author: HALL, J.

text:
    TACKLE CONSTRUCTION GROUP, LLC., Plaintiff-Appellant v. PEDTKE ENTERPRISES, INC., dba Servpro of Northwest Dayton, Defendant-Appellee
    No. 27813
    Court of Appeals of Ohio, Second District, Montgomery County.
    Rendered May 11, 2018
    STEPHEN E. KLEIN, Atty. Reg. No. 0014351, 124 W. Main Street, Troy, Ohio 45373, Attorney for Plaintiff-Appellant
    JONATHON L. BECK, Atty. Reg. No. 0076709, and CHRISTINE N. FARMER, Atty. Reg. No. 0093824, 130 W. Second Street, Suite 1500, Dayton, Ohio 45402, Attorney for Defendant-Appellee
   HALL, J.

{¶ 1} Tackle Construction Group, LLC appeals the amount that the trial court granted Pedtke Enterprises, Inc., dba Servpro of Northwest Dayton, as a set-off from the amount that it owes Tackle for construction work on multiple projects. We conclude that the evidence supports the set-off amount, so we affirm.

I. Background

{¶ 2} Servpro does disaster clean-up, performing clean-up and restoration services to damaged structures. It often hires subcontractors to work on restoration projects. Tackle is one such subcontractor, and Servpro has hired it to perform construction work on many projects.

{¶ 3} Tackle filed suit against Servpro in December 2016, claiming that Servpro owed it $6,320.13 for work that Tackle had done on five different projects-Upper Trent Way, Holman, Peeks, Adams, and Kimball-either on account or under a theory of unjust enrichment. Tackle's complaint asks for judgment in this amount, costs, and "statutory interest from and after judgment." Servpro admits in its answer that it owes Tackle money on the Upper Trent Way, Holman, Peeks, and Adams projects, though Servpro disputes the amount that it owes on the last one. But Servpro denies that it owes Tackle anything for the Kimball project. Instead, Servpro claims that it is entitled to a set-off for the profit that it lost because Tackle failed to complete work on the project. Servpro also asserts counterclaims against Tackle.

{¶ 4} A hearing was held in July 2017 before a magistrate at which Peter Elizondo, Tackle's owner, and Brian Pedtke, Servpro's owner, testified. The magistrate found that the parties do not dispute that Servpro owes Tackle a total of $1,083.01 for the Upper Trent Way, Holman, and Peeks projects. And on the Adams project, the magistrate agreed with Tackle that Servpro owed it $5,118.63. As to the Kimball project, which involved the restoration of a house, the magistrate found that the parties agreed that Servpro had hired Tackle to do $8,120.66 worth of work on the project, the amount that Tackle invoiced Servpro, and that Servpro is entitled to a credit of $6,616.81 because Tackle completed only some of the invoiced work. They also agreed that Servpro had paid Tackle $2,000 for the project. And they agreed that after Tackle left the Kimball project, the homeowner fired Servpro before Servpro could finish the restoration. But they disagreed on whether Tackle's failure to complete its work was wrongful and on whether it was Tackle's failure that caused Servpro to lose the project. While Tackle admitted that it did not complete the work, it denied that it did so wrongfully. Tackle said that it left the Kimball project because Servpro refused to "front" Tackle money to buy baseboard that Tackle had agreed to install in the house. Servpro maintained that it had no obligation to pay for the baseboard. The magistrate agreed with Servpro and found that Tackle's failure to complete its work was wrongful. The magistrate also found that it was because Tackle failed to finish that Servpro lost the Kimball project. Servpro claimed that as a result of losing the project, it lost $3,421.08 in expected profit and overhead. The magistrate agreed and deducted this amount from what Servpro owed Tackle. Consequently, instead of Servpro owing Tackle money on the Kimball project, the magistrate found that Tackle owed Servpro $3,917.23.

{¶ 5} In sum, then, for all the projects at issue, the magistrate found that Servpro owed Tackle $2,284.41. The magistrate recommended that judgment for Tackle be entered for that amount plus statutory interest from the date of judgment and costs. The magistrate also recommended that Servpro's counterclaims be dismissed.

