Arms Trucking Co., Inc. v. Braun

[Cite as Arms Trucking Co., Inc. v. Braun, 2014-Ohio-5077.]

IN THE COURT OF APPEALS

ELEVENTH APPELLATE DISTRICT

GEAUGA COUNTY, OHIO

ARMS TRUCKING CO., INC., : OPINION

Plaintiff-Appellee, :
CASE NO. 2014-G-3186
- vs - :

FEDERAL NATIONAL MORTGAGE :
ASSOCIATION a.k.a. FANNIE MAE, et al.,

Defendants, :

ARTHUR BRAUN, et al., :

Defendants-Appellants. :

Civil Appeal from the Geauga County Court of Common Pleas, Case No. 12 M
000823.

Judgment: Affirmed.

Jay R. Carson and Robert K. McIntyre, Wegman, Hessler & Vanderburg, 6055
Rockside Woods Boulevard, Suite 200, Cleveland, OH 44131 (For Plaintiff-Appellee).

Katherine M. Braun, Kordic & Braun, 820 West Superior Avenue, Suite 100, Cleveland,
OH 44113 (For Defendants-Appellants).

CYNTHIA WESTCOTT RICE, J.

{¶1} Appellants, Arthur Braun and Audrey Braun, appeal the judgment entered

by the Geauga County Court of Common Pleas dismissing their counterclaim for

tortious interference with contract and defamation against appellee, Arms Trucking Co.,

Inc. This court dismissed a prior appeal filed by the Brauns in this matter due to the
lack of a final, appealable order. This is the Brauns’ second appeal in this matter. For

the reasons that follow, the trial court’s judgment is affirmed.

{¶2} In August 2012, appellee, Arms Trucking Co. Inc., filed a complaint

against five defendants, Federal National Mortgage Association (“Fannie Mae”), New

Market Title Company, the Geauga County Recorder, and the Brauns. Arms Trucking

sought declaratory relief and an injunction against the Brauns.

{¶3} In its complaint, Arms Trucking, a sand-and-gravel mining business,

alleged it had an interest in the subject real property, which is a seven-acre parcel

located at 15190 Rider Road in Burton, Ohio. Arms Trucking alleged that in 2003, the

owner of the property, Donna Zaverl, sold the property to Haueter Sand and Gravel by

land installment contract. However, neither the land contract nor Haueter’s deed to the

property was recorded. The complaint alleged that in March 2012, Haueter entered into

a management agreement with Arms Trucking, pursuant to which Haueter leased the

property to Arms Trucking and granted it the right to operate a sand-and-gravel mining

operation there. Arms Trucking alleged it also obtained a permit to mine the property

from the Ohio Department of Natural Resources.

{¶4} Arms Trucking alleged that Donna Zaverl fell behind on her mortgage

payments and in March 2011, her mortgage lender, Chase Bank, filed a foreclosure

action against the property. Arms Trucking alleged in the complaint that Chase had

actual knowledge of the land installment contract and Arms Trucking’s mining rights in

the property when it filed the foreclosure action. In September 2011, Chase obtained a

foreclosure decree and an order that the property be sold at sheriff’s sale.

2
 {¶5} According to the complaint, in December 2011, Chase purchased the

property at sheriff’s sale, and subsequently sold it to Fannie Mae. Arms Trucking claims

in the complaint that Fannie Mae knew about Haueter’s purchase of the property and

Arms Trucking’s interest in it. Arms Trucking alleged that Fannie Mae offered the

property for sale through its “First Look” program, which is intended to restore at-risk

neighborhoods. Under this program, during the first 15 days that Fannie Mae lists a

property for sale (the “first look” period), Fannie Mae entertains bids only from buyers

who plan to use the property as their primary residence (“owner-occupants”).

Thereafter, other potential buyers may bid on the property. Audrey Braun submitted a

bid and entered a contract with Fannie Mae to buy the property.

