[Cite as Toledo Clinic, Inc. v. Felix, 2024-Ohio-489.]
IN THE COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT LUCAS COUNTY
Toledo Clinic, Inc. Court of Appeals No. L-23-1037
Appellee Trial Court No. CI0202102235
v.
Ashvin Felix DECISION AND JUDGMENT
Appellant Decided: February 9, 2024
*****
Jared J. Lefevre and Charles E. Hatch, for appellee.
Francis J. Landry and Katherine A. Pawlak Macek, for appellant.
DUHART, J.
{¶ 1} This is an appeal from a judgment of the Lucas County Court of Common
Pleas granting appellee Toledo Clinic, Inc.’s motion to confirm arbitration award
pursuant to R.C. 2711.09 and denying appellant Ashvin Felix’s motion to vacate and/or
modify arbitration award. For the reasons that follow, the trial court’s judgment is
affirmed. Background
Employment Agreement
{¶ 2} This case arises from an employment agreement that was executed in early
2017 between Felix, a physician, and Toledo Clinic, Inc. (“Toledo Clinic”). Under the
contract, Felix, “the Professional,” agreed to operate several urgent care facilities on
behalf of the clinic on a full-time basis and, in exchange, the clinic agreed to reimburse
Felix for certain business expenses and to provide facilities and support services adequate
for the performance of Felix’s duties under the agreement. The contract further provided
that upon termination of the agreement “any unresolved deficit of the Professional
existing as of the notice date of such termination shall be paid to the Toledo Clinic by the
Professional.” “Deficit” was defined in the contract to mean “the amount by which any
and all expenses incurred by the Toledo Clinic in connection with employment of the
Professional with the Toledo Clinic exceeds collections for professional services and
other income turned over to the Toledo Clinic * * *.”
{¶ 3} In a letter dated December 2, 2019, Toledo Clinic notified Felix that it was
terminating the agreement without cause, pursuant to paragraph 13(c) of their contract,
and that March 2, 2020, was the effective date of the termination.
Arbitration
{¶ 4} On January 21, 2020, Felix filed a demand for arbitration, which asserted
claims for breach of contract, fraudulent concealment, fraudulent misrepresentation,
2. fraudulent inducement, and breach of duty of good faith and fair dealing. Toledo Clinic
filed an answer denying Felix’s claims and, further, stating that Felix’s claims were
barred by his “prior material breach of the contract.” In addition, Toledo Clinic filed a
counterclaim for breach of contract asserting that Felix was obligated to pay an
unresolved deficit to the clinic in the amount of “at least $608,796.28.” Both parties
subsequently filed motions for summary judgment.
A. Summary Judgment
{¶ 5} In an order dated September 17, 2020, the arbitrator denied the parties’
motions for summary judgment on their respective breach of contract claims and granted
the clinic’s motion for summary judgment as to Felix’s claims for fraudulent
concealment, fraudulent misrepresentation, and fraudulent inducement.
{¶ 6} Felix’s fraud claims were based on alleged promises that he would be the
exclusive urgent care provider at the clinic. The arbitrator found that Felix “did not
testify in his deposition that he was promised exclusivity, only that it existed at the time
of contract execution.” She further found that “[t]he Clinic’s insistence on an
employment agreement with no promise of exclusivity put [Felix] on notice that the
Clinic was reserving its right to have another urgent care provider,” yet “[h]e chose to
sign the Employment Agreement anyway.”
3. B. Interim Award
{¶ 7} The arbitrator subsequently issued an interim award, dated January 15, 2021,
wherein she determined that Felix was the “prevailing party” and, as such, “shall be
awarded costs and reasonable allowance for attorney’s fees.” In rendering this decision,
the arbitrator found that Toledo Clinic breached the contract by denying Felix adequate
support during the time period of “2017 through April of 2019.” Specifically, the
arbitrator found that Toledo Clinic violated the agreement when it failed to “fully assume
the business expense of a marketing and business growth consultant,” when it failed to
“attend to the administrative function of providing and credentialing staff,” and when it
engaged a competitor “to conduct a similar if not comparable business right in the same
neighborhood.”
{¶ 8} The arbitrator additionally found that Felix, beginning in May 2019, failed to
comply with his “contractual promise to devote full-time efforts to Toledo Clinic.”
Based on this finding, the arbitrator concluded that Felix was responsible for the
“accumulation of deficit from May 1, 2019 until the end of his employment with Toledo
clinic.”
{¶ 9} The matter was then remanded to the parties for negotiations relating to
damages owed to Toledo Clinic by Felix, consistent with her individual findings of fact
under the contract, as stated in the interim award. Among these individual findings were
determinations that: 1) the salary for marketing and business growth consultant Tim
4. Schramko is an expense that is in “the category of business expenses” that are allocated
to Toledo Clinic; and 2) a $50,000 addition to Felix’s deficit that was made by the clinic
in March 2020 was untimely and, thus, “shall not count towards any deficit payable by
[Felix].”