{¶ 6} Tackle filed objections to the magistrate's decision with the trial court. The first four objections concerned the magistrate's findings related to the Kimball project: that Servpro was not obligated to pay for the baseboard, that Tackle's failure to complete its work was wrongful, that Tackle's failure to finish caused Servpro to be fired by the homeowner, and that Servpro lost $3,421.08 on the project. Tackle's final objection was that the magistrate failed to award prejudgment interest.

{¶ 7} After independently reviewing the objections, the trial court agreed with the magistrate's findings and conclusions and adopted the magistrate's decision, overruling Tackle's objections. The court entered judgment for Tackle in the amount of $2,284.41 plus court costs and statutory interest from the date of judgment.

{¶ 8} Tackle appealed.

II. Analysis

{¶ 9} Tackle assigns two errors to the trial court. The first argues that the finding that Tackle owes Servpro $3,917.23 on the Kimball project is against the manifest weight of the evidence. The second assignment of error argues that Tackle is entitled to prejudgment interest.

A. The Kimball project findings

{¶ 10} The first assignment of error states:

THE TRIAL COURT'S JUDGMENT WAS, PURSUANT TO APP.R. 12(C)(1), AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE AS TO THE FINDING OF FACT THAT PLAINTIFF-APPELLANT'S $6,201.64 AWARD SHOULD BE REDUCED BY $3,917.23.

Tackle challenges four findings on the Kimball project: (1) that Servpro was not required to purchase the baseboard, (2) that Tackle's failure to complete its work was wrongful, (3) that Tackle's failure to finish caused Servpro to be fired by the homeowner, and (4) that Servpro lost $3,421.08 on the project.

{¶ 11} The standard for reviewing criminal weight-of-the-evidence challenges, established in State v. Thompkins , 78 Ohio St.3d 380, 678 N.E.2d 541 (1997), also applies to weight-of-the-evidence challenges in civil cases. Crawford v. Hawes , 2013-Ohio-3173, 995 N.E.2d 966, ¶ 33 (2d Dist.), citing Eastley v. Volkman , 132 Ohio St.3d 328, 2012-Ohio-2179, 972 N.E.2d 517, ¶ 17. "In applying this standard, the appellate court, reviewing the entire record, weighs the evidence and all reasonable inferences, considers the credibility of witnesses and determines whether in resolving conflicts in the evidence, the factfinder clearly lost its way and created such a manifest miscarriage of justice that the judgment must be reversed and a new trial ordered." Id.

Servpro was not obligated to purchase the baseboard.

{¶ 12} Tackle argues that the evidence shows that Servpro was obligated to purchase the baseboard for Tackle. The evidence supporting Tackle's argument primarily comes from the testimony of Peter Elizondo, Tackle's owner, in which he insists that Servpro was obligated to purchase the baseboard. Tackle also points to text messages that Elizondo exchanged with Angela Bowling, Servpro's office manager, and emails exchanged with Brian Pedtke, Servpro's owner. In one text-message exchange, Elizondo asks Bowling, "Are you guys cutting a check for peeks and I need need a draw for Kimball for fridge and trim work." (Plaintiff's Exhibit A-4b). Bowling responds, "Yes but I need to wait until Brian gets back from his appointments he had two first thing." (Id. ). In an email sent to Pedtke the same day, Elizondo tells him that "* * * Kimball wants a fridge and I have to order all the trim its going to be quite expensive definitely need the funds to order it." (Plaintiff's Exhibit A-4d). Pedtke replies, "Let me look at the estimate for the numbers on the fridge. Once I give you the amount he can pick it out and sign off." (Id. ). Later in the day, Pedtke replies again, saying, "* * * Also, When will Kimball be done? * * *" (Plaintiff's Exhibit A-4c).