{¶6} Arms Trucking alleged that because Fannie Mae knew that Arms Trucking

claimed an interest in the property, any contract to transfer the property and any deed

associated with such transfer that did not recognize Arms Trucking’s rights would be

invalid. Arms Trucking alleged it disputed the validity of the contract between Fannie

Mae and Audrey Braun. Arms Trucking further alleged that Audrey Braun did not

qualify as an “owner-occupant” eligible to bid on the property during the first look period.

Arms Trucking prayed for a declaration that the contract between Audrey Braun and

Fannie Mae is invalid because Audrey Braun is not a qualified owner-occupant eligible

to participate in Fannie Mae’s first look program. Arms Trucking also requested a

declaration that it has mining rights in the property pursuant to its management

agreement with Haueter and its mining permit. In addition, Arms Trucking alleged that if

the contract between Audrey Braun and Fannie Mae proceeds to closing, it will be

3
irreparably harmed because it will lose significant property rights. Thus, Arms Trucking

also prayed for an injunction to enjoin the pending sale of the property to the Brauns.

{¶7} In October 2012, the Brauns filed their answer denying the material

allegations of the complaint. The Brauns’ answer included a two-count counterclaim

against Arms Trucking. In Count II, the Brauns alleged that by filing its complaint, Arms

Trucking tortiously interfered with Brauns’ contract to purchase the property. In Count

II, the Brauns alleged that Arms Trucking defamed Audrey Braun by alleging she did not

qualify as an owner-occupant eligible to bid on the property during the first look period.

{¶8} Between November and December 2012, Arms Trucking voluntarily

dismissed all defendants other than the Brauns. With respect to Fannie Mae, in

December 2012, Arms Trucking entered a settlement agreement with that defendant,

pursuant to which Fannie Mae terminated the proposed sale to the Brauns and sold the

property to Arms Trucking and Arms Trucking dismissed its claim against Fannie Mae.

The Brauns filed no pleading challenging Fannie Mae’s sale of the property to Arms

Trucking.

{¶9} Thereafter, in December 2012, Arms Trucking filed a Civ.R. 12(B)(6)

motion to dismiss the Brauns’ counterclaim, arguing that the allegations in the complaint

were privileged as part of a judicial proceeding and thus not actionable as an

interference with the Brauns’ purchase contract with Fannie Mae or as defamation. The

Brauns filed a brief in opposition, arguing that the Auditor’s website shows the subject

parcel is not one of the listed parcels in the management agreement. However, they

never asserted this in their answer or in a crossclaim against Fannie Mae.

4
 {¶10} On January 18, 2013, the trial court entered judgment granting Arms

Trucking’s motion to dismiss the Brauns’ counterclaim. Thereafter, Arms Trucking’s

claims against the Brauns remained pending, and the court’s entry did not include a

determination under Civ.R. 54(B) that there is no just reason for delay.

{¶11} About ten days later, on January 29, 2013, the Brauns filed a motion for

relief from the trial court’s judgment dismissing their counterclaim. As grounds, the

Brauns argued that Arms Trucking had engaged in misrepresentation by falsely alleging

in its complaint that it had an interest in the property. In support, the Brauns filed

several pages from the Geauga County Auditor’s website, which, they argued, showed

the property covered by the management agreement did not include the subject

property. Arms Trucking filed a brief in opposition. On May 1, 2013, the trial court

entered judgment denying the Brauns’ motion for relief from judgment.

{¶12} In its judgment, the trial court found that the Brauns’ motion for relief from

judgment lacked merit because it was improperly being used as a substitute for an

appeal. The court found that if the case had gone to trial, Arms Trucking would have

been required to prove the allegation in its complaint that it had an interest in the

property, but that because the case did not go to trial, whether Arms Trucking had an

interest in the property was nothing more than a matter for speculation.

