Semco, Inc. v. Sims Bros., Inc.

[Cite as Semco, Inc. v. Sims Bros., Inc., 2013-Ohio-4109.]

IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
MARION COUNTY

SEMCO, INC.,

PLAINTIFF-APPELLANT, CASE NO. 9-12-62

v.

SIMS BROS., INC., ET AL., OPINION

DEFENDANTS-APPELLEES.

Appeal from Marion County Common Pleas Court
Trial Court No. 09-CV-0218

Judgment Affirmed

Date of Decision: September 23, 2013

APPEARANCES:

J.C. Ratliff and Adam H. Karl for Appellant

Jasper N. Burt and Keith Shumate for Appellee, Sims Bros., Inc.
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PRESTON, P.J.

{¶1} Plaintiff-appellant, Semco, Inc. (“Semco”), appeals the Marion

County Court of Common Pleas’ October 12, 2011 and November 2, 2012

judgment entries. In its October 12, 2011 judgment entry, the trial court granted

summary judgment in favor of defendant-appellee, Sims Bros., Inc. (“Sims

Bros.”), concluding that Sims Bros. was entitled to summary judgment on

Semco’s conversion claim because Semco failed to demand return of its property

and on its civil-theft claim because no issue of fact existed as to whether Sims

Bros. knew or had reasonable cause to believe that the property was stolen. In its

November 2, 2012 judgment entry, the trial court granted Sims Bros.’s motion for

attorney fees on Semco’s dismissed Consumer Sales Practices Act (“CSPA”)

claim, awarding Sims Bros. its requested attorney fees of $26,130. For the reasons

that follow, we affirm.

{¶2} This case involves a dispute between a foundry, Semco, and a metal

recycler, Sims Bros. It stems from the repeated thefts of Semco’s metal materials

by two of its employees, and the thieves’ sale of those materials at Sims Bros.’s

drive-through recycling center. (Doc. Nos. 80, 83).

{¶3} On March 17, 2009, Semco filed a complaint against Sims Bros. and

two other metal-recycler defendants who settled with Semco and are not parties to

this appeal. (Doc. Nos. 1, 121, 122). Semco’s complaint contained four counts:

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violation of the CSPA under R.C. 1345.01 et seq.; civil theft under R.C. 2913.61,

based on a theory of receiving stolen property; conversion; and, unjust enrichment.

(Id.). Sims Bros. filed its answer on May 8, 2009. (Doc. No. 7).

{¶4} On August 21, 2009, Sims Bros. and the other two defendants filed a

joint motion for judgment on the pleadings as to all of the counts of the complaint.

(Doc. No. 13). Semco did not respond to that motion and instead moved for leave

to file an amended complaint. (Doc. No. 15). Three days later, the trial court

granted Semco’s motion for leave to file an amended complaint and noted that the

defendants could renew their motion for judgment on the pleadings after Semco

filed its amended complaint. (Doc. No. 16).

{¶5} Semco filed its amended complaint on October 2, 2009. (Doc. No.

17). In it, Semco included additional factual allegations and the same four counts

as it did in its original complaint. (Id.). On October 30, 2009, Sims Bros. and the

other two defendants filed a joint motion to dismiss the CSPA and unjust-

enrichment counts. (Doc. No. 20). Also on that day, Sims Bros. filed its answer

to Semco’s amended complaint. (Doc. No. 21). Semco opposed the defendants’

joint motion to dismiss on November 20, 2009, and the defendants filed a reply in

support on December 10, 2009. (Doc. Nos. 24, 26). On January 26, 2010, the trial

court granted the defendants’ motion to dismiss the CSPA and unjust-enrichment

counts. (Doc. No. 28).

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{¶6} On February 16, 2010, Sims Bros. moved pursuant to R.C.

1345.09(F)(1) for attorney fees that it incurred in defending against Semco’s

CSPA claim. (Doc. No. 32). Semco opposed the motion, and Sims Bros. filed a

reply in support. (Doc. Nos. 37, 41). The trial court did not rule on Sims Bros.’s

motion.

{¶7} On August 19, 2011, Sims Bros. moved for summary judgment on the

remaining counts in Semco’s amended complaint—civil theft and conversion.

(Doc. No. 80). Semco filed its opposition to Sims Bros.’s motion on September 6,

2011.1 (Doc. No. 83).

{¶8} On September 14, 2011—nine days after the date by which Semco

was to file its response to Sims Bros.’s motion—Semco filed a motion for leave to

file an affidavit in support of its memorandum in opposition to Sims Bros.’s

motion for summary judgment. (Doc. No. 103). The affidavit was of Dennis

Potts, a private investigator who interviewed three Sims Bros. employees—Otis

Britton, Hibbard Smith, and Chad Rayburn—who were present when, on multiple

occasions, the metal materials were brought to Sims Bros. for sale. (Potts Aff.,

Doc. No. 103, attached). Potts attached to his affidavit investigation reports that

1
The trial court ordered that Semco file its response to the Sims Bros.’s motion for summary judgment “on
or before September 5, 2011.” (Doc. No. 76). Attached to Semco’s memorandum in opposition to Sims
Bros.’s motion for summary judgment was a certificate of service certifying that Semco’s counsel served
opposing counsel with the memorandum in opposition on September 2, 2011. (Doc. No. 83). While it is
the responsibility of the filer, not the clerk of courts, to ensure that a document is timely filed, we do not
address in this appeal the timeliness or untimeliness of Semco’s memorandum in opposition because that
issue is not before this Court.

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he prepared after interviewing Britton, Smith, and Rayburn. (Id.). In the

investigation reports, Potts documented statements by Britton and Smith that they

believed the materials may have been stolen, and statements by Rayburn that the

materials included finished copper products known as plunger tips. (Id.).

