Seniah Corp. v. Buckingham, Doolittle & Burroughs, L.L.P.

[Cite as Seniah Corp. v. Buckingham, Doolittle & Burroughs, L.L.P., 2018-Ohio-855.]
FIFTH DISTRICT COURT OF APPEALS
STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT
SENIAH CORPORATION : JUDGES:
:
: Hon. Patricia A. Delaney, P.J.
Plaintiff-Appellant : Hon. Craig R. Baldwin, J.
: Hon. Earle E. Wise, Jr., J.
-vs- :
: Case No. 2017CA00109
:
BUcKINGHAM, DOOLITTLE & :
bURROUGHS, LLP, ET AL. :
:
:
Defendants-Appellees : OPINION
CHARACTER OF PROCEEDING: Appeal from the Stark County Court of
Common Pleas, Case No.
2015CV00785
JUDGMENT: AFFIRMED
DATE OF JUDGMENT ENTRY: March 5, 2018
APPEARANCES:
For Plaintiff-Appellant: For Defendants-Appellees:
BRADLEY J. BARMEN LEE PLAKAS
1375 E. 9th St., 16th Floor DAVID L. DINGWELL
Cleveland, OH 44114 MARIA C. KLUTINOTY EDWARDS
220 Market Ave. S., 8th Floor
Canton, OH 44702
Stark County, Case No. 2017CA00109 2
Delaney, P.J.
{¶1} Plaintiff-Appellant Seniah Corporation appeals the June 8, 2017 judgment
entry of the Stark County Court of Common Pleas.
FACTS AND PROCEDURAL HISTORY
Attorney-Client Relationship
{¶2} Defendant-Appellee Patrick J. Keating is an attorney with Defendant-
Appellee Buckingham, Doolittle & Burroughs. Plaintiff-Appellant Seniah Corporation
retained Keating and Buckingham to represent it in two legal matters. In February 2010,
Keating represented Seniah in a foreclosure action. Keating also represented Seniah in
its Chapter 11 Petition in the U.S. Bankruptcy Court for the Northern District of Ohio,
Eastern Division, Case No. 10-60620.
Cognizable Events and Termination of Relationship
{¶3} Seniah claimed Keating commit malpractice on two occasions during his
representation of Seniah. On November 23, 2010, the Bankruptcy Court denied a
motion to amend a Relief from Stay Order where Seniah requested an opportunity to file
a plan of reorganization that would allow Seniah to protect the property subject to the
foreclosure action. On August 15, 2011, the property subject to foreclosure was sold at
Sheriff’s Sale for allegedly a fraction of its lowest appraised value.
{¶4} The foreclosure action concluded on September 16, 2011. The bankruptcy
case closed on November 22, 2011. The attorney-client relationship between Keating
and Seniah ended no later than November 22, 2011.
Stark County, Case No. 2017CA00109 3
Initiation of Legal Malpractice Claim
{¶5} On July 24, 2012, Seniah contacted Keating by letter to advise him of
Seniah’s potential claim for legal malpractice. The letter asked Keating to arrange for
Seniah’s representative to take possession of the file and to schedule a time for a
meeting to discuss the matter. Keating gave the letter to Susan Rodgers, general
counsel for Buckingham.
{¶6} On August 6, 2012, Rodgers sent Seniah a letter identifying herself as
general counsel for Buckingham and indicating she was in receipt of Seniah’s July 24,
2012 letter. Rodgers stated that “we are investigating the matter and will be contacting
[Seniah] shortly to discuss the firm’s position.” Rodgers did not state in the letter that
she did not represent Keating.
{¶7} Rodgers, Keating, and Seniah met on September 21, 2012 to discuss
Seniah’s claim of legal malpractice. Rodgers did not state at the meeting that she
represented only Buckingham’s interests. The parties did not reach a settlement at the
meeting.
{¶8} Seniah was concerned about the expiration of the statute of limitations on
November 22, 2012. Rodgers drafted a Tolling Agreement to extend the statute of
limitations. Keating was not involved in the drafting of the Tolling Agreement. The
Tolling Agreement states as follows:
This Tolling Agreement (“Tolling Agreement”) is entered into effective
October 3, 2012 between and among Buckingham, Doolittle & Burroughs,
LLP (“BDB”), an Ohio limited liability partnership, and William K. Haines,
Jr. (“Haines”) and Seniah Corp. (“Corporation”) * * *.
Stark County, Case No. 2017CA00109 4
The Seniah Parties claim that certain legal services were not properly
rendered by BDB in relation to the handling of the Seniah Corp.
Bankruptcy Case * * * resulting in a potential malpractice claim (“Potential
Claim”); and
BDB denies any basis for any Potential Claim and further denies that it
performed services for Haines as a client in relation to the Potential Claim;
and
BDB and the Seniah Parties desire to pursue a potential resolution of the
Potential Claim, without prejudicing the Seniah Parties’ right to bring
claims against BDB due to the passage of time.
