Luri v. Republic Servs., Inc. , 2014 Ohio 3817 ( 2014 )

[Cite as Luri v. Republic Servs., Inc., 2014-Ohio-3817.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 100539
RONALD LURI
PLAINTIFF-APPELLANT
vs.
REPUBLIC SERVICES, INC., ET AL.
DEFENDANTS-APPELLEES
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-07-633043
BEFORE: Celebrezze, J., Boyle, A.J., and Stewart, J.
RELEASED AND JOURNALIZED: September 4, 2014
ATTORNEYS FOR APPELLANT
Irene Keyse-Walker
Benjamin C. Sasse
Tucker Ellis, L.L.P.
950 Main Avenue, Suite 1100
Cleveland, Ohio 44113
Richard C. Haber
Shannon J. Polk
Haber Polk Kabat, L.L.P.
737 Bolivar Road, Suite 4400
Cleveland, Ohio 44115
Michelle Pierce Stronczer
Pierce Stronczer Law, L.L.C.
P.O. Box 470606
Cleveland, Ohio 44147
ATTORNEYS FOR APPELLEES
Robin G. Weaver
Trevor G. Covey
Squire Sanders (US), L.L.P.
4900 Key Tower
127 Public Square
Cleveland, Ohio 44114
FRANK D. CELEBREZZE, JR., J.:
{¶1} Appellant, Ronald Luri, brings this appeal from the trial court’s decision to
grant appellees, Republic Services, Inc. (“Republic”), Republic Services of Ohio Hauling,
L.L.C. (“Ohio Hauling”), Republic Services of Ohio I, L.L.C. (“Ohio I”), Jim Bowen
(“Bowen”), and Ron Krall (“Krall”) (collectively known as “appellees”), a new trial. On
remand from the Ohio Supreme Court for the application of its decision in Havel v. Villa
St. Joseph, 131 Ohio St.3d 235, 2012-Ohio-552, 963 N.E.2d 1270 (“Havel”), the trial
court found that bifurcation on motion was required and ordered a new trial. Luri claims
that the trial court erred when it found the Ohio Supreme Court’s decision required a new
trial. After a thorough review of the record and law, we affirm the trial court’s decision.
I. Procedural History
{¶2} This court has previously recited the factual and procedural posture of this
case in Luri v. Republic Servs., 193 Ohio App.3d 682, 2011-Ohio-2389, 953 N.E.2d 859(8th Dist.). After our decision, appellees appealed to the Ohio Supreme Court for review
of our holding that the mandatory bifurcation provision in R.C. 2315.21 was
unconstitutional. Luri separately appealed this court’s application of punitive damages
caps. The Ohio Supreme Court accepted review of both appeals and stayed briefing for
its decision in a pending case dealing with the same bifurcation statute, Havel. On July
3, 2012, the Ohio Supreme Court remanded the case to the trial court for application of its
decision in Havel. The court also dismissed Luri’s appeal as moot.
{¶3} The trial court allowed the parties to brief the impact of Havel on the case
and held a hearing. The court issued a decision and entry on October 4, 2013. There,
the court found that bifurcation on motion was required and its prior failure to grant
appellees’ motion required a new trial. It also addressed Luri’s arguments that any error
was harmless or invited. The trial court found that the error was neither.
{¶4} Luri then filed the instant appeal assigning one error:
I. The trial court erred when it vacated the 2008 judgment on a jury verdict
and ordered a new trial.
