Court Opinion

ID: 2756186
Source: CourtListenerOpinion
Date Created: 2014-12-01 14:05:03.378343+00
Date Added: 2024-06-11T11:26:50.830723
License: Public Domain

[Cite as Adams Babner & Gitlitz, L.L.C. v. Tartan W., L.L.C., 2014-Ohio-5305.]

                             IN THE COURT OF APPEALS OF OHIO

                                   TENTH APPELLATE DISTRICT

Adams, Babner & Gitlitz, LLC,                          :

                 Plaintiff-Appellant/                  :
                 Cross-Appellee,
                                                       :
v.
                                                       :                  No. 14AP-277
Tartan West, LLC,                                                   (M.C. No. 2010 CVF 35005)
                                                       :
                 Defendant-Appellee/                               (REGULAR CALENDAR)
                 Cross-Appellee,                       :

Steven Simonetti,                                      :

                 Defendant-Appellee/                   :
                 Cross-Appellant.
                                                       :

                                         D E C I S I O N

                                  Rendered on November 28, 2014

                 Duncan Law Group, LLC, Brian K. Duncan, and Bryon D.
                 Thomas, for appellant/cross-appellee.

                 Mills, Mills, Fiely & Lucas LLC, Laura L. Mills, and Paul W.
                 Vincent, for appellee/cross-appellant.

                       APPEAL from the Franklin County Municipal Court

SADLER, P.J.
        {¶ 1} Plaintiff-appellant/cross-appellee, Adams, Babner & Gitlitz, LLC ("ABG"),
appeals from the March 5, 2014 decision and entry of the Franklin County Municipal
Court denying its motion for sanctions filed pursuant to R.C. 2323.51.                      Defendant-
No. 14AP-277                                                                                2

appellee/cross-appellant, Steven Simonetti, appeals from the same decision and entry
denying its R.C. 2323.51 motion for sanctions. For the following reasons, we affirm the
trial court's judgment.
I. BACKGROUND
       {¶ 2} On September 2, 2010, ABG filed a complaint for breach of contract against
"Tartan West, LLC c/o Steve Simonetti," seeking the payment of legal fees allegedly
incurred by Tartan West, LLC between March 2007 and June 2008. Tartan West, LLC
filed an answer on January 24, 2011 stating, in relevant part, "[ABG] has not named a
legal entity associated with Steven Simonetti." (Jan. 24, 2011 Answer, 2.)
       {¶ 3} On February 9, 2011, ABG filed a motion to substitute Tartan West for
Tartan West, LLC as the defendant, asserting the complaint misidentified the defendant
as Tartan West, LLC. The trial court granted ABG's motion on March 1, 2011. On
March 28, 2011, ABG filed a motion for leave to amend its complaint to add Simonetti as a
defendant, asserting there was a question of law as to Simonetti's personal liability on the
debt ABG sought to collect from Tartan West. The trial court granted the motion on
March 29, 2011.
       {¶ 4} On April 7, 2011, Simonetti filed an answer, along with a motion for R.C.
2323.51 sanctions.     In the motion, Simonetti maintained that ABG's filing of the
complaint constituted frivolous conduct as defined in R.C. 2323.51, as it "was filed to
harass or maliciously injure Defendant, [and] is not warranted under existing law, [or]
cannot be support[ed] by a good faith argument for an extension, modification, reversal
or establishment of existing law." (Apr. 7, 2011 Motion, 2.)
       {¶ 5} The trial court scheduled a trial on ABG's breach of contract action for
August 31, 2011. Minutes before trial was to commence, ABG dismissed Simonetti as a
defendant without prejudice pursuant to Civ.R. 41(A)(1)(a). The next day, September 1,
2011, ABG dismissed the entire action without prejudice pursuant to Civ.R. 41(A)(1)(a).
       {¶ 6} On September 8, 2011, Simonetti renewed his R.C. 2323.51 motion for
sanctions. Simonetti asserted that sanctions were warranted because (1) ABG dismissed
its lawsuit on the eve of trial in contravention of previous discussions between the parties
as to the impropriety of doing so, and (2) ABG filed its complaint solely in retaliation for a
pending lawsuit Simonetti filed against ABG and one of its principals, Bret Adams. On
No. 14AP-277                                                                               3

