[Cite as Favors v. Burke, 2013-Ohio-823.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 98617
DELORES FAVORS
PLAINTIFF-APPELLANT
vs.
WILLIAM BURKE, ET AL.
DEFENDANTS-APPELLEES
JUDGMENT:
AFFIRMED IN PART, REVERSED
IN PART AND REMANDED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-768958
BEFORE: Stewart, A.J., Jones, J., and Blackmon, J.
RELEASED AND JOURNALIZED: March 7, 2013
ATTORNEY FOR APPELLANT
Andrew S. Pollis
Milton A. Kramer Law Clinic Center
Case Western Reserve University School of Law
11075 East Boulevard
Cleveland, OH 44106
LEGAL INTERNS FOR APPELLANT
Jeffrey Bieszczak
Emily Grannis
Milton A. Kramer Law Clinic Center
Case Western Reserve University School of Law
11075 East Boulevard
Cleveland, OH 44106
FOR APPELLEE
William Burke, Pro Se
3019 Ruby Avenue
Cleveland, OH 44106
MELODY J. STEWART, A.J.:
{¶1} The court entered a default judgment in favor of plaintiff-appellant Delores
Favors and against defendant-appellee William Burke on Favors’s complaint that Burke
violated the Ohio Consumer Sales Practices Act (the “Act”) by failing to complete a
home remodeling contract. After a trial on damages, the court awarded Favors actual
damages of $6,050, which it trebled pursuant to R.C. 1345.09(B) for a total damage
award of $18,150 plus interest. On appeal, Favors complains that the court erred by
failing to award her noneconomic and punitive damages, as well as failing to award
attorney fees.
{¶2} Favors’s complaint alleged that Burke engaged in fraud by accepting a down
payment of $6,050 to remodel and enlarge her house. She alleged that Burke began
work on the project by “digging a hole in her backyard,” but then abandoned the project,
leaving nothing to show for her money but the unfilled hole. She further alleged that he
ignored her calls and complaints and then lied to the Ohio Attorney General’s office
about his progress on the project.
{¶3} Although Burke was initially represented by counsel, the court allowed
Burke’s lawyer to withdraw before answering the complaint. The court informed Burke
that he had to answer the complaint or face a default judgment. Burke did not answer the
complaint nor did he appear at the default hearing, despite having notice of the hearing.
The court entered a default judgment and ordered a hearing on the issue of damages only.
I
{¶4} Favors first argues that the court’s refusal to award her noneconomic
damages for her inconvenience, frustration, embarrassment, and mental distress caused by
Burke’s violations of the act was against the manifest weight of the evidence.
A
{¶5} R.C. 1345.09(A) states:
(A) Where the violation was an act prohibited by section 1345.02, 1345.03,
or 1345.031 of the Revised Code, the consumer may, in an individual
action, rescind the transaction or recover the consumer’s actual economic
damages plus an amount not exceeding five thousand dollars in
noneconomic damages.
{¶6} In the context of tort law, “noneconomic loss” has been defined by R.C.
2315.18(A)(4) as:
[N]onpecuniary harm that results from an injury or loss to person or
property that is a subject of a tort action, including, but not limited to, pain
and suffering, loss of society, consortium, companionship, care, assistance,
attention, protection, advice, guidance, counsel, instruction, training, or
education, disfigurement, mental anguish, and any other intangible loss.
{¶7} Although the Ohio Supreme Court has not expressly defined the scope of
“noneconomic damages” allowed under R.C. 1345.09(A), it has noted that Ohio courts
and federal courts interpreting comparable federal consumer protection laws have
awarded noneconomic damages for inconvenience, aggravation, frustration, humiliation,
and mental distress caused by violations of the act. See Whitaker v. M.T. Automotive,
Inc., 111 Ohio St.3d 177, 2006-Ohio-5481, 855 N.E.2d 825, ¶ 21-22 (collecting cases).
This interpretation is thus consistent with the general tort definition set forth in R.C.
2315.18(A)(4) and is sometimes referred to as damages for pain and suffering. Id. at ¶
19.
{¶8} Noneconomic damages are not presumed even if the plaintiff establishes
proof of actual economic damages. See Uhlir v. State Farm Ins. Co., 164 Ohio App.3d
71, 2005-Ohio-5545, 841 N.E.2d 344, ¶ 21; Metter v. Konrad, 8th Dist. No. 85271,
2005-Ohio-4290, ¶ 15. “Evidence relative to pain and suffering in damages evaluations
is within the province of the fact-finder.” Baughman v. Krebs, 8th Dist. No. 73832, 1998
Ohio App. LEXIS 5925 (Dec. 10, 1998). We are not at liberty to disturb the trier of
fact’s assessment of damages absent an affirmative finding of passion and prejudice or a
finding that the award is manifestly excessive or inadequate. Moskovitz v. Mt. Sinai Med.
