Figueroa v. Showtime Builders, Inc.

[Cite as Figueroa v. Showtime Builders, Inc., 2011-Ohio-2912.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 95246
MIGUEL A. FIGUEROA, ET AL.
PLAINTIFFS-APPELLEES
vs.
SHOWTIME BUILDERS, INC., ET AL.
DEFENDANTS-APPELLANTS
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-597877
BEFORE: Celebrezze, J., Kilbane, A.J., and S. Gallagher, J.
RELEASED AND JOURNALIZED: June 16, 2011
ATTORNEY FOR APPELLANTS
David A. Corrado
Skylight Office Tower
Suite 410
1660 West Second Street
Cleveland, Ohio 44113-1454
ATTORNEY FOR APPELLEES
Ronald I. Frederick
Ronald Frederick & Associates Co., L.P.A.
1370 Ontario Street
Suite 1240
Cleveland, Ohio 44113
FRANK D. CELEBREZZE, JR., J.:
{¶ 1} Defendants-appellants, Showtime Builders, Inc. and Charles
Zuchowski (collectively “Showtime”), assert that the trial court improperly
granted a motion for relief from judgment filed by plaintiffs-appellees, Miguel
Figueroa and Zulma Sanchez. After a thorough review of the record and law,
we affirm.
{¶ 2} On October 20, 2005, Showtime, Figueroa, and Sanchez entered
into a contract where Showtime agreed to remodel a portion of the couple’s
home in exchange for $35,000. Figueroa had several issues with the deal,
including the method of financing, and attempted to cancel the contract; he
demanded return of the money he had paid in full and in advance. No
resolution was reached, and appellees filed suit on August 3, 2006.
{¶ 3} After various pretrials, the parties agreed to arbitrate the
dispute. On January 10, 2008, the trial court continued the case for 90 days
to give the parties the opportunity to proceed with arbitration. After this
time expired, the parties indicated they had only just chosen an arbitrator,
and on April 11, 2008, the trial court dismissed the case without prejudice
with the understanding that the parties would proceed to arbitration. This
entry states, “THE COURT ORDERED THE CASE STAYED FOR NINETY
DAYS ON 01-18-08 TO ALLOW THE PARTIES TO COMPLETE BINDING
ARBITRATION AS AGREED UPON. PARTIES HAVE INDICATED THEY
HAVE RECENTLY CHOSEN AN ARBITRATOR AND WILL PROCEED
WITH BINDING ARBITRATION. CASE IS THEREFORE DISMISSED
WITHOUT PREJUDICE PURSUANT TO CIVIL RULE 41(A)(2).”
{¶ 4} As the one-year anniversary of the dismissal without prejudice
approached, appellees’ attorney contacted Showtime’s attorney to choose an
arbitrator and expressed dismay that Showtime was dragging out the
process. This resulted in an arbitrator finally being chosen. However, soon
after, Showtime terminated its attorney and retained new counsel. After
almost a year, appellees again sought to commence arbitration, but on
December 17, 2009, Showtime’s attorney advised them that Showtime no
longer wished to proceed with arbitration and that appellees should refile the
claim. He also noted that because appellees had waited so long, their
consumer practices claims were barred by the statute of limitations.
{¶ 5} Appellees then filed a motion for relief from judgment on April 22,
2010. On May 13, 2010, the trial court granted appellees’ motion and
ordered the parties to proceed to arbitration. Showtime then timely
appealed.
Law and Analysis
{¶ 6} Showtime raises three issues for review: (1) Whether the trial
court had jurisdiction to rule on a motion for relief from judgment that arose
from a dismissal without prejudice; (2) whether appellees satisfied the
requirements under Civ.R. 60(B) entitling them to relief; and (3) whether the
trial court could order the parties to arbitrate their dispute.
Dismissal without Prejudice
{¶ 7} Showtime first argues that “[t]he trial court was without
jurisdiction to rule on appellees’ motion for relief from judgment pursuant to
60(B) as its unconditional judgment entry dismissing the case without
prejudice pursuant to Civ.R. 41(A)(2) dismissed the case over two years ago.”
{¶ 8} Usually, when reviewing the denial of a motion for relief from
judgment, an appellate court applies an abuse of discretion standard of
review. Shuford v. Owens, Franklin App. No. 07AP-1068, 2008-Ohio-6220,
¶15, citing Natl. City Bank v. Rini, 162 Ohio App.3d 662, 2005-Ohio-4041, 834
N.E.2d 836, ¶15. However, this assumes a trial court has jurisdiction to
entertain such a motion. Civ.R. 60(B) permits courts to relieve a party only
from “a final judgment, order or proceeding.” In Hensley v. Henry (1980), 61
Ohio St.2d 277, 400 N.E.2d 1352, the Ohio Supreme Court recognized that
unless a “notice of dismissal operates as an adjudication upon the merits
under Civ.R. 41(A)(1),1 it is not a final judgment, order or proceeding, within
the meaning of Civ.R. 60(B).” Id. at the syllabus.