{¶ 10} The parties failed to resolve the damages issues between them, and so they
submitted briefs on the matter to the arbitrator.
C. Interim Award Regarding Damages and Determination of Prevailing Party
{¶ 11} On April 16, 2021, the arbitrator issued an “Interim Award Regarding
Damages and Determination of Prevailing Party.” In issuing the award, the arbitrator
determined that because “Toledo Clinic’s accounting records were the ones referenced by
both parties in the course of their dealings,” “[i]t follows that the calculation of [Felix’s]
deficit should be based on Toledo Clinic’s deficit account records.” The arbitrator noted
that “[a]side from contesting certain categories of expenses and the time period covered
by the report, [Felix] has made no assertion that [Toledo Clinic’s] numerical calculations
are erroneous. The arbitrator expressly disregarded an addendum that was included on
Felix’s damages submission on the grounds that it was “unsigned, unsworn and
unauthorized,” and, further, was “not referred to in [Felix’s] brief.”
{¶ 12} Upon her review of Toledo Clinics accounting records, the arbitrator
concluded that Toledo Clinic’s total deficit came to $671,003.65, but she also concluded
that the clinic could not collect the full amount, because it stood in breach of its
5. contractual obligation to provide adequate support to Felix from January 2017 through
April 2019.
{¶ 13} The arbitrator then went on to state that “[d]uring the months of May 2019
through March 2020, records of patient visits show a dramatic decrease in [Felix’s]
performance, such that the accumulating deficit could no longer be attributed to [Toledo
Clinic’s] lack of support.” The arbitrator characterized Felix’s unavailability after April
2019 as a “lapse in his performance obligation,” and emphasized that regardless of
whether such lapse is “labeled a breach of contract,” “it operated to dominate as the
reason for the unprofitability of [Toledo Clinic’s] urgent care enterprise.”
{¶ 14} Noting that Felix had prevailed on the “main issue” of breach of contract
by inadequate support, the arbitrator restated her earlier decision naming Felix as the
prevailing party in the dispute.
{¶ 15} A “Surplus Deficit Report” that was submitted by Toledo Clinic calculated
$187,950.83 as the deficit for the period of May 2019 through March 2020. Subtracting a
depreciation amount of $3,839.21 from the $187,950.83 figure, the arbitrator calculated
the final deficit amount to be $184,111.62. Thus, Felix was ordered to compensate
Toledo Clinic in the amount of $184,111.62. Felix, as the prevailing party, was further
ordered to submit a calculation of costs and attorney fees for payment by the clinic.
{¶ 16} On June 4, 2021, the arbitrator issued a final award, wherein she ordered
that the damages owed by Felix to Toledo Clinic would be offset by costs and attorney
6. fees of $48,565.81. Following an additional $300 offset for excessive administrative fees
that were previously incurred by Felix, the total award to Toledo Clinic came to
$135,245.81.
Application to Confirm Arbitration Award in the Trial Court
{¶ 17} On June 7, 2021, Toledo Clinic filed a complaint and application to
confirm arbitration award in the trial court, pursuant to R.C. 2711.09. On July 9, 2021,
Felix filed an answer with counterclaim and application to modify or vacate arbitration
award pursuant to R.C. 2711.10 and 2711.11. In his answer, Felix asserted the following
affirmative defenses, including: 1) The arbitrator was guilty of misconduct in refusing to
hear evidence pertinent and material to the controversy; 2) The arbitrator was guilty of
misconduct in misapplying the law which has prejudiced the rights of Defendant; 3) The
arbitrator exceeded and imperfectly executed her powers such that a mutual, final and
definite award upon the subject matter submitted was not made; 4) There was an evident
material miscalculation of figures in the award; 5) There was an evident material mistake
in the descriptions contained in the award; and 6) The arbitrator has awarded upon a
matter not submitted to her. In his application to vacate the arbitrator’s award under R.C.
2711.10, Felix asserted that the arbitrator was guilty of misconduct in refusing to hear
evidence pertinent and material to the controversy and in misapplying the law, which
prejudiced the rights of the defendant. He further stated that the arbitrator exceeded and
imperfectly executed her powers such that a mutual, final and definite award upon the
7. subject matter submitted was not made. In his application to modify the arbitrators award
under R.C. 2711.11, Felix asserted that there was an evident material miscalculation of
figures in the award, that there was an evident material mistake in the descriptions
contained in the award, and that the arbitrator awarded upon a matter not submitted to
her.
