Henderson v. Haverfield

[Cite as Henderson v. Haverfield, 2022-Ohio-2194.]
IN THE COURT OF APPEALS OF OHIO
SEVENTH APPELLATE DISTRICT
HARRISON COUNTY
DOUGLAS W. HENDERSON,
Plaintiff-Appellant,
v.
MARY E. HAVERFIELD et al.,
Defendants-Appellees.
OPINION AND JUDGMENT ENTRY
Case No. 21 HA 0005
Civil Appeal from the
Court of Common Pleas of Harrison County, Ohio
Case No. CVH 2013-0098
BEFORE:
Carol Ann Robb, Cheryl L. Waite, David A. D’Apolito, Judges.
JUDGMENT:
Reversed and Vacated.
Atty. David E. Butz, Atty. James M. Williams, Atty. Matthew W. Onest, Krugliak, Wilkins,
Griffiths, & Dougherty Co., L.P.A., 4775 Munson Street NW, P.O. Box 36963, Canton,
Ohio 44735 for Plaintiff-Appellant and
Atty. T. Owen Beetham, 146 S. Main Street, P.O. Box 128, Cadiz, Ohio 43907 for
Defendants-Appellees.
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Dated: June 24, 2022
Robb, J.
{¶1} Appellants, Douglas W. Henderson, and his attorneys, David E. Butz,
Gregory W. Watts, and Matthew W. Onest, and the law firm of Kruglilak, Wilkins, Griffiths
& Dougherty Co. L.P.A., appeal the May 10, 2021 judgment awarding Appellees
$22,207.26 attorney’s fees and expenses against Henderson and his attorneys, jointly
and severally. For the following reasons, we reverse and vacate the trial court’s May 10,
2021 decision.
STATEMENT OF THE CASE
{¶2} Henderson filed suit in August of 2013 against Appellees, Mary E.
Haverfield and Edward N. McDonald, husband and wife.1 Henderson asserted seven
causes of action, seeking in part to quiet title and for declaratory judgment under R.C.
5301.56, the 1989 Dormant Mineral Act (DMA), against Appellees regarding the mineral
rights relative to the property owned by Henderson. Henderson filed suit to demonstrate
that the previously severed mineral rights had merged by operation of law pursuant to the
DMA.
{¶3} Appellees filed a joint answer and counterclaim asking the court to quiet title
in favor of Mary E. Haverfield and for declaratory judgment finding that she is the owner
of all the interest in the oil, mineral, and gas rights underlying the subject property.
Appellees’ prayer for relief also generally sought costs and attorney’s fees. Appellees
contend that Haverfield’s mother transferred the surface estate to Henderson’s relatives
while reserving the oil, gas, and non-coal minerals underlying the surface estate.
Appellees also claim that the reservation was subsequently passed to Appellee, Mary E.
Haverfield. Consequently, they asserted that Appellant Henderson only inherited the
surface rights.
1 Henderson also named Hess Ohio Developments, LLC, CNX Gas Company, LLC, and Chesapeake
Exploration, LLC as Defendants, but the claims against these parties were eventually dismissed, and none
of these Defendants are a party on appeal.
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{¶4} The case was effectively stayed from September of 2014 through
September of 2016 when the Ohio Supreme Court agreed to hear certified questions
regarding the DMA in Corban v. Chesapeake Expl., L.L.C., 149 Ohio St.3d 512, 2016-
Ohio-5796, 76 N.E.3d 1089, and several companion cases.
{¶5} After the Supreme Court’s Corban decision, Henderson sought leave to file
a summary judgment motion, urging the court to allow him to file a motion for summary
judgment and claiming new defenses arose via Corban, including that the application of
Corban and the 2006 DMA constitutes an unconstitutional taking.
{¶6} Henderson filed his summary judgment motion January 23, 2017, arguing
that the 2006 DMA could not be applied against him without running afoul of the Fifth and
Fourteenth Amendments to the U.S. Constitution; seeking declaratory judgment that he
was the rightful owner of the mineral rights; and asking the court to enjoin Appellees from
continuing to claim ownership over the rights, trespassing, and conveying said rights.
{¶7} Appellees filed a competing summary judgment motion in February of 2017,
urging the court to find that Corban conclusively determined the parties’ rights and asking
the court to quiet title and for declaratory judgment in their favor. Appellees likewise
claimed Henderson’s continued arguments after Corban were patently frivolous; not
warranted under existing law or a good faith extension of the law; and causing excessive
and unnecessary litigations costs. Appellees also generally asked the court to grant them
attorney’s fees and costs in the conclusion of their motion.
{¶8} Before the court ruled on summary judgment but after the briefing
concluded, Henderson moved the court to dismiss the case in its entirety, in May of 2018,
based on this Court’s decision in Lower Valley Farm, LLC v. Croskey, 7th Dist. Mahoning
No. 16 HA 0010, 2018-Ohio-814. Appellees opposed the dismissal of their claims; did
not oppose the dismissal of Henderson’s claims; and asked the court to grant their
summary judgment motion. The trial court dismissed Appellant’s claims only. The only
remaining claims were Appellees’ counterclaims against Henderson, which were decided
via summary judgment on September 17, 2018.
{¶9} In its summary judgment decision, the trial court determined that Mary V.
Haverfield is the owner of all mineral, oil, and gas rights underlying Henderson’s surface
estate and quieted title in Haverfield’s favor. The trial court concluded without analysis
Case No. 21 HA 0005
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or citation to legal authority that “this matter shall come for hearing on Defendants’ prayer
for Costs and Attorney’s fees * * *.” Henderson appealed this September 17, 2018
decision in a prior appeal to this Court before the attorney’s fees hearing was held and
before the court awarded attorney’s fees. We ultimately dismissed his prior appeal in
October of 2019.
{¶10} In the meantime, the trial court held the attorney’s fees hearing on February
22, 2019 and awarded Appellees $22,207.26, consisting of $15,475 in attorney’s fees
and $6,732 in expert expenses, via its May 10, 2021 Judgment Entry, against Henderson
and his attorneys. Appellants filed the instant appeal and raise two assignments of error.