{¶9} On September 16, 2011, Sims Bros. filed its reply in support of its

motion for summary judgment. (Doc. No. 106). A week later, Sims Bros. filed a

memorandum in opposition to Semco’s motion for leave to file Potts’ affidavit.

(Doc. No. 107). On September 29, 2011, Sims Bros. filed a “supplemental

submission” in opposition to Semco’s motion for leave after deposing Semco’s

damages expert witness that day. (Doc. No. 109). Also that day, Semco filed its

reply in support of its motion for leave. (Doc. No. 111). The next day, Sims Bros.

filed supplemental authority in support of its motion for summary judgment.

(Doc. No. 113). On October 5, 2011, Semco filed memoranda in opposition to

Sims Bros.’s “supplemental submission” and supplemental authority. (Doc. Nos.

115, 116).

{¶10} On October 12, 2011, the trial court issued its judgment entry

granting Sims Bros.’s motion for summary judgment. (Doc. No. 120). The trial

court concluded that Semco’s admitted failure to demand return of the stolen

materials sold to Sims Bros. by Semco employees was fatal to its conversion

claim. (Id.). As for Semco’s civil-theft claim, the trial court “considered the

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[Potts] affidavit and its contents despite the fact that the affidavit was, to say the

least, untimely filed” and concluded that it contained “nothing more than hearsay-

opinion statements from the three Sims Bros.’s employees which directly

contradict their sworn testimony contained in their depositions.” (Id.). Given its

contents, the trial court said Semco could not use Potts’ affidavit to create an issue

of fact. (Id.). The trial court therefore issued summary judgment in Sims Bros.’s

favor. (Id.).

{¶11} On November 3, 2011, Semco filed a notice of appeal. (Doc. No.

123). We dismissed that appeal on January 6, 2012 for want of jurisdiction

because the trial court’s summary judgment entry did not resolve Sims Bros.’s

motion for attorney fees that it filed on February 16, 2010. (June 4, 2012 Tr. at 4).

Following our dismissal of that appeal, the trial court held a hearing on Sims

Bros.’s motion on June 4, 2012. (Id.); (Doc. No. 128). On November 2, 2012, the

trial court granted Sims Bros.’s motion and awarded it $26,130 in attorney fees

under R.C. 1345.09(F). (Doc. No. 129).

{¶12} Semco filed a notice of appeal on November 29, 2012, appealing the

trial court’s October 12, 2011 summary judgment entry and its November 2, 2012

entry granting Sims Bros.’s motion for attorney fees. (Doc. No. 133). Semco

raises three assignments of error for our review.

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Assignment of Error No. I

The trial court erred in granting defendant-appellee Sims Bros.,
Inc’s [sic] motion for summary judgment when there were
numerous genuine issues of material fact as to whether Sims
Bros., Inc. knew or had reason to know the Semco materials that
it purchased were stolen.

{¶13} In its first assignment of error, Semco argues that the trial court erred

when it granted summary judgment in favor of Sims Bros. on Semco’s civil-theft

claim. The trial court concluded that the “central element” of Semco’s civil-theft

claim—“that Sims [Bros.] knew, or reasonably could have known, that the

materials at issue were stolen”—was not present. The trial court considered the

affidavit of private investigator Dennis Potts, “despite the fact that the affidavit

was, to say the least, untimely filed,” but concluded that it was “replete with

hearsay statements” and, therefore, “useless in defending a motion for summary

judgment.” (Doc. No. 120). Specifically, the trial court concluded that Sims

Bros.’s employees’ statements contained in Potts’ investigation reports attached to

his affidavit were not admissions of a party-opponent under Evid.R. 801(D),

because they were opinion statements and admissions of liability against their

employer and, therefore, outside the scope of their employment. The trial court

also noted that the statements contradicted the employees’ sworn deposition

testimony. Semco argues that the employees’ statements in Potts’ investigation

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reports were factual assertions, not opinions, made within the scope of

employment.

{¶14} We review a decision to grant summary judgment de novo. Doe v.

Shaffer, 90 Ohio St.3d 388, 390 (2000). Summary judgment is proper where there

is no genuine issue of material fact, the moving party is entitled to judgment as a

matter of law, and reasonable minds can reach but one conclusion when viewing

the evidence in favor of the non-moving party, and the conclusion is adverse to the

non-moving party. Civ.R. 56(C); State ex rel. Cassels v. Dayton City School Dist.

Bd. of Edn., 69 Ohio St.3d 217, 219 (1994).

{¶15} Through a trail of statutes, Ohio law provides for a civil action based

on the crime of receiving stolen property. “Under R.C. 2307.60(A)(1), any person

who has been injured by a criminal act may bring a civil action to recover

damages.” Commonwealth Land Title Ins. Co. v. Choice Title Agency, Inc., 9th

Dist. Lorain Nos. 11CA009981 and 11CA009983, 2012-Ohio-2824, ¶ 21. R.C.

2307.61 allows a property owner who brings a civil action under R.C. 2307.60(A)

“to recover damages from any person who willfully damages the owner’s property

or who commits a theft offense, as defined in section 2913.01 of the Revised

Code, involving the owner’s property * * *.” R.C. 2307.61(A). R.C. 2913.01

defines theft offenses to include violations of R.C. 2913.51, the receiving-stolen-

property statute. R.C. 2913.51(A) provides, “[n]o person shall receive, retain, or

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dispose of property of another knowing or having reasonable cause to believe that

the property has been obtained through commission of a theft offense.”

