Eagle Realty Invests., Inc. v. Dumon , 2022 Ohio 4106 ( 2022 )

[Cite as Eagle Realty Invests., Inc. v. Dumon, 2022-Ohio-4106.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
EAGLE REALTY INVESTMENTS, INC., : APPEAL NOS. C-220087
C-220109
FRONTAGE LODGING INVESTOR C-220111
HOLDINGS, INC., : TRIAL NO. A-1901099
and :
VAIL HOTEL HOLDINGS ESHV, LLC,
: O P I N I O N.
Plaintiffs-Appellees,
:
vs.
PETER G. DUMON, :
GRAHAM L. HERSHMAN,
:
JULIE A. DUMON,
:
MICHAEL S. PAYNE,
HELMUT A. HORN, :
and
:
JULIE A. DUMON, as Trustee of the
Julie A. Dumon Trust Dated March 24, :
2006,
Defendants-Appellants. :
Civil Appeals From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Affirmed in Part, Reversed in Part, and Case Remanded
Date of Judgment Entry on Appeal: November 18, 2022
Vorys, Sater, Seymour, & Peas LLP, Emily E. St. Cyr, David F. Hine and Eric W.
Richardson, for Plaintiffs-Appellees,
OHIO FIRST DISTRICT COURT OF APPEALS
Lindhorst & Dreidame Co., LPA, Bradley McPeek and Michael F. Lyon, for
Defendants-Appellants Peter Dumon and Julie Dumon, Individually and As Trustee
of the Julie A. Dumon Trust Dated March 24, 2006,
Hahn Loesner & Parks, LLP, Daniel A. DeMarco, Christopher B. Wick and Andrew
Y. Schiefer, for Defendants-Appellants Graham Hershman, Michael Payne, and
Helmut Horn.
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BOCK, Judge.
{¶1} Defendants-appellants Peter Dumon and Julie Dumon, individually
and in her capacity as a trustee of the Julie A. Dumon Trust (collectively “Dumons”),
and defendants-appellants Graham Hershman, Michael Payne, and Helmut Horn
(collectively “Non-Dumons”) challenge the trial court’s judgment in favor of plaintiffs-
appellees Eagle Realty Investments, Inc., (“Eagle”) Frontage Lodging Investor
Holdings, LLC, (“Frontage”) and Vail Hotel Holdings ESHC, LLC, (“Vail Hotel
Holdings”) (collectively “Beneficiaries”). For the following reasons, we affirm the trial
court’s judgment in part, but reverse the trial court’s award of attorney fees and
remand the case for further proceedings.
I. Facts and Procedure
{¶2} This appeal is the product of a failed attempt to develop a luxury hotel
in Vail, Colorado. While the Dumons and Non-Dumons were experienced developers
and managers in the hospitality industry, they lacked funding. Eagle and Frontage had
capital. So, the Dumons and Non-Dumons entered a joint venture with Eagle and
Frontage to form Vail Hotel Holdings. The parties signed an “Operating Agreement”
to memorialize the joint-venture agreement, which identified Peter Dumon’s LLC as
the managing member of the project. This dispute centers on another agreement—a
“Guaranty of Completion, Budgets Cash Flow and Other Matters” (“Guaranty”), which
was created to induce the Beneficiaries to sign the “Operating Agreement.”
{¶3} The Guaranty’s introductory recital provides that Vail Hotel Holdings
“shall enter into a Construction Contract with Haselden Construction, LLC, a Colorado
limited liability company (the “Contractor”), which Construction Contract shall be
a ‘costs plus’ contract subject to a guaranteed maximum price” (“Haselden Recital”).
