Boulder Creek Assocs., Ltd. v. Fechko Excavating, Inc. ( 2013 )

[Cite as Boulder Creek Assocs., Ltd. v. Fechko Excavating, Inc., 2013-Ohio-3394.]
IN THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
PORTAGE COUNTY, OHIO
BOULDER CREEK ASSOCIATES, LTD., : OPINION
Plaintiff-Appellant, :
CASE NOS. 2012-P-0143
- vs - : and 2012-P-0157
FECHKO EXCAVATING, INC., :
Defendant-Appellee. :
Civil Appeals from the Portage County Court of Common Pleas, Case No. 2012 CV
00448.
Judgment: Reversed and remanded.
James M. Henshaw, 54 East Mill Street, Suite 400, Akron, OH 44308, and Nicholas
Swyrydenko, 137 South Main Street, #206, Akron, OH 44308 (For Plaintiff-Appellant).
Michael L. Fortney and Joseph R. Spoonster, Fortney & Klingshirn, 4040 Embassy
Parkway, Suite 280, Akron, OH 44333 (For Defendant-Appellee).
CYNTHIA WESTCOTT RICE, J.
{¶1} Appellant, Boulder Creek Associates, Ltd., appeals from the judgment of
the Portage County Court of Common Pleas, dismissing their complaint, with prejudice,
for failing to comply with its previous judgment ordering appellant to provide a more
definite statement by attaching a copy of the agreement upon which the cause was
based, pursuant to Civ.R. 10(D). For the reasons below, we reverse the trial court’s
judgment and remand the matter for further proceedings.
{¶2} On April 18, 2012, appellant filed a complaint alleging breach of contract
against appellee, Fechko Escavating, Inc., aka Fechko Excavating, Inc. The complaint
asserted that, pursuant to the contract, appellee was required to complete certain
construction within a specified time; appellant claimed appellee failed to meet the
deadline, which resulted in it incurring additional expenses. Appellants did not attach a
copy of the agreement to the complaint.
{¶3} In lieu of filing an answer, appellee subsequently moved for a more
definite statement pursuant to Civ.R. 12(D). In its motion, appellee asserted the
complaint recited numerous provisions of the agreement as the basis for the alleged
breach. Appellant, however, failed to attach a copy of the agreement as required by
Civ.R. 10(D). According to appellee, it could not properly file an answer without
appellant’s compliance with the rule. The trial court granted appellee’s motion and
ordered it to file an amended complaint, attaching a copy of the agreement, within 21
days of the order.
{¶4} Appellant failed to file its amended pleading within the timeframe set forth
by the court. On July 25, 2012, however, appellant filed a motion to file its amended
complaint instanter. The trial court granted the motion and appellant’s amended
complaint was filed with a copy of the agreement attached to the pleading.
{¶5} On August 10, 2012, appellee filed a motion to strike appellant’s amended
complaint and dismiss the action. Appellee alleged that the copy of the agreement
upon which its cause of action was based was incomplete. In particular, appellee
asserted the attached agreement was missing a page and did not include two exhibits
(detailing certain plans and specifications of the underlying construction) that were
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incorporated into the original agreement. Thus, appellee urged the trial court to dismiss
appellant’s complaint for failing to comply with the order for a more definite statement.
{¶6} Three days later, on August 13, 2012, the trial court entered judgment
dismissing appellant’s complaint with prejudice. The court found that the attached copy
of the agreement omitted attachments and material sections of the agreement without
explanation. Thus, the court determined the amended complaint failed to comply Civ.R.
10(D) as well as the court’s previous order.
{¶7} Unaware of the trial court’s entry, due to an apparent failure of service per
Civ.R. 58(B), counsel for appellant, on August 16, 2012, filed a memorandum in
opposition to appellee’s motion to strike and dismiss its complaint. Appellant asserted it
was unaware of the missing page in the agreement and attached a copy of the same to
its memorandum. It did not, however, attach the two exhibits to which the agreement
incorporated by reference.
{¶8} On October 9, 2012, appellant filed a Civ.R. 60(B) motion for relief from
the August 13, 2012 judgment. As a preliminary basis for filing the motion, counsel for
appellant, via affidavit, stated he only became aware of the judgment of dismissal on
October 5, 2012. Further, appellant asserted the trial court violated Portage County
Local Rule 8.02 when it entered judgment a mere three days after appellee filed its
motion to dismiss. According to the rule, “[a]ny memorandum in opposition to [a] motion
shall be filed and served upon the movant within fourteen (14) days from the date the
motion is served.” Appellant filed its memorandum six days after the motion was filed
and the pleading was therefore timely. In appellant’s view, the court’s judgment was
erroneously entered as it did not give appellant the full allotted time to file its
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memorandum under the local rule. As a result, appellant asserted it was entitled to
relief from judgment because, had the court considered its memorandum, it would have
determined appellant was in compliance with the court’s previous order for a more
definite statement.
