Court Opinion

ID: 2707763
Source: CourtListenerOpinion
Date Created: 2014-08-05 13:34:45.505703+00
Date Added: 2024-06-11T12:32:34.946569
License: Public Domain

[Cite as Fast Property Solutions, Inc. v. Jurczenko, 2013-Ohio-60.]

                                    IN THE COURT OF APPEALS

                                ELEVENTH APPELLATE DISTRICT

                                         LAKE COUNTY, OHIO

FAST PROPERTY SOLUTIONS, INC.,                           :            OPINION

                 Plaintiff-Appellee,                     :
                                                                      CASE NOS. 2012-L-015
        - vs -                                           :                  and 2012-L-016

ALEXANDER JURCZENKO, et al.,                             :

                 Defendants-Appellants,                  :

JAMES DOUGLASS,                                          :

                 Appellant.                              :

Civil Appeal from the Lake County Court of Common Pleas, Case No. 09 CV 000363.

Judgment: Affirmed.

Jaye M. Schlachet and Eric M. Levy, 55 Public Square, Suite 1600, Cleveland, OH
44113 (For Plaintiff-Appellee).

Alexander Jurczenko, pro se, P.O. Box 1366, Mentor, OH 44061.

Marjorie Jurczenko, pro se, P.O. Box 1366, Mentor, OH 44061.

Grace M. Doberdruk, Doberdruk & Harshman Law Office, 4600 Prospect Avenue,
Cleveland, OH 44103 (For Appellant).

MARY JANE TRAPP, J.

        {¶1}     Alexander and Marjorie Jurczenko and their counsel, Attorney James R.

Douglass, appeal from a judgment of the Lake County Court of Common Pleas, which

found them to have engaged in frivolous conduct in violation of Civ.R. 11 while

defending a complaint in forcible entry and detainer filed by Fast Property Solutions, Inc.
against the Jurczenkos. Citing both the trial court’s inherent authority and Civ. R. 11,

the court imposed a sanction of $11,155 in attorney fees plus costs, after a hearing and

an extensive review of years of voluminous pleadings, motions, and briefs filed in four

different courts, which demonstrated a pattern of          numerous, repeated violations of

Civ.R. 11, evincing willful conduct. This conduct can only be described as interposed

solely to delay, obfuscate, confuse, confound, and wear down their opponent and the

court.    We affirm the judgment of the trial court, and we cannot improve upon its

summary.

         {¶2}   The Jurczenkos and their counsel “exhibited a pattern of making

misrepresentations to the court, and engaging in dilatory and frivolous conduct, while

simultaneously accusing the plaintiff and its several attorneys of various forms of

misconduct. The defendants and their counsel repeatedly raised arguments that had

already been raised and ruled upon. When unhappy with these rulings, the defendants

and their counsel consistently chose courses of action designed to further delay these

proceedings, and increase the costs of litigation, such as filing actions in other courts in

an attempt to stay these proceedings, misrepresenting the procedural history of this

case and/or the prior rulings of the court to confuse and delay proceedings, or raising

the same issues that had already been litigated, rather than addressing the issues that

were at hand.”

         {¶3}   The appeals have been consolidated for disposition in this appeal.

         Substantive Facts and Procedural History

         {¶4}   This is not the first time the parties are before this court regarding litigation

centered upon a residential home owned by Fast Property Solutions.                    We have

described a portion of the lengthy procedural history of this case in State ex rel.

                                                2
Jurczenko v. Lake County Court of Common Pleas, 11th Dist. No. 2009-L-178, 2010-

Ohio-3252. For the benefit of the readers of this opinion, we recount the following

history:

        The Lease/Purchase Agreement

        {¶5}   In 2006, the Jurczenkos entered into an agreement to purchase a single-

family home on Lakeview Drive in Mentor, Ohio. As part of the express terms of this

agreement, the Jurczenkos were obligated to pay the prior owners the sum of $ 152,000

for the real estate. After living in their new residence for only forty-three days, the

Jurczenkos entered into a separate transaction with Fast Property Solutions. Under the

first step of this transaction, the Jurczenkos assigned the real estate purchase

agreement to Fast Property Solutions. Under the second step, the couple and Fast

Property Solutions executed a lease/purchase agreement, which allowed the couple to

retain possession of the residence notwithstanding the assignment to the company.

        {¶6}   Pursuant to the terms of the “lease/purchase” agreement, the Jurczenkos

were obligated to pay Fast Property Solutions a monthly rent payment of $900. These

rent payments were to continue for a period of 12 months, from July 2006 through June

2007.

        {¶7}   The “lease/purchase” agreement further provided that, once the one-year

lease period concluded, the Jurczenkos had the option of reacquiring the residence

from Fast Property Solutions for the sum of $180,000. According to this provision of the

agreement, the option to purchase had to be exercised by June 1, 2007.

        First Complaint in Forcible Entry and Detainer

        {¶8}   Despite the fact that the Jurczenkos failed to timely exercise their option to

purchase at the close of the one-year lease period, they continued to live in the

                                              3
residence over the ensuing months. Finally, in December 2007, Fast Property Solutions

instituted a forcible entry and detainer action against the Jurczenkos in the Mentor

Municipal Court.

       First Settlement Agreement

       {¶9}   Shortly after the eviction action was filed, it was voluntarily dismissed

when the two sides were able to negotiate a separate contract to modify the original

“lease/purchase” agreement. As part of this Lease Purchase Modification Agreement,

the Jurczenkos agreed that the option to purchase the residence for the sum of

$180,000 must be exercised by May 31, 2008. The agreement further provided for a

consent judgment entry which the Jurczenkos agreed to sign so Fast Property Solutions

could obtain an immediate final order if it became necessary to pursue a second case

for its possession of the property.

