Fast Property Solutions, Inc. v. Jurczenko , 2013 Ohio 60 ( 2013 )

[Cite as Fast Property Solutions, Inc. v. Jurczenko, 2013-Ohio-60.]
IN THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
LAKE COUNTY, OHIO
FAST PROPERTY SOLUTIONS, INC., : OPINION
Plaintiff-Appellee, :
CASE NOS. 2012-L-015
- vs - : and 2012-L-016
ALEXANDER JURCZENKO, et al., :
Defendants-Appellants, :
JAMES DOUGLASS, :
Appellant. :
Civil Appeal from the Lake County Court of Common Pleas, Case No. 09 CV 000363.
Judgment: Affirmed.
Jaye M. Schlachet and Eric M. Levy, 55 Public Square, Suite 1600, Cleveland, OH
44113 (For Plaintiff-Appellee).
Alexander Jurczenko, pro se, P.O. Box 1366, Mentor, OH 44061.
Marjorie Jurczenko, pro se, P.O. Box 1366, Mentor, OH 44061.
Grace M. Doberdruk, Doberdruk & Harshman Law Office, 4600 Prospect Avenue,
Cleveland, OH 44103 (For Appellant).
MARY JANE TRAPP, J.
{¶1} Alexander and Marjorie Jurczenko and their counsel, Attorney James R.
Douglass, appeal from a judgment of the Lake County Court of Common Pleas, which
found them to have engaged in frivolous conduct in violation of Civ.R. 11 while
defending a complaint in forcible entry and detainer filed by Fast Property Solutions, Inc.
against the Jurczenkos. Citing both the trial court’s inherent authority and Civ. R. 11,
the court imposed a sanction of $11,155 in attorney fees plus costs, after a hearing and
an extensive review of years of voluminous pleadings, motions, and briefs filed in four
different courts, which demonstrated a pattern of numerous, repeated violations of
Civ.R. 11, evincing willful conduct. This conduct can only be described as interposed
solely to delay, obfuscate, confuse, confound, and wear down their opponent and the
court. We affirm the judgment of the trial court, and we cannot improve upon its
summary.
{¶2} The Jurczenkos and their counsel “exhibited a pattern of making
misrepresentations to the court, and engaging in dilatory and frivolous conduct, while
simultaneously accusing the plaintiff and its several attorneys of various forms of
misconduct. The defendants and their counsel repeatedly raised arguments that had
already been raised and ruled upon. When unhappy with these rulings, the defendants
and their counsel consistently chose courses of action designed to further delay these
proceedings, and increase the costs of litigation, such as filing actions in other courts in
an attempt to stay these proceedings, misrepresenting the procedural history of this
case and/or the prior rulings of the court to confuse and delay proceedings, or raising
the same issues that had already been litigated, rather than addressing the issues that
were at hand.”
{¶3} The appeals have been consolidated for disposition in this appeal.
Substantive Facts and Procedural History
{¶4} This is not the first time the parties are before this court regarding litigation
centered upon a residential home owned by Fast Property Solutions. We have
described a portion of the lengthy procedural history of this case in State ex rel.
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Jurczenko v. Lake County Court of Common Pleas, 11th Dist. No. 2009-L-178, 2010-
Ohio-3252. For the benefit of the readers of this opinion, we recount the following
history:
The Lease/Purchase Agreement
{¶5} In 2006, the Jurczenkos entered into an agreement to purchase a single-
family home on Lakeview Drive in Mentor, Ohio. As part of the express terms of this
agreement, the Jurczenkos were obligated to pay the prior owners the sum of $ 152,000
for the real estate. After living in their new residence for only forty-three days, the
Jurczenkos entered into a separate transaction with Fast Property Solutions. Under the
first step of this transaction, the Jurczenkos assigned the real estate purchase
agreement to Fast Property Solutions. Under the second step, the couple and Fast
Property Solutions executed a lease/purchase agreement, which allowed the couple to
retain possession of the residence notwithstanding the assignment to the company.
{¶6} Pursuant to the terms of the “lease/purchase” agreement, the Jurczenkos
were obligated to pay Fast Property Solutions a monthly rent payment of $900. These
rent payments were to continue for a period of 12 months, from July 2006 through June
2007.
{¶7} The “lease/purchase” agreement further provided that, once the one-year
lease period concluded, the Jurczenkos had the option of reacquiring the residence
from Fast Property Solutions for the sum of $180,000. According to this provision of the
agreement, the option to purchase had to be exercised by June 1, 2007.
First Complaint in Forcible Entry and Detainer
{¶8} Despite the fact that the Jurczenkos failed to timely exercise their option to
purchase at the close of the one-year lease period, they continued to live in the
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residence over the ensuing months. Finally, in December 2007, Fast Property Solutions
instituted a forcible entry and detainer action against the Jurczenkos in the Mentor
Municipal Court.
First Settlement Agreement
{¶9} Shortly after the eviction action was filed, it was voluntarily dismissed
when the two sides were able to negotiate a separate contract to modify the original
“lease/purchase” agreement. As part of this Lease Purchase Modification Agreement,
the Jurczenkos agreed that the option to purchase the residence for the sum of
$180,000 must be exercised by May 31, 2008. The agreement further provided for a
consent judgment entry which the Jurczenkos agreed to sign so Fast Property Solutions
could obtain an immediate final order if it became necessary to pursue a second case
for its possession of the property.