{¶9} Appellee filed a memorandum in opposition to appellant’s Civ.R. 60(B)
motion asserting appellant was not entitled to relief because, even though it
supplemented the missing page, it failed to include the exhibits incorporated by
reference into the agreement. Thus, appellee concluded, appellant still failed to comply
with the trial court’s order to provide a more definite statement.
{¶10} A hearing was held on the motion, during which counsel for appellant
asserted the trial court’s premature entry and failure to consider its memorandum in
opposition to appellee’s motion to dismiss was sufficient to justify relief. Counsel noted
that the exhibits were not included with the other aspects of the agreement because
they were both unwieldy in size and voluminous in nature. The court observed that
appellant should have included the reason for omitting the exhibits in the amended
complaint and took the matter under advisement.
{¶11} On December 13, 2012, the trial court entered judgment denying appellant
relief from judgment. The trial court found that, even though appellant was not given
adequate time under the local rule to respond to appellee’s motion, any such error was
harmless. The trial court reasoned that appellant’s response memorandum, which
incorporated a partial copy of the agreement, neither included the entire contract nor
offered an explanation why the incorporated exhibits were not attached. Hence, the
court determined, even had it considered the pleading, appellant was still in violation of
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the original order for a more definite statement sufficient to justify striking the pleading
and dismissing the case. The court therefore determined appellant had failed to
establish grounds for relief from the August 13, 2012 judgment.
{¶12} Appellant filed a notice of appeal from both the judgment of dismissal and
the judgment denying its motion for relief from judgment. The separate appeals were
consolidated and we now consider appellant’s two assignments of error. For its first
assignment of error, appellant alleges:
{¶13} “The trial court acted contrary to law and/or abused its discretion in
dismissing appellant’s complaint with prejudice.”
{¶14} We initially observe that, while the trial court did not specify that its
dismissal, which was entered pursuant to appellee’s motion, was with prejudice, Civ.R.
41(B)(3) provides that, “[a] dismissal under division (B) of this rule and any dismissal not
provided for in this rule * * * operates as an adjudication upon the merits, unless the
court, in its order for dismissal, otherwise specifies.” Thus, the trial court’s dismissal was
with prejudice.
{¶15} Civ.R. 41(B)(1) states that when a plaintiff fails to comply with a court
order, the court may, after notice to plaintiff’s counsel, dismiss an action or claim.
Under this rule, counsel has notice of an impending dismissal with prejudice for failure
to comply with an order “* * * when counsel has been informed that dismissal is a
possibility and has had a reasonable opportunity to defend against dismissal.” Quonset
Hut, Inc. v. Ford Motor Co., 80 Ohio St.3d 46 (1997), syllabus.
{¶16} The notice requirement of Civ.R. 41(B) requires a trial court to give a
plaintiff prior notice of its intention to dismiss a case with prejudice. See e.g. Ohio
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Furniture Co. v. Mindala, 22 Ohio St.3d 99, 101 (1986). A court must give notice so
counsel has the opportunity to explain his or her reasons for failing to cure the alleged
defect before the case is involuntarily dismissed with prejudice. See e.g. Esser v.
Murphy, 9th Dist. No. 25945, 2012-Ohio-1168, ¶11. Further, various courts, including
this one, have interpreted Ohio Furniture Co. to mandate that a court provide a non-
compliant party a “second chance” to comply with the subject order or explain its non-
compliance before entering a judgment of dismissal with prejudice. See Loynd v. Scott
Molders, Inc., 62 Ohio App.3d 888, 893-894 (11th Dist.1990); Kane v. Internal.
Hydraulics, Inc., 11th Dist. Lake No. 12-031, 1987 Ohio App. LEXIS 9603, *4-*5 (Nov.
13, 1987); Esser, supra. (9th Dist.2012); LaRiche v. Delisio, 8th Dist. Cuyahoga No.
5592, 2000 Ohio App. LEXIS 5592, *8-*9 (Nov. 30, 2000). A dismissal on the merits is
a harsh remedy that calls for the due process guarantee of prior notice. See e.g. Ohio
Furniture Co., supra, at 101; see also Mid-West Telephone Service, Inc. v. Security
Products Company, 11th Dist. Trumbull No. 2010-T-0056, 2011-Ohio-3296, ¶14.