{¶13} The Brauns appealed the trial court’s judgment denying their motion for

relief from judgment. After the parties filed their respective briefs in that appeal, this

court reviewed the status of the case. Because it appeared that the trial court may not

have entered a final order, this court entered an order requiring the Brauns to show

cause why the case should not be dismissed for lack of a final, appealable order. In

5
response, the Brauns filed a “Statement in Opposition to Jurisdiction and Memorandum

of Arthur and Audrey Braun, Defendants-Appellants.” In this “Statement,” the Brauns

conceded that neither the judgment dismissing their counterclaim nor the judgment

denying their motion to vacate the dismissal of their counterclaim was a final,

appealable order. They therefore conceded they had no legal or factual basis to file

their appeal. Despite this concession, the Brauns did not explain why they filed the

appeal; why they did not dismiss it; why they allowed the appeal to remain active on this

court’s docket so long that Arms Trucking was required to prepare and file its answer

brief; and why they still did not dismiss the appeal even after this court suggested there

was no final, appealable order.

{¶14} Instead, in their Statement, the Brauns requested that this court remand

this matter with “instructions” to the trial court to “reconsider” their motion for relief from

judgment. They further requested that if it became necessary for them to again appeal

the trial court’s judgment, they be allowed to file another appeal at no cost to them. The

Brauns cited no precedent that would have authorized this court to grant them leave to

file another appeal at some unspecified time on some speculative ground in the future,

let alone to do so without cost.

{¶15} As a result, on November 25, 2013, this court dismissed the Brauns’

appeal in Arms Trucking Co., Inc. v. Fannie Mae, 11th Dist. Geauga No. 2013-G-3149,

2013-Ohio-5192 (“Arms Trucking I”), on the ground that the court’s judgment denying

their motion to vacate the judgment dismissing their counterclaim was not a final order.

Id. at ¶11.

6
 {¶16} One month later, the Brauns filed a motion in the trial court for

reconsideration of the court’s May 1, 2013 judgment denying their motion for relief from

judgment. In support, the Brauns once again argued they were entitled to relief from the

court’s judgment dismissing their counterclaim because Arms Trucking had falsely

claimed it had an interest in the property.

{¶17} On January 22, 2014, Arms Trucking filed a notice of dismissal of its

claims against the Brauns pursuant to Civ.R. 41(A).

{¶18} On January 27, 2014, the trial court overruled the Brauns’ motion for

reconsideration, concluding that said motion did not present anything to the court that

was not considered in the court’s denial of the Brauns’ earlier motion for relief from

judgment.

{¶19} The Brauns now appeal the trial court’s January 18, 2013 judgment

dismissing their counterclaim; the trial court’s May 1, 2013 judgment denying their

motion for relief from judgment; and the trial court’s January 27, 2014 judgment denying

their motion for reconsideration, asserting two assignments of error. For their first

assignment of error, the Brauns contend:

{¶20} “The trial court committed prejudicial error by dismissing the Brauns’

Counterclaim when Arms Trucking’s claim of privilege was based upon

misrepresentation of a material fact.”

{¶21} As this court noted in Arms Trucking I, the trial court’s dismissal of the

Brauns’ counterclaim was not a final order because, at that time, Arms Trucking’s

claims against them remained pending and the dismissal did not include a finding that

there was no just reason for delay. However, once Arms Trucking dismissed its claims

7
against the Brauns after this court’s dismissal of Arms Trucking I, no other claims

remained pending and the trial court’s dismissal of the Brauns’ counterclaim then

became a final, appealable order. As a result, the trial court’s dismissal of the Brauns’

counterclaim is properly before us.

{¶22} A court of appeals reviews a trial court’s judgment dismissing a pleading

asserting a claim for relief, such as a complaint or counterclaim, pursuant to Civ.R.

