Shaut v. Roberts

[Cite as Shaut v. Roberts, 2022-Ohio-817.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
MICHAEL H. SHAUT,
Plaintiff-Appellant, :
No. 110528
v. :
KEVIN ROBERTS, ET AL., :
Defendants-Appellees. :
JOURNAL ENTRY AND OPINION
JUDGMENT: REVERSED AND REMANDED
RELEASED AND JOURNALIZED: March 17, 2022
Civil Appeal from the Cuyahoga County Common Pleas Court
Case No. CV-20-936408
Appearances:
Michael Shaut Law Office, LPA, Michael Shaut, and Isaac
Tom Monah, for appellant.
The Roberts Law Firm and Kevin T. Roberts, for
appellees.
SEAN C. GALLAGHER, A.J.:
Michael Shaut appeals the trial court’s decision dismissing his legal
malpractice action against Kevin Roberts and The Roberts Law Firm (“Roberts”) as
being time barred under R.C. 2305.11(A). For the following reasons, we reverse and
remand for further proceedings.
Shaut filed a legal malpractice action on August 25, 2020. The action
arose from Roberts’s representation of Shaut in multiple employment and securities
law actions and arbitration proceedings, including Hart v. Downing Invest.
Partners (Am. Arbitration Assn. Case No. 01-16-0005-1632), which took place in
New York, New York, during 2017. According to Shaut, Roberts failed to meet the
standards of a legal professional during the course of and subsequent to the
arbitration proceeding, which resulted in a $2.5 million judgment entered against
Shaut. In 2018, Roberts agreed to file an appeal from the arbitration award in the
United States District Court for the Northern District of Ohio, but that appeal was
dismissed on July 24, 2018. Shortly thereafter (no specific date was included in the
first amended complaint), Shaut hired new counsel in New York through Roberts,
who continued to be involved in the matter and appeared on Shaut’s behalf in a
“related case” in Boston, Massachusetts.
After the arbitration award, the plaintiffs reduced the award to a final
judgment through a New York state court, and in July 2019, a foreign judgment case
was filed in the Cuyahoga County Court of Common Pleas to register the New York
judgment. Shaut represented himself in that local action. Through the end of
August 2019, Shaut alleged that neither party terminated the attorney-client
relationship. On August 30, 2019, Shaut sent correspondence seeking to discuss the
arbitration proceeding and its progeny and the potential malpractice claim in
compliance with their engagement agreement that required mediation or alternative
dispute resolution over disputes.
Shaut attached three documents to the first amended complaint
setting forth the above allegations: (1) the engagement agreement between him and
Roberts upon which the attorney-client relationship was based; (2) an
unauthenticated, partial printout of a docket from the United States District Court
for the Southern District of New York, Case No. 1:16-cv-04040, listing Roberts as
Shaut’s counsel of record and Shaut’s status in the case being “terminated” on
March 19, 2020; and (3) correspondence, dated August 30, 2019, from Shaut to
Roberts presenting a demand to settle the malpractice claim.
In response to the first amended complaint, Roberts filed a 40-page
motion to dismiss under Civ.R. 12(B)(6), attaching 18 exhibits of court filings from
the various cases referenced in the first amended complaint. The attachments
spanned 168 pages, but none of the attached exhibits were authenticated. Shaut
filed a brief in opposition in which he claimed, citing Civ.R. 8, that the complaint
was well pleaded and therefore should survive Roberts’s motion to dismiss.
Roberts’s motion to dismiss was based on the incorrect standard of
review, an issue that carried over into this appeal. Roberts’s motion is predicated
on the heightened pleading standard established for federal courts in Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and
Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), instead of
the notice pleading standard under Civ.R. 8. Under the heightened, federal
standard, a plaintiff must demonstrate the plausibility of the allegations, well
beyond the notice pleading standard under Ohio law of setting forth cognizable
claims. We need not consider Roberts’s attempt to impose the heightened standard
in this case. This court has altogether rejected the invitation to adopt the federal
approach in Tuleta v. Med. Mut. of Ohio, 2014-Ohio-396, 6 N.E.3d 106, ¶ 31 (8th
Dist.). And as Roberts indicated in the supplemental authority briefing, the Ohio
Supreme Court has not adopted the federal standard for Ohio either. Maternal
Grandmother, ADMR v. Hamilton Cty. Dept. of Job & Family Servs., Slip Opinion
No. 2021-Ohio-4096, ¶ 28 (DeWine, J., concurring).
