Moss v. Marshall Builders, Inc.

[Cite as Moss v. Marshall Builders, Inc., 2019-Ohio-97.]
COURT OF APPEALS
STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT
JEFFREY MOSS, et al. JUDGES:
Hon. John W. Wise, P. J.
Plaintiffs-Appellees Hon. W. Scott Gwin, J.
Hon. Earle E. Wise, Jr., J.
-vs-
Case No. 2018 CA 00038
MARSHALL BUILDERS, INC., et al.
Defendants-Appellants OPINION
CHARACTER OF PROCEEDING: Civil Appeal from the Court of Common
Pleas, Case No. 2017 CV 01931
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: January 14, 2019
APPEARANCES:
For Plaintiff-Appellees For Defendant-Appellants
JASON N. BING DAVID P. BERTSCH
TODD B. KOTLER STARK & KNOLL CO., LPA
GRUBER, THOMAS & CO. 3475 Ridgewood Road
6370 Mt. Pleasant Street, NW Akron, Ohio 44333
North Canton, Ohio 44720-0985
Stark County, Case No. 2018 CA 00038 2
Wise, John, P. J.
{¶1} Appellants Marshall Builders, Marshall Custom Homes, LLC and Matthew
Marshall appeal the March 5, 2018, decision of the Stark County Common Pleas Court’s
decision denying their motion to stay proceedings and compel arbitration.
{¶2} Appellees in this matter are Jeffrey M. Moss and Julie Moss.
STATEMENT OF THE FACTS
{¶3} The relevant facts and procedural history are as follows:
{¶4} On or about November 16, 2016, Appellees Jeffrey M. Moss and Julie Moss
entered into an Agreement including a Construction Contract and Specifications with
Appellants, Marshall Builders, Inc., Marshall Custom Homes, LLC and Matthew Marshall
for the construction of a single family home located at 9201 Beeson Street NE, Alliance,
Ohio 44601.
{¶5} Section 12 of the Agreement prepared by Marshall Builders contains a
provision labeled "Arbitration" which provides:
12. ARBITRATION: In the event that any dispute arises between
Contractor and Owner as to the meaning or interpretations of any
provisions of this Agreement and the Exhibits attached or if any dispute
arises as to the proper performance of any part of the work in building the
residence and Contractor and Owner are unable between themselves to
resolve such disputes, it is mutually agreed that Contractor and Owner will
submit said disputes for arbitration. Such arbitration shall consist of three
arbitrators, which shall be selected as follows: (1) Owner to select a
competent residential builder, (2) Contractor to select a competent
Stark County, Case No. 2018 CA 00038 3
residential builder and (3) the two aforementioned builders shall select a
third competent residential builder. Each party shall pay the expense of the
arbitrator they selected and shall equally share the expense of the third.
Each arbitrator/builder shall have minimum experience often [sic] (10)
years in the residential construction field. If arbitration cannot be resolved
within sixty (60) day period, said dispute shall he [sic] taken before a court
of law.
{¶6} A dispute arose between the Mosses and the Marshall Parties regarding
the construction of the home in the spring of 2017.
{¶7} On or about May 24, 2017, the Mosses' attorney at the time, David Weimer,
sent a demand letter to the Marshall Parties regarding the various issues that had arisen
during the construction of the home.
{¶8} On or about June 12, 2017, the Mosses sent the Marshall Parties an
electronic mail correspondence demanding immediate arbitration/mediation pursuant to
the Agreement. (Jeff Moss Affidavit at 13; Julie Moss Affidavit at 13).
{¶9} On or about June 19, 2017, Attorney Weimer sent another correspondence
to the Marshall Parties by regular mail and electronic mail demanding that they resolve
the issues with the home by June 23, 2017, or a lawsuit would be filed.
{¶10} On or about June 19, 2017, the Mosses received a correspondence from
Attorney Weimer stating that "Matt Marshall just called me and said he was out of town
last week and was going to Disney on Wednesday for 10 days, so he has limited time to
get your situation resolved ... [Matt Marshall] concluded by saying go ahead and sue me.
I don't care."
