Smith v. Ohio Edison Co.

2015 Ohio 4540

• Court: Ohio Court of Appeals
• Decided: November 2, 2015
• Docket: 2014-T-0093
• Status: Published

Opinion

[Cite as Smith v. Ohio Edison Co., 2015-Ohio-4540.]

IN THE COURT OF APPEALS

ELEVENTH APPELLATE DISTRICT

TRUMBULL COUNTY, OHIO

C. RICHARD SMITH, : OPINION

Plaintiff-Appellant, : CASE NO. 2014-T-0093 - vs - :

OHIO EDISON COMPANY, :

Defendant-Appellee. :

Civil Appeal from the Trumbull County Court of Common Pleas, Case No. 2012 CV 1528.

Judgment: Affirmed.

Michael D. Rossi, Guarnieri & Secrest, P.L.L., 151 East Market Street, P.O. Box 4270, Warren, OH 44482 (For Plaintiff-Appellant).

John T. Dellick, Harrington, Hoppe & Mitchell, LTD., 1200 Sky Bank Building, 26 Market Street, Suite 1200, P.O. Box 6077, Youngstown, OH 44501 (For Defendant- Appellee).

DIANE V. GRENDELL, J.

{¶1} Plaintiff-appellant, C. Richard Smith, appeals the May 8, 2014 Judgment

Entry of the Trumbull County Court of Common Pleas, granting defendant-appellee,

Ohio Edison Company’s, Motion to Dismiss with respect to his claim for Spoliation of

Evidence on the grounds of res judicata. The issue before this court is whether a

conclusive determination that a certain claim was waived in an administrative proceeding bars that claim from being raised in a separate action filed in common pleas

court. For the following reasons, we affirm the decision of the court below.

{¶2} On July 3, 2012, Smith filed a Complaint against Ohio Edison in the

Trumbull County Court of Common Pleas, setting forth claims for Inadequate Service

(Count I), Spoliation of Evidence (Count II), and Termination of Service without Proper

Notice (Count III).

{¶3} On October 29, 2013, Ohio Edison filed a Motion to Dismiss on the

following grounds: “[P]ursuant to Civ.R. 12(B)(1) and 12(B)(6), Count II and Count III

must be dismissed, as they were resolved at the Public Utilities Commission of Ohio

(‘PUCO’) and Plaintiff’s subsequent appeal to the Ohio Supreme Court. Count I must

also be dismissed due to the lack of recoverable damages.”

{¶4} On May 8, 2014, the trial court granted the Motion to Dismiss with respect

to the claims for Spoliation and Termination of Service on the grounds of res judicata.

The court denied the Motion with respect to the claim for Inadequate Service.

{¶5} On May 14, 2014, Ohio Edison filed an Answer.

{¶6} On October 6, 2014, the parties entered into a Stipulation and Judgment

Entry, whereby they stipulated that Smith’s damages for Inadequate Service were

nominal and agreed that judgment in the amount of $10 should be entered in Smith’s

favor.

{¶7} On October 17, 2014, Smith filed a Notice of Appeal. On appeal, Smith

raises the following assignment of error: “The trial court erred in dismissing Count II

(Spoliation of Evidence) of the Complaint.”

2 {¶8} “The doctrine of res judicata involves both claim preclusion (historically

called estoppel by judgment in Ohio) and issue preclusion (traditionally known as

collateral estoppel).” Grava v. Parkman Twp., 73 Ohio St.3d 379, 381, 653 N.E.2d 226

(1995). “A valid, final judgment rendered upon the merits bars all subsequent actions

based upon any claim arising out of the transaction or occurrence that was the subject

matter of the previous action.” Grava at syllabus. “[R]es judicata and collateral

estoppel relieve parties of the cost and vexation of multiple lawsuits, conserve judicial

resources, and, by preventing inconsistent decisions, encourage reliance on

adjudication.” Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 66 L.E.2d 308 (1980).

“[R]es judicata, whether claim preclusion or issue preclusion, applies to administrative

proceedings that are ‘of a judicial nature and where the parties have had an ample

opportunity to litigate the issues involved in the proceeding.’” (Internal citation omitted.)

Grava at 381, citing Set Prods., Inc. v. Bainbridge Twp. Bd. of Zoning Appeals, 31 Ohio

St.3d 260, 263, 510 N.E.2d 373 (1987); Office of Consumers’ Counsel v. Pub. Util.

Comm. of Ohio, 16 Ohio St.3d 9, 10, 475 N.E.2d 782 (1985).

{¶9} The application of the principles of res judicata and collateral estoppel is

not mandatory in every case. Castorr v. Brundage, 674 F.2d 531, 536 (6th Cir.1982).

The Ohio Supreme Court has recognized “that res judicata is not a shield to protect the

blameworthy.” Davis v. Wal-Mart Stores, Inc., 93 Ohio St.3d 488, 491, 756 N.E.2d 657

(2001).