The trial court nonetheless disagreed with Shaut and concluded based
on its review of the first amended complaint and the three attached exhibits that
“there is no set of facts from which this Court can conclude that the cognizable event
in this matter occurred on or after August 25, 2019 [(a year preceding the filing of
the malpractice action)] or that the attorney-client relationship for the particular
transaction or undertaking at issue in this matter existed on or after August 25,
2019.” In other words, the trial court concluded that the failure to include
allegations within the complaint demonstrating that the statute of limitations was
inapplicable meant that the action was time barred. Shaut timely appealed that
decision.
R.C. 2305.11(A) provides that an action for legal malpractice against
an attorney or a law firm shall be commenced within one year after the cause of
action accrued.
“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 that his
injury was related to his attorney’s act or non-act and the client is
put on notice of a need to pursue his possible remedies against the
attorney or when the attorney-client relationship for that particular
transaction or undertaking terminates, whichever occurs later.”
(Emphasis added.) Smith v. Conley, 109 Ohio St.3d 141, 2006-Ohio-2035, 846
N.E.2d 509, ¶ 4, quoting Zimmie v. Calfee, Halter & Griswold, 43 Ohio St.3d 54,
538 N.E.2d 398 (1989), syllabus, and citing Omni-Food & Fashion, Inc. v. Smith, 38
Ohio St.3d 385, 528 N.E.2d 941 (1988). The statute-of-limitations analysis in a legal
malpractice case requires two factual inquiries: “(1) When should the client have
known that he or she may have an injury caused by his or her attorney? and (2)
When did the attorney-client relationship terminate?” The later of those dates “is
the date that starts the running of the statute of limitations.” Smith at ¶ 4.
A “‘motion to dismiss for failure to state a claim upon which relief can
be granted is procedural and tests the sufficiency of the complaint.’” State ex rel.
Belle Tire Distribs. v. Indus. Comm. of Ohio, 154 Ohio St.3d 488, 2018-Ohio-2122,
116 N.E.3d 102, ¶ 17, quoting State ex rel. Hanson, 65 Ohio St.3d 545, 548, 605
N.E.2d 378 (1992). A court may grant a Civ.R. 12(B)(6) motion to dismiss “only
when the complaint, when construed in the light most favorable to the plaintiff and
presuming all the factual allegations in the complaint are true, demonstrates that
the plaintiff can prove no set of facts entitling him to relief.” Id., citing Mitchell v.
Lawson Milk Co., 40 Ohio St.3d 190, 192, 532 N.E.2d 753 (1988). Appellate courts
review an order granting a Civ.R. 12(B)(6) motion to dismiss de novo. Perrysburg
Twp. v. Rossford, 103 Ohio St.3d 79, 2004-Ohio-4362, 814 N.E.2d 44, ¶ 5. Thus,
the sole inquiry is whether on the face of the complaint, it can be determined that
the legal malpractice cause of action accrued over a year before the filing of the
complaint.
Under Ohio law, the statute of limitations is an affirmative defense.
Civ.R. 8(C). “[T]he difficulty of successfully asserting an affirmative defense in a
Civ.R. 12(B)(6) motion to dismiss” had been “long recognized” based on the fact that
“‘affirmative defenses typically rely on matters outside the complaint, they normally
cannot be raised successfully in a Civ.R. 12(B)(6) motion.’” Schmitz v. NCAA, 155
Ohio St.3d 389, 2018-Ohio-4391, 122 N.E.3d 80, ¶ 41, quoting Main v. Lima, 3d
Dist. Allen No. 1-14-42, 2015-Ohio-2572, ¶ 14, and citing Savoy v. Univ. of Akron,
10th Dist. Franklin No. 11AP-183, 2012-Ohio-1962, ¶ 6-7 (Kennedy, J., concurring
in part) (noting that “the better procedure is to address affirmative defenses by way
of a motion for summary judgment that will allow introduction of additional facts
beyond the complaint”). “A motion to dismiss based upon a statute of limitations[,
however,] may be granted when the complaint shows conclusively on its face that
the action is time-barred.” (Emphasis added.) Doe v. Archdiocese of Cincinnati,
109 Ohio St.3d 491, 2006-Ohio-2625, 849 N.E.2d 268, ¶ 11, citing Velotta v. Leo
Petronzio Landscaping, Inc., 69 Ohio St.2d 376, 433 N.E.2d 147 (1982), paragraph
three of the syllabus; see also Maitland v. Ford Motor Co., 103 Ohio St.3d 463,
2004-Ohio-5717, 816 N.E.2d 1061, ¶ 11. A plaintiff is not required to plead with
specificity to avoid application of the statute of limitations. Warren v. Estate of
Durham, 9th Dist. Summit No. 25624, 2011-Ohio-6416, ¶ 6, citing Irvin v. Am. Gen.
