[Cite as Shury v. Cusato, 2022-Ohio-
4401.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
DONALD SHURY, :
Plaintiff-Appellee, :
No. 111228
v. :
PAUL CUSATO, ET. AL, :
Defendants-Appellants. :
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED IN PART, REVERSED IN
PART, AND REMANDED
RELEASED AND JOURNALIZED: December 8, 2022
Civil Appeal from the Cuyahoga County Court of Common Pleas,
Case No. CV-19-918245
Appearances:
Susan L. Gragel Law, Inc., and Susan L. Gragel, for
appellee.
Kehoe & Associate, LLC, Robert D. Kehoe, and Lauren N.
Orrico, for appellants.
ANITA LASTER MAYS, P.J.:
Defendants-appellants Paul Cusato (“Cusato”) and Growler
Restorations, Inc. (“Growler”), appeal the trial court’s judgments arising from a civil
action initiated by plaintiff-appellee Donald Shury (“Shury”) and appellants’
counterclaims.
We affirm in part, reverse in part, and remand.
I. Background and History
On July 16, 2019, Shury filed a pro se replevin and conversion action
for a vintage 1963 Jaguar XKE (“Jaguar”) with an asserted value of $150,000 against
Cusato and Growler. Cusato, who had more than 40 years of experience restoring
British cars and specialized in Jaguars, formed Growler in 2005. Cusato was the
sole shareholder and president.
Shury claimed the vehicle was placed with appellants to correct repair
work appellants had previously performed. A vehicle title was attached to the
complaint that listed Shury as the owner, the purchase price as $2,500 and the
previous owner as A&B Motors in Wickliffe, Ohio (“A&B Motors”). Shury stated
appellants refused to return the vehicle due to disputed repair charges of $5,409.98
and storage fees of $1,725.
On August 9, 2019, the trial court ordered that appellants return the
vehicle and required that Shury post a bond of twice the amount of the disputed
repair charge. The trial court denied appellants’ motions to stay the replevin
judgment, and to issue an order preventing sale of the vehicle.
On August 15, 2019, appellants filed an answer denying Shury’s claims.
Appellants counterclaimed for 1) a declaratory judgment that appellants had an
artisan’s lien on the Jaguar and were entitled to possession until payment was
remitted; 2) breach-of-contract for nonpayment; 3) quantum meruit for third-party
storage fees beginning May 28, 2019, required because appellants’ insurance did not
permit storage; 4) defamation, and 5) commercial disparagement. Appellants
requested compensatory damages exceeding $25,000 and punitive damages. Shury
denied appellants counterclaims and posed several affirmative defenses including
violations of R.C. Chapter 1345 known as the Ohio Consumer Sales Practices Act
(“CSPA”).
Shury retained counsel and one week after his deposition moved for
leave to amend the complaint to add claims under the motor vehicle repair
regulations at Ohio Admin.Code 109:4-3-13, promulgated under the CSPA. Shury
asserted appellants failed to provide required documents such as an estimate form
and receipt for payment made. Appellants countered that the motion was a bad faith
attempt to delay the proceedings and did not comply with Civ.R. 15(A). On
January 20, 2020, the trial court granted leave.
On February 5, 2020, appellants filed an amended answer with
additional invoices and added a sixth counterclaim for breach of the covenant of
good faith and fair dealing. On February 28, 2020, the trial court denied Cusato’s
motion to dismiss the amended complaint against him individually based on his
status as an owner-employee of Growler.
Appellants moved to compel additional discovery from Shury on the
new claims. Appellants argued the written discovery responses lacked substance
and Shury stated at the original deposition that his case was based solely on the
replevin action. Shury replied that the requests were untimely, and appellants were
on notice due to the CSPA affirmative defense in Shury’s original answer to
appellants’ counterclaims. The trial court denied the motion.
Appellants subpoenaed the Taft Law Firm and Anthony Nero (“Nero”),
the owner of A&B Motors, to clarify what appellants argued was conflicting
testimony provided by Shury at deposition. Appellants questioned the true chain of
title and claimed value of the vehicle. The trial court denied the motions.
In April 2020, the parties filed cross-motions for summary judgment.
Each parties’ filings were accompanied by supporting exhibits. Shury requested
summary judgment for the conversion and CSPA motor vehicle repair rules claims,
subject to further proceedings for attorney fees and litigation expenses. Shury also
moved to deny appellants’ counterclaims at appellants’ cost. Appellants requested
summary judgment against Shury’s claims and partial summary judgment against
Shury for appellants’ declaratory judgment, breach-of-contract and quantum-
meruit counterclaims.
The trial court issued three entries.
On count one of the amended complaint, there is no question of
material fact about whether the defendants committed at least one
Ohio CSPA violation.
On count two of the amended complaint [for conversion], there are
issues of material fact about whether the parties had a contract or an
equitable substitute for a contract. If they did not, then it is possible
the defendants’ converted the Jaguar, thereby damaging the plaintiff.
Those same questions of material fact preclude summary judgment in
the defendants’ favor on the first three counts of their amended
counterclaim.
Journal entry No. 114400360 (Sept. 9, 2020).
Secondly, the trial court granted Shury’s summary judgment motion in
part. The trial court found “no genuine issue of material fact existed regarding
whether appellants ‘committed a deceptive trade practice and violated
R.C. 1345.02(A) when, in late 2018 or early 2019, they failed to meet their obligation
to provide to Shury the form required by Ohio Administrative Code 109:4-3-
13(A)(1).’” Journal entry No. 114398315 (Sept. 9, 2020).
There are, however, issues of material fact about how many times a
deceptive trade practice was committed. Shury claims a deceptive
trade practice [occurred] each time an invoice was produced and when
a $1,000 deposit was demanded by the defendants and paid by Shury.
The summary judgment, therefore, is on one instance of a 1345.02(A)
violation only. The summary judgment, moreover, is only on the
existence of the violation itself; there are still issues of fact about the
amount of damages caused by the violation.
Summary judgment was not sought on count two of the amended
complaint for conversion and that claim remains pending.
The portion of the April 17, 2020, motion seeking summary judgment
in Shury’s favor on Cusato and Growler Restorations’ counterclaims
[is] addressed in a separate judgment entry.
Id.1
The trial court incorrectly stated that Shury did not seek summary judgment on
1
the conversion claim, but the parties and the trial court addressed the issue as
documented in the first judgment entry. The claim was ultimately dismissed.