12(B)(6) de novo. Goss v. Kmart Corp., 11th Dist. Trumbull No. 2006-T-0117, 2007-

Ohio-3200, ¶17; BAC Home Loan Servicing, LP v. Kolenich, 194 Ohio App.3d 777,

2011-Ohio-3345, ¶33 (12th Dist.). A motion to dismiss for failure to state a claim on

which relief can be granted is procedural and tests the sufficiency of the complaint or

counterclaim. State ex rel. Hanson v. Guernsey Cty. Bd. Of Commrs., 65 Ohio St.3d

545, 548 (1992). When reviewing a judgment involving a Civ.R. 12(B)(6) motion to

dismiss, an appellate court must accept the allegations and all reasonable inferences

found in the complaint or counterclaim as true. Viking & Worthington Steel Enter., L.L.C.

v. James, 11th Dist. Geauga No. 2010-G-2971, 2011-Ohio-1714, ¶40. However, in

ruling on a Civ.R. 12(B)(6) motion to dismiss, an appellate court will not consider

conclusions that are not supported by factual allegations in the pleading because such

conclusions cannot be deemed admitted and are insufficient to withstand a motion to

dismiss. State ex rel. Hickman v. Capots, 45 Ohio St.3d 324 (1989); Silverman v.

Roetzel & Andress, L.P.A., 168 Ohio App.3d 715, 2006-Ohio-4785, ¶6 (10th Dist.).

Further, in ruling on a Civ.R. 12(B)(6) motion to dismiss, the trial court is strictly limited

to the allegations in the complaint or counterclaim, and may not consider any materials

outside the pleading. Braden v. Sinar, 9th Dist. Summit No. 23656, 2007-Ohio-4527,

8
¶23. If, after considering the complaint or counterclaim accordingly, there is no set of

facts consistent with appellants’ allegations that would permit recovery, the judgment of

dismissal will be affirmed. Transky v. Ohio Civil Rights Comm’n., 193 Ohio App.3d 354,

2011-Ohio-1865, ¶11 (11th Dist.).

{¶23} The Brauns’ first assignment of error challenges the trial court’s dismissal

of Count I of their counterclaim, alleging that Arms Trucking tortiously interfered with

their contract with Fannie Mae. The Brauns argue that by filing its complaint alleging it

had an interest in the property, Arms Trucking tortiously interfered with their contract

with Fannie Mae because that entity subsequently chose not to proceed with its contract

with the Brauns and, instead, sold the property to Arms Trucking.

{¶24} A claim for tortious interference with contract requires proof that: 1) a valid

contract existed; 2) the defendant was aware of the existence of the contract; 3) the

defendant intentionally procured a breach of the contract; 4) the defendant lacked

justification for his conduct; and 5) the plaintiff suffered damages as a result of the

defendant's conduct. Kenty v. Transamerica Premium Ins. Co., 72 Ohio St.3d 415, 419

(1995). “‘In the event a complaint fails to provide allegations regarding each of [the]

elements [of a tortious-interference claim], the complaint can properly be dismissed for

failure to state a claim upon which relief can be granted.’” Gibson v. City Yellow Cab

Co., 9th Dist. Summit No. 20167, 2001 Ohio App. LEXIS 518, *5 (Feb. 14, 2001),

quoting Schiavoni v. Steel City Corp., 133 Ohio App.3d 314, 317 (7th Dist.1999).

{¶25} The Brauns argue on appeal that Arms Trucking lacked justification to

interfere with their contract with Fannie Mae because, they contend, Arms Trucking had

no interest in the property when it filed the complaint. However, the Brauns’

9
counterclaim did not provide any allegations regarding Arms Trucking’s lack of interest

in the property, i.e., its lack of justification, the fourth element of a claim for tortious

interference with contract. Therefore, assuming the Brauns’ allegations in their

counterclaim to be true, as we must for purposes of this review, the Brauns are unable

to prove any set of facts which would entitle them to relief on their claim of tortious

interference with contract. Gibson, supra, at *8-*9.

{¶26} In support of the Brauns’ argument that Arms Trucking lacked justification

to interfere with their contract with Fannie Mae, they refer to the Geauga County

Auditor’s website, which, they contend, shows the property covered by Haueter’s

management agreement with Arms Trucking did not include the subject property.

