Boulder Creek Assocs., Ltd. v. Fechko Excavating, Inc.

2013 Ohio 3394

• Court: Ohio Court of Appeals
• Decided: August 5, 2013
• Docket: 2012-P-0143, 2012-P-0157
• Status: Published

Opinion

[Cite as Boulder Creek Assocs., Ltd. v. Fechko Excavating, Inc., 2013-Ohio-3394.]

IN THE COURT OF APPEALS

ELEVENTH APPELLATE DISTRICT

PORTAGE COUNTY, OHIO

BOULDER CREEK ASSOCIATES, LTD., : OPINION

Plaintiff-Appellant, : CASE NOS. 2012-P-0143 - vs - : and 2012-P-0157

FECHKO EXCAVATING, INC., :

Defendant-Appellee. :

Civil Appeals from the Portage County Court of Common Pleas, Case No. 2012 CV 00448.

Judgment: Reversed and remanded.

James M. Henshaw, 54 East Mill Street, Suite 400, Akron, OH 44308, and Nicholas Swyrydenko, 137 South Main Street, #206, Akron, OH 44308 (For Plaintiff-Appellant).

Michael L. Fortney and Joseph R. Spoonster, Fortney & Klingshirn, 4040 Embassy Parkway, Suite 280, Akron, OH 44333 (For Defendant-Appellee).

CYNTHIA WESTCOTT RICE, J.

{¶1} Appellant, Boulder Creek Associates, Ltd., appeals from the judgment of

the Portage County Court of Common Pleas, dismissing their complaint, with prejudice,

for failing to comply with its previous judgment ordering appellant to provide a more

definite statement by attaching a copy of the agreement upon which the cause was

based, pursuant to Civ.R. 10(D). For the reasons below, we reverse the trial court’s

judgment and remand the matter for further proceedings. {¶2} On April 18, 2012, appellant filed a complaint alleging breach of contract

against appellee, Fechko Escavating, Inc., aka Fechko Excavating, Inc. The complaint

asserted that, pursuant to the contract, appellee was required to complete certain

construction within a specified time; appellant claimed appellee failed to meet the

deadline, which resulted in it incurring additional expenses. Appellants did not attach a

copy of the agreement to the complaint.

{¶3} In lieu of filing an answer, appellee subsequently moved for a more

definite statement pursuant to Civ.R. 12(D). In its motion, appellee asserted the

complaint recited numerous provisions of the agreement as the basis for the alleged

breach. Appellant, however, failed to attach a copy of the agreement as required by

Civ.R. 10(D). According to appellee, it could not properly file an answer without

appellant’s compliance with the rule. The trial court granted appellee’s motion and

ordered it to file an amended complaint, attaching a copy of the agreement, within 21

days of the order.

{¶4} Appellant failed to file its amended pleading within the timeframe set forth

by the court. On July 25, 2012, however, appellant filed a motion to file its amended

complaint instanter. The trial court granted the motion and appellant’s amended

complaint was filed with a copy of the agreement attached to the pleading.

{¶5} On August 10, 2012, appellee filed a motion to strike appellant’s amended

complaint and dismiss the action. Appellee alleged that the copy of the agreement

upon which its cause of action was based was incomplete. In particular, appellee

asserted the attached agreement was missing a page and did not include two exhibits

(detailing certain plans and specifications of the underlying construction) that were

2 incorporated into the original agreement. Thus, appellee urged the trial court to dismiss

appellant’s complaint for failing to comply with the order for a more definite statement.

{¶6} Three days later, on August 13, 2012, the trial court entered judgment

dismissing appellant’s complaint with prejudice. The court found that the attached copy

of the agreement omitted attachments and material sections of the agreement without

explanation. Thus, the court determined the amended complaint failed to comply Civ.R.

10(D) as well as the court’s previous order.

{¶7} Unaware of the trial court’s entry, due to an apparent failure of service per

Civ.R. 58(B), counsel for appellant, on August 16, 2012, filed a memorandum in

opposition to appellee’s motion to strike and dismiss its complaint. Appellant asserted it

was unaware of the missing page in the agreement and attached a copy of the same to

its memorandum. It did not, however, attach the two exhibits to which the agreement

incorporated by reference.

{¶8} On October 9, 2012, appellant filed a Civ.R. 60(B) motion for relief from

the August 13, 2012 judgment. As a preliminary basis for filing the motion, counsel for

appellant, via affidavit, stated he only became aware of the judgment of dismissal on

October 5, 2012. Further, appellant asserted the trial court violated Portage County

Local Rule 8.02 when it entered judgment a mere three days after appellee filed its

motion to dismiss. According to the rule, “[a]ny memorandum in opposition to [a] motion

shall be filed and served upon the movant within fourteen (14) days from the date the

motion is served.” Appellant filed its memorandum six days after the motion was filed

and the pleading was therefore timely. In appellant’s view, the court’s judgment was

erroneously entered as it did not give appellant the full allotted time to file its

3 memorandum under the local rule. As a result, appellant asserted it was entitled to

relief from judgment because, had the court considered its memorandum, it would have

determined appellant was in compliance with the court’s previous order for a more

definite statement.

