Carbone v. Nueva Constr. Group, L.L.C. , 2017 Ohio 382 ( 2017 )


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  • [Cite as Carbone v. Nueva Constr. Group, L.L.C., 2017-Ohio-382.]
    Court of Appeals of Ohio
    EIGHTH APPELLATE DISTRICT
    COUNTY OF CUYAHOGA
    JOURNAL ENTRY AND OPINION
    Nos. 103942 and 104147
    ROSS P. CARBONE
    PLAINTIFF-APPELLANT
    CROSS-APPELLEE
    vs.
    NUEVA CONSTRUCTION GROUP, L.L.C., ET AL.
    DEFENDANTS-APPELLEES
    CROSS-APPELLANTS
    JUDGMENT:
    AFFIRMED
    Civil Appeal from the
    Cuyahoga County Court of Common Pleas
    Case No. CV-13-805622
    BEFORE: S. Gallagher, J., Stewart, P.J., and Celebrezze, J.
    RELEASED AND JOURNALIZED: February 2, 2017
    ATTORNEY FOR APPELLANT,
    CROSS-APPELLEE
    John R. Christie
    Lewis, Brisbois, Bisgaard & Smith, L.L.P.
    1375 East Ninth Street, Suite 1600
    Cleveland, Ohio 44114
    ATTORNEY FOR APPELLEES,
    CROSS-APPELLANTS
    David G. Phillips
    The Brown Hoist Building
    4403 St. Clair Avenue
    Cleveland, Ohio 44103
    SEAN C. GALLAGHER, J.:
    {¶1}    There are two distinct issues presented in this appeal.          Scaparotti
    Construction Group (“SCG”) claims the trial court erred in granting judgment in favor of
    Nueva Construction Group, L.L.C., Bertha Villanueva, B-Resource Management, L.L.C.,
    and Paul Gosden (collectively “Nueva”). SCG claims that it substantiated every element
    of each of its claims through unanswered requests for admissions and by a single witness
    presented at a bench trial. Nueva, in turn, claims that the trial court erred in denying a
    request to deem the complaint frivolous. Finding no merit to either argument, we affirm.
    {¶2} None of the defendants appeared for trial after having two written motions
    for continuance denied.     SCG presented one witness, and Nueva’s trial counsel
    cross-examined him. At trial, the trial court acknowledged that Nueva had not answered
    discovery, which included several requests for admissions that supplemented the trial
    record. The parties also agreed to submit closing arguments through post-trial briefing.
    Nueva filed a post-trial brief that contained 20 documentary exhibits that were not
    introduced during trial and were not otherwise authenticated.      SCG objected to the
    unauthenticated documents and also claimed to have never received those documents
    through the discovery process.
    {¶3} In this appeal, Nueva’s recitation of the facts entirely relies on the
    unauthenticated evidence attached to a post-trial brief and a motion for sanctions filed
    after the trial court entered a verdict in their favor. The documents attached to the
    motion for sanctions, however, were supposedly the same as those attached to the
    post-trial brief, which were not included in the appellate record. SCG timely objected to
    the belated attempt to introduce unauthenticated evidence through the post-trial brief, but
    the trial court denied the motion. The failure to include the post-trial brief exhibits in the
    appellate record is irrelevant because even if those records were included, none were
    authenticated for the purposes of trial as required prior to admission under Evid.R. 901.
    “It is a long-standing principle of the common law that most types of demonstrative or
    physical evidence must be authenticated or identified before such evidence may be
    deemed to be admissible at trial.” 
    Id. Staff Notes.
    We are precluded from considering
    Nueva’s version of the facts, which entirely relies on evidence that should have been
    excluded from consideration at trial for the lack of authentication and for the failure to
    timely admit the evidence into the trial record through witness testimony or stipulations.
    {¶4} Our rendition of the facts is based on admissions to the allegations in the
    complaint, trial testimony (the transcript was requested by SCG in its praecipe and
    thereafter filed on March 18, 2016), and the unanswered requests for admissions deemed
    admitted for trial (at trial, and after SCG called its sole witness, the trial court indicated
    that SCG need not introduce testimony duplicating the admissions from the unanswered
    requests for admissions; the admissions themselves were deemed admitted for the
    purposes of trial under Civ.R. 36(B).          Tr. 40:10-24).     SCG hired Nueva as a
    subcontractor for a project in Xenia, Ohio, because Nueva had obtained EDGE
    certification that SCG wanted credit for with the Ohio School Facilities Commission.