{¶16} In a criminal receiving-stolen-property case, this Court listed the

factors a court may consider in determining whether reasonable minds could

conclude that the defendant knew or should have known the property was stolen:

(a) the defendant’s unexplained possession of the merchandise, (b)

the nature of the merchandise, (c) the frequency with which such

merchandise is stolen, (d) the nature of the defendant’s commercial

activities, and (e) the relatively limited time between the thefts and

the recovery of the merchandise.

State v. Adams, 3d Dist. Defiance No. 4-09-16, 2009-Ohio-6863, ¶ 9, quoting

State v. Davis, 49 Ohio App.3d 109, 112 (8th Dist.1988). We also quoted Ohio

Jury Instructions’ directives to jurors for determining whether a defendant had

reasonable cause to believe property was stolen:

[i]n determining whether the defendant had reasonable cause to

believe that the property was obtained through a theft offense you

must put yourself in the position of this defendant with his/her

knowledge, or lack of knowledge, and under the circumstances and

conditions that surrounded him/her at that time. You must consider

the conduct of the persons involved and determine if their acts and

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words and all the surrounding circumstances would have caused a

person of ordinary prudence and care to believe that the property had

been obtained through the commission of a theft offense.

Id., quoting 2 Ohio Jury Instructions, CR Section 513.51 (2009).

{¶17} The key inquiry presented by Semco’s first assignment of error is

whether there is a genuine issue of material fact as to whether Sims Bros. knew or

had reasonable cause to believe that the materials the thieves sold to Sims Bros.

were stolen. After reviewing the record and viewing the evidence in a light most

favorable to Semco, we conclude that summary judgment in favor of Sims Bros.

on Semco’s civil-theft claim was appropriate because there was no genuine issue

of material fact concerning that question.

{¶18} At its drive-through recycling center in Marion, Sims Bros. receives

a variety of scrap metals from a variety of sources. (Sims Depo. at 27-28).

Although not as frequently as other types of scrap metal, Sims Bros. occasionally

receives scrap metal, such as copper castings, originating from foundries—for

example, if someone is cleaning out a foundry. (Id. at 28); (Britton Depo. at 49-

53); (Smith Depo. at 38-40). One of the thieves—Jeff Dolick—volunteered that

they were in town cleaning out a foundry and would be bringing in the scrap

metal. (Rayburn Depo. at 66, 70). Dolick’s vehicle had Indiana license plates,

and his story “made sense.” (Rayburn Depo. at 66, 70). (See also Britton Depo. at

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50); (Smith Depo. at 47). The thieves stole and sold the materials between

February and July 2008, before getting caught on July 8, 2008. (Tennar Depo. at

6, 127); (Dolick Depo. at 8-9).

{¶19} Britton and Smith testified that they did not suspect the materials

were stolen. (Britton Depo. at 49); (Smith Depo. at 47). Rayburn testified that

although he initially suspected the materials may have been stolen, after consulting

with Britton and Smith, he no longer believed they were. (Rayburn Depo. at 70).

Smith testified in his deposition that the materials looked like scrap. (Smith Depo.

at 38). (See also Rayburn Depo. at 37-45). Semco’s finished plunger tips bear

stamped “Semco” imprints that cannot be removed without grinding them.

(Tennar Depo. at 91, 151). However, the materials that Britton, Smith, and

Rayburn saw did not bear any identifying marks, such as the “Semco” imprint.

(Britton Depo. at 63); (Smith Depo. at 59); (Rayburn Depo. at 95). Nor were the

materials the type that Sims Bros. automatically rejects—such as kegs, grave

markers, and railroad material—or the type of which Sims Bros. is suspicious—

such as new material. (Sims Depo. at 31); (Fischer Depo. at 62); (Smith Depo. at

53); (Britton Depo. at 49); (Rayburn Depo. at 37-45). Dolick did not steal finished

materials or materials bearing identification marks, such as a “Semco” stamp.

(Dolick Depo. at 10). Sims Bros. received no alerts from Semco or law

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enforcement authorities to be on the lookout for stolen Semco materials. (Furman

Depo. at 29-30).

{¶20} Applying the factors this Court listed in Adams, (a) one of the thieves

explained their possession of the materials, and his story “made sense” to the Sims

Bros. employees; (b) to at least one Sims Bros. employee, the materials appeared

to be scrap metal, and the materials did not appear to be finished product bearing

the “Semco” imprint; (c) Sims Bros. occasionally receives foundry-type materials

at its recycling center; (d) Sims Bros. operates a drive-through recycling center, at

which they receive a variety of scrap metals from a variety of sources; and, (e) the

thieves stole and sold materials to Sims Bros. for approximately five months

before getting caught. See Adams, 2009-Ohio-6863, at ¶ 9. Weighing the facts

above and these factors, there was no genuine issue of material fact that Sims

Bros. did not know and had no reasonable cause to believe that the materials were

stolen. Semco has not directed us to any Civ.R. 56 evidence that creates a genuine

issue of material fact.

{¶21} Semco argues that Potts’ affidavit creates genuine issues of material

fact. The trial court considered Potts’ affidavit but concluded that it contained

inadmissible hearsay, which cannot be used to defeat summary judgment.2 Hall v.

2
Sims Bros. argues that Potts’ affidavit is not part of the record because the trial court never granted
Semco’s motion for leave to file it. We disagree. By considering Potts’ affidavit, the trial court implicitly
granted Semco leave to file it. Price v. Price, 3d Dist. Hancock No. 5-86-19, 1987 WL 1363642, *12 (Mar.

