ABN AMRO Mtge. Group, Inc. v. Evans

2011 Ohio 5654

• Court: Ohio Court of Appeals
• Decided: November 3, 2011
• Docket: 96120
• Status: Published

Opinion

[Cite as ABN AMRO Mtge. Group, Inc. v. Evans, 2011-Ohio-5654.]

Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION No. 96120

ABN AMRO MORTGAGE GROUP, INC. PLAINTIFF-APPELLEE

vs.

IRENE EVANS, ET AL. DEFENDANTS-APPELLANTS

JUDGMENT: REVERSED AND REMANDED

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-589598

BEFORE: Keough, J., Celebrezze, P.J., and Sweeney, J.

RELEASED AND JOURNALIZED: November 3, 2011 ATTORNEYS FOR APPELLANTS

Susan M. Gray Susan M. Gray Attorneys & Counselors at Law Ohio Savings Bank Building 22255 Center Ridge Road, Suite 210 Rocky River, OH 44116

Thomas C. Loepp Maistros & Loepp, Ltd. 3580 Darrow Road Stow, OH 44224

ATTORNEYS FOR APPELLEE

Karen M. Cadieux David A. Wallace Carpenter Lipps & Leland LLP 280 Plaza, Suite 1300 280 North High Street Columbus, OH 43215

KATHLEEN ANN KEOUGH, J.:

{¶ 1} Defendants-appellants, Irene Evans and Mark Evans (“appellants”), appeal

the trial court’s decision denying their motion for sanctions for lack of jurisdiction. For

the following reasons, we reverse and remand.

{¶ 2} In 2006, plaintiff-appellee, ABN AMRO Mortgage Group, Inc.

(“appellee”), filed a foreclosure action against appellants. After extensive discovery, appellee voluntarily dismissed its complaint pursuant to Civ.R. 41(A)(1)(a). Thereafter,

appellants moved for sanctions pursuant to Civ.R. 11 and R.C. 2323.51. The trial court

denied appellants’ motion, finding that it lacked jurisdiction to consider the motion

because it was filed after appellee had voluntarily dismissed its complaint.

{¶ 3} Appellants appeal raising the following assignments of error:

“1. Where the defendants moved for sanctions and recovery of attorneys’ fees under Rule 11, the trial court erred and abused its discretion by denying such motion on the grounds that the plaintiff’s filing of a Rule 41(A) notice of voluntary dismissal without prejudice divested it of jurisdiction to impose such sanctions.

“2. Where defendants moved for sanctions and recovery of attorneys’ fees under R.C. 2323.51, the trial court erred and abused its discretion by denying such motion on the grounds that the plaintiff’s filing of a Rule 41(A) notice of voluntary dismissal without prejudice divested it of jurisdiction to impose such sanctions.”

{¶ 4} Because these two assignments of error are interrelated, they will be

addressed together.

{¶ 5} We apply a de novo standard of review to questions of subject-matter

jurisdiction. Udelson v. Udelson, Cuyahoga App. No. 92717, 2009-Ohio-6462.

“Subject-matter jurisdiction is the power conferred on a court to decide a particular matter

on its merits and render an enforceable judgment over the action.” Id., citing Morrison v.

Steiner (1972), 32 Ohio St.2d 86, 290 N.E.2d 841, paragraph one of the syllabus.

{¶ 6} While a Civ.R. 41(A)(1) voluntary dismissal generally divests a court of

jurisdiction, a court may still consider collateral issues not related to the merits of the

action. State ex rel. Hummel v. Sadler, 96 Ohio St.3d 84, 2002-Ohio-3605, 771 N.E.2d

853, ¶23, citing Cooter & Gell v. Hartmarx Corp (1990), 496 U.S. 384, 396, 110 S.Ct. 2447, 110 L.Ed.2d 359; State ex rel. Corn v. Russo (2001), 90 Ohio St.3d 551, 556-557,

740 N.E.2d 265; Grossman v. Mathless & Mathless, C.P.A. (1993), 85 Ohio App.3d 525,

620 N.E.2d 160. A consideration of sanctions pursuant to Civ.R. 11 and R.C. 2323.51

are collateral issues. Schwartz v. Gen. Acc. Ins. of Am. (1993), 91 Ohio App.3d 603,

606, 632 N.E.2d 1379; Lewis v. Celina Fin. Corp. (1995), 101 Ohio App.3d 464, 470,

655 N.E.2d 1333.

{¶ 7} In Gitlin v. Plain Dealer Publishing Co., 161 Ohio App.3d 660,

2005-Ohio-3024, 831 N.E.2d 1029, this court addressed the same assignments of error as

those raised in this appeal. Much like the facts in the instant appeal, the plaintiff in

Gitlin filed a Civ.R. 41 notice of voluntary dismissal and the defendant subsequently

moved for sanctions pursuant to Civ.R. 11 and R.C. 2323.51. In reversing the trial court,

this court held that a Civ.R. 41 voluntary dismissal does not divest the trial court of

jurisdiction to consider collateral matters, such as a motion for sanctions pursuant to

Civ.R. 11 and R.C. 2323.51. Id. at ¶14. The Gitlin decision made no distinction

between motions for sanctions pending prior to the voluntary dismissal and motions for

sanctions filed after the dismissal. This distinction is the basis for the instant appeal.