{¶ 9} Here, there is no indication that the dismissal without prejudice
acted as an adjudication upon the merits. As in Hensley, “[u]nder
Civ.R.41(A)(1), plaintiff’s notice of dismissal does not operate ‘as an
adjudication upon the merits’ because plaintiff had not previously ‘dismissed
in any court, an action based on * * * the same claim,’ and because the notice
of dismissal did not ‘otherwise’ state that it should so operate.” Id. at 279,
quoting Civ.R. 41(A)(1)(b). Appellees were free to refile their claim.
{¶ 10} However, a trial court retains jurisdiction when it dismisses a
case without prejudice and makes such a dismissal conditional. Klever v.
City of Stow (1983), 13 Ohio App.3d 1, 468 N.E.2d 58. Showtime’s case was
also dismissed pursuant to Civ.R. 41(A)(2), which states, “a claim shall not be
dismissed at the plaintiff’s instance except upon order of the court and upon
such terms and conditions as the court deems proper.” (Emphasis added.)
In Berger v. Riddle (Aug. 18, 1994), Cuyahoga App. Nos. 66195 and 66200,
this court stated, “when an action is dismissed pursuant to a stated condition,
such as the existence of a settlement agreement, the court retains the
authority to enforce such an agreement in the event the condition does not
occur.” Further, “[t]he entering into the settlement agreement constitutes a
waiver of the defense of lack of jurisdiction and a consent to jurisdiction solely
for the purpose of enforcement of the settlement agreement in the absence of
some provision in the agreement itself to the contrary.” Ohio State Tie &
Timber, Inc. v. Paris Lumber Co. (1982), 8 Ohio App.3d 236, 240, 456 N.E.2d
1309, overruled on other grounds by Kentucky Oaks Mall Co. v. Mitchell’s
Formal Wear, Inc. (1990), 53 Ohio St.3d 73, 559 N.E.2d 477.
A dismissal by the plaintiff.
1
{¶ 11} Here, the parties entered into an agreement to proceed with
arbitration, which, from the trial court’s perspective, is indistinguishable
from an agreement to settle. The trial court retained jurisdiction through its
conditional dismissal entry, and Showtime waived arguing a lack of
jurisdiction while it unnecessarily prolonged the arbitration process.
{¶ 12} While a court normally lacks the ability to grant a motion for
relief from judgment where the action was terminated by a dismissal without
prejudice, here that dismissal was conditional on an event that did not occur.
The trial court could then grant appellees relief from that judgment in order
to enforce the condition.
Relief Under Civ.R. 60(B)
{¶ 13} Showtime next argues that “[e]ven if the court finds the trial
court had jurisdiction after the case was voluntarily dismissed, appellees’
motion for relief from judgment was fatally flawed as it was untimely and
failed to establish an entitlement to relief.”
{¶ 14} We must now analyze the trial court’s decision to determine
whether it abused its discretion. Shuford, supra. “To prevail on his motion
under Civ.R. 60(B), the movant must demonstrate that: (1) the party has a
meritorious defense or claim to present if relief is granted; (2) the party is
entitled to relief under one of the grounds stated in Civ.R. 60(B)(1) through
(5); and (3) the motion is made within a reasonable time, and, where the
grounds of relief are Civ.R. 60(B)(1), (2) or (3), not more than one year after
the judgment, order or proceeding was entered or taken.” GTE Automatic
Elec., Inc. v. ARC Industries, Inc. (1976), 47 Ohio St.2d 146, 150-51, 351
N.E.2d 113.
{¶ 15} In order to be afforded relief under Civ.R. 60(B), movants must
demonstrate that they possess a meritorious claim or defense. This does not
require a demonstration of absolute victory, only the possibility. See Moore
v. Emmanuel Family Training Ctr. (1985), 18 Ohio St.3d 64, 67, 479 N.E.2d
879. Here, appellees set forth evidence purporting to show that Showtime
violated various consumer protection laws, failed to live up to the terms of a
home remodeling contract, and that Showtime overcharged appellees. The
trial court heard this evidence and determined that Showtime had a
meritorious claim. From the record before us, that determination was not an
abuse of discretion.
{¶ 16} Under the next part of the analysis, Showtime must meet one of
the categories of relief set forth in the rule. The only avenue within Civ.R.