In the third entry, the trial court granted Shury’s motion for summary
judgment on appellants’ counterclaim for breach of the duty of good faith and fair
dealing.
There is no stand-alone cause of action for any such breach. Evidence
to the effect that duty was breached may, however, be considered in
connection with the breach of contract counterclaim (Count Two).
Otherwise, the motion for summary judgment on the counterclaims is
denied.
Journal entry No. 114399772 (Sept. 9, 2020).
A. Trial
The jury trial commenced on November 16, 2021. The case was
reassigned to a visiting judge the day prior to trial due to a scheduling conflict.
Shury, Cusato, John Barnard (“Barnard”), owner of Euro Motorsports (“Euro”), and
Terry Hawk (“Hawk”), owner of Hawk Engine & Machine, Inc. (“Hawk Engine”)
testified.
Shury met Cusato in 2007 and had appellants repair and restore several
vehicles for him. In 2011, Shury purchased several vintage Jaguars, including the
Jaguar, from an estate administered by the Taft Law Firm (“Taft Law”). The vehicles
required repairs and had missing or out-of-state titles. Shury had appellants repair
several of the vehicles.
In 2014, Shury hired appellants to resolve an issue with blue smoke
emanating from the Jaguar’s tail pipe. Shury had appellants remove the engine
cylinder head that Shury then delivered to Hawk Engine to machine and rebuild.
After the cylinder head was removed, appellants discovered that portions of a prior
rebuild had been improperly performed. Shury executed the motor-vehicle repair-
disclosure form that waived receipt of an estimate and authorized minimal repairs
because he planned to sell the vehicle. Appellants reinstalled the cylinder head.
Shury paid appellants $1,000.00 on a $1,673.35 invoice.
Cusato told Shury the car would stop smoking after it was driven for a
break-in period of several hundred miles. From 2014 to 2018, appellants and Shury
continued to do business without issue. In 2018, after the Jaguar was driven only
150 miles, Shury was unable to sell the Jaguar at a Sotheby’s auction.
In December 2018, Shury returned the Jaguar to appellants with
instructions to “[t]ake the engine out, disassemble it and send it to Hawk.”
(Tr. 330.) Shury delivered the engine to Hawk Engine and returned it to appellants
on February 12, 2019. The unit was returned to Hawk Engine three times for
additional work and adjustments so it could be properly reinstalled.
Appellants incurred additional costs due to the issues, and Cusato
testified about the charges in appellants’ invoices and how they related to the events.
Appellants reinstalled the engine and the car was running at a normal temperature
and fans were operating when a “substantial puddle of oil” was discovered
underneath the car. The rear main seal was leaking, an issue that could only be
discovered after the engine had been reassembled and the vehicle was running.
Cusato called Shury in May 2019 to inform him the car was ready.
Shury disputed the accuracy of the invoices and refused to pay. On June 20, 2019,
Shury texted Cusato advising that he wanted to pick up the car and appellants could
pursue payment however they determined. Cusato replied that he would meet with
him and bring the paperwork to discuss the matter but Shury did not respond. On
July 11, 2019, appellants sent a payment demand letter that explained the basis for
the charges, including storage fees. Shury testified “it was past the point of meeting
with him” by that time. (Tr. 190.) “There was so much venom going over this that
there was no need to meet with him.” Id. The replevin action was filed and Shury
secured possession.
Cusato testified that he believed the 2014 repair-estimate waiver form
extended to the 2018 repairs. Shury listed in the replevin action that the repairs
were to correct work performed, and Shury testified at trial that he wanted a credit
issued against the 2018 work due to the “defective” portion of the work appellants
did in 2014. (Tr. 37, 156.)
Barnard repaired and sold foreign cars for over 25 years. Barnard
testified that he had worked on the Jaguar “probably about three years ago,” which
would have been about 2018. (Tr. 230.) The Jaguar arrived on a flatbed leaking
coolant. Barnard discovered several coolant leaks in the manifold and made repairs.
About six months prior to that, Barnard examined the Jaguar for an oil
leak in the real main seal contained within the short block of the engine. (Tr. 238.)
Barnard told Shury the entire engine had to be removed to get to the main seal and
that he would “better off taking it back to the last person that worked on it” than
have Barnard fix it and estimated it would take about 40 hours of work. Shury did
not sign an estimate form on those occasions.
Hawk testified he had worked with appellants and with Shury over the
years. Hawk described the company’s involvement with the 2014 and 2018 Jaguar
repairs. Shury supplied the parts and paid Hawk Engine directly. Hawk performed
some of the work and had certain stages performed by third-parties who specialized
in the applicable function. Hawk confirmed that “the only way you can tell if a rear
main seal is going to leak” is to completely assemble the engine “and run it.”
(Tr. 430.)
Shury also testified that he told appellants’ landlord that he had a
dispute with appellants who did “substandard work, billed excessively, had an
unsafe facility and that appellants’ employees were mere apprentices.” (Tr. 207.)
Shury did not recall telling Barnard that Cusato was a thief or stating it during his
deposition. Shury also did not recall or otherwise disputed allegedly defamatory
statements made during deposition.
B. Verdict
The jury determined:
[V]erdict for defendants and against plaintiff on Count I of the
complaint [CSPA claim]; verdict for defendants and against plaintiff in
the amount of $6,462.98 on Count II of the counterclaim [breach of
contract for repair charge]; verdict for defendants and against plaintiff
in the amount of $2,250.00 on Count III of the counterclaim [quantum
meruit]; and verdict for plaintiff and against defendants on Counts IV
[defamation] and V [commercial disparagement] of the counterclaim.
Count II of complaint [conversion] and all other claims of the
counterclaim were and are dismissed. Defendants as prevailing party
on the CSPA claims of Count I of the complaint seek attorney fees and
expenses. At the agreement of the parties, trial on this claim of
defendants is set for 1:30 p.m. on Wednesday, December 8, 2021.
Courtroom to be announced. This is not a final judgment; the two (2)
replevin bonds posted in this court on August 8, 2019 and August 14,
2019, by plaintiff in favor of defendants remain in force until further
order of court.
Journal entry No. 119796381 (Dec. 1, 2021).