ASSIGNMENT OF ERROR ONE
{¶11} Appellants’ first assignment alleges:
“The trial court erred by awarding attorney’s fees to Appellees because the trial
court did not have jurisdiction to issue that award because a motion for sanctions was not
filed within 30 days of the final judgment.”
{¶12} This assignment consists of two arguments. Appellants primarily argue the
trial court lacked subject matter jurisdiction to award attorney’s fees because Appellees
did not file a motion for attorney’s fees within 30 days of the trial court’s September 17,
20182 decision granting summary judgment. And because the trial court lacked
jurisdiction, Appellants claim the trial court’s May 10, 2021 judgment, ultimately awarding
Appellees attorney’s fees and expenses pursuant to R.C. 2323.51 and Civ.R. 11, is void.
{¶13} We review a trial court’s jurisdiction, a question of law, de novo. Cirino v.
Ohio Bur. of Workers' Comp., 153 Ohio St.3d 333, 2018-Ohio-2665, 106 N.E.3d 41, ¶ 17.
{¶14} Subject matter jurisdiction is the court’s power to decide an issue and render
an enforceable judgment. State v. Mbodji, 129 Ohio St.3d 325, 2011-Ohio-2880, 951
N.E.2d 1025, ¶ 10. If a court lacked subject matter jurisdiction to decide an issue and
render a judgment, then the judgment is void and has no legal effect. In re J.J., 111 Ohio
2The trial court issued an October 4, 2018 nunc pro tunc decision adding language describing the real
estate. For purposes of our analysis here, we only refer to the September 17, 2018 decision since this is
the controlling date for final order analysis when a nunc pro tunc order is issued. State v. Lester, 130 Ohio
St.3d 303, 2011-Ohio-5204, 958 N.E.2d 142, ¶ 19.
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St.3d 205, 2006-Ohio-5484, 855 N.E.2d 851, ¶ 10; VOID, Black's Law Dictionary (11th
ed. 2019).
{¶15} Appellants correctly point out that Appellees did not file a formal motion for
attorney’s fees. Moreover, the court’s September 17, 2018 decision states that it would
be setting a hearing on Appellees’ “prayer” for relief.
{¶16} As stated, Appellees counterclaimed and asserted two claims for relief, i.e.,
declaratory judgment and to quiet title. Appellees requested costs and attorney’s fees as
a general prayer for relief. Based on the court’s reliance on the prayer for relief in its
September 17, 2018 decision, Appellants urge us to find that this decision was a final,
appealable order because there was no motion pending before it on which to grant
attorney’s fees. Consequently, Appellants claim the 30 days in R.C. 2323.51 was
triggered and the court lost jurisdiction to award attorney’s fees after the expiration of 30
days. For the following reasons, we disagree.
{¶17} Here, the trial court awarded attorney’s fees and expenses under Civ.R. 11
and R.C. 2323.51 against Henderson and his attorneys in its May 10, 2021 judgment.
{¶18} R.C. 2323.51(B)(1) states in pertinent part:
[A]t any time not more than thirty days after the entry of final judgment in a
civil action * * *, any party adversely affected by frivolous conduct may file
a motion for an award of court costs, reasonable attorney's fees, and other
reasonable expenses incurred in connection with the civil action * * *. The
court may assess and make an award to any party to the civil action or
appeal who was adversely affected by frivolous conduct, as provided in
division (B)(4) of this section.
(Emphasis added.)
{¶19} Unlike R.C. 2323.51(B)(1), Civ.R. 11 does not contain an express time limit
for filing a motion for sanctions. However, at least one court has inferred a 30-day time
limit in Civ.R. 11. Zunshine v. Cott, 10th Dist. Franklin No. 07AP-764, 2008-Ohio-2298,
¶ 21; but see Fast Property Sols., Inc. v. Jurczenko, 11th Dist. Lake No. 2012-L-015,
2013-Ohio-60, ¶ 69 (rejecting Zunshine’s 30-day time limit for Civ.R. 11 claims).
Regardless of whether there is a time constraint upon pursuing a Civ.R. 11 motion for
sanctions, the 30-day limit in R.C. 2323.51(B)(1) was not triggered here when the court
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issued its September 17, 2018 summary judgment decision because it was not a final,
appealable order. See Jones v. McAlamey Pools, Spas & Billiards, Inc., 4th Dist. No.
07CA34, 2008- Ohio-1365, ¶ 12.
{¶20} A party’s inclusion of a general prayer for costs and attorney’s fees in a
complaint or counterclaim that is not sought pursuant to an identified statute and that the
court does not address in an otherwise final judgment will not render the judgment non-
final and non-appealable. PC Surveillance. Net, LLC v. Rika Group, Corp., 7th Dist. No.
11 MA 165, 2012-Ohio-4569, 994 N.E.2d 843, ¶ 16, citing Jones. In the absence of
statutory authority, a general prayer attorney-fee request is deemed implicitly overruled
for purposes of a final order analysis because a general request for attorney’s fees in a
complaint does not state a separate cause of action. Jones at ¶ 11-12.
{¶21} An exception to this rule is when a trial court raises the attorney fee issue
in its judgment and defers its adjudication on attorney’s fees. Id. at ¶ 10; accord Ft. Frye
Teachers Assn. v. Ft. Frye Local School Dist. Bd. of Edn., 87 Ohio App.3d 840, 843, 623
N.E.2d 232 (4th Dist.1993). This is what occurred here.
{¶22} The trial court’s September 17, 2018 decision raises the issue of attorney’s
fees and sets a hearing on the issue. We acknowledge this judgment creates confusion
as to what “prayer” the court is referencing and consequently whether it was final for
appeal purposes based on the court’s statement that it was scheduling the hearing on the
“prayer” for attorney’s fees. Notwithstanding, this September 17, 2018 decision
nevertheless makes clear that all claims were not resolved because it also set the
attorney-fee issue for a later date. Thus, this decision did not “determine an action and
prevent a judgment * * *.” See Natl. City Commercial Capital Corp. v. AAAA at Your Serv.,
Inc., 114 Ohio St.3d 82, 2007-Ohio-2942, ¶ 7 (analyzing final orders). Consequently, it
was not a final, appealable order, and the 30-day period to move for attorney’s fees in
R.C. 2323.51 was not triggered.3 Thus, Appellants’ primary argument in their first
assigned error lacks merit and is overruled.