However, based on the authority cited above, in considering Arms Trucking’s motion to

dismiss the Brauns’ counterclaim, the trial court was limited to a review of the

allegations of the counterclaim and was not entitled to consider any facts or materials

outside that pleading. Our review of the counterclaim reveals that nowhere in that

pleading did the Brauns allege anything about the Auditor’s website. Thus, the trial

court was not entitled to consider information on the Auditor’s website in ruling on Arms

Trucking’s motion to dismiss.

{¶27} In any event, even if the Brauns had stated a claim for tortious

interference, Ohio courts recognize the defense of qualified privilege to such claim.

Ament v. Reassure Am. Life Ins. Co., 180 Ohio App.3d 440, 2009-Ohio-36, ¶62 (8th

Dist.2009). Under this defense, one is privileged to purposely cause another not to

perform a contract with a third person by asserting in good faith a legally protected

10
interest of his own which he believes may otherwise be impaired or destroyed by the

performance of the contract. Id.; Restatement of the Law 2d, Torts, Section 773 (1979).

{¶28} Once the privilege is found to exist, it can only be defeated by a clear and

convincing showing of “actual malice.” A & B-Abell Elevator Co. v. Columbus/Cent.

Ohio Bldg. & Constr. Trades Council, 73 Ohio St.3d 1, 11 (1995); Jacobs v. Frank, 60

Ohio St.3d 111 (1991), paragraph two of the syllabus. “‘[A]ctual malice’ is defined as

acting with knowledge that the statements are false or acting with reckless disregard as

to their truth or falsity.” Id. Where a complaint alleges it was filed to protect the

plaintiff’s property interests, a conclusory allegation by a defendant in a counterclaim

that the plaintiff’s lawsuit was a “malicious” act is insufficient to overcome the plaintiff’s

privilege to file the complaint. Ament, supra, at ¶64. In order to defeat the privilege, the

defendant must plead facts demonstrating actual malice. Id.

{¶29} Arms Trucking specifically alleged in its complaint that it acquired an

interest in the property pursuant to the management agreement in which Haueter

leased the property to it in order to operate a sand-and-gravel mining operation.

Further, Arms Trucking alleged it had obtained a permit from the Ohio Department of

Natural Resources to mine the property. Moreover, Arms Trucking alleged Fannie Mae

was on notice of its interest in the property and Fannie Mae’s proposed sale of the

property to the Brauns would extinguish its right to mine the property. Thus, Arms

Trucking alleged sufficient facts in its complaint to support its contention that it was

privileged to interfere with the Brauns’ contract with Fannie Mae.

{¶30} The Brauns concede that the management agreement gave Arms

Trucking mining rights in six different parcels of property, but argue the management

11
agreement did not grant mining rights to Arms Trucking in the subject property.

However, as noted above, the information on the Auditor’s website on which the Brauns

relied in their motion to vacate is not properly before us as the Brauns failed to refer to it

in their counterclaim. Nor did the Brauns allege in their counterclaim facts

demonstrating that Arms Trucking knew it had no interest in the property or was

reckless in that regard. In fact, the Brauns did not allege in their counterclaim any facts

supporting their claim that Arms Trucking filed its complaint with actual malice. To the

contrary, they merely alleged in conclusory terms that Arms Trucking maliciously filed its

complaint with no basis in law or fact.

{¶31} The facts in this case are quite similar to those in Ament, supra. There,

the plaintiff-trustee sued a life insurance company and a recently-named policy

beneficiary, alleging that the new beneficiary used undue influence to convince the

decedent policy-holder to change her original beneficiary designation. The new

beneficiary filed a counterclaim for tortious interference with the insurance contract.

