Hamlin v. Bosse

2018 Ohio 2657

• Court: Ohio Court of Appeals
• Decided: July 6, 2018
• Docket: 2017-CA-26
• Status: Published

Opinion

[Cite as Hamlin v. Bosse, 2018-Ohio-2657.]

IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT MIAMI COUNTY

SAUNDRA L. HAMLIN : : Plaintiff-Appellee : C.A. CASE NO. 2017-CA-26 : v. : T.C. NO. 2017-CV-31 : JOHN R. BOSSE : (Civil Appeal from : Common Pleas Court) Defendant-Appellant : : ...........

OPINION

Rendered on the 6th day of July, 2018.

...........

H. STEVEN HOBBS, Atty. Reg. No. 0018453, The Hobbs Law Office, 119 Commerce Street, P.O. Box 489, Lewisburg, Ohio 45338 Attorney for Plaintiff-Appellee

JOSEPH MOORE, Atty. Reg. No. 0014362, and BRIAN HUELSMAN, Atty. Reg. No. 55444, Moore & Associates, 262 James E. Bohanan Memorial Drive, Vandalia, Ohio 45377 Attorney for Defendant-Appellant

.............

DONOVAN, J. -2-

{¶ 1} Defendant-appellant John R. Bosse appeals a decision of the Miami County

Court of Common Pleas, Civil Division, denying his motion for sanctions, attorney’s fees,

and costs that he filed against plaintiff-appellee Saundra L. Hamlin and her attorney, H.

Steven Hobbs, for frivolous conduct pursuant to R.C. 2323.51(A)(2)(a)(ii) and Civ.R. 11.

Bosse filed a timely notice of appeal with this Court on November 9, 2017.

{¶ 2} In the instant case, the record establishes that Hamlin and her ex-husband,

David, obtained a divorce on August 2, 1990, in Darke County Common Pleas Court Case

No. 88-DIV-50267. Pursuant to one of the orders issued by the trial court, Hamlin was

to receive one-half of her ex-husband’s retirement benefits administered by the General

Motors Corporation. In May of 2003, David retired from Delphi Corporation, a subsidiary

of General Motors.

{¶ 3} Thereafter, on October 30, 2008, a magistrate from the Darke County

Common Pleas Court issued an order designating Bosse as the trial court’s expert

witness with respect to the distribution of David’s retirement benefits to the parties.

Specifically, Bosse, as the trial court’s expert, was ordered by the magistrate to prepare

four Qualified Domestic Relations Orders (“QDRO”) in order to equitably divide David’s

retirement benefits from Delphi Corporation. Pursuant to the magistrate’s order, in June

of 2009, Bosse presented the parties with four QDROs.

{¶ 4} In February 2010, Hamlin, through counsel, sent Bosse a letter informing him

that certain necessary language was missing from the QDROs and that the amount of

money distributed to her from David’s retirement benefits was incorrect. According to

Hamlin, Bosse did nothing to correct the QDROs, and on June 18, 2012, the four QDROs -3-

were filed in the Darke County Court of Common Pleas. Due to drafting errors in the

documents, Bosse subsequently prepared and filed an Amended QDRO on August 17,

2012.

{¶ 5} On January 22, 2016, the Darke County Court of Common Pleas issued a

decision based upon the recommendations of Bosse. Thereafter on January 20, 2017,

Hamlin filed a complaint in the Miami County Court of Common Pleas against Bosse for

malpractice, breach of contract, and unjust enrichment. In her complaint, Hamlin alleged

that the Darke County court’s reliance on Bosse’s recommendations and advice resulted

in her not receiving the proper allocation of her ex-husband’s retirement benefits.

Specifically, Hamlin alleged that she was damaged in the amount of $11,260.20 because

of the errors made by Bosse when he drafted the QDROs.

{¶ 6} On February 10, 2017, Bosse filed a motion to dismiss Hamlin’s complaint

pursuant to Civ.R. 12(B)(6). On March 6, 2017, Hamlin filed a memorandum in

opposition to Bosse’s motion to dismiss. On the same day, Hamlin also filed a notice of

dismissal of her complaint without prejudice pursuant to Civ.R. 41(A)(1)(a).