Appellants’ motion for judgment notwithstanding the verdict (“JNOV”)
on the claims for defamation and commercial disparagement was denied. At the
attorney fees hearing, defense counsel testified regarding the fees incurred and that
there was an overlap between work required for the CSPA claim and the breach-of-
contract and defamation claims. The trial court denied attorney fees.
Appellants appealed.
II. Assignments of Error
I. The trial court erred in denying appellants’ motion for judgment
notwithstanding the verdict.
II. The trial court erred in denying appellants’ motion for attorney
fees.
III. The trial court erred in granting appellee’s motion for leave to
file an amended complaint.
IV. The trial court erred in denying appellants’ motion to compel
discovery from appellee.
V. The trial court erred in denying appellants’ motion to compel
discovery from the Taft Law Firm.
VI. The trial court erred in excluding the testimony of Anthony
Nero.
III. Discussion
A. Judgment Notwithstanding the Verdict
The standard for reviewing a Civ.R. 50(B) motion for judgment
notwithstanding the verdict and a Civ.R. 50(A) motion for a directed verdict are the
same. Posin v. A. B. C. Motor Court Hotel, Inc., 45 Ohio St.2d 271,
344 N.E.2d 334
(1976). Both motions test the sufficiency of the evidence as a matter of law, and we
review questions of law de novo. Taylor Bldg. Corp. of Am. v. Benfield,
117 Ohio
St.3d 352,
2008-Ohio-938,
884 N.E.2d 12, ¶ 35.
Also,
The evidence adduced at trial and the facts established by admissions
in the pleadings and in the record must be construed most strongly in
favor of the party against whom the motion is made, and, where there
is substantial evidence to support his side of the case, upon which
reasonable minds may reach different conclusions, the motion must be
denied. Neither the weight of the evidence nor the credibility of the
witnesses is for the court’s determination in ruling upon either of the
above motions.
(Citations omitted.) Posin at 275, citing Civ.R. 50(A) and (B).
The role of an appellate court in reviewing a JNOV decision is not to
“weigh the evidence or evaluate the credibility of witnesses” but to “determine
whether there is ‘sufficient material evidence presented at trial on this issue to create
a factual question for the jury.’” Torres v. Concrete Designs, Inc., 2019-Ohio-1342,
134 N.E.3d 903, ¶ 74 (8th Dist.), quoting Malone v. Courtyard by Marriott Ltd.
Partnership,
74 Ohio St.3d 440, 445,
659 N.E.2d 1242 (1996). In addition,
“‘[a]bsent a reason to do otherwise, we presume regularity in the jury’s verdict.’”
Id.,
quoting Harris v. Univ. Hosps. of Cleveland, 8th Dist. Cuyahoga Nos. 76724 and
76785,
2002 Ohio App. LEXIS 1032 (Mar. 7, 2002).
Appellants maintain they are entitled to judgment on their
counterclaims for defamation and commercial disparagement. “Defamation is a
false publication that injures a person’s reputation, exposes him to public hatred,
contempt, ridicule, shame or disgrace; or affects him adversely in his trade or
business.” Mercer v. Goans, 8th Dist. Cuyahoga No. 109651, 2021-Ohio-1948, ¶ 19
“The essential elements of a defamation action are a false statement, that … was
defamatory, … was published, the plaintiff was injured and the defendant acted
with the required degree of fault.”
Id. “There are two forms of defamation: libel or
slander. Generally, slander refers to spoken defamatory words and libel refers to
written defamatory words.”
Id.
“Defamation is either per se or per quod.” Montgomery v. Greater
Cleveland Regional Transit Auth., 8th Dist. Cuyahoga No. 109559, 2021-Ohio-1198,
¶ 29. Appellants claimed defamation per se which “occurs when the defamation is
manifested by the very words spoken.”
Id. “Where the statement constitutes
defamation per se, damages and actual malice are presumed.”
Id. However, “the
presumptions are rebuttable.” Concrete Creations & Landscape Design L.L.C. v.
Wilkinson, 7th Dist. Carroll No. 20 CA 0946,
2021-Ohio-2508, ¶ 28, citing
Sayavich v. Creatore, 7th Dist. Mahoning No. 07-MA 217,
2009-Ohio-5270, ¶ 93-
94.
Actual malice must be demonstrated by clear and convincing evidence
that the defendant published the statement “with knowledge that it was false or with
reckless disregard of whether it was false or not.” Jacobs v. Frank, 60 Ohio St.3d
111,
573 N.E.2d 609, fn. 25 (1991).
The trial court explained to the jury that the legal principles underlying
individual defamation and commercial defamation are the same, and recited the six
statements that appellants cited as defamatory:
Cusato and Growler’s employees are unqualified, incompetent, did
substandard work and cannot be trusted, that’s one;
Number 2, Growler’s facility is dirty, unsafe, and its business is not run
in a professional manner;
Now on to 3, defendants engage in fraud;
Number 4, Cusato is a thief;
[Number] 5, Cusato is a liar;
And [number] 6, defendants charge excessive time for work performed.
(Tr. 469-470.)
Appellants argue the evidence is clear and convincing that Shury acted
with actual malice. “Shury admitted he had no evidence his statements were true
and took no steps to verify them.” Appellants reply brief, p. 2. Shury also stated that
he was voicing his opinion. (Tr. 207.) “[T]he ‘opinion privilege’ which “recognizes
opinions are ‘nonactionable expressions’ of a defendant’s personal judgment.”
Wilkinson, 7th Dist. Carroll No. 20 CA 0946, 2021-Ohio-2508, ¶ 30, quoting
Wampler v. Higgins,
93 Ohio St.3d 111, 127, 132,
2001-Ohio-1293,
752 N.E.2d 962.
Shury testified that he did not accept Cusato’s invitation to meet and
discuss the invoices because “[i]t was past the point of meeting with him. There was
so much venom going over this that there was no need to meet with him.” (Tr. 190.)
Appellants argue that Shury’s use of the word “venom” is proof of actual malice.
The trial court instructed the jury that it must find for each statement:
by the greater weight of the evidence, the plaintiff made the alleged
statement; the statement was about the defendant or defendants; the
statement was false; and the statement was published to one or more
persons other than the defendant. … Published is the legal term for
the statement being heard and understood by a person other than the
defendants.
(Tr. 470.)