{¶ 13} But Elizondo's testimony and the text messages and emails show at most only that Tackle might have thought that Servpro was obliged to purchase the baseboard. There is no evidence that Servpro agreed to do so. Pedtke testified that Servpro does sometimes "front" money to subcontractors as a courtesy, not because it is obligated to do so. Whether, when, and how much to give a subcontractor before the work is done are decisions entirely within Servpro's discretion. Indeed, this is illustrated here by the fact that Servpro gave Tackle $2,000 on the Kimball project even though Tackle had not yet done $2,000 worth of work and that this amount does not appear to have a calculable basis. With respect to the Kimball project, Pedtke did testify that he did not expect Tackle to pay for the baseboard and that Servpro would have paid for it-if Tackle had found baseboard that was acceptable. But finding acceptable baseboard proved to be difficult, and Tackle did not find any: "The big problem with the job," Pedtke testified, "was obtaining the exact same like, kind and quality of baseboards. They [Tackle] were unable to find them." (Tr. 61). Elizondo admitted as much in a text message, saying that he "can[']t find the original base[board]," though he said that he did find other baseboard, which he believed could substitute. (Plaintiff's Exhibit A-4e).

{¶ 14} In sum, the evidence does not show that Servpro was obligated to front Tackle money to purchase baseboard for the Kimball project. And even if there were such an obligation, the evidence suggests that Tackle never found baseboard that was acceptable. The trial court did not clearly lose its way by finding that Servpro was not obligated to purchase the baseboard for Tackle.

Tackle's failure to finish work on the Kimball project was wrongful.

{¶ 15} Tackle next argues that the evidence shows that its failure to finish work on the Kimball project was not wrongful. Elizondo testified that he told Servpro that he had found the baseboard and needed money to buy it because it was quite expensive. After a month of waiting for money, said Elizondo, Tackle left the Kimball project because it did not have the funds to pay for the baseboard. So it was Servpro's refusal to pay for the baseboard, Elizondo says, that prevented Tackle from finishing its work.

{¶ 16} We have upheld the finding that Servpro was not obligated to pay in advance for the baseboard. Which can mean only that it was Tackle's obligation. We note too that Elizondo testified that "everything on this invoice right here [Tackle's invoice for the Kimball project] is the work I was supposed to do." (Tr. 13). The installation of baseboard is listed on the invoice, and Elizondo testified that the total cost for that work includes not only installation but also the baseboard itself. This too suggests that Tackle was obligated to purchase the baseboard for the project. The trial court did not clearly lose its way by finding that Tackle's failure to complete its work on the Kimball project was wrongful.

Tackle's failure to finish caused Servpro to lose the Kimball project.

{¶ 17} Tackle argues that the evidence shows that Servpro's refusal to pay for the baseboard caused it to lose the Kimball project.

{¶ 18} Pedtke testified that as a result of Tackle's failure to install the baseboard, Servpro was fired by the homeowner. Pedtke explained that "[t]he big problem with the job was obtaining the exact same like, kind and quality of baseboards. They [Tackle] were unable to find them." (Tr. 61). After Tackle left the project, said Pedtke, Servpro tried to find acceptable baseboard but failed. At that point, said Pedtke, the homeowner "was not happy with the fact that we could not find the baseboards * * * and she ended up firing us." (Id. ). We said earlier that the evidence suggests that Tackle was required to supply and install the baseboard for the project. The just-quoted testimony from Pedtke suggests that by failing to install the baseboard Tackle proximately caused Servpro to lose the entire project. On this record we cannot say the trial court clearly lost its way by finding that Tackle's failure to finish work on the Kimball project resulted in Servpro losing the project.

Servpro lost money on the Kimball project.

{¶ 19} Lastly, Tackle argues that the evidence does not support the finding that Servpro lost $3,421.08 on the Kimball project.

{¶ 20} The Kimball project was an insurance claim under the homeowner's policy, so the insurance company was paying Servpro for the project. The insurance company estimated that the total cost of the work that needed to be done on the project would be $25,242.56. The total cost estimate includes not only amounts for labor and materials but also amounts for profit and overhead. The total amount allocated for profit and overhead is $3,421.08, an equal amount being allocated to each. It was Pedtke's testimony that Servpro lost this entire amount as a result of losing the Kimball project.

