New Beginnings Residential Treatment Ctr., L.L.C. v. Steel Town, L.L.C.

[Cite as New Beginnings Residential Treatment Ctr., L.L.C. v. Steel Town, L.L.C., 2016-Ohio-4814.]
STATE OF OHIO, MAHONING COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
NEW BEGINNINGS RESIDENTIAL )
TREATMENT CENTER, LLC., et al. )
)
PLAINTIFFS-APPELLANTS ) CASE NO. 15 MA 0185
)
VS. ) OPINION
)
STEEL TOWN, LLC., et al. )
)
DEFENDANTS-APPELLEES )
CHARACTER OF PROCEEDINGS: Civil Appeal from Court of Common
Pleas, Mahoning County, Ohio
Case No. 2013 CV 3422
JUDGMENT: Reversed and Remanded.
APPEARANCES:
For Plaintiffs-Appellants Attorney Thomas Leopp
1865 Arndale Road, Suite B
Stow, Ohio 44224
For Defendants-Appellees Attorney Percy Squire
341 South Third Street, Suite 10
Columbus, Ohio 43206
JUDGES:
Hon. Mary DeGenaro
Hon. Gene Donofrio
Hon. Carol Ann Robb
Dated: June 30, 2016
[Cite as New Beginnings Residential Treatment Ctr., L.L.C. v. Steel Town, L.L.C., 2016-Ohio-4814.]
DeGENARO, J.
{¶1} Plaintiffs-Appellants, New Beginnings Residential Treatment Center, et
al., appeal the October 20, 2015 judgment of the Mahoning County Court of Common
Pleas. New Beginnings’ arguments are meritorious as the trial court improperly used
Civ.R. 60 to make substantive, as opposed to clerical, changes to a previous order.
Facts and Procedural History
{¶2} Plaintiffs-Appellants, New Beginnings Residential Treatment Center,
LLC and Dr. Vanessa Jones (New Beginnings) filed a complaint for accounting
malpractice, retaliation, negligence, fraud, and breach of lease on December 4, 2013,
against Defendants-Appellees, Steel Town, LLC, Sterling A. Williams, and Tax
Master Accounting and Tax Service (Steel Town).
{¶3} After receiving leave of court, Steel Town filed a motion to dismiss,
answer, and counterclaim. In their answer Steel Town generally denied the
allegations of the complaint and asserted various defenses. For its counterclaim,
Steel Town asserted that New Beginnings breached the lease agreement.
{¶4} On September 23, 2014, New Beginnings filed a motion for summary
judgment on their claims contained in the complaint as well as Steel Town’s
counterclaim. Steel Town opposed the summary judgment motion and also filed a
motion to dismiss counts two and three of the complaint based upon a mandatory
arbitration provision. In the alternative Steel Town requested summary judgment on
counts two and three based upon an attached affidavit of defendant, Sterling
Williams.
{¶5} On October 20, 2014, New Beginnings filed a notice requesting the trial
court to grant its previously filed motion for summary judgment on the basis that Steel
Town failed to reply pursuant to the local rules within 14 days. Further, they asked
that their previously filed requests for admissions be deemed admitted because Steel
Town did not respond in a timely manner.
{¶6} On November 3, 2014, New Beginnings filed a brief in opposition to the
motion to dismiss arguing that Steel Town had consented and invoked the jurisdiction
of the trial court by filing a counterclaim and that they waived any argument regarding
-2-
arbitration.
{¶7} On January 14, 2015, the magistrate ruled that Steel Town had failed to
exercise and avail themselves of any rights they had to arbitrate any portion of the
proceedings in a timely manner and waived their right to do so. As such, the trial
court denied Steel Town’s motion to dismiss or otherwise stay the proceedings for
arbitration.
{¶8} On January 26, 2015, Steel Town filed a motion to set aside the
magistrate’s decision and objections to the magistrate’s decision again requesting
dismissal of counts two and three or a referral of the counts to arbitration arguing that
the magistrate disregarded strong public policy favoring arbitration and failed to
address waiver language contained within the lease.
{¶9} On January 28, 2015, the magistrate denied New Beginnings summary
judgment on counts one, two, and three; he sustained the motion on counts four and
five reserving the issues of proximate cause and damages for further adjudication
upon the merits by the trier of fact.
{¶10} On the same date the magistrate ordered that the requests for
admission served upon Steel Town be deemed admitted and also granted New
Beginnings motion for summary judgment on Steel Town’s counterclaim (breach of
commercial lease). In doing so, the magistrate held that Steel Town failed to explain
how the lease was breached, failed to address the counterclaim in its response to the
motion for summary judgment, and provided no evidentiary materials to support that
New Beginnings had breached the lease.
{¶11} On February 4, 2015, the trial judge sustained Steel Town’s motion to
allow arbitration of counts two and three of the complaint.
{¶12} On February 9, 2015, Steel Town filed a motion to withdraw the
admissions deemed admitted by the magistrate on January 28, 2015, and a
combined motion to set aside magistrate’s decision and objections to the magistrate’s
decision on the grant of summary judgment. New Beginnings promptly responded in
opposition noting the untimeliness of the motions, the unfairness of granting of same,
-3-
and the prejudice to New Beginnings if the motions were granted.