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{¶4} Relevant here, in Section 2.1 of the Guaranty the Dumons and Non-
Dumons “unconditionally and absolutely guarantee[d]” certain obligations:
(a) except as may be excused by an event of Force Majeure,
Completion of the Project on or before the date that is twenty (20)
months following the Construction Loan Closing (“Completion
Date”) in accordance with the requirements of the Plans and Specs, the
Operating Agreement, and the Construction Loan documents and in
compliance with any and all applicable laws and requirements of all
government authorities having jurisdiction over the project, free and
clear of all liens, claims, encumbrances and rights of others (other than
liens created by the Construction Loan documents and real estate taxes
not yet due and payable);
(b) the timely payment of all costs of Completion * * * for an amount
equal to or less than Thirty-Three Million, Nine Hundred Ninety-Seven
Thousand Six Hundred Ninety-four Dollars ($33,997,694) (without
using any of the funds of the Company to pay the amount, if any, by
which the total of such costs exceeds the Guaranteed Maximum Price);
***
(h) the payment on demand of all Enforcement Costs (as hereinafter
defined).
“Enforcement Costs” mean all costs incurred by Beneficiaries under
Section 6 as well as reasonable attorneys’ and paralegals’ fees, including
the cost of inside attorneys and paralegals, costs and expenses and all
court costs and costs of appeal actually incurred by Beneficiaries in
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collecting any amount due Beneficiaries under this Guaranty or in
prosecuting any action against Guarantors with respect to all or any part
of the Guaranty Obligations.
{¶5} In 2016, the Dumons and Non-Dumons signed a “Reaffirmation of
Guaranty” (“Reaffirmation”) to “reaffirm their respective obligations under the
Guaranty” to induce Eagle and Frontage to explore potential transactions related to
their interests in Vail Hotel Holdings. Specifically, the Dumons and Non-Dumons
“acknowledge[d] and agree[d] that all of the terms, conditions, waivers, consents, and
covenants in the Guaranty remain unaltered and in full force and effect, and that the
Guaranty is a legal, valid and binding obligation.”
{¶6} But the development stalled and in 2019 the Beneficiaries sued the
Dumons and Non-Dumons, alleging a breach of the Guaranty and requesting damages
and attorney fees. Following two hearings, the trial court granted the Beneficiaries’
summary-judgment motion and awarded $9,905,199.77 in damages, plus
prejudgment interest and attorney fees. The trial court determined that the Guaranty
was valid, enforceable, and unambiguous, and that the Dumons and Non-Dumons
breached the agreement by failing to perform their obligations under the Guaranty. In
addition, the trial court found the request for attorney fees reasonable. Relevant here,
the trial court denied as moot the Non-Dumons’ motion to amend their answer to
include the nonoccurrence of a condition precedent as a defense. Furthermore, the
trial court denied the Dumons’ motion to strike an affidavit submitted to the court by
the Beneficiaries in support of their request for attorney fees.
{¶7} The Dumons and Non-Dumons filed appeals, which we consolidated.
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II. Law and Analysis
{¶8} The Dumons challenge the trial court’s judgment in two assignments of
error. For their part, the Non-Dumons raise three assignments of error. For clarity and
ease of analysis, we consider some arguments together. We review the trial court’s
grant of summary judgment de novo. Wsb Rehab. Servs. v. Cent. Accounting Sys., 1st
Dist. Hamilton Nos. C-210454 and C-210467, 2022-Ohio-2160, ¶ 22. Summary
judgment is proper if there are no issues of material fact, and, construing the evidence
most strongly in favor of the nonmoving party, the moving party is entitled to
judgment as a matter of law. Civ.R. 56(C).
The Guaranty
{¶9} The trial court’s entry of summary judgment in favor of the Beneficiaries
was proper if 1.) a valid contract existed, 2.) the Dumons and Non-Dumons failed to
perform when performance was due, and 3.) the Beneficiaries suffered damages or
losses as a result. Gilman v. Physna, LLC, 1st Dist. Hamilton No. C-200457, 2021-
Ohio-3575, ¶ 17, citing Lucarell v. Nationwide Mut. Ins. Co., 152 Ohio St.3d 453, 2018-
Ohio-15, 97 N.E.3d 458, ¶ 41. “Where the facts are undisputed and the only question
to be resolved is whether a breach of contract occurred, a question of law exists for the
court to decide.” Stephan Business Ents. v. Lamar Outdoor Advertising Co., 1st Dist.
