Bancsi v. Valmark ( 2022 )

[Cite as Bancsi v. Valmark, 2022-Ohio-782.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
PAMELA BANCSI C.A. No. 29967
Appellee
v. APPEAL FROM JUDGMENT
ENTERED IN THE
VALMARK FINANCIAL GROUP, LLC, et COURT OF COMMON PLEAS
al. COUNTY OF SUMMIT, OHIO
CASE No. CV-2019-11-4210
Appellants
DECISION AND JOURNAL ENTRY
Dated: March 16, 2022
CALLAHAN, Judge.
{¶1} Appellants, Valmark Financial Group, LLC and Caleb Callahan1 (collectively,
“Valmark”) appeal an order of the Summit County Court of Common Pleas that granted relief
under Civ.R. 60(B). This Court reverses.
I.
{¶2} On October 31, 2019, Pamela Bancsi filed a complaint against Valmark alleging
claims arising from her employment (“the first case”). Valmark moved to dismiss the complaint
or, in the alternative, to stay the proceedings and compel arbitration pursuant to an arbitration
clause in Ms. Bancsi’s employment agreement, and for sanctions under R.C. 2323.51(A)(2). On
November 21, 2019, Valmark Financial Group, LLC also filed an action against Ms. Bancsi for
claims related to confidentiality of business information and a covenant not to compete (“the
1
Mr. Callahan is not related to the author of this opinion.
2
second case”). The trial court referred the first case to a magistrate, who determined that the parties
had entered into a valid agreement to arbitrate and that Ms. Bancsi’s claims were “explicitly
identified in the Agreement.” The magistrate rejected Ms. Bancsi’s argument that there was no
meeting of the minds or mutuality of agreement with respect to the arbitration clause. The
magistrate also rejected Ms. Bancsi’s argument that by filing the second case, Valmark waived its
right to enforce the arbitration clause. The magistrate determined that the arbitration clause was
neither substantively nor procedurally unconscionable and denied Valmark’s request for sanctions.
{¶3} Ms. Bancsi objected to the magistrate’s decision, arguing that Valmark Financial
Group, LLC’s claims against her in the second case consisted of tort claims as well as contract
claims. She also maintained that the arbitration clause was unenforceable and illusory, that there
was no meeting of the minds with respect to the arbitration clause, and that the arbitration clause
was unconscionable. On December 13, 2020, the trial court overruled Ms. Bancsi’s objections,
adopted the magistrate’s decision, and granted Valmark’s motion to stay the proceedings and
compel arbitration.
{¶4} Four days later, the trial court granted Ms. Bancsi’s motion to consolidate the first
case with the second case. In that order, the trial court also wrote, “Based on this order
consolidating the matters, the court may reconsider its prior order referring the matter to
arbitration. Therefore, the parties are granted leave to file any relevant motions within fourteen
days of this order.” On December 31, 2020, Valmark filed a response to the consolidation order
arguing that regardless of whether the cases were consolidated, Ms. Bancsi’s claims—and the
3
counterclaims that she had asserted in the second case—fell within the scope of the arbitration
clause.2
{¶5} On the same date, Ms. Bancsi filed a “Motion to Reconsider and/or Vacate” the
order compelling arbitration. She noted that her motion was made “pursuant to * * * Civ.R.
54(B)[] and Civ.R. 60(B)[.]” Ms. Bancsi reiterated the arguments that she had previously made in
opposition to the motion to compel arbitration and in her objections: that Valmark waived its rights
under the arbitration clause by asserting tort claims against Ms. Bancsi, that the arbitration clause
was unenforceable because it was substantively and procedurally unconscionable, and that the
arbitration clause was illusory. Although in a separate filing, Ms. Bancsi argued that the trial
court’s December 17, 2020, order was limited to her claims against Valmark, she supported the
arguments that she had previously made by maintaining that her counterclaims in the second action
were also not subject to arbitration. The balance of her filing argued that her claims were
meritorious.
{¶6} On January 12, 2021, Ms. Bancsi also filed an appeal from the trial court’s
December 13, 2020, order in the first case that compelled arbitration. This Court stayed that appeal
on February 5, 2021, for a period of sixty days. On April 1, 2021, the trial court granted Ms.
Bancsi’s motion under Civ.R. 60(B), noting that “the court hereby vacates its order adopting the
magistrate’s decision and orders the case returned to the active docket for adjudication of all claims
within the two consolidated cases.” On April 19, 2021, Valmark filed this appeal from the trial
court’s order that granted relief under Civ.R. 60(B). Shortly thereafter, on May 4, 2021, this Court
ordered Ms. Bancsi to file a response addressing the status of the first appeal. In
2
At the time of the consolidation, a motion to dismiss or to stay and compel arbitration of
Ms. Bancsi’s counterclaims remained pending in the second case.