    Nueva and SCG entered into a “Professional Services Certification of Intent,” dubbed the
    “Xenia Subcontract” by the parties, so that Nueva would provide approximately $200,000
    in services for SCG on the project.1
    {¶5} Nueva admitted, in its answer, that it not only entered the Xenia Subcontract
    with SCG, under which Nueva had obligations to perform, but also that SCG had
    conferred a benefit on Nueva by making an unspecified amount of payments that Nueva
    acknowledged it received. Nueva denied, however, that it had received any payments for
    services that were not performed and denied that Nueva had received $85,000 in
    connection with the Xenia, Ohio project under the terms of the Xenia Subcontract. If a
    written agreement memorializing the terms of the Xenia Subcontract exists, it was not
    introduced into evidence.
    {¶6} SCG and Nueva also entered a second contract (“Johnson Hotel Agreement”)
    pertaining to the proposed development of a hotel somewhere in the country. Nueva was
    basically an investor, and SCG provided services in connection with the acquisition and
    development.      According to the terms of the Johnson Hotel Agreement, SCG was
    responsible for all its expenses related to the project, but would periodically bill Nueva
    for consulting services. SCG and Nueva amended the Johnson Hotel Agreement in
    September 2010 to specifically define the project as the “Johnson Court Building in
    1
    Nueva failed to answer paragraphs 13 and 24 of the complaint. Those paragraphs are
    deemed admitted. Civ.R. 8(D) provides that “[a]verments in a pleading to which a responsive
    pleading is required, other than those as to the amount of damage, are admitted when not denied in the
    responsive pleading.” Nueva was required to file a responsive pleading, and thus any allegations not
    denied or not answered for the lack of knowledge or information are deemed admitted.
    Cleveland, Ohio.” In March 2011, that agreement was again amended to update the
    budget and compensation for the hotel project.
    {¶7} According to the unanswered fourth request for admissions, SCG paid Nueva
    $85,000 — the request asked for Nueva to admit “that [Nueva] was paid approximately
    $85,000.” Nueva also admitted, through the fifth unanswered request for admissions,
    that it “did not perform services relative to the agreements and to earn the monies paid”
    by SCG. (Emphasis added.) It is unclear which agreements or services were being
    referenced in the requests for admissions, and no trial evidence specifically connected the
    admissions to the Xenia Subcontract.
    {¶8} At trial and with respect to the Johnson Hotel Agreement, SCG’s
    representative testified that the company had spent exactly $400,000 on “pre-development
    costs,” exactly $9,500 on “survey costs,” approximately $70,000 representing 10 percent
    of the $700,000 “historic tax credit assistance” cost, exactly $50,000 on the
    “appraisal/market study,” and approximately $300,000 representing 15 percent of the $2
    million “architect/engineering fee,” all as demonstrated by a development-budget
    spreadsheet attached to the market study performed in March 2011. In addition to those
    expenses, deemed fees by the witness, SCG was entitled to an additional 5 percent under
    the terms of the Johnson Hotel Agreement. SCG claimed the above sums as damages.
    {¶9} In the unanswered requests for admissions, Nueva admitted that it had
    received invoices from SCG and that those invoices remained unpaid.              The trial
    testimony did not link the discussed expenses with those invoices. Regrettably, Ross
    Carbone, SCG’s employee handling the Nueva agreements, passed away before trial,
    complicating the introduction of evidence by SCG. All told, had the project moved
    forward, SCG anticipated a $2.5 million profit, which was a percentage of the entire
    development cost.
    {¶10} The trial court, acting as the trier of fact, entered a verdict in favor of Nueva
    upon all claims. Following that verdict, Nueva filed a motion for sanctions, claiming
    that SCG’s complaint was frivolous, largely based on documents submitted and
    authenticated for the first time for trial purposes in the motion for sanctions. Although
    some of the documents referenced in Nueva’s post-trial brief were properly attached to
    Nueva’s unsuccessful motion for summary judgment, the trial court deemed those
    documents to create genuine issues of material fact, and those documents were not
    introduced at trial. This appeal and cross-appeal timely followed.
    {¶11} SCG challenges the weight of the evidence presented at trial. The weight
    of the evidence concerns “‘the inclination of the greater amount of credible evidence,
    offered at trial, to support one side of the issue rather than the other [and] indicates clearly
    to the jury that the party having the burden of proof will be entitled to their verdict.’”
