Gauthier v. Gauthier

[Cite as Gauthier v. Gauthier, 2018-Ohio-4970.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
FORREST GAUTHIER, : APPEAL NOS. C-170387
C-170398
Plaintiff-Appellant/Cross- : TRIAL NO. A-1303244
Appellee,
: O P I N I O N.
vs.
:
SU KANG GAUTHIER,
:
and
:
ROBERT A. KLINGLER,
:
Defendants-Appellees/Cross-
Appellants. :
Civil Appeals From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Reversed and Cause Remanded
Date of Judgment Entry on Appeal: December 12, 2018
Thomas E. Grossmann, for Plaintiff-Appellant/Cross-Appellee,
Robert A. Klingler Co., L.P.A., and Robert A. Klingler, for Defendants-
Appellees/Cross-Appellants.
OHIO FIRST DISTRICT COURT OF APPEALS
MYERS, Judge.
{¶1} This is an appeal from the trial court’s award of attorney fees and
costs in favor of defendants-appellees/cross-appellants Su Kang Gauthier (“Su”) and
Robert A. Klingler. Su and Klingler had sought fees under two separate theories:
that plaintiff-appellant/cross-appellee Forrest Gauthier (“Forrest”) and his counsel
had engaged in frivolous conduct under R.C. 2323.51 by filing the underlying lawsuit,
and that Su was entitled to fees under a prior addendum agreement executed by the
parties. The court awarded Su and Klingler approximately $96,000 after
determining that Forrest and his counsel had engaged in frivolous conduct under
R.C. 2323.51, but it determined that it did not have jurisdiction to award fees under
the addendum agreement.
{¶2} In six assignments of error, Forrest argues that the trial court erred in
determining that he and his counsel had engaged in frivolous conduct, the trial court
erred in awarding fees and costs, the trial court abused its discretion in determining
the reasonableness of fees, the trial court erred in not transferring the case to the
Warren County Court of Common Pleas pursuant to the jurisdictional-priority rule,
the trial court erred in its evidentiary and procedural rulings, and the trial court
erred by sanctioning Forrest because Su was guilty of “unclean hands.”
{¶3} In a cross-appeal, Su and Klingler argue that the trial court erred in
determining that it did not have jurisdiction to award fees pursuant to the parties’
addendum agreement.
{¶4} Because we find that the trial court erred in determining that Forrest
and his counsel had engaged in frivolous conduct, and also erred in determining that
it did not have jurisdiction to award fees pursuant to the parties’ addendum
agreement, we reverse the trial court’s judgment and remand this action for further
proceedings consistent with this opinion.
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OHIO FIRST DISTRICT COURT OF APPEALS
Factual and Procedural Background
{¶5} In 2009, the Warren County Domestic Relations Court granted a
divorce to Su and Forrest. Incorporated into the divorce decree was a “Full Text
Separation Agreement,” which included a personal-property agreement dividing the
parties’ personal property. In 2010, the parties entered into an addendum
agreement to resolve further issues that had arisen regarding division of their assets.
Among other things, this addendum agreement governed the disposition of an IRS
refund check and the division of tax penalty reserves.
{¶6} Since the divorce decree was entered, relations between Su and Forrest
have been contentious and litigious. In 2009, Forrest filed a contempt action against
Su in the Warren County Court of Domestic Relations, arguing that she had failed to
return certain items of his property pursuant to the personal-property agreement. In
February 2013, Su filed suit against Forrest in the Warren County Court of Domestic
Relations, but her case was later transferred to the Warren County Court of Common
Pleas. Su’s complaint alleged that Forrest had violated the parties’ 2010 addendum
agreement by failing to pay her 50 percent of the parties’ tax penalty reserve that he
had held back from the IRS. Forrest filed a motion to dismiss Su’s complaint, and in
April 2013, he filed this underlying action against Su and Klingler in the Hamilton
County Court of Common Pleas.