Second Complaint in Forcible Entry and Detainer
{¶10} At the end of July, after the Jurczenkos again failed to pay the required
amount to exercise the option to purchase, Fast Property Solutions filed a second
complaint for forcible entry and detainer in the Mentor Municipal Court. Attached to the
new complaint was a copy of the consent judgment entry, which was referenced in the
Modification Lease Purchase Agreement and signed by the Jurczenkos. The municipal
court approved and signed the consent judgment entry, which was journalized on the
same day.
The Jurczenkos’ Motion for Relief From Judgment
{¶11} Three days later, the Jurczenkos filed a motion for relief from judgment,
alleging misconduct by Fast Property Solutions’ counsel, and claiming that the consent
entry was not enforceable because the Jurczenkos had sent a notice of rescission of
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the consent entry to Fast Property Solutions two months before the filing of the second
complaint. Attached to the motion for relief from judgment was Mr. Jurczenko’s affidavit
in which he averred that he had unilaterally rescinded the Modification Lease Purchase
Agreement on May 31, 2008 (the date the payment was due), because he believed it to
be a violation of R.C. 5321.13(B), which prohibits the use of a warrant of attorney to
confess judgment for the recovery of rent or damages to a residential property. The
affidavit also alleged Fast Property Solutions breached the settlement agreement by
demanding that the defendants pay its attorney’s fees.
{¶12} In addition, the Jurczenkos asserted that the municipal court did not have
subject matter jurisdiction over the action. They argued that a forcible entry and
detainer action was inappropriate because their relationship with Fast Property
Solutions was not that of landlord-tenant. According to the Jurczenkos, even though the
original contract had been labeled as a “lease/purchase” agreement, the nature of its
terms established that it was actually a “creative financing” document, under which they
had retained color of title to the subject residence and Fast Property Solutions had only
obtained a mortgage interest in the property.
Second Settlement Agreement
{¶13} A week later, the Mentor Municipal Court granted the motion for relief from
judgment and scheduled the matter for a hearing. At that hearing, a second settlement
agreement was reached. The second settlement agreement provided that the
Jurczenkos would withdraw their motion for relief from judgment, that the court would
vacate the consent judgment, and that the Jurczenkos would purchase the property for
$185,000.
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{¶14} The agreement also provided the Jurczenkos would fund the escrow with
a down payment of $5,550 by August 22, 2008, and close the deal by September 30,
2008. The parties also agreed that if the Jurczenkos failed to make the down payment
by August 22, 2008, they would vacate the premises by August 25, 2008, and consent
to the issuance of a writ of restitution. However, if the Jurczenkos made the down
payment, but failed to close by September 20, 2008, they would agree to the issuance
of a writ and vacate by October 1, 2008, and the down payment of $5,550 would be
returned to the Jurczenkos.
Defendants’ Notice of Compliance
{¶15} On September 8, 2008, the Jurczenkos filed, pro se, a notice of
compliance, alleging they had complied with the (second) settlement agreement, but
also claiming they were unable to purchase the home pursuant to the agreement
because Fast Property failed to provide the necessary paperwork for them to obtain
financing.
Fast Property Solutions’ Motion to Enforce
{¶16} Fast Property filed a motion to enforce the in-court settlement. At the
motion hearing, the municipal court found Fast Property to be entitled to a writ of
restitution. On that day, the municipal court issued the writ, but did not address the
substance of the pending motion for relief from judgment.
First Prohibition Action and the Motion to Stay
{¶17} Immediately after the hearing, the Jurczenkos initiated an original action
for a writ of prohibition in this court (Appeal No. 2008-L-149), to enjoin the municipal
court from continuing to exercise its jurisdiction over the forcible entry and detainer
action, and on the following day the Jurczenkos also filed, pro se, a motion to stay in the
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Mentor Municipal Court. They claimed the action had been treated as an eviction
matter, when in fact they had “unequivocally” presented evidence that the transaction
between the parties was a “creative financing” mechanism to allow them to purchase
the property.
{¶18} This court issued an alternative writ, denying the ex parte emergency
request for stay as to the writ of restitution, but granted a stay of any further
proceedings in the trial court. The Jurczenkos entered into negotiations with counsel
representing the municipal court to resolve the prohibition matter.
{¶19} The Jurczenkos also filed in the trial court a motion to restore possession
of premises, and a joint motion of the Jurczenkos and the City of Mentor’s law director
was filed in this court to dissolve the temporary stay to allow the trial court to address
the August 1, 2008 motion for relief from judgment, despite the fact that, as part of the
second settlement agreement, they had agreed to withdraw their motion for relief from
judgment.
{¶20} On October 10, 2008, this court granted the joint motion to dissolve the
stay. The Jurczenkos then filed an emergency motion to stay pending a hearing on the
motion for relief from the judgment.
Writ of Restitution Vacated
{¶21} On October 17, 2008, the municipal court issued a judgment granting the
motion for relief from judgment and restoring the Jurczenkos to the premises. The court
also vacated all orders, agreements, and consent entries. In its judgment vacating the
writ of restitution, the municipal court held that the Jurczenkos should have been given
the opportunity to respond to Fast Property Solutions’ second complaint before a final
determination was made; accordingly, the issuance of the writ of restitution was
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vacated, and the Jurczenkos were permitted to file an answer to the complaint. At the
end of October, this court, upon a joint request, dismissed the prohibition matter in Case
No. 2008-L-149.