Stark County, Case No. 2018 CA 00038 4
{¶11} The issues with the construction of the home could not be resolved and as
a result, the Mosses filed their Complaint in the Stark County Common Pleas Court on
September 25, 2017, more than sixty days after attempting to resolve the dispute through
the arbitration/mediation process stated in the Agreement.
{¶12} On November 14, 2017, Matt Marshall, pro se, filed a Motion for Extension
to File an Answer.
{¶13} On November 20, 2017, the trial court issued a Judgment Entry granting
Matt Marshall individually an extension to file an answer but denying the entity
defendants, Marshall Builders and Marshall Custom Homes, an extension as Matt
Marshall was not an attorney licensed to practice law in Ohio and could not request an
extension on behalf of the entity defendants.
{¶14} On November 22, 2017, the Mosses filed an Application for Default
Judgment and for Hearing as to Damages against the entity defendants Marshall Builders
and Marshall Custom Homes and on December 5, 2017, the Mosses filed an Amended
Application for Default Judgment and for Hearing as to Damages against the entity
defendants.
{¶15} On December 5, 2017, the trial court granted the Mosses' Amended
Application for Default Judgment against the entity defendants Marshall Builders and
Marshall Custom Homes.
{¶16} On December 15, 2017, Matt Marshall, individually, filed an Answer and
Counterclaim against the Mosses.
{¶17} On January 11, 2018, the Mosses filed their Answer to Matt Marshall's
Counterclaim.
Stark County, Case No. 2018 CA 00038 5
{¶18} On December 26, 2017, the Marshall Parties filed "Defendants' Motion to
Vacate Default Judgment against Marshall Builders, Inc. and Marshall Custom Homes,
LLC and to Stay Action and refer Claims to Binding Arbitration with Memorandum in
Support."
{¶19} The Mosses did not oppose the Marshall Parties' motion to vacate the
default judgment and on January 19, 2018, the trial court vacated the default judgment
against Marshall Builders and Marshall Custom Homes and set a briefing schedule on
the "Motion to Stay Action and refer Claims to Binding Arbitration."
{¶20} On January 23, 2018, Marshall Builders and Marshall Custom Homes filed
their Answer and Counterclaim against the Mosses.
{¶21} On February 6, 2018, the Mosses filed their Answer to the Counterclaim of
Marshall Builders and Marshall Custom Homes. Upon a stipulated extension granted by
the trial court, the Mosses filed their "Memorandum in Opposition to Defendants' Motion
to Stay Proceeding Pending Arbitration" on February 2, 2018.
{¶22} On February 19, 2018, after receiving an extension of time from the trial
court, the Marshall Parties filed their "Response Memorandum in Support of Motion to
Stay Proceedings Pending Arbitration with Request for Evidentiary Hearing."
{¶23} On February 21, 2018, the Marshall Parties filed an Affidavit of Matthew
Marshall.
{¶24} On February 22, 2018, the trial court issued an Order Setting Telephone
Conference for March 2, 2018 to "discuss the pending motion to stay with regard to
arbitration."
Stark County, Case No. 2018 CA 00038 6
{¶25} On March 5, 2018, the trial court's "Judgment Entry Denying Defendants'
Motion to Stay Pending Arbitration" was filed.
{¶26} It is from this decision Appellants now appeal, raising the following errors
for review:
ASSIGNMENTS OF ERROR
{¶27} “I. THE TRIAL COURT COMMITTED PREJUDICIAL ERROR IN DENYING
APPELLANTS' MOTION TO STAY PROCEEDINGS AND COMPEL ARBITRATION
WITHOUT CONDUCTING AN EVIDENTIARY HEARING.
{¶28} “II. THE TRIAL COURT COMMITTED PREJUDICIAL ERROR IN DENYING
APPELLANTS' MOTION TO STAY PROCEEDINGS AND COMPEL ARBITRATION
WITHOUT PROVIDING ANY REASON OR EXPLANATION FOR ITS DECISION.”
I., II.
{¶29} In each of its assignments of error, Appellants argue the trial court erred in
denying their motion to Stay Action and Refer Claims to Binding Arbitration. We shall
therefore discuss said assignments together.