{¶7} Forrest’s complaint alleged that Su had converted property that he was
entitled to under the personal-property agreement that had been incorporated into
the divorce decree, and that she had breached that agreement by not complying with
its terms regarding the return of his property. He claimed she had possession of
property that was his and refused to return it. He further alleged that Su had
breached the parties’ addendum agreement by negotiating an IRS refund check in
contravention of the terms of the agreement. With respect to this IRS refund check,
the agreement provided that Su was entitled to 50 percent of the parties’ tax refund
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OHIO FIRST DISTRICT COURT OF APPEALS
from certain specified years. If Su received a refund check, she was to cosign it and
return it to Forrest. He would then deposit the entire amount and distribute to Su
her 50 percent interest. When Su received the refund check, issues arose with the
bank verifying her signature and approving her endorsement. To address these
issues, Klingler emailed Forrest’s counsel and explained that, rather than sending the
check to Forrest, Su would deposit the proceeds and send Forrest his share. Klingler
asked Forrest’s counsel to let him know of any objections to this treatment of the
check. When no response was received, Su deposited the check and sent Forrest his
share. Forrest was out of the country when his share was sent to him, and a lengthy
period of time elapsed before Forrest obtained his share of the refund check. He had
not yet obtained his share at the time that the complaint was filed.
{¶8} As to Klingler, Forrest alleged that he had breached an agreement
concerning Su’s negotiation of the IRS refund check and that, as a result, Klingler
had converted Forrest’s refund proceeds.
{¶9} The trial court granted summary judgment to Su and Klingler on all
claims. Forrest appealed, and this court affirmed the trial court’s grant of summary
judgment. We held that Forrest’s claims against Su that related to the personal-
property agreement were barred by claim preclusion and the jurisdictional-priority
rule, because they arose out of the same transaction or occurrence that was the
subject matter of the contempt action in Warren County. With respect to the
remaining claims against Su and Klingler concerning breach of the addendum
agreement and negotiation of the tax refund check, we held that after viewing the
evidence in the light most favorable to Forrest, reasonable minds could only find in
favor of Su and Klingler on those claims. We thus upheld the granting of summary
judgment on the merits of these addendum-agreement claims.
{¶10} After this court’s affirmance of the trial court’s grant of summary
judgment, Su and Klingler filed a motion for an award of attorney fees and costs,
alleging frivolous conduct under R.C. 2323.51. Su also sought an award of fees and
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OHIO FIRST DISTRICT COURT OF APPEALS
costs pursuant to the parties’ 2010 addendum agreement, which provided that “[t]he
prevailing party to any action or proceeding brought to enforce any term of this
Agreement shall be entitled to recover all reasonable costs and attorneys fees arising
out [of] or related to the enforcement action or proceeding.”
{¶11} Following a hearing, the trial court issued an entry granting Su and
Klingler’s motion and awarding them approximately $96,000 in fees and costs,
which encompassed the total amount of fees and costs incurred in defending all
claims raised in Forrest’s complaint. The court found that Forrest and his counsel’s
conduct in filing the underlying action was frivolous pursuant to R.C. 2323.51, and it
awarded fees and costs on that basis. But it found that it did not have jurisdiction to
enforce the addendum agreement because “this case was disposed as a matter of law
under the jurisdictional priority rule.”
{¶12} Both Forrest and Su and Klingler appealed the trial court’s ruling.
Forrest’s Appeal
A. R.C. 2323.51
{¶13} In his first assignment of error, Forrest argues that the trial court erred
in finding that he and his counsel acted frivolously in filing the underlying lawsuit in
Hamilton County.
{¶14} R.C. 2323.51(B)(1) provides that any party to a civil action adversely
affected by another party’s frivolous conduct may file a motion for an award of court
costs, reasonable attorney’s fees, and other reasonable expenses incurred in
connection with the action. Pursuant to R.C. 2323.51, the conduct of a party to a civil
action will be considered frivolous where:
(i) It obviously serves merely to harass or maliciously injure another
party to the civil action or appeal or is for another improper purpose,
including, but not limited to, causing unnecessary delay or a needless
increase in the cost of litigation.
