[Cite as Pitcher v. Waldman, 2016-Ohio-5491.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
KENNETH B. PITCHER, : APPEAL NO. C-160245
TRIAL NO. A-1207858
and :
O P I N I O N.
MICHAEL ENDERS, :
Plaintiffs-Appellees, :
vs. :
LAWRENCE WALDMAN, :
Defendant-Appellant. :
Civil Appeal From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Affirmed
Date of Judgment Entry on Appeal: August 24, 2016
Bingham Greenebaum Dolle, L.L.P., and V. Brandon McGrath, for Plaintiffs-
Appellees,
Denlinger Rosenthal & Greenberg Co., LPA, and Gary L. Greenberg, for Defendant-
Appellant.
OHIO FIRST DISTRICT COURT OF APPEALS
M OCK , Judge.
{¶1} Defendant-appellant Lawrence Waldman appeals the trial court’s
decision overruling his motion for sanctions for alleged frivolous conduct by
plaintiffs-appellees Kenneth B. Pitcher and Michael Enders. We find no merit in
Waldman’s sole assignment of error, and we affirm the trial court’s judgment.
{¶2} The parties are the former owners of Waldman, Pitcher and Company
(“WPC”), an accounting firm. In 2009, Pitcher and Ender filed a lawsuit seeking a
judicial dissolution of the firm. In October 2009, the parties entered into a
settlement agreement in which Pitcher and Enders relinquished their ownership in
WPC. The settlement agreement also contained a nondisparagement provision,
which stated that “Pitcher, Enders, Waldman and the Company agree * * * not to
make or publish any negative or disparaging statements or comments about one
another[.]”
{¶3} In 2010, Waldman and his company, Waldman & Co. CPAs, PSC, filed
suit against Pitcher and Enders alleging breaches of the 2009 settlement agreement
and other tort claims. At that time, the parties agreed to a stipulated protective
order. It designated certain information disclosed during the suit as confidential and
allowed disclosure of confidential information to a court or administrative agency
under certain conditions. It stated:
If another court or administrative agency subpoenas or orders
production of any discovery materials that a Party has obtained under
the terms of this Protective Order, such party shall promptly notify the
party who produced the materials of the pendency of such subpoena or
order, and shall allow the party who produced the materials a
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reasonable period of time to oppose or quash the subpoena or order
before providing the materials to the person or entity seeking them.
No production or other disclosure of such information pursuant to the
subpoena or other process shall occur before the last date on which
production may be made as specified in or required by the subpoena or
other process.
{¶4} In 2011, Pitcher and Enders filed a lawsuit in federal court against
Waldman and his company in which they alleged that Waldman had filed fraudulent
tax documents. They claim that they discovered during that case that Waldman had
disclosed confidential information to the Internal Revenue Service (“IRS”) in
violation of the 2009 settlement agreement and the 2010 protective order.
{¶5} In the summer of 2011, Waldman had sent voluminous amounts of
information to Kent Pillow, an IRS auditor, about alleged professional misconduct by
Pitcher and Enders. He had also communicated with Kerry Johnson, a Treasury
Department investigator. Waldman’s complaints triggered an audit of Pitcher’s and
Enders’s tax returns.
{¶6} On January 31, 2012, the parties settled the 2010 lawsuit and entered
into another settlement agreement. It provided that with two exceptions, which
included the federal case, “Pitcher and Enders agree to fully and finally release
[Waldman’s company] and Waldman from any and all legal and equitable claims
which Pitcher and Ender know to exist as of the date of this Agreement.” It further
stated that with the same exceptions, “Pitcher and Enders hereby forever release and
discharge Waldman [and his company] from any and all claims, demands, actions
and causes of action, damages, costs or expenses, including attorney fees, that
Pitcher and Ender know to exist as of the date of this Agreement.”
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{¶7} In October 2012, Pitcher and Enders filed a six-count complaint
against Waldman alleging that his communications with Pillow and Johnson violated
the 2009 settlement agreement and the 2010 protective order. On May 22, 2014,
they voluntarily dismissed their complaint without prejudice under Civ.R. 41(A).
{¶8} Waldman filed a motion for sanctions under R.C. 2323.51 on June 20,
2104. On November 12, 2014, Pitcher and Enders filed a notice indicating that there
had been no activity on the case since July 2014, at which time the parties had filed
memoranda on the merits of the motion for sanctions. On November 19, 2014,
Waldman filed a notice informing the trial court that the “case is ripe for a decision
on his Motion for Sanctions.” On August 24, 2015, the parties jointly filed a motion
asking the trial court to issue a decision on the motion for sanctions. Subsequently,
the trial court denied Waldman’s motion for sanctions. This appeal followed.