Jurisdiction
{¶30} Initially we find we have appellate jurisdiction to proceed in this matter, even
though a final judgment is not before us. As a general rule, a judgment that leaves issues
unresolved and contemplates that further action must be taken is not a final appealable
order. See Moscarello v. Moscarello, 5th Dist. Stark No. 2014CA00181, 2015–Ohio–654,
¶ 11, quoting Rice v. Lewis, 4th Dist. Scioto No. 11CA3451, 2012–Ohio–2588, ¶ 14
(additional citations omitted). However, an order under R.C. §2711.02(B) that grants or
denies a stay of a trial of an action pending arbitration is a final appealable order. See
Stark County, Case No. 2018 CA 00038 7
R.C. 2711.02(C). Such a decision under R.C. §2711.02 remains a final appealable order
even without the language of Civ.R. 54(B). See, e.g., Welsh v. Indiana Insurance Co., 5th
Dist. Stark No. 2005–CA–00327, 2006–Ohio–6803, ¶ 15 (citations omitted). We will
therefore proceed to the merits of the present appeal.
Standard of Review
{¶31} Generally, an appellate court reviews a trial court's stay of proceedings
pending arbitration under R.C. 2711.02 under an abuse of discretion standard.
Featherstone v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 159 Ohio App. 3d 27, 30, 822
N.E.2d 841, 2004–Ohio–5953, citing Pinette v. Wynn's Extended Care, Inc., Summit App.
No. 21478, 2003–Ohio–4636, ¶ 5. However, the issue of whether a controversy is
arbitrable under an arbitration provision of a contract is a question of law for the court to
decide; therefore, the standard of review on those issues is de novo. Simmons v.
Extendicare Health Servs., Inc., 5th Dist. Delaware No. 15 CAE 12 0095, 2016–Ohio–
4831, ¶ 13, citing Church v. Fleishour Homes, Inc., 172 Ohio App. 3d 205, 874 N.E.2d
795, 172 Ohio App. 3d 205, ¶ 19 (5th Dist.2007).
Analysis
{¶32} Appellants first argue that the trial court should have held an evidentiary
hearing on their motion to stay action and refer claims to binding arbitration.
{¶33} R.C. §2711.02(B) provides:
If any action is brought upon any issue referable to arbitration under
an agreement in writing for arbitration, the court in which the action is
pending, upon being satisfied that the issue involved in the action is
referable to arbitration under an agreement in writing for arbitration, shall on
Stark County, Case No. 2018 CA 00038 8
application of one of the parties stay the trial of the action until the arbitration
of the issue has been had in accordance with the agreement, provided the
applicant for the stay is not in default in proceeding with arbitration.
{¶34} R.C. §2711.03 provides:
(A) The party aggrieved by the alleged failure of another to perform
under a written agreement for arbitration may petition any court of common
pleas having jurisdiction of the party so failing to perform for an order
directing that the arbitration proceed in the manner provided for in the
written agreement. * * * The court shall hear the parties, and, upon being
satisfied that the making of the agreement for arbitration or the failure to
comply with the agreement is not in issue, the court shall make an order
directing the parties to proceed to arbitration in accordance with the
agreement.
(B) If the making of the arbitration agreement or the failure to perform
it is in issue in a petition filed under division (A) of this section, the court
shall proceed summarily to the trial of that issue.
{¶35} While a motion to compel arbitration requires a hearing according to R.C.
§2711.03, one is not required for a motion to stay under R.C. §2711.02. Maestle v. Best
Buy Co., 100 Ohio St. 3d 330, 2003-Ohio-6465, 800 N.E.2d 7, ¶ 19; Davis v. Beggs, 10th
Dist. No. 08AP-432, 2008-Ohio-6311, 2008 WL 5104808, ¶ 8; Pyle at ¶ 21.
{¶36} In Maestle v. Best Buy Co., 100 Ohio St. 3d 330, 2003-Ohio-6465, the Ohio
Supreme Court reviewed to two statutes and what was required under each and found:
Stark County, Case No. 2018 CA 00038 9
Even though R.C. 2711.02 and 2711.03 both require a trial court to
determine ultimately whether an arbitration provision is enforceable (and to
be “satisfied” that the relief sought is appropriate before issuing the order),
the statutes are separate and distinct provisions and serve different
purposes. For that reason, there is no need to read the two statutes in pari
materia.