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OHIO FIRST DISTRICT COURT OF APPEALS
(ii) It is not warranted under existing law, cannot be supported by a
good faith argument for an extension, modification, or reversal of
existing law, or cannot be supported by a good faith argument for the
establishment of new law.
(iii) The conduct consists of allegations or other factual contentions that
have no evidentiary support or, if specifically so identified, are not
likely to have evidentiary support after a reasonable opportunity for
further investigation or discovery.
(iv) The conduct consists of denials or factual contentions that are not
warranted by the evidence or, if specifically so identified, are not
reasonably based on a lack of information or belief.
R.C. 2323.51(A)(2)(a); see Pitcher v. Waldman, 1st Dist. Hamilton No. C-160245,
2016-Ohio-5491, ¶ 14.
{¶15} This court’s standard of review depends on whether the appeal
involves questions of law or questions of fact. Pitcher at ¶ 16. Where purely legal
questions are involved, this court conducts a de novo review. Id. But on factual
issues, we defer to the trial court’s factual determinations if they are supported by
competent, credible evidence. Id.{¶16} In their motion for an award of fees and costs, Su and Klingler argued
that Forrest and his counsel had engaged in frivolous conduct pursuant to R.C.
2323.51(A)(2)(a)(ii) because their conduct “was not warranted under existing law,
[could not] be supported by a good faith argument for an extension, modification, or
reversal of existing law, or [could not] be supported by a good faith argument for the
establishment of new law.” They specifically contended that Forrest’s claims
concerning the personal-property agreement were frivolous because they had
previously been asserted in the contempt action before the Warren County Court of
Domestic Relations and were ultimately barred by res judicata. They further
contended that Forrest’s claims under the addendum agreement were frivolous,
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OHIO FIRST DISTRICT COURT OF APPEALS
because even if the procedure for depositing the check was not followed, Forrest’s
refusal to pick up the IRS refund check after it was delivered to him and his failure to
make any effort to obtain his share of the refund check rendered those claims
frivolous.
{¶17} In finding that the conduct of Forrest and his counsel was frivolous,
the trial court held that “[n]o reasonable attorney would file an action in the General
Division of the Hamilton County Court of Common Pleas on the question of division
of marital property after litigating the same nucleus of operative facts in the
Domestic Relations Division of the Warren County Court of Common Pleas.” The
court did not specifically address whether the claims under the addendum agreement
were frivolous, but it awarded Su and Klingler all requested fees and costs.
{¶18} Because the trial court’s determination that the conduct of Forrest and
his counsel was frivolous pursuant to R.C. 2323.51(A)(2)(a)(ii) involves a legal
analysis, we conduct a de novo review. Stremmel v. Demmery, 2d Dist. Miami No.
2016-CA-18, 2017-Ohio-5500, ¶ 21, citing Breen v. Total Quality Logistics, 10th Dist.
Franklin No. 16AP-3, 2017-Ohio-439, ¶ 11.
1. Personal-Property Claims
{¶19} We first consider whether Forrest and his counsel acted frivolously in
asserting the claims under the personal-property agreement that were later found by
this court to be barred by claim preclusion and the jurisdictional-priority rule. The
test to determine whether an asserted claim is frivolous “is whether no reasonable
lawyer would have brought the action in light of existing law.” See Pitcher, 1st Dist.
Hamilton No. C-160245, 2016-Ohio-5491, at ¶ 15.
{¶20} The Eighth District Court of Appeals has held that “after an action has
been fully litigated in the Domestic Relations Court and a judgment entry has been
filed granting a divorce and providing for the division of property, the exclusive
jurisdiction [of the Domestic Relations Court] is terminated. At that point, there
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OHIO FIRST DISTRICT COURT OF APPEALS
exist[s] concurrent jurisdiction with the Common Pleas Court, General Division.”
Price v. Price, 16 Ohio App.3d 93, 95-96, 474 N.E.2d 662 (8th Dist.1984).