{¶ 18} Competing motions were subsequently filed by Toledo Clinic and Felix,
with Toledo Clinic moving to confirm the arbitration award and Felix moving to vacate
or modify the award. In a judgment entry dated February 1, 2023, the trial court granted
the motion to confirm the arbitration award and denied the motion to vacate and/or
modify the arbitration award. Addressing Felix’s claims that the arbitrator “ignored
sections of his arbitration briefs and/or evidence presented by him,” the trial court
determined that “[w]hile the arbitrator may not have used [Felix’s] arguments/evidence in
the manner [Felix] hoped, it does not mean the arbitrator explicitly ignored them.”
Finding that the arbitrator’s award “draws its essence from the parties’ contract,” the trial
court ultimately declined to vacate the award.
{¶ 19} In rendering its decision, the court went out of its way to clarify that
although the court had misgivings of its own about the fairness of the award, the award
was, in fact, within the arbitrator’s power to grant:
Regardless of whether the Court may have reached a different
finding and/or fashioned a different award (or no award at all), the record
8. does not appear to present a scenario so egregious that the Court has the
power to vacate the arbitrator’s award. [Felix] was obligated under [the
agreement] to pay his operating deficits to [Toledo Clinic] upon
termination. The Court does not find the arbitrator acted outside her
authority when finding that [Toledo Clinic] breached the employment
contract by failing to sufficiently support [Felix’s] urgent care center(s)
through April of 2019. The Court agrees that [Felix] should not be
responsible for deficits incurred during [Toledo Clinic’s] breach. However,
the arbitrator found [Felix] also breached the employment contract from
May 2019 through March 2020 to the extent that [Toledo Hospital’s]
failure to support [Felix’s] urgent care center(s) could not be considered the
cause of the deficits. As such, the arbitrator found [Felix] was liable for the
accrued deficit while he was in breach, and [Toledo Clinic] was liable for
the accrued deficit while it was in breach. * * *
***
While the Court may not necessarily agree with this interpretation of
the facts, it cannot say the arbitrator’s determination and award is so
outlandish that it does not draw its essence from the parties’ agreement.
The arbitrator’s determination reflects an attempt to place the deficits
incurred with the respective party responsible for them. While this Court
9. may have reached a different determination as to [Toledo Clinic’s]
responsibility for deficits that accrued after years of failing to live up to its
contracted-for bargain to support [Felix’s] urgent care center(s), the
arbitrator’s award nevertheless draws its essence from the employment
contract. As such, the Court is not empowered to vacate the arbitration
award.
{¶ 20} Addressing Felix’s motion to modify the award based on Felix’s claim that
the arbitrator awarded on matters not submitted to her -- specifically, that the arbitrator
found a breach of contract against Felix where no such claim was raised by the clinic --
the trial court pointed to Toledo Clinic’s Answer and Counterclaim to Felix’s demand for
arbitration, wherein the clinic asserted that “[a]ll or some of Felix’s claims are barred by
his prior material breach of the contract,” and wherein the clinic asserted counterclaims
for breach of contract based on Felix’s failure to repay an unresolved $608,796.28 deficit
to the clinic. In light of these assertions by Toledo Clinic, the trial court concluded,
“Even if the crux of argument at arbitration was not related to [Felix’s] alleged breach of
contract from May 2019 through March 2020, this matter was nevertheless technically
before the arbitrator. As such, the Court cannot find the arbitrator awarded on a matter
not submitted to her.”
{¶ 21} Finally, the court considered Felix’s argument that his obligations under the
contract ceased as a result of Toledo Clinic’s material breach of failing to adequately
10. support Felix’s urgent care clinics. Citing Miller v. Management Recruiters Int’l, Inc.,
180 Ohio App.3d 645, 2009-Ohio-236, 906 N.E.2d 1162, ¶ 26-27 (8th Dist.) for the
proposition that “‘[w]hen disputing parties agree to submit their controversy to binding
arbitration, they agree to accept the result, even if it is legally or factually wrong,’” the
trial court concluded that it was without power to determine whether Toledo Clinic’s
breach of the parties’ contract was a material breach such that it voided any further
contractual obligations by Felix.
{¶ 22} Felix timely appealed from the trial court’s decision.
Assignments of Error
{¶ 23} Felix asserts the following assignment of error on appeal:
I. The trial court erred in confirming the arbitration award instead of
vacating the award.
II. The trial court erred in confirming the arbitration award instead
of modifying the award.
Analysis
{¶ 24} In agreeing to have their disputes settled by an arbitrator, the parties in this
case have agreed to accept the arbitrator’s view of the facts and the meaning of the
contract between them. See Carothers v. Shumaker, Loop & Kendrick, 2023-Ohio-1907,
215 N.E.3d 1217, ¶ 9 (6th Dist.), citing Southwest Ohio Regional Transit Auth v.
11. Amalgamated Transit Union, Local 627, 91 Ohio St.3d 108, 110, 742 N.E.2d 630 (2001).
“When agreeing to arbitration, the parties agree to accept the arbitrator’s award even if it
results in a legally or factually inaccurate decision.” Internatl. Ass’n. of Firefighters
Local 92 v. Toledo, 136 Ohio App.3d 56, 60-61, 735 N.E.2d 960 (6th Dist.1999); see also
Goodyear Tire & Rubber Co. v. Local Union No. 200, 42 Ohio St.2d 516, 522, 330
N.E.2d 703 (1975) (Noting that it has been held that even a grossly erroneous decision is
binding in the absence of fraud). “The parties do not forgo the substantive rights of their
disputes in arbitration, but they trade the procedures and review of a judicial forum for
the simplicity, informality and expediency of an arbitral forum.” Carothers at ¶ 9, citing
Mitsubishi Motors Corp v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628, 105 S.Ct.