{¶23} Alternatively, Appellants claim the trial court lacked the statutory authority
to award attorney’s fees under either R.C. 2323.51 or Civ.R. 11 since no motion was
3
This conclusion is consistent with this court’s judgment in Appellants’ prior appeal, 18 HA 0005, from the
September 17, 2018 decision that was ultimately dismissed for a lack of final, appealable order.
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pending when the court set the case for a hearing on attorney’s fees via its September
17, 2018 judgment.
{¶24} While Appellees did not file a motion explicitly identified in the caption as
one moving for attorney’s fees, Appellees did repeatedly assert that Appellants’
arguments were frivolous. Appellees first referred to Appellants’ arguments as patently
frivolous and not warranted under existing law and causing “a needless increase in the
cost of litigation” in their February 13, 2017 motion for summary judgment. In the
conclusion of their summary judgment motion, Appellees reasserted their request for
attorney’s fees and expenses, albeit without any reference to Civ.R. 11 or R.C. 2323.51.
{¶25} Thereafter, Appellees cited and relied on Civ.R. 11 upon moving to strike
Henderson’s reply in support of his summary judgment motion. Appellees’ March 7, 2017
motion to strike did not, however, request attorney’s fees or costs; it only requested that
the reply be stricken, and it related not to Appellants’ arguments but statements regarding
the timeliness of the reply brief.
{¶26} As emphasized by Appellants, the trial court granted Appellees’ summary
judgment via its September 17, 2018 judgment and set the case for a hearing on
attorney’s fees and costs “on Defendants’ prayer for Costs and Attorney’s Fees * * *.”
However, when the trial court held the hearing on attorney’s fees on February 22, 2019,
the court explained that it set the case for a hearing on attorney’s fees and costs in light
of Appellees’ repeated assertions that Appellants’ conduct was frivolous. The court also
noted at the hearing it had the authority to sua sponte award attorney’s fees under Civ.R.
11 or R.C. 2323.51 in light of Appellees’ allegations of frivolousness. Thereafter,
Appellees orally moved for attorney’s fees during this hearing.
{¶27} Regardless of the reason the court set the hearing, R.C. 2323.51(B)(2)
authorizes a court to fashion an award “upon the motion of a party” or “on the court’s own
initiative” if the procedural requirements are satisfied.4
{¶28} Thus, the court was within its authority to set the matter for a hearing on its
own initiative, or by construing Appellees’ request in their summary judgment motion as
4
We do not address the trial court’s compliance with the procedural aspects of R.C. 2323.51(B)(2)(a)-(c)
because Appellants do not raise this as an issue. App.R. 12(A)(1)(b).
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one for attorney’s fees for frivolous conduct, or both. Id. Whatever the reason, the trial
court was authorized to hold the attorney’s fee hearing because Appellees invoked the
language and essence of R.C. 2323.51 and asked for attorney’s fees and costs in the
conclusion of their summary judgment motion. Moreover, the court was authorized to set
and conduct the hearing if a formal motion was not filed. R.C. 2323.51(B)(2).
Accordingly, the second aspect of Appellants’ first assignment lacks merit as well.
{¶29} Appellants’ first assignment of error lacks merit in its entirety and is
overruled.
ASSIGNMENT OF ERROR TWO
{¶30} Appellants’ second assignment of error asserts:
“The trial court erred when it awarded sanctions because (1) the Fifth District Court
of Appeals already determined that reasonable attorneys would bring these arguments,
(2) the trial court had the full substance of the federal constitutional arguments before
Appellants filed new summary judgment briefs and approved of Appellants submitting
other briefs, (3) the trial court ignored the many federal cases cited within Doug
[Henderson’s] motion for summary judgment, and (5) the trial court record lacks any
evidence proving (or even suggesting) Appellants willfully violated Civ.R. 11.”
{¶31} Initially we address a portion of Appellants’ final sub-argument, which
asserts the trial court exceeded its authority upon imposing Civ.R. 11 sanctions on
Henderson, a represented party. To the extent this was the basis for the court’s decision,
Appellees concede error. For the following reasons, we agree.
{¶32} The May 10, 2021 judgment assessing attorney’s fees and expenses
against Appellants, jointly and severally, does not state on which grounds it is based. The
trial court referenced both R.C. 2323.51 and Civ.R. 11 in its analysis but did not delineate
whether its award was rendered under one or both authorities.
{¶33} We generally review sanctions imposed pursuant to Civ.R. 11 under an
abuse-of-discretion standard. State ex rel. Bardwell v. Cuyahoga Cty. Bd. of Commrs.,
127 Ohio St.3d 202, 2010-Ohio-5073, 937 N.E.2d 1274, ¶ 9. However, the standard of
review with respect to purely legal issues, such as the application of a rule of law, is de
novo. N.A.T. Trans., Inc. v. McClain, 165 Ohio St.3d 250, 2021-Ohio-1374, 178 N.E.3d
454, ¶ 12.
Case No. 21 HA 0005
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{¶34} Civ.R. 11 states in part:
The signature of an attorney or pro se party constitutes a certificate by the
attorney * * * that the attorney * * * has read the document; that to the best
of the attorney's or party's knowledge, information, and belief there is good
ground to support it; and that it is not interposed for delay. * * * For a willful
violation of this rule, an attorney * * *, upon motion of a party or upon the
court's own motion, may be subjected to appropriate action, including an
award to the opposing party of expenses and reasonable attorney fees
incurred in bringing any motion under this rule.
{¶35} As alleged, Civ.R. 11 does not authorize the imposition of sanctions or
attorney’s fees on a party to the suit unless the party is a pro se litigant who signed the
pleadings. Civ.R. 11; see Burrell v. Kassicieh, 128 Ohio App.3d 226, 231, 714 N.E.2d
442, 1998 WL 325264 (3rd Dist.1998) (applying Civ.R. 11 to litigant during period of pro
se representation). Thus, to the extent the trial court’s decision awarding Appellees
attorney’s fees against Henderson, a party and non-lawyer, relies on Civ.R. 11, the
decision constitutes an error of law. Id. Accordingly, this aspect of Appellants’ fifth sub-
argument has merit.