    (Emphasis sic.) Eastley v. Volkman, 
    132 Ohio St. 3d 328
    , 2012-Ohio-2179, 
    972 N.E.2d 517
    , ¶ 12, quoting State v. Thompkins, 
    78 Ohio St. 3d 380
    , 387, 1997-Ohio-52, 
    678 N.E.2d 541
    . When conducting a manifest weight review, the reviewing court must
    weigh the evidence and all reasonable inferences, consider the credibility of witnesses,
    and determine whether in resolving conflicts in the evidence, the finder of fact clearly lost
    its way and created such a manifest miscarriage of justice that the judgment must be
    reversed and a new trial ordered. Eastley at ¶ 20, citing Tewarson v. Simon, 141 Ohio
    App.3d 103, 115, 
    750 N.E.2d 176
    (9th Dist.2001).
    {¶12} “[A] court of appeals should affirm a trial court when the evidence is legally
    sufficient to support the jury verdict as a matter of law.” Bryan-Wollman v. Domonko,
    
    115 Ohio St. 3d 291
    , 2007-Ohio-4918, 
    874 N.E.2d 1198
    , ¶ 3, citing Thompkins at 386.
    Further, even if the evidence is sufficient as a matter of law, courts should affirm a jury’s
    verdict, as not being against the manifest weight of the evidence, if the verdict is
    supported by some competent, credible evidence. 
    Id. As the
    Ohio Supreme Court has
    explained, under the civil manifest weight of the evidence standard, courts must “presume
    that the findings of the trier of fact are correct” in light of the fact that “the [trier of fact]
    had an opportunity ‘to view the witnesses and observe their demeanor, gestures and voice
    inflections, and use these observations in weighing the credibility of the proffered
    testimony.’” Corrigan v. Illum. Co., 
    122 Ohio St. 3d 265
    , 2009-Ohio-2524, 
    910 N.E.2d 1009
    , ¶ 24, quoting Seasons Coal Co., Inc. v. Cleveland, 
    10 Ohio St. 3d 77
    , 80, 
    461 N.E.2d 1273
    (1984), and State v. Wilson, 
    113 Ohio St. 3d 382
    , 2007-Ohio-2202, 
    865 N.E.2d 1264
    .
    {¶13} There are no findings of fact to review. The trial court ordered the parties
    to present proposed findings of fact and conclusions of law according to Loc.R. 19(B)(1)
    for the Cuyahoga County Court of Common Pleas, but neither party complied. After the
    deadline, the trial court denied SCG’s motion filed under Civ.R. 52, and that decision has
    not been challenged on appeal. As a result, we must presume the findings of the trial
    court, sitting as the trier of fact, are correct. Udrija v. E. Cleveland, 8th Dist. Cuyahoga
    No. 102406, 2016-Ohio-288, ¶ 18 (in the absence of a record upon which it can be
    concluded otherwise, the trial court is entitled to a presumption of regularity).
    {¶14} In order to substantiate a breach of contract claim, a party must establish
    four elements: (1) a binding contract or agreement was formed; “[(2)] the nonbreaching
    party performed its contractual obligations; [(3)] the other party failed to fulfill its
    contractual obligations without legal excuse; and [(4)] the nonbreaching party suffered
    damages as a result of the breach.” Textron Fin. Corp. v. Nationwide Mut. Ins. Co., 
    115 Ohio App. 3d 137
    , 144, 
    684 N.E.2d 1261
    (9th Dist.1996), citing Garofalo v. Chicago Title
    Ins. Co., 
    104 Ohio App. 3d 95
    , 108, 
    661 N.E.2d 218
    (8th Dist.1995).
    {¶15} The sole witness could have simply been deemed incredible by the trier of
    fact and the testimony discredited based on his use of a budgetary prediction instead of
    documentary evidence demonstrating that services were rendered and damages incurred.
    Further, the witness never associated the costs that were demonstrated at trial with the
    unpaid invoices for the purpose of a breach of contract action. In light of the arguments
    presented, we cannot conclude that the finder of fact clearly lost its way and created such
    a manifest miscarriage of justice that the judgment must be reversed and a new trial
    ordered.