The Jurczenkos’ (First) Motion to Dismiss
{¶22} On October 24, 2008, the Jurczenkos filed, pro se, a motion to dismiss
and an answer in the Mentor Municipal Court. The motion to dismiss alleged the
municipal court did not have subject matter jurisdiction, claiming the agreement
between the parties was not a rental agreement but a “creative financing” arrangement.
They also accused Fast Property Solutions of making misrepresentations to the court
and engaging in egregious conduct.
{¶23} The municipal court set a hearing on the motion to dismiss for November
18, 2008. On November 14, 2008, the day the Jurczenkos’ brief was due, Attorney
Douglass filed a notice of appearance as counsel for both Mr. and Mrs. Jurczenko, and
asked for a continuance. He then filed a hearing brief, alleging again that the written
agreement was not a lease but a purchase agreement, and also accusing Fast Property
Solutions of violating Civ.R. 11, usury, and engaging in a pattern of corrupt activity.
The municipal court denied the motion to dismiss on November 25, 2008, and
scheduled the forcible entry and detainer action for trial.
Second Writ of Prohibition
{¶24} The Jurczenkos then instituted a second original action for a writ of
prohibition before this court (Case No. 2008-L-170). After we granted a temporary stay
of the municipal court proceedings, the Jurczenkos negotiated a new settlement with
counsel representing the municipal court. This settlement provided the stay order would
be momentarily lifted so that the Jurczenkos could submit an amended answer, which
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would set forth certain counterclaims against Fast Property Solutions, and, upon the
filing of the amended answer, the municipal court would then reconsider whether it still
should go forward on the merits of the forcible entry and detainer claim.
{¶25} In January 2009, we dissolved the temporary stay, and eventually granted
the parties’ joint motion to dismiss in June 2009.
Mrs. Jurczenko’s Counterclaim
{¶26} On January 9, 2009, Attorney Douglass, on behalf of the Jurczenkos and
without leave of court, filed an answer and Mrs. Jurczenko’s counterclaim. The
counterclaim alleged that Mrs. Jurczenko was the equitable owner of the subject
property, and that Fast Property Solutions was a non-bank mortgage lender in the
business of providing “creative financing.” Also, the counterclaim alleged that Fast
Property Solutions skirted Ohio’s law and persuaded the Jurczenkos to enter into the
lease/purchase agreement with it; the claim was made even though the Jurczenkos
themselves drafted the “lease/purchase” agreement. The counterclaim also alleged the
agreement was a “creative financing” agreement, which resulted in a constructive
mortgage. That allegation was made even though the agreement specifically stated
that the agreement “shall not under any circumstances or interpretation be construed as
a mortgage or other financing mechanism under any equitable or legal principle.”
{¶27} The multiple-count counterclaim further accused Fast Property Solutions
of engaging in deceptive acts. It also alleged violations of Home Ownership and Equity
Protection Act, the Truth in Lending Act, and the Consumer Sales Practices Act, as well
as unconscionable and frivolous conduct, usury, and abuse of process by Fast Property
Solutions. The counterclaim also sought to quiet title.
Transfer to the Court of Common Pleas
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{¶28} Because the Jurczenkos sought a money judgment in the sum of
$500,000, exceeding the limits of the municipal court’s monetary jurisdiction, the
municipal court ordered the case transferred to the Lake County Court of Common
Pleas. On February 5, 2009, the case was transferred from the Mentor Municipal Court
to the Lake County Court of Common Pleas. The matter was assigned to Judge Lucci
of the common pleas court for final disposition. While the parties were engaging in
preliminary discovery, the Jurczenkos renewed their motion to dismiss Fast Property
Solutions’ single claim on jurisdictional grounds.
{¶29} As they had before the municipal court, the Jurczenkos contended that
Fast Property Solutions could not maintain a proper claim in forcible entry and detainer
because the original agreement of the parties had established a mortgagor/mortgagee,
not landlord/tenant, relationship. In light of this, they further contended that, because
the municipal court never had subject matter jurisdiction over the claim, the common
pleas court and Judge Lucci could not have acquired jurisdiction over the claim through
the transfer.
Second Motion to Dismiss
{¶30} On May 15, 2009, the Jurczenkos, through Attorney Douglass, filed the
second motion to dismiss, alleging again that the municipal court lacked subject matter
jurisdiction, claiming this is not a forcible entry and detainer action because they had
color of title, and therefore, the municipal court had no power to transfer the case to the
common pleas court. To support the contention that their jurisdictional claim was
meritorious, they cited the fact that this court twice stayed the proceedings in the
prohibition actions; the claim was made despite the fact that this court stayed the
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proceedings only to maintain the status quo and to allow time to address the issues
raised in the prohibition proceedings.
{¶31} On August 13 2009, the trial court issued a judgment overruling the
Jurczenkos’ motion to dismiss. The next day, Mrs. Jurczenko filed a notice of
voluntarily dismissal of her counterclaims.
Fast Property Solutions’ Motion to Enforce Settlement Agreement
{¶32} On October 1, 2009, Fast Property Solutions moved for the enforcement
of the (second) settlement agreement that the parties had negotiated during the prior
proceedings before the municipal court. In the pre-trial brief, the defendants once
again attempted to re-litigate the motion to dismiss, and claimed the (second)
settlement agreement to have already been vacated by the court.