September 19, 2011, ABG filed a response to Simonetti's motion along with an R.C.
2323.51 motion for sanctions against Simonetti. ABG argued in its motion that Simonetti
engaged in frivolous conduct "by filing a motion for fees that was not based on any
statutory authority" and was "completely lacking in evidentiary support." (Sept. 19, 2011
Motion, 4.)
       {¶ 7} The trial court scheduled a hearing on the parties' motions for sanctions for
June 2012. Following numerous continuances and procedural maneuverings, the hearing
was finally set for November 20, 2013.
       {¶ 8} On October 11, 2013, the parties filed pre-hearing briefs in support of their
respective motions for sanctions. In his brief, Simonetti again alleged he was substituted
as a party to the lawsuit only in retaliation for separate litigation Simonetti filed against
ABG and Adams and that ABG dismissed its lawsuit at the last minute despite Simonetti's
request that it not do so. Citing unrelated litigation between him and Adams, Simonetti
claimed that Adams had a "propensity to file harassment litigation against Mr. Simonetti."
(Simonetti Oct. 11, 2013 Sanctions Brief, 3.) Simonetti claimed that ABG's conduct
qualified as frivolous conduct "obviously purposed in harassing or maliciously injuring
[Simonetti] by causing a needless increase in the cost of litigation" and was "not
warranted under existing law, cannot be supported by a good faith argument for an
extension, modification, or reversal of existing law, and also cannot be supported by a
good faith argument for the establishment of new law."           (Simonetti Oct. 11, 2013
Sanctions Brief, 6.) Simonetti requested sanctions in the amount of $14,808.53.
       {¶ 9} In its brief, ABG claimed Simonetti engaged in sanctionable frivolous
conduct by intentionally concealing the identity of the party responsible for payment of
the legal services rendered, by denying his personal responsibility for payment of the legal
services rendered, by filing frivolous pretrial motions, and by filing a frivolous motion for
sanctions. ABG argued that Simonetti's "gamesmanship" violated R.C. 2323.51. (ABG
Oct. 11, 2013 Sanctions Brief, 9.)
       {¶ 10} During a November 20, 2013 status conference, the parties agreed to submit
their motions for decision upon non-oral hearing after filing supplemental briefs and/or
evidentiary materials.    On December 9, 2013, the trial court filed an entry which
memorialized the parties' agreement and ordered that the supplemental materials be filed
No. 14AP-277                                                                               4

no later than December 23, 2013. On December 23, 2013, the parties submitted their
supplemental filings.
       {¶ 11} In his supplemental filing, Simonetti asserted that "[d]espite the game of
musical defendants [ABG] played," ABG was aware of the proper legal name of the entity
that had incurred the legal fees and/or had access to numerous members of that entity
who could have informed him of such. (Dec. 23, 2013 Supplemental Brief, 2.) He further
averred that despite knowledge that Simonetti was not a proper defendant, ABG
nonetheless added him as a party. Simonetti claimed that due to its "misbehavior and
misuse of the system," ABG "should be responsible for the expense * * * created for Mr.
Simonetti."    (Dec. 23, 2013 Supplemental Brief, 4.)          Simonetti attached various
evidentiary materials to his supplemental filing, most notably his own affidavit.
       {¶ 12} In its supplemental filing, ABG did not offer argument beyond that asserted
in its October 11, 2013 sanctions brief. ABG filed evidentiary materials in the form of
affidavits of two of its in-house attorneys, two members of an entity known as Tartan
Development Company (West), LLC, and the outside counsel who filed the motion for
sanctions on behalf of ABG. In his affidavit, outside counsel averred that ABG paid
$13,492.85 for his services in pursuing the motion for sanctions.
       {¶ 13} In its decision and entry, the trial court acknowledged the parties'
conflicting factual assertions underlying their motions for sanctions. As to Simonetti, the
court stated, "the version of those facts advanced by Mr. Simonetti asserts that ABG
engaged in an elaborate and calculated legal ruse to harass Mr. Simonetti by filing a
lawsuit, wherein the wrong party was deliberately named, but only just slightly mis-
named so as to lend the gambit an air of believability, and thereafter ABG brazenly twice
repeated the tactic before dismissing. Mr. Simonetti asserts that all of this was done,
(presumably at great expense to ABG), for the sole purpose of burdening him with an
expensive lawsuit." (Mar. 5, 2014 Decision and Entry, 4.) Regarding ABG, the court
averred, "[i]n stark contrast, ABG's version of the facts asserts that for over one year ABG
provided legal services to a client without coming to know the true legal identity of that
client, only to have the representative of that client extend the scheme to its extreme by
continuing to conceal the true identity of the client after ABG brought suit for unpaid legal
fees." (Mar. 5, 2014 Decision and Entry, 4.)
No. 14AP-277                                                                             5

