Capital One Bank (USA) N.A. v. Rotman , 2012 Ohio 480 ( 2012 )

[Cite as Capital One Bank (USA) N.A. v. Rotman, 2012-Ohio-480.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 96891
CAPITAL ONE BANK (USA), N.A.
PLAINTIFF-APPELLEE
vs.
MITCHELL R. ROTMAN
DEFENDANT-APPELLANT
JUDGMENT:
REVERSED AND REMANDED
Civil Appeal from the
Cleveland Heights Municipal Court
Case No. CVF 1100008
BEFORE: S. Gallagher, J., Celebrezze, P.J., and Kilbane, J.
RELEASED AND JOURNALIZED: February 9, 2012
ATTORNEY FOR APPELLANT
Andrew S. Pollis
Milton A. Kramer Law Clinic Center
C.W.R.U. School of Law
11075 East Boulevard
Cleveland, OH 44106
Also listed:
Matthew Bechtold
Legal Intern c/o Andrew Pollis
C.W.R.U. School of Law
11075 East Blvd.
Cleveland, OH 44106
ATTORNEY FOR APPELLEE
Deborah A. Winslow
Shermeta, Adams & Von Allmen, P.C.
P.O. Box 5016
Rochester Hills, MI 48308
SEAN C. GALLAGHER, J.:
{¶ 1} Defendant-appellant, Mitchell R. Rotman, appeals the decision of
the Cleveland Heights Municipal Court that denied his motion to stay
proceedings pending arbitration. For the reasons stated herein, we reverse
the decision of the trial court and remand the matter for further proceedings
consistent herewith.
{¶ 2} The issue presented in this appeal is whether a defendant may
obtain a stay of proceedings pending arbitration without having first initiated
the arbitration proceedings. We conclude that the initiation of the
arbitration proceedings is not a prerequisite for obtaining a stay of the action
pursuant to R.C. 2711.02(B).
{¶ 3} On January 5, 2011, plaintiff-appellee, Capital One Bank (USA),
filed a complaint against Rotman for money owing on an account. Capital
One alleged a balance due on a credit-card debt in the principal amount of
$2,249.65, with interest of $233.75, for a total of $2,483.40. The customer
agreement entered with Rotman was attached to the complaint. The
agreement includes an arbitration provision that provides, in pertinent part:
You and we agree that either you or we may, at either
party’s sole election, require that any Claim (as described below)
be resolved by binding arbitration.
IF YOU OR WE ELECT ARBITRATION OF A CLAIM,
NEITHER YOU NOR WE WILL HAVE THE RIGHT TO
PURSUE THAT CLAIM IN COURT OR BEFORE A JUDGE OR
JURY * * *.
The term “claim” encompasses “any claim, controversy or dispute of any kind
or nature between you and us.” Further, the agreement permits either party
to elect arbitration “even if the claim is part of a lawsuit brought in court.”
{¶ 4} On March 17, 2011, Rotman moved to stay proceedings pending
arbitration. In opposing the motion, Capital One argued that the arbitration
clause was optional, Capital One was not required to file arbitration, and
Rotman had not initiated any arbitration. Capital One further represented
that “should Defendant choose to file arbitration, Plaintiff will stipulate to a
dismissal without prejudice of this lawsuit while the arbitration is pending.”
{¶ 5} The trial court denied the motion to stay and ordered Rotman to
file an answer to the complaint. Rotman timely filed this appeal.
{¶ 6} Rotman raises one assignment of error that challenges the trial
court’s denial of a stay pending arbitration. He argues the claim is referable
to arbitration under the parties’ agreement and that Rotman was not
required to initiate arbitration before seeking a stay. Capital One has not
filed an appellate brief. Because our review of the issue is one of law, we
review the issue de novo. See Berry v. Lupica, 8th Dist. No. 90657,
2008-Ohio-5102, 2008 WL 4438444, ¶ 7.
{¶ 7} The arbitration statute, R.C. 2711.02(B), provides as follows:
If any action is brought upon any issue referable to
arbitration under an agreement in writing for arbitration, the
court in which the action is pending, upon being satisfied that the
issue involved in the action is referable to arbitration under an
agreement in writing for arbitration, shall on application of one of
the parties stay the trial of the action until the arbitration of the
issue has been had in accordance with the agreement, provided
the applicant for the stay is not in default in proceeding with
arbitration.
{¶ 8} Nothing in the above statute imposes a requirement that a party
must initiate arbitration before seeking a stay. Oftentimes, the question of
whether a matter is referable to arbitration is disputed by the parties.
Further, the statute clearly reflects that a party need only file a motion to
have the proceedings stayed when “the action is referable to arbitration under
an agreement in writing for arbitration.” R.C. 2711.02(B).
{¶ 9} Here, the terms of the arbitration agreement gave either party
the right to elect arbitration of any claim between them. Thus, either party
had the right to have the matter referred to arbitration. Case law instructs
that where a matter is subject to arbitration, “[t]he burden is on the plaintiff
to commence the arbitration action, and the parties are obliged to cooperate
and respond in a timely manner.” Sexton v. Kidder, Peabody & Co., Inc., 8th
Dist. No. 74833, 1999 WL 652028 (Aug. 24, 1999). See also Kessinger v.
SR83 Hotel Partners, LLC, 5th Dist. No. 04-CA-83, 2005-Ohio-4110, 2005 WL
1897376, ¶ 17; Johnson v. E. Bay Kia, Inc., S.D.Ala. No. 08-00656-CG-B, 2009
WL 928674, at *1 (Apr. 2, 2009). Indeed, it would be nonsensical to require a
defendant to commence arbitration of a claim against himself. Thus, where
a defendant properly exercises a right to arbitration, it is incumbent upon the
plaintiff to pursue its claims in arbitration once a stay of the action is
granted.
{¶ 10} Accordingly, we find the trial court erred in denying Rotman’s
motion to stay proceedings pending arbitration. Upon remand, the trial
court is instructed to issue an order staying proceedings and referring the
matter to arbitration. The trial court shall instruct Capital One to timely
initiate the arbitration proceedings or else be subject to dismissal of the
action pursuant to Civ.R. 41(B). Rotman’s assignment of error is sustained;
the judgment of the trial court is reversed; and this case is remanded for
further proceedings consistent herewith.
Judgment reversed; cause remanded.
It is ordered that appellant recover from appellee costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the municipal 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
FRANK D. CELEBREZZE, JR., P.J., and
MARY EILEEN KILBANE, J., CONCUR