{¶36} For ease of analysis, we address the second aspect of Appellants’ fifth sub-
argument and their other arguments under this assigned error collectively. Appellants
claim the frivolous conduct finding cannot stand under Civ.R. 11 because there is no
evidence showing they willfully violated Civ.R. 11, and Appellants’ remaining arguments
contend their continued pursuit of their legal theories was not frivolous conduct under
either R.C. 2323.51 or Civ.R. 11.
THE TRIAL COURT’S DECISION
{¶37} The trial court’s May 10, 2021 decision awarding Appellees attorney’s fees
and expenses finds in part:
The Court finds as follows: Plaintiff’s actions from September 21,
2016 to February 13, 2017 were permissible. The Court finds that from the
Corban decision on September 16, 2016 until this Court’s ruling in Gabriel
v. Tweedy C.P. Harrison County CVH-2013 on February 13, 2017 the
Case No. 21 HA 0005
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issues presented by Plaintiffs, though having but a miniscule chance of
success were not frivolous.
However, after substantially similar arguments were * * * [d]enied
Certiorari on due process and taking arguments by the United States
Supreme Court in Walker v. Shondrick-Nau ____U.S. ___, 137 S.Ct. 824,
2016-Ohio-5793, and dismissed pursuant to Civ.R. 12(B)(6) in Miller v.
Kenney C.P. Belmont County 14-CV-178 (January 27, 2017) and in this
Court dismissed pursuant to Civ.R. 12(B)(6) [in] Gabriel v. Tweedy supra[,]
February 13, 2017.
Furthermore, the 7th District Court of Appeals definitively put to bed
the arguments put forward by Plaintiffs in Lower Valley v. Croskey, 2018-
Ohio-814 (7th Dist.) March 6, 2018.
Plaintiff’s counsel was well aware of the decisions, at least one of
which (Miller v. Kinney) was a case they were counsel in.
The litigation brought by Plaintiffs was supported by their expert
witness attorney Joshua O’Farrell. However, simply because another
lawyer filed analogous arguments to their bitter conclusion is not enough to
negate the litigation’s frivolity.
The Court finds Defendants’ expert Attorney Matthew Warnock more
persuasive in his arguments that the continued litigation after Corban and
denial of cert by the Supreme Court was unwarranted.
The Court finds that after February 13, 2017, Henderson’s actions
were frivolous and that “no reasonable attorney would have concluded the
arguments made by Plaintiff[* * *] had any merit or chance of success” and
that they were “not warranted under existing law and after Corban, Walker,
and Gabriel supra could not be supported by a good faith argument for an
extension, modification or reveal of existing law, or cannot be supported by
a good faith argument for the establishment of a new law * * *.
{¶38} The court’s decision, as a whole, found Appellants’ conduct frivolous
because it was no longer warranted under existing law and could no longer be supported
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by a good faith argument for an extension, modification, or reversal of existing law as of
February 13, 2017.
ATTORNEY’S FEES GENERALLY & STANDARD OF REVIEW
{¶39} Ohio follows the American Rule which dictates that each party to a lawsuit
generally bears its own costs and attorney’s fees. Krasny-Kaplan Corp. v. Flo-Tork, Inc.,
66 Ohio St.3d 75, 609 N.E.2d 152 (1993); State ex rel. Varnau v. Wenninger, 131 Ohio
St.3d 169, 2012-Ohio-224, 962 N.E.2d 790, ¶ 23. Absent express statutory authority or
bad faith, an award of attorney’s fees is improper. Id. Exceptions to the American Rule
should be narrowly construed. Dolan v. Glouster, 4th Dist. Athens No. 11CA18, 2014-
Ohio-2017, ¶ 113; Columbus Check Cashers, Inc. v. Rodgers, 10th Dist. Franklin No.
08AP-149, 2008-Ohio-5498, ¶ 13 (statutes in derogation of common law must be strictly
construed).
{¶40} As stated, the trial court references Civ.R. 11 and R.C. 2323.51 in its May
10, 2021 judgment awarding attorney’s fees and expenses against Henderson and his
attorneys. It does not state under which authority it bases its award. Thus, we analyze
both.
{¶41} R.C. 2323.51(A) states in part:
(2) “Frivolous conduct” means either of the following:
(a) Conduct of * * * [a] party to a civil action, * * * or of the * * * other party's counsel
of record that satisfies any of the following:
(i) It obviously serves merely to harass or maliciously injure another party to the
civil action or appeal or is for another improper purpose, including, but not limited
to, causing unnecessary delay or a needless increase in the cost of litigation.
(ii) It is not warranted under existing law, cannot be supported by a good faith
argument for an extension, modification, or reversal of existing law, or cannot be
supported by a good faith argument for the establishment of new law.
(iii) The conduct consists of allegations or other factual contentions that have no
evidentiary support or, if specifically so identified, are not likely to have evidentiary
support after a reasonable opportunity for further investigation or discovery.
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(iv) The conduct consists of denials or factual contentions that are not warranted
by the evidence or, if specifically so identified, are not reasonably based on a lack
of information or belief.
(Emphasis added.)
{¶42} The crux of the trial court’s decision was based on its interpretation
Appellants’ arguments went from reasonable ones to frivolous conduct after certain other
courts considered the same arguments and rejected them. It concluded that at this point
in time, the arguments were not warranted under existing law and could not be supported
by a good faith argument for an extension, modification, or reversal of existing law. Thus,
we limit our R.C. 2323.51 review to the corresponding section, R.C. 2323.51(A)(a)(ii).