II. Law and Analysis
A. Standard of Review
{¶5} This court reviews the trial court’s decision to grant a new trial following
remand differently based on the type of decision. If the determination is a matter of law,
this court’s review is de novo. However, if the decision calls for the exercise of the
court’s discretion, it is reviewed for an abuse of that discretion. Rohde v. Farmer, 23
Ohio St.2d 82, 262 N.E.2d 685 (1970), paragraphs one and two of the syllabus. A de
novo standard of review gives no deference to the lower court’s determination, while an
abuse of discretion standard recognizes that the trial court is in the best position to resolve
the issue and gives deference to the court’s decision absent an arbitrary, unconscionable,
or unreasonable exercise of discretion. Blakemore v. Blakemore, 5 Ohio St.3d 217, 450
N.E.2d 1140 (1983). Here, the trial court determined that it had no discretion because
bifurcation was mandatory. So, as a matter of law, a new trial was required. It also
determined, as a matter of law, that the error was not harmless. See Hayward v. Summa
Health Sys., 139 Ohio St.3d 238, 2014-Ohio-1913, 11 N.E.3d 243, ¶ 23 (whether an error
prejudices a substantial right is a question of law).
B. Application of Havel
{¶6} The Ohio Supreme Court determined that bifurcation as outlined in R.C.
2315.21(B) created a substantive right, which takes precedence over the discretionary
bifurcation provision in Civ.R. 42(B). Havel at the syllabus. It held that R.C.
2315.21(B) “does more than set forth the procedure for the bifurcation of tort actions: it
makes bifurcation mandatory.” Id. at ¶ 25.
{¶7} This court has previously addressed the bifurcation requirement after Havel.
Flynn v. Fairview Village Retirement Community Ltd., 8th Dist. Cuyahoga No. 95695,
2013-Ohio-569, ¶ 6. Applying the holding in Havel, this court held, “the trial court erred
in denying appellants’ motions to bifurcate. Under R.C. 2315.21(B), the trial court has
no discretion to deny a motion to bifurcate the punitive damages issue in a tort case when
a party files a motion requesting bifurcation.” As Luri points out, this does not end the
inquiry in this case. Luri claims that a new trial was not mandated by the decision in
Havel because it is procedurally distinguishable from the present case. In many of the
cases dealing with the constitutionality of R.C. 2315.21(B) decided by courts of appeals,
the appeal was taken from an order denying or granting a motion to bifurcate. See, e.g.,
Havel. Luri distinguishes the present case by pointing out that appellees failed to
immediately appeal the bifurcation decision and a full trial has taken place.
{¶8} Luri argues that Republic invited the error by moving the court for
bifurcation under both the discretionary Civ.R. 42(B) and the mandatory statute. Often
motions are made with alternative arguments. The fact that Republic moved under both
provisions for bifurcation did not invite any error.
{¶9} Parties are not guaranteed a trial free from error. Only errors that
prejudicially affect a substantial right are reversible. Hayward, 139 Ohio St.3d 238,
2014-Ohio-1913, 11 N.E.3d 243, at ¶ 24. “Under the concept of harmless error, it is
neither prudent nor appropriate for this court to order a trial court to remedy an error that
does not affect the outcome of the case; i.e., ‘this court may not reverse the trial court
unless a substantive right is affected.’” Children’s Hosp. Med. Ctr. of Akron v. S. Lorain
Merchs. Assn. Health & Welfare Benefit Plan & Trust, 9th Dist. Summit No. 22881,
2006-Ohio-2407, ¶ 7, quoting Kelley v. Cairns & Bros., Inc., 89 Ohio App.3d 598, 608,
626 N.E.2d 986 (9th Dist.1993), citing Leichtamer v. Am. Motors Corp., 67 Ohio St.2d
456, 474-475, 424 N.E.2d 568 (1981). Therefore, even though bifurcation was
mandatory, a new trial is not required where the error is harmless.
{¶10} The trial court must and did analyze whether the failure to bifurcate was
harmless error. See Civ.R. 61; R.C. 2309.59. Republic argues that no such analysis is
required based on the Ohio Supreme Court’s holding in Havel. If the trial court’s duty
was simply to order a new trial, the Ohio Supreme Court could have easily remanded the
case for a new trial. It did not. The court remanded the case to the trial court for
application of Havel — a procedurally different case that did not address whether the
failure to bifurcate caused harm. Therefore, this court must determine whether the
failure to bifurcate prejudicially impacted a substantial right.