Injunction Sought in Federal Court
{¶33} The trial court scheduled an oral hearing on the motion to enforce the
settlement agreement for November 19, 2009. To prevent the proceedings from going
forward, the Jurczenkos sought an injunction in the U.S. District Court, Northern District
of Ohio (Case No. 09-cv-01127). The federal court denied the request for an injunction
and the hearing in common pleas court went forward.
{¶34} At that hearing, the trial court and the attorneys for both sides discussed
whether the Jurczenkos’ amended answer contained a request for a jury trial. When
both attorneys indicated that they could not affirmatively state that a written jury demand
had been made, the trial court concluded that the matter would proceed as a bench trial
on December 18, 2009.
{¶35} Two days before trial, the defendants, through Attorney Douglass, filed a
pretrial statement, raising again the argument that the court lacked jurisdiction.
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Trial on Forcible Entry and Detainer Action
{¶36} On December 18, 2009, the trial finally began on the forcible entry and
detainer claim and the motion to enforce the settlement agreement. Immediately prior
to the commencement of trial, Mr. Jurczenko filed a notice of appearance, indicating
Attorney Douglass was no longer the attorney of record and that he would be
representing himself. Attorney Douglass represented Mrs. Jurczenko alone.
{¶37} Also, before the trial was to begin, the defendants made an oral motion for
a jury trial, claiming that their answer and counterclaim filed on January 12, 2009, did
contain an express request for a jury trial. The trial court overruled the motion, after
determining that a waiver of the right to a jury trial had occurred during the discussion
with the attorneys at the November 18, 2009 hearing.
Another Prohibition Action
{¶38} After the completion of the proceeding’s first day, Mrs. Jurczenko filed
another petition for a writ of prohibition before this court against Judge Lucci and the
Lake County Court of Common Pleas, seeking a writ to enjoin any further proceedings
in the case (Case No. 2009-L-178). She raised two basic challenges to the trial court’s
jurisdiction over the matter. First, she again asserted that the court could not go forward
on the forcible entry and detainer claim because the municipal court could not transfer a
matter which never fell within the scope of its subject matter jurisdiction. Second, she
alleged that the trial court lost its jurisdiction over the entire matter when Judge Lucci
erroneously denied the Jurczenkos their right to a jury trial on the remaining issues.
{¶39} This court overruled the first motion to stay all further proceedings. The
trial went forward on December 22, 2009, December 23, 2009, and January 15, 2010.
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{¶40} This court eventually granted the motion for summary judgment denying
the writ. State ex rel. Jurczenko v. Lake County Court of Common Pleas, 11th Dist. No.
2009-L-178, 2010-Ohio-3252.1 This court concluded that: (1) the municipal court did
not exceed the scope of its jurisdiction in a plain and unambiguous manner; and (2)
relator had an adequate remedy at law.
The Trial Court’s Judgment Granting the Writ of Restitution
{¶41} After the four-day trial, the trial court issued a lengthy, 22-page judgment
on Fast Property Solutions’ sole claim and motion to enforce, granting a writ of
restitution. The trial court determined that the municipal court and the common pleas
court had jurisdiction over this matter, and also addressed in detail the various issues
raised by the defendants, including the validity of two prior settlement agreements and
the proper interpretation of the parties’ “lease/purchase” agreement.
Direct Appeal
{¶42} On March 16, 2010, Mrs. Jurczenko alone appealed the judgment in
Appeal No. 2010-L-024. Fast Property Solutions subsequently moved this court to
dismiss the appeal, because Mrs. Jurczenko had vacated the premises which were the
subject of the underlying forcible entry and detainer action. Mrs. Jurczenko did not file a
response to the motion to dismiss.
{¶43} On December 3, 2010, we dismissed the appeal, on the ground that the
sole purpose of a forcible entry and detainer action is to determine a party’s right to
have immediate possession of the disputed property. Showe Management Corp. v.
Moore, 5th Dist. No. 08 CA 10, 2009-Ohio-2312, ¶36. “Accordingly, once the tenant
has vacated the premises and the landlord has again taken possession, the merits of
1. The foregoing procedural history is taken, in part, from State ex rel. Jurczenko v. Lake County Court of
Common Pleas, ¶2-18.
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such action are rendered moot because no further type of relief can be granted in favor
of the landlord.” Fast Prop. Solutions, Inc. v. Jurczenko, 11th Dist. No. 2010-L-024,
2010-Ohio-5933, ¶3, citing Showe Management, supra.Motion for Sanctions
{¶44} Before the appeal was concluded, Fast Property Solutions filed a motion
for sanctions under R.C. 2323.51 and Civ.R. 11, alleging frivolous conduct by the
Jurczenkos and Attorney Douglass. The trial court determined Fast Property’s claims
under R.C. 2323.51 were untimely, but allowed the Civ.R. 11 claims to proceed.
{¶45} The court held a hearing on Fast Property’s Civ.R. 11 claims. Fast
Property Solutions presented evidence that it had incurred attorney’s fees in the amount
of $11,155.00 as a result of the defendants’ and their counsel’s frivolous conduct.
