolent Assn., 7th Dist. No. 05 JE 39, 2006-Ohio-1055, ¶34.
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{¶20} If a party to an arbitration agreement voluntarily participates in the
arbitration of a dispute pursuant to the agreement, or is ordered by the court to
participate, he is bound by the arbitrator’s decision. By participating voluntarily, or by
signing a valid agreement and being compelled to participate, a party limits his ability
to modify or avoid the decision of the arbitrator to those grounds provided by statute.
A party to a valid arbitration agreement may be bound to accept an arbitrator’s
decision even when it includes errors of fact or law; the extremely narrow review
allowed by law may not provide relief. “It is only when the arbitrator has overstepped
the bounds of his or her authority that a reviewing court will vacate or modify an
award.” Queen City Lodge No. 69, Fraternal Order of Police, Hamilton Cty., Ohio,
Inc. v. Cincinnati, 63 Ohio St.3d 403, 407, 588 N.E.2d 802 (1992). “For our
purposes, the converse is also true−if the arbitrator has not exceeded his or her
powers, the award should not be vacated or modified, absent any of the other
circumstances in R.C. 2711.10 and 2711.11 (such as corruption, fraud, misconduct,
partiality, or material mistake.)” Id. The grounds necessary to vacate an arbitration
award are found in the statute:
2711.10 Court may vacate award.
In any of the following cases, the court of common pleas shall
make an order vacating the award upon the application of any
party to the arbitration if:
The award was procured by corruption, fraud, or undue means.
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There was evident partiality or corruption on the part of the
arbitrators, or any of them.
The arbitrators were guilty of misconduct in refusing to postpone
the hearing, upon sufficient cause shown, or in refusing to hear
evidence pertinent and material to the controversy; or of any other
misbehavior by which the rights of any party have been
prejudiced.
The arbitrators exceeded their powers, or so imperfectly executed
them that a mutual, final, and definite award upon the subject
matter submitted was not made.
If an award is vacated and the time within which the agreement
required the award to be made has not expired, the court may
direct a rehearing by the arbitrators.
{¶21} Appellant argues that, despite statutory provisions and caselaw that
explicitly identify the mechanisms necessary to enforce a contractual arbitration
clause, the burden to enjoin arbitration is on the party who does not wish to arbitrate
and is challenging the validity of the arbitration clause. However, both the Ohio
legislature and the Supreme Court have clearly placed the burden on Appellant, as
the party seeking arbitration, to first obtain enforcement of the clause in a court with
jurisdiction over the matter by securing a court order. No requirement or mechanism
exists for Appellee to enjoin an arbitration that Appellant commenced after suit was
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filed prior to obtaining an order to arbitrate. In fact, Appellee’s participation in the
arbitration, depending on degree, might operate to waive his objections to arbitration
in the trial court. Hence, Appellant has the burdens reversed here. It was not
Appellee’s duty to stop the arbitration process. Instead, it was Appellant’s duty to first
obtain a court order to arbitrate before proceeding through the arbitration process.
{¶22} Arbitration is not a substitute for judicial process, nor does the process
followed by an arbitrator vindicate a litigant’s due process rights. These are functions
of government. Arbitration is an extra judicial process: a way, in theory, to avoid the
cost and time of litigation. Arbitration clauses cannot be enforced in the absence of
some voluntary act by the parties, who presumably made a genuine choice to
arbitrate, rather than use the courts, when negotiating their contracts. Academy of
Medicine of Cincinnati v. Aetna Health, Inc., 108 Ohio St.3d 185, 842 N.E.2d 488(2006). In the absence of voluntary participation by both parties, such a clause
cannot be enforced without court action. Just as an arbitrator’s power to subpoena
witnesses is not equal to a court’s power to compel the appearance of parties and
the parties must ask the court to enforce the subpoena, where a party seeks to
enforce an arbitration clause over the objections of the other party to the agreement,
the party seeking to arbitrate must first prove the validity of the clause and seek
enforcement in court according to the procedures outlined by the legislature. R.C.
2711.03.
{¶23} Appellant attempts to explain its decision to ignore the judicial
proceeding and to coerce Appellee into arbitration by citing to the February 24, 2009
change in the case disposition listed in the docket as the basis for its actions.
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Although the disposition may have created some momentary confusion, the efforts of
Appellant and the AAA to coerce Appellee into participating in arbitration significantly
predate the summary change in the docket. Similarly, the instant lawsuit predates
Appellant’s arbitration demand. Evidence of efforts to coerce arbitration prior to
February 24, 2009 include a December 5, 2008 letter faxed by Appellee’s counsel to
the AAA, apparently in response to a fax Appellee had received, informing the
organization that a lawsuit had been filed and that his client would not participate in
the arbitration process. Later the AAA sent a January 13, 2009 letter to both parties,
referencing a December 22, 2008 letter sent by Appellant (which does not appear in
the record), concerning the pending court case and arbitration proceeding. In the
January letter the AAA indicated that in the absence of an agreement by the parties
or a court order, arbitration would proceed according to the organization’s rules
although the parties could renew objections once an arbiter was appointed. The AAA
letter also gave the parties a January 20, 2009 deadline to submit a list of possible
arbitrators, and informed them that a $1,000.00 fee, to be split between the parties,
was due on January 27, 2009. Appellee responded to this letter on January 14,
2009, again stating that he would not participate in arbitration until ordered to do so
by the court. He also explained that he had never received an executed copy of the
contract containing the alleged arbitration agreement and that the matter was
pending in court. By February 6, 2009, despite Appellee’s clear refusal to participate,
a preliminary hearing was set by the arbitrator for February 13, 2009. All of this
occurred prior to any action by the trial court, and prior to any change in the case
disposition on the docket.
