Robb v. Chagrin Lagoons Yacht Club, Inc.

662 N.E.2d 9, 75 Ohio St. 3d 264

Opinions

Pfeifer, J.

We reverse the appellate court on its ruling regarding whether appellees were properly expelled from the club and on its ruling regarding appellants’ abuse of process claim. We affirm the appellate court’s decisions on appellants’ malicious prosecution and contract actions.

I

Expulsion

This is a case about a yacht club expelling some of its members. This is not the case of someone being denied his rights under the Constitution of the United States. We thus adopt a more relaxed standard as to whether appellees’ due process rights were violated. We find that the appellants substantially complied with the club’s constitution and that appellants should have been awarded summary judgment.

Section 4, Article 2 of the club’s constitution states that when the club’s grievance committee is unable to amicably resolve a grievance, and it determines that discipline will be needed to resolve the problem, notice of the charges must be given to the affected member by certified mail. No sooner than ten days after that notice “a formal closed hearing on the matter shall be conducted by the Board of Trustees.” After the hearing, the board makes a recommendation which is voted upon by the voting members at a meeting. The club constitution does not stipulate how much time must pass between the trustees’ recommendation and the meeting of the voting members, nor does it state whether persons to be disciplined may be heard at the meeting of the voting members.

Pursuant to Section 5, Article 2 of the club constitution, the voting membership makes the final determination of whether to mete out discipline. The fact that the trustees’ hearing was closed to appellees does not mean that they were denied an important right. The behavior for which the board recommended discipline was not subject to dispute: appellees could not deny that they had filed . complaints against the club in the trial court.

More importantly, the most significant opportunity to be heard was at the meeting of the voting membership. It was the voting membership who had the ultimate decision on appellees’ fate. The trustees gave appellees at least seven days’ notice of the meeting. Appellees took advantage of that time and communicated with the voting members through a letter. Appellees were not denied an opportunity to be heard at the members’ meeting — appellees simply chose not to attend. A discussion preceded the expulsion vote regarding each appellee. The members’ meeting was not a mere rubber stamp of the trustees’ recommendation. In fact, the board’s recommendation regarding Flood was rejected by the members.

Thus, the appellees had reasonable notice of the meeting at which the expulsion vote would be taken. They were able to communicáte with the persons who would decide their fate. Appellees were not denied an opportunity to attend the meeting or to be heard at the meeting. In short, they knew the charges leveled against them and had a meaningful opportunity to do something about them.

To substantially comply with the club’s constitution, appellants had to provide appellees notice and an opportunity to be heard. Appellants did so in a fair and reasonable manner. Accordingly, we reverse the appellate court and find that the trial court properly granted summary judgment in favor of appellants on the expulsion issue.

II

Malicious Prosecution

In Crawford v. Euclid Natl. Bank (1985), 19 Ohio St.3d 135, 19 OBR 341, 483 N.E.2d 1168, this court held that a plaintiff must satisfy four elements to establish a claim of malicious civil prosecution:

“[I]n order to state a cause of action for malicious prosecution in Ohio, four essential elements must be alleged by the plaintiff: (1) malicious institution of prior proceedings against the plaintiff by defendant, * * * (2) lack of probable cause for the filing of the prior lawsuit, * * * (3) termination of the prior proceedings in plaintiffs favor, * * * and (4) seizure of plaintiffs person or property during the course of the prior proceedings * * Crawford, 19 Ohio St.3d at 139, 19 OBR at 344, 483 N.E.2d at 1171.

In a later case, Trussell v. Gen. Motors Corp. (1990), 53 Ohio St.3d 142, 559 N.E.2d 732, this court eliminated the element of arrest or seizure from the claim of malicious criminal prosecution. In Trussell, this court noted that a majority of states had eliminated the element of arrest or seizure from both criminal and civil malicious prosecution. However, this court did not overrule Crawford, but instead pointed out the key differences in the two types of malicious prosecution claims. The court noted that a special stigma arises in criminal cases:

“The tort of malicious criminal prosecution compensates the plaintiff for the damage done to dignity and reputation caused by false accusation of a crime. * * * The damage occurs whether the plaintiff is arrested or * * * haled into court on a summons. Unlike the victim of malicious civil prosecution, the victim of false criminal charges does not have the remedies provided by Civ.R. 11.” Id. at 145-146, 559 N.E.2d at 736.

The Trussell court noted that the seizure requirement was first instituted by this court in a malicious civil prosecution case in Cincinnati Daily Tribune v. Bruck (1900), 61 Ohio St. 489, 56 N.E. 198. The line of cases developing malicious criminal prosecution, culminating in Rogers v. Barbera (1960), 170 Ohio St. 241, 10 O.O.2d 248, 164 N.E.2d 162, did not include the seizure requirement. The distinction between civil and criminal cases had become blurred in dicta in Kelly v. Whiting (1985), 17 Ohio St.3d 91, 17 OBR 213, 477 N.E.2d 1123, but the Trussell court clarified the distinction between the two in the case law and in fact.

