RRL Holding Co. Ohio, L.L.C. v. Stewart ( 2021 )

[Cite as RRL Holding Co. Ohio, L.L.C. v. Stewart, 2021-Ohio-3989.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
RRL Holding Company of Ohio, LLC, :
et al.,
:
Plaintiffs-Appellees,
: No. 20AP-493
v. (C.P.C. No. 15CV-1842)
:
Merrilee Stewart et al., (REGULAR CALENDAR)
:
Defendants-Appellants.
:
D E C I S I O N
Rendered on November 9, 2021
On brief: Shumaker, Loop & Kendrick, LLP, Matthew T.
Kemp, and James R. Carnes, for appellees, Firefly Agency, LLC
f.k.a. IHT Insurance Agency Group and successor-by-merger to
RRL Holding Company Ohio, LLC.
On brief: Brenner Hubble and Todd A. Brenner, for
appellants, Merilee Stewart and TRG United Insurance, LLC.
APPEAL from the Franklin County Court of Common Pleas.
MENTEL, J.
{¶ 1} Defendants-appellants, Merrilee Stewart and TRG United Insurance, LLC
("TRG"), appeal from the final judgment entry dated August 26, 2020 setting forth the
priority for payments to be made by plaintiff-appellee, Firefly Agency, LLC ("Firefly") f.k.a.
IHT Insurance Agency Group ("IHT") and successor-by-merger to RRL Holding Company
Ohio, LLC ("RRL").1 As appellant Stewart has failed to seek leave before filing this appeal
1 In December 2018, Firefly merged and is the successor to RRL. Similarly, IHT is also now known as Firefly.
For the purposes of this appeal, we will refer to each entity by its name as it was known during the period in
dispute.
No. 20AP-493 2
as required under R.C. 2323.52(D)(3), we must dismiss her appeal in this case. We also
dismiss the appeal from TRG for lack of standing.
I. FACTS AND PROCEDURAL HISTORY
{¶ 2} The facts and procedural history of this case are extensive. As the ultimate
resolution of this appeal is based on procedural grounds, we will be brief.
{¶ 3} The dispute arose out of a conflict among members of a limited liability
company, RRL. RRL was a holding company and sole owner of IHT. On March 2, 2015,
RRL and IHT filed a complaint and preliminary injunction against Stewart, a former
member of RRL and former president of IHT, in the Franklin County Court of Common
Pleas seeking to enjoin Stewart and TRG, a new company formed by Stewart, from
presenting themselves as affiliated with RRL or IHT. An amended complaint was filed on
May 4, 2015. On May 18, 2015, Stewart filed an answer and eight counterclaims. TRG also
filed an answer but did not assert any counterclaims in the case. On May 28, 2015, the
parties filed an agreed entry resolving the outstanding motion for a preliminary injunction.
The case was stayed and ordered to arbitration on November 10, 2015. On December 11,
2017, the arbitration panel found that Stewart was lawfully removed from her post at RRL,
and the removal was consistent with the parties' governing documents. On December 18,
2017, RRL and IHT filed a motion to confirm arbitration award. On January 1, 2018,
Stewart filed to vacate the arbitration award. The trial court confirmed the arbitration
award on February 5, 2018, which Stewart appealed. On September 28, 2018, this court
affirmed the trial court's order. See RRL Holding Co. of Ohio, LLC v. Stewart, 10th Dist.
No. 18AP-118, 2018-Ohio-3956. The Supreme Court of Ohio declined to accept jurisdiction
on appeal.
{¶ 4} Throughout the case, Stewart has repeatedly refused to comply with the trial
court's judgment affirming the arbitration award resulting in sanctions. After multiple
hearings and filings on this matter, the Franklin County Court of Common Pleas ultimately
declared Stewart a vexatious litigator pursuant to R.C. 2323.52 on December 20, 2019. See
RRL Holding Co. of Ohio, LLC v. Stewart, Franklin C.P. No. 18CV-7212 (Dec. 20, 2019
Entry). This court has since dismissed two pro se appeals by Stewart arising out of this
case. See Stewart v. RRL Holding Co. Ohio, LLC, 10th Dist. No. 19AP-674 (Jan. 21, 2020
Entry) (finding Stewart had not complied with the requirements of R.C. 2323.52 by failing
No. 20AP-493 3
to first seek leave to proceed); Stewart v. RRL Holding Co. Ohio, LLC, 10th Dist. No. 20AP-
44 (Jan. 23, 2020 Entry) (finding Stewart had failed to establish reasonable grounds to
allow the appeal to proceed).