Fin., Inc., 5th Dist. Muskingum No. CT2004-0046, 2005-Ohio-3523, ¶ 29, fn. 11.
In this case, although Shaut filed the complaint on August 25, 2020,
at the least, none of the allegations from the first amended complaint demonstrates
when the parties terminated the attorney-client relationship for the particular
transaction to demonstrate the latest accrual date for the statute of limitations. In
reaching its dismissal decision, the trial court flipped the standard of review by
concluding that the first amended complaint failed to demonstrate that the
cognizable event occurred or the attorney-client relationship existed after
August 25, 2019, for the purposes of the one-year statute of limitation for legal
malpractice under R.C. 2305.11(A). That conclusion is based on the incorrect
standard.
In order to dismiss a complaint based on the statute of limitations, it
must conclusively appear on the face of the complaint that the action is time barred.
Doe at ¶ 11. In other words, the trial court must conclude that the allegations within
the first amended complaint demonstrate that the accrual date for the statute of
limitations was prior to August 25, 2019. The trial court in this case concluded
otherwise, that the first amended complaint did not establish that the statute of
limitations accrued after August 25, 2019. Although that distinction seems nuanced,
the trial court’s conclusion upends the standard of review, placing the burden on the
plaintiff to plead facts supporting an argument against the statute of limitations.
The absence of allegations demonstrating the inapplicability of the statute of
limitations defense is not a cognizable reason to dismiss the action. Warren at ¶ 6,
Irvin at ¶ 29, fn. 11. In asserting an affirmative defense, the defendant bears the
burden of proving the existence of facts to support the claim.
Shaut has maintained the same objection to the court’s decision from
the beginning — that the complaint satisfies the Civ.R. 8 notice pleading standard.
We agree with Shaut. Because the trial court shifted the burden to Shaut to disprove
the statute-of-limitations defense within the four corners of the first amended
complaint, the trial court erred.
Despite this conclusion, it must be recognized that a “reviewing court
will not reverse a correct judgment merely because a trial court relied on an
erroneous reason as the basis for its determination.” O’Neal v. State, 2020-Ohio-
506, 146 N.E.3d 605, ¶ 20 (10th Dist.), citing Hassey v. Columbus, 2018-Ohio-3958,
111 N.E.3d 1253, ¶ 33 (10th Dist.), and Joyce v. Gen. Motors Corp., 49 Ohio St.3d
93, 96, 551 N.E.2d 172 (1990). “‘[A]n appellate court must affirm the judgment if it
is legally correct on other grounds, that is, it achieves the right result for the wrong
reason, because such an error is not prejudicial.’” Id. at ¶ 20, quoting Reynolds v.
Budzik, 134 Ohio App.3d 844, 846, 732 N.E.2d 485 (6th Dist.1999). Roberts, in this
appeal, claims that the unauthenticated documentary evidence attached to its
motion to dismiss conclusively demonstrates that the action is time barred because
the parties terminated their relationship for the arbitration-related matter and those
documents could have been considered by the trial court through the taking of
judicial notice of the unauthenticated court filings attached to the motion to dismiss.
Roberts asks this court to review the documentary evidence attached
to the motion to dismiss in order to determine the accrual date of the statute of
limitations irrespective of the fact that the trial court refused to consider the
extraneous evidence. In the motion to dismiss, Roberts presented copies of
documents alleged to establish the scope of their representation following the 2017
arbitration in order to determine when the attorney-client relationship for the
arbitration transaction ceased.