4
response, Ms. Bancsi moved to hold the first appeal in abeyance pending disposition of this appeal.
On October 29, 2021, this Court denied Ms. Bancsi’s motion and ordered her to file a brief within
twenty days. Ms. Bancsi did not do so, and this Court dismissed the first appeal on December 17,
2021.3 Accordingly, the issues before the Court in this appeal relate solely to the trial court’s order
that granted relief under Civ.R. 60(B).
II.
ASSIGNMENT OF ERROR NO. 1
THE TRIAL COURT ERRED BY GRANTING BANCSI’S “MOTION TO
RECONSIDER AND/OR VACATE DECEMBER 13, 2020 ORDER” UNDER
[CIV.R.] 60(B) BECAUSE BANCSI ALLEGED NO AND THE TRIAL COURT
FOUND NO [CIV.R.] 60(B) GROUNDS JUSTIFYING VACATUR.
{¶7} Valmark’s first assignment of error argues that the trial court erred by granting
relief from its December 13, 2020, order under Civ.R. 60(B) because Ms. Bancsi did not
demonstrate that she was entitled to relief under the grounds set forth in the Rule. This Court
agrees.
{¶8} Civ.R. 60(B) provides that relief from a judgment may be granted upon a
demonstration of:
(1) mistake, inadvertence, surprise or excusable neglect; (2) newly discovered
evidence which by due diligence could not have been discovered in time to move
for a new trial under Rule 59(B); (3) fraud (whether heretofore denominated
intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party;
(4) the judgment has been satisfied, released or discharged, or a prior judgment
upon which it is based has been reversed or otherwise vacated, or it is no longer
equitable that the judgment should have prospective application; or (5) any other
reason justifying relief from the judgment.
3
Ms. Bancsi did not file an application for reconsideration of the dismissal, as permitted
by App.R. 26(A)(1).
5
A party challenging a judgment under Civ.R. 60(B) must demonstrate that the party has a
meritorious defense or claim, that a circumstance has arisen under Civ.R. 60(B)(1)-(5), and that
the motion is made within a reasonable time. GTE Automatic Elec., Inc. v. ARC Industries, Inc.,
47 Ohio St.2d 146 (1976), paragraph two of the syllabus. “All three requirements are independent
and in the conjunctive, so each must be clearly established to be entitled to relief.” Windward
Ents., Inc. v. Valley City Dev. Group LLC, 9th Dist. Medina No. 18CA0001-M, 2019-Ohio-3419,
¶ 29, citing GTE Automatic Elec., Inc. at 151. A trial court’s determination of a motion for relief
from judgment pursuant to Civ.R. 60(B) is reviewed for an abuse of discretion. Strack v. Pelton,
70 Ohio St.3d 172, 174 (1994).
{¶9} “It is well-established that a Civ.R. 60(B) motion cannot be used as a substitute for
appeal[.]” Bank of Am., N.A. v. Kuchta, 141 Ohio St.3d 75, 2014-Ohio-4275, ¶ 16, citing Harris
v. Anderson, 109 Ohio St.3d 101, 2006-Ohio-1934, ¶ 8-9. As a corollary to that principle, this
Court has concluded that when a motion for relief from judgment is based exclusively upon issues
that could be raised on direct appeal, the motion is properly denied. Schutte v. Akron Pub. Schools
Bd. of Edn., 9th Dist. Summit No. 23036, 2006-Ohio-4726, ¶ 7, citing Yoakum v. McIntyre, 7th
Dist. Columbiana No. 03 CO 63, 2005-Ohio-7083, ¶ 31. See also Thornton v. Borstein, 9th Dist.
Summit No. 29669, 2021-Ohio-2231, ¶ 23 (noting that a Civ.R. 60(B) motion cannot be used to
reargue the merits of a dispositive motion); State ex rel. DeWine v. Helms, 9th Dist. Summit No.
26472, 2013-Ohio-359, ¶ 10, quoting Haas v. Bauer, 156 Ohio App.3d 26, 2004-Ohio-437, ¶ 25
(9th Dist.) (Alteration in original.) (“‘[T]he availability of Civ.R. 60(B) relief is generally limited
to issues that cannot properly be raised on appeal.’”).