       Second Complaint in Forcible Entry and Detainer

       {¶10} At the end of July, after the Jurczenkos again failed to pay the required

amount to exercise the option to purchase, Fast Property Solutions filed a second

complaint for forcible entry and detainer in the Mentor Municipal Court. Attached to the

new complaint was a copy of the consent judgment entry, which was referenced in the

Modification Lease Purchase Agreement and signed by the Jurczenkos. The municipal

court approved and signed the consent judgment entry, which was journalized on the

same day.

       The Jurczenkos’ Motion for Relief From Judgment

       {¶11} Three days later, the Jurczenkos filed a motion for relief from judgment,

alleging misconduct by Fast Property Solutions’ counsel, and claiming that the consent

entry was not enforceable because the Jurczenkos had sent a notice of rescission of

                                           4
the consent entry to Fast Property Solutions two months before the filing of the second

complaint. Attached to the motion for relief from judgment was Mr. Jurczenko’s affidavit

in which he averred that he had unilaterally rescinded the Modification Lease Purchase

Agreement on May 31, 2008 (the date the payment was due), because he believed it to

be a violation of R.C. 5321.13(B), which prohibits the use of a warrant of attorney to

confess judgment for the recovery of rent or damages to a residential property. The

affidavit also alleged Fast Property Solutions breached the settlement agreement by

demanding that the defendants pay its attorney’s fees.

      {¶12} In addition, the Jurczenkos asserted that the municipal court did not have

subject matter jurisdiction over the action.    They argued that a forcible entry and

detainer action was inappropriate because their relationship with Fast Property

Solutions was not that of landlord-tenant. According to the Jurczenkos, even though the

original contract had been labeled as a “lease/purchase” agreement, the nature of its

terms established that it was actually a “creative financing” document, under which they

had retained color of title to the subject residence and Fast Property Solutions had only

obtained a mortgage interest in the property.

      Second Settlement Agreement

      {¶13} A week later, the Mentor Municipal Court granted the motion for relief from

judgment and scheduled the matter for a hearing. At that hearing, a second settlement

agreement was reached.        The second settlement agreement provided that the

Jurczenkos would withdraw their motion for relief from judgment, that the court would

vacate the consent judgment, and that the Jurczenkos would purchase the property for

$185,000.

                                           5
       {¶14} The agreement also provided the Jurczenkos would fund the escrow with

a down payment of $5,550 by August 22, 2008, and close the deal by September 30,

2008. The parties also agreed that if the Jurczenkos failed to make the down payment

by August 22, 2008, they would vacate the premises by August 25, 2008, and consent

to the issuance of a writ of restitution. However, if the Jurczenkos made the down

payment, but failed to close by September 20, 2008, they would agree to the issuance

of a writ and vacate by October 1, 2008, and the down payment of $5,550 would be

returned to the Jurczenkos.

       Defendants’ Notice of Compliance

      {¶15} On September 8, 2008, the Jurczenkos filed, pro se, a notice of

compliance, alleging they had complied with the (second) settlement agreement, but

also claiming they were unable to purchase the home pursuant to the agreement

because Fast Property failed to provide the necessary paperwork for them to obtain

financing.

      Fast Property Solutions’ Motion to Enforce

       {¶16} Fast Property filed a motion to enforce the in-court settlement. At the

motion hearing, the municipal court found Fast Property to be entitled to a writ of

restitution. On that day, the municipal court issued the writ, but did not address the

substance of the pending motion for relief from judgment.

       First Prohibition Action and the Motion to Stay

      {¶17} Immediately after the hearing, the Jurczenkos initiated an original action

for a writ of prohibition in this court (Appeal No. 2008-L-149), to enjoin the municipal

court from continuing to exercise its jurisdiction over the forcible entry and detainer

action, and on the following day the Jurczenkos also filed, pro se, a motion to stay in the

                                            6
Mentor Municipal Court.     They claimed the action had been treated as an eviction

matter, when in fact they had “unequivocally” presented evidence that the transaction

between the parties was a “creative financing” mechanism to allow them to purchase

the property.

      {¶18} This court issued an alternative writ, denying the ex parte emergency

request for stay as to the writ of restitution, but granted a stay of any further

proceedings in the trial court. The Jurczenkos entered into negotiations with counsel

representing the municipal court to resolve the prohibition matter.

      {¶19} The Jurczenkos also filed in the trial court a motion to restore possession

of premises, and a joint motion of the Jurczenkos and the City of Mentor’s law director

was filed in this court to dissolve the temporary stay to allow the trial court to address

the August 1, 2008 motion for relief from judgment, despite the fact that, as part of the

second settlement agreement, they had agreed to withdraw their motion for relief from

judgment.

      {¶20} On October 10, 2008, this court granted the joint motion to dissolve the

stay. The Jurczenkos then filed an emergency motion to stay pending a hearing on the

motion for relief from the judgment.

      Writ of Restitution Vacated

      {¶21} On October 17, 2008, the municipal court issued a judgment granting the

motion for relief from judgment and restoring the Jurczenkos to the premises. The court

also vacated all orders, agreements, and consent entries. In its judgment vacating the

writ of restitution, the municipal court held that the Jurczenkos should have been given

the opportunity to respond to Fast Property Solutions’ second complaint before a final

determination was made; accordingly, the issuance of the writ of restitution was

                                            7
vacated, and the Jurczenkos were permitted to file an answer to the complaint. At the

end of October, this court, upon a joint request, dismissed the prohibition matter in Case

No. 2008-L-149.