The trial court also instructed, “you must also find, by clear and
convincing evidence that the plaintiff in making the statement acted with actual
malice” … “It means the evidence must produce in the mind a firm belief or
conviction about the facts to be proved.” (Tr. 471.) “Actual malice occurs when the
plaintiff makes a false statement either with knowledge that it is false, or with
reckless disregard of whether it is false or not.” (Tr. 472.) “Reckless disregard means
the plaintiff acted while actually aware of the probable falsity of the statement, or
… entertained serious doubts as to the truth of the statement.” Id.
“The plaintiff’s failure to investigate may be considered evidence” “of
reckless[ly] disregarding to the statement’s truth or falsity, but only if you find from
the facts and circumstances that the plaintiff had serious doubts about the truth of
the statement.” Id. The trial court also instructed
[t]he plaintiff’s words must be given their natural and ordinary
meaning, taking into consideration the circumstances in which the
statement was made. You must ignore any minor ways in which the
statement is false. In deciding whether the statement is false you may
not consider the plaintiff’s belief as to the truth of the statement.
(Tr. 474.)
After the verdict, the jury’s interrogatory responses were read for the
record. The jury found that Shury’s statements were defamatory, false, and
published. However, the jury did not find “by clear and convincing evidence, that
the plaintiff acted with actual malice.” (Tr. 550.)
Our review of the record supports the trial court’s findings regarding
the facts and evidence, and that the appropriate legal standard was applied:
The jury answered the interrogatories requested by defendants and
their answers were consistent and logical; they clearly established that
the jury did not find plaintiff Shury acted with actual malice when he
made the defamatory and disparaging statements about defendants.
The parties approved the definition of actual malice given the jury in
written instruction. The jury did not indicate any difficulty
understanding or applying the concept during deliberation. The jury
had the opportunity to evaluate Shury’s demeanor and testimony on
the witness stand and that of defendant Cusato when he testified as well
as the surrounding evidence. The parties had had prior business
dealings; there was an apparent difference in their ages; both had been
extensively involved in automotive matters for many years. Where
reasonable minds could reach different conclusions about the evidence,
request for a judgment notwithstanding the verdict must be denied.
Journal entry No. 120396330, p. 1 (Dec. 31, 2021).
This court finds that there was sufficient evidence for the jury to decide
that Shury did not act with actual malice. Torres, 2019-Ohio-1342,
134 N.E.3d 903,
¶ 74 (8th Dist.). We find no reason to rebut the presumption of regularity in the
jury’s verdict. Id. at ¶ 73. The first assigned error lacks merit.
B. Attorney Fees
Appellants second challenge is to the trial court’s failure to award
attorney fees under the CSPA where the evidence demonstrated that Shury brought
and maintained a groundless action in bad faith. We find that the claim has merit.
The standard of review on the award of attorney fees is abuse of
discretion. Einhorn v. Ford Motor Co., 48 Ohio St.3d 27, 29,
548 N.E.2d 933 (1990).
When a court exercises its judgment in an unwarranted way over a matter upon
which it has discretionary authority, the court has abused its discretion. Johnson v.
Abdullah,
166 Ohio St.3d 427,
2021-Ohio-3304,
187 N.E.3d 463, ¶ 35. “‘The concept
of ‘abuse of discretion’ as the basis for determining ‘error’ of the trial court connotes
the right to exercise a sound discretion.’” Id. at ¶ 37, quoting Rohde v. Farmer,
23
Ohio St.2d 82,
262 N.E.2d 685 (1970).
Conversely, “courts lack the discretion to make errors of law,
particularly when the trial court’s decisions goes against the plain language of a
statute or rule.” Id. at ¶ 39. For this reason, an appellate court applies a de novo
“standard of review when reviewing issues of law.” Id. at ¶ 38, citing State v. Boles,
187 Ohio App.3d 345,
2010-Ohio-278,
932 N.E.2d 345, ¶ 26 (2d Dist.); Hudson v.
Petrosurance, Inc.,
127 Ohio St.3d 54,
2010-Ohio-4505,
936 N.E.2d 481, ¶ 30.
This court has also held that “[a] trial court also abuses its discretion
when ‘the amount of fees determined is so high or so low as to shock the
conscience.’” Alcorso v. Correll, 8th Dist. Cuyahoga No. 110218, 2021-Ohio-3351,
¶ 43, quoting Bittner v. Tri-County Toyota, Inc.,
58 Ohio St.3d 143, 146,
569 N.E.2d
464 (1991). Appellants moved for attorney fees and expenses under the CSPA. The
trial court advised that appellants were required to prove that the fees and expenses
were reasonable and related to work reasonably performed, and that Shury brought
or maintained a groundless CSPA action or prosecuted it in bad faith under
R.C. 1345.09(F).
R.C. 1345.09(F) provides:
(F) The court may award to the prevailing party a reasonable attorney’s
fee limited to the work reasonably performed and limited pursuant to
section 1345.092 of the Revised Code, if either of the following apply:
(1) The consumer complaining of the act or practice that violated this
chapter has brought or maintained an action that is groundless, and
the consumer filed or maintained the action in bad faith;
(2) The supplier has knowingly committed an act or practice that
violates this chapter.
Thus, R.C. 1345.09(F)(1) allows a supplier to recover attorney fees from a consumer
that files and maintained a groundless action and maintains that action in bad faith.
R.C. 1345.09(F)(2) allows the successful consumer to recover attorney fees from the
supplier who knowingly violates the chapter.
C. Groundless Action in Bad Faith
The term “groundless” under R.C. 1345.09(F)(1) has been defined as
“‘lacking a basis or a rationale.’” Semco, Inc. v. Sims Bros., Inc., 3d Dist. Marion
No. 9-12-62, 2013-Ohio-4109, ¶ 42, quoting Black’s Law Dictionary 772 (9th
Ed.2009). “Black’s Law Dictionary defines “‘bad faith’” as “‘[d]ishonesty of belief or
purpose.’” Id. at ¶ 45, quoting State ex rel. Bardwell v. Cuyahoga Cty. Bd. of
Commrs.,
127 Ohio St.3d 202,
2010 Ohio 5073, ¶ 8,
937 N.E.2d 1274.
The trial court found
it difficult to conclude Shury’s O[hio]CSPA claims were groundless
because Shury brought forward admissible evidence to establish them
at trial and survived a directed verdict motion on that evidence. The
Court finds it difficult to conclude Shury’s O[hio]CSPA claims were
prosecuted in bad faith. True, these claims might not have been
brought absent Defendants’ commencement of their breach of contract
and defamation claims but litigation does encourage a party on the
defensive to bring any claims he has in an effort to somewhat level the
playing field. In addition, Ohio law requires a party in Shury’s position
to bring any mandatory claims he has against Defendants (which the
O[hio]CSPA claims would be) when Defendants bring their claims
against him. Had Shury developed no evidence in support of the
claims, he would be required to dismiss the claims or risk sanctions for
maintaining the action without grounds or in bad faith. Here however
Shury had some evidence to support his O[hio]CSPA allegations and
survived a directed verdict. The fact that if proven they would have
returned modest compensation does not make them groundless or
made in bad faith.