{¶ 21} Tackle argues that Servpro could not have lost the entire amount. Tackle points out that the insurance company's cost estimate separately lists each item of work that needs to be done and, in addition to the item's estimated material or labor cost, an amount of profit and overhead for the item. So, for example, item number 18 on the estimate is "Baseboard-10" hardwood-2 piece." (Defendant's Exhibit C1). The estimated quantity of baseboard needed is 55.84 linear feet, the estimated price is $11.15 per foot, and the amount of overhead and profit is $130.74. The sum of the overhead-and-profit amount for each item is $3,421.08. Servpro received a total of $24,242.56 from the insurance company and returned $10,287.14 to the homeowner for the work that Servpro did not complete. Using a series of calculations based on the amount that Servpro returned to the homeowner, Tackle concludes that Servpro's lost profit and overhead was only $1,714.52.

{¶ 22} Here, as an initial matter, we do not quite follow the series of calculations that Tackle uses to determine Servpro's lost profit and overhead. But more importantly, as Servpro points out, these calculations were not presented at the hearing. Indeed, no alternative calculation for Servpro's loss on the Kimball project was presented. "The determination of the existence and amount of the lost profits is a question of fact." (Citation omitted.) Kosier v. DeRosa , 169 Ohio App.3d 150, 2006-Ohio-5114, 862 N.E.2d 159, ¶ 33 (6th Dist.). "The general rule regarding damages in civil cases is that they must be proven with certainty, but the amount may be reasonably estimated. 'Damages are not rendered uncertain because they cannot be calculated with absolute exactness. It is sufficient if a reasonable basis of computation is afforded, although the result be only approximate.' " (Citation omitted.) TJX Cos., Inc. v. Hall , 183 Ohio App.3d 236, 2009-Ohio-3372, 916 N.E.2d 862, ¶ 32 (8th Dist.), quoting Palmer v. Connecticut Ry. & Lighting Co. , 311 U.S. 544, 559-560, 61 S.Ct. 379, 85 L.Ed. 336 (1941). Here, the evidence supports the finding that Servpro lost $3,421.08 on the Kimball project. This is the amount of overhead and profit on the project calculated by the insurer in its cost estimate. And it is the amount that Pedtke testified Servpro lost. How much of $10,287.14 that Pedtke returned to the home owner was profit rests largely on the credibility of Pedtke's testimony. "The credibility of the witnesses and the weight to be given to their testimony are primarily matters for the trier of facts to resolve." Crawford , 2013-Ohio-3173, 995 N.E.2d 966, at ¶ 38, citing State v. DeHass , 10 Ohio St.2d 230, 231, 227 N.E.2d 212 (1967). "The decision whether, and to what extent, to credit the testimony of particular witnesses is within the peculiar competence of the factfinder, who has seen and heard the witness." State v. Lawson , 2d Dist. Montgomery No. 16288, 1997 WL 476684, *4 (Aug. 22, 1997). We defer to the trial court's credibility determinations in calculating Servpro's loss on the Kimball project. The trial court's calculation of Servpro's loss on the Kimball project is not against the manifest weight of the evidence.

{¶ 23} When applying the manifest-weight-of-the-evidence standard in a civil case we have said "[t]he discretionary power to grant a new trial should be exercised only in the exceptional case in which the evidence weighs heavily against the judgment." (Citation omitted.) Crawford at ¶ 33. This is not the exceptional case in which the evidence weighs heavily against the judgment of the trial court, creating a manifest injustice.

{¶ 24} The first assignment of error is overruled.

B. Prejudgment interest

{¶ 25} The second assignment of error states:

PLAINTIFF-APPELLANT IS ENTITLED TO PRE-JUDGMENT INTEREST ON ITS AWARD.

Tackle argues that it is entitled to prejudgment interest under R.C. 1343.03(A) from September 1, 2016, which it claims is the date that its claim against Servpro accrued.

{¶ 26} Neither the magistrate nor the trial court made any finding with respect to prejudgment interest. Perhaps this is because the first time that Tackle mentioned it was in its objections. The request for relief in the complaint asks only for "statutory interest from and after judgment." And Tackle never filed a motion asking for prejudgment interest. While it may be that, as Tackle argues, R.C. 1343.03(A) gives Tackle a right to prejudgment interest, it does not appear that Tackle availed itself of this right. We do not see how we can say that the trial court erred by not awarding something that was never requested. Moreover interest under R.C. 1343.03(A) relates to the date that "money becomes due and payable." In this disputed matter, where the court applied an offset, the appellant failed to demonstrate whether or what money was due and payable until the judgment of the trial court.