       The Jurczenkos’ (First) Motion to Dismiss

       {¶22} On October 24, 2008, the Jurczenkos filed, pro se, a motion to dismiss

and an answer in the Mentor Municipal Court.          The motion to dismiss alleged the

municipal court did not have subject matter jurisdiction, claiming the agreement

between the parties was not a rental agreement but a “creative financing” arrangement.

They also accused Fast Property Solutions of making misrepresentations to the court

and engaging in egregious conduct.

       {¶23} The municipal court set a hearing on the motion to dismiss for November

18, 2008. On November 14, 2008, the day the Jurczenkos’ brief was due, Attorney

Douglass filed a notice of appearance as counsel for both Mr. and Mrs. Jurczenko, and

asked for a continuance. He then filed a hearing brief, alleging again that the written

agreement was not a lease but a purchase agreement, and also accusing Fast Property

Solutions of violating Civ.R. 11, usury, and engaging in a pattern of corrupt activity.

The municipal court denied the motion to dismiss on November 25, 2008, and

scheduled the forcible entry and detainer action for trial.

       Second Writ of Prohibition

       {¶24} The Jurczenkos then instituted a second original action for a writ of

prohibition before this court (Case No. 2008-L-170). After we granted a temporary stay

of the municipal court proceedings, the Jurczenkos negotiated a new settlement with

counsel representing the municipal court. This settlement provided the stay order would

be momentarily lifted so that the Jurczenkos could submit an amended answer, which

                                              8
would set forth certain counterclaims against Fast Property Solutions, and, upon the

filing of the amended answer, the municipal court would then reconsider whether it still

should go forward on the merits of the forcible entry and detainer claim.

       {¶25} In January 2009, we dissolved the temporary stay, and eventually granted

the parties’ joint motion to dismiss in June 2009.

       Mrs. Jurczenko’s Counterclaim

       {¶26} On January 9, 2009, Attorney Douglass, on behalf of the Jurczenkos and

without leave of court, filed an answer and Mrs. Jurczenko’s counterclaim.           The

counterclaim alleged that Mrs. Jurczenko was the equitable owner of the subject

property, and that Fast Property Solutions was a non-bank mortgage lender in the

business of providing “creative financing.”      Also, the counterclaim alleged that Fast

Property Solutions skirted Ohio’s law and persuaded the Jurczenkos to enter into the

lease/purchase agreement with it; the claim was made even though the Jurczenkos

themselves drafted the “lease/purchase” agreement. The counterclaim also alleged the

agreement was a “creative financing” agreement, which resulted in a constructive

mortgage. That allegation was made even though the agreement specifically stated

that the agreement “shall not under any circumstances or interpretation be construed as

a mortgage or other financing mechanism under any equitable or legal principle.”

       {¶27} The multiple-count counterclaim further accused Fast Property Solutions

of engaging in deceptive acts. It also alleged violations of Home Ownership and Equity

Protection Act, the Truth in Lending Act, and the Consumer Sales Practices Act, as well

as unconscionable and frivolous conduct, usury, and abuse of process by Fast Property

Solutions. The counterclaim also sought to quiet title.

       Transfer to the Court of Common Pleas

                                             9
       {¶28} Because the Jurczenkos sought a money judgment in the sum of

$500,000, exceeding the limits of the municipal court’s monetary jurisdiction, the

municipal court ordered the case transferred to the Lake County Court of Common

Pleas. On February 5, 2009, the case was transferred from the Mentor Municipal Court

to the Lake County Court of Common Pleas. The matter was assigned to Judge Lucci

of the common pleas court for final disposition. While the parties were engaging in

preliminary discovery, the Jurczenkos renewed their motion to dismiss Fast Property

Solutions’ single claim on jurisdictional grounds.

       {¶29} As they had before the municipal court, the Jurczenkos contended that

Fast Property Solutions could not maintain a proper claim in forcible entry and detainer

because the original agreement of the parties had established a mortgagor/mortgagee,

not landlord/tenant, relationship. In light of this, they further contended that, because

the municipal court never had subject matter jurisdiction over the claim, the common

pleas court and Judge Lucci could not have acquired jurisdiction over the claim through

the transfer.

       Second Motion to Dismiss

       {¶30} On May 15, 2009, the Jurczenkos, through Attorney Douglass, filed the

second motion to dismiss, alleging again that the municipal court lacked subject matter

jurisdiction, claiming this is not a forcible entry and detainer action because they had

color of title, and therefore, the municipal court had no power to transfer the case to the

common pleas court.      To support the contention that their jurisdictional claim was

meritorious, they cited the fact that this court twice stayed the proceedings in the

prohibition actions; the claim was made despite the fact that this court stayed the

                                            10
proceedings only to maintain the status quo and to allow time to address the issues

raised in the prohibition proceedings.

       {¶31} On August 13 2009, the trial court issued a judgment overruling the

Jurczenkos’ motion to dismiss.       The next day, Mrs. Jurczenko filed a notice of

voluntarily dismissal of her counterclaims.

       Fast Property Solutions’ Motion to Enforce Settlement Agreement

       {¶32} On October 1, 2009, Fast Property Solutions moved for the enforcement

of the (second) settlement agreement that the parties had negotiated during the prior

proceedings before the municipal court.       In the pre-trial brief, the defendants once

again attempted to re-litigate the motion to dismiss, and claimed the (second)

settlement agreement to have already been vacated by the court.

       Injunction Sought in Federal Court

       {¶33} The trial court scheduled an oral hearing on the motion to enforce the

settlement agreement for November 19, 2009. To prevent the proceedings from going

forward, the Jurczenkos sought an injunction in the U.S. District Court, Northern District

of Ohio (Case No. 09-cv-01127). The federal court denied the request for an injunction

and the hearing in common pleas court went forward.