{¶9} In his sole assignment of error, Waldman contends that the trial court
erred by arbitrarily denying his motion for sanctions. He argues that the record
shows that Pitcher and Enders filed the complaint against him for claims that they
knew they had previously released, and that its sole purpose was to harass him. This
assignment of error is not well taken.
{¶10} Waldman first argues that the trial court erred by failing to hold a
hearing on his motion. But, this court has stated that “R.C. 2323.51 does not
mandate that a hearing be conducted to determine whether a particular action
involves frivolous conduct, but does require that if attorney’s fees are to be ultimately
awarded, then a hearing must be held in accordance with * * * R.C. 2323.51(B)(2).”
Polk v. Spirit Homecare, Inc., 1st Dist. Hamilton No. C-120088, 2012-Ohio-4948, ¶
6, quoting Mays v. Rebar, 1st Dist. Hamilton No. C-910585, 1992 Ohio App LEXIS
5154, *7 (Oct. 7, 1992). If the motion has merit, the statute requires the trial court to
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set a hearing. If the motion lacks merit, then no hearing date need be set for the trial
court to deny the motion. Mays at *6.
{¶11} This court has also held that a trial court may not arbitrarily deny a
request for sanctions. An arbitrary denial occurs when (1) the record clearly
evidences frivolous conduct and (2) the trial court nonetheless denies a motion for
attorney fees without holding a hearing. Polk at ¶ 6. In this case, the trial court did
not arbitrarily deny Waldman’s motion. Both Waldman’s motion and Pitcher and
Enders’s memorandum opposing the motion contained substantial amounts of
documentary evidence, and the record in this case does not clearly evidence frivolous
conduct. Because the motion has no merit, the trial court did not err in failing to
hold a hearing.
{¶12} Additionally, Waldman did not ask for a hearing on the motion. Loc.R.
14(C) of the Hamilton County Rules of Practice of the Court of Common Pleas
provides that no motions will be set for hearing unless a party requests a hearing in
writing or the court directs the assignment commissioner to set a motion for oral
argument. If no request for oral argument is made within ten days of the filing of
the motion, “the motion shall be considered by the assigned judge for decision.”
{¶13} Further, when a decision on the motion was not forthcoming, the
parties asked the court to decide the motion, and Waldman still did not ask for a
hearing. Under the circumstances, he forfeited any right to a hearing. State v.
Rogers, 143 Ohio St.3d 385, 2015-Ohio-2459, 38 N.E.3d 860, ¶ 21; Jeffers v.
Bumgardner, 7th Dist. Belmont No. 15 BE 0024, 2016-Ohio-4655, ¶ 22. “[A]n
appellate court will not consider any error which counsel for a party complaining of
the trial court's judgment could have called but did not call to the trial court's
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attention at a time when such error could have been avoided or corrected by the trial
court." Jeffers at ¶ 22, quoting Rogers at ¶ 21.
{¶14} Next, Waldman contends that the trial court erred in overruling his
motion because he presented clear evidence that Pitcher and Enders had engaged in
frivolous conduct. A motion for sanctions under R.C. 2323.51 requires a court to
determine whether the challenged conduct constitutes frivolous conduct as defined
in the statute, and, if so, whether any party has been adversely affected by the
frivolous conduct. Riston v. Butler, 149 Ohio App.3d 390, 2002-Ohio-2308, 777
N.E.2d 857, ¶ 21 (1st Dist.). The statute defines frivolous conduct as conduct by a
party to a civil action: (1) that serves merely to harass or maliciously injure another
party to the action or is used for another improper purpose; (2) that is not warranted
under existing law and cannot be supported by a good faith argument for a
modification or establishment of new law; (3) that consists of allegations or other
factual contentions that have no evidentiary support; or (4) that consists of denials or
factual contentions that are not warranted by the evidence. Radvansky v. W. & S.
Fin. Group, 1st Dist. Hamilton No. C-070470, 2008-Ohio-4472, ¶ 20.
{¶15} The statute was designed to chill egregious, overzealous, and frivolous
action. Evans v. Quest Diagnostics, Inc., 1st Dist. Hamilton No. C-140479, 2015-
Ohio-3320, ¶ 18; Riston at ¶ 35. The test to determine whether a claim is frivolous is
whether no reasonable lawyer would have brought the action in light of existing law.