{¶ 27} The second assignment of error is overruled.

III. Conclusion

{¶ 28} We have overruled both of the assignments of error presented. The trial court's judgment is therefore affirmed.

WELBAUM, P.J. and FROELICH, J., concur.

      The first two counterclaims allege unjust enrichment on the Adams project and on another project (Easton/Oxford). The third and fourth counterclaims relate to the Kimball project. One claim alleges that Tackle breached a contract to perform construction work on the Kimball project by failing to complete the work. The other claim alleges that Tackle was unjustly enriched on the project.

      This is the invoice amount ($8,120.66) minus the credit for work not done ($6,616.81) minus the amount that Servpro had paid Tackle ($2,000) plus the amount that Servpro lost on the project ($3,421.08).

      This is the amount owed on the Upper Trent Way, Holman, and Peeks projects ($1,083.01) plus the amount owed on the Adams project ($5,118.63) minus the amount that Tackle owed Servpro on the Kimball project ($3,917.23).


source: Caselaw Access Project

author: DORRIAN, J.

license: Public Domain

text:
    Dan W. VOSSMAN, Plaintiff-Appellant,
    [Russell A. Kelm et al., Appellants], v. AIRNET SYSTEMS, INC. et al., Defendants-Appellees.
    No. 16AP-801
    Court of Appeals of Ohio, Tenth District, Franklin County.
    Rendered on May 17, 2018
    On brief: Law Offices of Russell A. Kelm, and Russell A. Kelm, Columbus, for appellants. Argued: Russell A. Kelm.
    On brief: Elfvin, Klingshirn, Royer & Torch, LLC, and Neil E. Klingshirn, Akron, for Amicus Curiae Ohio Employment Lawyers Association.
    On brief: Vorys, Sater, Seymour and Pease LLP, David A. Campbell, and Gregory C. Schneiderer, Cleveland, for appellees. Argued: David A. Campbell.
    DECISION
   DORRIAN, J.

{¶ 1} Plaintiff-appellant, Dan W. Vossman ("Vossman"), along with his attorneys, Russell A. Kelm and Joanne Detrick (collectively "appellants"), appeal the November 7, 2016 judgment entry of the Franklin County Court of Common Pleas which made final and appealable the court's: (1) February 12, 2015 decision and entry finding defendants-appellees, AirNet Systems, Inc. ("AirNet"), Thomas Schaner, and Quinn Hamon (collectively "appellees"), are entitled to recover attorney fees from appellants, pursuant to R.C. 2323.51(A)(2)(a)(ii), for the time period April 26 through December 10, 2012, and (2) October 19, 2016 decision and entry finding the amount of attorney fees owed to be $45,714.53. For the following reasons, we reverse.

I. Procedural History

A. Merit Determination

{¶ 2} The facts of this case are summarized in Vossman v. AirNet Sys., Inc. , 10th Dist. No. 12AP-971, 2013-Ohio-4675, 2013 WL 5745284, and will only be repeated herein as relevant to the analysis of the assignments of error. On June 15, 2011, Vossman filed suit against appellees asserting a single cause of action for age discrimination under R.C. 4112.14. On July 12, 2011, appellees filed a motion to dismiss, pursuant to Civ.R. 12(B)(6), asserting Vossman failed to state a claim upon which relief could be granted. On September 22, 2011, the trial court denied appellees' motion to dismiss.

{¶ 3} On October 19, 2012, upon appellees' motion, the trial court entered a decision granting summary judgment in favor of appellees. The trial court reasoned that: (1) there was no evidence age discrimination was the basis for Vossman's termination, and (2) Vossman admitted he does not believe age discrimination was the cause of the allegations and investigations into his conduct. Vossman appealed. On October 22, 2013, this court affirmed the trial court's granting of summary judgment in favor of appellees. Vossman . Vossman appealed to the Supreme Court of Ohio. On March 26, 2014, the Supreme Court declined to accept jurisdiction of the appeal. Vossman v. AirNet Sys., Inc. , 03/26/2014 Case Announcements , 138 Ohio St.3d 1449, 2014-Ohio-1182, 5 N.E.3d 667.

