Baker v. Lifeline Field Marketing, L.L.C. , 93 N.E.3d 1231 ( 2017 )

[Cite as Baker v. Lifeline Field Marketing, L.L.C., 2017-Ohio-5675.]
IN THE COURT OF APPEALS OF OHIO
SIXTH APPELLATE DISTRICT
LUCAS COUNTY
William M. Baker, Jr. Court of Appeals No. L-15-1224
Appellant Trial Court No. CI0201403332
v.
Lifeline Field Marketing, LLC DECISION AND JUDGMENT
Appellee Decided: June 30, 2017
*****
William M. Baker, Jr., pro se.
*****
OSOWIK, J.
{¶ 1} Plaintiff-appellant, William M. Baker, Jr., appeals the July 29, 2015
judgment of the Lucas County Court of Common Pleas, denying his motions for default
judgment and summary judgment against defendant-appellee, Lifeline Field Marketing,
LLC. For the reasons that follow, we reverse the trial court judgment, in part, and affirm,
in part.
I. Background
{¶ 2} William Baker, Jr., pro se, filed a complaint on July 29, 2014, against
Lifeline Field Marketing, LLC. Baker’s complaint is written in narrative form and the
nature of his legal claims is subject to interpretation, however, he alleges in his complaint
that he was working for Lifeline pursuant to an independent contractor agreement,
soliciting applications for cell phones. The agreement, an unexecuted copy of which was
attached to his complaint, describes that Baker was to “generate applications for free
Lifeline wireless equipment and wireless minutes from qualified applicants by staffing
locations derived by Independent Contractor.” (Emphasis sic.) It provides that Baker
was to be paid “per account approved,” and it includes a list of rates that vary based on
the number of applications approved. (Emphasis sic.) The agreement does not provide a
start date, but it provides a termination date of December 31, 2015, “unless terminated
earlier.” It states that Lifeline may terminate the agreement “on 1 days notice to
Independent Contractor for unsatisfactory performance.”
{¶ 3} Baker alleges that on May 23, 2014, without prior notice, Lifeline disabled
his promotion code, rendering him unable to process applications. Lifeline told Baker
that it was doing so because he was being investigated for fraudulent use of EBT cards
(i.e., food stamps),1 and that his continued employment depended on the outcome of that
investigation. Baker claims that he was never informed of the results of the investigation
1
Baker alleges in his complaint that he was accused of “fraudulently using EBT cards.”
While it is not entirely clear, we have surmised from his other filings that Lifeline’s claim
was that Baker was improperly using EBT cards as a method of qualifying customers for
products and services in order to increase his number of approved applications.
2.
and Lifeline ceased communicating with him. He alleges that Lifeline’s stated reason for
disabling his promotion code, effectively discharging him, was a pretext and that in truth,
Lifeline was retaliating against him for refusing to provide his bank account and routing
numbers.
{¶ 4} In his complaint, Baker explains that among other locations, he solicited cell
phone applications at the Economic Opportunity Planning Association (“EOPA”), now
known as Pathway, Inc. He claims that he had an employment opportunity with EOPA
that was lost when he was forced to tell EOPA’s director that he could not process
applications for EOPA clients because he was being investigated for fraud. He also
claims that Lifeline had promised to donate $1 to EOPA for every approved cell phone
application Baker processed there, but failed to do so for April and May 2014.
{¶ 5} Baker alleges that Lifeline misclassifies its workers as “independent
contractors” instead of “employees,” thereby depriving workers of employee protections
and avoiding taxes. He claims that he worked seven days a week, as well as overtime,
but was paid less than minimum wage. He also complains that in reliance on his
continued employment with Lifeline, he incurred expenses for wireless internet services
and devices needed to process applications.
{¶ 6} Baker attempted to amend his complaint twice. His first amended complaint
purported to name two additional defendants, Carl Bryant and Safelink Division, but the
complaint was not properly served. He filed his second amended complaint on
February 17, 2015, against only Lifeline.
