Booth v. Copeco, Inc.

2019 Ohio 5361

• Court: Ohio Court of Appeals
• Decided: December 27, 2019
• Docket: L-19-1062
• Status: Published

Opinion

[Cite as Booth v. Copeco, Inc., 2019-Ohio-5361.]

IN THE COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT LUCAS COUNTY

John Booth Court of Appeals No. L-19-1062

Appellant Trial Court No. CI0201601241

v.

Copeco, Inc. DECISION AND JUDGMENT

Appellee Decided: December 27, 2019

*****

Mark A. Davis, for appellant.

Thomas W. Connors, for appellee.

SINGER, J.

{¶ 1} Appellant, John Booth, appeals from the March 1, 2019 judgment of the

Lucas County Court of Common Pleas awarding appellee, Copeco, Inc., attorney fees of

$20,407.20 pursuant to R.C. 1335.11(D). For the reasons which follow, we affirm in part

and reverse in part. {¶ 2} On appeal, Booth asserts the following assignments of error:

ASSIGNMENT OF ERROR No. 1:

The Trial Court Erred in Awarding Attorney Fees

ASSIGNMENT OF ERROR No. 2:

The Trial Court Erred by Placing the Burden on the Nonmovant to

Prove Reasonableness of Attorney Fees

ASSIGNMENT OF ERROR No. 3:

The Trial Court Erred by Requiring “Authority” as to

Reasonableness of Fees

ASSIGNMENT OF ERROR No. 4:

The Trial Court Erred by Failing to Strike Testimony of a Witness

without Knowledge

ASSIGNMENT OF ERROR No. 5:

The Trial Court Erred in Failing to Allocate Fees Between the

Causes of Action

ASSIGNMENT OF ERROR No. 6:

The Trial Court Erred in Finding Reasonable Attorney Fees

ASSIGNMENT OF ERROR No. 7:

The Trial Court Erred by Misinterpreting the Remedial Statute

{¶ 3} Booth sued Copeco, Inc. asserting claims of a breach of a compensation

contract and unjust enrichment regarding a sales commission. Booth sought treble

2. damages and attorney fees pursuant to R.C. 1335.11(D). The case was dismissed by the

trial court after granting summary judgment in favor of Copeco Inc. in 2016, and we

affirmed the trial court’s decision on appeal, Booth v. Copeco, Inc., 6th Dist. Lucas No.

L-16-1227, 2017-Ohio-2897, ¶ 3.

{¶ 4} After the complaint was dismissed, Copeco, Inc. sought attorney fees

pursuant to R.C. 1335.11(D). Following a hearing on the matter, the trial court awarded

attorney fees to Copeco, Inc. on July 26, 2017. However, the trial court never determined

the amount of the fee award until March 1, 2019, when Copeco, Inc. filed a supplement

to the motion for attorney fees. In a March 1, 2019 judgment entry, the trial court

awarded Copeco, Inc. attorney fees of $20,407.20. Booth appeals.

{¶ 5} R.C. 1335.11(D) provides that “[t]he prevailing party in an action brought

under this section is entitled to reasonable attorney’s fees and court costs.” The party

seeking attorney fees must establish the fees were reasonable and necessary and relate

solely to the statutory claim. R.C. 1335.11(D); Cuspide Properties, Ltd. v. Earl

Mechanical Services, Inc., 6th Dist. Lucas No. L-16-1141, 2017-Ohio-5680, ¶ 12; Kosta

v. Ohio Outdoor Advertising Corp., 103 Ohio App.3d 361, 364, 659 N.E.2d 810 (11th

Dist.1995). Compare City of Canton v. Irwin, 5th Dist. Stark No. 2011CA00029, 2012-

Ohio-344, ¶ 12 (applying R.C. 163.09(G)). The moving party must submit the attorney’s

detailed bill indicating the time expended on each matter. State ex rel. Harris v. Rubino,

156 Ohio St.3d 296, 2018-Ohio-5109, 126 N.E.3d 1068, ¶ 5-6. But, the bill alone cannot

support a finding of reasonableness. United Assn. of Journeymen & Apprentices of the

3. Plumbing & Pipe Fitting Industry v. Jack’s Heating, Air Conditioning & Plumbing, Inc.,

3d Dist. Hardin No. 6-12-06, 2013-Ohio-144, ¶ 24; Whitaker v. Kear, 123 Ohio App.3d

413, 424, 704 N.E.2d 317 (4th Dist.1997). The reasonableness of both the hours

expended and the hourly fee must be proven through the billing attorney’s testimony or

affidavit and/or independent, unbiased evidence. United Assn. of Journeymen at ¶ 24, 28;

Breen v. Total Quality Logistics, 10th Dist. Franklin No. 16AP-3, 2017-Ohio-439, ¶ 25.

