Court Opinion

ID: 9893348
Source: CourtListenerOpinion
Date Created: 2023-10-26 17:12:10.85423+00
Date Added: 2024-06-11T09:02:29.158868
License: Public Domain

[Cite as Rosenberger v. Paduchik, 2023-Ohio-3898.]

                             IN THE COURT OF APPEALS OF OHIO

                                  TENTH APPELLATE DISTRICT

Laura Rosenberger,                                   :

                Plaintiff-Appellant,                 :
                                                               No. 22AP-320
v.                                                   :       (C.P.C. No. 21CV-7443)

Robert A. Paduchik et al.,                           :   (ACCELERATED CALENDAR)

                Defendants-Appellees.                :

                                          D E C I S I O N

                                   Rendered on October 26, 2023

                On brief: Pullins Law Firm LLC, and Scott Allen Pullins for
                appellant. Argued: Scott Allen Pullins.

                On brief: Bricker & Eckler LLP, Anne Marie Sferra, and
                Nelson M. Reid for appellees. Argued: Anne Marie Sferra.

                  APPEAL from the Franklin County Court of Common Pleas

MENTEL, J.
        {¶ 1} Plaintiff-appellant, Laura Rosenberger, appeals from the decision of the
Franklin County Court of Common Pleas denying her motion for leave to file an amended
complaint under Civ.R. 15(A) and granting the motion to dismiss under Civ.R. 12(B)(6) filed
by defendants-appellees, Robert A. Paduchik, Dave Johnson, and the Ohio Republican
Party. For the reasons that follow, we affirm the trial court’s decision.
        {¶ 2} Ms. Rosenberger, JoAnn Campbell, Mark Bainbridge, Joe Miller, and Denise
Verdi filed a verified complaint on November 29, 2021, against Robert A. Paduchik, the
Chairman of the Republican State Central and Executive Committee of the Republican
Party, Dave Johnson, the party’s treasurer, and the Republican Party itself. The plaintiffs
alleged that they had all been appointed to various Standing Committees of the Republican
No. 22AP-320                                                                               2

Party in 2020, in accordance with the Republican State Central and Executive Committee
of Ohio Permanent Rules (“Bylaws”). (Nov. 29, 2021 Compl. at 5.) A copy of the Bylaws
was attached to the verified complaint. Ms. Rosenberger alleged that she was appointed to
the party’s Audit Committee. Id.
       {¶ 3} The plaintiffs alleged that over three million dollars of the party’s funds “may
have been improperly misappropriated, misreported, and/or otherwise improperly
expended” by Mr. Paduchik and the party’s former chairperson, Jane Timken. Id. at 6.
They alleged that the party’s financial statements from 2017 onward were “materially
misstated” and required auditing. Id. They accused Mr. Johnson, the treasurer, of keeping
“poor records” and never attesting to the accuracy of the party’s financial statements, as
required by the Bylaws. Id. The plaintiffs alleged that after “voicing their concerns” in
October 2021, Mr. Paduchik improperly removed them from their positions on the
Standing Committees, reorganized the committees, and “appointed himself chairman of
the Fiscal Review Committee,” in violation of the Bylaws. Id. at 6-7.
       {¶ 4} The complaint also alleged that Mr. Paduchik used party funds to support
unendorsed candidates without obtaining the authorization of the Fiscal Review
Committee. Id. at 7-8. This and other expenditures totaling “hundreds of thousands” of
dollars in party funds allegedly violated the party’s Bylaws. Id. at 8. In addition, the
plaintiffs alleged that Mr. Johnson violated his obligations under both the Bylaws and
R.C. 3517.081 to provide accurate statements of the party’s expenditures. Id. at 8-10. The
plaintiffs alleged that they requested “a certified public accountant to perform an audit” of
the party’s finances in accordance with the Bylaws, but Mr. Paduchik and Mr. Johnson
refused to allow any audit. Id. at 10-11. Instead, plaintiffs alleged that Mr. Paduchik
“retaliated” against them by removing them from their positions on the party’s standing
committees. Id. at 10.
       {¶ 5} Citing the Bylaws, the complaint alleged two breach of contract claims. The
first, against Mr. Paduchik, arose from the reorganization of the standing committees and
the plaintiffs’ removal from them. Id. at 11-14. The second breach of contract claim, also
stated against Mr. Paduchik, arose from his allegedly unauthorized support of unendorsed
candidates. Id. at 14-16. The third claim alleged that the plaintiffs were entitled to an
inspection and accounting of the party’s financial records under R.C. 1702.15. Id. at 16-19.
No. 22AP-320                                                                                3