3346, 87 L.Ed.2d 444 (1985).
{¶ 25} “In order to uphold the strong public policy favoring private settlement of
grievances, the General Assembly has limited the role of judicial review [of arbitration
awards].” Lake Cty. Bd. of Mental Retardation & Dev. Disabilities v. Professional Ass’n.
for Teaching of Mentally Retarded, 71 Ohio St.3d 15, 17, 641 N.E.2d 180 (1994). R.C.
Chapter 2711 governs arbitrations and sets forth the methods by which to challenge an
arbitration award. See Warren Educ. Ass’n. v. Warren City Bd. of Educ., 18 Ohio St. 3d
170, 172-173, 480 N.E.2d 456 (1985).
{¶ 26} “When reviewing a trial court’s decision to confirm, modify, vacate, or
correct an arbitration award, an appellate court should accept findings of fact that are not
12. clearly erroneous but should review questions of law de novo.” Portage Cty. Bd. of
Developmental Disabilities v. Portage Cty. Educators’ Ass’n. for Developmental
Disabilities, 153 Ohio St.3d 219, 2018-Ohio-1590, 103 N.W.3d 804, ¶ 2. An appellate
court’s review on appeal is not a de novo review of the merits of the dispute as presented
to the arbitrator. See Carothers at ¶ 15, citing Zeck v. Smith Custom Homes & Design,
LLC, 8th Dist. Cuyahoga No. 110574, 2022-Ohio-622, ¶ 12. (Additional citations
omitted.) Instead, R.C. 2711.15 review is confined to the trial court’s order and the
question of whether any of the statutory grounds for vacating an award exist. See
Carothers at ¶17; Zeck at ¶ 12.
{¶ 27} “The authority of an arbitrator to interpret and enforce a contract is drawn
from the contract itself.” Cedar Fair. L.P. v. Falfas, 140 Ohio St.3d 447, 2014-Ohio-
3943, 19 N.E.3d 893, ¶ 5. “So long as arbitrators act within the scope of the contract,
they have great latitude in issuing a decision. An arbitrator’s improper determination of
the facts or misinterpretation of the contract does not provide a basis for reversal of an
award by a reviewing court, because ‘[i]t is not enough * * * to show that the [arbitrator]
committed an error – or even a serious error.’” Id. at ¶ 6, quoting Stolt-Nielsen, S.A. v.
AnimalFeeds Internatl. Corp., 559 U.S. 662, 671, 130 S.Ct. 1758, 176 L.Ed.2d 605
(2010). In addition, arbitrators have “‘broad authority to fashion a remedy, even if the
remedy contemplated is not explicitly mentioned’ in the applicable contract.” Id.,
13. quoting Queen City Lodge No. 69, Fraternal Order of Police, Hamilton Cty., Ohio, Inc.
v. Cincinnati, 63 Ohio St.3d 403, 407, 588 N.E.2d 802 (1992).
{¶ 28} An arbitrator acts within her authority to craft an award “so long as the
award ‘draws its essence’ from the contract – that is, ‘when there is a rational nexus
between the agreement and the award, and where the award is not arbitrary, capricious or
unlawful.” Cedar Fair at ¶ 7, quoting Mahoning Cty. Bd. of Mental Retardation and
Dev. Disabilities v. Mahoning Cty. TMR Edn. Ass’n., 22 Ohio St. 3d 80, 488 N.E.2d 872
(1986), paragraph one of the syllabus. Where there is “a good-faith argument that an
arbitrator’s award is authorized by the contract that provides the arbitrator’s authority, the
award is within the arbitrator’s power, but an award ‘departs from the essence of a
[contract] when: (1) the award conflicts with the express terms of the agreement, and/or
(2) the award is without rational support or cannot be rationally derived from the terms of
the agreement.’” Id. at ¶ 7, quoting Ohio Office of Collective Bargaining v. Ohio Civ.
Serv. Emps. Ass’n., Local 11, AFSCME, AFL-CIO, 59 Ohio St.3d 177, 572 N.E.3d 71
(1991), syllabus; see also, Miller v. Gunckle, 96 Ohio St.3d 359, 2002-Ohio-4932, 775
N.E.2d 475, ¶ 19 (“In the absence of language restricting the authority of an arbitrator to
review a particular subject matter or to award a particular remedy, courts will generally
hold than an arbitrator has the authority to make the award and to fashion a remedy even
though the agreement is silent on the issue of remedial authority.”).