***
1. The parties are entering into this Agreement for the purpose of
preserving the status quo as of October 3, 2012 with respect to any
applicable statute(s) of limitations and other time-related defenses relating
to or arising from any applicable law on which the Potential Claim is/or
may be based.
2. The parties agree that as of October 3, 2012, the running of any
statute(s) of limitations with respect to any and all possible causes of
action and claims which the Seniah Parties may have against BDB with
respect to the Potential Claim is tolled and suspended until this
Agreement is terminated as set forth in Section 7.
***
7. * * * This Agreement will terminate the earlier of January 31, 2013 * * *.
Stark County, Case No. 2017CA00109 5
8. This Agreement constitutes the entire agreement of the parties with
respect to the tolling of any statute(s) of limitations, the equitable doctrine
of laches, and the waiver of claims and defenses related to the passage of
time with respect to the Potential Claim. No modifications or amendments
to this Agreement are effective unless they are set forth in writing and
signed by all of the parties. * * * This Agreement is binding upon and
inures to the benefit of each party, as well as their heirs, successors,
assigns, shareholders, members, officers, directors, agents, or insurers,
as these terms are applicable. * * *.
9. Each party represents and warrants that the individuals whose
signatures appear below is duly authorized to execute this Agreement on
behalf of their respective party.
{¶9} The Tolling Agreement was signed by Seniah’s counsel on behalf of
William K. Haines, Jr. and Seniah Corp. Rodgers signed the Tolling Agreement as
general counsel on behalf of Buckingham. Keating did not sign the Tolling Agreement.
{¶10} Seniah and Rodgers met again on October 15, 2012. Keating was not
present at the meeting. Seniah and Rodgers did not reach a settlement.
{¶11} Seniah and Rodgers participated in a private mediation on January 11,
2013. Keating was not present at the mediation. The matter was not settled at
mediation.
Malpractice Complaint
{¶12} On February 19, 2013, Seniah filed a complaint in the Stark County Court
of Common Pleas naming Buckingham, Keating, and Joshua Berger, an attorney with
Stark County, Case No. 2017CA00109 6
Buckingham, as Defendants. The complaint alleged Keating and Berger committed
legal malpractice relating to their representation of Seniah during a foreclosure action
and a Chapter 11 Bankruptcy proceeding. The complaint sought to hold Keating and
Berger liable in their individual capacities.
{¶13} Buckingham filed an answer to the complaint.
{¶14} Keating and Berger filed a Motion to Dismiss on April 26, 2013. The
motion to dismiss argued that pursuant to Civ.R. 12(B)(6), Seniah could prove no set of
facts entitling it to relief because the applicable statute of limitations for a legal
malpractice expired prior to the filing of the complaint. Keating and Berger noted Seniah
filed its complaint for legal malpractice on February 19, 2013. They argued the
complaint stated two cognizable events whereby Seniah could have discovered the
legal malpractice. Those events, however, were beyond the one-year statute of
limitations. Keating and Berger also argued Seniah could not rely upon the termination
of the attorney-client relationship to determine the statute of limitations because the
complaint failed to state any facts as to the attorney-client relationship termination.
{¶15} On May 13, 2013, Seniah filed a “Brief in Opposition to Defendants'
Motion to Dismiss, or in the Alternative, Motion for Leave to Amend Complaint,
Instanter.” In support of its opposition to the motion to dismiss, Seniah argued the
complaint was timely filed based on a Tolling Agreement entered into between Seniah
and Buckingham, Doolittle & Burroughs, LLP on October 3, 2012. Seniah attached the
Tolling Agreement to the May 13, 2013 motion as Exhibit A. Seniah also attached
correspondence between the parties as exhibits to further support its opposition to the
motion to dismiss.
Stark County, Case No. 2017CA00109 7
{¶16} On June 4, 2013, the trial court issued its judgment entry granting the
motion to dismiss. In its judgment entry, the trial court agreed with the argument of
Keating and Berger that the complaint was filed outside of the one-year statute of
limitations. The trial court referred to the factual allegations in the complaint to find
Seniah could prove no set of facts warranting recovery. The trial court further found the
Tolling Agreement did not serve to extend the statute of limitations for filing the legal
malpractice complaint. The trial court found the Tolling Agreement was not signed by
Keating or Berger and therefore was not binding upon those parties per the language of
the Tolling Agreement.
{¶17} After the ruling, Buckingham, Doolittle & Burroughs, LLP filed a motion for
judgment on the pleadings. Seniah filed a motion for relief from judgment.
{¶18} Seniah dismissed Berger as a party-defendant.
{¶19} On December 19, 2013, the trial court denied Seniah’s motion for relief
from judgment. The trial court also granted the motion for judgment on the pleadings
filed by Buckingham, Doolittle & Burroughs, LLP via judgment entry on January 13,
2014.