The fourth claim alleged that the plaintiffs were entitled to an audit and accounting of the
party’s finances under Article IV, Section 6 of the Bylaws. Id. at 19-20. The fifth and sixth
claims purported to seek “interlocutory injunctions” against the defendants to prevent
them from spending any party funds or instituting organizational changes during the
pendency of the case. Id. at 20-22. The sixth claim alleged that Mr. Paduchik breached the
fiduciary duty of the party imposed on him by R.C. 1702.30. Id. at 22-23. The seventh
claim sought the plaintiffs attorney fees and litigation expenses from the defendants. Id. at
23-24. As relief, the plaintiffs sought damages, attorney fees, and injunctive relief in the
form of court orders reinstating them to their standing committee positions and allowing
them to inspect and audit party records. Id. at 24-25.
       {¶ 6} On December 29, 2021, the defendants filed a motion to dismiss under
Civ.R. 12(B)(6) for failure to state a claim upon which relief can be granted. They argued
that the plaintiffs’ claims were not justiciable because they arose from the internal workings
of a political party. (Dec. 29, 2021 Mot. to Dismiss at 4.) Even if they were justiciable,
defendants asserted that “none of the claims are supported by applicable law.” Id. at 5.
They argued that plaintiffs lacked standing to bring claims on behalf of Republican party
members and donors, and that no contract existed between the plaintiffs and Mr. Paduchik
to support the breach of contract claims. Id. at 6-9. The defendants also argued that Ohio
Revised Code Chapter 1702 could not form the basis for the plaintiffs’ demand to inspect
the party’s books and records or the claim for breach of fiduciary duty because the chapter
only applied to nonprofit corporations, not a political party established under R.C. 3517.01.
Id. at 10-12. The plaintiffs’ purported claims for injunctive relief, attorney fees, and
expenses should also be dismissed, defendants argued, because they were not claims at all
but remedies. Id. at 13-14.
       {¶ 7} The plaintiffs responded on January 26, 2022, and agreed with the
defendants that “political parties are not incorporated nonprofit [entities] as described
under Ohio Revised Code Section 1702.” (Jan. 26, 2022 Memo in Opp. at 2.) The plaintiffs
instead asserted that a political party fit the definition of an unincorporated nonprofit
association under R.C. 1745.05. Id. The plaintiffs argued that this statute not only gave
them standing to sue, but also authorized their breach of contract claims, their claims to
inspect records, and their breach of fiduciary duty claim. Id. at 3-6.
No. 22AP-320                                                                                    4

       {¶ 8} While the motion to dismiss was pending, the plaintiffs filed a motion for
leave to file an amended complaint under Civ.R. 15(A). (Feb. 9, 2022 Req. for Leave to File
an Am. Compl.) They did not describe any new claims or how the existing ones might be
amended, nor did they attach a proposed amended complaint to the filing. The defendants
opposed the motion, arguing that the plaintiffs had “failed to establish a prima facie
showing of support for their purported claims.” (Feb. 15, 2022 Def.’s Memo in Opp. at 1.)
On February 22, 2022, the plaintiffs filed a reply to the defendants’ response and a
proposed amended complaint. The defendants subsequently filed a motion to strike the
proposed amended complaint, arguing that the plaintiffs had “improperly filed [the]
amended complaint without first obtaining leave of court or Defendants’ consent.”
(Mar. 14, 2022 Def.’s Mot. to Strike at 1.)
       {¶ 9} On May 27, 2022, the trial court denied the plaintiffs’ motion for leave to
amend the complaint. The trial court noted that plaintiffs had provided no reason for
granting leave to amend in the motion, as it “includes nothing other than a recitation of
Civ.R. 15(A) and an acknowledgment that leave is required.” (May 27, 2022 Decision &
Entry at 3.) Furthermore, the plaintiffs had denied the defendants an “opportunity to
challenge the support offered by Plaintiffs” by only filing their proposed amended
complaint with their reply brief. Id. Finding that the plaintiffs had not acted in accordance
with Civ.R. 15 and had “prevented Defendants from challenging the substance of Plaintiffs’
proffered support” by failing to attach the proposed amended complaint until replying, the
trial court denied the motion. Id. at 4.
       {¶ 10} In the same decision, the trial court granted the defendants’ motion to
dismiss the plaintiffs’ complaint under Civ.R. 12(B)(6) for failure to state a claim upon
which relief may be granted. The trial court found that the disputes alleged were not
justiciable because the plaintiffs had no standing to litigate claims that only involved the
internal matters of a political party. Id. at 5. The trial court rejected the plaintiffs’ argument
that their claims were justiciable because the party qualified as an unincorporated
nonprofit association under R.C. Chapter 1745, citing the exclusion in R.C. 1745.05(M)(3)
of organizations formed under other statutes, such as political parties.               Id. at 6.
Additionally, the trial court noted that the majority of the claims in the complaint were
No. 22AP-320                                                                               5

