[Cite as Murman v. Univ. Hosps. Health Sys., Inc., 2017-Ohio-1282.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 104726
MICHAEL E. MURMAN, GUARDIAN OF
LEAH APEL, A MINOR, ET AL.
PLAINTIFFS
vs.
UNIVERSITY HOSPITALS HEALTH SYSTEMS, INC.,
ET AL.
DEFENDANTS-APPELLEES
[Appeal by Diez-Arguelles & Tejedor, P.A.
Plaintiff-Appellant]
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-13-818388
BEFORE: Stewart, P.J., Laster Mays, J., and Jones, J.
RELEASED AND JOURNALIZED: April 6, 2017
ATTORNEYS FOR APPELLANT
Maria Tejedor
Carlos Diez-Arguelles
Diez-Arguelles & Tejedor, P.A.
505 N. Mills Avenue
Orlando, FL 32803
Also Listed
Michael E. Murman
Murman & Associates
14701 Detroit Avenue, Suite 555
Lakewood, OH 44107
ATTORNEYS FOR APPELLEES
For University Hospitals Health Systems, Inc., et al.
George M. Moscarino
Kris H. Treu
Mary E. White
Susan R. Massey
Moscarino & Treu, L.L.P.
1422 Euclid Avenue, Suite 630
Cleveland, OH 44115
For David M. Burkons, M.D.
W. Bradford Longbrake
Michael Ockerman
Douglas G. Leak
Hanna, Campbell & Powell, L.L.P.
3737 Embassy Parkway, Suite 100
Akron, OH 44333
MELODY J. STEWART, P.J.:
{¶1} This is an appeal from an order requiring appellant law firm Diez-Arguelles
& Tejedor, P.A. to pay $20,770 expended by appellee University Hospital (“UH”) to
defend what the court found was a bad faith motion to vacate a settlement agreement.
The law firm maintains that the court erred by awarding sanctions because it did not act in
bad faith by filing the motion to vacate, but under a reasonable belief that the settlement
agreement had been violated. UH requests that we find this appeal to be frivolous and
award it attorney fees for this appeal.
{¶2} The court found sanctions appropriate under both Civ.R. 11 and
R.C. 2323.51.
{¶3} Civ.R. 11 states that “[e]very pleading, motion, or other document of a party
represented by an attorney shall be signed by at least one attorney of record * * *.” An
attorney’s signature “constitutes a certificate by the attorney or party that the attorney or
party has read the document; that to the best of the attorney’s or party’s knowledge,
information, and belief there is good ground to support it; and that it is not interposed for
delay.”
{¶4} R.C. 2323.51(B)(1) applies more broadly than Civ.R. 11 and permits the
court to award attorney fees and costs to any party adversely affected by frivolous
conduct of another party or that party’s attorney, even if that conduct is not relating to a
pleading, motion, or other document. “Frivolous conduct” is defined by R.C.
2323.51(A)(2)(a)(I) as, among other things, conduct that “obviously serves merely to
harass or maliciously injure another party to the civil action or appeal or is for another
improper purpose, including, but not limited to, causing unnecessary delay or a needless
increase in the cost of litigation[.]”
{¶5} Civ.R. 11 uses a “subjective standard” of “bad faith” that goes beyond mere
bad judgment; it sanctions conduct amounting to “dishonest purpose,” “moral obliquity,”
“a breach of a known duty through some motive of interest or ill will,” or that “partakes
of the nature of fraud * * * with an actual intent to mislead or deceive another.” State ex
rel. Bardwell v. Cuyahoga Cty. Bd. of Commrs., 127 Ohio St.3d 202, 2010-Ohio-5073,
937 N.E.2d 1274, ¶ 8. “Frivolous conduct, as contemplated by R.C. 2323.51(A)(2)(a), is
judged under an objective, rather than a subjective standard * * *.” State ex rel.
DiFranco v. S. Euclid, 144 Ohio St.3d 571, 2015-Ohio-4915, 45 N.E.3d 987, ¶ 15, citing
State ex rel. Striker v. Cline, 130 Ohio St.3d 214, 2011-Ohio-5350, 957 N.E.2d 19, ¶ 21.