{¶20} Seniah appealed the June 4, 2013 judgment entry of the Stark County
Court of Common Pleas to this Court in Seniah Corp. v. Buckingham, Doolittle &
Burroughs, LLP, 5th Dist. Stark No. 2014CA00013, 2014-Ohio-4370 (“Seniah I”). In its
appeal, Seniah argued the trial court erred in granting the Civ.R. 12(B)(6) motion to
dismiss. We agreed the trial court erred when it granted the motion to dismiss because
the trial court considered evidence and materials outside the four corners of the
complaint to reach its decision to grant the motion to dismiss. Id. at ¶ 18-19. We held
Stark County, Case No. 2017CA00109 8
that in order to consider matters outside the complaint, the trial court should have
converted the Civ.R. 12(B)(6) to a motion for summary judgment. Id. at ¶ 20. We
reversed the trial court’s June 4, 2013 judgment entry granting the motion to dismiss
and remanded the matter for further proceedings. Id. at ¶ 25.
{¶21} Upon remand, Keating filed a motion for summary judgment on January
12, 2015. Seniah filed a notice of dismissal on January 30, 2015.
{¶22} On April 15, 2015, Seniah refiled its complaint naming Buckingham,
Doolittle & Burroughs, LLP and Keating as defendants. Buckingham and Keating filed
answers to the complaint.
{¶23} On August 10, 2015, Keating filed a motion for summary judgment.
Keating’s sole argument in the motion for summary judgment was that Seniah’s claim
for legal malpractice was time-barred by the statute of limitations. Pursuant to the trial
court’s pre-trial order, Seniah’s response was due on September 7, 2015.
{¶24} Seniah did not file a response to the motion for summary judgment by
September 7, 2015. On September 16, 2015, the trial court issued its judgment entry
finding there were no genuine issues of material fact and Keating was entitled to
judgment as a matter of law. The judgment entry did not dispose of all pending claims.
Seniah’s claims against Buckingham were still pending.
{¶25} Seniah filed a motion for relief from judgment arguing its failure to answer
was due to mistake, inadvertence, and excusable neglect.
{¶26} On October 28, 2015, Buckingham filed a motion for summary judgment.
Buckingham argued Seniah’s claims against Buckingham were barred by res judicata
Stark County, Case No. 2017CA00109 9
and the law of the case based on Seniah’s failure to appeal the trial court’s January
2014 judgment entry granting Buckingham’s motion for judgment on the pleadings.
{¶27} The trial court denied Seniah’s motion for relief from judgment on
December 7, 2015. The trial court found Seniah failed to show a likelihood of success
on the merits because it failed to identify an expert to support its claim for legal
malpractice.
{¶28} The trial court granted Buckingham’s motion for summary judgment on
January 27, 2016.
{¶29} Seniah appealed the December 7, 2015 judgment entry in Seniah Corp. v.
Buckingham, Doolittle & Burroughs, LLP, 5th Dist. Stark No. 2016CA00039, 2016-Ohio-
7516 (“Seniah II”). Seniah argued the trial court erred by denying its motion for relief
from judgment. In Seniah II, we held the September 16, 2015 judgment entry was not a
final order, therefore Civ.R. 60(B) was not the proper procedural mechanism. Id. at ¶ 21.
Seniah’s motion should have been considered a motion for reconsideration. Id. We
reviewed the motion and found the trial court abused its discretion when it denied the
motion. Keating argued in his motion for summary judgment that Seniah’s claim for legal
malpractice was barred by the statute of limitations, but did not address the substantive
merits of Seniah’s claim. The trial court found Seniah was not entitled to reconsideration
because Seniah could not present a meritorious claim or defense on the basis that
Seniah did not identify an expert witness to support its claim for legal malpractice. We
held only the issue of the statute of limitations was before the trial court, not the merits
of the legal malpractice claim. Id. at ¶ 31. Accordingly, we reversed the judgment of the
trial court and remanded the matter for further proceedings.
Stark County, Case No. 2017CA00109 10
{¶30} Upon remand, Keating filed his motion for summary judgment with the
trial court on November 18, 2016. He renewed his argument that the statute of
limitations on Seniah’s claim had expired. Seniah responded to the motion and Keating
replied.
{¶31} On June 8, 2017, the trial court granted Keating’s motion for summary
judgment. The trial court first determined the date Seniah’s claim for legal malpractice
accrued was not based on the termination of the attorney-client relationship, but on two
cognizable events that occurred no later than October 2011. Seniah filed its original
complaint against Keating on February 19, 2013. Pursuant to R.C. 2305.11(A), the trial
court determined Seniah’s claim for legal malpractice occurred outside of the one-year
statute of limitations. The trial court next examined whether the Tolling Agreement
worked to toll the statute of limitations as to its claims against Keating. The trial court
determined Keating was not a party to the Tolling Agreement and did not sign it. The
language of the Tolling Agreement stated it applied to the signatories only: William
Haines, Seniah, and Buckingham. Finally, the deposition testimony of Rodgers and
Keating demonstrated Keating never authorized Rodgers to sign the Tolling Agreement
on his behalf and Rodgers did not have authority to bind members of Buckingham in
their individual capacity.
{¶32} It is from this judgment Seniah now appeals.