While expert evidence is not required to establish that the fees were reasonable and

necessary, the lack of independent, expert evidence may impact the weight of the

evidence. Cleveland v. Capitalsource Bank, 8th Dist. Cuyahoga No. 103231, 2016-Ohio-

3172, ¶ 13; Grove v. Gamma Ctr., Inc., 3d Dist. Marion No. 9-12-41, 2013-Ohio-1734,

¶ 31-32.

{¶ 6} The determination of whether to award reasonable attorney fees and the

amount is a matter left to the sound discretion of the trial court. Bittner v. Tri-Cty.

Toyota, Inc., 58 Ohio St.3d 143, 146, 569 N.E.2d 464 (1991), quoting Brooks v. Hurst

Buick-Pontiac-Olds-GMC, Inc., 23 Ohio App.3d 85, 91, 491 N.E.2d 345 (12th

Dist.1985). However, the court “must base its fee determination upon the evidence”

submitted and not its own assessment. United Assn. of Journeymen at ¶ 31, quoting In re

Wood’s Estate, 55 Ohio App.2d 67, 75, 379 N.E.2d 256 (10th Dist.1977). See also Corp.

Communication Servs. of Dayton, LLC v. MCI Communications Servs., Inc., S.D.Ohio

No. 3:08-CV-046, 2012 WL 2006642, *2 (June 5, 2012), citing Geier v. Sunddquist, 372

4. F.3d 784, 791 (6th Cir.2004) (the “court must provide an adequate explanation of the

reasons for its award and the manner in which the award was determined”).

{¶ 7} The trial court’s determination is reviewed under an abuse of discretion

standard. Bittner v. Tri-Cty. Toyota, Inc., 58 Ohio St.3d 143, 146, 569 N.E.2d 464

(1991). An abuse of discretion involves more than an error of law or judgment. We must

find the trial court’s attitude was unreasonable, arbitrary or unconscionable. Tracy v.

Merrell Dow Pharmaceuticals, Inc., 58 Ohio St.3d 147, 152, 569 N.E.2d 875 (1991).

The failure to apply the two-part test discussed below is sufficient to warrant a finding

the trial court abused its discretion. Bittner; Grieselding v. Krischak, 6th Dist. Lucas No.

L-06-1010, 2007-Ohio-2668, ¶ 40.

{¶ 8} The starting point for determining reasonable attorney fees is to determine

the product of the “reasonable hourly rate” and the total “hours reasonably expended” in

connection with the R.C. 1335.11 claim. State ex rel. Harris v. Rubino, 156 Ohio St.3d

296, 2018-Ohio-5109, 126 N.E.3d 1068, ¶ 3. Once this base figure has been determined,

the trial court has the discretion to “adjust the fee upward or downward, based on the

factors listed in Prof.Cond.R. 1.5(a)” to determine the appropriate fee award. Id., citing

Bittner at syllabus. The factors in Prof.Cond.R. 1.5(a) include: “ 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

5. the attorney/client relationship; the experience, reputation, and ability of the attorney; and

whether the fee is fixed or contingent.” Sky v. Van Der Westhuizen, 5th Dist. Stark No.

2018 CA 00127, 2019-Ohio-1960, ¶ 73, citing Canton v. Irwin, 5th Dist. Stark No. 2011

CA00029, 2012-Ohio-344.

{¶ 9} In the case before us, Booth does not challenge the basis for awarding

attorney fees or the reasonableness of the hourly rate charged by counsel. Instead, Booth

argues that the hours expended in this case were unreasonable.

{¶ 10} The following evidence was presented at the hearing. Thomas Connors,

attorney for Copeco, Inc. testified he has 30 years of experience and has been counsel for

Graphic Enterprises since the 1990s, which later purchased Copeco, Inc. He further

testified that while he has dealt with breach of contracts cases many times, he has only

worked with a R.C. 1335.11 claim a couple of times and never sought attorney fees in

those cases. Connors authenticated the bills his office submitted to Copeco, Inc. for the

work done with regard to this suit. His affidavit attesting to the necessity and

reasonableness of his fees was also admitted into evidence.