       {¶ 14} The court concluded that neither party had met its burden of establishing its
version of the facts. Regarding Simonetti, the court stated, "instead of showing ABG to be
malevolent and plotting, the evidence and the record in this case show sloppy and
inattentive legal practice by ABG. However, mistakes and misstatements do not rise to
'the sort of egregious conduct subject to sanction as frivolous conduct.' Judd v. Meszaroz,
10th Dist. No. 10AP-1189, 2011-Ohio-4983, ¶ 28." (Mar. 5, 2014 Decision and Entry, 4.)
       {¶ 15} As to ABG, the court stated, "instead of showing a deliberate scheme to
evade paying legal fees by concealing the proper defendant's identity, the evidence and the
record show that Mr. Simonetti's counsel chose to employ a legal strategy of declining to
aid ABG's stumbling efforts to prosecute its claim for relief.      The Court notes that
although that strategy was consistent with the Civil Rules and applicable law, and was
therefore within Mr. Simonetti's counsel's prerogative to employ, whether that strategy
was a wise one is questionable, in hindsight, given the way in which it contributed to the
prolonged character of this case." (Mar. 5, 2014 Decision and Entry, 4-5.) In a related
footnote, the court noted, "[t]he strategy was also futile, ultimately, because ABG also
represents that after dismissing the instant action, it filed suit against the proper legal
entity (a company associated with Mr. Simonetti) and obtained summary judgment, and
the judgment was affirmed on appeal. * * * See Adams, Babner & Gitlitz, L.L.C. v. Tartan
Dev. Co. (West), L.L.C., 10th Dist. No. 12AP-729, 2013-Ohio-1573."          (Mar. 5, 2014
Decision and Entry, 5, fn. 3.) The court further observed that "the general confusion over
precise legal names in this case is consistent with the numerous instances in the record in
which the parties and their counsel used various versions of the name 'Tartan West,'
seemingly interchangeably." (Mar. 5, 2014 Decision and Entry, 5.)
       {¶ 16} The court also rejected Simonetti's claim that ABG engaged in frivolous
conduct by adding him as a defendant without sufficient basis and dismissing him on the
day of trial, finding that ABG's evidentiary materials provided "colorable legal arguments
to support adding and dismissing Mr. Simonetti." (Mar. 5, 2014 Decision and Entry, 6.)
The court averred, "[t]hus, the Court cannot conclude, as a matter of fact, that adding and
then dismissing Mr. Simonetti was done solely for the purpose of harassing and
maliciously injuring him." (Mar. 5, 2014 Decision and Entry, 6.)
No. 14AP-277                                                                                6

         {¶ 17} The court ultimately concluded, "because neither party has met its burden
of proof by showing that the other engaged in conduct which objectively and obviously
served merely to harass and maliciously injure the other, the Court cannot conclude, as a
factual matter, that either party engaged in frivolous conduct." (Mar. 5, 2014 Decision
and Entry, 6.) Accordingly, the court denied both parties' R.C. 2323.51 motions for
sanctions.
II. ASSIGNMENT OF ERROR
         {¶ 18} In a timely appeal, ABG sets forth a single assignment of error:
                IN LIGHT OF THIS COURT'S DECISION IN ADAMS,
                BABNER & GITLITZ, LLC V. TARTAN DEVELOPMENT CO.
                (WEST), LLC., 2013-Ohio-1573 (APRIL 2013), IT IS CLEAR
                THAT APPELLEE'S CONDUCT WAS FRIVOLOUS;
                THEREFORE, ABG SHOULD BE AWARDED REASONABLE
                ATTORNEY'S FEES AS COMPENSATION IN LITIGATING
                THIS ISSUE.