{¶ 8} The issue before this court is whether the filing of a Civ.R. 41 notice of

voluntary dismissal divests the trial court of jurisdiction to consider a postdismissal

motion for sanctions pursuant to Civ.R. 11 and/or R.C. 2323.51. We find that it does

not. {¶ 9} The trial court’s conclusion that it lacked jurisdiction to consider the

postdismissal motion for sanctions was based on this court’s decision in Dyson v.

Adrenaline Dreams Adventures (2001), 143 Ohio App.3d 69, 757 N.E.2d 401, and the

Sixth District’s decision in Hanson v. Riccardi, 6th Dist. No. E-08-045, 2009-Ohio-2930.

However, we find that Dyson is factually distinguishable from this case, and the Hanson

court’s reliance on Dyson is misplaced due to the factual distinction.

{¶ 10} In Dyson, the defendant filed a “postdismissal motion for costs, attorney

fees, and expenses” pursuant to Civ.R. 37(D) and 41(D) after plaintiff filed its second

Civ.R. 41 voluntary dismissal, which was thus a dismissal with prejudice. The trial court

granted defendant’s motion for costs, and plaintiff appealed, challenging the trial court’s

jurisdiction to consider the motion because the voluntary dismissal was filed prior to the

defendant’s motion for discovery sanctions. This court in Dyson specifically recognized

that trial courts retain jurisdiction to consider collateral matters, including motions for

sanctions pursuant to Civ.R. 11 and R.C. 2323.51. Dyson at 72. Nevertheless, the court

added a distinguishing factor: that motions for sanctions filed after the Civ.R. 41(A)

notice of voluntary dismissal may not be considered. Id. Based on the distinguishing

factor, the Dyson court held that unless the motion for sanctions was filed and pending

prior to the Civ.R. 41 dismissal notice, the trial court lacked jurisdiction to consider the

motion. Id. “As a result, the courts acquired jurisdiction of the ‘collateral’ matters

before and retained jurisdiction after the Civ.R. 41(A)(1) dismissal.” Id. {¶ 11} However, a closer reading of the Dyson opinion shows a factual distinction

between it and the case before us. In Dyson, the motion filed with the trial court was a

“postdismissal for costs, attorney fees, and expenses incurred as a result of appellant[’s] *

* * repeated failure to attend her deposition pursuant to Civ.R. 37(D) and Civ.R. 41(D).”

The case before us is a postdismissal motion for sanctions pursuant to Civ.R. 11 and R.C.

2323.51.

{¶ 12} The Dyson court focused its attention on when the motion for costs was

filed in correlation to when the plaintiff voluntarily dismissed its complaint. We agree

that the issue in Dyson was the timeliness of the motion for costs because the relief that

was being sought was pursuant to Civ.R. 37 and 41. Dyson held that motions for

discovery sanctions filed prior to the Civ.R. 41 dismissal are considered collateral and

may survive a voluntary dismissal. Dyson at 72. However, Dyson also implicitly held

that motions for sanctions filed pursuant to Civ.R. 11 and its statutory counterpart, R.C.

2323.51, are considered collateral, even though those motions are filed postdismissal. Id.

at 73; Williams v. Thamann, 173 Ohio App.3d 426, 2007-Ohio-4320, 878 N.E.2d 1070,

¶5.

{¶ 13} In the instant case, appellants’ motion for sanctions was made pursuant to

Civ.R. 11 and R.C. 2323.51(B)(1). Civ.R. 11 does not set forth a time frame for when a

motion for sanctions needs to be filed. Edwards v. Lopez, 8th Dist. No. 95860,

2011-Ohio-5173, ¶14. See, also, Cooter & Gell at 393-398 (interpreting the jurisdictional issue of Fed.R. 41 dismissal and Fed.R. 11 sanctions). Therefore a Civ.R.

11 motion for sanctions can be filed after a Civ.R. 41(A) voluntary dismissal.

{¶ 14} Moreover, R.C. 2323.51(B)(1) provides that “at anytime not more than

thirty days after the entry of final judgment in a civil action or appeal, any party adversely

affected by frivolous conduct may file a motion for an award of court costs, reasonable

attorney fees, and other reasonable expenses incurred in connection with the civil action

or appeal.” In Edwards, this court explained that the “thirty-day” time limit applies even

when a case is dismissed without prejudice and is not a final appealable order. Edwards

at ¶12-13, citing Gitlin. Therefore, the plain language of the statute and the holding in

Edwards evidences that a motion for sanctions pursuant to R.C. 2323.51 does not need to

be pending prior to the voluntary dismissal under Civ.R. 41.

