Cleveland Constr., Inc. v. Ruscilli Constr. Co., Inc.

2023 Ohio 363
CourtOhio Court of Appeals
DecidedFebruary 8, 2023
Docket18AP-480 & 21AP-375
StatusPublished
Cited by2 cases

This text of 2023 Ohio 363 (Cleveland Constr., Inc. v. Ruscilli Constr. Co., Inc.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cleveland Constr., Inc. v. Ruscilli Constr. Co., Inc., 2023 Ohio 363 (Ohio Ct. App. 2023).

Opinion

[Cite as Cleveland Constr., Inc. v. Ruscilli Constr. Co., Inc., 2023-Ohio-363.]

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

Cleveland Construction, Inc., :

Plaintiff-Appellant, : No. 18AP-480 v. : and No. 21AP-375 Ruscilli Construction Co., Inc. et al., : (C.P.C. No. 16CV-798)

Defendant-Appellee. : (REGULAR CALENDAR)

:

D E C I S I O N

Rendered on February 8, 2023

On brief: Daniel R. Wireman, Dinsmore & Shohl LLP, Peter J. Georgiton, and Joshua M. Cartee, for appellant. Argued: Peter J. Georgiton.

On brief: Ruscilli Construction Co., Inc., Andrew Fredelake, Porter Wright, Morris & Arthur LLP, J. Thomas Nocar, and Ryan Sherman, for appellee. Argued: J. Thomas Nocar.

APPEAL from the Franklin County Court of Common Pleas

MENTEL, J. {¶ 1} Plaintiff-appellant, Cleveland Construction, Inc. ("Cleveland"), appeals from

the decisions of the Franklin County Court of Common Pleas denying Cleveland's motion

to partially vacate an arbitration award and granting post-judgment attorneys' fees, costs

and interests favor of defendant-appellee, Ruscilli Construction Co., Inc. ("Ruscilli"). For

the reasons that follow, we affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND Nos. 18AP-480 & 21AP-375 2

{¶ 2} This appeal arises out of a subcontract for a construction project at the

Goodale Landing Building in Columbus, Ohio. The structure is owned by Ohio Presbyterian

Retirement Services Communities ("OPRS"). Ruscilli and Cleveland were hired as the

project's general contractor and metal stud and drywall subcontractor, respectively. On

February 17, 2014, Ruscilli and Cleveland entered into a subcontract for Cleveland's work.

During the course of the project, disputes about performance under the agreement arose

between Ruscilli and Cleveland.

{¶ 3} Eventually, Cleveland brought claims of breach of contract, violation of the

Ohio Prompt Payment Act, foreclosure, and unjust enrichment against Ruscilli. (Jan. 25,

2016 Compl.) Cleveland alleged that Ruscilli required Cleveland to perform "additional

work outside the scope" of the parties' agreement, "failed to properly manage the

construction schedule," and caused delays and inefficiencies on the project. Id. at ¶ 9-13.

Additionally, Cleveland alleged that Ruscilli did not pay Cleveland for all of its completed

work. Id. at ¶ 15. Consequently, Cleveland filed a mechanic's lien on the construction

project to protect its interests. Id. at ¶ 17.

{¶ 4} Pursuant to Article 6 of the parties' Subcontractor Agreement, which requires

arbitration of "[a]ny claim arising out of or related to" it, the parties submitted their claims

to binding arbitration before a three-arbitrator panel ("Panel"). Id., Ex. A at 8. After a nine-

day arbitration hearing from April 24 to May 5, 2017, the Panel issued an interim

arbitration award, disposing of all of Cleveland's claims and Ruscilli's counterclaims.

(Nov. 21, 2017 Mot. to Partially Vacate, Ex. 3 hereinafter "Interim Arbitration Award"). The

Panel concluded that Cleveland was entitled to an award of $102,271.59, inclusive of pre-

judgment interest as of June 12, 2017, with interest accruing at $10.82 per day thereafter Nos. 18AP-480 & 21AP-375 3

until payment. Id. at 18. Additionally, the Panel directed Cleveland to release its

mechanic's lien and bond claim upon Ruscilli's payment of the interim award. Id.