Hamilton No. C-070373, 2008-Ohio-954, ¶ 16.
1. Conditions Precedent
{¶10} In their first assignment of error, the Dumons raise an issue of contract
interpretation, arguing that the nonoccurrence of an alleged condition precedent
excused their obligations under the Guaranty. The Non-Dumons argue the same in
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their first assignment of error. We review the meaning of a contract de novo. Groen v.
Children’s Hosp. Med. Ctr., 2012-Ohio-2815, 972 N.E.2d 648, ¶ 19 (1st Dist.).
{¶11} The Dumons and Non-Dumons maintain that the plain and
unambiguous language of the Haselden Recital, which provided that Vail Hotel
Holdings “shall enter into a Construction Contract with Haselden Construction, LLC,
a Colorado limited liability company,” constituted a condition precedent. In a contract,
a condition precedent “is an act or event that must occur before performance
obligations arise.” Gilman at ¶ 19, citing Transtar Elec., Inc. v. A.E.M. Elec. Servs.
Corp., 140 Ohio St.3d 193, 2014-Ohio-3095, 16 N.E.3d 645, ¶ 22. The nonoccurrence
of a condition precedent “excuses performance under the contract and is a defense to
a breach-of-contract claim.” Id. The parties agree that a construction contract with
Haselden never materialized. The Dumons and Non-Dumons contend that their
obligations under the Guaranty were never triggered because Haselden was never
involved in the project.
{¶12} In contract law, conditions precedent are disfavored and “will not be
found unless the agreement plainly shows an intent to the contrary.” City of Westlake
v. VWS, Inc., 8th Dist. Cuyahoga No. 100180, 2014-Ohio-1833, ¶ 24, quoting
Campbell v. George J. Igel & Co., 2013-Ohio-3584, 3 N.E.3d 219 ¶ 13 (4th Dist.). Any
interpretation of the Haselden Recital must “give effect to the intent of the parties.”
Transtar at ¶ 9. To determine the parties’ intent, we consider “ ‘the language of a
particular provision, the language of an entire agreement, or the subject matter of an
agreement.’ ” Campbell at ¶ 13, quoting Adkins v. Bratcher, 4th Dist. Washington No.
07CA55, 2009-Ohio-42, ¶ 32, quoting Hiatt v. Giles, 2d Dist. Darke No. 1662, 2005-
Ohio-6536, ¶ 23. As always, we are instructed to avoid any interpretation of a contract
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that would render terms or provisions superfluous or meaningless. See Bates v. Bates,
7th Dist. Noble No. 21 No. 0482, 2022-Ohio-1055, ¶ 38, citing Fifth Third Mtge. Co.
v. Rankin, 4th Dist. Pickaway No. 10CA45, 2011-Ohio-2757, ¶ 24, citing Capital City
Community Urban Redev. Corp. v. City of Columbus, 10th Dist. Franklin No. 08AP-
769, 2009-Ohio-6835, ¶ 30.
{¶13} As evidence of the parties’ intent, the Dumons contend that the
“Operating Agreement” incorporated an estimate from Haselden and, the Dumons
argue, the project could not move forward without Haselden as the contractor. Indeed,
the Guaranty incorporated the “Operating Agreement’s” definitions to define any
capitalized, but undefined, words in the Guaranty. The Dumons point to the first
obligation listed, which guaranteed the “Completion of the Project” within 20 months
of the closing of the “Construction Loan.” Relevant here, the “Operating Agreement”
defined “Completion” as the point in time when Vail Hotel Holdings received “final
waivers and releases of liens from the Contractor,” and “Contractor” is defined as
Haselden. To this end, the Dumons argue that the execution of a construction contract
with Haselden was necessary to trigger their obligations under the Guaranty.