Journal entry No. 120396330, p. 2 (Dec. 31, 2021.)2
Appellants offer that the trial court’s determination that there was no
evidence of bad faith because Shury survived a directed verdict is incorrect.
Appellants sole challenge in the motion for a directed verdict was to the claims
relating to the May invoices and that challenge was upheld in toto. The record
supports appellants’ position.
2 The trial court addressed the prior summary judgment finding that Shury was
entitled to at least one CSPA claim and explained the finding was the source of confusion
since there were clearly issues of fact. Thus, the trial court determined, "[w]e cannot read
that holding … as a holding that this was a consumer transaction and there was at least
one violation … so I am treating that as if it is a nullity for our proceedings. (Tr. 388-
389.) Shury objected but the issue is not presented for cross-appeal.
Shury contended that seven CSPA violations occurred. As defense
counsel stated, “[T]here is a list of A through G specific violations.” (Tr. 391.)
Counsel specified that appellants challenge was only to the C through G violations
regarding the May invoices. “I think there has been no testimony that … [the]
violations alleged in C through G occurred.” (Tr. 396.) This is confirmed by the trial
court’s earlier statement that “[w]e have been off the record discussing whether the
violations identified as C through G in the plaintiff’s list … are, per se, violations.”
(Tr. 393.)
The trial court agreed with appellants:
I think the only violations that the defendant can come up with that are
per se, is the failure to give the receipt and the failure to provide the —
do the work without the written — here it is — the written estimate. I
think … those are the only two, per se, violations.
…
I know that yesterday the defendants said they had no directed verdict
motion, but today they made a directed verdict motion targeted with
those items. And I think that is correct so hence my ruling.
(Tr. 403-404.)
It is also significant that the jury did not find appellants liable for the
remaining two CSPA claims. According to the jury’s interrogatory responses, the
dealings were consumer transactions and appellants did not fail to provide the
estimate form or a receipt for the $1,000 deposit. The finding was unanimous that
judgment was entered “against the plaintiff and for the defendant[s] on the
Consumer Sales Practices Act.” (Tr. 547-548.)
In appellants post-hearing brief, they summarized the trial evidence
that demonstrated bad faith and groundlessness. Appellants cited the history of
dealings between the parties, the individual expertise of the parties, and the fact that
both parties testified, as supported by the replevin complaint, that the 2018 work
was a continuation of the 2014 work for which the proper disclosure was made.
Appellants also stated that Shury was presented with a $1,000 invoice immediately
prior to the issuance of a $1,000 check for the work listed which shows that the
payment was not a deposit.
The trial court also stated that Shury was required to bring the CSPA
claims in response to appellants’ counterclaims. Except for the breach of good faith
and fair-dealing counterclaim added in response to Shury’s amended complaint,
appellants’ counterclaims were advanced with their original answer. Shury,
represented by counsel, included a CSPA affirmative defense but not a claim.
Appellants attempted to address the issue at Shury’s deposition who
testified that he was standing on the replevin action. The claim was added one week
after the deposition and after the Cusato deposition. Counsel for appellants testified
that no new evidence emerged to support the added claim. Appellants also cited
Shury’s alleged statements to appellants and counsel that he would use the CSPA to
increase appellants costs.
Based on this court’s review of the record, we find that the trial court’s
decision that the claims were not groundless or made in bad faith due to Shury’s
ability to survive a directed verdict on issues that were not presented for
adjudication constitutes an abuse of discretion.
D. Fee Amount
This court further finds that the trial court’s holding that appellants
were not entitled to any amount of attorney fees also constitutes an abuse of
discretion.
The trial court stated that appellants were required to prove that the
fees and expenses were reasonable and related to work reasonably performed.
“‘With regard to the reasonableness of the fee award, the Ohio Supreme Court has
set forth a two-part process a trial court is to follow when determining the amount
of fees to award the prevailing party.’” Semco, Inc., 3d Dist. Marion No. 9-12-62,
2013-Ohio-4109, ¶ 51, quoting Mike Castrucci Ford Sales, Inc. v. Hoover, 12th Dist.
Clermont No. CA2009-03-016,
2009-Ohio-4823, ¶ 14, citing Bittner,
58 Ohio St.3d
143, 145,
569 N.E.2d 464 (1991). Though very few cases involve R.C. 1345.09(F) (1),
courts apply the Bittner fee calculation formula to both subsections of
R.C. 1345.09(F). See
id.
The Ohio Supreme Court set forth the attorney fee calculation formula:
When awarding reasonable attorney fees pursuant to
R.C. 345.09(F)(2), the trial court should first calculate the number of
hours reasonably expended on the case times an hourly fee, and then
may modify that calculation by application of the factors listed in DR
2-106(B). These factors are: the time and labor involved in maintaining
the litigation; the novelty and difficulty of the questions involved; the
professional skill required to perform the necessary legal services; the
attorney’s inability to accept other cases; the fee customarily charged;
the amount involved and the results obtained; any necessary time
limitations; the nature and length of the attorney/client relationship;
the experience, reputation, and ability of the attorney; and whether the
fee is fixed or contingent. All factors may not be applicable in all cases
and the trial court has the discretion to determine which factors apply,
and in what manner that application will affect the initial calculation.
Bittner, 58 Ohio St.3d 143, 146,
569 N.E.2d 464. “Prof.Cond.R. 1.5(a) superseded
former DR 2-106, but the two rules are substantially the same.” Phoenix Lighting
Group, L.L.C. v. Genlyte Thomas Group, L.L.C.,
160 Ohio St.3d 32, 2020-Ohio-
1056,
153 N.E.3d 30, ¶ 12.3 “When making a fee award pursuant to
R.C. 1345.09(F)(2), the trial court must state the basis for the fee determination.