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{¶ 7} The second amended complaint is also written in narrative form. In it, Baker
restates many of his previous allegations, but also provides additional details. He claims
that Lifeline knew he would have to tell EOPA why he was no longer processing
applications, and while he acknowledges that Lifeline likely did not know of his
employment opportunity with EOPA, he claims that such knowledge is not required to
establish a claim of defamation. He reiterates that his contract promised employment
until December 31, 2015, and that Lifeline failed to provide the required notice before
terminating him. He says that his performance was “outstanding in every respect” and
“beyond reproach,” and he claims that he was a top producer for Lifeline.
{¶ 8} Baker also describes a confrontation with his supervisor during which they
argued over who was responsible for securing EOPA as a location at which to solicit
applications; Baker maintained that he had secured the location, and his supervisor
maintained that she had. Baker claims that his supervisor assigned additional employees
to the locations where he worked, thus diluting his business, but she retained the busiest,
most profitable locations for herself.
{¶ 9} Baker requested that the trial court find that Lifeline breached his
“employment” contract without just cause and defamed him. He sought damages of
$15,000 for lost compensation, $15,000 in punitive damages for defamation, and
reimbursement for equipment and services obtained by Baker in furtherance of Lifeline’s
business, including two tablets, a cell phone, and wireless internet services.
4.
{¶ 10} Carl Bryant, the sole member of Lifeline Field Marketing, LLC, purported
to file responsive pleadings on behalf of Lifeline, but the trial court struck his filings
because he is not a licensed attorney authorized to represent the LLC. It warned that it
may grant default judgment should Lifeline fail to respond through a licensed attorney.
When it failed to do so, Baker moved for default judgment and for summary judgment.
{¶ 11} In a decision journalized on July 29, 2015, the trial court denied Baker’s
motions. It began by interpreting Baker’s legal claims to include (1) breach of the
independent contractor agreement; (2) defamation; and (3) unlawful employment
practices. It concluded that any claims relating to Lifeline’s agreement to make
donations to EOPA or its misclassification of workers’ employment status to avoid tax
obligations to the state did not belong to Baker and were not properly before the court.
{¶ 12} Turning to the claims belonging to Baker, the trial court recognized that
while Lifeline had defaulted, effectively admitting the allegations in Baker’s complaint,
Baker still must establish damages, and he still must plead facts sufficient to support his
claims. It addressed each of Baker’s three claims.
{¶ 13} As to Baker’s breach of contract claim, the trial court found that by failing
to answer, Lifeline admitted the existence of the independent contractor agreement and
admitted that it terminated the agreement because it was investigating Baker for
fraudulent use of EBT cards. But the court also found that there is nothing in the
agreement providing Baker with a right to challenge termination of the agreement and
Lifeline was permitted to withhold commission payments for unqualified applications. It
5.
held that while Baker sought damages for breach of an “employment agreement” without
just cause, the agreement with Lifeline was not, in fact, an employment agreement
requiring just cause for termination. The court also suggested that because Baker was
provided notice that his promotion code was being revoked, he was, therefore, supplied
with “1 days notice” as provided in the agreement.
{¶ 14} The court recited language in the agreement indicating that the
“CONTRACTING PARTY IS ONLY INTERESTED IN THE RESULTS OBTAINED
BY THE INDEPENDENT CONTRACTOR.” It found that the facts alleged by Baker
concerned his satisfactory “performance,” but not satisfactory “results” as required by the
agreement. The court characterized Baker’s allegedly fraudulent use of EBT cards as an
acknowledgment that his results were questionable, and it found that Baker failed to
allege that he processed acceptable applications for which no commission was paid or
that Lifeline wrongfully rejected those applications. It also observed that the agreement
placed the obligation for purchasing materials on Baker. It, therefore, denied Baker’s
motions for default judgment and summary judgment on Baker’s claim for breach of the
agreement.
{¶ 15} As to Baker’s defamation claim, the trial court rejected this claim because
Baker’s complaint did not allege that Lifeline made any statement to EOPA; rather,
Baker himself conveyed the allegedly defamatory statements to EOPA.
{¶ 16} Finally, as to Baker’s claim of unlawful employment practices and
discharge in retaliation for refusing to provide his bank account and routing numbers, the
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court held that R.C. 4112.01 et seq. does not extend to independent contractor
relationships, therefore, Baker did not state a cognizable claim.