B. Motion for Attorney Fees

{¶ 4} On November 7, 2012, appellees moved for an award of attorney fees against appellants in the trial court, alleging Vossman's claim was frivolous and Vossman's counsel vigorously continued to pursue the frivolous claim pursuant to R.C. 2323.51 and Civ.R. 11. In the motion for attorney fees, appellees stated the allegations made by Vossman in his complaint and relied on to overcome appellees' motion to dismiss were ultimately revealed to be untruthful when appellees' counsel deposed Vossman. Appellees argued the following allegations made by Vossman were unsubstantiated: (1) his co-worker's allegations regarding his flying behavior was false and based on his age, (2) the investigation into his behavior revealed his co-worker's allegations were unsubstantiated, (3) he was never directed to keep the investigation confidential, and (4) he was pretextually terminated because of his age. In support of its argument, appellees pointed to Vossman's own admissions in his deposition testimony that: (1) there was truth to his co-worker's allegations of his flying behavior, (2) he was directed to keep the investigation confidential, (3) he violated the confidentiality directive, and (4) he never believed his co-worker's allegations against him were age based. Appellees argued Vossman's own admissions made the initial complaint lack evidentiary support and that his initial filing of the complaint and subsequent pursuit of the case through baseless arguments served only to harass and impose litigation costs on appellees. Appellees argued Vossman's pursuit of the case through baseless and untrue allegations was in violation of Civ.R. 11 and constituted frivolous conduct in violation of R.C. 2323.51. Therefore, appellees argued the case was frivolous as it could not be supported by a good-faith argument.

1. Entitlement Determination

{¶ 5} On May 22, 2013, the magistrate conducted a hearing on the motion for attorney fees. On June 3, 2014, the magistrate rendered a decision which granted appellees' motion for an award of attorney fees, in part. The magistrate found, pursuant to R.C. 2323.51(A)(2)(a)(ii), appellees were entitled to recover reasonable attorney fees they incurred from April 26 through December 10, 2012 from appellants. The magistrate reasoned: "It was absolutely clear, under existing age-discrimination law, that no reasonable attorney would have continued to prosecute [Vossman's] age-discrimination cause of action after April 26, 2012," the date appellees' counsel deposed Vossman. (June 3, 2014 Mag. Decision at 14.)

{¶ 6} On June 17, 2014, appellants filed objections to the magistrate's decision. Along with the objections, appellants submitted three affidavits, one from Vossman's trial counsel, Kelm, one from attorney Paul Tobias of Cincinnati, and one from attorney Frederick Gittes of Columbus. All the affiants are employment law practitioners in Ohio. Appellees did not file a response.

{¶ 7} On February 12, 2015, the trial court overruled appellants' objections to the magistrate's decision and found the magistrate properly determined the factual issues and applied the law correctly. The court reasoned "there is no evidence, direct or indirect, that [Vossman's] age actually motivated [appellees] to terminate him or that his age played any role in his termination." (Feb. 12, 2015 Decision at 8.) The court found:

The record indicates that by April 26, 2012, [Vossman] and his counsel knew: (1) [appellees] had a legitimate reason to investigate and suspend [Vossman], (2) [Vossman] was the only employee under suspension, under investigation, and issued a confidentiality directive, and (3) [appellees'] stated reason for terminating [Vossman's] employment was true. Nevertheless, with no proof that age was a factor behind his termination, [Vossman] and his counsel continued to prosecute this action.

(Feb. 12, 2015 Decision at 8-9.) Finally, the trial court held: "Upon review, this Court finds that [Vossman] and his counsel definitively knew by April 26, 2012, that there was no evidence of similarly situated employees being treated more favorably than [Vossman]. [Vossman] and his counsel also knew, by April 26, 2012 at latest, that there was no evidence, circumstantial or direct, indicating that age actually motivated [appellees'] decision to terminate [Vossman's] employment." (Feb. 12, 2015 Decision at 9.) The trial court adopted the magistrate's decision and held appellees were entitled to recover attorney fees from appellants, pursuant to R.C. 2323.51(A)(2)(a)(ii), which were incurred from April 26 through December 10, 2012. The court referred the matter back to the magistrate to determine the reasonable amount of attorney fees due to appellees.

