Court Opinion

ID: 2755768
Source: CourtListenerOpinion
Date Created: 2014-11-26 17:06:31.509688+00
Date Added: 2024-06-11T11:26:49.762237
License: Public Domain

[Cite as Clean Wood Recycling, Inc. v. Tony’s Landscaping, Inc., 2014-Ohio-5280.]

                            IN THE COURT OF APPEALS OF OHIO
                                SIXTH APPELLATE DISTRICT
                                     LUCAS COUNTY

Clean Wood Recycling, Inc.                                Court of Appeals No. L-14-1074

        Appellant                                         Trial Court No. CVI-1300241

v.

Tony's Landscaping, Inc. and
Anthony Martin                                            DECISION AND JUDGMENT

        Appellees                                         Decided: November 26, 2014

                                                 *****

        Matthew M. McHugh, for appellant.

                                                 *****

        JENSEN, J.

                                              Introduction

        {¶ 1} This is a breach of contract action brought by appellant, Clean Wood

Recyling, Inc., an Ohio corporation with its principle place of business in Toledo, Ohio.
Appellant is engaged in the business of recycling whereby it processes green waste and

then resells products derived from that waste. Appellee, Anthony Martin, is the sole

proprietor of appellee, Tony’s Landscaping, Inc.

       {¶ 2} Appellant sued appellees for breach of contract after appellees failed to pay

for any of the eleven loads of mulch appellant supplied to them in May of 2012.

Appellant sought to recover compensatory damages and costs, including reasonable

attorney fees, pursuant to the terms of the contract between the parties. Following a

bench trial, the trial court awarded appellant the full amount of the unpaid invoices, with

interest, but denied appellant’s request for attorney fees.

       {¶ 3} For the following reasons, we reverse the trial court’s judgment and remand

the matter to the lower court for further proceedings consistent with this opinion.

                              Facts and Procedural History

       {¶ 4} On April 30, 2012, Anthony Martin, acting on behalf of Tony’s

Landscaping, Inc., completed an application for credit from appellant. Tony’s

Landscaping sought a credit limit of $1000 and agreed that “invoices are due on receipt.”

In exchange for the extension of credit, Tony’s Landscaping agreed “to pay for

[appellant’s] costs in collecting over due [sic] invoices which includes actual costs and

reasonable attorney fees.” As a condition of extending credit to Tony’s Landscaping,

appellant sought a “personal guarantee” from Anthony Martin. The personal guarantee

also provided for “reasonable counsel fees” in the event of default by Tony’s

Landscaping.

2.
       {¶ 5} Between May 5 and 16, 2012, appellant supplied Tony’s Landscaping with

eleven loads of mulch, worth a total of $606.32. Neither appellee paid any of the eleven

invoices that were submitted by appellant.

       {¶ 6} On August 27, 2012, appellant filed a breach of contract claim in the

Sylvania Municipal Court (case no. CVF-1201034). The court dismissed the case for

want of prosecution on June 7, 2013. Appellant refiled the instant case in the small

claims division of the municipal court on October 16, 2013.

       {¶ 7} In the complaint, appellant requested compensatory damages in the amount

of $606.32, plus interest and attorney fees. Neither appellee filed an answer to the

complaint. Martin did, however, attend a pretrial conference on December 17, 2013.

After the pretrial conference, the trial court issued a journal entry in which the court

noted Martin’s acknowledgement of part of the debt. That is, he acknowledged receiving

six loads of mulch and owing appellant $337.84. He denied, however, having received

the other five loads, worth $268.48. The court set a trial date for February 6, 2014.

       {¶ 8} During the trial, the court received evidence from both sides and heard

testimony from Martin and two managers employed by appellant. At the conclusion of

the trial, the court found that the testimony and evidence presented by appellant was

credible. It concluded that appellant had established by a preponderance of the evidence

that it provided all eleven loads of mulch to Tony’s Landscaping. It found Martin’s

theory, that some unknown third party had signed for the disputed deliveries,

“inconceivable.”

3.
       {¶ 9} The trial court awarded appellant compensatory damages in the amount of

$606.32 against appellees, jointly and severally, “plus costs and statutory interest * * *.”

With regard to attorney fees, however, the trial court decided,

              In the instance [sic] case, the Court urged [Martin] and

       representatives of [appellant] to meet and consult over the discrepancies

       which [Martin] indicated he made numerous attempts to do. [Martin] was

       questioned by the Court as to what response he received to which he stated

       [that appellant’s office manager] told him that “she had nothing to discuss

       with him.” But for this lack of responsiveness * * * the Court would have

       awarded attorney’s fees to [appellant’s] counsel pursuant to the application

       for credit * * *. [T]he Court is of the opinion that [appellant] is not entitled

       to attorney’s fees.

       {¶ 10} The trial court journalized its decision and judgment entry on March 6,

2014. Appellant filed a notice of appeal on April 4, 2014. Appellant alleges one

assignment of error:

              I.The trial court abused its discretion in refusing to award attorney

       fees under a valid commercial contract and guaranty.

                                     Law and Analysis

       {¶ 11} With regard to attorney fees, Ohio follows the “American Rule,” which

means that each party to a lawsuit must pay its own attorney fees. Sorin v. Warrensville

Hts. School Dist. Bd. of Edn., 46 Ohio St.2d 177, 179, 347 N.E.2d 527 (1976). There

4.
are, however, three exceptions to that rule whereby fee-shifting for, and taxing attorney

fees as, costs is allowed. Thus, attorney fees may be awarded (1) if there has been a

finding of bad faith; (2) if a statute expressly provides that the prevailing party may

recover attorney fees; or (3) if the parties' enforceable contract provides for fee-shifting.