{¶21} While Forrest’s claims under the personal-property agreement were
ultimately found to be barred by claim preclusion and the jurisdictional-priority rule,
in light of the existing case law on the concurrent jurisdiction between domestic
relations courts and general division common pleas courts after the issuance of a
divorce decree, the Hamilton County Court of Common Pleas arguably had
jurisdiction over the property claims. Therefore, we cannot conclude that the actions
of Forrest and his counsel were not warranted under existing law. See R.C.
2323.51(A)(2)(a)(ii).
{¶22} In further support of his conduct, Forrest contends that he filed this
action in the Hamilton County Court of Common Pleas because he sought an award
of damages that could not be issued by a domestic relations court. This argument is
likewise supported by existing law. See Gibson v. Gibson, 87 Ohio App.3d 426, 431,
622 N.E.2d 425 (4th Dist.1993) (holding that domestic relations courts “have, by
statute, full equitable powers and jurisdiction appropriate to the determination of all
domestic relations matters,” but that these powers do not include the authority to
enter a judgment for damages).
{¶23} We cannot conclude that no reasonable lawyer would have filed the
personal-property claims, which, after a decree of divorce was granted, sought an
award of damages on claims for breach of contract and conversion regarding
separation of the parties’ personal property, in a court of common pleas rather than a
domestic relations court. See Pitcher, 1st Dist. Hamilton No. C-160245, 2016-Ohio-
5491, at ¶ 15.
{¶24} The trial court erred in concluding that Forrest and his counsel had
acted frivolously in filing the personal-property claims in Hamilton County.
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OHIO FIRST DISTRICT COURT OF APPEALS
2. Addendum-Agreement Claims
{¶25} We now consider whether Forrest and his counsel acted frivolously in
filing the claims concerning the parties’ addendum agreement. Su and Klingler were
granted summary judgment on the addendum-agreement claims and this court
affirmed that ruling after a de novo review.
{¶26} As the Supreme Court of Ohio has previously stated, frivolous conduct
“must involve egregious conduct. Frivolous conduct is not proved merely by winning
a legal battle or by proving that a party’s factual assertions were incorrect.” State ex
rel. DiFranco v. S. Euclid, 144 Ohio St.3d 571, 2015-Ohio-4915, 45 N.E.3d 987, ¶ 15.
The fact that Forrest lost on the merits of his addendum-agreement claims does not
mean that he acted frivolously in filing them. While Forrest’s actions in refusing to
accept delivery of his share of the IRS refund check may have factored into the
ultimate resolution of the claims against him, his conduct did not render the filing of
the claims frivolous. At the time of filing, Forrest had not received the proceeds and
there was a good-faith argument for filing the claims under existing law. We hold
that the actions of Forrest and his counsel in asserting claims under the addendum
agreement were not frivolous. See R.C. 2323.51(A)(2)(a)(ii).
{¶27} We therefore conclude that the trial court erred in finding that Forrest
and his counsel had acted frivolously under R.C. 2323.51 and in awarding fees and
costs on that basis. Forrest’s first assignment of error is sustained.
{¶28} Our resolution of this assignment of error renders moot Forrest’s
second, third, fifth, and sixth assignments of error, and we do not address them.
B. Jurisdictional Priority
{¶29} In his fourth assignment of error, Forrest argues that the trial court
erred in not transferring the case to the Warren County Court of Common Pleas
pursuant to the jurisdictional-priority rule.
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OHIO FIRST DISTRICT COURT OF APPEALS
{¶30} Prior to the hearing on Su and Klingler’s motion for an award of fees
and costs, Forrest filed a motion to dismiss the entire action for lack of subject-
matter jurisdiction. His motion contended that the court “must dismiss this matter
in its entirety, and vacate all judgment entries and orders entered because this Court
does not possess subject-matter jurisdiction.” He specifically asserted that
jurisdictional priority of his claims had vested in the Warren County Court of
Common Pleas when Su filed her complaint asserting her own claims under the
addendum agreement. He argued that his addendum-agreement claims were
compulsory counterclaims to Su’s, and that because Su’s case was filed first, the
entire Hamilton County action must be dismissed. The trial court denied Forrest’s
motion.
