Court Opinion

ID: 2696528
Source: CourtListenerOpinion
Date Created: 2014-08-04 15:40:27.929773+00
Date Added: 2024-06-11T12:20:10.517984
License: Public Domain

[Cite as First Fed. Bank of Ohio v. Angelini, 2012-Ohio-2136.]

                            IN THE COURT OF APPEALS OF OHIO
                                THIRD APPELLATE DISTRICT
                                   CRAWFORD COUNTY

First Federal Bank of Ohio                                 Court of Appeals No. 3-11-16

        Appellee                                           Trial Court No. 03-CV-0098

v.

John Angelini, Jr., et al.

        Defendants                                         DECISION AND JUDGMENT

[Timothy A. Shimko, Appellant]                             Decided:   May 14, 2012

                                                  *****

        Stephen E. Chappelear, John F. Marsh and Phillip G. Eckenrode,
        for appellee.

        Robert L. Tucker and R. Brian Borla, for appellant.

                                                  *****

        OSOWIK, J.

        {¶ 1} This is an appeal from a judgment of the Crawford County Court of

Common Pleas, awarding appellee, First Federal Bank, $119,690.55 in attorney fees and
$39,574.80 in expenses due to the conduct of appellant, Timothy Shimko. For the

reasons that follow, this court affirms the judgment of the trial court.

       {¶ 2} Appellant sets forth the following assignment of error:

              1. The trial court erred in imposing sanctions under R.C. 2323.51

       and Rule 11 of the Ohio Rules of Civil Procedure against Timothy A.

       Shimko in the amount of $159,265.35.

       {¶ 3} This case stems from a mortgage foreclosure claim which was originally

filed by First Federal on April 1, 2003. Judgments were obtained against defendants John

and Joyce Angelini, and also against their son, Jeffrey Angelini. In 2005, Jeffrey

Angelini declared bankruptcy. Subsequently, the bankruptcy trustee authorized

appellant, Timothy Shimko, to represent the trustee.

       {¶ 4} On May 4, 2006, Shimko filed a counterclaim on behalf of the trustee

asserting:

              (1) Plaintiff extorted Jeffrey Angelini’s signature on the loan and

       mortgage documents; (2) Plaintiff fraudulently induced Jeffrey Angelini to

       co-sign the 2001 loan by misrepresenting the application of loan payments;

       (3) Plaintiff induced Jeffrey Angelini to sign the loan documents by

       constructive fraud; (4) Plaintiff violated the “RICO” statute; and,

       (5) Plaintiff breached a contract with Jeffrey in its application of the loan

       payments. (See Judgment Entry on Motions for Sanctions.)

2.
       {¶ 5} Appellee moved pursuant to Civ.R. 12(B)(6) to dismiss these counterclaims

for failure to state a claim upon which relief can be granted. On September 20, 2006, the

court granted the motion with respect to both the extortion and RICO claims. Appellant

then filed an amended counterclaim which included a claim for conversion of real

property. In response, appellee filed a motion for summary judgment. It was granted on

January 9, 2007. On appeal, the court affirmed the granting of summary judgment with

respect to the conversion claim, but overruled the summary judgment with respect to the

fraud, constructive fraud, and breach of contract claims.

       {¶ 6} Following the summary judgment ruling, the case proceeded to trial. The

jury returned a verdict against Jeffrey Angelini for $40,735.46 and against appellee for

$641,000. On February 18, 2009, Judge Markus declared a mistrial due to

inconsistencies between the jury interrogatories and the verdict and based upon

misconduct during trial by Shimko. The Court of Appeals for the Third District affirmed

the granting of the mistrial on the basis of the inconsistencies in the interrogatories and

the verdicts. The case was retried in 2011. The court granted a directed verdict on the

constructive fraud claim. The jury found that appellee had not committed fraud or

duress.

       {¶ 7} Following the 2011 trial, appellee moved for sanctions against the trustee,

appellant, Galion Bank, and the attorneys for Galion Bank. The court held an evidentiary

hearing on June 2, 2011. The defendants called no witnesses. Although the trial court

placed appellant under oath, he refused to respond whatsoever to any questions. On the

3.
contrary, he systematically referred the court to the record and to his brief in support of

his petition for writ of mandamus against the judge in this case. Appellant was

unapologetically defiant and wholly uncooperative throughout the proceeding.

       {¶ 8} At the conclusion of the hearing, the court found that all of the defendants

except the trustee had engaged in frivolous conduct. The court awarded $119,690.55 in

attorney fees and $39,574.80 in expenses against appellant. The court awarded

$57,903.25 in attorney fees and $6,430.70 in expenses against Galion Bank and its

attorneys. Galion Bank’s counsel paid the full amount of sanctions awarded against

them. It should be noted that the bank did not appeal the sanction award. Nevertheless,

appellant asserts that the sanctions awarded by the trial court were improper.