Ctr., 69 Ohio St.3d 638, 655, 1994-Ohio-324, 635 N.E.2d 331. This is a very high legal
hurdle for a plaintiff, for we have held that a damages award will not be found to be
against the manifest weight of the evidence unless it is “so gross as to shock the sense of
justice and fairness, cannot be reconciled with the undisputed evidence in the case, or is
the result of an apparent failure by the jury to include all the items of damage making up
the plaintiff’s claim.” Tenaglia v. Russo, 8th Dist. No. 87911, 2007-Ohio-833, ¶ 22,
citing Iames v. Murphy, 106 Ohio App.3d 627, 666 N.E.2d 1147 (1st Dist.1995).
B
{¶9} Favors testified that she contracted with Burke after receiving a notice from a
neighborhood development group that peeling paint on her house might be considered a
housing violation. She said that she took pride in her house, but acknowledged that it
had peeling paint and rotting windows. Her contract with Burke called for the
installation of vinyl siding and repair of the windows, in addition to a first-floor addition
to the house that would include a bathroom. Favors’s evidence showed that Burke
created a shallow excavation for the footprint of the addition in preparation to pour
footers for the new addition, but otherwise did no other work on the house. She made
numerous unsuccessful efforts to contact Burke, both directly and indirectly through her
council person, the attorney general’s office, and the Better Business Bureau.
{¶10} The testimony going to noneconomic damages consisted of Favors testifying
that her unsuccessful attempts to resolve Burke’s failure to fulfill his contract left her
feeling “let down” and that she felt “a lot of anxiety and I was really depressed.” She
stated that she needed to “talk to somebody to try to get help for myself[,]” so she made
three office visits to a psychologist. She said that the unfinished condition of Burke’s
renovations left her feeling “depressed” and “ashamed of my property.”
C
{¶11} At the outset, we note that the court’s refusal to award noneconomic
damages was not necessarily against the manifest weight of the evidence solely because
Burke did not appear for trial or otherwise contest Favors’s testimony. In Decapua v.
Rychlik, 8th Dist. No. 91189, 2009-Ohio-2029, we stated:
[T]he mere fact that testimony is uncontradicted, unimpeached, and
unchallenged does not require the trier of fact to accept the evidence * * *
(citation omitted). “The trier of facts always has the duty, in the first
instance, to weigh the evidence presented, and has the right to accept or
reject it.” Ace Steel Baling v. Porterfield (1969), 19 Ohio st.2d 137, 138,
249 N.E.2d 892; see, also, Rogers v. Hill (1998), 124 Ohio App.3d 468,
470,706 N.E.2d 438.
Id. at ¶25. However, in its judgment entry, the court did not indicate that it found
Favors’s evidence of noneconomic damages wanting in any way, let alone to the degree
necessitating a rejection of her claim. In fact, the court did not address the noneconomic
damages claim, but implicitly rejected it in the court’s judgment entry. We find that the
court’s refusal to award noneconomic damages was manifestly inadequate.
{¶12} Favors offered testimonial and documentary evidence showing that Burke’s
violations of the Consumer Sales Practices Act left her anxious and depressed to such a
degree that she sought psychological help. Whitaker specifically endorsed “aggravation,
frustration, and humiliation” as compensable noneconomic damages under R.C.
1345.09(A), so the court had no basis for denying damages for lack of evidence. And
because Favors’s evidence of noneconomic damages was uncontested, it is unclear how
the court could justify rejecting her claim. In related cases, courts have found that “when
a plaintiff receives damages for medical expenses but does not receive an award of
damages for past pain and suffering, and where there is evidence supporting such
damages, such judgment is against the manifest weight of the evidence.” Juarez v.
Osterman, 10th Dist. No. 98AP-1221, 1999 Ohio App. LEXIS 6536 (Aug. 12, 1999). See
also Miller v. Irvin, 49 Ohio App.3d 96, 98, 550 N.E.2d 501 (3d Dist.1988).
{¶13} The court awarded Favors damages under the Act, so it should have
awarded noneconomic damages given her evidence that she suffered depression, anxiety,
and frustration as a result of Burke’s violations. We therefore sustain this assignment of
error and remand with instructions for the court to determine the amount of noneconomic
damages that Favors is entitled to receive.
II
{¶14} In addition to her claim that Burke violated the Ohio Consumer Sales
Practices Act, Favors’s complaint set forth claims of fraud and civil theft. She sought
punitive damages for each of those claims. The court declined to award punitive
damages, finding that Favors failed to produce “enough evidence” to warrant punitive
damages.
