[Cite as First Fed. Bank of Ohio v. Angelini, 2012-Ohio-2136.]
IN THE COURT OF APPEALS OF OHIO THIRD APPELLATE DISTRICT CRAWFORD COUNTY
First Federal Bank of Ohio Court of Appeals No. 3-11-16
Appellee Trial Court No. 03-CV-0098
v.
John Angelini, Jr., et al.
Defendants DECISION AND JUDGMENT
[Timothy A. Shimko, Appellant] Decided: May 14, 2012
*****
Stephen E. Chappelear, John F. Marsh and Phillip G. Eckenrode, for appellee.
Robert L. Tucker and R. Brian Borla, for appellant.
OSOWIK, J.
{¶ 1} This is an appeal from a judgment of the Crawford County Court of
Common Pleas, awarding appellee, First Federal Bank, $119,690.55 in attorney fees and $39,574.80 in expenses due to the conduct of appellant, Timothy Shimko. For the
reasons that follow, this court affirms the judgment of the trial court.
{¶ 2} Appellant sets forth the following assignment of error:
1. The trial court erred in imposing sanctions under R.C. 2323.51
and Rule 11 of the Ohio Rules of Civil Procedure against Timothy A.
Shimko in the amount of $159,265.35.
{¶ 3} This case stems from a mortgage foreclosure claim which was originally
filed by First Federal on April 1, 2003. Judgments were obtained against defendants John
and Joyce Angelini, and also against their son, Jeffrey Angelini. In 2005, Jeffrey
Angelini declared bankruptcy. Subsequently, the bankruptcy trustee authorized
appellant, Timothy Shimko, to represent the trustee.
{¶ 4} On May 4, 2006, Shimko filed a counterclaim on behalf of the trustee
asserting:
(1) Plaintiff extorted Jeffrey Angelini’s signature on the loan and
mortgage documents; (2) Plaintiff fraudulently induced Jeffrey Angelini to
co-sign the 2001 loan by misrepresenting the application of loan payments;
(3) Plaintiff induced Jeffrey Angelini to sign the loan documents by
constructive fraud; (4) Plaintiff violated the “RICO” statute; and,
(5) Plaintiff breached a contract with Jeffrey in its application of the loan
payments. (See Judgment Entry on Motions for Sanctions.)
2. {¶ 5} Appellee moved pursuant to Civ.R. 12(B)(6) to dismiss these counterclaims
for failure to state a claim upon which relief can be granted. On September 20, 2006, the
court granted the motion with respect to both the extortion and RICO claims. Appellant
then filed an amended counterclaim which included a claim for conversion of real
property. In response, appellee filed a motion for summary judgment. It was granted on
January 9, 2007. On appeal, the court affirmed the granting of summary judgment with
respect to the conversion claim, but overruled the summary judgment with respect to the
fraud, constructive fraud, and breach of contract claims.
{¶ 6} Following the summary judgment ruling, the case proceeded to trial. The
jury returned a verdict against Jeffrey Angelini for $40,735.46 and against appellee for
$641,000. On February 18, 2009, Judge Markus declared a mistrial due to
inconsistencies between the jury interrogatories and the verdict and based upon
misconduct during trial by Shimko. The Court of Appeals for the Third District affirmed
the granting of the mistrial on the basis of the inconsistencies in the interrogatories and
the verdicts. The case was retried in 2011. The court granted a directed verdict on the
constructive fraud claim. The jury found that appellee had not committed fraud or
duress.
{¶ 7} Following the 2011 trial, appellee moved for sanctions against the trustee,
appellant, Galion Bank, and the attorneys for Galion Bank. The court held an evidentiary
hearing on June 2, 2011. The defendants called no witnesses. Although the trial court
placed appellant under oath, he refused to respond whatsoever to any questions. On the
3. contrary, he systematically referred the court to the record and to his brief in support of
his petition for writ of mandamus against the judge in this case. Appellant was
unapologetically defiant and wholly uncooperative throughout the proceeding.