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Fairmont Homes, Inc., 105 Ohio App.3d 424, 436 (4th Dist.1995) (“Affidavits

based on hearsay evidence are not admissible for the purposes of summary

judgment.”), citing Pond v. Carey Corp., 34 Ohio App.3d 109 (10th Dist.1986);

Pennisten v. Noel, 4th Dist. Pike No. 01CA669, 2002 WL 254021, *2 (Feb. 8,

2002). Potts’ affidavit and the investigation reports attached to it contain multiple

alleged statements by Sims Bros. employees, which we address in turn.

{¶22} In his affidavit, Potts averred that Britton, Smith, and Rayburn made

certain statements to him. Several of these statements concerned the frequency

with which the thieves visited Sims Bros. and the quantities the thieves sold to

Sims Bros. (Potts Aff. at ¶ 7, 8, 10, 11, Doc. No. 103, attached). Potts also

averred that Rayburn told him that Sims Bros. owner Scott Fischer initially graded

some of the materials that the thieves produced for sale. (Id. at ¶ 10). The

investigation reports attached to Potts’ affidavit contain similar statements

allegedly made by Britton, Smith, and Rayburn concerning the frequency of visits,

quantities of materials, and Fischer’s grading involvement. (Id. at Investigation

Reports).

{¶23} Even assuming these statements in Potts’ affidavit and investigation

reports were admissible—such that the trial court could have considered them in

deciding whether to grant Sims Bros.’s motion for summary judgment—they are

13, 1987) (“[T]here is a presumption that a final judgment resolves all pending motions where the relief
sought in those motions is implicitly granted or denied by the final judgment.”).

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not inconsistent with the facts above warranting summary judgment, and they do

not create a genuine issue of material fact concerning whether Sims Bros. knew or

had reasonable cause to believe the materials were stolen. Individuals cleaning

out a shop, warehouse, or foundry occasionally make multiple trips to the Sims

Bros. drive-through, bringing in high volumes of materials for sale. (Smith Depo.

at 39-40); (Britton Depo. at 48-53). As for Fischer, he simply graded the materials

as “copper no. 2”—something less than 100 percent pure copper—during one of

the thieves’ visits to the drive-through, and there is no indication he knew or had

reasonable cause to believe the materials were stolen. (Rayburn Depo. at 60-61).

{¶24} Potts also averred and stated in the investigation reports that when he

showed Rayburn sample Semco materials, Rayburn twice told him that Sims Bros.

purchased “new plunger tips” or “new tips” from the thieves. (Id. at ¶ 10, 11,

Investigation Reports). Again, even assuming these statements by Rayburn were

admissible, they do not create a genuine issue of material fact. No photographs or

descriptions of the “new plunger tips” or “new tips” are attached to or contained in

Potts’ affidavit and investigation reports.3 However, in his deposition, Rayburn—

using photographs marked as Plaintiff’s Exhibit 2—identified the materials that

Sims Bros. purchased from the thieves. (Rayburn Depo. at 37-45). Among them

were plunger tips with coarse exteriors and no threading or holes in them. (Id. at

3
Semco attached to its memorandum in opposition to Sims Bros.’s motion for summary judgment several
unsworn and unauthenticated materials, including the investigation reports and accompanying compact
disc. However, Potts did not attach the compact disc to his affidavit, and we do not consider its contents.

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42, 45). Semco did not come forth with admissible evidence, such as

authenticated photographs, identifying or describing the “new plunger tips” and

“new tips” that Potts showed Rayburn. In other words, Semco failed to

demonstrate that “new plunger tips” and “new tips” were different than the

plunger tips that Rayburn identified in his deposition. Therefore, even assuming

they were admissible, Rayburn’s statements, as restated by Potts, do not create a

genuine issue of material fact.

{¶25} Finally, Potts averred and stated in the investigation reports that

Britton and Smith told him that they thought the materials were stolen or may have

been stolen. (Id. at ¶ 9, 12, Investigation Reports). Even assuming the

investigation reports were admissible, we agree with the trial court that these

statements by Britton and Smith, as restated by Potts, are inadmissible hearsay that

cannot be used to defeat summary judgment.

{¶26} Under Evid.R. 801(D)(2)(d), “[a] statement is not hearsay if * * *

[t]he statement is offered against a party and is * * * a statement by the party’s

agent or servant concerning a matter within the scope of the agency or

employment, made during the existence of the relationship * * *.” See Shumway

v. Seaway Foodtown, Inc., 3d Dist. Crawford No. 3-97-17, 1998 WL 125555, *2

(Feb. 24, 1998), citing Evid.R. 801(D)(2)(d). Admissions of liability against an

employer, including statements of opinion regarding liability, are not within an

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employee’s scope of employment and are therefore inadmissible under Evid.R.

801(D)(2)(d). Johnson v. United Dairy Farmers, Inc., 1st Dist. Hamilton No. C-

940240, 1995 WL 96853, *3 (Mar. 8, 1995), citing Stormont v. New York Cent. R.

Co., 1 Ohio App.2d 414, 419 (10th Dist.1964) and Kroger Grocery & Baking Co.

v. McCune, 46 Ohio App. 291, 294 (2d Dist.1933). However, factual assertions

made by an employee within his or her knowledge and scope of employment are

admissible. Cordle v. Bravo Dev., Inc., 10th Dist. Franklin No. 06AP-256, 2006-

Ohio-5693, ¶ 16.

{¶27} The party claiming admissibility under Evid.R. 801(D)(2)(d) bears

the burden of showing that the statement concerned a matter within the scope of

the declarant’s employment. Pennisten, 2002 WL 254021, at *2 (citations

omitted); Brock v. Gen. Elec. Co., 125 Ohio App.3d 403, 409-410 (1st Dist.1998).

“Absent evidence that the statement concerned a matter within the scope of the

declarant’s duties, the statement is not admissible.” Pennisten at *2, citing

Shumway.