{¶9} Appellee filed a memorandum in opposition to appellant’s Civ.R. 60(B)

motion asserting appellant was not entitled to relief because, even though it

supplemented the missing page, it failed to include the exhibits incorporated by

reference into the agreement. Thus, appellee concluded, appellant still failed to comply

with the trial court’s order to provide a more definite statement.

{¶10} A hearing was held on the motion, during which counsel for appellant

asserted the trial court’s premature entry and failure to consider its memorandum in

opposition to appellee’s motion to dismiss was sufficient to justify relief. Counsel noted

that the exhibits were not included with the other aspects of the agreement because

they were both unwieldy in size and voluminous in nature. The court observed that

appellant should have included the reason for omitting the exhibits in the amended

complaint and took the matter under advisement.

{¶11} On December 13, 2012, the trial court entered judgment denying appellant

relief from judgment. The trial court found that, even though appellant was not given

adequate time under the local rule to respond to appellee’s motion, any such error was

harmless. The trial court reasoned that appellant’s response memorandum, which

incorporated a partial copy of the agreement, neither included the entire contract nor

offered an explanation why the incorporated exhibits were not attached. Hence, the

court determined, even had it considered the pleading, appellant was still in violation of

4 the original order for a more definite statement sufficient to justify striking the pleading

and dismissing the case. The court therefore determined appellant had failed to

establish grounds for relief from the August 13, 2012 judgment.

{¶12} Appellant filed a notice of appeal from both the judgment of dismissal and

the judgment denying its motion for relief from judgment. The separate appeals were

consolidated and we now consider appellant’s two assignments of error. For its first

assignment of error, appellant alleges:

{¶13} “The trial court acted contrary to law and/or abused its discretion in

dismissing appellant’s complaint with prejudice.”

{¶14} We initially observe that, while the trial court did not specify that its

dismissal, which was entered pursuant to appellee’s motion, was with prejudice, Civ.R.

41(B)(3) provides that, “[a] dismissal under division (B) of this rule and any dismissal not

provided for in this rule * * * operates as an adjudication upon the merits, unless the

court, in its order for dismissal, otherwise specifies.” Thus, the trial court’s dismissal was

with prejudice.

{¶15} Civ.R. 41(B)(1) states that when a plaintiff fails to comply with a court

order, the court may, after notice to plaintiff’s counsel, dismiss an action or claim.

Under this rule, counsel has notice of an impending dismissal with prejudice for failure

to comply with an order “* * * when counsel has been informed that dismissal is a

possibility and has had a reasonable opportunity to defend against dismissal.” Quonset

Hut, Inc. v. Ford Motor Co., 80 Ohio St.3d 46 (1997), syllabus.

{¶16} The notice requirement of Civ.R. 41(B) requires a trial court to give a

plaintiff prior notice of its intention to dismiss a case with prejudice. See e.g. Ohio

5 Furniture Co. v. Mindala, 22 Ohio St.3d 99, 101 (1986). A court must give notice so

counsel has the opportunity to explain his or her reasons for failing to cure the alleged

defect before the case is involuntarily dismissed with prejudice. See e.g. Esser v.

Murphy, 9th Dist. No. 25945, 2012-Ohio-1168, ¶11. Further, various courts, including

this one, have interpreted Ohio Furniture Co. to mandate that a court provide a non-

compliant party a “second chance” to comply with the subject order or explain its non-

compliance before entering a judgment of dismissal with prejudice. See Loynd v. Scott

Molders, Inc., 62 Ohio App.3d 888, 893-894 (11th Dist.1990); Kane v. Internal.

Hydraulics, Inc., 11th Dist. Lake No. 12-031, 1987 Ohio App. LEXIS 9603, *4-*5 (Nov.

13, 1987); Esser, supra. (9th Dist.2012); LaRiche v. Delisio, 8th Dist. Cuyahoga No.

5592, 2000 Ohio App. LEXIS 5592, *8-*9 (Nov. 30, 2000). A dismissal on the merits is

a harsh remedy that calls for the due process guarantee of prior notice. See e.g. Ohio

Furniture Co., supra, at 101; see also Mid-West Telephone Service, Inc. v. Security

Products Company, 11th Dist. Trumbull No. 2010-T-0056, 2011-Ohio-3296, ¶14.