    {¶16} Further, the unanswered admissions do not establish claims for breach of
    contract pertaining to the Xenia Subcontract per se.            The pertinent requests for
    admissions provided (1) “Admit that [Nueva] was paid approximately $85,000,” and (2)
    “Admit that [Nueva] did not perform services relative to the agreements and to earn the
    monies paid to it by [SCG].” Nueva thus admitted that SCG paid $85,000 to Nueva, for
    an unspecified reason, but it did not perform services relative to the unspecified
    agreements to earn any money. In the post-trial briefing, SCG claimed the $85,000
    pertained to a project SCG undertook in Xenia, Ohio, under the Xenia Subcontract, but
    evidence of such was not presented in the record. Attached to the complaint was the
    single page reflecting the Xenia Subcontract that demonstrated an intent for SCG to hire
    Nueva as a subcontractor for an amount of services totaling $200,000. In answering the
    complaint, Nueva denied that it was paid $85,000 for the Xenia, Ohio project, but
    admitted that it was paid an unspecified amount in furtherance of the project. Thus, SCG
    was obligated to prove at trial that Nueva was paid $85,000 in furtherance of the Xenia
    Subcontract and that Nueva did not perform services as obligated under that particular
    contract. Even if we consider the request for admission as a measure of damages, there
    was no evidence substantiating any other element of a breach of contract claim with
    regard to the Xenia Subcontract.
    {¶17} The unanswered requests for admissions did not specify (1) which of the
    agreements was breached — the breach occurring by Nueva not performing services
    relative to the agreements; or (2) what the terms of the agreement were as it applied to the
    $85,000 SCG paid to Nueva. In consideration that the answer denied that $85,000 was
    exchanged under the Xenia Subcontract and that the $85,000 was not linked to the Xenia
    Subcontract, the requests for admission did not prove each and every element of a breach
    of the Xenia Subcontract — that the nonbreaching party performed its contractual
    obligations and the other party failed to fulfill its contractual obligations without legal
    excuse — it only demonstrated a damage to be recovered if a breach was proven.
    {¶18} In the alternative to a contractual relationship with regard to the Xenia
    Subcontract, SCG attempted to demonstrate unjust enrichment solely based on the
    unanswered requests for admission. “[U]njust enrichment operates in the absence of an
    express contract or a contract implied in fact to prevent a party from retaining money or
    benefits that in justice and equity belong to another.” Gallo v. Westfield Natl. Ins. Co.,
    8th Dist. Cuyahoga No. 91893, 2009-Ohio-1094, ¶ 19. An unjust enrichment claim
    cannot stand in this case because Nueva admitted in the answer that it contracted, and
    thus entered an enforceable agreement, with SCG for services pertaining to the Xenia,
    Ohio project.   An unjust enrichment claim cannot stand when the parties have an
    otherwise enforceable agreement.     In such situations, the appropriate claim is for a
    breach of contract.
    {¶19} The admissions themselves did not establish each and every element of the
    breach of contract claim, and in light of Nueva’s admissions, the unjust enrichment
    claims were subsumed by the enforceable contracts that existed. The judgment in favor
    of Nueva is affirmed.
    {¶20} Finally, in Nueva’s cross-appeal, Nueva contends that the trial court erred in
    denying its motion for sanctions because the complaint was frivolous based on documents
    submitted and authenticated for the first time for trial purposes after the verdict was
    entered.   The complaint was filed in April 2013.          A year later, the parties filed
    cross-motions for summary judgment. Both motions were denied, under the necessary
    presumption that the documentary evidence created genuine issues of material fact with
    regard to the claims advanced in the complaint. The matter was set for trial in June
    2015. At Nueva’s request, the trial was continued until October 2015. In the run-up to
    the October trial date, Nueva filed two separate motions to continue the trial date. Both
    were denied. On the day of trial, Nueva orally moved to continue the trial. The oral
    motion was also denied. None of the defendants appeared for trial, and Nueva failed to
    introduce any evidence in its defense. In the post-trial brief, Nueva attached several
    unauthenticated documents, and it is upon those documents that it seeks to demonstrate
    the frivolity of the complaint.
    {¶21} R.C. 2323.51 defines “frivolous conduct” as conduct that (1) serves merely
    to harass or maliciously injure another party to the civil action or appeal or is for another
    improper purpose, including, but not limited to, causing unnecessary delay or a needless
    increase in the cost of litigation; (2) conduct that is not warranted under existing law, or
    cannot be supported by a good faith argument for an extension, modification, or reversal
    of existing law, or cannot be supported by a good faith argument for the establishment of
    new law; or (3) conduct that consists of allegations that have no evidentiary support.