Absent such a statement, it is not possible for an appellate court to conduct a
meaningful review.”
Bittner at 146.
The trial court declined to award fees and expenses based on the fee
bills presented and appellants’ counsel’s testimony because the fees and expenses
were not “allocated between [the] defense of Shury’s O[hio]CSPA claim and the
prosecution of [appellants’] contract and defamation claim.” Journal entry
No. 120396330, p. 2 (Dec. 31, 2021). Appellants’ counsel testified that the issues
were effectively inextricably intertwined.
3 In Phoenix, the court determined that the “lodestar” estimate establishes a
reasonable fee and the factors set forth in Prof.Cond.R. 1.5(a) are generally “included as
part of the hourly fee used to calculate the lodestar.” Id. at ¶ 16, citing Bittner, 58 Ohio
St.3d at 145,
569 N.E.2d 464, and Hensley v. Eckerhart,
461 U.S. 424,
103 S.Ct. 1933,
76
L.Ed.2d 40. The court determined “[t]here is a strong presumption that the reasonable
hourly rate multiplied by the number of hours worked, which is sometimes referred to as
the ‘lodestar,’ is the proper amount for an attorney-fee award. Enhancements to the
lodestar should be granted rarely and are appropriate when an attorney produces
objective and specific evidence that an enhancement of the lodestar is necessary to
account for a factor not already subsumed in the lodestar calculation.” Id. at ¶ 19, citing
Perdue v. Kenny A.,
559 U.S. 542,
130 S.Ct. 1662,
176 L.Ed.2d 494 (2010).
Counsel testified that charges relating to the CSPA claims occurred
prior to the amended complaint based on Shury’s statement to Cusato, after the
replevin hearing, that if the litigation continued appellants would be paying treble
damages. Fee bills covered work conducted from June 20, 2019, to December 31,
2019, 2020, and 2021.
Pursuant to counsel’s testimony and as summarized in appellants’
post-hearing brief, the CSPA claim overlapped with the work required to prosecute
the counterclaims. For example, the evidence used to defend the CSPA claim
inextricably supported the breach-of-contract counterclaim.
Counsel testified:
[I]t is impossible to segregate the amount of time committed to the
CSPA claim versus the defamation commercial disparagement. So for
example, if there’s a charge for the summary judgment it’s regarding
drafting a brief in opposition, something like that, there’s no breakout
of how much time was committed to one claim versus the other.
…
[For 2021] [t]he major events are the mediation process, preparation
for the trial and a five-day trial.
(Tr. 577-578.)
The trial court determined:
Defendants’ failure to allocate their fees in this situation deprives the
Court of any means to determine the extent of fees related to OCSPA
claims and of any means to gauge the reasonableness of such fees. The
Court finds it was not impossible to allocate the legal billing items
between the categories and concludes it is unreasonable to award
Defendants’ entire legal bill when their entitlement to fees and
expenses is limited to one out of three main claims or defenses which
the litigation involved. For this reason, the Court finds the facts do not
justify following Bryant v. Walt Sweeney Automotive, [1st Dist.
Hamilton Appeal Nos. C-010395, C-010404,] 2002 Ohio 2577 (1st
Dist.) and Edlong Corp. v. Nadathur, [1st Dist. Hamilton No. C-
120369,] 2013-Ohio-1283, reasonable and practical as their holdings
are [applicable] if the facts justify them. The facts do not do so here.
Journal entry No. 120396330, p. 2 (Dec. 31, 2021).
As appellants emphasize, the trial court stated that
[i]t seems plausible that some legal work would overlap between the
two categories of legal work and that it might be difficult to allocate
each of the bills line items with precision. Even considering these
practical difficulties however, allocation was possible.
Id.
The cases cited by the trial court relied on Bittner, 58 Ohio St.3d 143,
569 N.E.2d 464. The Bryant court “held that when it is not possible to divide claims
in this fashion, such as when claims not covered under the CSPA involve a common
core of facts with claims arising under the CSPA, then the court may award attorney
fees for all time reasonably spent pursuing all claims.” Bryant, 1st Dist. Hamilton
No. C-010395 and C-010404,
2002-Ohio-2577, at ¶ 35.
The court in Edlong Corp. v. Nadathur, 1st Dist. Hamilton No. C-
120369, 2013-Ohio-1283, which followed Bryant, added that
the inability of a prevailing party to allocate attorney fees for discrete
claims does not necessarily render a fee award for the full amount
unreasonable. See Miller v. Grimsley, 197 Ohio App.3d 167, 2011-
Ohio- 6049, 966 N.E.2d 932, ¶ 17 (10th Dist.). So a trial court abuses
its discretion to award attorney fees if it arbitrarily excises a portion of
attorney fees in the face of uncontroverted evidence that the attorney
fees are indivisible because the claims involved were so intrinsically
intertwined. Id.
Id at ¶ 17.
This court has similarly held that “fees may be awarded for claims
related to the violation of the Consumer Sales Practices Act, when they are not easily
separated.” Gonzalez v. Spofford, 8th Dist. Cuyahoga No. 85231, 2005-Ohio-3415,
¶ 39, citing Fit ‘N’ Fun Pools, Inc. v. Shelly, 9th Dist. Wayne No. 99CA0048,
2001
Ohio App. LEXIS 3 (Jan. 3, 2001); Bryant, 1st Dist. Hamilton Nos. C-010395 and
C-010404,
2002-Ohio-2577; Parker v. I&F Insulation Co., 1st Dist. Hamilton No.
C-960602,
1998 Ohio App. LEXIS 1187 (Mar. 27, 1998); Budner v. Lake Erie
Homes, 11 Dist. Portage No. 2000-P-0108,
2001-Ohio-4288; Luft v. Perry Cty.
Lumber & Supply Co., 10th Dist. Franklin No. 02AP-559,
2003-Ohio-2305.
This court finds that, under the circumstances of this case, the failure
to award any attorney fees shocks the conscience and as a result constitutes an abuse
of discretion. Bittner, 58 Ohio St.3d at 146,
569 N.E.2d 464.
The second assignment of error is sustained.