14. Application to Vacate Arbitration Award Under R.C. 2711.10
{¶ 29} R.C. 2711.10 provides that, upon the application of any party, the court of
common pleas shall make an order vacating an arbitration award if:
(A) The award was procured by corruption, fraud, or undue means.
(B) There was evident partiality or corruption on the part of the
arbitrators, or any of them.
(C) The arbitrators were guilty of misconduct in refusing to postpone
the hearing, upon sufficient cause shown, or in refusing to hear evidence
pertinent and material to the controversy; or of any other misbehavior by
which the rights of any party have been prejudiced.
(D) The arbitrators exceeded their powers, or so imperfectly executed
them that a mutual, final, and definite award upon the subject matter
submitted was not made.
{¶ 30} This court has clarified that “‘the misbehavior of an arbitrator may only
serve as the basis for vacating an arbitration award under R.C. 2711.10(C) if it results in
prejudice.’” Fowler v. Menards, 2018-Ohio-4052, 113 N.E.3d 568, ¶ 28 (6th Dist.),
quoting Hoffbauer v. Wayne Homes, 1st Dist. Hamilton No. C-990750, 2000 WL
1062044 *3 (Aug.4, 2000).
15. Allegations of Arbitrator Misconduct under R.C. 2711.10(C)
{¶ 31} Felix initially argues that the arbitrator engaged in misconduct under R.C.
2711.10(C) in ignoring the addendum that was included in his counsel’s submission on
damages. The addendum, submitted in addition to the evidence and arguments submitted
by his counsel, set forth Felix’s own explanation and calculation of the amount that he
believed was owed to him. Following objections by the clinic, the arbitrator ultimately
declined to consider the addendum on the grounds that it was an “unsigned, unsworn, and
unauthorized submission.” Instead -- as evidenced in the findings contained in the
interim award regarding damages -- the arbitrator elected to focus on and address the
calculations that were provided by Felix’s counsel.
{¶ 32} As Felix’s addendum represented only a portion of the documentation on
damages that was submitted by Felix in the arbitration, and as the record establishes that
the arbitrator did consider other such evidence pertinent and material to Felix’s
calculation of damages, we do not find that the omission resulted in prejudice to Felix
such that the award should be vacated. Nor do we find that the arbitrator was guilty of
misconduct in selecting which and whose figures would be accorded weight.
Accordingly, we do not find that the trial court erred in refusing to vacate the arbitration
award pursuant to R.C. 2711.10(C).
16. Allegations that the Arbitrator Exceeded or Imperfectly Executed Her Powers Under R.C. 2711.10(D)
A. Allegations that the Arbitrator Exceeded her Powers by Holding Felix Responsible for Duties to be Fulfilled by the Clinic
{¶ 33} Felix next argues that the arbitrator “exceeded her powers” under R.C.
2711.10(D) when she “held Dr. Felix responsible for duties to be fulfilled by [the
clinic].” Essentially, Felix complains that in light of the clinic’s breaches, both before
and after May 2019, the arbitrator’s decision to hold Felix accountable for the
accumulation of deficit after April 2019 was arbitrary and without any “rational nexus to
the contract in this decision.”
{¶ 34} Upon de novo review, we find the arbitrator, who was empowered to
decide all issues and claims related to the employment contract, acted within the scope of
the contract. We further find that her award was within her broad authority to fashion, as
it draws its essence from the employment contract and does not conflict with any express
terms of the contract.
{¶ 35} As indicated above, the trial court disagreed with the arbitrator’s decision,
but also determined that it was not empowered to vacate the arbitration award on this
ground. Indeed, “[t]he fact that the common pleas court reviewing an award under R.C.
2711.10 “may have arrived at a different conclusion than did the arbitrator is immaterial.
The common pleas court does not balance the equities, weigh the evidence or assess the
credibility of witnesses.” Carothers at ¶ 28, quoting Motor Wheel Corp. v. Goodyear
17. Tire & Rubber Co., 98 Ohio App.3d 45, 52, 647 N.E.2d 844 (8th Dist.1994.) (Additional
citations omitted.)
B. Allegations that the Arbitrator Exceeded her Powers by Ignoring Felix’s Termination “Without Cause”
{¶ 36} Felix additionally argues that the arbitrator exceeded her power “when she
ignored the termination letter which stated Dr. Felix was terminated without cause.”