       {¶34} At that hearing, the trial court and the attorneys for both sides discussed

whether the Jurczenkos’ amended answer contained a request for a jury trial. When

both attorneys indicated that they could not affirmatively state that a written jury demand

had been made, the trial court concluded that the matter would proceed as a bench trial

on December 18, 2009.

       {¶35} Two days before trial, the defendants, through Attorney Douglass, filed a

pretrial statement, raising again the argument that the court lacked jurisdiction.

                                              11
       Trial on Forcible Entry and Detainer Action

       {¶36} On December 18, 2009, the trial finally began on the forcible entry and

detainer claim and the motion to enforce the settlement agreement. Immediately prior

to the commencement of trial, Mr. Jurczenko filed a notice of appearance, indicating

Attorney Douglass was no longer the attorney of record and that he would be

representing himself. Attorney Douglass represented Mrs. Jurczenko alone.

       {¶37} Also, before the trial was to begin, the defendants made an oral motion for

a jury trial, claiming that their answer and counterclaim filed on January 12, 2009, did

contain an express request for a jury trial. The trial court overruled the motion, after

determining that a waiver of the right to a jury trial had occurred during the discussion

with the attorneys at the November 18, 2009 hearing.

       Another Prohibition Action

       {¶38} After the completion of the proceeding’s first day, Mrs. Jurczenko filed

another petition for a writ of prohibition before this court against Judge Lucci and the

Lake County Court of Common Pleas, seeking a writ to enjoin any further proceedings

in the case (Case No. 2009-L-178). She raised two basic challenges to the trial court’s

jurisdiction over the matter. First, she again asserted that the court could not go forward

on the forcible entry and detainer claim because the municipal court could not transfer a

matter which never fell within the scope of its subject matter jurisdiction. Second, she

alleged that the trial court lost its jurisdiction over the entire matter when Judge Lucci

erroneously denied the Jurczenkos their right to a jury trial on the remaining issues.

       {¶39} This court overruled the first motion to stay all further proceedings. The

trial went forward on December 22, 2009, December 23, 2009, and January 15, 2010.

                                            12
        {¶40} This court eventually granted the motion for summary judgment denying

the writ. State ex rel. Jurczenko v. Lake County Court of Common Pleas, 11th Dist. No.

2009-L-178, 2010-Ohio-3252.1 This court concluded that: (1) the municipal court did

not exceed the scope of its jurisdiction in a plain and unambiguous manner; and (2)

relator had an adequate remedy at law.

        The Trial Court’s Judgment Granting the Writ of Restitution

        {¶41} After the four-day trial, the trial court issued a lengthy, 22-page judgment

on Fast Property Solutions’ sole claim and motion to enforce, granting a writ of

restitution. The trial court determined that the municipal court and the common pleas

court had jurisdiction over this matter, and also addressed in detail the various issues

raised by the defendants, including the validity of two prior settlement agreements and

the proper interpretation of the parties’ “lease/purchase” agreement.

        Direct Appeal

        {¶42} On March 16, 2010, Mrs. Jurczenko alone appealed the judgment in

Appeal No. 2010-L-024.           Fast Property Solutions subsequently moved this court to

dismiss the appeal, because Mrs. Jurczenko had vacated the premises which were the

subject of the underlying forcible entry and detainer action. Mrs. Jurczenko did not file a

response to the motion to dismiss.

        {¶43} On December 3, 2010, we dismissed the appeal, on the ground that the

sole purpose of a forcible entry and detainer action is to determine a party’s right to

have immediate possession of the disputed property. Showe Management Corp. v.

Moore, 5th Dist. No. 08 CA 10, 2009-Ohio-2312, ¶36. “Accordingly, once the tenant

has vacated the premises and the landlord has again taken possession, the merits of

1. The foregoing procedural history is taken, in part, from State ex rel. Jurczenko v. Lake County Court of
Common Pleas, ¶2-18.

                                                    13
such action are rendered moot because no further type of relief can be granted in favor

of the landlord.” Fast Prop. Solutions, Inc. v. Jurczenko, 11th Dist. No. 2010-L-024,

2010-Ohio-5933, ¶3, citing Showe Management, supra.

       Motion for Sanctions

       {¶44} Before the appeal was concluded, Fast Property Solutions filed a motion

for sanctions under R.C. 2323.51 and Civ.R. 11, alleging frivolous conduct by the

Jurczenkos and Attorney Douglass. The trial court determined Fast Property’s claims

under R.C. 2323.51 were untimely, but allowed the Civ.R. 11 claims to proceed.

       {¶45} The court held a hearing on Fast Property’s Civ.R. 11 claims.               Fast

Property Solutions presented evidence that it had incurred attorney’s fees in the amount

of $11,155.00 as a result of the defendants’ and their counsel’s frivolous conduct.

       {¶46} At the hearing, Mr. Jurczenko argued again the motion was untimely, and

alleged Mrs. Jurczenko was not served with notice of the hearing. He also claimed the

plaintiff could not establish frivolous conduct unless it first filed a Civ.R. 12(B)(6) motion

to dismiss or motion for summary judgment. He argued additionally that he was not

subject to sanctions because he was not a party to the counterclaim or the original

actions for writs of prohibition, and because he only signed the filings in the Mentor

Municipal Court, which had granted his motion for relief from judgment.

       {¶47} The trial court, in a lengthy, 24-page decision, granted the motion for

sanctions pursuant to Civ.R. 11 against Alexander and Marjorie Jurczenko and Attorney

Douglass. The court found the defendants and their counsel, throughout the entire

course of the action, engaged in egregious, frivolous conduct in violation of Civ.R. 11,

by making a “continual and collaborative effort to delay the proceedings and increase

                                             14
the costs of the litigation.”   The court held them jointly and severally liable for the

amount of $11,155.00 plus costs.