{¶43} Before a court may subject an attorney to Civ.R. 11 sanctions, the lawyer
must have willfully violated the rule by filing a pleading that to the best of her knowledge,
information, and belief, was not supported by good grounds or was filed for purpose of
delay. Haubeil & Sons Asphalt & Materials, Inc. v. Brewer & Brewer Sons, Inc., 57 Ohio
App.3d 22, 565 N.E.2d 1278 (4th Dist.1989); State ex rel. Bardwell v. Cuyahoga Cty. Bd.
of Commrs., 127 Ohio St.3d 202, 2010-Ohio-5073, 937 N.E.2d 1274, ¶ 8. Civ.R. 11 uses
a subjective bad faith standard that requires all violations to be willful. Id. Bad faith is not
just bad judgment or negligence. Id. Bad faith “imports a dishonest purpose or some
moral obliquity. It implies conscious doing of wrong. It means a breach of a known duty
through some motive of interest or ill will. It partakes of the nature of fraud.” (Citations
and quotations omitted.) Id.{¶44} Unlike Civ.R. 11, frivolous conduct under R.C. 2323.51(A) invokes an
objective standard. State ex rel. DiFranco v. S. Euclid, 144 Ohio St.3d 571, 2015-Ohio-
4915, 45 N.E.3d 987, ¶ 15. A finding of frivolousness requires more than prevailing on
the legal merits; it requires egregious and unjustifiable conduct. Id. Thus, the applicable
test is whether no reasonable lawyer would have argued that claim in light of the existing
law. Id. Merely winning a legal battle is not enough to invoke R.C. 2323.51 sanctions;
this statute must be carefully applied to avoid chilling legitimate claims. Ohio Edison Co.
v. Cubick, 2020-Ohio-7027, 166 N.E.3d 575, ¶ 21 (7th Dist.)
{¶45} “The standard of review employed by an appellate court when reviewing
rulings on R.C. 2323.51 motions varies and is contingent upon the basis for the trial
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court's decision.” Harris v. Rossi, 11th Dist. No. 2017-T-0045, 2018-Ohio-4573, 123
N.E.3d 284, ¶ 75. We review purely legal issues, such as if an attorney’s conduct is
warranted under existing law and cannot be supported by a good faith argument for an
extension, modification, or reversal of existing law, without deference to the trial court’s
decision. Lable & Co. v. Flowers, 104 Ohio App.3d 227, 233, 661 N.E.2d 782 (9th
Dist.1995); Cubick, at ¶ 20 (whether a claim is warranted under existing law is a legal
issue reviewed de novo). This de novo standard likewise governs our review of a court’s
award under Civ.R. 11 for the same reason. Id.; Burns v. Henne, 115 Ohio App.3d 297,
302, 685 N.E.2d 294 (2d Dist.1996).
{¶46} The remaining arguments under Appellants’ second assigned error
advance the same contention, i.e., the trial court erred by finding Appellants’ pursuit of
their legal arguments was frivolous conduct warranting sanctions.
SUMMARY JUDGMENT ARGUMENTS
{¶47} As stated, Henderson’s complaint alleges seven causes of action, seeking
in part to quiet title and for declaratory judgment under the 1989 DMA against Appellees
regarding the mineral rights relative to the property owned by Henderson. Appellees
counterclaimed and sought to quiet title in favor of Haverfield and for declaratory judgment
that she is the owner of the mineral rights underlying the subject property.
{¶48} Henderson moved the court to stay the proceedings pending the Ohio
Supreme Court’s decision to consider comparable issues in other cases. The
proceedings resumed once the Supreme Court issued its decision in Corban on
September 15, 2016.
{¶49} Although the parties’ causes of action were filed before the Supreme Court’s
decision in Corban, their competing summary judgment motions were filed after Corban.
In January of 2017, Henderson moved for summary judgment in its favor relying in part
on Justice Pfeifer’s partial dissent in Corban. Henderson’s motion was based in large
part on the impact of Corban, which he argued violated his federal constitutional rights.
Henderson claimed the application of the 2006 DMA violated the Fifth and Fourteenth
Amendments to the U.S. Constitution because it destroyed or eliminated the conclusive
presumption of abandonment and ownership Henderson acquired under the 1989 DMA.
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Appellants argued Corban’s application of the 2006 DMA results in an unconstitutional
taking of his substantive property right. (Jan. 23, 2017 Summary Judgment Motion).
{¶50} Appellees filed a competing summary judgment motion on February 13,
2017, arguing that Henderson’s constitutional taking argument was expressly rejected by
the Ohio Supreme Court in Corban based on its conclusion that “the conclusive
presumption was not a vested substantive right, but a procedural evidentiary rule[,]” and
because Henderson did not comply with certain procedural requirements, he never
acquired the right. Consequently, because Henderson never acquired the substantive
right, Appellees claimed he had no property right and Corban required the trial court to
quiet title to the mineral rights in Haverfield’s favor. (Feb. 13, 2017 Summary Judgment
Motion 13-14.) Henderson filed an opposition to Appellees’ summary judgment motion
on February 28, 2017.
{¶51} The trial court summarized the parties’ arguments at the March 20, 2017
summary judgment hearing: “[T]he issue before the Court is whether the Dormant Mineral
Act of 2006 applies in this case as articulated in Corban v. Chesapeake or whether a
presumptive property right was acquired by Plaintiffs prior to the 2006 Act that gives them
protection under the United States Constitution.”
{¶52} At that hearing, counsel for Henderson again stated they were not
challenging Corban’s interpretation of Ohio law, but instead arguing that a federal
question remained, explaining there is “a distinction about what is property under the
Federal Constitution versus what [the Ohio Supreme Court in Corban was] looking at as
a vested right under Ohio law.” Appellants claimed under federal law Henderson’s cause
of action arising via the 1989 DMA was a protected property right that was taken in
violation of the Fifth and Fourteenth Amendments via the Ohio Supreme Court’s decision
in Corban. (March 20, 2017, Tr. 3-6.)
{¶53} To the contrary, Appellees argued Henderson’s theory failed on several
grounds. Among other reasons, they claimed the U.S. Supreme Court already decided
these federal constitutional arguments when it denied certiorari in a case raising these
precise arguments. (March 20, 2017, Tr. 19.) Appellees also pointed to two other trial
court decisions—one in Harrison and the other in Belmont County—rejecting appellants’
federal constitutional arguments.