{¶14} But interpreting the Haselden Recital as a condition precedent would
render other provisions of the Guaranty meaningless. See Bates at ¶ 38. Provisions of
a contract should not be read in a vacuum; rather, “we must construe the contract as
a whole.” Wall v. Kroger Co., 1st Dist. Hamilton No. C-140355, 2015-Ohio-734, ¶ 13.
Consider Section 2.1, which delineates obligations of the Dumons and Non-Dumons.
In that provision of the Guaranty, the Dumons and Non Dumons “unconditionally and
absolutely guarantee” their obligations. When we construe the Guaranty as a whole,
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the Guaranty makes clear that the obligations were not contingent upon the execution
of a construction contract with Haselden.
{¶15} The Beneficiaries argue that the Dumons and Non-Dumons waived
their rights to assert the failure of a condition precedent. We agree because guarantors
cannot assert defenses that they have waived. O’Brien v. Ravenswood Apts., Ltd., 169
Ohio App.3d 233, 2006-Ohio-5264, 862 N.E.2d 549, ¶ 29 (1st Dist.); see Kraft Elec.
Contr., Inc. v. Lori A. Daniels Irrevocable Trust, 2019-Ohio-2029, 136 N.E.3d 951,
¶ 24 (1st Dist.). A condition precedent may be waived “ ‘expressly or by implication.’ ”
Corey v. Big Run Indus. Park, LLC, 10th Dist. Franklin No. 09AP-176, 2009-Ohio-
5129, ¶ 18, quoting Mangan v. Prima Constr., Inc., 1st Dist. Hamilton No. C-860234,
1987 Ohio App. LEXIS 6375 (Apr. 8, 1987). A party may waive a contractual right
through a voluntary or intentional “ ‘act inconsistent with claiming it.’ ” Baughman v.
State Farm Mut. Auto. Ins. Co., 160 Ohio App.3d 642, 2005-Ohio-1948, 828 N.E.2d
211, ¶ 9 (9th Dist.), quoting Marfield v. Cincinnati, D&T Traction Co., 111 Ohio St. 139,
144, 144 N.E. 689 (1924).
{¶16} The actions of the parties demonstrate that contracting with Haselden
was not necessary to trigger the Guaranty’s obligations. As this court has explained,
“[C]ommunications between the parties after the agreement’s execution often
constitute valuable evidence as to how both parties understood and implemented the
agreement.” Kraft at ¶ 16. The Dumons acknowledged in their brief that six months
after the Guaranty was signed, Peter Dumon, as the managing member of Vail Hotel
Holdings, and the Beneficiaries agreed to consider substitute contractors. The
evidence in the record indicates that Eagle informed Peter Dumon that the project
needed to move forward with Haselden or another contractor. Indeed, Eagle told Peter
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Dumon, “we must select one of the two contractors and move forward with
construction.”
{¶17} Then in 2016, the Dumons and Non-Dumons signed the Reaffirmation
and agreed “that all of the terms, conditions, waivers, consents, and covenants in the
Guaranty remain unaltered and in full force and effect, and that the Guaranty is a legal,
valid and binding obligation of such.” The Reaffirmation provided that the Dumons
and Non-Dumons had “no defenses or set offs against any Beneficiary, its officers,
directors, employees, agents or attorneys, with respect to the Guaranty.”
{¶18} At a minimum, these acts demonstrate an understanding by the parties
that the Guaranty obligations were unqualified and unconditional. While the Non-
Dumons argue that Peter Dumons’ actions were impermissibly considered by the trial
court as parol evidence, this court recently rejected a similar argument in Kraft as a
“misunderstanding of the parol evidence rule, which endeavors to preserve the
integrity of written agreements by prohibiting modification with evidence of prior or
contemporaneous writings.” Kraft, 2019-Ohio-2029, 136 N.E.3d 951, at ¶ 16.