{¶ 11} Booth called attorney Thomas Cafferty as an expert to testify regarding the

unreasonableness of the billings. Cafferty testified he has 11 years of experience and has

worked on dozens of breach of contract cases. He reviewed the motion for attorney fees,

the prior filings in the case, and the fees charged.

{¶ 12} The bills reflected that Connors expended a total of 61.4 hours representing

Copeco, Inc. in this case. Booth took issue with the necessity and reasonableness of

6. expending 19.2 hours to prepare a six-page motion for summary judgment and attached

affidavit. Booth also challenged the 7.4 hours expended to prepare a reply brief to the

memorandum in opposition to the motion for summary judgment, which did not include

any legal citations.

{¶ 13} While Connors admitted the legal issues were not complicated, he testified

he had to spend considerable time to meet with Copeco, Inc. and understand the factual

issue of the commission formula based on the information supplied by Copeco, Inc. and

to assemble the documents which would support the motion. Connors testified that the

reply brief required that he track down the factual information regarding costs, which

supported the commission calculation, and to prepare an affidavit.

{¶ 14} Cafferty testified the hours spent in preparing the motion for summary

judgment were unreasonable because the only issue in the case was a factual matter and

Connor had a high level of expertise. Cafferty believed that even preparation of the

affidavit should not have taken more than one-to-two hours.

{¶ 15} Connors testified the appeal process required 7.9 hours of work. Booth

argues the Copeco, Inc. appellate brief included approximately three pages of argument,

including the standard of review. No further legal citations were needed as the only issue

was factual. Furthermore, the statements of facts included in the brief were taken

verbatim from the summary judgment motion.

{¶ 16} Connors testified he spent most of this time thinking about the arguments.

He believed that while this was not a complex case, the issue of the commission formula

7. and the cost accounting issue was complicated. Cafferty testified the time spent

preparing the appellate brief was unreasonable considering that the issue was merely

factual.

{¶ 17} Booth also challenged the 2.4 hours expended to prepare a motion for

attorney fees. Connors testified he was not familiar with the process for seeking attorney

fees and spent additional time determining how to proceed. He further indicated he

expended 2.4 hours to research and draft the motion and an additional 6.89 hours to

prepare a reply to the memorandum in opposition to his motion for attorney fees. He

later expended another 3.5 hours on the attorney fee issue. Connors testified that the time

was justified by the fact that the fee issue involved a number of complex procedural

issues.

{¶ 18} Cafferty testified that expending nearly 7 hours to prepare the reply brief

regarding the motion for attorney fees and the affidavit, which merely cited the facts and

no law, was unreasonable.

{¶ 19} Following the hearing, the court took the matter under advisement, but did

not issue a written judgment until March 1, 2019, when it determined that total fees due

to Copeco, Inc. were $20,407.20. In that judgment, the trial court did not determine

whether the fees presented were necessary and reasonable. Instead, the court noted only

that Booth had not “cited any authority indicating that the fees accrued * * * are

unreasonable.”

8. {¶ 20} In his first assignment of error, Booth argues the trial court erred in

awarding attorney fees in this case because Booth had not asserted an action under R.C.

1335.11(D). We find this argument lacks merit. Booth expressly asserted in his

complaint that the provisions of R.C. 1335.11(D) permitting treble damages and attorney

fees applied in this case because the alleged failure to pay Booth’s commission was

“willful, wanton, or reckless misconduct or bad faith” and this assertion was expressly

incorporated into both his breach of contract and unjust enrichment claims. Therefore, it

is clear Booth asserted the statutory claim. Accordingly, we find Booth’s first

assignment of error not well-taken.

{¶ 21} In his second assignment of error, Booth argues that the trial court erred by

placing the burden on him to prove the reasonableness of the Copeco, Inc. attorney fees.

In his third assignment of error, Booth argues the trial court erred by considering the

reasonable and necessary finding as a legal issue rather than a factual issue and requiring

Booth to cite authority as to the reasonableness of the attorney fees. In his sixth

assignment of error, Booth argues the trial court erred in finding the Copeco, Inc.

attorney fees were reasonable. We will address these three assignments of errors

together.

{¶ 22} The trial court held that “Booth has not cited any authority indicating that

the fees accrued by [Copeco, Inc.] are unreasonable.” We agree with Booth that this

finding suggests the court erroneously considered the issue of the reasonableness of the

fees as a legal issue and placed the burden of proof on Booth. In this case, Copeco, Inc.