{¶ 8} At the conclusion of the hearing, the court found that all of the defendants
except the trustee had engaged in frivolous conduct. The court awarded $119,690.55 in
attorney fees and $39,574.80 in expenses against appellant. The court awarded
$57,903.25 in attorney fees and $6,430.70 in expenses against Galion Bank and its
attorneys. Galion Bank’s counsel paid the full amount of sanctions awarded against
them. It should be noted that the bank did not appeal the sanction award. Nevertheless,
appellant asserts that the sanctions awarded by the trial court were improper.
{¶ 9} Civ.R. 11 in pertinent part states:
[T]he signature of an attorney or pro se party constitutes a certificate
by the attorney or party that the attorney or party has read the document;
that to the best of the attorney’s or party’s knowledge, information, and
belief there is good ground to support it; * * *. For a willful violation of
this rule, an attorney or pro se party, upon motion of a party or upon the
court’s own motion, may be subjected to appropriate action, including an
award to the opposing party of expenses and reasonable attorney fees
incurred in bringing any motion under this rule.
{¶ 10} Under R.C. 2323.51, conduct means “the filing of a civil action, the
assertion of a claim, defense, or other position in connection with a civil action, the filing
4. of a pleading, motion, * * * or the taking of any other action in connection with a civil
action.”
{¶ 11} R.C. 2323.51(A)(2)(a) defines frivolous conduct as any of the following:
(i) It obviously serves merely to harass or maliciously injure another
party to the civil action or appeal or is for another improper purpose,
including but not limited to, causing unnecessary delay or a needless
increase in the cost of litigation. (ii) It is not warranted under existing law,
cannot be supported by a good faith argument for an extension,
modification, or reversal of existing law, or cannot be supported by a good
faith argument for the establishment of new law. (iii) The conduct consists
of allegations or other factual contentions that have no evidentiary support
or, if specifically so identified, are not likely to have evidentiary support
after a reasonable opportunity for further investigation or discovery.
{¶ 12} A sanctions award by a trial court under Civ.R. 11 or R.C. 2323.51 will not
be disturbed unless there was an abuse of discretion. Resources for Healthy Living, Inc.
v. Haslinger, 6th Dist. No. WD-10-073, 2011-Ohio-1978, ¶ 26.
{¶ 13} We first review the sanctions for the counterclaim asserted by appellant
that appellee violated the RICO statute. Two requisite elements of a RICO claim did not
exist when appellant filed the counterclaim, specifically, that the conduct of the defendant
involves the commission of two or more specifically prohibited state or federal criminal
offenses, and that the prohibited criminal conduct of the defendant constitutes a pattern of
5. corrupt activity. Wilson v. Marino, 6th Dist. No. L-06-1027, 2007-Ohio-1048, ¶ 52.
Proceeding under these circumstances constituted a willful violation. The filing of the
RICO claim was in violation of Civ.R. 11 and R.C. 2323.51.
{¶ 14} Next, we consider the sanctions for the counterclaim asserted by appellant
for extortion. Simply put, Ohio law does not recognize a civil action for extortion. Thus,
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[Cite as First Fed. Bank of Ohio v. Angelini, 2012-Ohio-2136.]
IN THE COURT OF APPEALS OF OHIO THIRD APPELLATE DISTRICT CRAWFORD COUNTY
First Federal Bank of Ohio Court of Appeals No. 3-11-16
Appellee Trial Court No. 03-CV-0098
v.
John Angelini, Jr., et al.
Defendants DECISION AND JUDGMENT
[Timothy A. Shimko, Appellant] Decided: May 14, 2012
*****
Stephen E. Chappelear, John F. Marsh and Phillip G. Eckenrode, for appellee.
Robert L. Tucker and R. Brian Borla, for appellant.
OSOWIK, J.
{¶ 1} This is an appeal from a judgment of the Crawford County Court of
Common Pleas, awarding appellee, First Federal Bank, $119,690.55 in attorney fees and $39,574.80 in expenses due to the conduct of appellant, Timothy Shimko. For the
reasons that follow, this court affirms the judgment of the trial court.
{¶ 2} Appellant sets forth the following assignment of error:
1. The trial court erred in imposing sanctions under R.C. 2323.51
and Rule 11 of the Ohio Rules of Civil Procedure against Timothy A.
Shimko in the amount of $159,265.35.