{¶6} Under both Civ.R. 11 and R.C. 2323.51, we review a trial court’s decision to
award sanctions for an abuse of discretion. If competent, credible evidence exists to
support an award of sanctions, the award must stand. Striker at ¶ 9; DiFranco at ¶ 13.
In addition, the abuse of discretion standard means that we cannot substitute our judgment
for that of the trial court. Bardwell at ¶ 9, citing State ex rel. Grein v. Ohio State Hwy.
Patrol Retirement Sys., 116 Ohio St.3d 344, 2007-Ohio-6667, 879 N.E.2d 195, ¶ 1.
{¶7} The evidence shows that Leah Apel, through her court-appointed guardian
Michael Murman, brought this medical malpractice action against UH and certain
physicians and nurses involved with her birth. At the time the complaint was filed, Apel
lived in Florida and was represented by Maria D. Tejedor of the law firm of
Diez-Arguelles & Tejedor, P.A. Tejedor appeared in the court of common pleas pro hac
vice by way of local counsel. During the pretrial phase, Murman gave notice of
appearance as additional counsel on behalf of himself as Apel’s guardian. Local counsel
then gave “notice of substitution of counsel” asking the court to take notice that Murman
“replaced” original local counsel and that original local counsel “are no longer counsel on
this case and should be removed from all certificates of services [sic].”
{¶8} On the eve of trial, Apel and UH settled — trial would go forward against a
single remaining defendant. The settlement would not, however, be immediately
reduced to judgment. During the 14-day period between reaching the settlement and
filing a stipulation of dismissal, Tejedor and Murman became involved in a fee dispute:
Murman claimed an entitlement to a contingency fee on the settlement proceeds; Tejedor
claimed Murman was to be paid on an hourly basis. Murman had the upper hand in this
dispute: according to Tejedor, Murman, as Apel’s court-appointed guardian, knew that all
settlements had to be approved by the probate court and he allegedly told Tejedor that
they had to “discuss his fee before he would sign the release.”
{¶9} Despite the fee dispute, the parties submitted a stipulation for dismissal
stating that they had an agreement to settle and were dismissing that part of the action
with prejudice. The parties further agreed that the court would retain jurisdiction over
the settlement agreement for enforcement purposes.
{¶10} On April 24, 2016, three days after the court reduced the settlement
agreement to judgment, Tejedor filed a motion asking the court to “set aside” the
settlement agreement under Civ.R. 60(B). Making no mention of the fee dispute with
Murman, the motion claimed that UH cooperated and assisted other non-settling
defendants in violation of the settlement agreement.
{¶11} An attorney for UH called Tejedor on April 26, 2016. That conversation
was memorialized in a letter to Tejedor, the contents of which she does not dispute. See
Tr. 18. Counsel for UH informed Tejedor that the motion to set aside the settlement
agreement was completely without merit and that she should withdraw it. Tejedor
agreed with counsel for UH that the court would likely deny her motion to set aside the
settlement agreement. She asked about the status of the settlement proceeds and when
UH would provide a release in order to pay out the proceeds. Counsel for UH responded
by asking her why was she “inquiring about the settlement funds and the Release while at
the same time * * * asking the Court to set aside the settlement.” The phone
conversation ended with counsel for UH asking Tejedor to “make a decision on which
position you were taking, to finalize the settlement or set it aside.”
{¶12} Tejedor called back four minutes later. She said that she was prepared to
withdraw her motion to set aside the settlement agreement upon receipt of the settlement
proceeds. Counsel for UH told Tejedor that he could not forward the settlement
proceeds until he had approval from the probate court — a fact he confirmed in a separate
discussion with Murman. Tejedor objected to counsel speaking with Murman, telling
him that Murman had “no authority” to speak on Apel’s behalf because he was merely the
child’s guardian and not local counsel. Counsel for UH pointed out that Murman had
given notice of appearance as local counsel for Apel. The conversation concluded with
counsel for UH again demanding that Tejedor withdraw the motion to set aside the
settlement agreement or UH would file a brief in opposition and a request for sanctions.