    State ex rel. Davis v. Metzger, 
    145 Ohio St. 3d 405
    , 2016-Ohio-1026, 
    49 N.E.3d 1293
    , ¶ 9,
    citing R.C. 2323.51(A)(2)(a)(i), (ii), and (iii). A trial court’s decision on whether to
    award sanctions under R.C. 2323.51 is reviewed only for an abuse of discretion. 
    Id., citing State
    ex rel. Striker v. Cline, 
    130 Ohio St. 3d 214
    , 2011-Ohio-5350, 
    957 N.E.2d 19
    ,
    ¶ 11, and Ron Scheiderer & Assocs. v. London, 
    81 Ohio St. 3d 94
    , 98, 1998-Ohio-453, 
    689 N.E.2d 552
    .
    {¶22} Although not dispositive, generally when the trial court concludes that
    genuine issues of material fact preclude summary judgment, appellate courts will be
    hard-pressed to overturn the trial court’s denial of sanctions, especially based on
    allegations focused on the filing of a frivolous complaint. See, e.g., Cawrse v. Melvin
    Banchek Co., L.P.A. (In re Apelt), 8th Dist. Cuyahoga No. 102765, 2015-Ohio-5149, ¶ 40
    (noting that denying a motion for summary judgment necessarily concludes that issues of
    fact must be resolved by the trier of fact and therefore the complaint is not frivolous);
    King v. Pattison, 5th Dist. Muskingum No. CT2016-0007, 2016-Ohio-4785, ¶ 17 (the fact
    that the trial court twice found genuine issues of material fact demonstrated the decision
    to deny sanctions was not an abuse of discretion); Wrinch v. Miller, 
    183 Ohio App. 3d 445
    , 2009-Ohio-3862, 
    917 N.E.2d 349
    , ¶ 55 (9th Dist.) (“the fact that summary judgment
    was denied demonstrates that [the party] provided at least some factual basis to support
    the claims”); Baker v. Beachwood Villas Condominium Owners Assoc., 6th Dist. Erie No.
    E-03-011, 2004-Ohio-682, ¶ 23 (denial of direct verdict at least demonstrates that the
    lawsuit was “not legally unwarranted”).     In this case, what evidence was submitted
    through Nueva’s motion for summary judgment was found to create genuine issues of
    material fact, and that decision has not been appealed by Nueva.
    {¶23} Further,
    [a] motion for sanctions brought under R.C. 2323.51 requires a three-step
    analysis by the trial court: (1) whether the party engaged in frivolous
    conduct, (2) if the conduct was frivolous, whether any party was adversely
    affected by it, and (3) if an award is to be made, the amount of the award.
    Ferron v. Video Professor, Inc., 5th Dist. Delaware No. 08-CAE-09-0055,
    2009-Ohio-3133, ¶ 44. Although some of the documents attached to the motion for
    sanctions were attached to Nueva’s motion for summary judgment, the bulk of documents
    upon which Nueva relies to demonstrate the frivolity of the complaint were not
    introduced into the record and authenticated until after trial. Further, SCG claimed none
    of the documents submitted after trial had been turned over in discovery. Nueva failed to
    appear for that trial after the trial court denied three motions to continue it and after
    Nueva had already successfully postponed the original trial date.
    {¶24} It is nonsensical for Nueva to claim the trial court erred in denying Nueva’s
    motion for sanctions, focusing on the frivolity of the allegations in the complaint, when
    Nueva failed to present the alleged “smoking guns” until December 2015 — two and a
    half years after the complaint had been filed, after trial had concluded, and largely based
    on documents never propounded in discovery. According to Nueva, SCG was aware of
    the documents that mostly consisted of correspondence between Nueva and SCG and, by
    implication, so should have Nueva. In light of the facts that some of the evidence
    allegedly proved the frivolous conduct merely created genuine issues of material fact, the
    remaining evidence had never been timely introduced for consideration at trial, and
    neither party challenged the summary judgment proceedings on appeal, we cannot
    conclude that the trial court abused its discretion in denying Nueva’s motion for
    sanctions.
    {¶25} We affirm.
    It is ordered that appellant and appellees share costs herein taxed.
    The court finds there were reasonable grounds for this appeal.
    It is ordered that a special mandate be sent to said court to carry this judgment into
    execution.
    A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
    the Rules of Appellate Procedure.
    SEAN C. GALLAGHER, JUDGE
    MELODY J. STEWART, P.J., and
    FRANK D. CELEBREZZE, JR., J., CONCUR