{¶28} Here, Britton’s and Smith’s statements were ones of opinion

regarding liability. (Potts Aff. at ¶ 9 (“Mr. Smith stated that he thought the copper

materials that were being brought in for sale were stolen but he was not sure where

they were coming from.” (emphasis added)); (Id. at ¶ 12 (“Mr. Britton advised that

he thought the Semco materials that were brought in for sale to Sims may have

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been stolen from a foundry but did not know of any around here.” (emphasis

added)); (Id. at Investigation Reports (“[Smith] stated he thought these items were

stolen but not sure where they came from.” (emphasis added); “Mr. Britton

advised that he thought they may be stolen from a foundry but did not know of any

around here.” (emphasis added)). Accordingly, Evid.R. 801(D)(2)(d)’s hearsay

exemption does not apply to these statements. They are inadmissible hearsay and

do not create a genuine issue of material fact precluding summary judgment. See

Johnson at *3 (classifying as inadmissible “statements of opinions regarding

liability” an employee’s statements that a newspaper rack was in “a bad location”

and that “she was afraid somebody else would” sustain an injury); Pennisten at *1-

2 (holding that the trial court did not err by striking paragraphs in an affidavit

containing hearsay statements of an employee concerning the dangerous

placement of a machine).

{¶29} For these reasons, the trial court did not err in granting summary

judgment in favor of Sims Bros. on Semco’s civil-theft claim. Semco’s first

assignment of error is therefore overruled.

Assignment of Error No. II

The trial court erred in granting defendant-appellee Sims Bros.,
Inc’s [sic] motion for summary judgment on Semco’s conversion
claim.

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{¶30} In its second assignment of error, Semco argues that the trial court

erred when it granted summary judgment in favor of Sims Bros. on Semco’s

conversion claim. The trial court concluded that summary judgment was

warranted because Semco admitted it did not demand from Sims Bros. the return

of the stolen materials, and it therefore could not prove an essential element of

conversion. Semco argues that the trial court erred because the notice requirement

of R.C. 2307.61 was not a prerequisite to Semco’s filing suit, and because

demanding the return of the materials would have been superfluous and was not

required. As with the first, we review de novo this second assignment of error.

{¶31} “It is axiomatic that a party may not assert an issue for the first time

on appeal.” Neville v. Neville, 3d Dist. Marion No. 9-08-37, 2009-Ohio-3817, ¶

14, citing Gibson v. Gibson, 3d Dist. Marion No. 9-07-06, 2007-Ohio-6965, ¶ 34.

In its memorandum in opposition to Sims Bros.’s motion for summary judgment,

Semco failed to assert its argument that R.C. 2307.61’s notice requirement was not

a prerequisite to Semco’s filing its conversion claim. Because Semco asserts that

argument for the first time on appeal, we need not consider it. Id. Even if we

were to consider it, Semco’s R.C. 2307.61 argument lacks merit because its

conversion claim was a common-law claim, not a statutory one, so R.C. 2307.61 is

not applicable. (See Doc. No. 17).

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{¶32} Semco did argue below that demanding return of the materials would

have been superfluous, so we address that argument. “Conversion is the wrongful

exercise of dominion over property to the exclusion of the rights of the owner, or

withholding it from his possession under a claim inconsistent with his rights.”

Warnecke v. Chaney, 194 Ohio App.3d 459, 2011-Ohio-3007, ¶ 15 (3d Dist.),

quoting State ex rel. Toma v. Corrigan, 92 Ohio St.3d 589, 592 (2001) (internal

quotation marks omitted). “The elements of conversion are: (1) plaintiff’s

ownership or right to possession of the property at the time of the conversion; (2)

defendant’s conversion by a wrongful act or disposition of plaintiff’s property

rights; and (3) damages.” Id., quoting Miller v. Cass, 3d Dist. Crawford No. 3-09-

15, 2010-Ohio-1930, ¶ 32 (internal quotation marks omitted).

{¶33} “If the defendant came into possession of the property lawfully, the

plaintiff must prove two additional elements to establish conversion: (1) that the

plaintiff demanded the return of the property after the defendant exercised

dominion or control over the property; and (2) that the defendant refused to deliver

the property to the plaintiff.” Peirce v. Szymanski, 6th Dist. Lucas No. L-11-1298,

2013-Ohio-205, ¶ 19, citing R & S Distrib., Inc. v. Hartge Smith Nonwovens,

L.L.C., 1st Dist. Hamilton No. C-090100, 2010-Ohio-3992, ¶ 23. See also Marion

Plaza, Inc. v. The Fahey Banking Co., 3d Dist. Marion No. 9-2000-59, 2001 WL

218434, *4 (Mar. 6, 2001) (“A demand and refusal in a conversion action are

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usually required to prove the conversion of property otherwise lawfully held.”

(citation omitted)). “The object of the demand and refusal elements are to ‘turn an

otherwise lawful possession into an unlawful one, by reason of a refusal to comply

* * *.’” RFC Capital Corp. v. EarthLink, Inc., 10th Dist. Franklin No. 03AP-735,

2004-Ohio-7046, ¶ 61, quoting Fidelity & Deposit Co. v. Farmers & Citizens

Bank, 72 Ohio App. 432, 434 (5th Dist.1943).