{¶ 3} This case stems from a mortgage foreclosure claim which was originally
filed by First Federal on April 1, 2003. Judgments were obtained against defendants John
and Joyce Angelini, and also against their son, Jeffrey Angelini. In 2005, Jeffrey
Angelini declared bankruptcy. Subsequently, the bankruptcy trustee authorized
appellant, Timothy Shimko, to represent the trustee.
{¶ 4} On May 4, 2006, Shimko filed a counterclaim on behalf of the trustee
asserting:
(1) Plaintiff extorted Jeffrey Angelini’s signature on the loan and
mortgage documents; (2) Plaintiff fraudulently induced Jeffrey Angelini to
co-sign the 2001 loan by misrepresenting the application of loan payments;
(3) Plaintiff induced Jeffrey Angelini to sign the loan documents by
constructive fraud; (4) Plaintiff violated the “RICO” statute; and,
(5) Plaintiff breached a contract with Jeffrey in its application of the loan
payments. (See Judgment Entry on Motions for Sanctions.)
2. {¶ 5} Appellee moved pursuant to Civ.R. 12(B)(6) to dismiss these counterclaims
for failure to state a claim upon which relief can be granted. On September 20, 2006, the
court granted the motion with respect to both the extortion and RICO claims. Appellant
then filed an amended counterclaim which included a claim for conversion of real
property. In response, appellee filed a motion for summary judgment. It was granted on
January 9, 2007. On appeal, the court affirmed the granting of summary judgment with
respect to the conversion claim, but overruled the summary judgment with respect to the
fraud, constructive fraud, and breach of contract claims.
{¶ 6} Following the summary judgment ruling, the case proceeded to trial. The
jury returned a verdict against Jeffrey Angelini for $40,735.46 and against appellee for
$641,000. On February 18, 2009, Judge Markus declared a mistrial due to
inconsistencies between the jury interrogatories and the verdict and based upon
misconduct during trial by Shimko. The Court of Appeals for the Third District affirmed
the granting of the mistrial on the basis of the inconsistencies in the interrogatories and
the verdicts. The case was retried in 2011. The court granted a directed verdict on the
constructive fraud claim. The jury found that appellee had not committed fraud or
duress.
{¶ 7} Following the 2011 trial, appellee moved for sanctions against the trustee,
appellant, Galion Bank, and the attorneys for Galion Bank. The court held an evidentiary
hearing on June 2, 2011. The defendants called no witnesses. Although the trial court
placed appellant under oath, he refused to respond whatsoever to any questions. On the
3. contrary, he systematically referred the court to the record and to his brief in support of
his petition for writ of mandamus against the judge in this case. Appellant was
unapologetically defiant and wholly uncooperative throughout the proceeding.
{¶ 8} At the conclusion of the hearing, the court found that all of the defendants
except the trustee had engaged in frivolous conduct. The court awarded $119,690.55 in
attorney fees and $39,574.80 in expenses against appellant. The court awarded
$57,903.25 in attorney fees and $6,430.70 in expenses against Galion Bank and its
attorneys. Galion Bank’s counsel paid the full amount of sanctions awarded against
them. It should be noted that the bank did not appeal the sanction award. Nevertheless,
appellant asserts that the sanctions awarded by the trial court were improper.
{¶ 9} Civ.R. 11 in pertinent part states:
[T]he signature of an attorney or pro se party constitutes a certificate
by the attorney or party that the attorney or party has read the document;
that to the best of the attorney’s or party’s knowledge, information, and
belief there is good ground to support it; * * *. For a willful violation of
this rule, an attorney or pro se party, upon motion of a party or upon the
court’s own motion, may be subjected to appropriate action, including an
award to the opposing party of expenses and reasonable attorney fees
incurred in bringing any motion under this rule.
{¶ 10} Under R.C. 2323.51, conduct means “the filing of a civil action, the
assertion of a claim, defense, or other position in connection with a civil action, the filing
4. of a pleading, motion, * * * or the taking of any other action in connection with a civil
action.”