Evans at ¶ 18; Riston at ¶ 36.
{¶16} Our standard of review depends on whether there are questions of law
and fact, or whether there are mixed questions of law and fact. Radvansky at ¶ 20.
With respect to purely legal questions, we employ a de novo standard of review. Id.;
Riston at ¶ 26. On factual issues, we give deference to the trial court’s factual
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determinations, which we should not disturb if they are supported by competent,
credible evidence. Radvansky at ¶ 20; Riston at ¶ 25-26. Finally, we review a trial
court’s decision to award any fees on the basis of frivolous conduct for an abuse of
discretion. Radvansky at ¶ 20; Riston at ¶ 27.
{¶17} Waldman contends that Pitcher and Enders’s complaint was based
entirely on his communications with Pillow and Johnson. He cites to deposition
testimony in which Pitcher and Enders acknowledged that they knew in the summer
and fall of 2011 that Waldman had been communicating with Pillow and Johnson,
and that he had filed a complaint against them with the IRS. Pitcher and Enders had
even met with Johnson in the summer of 2011, and they admitted that, at that time,
Johnson had binders of information that Waldman had supplied to them. They also
acknowledged that by the fall of 2011, Pillow had discussed with them a possible
audit. Waldman also contends that Pitcher and Enders’s attorney had argued about
Waldman’s alleged violations of the 2009 settlement agreement and the 2010
protective order and Waldman’s alleged “pattern” of “trying to defame” them at a
hearing a few weeks before the execution of the settlement agreement.
{¶18} Yet, Waldman contends, despite knowing about these
communications, Pitcher and Enders released all claims that they knew to exist in
the January 31, 2012 settlement agreement. Because Pitcher and Enders raised
claims in this case that they had released in that settlement agreement, he argues,
their claims were clearly frivolous and were filed merely to harass him.
{¶19} We note that Pitcher and Enders rely on a statement this court made
involving a previous version of R.C. 2323.51. We stated that “[a] party is not
frivolous merely because a claim is not well grounded.” Riston, 149 Ohio App.3d 390,
2002-Ohio-2308, 777 N.E.2d 857, at ¶ 35. That statement is no longer good law
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because the statute has since been amended to include the two prongs that relate to
the absence of evidentiary support for a claim or defense. Williams Creek
Homeowners Assn. v. Zweifel, 10th Dist. Franklin No. 07AP-689, 2008-Ohio-2434,
¶ 83.
{¶20} While the record shows that Pitcher and Enders knew that Waldman
was communicating with the IRS before they signed the January 31, 2012 settlement
agreement, it does not show that they were specifically aware of the disclosure of
information deemed confidential under the 2009 settlement agreement and the 2010
protective order. They claimed that they did not know about the disclosure of the
confidential information until July 2012, which was six months after the execution of
the settlement agreement, and therefore, they believed that they had not released
those claims in that agreement.
{¶21} Waldman has failed to show that there was no reasonable basis for
Pitcher and Enders’s interpretation of the agreement. They may not have prevailed
at trial, but that does not make their arguments frivolous. See Schiff v. Dickson, 8th
Dist. Cuyahoga No. 99719, 2013-Ohio-5253, ¶ 14. “R.C. 2323.51 does not purport to
punish a party for failing on a claim[,]” or for making a misjudgment or tactical
error. State ex rel. Chrisman v. Clearcreek Twp., 12th Dist. Warren No. CA2013-03-
025, 2014-Ohio-252, ¶ 10; Bennett v. Martin, 10th Dist. Franklin No. 13AP-99, 2013-
Ohio-5445, ¶ 27, quoting Indep. Taxicab Assn. of Columbus v. Abate, 10th Dist.
Franklin No. 08AP-44, 2008-Ohio-4070, ¶ 22; Riston at ¶ 35. Whether conduct
evidences an intent to harass or maliciously injure generally is a factual
determination best suited for the trial court. Therefore, we must give deference to
the lower court’s judgment regarding those issues. Schiff at ¶ 10.
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{¶22} There was a legal basis for the suit, and we cannot hold that no
reasonable lawyer would have brought the action. Consequently, the trial court did
not err in denying Waldman’s motion for sanctions. We overrule Waldman’s
assignment of error and affirm the trial court’s judgment.
Judgment affirmed.
H ENDON , P.J., and S TAUTBERG , J., concur.
Please note:
The court has recorded its own entry this date.
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Pitcher v. Waldman
Combined Opinion