{¶13} The next day, April 27, 2016, Tejedor caused a petition for the “appointment
of emergency temporary guardian” for Apel to be filed in the Circuit Court for Seminole
County, Florida.1 The petition alleged that there was an “imminent danger” that Apel’s
property would be wasted, misappropriated, or lost unless immediate action was taken
because “there is a pending partial settlement of a pending medical
malpractice/negligence action that is currently in trial which necessitates the appointment
of an emergency temporary guardian in order to do all things necessary to successfully
conclude the pending partial settlement.” The petition for the appointment of an
emergency temporary guardian did not mention that Apel had a court-appointed guardian
with respect to the action involving the settlement.
{¶14} UH filed a brief in opposition to the motion to set aside the settlement
agreement and a request for sanctions. The day after UH filed its brief in opposition,
Tejedor withdrew the motion to set aside the settlement agreement and filed a motion to
enforce the settlement agreement. UH then filed a “renewed” motion for sanctions.
{¶15} In its judgment entry granting the motion for sanctions, the court stated:
Although Tejedor did not sign the petition for the appointment of an emergency temporary
1
guardian, she has not denied that the petition was filed at her direction.
The Court finds that plaintiffs’ counsel filed the motion to set aside
settlement in bad faith in order to obtain the settlement funds before they
came due. The Court makes this finding based on representations made by
plaintiffs’ counsel to defense counsel and the fact that plaintiffs’ [sic]
contemporaneously filed conflicting pleadings in a Florida court. Pursuant
to R.C. 2323.51 and Civ.R. 11, this Court orders sanctions and reasonable
attorney fees to be paid by plaintiffs’ counsel.
{¶16} Beginning first with Civ.R. 11, we find that the court did not abuse its
discretion by granting the motion for sanctions. Although the terms of the settlement
remain confidential, the parties apparently set forth some conditions of the settlement in a
memorandum of settlement. In addition, the parties gave the court continuing
jurisdiction to enforce the settlement. A settlement agreement is a binding contract.
Infinite Sec. Solutions, L.L.C. v. Karam Properties II, 143 Ohio St.3d 346,
2015-Ohio-1101, 37 N.E.3d 1211, ¶ 16. As with any other kind of contract, the courts
presume that the intent of the contracting parties resides in the language they choose to
employ in the agreement. Shifrin v. Forest City Ent., Inc., 64 Ohio St.3d 635, 638, 597
N.E.2d 499 (1992).
{¶17} The motion to set aside the settlement agreement was premised on UH’s
alleged violation of an agreement not to cooperate with the remaining defendant in the
case. Although Tejedor claimed that this term was discussed and was a “subject of the
settlement,” Tr. 16, she conceded that “there was nothing in writing.” Tr. 21. An
agreement to cooperate may have been discussed by the parties prior to finalizing the
terms of the settlement agreement, but the court’s retention of jurisdiction to enforce the
settlement agreement extended only to those terms specifically contained in the
agreement. The absence of any written term barring UH from actively cooperating with
the remaining defendant means that Tejedor subjectively knew that she was asking the
court to vacate the settlement agreement based on the violation of a term that did not exist
in that agreement.
{¶18} Tejedor’s bad faith in filing the motion to set aside the settlement was
further demonstrated by her attempt to have a court in Florida contemporaneously enforce
the same settlement that she was seeking to set aside in Ohio. There was competent,
credible evidence to support a finding that Tejedor willfully filed the motion to set aside
the settlement in an attempt to coerce UH into paying the settlement proceeds directly to
her in order to bypass Murman with whom she had an attorney fee dispute. At the same
time that Tejedor was conditioning her withdrawal of the motion to set aside the
settlement on UH signing a release of the settlement funds, she was asking a Florida
judge to appoint an emergency guardian who would order the funds released.