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{¶54} After the summary judgment hearing, but before the trial court issued its
decision on the merits, Henderson moved to dismiss the entire case on May 3, 2018.
Henderson asked the court to dismiss in light of the Seventh District’s decision in another
appeal which, according to Henderson, rejected the only remaining issue before the trial
court, i.e., whether rights conveyed to surface owners via R.C. 5301.56, in effect before
2006, constituted property rights protected by the U.S. Constitution. See Lower Valley
Farm, LLC v. Croskey, 7th Dist. Mahoning No. 16 HA 0010, 2018-Ohio-814, ¶ 35 (holding
in part that Corban’s description of the conclusive presumption established by the 1989
law as one that was “procedural in nature” consequently established that a change in the
right “does not alter a vested substantive right.”). Lower Valley was decided March 28,
2018. Appellants moved to dismiss all claims 36 days later.
{¶55} Appellees opposed the dismissal of their claims and reasserted their desire
to have the case adjudicated on the merits pursuant to their summary judgment motion.
In response, the court dismissed Appellants’ affirmative claims only.
{¶56} Appellants did not thereafter renew Henderson’s opposition to Appellees’
summary judgment motion. But the parties filed competing motions about an extension
of time regarding an agreed judgment entry dismissing the case, which never came to
fruition.
{¶57} Thereafter, the trial court granted Appellees summary judgment on
September 17, 2018, without analysis.
APPLICABLE LAW
{¶58} Because we are not ruling on the merits of the parties’ summary judgment
arguments, we do not conduct an all-encompassing review and analysis of Ohio’s
Dormant Mineral Act and Appellants’ alleged federal constitutional violations and
arguments. Instead, we address the parties’ arguments and the law necessary for the
limited determination before us, i.e., whether no reasonable lawyer would have raised
these arguments in light of the existing law. State ex rel. DiFranco, 144 Ohio St.3d 571at ¶ 15.
{¶59} As stated, the trial court determined that Appellants’ arguments were
reasonable when they were raised in Henderson’s January 23, 2017 summary judgment
motion, but it found that less than a month later, or as of February 13, 2017, Appellants’
Case No. 21 HA 0005
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arguments became frivolous conduct in light of decisions rendered by two other Ohio
courts of common pleas addressing similar claims and since the U.S. Supreme Court
denied certiorari in Walker v. Shondrick-Nau ____U.S. ___, 137 S.Ct. 824, 2016-Ohio-
5793, which raised the same issues.
{¶60} It is an understatement that the enactment of the 2006 DMA caused a flurry
of litigation and created unforeseen issues and arguments throughout Ohio courts. In
fact, after Appellants filed their lawsuit in this case in August of 2013, this Court in April
of 2014 held that the 2006 DMA only applies prospectively. Walker v. Shondrick-Nau,
7th Dist. Noble No. 13 NO 402, 2014-Ohio-1499, 2014 WL 1407942, ¶ 37, rev’d, 149
Ohio St.3d 282, 2016-Ohio-5793, 74 N.E.3d 427. We also found that the 1989 DMA was
self-executing, and thus, in the absence of a savings event, the mineral interest
automatically reunited with the surface estate. Id. at ¶ 39. Our decision in Walker was
eventually reversed via Corban.
{¶61} In Corban, the Supreme Court was asked to address certified questions of
Ohio law raised by the Southern District of Ohio, Eastern Division while it was addressing
competing summary judgment motions regarding the DMA. Corban v. Chesapeake Expl.,
L.L.C., 149 Ohio St.3d 512, 2016-Ohio-5796, 76 N.E.3d 1089, ¶ 1.
{¶62} Upon expounding its decision, Corban states that the 1989 DMA provided
a “conclusive presumption” of abandonment, an evidentiary device, and not an automatic
vesting of the right in the surface owner. Id. at ¶ 25-26. Corban provides this explanation,
not in response to a constitutional challenge based on a federal taking argument, but
upon overruling the argument that the 2006 DMA violated the Ohio Constitution’s
Retroactivity Clause. Id.
{¶63} Corban does not address the U.S. Constitution or whether its decision and
application of the 2006 DMA constitutes a taking in violation of the U.S. Constitution. Id.
{¶64} As stated, Justice Pfeifer concurred in part and dissented in part, and his
dissent, joined by Justice O’Neill, raised the issue pursued by Appellants here. Justice
Pfeifer first concludes that the Corban lead opinion results in an unconstitutional
retroactive law in violation of the Ohio Constitution, explaining: “The 1989 ODMA did not
merely create a simplified way to prove abandonment in a quiet-title action; instead, on
its own, it vested in the surface owner the interest in the minerals under the surface. * * *
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That the mineral interest is ‘vested in the owner of the surface’ means that there is no
further procedure necessary to complete the reunification of the mineral rights with the
surface rights.” (Emphasis sic.) Corban at ¶ 133 (Pfeifer, J., concurring in part and
dissenting in part). Springing from this conclusion, Justice Pfeifer then opined that
“applying the 2006 amendment to surface owners whose rights to mineral interests had
vested pursuant to the 1989 ODMA constitutes nothing less than a taking * * *.” Id. at ¶
140.
{¶65} Among other cases, Appellants’ summary judgment argument also relied
on Greyhound Food Mgt., Inc. v. City of Dayton, 653 F.Supp. 1207, 1218 (S.D.Ohio
1986), aff'd and remanded, 852 F.2d 866, (6th Cir.1988), arguing the retroactive
application of the 2006 DMA constitutes a due process violation and an unconstitutional
taking of Henderson’s cause of action and corresponding remedy. Greyhound held in
part that an insurer’s subrogation causes of action were property under the Fifth
Amendment’s Taking Clause. Id.{¶66} Nearly a year and a half after Corban, we issued our decision in Lower
Valley Farm, LLC v. Croskey, 7th Dist. Mahoning No. 16 HA 0010, 2018-Ohio-814. Our
March 28, 2018 Lower Valley decision involved similar legal arguments and the same
counsel representing Henderson. In Lower Valley, the trial court had granted summary
judgment in favor of the surface owner before Corban was decided based on our decision
in Walker, supra. We then reversed based on Corban and held, in part, that the 2006
DMA applied. Upon considering whether we had to remand the case for the trial court to
rule on the “other defenses” raised, we held:
It is clear from the Ohio Supreme Court's characterization, that a conclusive
presumption is neither a property right nor a vested substantive right. It is
simply an evidentiary device used in litigation. Therefore, any modification
to, or ‘taking’ of, the presumption cannot be held to be unconstitutional as
alleged by Lower Valley. * * * Given the Ohio Supreme Court's clear
characterization of the conclusive presumption, a remand on this issue is
unnecessary. Summary judgment in the * * * Defendants' favor is proper.