{¶19} For these reasons, we hold that the language of the Guaranty and
subsequent acts of the parties show that a Haselden contract was not a condition
precedent to the Guaranty obligations. Moreover, the Dumons and Non-Dumons
waived the non-occurrence of a condition precedent as a defense to their obligations
in the Guaranty. We overrule the Non-Dumons’ first assignment of error.
2. Breach of the Guaranty
{¶20} In their second assignment of error, the Non-Dumons challenge the trial
court’s award of damages to the Beneficiaries for their equity contributions and argue
that the damages exceeded the scope of the Guaranty. Likewise, the Dumons argue
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that the Beneficiaries failed to connect the equity contributions to the obligations
listed in the Guaranty. Specifically, both the Dumons and Non-Dumons assert that the
Beneficiaries’ equity contributions were not listed in Section 2.1 of the Guaranty, which
identified the obligations of the Dumons and Non-Dumons. The trial court ruled that
“Plaintiffs performed their obligations under contract; that Defendants did not
perform their obligations under contract and breached the same; that Plaintiffs have
suffered compensatory damages as a result of Defendants’ breaches.”
{¶21} In response, the Beneficiaries argue that the equity payments were
discussed in the Guaranty. We agree. The Guaranty’s recitals stated that Eagle and
Frontage agreed “to make certain equity contributions to the Company.” Section 2.2
provided that “[a]mounts distributed or repaid to and re-contributed or re-advanced
by Beneficiaries will be guaranteed to the same extent as original obligations.” The
Guaranty was signed “to induce Eagle and [Frontage] to agree to make the [equity]
[c]ontributions.” The Beneficiaries contributed “$10,534,848.93 in equity payments”
from October 2014 to February 2015. At the February hearing, the trial court ruled
that the equity contributions were recoverable as compensatory damages.
{¶22} Still more, the trial court’s award of compensatory damages was proper.
Compensatory damages awarded for a breach of contract are limited to actual loss for
the purpose of placing “ ‘the injured party in as good a position as it would have been
but for the breach.’ ” Evans Landscaping, Inc. v. Grubb, 1st Dist. Hamilton No. C-
090139, 2009-Ohio-6645, ¶ 12, quoting Textron Fin. Corp. v. Nationwide Mut. Ins.
Co., 115 Ohio App.3d 137, 144, 684 N.E.2d 1261 (9th Dist.1996). The damages awarded
“must correspond to injuries resulting from the breach.” Textron at 144. The party in
breach of the contract “must pay damages equivalent to the total harm suffered, even
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if factors other than the breach contributed to causing that harm.” Claris, Ltd. v. Hotel
Dev. Servs., LLC, 2018-Ohio-2602, 104 N.E.3d 1076, ¶ 40 (10th Dist.), citing 2 Perillo,
Corbin on Contracts, Section 55.9, at 31 (Rev.Ed.2005). As the Beneficiaries point out,
damages awarded for a breach of contract are proper if the damages are the “natural
or probable consequences of the breach.” Thompson Thrift Constr. v. Lynn, 5th Dist.
Delaware No. 15 CAE 10 004, 2016-Ohio-1530, ¶ 100.
{¶23} The record is clear that the Beneficiaries contributed $10,534,848.93 as
of February 2015. Approximately $8,400,000 was allocated to purchase the land for
the project. Under the Guaranty, the Dumons and Non-Dumons were obligated to
“complete” the project within a 20-month period following the closing of the
construction loan. While the Guaranty required the project to be completed “free and
clear of all liens, claims, encumbrances, and rights of others,” several mechanics liens
were filed against the project. Ultimately, they failed to complete the project. The
damages were the natural and probable consequences of the breach. The trial court’s
award of compensatory damages was proper, and we overrule the Non-Dumons’
second assignment of error.
3. Prejudgment Interest
{¶24} Finally, the Dumons maintain that the trial court erroneously awarded
prejudgment interest without making a factual determination as to when the
prejudgment interest began to accrue and without identifying an interest rate.
