Salata v. Vallas

{¶ 1} This is an appeal of a judgment from the Mahoning County Court of Common Pleas granting partial summary judgment to appellee, Daniel Salata, on a civil Racketeer Influenced and Corrupt Organizations Act ("RICO") claim. It appears from the record that this interlocutory matter does not present us with a final appealable order, and for that reason we must dismiss this appeal.

{¶ 2} On May 23, 2000, appellee filed a complaint in Campbell Municipal Court, Mahoning County, Ohio, against appellant, Jack Vallas, alleging breach of contract in the sale of a home and conversion of certain property appellee had left on the property. Appellant filed an answer and counterclaim, alleging fraud in the execution of the purchase agreement, civil RICO claims related to the sale of the property, and costs involved in the wrongful removal of certain fixtures after the closing. The case was later transferred to the Mahoning County Court of Common Pleas.

{¶ 3} On February 28, 2003, appellee filed a motion for summary judgment. The motion covered appellee's two claims, as well as appellant's fraud and RICO counterclaims. Concerning the RICO counterclaim, appellee argued that a civil RICO complaint must contain particular allegations of a violation of Ohio's criminal RICO statute, R.C. 2923.32, and must specify the alleged pattern of criminal activity and the criminal enterprise that was engaged in that activity.

{¶ 4} On July 9, 2003, appellant filed a response in opposition to appellee's motion for summary judgment.

{¶ 5} On July 30, 2003, the trial court ruled on appellee's motion for summary judgment. The court overruled the motion with respect to appellee's two claims for breach of contract and conversion. The court also overruled the motion with respect to appellant's counterclaim for fraud. The court did grant summary judgment with respect to the civil RICO claim, stating that appellant did not state his claim with enough specificity to avoid dismissal of the claim. The court also ended its judgment by stating, "There is no just cause for delay."

{¶ 6} Appellant filed a timely notice of appeal on August 28, 2003.

{¶ 7} Appellant has asserted two assignments of error, which both challenge the trial court's decision to grant summary judgment to appellee on the civil RICO claim:

{¶ 8} "Where the party moving for summary judgment fails to identify any evidence of a defect in the opposing party's claim, the movant has not met his burden and a grant of summary judgment in the movant's favor is prejudicial error.

{¶ 9} "Where appellant submitted evidence establishing a genuine issue of material fact, the trial court erred in granting partial summary judgment."

{¶ 10} The trial court ruled that appellant did not allege sufficient facts in order to sustain a civil RICO claim. A valid civil RICO claim must allege that the defendant violated one or more of the crimes set forth in R.C. 2923.32. See R.C.2923.34(B); U.S. Demolition Contracting Inc. v. O'RourkeConstr. Co. (1994), 94 Ohio App.3d 75, 83, 640 N.E.2d 235. A civil RICO claim must also state with specificity that (1) the defendant was involved in a "corrupt activity" as defined by R.C.2923.31(I), (2) that the defendant was involved in a pattern of corrupt activity that consisted of two or more incidents of corrupt activity as prohibited by R.C. 2923.31(I), and (3) that an enterprise existed separate and apart from the defendant through which the defendant acted. Universal Coach, Inc. v. NewYork City Transit Auth., Inc. (1993), 90 Ohio App.3d 284, 291,629 N.E.2d 28.

{¶ 11} The trial court appears to have treated appellee's motion for summary judgment as if it were a motion to dismiss for failure to state a cognizable claim. Civ.R. 12(H)(2) specifically states that a motion to dismiss for failure to state a claim may be raised even during a trial on the merits:

{¶ 12} "(2) A defense of failure to state a claim upon which relief can be granted * * * may be made in any pleading permitted or ordered under Rule 7(A), or by motion for judgment on the pleadings, or at the trial on the merits."

{¶ 13} Although appellee did not expressly state that the RICO claim should be dismissed under Civ.R. 12(H), the Ohio Supreme Court has held that the trial court itself is permitted sua sponte to dismiss a claim or complaint for failure to state a cognizable claim:

{¶ 14} "Sua sponte dismissal of a complaint for failure to state a claim upon which relief can be granted is appropriate if the complaint is frivolous or the claimant obviously cannot prevail on the facts alleged in the complaint." State ex rel.Kreps v. Christiansen (2000), 88 Ohio St.3d 313, 316,725 N.E.2d 663.