E. Leave to File Amended Complaint
Appellants also claim that the trial court’s grant of Shury’s motion for
leave to file an amended complaint was in error. Shury’s motion was filed pursuant
to Civ.R. 15(A):
(A) Amendments. A party may amend its pleading once as a matter of
course within twenty-eight days after serving it or, if the pleading is one
to which a responsive pleading is required within twenty-eight days
after service of a responsive pleading or twenty-eight days after service
of a motion under Civ.R. 12(B), (E), or (F), whichever is earlier. In all
other cases, a party may amend its pleading only with the opposing
party’s written consent or the court’s leave. The court shall freely give
leave when justice so requires. Unless the court orders otherwise, any
required response to an amended pleading must be made within the
time remaining to respond to the original pleading or within fourteen
days after service of the amended pleading, whichever is later.
Id.
This court reviews a trial court’s decision to grant or deny a motion for
leave to file an amended pleading for an abuse of discretion. Wilmington Steel
Prods., Inc. v. Cleveland Elec. Illum. Co., 60 Ohio St.3d 120, 122,
573 N.E.2d 622
(1991). When a court exercises its judgment in an unwarranted way over a matter
upon which it has discretionary authority, the court has abused its discretion.
Johnson,
166 Ohio St.3d 427,
2021-Ohio-3304,
187 N.E.3d 463, at ¶ 35. “The
concept of ‘abuse of discretion’ as the basis for determining ‘error’ of the trial court
connotes the right to exercise a sound discretion.” Id. at ¶ 37.
A Civ.R. 15(A) motion for leave to amend a pleading “should be refused
if there is a showing of bad faith, undue delay, or undue prejudice to the opposing
party.” Turner v. Cent. Local School Dist., 85 Ohio St.3d 95, 99,
706 N.E.2d 1261
(1999), citing Hoover v. Sumlin,
12 Ohio St.3d 1,
465 N.E.2d 377 (1984), paragraph
two of the syllabus.
We do not find that to be the case. Shury originally filed pro se and
subsequently secured the assistance of counsel who filed the motion for leave. The
amendment identified the corporate status of Growler and distinguished which
claims were against which appellant. Appellants prevailed on the CSPA claims and
this court has determined that the failure to award attorney fees was in error, and
that the trial court did not abuse its discretion in denying the JNOV for defamation
and commercial disparagement. Ownership of the Jaguar was not a prerequisite to
any of the claims. Jones v. All Tune Lube, 8th Dist. Cuyahoga No. 96674, 2011-Ohio-
6432, fn. 2, citing Bridge v. Midas Auto Experts, 8th Dist. Cuyahoga No. 94115,
2010-0hio-4681, ¶ 10. The record does not support that appellants were prejudiced
by the amendment or that the trial court abused its discretion. The third error lacks
merit.
F. Denial of Motions to Compel
For the fourth and fifth errors, appellants complain that the trial court’s
refusal to compel Shury to submit to a second deposition and to require the Taft Law
Firm to respond to discovery was in error.
An appellate court reviews the denial of a motion to compel discovery
for an abuse of discretion. State ex rel. V. Cos. v. Marshall, 81 Ohio St.3d 467, 469,
692 N.E.2d 198 (1998). When a court exercises its judgment in an unwarranted way
over a matter upon which it has discretionary authority, the court has abused its
discretion. Johnson,
166 Ohio St.3d 427,
2021-Ohio-3304,
187 N.E.3d 463, at ¶ 35.
“The concept of ‘abuse of discretion’ as the basis for determining ‘error’ of the trial
court connotes the right to exercise a sound discretion.” Id. at ¶ 37.
1. Shury
Appellants requested that Shury appear for a supplemental deposition
to address the grounds for the CSPA claim and ownership of the Jaguar. Appellants
argued that the refusal caused appellants to incur substantial attorney fees to defend
against the CSPA claims and to demonstrate that Shury acted in bad faith.
We reiterate that a plaintiff is not required to prove ownership of a
motor vehicle to proceed with claims under the CSPA motor vehicle repair rules. All
Tune Lube, 8th Dist. Cuyahoga No. 96674, 2011-Ohio-6432, fn. 2, citing Midas Auto
Experts, 8th Dist. Cuyahoga No. 94115, 2010-0hio-4681, ¶ 10. Appellants prevailed
on the CSPA claims and this court has determined that the failure to award attorney
fees was in error.
We do not find that the trial court abused its discretion.
2. Taft Firm
Appellants subpoenaed documents relating to Shury’s acquisition of
the vehicle. Appellants argued that the evidence would demonstrate validity of title,
the lack of a consumer transaction, and the claim was brought in bad faith.
The Taft Firm defended that they cannot be forced to search a client’s
file that was closed more than five years earlier and that they were ethically
prohibited from producing the documents by the Code of Professional Conduct, and
that appellants could have pursued consent from the estate executor or the probate
court. The trial court quashed the motion pursuant to Civ.R. 45(C)(3)(d).
Appellants prevailed on the CSPA action and counterclaims except for
defamation and commercial disparagement. The vehicle has since been sold. We
do not find that the trial court abused its discretion.
The fourth and fifth assigned errors are overruled.
G. Witness Exclusion
The sixth and final assigned error is the trial court’s exclusion of
testimony from the owner of AB Motors. Appellants sought to call Nero to show the
lack of a consumer transaction, bad faith, and invalid price listed on the title. They
alleged the information would go to Shury’s “credibility, propensity for truthfulness,
and whether he was acting with a dishonest purpose, moral obliquity, and conscious
wrongdoing, all important factors in the appellants’ claim for attorneys’ fees.”
Appellants’ brief, p. 40. Without detail, the trial court excluded Nero’s testimony
under Evid.R. 404(B).
Evid.R. 404(A) is a general prohibition on using evidence of a person’s
character to prove he or she acted “‘in conformity therewith on a particular
occasion.’” State v. Graham, 164 Ohio St.3d 187,
2020-Ohio-6700,
172 N.E.3d 841,
¶ 71. Evid.R. 404(B) “provides that ‘[e]vidence of other crimes, wrongs, or acts is
not admissible to prove the character of a person in order to show action in
conformity therewith.’” Allen v. Allen, 11th Dist. Geauga No. 2021-G-0023, 2022-
Ohio-3198, ¶ 42, quoting Evid.R. 404(B). “It may, however, be admissible for other
purposes, such as proof of motive, opportunity, intent, preparation, plan,
knowledge, identity, or absence of mistake or accident.”
Id.