{¶25} Prejudgment interest “acts as compensation and serves ultimately to
make the aggrieved party whole.” Royal Elec. Constr. Corp. v. Ohio State Univ., 73
Ohio St.3d 110, 117, 652 N.E.2d 687 (1995). When a trial court awards damages for a
breach of contract, R.C. 1343.03(A) provides that “the creditor is entitled to interest at
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the rate per annum determined pursuant to section 5703.47 of the Revised Code,
unless a written contract provides a different rate of interest in relation to the money.”
Under R.C. 1343.03(A), a party granted judgment on a breach-of-contract claim “is
entitled to prejudgment interest as a matter of law.” Ronald J. Solomon, D.D.S., Inc.
v. Davisson, 2018-Ohio-2011, 113 N.E.3d 1003, ¶ 7 (1st Dist.). Yet, a trial court must
determine “when the debt became due and payable and calculate the amount of
interest due.” Thompson Farms, Inc. v. Estate of Thompson, 7th Dist. Columbiana
No. 20 CO 0014, 2021-Ohio-2364, ¶ 100, quoting Landis v. Grange Mut. Ins. Co., 82
Ohio St.3d 339, 342, 695 N.E.2d 1140 (1998). Determining the date when the debt
became due is a factual determination made by the court. Solomon at ¶ 8.
{¶26} The trial court ordered the Dumons and Non-Dumons to pay
“$9,905,199.77, plus costs, pre-judgment interest running from May 24, 2018.” The
Dumons maintain that the record fails to support the trial court’s choice of accrual
date for prejudgment interest. But a review of the record makes clear that Eagle and
Frontage sent a demand letter requesting $11,293,909.55, dated May 16, 2018, to the
Dumons and Non-Dumons. The letter imposed a May 23 deadline to consent to the
payments. The trial court’s finding that prejudgment interest began accruing on May
24, 2018, corresponds with the deadline and was therefore proper.
{¶27} Turning to the appropriate interest rate, R.C. 1343.03(A) and 5703.47
establish a default statutory rate for prejudgment interest. Dix Rd. Property Mgt. LLC
v. Thomas, 12th Dist. Butler No. CA2019-07-126, 2019-Ohio-5366, ¶ 10. Under R.C.
5703.47, “the statutory interest rate for judgment is calculated annually based on the
federal short-term interest rate, rounded to the nearest whole number, plus three
percent.” Yet, the statutory interest rate does not apply where the parties have a
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written contract that “provide[s] a rate of interest with respect to money that becomes
due and payable.” Solomon at ¶ 5, quoting Hobart Bros. Co. v. Welding Supply Serv.,
Inc., 21 Ohio App.3d 142, 144, 486 N.E.2d 1229 (10th Dist.1985).
{¶28} The Guaranty does not provide an interest rate. Therefore, the trial
court had no reason to deviate from the statutory rate under R.C. 1343.03(A) and
5703.47. In short, the trial court’s compensatory-damages award arising out of the
Beneficiaries’ equity payments was within the scope of the Guaranty. The trial court’s
determination that prejudgment interest began accruing on May 24, 2018, was
supported by the record and the default statutory rate established by R.C. 1343.03 and
5703.47 applies. Therefore, we overrule the Dumons’ first assignment of error.
Attorney Fees
{¶29} The Dumons’ second assignment of error challenges the trial court’s
award of attorney fees. Specifically, they maintain that the trial court abused its
discretion when it denied their motion to strike the affidavit of Eric W. Richardson, a
partner at Vorys, Sater, Seymour and Pease, LLP, which the Beneficiaries attached to
their motion for summary judgment in support of their request for attorney fees. The
trial court found that “Plaintiffs’ attorney’s fees are reasonable” and awarded the
Beneficiaries “reasonable costs and attorneys’ fees incurred in collecting this
judgment.” We review an award of attorney fees for an abuse of discretion. Kitchens v.
