Shillingburg v. Turtle Creek Assets, Ltd.

2019 Ohio 1156

• Court: Ohio Court of Appeals
• Decided: March 29, 2019
• Docket: 29113
• Status: Published

Opinion

[Cite as Shillingburg v. Turtle Creek Assets, Ltd., 2019-Ohio-1156.]

STATE OF OHIO ) IN THE COURT OF APPEALS )ss: NINTH JUDICIAL DISTRICT COUNTY OF SUMMIT )

BRADLEY SHILLINGBURG C.A. No. 29113

Appellant

v. APPEAL FROM JUDGMENT ENTERED IN THE TURTLE CREEK ASSETS, LTD., et al. COURT OF COMMON PLEAS COUNTY OF SUMMIT, OHIO Appellees CASE No. CV-2017-12-5096

DECISION AND JOURNAL ENTRY

Dated: March 29, 2019

TEODOSIO, Presiding Judge.

{¶1} Bradley Shillingburg appeals the order of the Summit County Court of Common

Pleas granting the motion to compel arbitration and staying the case. We reverse and remand.

I.

{¶2} In June 2016, Mr. Shillingburg entered into a lease purchase agreement with

Aaron’s Inc. (“Aaron’s”) for a Motorola G5 smartphone. On the same day that Mr. Shillingburg

signed the leasing contract, he also signed an arbitration agreement with Aaron’s. In June 2017,

Aaron’s sold Mr. Shillingburg’s account, alleged to be delinquent, and assigned the lease

purchase agreement to Turtle Creek Assets, Ltd. (“Turtle Creek”). Mr. Shillingburg alleges that

Turtle Creek engaged in unlawful activities in attempting to collect on the alleged debt, and in

December 2017, Mr. Shillingburg filed his complaint against Turtle Creek and its owner, Gordon

S. Engle. In January 2018, Mr. Shillingburg filed an amended class action complaint, adding

Forward Properties International, Inc. as a defendant, and alleging claims based upon the Ohio 2

Consumer Sales Practices Act, the Fair Debt Collection Practices Act, and the Telephone

Consumer Protection Act.

{¶3} The defendants filed a motion to compel arbitration and to stay the case pending

arbitration, to which Mr. Shillingburg responded in opposition. In June 2018, the trial court

granted the motion, staying the case and ordering the matter to arbitration, to be conducted with

Mr. Shillingburg in his individual capacity only. Mr. Shillingburg now appeals, raising four

assignments of error.

II.

ASSIGNMENT OF ERROR ONE

THE TRIAL COURT ERRED IN GRANTING TURTLE CREEK-APPELLEES’ MOTION TO COMPEL ARBITRATION, BECAUSE TURTLE CREEK DID NOT OFFER COMPETENT PROOF OF ASSIGNMENT.

ASSIGNMENT OF ERROR TWO

THE TRIAL COURT ERRED IN GRANTING TURTLE CREEK’S MOTION TO COMPEL ARBITRATION BECAUSE AARON’S MANDATORY ARBITRATION AGREEMENT WAS NOT ASSIGNABLE TO TURTLE CREEK.

ASSIGNMENT OF ERROR THREE

THE TRIAL COURT ERRED IN GRANTING TURTLE CREEK’S MOTION TO COMPEL ARBITRATION, BECAUSE AARON’S MANDATORY ARBITRATION AGREEMENT DOES NOT APPLY TO IT.

ASSIGNMENT OF ERROR FOUR

THE TRIAL COURT ERRED IN GRANTING TURTLE CREEK’S MOTION TO COMPEL ARBITRATION, BECAUSE AARON’S MANDATORY ARBITRATION AGREEMENT DOES NOT APPLY TO THE CLAIMS OF MR. SHILLINGBURG.

{¶4} Mr. Shillingburg’s first three assignments of error are largely premised upon the

theory that the arbitration agreement was a stand-alone document and was not assigned to Turtle 3

Creek. His fourth assignment of error is based upon his contention that his claims fall outside of

the scope of the arbitration agreement. We agree the trial court erred, but for reasons other than

those stated.

{¶5} “An arbitration agreement may be enforced through an order directing parties to

proceed to arbitration, pursuant to R.C. 2711.03; a stay of trial court proceedings pending

arbitration, pursuant to R.C. 2711.02; or both.” Krakora v. Superior Energy Sys., 9th Dist.

Lorain No. 08CA009423, 2009-Ohio-401, ¶ 5, citing Maestle v. Best Buy Co., 100 Ohio St.3d

330, 2003-Ohio-6465, at ¶ 14, citing Brumm v. McDonald & Co. Securities, Inc., 78 Ohio

App.3d 96, 100 (4th Dist.1992). “[P]ursuant to the plain language of R.C. 2711.03, a trial court

is explicitly required to hold a hearing on a motion to compel arbitration. A hearing is especially

necessary when the parties contest the scope of the arbitration clause.” Boggs Custom Homes,

Inc. v. Rehor, 9th Dist. Summit No. 22211, 2005-Ohio-1129, ¶ 16. Whether a motion to compel

arbitration is filed “alone or in combination with a motion to stay the proceedings, the trial court

must conduct a hearing.” Krakora at ¶ 5. “When the record indicates that the trial court did not

conduct a hearing, this Court will reverse without addressing the merits of the trial court’s

decision.” Id.

{¶6} Turtle Creek expressly requested an order to compel arbitration, and not merely a

stay so that arbitration might proceed. It does not appear from the record that a hearing on the

motion was held. We therefore reverse and remand so that the trial court may conduct a hearing

on the motion. We further note that a hearing is especially necessary when the scope of the

arbitration agreement is contested. See Boggs Custom Homes at ¶ 16. Although Mr.

Shillingburg argued that his claims were outside of the scope of arbitration in his brief to the trial

court, the trial court’s order failed to specifically address those arguments. 4

III.

{¶7} The order of the Summit County Court of Common Pleas is hereby reversed and

remanded for further proceedings consistent with this decision.

Judgment reversed and remanded.

There were reasonable grounds for this appeal.

We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy

of this journal entry shall constitute the mandate, pursuant to App.R. 27.

Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is

instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30.

Costs taxed to Appellees.

THOMAS A. TEODOSIO FOR THE COURT

HENSAL, J. CALLAHAN, J. CONCUR. 5

APPEARANCES:

RONALD I. FREDERICK and MICHAEL L. BERLER, Attorneys at Law, for Appellant.

BOYD W. GENTRY and ZACHARY P. ELLIOTT, Attorneys at Law, for Appellees.