{¶31} Under the jurisdictional-priority rule, “when there are courts with
concurrent jurisdiction, the court whose powers are first invoked through the
initiation of an appropriate legal action acquires jurisdiction to the exclusion of all
other courts to adjudicate the issues and to settle the rights of the parties.” Zhao v.
Zeng, 1st Dist. Hamilton No. C-020131, 2003-Ohio-3060, ¶ 13. Generally, the rule
only applies when the claims and parties are the same in both cases. State ex rel.
Dunlap v. Sarko, 135 Ohio St.3d 171, 2013-Ohio-67, 985 N.E.2d 450, ¶ 10. When the
cases involve different claims or parties, the rule can still apply if the actions are part
of the same “whole issue.” Id. at ¶ 11; Triton Servs., Inc. v. Reed, 12th Dist. Butler
Nos. CA2016-04-028 and CA2016-08-068, 2016-Ohio-7838, ¶ 8. Two cases will be
considered part of the same “whole issue” where the cases are pending in courts of
concurrent jurisdiction and involve substantially the same parties, and “the ruling of
the court subsequently acquiring jurisdiction may affect or interfere with the
resolution of the issues before the court where suit was originally commenced.”
Triton Servs., Inc. at ¶ 9, quoting Michaels Bldg. Co. v. Cardinal Fed. S. & L.
Bank, 54 Ohio App.3d 180, 183, 561 N.E.2d 1015 (8th Dist.1988).
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OHIO FIRST DISTRICT COURT OF APPEALS
{¶32} Here, Forrest’s action in Hamilton County contained an additional
party that was not part of the action in Warren County, namely Klingler. And
following our review of the record, we cannot find that the two causes of action are
part of the same “whole issue.” We therefore conclude that the trial court did not err
in failing to transfer the case to Warren County or in failing to dismiss the case
pursuant to the jurisdictional-priority rule.
{¶33} Forrest’s fourth assignment of error is overruled.
Su and Klingler’s Cross-Appeal
{¶34} In their sole assignment of error, Su and Klingler argue that the trial
court erred in determining that it did not have jurisdiction to award attorney fees
pursuant to the addendum agreement. We agree.
{¶35} The trial court held that it did not have jurisdiction to enforce the
terms of the addendum agreement because “this case was disposed as a matter of law
under the jurisdictional priority rule.” The trial court’s statement was incorrect.
While Forrest’s claims pertaining to the personal-property agreement were disposed
of under the jurisdictional-priority rule, the addendum-agreement claims were
disposed of on their merits by a grant of summary judgment to Su and Klingler.
{¶36} Su and Klingler sought attorney fees under paragraph eight to the
addendum agreement, which provides that “[t]he prevailing party to any action or
proceeding brought to enforce any term of this Agreement shall be entitled to recover
all reasonable costs and attorneys fees arising out [of] or related to the enforcement
action or proceeding.” Just as it had jurisdiction to rule on the merits of the
addendum-agreement claims, the trial court had jurisdiction to interpret paragraph
eight of the agreement and to award fees if it determined that a party was entitled to
them.
{¶37} Su and Klingler’s assignment of error is sustained.
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OHIO FIRST DISTRICT COURT OF APPEALS
Conclusion
{¶38} Because the trial court erred in determining that the conduct of
Forrest and his counsel in filing the underlying action was frivolous under R.C.
2323.51, and in determining that it did not have jurisdiction to award fees under the
addendum agreement, we reverse the trial court’s judgment.
{¶39} This cause is remanded for the trial court to determine whether the
addendum agreement entitled Su to attorney fees and costs incurred defending the
addendum-agreement claims, and if so, to determine the amount the amount of fees
and costs to which Su is entitled and to issue an award accordingly.
Judgment reversed and cause remanded.
MOCK, P.J., and ZAYAS, J., concur.
Please note:
The court has recorded its own entry on the date of the release of this opinion.
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