{¶15} R.C. 2315.21(C)(1) states that punitive damages cannot be recovered unless
“[t]he actions or omissions of [the] defendant demonstrate malice or aggravated or
egregious fraud * * *.” “Actual malice, necessary for an award of punitive damages, is
(1) that state of mind under which a person’s conduct is characterized by hatred, ill will or
a spirit of revenge, or (2) a conscious disregard for the rights and safety of other persons
that has a great probability of causing substantial harm.” Preston v. Murty, 32 Ohio
St.3d 334, 336, 512 N.E.2d 1174 (1987), syllabus. The plaintiff has the burden to prove
evidence of entitlement to punitive damages by clear and convincing evidence. R.C.
2315.21(D)(4). “Clear and convincing evidence” is “proof which is more than a mere
‘preponderance of the evidence,’ but not to the extent of such certainty as is required
‘beyond a reasonable doubt’ in criminal cases, and which will produce in the mind of the
trier of facts a firm belief or conviction as to the facts sought to be established.” Cross v.
Ledford, 161 Ohio St. 469, 120 N.E.2d 118 (1954), paragraph three of the syllabus.
{¶16} Favors offered no evidence of actual malice at the hearing — she relied on
general statements in her complaint that alleged that Burke’s conduct “demonstrated
actual malice and/or aggravated egregious fraud.” For example, Favors alleged in her
complaint that Burke replied to an inquiry by the attorney general’s office by lying about
his progress on the job. Although a defendant’s failure to answer or otherwise defend a
complaint constitutes an admission of facts alleged in the complaint, Belfance v. Resash,
Inc., 9th Dist. Nos. 23415 and 23437, 2007-Ohio-6614, ¶ 5, those admitted facts alone are
not enough to warrant the imposition of punitive damages. In Carr v. Charter Natl. Life
Ins. Co., 22 Ohio St.3d 11, 488 N.E.2d 199 (1986), the Supreme Court found that the
evidence presented in a default judgment hearing must support the damages awarded,
particularly punitive damages. Id. at 13. Under Carr, these general allegations were,
without more, insufficient to support a finding by clear and convincing evidence that
Burke acted with actual malice.
{¶17} Favors cites Grodhaus v. Burson, 71 Ohio App.3d 477, 481, 594 N.E.2d 717
(10th Dist.1991), as support for the proposition that punitive damages can be awarded
solely on the allegations of a complaint. We do not believe that Grodhaus stands for the
proposition suggested by Favors because the facts of that case show that Burson, the party
against whom punitive damages were sought, actually testified at the hearing on damages
and that testimony greatly informed the decision to award punitive damages. Id. at 480.
(“Appellant’s testimony at the damage hearing was found not to be credible and we have
no difficulty upholding that finding.”) That testimony was viewed in conjunction with
the allegations of the complaint to uphold a trial court’s finding that Burson acted with
malice. No such testimony was offered in this case.
{¶18} Favors also relied on her request for admissions, which were deemed
admitted when Burke failed to reply to her request. See Civ.R. 36(A).
{¶19} “When a party fails to timely respond to requests for admissions under
Civ.R. 36, the admissions become facts of record that the court must recognize.” N.
Eagle, Inc. v. Kosas, 8th Dist. No. 92358, 2009-Ohio-4042, ¶ 22, citing Cleveland Trust
Co. v. Willis, 20 Ohio St.3d 66, 67, 485 N.E.2d 1052 (1985). But the only request for
admissions that touched on Burke’s malice was Request for Admission No. 21, which
asked Burke to admit that “Defendant never intended to complete the work they agreed to
perform in the Remodeling Contracts.” Taking it as admitted that Burke “never intended
to complete the work,” that fact does not necessarily require a finding of malice or
egregious fraud.
{¶20} A party to a contract is free to breach the contract, subject to paying
damages for the breach. Farnsworth, Contracts, Section 12.3, at 157 (2d ed. 1998).
Indeed, this is why contract cases are not torts — for instance a party to Contract A ought
to be free to breach that contract, subject to payment of damages for the breach, in order
to perform Contract B if the profit earned on Contract B would exceed the loss to the
non-breaching party to Contract A. Posner, Economic Analysis of Law, 106 (3d ed.
1986) (“[I]t is not the policy of the law to compel adherence to contracts but only to
require each party to choose between performing in accordance with the contract and
compensating the other party for any injury resulting from a failure to perform.”). The
breach of Contract A would thus not necessarily show malice against the aggrieved party
to the contract. Farnsworth, Section 12.8, at 842.
