Raney v. Weather Safe Exteriors, Inc.

[Cite as Raney v. Weather Safe Exteriors, Inc., 2021-Ohio-999.]
IN THE COURT OF APPEALS
TWELFTH APPELLATE DISTRICT OF OHIO
PREBLE COUNTY
STEVEN RANEY, et al., :
Appellees, : CASE NO. CA2020-08-014
: OPINION
- vs - 3/29/2021
:
WEATHER SAFE EXTERIORS, INC., et :
al.,
:
Appellants.
CIVIL APPEAL FROM PREBLE COUNTY COURT OF COMMON PLEAS
Case No. 20-CV-031982
Siemann Law Office, Serah E. Siemann, 130 West Second Street, Suite 460, Dayton, Ohio
45402, for appellees
Gregory M. Gantt Co., L.P.A., Gregory M. Gantt, Erik R. Blaine, 130 West Second Street,
Suite 310, Dayton, Ohio 45402, for appellants
HENDRICKSON, J.
{¶1} Appellants, Weather Safe Exteriors Inc., Weather Safe Exterior LLC, and
Michael Wellmeier, appeal the decision of the Preble County Court of Common Pleas
denying their motion to dismiss. For the reasons discussed below, we dismiss the appeal
for lack of a final appealable order.
{¶2} In April 2020, appellees, Steven and Cathy Raney, filed a complaint against
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appellants for breach of contract, conversion, violation of the Ohio Consumer Sales
Practices Act, and violation of the Ohio Home Solicitation Sales Act. Based on the
pleadings, the factual background is that the parties entered into a construction and
restoration services contract. Appellants agreed to repair the roof of appellees' home. In a
supplemental contract, appellants further agreed to replace windows, gutters, and siding on
appellees' house. In June 2019, appellees contacted appellants alleging inferior quality of
the workmanship performed under the supplemental contract. The parties were not able to
timely resolve these issues between them, so appellees hired a third party in September
2019 to correct the disputed workmanship provided by appellants' installers.
{¶3} Appellants were served with the complaint in June 2020. Appellants moved
to dismiss the complaint in August 2020 based on an arbitration clause in the parties'
underlying contract.1 Appellants attached a copy of the contract to their motion to dismiss.
The arbitration clause is found in paragraph 10 of the contract and sets forth the following
Arbitration - All claims and disputes relating to this contract shall
be subject to arbitration at the option of either the Owner or
Weather Safe Exterior in accordance with the Arbitration Rules
of the American Arbitration Association for the construction
industry in effect at the time of the arbitration. Written notice or
demand for arbitration shall be filed with the other party to the
contract and with the American Arbitration Association, within a
reasonable time after the dispute has arisen.
{¶4} The trial court ordered the parties to file supplemental memoranda on the
issue. Appellants filed their memorandum, which merely reiterated their arguments from
the initial motion, and appellees responded. In their response, appellees argued that the
trial court should not dismiss the complaint and alternatively argued that if the trial court
found merit in appellants' motion it should stay the action pursuant to R.C. 2711.02.
1. Appellants filed their motion to dismiss after the expiration of the Ohio Supreme Court's March 27, 2020
order tolling the time requirements of the rules of civil procedure. The supreme court's order was issued in
response to the COVID-19 pandemic.
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{¶5} In August 2020, the trial court denied the motion to dismiss. The trial court
did not construe the motion as a request to stay proceedings pursuant to R.C. 2711.02(B).
However, the trial court determined that arbitration was not the "exclusive remedy" for
dispute resolution in the contract and appellants had failed to request arbitration in writing
within a reasonable time as required by the arbitration clause. The trial court determined
that appellants delay in requesting arbitration was unreasonable because appellants knew
of a potential dispute as early as June 2019 and had not provided a notice or a demand for
arbitration in the time between June 2019 and the service of the complaint in June 2020.
Because the trial court resolved the motion to dismiss in appellees' favor, appellees'
alternative argument to stay the action pursuant to R.C. 2711.02 became moot and was not
addressed.
{¶6} Appellants now appeal and assign two errors for review. For ease of
discussion, we will consider both assignments of error together.
{¶7} Assignment of Error No. 1:
{¶8} THE TRIAL COURT ERRED BY FINDING THAT A SEPARATE WRITTEN
NOTICE OF INTENT TO ARBITRATE WAS A CONDITION PRECEDENT TO STAYING
THE LITIGATION PENDING CONTRACTUAL ARBITRATION.
{¶9} Assignment of Error No. 2:
{¶10} THE TRIAL COURT ERRED WHEN IT DETERMINED THAT WEATHER
SAFE WAIVED THE CONTRACTUAL RIGHT TO ARBITRATE AFTER ONLY SEVEN
MONTHS HAD ELAPSED FROM THE DISPUTE TO THE FILING OF THE LAWSUIT.
{¶11} In their first assignment of error, appellants challenge the trial court's
determination that there was no contractual right to arbitrate because appellants failed to
give written notice of an intent to arbitrate before filing the motion to dismiss. In support,
appellants contend that R.C. 2711.02 does not require a party to initiate arbitration before
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seeking a stay of proceedings. In their second assignment of error, appellants argue that
the trial court erred finding that they waived the right to arbitrate.
