State ex rel. Dann v. Tabacalera Nacional, S.A.A.

[Cite as State ex rel. Dann v. Tabacalera Nacional, S.A.A., 2012-Ohio-5301.]
Court of Claims of Ohio
The Ohio Judicial Center
65 South Front Street, Third Floor
Columbus, OH 43215
614.387.9800 or 1.800.824.8263
www.cco.state.oh.us
STATE OF OHIO, ex rel. ATTORNEY GENERAL MARC DANN
Plaintiff/Counter Defendant
v.
TABACALERA NACIONAL, S.A.A.
Defendant/Counter Plaintiff
Case No. 2008-09848-PR
Judge Clark B. Weaver Sr.
Magistrate Lewis F. Pettigrew
JUDGMENT ENTRY
{¶ 1} This case arises from a settlement agreement entered into between
defendant/counter plaintiff, Tabacalera Nacional, S.A.A. (Tanasa) and plaintiff/counter
defendant, State of Ohio, ex rel. Attorney General Marc Dann (the State). On May 20,
2011, the court granted Tanasa’s motion for summary judgment as to its counterclaim
for breach of contract and a trial was then held on the issue of damages before a
magistrate. On March 16, 2012, the magistrate issued a decision recommending
judgment in favor of Tanasa on its counterclaim in the amount of $38,053.30. On the
same day, the court adopted the magistrate’s recommendation pursuant to Civ.R.
53(D)(4)(d)(i) and entered judgment in favor of Tanasa in the amount of $38,053.30.
{¶ 2} Civ.R. 53(D)(3)(b)(i) states, in part: “A party may file written objections to a
magistrate’s decision within fourteen days of the filing of the decision, whether or not the
court has adopted the decision during that fourteen-day period as permitted by Civ.R.
Case No. 2008-09848-PR -2- ENTRY
53(D)(4)(e)(i).” On March 29, 2012, the State filed objections. On April 27, 2012,
Tanasa filed a combined memorandum contra and cross-objection.1
{¶ 3} Tanasa sought to recover attorney fees and litigation expenses for the law
firm of Doucher & Doucher, located in Columbus, Ohio (Doucher) and attorney
Jonathan Weis of Levin Ginsburg, located in Chicago, Illinois. The magistrate limited
Tanasa’s presentation of evidence to only the fees incurred by Doucher.2 At trial, the
State objected to the inclusion of any testimony regarding the fees of Doucher because
of Tanasa’s failure to comply with the Rules of Civil Procedure and court orders.
However, the magistrate allowed the testimony of Kimberly Doucher regarding her fees
and the expert testimony of John Mazza regarding the reasonableness of the Doucher
fees. Based on those findings, the magistrate determined that Tanasa incurred
reasonable and necessary attorney fees and expenses in the amount of $38,053.30.
{¶ 4} The State’s first objection relates to the magistrate’s conclusion that
attorney fees can be recovered by Tanasa in this action. The State argues that neither
the parties’ settlement agreement nor R.C. 2743.19 and 2335.39 allows Tanasa to
recover attorney fees. The State acknowledges that it presented these same
arguments in its October 14, 2011 motion for summary judgment. The court addressed
those arguments and denied the State’s motion in its November 22, 2011 decision, and
for the reasons set forth therein, the objection shall be overruled.
{¶ 5} In its second objection, the State contends that the magistrate erred in
allowing Tanasa to present any evidence of its damages based upon both the
arguments presented in the State’s March 2, 2012 motion in limine and Tanasa’s failure
to comply with a court order to produce discovery.
1
On May 2, 2012, the State filed a motion to strike Tanasa’s memorandum contra and cross-
objection as untimely. On May 7, 2012, the State withdrew its May 2, 2012 motion to strike. The May 2,
2012 motion to strike is WITHDRAWN.
2
The magistrate allowed Tanasa to proffer the trial testimony of Weis and excluded the portion of
Mazza’s deposition testimony as it related to Levin Ginsburg’s fees.