Even if the trial court had considered the voluminous documentary
evidence attached to the motion to dismiss, the black-letter law is well settled: “A
motion to dismiss based upon a statute of limitations may be granted when the
complaint shows conclusively on its face that the action is time-barred.” Doe, 109
Ohio St.3d 491, 2006-Ohio-2625, 849 N.E.2d 268, at ¶ 11, citing Velotta, 69 Ohio
St.2d 376, 433 N.E.2d 147, at paragraph three of the syllabus. Based on the
allegations in the complaint, it cannot be determined that the action is time-barred
and we cannot review the documentary evidence Roberts attached to determine
when the parties terminated the attorney-client relationship for the particular
transaction underlying the legal malpractice claims.
As already discussed, nothing from the face of the complaint
demonstrates when the attorney-client relationship for the particular legal
transaction terminated. For that, extraneous evidence is a necessary consideration
because Shaut alleges that Roberts “retained” Shaut’s local counsel in New York for
the purposes of appealing the arbitration award and that Roberts appeared on behalf
of Shaut in a related case and otherwise maintained the attorney-client relationship
through August 30, 2019. “The determination of when an attorney-client
relationship terminated is typically a factual question resolved by the trier of fact.”
Kalski v. Bartimole, 2020-Ohio-4137, 157 N.E.3d 436, ¶ 36 (8th Dist.), citing Kinasz
v. Dickson, 2018-Ohio-1754, 110 N.E.3d 1034, ¶ 22 (8th Dist.), and Mobberly v.
Hendricks, 98 Ohio App.3d 839, 843, 649 N.E.2d 1247 (9th Dist.1994). Thus, the
termination of the attorney-client relationship is dependent on a factual record,
beyond the purview of Civ.R. 12(B)(6).
The only remaining question, therefore, is whether a court may take
judicial notice of unauthenticated court filings attached to a motion to dismiss.
Under Evid.R. 201(B), a “judicially noticed fact must be one not subject to
reasonable dispute in that it is either (1) generally known within the territorial
jurisdiction of the trial court or (2) capable of accurate and ready determination by
resort to sources whose accuracy cannot reasonably be questioned.” As the Supreme
Court of Ohio has recognized, courts “may take judicial notice of appropriate
matters in considering a motion to dismiss for failure to state a claim” without
having to consider the matter as a motion for summary judgment. (Emphasis
added.) State ex rel. Neff v. Corrigan, 75 Ohio St.3d 12, 16, 661 N.E.2d 170 (1996).
The operative phrase is “appropriate matters.” Not all facts are capable of being
judicially noticed.
Although courts may take judicial notice of facts under Evid.R.
201(B), parties cannot request consideration of the documentary evidence, such as
documents filed with another court, without those documents being properly
authenticated.1 Uren v. Scoville, 1st Dist. Hamilton No. C-170438, 2021-Ohio-3425,
¶ 23. Judicial notice of the adjudicative facts contained in earlier cases is not
permissible nor can it be used to authenticate documents. Natl. Distillers & Chem.
Corp. v. Limbach, 71 Ohio St.3d 214, 216, 643 N.E.2d 101 (1994); see also Uren
(taking judicial notice that a plea agreement was docketed is permissible, but courts
cannot take judicial notice of the actual plea agreement or the contents therein);
State ex rel. Jones v. Hogan, Slip Opinion No. 2021-Ohio-3567, ¶ 11 (a list of the
state’s exhibits in another proceeding, written reports of police interviews of him
and three other individuals, a document that appears to be a log of a call to the police
concerning the incident for which he was convicted, and a document that appears to
be part of an evidentiary stipulation from another case are not documents that may
be judicially noticed); Cook v. NL Industries, Inc., 8th Dist. Cuyahoga Nos. 98911
and 99522, 2013-Ohio-5119, ¶ 42, citing NorthPoint Properties, Inc. v. Petticord,
179 Ohio App.3d 342, 2008-Ohio-5996, 901 N.E.2d 869, ¶ 16 (8th Dist.) (courts
cannot take judicial notice of matters in unrelated cases even where it presided over
those other cases for the purposes of Civ.R. 12(B)(6)).