The plaintiff moved to dismiss the counterclaim pursuant to Civ.R. 12(B)(6), arguing the

trust had an interest in the insurance proceeds. Similar to the Brauns’ allegations, the

defendant alleged in his counterclaim that the plaintiff’s suit was a “malicious, baseless

act” and thus not privileged. The trial court granted the motion to dismiss and the Eighth

District affirmed, holding that the defendant’s conclusory allegations were insufficient to

overcome the plaintiff’s privilege as trustee to protect the trust’s interest in the insurance

proceeds via a lawsuit. Ament, supra, at ¶64.

{¶32} In summary, Arms Trucking demonstrated its privilege to file the complaint

by alleging that it had an interest in the property, which allegedly survived the

12
foreclosure because Fannie Mae knew about Haueter’s purchase of the property and

Arms Trucking’s interest in it.

{¶33} Further, while the information on the Auditor’s website would have been

pertinent to the ultimate issue in this case, i.e., Arms Trucking’s interest in the property,

that issue is not before us in this appeal. On Arms Trucking’s Civ.R. 12(B)(6) motion to

dismiss, the trial court’s review was limited to the allegations in the Brauns’

counterclaim, and it could not consider any materials outside that pleading. Thus, our

review is limited to determining whether the counterclaim properly alleged a claim for

tortious interference with contract. As such, the Brauns were required to allege in their

counterclaim that Arms Trucking had no interest in the property and facts showing

actual malice on the part of Arms Trucking, i.e., that Arms Trucking knew it had no

interest in the property or was reckless in that regard. Jacobs, supra. Because no such

allegations appear in the counterclaim, the trial court properly dismissed the Brauns’

counterclaim for tortious interference. The Brauns’ conclusory allegation that the

complaint was filed maliciously was insufficient to overcome Arms Trucking’s privilege

to protect its interest in the property as described in the complaint via a lawsuit. Ament,

supra.

{¶34} If the Brauns wanted to pursue their interest in the property, that objective

could have been accomplished by including a counterclaim against Arms Trucking and

a cross-claim against Fannie Mae seeking declaratory judgment to establish their

interest in the property. From the information on the Auditor’s website, it appears they

may have had a legitimate challenge to Arms Trucking’s interest in the property.

However, by failing to properly assert it in such pleading, the challenge was waived.

13
 {¶35} We therefore hold that the Brauns’ conclusory allegation in their

counterclaim that Arms Trucking maliciously filed the complaint without any basis in law

or fact was insufficient to overcome Arms Trucking’s privilege to protect its interest in

the property via a lawsuit. Thus, the trial court did not err in granting Arms Trucking’s

motion to dismiss the Brauns’ counterclaim for tortious interference with contract.

{¶36} The Brauns’ first assignment of error is overruled.

{¶37} For their second assigned error, the Brauns allege:

{¶38} “The trial court committed prejudicial error by dismissing the Brauns’

Counterclaim when the defamatory statements in the Complaint are not protected by

the doctrine of absolute privilege.”

{¶39} In their second assigned error, the Brauns challenge the trial court’s

dismissal of Count Two of their counterclaim alleging defamation.

{¶40} Defamation is a false publication that injures a person’s reputation or

exposes that person to public hatred, contempt, ridicule, or shame, or affects him

adversely in his trade or business. Dale v. Ohio Civ. Serv. Emp. Assn., 57 Ohio St.3d

112, 117 (1991); Cleveland Leader Printing Co. v. Nethersole, 84 Ohio St. 118 (1911).

Defamation can occur in one of two forms. Written defamation is known as libel;

spoken defamation is known as slander. Restatement of the Law 2d, Torts, Section 568

(1977).

{¶41} Moreover, there are two kinds of defamation. A statement is “defamation

per se” if, on its face, it reflects on a person’s character in a manner that will cause him

to be ridiculed, hated, or held in contempt, or in a manner that will injure him in his trade

or profession. Becker v. Toulmin, 165 Ohio St. 549, 553, 556 (1956). On the other

14
hand, “defamation per quod” is a statement with an apparently innocent meaning, which

becomes defamatory through interpretation or innuendo. Id.