{¶ 7} On April 18, 2017, Bosse filed a motion for sanctions, attorney fees, and

costs against Hamlin in which he alleged that she acted frivolously when she filed the

complaint against him. A brief hearing was held before the trial court on August 10, 2017,

regarding stipulations agreed to by the parties and the admission of several exhibits.1

Bosse filed a memorandum in support of his motion for sanctions on August 30, 2017.

1 One of the primary exhibits filed with the trial court was Plaintiff’s Exhibit 1, a typed transcript of a hearing held before a Darke County magistrate in Case No. 88-DIV-50267 on January 13, 2015. The hearing was being held in order to analyze the current status of David Hamlin’s retirement pensions and the distribution of the accounts to the parties. -4-

On August 31, 2017, Hamlin filed a memorandum in opposition to Bosse’s motion for

sanctions. On October 18, 2017, the trial court issued a decision denying Bosse’s

motion for sanctions, attorney fees, and costs.

{¶ 8} It is from this judgment that Bosse now appeals.

{¶ 9} Because they are interrelated, Bosse’s first and second assignments of error

will be discussed together as follows:

THE TRIAL COURT ERRED AS A MATTER OF LAW BY DENYING

SANCTIONS AGAINST APPELLEE, SAUNDRA L. HAMLIN FOR BEING

FRIVOLOUS BECAUSE THE COMPLAINT WAS FILED BEYOND THE

STATUTE OF LIMITATIONS AND THEREFORE NOT WARRANTED

UNDER THE LAW.

FRIVOLOUS BECAUSE APPELLANT, JOHN R. BOSSE HAD IMMUNITY

AS THE TRIAL COURT’S EXPERT AND THE COMPLAINT FILED IS NOT

SUPPORTED BY EXISTING LAW AND CANNOT BE SUPPORTED BY A

GOOD FAITH ARGUMENT FOR AN EXTENSION, MODIFICATION, OR

REVERSAL OF EXISTING LAW.

{¶ 10} In his first assignment, Bosse contends that the trial court erred when it

denied his motion for sanctions because Hamlin’s complaint was filed outside the statute

of limitations for civil actions brought against accountants. In Bosse’s second

assignment, he argues that as a court-appointed expert, he is entitled to immunity from

any liability with respect to the work he performed relating to the Hamlins’ divorce and the -5-

subsequent distribution of David’s retirement benefits.

{¶ 11} “On appeal, [this court] will not reverse a lower court's decision on whether

to award sanctions under R.C. 2323.51 absent a showing of an abuse of discretion.” State

ex rel. Bell v. Madison Cty. Bd. of Commrs., 139 Ohio St.3d 106, 2014-Ohio-1564, 9

N.E.3d 1016, ¶ 10, citing State ex rel. Striker v. Cline, 130 Ohio St.3d 214, 2011-Ohio-

5350, 957 N.E.2d 19, ¶ 11. To prove such an abuse, the appellant must establish that

the court of appeals' award or denial of sanctions was unreasonable, arbitrary, or

unconscionable. Id.

{¶ 12} R.C. 2323.51 allows a court to award “court costs, reasonable attorney's

fees, and other reasonable expenses” to any party “who was adversely affected by

frivolous conduct.” R.C. 2323.51(B)(1). Before making an award, the court must hold a

hearing “to determine whether particular conduct was frivolous, to determine, if the

conduct was frivolous, whether any party was adversely affected by it, and to determine,

if an award is to be made, the amount of that award.” R.C. 2323.51(B)(2)(a).

{¶ 13} R.C. 2323.51(A)(2)(a) defines “frivolous conduct” as conduct that does 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 -6-

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.

(iv) The conduct consists of denials or factual contentions that are not

warranted by the evidence or, if specifically so identified, are not reasonably

based on a lack of information or belief.

{¶ 14} Frivolous conduct, as contemplated by R.C. 2323.51(A)(2)(a), is judged

under an objective, rather than a subjective standard, and must involve egregious

conduct. Striker at ¶ 21. Frivolous conduct is not proved merely by winning a legal battle

or by proving that a party's factual assertions were incorrect. State ex rel. DiFranco v. S.