ASSIGNMENT OF ERROR
{¶33} Seniah raises one Assignment of Error:
{¶34} “THE TRIAL COURT ERRED BY GRANTING APPELLEE’S MOTION
FOR SUMMARY JUDGMENT.”
Stark County, Case No. 2017CA00109 11
ANALYSIS
{¶35} Seniah argues in its sole Assignment of Error that the trial court erred
when it granted summary judgment in favor of Keating. We disagree.
Summary Judgment Standard of Review
{¶36} We refer to Civ.R. 56(C) in reviewing a motion for summary judgment
which provides, in pertinent part:
Summary judgment shall be rendered forthwith if the pleading,
depositions, answers to interrogatories, written admissions, affidavits,
transcripts of evidence in the pending case and written stipulations of fact,
if any, timely filed in the action, show that there is no genuine issue as to
any material fact and that the moving party is entitled to judgment as a
matter of law. * * * A summary judgment shall not be rendered unless it
appears from such evidence or stipulation and only from the evidence or
stipulation, that reasonable minds can come to but one conclusion and
that conclusion is adverse to the party against whom the motion for
summary judgment is made, such party being entitled to have the
evidence or stipulation construed most strongly in the party's favor.
{¶37} The moving party bears the initial responsibility of informing the trial court
of the basis for the motion, and identifying those portions of the record before the trial
court, which demonstrate the absence of a genuine issue of fact on a material element
of the nonmoving party's claim. Dresher v. Burt, 75 Ohio St. 3d 280, 292, 662 N.E.2d
264 (1996). The nonmoving party then has a reciprocal burden of specificity and cannot
rest on the allegations or denials in the pleadings, but must set forth “specific facts” by
Stark County, Case No. 2017CA00109 12
the means listed in Civ.R. 56(C) showing that a “triable issue of fact” exists. Mitseff v.
Wheeler, 38 Ohio St. 3d 112, 115, 526 N.E.2d 798, 801 (1988).
{¶38} Pursuant to the above rule, a trial court may not enter summary judgment
if it appears a material fact is genuinely disputed. Vahila v. Hall, 77 Ohio St. 3d 421, 429,
674 N.E.2d 1164 (1997), citing Dresher v. Burt, 75 Ohio St. 3d 280, 662 N.E.2d 264
(1996).
Legal Malpractice and the Statute of Limitations
{¶39} R.C. 2305.11 sets forth a one-year statute of limitations for legal
malpractice claims. The one-year statutory period begins to run upon the termination of
the attorney-client relationship or the discovery of the alleged malpractice, whichever
occurs later. Hicks v. Garrett, 5th Dist. Stark No. 2011CA00109, 2012-Ohio-3560, ¶ 46
citing Ladanyi v. Crookes & Hanson Ltd., et al., 8th Dist. No. 87888, 2007-Ohio-540. In
Zimmie v. Calfee, Halter & Griswold, 43 Ohio St. 3d 54, 538 N.E.2d 398 (1989), the Ohio
Supreme Court set forth the standard with respect to the statute of limitations for
malpractice:
Under R.C. 2305.11(A), an action for legal malpractice accrues and the
statute of limitations begins to run when there is a cognizable event
whereby the client discovers or should have discovered his injury was
related to his attorney's act or non-act and the client is put on notice of a
need to pursue its possible remedies against the attorney, or when the
attorney-client relationship for that particular transaction or undertaking
terminates, whichever occurs later.
Stark County, Case No. 2017CA00109 13
Id. at 58, 538 N.E.2d 398. A cognizable event is defined as an event that is sufficient to
“alert a reasonable person that in the course of legal representation his attorney
committed an improper act.” Spencer v. McGill, 87 Ohio App. 3d 267, 278, 622 N.E.2d 7
(8th Dist.1993).
{¶40} In this case, there were two cognizable events. On November 23, 2010,
the Bankruptcy Court denied a motion to amend a Relief from Stay Order where Seniah
requested an opportunity to file a plan of reorganization that would allow Seniah to
protect the property subject to the foreclosure action. On August 15, 2011, the property
subject to foreclosure was sold at Sheriff’s Sale for allegedly a fraction of its lowest
appraised value.
{¶41} The foreclosure action concluded on September 16, 2011. The bankruptcy
case closed on November 22, 2011. Seniah states the attorney-client relationship
between Keating and Seniah ended no later than November 22, 2011.
{¶42} Seniah claims in its appellate brief that its legal malpractice claim did not
accrue until November 22, 2011, when the attorney-client relationship terminated. If its
claim for legal malpractice accrued on November 22, 2011, Seniah’s complaint should
have been filed by November 22, 2012. Seniah’s complaint was filed on February 19,
2013. Under either the termination of the attorney-client relationship or discovery of the
cognizable events, Seniah’s complaint against Keating was filed outside the one-year
statute of limitations. Seniah’s claim for legal malpractice against Keating can only
survive if the Tolling Agreement extending the statute of limitations applies to Keating.