The doctrine of res judicata is not a mere matter of practice or

procedure inherited from a more technical time, but rather a rule

of fundamental and substantial justice, or public policy and of

3 private peace. The doctrine may be said to adhere in legal

systems as a rule of justice. Hence, the position has been

taken that the doctrine of res judicata is to be applied in

particular situations as fairness and justice require, and that it is

not to be applied so rigidly as to defeat the ends of justice or so

as to work an injustice.

(Internal citations omitted.) Id.

{¶10} The application of res judicata is reviewed de novo on appeal. McGowan

v. McDowell, 11th Dist. Portage No. 2008-P-0112, 2009-Ohio-5891, ¶ 18; Zamos v.

Zamos, 11th Dist. Portage No. 2008-P-0021, 2009-Ohio-1321, ¶ 14.

{¶11} In the present case, Smith’s Spoliation claim arose out of a complaint filed

against Ohio Edison with the Public Utilities Commission (Case No. 10-340-EL-CSS).

Complaint at ¶ 3.

[O]n March 17, 2010, Smith filed a pro se complaint against

Ohio Edison with the commission pursuant to R.C. 4905.26.

Smith subsequently retained counsel and filed an amended

complaint on August 9, 2010. The amended complaint alleged,

among other things, that Smith had established residential

electric service to his Mahoning Avenue property through his

repeated phone calls to Ohio Edison. Smith further alleged that

Ohio Edison had terminated the electric service to this property

without warning or proper notification to him, in violation of the

4 Ohio Administrative Code. Smith claimed injury and requested

that Ohio Edison pay damages.

Smith v. Ohio Edison Co., 137 Ohio St.3d 7, 2013-Ohio-4070, 996 N.E.2d 927, ¶ 17.

{¶12} “The commission held an evidentiary hearing on February 23, 2011.” Id.

at ¶ 18. “At the February 23, 2011 hearing before the Public Utilities Commission, Ohio

Edison Company played Exhibit G [which] was a CD containing eleven recorded

telephone conversations between C. Richard Smith and Ohio Edison Company

representatives.” Complaint at ¶ 44.

{¶13} “Smith * * * sought rehearing before the commission.” Smith at ¶ 20.

45. After the hearing, C. Richard Smith submitted a digital

copy of Exhibit G, that he obtained from Ohio Edison Company,

to an expert in the analysis of audio recordings, and based upon

the review of only one of the eleven telephone conversations,

the expert found 13 areas of concern.

46. Based upon the expert evaluation of Exhibit G, C.

Richard Smith believes that Ohio Edison Company altered the

evidence that was submitted to the Public Utilities Commission

at the February 23, 2011 hearing.

Complaint at 7.

{¶14} The Commission denied Smith’s application for rehearing on August 31,

2011, and Smith appealed to the Ohio Supreme Court. Smith at ¶ 20; Complaint at ¶ 6.

{¶15} Among the propositions of law presented before the Supreme Court,

Smith “claim[ed] that the commission should have granted his rehearing application

5 because he provided ‘some evidence’ to support his claim that the recordings were

altered.” Smith at ¶ 46. The Supreme Court found no error in the Commission’s

decision to deny rehearing.

First, Smith’s counsel completely ignores that he signed

a stipulation before the hearing that the recordings were

authentic. The stipulation states that “[t]he tape recorded

telephone conversations between C. Richard Smith and Ohio

Edison personnel * * * are authentic recordings of those

conversations made at the time of the telephone conversations

in the ordinary course of business by Respondent Ohio Edison

Company.” Yet on appeal, Smith’s counsel makes no mention

of the stipulation, let alone offers an explanation that would

serve as a reason to invalidate the stipulation at this late date.

Second, the commission did not deny rehearing based

on a lack of evidence. Rather, it found that the alleged error

had been waived. We agree with this conclusion. As noted,

Smith did not raise any complaint regarding the audio

recordings until he filed his application for rehearing, long after

the evidentiary hearing where those recordings were played.

Smith did not object to the fact that he received the compact

discs only six days before the hearing or argue that he had

insufficient time before the hearing to review the recordings. He

also waited until after the hearing to hire an audio expert,

6 instead of seeking to have the hearing continued so he could

retain an expert to review the recordings before the hearing. By

failing to take any of these steps, Smith deprived the

commission of an opportunity to cure any error when it

reasonably could have. Therefore, the commission correctly

found that the issue had been waived. See Parma v. Pub. Util.

Comm., 86 Ohio St. 3d 144, 148, 712 N.E.2d 724 (1999) (“we

do not accept * * * objections” when appellant has “deprived the

commission of an opportunity to redress any injury or prejudice

that may have occurred”); In re Application of Am. Transm. Sys.,

Inc., 125 Ohio St.3d 333, 2010-Ohio-1841, 928 N.E.2d 427, ¶

31 (same).

Smith at ¶ 47-48.

{¶16} Smith’s argument on appeal in the present case is that the application of

res judicata works an injustice and rewards the offending party (Ohio Edison) for

misrepresenting or destroying evidence. We disagree.