9. submitted the affidavit and testimony of its lawyer to establish his bill was reasonable and

necessary. Booth submitted independent, expert testimony to establish the hours

expended were unreasonable. The failure of the trial court to make finding as to the

reasonableness and necessity of the fees in light of the contradictory evidence and to

consider adjustment of the fee based on Prof.Cond.R 1(a) constitutes an abuse of its

discretion. Therefore, we find Booth’s second, third, and sixth assignments of error well-

taken.

{¶ 23} In his fourth assignment of error, Booth argues that the trial court erred by

failing to strike the testimony of a witness without knowledge.

{¶ 24} Generally, a trial court has broad discretion in determining whether to

admit or exclude evidence, but it cannot admit evidence contrary to the rules of procedure

and evidence. Beard v. Meridia Huron Hosp., 106 Ohio St.3d 237, 2005-Ohio-4787, 834

N.E.2d 323, ¶ 20; Rigby v. Lake Cty., 58 Ohio St.3d 269, 271, 569 N.E.2d 1056 (1991).

Evid.R. 602 prohibits a witness from testifying about matters which they have no

personal knowledge. Hearsay is inadmissible unless an exception to the rule applies.

Evid.R. 802 and 803. On appeal, we apply an abuse of discretion standard and reverse if

an abuse of discretion resulted in material prejudice. Beard.

{¶ 25} In the case before us, Copeco, Inc. called Renae Howard, the office

administrator for Copeco, Inc., who testified Connor’s legal bills in this action had been

paid. The administrator admitted she does not work in accounts payable and had

contacted the accounts payable department to learn whether the bills had been paid. The

10. trial court denied Booth’s motion to strike the witness’s testimony on the grounds of

hearsay.

{¶ 26} We agree with Booth that the witness did not testify from her own personal

knowledge about whether the bills were paid. Furthermore, none of the exceptions to

hearsay applied in this case. However, the attorney for Copeco, Inc. authenticated his

bills and attested he submitted the bills to Copeco, Inc. All of the bills except the last

contained a running balance indicating the attorney had received payment for all the prior

bills. Only the final bill lacked a notation that it was paid. Therefore, for the most part,

the administrator’s testimony was unnecessary. While we find the trial court abused its

discretion by failing to strike the testimony of Howard, Booth was only materially

prejudiced regarding the testimony that the final bill had been paid. Booth’s fourth

assignment of error is found well-taken in part.

{¶ 27} In his fifth assignment of error, Booth argues the trial court erred in failing

to allocate the fees between the two causes of action. Upon a review of the complaint,

we find that the breach of contract claim and the R.C. 1335.11(D) claims are interrelated

and the total fees incurred were required to defend against the statutory claim. Corp.

Communication Servs. of Dayton, S.D.Ohio No. 3:08-CV-046, 2012 WL 2006642, at *4.

Therefore, we find Booth’s fifth assignment of error not well-taken.

{¶ 28} In his seventh assignment of error, Booth argues the trial court erred by

misinterpreting the remedial statute. He asserts the statute was designed to protect

workers, not employers.

11. {¶ 29} The purpose of R.C. 1335.11(D) is to “provide a penalty by way of

damages and reasonable attorney fees against a principal who fails to pay commissions in

compliance with subdivision (C) of the statute” and to “deter the assertion of unfounded

claims under the statute by providing for the recovery of attorney fees and costs by a

defendant who successfully defends the claim.” Kosta, 103 Ohio App.3d at 364, 659

N.E.2d 810 (11th Dist.1995). See also Corp. Communication Servs. of Dayton at *2.

Therefore, we find Booth’s seventh assignment of error not well-taken.

{¶ 30} Having found that the trial court did commit error prejudicial to Booth and

that substantial justice has not been done, the judgment of the Lucas County Court of

Common Pleas is reversed. This case is remanded to the trial court for further

proceedings consistent with this judgment. Copeco, Inc. is ordered to pay the costs of

this appeal pursuant to App.R. 24.

Judgment reversed and remanded.

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

12. Booth v. Copeco, Inc. C.A. No. L-19-1062

Arlene Singer, J. _______________________________ JUDGE Christine E. Mayle, P.J. _______________________________ Gene A. Zmuda, J. JUDGE CONCUR. _______________________________ JUDGE

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.supremecourt.ohio.gov/ROD/docs/.

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