{¶ 5} On February 5, 2018, the trial court ordered Stewart to sign the closing
documents in accordance with the final arbitration award. On March 13, 2020, after two
additional hearings on January 8 and February 28, 2020, the magistrate recommended
sanctions and that the closing documents be deemed signed pursuant to Civ.R. 70. On
June 26, 2020, the trial court adopted the magistrate's recommendation as to the sanctions
and Civ.R. 70 decision. On August 26, 2020, the trial court issued a final judgment entry
setting forth the priority for payments to be made by Firefly to Stewart.
{¶ 6} On October 26, 2020, appellants, through counsel, filed a notice of appeal of
the trial court's final judgment entry dated August 26, 2020. On October 29, 2020, Firefly
filed a motion to dismiss the appeal for failure to comply with R.C. 2323.52(D)(3) and for
lack of standing. Appellants filed a memorandum contra on November 30, 2020. A reply
brief was filed on December 7, 2020.
II. ASSIGNMENTS OF ERROR
{¶ 7} Appellants assign the following as trial court error:
[1.] The trial court failed to consider the claims and defenses of
TRG.
[2.] The trial court lacked jurisdiction to consider many of the
substantive issues it adjudicated in the June 26, 2020 and
August 26, 2020 Entries.
[3.] The trial court failed to consider critical claims and
defenses of Ms. Stewart in the June 26, 2020 and August 26,
2020 Entries.
[4.] The trial court committed reversible error by refusing to
conduct hearings as ordered by the Tenth District Court of
Appeals.
[5.] The trial court committed reversible error by ruling,
pursuant to Civ.R. 70, that Ms. Stewart was deemed to have
executed the purported closing documents.
No. 20AP-493 4
III. LEGAL ANALYSIS
A. Merrilee Stewart
{¶ 8} We must first address appellees' outstanding motion to dismiss. Appellees
argue that Stewart's appeal should be dismissed for failing to seek leave to proceed in
violation of R.C. 2323.52(D)(3).
{¶ 9} A "vexatious litigator" is defined as "any person who has habitually,
persistently, and without reasonable grounds engaged in vexatious conduct in a civil action
or actions, whether in the court of claims or in a court of appeals, court of common pleas,
municipal court, or county court, whether the person or another person instituted the civil
action or actions, and whether the vexatious conduct was against the same party or against
different parties in the civil action or actions." R.C. 2323.52(A)(3). Pursuant to R.C.
2323.52(D)(3), a person deemed to be a vexatious litigator "may not institute legal
proceedings in a court of appeals, continue any legal proceedings that the vexatious litigator
had instituted in a court of appeals prior to entry of the order, or make any application,
other than the application for leave to proceed allowed by division (F)(2) of this section, in
any legal proceedings instituted by the vexatious litigator or another person in a court of
appeals without first obtaining leave of the court of appeals to proceed pursuant to division
(F)(2) of this section." When a person found to be a vexatious litigator has instituted a legal
proceeding without obtaining leave to proceed from the appropriate court of common pleas
or court of appeals under R.C. 2323.52(F), the court shall dismiss the proceedings or
application of the vexatious litigator. R.C. 2323.52(I).
{¶ 10} Stewart does not dispute that she has failed to comply with R.C.
2323.52(D)(3), but argues that, because she is represented by counsel, the statute is
inapplicable. We disagree.
{¶ 11} The plain language of R.C. 2323.52 makes clear that a vexatious litigator must
first seek leave of the court before bringing a new legal proceeding. The statute provides no
language that carves out an exception if the vexatious litigator has obtained counsel. The
United States District Court for the Northern District of Ohio reached a similar conclusion
writing: "O.R.C. §2323.52 does not limit its applicability solely to actions taken pro se.