       {¶48} Attorney Douglass, represented by counsel, and the Jurczenkos, pro se,

filed separate appeals in No. 2012-L-015 and 2012-L-016, respectively.

       Appeal No. 2012-T-015: Attorney Douglass’ Appeal

       {¶49} In Appeal No. 2012-L-0015, Attorney Douglass brings the following two

assignments of error for our review:

       {¶50} “[1.] It was an abuse of discretion for the trial court to sanction appellant

when the evidence presented at the hearing failed to show a willful violation of Civil Rule

11.”

       {¶51} “[2.] The trial court abused its discretion by sanctioning appellant when

appellee’s motion for sanctions was not filed within a reasonable time period.”

       Civ. R. 11 Sanctions and Our Standard of Review

       {¶52} In this case, although the motion for sanctions sought imposition of

sanctions pursuant to both R.C. 2323.51 and Civ.R. 11, the court imposed the sanctions

only under Civ.R. 11. That rule requires attorneys, or pro se litigants, to sign every

motion, pleading, or other document filed in a civil action. This signature serves as a

certificate that the attorney (or pro se litigant) filing the document: (1) has read the

document; (2) that everything contained in it is true to the best of the individual’s

knowledge; (3) that there is a good ground to support it; and (4) that its purpose was not

to delay. Civ.R. 11. An R.C. 2323.51 frivolous conduct motion is determined under an

objective standard; however, the courts have applied a subjective bad faith standard in

determining whether there is a violation of Civ.R. 11. See State ex rel. Bardwell v.

Cuyahoga Cty. Bd. of Commrs., 127 Ohio St.3d 202, 2010-Ohio-5073, ¶8; State Farm

                                            15
Ins. Cos. v. Peda, 11th Dist. No. 2004-L-082, 2005-Ohio-3405; Riston v. Butler, 149

Ohio App.3d 390, 2002-Ohio-2308, ¶12,36 (1st Dist.).

       {¶53} The subjective bad-faith standard is met when a violation of Civ.R. 11 is

found to be willful. State ex rel. Dreamer v. Mason, 115 Ohio St.3d 190, 2007-Ohio-

4789. In other words, when a party is found to have filed a document without good

grounds to support it or for the purpose to delay, the court must determine whether the

violation was willful. Rondini v. Seman, 11th Dist. No. 2002-L-017, 2002-Ohio-6590, ¶6,

citing Stone v. House of Day Funeral Serv., Inc., 140 Ohio App.3d 713, 721 (6th

Dist.2000). If the court concludes that the violation was willful, the court may then

impose sanctions pursuant to Civ.R. 11. Id.

       {¶54} In Law Office of Natalie F. Grubb v. Bolan, 11th Dist. No. 2010-G-2965,

2011-Ohio-4302, this court elaborated on the notion of willfulness:

       {¶55} “Civ.R. 11 measures sanctionable conduct using a subjective bad faith

standard which requires all violations to be willful. Bad faith ‘is not simply bad judgment.

It is not merely negligence. It 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. * * * It means ‘with actual

intent to mislead or deceive another.’ Thus, ‘* * * a court can impose sanctions only

when the attorney or pro se litigant acts willfully and in bad faith by filing a pleading that

he or she believes lacks good grounds or is filed merely for the purpose of delay.”

(Citations omitted.) Id. at ¶32. See also Slater v. Motorists Mutual Insurance Co., 174

Ohio St. 148 (1962), paragraph two of the syllabus.

       {¶56} The purpose of Civ.R. 11 is “to curb the abuse of the judicial system which

results from baseless filings that burden the courts and individuals with needless

                                              16
expense and delay.” Bardwell at ¶12, citing Cooter & Gell v. Hartmarx Corp., 496 U.S.

384, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990). “[T]he specter of Rule 11 sanctions

encourages a civil litigant to ‘stop, think and investigate more carefully before serving

and filing papers.’” Id., quoting Cooter.

       {¶57} As to our standard of review of an award under Civ.R. 11, such an award

will be upheld on appeal unless there is an abuse of discretion by the trial court. State

ex rel. Fant v. Sykes, 29 Ohio St.3d 65 (1987).         We recognize, however, that the

standard of review with respect to purely legal issues, such as whether good legal

grounds exist to support a complaint, is de novo. Stevenson v. Bernard, 11th Dist. No.

2006-L-096, 2007-Ohio-3192, ¶38.

       {¶58} As this court recently stated, the term “abuse of discretion” is one of art,

“connoting judgment exercised by a court, which does not comport with reason or the

record.”   State v. Underwood, 11th Dist. No. 2008-L-113, 2009-Ohio-2089, ¶30, citing

State v. Ferranto, 112 Ohio St. 667, 676-678 (1925). The Second Appellate District

also recently adopted a similar definition of the abuse-of-discretion standard: an abuse

of discretion is the trial court’s “failure to exercise sound, reasonable, and legal

decision-making.”    State v. Beechler, 2d Dist. No. 09-CA-54, 2010-Ohio-1900, ¶62,

quoting Black’s Law Dictionary (8 Ed.Rev.2004) 11. As the Second District explained,

when an appellate court is reviewing a pure issue of law, “the mere fact that the

reviewing court would decide the issue differently is enough to find error (of course, not

all errors are reversible. Some are harmless; others are not preserved for appellate

review). By contrast, where the issue on review has been confined to the discretion of

the trial court, the mere fact that the reviewing court would have reached a different

result is not enough, without more, to find error.” Id. at ¶67.

                                             17
       The Trial Court’s Decision Finding Willful Violation of Civ.R. 11

       {¶59} In his first assignment of error, Attorney Douglass claims the trial court

abused its discretion because the evidence failed to show a willful violation of Civ.R. 11.