With this argument, Felix challenges the arbitrator’s finding that Felix -- like the clinic --
breached the employment agreement. In so doing, Felix attacks both the arbitrator’s view
of the facts and her related attempt to allocate the deficits incurred in connection with the
contract. Because this argument ignores the fact that a court reviewing an arbitration
decision “must be deaf to claims that an arbitrator made factual or legal errors,” Sicor
Secs., Inc. v. Albert, 2d Dist. Montgomery No. 22799, 2010-Ohio-217, *3, it is properly
dismissed as without merit.
C. Allegations that the Arbitrator Exceeded Her Powers by Ignoring Portions of the Employment Contract in Fashioning Her Award
{¶ 37} Felix next argues that the arbitrator exceeded her power “when she ignored
key portions of the contract in assessing the accounts receivable.” In the interim award
regarding damages, the arbitrator cited the following contract provision in support of her
conclusion that “all receivables generated by [Felix] are the property of [the Clinic], and
therefore should not be set off:”
18. All accounts receivable and fees arising from services rendered by the
Professional, wherever performed, shall belong to the Toledo Clinic and the
Professional shall not be entitled to any portion of such fees or receivables
for any reason whatsoever, it being specifically agreed that the
compensation to be paid by the Toledo Clinic to the Professional as set
forth in Paragraph 3 shall be his full compensation for all professional
services rendered.
The arbitrator further found that because the contested accounts receivable were at least a
year old or older at the time of her decision, it was “not reasonable to view such
receivables as an asset.”
{¶ 38} According to Felix “[i]t is not rational to award the accounts receivable to
Toledo Clinic when Dr. Felix is held responsible for the salaries of the providers who
provided the services.” He further argues that the decision “does not draw its essence
from the contract, but instead, substitutes the arbitrator’s own beliefs and thoughts for
that of clear contract language.” We disagree. Not only does the award clearly draw its
essence from the contract, it does not conflict with any express terms of the contract, and
it is based upon fact-finding and legal conclusions by the arbitrator that this court is not
permitted to review.
{¶ 39} Felix further complains that the surplus deficit reports provided by the
Toledo Clinic “contain categories not included in the [applicable] definition of
19. ‘expenses,’” including amounts for depreciation and interest, and that such amounts
should not be included in any final deficit calculation. In connection with this complaint,
we note that arbitrator determined in her interim award regarding damages that
“expenses” are “cash expenditures paid by Toledo Clinic,” and that depreciation was not
eligible for inclusion in the calculation of unresolved deficit. She also found, however,
that interest, as a cash expense, was properly included.
{¶ 40} More importantly, we find, once again, that the findings to which Felix
objects were properly made by the arbitrator who was empowered to decide all issues and
claims related to the employment contract. We further find that the award draws its
essence from the contract and does not conflict with any express terms of the contract.
{¶ 41} Finally, Felix argues that the arbitrator exceeded her authority when she
determined that Felix was in breach of the contract during the period from May 2019 to
December 2019 and that -- as a result of this improper fact finding -- she crafted an award
that was not based on the claims in front of her. In making this argument, Felix reiterates
that the clinic terminated him without cause and, further, posits that the clinic never
asserted a claim against him for a breach of contract that was said to have occurred prior
to his termination.
{¶ 42} In this instance, Felix’s asserted factual basis, reasoning and conclusion are
all flawed. First, the clinic’s answer and counterclaim to Felix’s demand for arbitration
assert both: 1) a defense that “[a]ll or some of Felix’s claims are barred by his prior
20. material breach of the contract;” and 2) a claim for breach of contract claim based on
Felix’s failure to repay a deficit sum to the clinic. Although the arbitrator, in determining
the prevailing party, did state that the main issue in the dispute was whether the clinic
breached the employment agreement, she acknowledged that there were, in addition,
“collateral claims.” Many of these claims involved allegations of Felix’s part in the
eventual failure of his urgent care venture.
{¶ 43} That the arbitrator attempted to allocate financial responsibility for the
overall deficit in conformity with the evidence is clear. The law provides that “[i]n the
absence of language restricting the authority of an arbitrator to review a particular subject
matter or to award a particular remedy, courts will generally hold that an arbitrator has
the authority to make the award and to fashion a remedy even though the agreement is
silent on the issue of remedial authority.” Miller, 96 Ohio St.3d 359, 2002-Ohio-4932,
775 N.E.2d 475, at ¶ 19. Further, “‘[a]s long as the arbitrator is even arguably construing
or applying the contract and acting within the scope of his authority’ a court should not
overturn the decision, even if ‘convinced he committed serious error.’” Painesville City
Local Schools Bd. of Edn. v. Ohio Ass’n. of Pub School Emps., 11th Dist. Lake No. 2005-
L-100, 2006-Ohio3645, ¶ 37, quoting United Paperworkers Intern. Union, AFL-CIO v.