We believe that the interests of justice and judicial economy are best served by continuing to require the element of seizure of property in malicious civil prosecution cases. The damages from being sued civilly are of a different character than from being arrested or haled into court on a criminal charge. A person’s freedom is not at stake in a civil trial. Civ.R. 12 allows for the quick disposal of meritless claims, and Civ.R. 11 presents the best avenue to deal early, quickly, and effectively with bogus lawsuits. Also, R.C. 2323.51(B)(1) allows for the award of attorney fees to victims of frivolous conduct in a civil case.

We echo this court’s concern in Crawford that removing the seizure requirement from malicious civil prosecution claims would result in an explosion of claims for malicious prosecution. There are opportunities already built into the civil system to deal with ao meritless lawsuit within that same lawsuit, rather than instituting another suit. Every successful summary judgment defendant should not be tempted to file a malicious prosecution claim.

We therefore retain in malicious civil prosecution cases the long-held and well-reasoned requirement of seizure of property, and leave to our Rules of Civil Procedure, or the General Assembly, the method with which to deal with meritless civil claims. A cause of action for malicious civil prosecution will lie only in cases where there is a prejudgment seizure of property, i.e., where there essentially has been a judgment against, and a concomitant injury suffered by, a defendant before he has had a chance to defend himself. We therefore decline to overrule this court’s decision in Crawford.

Thus, in order to properly assert a claim of malicious civil prosecution, appellants were required to satisfy the seizure element. Since appellants presented no evidence of seizure, we affirm the judgment of the appellate court on this issue.

Ill

Abuse of Process

In order to establish a claim of abuse of process, a plaintiff must satisfy three elements: “(1) that a legal proceeding has been set in motion in proper form and with probable cause; (2) that the proceeding has been perverted to attempt to accomplish an ulterior purpose for which it was not designed; and (3) that direct damage has resulted from the wrongful use of process.” Yaklevich v. Kemp, Schaeffer & Rowe Co., L.P.A (1994), 68 Ohio St.3d 294, 298, 626 N.E.2d 115, 118.

Appellants argue that appellees’ barrage of lawsuits constituted an abuse of process, and specifically that the third and fourth actions were initiated to stop the voting members from acting on the board’s disciplinary recommendations. The appellate court found that appellants could not prove their case as to the element of appellees’ ulterior motive. We disagree, and believe a genuine issue of material fact exists as to whether appellees had an ulterior motive for filing their lawsuits.

“ ‘[Ajbuse of process’ differs from ‘malicious prosecution’ in that the former connotes the use of process properly initiated for improper purposes, while the latter relates to the malicious initiation of a lawsuit which one has no reasonable chance of winning.” Clermont Environmental Reclamation Co. v. Hancock (1984), 16 Ohio App.3d 9, 11, 16 OBR 9, 12, 474 N.E.2d 357, 362. In an abuse of process case, “[tjhe improper purpose usually takes the form of coercion to obtain a collateral advantage, not properly involved in the proceeding itself, such as the surrender of property or the payment of money, by the use of the process as a threat or a club.” Prosser & Keeton on Torts (5 Ed.1984) 898, Section 121. Simply, abuse of process occurs where someone attempts to achieve through use of the court that which the court is itself powerless to order.

We believe that reasonable minds could conclude that appellees instituted at least one of their suits with the intention to use it as a club to coerce the membership to vote in their favor. Clearly, the trial court had no authority to order club members how to vote. In opposition to appellees’ motion for summary judgment on the issue, appellants presented evidence which could be construed as proof of an ulterior motive. In their September 3, 1991 letter to the members, appellees stated, in part:

“Without the Grievances, there would not have been a law suit * * *. Remember, no grievances, the case is dead and you members stop paying * * *. VOTE TO DROP THE GRIEVANCES.” (Emphasis sic.)

Appellee Graham also stated in a deposition that “the reasoning behind our litigation was, to keep the membership from, in fact, rejecting our membership.”

There are sufficient facts in their favor for appellants to successfully prosecute a claim for abuse of process. Accordingly, we overrule the court of appeals on this issue.

IV

Contract Action

Finally, appellants appeal the holding of the appellate court that a nonprofit corporation cannot maintain an action for damages incurred as a result of a member’s failure to abide by the rules and regulations of the corporation. The appellants’ remedy lies within the contract between the club and its members. The club exercised its right of expulsion thereunder. We decline to recognize any action for damages for appellees’ alleged breach, and therefore affirm the appellate court on this issue.

Judgment affirmed in part, reversed in part and cause remanded.

Moyer, C.J., Wright and Cook, JJ., concur. Resnick, J., concurs in part and dissents in part. Douglas and F.E. Sweeney, JJ., dissent.