III. DISCUSSION
         {¶ 19} At the outset, we note that even after ABG voluntarily dismissed its breach
of contract action, the trial court retained jurisdiction to decide the motions for sanctions,
as such are considered collateral issues unrelated to the merits of the action. State ex rel.
Hummel v. Sadler, 96 Ohio St. 3d 84, 88, 2002-Ohio-3605, ¶ 23; Grossman v. Mathless &
Mathless, 85 Ohio App. 3d 525, 528 (10th Dist.1993) (holding that a trial court may
entertain a motion to impose sanctions under R.C. 2323.51 even after a voluntary
dismissal).
         {¶ 20} ABG states in its assignment of error that our decision in Adams, Babner &
Gitlitz, LLC v. Tartan Dev. Co. W., LLC, 10th Dist. No. 12AP-729, 2013-Ohio-1573,
wherein we concluded the trial court did not err in granting summary judgment to ABG
on its breach of contract claim against an entity known as Tartan Development Company
(West) LLC, necessitates a finding that Simonetti engaged in frivolous conduct. However,
ABG fails to offer any legal argument as to why this is true. Indeed, ABG mentions our
decision only in its procedural history and in reference to the trial court's footnote quoted
above.     Under App.R. 16(A)(7), an assignment of error must be supported by an
argument. "If an argument exists supporting an assignment of error, 'it is not this court's
No. 14AP-277                                                                               7

duty to root it out.' " Reid v. Plainsboro Partners, III, 10th Dist. No. 09AP-442, 2010-
Ohio-4373, ¶ 22, quoting State v. Breckenridge, 10th Dist. No. 09AP-95, 2009-Ohio-
3620, ¶ 10.    Appellate courts may not construct legal arguments in support of an
appellant's appeal. Camp v. Star Leasing Co., 10th Dist. No. 11AP-977, 2012-Ohio-3650,
¶ 67.
        {¶ 21} ABG's actual argument is set forth in the body of its brief: "[t]he issue
presented on appeal is whether [Simonetti's] tactic of prolonging the case is sufficient
grounds for sanctions under R.C. 2323.51?"          (ABG's Brief, 1.)     Pursuant to R.C.
2323.51(B)(1), "any party adversely affected by frivolous conduct may file a motion for an
award of court costs, reasonable attorney's fees, and other reasonable expenses incurred
in connection with the civil action or appeal."       When presented with a motion for
sanctions under R.C. 2323.51, a trial court must employ a two-step process. McCallister
v. Frost, 10th Dist. No. 07AP-884, 2008-Ohio-2457, ¶ 24. First, the court must determine
whether an action taken by the party against whom sanctions are sought constituted
frivolous conduct. Id. Second, if the court finds the conduct frivolous, it must determine
what amount, if any, of reasonable attorney fees to award the party aggrieved by the
frivolous conduct. Id.
        {¶ 22} "No single standard of review applies to appeals of rulings on R.C. 2323.51
motions." Groves v. Groves, 10th Dist. No. 09AP-1107, 2010-Ohio-4515, ¶ 18, citing
Indep. Taxicab Assn. of Columbus, Inc. v. Abate, 10th Dist. No. 08AP-44, 2008-Ohio-
4070, ¶ 13. "The standard an appellate court uses depends upon whether the trial court's
determination resulted from factual findings or a legal analysis." Bartelt Dancers, LLC v.
Icenhour, 10th Dist. No. 13AP-154, 2013-Ohio-5604, ¶ 10. "When the question regarding
what constitutes frivolous conduct calls for a legal determination, 'e.g., whether a claim is
warranted under existing law or could be supported by a good faith argument for the
extension, modification, or reversal of existing law or the establishment of new law,' we
employ a de novo standard of review."         Id., quoting Groves at ¶ 18.       "When the
determination of frivolous conduct results from a factual determination, we review the
trial court's findings with a 'degree of deference, and we do not disturb those findings
where the record contains competent, credible evidence to support them.' " Id., quoting
Groves at ¶ 18. "A frivolous conduct finding under R.C. 2323.51(A)(2)(a)(i) involves a
No. 14AP-277                                                                               8