Tolling Agreement
Stark County, Case No. 2017CA00109 14
{¶43} There is no dispute the Tolling Agreement is a contract. When confronted
with an issue of contract interpretation, our role is to give effect to the intent of the
parties. SPG, Inc. v. First St. Dev., L.L.C., 2016-Ohio-2824, 64 N.E.3d 340, ¶ 37 (5th
Dist.) citing Gen. Elec. Capital Corp. v. Tartan Fields Golf Club, Ltd., 5th Dist., 2013-
Ohio-4875, 1 N.E.3d 463, ¶ 19 citing Westfield Ins. Group v. Affinia Dev., L.L.C., 2012-
Ohio-5348, 982 N.E.2d 132, ¶ 21 (5th Dist.). We will examine the contract as a whole
and presume that the intent of the parties is reflected in the language of the contract. In
addition, we will look to the plain and ordinary meaning of the language used in the
contract unless another meaning is clearly apparent from the contents of the
agreement. When the language of a written contract is clear, a court may look no further
than the writing itself to find the intent of the parties. “As a matter of law, a contract is
unambiguous if it can be given a definite legal meaning.” Sunoco, Inc. (R & M) v. Toledo
Edison, Co., 129 Ohio St. 3d 397, 2011-Ohio-2720, 953 N.E.2d 285, ¶ 37 citing
Westfield Ins. Co. v. Galatis, 100 Ohio St. 3d 216, 2003-Ohio-5849, 797 N.E.2d 1256, ¶
11.
{¶44} However, where the contract language is reasonably susceptible of more
than one interpretation, the meaning of the ambiguous language is a question of fact.
Ohio Historical Soc. v. Gen. Maint. & Eng. Co., 65 Ohio App. 3d 139, 146, 583 N.E.2d
340 (10th Dist.1989). “Only when the language of a contract is unclear or ambiguous, or
when the circumstances surrounding the agreement invest the language of the contract
with a special meaning will extrinsic evidence be considered in an effort to give effect to
the parties' intentions.” Shifrin v. Forest City Ent., Inc., 64 Ohio St. 3d 635, 638, 597
N.E.2d 499 (1992), syllabus.
Stark County, Case No. 2017CA00109 15
{¶45} In Taft, Stettinius, & Hollister, LLP v. Calabrese, 2016-Ohio-4713, 69
N.E.3d 72 (1st Dist.), the First District reviewed a tolling agreement entered into
between a former client and a law firm. The former client brought an action for legal
malpractice against an attorney working for the law firm. The tolling agreement named
the former client and law firm, but did not name the attorney. The First District held the
clear terms of the tolling agreement did not toll the statute of limitations against the
attorney because he was not named in the agreement and did not sign the agreement.
Id. at ¶ 24.
{¶46} The plain language of the Tolling Agreement at issue herein states there
was an agreement between “Buckingham, Doolittle & Burroughs, LLP (“BDB”), an Ohio
limited liability partnership, and William K. Haines, Jr. (“Haines”) and Seniah Corp.
(“Corporation”).” Keating was not named in the agreement and he did not sign the
agreement. If this Court applies Taft to these facts, there is no genuine issue of material
fact that the plain language of the Tolling Agreement does not toll the statute of
limitations against Keating.
{¶47} Seniah responds that while Keating is not named in the Tolling Agreement
and did not sign the Tolling Agreement, the plain language of the Tolling Agreement still
binds Keating. The Tolling Agreement states, “This Agreement is binding upon and
inures to the benefit of each party, as well as their heirs, successors, assigns,
shareholders, members, officers, directors, agents, or insurers, as these terms are
applicable.” Keating is a shareholder of Buckingham. Seniah states that as a
shareholder, Keating is bound by the plain terms of the Tolling Agreement.
Stark County, Case No. 2017CA00109 16
{¶48} The purpose of the Tolling Agreement is to invalidate the legal defense of
statute of limitations if Seniah filed a lawsuit after the expiration of the statute of
limitations. The Tolling Agreement was necessary to prevent Buckingham, or anyone
acting on Buckingham’s behalf, from seeking to defend against Seniah’s claims on the
basis of the statute of limitations. The Tolling Agreement states, “This Agreement is
binding upon and inures to the benefit of each party, * * *.” (Emphasis added). The
parties to the Tolling Agreement are, “Buckingham, Doolittle & Burroughs, LLP (“BDB”),
an Ohio limited liability partnership, and William K. Haines, Jr. (“Haines”) and Seniah
Corp. (“Corporation”) * * *.” In her deposition, Rodgers testified she signed the Tolling
Agreement on behalf of Buckingham. (Depo. 37). The term of the agreement, “heirs,
successors, assigns, shareholders, members, officers, directors, agents, or insurers”,
therefore refers to anyone acting on behalf of one of the parties and precludes anyone
from acting on the parties’ behalf from seeking to avoid the legal effect of the Tolling
Agreement. Seniah named Buckingham and Keating as defendants in its lawsuit for
legal malpractice. Seniah sued Keating in his individual capacity. There are currently no
pending claims against Buckingham; Keating is the remaining defendant. Keating is not
seeking to defend against Seniah’s claims as a shareholder on behalf of Buckingham.