{¶ 17} Baker appealed the trial court’s judgment and assigns eight errors for our
review. The errors as assigned by Baker are verbose, repetitive, and, frankly, difficult to
decipher, and we do not recite them here. Instead we paraphrase his assignments of error.
Put simply, Baker claims error in the trial court’s denial of his motions because (1) there
were questions of fact as to whether Lifeline breached the contract; (2) there were
questions of fact as to whether the independent contractor agreement was really an
“employment” agreement; (3) his defamation claim is proper because even though it was
he who published the allegedly defamatory statements to EOPA about the fraud
investigation, he was compelled to do so; (4) Lifeline breached the independent
contractor agreement when it discharged him without notice and without proof of
unsatisfactory performance; (5) even though the agreement placed the obligation on
Baker to purchase equipment, he did so in reliance on remaining employed until the
agreement’s termination date; and (6) his requested damages were reasonable. He
clarified that he raised the issues of Lifeline’s failure to make promised donations to
EOPA and its practice of avoiding state taxes by misclassifying employees not for the
purpose of recovering on these claims, but as evidence of Lifeline’s bad acts and bad
character.
{¶ 18} For ease of discussion, we limit our review here to the question of whether
the trial court erred in denying Baker’s motion for default judgment as to his claims for
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breach of contract and defamation.2 We note that he does not challenge the trial court
judgment as it relates to his claim of unlawful employment practices.3
II. Law and Analysis
{¶ 19} 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.” Under Civ.R. 55(A), where a defendant has failed to
plead or otherwise defend, the plaintiff may move for a default judgment. “A default
judgment is proper against an unresponsive defendant as liability has been admitted or
‘confessed’ by the omission of statements refuting the plaintiff’s claims.” (Internal
quotations and citations omitted.) Lopez v. Quezada, 10th Dist. Franklin Nos. 13AP-389,
13AP-664, 2014-Ohio-367, ¶ 12. We review a trial court’s decision to grant or deny a
motion for default judgment for an abuse of discretion. Morrison v. Hunt, 5th Dist.
Richland No. 17 CA 14, 2017-Ohio-4332, ¶ 21.
2
Although Baker references factual questions and sought summary judgment in addition
to default judgment, the “absence of an answer would require default judgment rather
than summary judgment.” Commercial Invest. Assocs. v. Dean, 11th Dist. Trumbull No.
2004-T-0103, 2005-Ohio-6714, ¶ 18. As this court has recognized, “a court may afford a
pro se litigant reasonable leeway in the construction of pleadings in order to reach the
merits of the action.” State v. Rickard, 6th Dist. Lucas No. L-16-1043, 2016-Ohio-4755,
¶ 3. With this in mind, we have narrowed the scope of our analysis of Baker’s appeal.
3
In any event, it appears that Baker’s claim of unlawful employment practices was aimed
at establishing that he was an “employee” because he appears to believe that an employer
must have “just cause” to terminate an “employee.” In Ohio, however, employment is
“at will” unless an employment agreement provides otherwise, and an at-will employee
may be terminated at any time, with or without case. Sagonowski v. Andersons, Inc., 6th
Dist. Lucas No. L-03-1168, 2005-Ohio-326, ¶ 49. Here, regardless of whether Baker is
an “employee” or an “independent contractor,” the agreement specifies the sole basis for
terminating the agreement before the expiration date: “unsatisfactory performance.”
8.
{¶ 20} Baker alleges that Lifeline breached the terms of the independent
contractor agreement when it terminated the agreement without notice. While the trial
court acknowledged that Lifeline admitted the allegations in the second amended
complaint by failing to respond to it, it nonetheless found that Baker’s complaint fails to
state a claim upon which relief may be granted.
{¶ 21} “In order to prevail on a breach-of-contract claim, a plaintiff must
demonstrate by a preponderance of the evidence that: ‘(1) the parties reached a valid and
binding agreement; (2) that the defendant breached the terms of that agreement; and
(3) that the nonbreaching party suffered damages as a result of the breach of contract.’”
Hinsch v. Root Learning, Inc., 6th Dist. Lucas No. L-12-1192, 2013-Ohio-3371, ¶ 55,
quoting Lavarre v. Fifth Third Secs., Inc., 1st Dist. Hamilton No. C-110302, 2012-Ohio-
4016, ¶ 30.