{¶46} At the hearing, Mr. Jurczenko argued again the motion was untimely, and
alleged Mrs. Jurczenko was not served with notice of the hearing. He also claimed the
plaintiff could not establish frivolous conduct unless it first filed a Civ.R. 12(B)(6) motion
to dismiss or motion for summary judgment. He argued additionally that he was not
subject to sanctions because he was not a party to the counterclaim or the original
actions for writs of prohibition, and because he only signed the filings in the Mentor
Municipal Court, which had granted his motion for relief from judgment.
{¶47} The trial court, in a lengthy, 24-page decision, granted the motion for
sanctions pursuant to Civ.R. 11 against Alexander and Marjorie Jurczenko and Attorney
Douglass. The court found the defendants and their counsel, throughout the entire
course of the action, engaged in egregious, frivolous conduct in violation of Civ.R. 11,
by making a “continual and collaborative effort to delay the proceedings and increase
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the costs of the litigation.” The court held them jointly and severally liable for the
amount of $11,155.00 plus costs.
{¶48} Attorney Douglass, represented by counsel, and the Jurczenkos, pro se,
filed separate appeals in No. 2012-L-015 and 2012-L-016, respectively.
Appeal No. 2012-T-015: Attorney Douglass’ Appeal
{¶49} In Appeal No. 2012-L-0015, Attorney Douglass brings the following two
assignments of error for our review:
{¶50} “[1.] It was an abuse of discretion for the trial court to sanction appellant
when the evidence presented at the hearing failed to show a willful violation of Civil Rule
11.”
{¶51} “[2.] The trial court abused its discretion by sanctioning appellant when
appellee’s motion for sanctions was not filed within a reasonable time period.”
Civ. R. 11 Sanctions and Our Standard of Review
{¶52} In this case, although the motion for sanctions sought imposition of
sanctions pursuant to both R.C. 2323.51 and Civ.R. 11, the court imposed the sanctions
only under Civ.R. 11. That rule requires attorneys, or pro se litigants, to sign every
motion, pleading, or other document filed in a civil action. This signature serves as a
certificate that the attorney (or pro se litigant) filing the document: (1) has read the
document; (2) that everything contained in it is true to the best of the individual’s
knowledge; (3) that there is a good ground to support it; and (4) that its purpose was not
to delay. Civ.R. 11. An R.C. 2323.51 frivolous conduct motion is determined under an
objective standard; however, the courts have applied a subjective bad faith standard in
determining whether there is a violation of Civ.R. 11. See State ex rel. Bardwell v.
Cuyahoga Cty. Bd. of Commrs., 127 Ohio St.3d 202, 2010-Ohio-5073, ¶8; State Farm
15
Ins. Cos. v. Peda, 11th Dist. No. 2004-L-082, 2005-Ohio-3405; Riston v. Butler, 149
Ohio App.3d 390, 2002-Ohio-2308, ¶12,36 (1st Dist.).
{¶53} The subjective bad-faith standard is met when a violation of Civ.R. 11 is
found to be willful. State ex rel. Dreamer v. Mason, 115 Ohio St.3d 190, 2007-Ohio-
4789. In other words, when a party is found to have filed a document without good
grounds to support it or for the purpose to delay, the court must determine whether the
violation was willful. Rondini v. Seman, 11th Dist. No. 2002-L-017, 2002-Ohio-6590, ¶6,
citing Stone v. House of Day Funeral Serv., Inc., 140 Ohio App.3d 713, 721 (6th
Dist.2000). If the court concludes that the violation was willful, the court may then
impose sanctions pursuant to Civ.R. 11. Id.{¶54} In Law Office of Natalie F. Grubb v. Bolan, 11th Dist. No. 2010-G-2965,
2011-Ohio-4302, this court elaborated on the notion of willfulness:
{¶55} “Civ.R. 11 measures sanctionable conduct using a subjective bad faith
standard which requires all violations to be willful. Bad faith ‘is not simply bad judgment.
It is not merely negligence. It imports a dishonest purpose or some moral obliquity. It
implies conscious doing of wrong. It means a breach of a known duty through some
motive of interest or ill will. It partakes of the nature of fraud. * * * It means ‘with actual
intent to mislead or deceive another.’ Thus, ‘* * * a court can impose sanctions only
when the attorney or pro se litigant acts willfully and in bad faith by filing a pleading that
he or she believes lacks good grounds or is filed merely for the purpose of delay.”
(Citations omitted.) Id. at ¶32. See also Slater v. Motorists Mutual Insurance Co., 174
Ohio St. 148 (1962), paragraph two of the syllabus.
{¶56} The purpose of Civ.R. 11 is “to curb the abuse of the judicial system which
results from baseless filings that burden the courts and individuals with needless
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expense and delay.” Bardwell at ¶12, citing Cooter & Gell v. Hartmarx Corp., 496 U.S.
384, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990). “[T]he specter of Rule 11 sanctions
encourages a civil litigant to ‘stop, think and investigate more carefully before serving
and filing papers.’” Id., quoting Cooter.
{¶57} As to our standard of review of an award under Civ.R. 11, such an award
will be upheld on appeal unless there is an abuse of discretion by the trial court. State
ex rel. Fant v. Sykes, 29 Ohio St.3d 65 (1987). We recognize, however, that the
standard of review with respect to purely legal issues, such as whether good legal
grounds exist to support a complaint, is de novo. Stevenson v. Bernard, 11th Dist. No.