       {¶ 9} Civ.R. 11 in pertinent part states:

              [T]he signature of an attorney or pro se party constitutes a certificate

       by the attorney or party that the attorney or party has read the document;

       that to the best of the attorney’s or party’s knowledge, information, and

       belief there is good ground to support it; * * *. For a willful violation of

       this rule, an attorney or pro se party, upon motion of a party or upon the

       court’s own motion, may be subjected to appropriate action, including an

       award to the opposing party of expenses and reasonable attorney fees

       incurred in bringing any motion under this rule.

       {¶ 10} Under R.C. 2323.51, conduct means “the filing of a civil action, the

assertion of a claim, defense, or other position in connection with a civil action, the filing

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of a pleading, motion, * * * or the taking of any other action in connection with a civil

action.”

       {¶ 11} R.C. 2323.51(A)(2)(a) defines frivolous conduct as any of the following:

              (i) 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. (ii) It is not warranted under existing law,

       cannot be supported by a good faith argument for an extension,

       modification, or reversal of existing law, or cannot be supported by a good

       faith argument for the establishment of new law. (iii) The conduct consists

       of allegations or other factual contentions that have no evidentiary support

       or, if specifically so identified, are not likely to have evidentiary support

       after a reasonable opportunity for further investigation or discovery.

       {¶ 12} A sanctions award by a trial court under Civ.R. 11 or R.C. 2323.51 will not

be disturbed unless there was an abuse of discretion. Resources for Healthy Living, Inc.

v. Haslinger, 6th Dist. No. WD-10-073, 2011-Ohio-1978, ¶ 26.

       {¶ 13} We first review the sanctions for the counterclaim asserted by appellant

that appellee violated the RICO statute. Two requisite elements of a RICO claim did not

exist when appellant filed the counterclaim, specifically, that the conduct of the defendant

involves the commission of two or more specifically prohibited state or federal criminal

offenses, and that the prohibited criminal conduct of the defendant constitutes a pattern of

5.
corrupt activity. Wilson v. Marino, 6th Dist. No. L-06-1027, 2007-Ohio-1048, ¶ 52.

Proceeding under these circumstances constituted a willful violation. The filing of the

RICO claim was in violation of Civ.R. 11 and R.C. 2323.51.

       {¶ 14} Next, we consider the sanctions for the counterclaim asserted by appellant

for extortion. Simply put, Ohio law does not recognize a civil action for extortion. Thus,

the counterclaim was based upon a legal nullity. It could not be supported by a good

faith argument for an extension, modification, or reversal of existing law, nor could it be

supported by a good faith argument for the establishment of new law. As such, its

assertion under these circumstances constituted a willful violation of Civ.R. 11 and

frivolous conduct under R.C. 2323.51.

       {¶ 15} We must now consider the sanctions for the counterclaim asserted by

appellant for conversion. Despite appellant’s creative arguments, real property may not

be the subject of a conversion claim under Ohio law. The trial court correctly awarded

sanctions under Civ.R. 11 and R.C. 2323.51 because the counterclaim was not

conceivably encompassed by existing law.

       {¶ 16} Appellant also engaged in a tactic of seeking the removal of every judge in

this case. The trial court ordered sanctions against appellant for filing a mandamus and

prohibition action against Judge Markus. Appellant clearly did not like the judge’s

rulings and rather than appealing these rulings, the appellant sought to have the judge

removed from the case. In fact, appellee intervened in support of Judge Markus’ motion

to dismiss. The court of appeals denied appellant’s requested relief. Under these facts

6.
and circumstances, appellant’s actions were unwarranted, willful, and frivolous. They

were in violation of Civ.R. 11 and R.C. 2323.51.

       {¶ 17} The court awarded sanctions pursuant to R.C. 2323.51 for the constructive

fraud and fraudulent concealment counterclaims. Appellee did not have a fiduciary

relationship with Jeffrey Angelini and thus had no duty to disclose matters to him. The

court did not abuse its discretion when it awarded sanctions.

       {¶ 18} We find that the court did not abuse its discretion when it imposed

sanctions pursuant to Civ.R. 11 and R.C. 2323.51. We find that appellant’s assignment

of error is not well-taken.

       {¶ 19} Wherefore, we hereby affirm the judgment of the Crawford County Court

of Common Pleas. Pursuant to App.R. 24, appellant is ordered to pay the costs of this

appeal.

                                                                     Judgment affirmed.

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

7.
                                                              First Fed. Bank of Ohio v.
                                                              Angelini
                                                              C.A. No. 3-11-16

Peter M. Handwork, J.                         _______________________________
                                                          JUDGE
Mark L. Pietrykowski, J.
                                              _______________________________
Thomas J. Osowik, J.                                      JUDGE
CONCUR.
                                              _______________________________
                                                          JUDGE

Judges Peter M. Handwork, Mark L. Pietrykowski, and Thomas J. Osowik, Sixth District
Court of Appeals, sitting by assignment of the Chief Justice of the Supreme Court of
Ohio.

          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.

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