A party seeking to enforce an arbitration provision may choose to
move for a stay under R.C. 2711.02, or to petition for an order for the parties
to proceed to arbitration under R.C. 2711.03, or to seek orders under both
statutes. If, however, the party moves for a stay pursuant to R.C. 2711.02
without also petitioning under R.C. 2711.03, the trial judge's consideration
is guided solely by R.C. 2711.02 without reference to R.C. 2711.03.
Consequently, in that situation it is not necessary for a trial court to comply
with the procedural requirements of R.C. 2711.03, since only R.C. 2711.02
is involved.
We hold that a trial court considering whether to grant a motion to
stay proceedings pending arbitration filed under R.C. 2711.02 need not hold
a hearing pursuant to R.C. 2711.03 when the motion is not based on R.C.
2711.03. While it is within a trial court's discretion to hold a hearing when
considering whether a R.C. 2711.02 stay is warranted, that statute does not
on its face require a hearing, and it is not appropriate to read an implicit
requirement into the statute.
Stark County, Case No. 2018 CA 00038 10
{¶37} Upon review, we find in this case that Appellants’ motion was a motion to
stay, pursuant to R.C. §2711.02, not a motion to compel pursuant to R.C. §2711.03, and
therefore no evidentiary hearing was required.
{¶38} Appellant further argues that the trial court erred in denying their motion to
stay without explanation.
{¶39} The trial court’s Judgment Entry denying the motion to stay states that in
making its decision, the trial court had before it Appellants’ Motion to Stay, Appellees’
Memorandum in Opposition, and Appellants’ Response in Support of Motion to Stay and
the Affidavit of Matthew Marshall. The Entry further states the trial court held a telephone
conference with counsel for all parties participating. The trial court stated that it reached
its decision “based upon discussion with counsel and upon review of the briefs filed.”
{¶40} Upon review of those briefs filed before the trial court, we find that the trial
court’s decision to deny the motion to stay is supported by the arguments set forth in
Appellees’ brief wherein Appellees argued that the “arbitration” provision contained in the
Agreement does not state that it is binding on the Appellees or that they were waiving
their right to go to court or present their case to a jury. Rather, the “arbitration” clause
provides the dispute “shall” be taken before a court of law if the issues cannot be resolved
within sixty days. In Schaefer v. Allstate Ins. Co., 63 Ohio St. 3d 708, 590 N.E.2d 1242
(1992), the Ohio Supreme Court held that for a dispute resolution procedure to be
classified as arbitration, the decision rendered must be final, binding and without any
qualification or condition as to the finality of an award.
{¶41} Further, Appellees argued that Appellants waived the “arbitration” provision
in the Agreement because Appellees attempted to comply with the “arbitration” provision
Stark County, Case No. 2018 CA 00038 11
but same was rejected by Appellants who informed their attorney that they were
unavailable and that Appellees could go ahead and sue them.
{¶42} “Like any other contractual right, * * * the right to arbitrate may be implicitly
waived.” Donnell, supra, at ¶ 20, quoting Travelers Cas. & Sur. Co. v. Aeroquip–Vickers,
Inc., 6th Dist. Lucas No. L-06-1201, 2007-Ohio-5305, 2007 WL 2874296, ¶ 34. “Whether
the contractual right to arbitration has been waived is a mixed question of both factual
issues and the weight to be given those facts under the applicable legal standard.”
Donnell, supra, quoting Buyer v. Long, 6th Dist. Fulton No. F-05-012, 2006-Ohio-472,
2006 WL 259605, ¶ 7. “[A]lthough questions of law may be reviewed de novo, the trial
court's ultimate determination of whether the right to demand arbitration has been waived
will be reviewed under an abuse of discretion standard.” Id.
{¶43} Based on the foregoing arguments contained in Appellees’ brief before the
trial court, we cannot say the trial court abused its discretion in denying Appellants’ Motion
to Stay. Accordingly, Appellants’ assignments of error are overruled.
{¶44} For the reasons stated in the foregoing opinion, the judgment of the Stark
County Court of Common Pleas is affirmed.
By: Wise, John, P. J.
Gwin, J., and
Wise, Earle, J., concur.
JWW/d 0104