{¶42} The allegation in the complaint which the Brauns contend constitutes

defamation is that Audrey Braun did not qualify as an owner-occupant under Fannie

Mae’s “first look” program. Based on the foregoing authority, this allegation does not

constitute defamation because it is neither defamation per se nor defamation per quod.

There is nothing about this allegation that would, on its face, cause Ms. Braun to be

ridiculed, hated, or held in contempt. Thus, the allegation is not defamation per se.

Alternatively, the Brauns do not explain and we do not perceive how the allegation could

be interpreted in such a manner as to have such effect. As a result, the allegation is not

defamation per quod.

{¶43} In any event, the Brauns’ counterclaim for defamation is barred by the

doctrine of absolute privilege. The Supreme Court of Ohio in Surace v. Wuliger, 25

Ohio St.3d 229 (1986), held that “as a matter of public policy, under the doctrine of

absolute privilege in a judicial proceeding, a claim alleging that a defamatory statement

was made in a written pleading does not state a cause of action where the allegedly

defamatory statement bears some reasonable relation to the judicial proceeding in

which it appears.” Id. at 233. Such a privilege is applicable even though the statement

may have been made with actual malice, in bad faith and with knowledge of its falsity.

Bigelow v. Brumley, 138 Ohio St. 574, 579 (1941).

{¶44} The Brauns argue that the absolute privilege does not apply to Arms

Trucking’s allegation that Audrey Braun is not eligible to bid on the property because

this allegation had no relation to Arms Trucking’s action. In explaining the privilege’s

15
requirement that the statement bear “some reasonable relation to the judicial

proceeding in which it appears,” the Supreme Court in Surace, supra, rejected its

previous holding that in order to be privileged, the defamatory statement was required to

be relevant to the proceedings. The Court stated that its former standard was unduly

restrictive because it gave the mistaken impression that the absolute privilege in court

proceedings extended only to matters that were “legally” relevant. Id. at 232. The court

adopted a more “liberal” standard, holding that any statement made in a court

proceeding is absolutely privileged if it bears “some reasonable relation to the judicial

proceeding in which it appears.” Id. at 234-235.

{¶45} Contrary to the Brauns’ argument, Arms Trucking’s allegation that Ms.

Braun was not a qualified owner-occupant was reasonably related to this action. By its

complaint, Arms Trucking sought to have its rights in the property determined and to

enjoin the sale of the property to the Brauns. In alleging that Ms. Braun was not a

qualified owner-occupant, Arms Trucking sought to enjoin the sale of the property to her

so its right to mine the property would not be extinguished. Thus, the allegation

concerning Ms. Braun’s ineligibility to purchase the property was protected by the

absolute privilege for statements made in a court proceeding.

{¶46} The Brauns additionally argue that Arms Trucking’s argument fails

because, even if Ms. Braun was not a qualified owner-occupier, Arms Trucking could

not be a qualified buyer and compete with the Brauns in bidding on the property.

However, under the first look program, Fannie Mae entertains bids only from qualified

owner-occupants during the first 15 days that Fannie Mae lists a property for sale.

16
Thus, if Audrey Braun was not qualified as an owner-occupant, she would not be

eligible to bid during the first look period, and Arms Trucking could bid on the property.

{¶47} We therefore hold the trial court did not err in dismissing the Brauns’

counterclaim for defamation because the allegation in the complaint that Ms. Braun was

not a qualified bidder was not defamation, but even if it was, it was reasonably related to

the action in which it was made and thus absolutely privileged.

{¶48} The Brauns’ second assignment of error is overruled.

{¶49} For the reasons stated in this opinion, appellants’ assignments of error are

overruled. It is the judgment and order of this court that the judgment of the Geauga

County Court of Common Pleas is affirmed.

THOMAS R. WRIGHT, J., concurs,

COLLEEN MARY O’TOOLE, J., dissents.

17