Indeed, any party, represented by an attorney, takes actions in a proceeding through the
attorney." (Emphasis sic.) De Leon Lomaz v. Ohio DOC Div. of State Fire Marshal, 2005
No. 20AP-493 5
U.S. Dist. LEXIS 63928, *8 (N.D.Ohio 2005). Accordingly, R.C. 2323.52 not only applies
to a vexatious litigator representing themselves pro se, but to a vexatious litigator
represented by counsel.
{¶ 12} Stewart relies on Sailing v. Pavarini, 8th Dist. No. 89150, 2007-Ohio-6844,
for the proposition that a vexatious litigator does not need to seek leave if he/she has
retained counsel. A brief review is instructive.
{¶ 13} In Sailing, the appellants were deemed vexatious litigators under R.C.
2323.52(A)(2)(c). In the trial court's entry classifying the appellants as vexatious litigators,
the appellants were prohibited from "instituting and/or maintaining legal proceedings in a
pro se capacity in a court of common pleas, municipal court, or county court without first
obtaining the leave of court to proceed." Id. at ¶ 3. The appellants, represented by counsel,
filed a notice of appeal without first seeking leave of the court. The appellee argued that the
appellants' failure to first seek leave of the court reduced the notice of appeal to a nullity.
The appellants argued that they did not need to seek leave as they were represented by
counsel in the appeal. The Eighth District Court of Appeals allowed appellants' appeal to
proceed reasoning that as "[a]n attorney filed the notice of appeal and currently represents
the [appellants] in this appeal, so they are not 'pro se' and not in violation of the court's
order prohibiting them from 'instituting and/or maintaining legal proceedings in a pro se
capacity.' " Sailing at ¶ 4. The Sailing court continued noting that R.C. 2323.52 places no
express restriction on the court's ability to qualify a vexatious litigator designation solely to
pro se filings.
{¶ 14} We are not persuaded by the analysis in Sailing as the facts are distinct from
the instant case. Most notably, the trial court's entry in Sailing expressly restricted
appellants' vexatious litigator designation to cases that they brought pro se. Here, the trial
court's December 20, 2019 entry makes no such restriction.
{¶ 15} Stewart also argues that R.C. 2323.52 is unconstitutional as it deprives
litigants of due process rights under the Ohio Constitution. This argument is without merit.
The Supreme Court considered this same argument in Mayer v. Bristow, 91 Ohio St.3d 3,
4 (2000), finding that "R.C. 2323.52 is not arbitrary or unreasonable, nor does it deny
vexatious litigators their constitutional right of access to the courts. Accordingly, we hold
that R.C. 2323.52 is constitutional in its entirety under Section 16, Article I of the Ohio
No. 20AP-493 6
Constitution." See also Hall v. Callahan, 2013 U.S. App. LEXIS 14520 (6th Cir.2000)
(concluding that R.C. 2323.52 is constitutional in its entirety). Accordingly, Stewart's
appeal is dismissed for failing to first seek leave to proceed in violation of R.C.
2323.52(D)(3).
{¶ 16} Going forward, this court must also look at whether the time for commencing
this appeal has tolled. App.R. 4 governs the period for filing a notice of appeal. "Subject to
the provisions of App.R. 4(A)(3), a party who wishes to appeal from an order that is final
upon its entry shall file the notice of appeal required by App.R. 3 within 30 days of that
entry." App.R.(A)(1). As set forth in R.C. 2323.52(F)(2), the period for filing a notice of
appeal under App.R. 4(A) tolls when "the period of time commencing with the filing with
the court of an application for the issuance of an order granting leave to proceed and ending
with the issuance of an order." If the vexatious litigator files for leave after the expiration
of the 30-day period, the appellate court lacks jurisdiction over the appeal. State ex rel.
Sapp v. Franklin Cty. Court of Appeals, 118 Ohio St.3d 368, 2008-Ohio-2637, ¶ 16-25;
Prime Equip. Group, Inc. v. Schmidt, 10th Dist. No. 15AP-584, 2015-Ohio-3683, ¶ 6-8
(finding a vexatious litigator must file an application for leave before the expiration of the
30-day period under App.R. 4(A)).
{¶ 17} In the instant case, appellant filed her notice of appeal within the 30-day
period for filing under App.R. 4(A) but failed to first seek leave to file under R.C.