Id. at ¶ 31-32. Lower Valley was not appealed to the Ohio Supreme Court.
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{¶67} Appellees and the trial court also rely on a few trial court cases. In Miller v
Kinney, Belmont C.P. No. 14-CV-178 (January 27, 2017), the Belmont County Common
Pleas Court granted a motion to dismiss on this same ground and found the 2006 DMA
was not unconstitutional and did not result in an unconstitutional taking or denial of due
process. And according to the trial court’s May 10, 2021 decision, Gabriel v. Tweedy,
Harrison C.P. No. CVH-2013-0112 (Feb. 13, 2017), is a Harrison County Court of
Common Pleas case that granted a motion to dismiss in a case that raised substantially
similar due process and taking arguments.
FRIVOLOUS CONDUCT HEARING
{¶68} The trial court held the attorney’s fee hearing on February 22, 2019. At the
hearing, Appellees urged the court to find that post-Corban, it was clear Henderson had
no valid theory of law under which he could prevail and Appellants’ continued arguments
were frivolous.
{¶69} Appellants, on the other hand, urged the trial court to reject Appellees’
frivolousness argument. They asserted they were advancing reasonable and yet
undecided arguments under federal law consistent with other attorneys litigating
comparable DMA cases throughout Ohio.
{¶70} Two lawyers testified on Henderson’s behalf that they raised similar post-
Corban arguments. Daniel Corcoran testified he is an attorney who was involved in
mineral rights litigation for approximately seven years. In 2018, he was a presenter at an
OSBA oil and gas seminar on the topic of mineral rights. His presentation included post-
Corban unresolved issues. One of his PowerPoint slides titled “Unresolved Issues” was
introduced at the hearing. One of the identified “unresolved issues” post-Corban was
whether the decision violates one’s substantive rights in violation of federal law.
{¶71} Corcoran acknowledged that the Seventh and Fifth District Courts of
Appeals were considering these issues at the time but these issues were still unresolved
because these are only intermediary state courts of appeals. Corcoran raised similar
federal constitutional arguments, and even at the time of the hearing, Corcoran opined,
“it’s an open question.” (Tr. 63-66, 72-74.)
{¶72} Attorney Josh O’Farrell also testified and said he had been a lawyer since
2010 and approximately 80 percent of his legal work was devoted to oil and gas issues.
Case No. 21 HA 0005
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O’Farrell also raised similar arguments in his cases based on the federal constitutional
issues evoked by Justice Pfeifer’s partial dissent. O’Farrell agreed these issues were
unresolved after Corban, and he raised them in order to vet the constitutional application
of the opinion under federal law. (Tr. 91-94.)
{¶73} One of Henderson’s attorneys and a party to this appeal, Matthew Onest,
also testified. He said Corban did not address the federal constitutional arguments that
they raised on Henderson’s behalf here. Onest explained that upon reading the Corban
decision, he and other lawyers in his firm spent hours examining federal and Sixth Circuit
cases assessing whether Corban effectively violated due process and constituted an
unconstitutional taking. Onest said the issue was neither briefed nor argued before the
Ohio Supreme Court. He also testified he and his firm raised this same argument in
several trial courts throughout Ohio. (Tr. 103-107, 114.)
{¶74} Onest also testified opposing counsel in a different case he was counsel on
in the Fifth District Court of Appeals alleged his firm’s appellate arguments, like the ones
here, were frivolous, but the court disagreed. (Tr. 108-109.) Onest also said frivolous
conduct attorney’s fees were also sought, but rejected, against his firm for raising these
same arguments in a Jefferson County Court of Common Pleas case. (Tr. 111.) His
firm stopped pursuing these federal constitutional claims in Henderson’s case once the
Seventh District issued its decision in Lower Valley. They dismissed Henderson’s claims
at that juncture because the issue had been fully vetted and rejected in this district. (Tr.
115.)
{¶75} Appellees’ only testimony on the issue of frivolousness was their counsel,
Owen Beetham. Beetham reaffirmed the statements in his affidavit filed in advance of
the hearing. Beetham said after Corban, he asked counsel for Henderson to concede
and agree to quiet title in favor of his client; the Supreme Court had already conclusively
addressed the arguments that they continued to raise; and their arguments were likewise
rejected by several trial courts, including Gabriel v. Tweedy, Walker v. Shndrick-Nau, and
Miller v. Kinney, supra, and the Seventh District Court of Appeals in Lower Valley Farm
v. Croskey, supra. Beetham also asserted Appellees incurred significant legal expenses
attempting to finalize the case and they were unable to access certain royalties being held
in escrow as a result of the proceedings.
Case No. 21 HA 0005
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{¶76} Appellees’ other witness at the attorney’s fee hearing, Attorney Matthew
Warnock, testified Beetham’s attorney’s fees were reasonable. Warnock, who is listed
as one of the amici curiae counsel of record on the Corban decision, did not testify, nor
was he asked at the hearing, whether he thought a reasonable lawyer would have raised
these arguments. This is contrary to the trial court’s finding in its May 10, 2021 decision,
which states: “The Court found Defendants’ expert Attorney Matthew Warnock more
persuasive in his arguments that the continued litigation after Corban and denial of
cert[iorari] by the Supreme Court was unwarranted.” (May 10, 2021 Judgment, p. 6.)