       {¶60} In its judgment, the trial court found Attorney Douglass and the

Jurczenkos acted in concert and in bad faith in filing multiple motions for the purposes

of delaying the litigation, maliciously injuring the plaintiff, and increasing the costs of

litigation. The lengthy decision enumerated many instances of such conduct and more

than adequately provided the trial court’s rationale for finding the conduct in willful

violation of Civ.R. 11.   Notably, on appeal, Attorney Douglass does not refute any

specific findings by the trial court, but simply claims in a conclusory manner that there

was no evidence that he acted with willful intent to violate Civ.R. 11.

       We Find No Abuse of Discretion in the Court’s Imposition of Sanctions

       {¶61} Having reviewed the protracted procedural history of this case and the

lengthy decision of the trial court, which thoroughly articulated its rationale for sanctions,

we do not find an abuse of discretion of the trial court in sanctioning the Jurczenkos and

their counsel, who repeatedly and persistently engaged in conduct that unnecessarily

delayed the proceedings and increased the costs of litigation.            We admire zealous

advocacy, but Attorney Douglass and the Jurczenkos crossed the line separating zeal

from patent frivolousness. As the trial court observed, the Jurczenkos last paid rent in

August 2007, but the trial on Fast Property Solutions’ forcible entry and detainer

complaint could not begin until December 18, 2009, due to the defendants’ and

counsel’s delaying tactics in filing numerous pleadings and motions in the municipal

court, the common pleas court, the court of appeals, as well as the federal court.

                                             18
       {¶62} By engaging in the prolonged litigation, in which the Jurczenkos and their

counsel repeatedly raised issues already ruled upon, making arguments not supported

by the existing law, and making misrepresentations to the court – in an apparent effort

to delay or avoid a trial on the merits of the eviction action – the Jurczenkos were able

to reside rent-free for two years in a house owned by the plaintiff, without ever

presenting any credible evidence they had the means to purchase the home.

       {¶63} In the following chart, we summarize the filings and conduct found to be

sanctionable by the trial court. The five columns in the chart represent (1) the date, (2)

the sanctioned filing/conduct, (2) the individual(s) who signed or committed the conduct,

(4) claims made by defendants, and (5) the trial court’s reasons for sanctions.

Date        Filing/Conduct           Signed by              Claims                Reasons for Sanction
8/1/2008    Motion for Relief from   Filed and signed by     alleged              There was no good
            Judgment and             Alexander and          misconduct by         ground to support the
            Affidavit                Marjorie Jurczenko,    opposing counsel      motion; allegation that
                                     pro se; affidavit by    claimed             the consent entry
                                     Alexander              consent entry not     violated R.C.
                                     Jurczenko              enforceable due       5321.13(B) was not
                                                            to rescission.        supportable by
                                                             claimed the         existing law; motion
                                                            municipal court       filed in bad faith, for
                                                            did not have          purpose of delay and
                                                            subject matter        to increase costs of
                                                            jurisdiction          litigation;
                                                            claimed the           Argument that
                                                            lease/purchase        Plaintiff breached the
                                                            agreement was a       settlement agreement
                                                            “creative             exhibited bad faith
                                                            financing”
                                                            document
                                                             affidavit alleged
                                                            unilateral
                                                            rescission of the
                                                            modified lease
                                                            and purchase
                                                            agreement
                                                            alleged Plaintiff
                                                            breached the first
                                                            settlement
                                                            agreement
9/8/2008    Notice of Compliance     Filed and signed by    alleged they          the notice was filed
                                     Alexander and          complied with the     in bad faith because
                                     Marjorie Jurczenko,    second                the Jurczenkos
                                     pro se                 settlement            presented nothing in
                                                            agreement             writing confirming they

                                                 19
                                                            claimed they         qualified for a loan
                                                            were unable to        attempted to evade
                                                            complete the          the purchase
                                                            purchase              agreement by raising
                                                            because of            spurious arguments
                                                            Plaintiff’s failure
                                                            to provide
                                                            necessary
                                                            paperwork
10/1/2008   Motion to Stay Filed in   Filed and signed by   claimed the           the Jurczenkos twice
            Writ of Prohibition       Alexander and         matter involved a     settled the eviction
            (2008-L-149)              Marjorie Jurczenko,   “creative             action, and, after
                                      pro se                financing             receiving the benefits,
                                                            mechanism,” not       twice attempted to
                                                            subject to an         invalidate the
                                                            eviction action       settlement agreement
                                                                                  No good ground to
                                                                                  support the motion to
                                                                                  stay; asserted factual
                                                                                  contentions without
                                                                                  evidentiary support;
                                                                                  misrepresented
                                                                                  procedural history and
                                                                                  pertinent issues
1/9/2009    Counterclaim              Filed by Marjorie     alleged Marjorie     bad faith claim that
                                      Jurczenko; signed     was the               Plaintiff persuaded
                                      by Attorney           “equitable” owner     defendants to enter
                                      Douglass              of the subject        into the
                                                            property              lease/purchase
                                                            claiming Plaintiff   agreement when in
                                                            violated Home         fact defendants
                                                            Ownership and         drafted the agreement
                                                            Equity Protection     bad faith claim that
                                                            Act, Truth in         the lease/purchase
                                                            Lending Act,          agreement was a
                                                            Consumer Sales        financing agreement
                                                            Practices Act,        even though the
                                                            and committed         agreement specifically
                                                            unconscionable        stated the agreement
                                                            and frivolous         was not to be
                                                            acts, usury, and      construed as a
                                                            abuse of process      mortgage or financing
                                                            Counterclaim         mechanism.
                                                            withdrawn later       Homeownership and
                                                            by Attorney           Equity Protection Act,
                                                            Douglass              Truth in Lending Act,
                                                                                  and quiet title claims
                                                                                  were clearly
                                                                                  inappropriate, and no
                                                                                  evidence was
                                                                                  presented to support
                                                                                  remaining claims
                                                                                  factual and legal
                                                                                  contentions were not
                                                                                  supported by good
                                                                                  grounds counterclaim
                                                                                  filed in bad faith,
                                                                                  interposed only to