based on alleged “violations of the Bylaws, not on violations of any legislative enactment
governing political parties.” Id. at 7.
       {¶ 11} The trial court also addressed the claims themselves and concluded that even
if the plaintiffs had standing, all of the claims failed under Civ.R. 12(B)(6). The breach of
contract claims failed because the complaint contained “no allegations of factual support”
from which to infer that Mr. Paduchik and the plaintiffs had entered into a valid contract.
Id. at 10. Nor did “any set of facts exist within Plaintiffs’ complaint that support the
averment that the Bylaws created a contract between Plaintiffs and Paduchik, only that a
contract between each plaintiff and the ORP was allegedly formed.” Id. at 11. The claim for
inspection of books and records and the claim of breach of fiduciary duty failed because the
provisions of the Ohio Revised Code under which they were alleged did not apply to political
parties. Id. at 11, 13. Nor did the Bylaws provide any basis for demanding an audit. Id. The
interlocutory injunction claims merely stated a remedy, and the attorney fees claims could
not “exist separately” from the other claims. Id. at 13-15. Accordingly, the trial court
granted the motion to dismiss.
       {¶ 12} Only Ms. Rosenberger appealed from the trial court’s decision. She asserts
the following assignments of error:
              [I.] The trial court erred when it dismissed the Appellants’
              complaint and abused its discretion when it denied them leave
              to amend it to correct its deficiencies.

              [II.] The trial court erred when it failed to determine whether
              Ohio Revised Code Section 1745.05 is plain and unambiguous
              or ambiguous.

              [III.] The trial court erred when it found that Ohio Revised
              Code Section 1745.05 specifically excluded political parties.

       {¶ 13} Initially, we must clarify that although Ms. Rosenberger purports to assert
error on behalf of other appellants, she was the only party to appeal from the trial court’s
judgment.    (June 2, 2022 Notice of Appeal.)       “An appellant cannot raise issues on
another’s behalf, especially when that party could have appealed the issues appellant
posits.” In re D.T., 10th Dist. No. 07AP-853, 2008-Ohio-2287, ¶ 8. “Generally, a litigant
must assert its own rights, not the claims of third parties.” N. Canton v. Canton, 114 Ohio
St.3d 253, 2007-Ohio-4005, ¶ 14. Ms. Rosenberger has no standing to assert error on
No. 22AP-320                                                                                6