Further,
To be admissible, (1) the evidence must be relevant, Evid.R. 401, (2) the
evidence cannot be presented to prove a person’s character to show
conduct in conformity therewith but must instead be presented for a
legitimate other purpose, Evid.R. 404(B), and (3) the probative value
of the evidence cannot be substantially outweighed by the danger of
unfair prejudice, Evid.R. 403. State v. Graham, 164 Ohio St.3d 187,
2020-Ohio-6700,
172 N.E.3d 841, ¶ 72.
Allen at ¶ 44.
Finally, “‘[s]pecific instances of the conduct of a witness, for the
purpose of attacking or supporting the witness’s character for truthfulness, … may
not be proved by extrinsic evidence.’” Lambert v. Wilkinson, 11th Dist. Ashtabula
No. 2007-A-0032, 2008-Ohio-2915, ¶ 98, quoting Evid.R. 608(B).
Once again, ownership was not a prerequisite for the CSPA claims upon
which appellants prevailed. Coupled with our findings herein, we do not find that
the trial court abused its discretion.
The sixth assignment of error is overruled.
IV. Conclusion
The trial court’s judgment is affirmed in part and reversed in part. The
trial court’s judgment denying the award of attorney fees is hereby reversed and
remanded.
It is ordered that each party equally bear the 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
common pleas 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.
ANITA LASTER MAYS, PRESIDING JUDGE
KATHLEEN ANN KEOUGH, J., CONCURS;
MARY J. BOYLE, J., CONCURS IN PART AND DISSENTS IN PART (WITH
SEPARATE OPINION)
MARY J. BOYLE, J., CONCURRING IN PART AND DISSENTING IN PART:
I concur with the majority’s decision concerning all but the second
assignment of error. I respectfully dissent from the majority’s awarding appellants
all of their legal fees for two reasons. First, appellants seek legal fees under
R.C. 1345.09(F)(1), not R.C. 1345.09(F)(2), which is cited by the majority.
R.C. 1345.09(F)(2) concerns the supplier’s knowledge of a violation, not the
consumer’s bad faith in claiming a violation. “Bad faith” under R.C. 1345.09(F)(1)
“embraces more than bad judgment or negligence. It imports a
dishonest purpose, moral obliquity, conscious wrongdoing, breach of a
known duty through some ulterior motive or ill will partaking of the
nature of fraud. It also embraces actual intent to mislead or deceive
another.”
Semco, Inc., 2013-Ohio-4109, ¶ 45, quoting Slater v. Motorists Mut. Ins. Co.,
174
Ohio St. 148,
187 N.E.2d 45 (1962), paragraph two of the syllabus, overruled on other
grounds by Zoppo v. Homestead Ins. Co.,
71 Ohio St.3d 552,
644 N.E.2d 397 (1994).
Here, the trial court concluded that Shury produced “some evidence”
of his CSPA claims, these claims “survived directed verdict,” and two of the CSPA
claims were submitted to and resolved by the jury. Journal entry No. 120396330,
p. 2 (Dec. 31, 2021.). Therefore, I would not find that the trial court abused its
discretion in concluding that Shury’s CSPA claims were neither groundless nor
made in bad faith.
Second, I would not find that the trial court abused its discretion in
denying appellants’ request for their entire legal bill based on appellants’ failure to
separate the fees they incurred in pursuing their breach-of-contract and defamation
counterclaims from the fees they incurred in defending Shury’s CSPA claims. In
Bittner, 58 Ohio St.3d 143,
569 N.E.2d 464 (1991), the Ohio Supreme Court
recognized that contract and CSPA claims “can be separated into a claim for which
fees are recoverable and a claim for which no fees are recoverable, [and] the trial
court must award fees only for the amount of time spent pursuing the claim for
which fees may be awarded.”
Id. at 145.
In the instant case, the trial court distinguished Shury’s CSPA claims
that involved both his “right to a repair estimate” and appellants’ “failure to give a
receipt,” from appellants’ breach-of-contract counterclaim, which “involved Shury’s
refusal to pay the repair bill on his auto either because the billings were excessive or
the work was substandard.” Journal entry No. 120396330, p. 2 (Dec. 31, 2021.).
The trial court also distinguished Shury’s CSPA claims from appellants’ defamation
counterclaim, finding that “[n]o part of the defamatory or disparaging statements
attributed to Shury involved allegations that [appellants] violated the OCSPA.”
Journal entry No. 120396330, p. 2 (Dec. 31, 2021.). By not separating the time it
spent defending Shury’s CSPA claims from the time it spent pursuing its breach-of-
contract and defamation counterclaims, counsel for appellants left the trial court
without “means to determine the extent of fees related to [the] OCSPA claims and
[without] any means to gauge the reasonableness of such fees.” Journal entry
No. 120396330, p. 2 (Dec. 31, 2021.); see Bittner at 145.
The cases cited by the majority to support awarding appellants’ legal
fees are distinguishable because in each case, the court found that the CSPA claims
and the associated claims shared “a common core of facts.” See Bryant, 2002-Ohio-
2577, at ¶ 35 (finding plaintiff’s fraud allegation and allegation of deceptive acts in
violation of the CSPA “involve a common core of facts”); Gonzalez, 2005-Ohio-3415,
at ¶ 39 (finding plaintiff’s CSPA and fraud and theft claims had “common core
facts”); Nadathur,
2013-Ohio-1283, at ¶ 18 (finding breach-of-contract and trade-
secret claims “involved a common core of facts” based on a confidentiality
agreement providing for reasonable attorney fees to the prevailing party in an action
to enforce the agreement). In contrast, here, the trial court concluded that
appellants’ breach-of-contract counterclaim “presented a totally separate subject
matter” from Shury’s CSPA claims and that no part of appellants’ defamation
counterclaim involved Shury’s allegation that appellants violated the CSPA.
Because the trial court provided clear reasons why it found that Shury’s
CSPA claims were neither groundless nor made in bad faith and why it denied
appellants’ request for its entire legal bill, I decline to find that the trial court’s denial
of attorney fees evidences a “‘perversity of will, passion, prejudice, partiality, or
moral delinquency.’” Johnson, 166 Ohio St.3d 427,
2021-Ohio-3304,
187 N.E.3d
463, at ¶ 35, quoting Black’s Law Dictionary 11 (2d Ed.1910). Therefore, I would
overrule appellants’ second assignment of error.