{¶19} Having obtained the emergency appointment of a temporary guardian in
Florida, Tejedor withdrew the motion to set aside the settlement and, in a complete
about-face, filed a motion to enforce the settlement. She did so without any mention of
her prior motion to set aside the settlement agreement. These actions constituted
competent, credible evidence to establish that Tejedor used the motion to set aside the
settlement for the sole purpose of coercing UH into releasing the settlement proceeds
without going through the probate court.
{¶20} Finally, in a motion for reconsideration of the preliminary order granting the
motion for sanctions,2 Tejedor stated that she “never indicated that [she] intended to call
up [her] motion for hearing.” Plaintiff’s motion for reconsideration of the court’s May
10 order granting defendant’s motion for sanctions and attorney fees, at 2. Not only did
Tejedor not intend to seek a hearing on the motion, she appeared vexed that UH even
responded to the motion. She characterized UH’s brief in opposition to the motion to set
aside the settlement as “excessive” and that UH did not “mitigate their damages.” Id.
In addition, she claimed that “[t]he issue at hand could have likely been resolved absent
Defendant’s completely unnecessary filing and similarly, without intervention of the
Court.” Id. In essence, Tejedor’s argument shows that her motion was not seriously
made and that she had no intention of enforcing it. We cannot find that the court abused
its discretion by concluding that Tejedor acted in bad faith by filing the motion to set
aside the settlement.
The court issued a judgment entry granting the motion for sanctions but reserved ruling on
2
{¶21} Compared to the subjective standard applied under Civ.R. 11, sanctions
under R.C. 2323.51 can be imposed under the less restrictive “objective” standard to view
the conduct of the sanctioned person — rather than focus on what the person subject to
sanctions actually thought, an objective standard is essentially one that looks to what the
reasonable person would have thought. Harris v. Rossi, 11th Dist. Trumbull No.
2016-T-0014, 2016-Ohio-7163, ¶ 19. We conclude that the court did not abuse its
discretion by imposing sanctions because no reasonable attorney would have filed the
motion to set aside the settlement without knowing that its purpose was to cause a
needless delay and would unnecessarily increase the cost of litigation.
{¶22} Our discussion of the facts for purposes of Civ.R. 11 applies with equal
force to the imposition of sanctions under R.C. 2323.51. In addition, other facts
objectively showed that Tejedor knew there was no basis for her motion to set aside the
settlement agreement.
the amount of sanctions for a later date.
{¶23} With Tejedor being less than forthright in the Florida court when seeking
the appointment of an emergency temporary guardian — she was seeking to enforce a
settlement she was concurrently trying to vacate and she failed to tell the Florida court
that Apel already had a guardian — she filed the motion to enforce the settlement as soon
as the Florida court appointed a temporary guardian. That motion made no mention of
her prior claim that UH violated the terms of the settlement agreement. It stated only that
the Florida court entered an order approving the settlement. The trial judge in this case
was well aware that despite a Florida guardian being appointed, Murman had yet to be
removed as guardian by the probate court. The trial judge likewise understood that the
probate court had prior jurisdiction over the matter and was the only court that could
remove Murman as guardian.
{¶24} At that point, Tejedor resorted to outlandish arguments to support her
actions. For example, she told the court that Murman had no right to a contingency fee
because he was not local counsel. While it is true that Murman initially filed a notice of
appearance as “additional counsel in this action on behalf of himself, Michael E.
Murman, Guardian of Leah Apel,” the parties acted as though he was serving as local
counsel for Tejedor. This conclusion is compelled for two reasons.
{¶25} First, Tejedor could not consistently argue that Murman was not acting as
local counsel when she admitted that she was paying him an hourly fee for his services.
See Plaintiff’s supplemental motion to enforce settlement and response to hospital’s
motion for sanctions, at 4. In addition, Tejedor contested whether he did any work that
would justify a contingency fee — she claimed that Murman “did not attend a single
hearing, deposition or assist in any discovery.” If Murman was nothing more than the
attorney for the guardian, the ward’s estate would have been responsible for his attorney
fee, not Tejedor, and his contribution to the prosecution of the medical malpractice claims
would have been irrelevant.
{¶26} Second, Tejedor’s admission to practice pro hac vice required the
association of an active Ohio attorney in good standing. See Gov.Bar.R. XII, Section
2(A)(7). When the complaint was filed, another attorney was acting as local counsel.