60(B) left open to appellees given the delay in filing their motion is Civ.R.
60(B)(5). Appellees assert that Showtime had committed a fraud upon the
court. This type of fraud “embrace[s] only that type of conduct which defiles
the court itself, or fraud which is perpetrated by officers of the court so as to
prevent the judicial system from functioning in the customary manner of
deciding the cases presented in an impartial manner.” Hartford v. Hartford
(1977), 53 Ohio App.2d 79, 84, 371 N.E.2d 591, citing, among others, Serzysko
v. Chase Manhattan Bank (C.A.2, 1972), 461 F.2d 699, certiorari denied 409
U.S. 883, 93 S.Ct. 173, 34 L.Ed.2d 139. The trial court is in the best
position to determine this issue, and its determination should be afforded
proper deference. Id. at 85.
{¶ 17} While Showtime argues that it had the legal right to withdraw
consent to arbitration at any time prior to the announcement of a decision by
the arbitrator,2 it did not have an absolute right to mislead the court into
believing it held a good-faith intention to proceed with arbitration. Appellees
put forth evidence of a two-year span of unreturned phone calls, emails, and
letters. Appellees argue this demonstrates that Showtime and its prior
counsel acted with an intent to deceive the trial court and evidences that
Showtime, through counsel, committed a fraud upon the court. The trial
court could have properly concluded that this demonstrated a deliberate
tactic on the part of Showtime’s counsel. This is grounds for application
Civ.R. 60(B)(5) and the “fraud upon the court” doctrine specifically mentioned
in the Staff Notes to Civ.R. 60(B). There is nothing in the record that
demonstrates the trial court abused its discretion in so finding.
This assertion is based on one line in Buyer’s First Realty, Inc. v. Cleveland Area Bd. of
2
Realtors (2000), 139 Ohio App.3d 772, 745 N.E.2d 1069, discussing the history of common law
{¶ 18} Showtime argues that the trial court did not hold a hearing on
this motion or that it did not receive proper notice of any hearing. However,
this is contradicted by the journal entries in this case indicating that a
hearing was held and that Showtime was present through counsel. While no
transcript was included in the record, if no hearing was held, as Showtime
claims, it could have supplemented the record with an App.R. 9(C) statement
of the evidence establishing this fact. In the absence of such a statement, we
must conclude that the trial court held a hearing on appellees’ motion.
{¶ 19} Relief under Civ.R. 60(B)(5) is limited to motions filed within a
“reasonable time.” Grounds for relief under Civ.R. 60(B)(5) are not limited to
motions filed within one year of the adverse judgment as are those under
Civ.R. 60(B)(1) through (3). Therefore, we must determine if the trial court
abused its discretion in finding that appellees filed their motion in a
reasonable time. Hartford, supra.
{¶ 20} Showtime points to the fact that appellees waited two years after
the dismissal of the case to file their motion and asserts that the motion was
untimely. However, soon after Showtime made it known that it did not wish
to proceed with arbitration, appellees filed their motion seeking relief.
Because the motion was made very soon after appellees learned of Showtime’s
refusal to arbitrate, it was, therefore, timely filed.
arbitration, but does not address the tactics of delay used in the present case.
{¶ 21} Accordingly, Showtime’s second assignment of error is overruled.
Trial Court’s Power to Enforce Agreements
{¶ 22} In Showtime’s final assignment of error, it asserts that “[t]he trial
court erred in ordering the parties to binding arbitration.”
{¶ 23} The trial court, through its reserved jurisdiction, enforced the
agreement of the parties. “Courts are authorized to enforce the terms of
their judgments through post-judgment proceedings.” Grace v. Howell,
Montgomery App. No. 20283, 2004-Ohio-4120, ¶11; Civ.R. 70. Here, the trial
court ordered the parties to abide by their agreement that was evidenced in
the record.3 The court may enforce such an agreement. See Berger, supra.
Therefore, the trial court had the ability to enforce the agreement that was
made before it and evidenced in the record.
{¶ 24} This last assignment of error is overruled.
Judgment affirmed.
It is ordered that appellees recover of said appellants costs herein
taxed.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the
common pleas court to carry this judgment into execution.
Attached to the journal entry staying the case pending arbitration is an agreed entry signed
3
by both parties stating, “[t]he parties to this action, by and through counsel, have agreed to submit this
A certified copy of this entry shall constitute the mandate pursuant to
Rule 27 of the Rules of Appellate Procedure.
FRANK D. CELEBREZZE, JR., JUDGE
MARY EILEEN KILBANE, A.J., and
SEAN C. GALLAGHER, J., CONCUR
dispute to binding arbitration * * *.”