Warnock did not testify in this regard. Warnock did testify, however, that he defended
this very issue in Belmont County and said, “for all of the Dormant Mineral Act litigation
that I think all of counsel in this room did[,] these are novel and unique issues that came
up post Corban * * *, as Mr. Onest testified earlier, he had to do a lot of research on these
federal cases to come up with a theory.” (Feb. 22, 2019 Tr. 129.)
ANALYSIS & CONCLUSION
{¶77} As referenced, Henderson’s lawsuit was filed well in advance of Corban.
When faced with the unfavorable lead decision in Corban, Henderson’s attorneys appear
to have conducted themselves as a reasonable attorney would do in this situation—by
fully vetting the opinion and exploring whether other viable arguments or avenues of relief
existed to advocate in furtherance of their client’s claims. Appellants thereafter relied on
federal case law, as well as Justice Pfeifer’s partial dissenting opinion in Corban, to
advance their client’s position. While not ultimately meritorious, Appellants’ arguments
were reasonable and based on a cogent argument to extend then-existing law.
{¶78} Because “lacking merit” is not synonymous with “frivolous conduct,” the trial
court’s decision is reversed. State ex rel. DiFranco v. S. Euclid, 144 Ohio St.3d 571,
2015-Ohio-4915, 45 N.E.3d 987, ¶ 15 (“Frivolous conduct is not proved merely by winning
a legal battle or by proving that a party's factual assertions were incorrect.”)
{¶79} Further, neither the trial court nor this court is bound to follow
trial court decisions on the same issue involving different parties. See In re Lebanon
Health Care Ctr., 10th Dist. No. 86AP-168 (Aug. 26, 1986) (finding “[a] decision of one
branch of a common pleas court is not binding upon any other branch of the same court”);
Cyr v. State Med. Bd. of Ohio, 10th Dist. Franklin No. 21AP-273, 2022-Ohio-25, ¶ 15; see
Case No. 21 HA 0005
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also Camreta v. Greene, 563 U.S. 692, 709, 131 S.Ct. 2020,179 L.Ed.2d 1118, fn 7
(explaining that district court decisions are not binding precedent even in the same district
or upon the same judge.)
{¶80} Moreover, the U.S. Supreme Court’s denial of certiorari is not a ruling on
the merits. United States v. Carver, 260 U.S. 482, 490, 43 S.Ct. 181, 67 L.Ed. 361 (1923);
al-Alwi v. Trump, ___U.S. ___, 139 S.Ct. 1893, 1894, 204 L.Ed.2d 1102 (2019). It is
simply the court’s decision declining to review a case. Id. Thus, any reliance on the
Supreme Court’s denial of certiorari in Walker v. Shondrick-Nau ____U.S. ___, 137 S.Ct.
824, 2016-Ohio-5793 (2016), is misplaced.
{¶81} As noted, once this court issued its decision in Lower Valley, Appellants
moved to dismiss their affirmative claims.
{¶82} Although the trial court was bound to follow our decision in Lower Valley,
Ohio’s Supreme Court was not. Thus, despite our decision in Lower Valley, Appellants
could have appealed these same issues to this court; to the Ohio Supreme Court; and
then to the U.S. Supreme Court, the highest law of the land on federal constitutional
issues. See generally State v. Burnett, 93 Ohio St.3d 419, 422, 755 N.E.2d 857, ¶ 46. In
order to present these arguments to the U.S. Supreme Court, Appellants had to raise the
issues to the trial court before they could pursue the same on appeal. State v.
Wintermeyer, 158 Ohio St.3d 513, 2019-Ohio-5156, 145 N.E.3d 278, ¶ 10 (“A first
principle of appellate jurisdiction is that a party ordinarily may not present an argument on
appeal that it failed to raise below.”)
{¶83} Based on the foregoing, we cannot conclude as a matter of law that no
reasonable lawyer would have continued to assert these arguments in light of the existing
law.
{¶84} Similarly, this court cannot conclude that counsel here willfully violated
Civ.R. 11 by filing pleadings that, to the best of their knowledge, information, and
belief, were not supported by good grounds or were filed for purpose of delay. Haubeil &
Sons Asphalt & Materials, Inc. v. Brewer & Brewer Sons, Inc., 57 Ohio App.3d 22, 565
N.E.2d 1278 (4th Dist.1989), syllabus; State ex rel. Bardwell v. Cuyahoga Cty. Bd. of
Commrs., 127 Ohio St.3d 202, 2010-Ohio-5073, 937 N.E.2d 1274, ¶ 8. Instead, the
evidence, arguments, and law depict counsel employing reasonable efforts to urge the
Case No. 21 HA 0005
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trial court to adopt their arguments. There is nothing tending to show Appellants used
bad faith tactics or had a dishonest purpose. Id. (Civ.R. 11 frivolous conduct “imports a
dishonest purpose or some moral obliquity. It implies conscious doing of wrong. It means
a breach of a known duty through some motive of interest or ill will. It partakes of the
nature of fraud.”). Their arguments were subjectively and objectively reasonable. See
Callahan v. Akron Gen. Med. Ctr., 9th Dist. Summit No. 24434, 2009-Ohio-5148, ¶ 30
(reversing Civ.R. 11 sanctions because counsel had an adequate legal foundation on
which to base the claim).
{¶85} Thus, Appellants’ second assignment of error has merit. Consequently, we
reverse and vacate the trial court’s May 10, 2021 decision awarding Appellees attorney’s
fees and expenses in its entirety.
Waite, J., concurs.
D’Apolito, J., concurs.
Case No. 21 HA 0005
[Cite as Henderson v. Haverfield, 2022-Ohio-2194.]
For the reasons stated in the Opinion rendered herein, it is the final judgment and
order of this Court that the Appellants’ second assignment of error has merit.
Consequently, we reverse and vacate the trial court’s May 10, 2021 decision awarding
Appellees attorney’s fees and expenses in its entirety, according to law and consistent
with this Court’s Opinion. Costs to be taxed against the Appellees.
A certified copy of this opinion and judgment entry shall constitute the mandate in
this case pursuant to Rule 27 of the Rules of Appellate Procedure. It is ordered that a
certified copy be sent by the clerk to the trial court to carry this judgment into execution.
NOTICE TO COUNSEL
This document constitutes a final judgment entry.