{¶11} The evidence introduced at trial that appellees argued should have been
reserved for the punitive damages phase falls into two categories — evidence of wealth
and evidence of malice. Evidence that Republic employees fabricated evidence in an
attempt to establish that Luri was terminated for cause was introduced to demonstrate
malice. This evidence of malice is so intertwined with appellees’ defense that it cannot
feasibly be left out of the compensatory damage phase. This evidence was used by Luri
to rebut appellees’ arguments that Luri was terminated for cause.
{¶12} Evidence of wealth was also the subject of testimony during trial. Luri’s
cross-examination of a Republic executive brought forth, at first unsolicited, information
about Republic’s value as a company. Without prompt, the executive offered that the
company was worth $3 billion. As a follow-up, Luri’s attorney inquired if Republic
earned $300 million in profits last year. Luri then relied on this information in closing
arguments. The trial court found this constituted harm enough to grant Republic a new
trial. In fact, “[t]he most common reason for bifurcating is to exclude evidence of the
defendant’s wealth or net worth from the compensatory damages phase * * *.” Cain v.
Pittsburgh Corning Corp., 9th Cir. Nos. 90-16668, 90-16802, 90-16669, 90-16803, 1992
U.S. App. LEXIS 8568, 3-4 (Apr. 20, 1992). See also S.S. v. Leatt Corp., N.D.Ohio No.
1:12 CV 483, 2014 U.S. Dist. LEXIS 12192 (Jan. 31, 2014).
{¶13} In Volpe v. Heather Knoll Retirement Village, 9th Dist. Summit No. 26215,
2012-Ohio-5404, the Ninth District applied Havel to a decision by the trial court denying
bifurcation and found that it was unnecessary to disturb a jury award after trial. In that
case, the jury had awarded significant compensatory damages, but declined to award any
punitive damages. The court held that the trial court’s refusal to bifurcate “the trial and
giving an instruction on punitive damages was harmless because it did not affect [the
defendants’] substantial rights.” Id. at ¶ 20. This was because the complained of error,
an improper jury instruction on punitive damages, was normally remedied by vacation of
the punitive damages award. There was no punitive damages award in that case. The
lack of prejudice that runs through Volpe is not present here. Luri was awarded
significant compensatory and punitive damages where evidence of wealth and jury
instructions on both types of damages were presented in a single trial after motion for
bifurcation. According to the holding in Havel, Republic was entitled to have those
issues tried separately, and this court cannot say that the error did not affect the outcome.
Luri solicited some of this evidence and relied upon it forcefully during closing
arguments.
III. Conclusion
{¶14} The trial court properly applied the holding in Havel on remand from the
Ohio Supreme Court. The failure to bifurcate likely impacted a substantial right of the
appellees, requiring a new trial.
{¶15} Judgment affirmed.
It is ordered that appellees recover from appellant 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.
FRANK D. CELEBREZZE, JR., JUDGE
MARY J. BOYLE, A.J., CONCURS;
MELODY J. STEWART, J., CONCURS WITH SEPARATE OPINION
MELODY J. STEWART, J., CONCURRING:
{¶16} I reluctantly concur with the majority decision to affirm the trial court’s
granting of a new trial in this case. Although I agree fully with the majority’s
conclusions that (1) the remand from the Supreme Court to apply Havel does not
automatically require a new trial but requires a harmless error analysis; and (2) that the
appellees did not invite error by alternatively moving the trial court for bifurcation
pursuant to Civ.R. 42(B), I am not as sure about the majority’s conclusion that the
“failure to bifurcate likely impacted a substantial right of the appellees.” Ante at ¶ 15.
But I concur nonetheless.
{¶17} As the majority and both sides note, the taint of appellees’ malicious
conduct evidence is not at issue in this appeal. The appellees’ position is solely that
because evidence of their size, wealth, and net worth was improperly put before the jury,
they were prejudiced. But the appellees fail to show how they were prejudiced. Like
the Ninth District found in Volpe, the appellees’ assertion in this matter is really “purely
speculative.” However, I understand the practical reasons for excluding this kind of
information from the compensatory phase of a trial.