{¶ 22} Baker’s complaint alleges that (1) the parties entered into the agreement;
(2) the agreement provides that it would terminate on December 31, 2015, unless
terminated earlier; (3) the agreement specifies that it may be terminated “on 1 days notice
to Independent Contractor for unsatisfactory performance”; (4) Lifeline terminated the
agreement on May 23, 2014, without providing one days’ notice despite the fact that
Baker performed satisfactorily under the agreement and achieved outstanding results as a
top producer, and (5) Baker suffered damages resulting from Lifeline’s breach of the
agreement. As such, his second amended complaint states a claim for breach of contract,
and it was incumbent on the trial court to proceed to determine Baker’s alleged damages.
9.
{¶ 23} As to Baker’s defamation claim, the trial court again acknowledged that
Lifeline admitted the allegations in the complaint by failing to respond to them, but it
found that Baker’s complaint does not state a claim for defamation because he did not
allege that Lifeline published any statements to EOPA concerning its fraud investigation.
{¶ 24} “‘To establish defamation, the plaintiff must show (1) that a false statement
of fact was made, (2) that the statement was defamatory, (3) that the statement was
published, (4) that the plaintiff suffered injury as a proximate result of the publication,
and (5) that the defendant acted with the requisite degree of fault in publishing the
statement.’” Dickinson v. Spieldenner, 6th Dist. Lucas No. L-16-1041, 2017-Ohio-667,
¶ 14, quoting Pollock v. Rashid, 117 Ohio App.3d 361, 368, 690 N.E.2d 903 (1st
Dist.1996).
{¶ 25} Baker acknowledges that publication of the false statement is a necessary
element of defamation. He contends, however, that while Lifeline made no publication,
it can still be held liable under the “forced republication” doctrine. Baker argues that he
was compelled himself to publish the defamatory statement in response to questions from
EOPA’s director.
{¶ 26} “‘Forced republication’ provides for proof of publication where a defamed
person is forced to republish defamatory statements to a third party, such as a person who
is required to state the reason for leaving his or her former employer when completing an
application for employment.” Schacht v. Ameritrust Co. N.A., 8th Dist. Cuyahoga No.
64782, 1994 Ohio App. LEXIS 1125, *8 (Mar. 17, 1994), fn. 3. While this doctrine is
10.
accepted in some jurisdictions, it has repeatedly been recognized that the Ohio Supreme
Court has not adopted it. Id. See also Guy v. McCartney, 7th Dist. Jefferson No. 00 JE 7,
2002-Ohio-3035, ¶ 35 (“[N]o court in this jurisdiction has yet embraced the idea that an
alleged victim of defamation can satisfy the publication element of the tort by publishing
it himself, i.e. to prospective employers.”); Somogye v. Toledo Clinic, Inc., N.D.Ohio No.
3:11 CV 496, 2012 U.S. Dist. LEXIS 82339, *39 (June 14, 2012). We, therefore agree
with the trial court that even though admitted by Lifeline, Baker’s complaint does not
state a claim for defamation.
{¶ 27} Accordingly, we find that the trial court abused its discretion in denying
Baker’s motion for default judgment as to his breach of contract claim, but we find no
abuse of discretion with respect to Baker’s defamation claim.
III. Conclusion
{¶ 28} For the foregoing reasons, we reverse the July 29, 2015 judgment of the
Lucas County Court of Common Pleas to the extent that it denied Baker’s motion for
default judgment on his breach of contract claim, and we remand the matter to the trial
court for a determination of damages. We otherwise affirm the trial court judgment.
Lifeline is ordered to pay the costs of this appeal under App.R. 24.
Judgment reversed, in part,
and affirmed, in part.
11.
Baker v. Lifeline Field
Marketing, LLC
C.A. No. L-15-1224
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.
Mark L. Pietrykowski, J. _______________________________
JUDGE
Thomas J. Osowik, J.
_______________________________
James D. Jensen, P.J. JUDGE
CONCUR.
_______________________________
JUDGE
This decision is subject to further editing by the Supreme Court of
Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
version are advised to visit the Ohio Supreme Court’s web site at:
http://www.supremecourt.ohio.gov/ROD/docs/.
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