determination of factual issues." Ruffian, LLC v. Hayes, 10th Dist. No. 09AP-948, 2011-
Ohio-831, ¶ 30, citing Orbit Electronics, Inc. v. Helm Instrument Co., 167 Ohio App. 3d
301, 2006-Ohio-2317, ¶ 47 (8th Dist.).
       {¶ 23} ABG's contention that Simonetti engaged in frivolous conduct by
"prolonging the case" invokes R.C. 2323.51(A)(2)(a)(i). Under that section, conduct is
frivolous if it "obviously serves merely to harass or maliciously injure another party to the
civil action or appeal or is for another improper purpose, including, but not limited to,
causing unnecessary delay or a needless increase in the cost of litigation." Although R.C.
2323.51 does not define the term "purpose," at least one appellate court has applied the
definition of "purpose" set forth in R.C. 2901.22(A) to an R.C. 2323.51 frivolous conduct
analysis. See Wagner v. Cormeg, Inc., 5th Dist. No. 2010 CA 00134, 2011-Ohio-1205,
¶ 39-42. "Purpose is defined in terms of a specific intention either to cause a certain
result, or to engage in conduct of a certain nature regardless of what the offender intends
to accomplish through that conduct." Id. at ¶ 40. As noted, the trial court found that the
legal strategy employed by Simonetti in failing to assist ABG in determining the proper
defendant to sue did not amount to frivolous conduct because such strategy was
sanctioned by the civil rules and was thus within Simonetti's prerogative to employ. The
trial court questioned the wisdom of this strategy "given the way in which it contributed to
the prolonged character of this case." (Mar. 5, 2014 Decision and Entry, 5.)
       {¶ 24} ABG seizes upon the trial court's language quoted above in arguing that
"[i]nexplicably, in coming to the conclusion that [Simonetti] had employed a legal
strategy, solely for the purpose of prolonging the case, the trial court then denied ABG's
claim for sanctions." (ABG's Brief, 6.) We disagree with ABG's characterization of the
trial court's statement. Contrary to ABG's contention, the trial court did not find that the
legal strategy employed by Simonetti was for the sole purpose of prolonging the case;
rather, the trial court merely found that such strategy may not have been wise, as it
contributed to the lengthy proceedings in this case.
       {¶ 25} Upon review, while we agree with the trial court that the legal tactics taken
by Simonetti may have contributed, at least in part, to the lengthy nature of this case, we
do not find sufficient evidence that those tactics were employed with the specific intention
of "causing unnecessary delay or a needless increase in the cost of litigation." R.C.
No. 14AP-277                                                                                9

2323.51(A)(2)(a)(i). Accordingly, the trial court did not err in declining to find frivolous
conduct under R.C. 2323.51(A)(2)(a)(i).
       {¶ 26} ABG's assignment of error is overruled.
IV. CROSS-ASSIGNMENT OF ERROR
       {¶ 27} Simonetti filed a notice of cross-appeal and sets forth the following
assignment of error:
               The trial court erred to the prejudice of Defendant/Cross-
               Appellant Steven Simonetti ("Simonetti") when it determined
               that Simonetti is not entitled to attorneys fees and sanctions
               stemming from Plaintiff/Cross-Appellee Adams Babner,
               LLC's ("Adams") frivolous conduct.

       {¶ 28} Before considering the merits of this assignment of error, we must first
consider our jurisdiction to do so.
       {¶ 29} App.R. 3(C)(1) provides, in part, that "[a] person who intends to defend a
judgment or order against an appeal taken by an appellant and who also seeks to change
the judgment or order * * * shall file a notice of cross appeal within the time allowed by
App.R. 4." As relevant here, pursuant to App.R. 4(A), "a party who wishes to appeal from
an order that is final upon its entry shall file the notice of appeal * * * within 30 days of
that entry." App.R. 4(B)(1) provides that "[i]f a notice of appeal is timely filed by a party,
another party may file a notice of appeal within the appeal time period otherwise
prescribed by this rule or within ten days of the filing of the first notice of appeal."
       {¶ 30} The trial court entered final judgment in this matter on March 5, 2014.
ABG filed its notice of appeal on April 4, 2014, within the time prescribed by App.R. 4.
Simonetti did not file his notice of cross-appeal with the trial court until April 15, 2014,
which was one day out of rule pursuant to App.R. 4(B)(1). "The time requirements for
filing a cross-appeal pursuant to App.R. 4 are mandatory and jurisdictional." Tod v.
Cincinnati State Technical & Community College, 10th Dist. No. 10AP-656, 2011-Ohio-
2743, ¶ 94, citing Donahue v. Silberstein, 10th Dist. No. 90AP-588 (1990). "An appellate
court may not enlarge the time for filing a notice of appeal." Id., citing App.R. 14.
Because Simonetti failed to comply with the time requirements of App.R. 4 in filing his
notice of cross-appeal, we are without jurisdiction to consider his cross-appeal.
No. 14AP-277                                                                         10

V. CONCLUSION
      {¶ 31} Accordingly, having overruled ABG's assignment of error, we affirm the
judgment of the Franklin County Municipal Court. Simonetti's cross-appeal is dismissed.
                                                                   Judgment affirmed;
                                                                cross-appeal dismissed.

                          TYACK and CONNOR, JJ., concur.
                       _____________________________