{¶34} We concluded above that there is no genuine issue of material fact

that Sims Bros. neither knew nor had reasonable cause to believe that the materials

the thieves sold to Sims Bros. were stolen. Because Sims Bros. did not know or

have reasonable cause to believe that the materials were stolen, Sims Bros. came

into possession of the materials lawfully, and Semco was required to establish the

demand and refusal elements of conversion. See Peirce, 2013-Ohio-205, at ¶ 20

(holding that summary judgment was appropriate on appellant-jewelry owner’s

conversion claim because appellee-jewelry store did not know or have reason to

believe the jewelry it purchased was stolen, and because appellant failed to

produce evidence of demand and refusal). See also State v. Jeantine, 10th Dist.

Franklin No. 09AP-296, 2009-Ohio-6775, ¶ 23 (“The gist of a theft offense is not

the particular ownership of the property, but instead the ‘wrongful taking.’”),

citing State v. Shoemaker, 96 Ohio St. 570, 572 (1917).

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{¶35} Semco does not argue that it demanded from Sims Bros. that it return

the materials and that Sims Bros. refused. Indeed, no evidence in the record

suggests that Semco made a demand and Sims Bros. refused. Because Semco did

not introduce evidence establishing demand and refusal, the trial court properly

granted Sims Bros. summary judgment on Semco’s conversion claim. See Peirce,

2013-Ohio-205, at ¶ 20.

{¶36} Semco instead argues, without citing authority, that the demand and

refusal elements did not apply because demand would have been “superfluous”

and “futile” given the nature of the scrap metal business, where metal materials are

processed, combined with other inventory, and sold. However, Semco’s argument

overlooks the legal significance of the demand and refusal elements. Because

Sims Bros. did not know or have reasonable cause to believe that the materials

were stolen, its possession of the materials—in whatever form—was not unlawful

as long as Semco did not demand their return. Therefore, without a demand and

refusal, there could be no conversion in this case.

{¶37} For these reasons, the trial court did not err in granting summary

judgment in favor of Sims Bros. on Semco’s conversion claim. Semco’s second

assignment of error is therefore overruled.

Assignment of Error No. III

The trial court erred in awarding defendant-appellee, Sims Bros.
Inc. [sic], its attorney fees under R.C. 1345.09(F).

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{¶38} In its third assignment of error, Semco argues that the trial court

erred when it awarded Sims Bros. $26,130 in attorney fees under R.C. 1345.09(F).

Semco argues that its CSPA claim was not groundless, and it did not maintain the

claim in bad faith—the prerequisites for a fee award under R.C. 1345.09(F)(1).

Semco also argues that even if a fee award was appropriate under the statute, the

amount of fees that the trial court awarded was excessive.

{¶39} The CSPA provides for the award of reasonable attorney fees to the

prevailing party in an action brought under the CSPA if either of two

circumstances apply:

The court may award to the prevailing party a reasonable attorney’s

fee limited to the work reasonably performed and limited pursuant to

section 1345.092 of the Revised Code, if either of the following

apply:

(1) The consumer complaining of the act or practice that violated

this chapter has brought or maintained an action that is groundless,

and the consumer filed or maintained the action in bad faith;

(2) The supplier has knowingly committed an act or practice that

violates this chapter.

R.C. 1345.09(F).

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{¶40} “A trial court possesses discretion when determining whether to

award R.C. 1345.09(F) attorney fees.” Davis v. Byers Volvo, 4th Dist. Pike No.

11CA817, 2012-Ohio-882, ¶ 67, citing Charvat v. Ryan, 116 Ohio St.3d 394,

2007-Ohio-6833, ¶ 27 (additional citation omitted). See also Schneble v. Stark,

12th Dist. Warren Nos. CA2011-06-063 and CA2011-06-064, 2012-Ohio-3130, ¶

86, citing Einhorn v. Ford Motor Co., 48 Ohio St.3d 27, 29 (1990). “Absent an

abuse of that discretion, the trial court’s determination of attorney fees will not be

disturbed on appeal.” Schneble at ¶ 86, citing Moore v. Vandemark Co., Inc., 12th

Dist. Clermont No. CA2003-07-063, 2004-Ohio-4313, ¶ 26 and Bittner v. Tri–

County Toyota, Inc., 58 Ohio St.3d 143, 146 (1991). “An abuse of discretion

implies that a trial court’s attitude is unreasonable, arbitrary, or unconscionable.”

Davis at ¶ 67, citing Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983).

{¶41} The trial court awarded Sims Bros. its attorney fees under R.C.

1345.09(F)(1). It concluded that Semco’s CSPA claim was “groundless and did

not come close to being able to survive a Rule 12(B)(6) motion,” and that Semco’s

“continuation of the action by way of its amended complaint, after [Sims Bros.]

had filed its 12(B)(6) motion, indicates bad faith.” (Doc. No. 129). We agree with

the trial court.

{¶42} We first address the “groundless” requirement of R.C. 1345.09(F)(1).

The CSPA does not define “groundless,” so we apply its ordinary and common

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understanding. See Culbreath v. Golding Ents., L.L.C., 114 Ohio St.3d 357, 2007-

Ohio-4278, ¶ 22, citing R.C. 1.42. Black’s Law Dictionary defines “groundless”

as “lacking a basis or a rationale.” Black’s Law Dictionary 772 (9th Ed.2009).

Thus, a claim is “groundless” if it lacks a legal or factual basis. See id.; Palmer v.

Daniel Troth & Son Builders, Inc., 10th Dist. Franklin No. 97APE08-1050, 1998

WL 255566, *5 (May 19, 1998). Here, we agree with the trial court that Semco’s

CSPA claim lacked a legal basis.