{¶21} Favors’s own evidence showed that Burke commenced some work,
however minimal, on Favors’s house by excavating in preparation for pouring a footer for
the new addition. This left open the possibility that Burke undertook the project with an
intent to finish it, only to abandon it later. Admittedly, Burke conceivably could have
started working on the project with no intent to finish it, but under contract law he was
free to breach the contract with Favors, subject to making her whole for the breach. So
even with the admission that Burke did not intend to finish the project, it would be
speculation to say that Burke acted with malice. With the assertion that there was no
intent to finish the work being speculative, the discovery admission would not suffice to
carry Favors’s burden of proving actual malice by clear and convincing evidence. The
court’s finding that Favors did not present enough evidence to obtain punitive damages
was not against the manifest weight of the evidence.
{¶22} We likewise find no basis for an award of punitive damages based on the
fraud claim. To the extent that Favors’s fraud claim is based on Burke making a
materially false representation via his admission that he never intended to honor the
remodeling contract, that fact was admitted for purposes of liability when Burke failed to
answer the complaint. However, Favors’s evidence at the damages hearing contradicted
the allegation that Burke entered into that contract with no intention to do any work at all.
By her own testimony, Burke did commence work, however minimal, on the project, so
the court could find that Favors did not establish evidence sufficient to show the kind of
aggravated or egregious fraud necessary for an award of punitive damages. See, e.g.,
Apel v. Katz, 83 Ohio St.3d 11, 22, 1998-Ohio-420, 697 N.E.2d 600.
III
{¶23} Finally, Favors argues that the court erred by failing to award her attorney
fees under R.C. 1345.09(F)(2). She claims that the allegations of the complaint justified
a finding that Burke knowingly violated the act and thus warranted the imposition of
attorney fees.
{¶24} R.C. 1345.09(F)(2) permits a trial court to award reasonable attorney fees to
a prevailing party for legal services reasonably performed against a person who has
“knowingly committed an act or practice” that violates the act. An award of attorney
fees under R.C. 1345.09(F)(2) to a prevailing party is not mandatory, but within the
discretion of the trial court, subject to review only for an abuse of that discretion.
Reagans v. Mountainhigh Coachworks, Inc., 117 Ohio St.3d 22, 2008-Ohio-271, 881
N.E.2d 245, ¶ 34.
{¶25} Given the nature of the facts admitted by virtue of Burke’s failure to answer
the complaint or respond to requests for admissions, the uncontradicted evidence
submitted at the hearing on damages, and the apparent reasonableness of both the hourly
rate and hours worked, we see nothing that would justify the court’s refusal to grant
attorney fees. In the face of these factors, the court did not state any reasons for denying
attorney fees, nor were any reasons obvious on the record. It was thus arbitrary and
unreasonable for the court to deny attorney fees.
{¶26} We note that the request for attorney fees was made on behalf of law
students practicing as certified legal interns pursuant to Gov.Bar.R. II. Favors was
represented pro bono by the Milton A. Kramer Law Clinic Center at Case Western
Reserve University School of Law. The law students, under the supervision of an
attorney-professor, handled the case. Gov.Bar.R. II, Section 6 states:
A legal intern shall not ask for or receive any compensation or remuneration
of any kind from a financially needy client on whose behalf services are
rendered. However, the law school clinic, legal aid bureau, public
defender’s office, or other legal services organization may be awarded
attorney fees for services rendered by the legal intern consistent with the
Ohio Rules of Professional Conduct and as provided by law. A law school
clinic, legal aid bureau, public defender’s office, or other legal services
organization, the state, or any municipal corporation may pay compensation
to the legal intern.
{¶27} In this case, the supervisor of the legal interns submitted an affidavit in
which he stated that the interns logged 156.19 hours of time working on the case. He
“conservatively” stated that the prevailing hourly rate for lawyers performing this kind of
legal work would be $100 per hour. Nevertheless, the supervisor requested only $10,000
in attorney fees. All of this complied with Gov.Bar.R. II, Section 6.
{¶28} With there being no legal impediment to an award of attorney fees based on
the work of the legal interns, and nothing to dispute or contradict the reasonableness of
the hourly rate requested and number of hours worked, the court’s refusal to grant
attorney fees was unreasonable, arbitrary, and capricious. We sustain the third
assignment of error and remand with instructions for the court to award attorney fees of
$10,000.
{¶29} This cause is affirmed in part, reversed in part, and remanded to the trial
court for further proceedings consistent with this opinion.
It is ordered that appellant and appellee share the costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the Cuyahoga
County Court of Common Pleas to carry this judgment into execution. A certified
copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of
Appellate Procedure.
MELODY J. STEWART, ADMINISTRATIVE JUDGE
LARRY A. JONES, SR., J., and
PATRICIA ANN BLACKMON, J., CONCUR