Ruff, 2022-Ohio-1378, 188 N.E.3d 684, ¶ 11 (1st Dist.).
{¶30} As a general rule, attorney fees are not recoverable in contract actions.
Wright v. Fleming, 1st Dist. Hamilton No. C-070121, 2008-Ohio-1435, ¶ 5, quoting
Keal v. Day, 164 Ohio App.3d 21, 2005-Ohio-5551, 840 N.E.2d 1139, ¶ 5 (1st Dist.).
But a prevailing party may recover attorney fees under a specific provision in a
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contract. Kitchens at ¶ 12. The Guaranty required the Dumons and Non-Dumons to
cover “enforcement costs,” which included
reasonable attorneys’ fees and paralegals’ fees, including the cost of
inside attorneys and paralegals, costs expenses and all court costs of
appeal actually incurred by Beneficiaries in collecting any amount due
Beneficiaries under this Guaranty or in prosecuting any action against
Guarantors with respect to all or any part of the Guaranty Obligations.
{¶31} A party requesting attorney fees must show that the requested fees are
reasonable. Wsb Rehab. Servs., 1st Dist. Hamilton Nos. C-210454 and C-210467,
2022-Ohio-2160, at ¶ 44, quoting Metron Nutraceuticals, L.L.C. v. Thomas, 8th Dist.
Cuyahoga No. 110280, 2022-Ohio-79, ¶ 36. Determining “ ‘ “what is reasonable” ’ ”
presents a question of fact. Mann v. Mendez, 9th Dist. Lorain No. 04CA008562, 2005-
Ohio-3114, ¶ 22, quoting Kimball v. Austin, 9th Dist. Lorain No. 01CA007760, 2001
Ohio App. LEXIS 3384, *3-4, (Aug. 1, 2001), quoting Madden v. Madden, 2d Dist.
Montgomery No. 15576, 1996 Ohio App. LEXIS 2557, *11 (June 14, 1996).
{¶32} In support of the request for attorney fees, the Richardson affidavit
provided, based on his personal knowledge, that four Vorys attorneys worked 1,414.7
total hours as of February 28, 2021, resulting in $471,259.50 billed for attorney fees.
Richardson stated that the billing practices, fees, and costs were reasonable and fair.
Under Civ.R. 56(E), supporting affidavits “shall be made on personal knowledge, shall
set forth such facts as would be admissible in evidence, and shall show affirmatively
that the affiant is competent to testify to the matters stated in the affidavit.” When an
affidavit references a document, “[s]worn or certified copies of all papers or parts
thereof referred to in an affidavit shall be attached.” Civ.R. 56(E). Here, the
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Richardson affidavit referenced the billing records to establish the total amount of
attorney fees incurred by the Beneficiaries related to this lawsuit.
{¶33} A trial court “may permit affidavits to be supplemented” by further
affidavits under Civ.R. 56(E). Following a hearing in which the trial court granted
summary judgment in favor of the Beneficiaries, the Beneficiaries filed a “Notice of
Supplementation,” which requested an additional $297,118.50 for 929.80 hours of
work by Vorys attorneys beginning on March 1, 2021. The Beneficiaries attached a
second Richardson affidavit and attached a “Statement of Services and
Disbursements” from Vorys, which identified the attorneys who worked on the
Beneficiaries’ case, the description of the work they performed, the date, and the hours
the work was performed. Therefore, we hold that the affidavits attached to the
attorney-fee requests satisfied Civ.R. 56(E), and the trial court’s decision to deny the
Dumons’ motion to strike the Richardson affidavit was proper.