{¶43} “A violation of the CSPA is premised upon the existence of a

‘supplier’, a ‘consumer’, and a ‘consumer transaction,’ all of which are defined

under the act.” DeRosa v. Elliott Leveling, Inc., 6th Dist. Lucas No. L-07-1148,

2008-Ohio-3502, ¶ 33, citing R.C. 1345.02 and 1345.03. The CSPA defines

“consumer transaction” as “a sale, lease, assignment, award by chance, or other

transfer of an item of goods, a service, a franchise, or an intangible, to an

individual for purposes that are primarily personal, family, or household, or

solicitation to supply any of these things.” (Emphasis added.) R.C. 1345.01(A).

The Supreme Court of Ohio has held “that, as used in R.C. 1345.01(A),

‘individual’ means ‘natural person.’” Culbreath at ¶ 26. A business entity, such

as a corporation, is not a “natural person.” Id. at ¶ 23-26.

{¶44} Here, Semco based its CSPA claim on a theory that because it was

the owner of the materials that the thieves sold to Sims Bros., Semco “[stood] in

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the shoes” of the thieves, who Semco said were “consumers” under the CSPA who

engaged in “consumer transactions” with “supplier” Sims Bros. (Amended

Complaint at ¶ 27, 33, 34, 42, Doc. No. 17). However, Semco’s erroneous stand-

in-the-shoes argument notwithstanding, a plaintiff must be a natural person, not a

business entity, to maintain an action under the CSPA. See Culbreath at ¶ 26

(“We have declined to recognize Culbreath’s right to maintain an action under the

OCSPA based upon the fact that the law firm is not an ‘individual’ for purposes of

the act.”); Anderson Law Office, LLC v. Esquire Deposition Services, LLC,

N.D.Ohio No. 1:09 CV 1909 (Mar. 31, 2011) (“Based on the Culbreath decision,

the court determines that Plaintiff Anderson Law Office does not possess standing

under the OCSPA.”). Because Semco is a corporation—not a natural person—we

agree with the trial court that Semco’s CSPA claim was groundless for at least that

reason.

{¶45} We next address the “bad faith” requirement of R.C. 1345.09(F)(1).

The CSPA does not define “bad faith,” so we apply its ordinary and common

understanding. See Culbreath at ¶ 22, citing R.C. 1.42. Black’s Law Dictionary

defines “bad faith” as “[d]ishonesty of belief or purpose.” State ex rel. Bardwell v.

Cuyahoga Cty. Bd. of Commrs., 127 Ohio St.3d 202, 2010-Ohio-5073, ¶ 8,

quoting Black’s Law Dictionary 159 (9th Ed.2009) (internal quotation marks

omitted). The Supreme Court of Ohio has described “bad faith” as follows:

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A lack of good faith is the equivalent of bad faith, and bad faith,

although not susceptible of concrete definition, embraces more than

bad judgment or negligence. It imports a dishonest purpose, moral

obliquity, conscious wrongdoing, breach of a known duty through

some ulterior motive or ill will partaking of the nature of fraud. It

also embraces actual intent to mislead or deceive another.

Slater v. Motorists Mut. Ins. Co., 174 Ohio St. 148 (1962), paragraph two of the

syllabus, overruled on other grounds in Zoppo v. Homestead Ins. Co., 71 Ohio

St.3d 552 (1994). See also Palmer, 1998 WL 255566, at *6, quoting Slater.

{¶46} Here, Semco’s original complaint included a CSPA claim. (Doc. No.

1). Sims Bros. and the other defendants moved for judgment on the pleadings

under Civ.R. 12(C), requesting, in part, that the trial court dismiss Semco’s CSPA

claim because, among other reasons, Semco was not an “individual” who

possessed standing to bring a CSPA claim. (Doc. No. 13). Sims Bros. and the

other defendants cited Culbreath several times in their motion. (Id.). Instead of

responding to the motion, Semco sought and was granted leave to file an amended

complaint. (Doc. No. 16). Semco filed its amended complaint, which contained

additional factual allegations and added paragraphs to Semco’s CSPA count.

(Doc. No. 17). Sims Bros. and the other defendants moved to dismiss the CSPA

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claim, again citing Culbreath and other authorities. (Doc. No. 20). The trial court

granted the motion to dismiss. (Doc. No. 28).

{¶47} The trial court concluded that Semco acted in bad faith when it

included the CSPA claim in its amended complaint after the defendants filed their

motion for judgment on the pleadings, bringing Culbreath and other authorities to

Semco’s attention.4 We also note that Semco apparently knew it was not a party

to a “consumer transaction” but included a CSPA claim in its amended complaint

anyway, alleging that it “[stood] in the shoes” of the thieves.

{¶48} We find unpersuasive Semco’s argument that its CSPA claim was

not groundless because the trial court denied the defendants’ joint motion for

judgment on the pleadings. The trial court did not rule on the merits of the motion

for judgment on the pleadings, but rather denied it and Semco’s motion to hold it

in abeyance pending a ruling on Semco’s motion for leave to file its amended

complaint. (Doc. No. 16). Indeed, the trial court informed the defendants that

they could “renew their motion for judgment on pleadings after being served the

amended complaint.” (Id.).

{¶49} Based on these facts, the trial court could have determined that

Semco acted with a dishonest purpose. It was not abuse of its discretion for the

trial court to conclude that Semco filed its CSPA claim in bad faith. Accordingly,

4
In reaching this conclusion, the trial court mistakenly referred to the defendants’ motion for judgment on
the pleadings, filed before Semco’s amended complaint, as a “12(B)(6) motion.” This apparent oversight
does not impact our analysis.

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the trial court did not abuse its discretion when it decided an attorney-fee award to

Sims Bros. was appropriate.

{¶50} Nor did the trial court abuse its discretion in setting the amount of the

attorney fee award. R.C. 1345.09(F) provides that a trial court “may award to the

prevailing party a reasonable attorney’s fee limited to the work reasonably

performed.” As with the decision of whether to award attorney fees, “the amount

any such award pursuant to R.C. 1345.09(F) [is] left to the trial court’s discretion.”