{¶17} Here, appellee’s motion to dismiss provided appellant with knowledge that
dismissal was a possibility. The trial court, however, never provided appellant with
notice that a dismissal with prejudice would eventuate from its failure to either file the
omitted portions of the agreement or provide a reason for their omission. The failure to
do so constituted prejudicial error.
{¶18} In addition to this conclusion, we also hold the trial court’s ultimate
decision to dismiss the matter with prejudice evinced an abuse of discretion. The trial
court dismissed the case with prejudice three days after appellee’s motion was filed and
prior to appellant filing its memorandum in opposition to appellee’s motion. The trial
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court’s local rules, however, allow a party opposing a motion 14 days from service of the
motion to file a memorandum in opposition. In rendering its judgment, therefore, the
trial court failed to consider appellant’s memorandum even though it was filed within the
timeframe allowed under Loc.R. 8.02. This, unto itself, was error.
{¶19} A review of appellant’s post-judgment memorandum in opposition
indicates, however, it did not include all missing documentation identified by appellee in
its motion for a more definite statement. Appellant’s amended complaint consequently
failed to fully comply with Civ.R. 10(D) in that it failed to include the full agreement and
did not provide a reason for its omission. The question, therefore, is whether such an
omission was sufficient to justify dismissing the action with prejudice. We hold it was
not.
{¶20} This court has previously observed that dismissals pursuant to Civ.R.
41(B) are punitive in nature and should be utilized only when necessary to vindicate the
court’s authority. Mid-West Telephone Service, Inc., supra, at ¶12; see also Armstrong
v. Revco D.S., Inc., 8th Dist. Cuyahoga No. 64044, 1993 Oho App. LEXIS 5655, *6; 2
Klein Darling, Civil Practice, (1997), 228-229, Section 41-30. And because the law
favors adjudicating matters on their merits, dismissals with prejudice should be reserved
for extreme circumstances such as situations where a plaintiff’s conduct is so
unreasonable, irresponsible, contumacious or dilatory that a dismissal on the merits is
justified. See e.g. Nozik v. Dalheim, 11th Dist. Lake No. 96-L-205, 1998 Ohio App.
LEXIS 1072, *5 (Mar. 20, 1998). “Ordinarily, Ohio courts have followed the policy of
imposing the least severe sanction, or at least a sanction short of outright dismissal of
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the action with prejudice, unless the plaintiff’s conduct evidences bad faith.”
Transamerica Ins. Group v. Maytag, Inc. 99 Ohio App.3d 203, 206 (9th Dist.1994).
{¶21} In this case, even though appellant did not strictly comply with the trial
court’s order for a more definite statement, a review of the record demonstrates the
copy of the contract attached to appellant’s amended complaint included all provisions
that were central to its breach of contract claim. Indeed, even though the agreement
omitted materials, i.e., a page itemizing details of the agreement not ostensibly at issue
in the complaint and two exhibits that are not obviously germane to the breach claim,
the attached document provided appellee with sufficient information upon which it could
answer the allegations in the complaint. The omitted exhibits, while potentially relevant
to the case, do not appear crucial, given the way the case was plead, to the allegations
of breach. And, in any event, the documentation would be subject to disclosure or
discovery if, at some point, they did have some bearing on the case.
{¶22} Given these points, appellant’s conduct does not indicate it was
deliberately attempting to flout the court’s authority, behave unreasonably, or engage in
dilatory conduct. Further, in light of the circumstances, we cannot impute bad faith to
appellant’s omission. The trial court’s dismissal with prejudice was, in our opinion,
unduly harsh and unreasonable under the circumstances.
{¶23} We therefore conclude the trial court abused its discretion when it entered
its judgment of dismissal with prejudice. Our holding is premised upon two discrete
bases. First, we hold the court erred by dismissing the matter without giving appellant’s
counsel adequate notice of its intention to dismiss the matter with prejudice if appellant
did not either (1) file the omitted documentation or (2) explain why the documentation
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was omitted. We further conclude the court erred by imposing an unduly harsh sanction
given the circumstances of the case.
{¶24} Appellant’s first assignment of error is sustained.
{¶25} Appellant’s second assignment of error provides:
{¶26} “The trial court acted contrary to law and/or abused its discretion in
denying appellant relief from judgment under Civ.R. 60(B).”
{¶27} By reason of our disposition of appellant’s first assignment of error,
appellant’s second assignment of error is rendered moot.
{¶28} For the reasons discussed in this opinion, the judgment of the Portage
County Court of Common Pleas is reversed and the matter remanded for further
proceedings.
TIMOTHY P. CANNON, P.J.,
DIANE V. GRENDELL, J.,
concur.
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