2006-L-096, 2007-Ohio-3192, ¶38.
{¶58} As this court recently stated, the term “abuse of discretion” is one of art,
“connoting judgment exercised by a court, which does not comport with reason or the
record.” State v. Underwood, 11th Dist. No. 2008-L-113, 2009-Ohio-2089, ¶30, citing
State v. Ferranto, 112 Ohio St. 667, 676-678 (1925). The Second Appellate District
also recently adopted a similar definition of the abuse-of-discretion standard: an abuse
of discretion is the trial court’s “failure to exercise sound, reasonable, and legal
decision-making.” State v. Beechler, 2d Dist. No. 09-CA-54, 2010-Ohio-1900, ¶62,
quoting Black’s Law Dictionary (8 Ed.Rev.2004) 11. As the Second District explained,
when an appellate court is reviewing a pure issue of law, “the mere fact that the
reviewing court would decide the issue differently is enough to find error (of course, not
all errors are reversible. Some are harmless; others are not preserved for appellate
review). By contrast, where the issue on review has been confined to the discretion of
the trial court, the mere fact that the reviewing court would have reached a different
result is not enough, without more, to find error.” Id. at ¶67.
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The Trial Court’s Decision Finding Willful Violation of Civ.R. 11
{¶59} In his first assignment of error, Attorney Douglass claims the trial court
abused its discretion because the evidence failed to show a willful violation of Civ.R. 11.
{¶60} In its judgment, the trial court found Attorney Douglass and the
Jurczenkos acted in concert and in bad faith in filing multiple motions for the purposes
of delaying the litigation, maliciously injuring the plaintiff, and increasing the costs of
litigation. The lengthy decision enumerated many instances of such conduct and more
than adequately provided the trial court’s rationale for finding the conduct in willful
violation of Civ.R. 11. Notably, on appeal, Attorney Douglass does not refute any
specific findings by the trial court, but simply claims in a conclusory manner that there
was no evidence that he acted with willful intent to violate Civ.R. 11.
We Find No Abuse of Discretion in the Court’s Imposition of Sanctions
{¶61} Having reviewed the protracted procedural history of this case and the
lengthy decision of the trial court, which thoroughly articulated its rationale for sanctions,
we do not find an abuse of discretion of the trial court in sanctioning the Jurczenkos and
their counsel, who repeatedly and persistently engaged in conduct that unnecessarily
delayed the proceedings and increased the costs of litigation. We admire zealous
advocacy, but Attorney Douglass and the Jurczenkos crossed the line separating zeal
from patent frivolousness. As the trial court observed, the Jurczenkos last paid rent in
August 2007, but the trial on Fast Property Solutions’ forcible entry and detainer
complaint could not begin until December 18, 2009, due to the defendants’ and
counsel’s delaying tactics in filing numerous pleadings and motions in the municipal
court, the common pleas court, the court of appeals, as well as the federal court.
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{¶62} By engaging in the prolonged litigation, in which the Jurczenkos and their
counsel repeatedly raised issues already ruled upon, making arguments not supported
by the existing law, and making misrepresentations to the court – in an apparent effort
to delay or avoid a trial on the merits of the eviction action – the Jurczenkos were able
to reside rent-free for two years in a house owned by the plaintiff, without ever
presenting any credible evidence they had the means to purchase the home.
{¶63} In the following chart, we summarize the filings and conduct found to be
sanctionable by the trial court. The five columns in the chart represent (1) the date, (2)
the sanctioned filing/conduct, (2) the individual(s) who signed or committed the conduct,
(4) claims made by defendants, and (5) the trial court’s reasons for sanctions.
Date Filing/Conduct Signed by Claims Reasons for Sanction
8/1/2008 Motion for Relief from Filed and signed by  alleged  There was no good
Judgment and Alexander and misconduct by ground to support the
Affidavit Marjorie Jurczenko, opposing counsel motion; allegation that
pro se; affidavit by  claimed the consent entry
Alexander consent entry not violated R.C.
Jurczenko enforceable due 5321.13(B) was not
to rescission. supportable by
 claimed the existing law; motion
municipal court filed in bad faith, for
did not have purpose of delay and
subject matter to increase costs of
jurisdiction litigation;
claimed the  Argument that
lease/purchase Plaintiff breached the
agreement was a settlement agreement
“creative exhibited bad faith
financing”
document
 affidavit alleged
unilateral
rescission of the
modified lease
and purchase
agreement
alleged Plaintiff
breached the first
settlement
agreement
9/8/2008 Notice of Compliance Filed and signed by alleged they  the notice was filed
Alexander and complied with the in bad faith because
Marjorie Jurczenko, second the Jurczenkos
pro se settlement presented nothing in
agreement writing confirming they
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claimed they qualified for a loan
were unable to attempted to evade
complete the the purchase
purchase agreement by raising
because of spurious arguments
Plaintiff’s failure
to provide
necessary
paperwork
10/1/2008 Motion to Stay Filed in Filed and signed by claimed the the Jurczenkos twice
Writ of Prohibition Alexander and matter involved a settled the eviction
(2008-L-149) Marjorie Jurczenko, “creative action, and, after
pro se financing receiving the benefits,
mechanism,” not twice attempted to
subject to an invalidate the
eviction action settlement agreement
No good ground to
support the motion to
stay; asserted factual
contentions without
evidentiary support;
misrepresented
procedural history and
pertinent issues
1/9/2009 Counterclaim Filed by Marjorie alleged Marjorie bad faith claim that
Jurczenko; signed was the Plaintiff persuaded
by Attorney “equitable” owner defendants to enter
Douglass of the subject into the
property lease/purchase
claiming Plaintiff agreement when in
violated Home fact defendants
Ownership and drafted the agreement
Equity Protection bad faith claim that
Act, Truth in the lease/purchase
Lending Act, agreement was a
Consumer Sales financing agreement
Practices Act, even though the
and committed agreement specifically
unconscionable stated the agreement
and frivolous was not to be
acts, usury, and construed as a
abuse of process mortgage or financing
Counterclaim mechanism.