                                                 20
                                                                                  delay the litigation,
                                                                                  and to increase costs
                                                                                  of litigation
5/15/2009    Second Motion to        Filed and signed by    Raised again the      Motion was filed in
             Dismiss                 Attorney Douglass      subject matter        bad faith; the claim
                                     on behalf of the       jurisdiction issue    that defendants had
                                     Jurczenkos             claiming the          color of title precluding
                                                            defendants had        the municipal court’s
                                                            color of title and    jurisdiction was
                                                            the action was        groundless
                                                            not an eviction
                                                            matter
10/15/2009   Brief opposing Motion   Filed and signed by    Attempted to         The defendants’
             to Enforce Settlement   Attorney Douglass      reopen the            conduct in continually
             Agreement               on behalf of the       motion to             renewing arguments
                                     Jurczenkos             dismiss; claimed      already addressed
                                                            again the court       and alleging facts that
                                                            did not have          had no evidentiary
                                                            jurisdiction;         basis was in bad faith,
                                                            accused              and served only to
                                                            opposing counsel      harass plaintiff, delay
                                                            of                    the proceedings, and
                                                            misrepresentation     increase the cost of
                                                            and violation of      litigation
                                                            federal law;
                                                            claimed plaintiff,
                                                            who was the title
                                                            owner, was not
                                                            the owner;
                                                            claimed the trial
                                                            court had
                                                            “vacated” the
                                                            second
                                                            settlement
                                                            agreement,
                                                            contrary to the
                                                            record
12/16/2009   Pretrial statement      Filed and signed by    Reiterated            The repetitive
                                     Attorney Douglass      arguments that        arguments regarding
                                     on behalf of the       the case was not      jurisdiction was
                                     Jurczenkos             an eviction           frivolous and in
                                                            action; that          violation of Civ.R.11
                                                            Marjorie had
                                                            color of title; and
                                                            that the court
                                                            lacked jurisdiction
12/18/2009   Jury Demand made        Attorney Douglass      Attorney              One month before
             on 1st day of bench     represented Marjorie   Douglass and Mr.      the trial, the court had
             trial                   Jurczenko only;        Jurczenko             inquired as to whether
                                     Alexander              claimed there had     there was a demand
                                     Jurczenko              been a demand         for jury trial and
                                     represented himself    for jury trial        decided the case
                                                                                  would proceed as a
                                                                                  bench trial when the
                                                                                  parties could not
                                                                                  affirmatively state
                                                                                  there was a jury

                                                21
                                                                            demand. Attorney
                                                                            Douglass and Mr.
                                                                            Jurczenko did not
                                                                            object during the
                                                                            month-long interval
                                                                            The trial court found
                                                                            the jury trial demand
                                                                            made on the morning
                                                                            of trial was to delay
                                                                            and to increase
                                                                            litigation cost
12/22/2009;   Trial              Attorney Douglass      raised again the    The trial court found
12/23/2009;                      represented Marjorie   argument that the   defendants’
01/15/2010                       Jurczenko;             lease/purchase      arguments
                                 Alexander              agreement was a     contradicted by the
                                 Jurczenko              “creative           agreement itself
                                 represented himself    financing”          (drafted by
                                                        agreement/          defendants), which
                                                        equitable           provided that the
                                                        mortgage/land       agreement “shall not
                                                        contract            under any
                                                                            circumstances or
                                                                            interpretation be
                                                                            construed as a
                                                                            mortgage or other
                                                                            financing mechanism
                                                                            under any equitable or
                                                                            legal principle.” The
                                                                            court found the
                                                                            Jurczenkos’ insistence
                                                                            upon arguing a
                                                                            position contradicted
                                                                            by the express
                                                                            provision of the
                                                                            agreement they
                                                                            themselves drafted to
                                                                            warrant sanctions.

       {¶64} Notably, the Jurczenkos did not pursue their direct appeal, which this court

dismissed after the Jurczenkos voluntarily vacated the premises, rendering the appeal

moot. It is quite telling that, after the protracted litigation over the issue of the lower

court’s lack of subject matter jurisdiction, the defendants chose not to pursue the direct

appeal and present the issue for our review.

       {¶65} A trial court is in the best position to assess what is permissible zealous

advocacy and what crosses the line, and is appropriately given an inherent authority, as

well as authority conferred by Civ.R. 11, to impose sanctions based on a party’s

                                            22
litigation conduct. Viewing the conduct of the Jurczenkos and their counsel in totality,

we cannot say that their actions were merely negligent or resulted from a good faith

misinterpretation of the state of existing law. The conduct, indeed, imported a dishonest

purpose, implied conscious doing of wrong, and was for the purpose of delay, thus

rising to the level of willfulness warranting sanctions under Civ.R. 11. Grubb, supra.

The abuse of the judicial system by the defendants and their counsel – in repeatedly

filing documents, raising baseless claims, and burdening the courts and the opposing

party with needless expense and delay – is exactly what Civ.R. 11 is designed to deter.

Bardwell, supra. The trial court, in addition, possesses “the inherent power to do those

things necessary for the preservation of their judicial powers and processes * * *.”

Slabinski v. Servisteel Holding Co., 33 Ohio App.3d 345 (9th Dist.1986), syllabus.