That attorney, in response to Murman’s notice of appearance, filed a “notice of
substitution of counsel” asking the court to take notice that Murman “replaced” original
local counsel and that original local counsel “are no longer counsel on this case and
should be removed from all certificates of services [sic].” When the originally retained
local counsel left the case, it meant that Murman had to step into that role, lest Tejedor
would be in violation of the Ohio Supreme Court rules governing appearances pro hac
vice. Without the services of local counsel, Tejedor’s pro hac vice status would have
been revoked and she could have been accused of the unauthorized practice of law.
Tejedor made no objection to original local counsel’s notice of substitution of counsel nor
did she take steps to disabuse the court of the belief that Murman was acting as local
counsel.
{¶27} Tejedor also argued that Murman had been improperly appointed guardian.
This argument was without any basis. The complaint, a document that listed Tejedor as
one of the attorneys for Apel (even though she had not sought admission to practice pro
hac vice at that point), specifically alleged that Murman was appointed guardian.
Attached as an exhibit to the complaint were the letters of guardianship issued by the
probate court. At no point throughout the lengthy pretrial proceedings did Tejedor raise
any objection to Murman’s status as Apel’s guardian. It was only when the fee dispute
with Murman became intractable that Tejedor filed the motion to set aside the settlement
agreement and questioned Murman’s status as the child’s guardian. The timing of
Tejedor’s objection to Murman as guardian for Apel suggested the opportunistic nature of
her argument — during the hearing on UH’s motion for sanctions, Tejedor complained
that what UH’s attorneys “want to do in this case now is hand the check over to a
guardian who is wrongfully appointed * * *.”
{¶28} Tejedor wanted UH to bypass the probate court approval process entirely
(and her fee dispute with Murman) to have the settlement proceeds paid directly to her.
UH repeatedly told Tejedor that it could not bypass probate court’s approval of the
settlement. And apart from the legal restrictions on UH paying the settlement without
prior probate court approval, there was the practical consideration that if it was found to
have improperly paid settlement proceeds, it might be open to liability for that error.
{¶29} The attack on the validity of the guardianship went so far as Tejedor’s
asking the court to “quash the guardianship.” Plaintiff’s supplemental motion to enforce
settlement and response to hospital’s motion for sanctions at 2. That same motion,
however, stated that “[t]he Probate Court is the court who has justification [sic] on
appointing guardians and settling the accounts of wards. The trial court does not have
jurisdiction over said matters.” Id. at 7. Having conceded that the probate court had
jurisdiction over the guardianship, it is unclear why the motion asked the trial court to
quash the guardianship.
{¶30} There was more than enough competent, credible evidence to show
objectively that Tejedor engaged in frivolous conduct for purposes of R.C. 2323.51. The
court did not abuse its discretion by awarding sanctions under the statute.
{¶31} Finally, we address UH’s motion for sanctions under App.R. 23.
{¶32} App.R. 23 states: “If a court of appeals shall determine that an appeal is
frivolous, it may require the appellant to pay reasonable expenses of the appellee
including attorney fees and costs.” An appeal is frivolous when it presents “no
reasonable question for review.” Talbott v. Fountas, 16 Ohio App.3d 226, 475 N.E.2d
187 (10th Dist.1984).
{¶33} The appeal in this case is not premised on established questions of law for
which the appellant fails to make a good faith argument suggesting why the law should be
changed; it maintains that the court abused its discretion by finding violations of Civ.R.
11 and R.C. 2323.51. Unlike clear issues of law, claims of an abuse of discretion are
open to enough interpretation that it is difficult to conclude that the appeal in this case is
frivolous. Appellee’s motion for sanctions is denied.
{¶34} Judgment affirmed.
It is ordered that appellee recover of appellant 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 common
pleas court 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, PRESIDING JUDGE
ANITA LASTER MAYS, J. and
LARRY A. JONES, SR., J., CONCUR
Murman v. Univ. Hosps. Health Sys., Inc.
Combined Opinion