2323.52(D)(3). Because the 30-day period has now expired, this court lacks jurisdiction
over the appeal. App.R. 4(A); R.C. 2323.52(I).
B. TRG United Insurance, LLC
{¶ 18} Appellee also moves to dismiss the appeal of TRG for lack of standing to
challenge the August 26, 2020 entry.
{¶ 19} A party has standing to appeal if: "(1) he has a present interest in the subject
matter of the litigation and (2) he has been prejudiced by the judgment of the trial court."
Thomas v. Wright State Univ. School of Med., 10th Dist. No. 12AP-839, 2013-Ohio-3338,
¶ 12, citing Willoughby Hills v. C. C. Bar's Sahara, Inc., 64 Ohio St.3d 24, 26 (1992); Chase
Bank USA, N.A. v. Jacobs, 10th Dist. No. 11AP-343, 2012-Ohio-64, ¶ 7. A party's interest
in the case must be immediate and pecuniary and not a general consequence of the final
judgment. Thomas at ¶ 12, citing Midwest Fireworks Mfg. Co. v. Deerfield Twp. Bd. of
No. 20AP-493 7
Zoning Appeals, 91 Ohio St.3d 174, 177 (2001). In order to demonstrate prejudice, the
appellant must show that the trial court's error injuriously affected them. Ohio Contract
Carriers Assn., Inc. v. Pub. Utilities Comm., 140 Ohio St. 160, 161 (1942).
{¶ 20} In the case sub judice, the August 26, 2020 final judgment entry addresses
the priority for payments under the buy-sell agreement and arbitration ruling as described
in the trial court's June 26, 2020 entry. Of the relief ordered, the trial court imposed fines,
penalties, and attorney fees against Stewart not TRG. "An appeal lies only on behalf of a
party aggrieved by the final order appealed from. Appeals are not allowed for the purpose
of settling abstract questions, but only to correct errors injuriously affecting the appellant."
(Internal citations omitted.) State ex rel. Winfree v. McDonald, 147 Ohio St.3d 428, 2016-
Ohio-8098, ¶ 8. As TRG is not a party aggrieved by the final order it has no standing to
proceed with this appeal.
{¶ 21} Appellants concede that the August 26, 2020 entry does not implicate TRG
directly but contends that it has standing to proceed on a number of grounds, none of which
are persuasive. First, TRG argues that the trial court failed to address unresolved issues
involved in a May 28, 2015 agreed entry contending, "TRG continues to be bound by this
agreement, which by its very existence is destructive to its business." (Nov. 30, 2015
Appellants' Memo. in Opp. at 11.) This court is puzzled by TRG's position that the agreed
entry is "destructive to its business interest" when TRG, in fact, agreed to the terms of the
entry. Regardless, after careful review of the record, TRG has not sought any type of relief
or clarification with the trial court as to issues encompassed in the May 28, 2015 agreed
entry. "In general, issues not raised before the trial court are waived on appeal, and
appellate courts need not consider errors that the complaining party could have brought to
the attention of the trial court at the time the error could have been corrected." State ex rel.
Yost v. Summer Rays, Inc., 10th Dist. No. 18AP-929, 2019-Ohio-3907, ¶ 20, citing Parker
v. Elsass, 10th Dist. No. 01AP-1306, 2002-Ohio-3340, ¶ 14, citing State ex rel. Quarto
Mining Co. v. Foreman, 79 Ohio St.3d 78, 81 (1997). Therefore, even if TRG had standing
to appeal the August 26, 2020 entry, it has waived this argument, for the purposes of this
appeal, by failing to first bring the alleged error to the trial court. Next, TRG argues that
the August 26, 2020 entry fails to resolve the counterclaims asserted by TRG. This
No. 20AP-493 8
argument is also without merit as the record indicates that it was Stewart, not TRG, that
filed multiple counterclaims in this case.
{¶ 22} Accordingly, appellees' motion to dismiss is granted.
IV. CONCLUSION
{¶ 23} Based on the foregoing, appellees' motion to dismiss is granted. Appellants'
appeal is dismissed.
Motion to dismiss granted; appeal dismissed.
DORRIAN, P.J., and BEATTY BLUNT, J., concur.
_____________