{¶13} On February 25, 2015, the trial judge overruled the objections,
upholding the magistrate’s decision to grant summary judgment. With respect to the
counterclaim, the trial judge agreed with the magistrate that Steel Town had not
responded in any manner to the motion, and sustained the motion.
{¶14} On March 25, 2015, the magistrate denied Steel Town’s motion to
withdraw admissions. Once again Steel Town filed a combined motion to set aside
magistrate’s decision and objections to the magistrate’s decision. Again, New
Beginnings promptly responded in opposition.
{¶15} On April 20, 2015, the trial court sustained Steel Town’s objections to
the March 25, 2015 magistrate’s decision regarding the requests for admissions.
Consequently, the admissions filed by Steel Town on July 10, 2014, were to be
considered by the magistrate when deciding the case.
{¶16} On May 21, 2015, the trial court, recognizing that an inconsistency
existed in two prior judgment entries, overruled its earlier grant of summary judgment
on counts four and five of the complaint. The trial court cited the fact that the
magistrate had used the admissions that were previously deemed admitted when
reaching its decision to grant the summary judgment. As the trial court had stated
that a different set of admissions was to be used (i.e. July 10, 2014 admissions), the
grant of summary judgment was vacated and counts four and five remained pending
for further adjudication. The judgment entry states that this was a sua sponte act by
the trial judge based upon Civ.R. 60(A).
{¶17} On October 20, 2015, the trial judge, pursuant to Civ.R 60(A), vacated
the grant of summary judgment to New Beginnings on Steel Town’s counterclaim and
ordered the counterclaim into arbitration based upon the same contractual language
that was cited to submit counts two and three of the complaint to arbitration.
Civil Rule 60
{¶18} As the first two assignments of error share a basis in law and fact, they
will be addressed together for clarity analysis. New Beginnings asserts:
-4-
The trial court erred and abused its discretion in using Civil Rule 60(A)
to “correct” its judgments regarding summary judgment and referring
the Counterclaim to arbitration.
The trial court erred and abused its discretion in referring to arbitration
the Counterclaim.
{¶19} "[I]t is within the trial court's discretion to correct mistakes pursuant to
Civ.R. 60(A) and its decision will not be reversed absent an abuse of that discretion."
Bobb Forest Products, Inc. v. Morbark Industries, Inc., 151 Ohio App. 3d 63, 2002–
Ohio–5370, 783 N.E.2d 560, ¶ 27 (7th Dist.). Abuse of discretion means the trial
court's decision is unreasonable based upon the record; that the appellate court may
have reached a different result is not enough to warrant reversal. Downie v.
Montgomery, 7th Dist. No. 12 CO 43, 2013–Ohio–5552, ¶ 50.
{¶20} "Civ.R. 60(A) permits a trial court, in its discretion, to correct clerical
mistakes which are apparent on the record but does not authorize a trial court to
make substantive changes in judgments." State ex rel. Litty v. Leskovyansky, 77
Ohio St. 3d 97, 100, 1996-Ohio-340, 671 N.E.2d 236. "A clerical mistake
contemplated by Civ.R. 60(A) is mechanical in nature, apparent on the record, and
does not involve a legal decision or judgment by an attorney." Bobb, supra, at ¶ 28.
{¶21} Here, the trial judge stated that Civ.R. 60(A) enabled him to "correct
errors in Judgments, Orders or other parts of the record arising from the oversight or
omission at any time on its own initiative" and that he was taking action to correct an
error and "prevent manifest injustice." Specifically, it vacated a portion of a February
25, 2015 judgment entry that granted summary judgment in favor of New Beginnings
on Steel Town's counterclaim. The trial judge then ordered the counterclaim to
binding arbitration with counts two and three of the complaint that had previously
been ordered to arbitration on February 4, 2015.
{¶22} This action by the trial court clearly constitutes a substantive change as
opposed to a clerical correction. Indeed, by its own account, the trial court was asked
-5-
twice earlier in the proceedings by Steel Town to refer the counterclaim to arbitration.
That had not occurred. Ultimately the magistrate granted summary judgment on the
counterclaim to New Beginnings.
{¶23} Accordingly, the changes associated with the October 20, 2015
judgment entry were substantive in nature. As such, the trial court improperly used
Civ.R. 60(A) to vacate the grant of summary judgment on the counterclaim and to
send it to binding arbitration. Accordingly, New Beginnings' first and second
assignments of error are meritorious.
{¶24} In the final of three assignments of error, New Beginnings asserts:
The trial court erred and abused its discretion in permitting the
withdrawal of the deemed admissions.
{¶25} On appeal, New Beginnings contends that Steel Town should not have
been permitted to withdraw admissions that the magistrate had previously deemed
admitted. However, New Beginnings is appealing the judgment of October 20, 2015.
This entry does not address the withdrawal of admissions. That was done in the May
21, 2015 order. The notice of appeal says nothing about appealing the May order,
and the time to appeal has long since passed. See App.R. 3(A); App.R. 4(A).
Accordingly, this assignment of error is meritless.
{¶26} In sum, New Beginnings’ arguments are meritorious as the trial court
improperly used Civ.R. 60 to make substantive, as opposed to clerical, changes to a
previous order of the court. As such, the October 20, 2015 decision of the trial court
reversed and remanded, the February 25, 2015 judgment is reinstated, and the
-6-
matter remanded for further proceedings.
Donforio, P. J., concurs.
Robb, J., concurs.