He is seeking to defend Seniah’s claims against him in his individual capacity.
Therefore, Keating does not fall within the group of “heirs, successors, assigns,
shareholders, members, officers, directors, agents, or insurers” intended to be bound by
the Tolling Agreement. See e.g. Resolution Trust Corp. v. Bonner, 848 F. Supp. 96
(1994).
Stark County, Case No. 2017CA00109 17
{¶49} Seniah next argues this Court should look beyond the plain language of
the Tolling Agreement and consider the circumstances upon which it entered into the
Tolling Agreement with Buckingham. Seniah claims Keating was bound by the Tolling
Agreement under either the legal theories of agency, ratification, and/or equitable
estoppel.
Agency
{¶50} Seniah claims Rodgers had the authority to bind Keating to the Tolling
Agreement based on an agency relationship. Seniah states the agency relationship was
created by either express, implied, or apparent authority. “The relationship of principal
and agent, and the resultant liability of the principal for the acts of the agent, may be
created by the express grant of authority by the principal. Absent express agency, the
relation may be one of implied or apparent agency.” Master Consolidated Corp. v.
BancOhio Natl. Bank, 61 Ohio St. 3d 570, 574, 575 N.E.2d 817 (1991).
{¶51} “Express authority is that authority which is directly granted to or conferred
upon the agent or employee in express terms by the principal, and it extends only to
such powers as the principal gives the agent in direct terms; and the express provisions
are controlling where the agency is expressly conferred * * *.” Id. “An agent's implied
authority may also arise from the principal's express delegation of actual authority.
Unless its extent is expressly limited by the principal, implied authority is that authority
which is incidental and necessary for the agent to carry into effect the powers expressly
conferred upon him by the principal.” Kaplan Trucking Co. v. Grizzly Falls Inc., 2017-
Ohio-926, 86 N.E.3d 845, ¶ 32 (8th Dist.) quoting Damon's Missouri, Inc. v. Davis, 63
Ohio St. 3d 605, 608, 590 N.E.2d 254 (1992). An agent acting within the scope of his
Stark County, Case No. 2017CA00109 18
actual authority, expressly or impliedly conferred, has the power to bind the principal. Id.
citing Saunders v. Allstate Ins. Co., 168 Ohio St. 55, 58–59, 151 N.E.2d 1 (1958).
{¶52} Seniah claims Rodgers had express and/or implied authority to act as
Keating’s agent and bind him to the terms of the Tolling Agreement. On July 24, 2012,
Seniah contacted Keating by letter to advise him of Seniah’s potential claim for legal
malpractice. Keating gave the letter to Rodgers. Rodgers responded to the letter, stating
she represented Buckingham. Seniah states Rodgers’s act of responding to Seniah’s
letter sent to Keating demonstrates Keating gave Rodgers express authority to act on
his behalf. Keating did not independently respond to Seniah’s letter. Rodgers further
demonstrated she represented Keating’s interests by attending meetings and mediation
with Seniah. Seniah states Rodgers therefore had express authority to execute the
Tolling Agreement on behalf of Keating.
{¶53} Keating testified in his deposition that he did not give Rodgers express
authority to act upon his behalf. Keating agreed he did not individually respond to
Seniah’s letter, but he did not ask Rodgers to respond to the letter. (Depo. 13, 16).
Keating gave the letter to Rodgers because Seniah asked for its case file, which was
the property of Buckingham. Rodgers’s letter to Seniah stated she was general counsel
for Buckingham and she wished to discuss the “firm’s position” with Seniah. Keating
attended a meeting with Seniah and Rodgers to discuss Seniah’s alleged claims.
(Depo. 34). Keating states at the meeting he was representing himself. (Depo. 19).
Keating testified that Seniah never asked if he was represented by counsel. (Depo. 19).
Keating denied having anything to do with the drafting or execution of the Tolling
Agreement. (Depo. 28). He did not sign the Tolling Agreement or approve the Tolling
Stark County, Case No. 2017CA00109 19
Agreement. After Seniah filed its lawsuit and sued Keating in his individual capacity,
Keating retained counsel. (Depo. 37).
{¶54} Based on the Civ.R. 56 evidence, we find that reasonable minds can only
conclude there was no express or implied agency relationship between Keating and
Buckingham as to the Tolling Agreement. Seniah had a potential claim for legal
malpractice against Keating individually. Seniah never asked if Keating was represented
by Rodgers. Keating and Rodgers never stated to Seniah that Rodgers represented
Keating. In Rodgers’s response, she stated she was contacting Seniah to discuss the
law firm’s position. Seniah cannot rely upon the October 15, 2012 meeting with Rodgers
or the January 11, 2013 private mediation with Rodgers to support its claim for express
authority because those events occurred after the execution of the Tolling Agreement
on October 3, 2012.