{¶ 15} A dismissal for failure to state a claim upon which relief can be granted is reviewed de novo, as it involves a purely legal issue. Bell v. Horton (1995), 107 Ohio App.3d 824,826, 669 N.E.2d 546. In order to dismiss a complaint for failure to state a cognizable claim, it must appear beyond doubt that the plaintiff can prove no set of facts in support of the claim that would entitle plaintiff to relief. York v. Ohio State Hwy.Patrol (1991), 60 Ohio St.3d 143, 144, 573 N.E.2d 1063. In determining whether a complaint presents a claim for which relief may be granted, the court must presume that all of the factual allegations in the complaint are true and make all reasonable inferences in favor of the nonmoving party. Id. The court must also confine its review to the averments contained in the complaint. See State ex rel. Alford v. Willoughby (1979),58 Ohio St.2d 221, 223, 12 O.O.3d 229, 390 N.E.2d 782.

{¶ 16} Appellant's civil RICO claim fails to allege that appellee pleaded guilty to or committed any specific crime, much less a pattern of crimes, and thus, on its face it fails to state with specificity a required element of a civil RICO claim. The trial court, therefore, would appear to have been correct in dismissing this aspect of appellant's counterclaim for failure to state a claim for which relief could be granted.

{¶ 17} During our review of appellant's assignments of error, however, a question was raised as to whether this appeal is ripe for review. As we have stated on many occasions, a court of appeals has authority to review only final appealable orders. "Courts of appeals shall have such jurisdiction as may be provided by law to review and affirm, modify, or reverse judgments or final orders of the courts of record inferior to the court of appeals within the district * * *." Section 3(B)(2), Article IV of the Ohio Constitution. This court is permitted to review judgments only when it is presented with an order that is both final and appealable as defined by R.C. 2505.02 and other relevant procedural rules. Chef Italiano Corp. v. Kent StateUniv. (1989), 44 Ohio St.3d 86, 541 N.E.2d 64, syllabus.

{¶ 18} This appeal does not present a final appealable order because the trial court's decision to grant partial summary judgment is based on the same facts and circumstances that exist in the claims that remain pending before the trial court. The parties' dispute centers around a purchase agreement to buy land and a home at 771 Coitsville-Hubbard Road, Youngstown, Ohio. Appellant's counterclaims allege fraud and racketeering in the sale of the same property.

{¶ 19} The Ohio Supreme Court has said: "A final order * * * is one disposing of the whole case or some separate and distinct branch thereof." Noble v. Colwell (1989), 44 Ohio St.3d 92, 94,540 N.E.2d 1381. It does not appear that appellant's civil RICO counterclaim is separate and distinct from appellee's original complaint or from appellant's fraud counterclaim, as they are all based on the same set of facts and circumstances.

{¶ 20} We acknowledge that the trial judge intended his judgment to be immediately appealable because he included the "no just cause for delay" language of Civ.R. 54(B) in his judgment entry. Civ.R. 54(B) states:

{¶ 21} "When more than one claim for relief is presented in an action whether as a claim, counterclaim, cross-claim, or third-party claim, and whether arising out of the same or separate transactions, or when multiple parties are involved, the court may enter final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay."

{¶ 22} Nevertheless, "the mere incantation by a court of the language ``no just reason for delay' does not convert an otherwise interlocutory order into a final appealable judgment." Korodi v.Minot (1987), 40 Ohio App.3d 1, 3, 531 N.E.2d 318. "An order of a court is final and appealable only if it meets the requirements of both Civ.R. 54(B) and R.C. 2505.02." Denham v. New Carlisle (1999), 86 Ohio St.3d 594, 596, 716 N.E.2d 184.

{¶ 23} The Chef Italiano case itself dealt with the problem of the final-appealable-order status of a number of claims that had been resolved through partial summary judgment. In ChefItaliano, a corporation was suing multiple parties involving multiple claims. Ultimately, the court ruled that some of the claims that had been resolved in summary judgment were final orders that could have been immediately appealed if the trial court had included the appropriate language set forth in Civ.R. 54(B). Without explicitly saying so, the Ohio Supreme Court also ruled that for any adjudicated claim that had a common body of interest still pending before the trial court, the partially resolved issues were not final and appealable despite the inclusion in the judgment entry of the "no just cause for delay" language from in Civ.R. 54(B). This implicit holding in ChefItaliano applies to the situation presented to us in the instant appeal.

{¶ 24} Based on the reasons set forth above, we must dismiss this interlocutory appeal because it does not present a final appealable order that may be reviewed by this court.

Appeal dismissed.

DONOFRIO, J., concurs.

DeGENARO, J., dissents.