Case No. 2008-09848-PR -3- ENTRY
{¶ 6} In the court’s September 26, 2011 entry granting the State’s motion to
compel discovery requests related to Tanasa’s legal expenses, the court stated that
Tanasa “shall provide [the State] with complete and un-redacted responses to the
relevant discovery requests within 10 days of the date of this entry.” In its March 2,
2012 motion in limine, the State asserted that while Tanasa provided some
documentation in accordance with the court’s order, Tanasa failed to provide all of the
invoices used to support it claims for damages.
{¶ 7} At trial, the State admitted that as of October 6, 2011, it had received a
portion of the invoices from Doucher and that several weeks after October 6, 2011,
further invoices from Doucher were provided. The first time any invoices for Levin
Ginsburg were provided to the State was after the October 6, 2011 deadline.
{¶ 8} Upon review, the court finds that the magistrate correctly allowed the
evidence of the legal fees from Doucher to be introduced at trial inasmuch as Tanasa
provided discovery regarding Doucher’s fees both before and after October 6, 2011.
Further, the magistrate properly excluded evidence of Levin Ginsburg’s fees as no
invoices for attorney Weis’ expenses were provided before October 6, 2011.
Accordingly, the objection shall be overruled.
{¶ 9} In its third objection, the State argues that the magistrate erred in allowing
Tanasa to present evidence and expert testimony regarding legal fees it incurred from
Doucher between August 24, 2010 and February 10, 2012.
{¶ 10} At trial, the State argued that Tanasa’s expert report from John Mazza only
addressed Doucher’s legal invoices produced through August 24, 2010, and that
Tanasa never produced a supplemental report regarding subsequent invoices from
Doucher. Mazza never provided a report regarding any of the legal invoices from Levin
Ginsburg. Pursuant to L.C.C.R. 7(E)3, a party may not call an expert witness to testify
3
L.C.C.R. 7(E) states, in part: “A party may not call an expert witness to testify unless a written
report has been procured from said witness. It is the trial attorney’s responsibility to take reasonable
measures, including the procurement of supplemental reports, to insure that each such report adequately
Case No. 2008-09848-PR -4- ENTRY
unless a written report has been provided by such witness. The magistrate concluded
at trial that because Doucher had an “ongoing tab” accruing additional legal fees and
expenses, Doucher was not expected to comply with the 30-day supplemental report
requirement. The magistrate also ruled that because Mazza’s report does not address
Levin Ginsburg’s fees, expert testimony was not permitted regarding its legal fees.
{¶ 11} In September 2011, Tanasa provided the State with an expert report
setting forth Mazza’s opinion regarding Doucher’s fees. While Mazza’s report does not
address fees beyond August 2010, the court finds that any such failure to update the
expert report regarding Doucher’s fees has not unduly prejudiced the State. “The
purpose of the discovery rules is to avoid the element of surprise. However, these rules
are not designed to be enforced in a manner that causes undue prejudice to their
noncompliance.” Laster v. Light, 8th Dist. No. 66747 (Mar. 16, 1995), citing Huffman v.
Hair Surgeon, Inc., 19 Ohio St.3d 83 (1985) (applying Cuyahoga County Loc.R. 21.1,
the appeals court concluded that it is within the trial court’s purview to assess the
prejudice presented by the evidence which is sought to be excluded). Tanasa has
provided good cause as to why a supplemental expert report was not supplied to the
State more than 30 days before trial. The court finds that because this litigation was
ongoing, the State knew that Tanasa would continue to incur legal expenses and that
Doucher would continue to bill Tanasa. There has been no undue prejudice to the
State. Accordingly, the objection shall be overruled.
{¶ 12} Finally, the State objects to the magistrate’s failure to “apply an adverse
evidentiary inference based on Tanasa’s bad faith refusal to provide discovery
responses concerning potential collateral sources of payment under R.C. 2743.02(D).”
The State argues that Tanasa failed to produce discovery regarding payment of its fees
sets forth the expert’s opinion. However, unless good cause is shown, all supplemental reports must be
supplied no later than thirty days prior to trial. The report of an expert must reflect his opinions as to each
issue on which the expert will testify. An expert will not be permitted to testify or provide opinions on
issues not raised in his report.”