{¶17} The Ohio Supreme Court has held that “claims for spoliation of evidence

may be brought after the primary action has been concluded only when evidence of

spoliation is not discovered until after the conclusion of the primary action.” Davis, 93

Ohio St.3d at 491, 756 N.E.2d 657; Monroe v. Forum Health, 11th Dist. Trumbull No.

2014-T-0015, 2014-Ohio-3974, ¶ 34 (“since the spoliation was discovered during the

trial, it could not be raised in a separate claim”).

7 {¶18} With respect to Smith’s Spoliation claim, the Ohio Supreme Court

conclusively determined that Smith waived it by not raising it during the course of the

proceedings before the Commission. Thus, under the aspect of res judicata known as

issue preclusion, Smith is collaterally estopped from raising his Spoliation claim in an

independent action. Fort Frye Teachers Assn., OEA/NEA v. State Emp. Relations Bd.,

81 Ohio St.3d 392, 395, 692 N.E.2d 140 (1998) (“[t]he doctrine of issue preclusion, also

known as collateral estoppel, holds that a fact or a point that was actually and directly at

issue in a previous action, and was passed upon and determined by a court of

competent jurisdiction, may not be drawn into question in a subsequent action between

the same parties or their privies, whether the cause of action in the two actions be

identical or different”).

{¶19} Although not raised by the parties, the trial court erred by granting Ohio

Edison’s Motion to Dismiss based on res judicata inasmuch as the Ohio Supreme Court

holds that res judicata is not a proper basis for a Civil Rule 12 motion. Jefferson v.

Bunting, 140 Ohio St.3d 62, 2014-Ohio-3074, 14 N.E.3d 1036, ¶ 9-10, citing State ex

rel. Freeman v. Morris, 62 Ohio St.3d 107, 109, 579 N.E.2d 702 (1991). “It is not proper

for a court to grant a motion to dismiss based on res judicata, because res judicata is an

affirmative defense, [Civ.R. 8(C)] * * * and because resolution of a res judicata defense

typically requires resort to materials outside the pleadings.” State ex rel. West v.

McDonnell, 139 Ohio St.3d 115, 2014-Ohio-1562, 9 N.E.3d 1025, ¶ 16 (cases cited).

“When the res judicata defense depends on documents outside the pleadings, the

proper procedure is for the court to convert the motion to dismiss into a motion for

8 summary judgment and provide the opposing party with notice and an opportunity to

respond.” Jefferson at ¶ 12.

{¶20} In the present case, we find the error harmless. Civ.R. 61 (“no error or

defect in any ruling or order * * * is ground for * * * vacating, modifying or otherwise

disturbing a judgment or order, unless refusal to take such action appears to the court

inconsistent with substantial justice”).

{¶21} “The primary vice of unexpected conversion to summary judgment is that

it denies the surprised party sufficient opportunity to discover and bring forward factual

matters which may become relevant only in the summary judgment, and not the

dismissal, context.” (Citation omitted.) Petrey v. Simon, 4 Ohio St.3d 154, 155, 447

N.E.2d 1285 (1983).

{¶22} In support of its Motion to Dismiss, Ohio Edison attached copies of the

Commission’s July 6, 2011 Opinion and Order and August 31, 2011 Entry on

Rehearing. Although these documents are outside of the pleadings, neither document

is necessary to establish the applicability of res judicata to bar Smith’s Spoliation claim.

Smith’s Complaint and the Ohio Supreme Court’s decision in Smith v. Ohio Edison Co.

are sufficient to demonstrate that the claim for Spoliation has been passed upon by a

court of competent jurisdiction and, thus, is barred from being raised herein.

{¶23} Moreover, Smith had ample opportunity to respond or object to the

documents attached to Ohio Edison’s Motion to Dismiss. The Motion to Dismiss was

filed on October 29, 2013. Smith responded on November 13, 2013, with a

Memorandum contra Defendant’s Motion to Dismiss and a Motion for Leave to File an

Amended Complaint. Smith sought to dismiss the Termination of Service without

9 Proper Notice (Count III) claim, acknowledging “the finality of certain companion PUCO

proceedings” with respect to this claim. On May 2, 2014, Smith filed a Supplemental

Memorandum contra Defendant’s Motion to Dismiss. The trial court dismissed the

Spoliation claim on May 8, 2014, over six months after the Motion to Dismiss was filed.

See Dietelbach v. Ohio Edison Co., 11th Dist. Trumbull No. 2004-T-4902, 2005-Ohio-

0063, ¶ 11 (“[w]hile the court did not provide any type of formal notice of the conversion

of the Civ.R 12(B)(6) to one under Civ.R. 56, Dietelbach did have a reasonable

opportunity to present evidence outside her complaint in support of her opposition to

Ohio Edison’s motion”).

{¶24} The sole assignment of error is without merit.

{¶25} For the foregoing reasons, the May 8, 2014 Judgment Entry of the

Trumbull County Court of Common Pleas, dismissing Smith’s claim for Spoliation of

Evidence, is affirmed. Costs to be taxed against appellant.

TIMOTHY P. CANNON, P.J.,

THOMAS R. WRIGHT, J.,

concur.