{¶12} Arbitration is an encouraged method of dispute resolution, and there exists a
presumption in favor of arbitration when the disputed issue is subject to an arbitration
provision. Rinderle v. Whispering Pines Health Care Ctr., 12th Dist. Fayette No. CA2007-
12-041, 2008-Ohio-4168, ¶ 15. The General Assembly has provided for arbitration in R.C.
Chapter 2711. See ABM Farms v. Woods, 81 Ohio St.3d 498, 500 (1998). Specifically,
R.C. 2711.01(A) provides that a
provision in any written contract * * * to settle by arbitration a
controversy that subsequently arises out of the contract, or out
of the refusal to perform the whole or any part of the contract, or
any agreement in writing between two or more persons to
submit to arbitration any controversy existing between them at
the time of the agreement to submit, * * * shall be valid,
irrevocable, and enforceable, except upon grounds that exist at
law or in equity for the revocation of any contract.
The Revised Code provides two methods by which a party may enforce the arbitration
provision in the face of pending litigation. "A party seeking to enforce an arbitration
provision may choose to move for a stay under R.C. 2711.02, or to petition for an order for
the parties to proceed to arbitration under R.C. 2711.03, or to seek orders under both
statutes." Maestle v. Best Buy Co., 100 Ohio St.3d 330, 2003-Ohio-6465, ¶ 18. To grant
the stay of proceedings pursuant to R.C. 2711.02(B), the trial court must determine whether
the issue involved in the action is "referable" to arbitration under an agreement and that the
applicant for the stay is not in default of proceeding with the arbitration. See also McGuffey
v. LensCrafters, Inc., 141 Ohio App.3d 44, 51 (12th Dist.2001). Once these conditions are
met, a stay in proceedings is required by R.C. 2711.02. Capital One Bank (USA), NA v.
Collins, 12th Dist. Butler No. CA2011-05-090, 2011-Ohio-6533, ¶ 12.
{¶13} With that in mind, there is a threshold jurisdictional issue to address in this
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matter. That is, whether the order appealed from is a final, appealable order. There must
be a final order for this court to have jurisdiction to hear the appeal. Anglin v. Donohoo,
12th Dist. Clermont No. CA2018-05-025, 2018-Ohio-4484, ¶ 12, citing Gen. Acc. Ins. Co.
v. Ins. Co. of N. Am., 44 Ohio St.3d 17, 20 (1989). R.C. 2711.02(C) provides that an order
that grants or denies a stay of proceedings based upon arbitration is a final order subject to
appeal. However, the denial of a motion to dismiss based upon an arbitration provision is
not a final, appealable order because dismissal of a claim allegedly subject to arbitration is
not a remedy authorized by R.C. Chapter 2711. John R. Davis Trust 8/12/05 v. Beggs, 10th
Dist. Franklin No. 08AP-432, 2008-Ohio-6311, ¶ 6; accord Anglin at ¶ 25.
{¶14} As this court previously explained in Anglin,
[a]ppellants did not file a motion seeking to stay proceedings
pending arbitration under R.C. 2711.02(B). The trial court also
did not construe appellants' motion as one requesting a stay
pending arbitration. As appellants did not move to stay
proceedings pending arbitration we cannot exercise jurisdiction
under R.C. 2711.02(C) to review the court's decision finding a
waiver of the right to arbitration.
(footnote omitted.) Id., 2018-Ohio-4484 at ¶ 25. The same is true in the instant matter.
Appellants moved to dismiss the complaint but did not otherwise move for a stay of
proceedings pursuant to R.C. 2711.02 or to compel arbitration pursuant to R.C. 2711.03.
In their motion, appellants asserted the following
Now comes, Defendants, by and through counsel, and without
submitting to the jurisdiction of this Court, does pray this Court
to dismiss this matter. The parties entered into a contract, copy
attached hereto as Exhibit A, wherein it was specifically
provided that any and all claims and disputes relating to this
contract were to be dealt with through arbitration pursuant to
section 10. This matter has not been through arbitration and is
not ripe for a decision or action before this Honorable Court and
Defendants are formally requesting such resolution.
Although appellants did not refer to a specific Civ.R. 12(B) subsection as grounds for the
dismissal, based on the language used, we construe it as a motion to dismiss for lack of
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subject matter jurisdiction pursuant to Civ.R. 12(B)(1).2 In ruling on the motion, the trial
court confined its decision to the issue of dismissal. The trial court did not address R.C.
2711.02(B) and did not construe the motion as a request to stay proceedings. Following
Anglin, we hold that the trial court's denial of the motion to dismiss was not a final,
appealable order. Accordingly, the appeal must be dismissed for the reason that this court
lacks jurisdiction.
{¶15} Appeal dismissed.
M. POWELL, P.J., and BYRNE, J., concur.
2. Even if we construe appellants' motion as one made pursuant to Civ.R. 12(B)(6), a denial of that type of
motion is also not a final appealable order. Anglin, 2018-Ohio-4484 at ¶ 16-17.
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