{¶ 15} Accordingly, because of our interpretation of Dyson, we find the Sixth

District’s reliance on Dyson in its Hanson decision is misplaced. In Hanson, the plaintiff

filed his Rule 41 voluntary dismissal, and the trial court noted that it would retain

jurisdiction to consider defendant’s motion for costs. However, the plaintiff filed a

subsequent postdismissal motion for sanctions pursuant to Civ.R. 11 and R.C. 2323.51.

Relying on David v. Kaiser, 6th Dist. No. L-03-1315, 2004-Ohio-3149, and Dyson, the

Sixth District held that “once appellant dismissed his complaint, the trial court lost

jurisdiction to consider [appellant’s] postdismissal motion for sanctions.” However, its

reliance was misplaced, because both David and Dyson involved postdismissal motions

for discovery costs under Civ.R. 37(D) and 41(D). {¶ 16} Accordingly, we find that the trial court erred in relying on Hanson and

Dyson in finding that it lacked jurisdiction to consider appellants’ motion for sanctions

pursuant to Civ.R. 11 and R.C. 2323.51.

{¶ 17} Our interpretation of Dyson is consistent with subsequent holdings in our

court regarding the issue of postdismissal motions for Civ.R. 11 and R.C. 2323.51

sanctions.

{¶ 18} In Wheeler v. Best Emp. Fed. Credit Union, 8th Dist. No. 92159,

2009-Ohio-2139, this court addressed whether the trial court lacked jurisdiction to impose

costs as a sanction against a plaintiff after the plaintiff had voluntarily dismissed his

claims. In Wheeler, the plaintiff dismissed his complaint pursuant to Civ.R. 41 and nine

days later, defendant moved for sanctions pursuant to R.C. 2323.51. This court, citing

Hummel, held that “[s]anctioning a party for frivolous conduct is considered a collateral

proceeding, and trial courts retain jurisdiction to make this determination under R.C.

2323.51 subsequent to a case being voluntarily dismissed.” Wheeler at ¶12. See, also,

Ayad v. Radio One Inc., 8th Dist. No. 90638, 2008-Ohio-5487 (“trial courts retain

jurisdiction to resolve collateral matters, such as a motion for sanctions, pursuant to

Civ.R. 11 and R.C. 2323.51”), and State ex rel. Stifel v. Stokes, 8th Dist. No. 89466,

2007-Ohio-997 (a trial judge is not patently and unambiguously without jurisdiction to

consider a motion for Civ.R. 11 sanctions after a voluntary dismissal; thus writ of

prohibition is denied). {¶ 19} We do not find our decision to be in conflict with this court’s holding in

Dyson; however, even if we were to conclude that Dyson is in conflict with our holding

today, we find that the Ohio Supreme Court has effectively overruled Dyson in its

subsequent decisions applying Hummel. Although Hummel is factually similar to Dyson

and distinguishable from the case before us, the Ohio Supreme Court has applied Hummel

to cases that are factually similar to the instant appeal — where a motion for Civ.R. 11

and/or R.C. 2323.51 sanctions is filed after the filing of a Civ.R. 41(A) notice of

voluntary dismissal.

{¶ 20} In State ex rel. Ahmed v. Costine, 100 Ohio St.3d 36, 2003-Ohio-4776, 795

N.E.2d 672, the plaintiff voluntarily dismissed his complaint under Civ.R. 41(A)(1)(a),

and then subsequently moved for sanctions and contempt. The Supreme Court, reversing

the court of appeals and citing Hummel, held that “trial courts may consider collateral

issues like criminal contempt and Civ.R. 11 sanctions despite dismissal.” Id at ¶5. See,

also, State ex rel. Fifth Third Mtge. Co. v. Russo, 129 Ohio St.3d 250, 2011-Ohio-3177,

951 N.E.2d 414, ¶13.

{¶ 21} Accordingly, we hold that a Civ.R. 41 voluntary dismissal does not divest

the trial court of jurisdiction to consider a subsequently filed motion for sanctions

pursuant to Civ.R. 11 and/or R.C. 2323.51. To hold otherwise would effectively leave

an alleged aggrieved party without a remedy to pursue a claim for frivolous conduct. See

State ex rel. J. Richard Gaier Co., L.P.A. v. Kessler (1994), 97 Ohio App.3d 782, 785, 647 N.E.2d 564. The trial court erred in finding that it lacked jurisdiction to consider

appellants’ motion for sanctions.

{¶ 22} We sustain appellants’ assignments of error, reverse the decision of the trial

court, and remand the matter for consideration of the merits of appellants’ motion for

Judgment reversed.

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

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to said 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.

KATHLEEN ANN KEOUGH, JUDGE

FRANK D. CELEBREZZE, JR., P.J., and JAMES J. SWEENEY, J., CONCUR