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{¶24} The arbitrator’s February 13, 2009 letter to AAA indicates that Appellant
appeared for the February 13, 2009 teleconference but Appellee did not and that
deadlines were set for an exchange of documents in the absence of Appellee. Also
on February 13, 2009, Appellant made his first appearance in the lawsuit by filing his
motion for stay pending arbitration. The facts presented by Appellant reflect a single-
minded focus on arbitration and predated any change in the information reflected in
the docket. It continued despite the fact that no order was issued by the court. The
case notation in the docket is irrelevant to Appellant’s attempts to force Appellee’s
participation in arbitration. More importantly, because the disposition in the docket is
not a court order or judgment of the court, on which Appellant would be genuinely
entitled to rely, in the absence of a journalized order or judgment he would have done
so to his own detriment.
{¶25} “Dockets and journals are distinct records kept by clerks;” a court,
however, speaks only through its journal. (Internal citation omitted.) State ex rel.
White v. Junkin, 80 Ohio St.3d 335, 337 (1997). The common pleas clerk of courts is
charged by R.C. 2303.12, to “keep at least four books. They shall be called the
appearance docket, trial docket, and printed duplicates of the trial docket * * * journal,
and execution docket. * * * He shall keep an index to the trial docket and to the
printed duplicates of the trial docket and of the journal direct, and to the appearance
docket, record, and execution docket, direct and reverse.” The clerk is similarly
charged by the Ohio Supreme Court’s Superintendence Rules which requires that
clerks maintain four separate categories of records: “an index, docket, journal, and
case files in accordance with Sup. R. 26(B).” Sup.R. 26.03(B)(1).
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{¶26} The “case file” under the rule is a “compendium of original documents
filed in an action or proceeding in a court, including the pleadings, motions, orders,
and judgments of the court” and the “journal” is “a verbatim record of every order or
judgment of a court.” Sup.R. 26(B).
{¶27} The “docket” as it pertains to a common pleas court is prepared and
maintained by the clerk and is required to include the “[n]ames and addresses of all
parties in full”; “[n]ames, addresses, and Supreme Court attorney registration
numbers of all counsel”; “issuance of documents for service upon a party and the
return of service or lack of return” as well as a “brief description of all records and
orders filed in the proceeding, the time and date filed, and a cross reference to other
records as appropriate”; “[a] schedule of court proceedings for the division and its
officers to use for case management”; “[a]ll actions taken by the division to enforce
orders or judgments; and * * * [a]ny information necessary to document the activity of
the clerk of the division regarding the case.” Sup.R. 26.03(C).
{¶28} As this Court recently explained in State v. Roepke, 7th Dist. No. 10 MA
138, 2011-Ohio-6369, the general index and docket created by the clerk is “not the
same as a journal.” Id. at ¶18. While the docket is prepared and maintained by the
clerk, the “court speaks through its journals and an entry is effective only when it has
been journalized. Civ. R. 58 and Crim. R. 32(B). To journalize a decision means that
certain formal requirements have been met, i.e., the decision is reduced to writing, it
is signed by a judge, and it is filed with the clerk so that it may become a part of the
permanent record of the court.” State v. Ellington, 36 Ohio App.3d 76, 77-78 (1987).
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{¶29} Journalization requirements are not empty formalities. Where a court
issues a decision verbally or even in writing, but it has not been journalized, the
judgment is not final. State v. Ginocchio, 38 Ohio App.3d 105, 526 N.E.2d 1366(1987). Similarly, a court will lose jurisdiction if it fails to journalize its decision within
the period prescribed by statute. Ellington, paragraph two of the syllabus. A case
disposition entered by a clerk that does not reflect a properly journalized order or
judgment of the court has no force or effect under Ohio law. Even if the court in this
case had ordered arbitration, without a properly journalized record of that order it
would be ineffective. The case disposition notation in the docket is not a decision
reduced to writing, signed by a judge, and filed with the clerk. Nothing short of a
journalized judgment entry alters the fact that the trial court did not order arbitration.
{¶30} In essence, because the trial court did not order arbitration, Appellee
did not voluntarily participate and no valid arbitration occurred. Without Appellee’s
voluntary or court-ordered participation the arbitrator exceeded his power and so
imperfectly executed his duties that the resulting decision was in no way mutual, and
severely prejudiced Appellee. Appellant failed to obtain a court order enforcing the
alleged arbitration clause prior to proceeding with arbitration and Appellee refused to
participate voluntarily. Hence, the trial court was correct to refuse to enforce the
resulting invalid award. Appellant’s assignment of error is without merit and is
overruled.
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Conclusion
{¶31} The record below supports the trial court’s decision to vacate the
arbitration award. Appellant’s assignment of error is without merit and is overruled.
The decision of the trial court is affirmed and the matter remanded to the trial court
for further proceedings in compliance with R.C. 2711.02 and .03, and consistent with
this Court’s Opinion and the Ohio Supreme Court’s decision in Maestle v. Best Buy
Co., 100 Ohio St.3d 330, 2003-Ohio-6465, 800 N.E.2d 7. Costs, including the full
cost of the invalid arbitration, are taxed to Appellant.
Donofrio, J., concurs.
DeGenaro, J., concurs.