{¶10} Ms. Bancsi’s motion did not explicitly assert that she was entitled to relief on any
of the grounds listed in Civ.R. 60(B)(1)-(4). She now maintains that her motion was grounded in
6
Civ.R. 60(B)(4), which provides that relief from judgment may be granted when “the judgment
has been satisfied, released or discharged, or a prior judgment upon which it is based has been
reversed or otherwise vacated, or it is no longer equitable that the judgment should have
prospective application[.]” Civ.R. 60(B)(4) “was designed to provide relief to those who have
been prospectively subjected to circumstances which they had no opportunity to foresee or
control.” Knapp v. Knapp, 24 Ohio St.3d 141 (1986), paragraph one of the syllabus. As this Court
has explained,
“The purpose of Civ.R. 60(B)(4) * * * is to relieve a litigant of the burdens of a
judgment when changed circumstances have rendered its continued application
inequitable.” Rock v. Inn at Medina Mgt. Co., Inc., 9th Dist. Medina No.
07CA0072-M, 2008-Ohio-1992, ¶ 6. “Relief under Civ.R. 60(B)(4) must be
warranted by events occurring subsequent to the entry of the judgment in question.
Events which occurred prior to judgment cannot be relied upon as grounds to vacate
the judgment pursuant to Civ.R. 60(B)(4).” (Internal citation omitted.) Youssefi v.
Youssefi, 81 Ohio App.3d 49, 52-53, 610 N.E.2d 455 (9th Dist.1991).
Wells Fargo Bank, N.A. v. Clucas, 9th Dist. Summit No. 27264, 2015-Ohio-88, ¶ 12.
{¶11} Ms. Bancsi’s motion stated that “it [was] in the interest of justice and equity that
this court reconsider and/or vacate its December 13, 2020[,] judgment entry.” It appears that to
the extent the motion was grounded in Civ.R. 60(B)(4), it relied on the consolidation of the two
cases as an intervening event. When two cases are consolidated, however, it is a matter of
convenience and judicial economy; the cases are not merged and the rights of the parties are
unchanged. Transcon Builders, Inc. v. Lorain, 49 Ohio App.2d 145, 150 (9th Dist.1976), quoting
Johnson v. Manhattan Ry. Co., 289 U.S. 479, 496-497 (1933). Moreover, Ms. Bancsi’s motion
reiterated the arguments that she had made both in opposition to Valmark’s motion to compel
arbitration and in her objections to the trial court’s December 13, 2020, judgment—including her
argument that Valmark Financial Group, LLC waived its rights under the arbitration clause by
7
filing suit against her. Both of those previous filings, in fact, were incorporated by reference into
her motion for relief from judgment.
{¶12} Ms. Bancsi’s arguments in support of her motion for relief from judgment, which
could have been raised on direct appeal, were not proper grounds for relief under Civ.R. 60(B)(4).
See Fowler v. Fowler, 9th Dist. Medina No. 15CA0079-M, 2016-Ohio-5768, ¶ 15. Accordingly,
the trial court abused its discretion by granting relief under Civ.R. 60(B). This Court also observes
that Ms. Bancsi appealed the December 13, 2020, judgment, but failed to prosecute the appeal by
filing an appellate brief. Having done so, she cannot now pursue her arguments related to the
merits of the judgment in the context of Valmark’s appeal.
{¶13} Valmark’s first assignment of error is sustained.
ASSIGNMENT OF ERROR NO. 2
THE TRIAL COURT ERRED IN NOT COMPELLING ARBITRATION AND
ENFORCING THE PARTIES’ VALID AND ENFORCEABLE ARBITRATION
AGREEMENT.
{¶14} Valmark’s second assignment of error argues that the trial court erred with respect
to the merits of the motion to compel arbitration. In light of our disposition of Valmark’s first
assignment of error, the second assignment of error is moot. See App.R. 12(A)(1)(c).
III.
{¶15} Valmark’s first assignment of error is sustained. The second assignment of error is
moot. The judgment of the Summit County Court of Common Pleas is reversed, and this matter
is remanded for proceedings consistent with this opinion.
Judgment reversed
and cause remanded.
8
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period
for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is instructed to
mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the
docket, pursuant to App.R. 30.
Costs taxed to Appellee.
LYNNE S. CALLAHAN
FOR THE COURT
TEODOSIO, P.J.
SUTTON, J.
CONCUR.
APPEARANCES:
AMY RYDER WENTZ, EDWARD H. CHYUN, and BRIAN P. FITZGERALD, Attorneys at
Law, for Appellants.
MATTHEW S. GRIMSLEY and CARYN M. GROEDEL, Attorneys at Law, for Appellee.