{¶55} If express or implied agency does not exist, Seniah next argues that
Rodgers had apparent authority to bind Keating to the Tolling Agreement. Apparent
agency exists “where one who is assuming to act as an agent for a party in the making
of a contract but in fact has no actual authority to do so, such party will nonetheless be
bound by the contract ‘if such party has by his words or conduct, reasonably interpreted,
caused the other party to the contract to believe that the one assuming to act as agent
had the necessary authority to make the contract.’ “ Scott v. Kindred Transitional Care &
Rehab., 8th Dist. Cuyahoga No. 103256, 2016–Ohio–495, ¶ 13 quoting Master
Consolidated, 61 Ohio St. 3d at 576, 575 N.E.2d 817 quoting Miller v. Wick Bldg. Co.,
154 Ohio St. 93, 93 N.E.2d 467 (1950).
Stark County, Case No. 2017CA00109 20
{¶56} In order for a principal to be bound by the acts of his agent under the
theory of apparent agency, evidence must affirmatively show: (1) that the principal held
the agent out to the public as possessing sufficient authority to embrace the particular
act in question, or knowingly permitted him to act as having such authority, and (2) that
the person dealing with the agent knew of those facts and acting in good faith had
reason to believe and did believe that the agent possessed the necessary authority.
Master Consolidated Corp., 61 Ohio St.3d at syllabus. The burden of proving that
apparent authority exists rests upon the party asserting the agency. Scott at ¶ 15 citing
Irving Leasing Corp. v. M & H Tire Co., 16 Ohio App. 3d 191, 475 N.E.2d 127 (2nd
Dist.1984).
{¶57} It is the acts of the principal, not the acts of the agent, that create apparent
authority. Master Consolidated, 61 Ohio St.3d at syllabus. “The principal is responsible
for the agent's acts only when the principal has clothed the agent with apparent
authority and not when the agent's own conduct has created the apparent authority.”
Primmer, 2015–Ohio–4104, ¶ 26, 43 N.E.3d 788 quoting Ohio State Bar Assn. v.
Martin, 118 Ohio St. 3d 119, 2008–Ohio–1809, 886 N.E.2d 827, ¶ 41.
{¶58} The first prong of the analysis requires Seniah to establish that Keating,
the principal, held Rodgers, the alleged agent, out to the public as possessing sufficient
authority to bind Keating to the Tolling Agreement. Keating testified he did not have
anything to do with the Tolling Agreement. (Depo. 28). Keating did not sign or approve
the Tolling Agreement. There was no testimony that Keating spoke to Seniah about the
Tolling Agreement. There is no testimony that Keating was present when Rodgers or
Seniah signed the Tolling Agreement.
Stark County, Case No. 2017CA00109 21
{¶59} The second prong of the apparent authority analysis requires Seniah to
prove that it, acting in good faith, had reason to believe that Rodgers possessed the
authority to bind Keating to the terms of the Tolling Agreement. Seniah relies on the
events that occurred prior to the drafting of the Tolling Agreement to demonstrate that it
had a good faith reason to believe that Rodgers possessed the authority to bind Keating
to the terms of the Tolling Agreement. It states that because Rodgers responded to the
letter regarding a possible claim for legal malpractice that it sent to Keating, Seniah
believed Rodgers possessed the authority to bind Keating to the Tolling Agreement.
Seniah claims its belief that Rodgers had authority to bind Keating to the Tolling
Agreement was further reinforced because Rodgers appeared at a meeting to discuss
Seniah’s potential claims. Keating also appeared at the meeting. A second meeting and
a mediation occurred after the execution of the Tolling Agreement, but these events
cannot be used to support Seniah’s claim it believed Rodgers had the authority to bind
Keating to the Tolling Agreement because the events occurred after its execution.
{¶60} Reviewing these facts in a light most favorable to Seniah, we cannot find
Seniah met its burden to establish these two events were a basis for a good faith belief
that Rodgers had the authority to bind Keating to the Tolling Agreement. We do not find
Rodgers’s letter that stated she wished to discuss Buckingham’s position and her
attendance at a meeting where Keating also appeared cloaked Rodgers with apparent
authority to bind Keating to the Tolling Agreement. Seniah failed to meet its burden to
demonstrate a genuine issue of material fact that Rodgers had apparent authority to
bind Keating to the Tolling Agreement.