{¶17} Here, appellee’s motion to dismiss provided appellant with knowledge that

dismissal was a possibility. The trial court, however, never provided appellant with

notice that a dismissal with prejudice would eventuate from its failure to either file the

omitted portions of the agreement or provide a reason for their omission. The failure to

do so constituted prejudicial error.

{¶18} In addition to this conclusion, we also hold the trial court’s ultimate

decision to dismiss the matter with prejudice evinced an abuse of discretion. The trial

court dismissed the case with prejudice three days after appellee’s motion was filed and

prior to appellant filing its memorandum in opposition to appellee’s motion. The trial

6 court’s local rules, however, allow a party opposing a motion 14 days from service of the

motion to file a memorandum in opposition. In rendering its judgment, therefore, the

trial court failed to consider appellant’s memorandum even though it was filed within the

timeframe allowed under Loc.R. 8.02. This, unto itself, was error.

{¶19} A review of appellant’s post-judgment memorandum in opposition

indicates, however, it did not include all missing documentation identified by appellee in

its motion for a more definite statement. Appellant’s amended complaint consequently

failed to fully comply with Civ.R. 10(D) in that it failed to include the full agreement and

did not provide a reason for its omission. The question, therefore, is whether such an

omission was sufficient to justify dismissing the action with prejudice. We hold it was

not.

{¶20} This court has previously observed that dismissals pursuant to Civ.R.

41(B) are punitive in nature and should be utilized only when necessary to vindicate the

court’s authority. Mid-West Telephone Service, Inc., supra, at ¶12; see also Armstrong

v. Revco D.S., Inc., 8th Dist. Cuyahoga No. 64044, 1993 Oho App. LEXIS 5655, *6; 2

Klein Darling, Civil Practice, (1997), 228-229, Section 41-30. And because the law

favors adjudicating matters on their merits, dismissals with prejudice should be reserved

for extreme circumstances such as situations where a plaintiff’s conduct is so

unreasonable, irresponsible, contumacious or dilatory that a dismissal on the merits is

justified. See e.g. Nozik v. Dalheim, 11th Dist. Lake No. 96-L-205, 1998 Ohio App.

LEXIS 1072, *5 (Mar. 20, 1998). “Ordinarily, Ohio courts have followed the policy of

imposing the least severe sanction, or at least a sanction short of outright dismissal of

7 the action with prejudice, unless the plaintiff’s conduct evidences bad faith.”

Transamerica Ins. Group v. Maytag, Inc. 99 Ohio App.3d 203, 206 (9th Dist.1994).

{¶21} In this case, even though appellant did not strictly comply with the trial

court’s order for a more definite statement, a review of the record demonstrates the

copy of the contract attached to appellant’s amended complaint included all provisions

that were central to its breach of contract claim. Indeed, even though the agreement

omitted materials, i.e., a page itemizing details of the agreement not ostensibly at issue

in the complaint and two exhibits that are not obviously germane to the breach claim,

the attached document provided appellee with sufficient information upon which it could

answer the allegations in the complaint. The omitted exhibits, while potentially relevant

to the case, do not appear crucial, given the way the case was plead, to the allegations

of breach. And, in any event, the documentation would be subject to disclosure or

discovery if, at some point, they did have some bearing on the case.

{¶22} Given these points, appellant’s conduct does not indicate it was

deliberately attempting to flout the court’s authority, behave unreasonably, or engage in

dilatory conduct. Further, in light of the circumstances, we cannot impute bad faith to

appellant’s omission. The trial court’s dismissal with prejudice was, in our opinion,

unduly harsh and unreasonable under the circumstances.

{¶23} We therefore conclude the trial court abused its discretion when it entered

its judgment of dismissal with prejudice. Our holding is premised upon two discrete

bases. First, we hold the court erred by dismissing the matter without giving appellant’s

counsel adequate notice of its intention to dismiss the matter with prejudice if appellant

did not either (1) file the omitted documentation or (2) explain why the documentation

8 was omitted. We further conclude the court erred by imposing an unduly harsh sanction

given the circumstances of the case.

{¶24} Appellant’s first assignment of error is sustained.

{¶25} Appellant’s second assignment of error provides:

{¶26} “The trial court acted contrary to law and/or abused its discretion in

denying appellant relief from judgment under Civ.R. 60(B).”

{¶27} By reason of our disposition of appellant’s first assignment of error,

appellant’s second assignment of error is rendered moot.

{¶28} For the reasons discussed in this opinion, the judgment of the Portage

County Court of Common Pleas is reversed and the matter remanded for further

proceedings.

TIMOTHY P. CANNON, P.J.,

DIANE V. GRENDELL, J.,

concur.