Misco, Inc., 484 U.S. 29, 38, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987); see also Carothers,
2023-Ohio-1907, 215 N.E.3d 1217, at ¶ 41-46 (although appellant did not specifically
ask for non-compete clause to be rewritten, where the issue submitted to arbitration was
21. the enforceability of the non-compete and where the arbitration clause contained no
restriction to be fashioned by the arbitrator, the arbitrator was found to have the authority
to issue an advisory opinion and to order revisions to the geographic and temporal
restrictions in the partnership agreement’s non-compete clause.). Thus, contrary to
Felix’s claim, the arbitrator’s allocation of financial responsibility was not error.
{¶ 44} In fashioning the remedy in this case, the arbitrator acted within her
authority inasmuch as there is a rational nexus between the agreement and the award, the
award is not arbitrary, capricious or unlawful, and the award does not conflict with the
express terms of the agreement.
D. Allegations that the Arbitrator Exceeded her Powers When She Ignored Evidence that Toledo Clinic Cut Down Hours at the Urgent Care in an Effort to Decrease Felix’s Earnings
{¶ 45} Felix also argues that the arbitrator exceeded her powers when she ignored
evidence that the clinic reduced hours at the urgent care, rendering Felix unable to work
full-time as required under the contract. We disagree that the arbitrator “ignored” this
evidence. In determining as part of her fact-finding that the “lapse” in Felix’s
performance obligation “operated to dominate as the reason for the unprofitability of
Felix’s urgent care enterprise,” the arbitrator merely rejected Felix’s interpretation of the
facts. To the extent that the decision impacted her award, it comports with our earlier
determination that the award, fashioned in part on the basis of this decision, draws its
essence from the contract.
22. {¶ 46} For the foregoing reasons, we find that the trial court appropriately refused
to vacate the arbitration award on the grounds that the arbitrator exceeded her powers.
E. Allegations that the Arbitrator Imperfectly Executed Her Powers when she Misapplied the Law in Disposing of the Claims for Fraudulent Concealment, Fraudulent Inducement, and Fraudulent Misrepresentation.
{¶ 47} Felix next argues that the arbitrator imperfectly executed her powers when
she “misapplied the law” in disposing of his claims for fraudulent concealment,
fraudulent inducement, and fraudulent misrepresentation. Specifically, Felix claims that
the arbitrator misapplied the parol evidence rule in connection with his claim that in
entering into a business relationship with the clinic he relied upon a promise by the clinic
that he would be the exclusive urgent care provider.
{¶ 48} At the outset of her analysis of Felix’s claims for fraud, the arbitrator
observed that Felix never testified in his deposition that he was promised exclusivity,
only that he was the exclusive urgent care provider at the time the contract was executed.
She further found that the clinic’s insistence on an employment agreement with no
promise of exclusivity, despite Felix’s prior request for one, put Felix on notice that the
clinic was reserving its right to have another urgent care provider. Finally, she pointed
out that the terms of the agreement provide that it is the “Entire Agreement” between the
parties, “thereby expressly excluding any prior representations or understandings as
binding.” On the basis of these facts, the arbitrator concluded that “[t]here is no genuine
23. issue as to any material fact regarding the fraud claims, and viewed in the light most
favorable to Felix, the facts provide no support for allegations of [fraud].”
{¶ 49} In this appeal, Felix argues that the arbitrator misapplied the parol evidence
rule inasmuch as the parol evidence rule “is not applicable to preclude the admission of
parol or extrinsic evidence to prove that a written contract was induced by fraud.” Aside
from the fact that Felix does not appear to have submitted any extrinsic evidence in
support of his claim – which, of course, militates in favor of the arbitrator’s decision --
we remain mindful that courts “do not sit to hear claims of factual or legal error by an
arbitrator,” Southwest Ohio Regional Transit Auth. v. Amalgamated Transit Union, Local
627, 91 Ohio St.3d 108, 110, 742 N.E.2d 630 (2001), and that “even a grossly erroneous
decision” may be binding in the absence of fraud. Goodyear, 42 Ohio St.2d 516, 330
N.E.2d 703, at 522. As Felix makes no allegation of fraud in connection with the award,
we do not find that the arbitrator imperfectly executed her powers in such a way, or to
such an extent, that the award should be vacated.
{¶ 50} Because we do not find that any grounds exist for vacating the arbitration
award pursuant to R.C. 2711.10, Felix’s first assignment of error is found not well-taken.
In his second assignment of error, Felix argues, in the alternative, that the arbitrator’s
award should be modified.
24. Application to Modify Arbitration Award Under R.C. 2711.11
{¶ 51} R.C. 2711.11 provides that, upon the application of any party, the court of
common pleas shall make an order modifying or correcting an arbitration award if:
(A) There was an evident material miscalculation of figures or an
evident material mistake in the description of any person, thing, or property
referred to in the award;
(B) The arbitrators have awarded upon a matter not submitted to
them, unless it is a matter not affecting the merits of the decision upon the
matters submitted;
(C) The award is imperfect in matter of form not affecting the merits
of the controversy.