Euclid, 144 Ohio St.3d 571, 2015-Ohio-4915, 45 N.E.3d 987, ¶ 15; see also Ohio Power

Co. v. Ogle, 4th Dist. Hocking No. 12CA14, 2013-Ohio-1745, ¶ 29–30, quoting Hickman

v. Murray, 2d Dist. Montgomery No. CA15030, 1996 WL 125916, *5 (Mar. 22, 1996).

(“ ‘A party is not frivolous merely because a claim is not well-grounded in fact. * * * [R.C.

2323.51] was designed to chill egregious, overzealous, unjustifiable, and frivolous action.

* * * [A] claim is frivolous if it is absolutely clear under the existing law that no reasonable

lawyer could argue the claim’ ”).

{¶ 15} In the instant case, Bosse argues that Hamlin’s filing of the malpractice

complaint violated R.C. 2323.51(A)(2)(a)(ii), insofar as he contends that the complaint

was not warranted by existing law or extension, modification, or reversal of existing law,

or the establishment of new law. -7-

Statute of Limitations

{¶ 16} In Investors REIT One v. Jacobs, 46 Ohio St.3d 176, 546 N.E.2d 206

(1989), the court held that claims of negligence against an accountant were governed by

the four-year statute of limitations found in R.C. 2305.09(D). Id. at 181. It noted that R.C.

2305.09 expressly included its own discovery rule, which did not apply to general

negligence claims. Id. Therefore, the court held that the discovery rule “is not available

to claims of professional negligence brought against accountants.” Id. at ¶ 2 of the

syllabus. As a result, it held that the statute of limitations began to run immediately when

the acts of accounting negligence occurred. Auckerman v. Rogers, 2d Dist. Greene No.

2011-CA-23, 2012-Ohio-23, ¶ 13. The Supreme Court later reaffirmed that holding in

Grant Thornton, Inc. v. Windsor House, 57 Ohio St.3d 158, 160–161, 566 N.E.2d 1220

(1991).

{¶ 17} Thereafter, in Flagstar Bank, F.S.B. v. Airline Union's Mtge. Co., 128 Ohio

St.3d 529, 2011-Ohio-1961, 947 N.E.2d 672, the Supreme Court held that a cause of

action for professional negligence against an appraiser “accrues on the date that the

negligent act is committed, and the four-year statute of limitations commences on that

date.” Id. at syllabus. The Flagstar court briefly discussed the delayed-damages rule and

expressly refused to apply the rule in that case. It stated:

Both the discovery rule and the delayed-damages rule relate to when a

cause of action for negligence accrues. Nevertheless, with regard to

claims for professional negligence under R.C. 2305.09, this court has

clearly stated that the cause of action accrues when the allegedly negligent

act is committed. * * * In Investors REIT One, we explicitly rejected the -8-

application of the discovery rule for these causes of actions. * * * We

implicitly rejected the delayed-damages rule in Grant Thornton.

Flagstar at ¶ 25, citing REIT One, 46 Ohio St.3d at 182, 546 N.E.2d 206, and Grant

Thornton, 57 Ohio St.3d 158, 566 N.E.2d 1220.

{¶ 18} In light of the foregoing precedent from the Ohio Supreme Court, Bosse

argues that the statute of limitations for filing a complaint against an accountant for

professional negligence is four years from the time the services were performed. Bosse

asserts that the last time he provided any services to the Hamlins was in January 2012.

Since Hamlin did not file her malpractice complaint until January of 2017, Bosse argues

that she is clearly outside the statute of limitations for her claims. Bosse therefore

contends that her malpractice complaint amounts to frivolous conduct requiring that she

be sanctioned.

{¶ 19} Conversely, Hamlin argues that the delayed-damages rule applies in this

case, and her cause of action for malpractice against Bosse did not accrue until January

22, 2016, when the Darke County Court of Common Pleas issued a decision based upon

the allegedly erroneous recommendations of Bosse. Accordingly, Hamlin contends that

her malpractice action was not filed outside of the statute of limitations for professional

negligence claims, and therefore does not amount to frivolous conduct.