“Sanctions may be imposed against parties or their attorneys when the judicial process

is abused.” Ceol v. Zion Industries, Inc., 81 Ohio App. 3d 286, 289 (9th Dist.1992). The

first assignment of error is without merit.

       Whether the Motion for Sanction was Filed Untimely

       {¶66} Under the second assignment of error, Attorney Douglass contends the

trial court abused its discretion in sanctioning him because the motion for sanction was

not filed within a reasonable time.

       {¶67} R.C. 2323.51 requires a motion for an award of sanctions to be filed not

more than 30 days after the entry of final judgment. R.C. 2323.51(B). In contrast,

Civ.R. 11 does not have a time limitation. Mitchell v. Whitaker, 33 Ohio App.3d 170 (8th

Dist.1988).

       {¶68} Here, Fast Property Solutions filed the motion for sanctions on August 2,

2010, slightly over five months after the final judgment was entered in this case on

                                              23
February 16, 2010. The trial court considered the Jurczenkos’ claim that the motion

was untimely, but ruled it was filed within a reasonable time.

       {¶69} On appeal, Attorney Douglass cites to a single case authority for his claim,

Zunshine v. Cott, 10th Dist. No. 07AP-764, 2008-Ohio-2298, ¶17. In this case involving

the recovery of attorney’s fees, the attorney waited nearly a year – until after the fee

matter was terminated, appealed, and then remanded – to file the motion for sanctions

against his client. The court of appeals found the motion to be untimely, because “[n]o

facts that give rise to [the motion for sanctions] accrued after [the final pretrial on the fee

matter].”

       {¶70} Zunshine      is   not   binding    authority,   and,   furthermore,   is   readily

distinguishable.   Here, the Jurczenkos filed a notice of appeal on March, 16, 2010

(Case No. 2010-L-024) from the final judgment, which we eventually dismissed on

December 3, 2010, because they vacated the premises, rendering the appeal moot. In

light of the history of this case, Fast Property Solutions cannot be faulted for waiting for

the conclusion of the direct appeal before filing its motion for sanctions. Therefore, we

do not find an abuse of discretion by the trial court in ruling that the motion for sanctions

was filed timely. The second assignment of error is without merit.

       Appeal No. 2012-L-016: the Jurczenkos’ Appeal

       {¶71} The Jurczenkos assign two errors for our review:

       {¶72} “[1.] The Mentor Municipal Court and the Lake County Court of Common

Pleas lacked subject matter jurisdiction, which can never be waived and is not barred by

res judicata, and can be raised at any time, even on appeal, rendering the proceedings

below void ab initio.”

                                                24
       {¶73} “[2.] The Common Pleas Court committed clear error by considering and

granting appelles [sic] untimely motion for sanctions which was devoid of any factual

and legal merit.”

       {¶74} We have already addressed the Jurczenkos’ second assignment of error

in Appeal No. 2012-L-015. We now turn to their first assignment of error.

       The Municipal Court Had Subject Matter over This Action

       {¶75} Despite the belated presentation of the jurisdictional issue for our review,

we will address the issue of the municipal court’s subject matter jurisdiction in this

appeal. If the municipal court had no jurisdiction over this forcible entry and detainer

action, it would not have the authority to transfer the matter to the common pleas court,

which in turn would lack authority to issue any rulings on this case, including the

judgment of sanctions.

       {¶76} Pursuant to Civ.R. 12(H)(3), an action over which a court lacks subject

matter jurisdiction must be dismissed. “The standard of review for a dismissal for lack

of subject matter jurisdiction is whether any cause of action cognizable by the forum has

been raised in the complaint.” Reynoldsburg City Sch. Dist. Bd. of Edn. v. Licking

Heights Local Sch. Dist. Bd. of Edn., 10 Dist. No. 08AP-415, 2008-Ohio-5969, ¶15.

       {¶77} A municipal court has jurisdiction to hear any action in forcible entry and

detainer. R.C. 1901.18(A)(8); Estate of Allen v. Allen, 11th Dist. No. 91-T-4580, 1992

Ohio App. LEXIS 3060, *3 (June 12, 1992).         Here, Fast Property Solutions filed a

complaint for forcible entry and detainer, alleging that it is the landlord of the property

occupied by the Jurczenkos and that they had breached their lease agreement by failing

to pay rent.

                                            25
      {¶78} The Jurczenkos claimed, however, that they occupied the premises under

color of title and were the equitable owners of the property.          They claimed the

relationship between them and Fast Property Solutions was not that of landlord and

tenant, and, therefore, the municipal court had no jurisdiction, despite the allegations on

the face of the complaint. The Jurczenkos’ claim is meritless.

      {¶79} The Supreme Court of Ohio has held that “[a] Municipal Court, under

section 1901.18, Revised Code, has jurisdiction to hear and determine a forcible entry

and detainer action, where, although title to the realty is drawn in question, there is no

question as to present record title.” Haas v. Gerski, 175 Ohio St. 327 (1963), paragraph

one of the syllabus. This court has also stated that if there is no question as to the

present record title holder, then the municipal court is not precluded from deciding the

forcible entry and detainer issue. Allen at *3, citing Haas and State, ex rel. Carpenter v.

Court, 61 Ohio St.2d 208, 209 (1980). Thus, the Mentor Municipal Court had subject

matter jurisdiction over this action; so did the Lake County Court of Common Pleas

upon transfer from that court.

      {¶80} The Jurczenkos’ first assignment of error is without merit.

      {¶81} The judgment of the Lake County Court of Common Pleas is affirmed.

TIMOTHY P. CANNON, P.J.,

CYNTHIA WESTCOTT RICE, J.,

concur.

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