1 Although the Ohio Supreme Court has taken judicial notice of a court filing for
the purposes of affirming an appellate court’s decision under Civ.R. 12(B)(6) to dismiss a
writ of prohibition, it has done so based on the court’s “plenary authority in extraordinary
actions [that] permits us to consider the instant appeal as if it had been filed in this court
originally” and in cases in which the parties agree to the underlying fact to be judicially
noticed. State ex rel. Everhart v. McIntosh, 115 Ohio St.3d 195, 2007-Ohio-4798, 874
N.E.2d 516, ¶ 9, quoting State ex rel. Walker v. Lancaster City School Dist. Bd. of Edn.,
79 Ohio St.3d 216, 220, 680 N.E.2d 993 (1997). McIntosh does not supersede or overrule
Limbach.
In this case, Roberts claims in part, for example, that a foreign
judgment action filed in Cuyahoga County seeking to recognize the final New York
judgment entered upon the arbitration proceedings demonstrates that the parties
terminated the attorney-client relationship for the arbitration transaction because
Shaut represented himself. The docket from that case, even if the docket itself could
be judicially noticed for the truth of the matter asserted without obtaining a certified
copy from the local clerk of courts, does not establish that the foreign judgment
action is based on the final judgment entered from the arbitration proceedings.
In order to determine that the foreign judgment action pertained to
the arbitration underlying the allegations in the first amended complaint, the
certified copy of the foreign judgment filed must be considered. The docket itself
does not establish that the action was based on the arbitration proceeding relating
to the allegations in the complaint. In order for that certified foreign judgment to
be admissible with relevant information, the party presenting the evidence must
authenticate the document. Evid.R. 902; Evid.R. 803(8); see also Soliel Tans, L.L.C.
v. Timber Bentley Coe, L.L.C., 8th Dist. Cuyahoga No. 108125, 2019-Ohio-4889,
¶ 43 (defendant presented certified copies of the court documents, which are
therefore admissible). Courts may not take judicial notice of documents filed upon
another court’s docket in circumvention of the rules of authentication.
In Soliel, for example, the defendant filed a motion to dismiss, but
recognized that the trial court would be required to review the content of earlier
proceedings between the parties to establish a defense to the complaint. Id. The
defendant attached a copy of a complaint, an affidavit, various journal entries, and
an answer all filed in other court actions. Id. at ¶ 13. The defendant successfully
sought to have the motion to dismiss treated as one for summary judgment with the
trial court providing the requisite notice to the plaintiff based on the extraneous
documentary evidence. Id. at ¶ 16. In the ensuing appeal, the panel affirmed the
trial court’s decision to consider the motion to dismiss under Civ.R. 56 based on the
defendant’s request for consideration of other court cases. Id. at ¶ 24; see also
Ghaster v. Rocky River, 8th Dist. Cuyahoga No. 99779, 2013-Ohio-5587, ¶ 19 (in
resolving the Civ.R. 12(B)(6) motion, the trial court improperly considered other
proceedings to determine when the statute of limitations accrued); Harris v. Pro-
Lawn Landscaping, Inc., 8th Dist. Cuyahoga No. 97302, 2012-Ohio-498, ¶ 9 (trial
court erred in considering other proceedings to determine the applicability of the
Savings Statute upon a Civ.R. 12 motion to dismiss); Evans v. Ohio Dept. of Rehab.
& Corr., 10th Dist. Franklin No. 19AP-270, 2019-Ohio-4871, ¶ 21 (court did not err
by refusing to take judicial notice of the contents of documents filed in other
proceedings). We cannot create two standards by affirming the dismissal in this
case based on review of documents filed in other actions through Civ.R. 12(B)(6) and
maintain adherence to Soliel, which affirmed the same course of action under a
motion to dismiss that was considered under Civ.R. 56. It is one or the other. Soliel
affirmed a trial court’s decision to consider documents filed in other court cases
concluding that such documents could not be considered under Civ.R. 12(B)(6). The
same conclusion applies here.
Based on a de novo review of the trial court proceedings, we conclude
the trial court erred in dismissing the action. In addition, we cannot consider
documents and evidence outside the pleadings that were attached to the defendants’
motion to dismiss in order to find an alternative basis to affirm the trial court’s
decision.
Judgment reversed and case remanded for further proceedings.
It is ordered that appellant recover from appellees 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.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27
of the Rules of Appellate Procedure.