Ratification
Stark County, Case No. 2017CA00109 22
{¶61} Seniah claims if Rodgers lacked apparent authority to enter into the
Tolling Agreement on behalf of Keating, Keating ratified the Tolling Agreement. The
Ohio Supreme Court in State v. Warner, 55 Ohio St. 3d 31, 65, 564 N.E.2d 18, (1990)
stated:
A well-settled doctrine of the law of agency is that a principal may ratify
the acts of its agent performed beyond the agent's scope of authority, and
such ratification relates back to the time of performance of the acts and
binds the principal from that time. State, ex rel. Riley Constr. Co., v. East
Liverpool Bd. of Edn. (1967), 10 Ohio St. 2d 25, 29, 39 O.O.2d 15, 18, 225
N.E.2d 246, 249. In Campbell v. Hospitality Motor Inns, Inc. (1986), 24
Ohio St. 3d 54, 24 OBR 135, 493 N.E.2d 239, we concluded that a
corporation could be bound to a contract that was neither expressly
authorized nor expressly ratified by its board of directors, thus reaffirming
the established rule that “an unauthorized contract entered into by a
corporate officer or agent may be impliedly ratified by the corporate board
of directors where the directors have actual knowledge of the facts and (1)
accept and retain the benefits of the contract, (2) acquiesce in it, or (3) fail
to repudiate the contract within a reasonable period of time.” Id. at 57, 24
OBR at 138, 493 N.E.2d at 242.
{¶62} Seniah contends Keating knew of the Tolling Agreement. He accepted
and benefitted from the Tolling Agreement by not being sued. Seniah also contends he
failed to repudiate the Tolling Agreement.
Stark County, Case No. 2017CA00109 23
{¶63} Reasonable minds could only conclude the theory of ratification is not
applicable to the facts of this case. We found above there was no agency relationship
between Keating and Rodgers. Keating did not benefit from the Tolling Agreement by
not being sued because he was ultimately sued by Seniah in his individual capacity. In
his answer to the complaint, Keating raised as a defense the statute of limitations,
thereby repudiating any alleged benefit the Tolling Agreement may have given Keating.
Equitable Estoppel
{¶64} Seniah finally claims if the Tolling Agreement is not applicable to Keating,
the statute of limitations should be tolled under the doctrine of equitable estoppel.
{¶65} Equitable estoppel requires a party prove another party made a factual
misrepresentation, that is misleading, that induced actual reliance which is reasonable
and in good faith; and the misrepresentation caused detriment to the relying party.
Alford v. E. Ohio Gas Co., 5th Dist. Tuscarawas No. 2013AP030014, 2014-Ohio-2134,
¶ 255 citing Doe v. Blue Cross/Blue Shield of Ohio, 79 Ohio App. 3d 369, 607 N.E.2d
492 (10th Dist.1992). The Ohio Supreme Court discussed the application of the doctrine
of equitable estoppel to toll the statute of limitations:
“The purpose of equitable estoppel is to prevent actual or
constructive fraud and to promote the ends of justice. It is available only in
defense of a legal or equitable right or claim made in good faith and
should not be used to uphold crime, fraud, or injustice.” Ohio State Bd. of
Pharmacy v. Frantz (1990), 51 Ohio St. 3d 143, 145, 555 N.E.2d 630.
Our sister court in New York recently considered whether equitable
estoppel applied to toll the statutes of limitations for plaintiffs' claims in an
Stark County, Case No. 2017CA00109 24
analogous case. The court held, “A defendant/wrongdoer cannot take
affirmative steps to prevent a plaintiff from bringing a claim and then
assert the statute of limitations as a defense. However, if the doctrine of
equitable estoppel were to be applied as broadly as plaintiffs suggest, the
statute of limitations would rarely be available as a defense. Plaintiff's
proposed rule would revive any lapsed claim where the defendant inflicted
some type of injury upon a knowing plaintiff but failed to come forward with
further information about his or her wrongdoing.
“It is therefore fundamental to the application of equitable estoppel
for plaintiffs to establish that subsequent and specific actions by
defendants somehow kept them from timely bringing suit * * *.” Zumpano
v. Quinn (2006), 6 N.Y.3d 666, 674, 816 N.Y.S.2d 703, 849 N.E.2d 926.
Doe v. Archdiocese of Cincinnati, 109 Ohio St. 3d 491, 2006-Ohio-2625, 849 N.E.2d
268, ¶¶ 43-45 (2006).
{¶66} It is Seniah’s burden to establish that Keating engaged in specific actions
that kept it from timely bringing suit. The Civ.R. 56 evidence in this case shows that
Seniah agreed to enter into a Tolling Agreement with Buckingham. Keating was not a
party to the Tolling Agreement. There is no evidence that Keating made a factual
misrepresentation to Seniah to change its position as whether to sue Keating for legal
malpractice. The terms of the Tolling Agreement allowed Seniah to terminate the Tolling
Agreement with 30 days advance notice. Even if the Tolling Agreement applied to
Keating, Seniah could have brought suit against Keating at any time before the
expiration of the statute of limitations.
Stark County, Case No. 2017CA00109 25
CONCLUSION
{¶67} Upon our de novo review, we find reasonable minds could only conclude
that under the plain language of the Tolling Agreement and/or under the theories of
agency, ratification, and equitable estoppel, the Tolling Agreement did not apply to
Keating. The trial court therefore properly entered summary judgment in favor of
Keating.
{¶68} Seniah’s sole Assignment of Error is overruled.
{¶69} The judgment of the Stark County Court of Common Pleas is affirmed.
By: Delaney, P.J.,
Baldwin, J. and
E. Wise, J., concur.