Nottingdale Homeowners' Assn., Inc. v. Darby, 33 Ohio St.3d 32, 33-34, 514 N.E.2d 702

(1987); Sorin, supra.

       {¶ 12} This case involves fee shifting pursuant to a contract. “[A]greements to

pay another's attorney fees are generally enforceable and not void as against public policy

so long as the fees awarded are fair, just and reasonable as determined by the trial court

upon full consideration of all of the circumstances of the case.” (Citation omitted.)

Wilborn v. Bank One Corp., 121 Ohio St.3d 546, 2009-Ohio-306, 906 N.E.2d 396, ¶ 8.

“The presence of equal bargaining power and the lack of indicia of compulsion or duress

are characteristics of agreements that are entered into freely.” Id.

       {¶ 13} Generally, we review a trial court's decision regarding an award of attorney

fees for an abuse of discretion. Painters Supply & Equipment Co. v. Wagner, 6th Dist.

Lucas No. L-07-1320, 2008–Ohio–258, ¶ 16. This case, however, involves whether the

trial court erred in failing to enforce the attorney fee agreements. Interpretation of

written contracts are questions of law. Alexander v. Buckeye Pipe Line Co., 53 Ohio

St.2d 241, 374 N.E.2d 146 (1978), paragraph one of the syllabus, superseded by statute

on other grounds. A trial court's interpretation of a contract is subject to de novo review.

5.
Long Beach Assn., Inc. v. Jones, 82 Ohio St.3d 574, 576, 697 N.E.2d 208 (1998), citing

Ohio Bell Tel. Co. v. Pub. Util. Comm., 64 Ohio St.3d 145, 147, 593 N.E.2d 286 (1992).

       {¶ 14} In this case, each appellee agreed to pay reasonable attorney fees. Again,

Tony’s Landscaping agreed “to pay for [appellant’s] costs in collecting over due [sic]

invoices which includes actual costs and reasonable attorney fees.” Likewise, Anthony

Martin signed a “personal guarantee” which provides, in part,

              As an inducement to [Clean Wood Recycling, Inc.] to grant credit *

       * * to Tony’s Landscaping, hereinafter referred to as the “Customer” * * *

       [Anthony Martin] shall pay [Clean Wood Recycling, Inc.] promptly when

       due, or upon demand thereafter, * * * including interest * * * together with

       al [sic] expenses of collection and/or reasonable counsel fees incurred by

       [Clean Wood Recycling, Inc.] by reason of the default of the Customer.

       {¶ 15} The trial court denied enforcement of the above provisions as a

consequence for, what the court called, appellant’s “unresponsiveness” prior to trial.

Importantly, however, the lower court made no finding that the attorney fee provisions

were ambiguous, or the product of compulsion or duress, or that the parties had unequal

bargaining power. Moreover, this court has reviewed the record and found no such

factors that, if present, could have supported the trial court’s decision not to enforce an

otherwise valid attorney fee provision.

       {¶ 16} “[P]ersons have a fundamental right to contract freely with the expectation

that the terms of the contract will be enforced. * * * Government interference with this

6.
right must therefore be restricted to those exceptional cases where intrusion is absolutely

necessary, such as contracts promoting illegal acts.” Nottingdale, 33 Ohio St.3d at 36,

514 N.E.2d 702. We find no evidence in this case warranting the trial court’s

interference with the lawful agreement of the parties. In other words, while the trial court

has discretion to determine the amount of the award, it may not refuse to enforce their

agreement. Painters Supply & Equip. Co., 6th Dist. Lucas No. L-07-1320, 2008-Ohio-

258, ¶ 17. (Trial court erred in refusing to enforce attorney fee agreements set forth in

credit application and personal guarantee in successful breach of contract action by

supplier.).

       {¶ 17} The record contains evidence of an enforceable contract between the parties

for the payment of reasonable attorney’s fees. The trial court erred in refusing

appellant’s request for payment of those fees. We find appellant’s assignment of error is

well-taken.

       {¶ 18} We remand this case to the trial court and instruct it to determine the

reasonable amount of attorney fees owed by appellees. Klein v. Moutz, 118 Ohio St.3d

256, 2008-Ohio-2329, 888 N.E.2d 404, ¶ 13. (“The trial court is in a better position to

determine a fee award, for it may hold a hearing, take testimony, create a record, and

otherwise evaluate the numerous factors associated with calculating an attorney-fee

award.”)

7.
       {¶ 19} The judgment of the Municipal Court of Sylvania, Small Claims Division

in Lucas County, Ohio, is hereby reversed and remanded to the lower court for further

proceedings consistent with this opinion. Appellees are ordered to pay the costs of this

appeal pursuant to App.R. 24.

                                                                      Judgment reversed.

       A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.

Mark L. Pietrykowski, J.                       _______________________________
                                                           JUDGE
Thomas J. Osowik, J.
                                               _______________________________
James D. Jensen, J.                                        JUDGE
CONCUR.
                                               _______________________________
                                                           JUDGE

           This decision is subject to further editing by the Supreme Court of
      Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
           version are advised to visit the Ohio Supreme Court’s web site at:
                 http://www.sconet.state.oh.us/rod/newpdf/?source=6.

8.