____________________________________
SEAN C. GALLAGHER, ADMINISTRATIVE JUDGE
MARY J. BOYLE, P.J., CONCURS;
MICHELLE J. SHEEHAN, J., DISSENTS (WITH SEPARATE OPINION)
MICHELLE J. SHEEHAN, J., DISSENTING:
Respectfully, I offer another perspective in this Civ.R. 12(B)(6)
matter. While I generally agree with the law set forth by the majority opinion that
the trial court is limited to the four corners of the complaint when considering a
Civ.R. 12(B)(6) motion to dismiss, case law authority permits the trial court to take
judicial notice of appropriate matters in considering a motion to dismiss. To grant
Roberts’s motion to dismiss on the statute-of-limitations grounds, the trial court
need only take judicial notice of the date of filing of a closely related case on its own
docket. Based on my review of the record, I believe Shaut’s legal malpractice
complaint was properly dismissed as barred by the statute of limitations.
The background of the underlying case in this legal malpractice suit
was summarized in Shaut v. Natl. Cas. Co., 2021-Ohio-2522, 176 N.E.3d 1122 (8th
Dist.) Employees of companies Shaut was affiliated with alleged that Shaut and
other individuals operated an employment Ponzi scheme and the employees had
been fraudulently induced into entering employment agreements and investing in
the companies. The matter went to arbitration in New York. Shaut, himself an
attorney, retained Roberts to represent him in the arbitration. Shaut claimed
Roberts committed malpractice in failing to follow his legal advice in the arbitration
case and also failing to properly file an appeal from the arbitration award in a federal
court in Ohio.
The Allegations in the Complaint
At the conclusion of the arbitration case, Hart v. Downing Invest.
Partners, American Arbitration Association Case No. 01-16-0005-1632, the AAA
issued an award in favor of the plaintiffs, who then filed a case in a New York state
court to confirm the arbitration award. Shaut retained New York counsel to
represent him in the case. Meanwhile, Roberts filed a motion to vacate the
arbitration award in the United States District Court for the Northern District of
Ohio. Shaut’s allegations in the amended complaint (“complaint”) reflects that this
was the last filing regarding the arbitration matter by Roberts as Shaut’s counsel.
The district court dismissed the case, and as Shaut alleged, the dismissal led to the
loss of his appeal in the New York court and the Hart plaintiffs obtained a final
judgment from that court on the arbitration award. Thereafter, the Hart plaintiffs
filed Cuyahoga C.P. No. CV-19-910808 in the Cuyahoga County Court of Common
Pleas to enforce the New York judgment. As alleged in the complaint, Shaut
represented himself in the common pleas court case, which the court subsequently
decided in favor of the plaintiffs and issued a judgment of $ 2.5 million. The
common pleas court’s docket shows that No. CV-19-910808 was filed on July 31,
2019.
While the complaint cited other cases (relating to the fraudulent
employment scheme) where Roberts also represented Shaut, Shaut’s complaint only
alleged Roberts committed legal malpractice in his representation of Shaut in the
AAA arbitration; specifically, he alleged Roberts failed to file counterclaims against
a codefendant and failed to file the codefendant’s deposition testimony. He also
alleged Roberts failed to properly file the subsequent appeal from the arbitration
award in the district court in Ohio.
Accrual of a Legal Malpractice Claim
Pursuant to Zimmie v. Calfee, Halter & Griswold, 43 Ohio St.3d 54,
538 N.E.2d 398 (1989), Shaut’s legal malpractice action accrued and the one-year
statute of limitations began to run when there was a “cognizable event” whereby
Shaut discovered or should have discovered his alleged injury was related to
Roberts’s conduct, or when the attorney-client relationship for the “particular
transaction or undertaking” — the arbitration and the related appeal — terminated,
whichever occurred later.
“Cognizable Event”
According to the allegations of the complaint, the “cognizable event”
sufficient to put Shaut on notice of the alleged malpractice and triggering the one-
year statute of limitations was the AAA’s issuance of the arbitration award and the
dismissal of Shaut’s appeal from the arbitration award in the Ohio district court.
Dottore v. Vorys, Sater, Seymour & Pease, L.L.P., 8th Dist. Cuyahoga No. 98861,
2014-Ohio-25, ¶ 58 (a “cognizable event” is an event that is sufficient to alert a
reasonable person that his attorney may have committed an improper act and that
further investigation is needed). The later of these two events — the federal court’s
dismissal of the appeal — occurred on July 24, 2018, as Shaut alleged in the
complaint. Based on the allegations of the complaint, therefore, the legal
malpractice action accrued at that time and the one-year statute of limitations had
run by the time Shaut filed the instant case on August 25, 2020.