{¶34} But when attorney fees are disputed as unreasonable, “there should be
a trial.” Wsb Rehab. Servs., 1st Dist. Hamilton Nos. C-210454 and C-210467, 2022-
Ohio-2160, at ¶ 44, citing World Metals Inc. v. AGA Gas, Inc., 142 Ohio App.3d 283,
755 N.E.2d 434 (9th Dist.2001). The Dumons filed a motion to sever the Beneficiaries’
request for attorney fees and argued for a separate hearing to determine the
reasonableness of the Beneficiaries’ claimed fees. The Dumons disputed the
reasonableness of the claimed attorney fees. At the December hearing, the Dumons
repeated their request to sever the attorney-fee issue and hold a hearing on the
attorney-fee issue after the breach-of-contract claim was decided. The Dumons
asserted that a hearing was necessary to “talk about whether certain fees were
reasonable or not” and that the issue “shouldn’t be handled through an affidavit.”
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{¶35} Because the attorney fees were disputed in this case, the trial court
should have held a hearing on that issue. Some factors to consider when determining
whether attorney fees are reasonable include “(1) time and labor, novelty of issues
raised, and necessary skill to pursue the course of action; (2) customary fees in the
locality for similar legal services; (3) result obtained; and (4) experience, reputation
and ability of counsel.” Benton Village Condominium Owners Assn. v. Bridge, 8th
Dist. Cuyahoga No. 106892, 2018-Ohio-4896, ¶ 29, citing Bolek v. Miller-McNeal, 8th
Dist. Cuyahoga No. 103320, 2016-Ohio-1383, citing Pyle v. Pyle, 11 Ohio App.3d 31,
35, 463 N.E.2d 98 (8th Dist.1983).
{¶36} Consequently, we hold that the trial court abused its discretion when it
granted the Beneficiaries’ request for attorney fees without holding a hearing. The
Dumons’ second assignment of error is sustained.
Motion to Amend
{¶37} Finally, in their third assignment of error, the Non-Dumons argue that
the trial court abused its discretion when it denied their motion to amend their answer.
In their 2019 answer, the Non-Dumons failed to assert the failure of a condition
precedent as a defense. In 2021, two months after the Beneficiaries and Non-Dumons
filed competing motions for summary judgment, the Non-Dumons moved to amend
their answer to include the failure of a condition precedent as a defense. The trial court
denied the motion. We review the trial court’s ruling for an abuse of discretion.
Henderson v. Dewine, 1st Dist. Hamilton No. C-210201, 2022-Ohio-1025, ¶ 15.
{¶38} Under Civ.R. 15(A), a party “may amend his pleading only by leave of
court or by written consent of the adverse party. Leave of court shall be freely given
when justice so requires.” While leave should be freely given, “the trial court should
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OHIO FIRST DISTRICT COURT OF APPEALS
consider ‘whether the movant made a prima facie showing of support for the new
matters sought to be pleaded, the timeliness of the motion, and whether the proposed
amendment would prejudice the opposing party.’ ” Henderson at ¶ 15, quoting Maas
v. Maas, 2020-Ohio-5160, 161 N.E.3d 863, ¶ 84 (1st Dist.). Denying a motion to amend
is proper “when the amendment sought would be futile.” Id. at ¶ 16.
{¶39} The Non-Dumons’ motion for leave to amend was untimely. See
McConaughy v. Boswell Oil Co., 126 Ohio App.3d 820, 831, 711 N.E.2d 719 (1st
Dist.1998) (no abuse of discretion where a party “moved for amendment after the
completion of discovery and after cross-motions for summary judgment had been
filed.”). And because the Guaranty did not contain a condition precedent, the
amendment would have been futile. The trial court did not abuse its discretion and we
overrule the Non-Dumons’ third assignment of error.
III. Conclusion
{¶40} For the reasons stated, we overrule the Dumons’ first assignment of
error and the Non-Dumons’ first, second, and third assignments of error. But we
sustain the Dumons’ second assignment of error. We reverse the trial court’s award of
attorney fees and remand this case to the trial court to hold a hearing to determine
whether the Beneficiaries’ requested attorney fees are reasonable.
Judgment affirmed in part, reversed in part, and case remanded.
BERGERON, P.J., and WINKLER, J., concur.
Please note:
The court has recorded its entry on the date of the release of this opinion.
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