withdrawn later Homeownership and
by Attorney Equity Protection Act,
Douglass Truth in Lending Act,
and quiet title claims
were clearly
inappropriate, and no
evidence was
presented to support
remaining claims
factual and legal
contentions were not
supported by good
grounds counterclaim
filed in bad faith,
interposed only to
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delay the litigation,
and to increase costs
of litigation
5/15/2009 Second Motion to Filed and signed by Raised again the Motion was filed in
Dismiss Attorney Douglass subject matter bad faith; the claim
on behalf of the jurisdiction issue that defendants had
Jurczenkos claiming the color of title precluding
defendants had the municipal court’s
color of title and jurisdiction was
the action was groundless
not an eviction
matter
10/15/2009 Brief opposing Motion Filed and signed by Attempted to The defendants’
to Enforce Settlement Attorney Douglass reopen the conduct in continually
Agreement on behalf of the motion to renewing arguments
Jurczenkos dismiss; claimed already addressed
again the court and alleging facts that
did not have had no evidentiary
jurisdiction; basis was in bad faith,
accused and served only to
opposing counsel harass plaintiff, delay
of the proceedings, and
misrepresentation increase the cost of
and violation of litigation
federal law;
claimed plaintiff,
who was the title
owner, was not
the owner;
claimed the trial
court had
“vacated” the
second
settlement
agreement,
contrary to the
record
12/16/2009 Pretrial statement Filed and signed by Reiterated The repetitive
Attorney Douglass arguments that arguments regarding
on behalf of the the case was not jurisdiction was
Jurczenkos an eviction frivolous and in
action; that violation of Civ.R.11
Marjorie had
color of title; and
that the court
lacked jurisdiction
12/18/2009 Jury Demand made Attorney Douglass Attorney One month before
on 1st day of bench represented Marjorie Douglass and Mr. the trial, the court had
trial Jurczenko only; Jurczenko inquired as to whether
Alexander claimed there had there was a demand
Jurczenko been a demand for jury trial and
represented himself for jury trial decided the case
would proceed as a
bench trial when the
parties could not
affirmatively state
there was a jury
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demand. Attorney
Douglass and Mr.
Jurczenko did not
object during the
month-long interval
The trial court found
the jury trial demand
made on the morning
of trial was to delay
and to increase
litigation cost
12/22/2009; Trial Attorney Douglass raised again the The trial court found
12/23/2009; represented Marjorie argument that the defendants’
01/15/2010 Jurczenko; lease/purchase arguments
Alexander agreement was a contradicted by the
Jurczenko “creative agreement itself
represented himself financing” (drafted by
agreement/ defendants), which
equitable provided that the
mortgage/land agreement “shall not
contract under any
circumstances or
interpretation be
construed as a
mortgage or other
financing mechanism
under any equitable or
legal principle.” The
court found the
Jurczenkos’ insistence
upon arguing a
position contradicted
by the express
provision of the
agreement they
themselves drafted to
warrant sanctions.
{¶64} Notably, the Jurczenkos did not pursue their direct appeal, which this court
dismissed after the Jurczenkos voluntarily vacated the premises, rendering the appeal
moot. It is quite telling that, after the protracted litigation over the issue of the lower
court’s lack of subject matter jurisdiction, the defendants chose not to pursue the direct
appeal and present the issue for our review.
{¶65} A trial court is in the best position to assess what is permissible zealous
advocacy and what crosses the line, and is appropriately given an inherent authority, as
well as authority conferred by Civ.R. 11, to impose sanctions based on a party’s
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litigation conduct. Viewing the conduct of the Jurczenkos and their counsel in totality,
we cannot say that their actions were merely negligent or resulted from a good faith
misinterpretation of the state of existing law. The conduct, indeed, imported a dishonest
purpose, implied conscious doing of wrong, and was for the purpose of delay, thus
rising to the level of willfulness warranting sanctions under Civ.R. 11. Grubb, supra.
The abuse of the judicial system by the defendants and their counsel – in repeatedly
filing documents, raising baseless claims, and burdening the courts and the opposing
party with needless expense and delay – is exactly what Civ.R. 11 is designed to deter.
Bardwell, supra. The trial court, in addition, possesses “the inherent power to do those
things necessary for the preservation of their judicial powers and processes * * *.”
Slabinski v. Servisteel Holding Co., 33 Ohio App.3d 345 (9th Dist.1986), syllabus.
“Sanctions may be imposed against parties or their attorneys when the judicial process
is abused.” Ceol v. Zion Industries, Inc., 81 Ohio App. 3d 286, 289 (9th Dist.1992). The
first assignment of error is without merit.