behalf of her fellow former defendants who, having chosen not to appeal, are now third
parties with no present stake in this litigation. Thus, we construe any reference in her
briefing to “appellants” to refer only to her.
       {¶ 14} We turn first to Ms. Rosenberger’s assertion that the trial court abused its
discretion by denying the motion to amend the complaint under Civ.R. 15(A). She argues
that because leave to amend a complaint should be “freely given” in the absence of “bad
faith, undue delay or undue prejudice to the opposing party,” the trial court erred by not
granting the motion. (Am. Brief of Appellant at 9.) Furthermore, she asserts that the trial
court “made much” of the failure to attach a proposed amended complaint to the motion
because if leave had been granted, “Defendants would have had ample opportunity to
respond to it.” Id. at 10-11. Denying the motion amounted to “punishing” her and the other
plaintiffs, Ms. Rosenberger claims.
       {¶ 15} We review a trial court’s ruling granting or denying a motion for leave to
amend a complaint under Civ.R. 15(A) for an abuse of discretion. Banks v. Ohio Bur. of
Workers’ Comp., 10th Dist. No. 17AP-748, 2018-Ohio-5246, ¶ 29. The rule allows a party
to amend a complaint “once as a matter of course within twenty-eight days after serving it,”
after which “a party may amend its pleading only with the opposing party’s written consent
or the court’s leave.” Civ.R. 15(A). “The court shall freely give leave when justice so
requires.” Id. “Although Civ.R. 15(A) provides that leave of court shall be freely given when
justice so requires, there is no absolute or unlimited right to amend a complaint.” Rose v.
Cochran, 4th Dist. No. 14CA3445, 2014-Ohio-4979, ¶ 20.
       {¶ 16} “Where a plaintiff fails to make a prima facie showing of support for new
matters sought to be pleaded, a trial court acts within its discretion to deny a motion to
amend the pleading.” Wilmington Steel Prods., Inc. v. Cleveland Elec. Illum. Co., 60 Ohio
St.3d 120 (1991), syllabus. Other than quoting the language of Civ.R. 15(A), the motion for
leave to amend stated only that because “the Court could grant Defendants’ motion [to
dismiss] at any time, Plaintiff is requesting leave of court to amend its complaint.” (Feb. 9,
2022 Req. for Leave to File an Am. Compl. at 2.) The Wilmington Steel standard requires
more. Absent any mention of new matters to be pleaded, the trial court properly denied
the motion. Wilmington Steel, syllabus. See also McDermott v. Tweel, 151 Ohio App.3d
763, 2003-Ohio-885, ¶ 27 (10th Dist.) (affirming denial of motion for leave to amend under
No. 22AP-320                                                                                  7

Civ.R. 15(A) where the motion was “a mere two sentences long and simply asserted that
newly received evidence gave rise to the fraud claim”); Grenga v. Youngstown State Univ.,
10th Dist. No. 11AP-165, 2011-Ohio-5621, ¶ 15 (affirming denial of motion for leave to
amend, where plaintiff not only failed to “make a prima facie showing of support for new
matters sought to be pleaded, he did not even identify the ways in which he intended to
amend his complaint”).
       {¶ 17} Furthermore, it matters not that “Plaintiffs had already made their case for
the need for an amended complaint in their Memorandum in Opposition to Defendants’
Motion to Dismiss,” as Ms. Rosenberger asserts. (Am. Brief of Appellant at 10.) The trial
court was not obligated to search the docket for another filing containing a party’s argument
relevant to the motion before its ruling on the motion. Similarly misguided is the argument
that the trial court wrongly criticized the plaintiffs for only attaching the proposed amended
complaint to the reply brief, thereby depriving the defendants of an opportunity to respond,
because “Defendants would have had ample opportunity to respond” if the motion had been
granted. Id. at 10-11. The trial court was referring to the defendants’ ability to address any
arguments for granting the motion, which, as the Wilmington Steel standard makes clear,
depends on the substance of the claims in the proposed amended complaint.                  The
defendants were entitled to have this opportunity before having to plead an answer in
response to a newly filed complaint. It was not error for the trial court to deny the motion
where the plaintiffs made no case for granting it. Given the plaintiffs’ noncompliance with
basic requirements of civil procedure, the trial court acted within its discretion when
denying their motion for leave to amend the complaint under Civ.R. 15(A).
       {¶ 18} Ms. Rosenberger also asserts in her first assignment of error that it was error
for the trial court to dismiss the complaint. We apply a de novo standard when reviewing
a trial court’s decision granting a motion to dismiss for failure to state a claim under
Civ.R. 12(B)(6). State ex rel. Duncan v. Am. Transm. Sys., 166 Ohio St.3d 416, 2022-Ohio-
323, ¶ 10. She argues that it was error for the trial court to interpret R.C. 1745.05 to exclude
political parties without making an initial determination as to whether “the statute is plain
and unambiguous or ambiguous.” (Am. Brief of Appellant at 11.) In her reading, the statute
applies to political parties because they are not expressly excluded by its definition of an
unincorporated nonprofit organization. Id. at 11-12.
No. 22AP-320                                                                                                 8