Case No. 2008-09848-PR -5- ENTRY
which may establish that a collateral source paid Tanasa’s legal fees. The magistrate
found that the State’s argument that payment of Tanasa’s legal fees by an unidentified
third party constituted a collateral source was unsupported by the law and the evidence.
{¶ 13} Civ.R. 37(B)(2) states, in part: “If any party * * * fails to obey an order to
provide or permit discovery, including an order made under subdivision (A) of this rule
and Rule 35, the court in which the action is pending may make such orders in regard to
the failure as are just, and among others the following: (a) An order that the matters
regarding which the order was made or any other designated facts shall be taken to be
established for the purposes of the action * * *.” (Emphasis added.) “Pursuant to Civ.R.
37(B)(2)(a) * * *, for failure to provide discovery, the trial court has the discretion to order
matters established * * *.” Rice v. Natl. Fleet Serv., 5th Dist. No. 1998CA00117 (Oct.
13, 1998). The court concludes that sanctions are not just in this case. Upon review,
the court agrees with the magistrate’s determination and sanctions will not be imposed
for Tanasa’s failure to provide the requested discovery. Accordingly, the objection shall
be overruled.
{¶ 14} Tanasa’s cross-objection relates to the exclusion of a damages award for
the fees incurred by attorney Weis of Levin Ginsburg. Its objection is two-fold. First,
Tanasa argues that Mazza’s testimony should have been admitted in its entirety,
including his opinions on the fees incurred by Levin Ginsburg. At trial, the magistrate
sustained the State’s objection to Mazza’s opinions as it related to Levin Ginsburg
because Tanasa failed to provide a supplemental expert report that included Mazza’s
opinion as to Levin Ginsburg’s fees. Mazza’s report provided opinions as to the
reasonableness of Doucher’s fees but it failed to provide any opinion on Levin
Ginsburg’s fees. Accordingly, the court finds that the magistrate properly excluded
Mazza’s testimony as no report was ever provided to the State regarding opinions on
the reasonableness of Levin Ginsburg’s fees pursuant to L.C.C.R. 7(E).
{¶ 15} Further, Tanasa argues that Levin Ginsburg’s invoices should not have
been excluded. Tanasa contends that even without expert testimony, it can still recover
Case No. 2008-09848-PR -6- ENTRY
fees as testified by attorney Weis. The magistrate’s decision states, “[T]he court finds
that Tanasa’s late production of Weis’ itemized invoice has unfairly prejudiced the State
in its defense of Weis’ fees.”
{¶ 16} The court agrees with the magistrate’s exclusion of Weis’ testimony
regarding his fees for Levin Ginsburg. Tanasa failed to comply with the September 26,
2011 court order by failing to provide the pertinent discovery materials within 10 days.
At trial, Tanasa admitted that none of attorney Weis’ invoices were provided to the State
before October 6, 2011. Upon review, the court agrees with the magistrate’s decision to
exclude Weis’ testimony and Mazza’s expert testimony regarding the attorney fees for
Weis. The magistrate was correct in not allowing Tanasa to recover those fees.
Accordingly, Tanasa’s objection shall be overruled.
{¶ 17} Upon review of the record, the transcript, the magistrate’s decision and the
objections, the court finds that the magistrate has properly determined the factual issues
and appropriately applied the law. Both the State’s objections and Tanasa’s objections
are OVERRULED. Therefore, pursuant to Civ.R. 53(D)(4)(e)(i), the court “adheres to
the judgment previously entered.”
_____________________________________
CLARK B. WEAVER SR.
Judge
cc:
Angela M. Sullivan Christopher P. Conomy
Assistant Attorney General Assistant Attorney General
Tobacco Enforcement Section 150 East Gay Street, 18th Floor
30 East Broad Street, 16th Floor Columbus, Ohio 43215-3130
Columbus, Ohio 43215
Case No. 2008-09848-PR -7- ENTRY
Kimberley A. Doucher
6385 Shier Rings Road, Suite 100
Dublin, Ohio 43016
007
Filed June 15, 2012
To S.C. Reporter November 15, 2012