Court Opinion

ID: 2703834
Source: CourtListenerOpinion
Date Created: 2014-08-04 20:15:44.233033+00
Date Added: 2024-06-11T09:14:31.155272
License: Public Domain

[Cite as Capital One Bank (USA) N.A. v. Rotman, 2012-Ohio-480.]

         Court of Appeals of Ohio
                               EIGHTH APPELLATE DISTRICT
                                  COUNTY OF CUYAHOGA

                          JOURNAL ENTRY AND OPINION
                                   No. 96891

                 CAPITAL ONE BANK (USA), N.A.
                                                         PLAINTIFF-APPELLEE

                                                   vs.

                           MITCHELL R. ROTMAN
                                                         DEFENDANT-APPELLANT

                                JUDGMENT:
                          REVERSED AND REMANDED

                                   Civil Appeal from the
                            Cleveland Heights Municipal Court
                                  Case No. CVF 1100008

        BEFORE:          S. Gallagher, J., Celebrezze, P.J., and Kilbane, J.

        RELEASED AND JOURNALIZED: February 9, 2012
ATTORNEY FOR APPELLANT

Andrew S. Pollis
Milton A. Kramer Law Clinic Center
C.W.R.U. School of Law
11075 East Boulevard
Cleveland, OH 44106

Also listed:

Matthew Bechtold
Legal Intern c/o Andrew Pollis
C.W.R.U. School of Law
11075 East Blvd.
Cleveland, OH 44106

ATTORNEY FOR APPELLEE

Deborah A. Winslow
Shermeta, Adams & Von Allmen, P.C.
P.O. Box 5016
Rochester Hills, MI 48308

SEAN C. GALLAGHER, J.:

     {¶ 1} Defendant-appellant, Mitchell R. Rotman, appeals the decision of

the Cleveland Heights Municipal Court that denied his motion to stay

proceedings pending arbitration. For the reasons stated herein, we reverse
the decision of the trial court and remand the matter for further proceedings

consistent herewith.

      {¶ 2} The issue presented in this appeal is whether a defendant may

obtain a stay of proceedings pending arbitration without having first initiated

the arbitration proceedings.       We conclude that the initiation of the

arbitration proceedings is not a prerequisite for obtaining a stay of the action

pursuant to R.C. 2711.02(B).

      {¶ 3} On January 5, 2011, plaintiff-appellee, Capital One Bank (USA),

filed a complaint against Rotman for money owing on an account. Capital

One alleged a balance due on a credit-card debt in the principal amount of

$2,249.65, with interest of $233.75, for a total of $2,483.40. The customer

agreement entered with Rotman was attached to the complaint.                  The

agreement includes an arbitration provision that provides, in pertinent part:

            You and we agree that either you or we may, at either
      party’s sole election, require that any Claim (as described below)
      be resolved by binding arbitration.

          IF YOU OR WE ELECT ARBITRATION OF A CLAIM,
      NEITHER YOU NOR WE WILL HAVE THE RIGHT TO
      PURSUE THAT CLAIM IN COURT OR BEFORE A JUDGE OR
      JURY * * *.

The term “claim” encompasses “any claim, controversy or dispute of any kind

or nature between you and us.” Further, the agreement permits either party

to elect arbitration “even if the claim is part of a lawsuit brought in court.”
      {¶ 4} On March 17, 2011, Rotman moved to stay proceedings pending

arbitration. In opposing the motion, Capital One argued that the arbitration

clause was optional, Capital One was not required to file arbitration, and

Rotman had not initiated any arbitration. Capital One further represented

that “should Defendant choose to file arbitration, Plaintiff will stipulate to a

dismissal without prejudice of this lawsuit while the arbitration is pending.”

      {¶ 5} The trial court denied the motion to stay and ordered Rotman to

file an answer to the complaint. Rotman timely filed this appeal.

      {¶ 6} Rotman raises one assignment of error that challenges the trial

court’s denial of a stay pending arbitration. He argues the claim is referable

to arbitration under the parties’ agreement and that Rotman was not

required to initiate arbitration before seeking a stay. Capital One has not

filed an appellate brief. Because our review of the issue is one of law, we

review the issue de novo.       See Berry v. Lupica, 8th Dist. No. 90657,

2008-Ohio-5102, 2008 WL 4438444, ¶ 7.

      {¶ 7} The arbitration statute, R.C. 2711.02(B), provides as follows:

            If any action is brought upon any issue referable to
      arbitration under an agreement in writing for arbitration, the
      court in which the action is pending, upon being satisfied that the
      issue involved in the action is referable to arbitration under an
      agreement in writing for arbitration, shall on application of one of
      the parties stay the trial of the action until the arbitration of the
      issue has been had in accordance with the agreement, provided
      the applicant for the stay is not in default in proceeding with
      arbitration.
      {¶ 8} Nothing in the above statute imposes a requirement that a party

must initiate arbitration before seeking a stay. Oftentimes, the question of

whether a matter is referable to arbitration is disputed by the parties.

Further, the statute clearly reflects that a party need only file a motion to

have the proceedings stayed when “the action is referable to arbitration under

an agreement in writing for arbitration.” R.C. 2711.02(B).

      {¶ 9} Here, the terms of the arbitration agreement gave either party

the right to elect arbitration of any claim between them. Thus, either party

had the right to have the matter referred to arbitration. Case law instructs

that where a matter is subject to arbitration, “[t]he burden is on the plaintiff

to commence the arbitration action, and the parties are obliged to cooperate

and respond in a timely manner.” Sexton v. Kidder, Peabody & Co., Inc., 8th

Dist. No. 74833, 1999 WL 652028 (Aug. 24, 1999).         See also Kessinger v.

SR83 Hotel Partners, LLC, 5th Dist. No. 04-CA-83, 2005-Ohio-4110, 2005 WL

1897376, ¶ 17; Johnson v. E. Bay Kia, Inc., S.D.Ala. No. 08-00656-CG-B, 2009

WL 928674, at *1 (Apr. 2, 2009). Indeed, it would be nonsensical to require a

defendant to commence arbitration of a claim against himself. Thus, where

a defendant properly exercises a right to arbitration, it is incumbent upon the

plaintiff to pursue its claims in arbitration once a stay of the action is

granted.
       {¶ 10} Accordingly, we find the trial court erred in denying Rotman’s

motion to stay proceedings pending arbitration.                   Upon remand, the trial

court is instructed to issue an order staying proceedings and referring the

matter to arbitration. The trial court shall instruct Capital One to timely

initiate the arbitration proceedings or else be subject to dismissal of the

action pursuant to Civ.R. 41(B). Rotman’s assignment of error is sustained;

the judgment of the trial court is reversed; and this case is remanded for

further proceedings consistent herewith.

       Judgment reversed; cause remanded.

       It is ordered that appellant recover from appellee costs herein taxed.

       The court finds there were reasonable grounds for this appeal.

       It is ordered that a special mandate issue out of this court directing the municipal court

to carry this judgment into execution.

       A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the

Rules of Appellate Procedure.

SEAN C. GALLAGHER, JUDGE

FRANK D. CELEBREZZE, JR., P.J., and
MARY EILEEN KILBANE, J., CONCUR