{¶ 52} In this case, Felix argues that the arbitrator’s award should be modified
because the arbitrator allegedly: 1) awarded upon a matter not submitted to her, pursuant
to R.C. 2711.11(B); and 2) miscalculated damages, pursuant to R.C. 2711.11(A).
Allegations that the Arbitrator Awarded Upon a Matter Not Submitted to Her, Pursuant to R.C. 2711.11(B)
{¶ 53} Once again, Felix argues that the arbitrator awarded on a matter not
submitted to her when she determined that he breached the employment contract with the
clinic. As indicated above, breach of contract was raised by the clinic both as a defense
and as a counterclaim against Felix. Even in the absence of such a claim or defense,
however, allocation of the deficit among the responsible parties was within the
25. arbitrator’s authority, because, as we have repeatedly stated in this decision, there is a
rational nexus between the agreement and the award, the award is not arbitrary,
capricious or unlawful, and the award does not conflict with the express terms of the
agreement.
{¶ 54} Felix similarly argues that the arbitrator awarded on a matter not submitted
to her when she determined that Felix “breached the covenant of good faith and fair
dealing.” This finding, which was expressed in the arbitrator’s interim award, was made
in the context of the arbitrator’s consideration of Felix’s claim for such against the clinic.
The arbitrator stated only that “[b]y the end of their relationship, the obligation of good
faith and fair dealing was disrespected equally by both parties, providing neither with
access to a remedy on this basis.” Under Ohio law, “every contract contain[s] an implied
duty for the parties to act in good faith and to deal fairly with each other.” Littlejohn v.
Parrish, 163 Ohio App.3d 456, 2005-Ohio-4850, 839 N.E.2d 49, ¶ 27. Thus, breach of
this implied covenant is at issue whenever breach of contract is claimed, and, in this case,
was well within the arbitrator’s authority to determine. Id. at ¶ 23 (good faith and fair
dealing is part of the contract, not an independent claim).
Allegations that the Arbitrator Miscalculated Felix’s Damages
{¶ 55} Finally, Felix asserts that the arbitrator miscalculated his damages.
Specifically, Felix asserts that the arbitrator “refused to calculate” the appropriate
damages and lost profit he claims to have suffered. Rather than asserting a
26. miscalculation of figures, however -- which is a matter that is subject to our review -- this
claim goes to the merits of the dispute as presented to the arbitrator, which is clearly
beyond our purview.
{¶ 56} Felix additionally claims that, pursuant to the findings in the arbitrator’s
interim award, the final award should be modified to include: 1) the $50,000 that was
improperly added to his deficit in March 2020; and 2) Tim Schramko’s salary “of $127,
411.50.” As indicated above, the arbitrator determined in her interim award that a
$50,000 addition to Felix’s deficit that was made by the clinic in March 2020 was
untimely and, therefore, would not count toward any deficit payable by Felix. She
further found that Tim Schramko’s (unspecified) salary was in the category of business
expenses allocated to Toledo Clinic.
{¶ 57} In the subsequently issued interim award regarding damages, the arbitrator
determined that the clinic’s total deficit came to $671,003.65, but that the clinic could not
collect the full amount because it stood in breach of the employment agreement from
January 2017 through April 2019. Relying on the $187,950.82 figure that was set forth in
Toledo Clinic’s “Surplus Deficit Report,” and then subtracting a depreciation amount of
$3,839.21, the arbitrator concluded that $184,111.62 was the final deficit amount for the
period of May 2019 through March 2020. (In making this decision, the arbitrator noted
that Felix made no assertion that the clinic’s numerical calculations were erroneous.)
27. {¶ 58} Given the record before us, it is impossible to discern whether or not the
offsets that were discussed in the interim award, and which are now claimed by Felix,
were ever factored into Toledo Clinic’s final award, as set forth in the subsequently
issued interim award on damages. Because we recognize that “a strong presumption
favors the regularity and integrity of an arbitrator’s award,” Cincinnati v. Queen City
Lodge No. 69, Fraternal Order of Police, 164 Ohio App.3d 408, 2005-Ohio-6225, 842
N.E.2d 588, ¶14 (1st Dist.), absent evidence to suggest that the offsets were not, in fact,
factored into the final deficit amount, we cannot modify the amount of the award on the
grounds that Felix currently asserts. Accordingly, appellant’s second assignment of error
is not well-taken.
Conclusion
{¶ 59} The judgment of the Lucas County Court of Common Pleas is affirmed.
Appellant is to pay the costs of appeal pursuant to App.R. 24.
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.
28. Toledo Clinic, Inc. v. Ashvin Felix L-23-1037
Thomas J. Osowik, J. ____________________________ JUDGE Gene A. Zmuda, J. ____________________________ Myron C. Duhart, J. JUDGE CONCUR. ____________________________ JUDGE
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.supremecourt.ohio.gov/ROD/docs/.
29.