{¶18} The appellees state in their brief that the record makes clear that they were
prejudiced by the failure to bifurcate and consequently the introduction of evidence
relating to the company’s wealth, size, and profits during the liability phase of the trial,
but nowhere does Republic point to the clarity of this prejudice. Republic merely asserts
that the evidence relating to their wealth, size, and profits “resulted in the largest
employment verdict ever in Ohio.” This contention, however, does nothing to show the
nexus between the evidence and its generating “the largest employment verdict ever.”
To say that the amount of the award, in and of itself, speaks to the prejudice caused by the
evidence is merely a statement of a post hoc ergo propter hoc relationship. The appellees
point to nothing in the record or make any kind of cogent argument of how the wealth-net
worth information impacted the jury’s decision regarding liability and compensatory
damages; especially with the jury knowing that it had the ability to award punitive
damages if indeed it found liability.
{¶19} To be sure, evidence of the appellees’ profits or net worth is completely
irrelevant to the issue of liability and compensatory damages, but the erroneous admission
of evidence that is not relevant does not mean that the evidence was necessarily
considered, nor does it automatically demonstrate prejudice. See Canterbury v. Skulina,
11th Dist. Portage No. 2000-P-0060, 2001-Ohio-8768, *8-9. But I agree that, to the
extent the jury may have relied on the evidence at all when deciding the award for
compensation, such reliance would be improper.1
{¶20} Although the trial court opined that the failure to bifurcate was not harmless,
it rendered its decision primarily based on the fact that the Supreme Court in Havel found
that R.C. 2315.21(B) creates a substantive, enforceable right to have evidence of
compensatory damages and punitive damages presented separately. The trial court
therefore concluded that the deprivation of this substantive right is a denial of substantial
justice. The court relied on paragraph two of the syllabus to Taylor v. Schlichter, 118
Ohio St. 131, 144, 160 N.E. 610 (1928), that states: “a judgment does not and cannot
accomplish substantial justice when the record makes clearly manifest the fact that
substantive rights guaranteed by the law and the Constitution have been denied the party
against whom the judgment operates.” In other words, this quote suggests that the denial
of a substantive right alone is enough to deny substantial justice and no further analysis
need take place.
{¶21} In Taylor, during a trial on an alleged breach of a promise to marry, the trial
court withdrew all questions of fact from the jury’s consideration and decided them itself.
It could certainly be argued that, to the extent that the financial information impacted the
1
jury verdict at all, it appears that the impact is demonstrated in the punitive damages award where the
evidence would have properly been considered. And if the malicious conduct evidence was
improperly before the jury at the liability phase of the trial, the appellees would certainly have a
stronger argument regarding taint. But as previously mentioned, that is not the case here.
After the jury returned a verdict in an amount the court found excessive, it remitted the
amount. In affirming the trial court, the court of appeals found that the trial court’s
judgment accomplished substantial justice. The Supreme Court reversed.
{¶22} If the position in Taylor, that a judgment cannot accomplish substantial
justice when a substantive right has been denied the party against whom the judgment
operates, is controlling law of this state, then it is more perplexing that the Supreme Court
did not simply remand this case to the trial court for a new trial instead of the more
ambiguous mandate to apply Havel. Not doing so suggests that an after-trial review of
the trial court’s denial of a motion to bifurcate is indeed subject to a harmless error
analysis — as we have applied in this case, and as did the Ninth District in Volpe. To
apply the language in Taylor to this case would be equivalent to telling parties who have
bifurcation requests denied that they can proceed to trial and get an automatic do over of
the trial if they lose. This would be so even if minimal or no prejudicial evidence of any
kind was presented in the compensatory phase of the trial. I submit that this outcome
would contravene “substantial justice.”