Termination of the Attorney-Client Relationship for the “Particular
Transaction or Undertaking”
Regarding the “particular transaction or undertaking” giving rise to
the Shaut’s legal malpractice claim, paragraph 14 of the complaint states:
“Defendants’ representation of Plaintiff during the Hart Arbitration proceeding
failed to meet the standards of care in the legal profession in five significant aspects.”
In addition, the first paragraph of the “demand letter,” which Shaut attached to his
complaint, states that “[t]he demand at issue is based on your past representation
of me, Michael Shaut, as lead counsel during an employment and securities law
based arbitration complaint.”
Consequently, for purposes of the statute of limitations, we only look
to the date of the termination of the attorney-client relationship in the arbitration
matter and the related appeal — the “particular transaction or undertaking” in this
legal malpractice case. Smith v. Conley, 109 Ohio St.3d 141, 2006-Ohio-2035, 846
N.E.2d 509, ¶ 4 (reaffirming the particular-transaction set forth in Zimmie, 43 Ohio
St.3d 54, 538 N.E.2d 398).
In this regard, paragraph 28 of the complaint states that “the Hart
Arbitration Petitioners [] filed to enroll their New York Judgment as Plaintiff’s
Judgment Creditors in the Cuyahoga County Court of Common Pleas Case
No. CV-19-919080. Plaintiff represented himself pro se. * * *.” Based on this
allegation, the attorney-client relationship for the “particular transaction or
undertaking” terminated when the Hart plaintiffs registered the final judgment
regarding the arbitration award from New York in the common pleas court because
Roberts no longer represented Shaut in the subject arbitration matter.
While Shaut alleged in the complaint that Roberts never terminated
the attorney client relationship, a formal letter of termination is not required to
extinguish the attorney-client relationship. Kalski v. Bartimole, 2020-Ohio-4137,
157 N.E.3d 436, ¶ 38 (8th Dist.), citing Brown v. Johnstone, 5 Ohio App.3d 165, 166-
167, 450 N.E.2d 693 (9th Dist.1982). Rather, “‘the attorney-client relationship is
consensual in nature and the action of either party can affect its continuance.’” Id.
at ¶ 37, quoting Brown at 167. Furthermore, “Ohio law generally recognizes that
the retention of new counsel to handle issues previously managed by a former
attorney indicates the former attorney-client relationship has been terminated.” Id.
at ¶ 38, citing Accelerated Sys. Integration, Inc. v. Ritzler, Coughlin & Swansinger,
Ltd., 8th Dist. Cuyahoga No. 97481, 2012-Ohio-3803, ¶ 50.
The attorney-client relationship terminated in the arbitration matter
— the “particular transaction or undertaking” — when the Hart plaintiffs, having
obtained the final judgment regarding their arbitration award, filed the common
pleas court case as judgment creditors to collect the arbitration award on July 31,
2019. According to Shaut’s allegation, he “represented himself pro se in the matter
as he had exhausted all of his financial resources.” While the court has held that it
is “not necessary to specify facts to defend from a statute of limitations defense,”
Warren v. Estate of Durham, 9th Dist. Summit No. 25624, 2011-Ohio-6416, ¶ 6,
quoting Irvin v. Am. Gen. Fin., Inc., 5th Dist. Muskingum No. CT2004-0046, 2005-
Ohio-3523, ¶ 29, fn. 11, and while Shaut was not required to demonstrate in the
complaint that his claim was not time barred, Shaut’s own allegations in the
complaint establish that Roberts’s service as counsel in the arbitration matter had
been terminated no later than the day the Hart plaintiffs filed the common pleas
case, regardless of Shaut’s vague allusion to a April 2019 meeting where some
“confidential matters” concerning Shaut were discussed and Roberts “represented
that he was Plaintiff’s lawyer and sat through the entire meeting.“
Judicial Notice
While the complaint did not specify the date the Hart plaintiffs filed
the common pleas court case, based on the case law authority, I believe the fact that
CV-919080 was filed on July 31, 2019, can be judicially noticed, for the following
reasons.