{¶ 20} As noted by the trial court, LGR Realty, Inc. v. Frank & London Ins. Agency,

2016-Ohio-5044, 58 N.E.3d 1179 (10th Dist.), was pending before the Ohio Supreme

Court at the time that the trial court denied Bosse’s motion for sanctions. In LGR Realty,

the Tenth District Court of Appeals held that in a case of alleged insurance malpractice,

unlike the discovery rule, the delayed-damages rule does not just toll the running of the -9-

statute of limitations, it adjusts when the cause of action accrues. Id. at ¶ 14. “In other

words, a cause of action for negligence is not complete, and the statute of limitations does

not begin to run, until there has been an injury.” Flagstar at ¶ 19. Thus, the negligent act

did not accrue on the date that the insurance policy was originally issued by the company

agent. Rather, the court applied the delayed-damages rule and held that the negligent

act accrued years later when the insurance company refused to defend a claim when the

insured individual was injured. Id. at ¶ 41.

{¶ 21} The Ohio Supreme Court ultimately reversed the judgment of the Tenth

District Court of Appeals, holding that the delayed-damage rule did not apply in a case

involving the four-year statute of limitations set forth in R.C. 2305.09 for negligent

procurement of a professional-liability insurance policy and negligent representation. LGR

Realty, Inc. v. Frank & London Ins. Agency, 152 Ohio St.3d 517, 2018-Ohio-334, 98

N.E.3d 241, at ¶ 31. Nevertheless, at the time that Hamlin filed her malpractice action

against Bosse, LGR Realty had not yet been decided by the Ohio Supreme Court, and

there was still an apparent conflict between the Ohio appellate districts regarding the

application of the delayed-damages rule to the four-year statute of limitations in

professional malpractice cases. Thus, we cannot say that the trial court erred when it

denied Bosse’s motion for sanctions for Hamlin’s allegedly frivolous conduct.

Immunity

{¶ 22} In his second assignment, Bosse argues that, as the trial court’s appointed

expert regarding the Hamlins’ QDROs, he has immunity from any malpractice claims

based on his performance therein. In support of his argument, Bosse cites two Ohio

cases in which psychologists who testified as experts in divorce cases were granted -10-

immunity from suit. See McCleery v. Leach, 11th Dist. Lake No. 2001-L-195, 2003-Ohio-

1875; Crosset v. Marquette, 1st Dist. Hamilton Nos. C-060148, C-060180, 2007-Ohio-

550. Specifically, both cases stand for the proposition that the appointed psychologists

were “acting as an arm of the court and only carrying out a duty imposed upon [them] by

the court order, regardless of whether the duty was to produce an evaluation or to testify.

In other words, [the psychologists] ‘performed a function integral to the judicial process.

As arms of the court, [they were] entitled to the absolute immunity given to judges and

other judicial officials.’ ” Crosset at ¶ 20, quoting McCleery at ¶ 44.

{¶ 23} In his appellate brief, Bosse concedes there is no case law in Ohio stating

that court-appointed accountants are entitled to absolute immunity for their evaluations

and/or testimony in domestic relations cases. As noted by the trial court, the issue of

whether an accountant should be provided immunity when acting as a court-appointed

expert was not the issue before the trial court, and it is not the issue before us. The

relevant issue before the trial court and before us is whether an argument that a court-

appointed accountant is not necessarily immune from a malpractice suit constitutes

frivolous conduct. Clearly, the issue of whether Bosse is entitled to absolute immunity

as a court-appointed accountant is not settled in Ohio. Therefore, we cannot say that

the trial court abused its discretion when it rejected Bosse’s argument in this regard.

Accordingly, the trial court did not err when it denied Bosse’s motion for sanctions,

attorney fees, and costs.

{¶ 24} Bosse’s first and second assignments of error are overruled. The

judgment of the trial court is affirmed.

............. -11-

HALL, J. and TUCKER, J., concur.

Copies mailed to:

H. Steven Hobbs Joseph Moore Brian Huelsman Hon. James F. Stevenson – for Hon. Jeannine M. Pratt