        {¶ 19} Ms. Rosenberger’s argument fails to address the trial court’s stated grounds
for granting the defendants’ motion to dismiss under Civ.R. 12(B)(6): the nonjusticiability
of disputes arising from the internal affairs of a political party. (May 27, 2022 Decision &
Entry at 5-6.) No claim in the complaint invokes R.C. 1745.05 or any provision of Chapter
1745, which governs unincorporated associations. As the trial court observed, “[t]he only
allegation involving a legislative enactment within Plaintiffs’ complaint[] is that for breach
of a fiduciary duty pursuant to R.C. 1702.30.”1 Id. at 7. In response to the motion to dismiss,
the plaintiffs conceded the nonjusticiability of internal political party disputes but asserted
that the passage of R.C. 1745 conferred standing on them, citing the statute’s definition of
an unincorporated nonprofit association under R.C. 1745.05(M). (Jan. 26, 2022 Memo in
Opp. at 2.)
        {¶ 20} The trial court correctly concluded that R.C. 1745.05(M) excludes political
parties. At first glance, the statute’s definition of an unincorporated nonprofit association
plausibly includes a political party, as the term “means an unincorporated organization,
consisting of two or more members joined by mutual consent pursuant to an agreement,
written, oral, or inferred from conduct, for one or more common, nonprofit purposes.”
R.C. 1745.05(M). However, the definition also includes a list of exclusions. Relevant here
is the exclusion stating that the definition of an unincorporated nonprofit association “does
not include * * * [a]n organization that is formed under any other statute that governs the
organization and operation of unincorporated associations.” R.C. 1745.05(M)(3). Because
Chapter 3517 of the Ohio Revised Code governs the organization of political parties, the
exclusion applies.       See R.C. 3517.01(A)(1) (setting forth requirements for forming a
“political party”). The trial court did not err in its reading of the statute.
        {¶ 21} Furthermore, the trial court was not required to expressly determine whether
the statute was unambiguous or not before applying it, as Ms. Rosenberger suggests. See
Church at Warren v. Warzala, 11th Dist. No. 2016-T-0073, 2017-Ohio-6947, ¶ 25 (applying
exclusion of religious organizations under R.C. 1745.05(M)(5) to definition of
unincorporated nonprofit association with no interpretation of statute). In any case, the

1 The complaint’s factual allegations did cite R.C. 3517.081 and R.C. 3517.10 when alleging that the party
treasurer failed to file financial reports required by law, but these provisions were not tied to any claim for
relief. (Nov. 29, 2021 Compl. at 9.) As the trial court noted, those provisions only apply to political
campaigns and their treasurers, not political parties.
No. 22AP-320                                                                               9

trial court effectively determined that the statute was unambiguous. The trial court stated
that the plaintiffs’ argument for standing under Chapter 1745 “fails by the plain meaning of
R.C. 1745.05” before applying the exclusion. (May 27, 2022 Decision & Entry at 6.) Because
“[u]nambiguous statutes are to be applied according to the plain meaning of the words
used,” if the statute had been ambiguous, the trial court would not have been able to
recognize its plain meaning. State ex rel. Burrows v. Indus. Comm. of Ohio, 78 Ohio St.3d
78, 81 (1997), citing Roxane Laboratories, Inc. v. Tracy, 75 Ohio St.3d 125, 127 (1996).
Finally, we note that even if the definition of an unincorporated nonprofit association under
R.C. 1745.05(M) did apply to political parties, Ms. Rosenberger’s briefing fails to explain
how that confers standing on her as an individual to litigate intraparty disputes with other
members. Nor does she address any of the trial court’s arguments concerning the failure
of any claim in the complaint, apart from the issue of standing, to state a claim upon which
relief may be granted.
       {¶ 22} For the foregoing reasons, we overrule all of the assignments of error and
affirm the judgment of Franklin County Court of Common Pleas.
                                                                        Judgment affirmed.
                          DORRIAN and JAMISON, JJ., concur.
                              _________________