Mansour v. Vulcan Waterproofing, Inc., 12th Dist. Butler No. CA99-09-150, 2000

WL 783069, *4 (June 19, 2000). See also White v. Lima Auto Mall, Inc., 3d Dist.

Allen No. 1-08-63, 2009-Ohio-411, ¶ 15. “Unless the amount of fees determined

is so high or so low as to shock the conscience, an appellate court will not

interfere.” White at ¶ 15, citing Brooks v. Hurst Buick-Pontiac-Olds-GMC, Inc.,

23 Ohio App.3d 85, 91 (12th Dist.1985). A trial court judge has “an infinitely

better opportunity to determine the value of services rendered by lawyers who

have tried a case before him than does an appellate court.” White at ¶ 16, citing

Brooks, 23 Ohio App.3d at 91. See also Mike Castrucci Ford Sales, Inc. v.

Hoover, 12th Dist. Clermont No. CA2009-03-016, 2009-Ohio-4823, ¶ 11.

{¶51} “With regard to the reasonableness of the fee award, the Ohio

Supreme Court has set forth a two-part process a trial court is to follow when

determining the amount of fees to award the prevailing party.” Mike Castrucci

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Ford Sales, Inc. at ¶ 14, citing Bittner v. Tri-County Toyota, Inc., 58 Ohio St.3d

143, 145 (1991). “Pursuant to Bittner, the trial court should first calculate the

number of hours reasonably expended on the case multiplied by a reasonable

hourly rate.” Id., citing Bittner at 145. The trial court “may then modify its initial

calculation after applying the factors listed in DR 2-106(B).”5 Id. at ¶ 15, citing

Bittner at 145. Those factors include:

the time and labor involved in maintaining the litigation; the novelty

and difficulty of the questions involved; the professional skill

required to perform the necessary legal services; the attorney’s

inability to accept other cases; the fee customarily charged; the

amount involved and the results obtained; any necessary time

limitations; the nature and length of the attorney/client relationship;

the experience, reputation, and ability of the attorney; and whether

the fee is fixed or contingent.

Id., quoting Bittner at 145-146. “The trial court has the discretion to determine

which factors to apply, and the manner in which the application of the factors will

affect the [trial] court’s initial calculation.” Id., citing Bittner at 146.

{¶52} As the trial court noted, at the hearing on Sims Bros.’s motion for

attorney fees, counsel for Sims Bros. testified that his firm expended 75.2 hours of

5
DR 2-106 of the Disciplinary Rules of the Code of Professional Responsibility has been replaced by Rule
1.5 of the Rules of Professional Conduct. “The factors contained in both the code and the professional
rules are virtually identical.” Mike Castrucci Ford Sales, Inc. at ¶ 15, fn. 2 (citation omitted).

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attorney and paralegal time in defense of Semco’s CSPA claim. (June 4, 2012 Tr.

at 22). (See also D’s Ex. 1). Given the attorney-fee award of $26,130, Sims

Bros.’s counsel’s average hourly rate equaled just over $340 per hour. The trial

court concluded that the number of hours expended on the CSPA claim and the

hourly rate, “[a]lthough on the high side,” were reasonable. (Doc. No. 129). The

trial court did not modify its initial calculation of $26,130, nor was it required to

do so. See Mike Castrucci Ford Sales, Inc. at ¶ 15.

{¶53} Sims Bros.’s attorney-fee witness testified that the number of hours

expended was “entirely reasonable,” and that the hourly rate, although “towards

the upper end” of the reasonable range, was reasonable. (June 4, 2012 Tr. at 55-

58). Included in Sims Bros.’s counsel’s work related to the CSPA claim were a

joint motion for judgment on the pleadings and a joint motion to dismiss two

counts of the amended complaint, including the CSPA claim. (Id. at 10-12, 55).

The defendants, including Sims Bros., prevailed on their joint motion to dismiss

the CSPA claim. (Doc. No. 28). Sims Bros.’s attorney-fee witness testified that

the average hourly rate of over $340 was “on the higher range of the

reasonableness scale” considering rates for “Columbus or central Ohio.” (June 4,

2012 Tr. at 57). He considered central Ohio rates, not just Marion rates, in part

because Semco was represented by two Columbus firms and one Marion firm.

(Id. at 30). The $26,130 award represented approximately one tenth of the total

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amount billed to Sims Bros. to defend it against Semco’s four-count case. (Id. at

58). In its amended complaint, Semco requested $711,000, plus treble damages.

(Doc. No. 17); (June 4, 2012 Tr. at 58).

{¶54} We reject Semco’s argument that any attorney-fee award should not

include fees incurred before September 25, 2009—the day the trial court granted

Semco leave to file an amended complaint and denied the defendants’ motion for

judgment on the pleadings and Semco’s motion to hold that motion in abeyance.

(Doc. No. 16). Again, the trial court did not rule on the merits of the motion for

judgment on the pleadings and instead invited the defendants to renew it after

Semco filed its amended complaint. (Id.). Sims Bros. is not responsible for

Semco’s seeking leave to file an amended complaint.

{¶55} We cannot conclude that the trial court’s decision to award Sims

Bros. $26,130 in attorney fees was unreasonable, arbitrary, or unconscionable.

The trial court did not abuse its discretion. Semco’s third assignment of error is

therefore overruled.

{¶56} Having found no error prejudicial to the appellant herein in the

particulars assigned and argued, we affirm the judgment of the trial court.

Judgment Affirmed

WILLAMOWSKI and SHAW, J.J., concur.

/jlr

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