{¶ 5} In addition to damages related to the contract balance, both Cleveland and

Ruscilli made claims for attorneys' fees and costs. For several reasons, the Panel

determined that Cleveland was not entitled to an award. The Panel noted that, based on its

findings, Ruscilli "had a good-faith basis to withhold funds from" Cleveland. Id. at 16. The

Panel also referenced its findings when rejecting Cleveland's assertion that Ruscilli had

been "vexatious and unreasonable in prosecuting its claims," while nevertheless stating

that:

the Panel acknowledges and agrees that some of the tactics employed by [Ruscilli] and its counsel, specifically the late detailing of its damages, caused problems for [Cleveland's] legal team. The Panel has determined [that Cleveland] had the ability and opportunity to ameliorate any problem created by this late identification through a request for a continuance but chose not to do so.

Id. at 16.

{¶ 6} Thus, the Panel concluded that Cleveland was "not entitled" to an attorney

fee award. Id.

{¶ 7} Regarding Ruscilli's claim for attorneys' fees and costs, the Panel found that

Section 4.6.3.2 of the parties' agreement supported an award. Id. at 17. The Panel stated

that "[t]he Parties are two sophisticated commercial entities that entered into a negotiated,

lengthy Subcontract agreement that included several specific provisions that shifted the

risk of [Ruscilli's] attorneys' fees and costs onto [Cleveland] in any dispute between the

Parties." Id. at 16. Accordingly, the Panel directed Ruscilli to file a petition for attorneys'

fees and costs and allowed Cleveland the opportunity to respond. Id. at 17. Nos. 18AP-480 & 21AP-375 4

{¶ 8} After reviewing the parties' briefing on the issue, the Panel found that Ruscilli

was entitled to recover from Cleveland $624,087.45 in attorneys' fees, costs, and expenses.

(Nov. 21, 2017 Mot. to Partially Vacate, Ex. 5.) The combined effect of the interim

arbitration award and the final arbitration award was a net award to Ruscilli of

$521,885.34.

{¶ 9} On the same day the Panel issued the final arbitration award, Cleveland filed

suit against OPRS, asserting a claim of tortious interference with a contractual relationship.

Based on its finding that the "cases stem from the same construction project and involve

substantially similar parties and related issues," the trial court ordered the cases to be

consolidated. (Apr. 20, 2018 Decision & Entry.) The trial court also ordered "all future

filings" to "be filed in both cases," based on its Local Rule 31.02(E)(2). Id.

{¶ 10} Cleveland also filed a motion under R.C. 2711.10 in the trial court to partially

vacate the arbitration award, arguing that the Panel exceeded its authority by ignoring a

notice provision under Article 3.3.2.2 of the parties' subcontract. (Nov. 21, 2017 Mot. to

Partially Vacate Arbitration Award.) The trial court rejected Cleveland's argument and

denied the motion, noting that the language Cleveland had cited to support its argument

actually applied to the Panel's ruling on attorneys' fees. (May 15, 2018 Decision & Entry at

7.)

{¶ 11} As the litigation continued, Ruscilli filed several motions to increase its award

of post-judgment attorney fees, costs and interest. (June 1, 2018 Petition for Post-Jgmt.

Attorneys' Fees, Costs, and Interest; Oct. 14, 2019 Second Supp.; Mar. 18, 2020 Third

Supp.) Because Cleveland had not released its mechanic's lien as the arbitrators ordered,

Ruscilli claimed that it had incurred an additional $12,223 in bond premium payments per Nos. 18AP-480 & 21AP-375 5

year. Id. at 3. Ruscilli also claimed additional attorneys' fees arising from Cleveland's filing

of the case against OPRS. Id. at 5.

{¶ 12} After a hearing, a magistrate concluded that Ruscilli was entitled to recover

the following from Cleveland: (1) post-judgment interest on the unpaid arbitration award

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2023 Ohio 363, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cleveland-constr-inc-v-ruscilli-constr-co-inc-ohioctapp-2023.