{¶ 11} R.C. 2323.51(A)(2)(a) defines frivolous conduct as any of the following:
(i) It obviously serves merely to harass or maliciously injure another
party to the civil action or appeal or is for another improper purpose,
including but not limited to, causing unnecessary delay or a needless
increase in the cost of litigation. (ii) It is not warranted under existing law,
cannot be supported by a good faith argument for an extension,
modification, or reversal of existing law, or cannot be supported by a good
faith argument for the establishment of new law. (iii) The conduct consists
of allegations or other factual contentions that have no evidentiary support
or, if specifically so identified, are not likely to have evidentiary support
after a reasonable opportunity for further investigation or discovery.
{¶ 12} A sanctions award by a trial court under Civ.R. 11 or R.C. 2323.51 will not
be disturbed unless there was an abuse of discretion. Resources for Healthy Living, Inc.
v. Haslinger, 6th Dist. No. WD-10-073, 2011-Ohio-1978, ¶ 26.
{¶ 13} We first review the sanctions for the counterclaim asserted by appellant
that appellee violated the RICO statute. Two requisite elements of a RICO claim did not
exist when appellant filed the counterclaim, specifically, that the conduct of the defendant
involves the commission of two or more specifically prohibited state or federal criminal
offenses, and that the prohibited criminal conduct of the defendant constitutes a pattern of
5. corrupt activity. Wilson v. Marino, 6th Dist. No. L-06-1027, 2007-Ohio-1048, ¶ 52.
Proceeding under these circumstances constituted a willful violation. The filing of the
RICO claim was in violation of Civ.R. 11 and R.C. 2323.51.
{¶ 14} Next, we consider the sanctions for the counterclaim asserted by appellant
for extortion. Simply put, Ohio law does not recognize a civil action for extortion. Thus,
the counterclaim was based upon a legal nullity. It could not be supported by a good
faith argument for an extension, modification, or reversal of existing law, nor could it be
supported by a good faith argument for the establishment of new law. As such, its
assertion under these circumstances constituted a willful violation of Civ.R. 11 and
frivolous conduct under R.C. 2323.51.
{¶ 15} We must now consider the sanctions for the counterclaim asserted by
appellant for conversion. Despite appellant’s creative arguments, real property may not
be the subject of a conversion claim under Ohio law. The trial court correctly awarded
sanctions under Civ.R. 11 and R.C. 2323.51 because the counterclaim was not
conceivably encompassed by existing law.
{¶ 16} Appellant also engaged in a tactic of seeking the removal of every judge in
this case. The trial court ordered sanctions against appellant for filing a mandamus and
prohibition action against Judge Markus. Appellant clearly did not like the judge’s
rulings and rather than appealing these rulings, the appellant sought to have the judge
removed from the case. In fact, appellee intervened in support of Judge Markus’ motion
to dismiss. The court of appeals denied appellant’s requested relief. Under these facts
6. and circumstances, appellant’s actions were unwarranted, willful, and frivolous. They
were in violation of Civ.R. 11 and R.C. 2323.51.
{¶ 17} The court awarded sanctions pursuant to R.C. 2323.51 for the constructive
fraud and fraudulent concealment counterclaims. Appellee did not have a fiduciary
relationship with Jeffrey Angelini and thus had no duty to disclose matters to him. The
court did not abuse its discretion when it awarded sanctions.
{¶ 18} We find that the court did not abuse its discretion when it imposed
sanctions pursuant to Civ.R. 11 and R.C. 2323.51. We find that appellant’s assignment
of error is not well-taken.
{¶ 19} Wherefore, we hereby affirm the judgment of the Crawford County Court
of Common Pleas. Pursuant to App.R. 24, appellant is ordered to pay the costs of this
appeal.
Judgment affirmed.
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27. See also 6th Dist.Loc.App.R. 4.
7. First Fed. Bank of Ohio v. Angelini C.A. No. 3-11-16
Peter M. Handwork, J. _______________________________ JUDGE Mark L. Pietrykowski, J. _______________________________ Thomas J. Osowik, J. JUDGE CONCUR. _______________________________ JUDGE
Judges Peter M. Handwork, Mark L. Pietrykowski, and Thomas J. Osowik, Sixth District Court of Appeals, sitting by assignment of the Chief Justice of the Supreme Court of Ohio.
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.sconet.state.oh.us/rod/newpdf/?source=6.
8.