In State ex rel. Everhart v. McIntosh, 115 Ohio St.3d 195, 2007-Ohio-
4798, 874 N.E.2d 516, a writ case, the Supreme Court of Ohio addressed the
question of whether it was error for the Tenth District court to take judicial notice of
its prior dismissal entry and granted a Civ.R. 12(B)(6) motion to deny the writ. The
Supreme Court of Ohio acknowledged that it has been held that the courts may not
take judicial notice of their own proceedings in other cases. It explained, however,
that the rationale for these holdings is that the prior proceedings are not part of the
record on appeal and, therefore, the appellate court cannot review whether the trial
court correctly interpreted such prior proceedings. Id. at ¶ 7. The court in Everhart
held that it was proper for the prior dismissal entry to be judicially noticed because
that entry was made part of the record and parties agreed that the Tenth District did
dismiss the prior appeal. Everhart at ¶ 9-10. In other words, the extraneous matter
— the dismissal of the prior appeal — can be considered in a Civ.R. 12(B) motion
when the dismissal entry was part of the record and no “interpretation” of the prior
proceeding was required to ascertain the matter.
It appears that Everhart can be relied upon as authority for affirming
the trial court’s decision here. The only “extraneous matter” to be judicially noticed
in this case for the trial court to grant Roberts’s Civ.R. 12(B)(6) motion to dismiss
on the ground of statute of limitations is the fact that the common pleas court’s case
No. CV-919080 was filed July 31, 2019. The docket sheet of that case number from
the trial court is part of the record before us, and no “interpretation” of the prior
proceeding is required — the only matter to be ascertained is the date of the filing.
Evid.R. 201(B) states that “[a] judicially noticed fact must be one not
subject to reasonable dispute in that it is either (1) generally known within the
territorial jurisdiction of the trial court or (2) capable of accurate and ready
determination by resort to sources whose accuracy cannot reasonably be
questioned.” Here, the filing date of a case in the court’s own docket is certainly
capable of accurate and ready determination. Indus. Risk Insurers v. Lorenz Equip.
Co., 69 Ohio St.3d 576, 580, 635 N.E.2d 14 (1994) (“It is axiomatic that a trial court
may take judicial notice of its own docket.”); Summit Cty. Children Servs. v. Stucki,
9th Dist. Summit No. 29911, 2021-Ohio-4584 (a court may take notice of the docket
in a closely related case to determine whether the current complaint states a claim
for relief). See also Uren v. Scoville, 1st Dist. Hamilton No. C-170438,
2021-Ohio-3425, ¶ 23 (noting that taking judicial notice that a plea agreement is
docketed in a criminal case is permissible under Evid.R. 201(B) but taking judicial
notice of that document is not permitted).
In reaching its decision, the court in Everhart affirmed the principle
that the court can take judicial notice of “appropriate matters” in determining
Civ.R. 12(B)(6) motion without converting it to a motion for summary judgment.
Id., 115 Ohio St.3d 195, 2007-Ohio-4798, 874 N.E.2d 516, at ¶ 10, citing State ex rel.
Scott v. Cleveland, 112 Ohio St.3d 324, 2006-Ohio-6573, 859 N.E.2d 923, ¶ 26,
citing State ex rel. Neff v. Corrigan, 75 Ohio St.3d 12, 16, 661 N.E.2d 170. I believe
the holding is applicable under the unique circumstances of this case. While it is
improper to consider extraneous materials without converting a motion to dismiss
to a motion for summary judgment in many instances, it does not appear necessary
in this case to convert the motion to dismiss to a summary judgment proceeding just
so that the trial court could take note of the date of a case’s filing in its own docket.
While the termination of an attorney-client relationship is typically a
factual question resolved by the trier of fact, Kinasz v. Dickson, 2018-Ohio-1754, 110
N.E.3d 1034, ¶ 22 (8th Dist.), based on the allegations in the instant complaint, there
appears to be no set of facts permitting a conclusion that the attorney-client
relationship for the arbitration matter existed as of August 25, 2019, a year before
the legal malpractice complaint was filed. Upon a de novo review, I would conclude
that the trial court did not err in granting Roberts’s motion to dismiss because it was
barred by the one-year statute of limitations for a legal malpractice claim. For these
reasons, I respectfully dissent.