Whether the Motion for Sanction was Filed Untimely
{¶66} Under the second assignment of error, Attorney Douglass contends the
trial court abused its discretion in sanctioning him because the motion for sanction was
not filed within a reasonable time.
{¶67} R.C. 2323.51 requires a motion for an award of sanctions to be filed not
more than 30 days after the entry of final judgment. R.C. 2323.51(B). In contrast,
Civ.R. 11 does not have a time limitation. Mitchell v. Whitaker, 33 Ohio App.3d 170 (8th
Dist.1988).
{¶68} Here, Fast Property Solutions filed the motion for sanctions on August 2,
2010, slightly over five months after the final judgment was entered in this case on
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February 16, 2010. The trial court considered the Jurczenkos’ claim that the motion
was untimely, but ruled it was filed within a reasonable time.
{¶69} On appeal, Attorney Douglass cites to a single case authority for his claim,
Zunshine v. Cott, 10th Dist. No. 07AP-764, 2008-Ohio-2298, ¶17. In this case involving
the recovery of attorney’s fees, the attorney waited nearly a year – until after the fee
matter was terminated, appealed, and then remanded – to file the motion for sanctions
against his client. The court of appeals found the motion to be untimely, because “[n]o
facts that give rise to [the motion for sanctions] accrued after [the final pretrial on the fee
matter].”
{¶70} Zunshine is not binding authority, and, furthermore, is readily
distinguishable. Here, the Jurczenkos filed a notice of appeal on March, 16, 2010
(Case No. 2010-L-024) from the final judgment, which we eventually dismissed on
December 3, 2010, because they vacated the premises, rendering the appeal moot. In
light of the history of this case, Fast Property Solutions cannot be faulted for waiting for
the conclusion of the direct appeal before filing its motion for sanctions. Therefore, we
do not find an abuse of discretion by the trial court in ruling that the motion for sanctions
was filed timely. The second assignment of error is without merit.
Appeal No. 2012-L-016: the Jurczenkos’ Appeal
{¶71} The Jurczenkos assign two errors for our review:
{¶72} “[1.] The Mentor Municipal Court and the Lake County Court of Common
Pleas lacked subject matter jurisdiction, which can never be waived and is not barred by
res judicata, and can be raised at any time, even on appeal, rendering the proceedings
below void ab initio.”
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{¶73} “[2.] The Common Pleas Court committed clear error by considering and
granting appelles [sic] untimely motion for sanctions which was devoid of any factual
and legal merit.”
{¶74} We have already addressed the Jurczenkos’ second assignment of error
in Appeal No. 2012-L-015. We now turn to their first assignment of error.
The Municipal Court Had Subject Matter over This Action
{¶75} Despite the belated presentation of the jurisdictional issue for our review,
we will address the issue of the municipal court’s subject matter jurisdiction in this
appeal. If the municipal court had no jurisdiction over this forcible entry and detainer
action, it would not have the authority to transfer the matter to the common pleas court,
which in turn would lack authority to issue any rulings on this case, including the
judgment of sanctions.
{¶76} Pursuant to Civ.R. 12(H)(3), an action over which a court lacks subject
matter jurisdiction must be dismissed. “The standard of review for a dismissal for lack
of subject matter jurisdiction is whether any cause of action cognizable by the forum has
been raised in the complaint.” Reynoldsburg City Sch. Dist. Bd. of Edn. v. Licking
Heights Local Sch. Dist. Bd. of Edn., 10 Dist. No. 08AP-415, 2008-Ohio-5969, ¶15.
{¶77} A municipal court has jurisdiction to hear any action in forcible entry and
detainer. R.C. 1901.18(A)(8); Estate of Allen v. Allen, 11th Dist. No. 91-T-4580, 1992
Ohio App. LEXIS 3060, *3 (June 12, 1992). Here, Fast Property Solutions filed a
complaint for forcible entry and detainer, alleging that it is the landlord of the property
occupied by the Jurczenkos and that they had breached their lease agreement by failing
to pay rent.
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{¶78} The Jurczenkos claimed, however, that they occupied the premises under
color of title and were the equitable owners of the property. They claimed the
relationship between them and Fast Property Solutions was not that of landlord and
tenant, and, therefore, the municipal court had no jurisdiction, despite the allegations on
the face of the complaint. The Jurczenkos’ claim is meritless.
{¶79} The Supreme Court of Ohio has held that “[a] Municipal Court, under
section 1901.18, Revised Code, has jurisdiction to hear and determine a forcible entry
and detainer action, where, although title to the realty is drawn in question, there is no
question as to present record title.” Haas v. Gerski, 175 Ohio St. 327 (1963), paragraph
one of the syllabus. This court has also stated that if there is no question as to the
present record title holder, then the municipal court is not precluded from deciding the
forcible entry and detainer issue. Allen at *3, citing Haas and State, ex rel. Carpenter v.
Court, 61 Ohio St.2d 208, 209 (1980). Thus, the Mentor Municipal Court had subject
matter jurisdiction over this action; so did the Lake County Court of Common Pleas
upon transfer from that court.
{¶80} The Jurczenkos’ first assignment of error is without merit.
{¶81} The judgment of the Lake County Court of Common Pleas is affirmed.
TIMOTHY P. CANNON, P.J.,
CYNTHIA WESTCOTT RICE, J.,
concur.
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