2. Amount Determination

{¶ 8} On June 18, 2015, the magistrate conducted an evidentiary hearing to determine the amount of attorney fees owed to appellees. Appellees presented expert testimony as well as several exhibits which were admitted into evidence. (See Deft.'s Ex. A through H.) Appellants presented the testimony of Schaner and Vossman's own trial counsel, Kelm. Appellants presented several exhibits, only some of which were admitted into evidence. (See Pltf.'s Ex. 8 through 15.) The magistrate found appellees incurred reasonable attorney fees in the amount of $45,714.53 from April 26 through December 10, 2012. The magistrate further found that AirNet is the real party in interest pursuant to the receiver (appointed by the United States District Court for the Northern District of Georgia, Atlanta Division, in case N.D.Ga. No. 1:14-cv-00178-WSD), having authorized AirNet's counsel to prosecute AirNet's claim for attorney fees and conclude this litigation. The court found the receiver confirmed appellees' counsel's authority in an e-mail communication.

{¶ 9} On August 3, 2015, appellants submitted their objections to the magistrate's decision on grounds that the decision: (1) granted attorney fees for illegal activity by appellees and their counsel, (2) granted attorney fees to AirNet now in receivership, in violation of a federal court ordered stay of proceedings, and (3) granted attorney fees to appellees who are not the real party in interest, since these claims are owned by a federal court receiver. On August 31, 2015, appellees filed a memorandum contra appellants' objections to the magistrate's decision.

{¶ 10} On October 19, 2016, the trial court overruled appellants' objections and adopted the magistrate's decision in its entirety. The trial court found appellants' objections to be not well-taken. The court found appellees were entitled to recover attorney fees in the amount of $45,714.53, pursuant to R.C. 2323.51(A)(2)(a)(ii), from appellants.

C. Final Appealable Order

{¶ 11} On November 7, 2016, the trial court filed a final judgment entry thereby making final and appealable the court's judgment entries filed February 12, 2015 and October 19, 2016. Appellants filed a notice of appeal to this court.

II. Assignments of Error

{¶ 12} Appellants appeal and assign the following three assignments of error for our review:

I. THERE WERE SUFFICIENT FACTS AVAILABLE TO PLAINTIFF AT TRIAL TO MAKE IT ERROR TO AWARD SANCTIONS FOR FRIVILOUS CONDUCT FOR PROCEEDING WITH THE CASE.
II. DEFENDANTS AND COUNSEL ENGAGING IN ILLEGAL CONDUCT SHOULD NOT BE AWARDED SANCTIONS WHICH WOULD REWARD THEIR CONDUCT IN OBTAINING SUMMARY JUDGMENT THROUGH PERJURED TESTIMONY.
III. OWNERSHIP OF A RECEIVERSHIP ASSET CANNOT BE PROVEN BY HEARSAY TESTIMONY AS TO WHAT THE RECEIVER TOLD THEM.

III. Analysis

{¶ 13} Before discussing appellants' assignments of error, it is important to consider what was actually appealed and what can be considered on appeal. In simplest terms, this case breaks down to three trial court determinations. First, the trial court determined to grant summary judgment on the complaint in favor of appellees. It made this determination in the October 19, 2012 decision granting appellees' motion for summary judgment. As noted previously, we affirmed this determination in Vossman , and the Supreme Court declined to review this determination. The appeal before us today will not address this first determination as it has already been reviewed and affirmed by this court. We will refer to this determination as the "merits determination."

{¶ 14} Second, the trial court determined appellees are entitled to recover attorney fees from appellants. The court made this determination in the February 12, 2015 decision overruling appellants' objections to the magistrate's June 3, 2014 decision. We will refer to this determination as the "entitlement determination."

{¶ 15} Third, the trial court determined the amount of attorney fees to which appellees were entitled from appellants. The court made this determination in the October 19, 2016 decision and entry adopting the magistrate's June 19, 2015 decision and overruling appellants' objections to the magistrate's decision. We will refer to this determination as the "amount determination."

{¶ 16} On November 7, 2016, the trial court entered a final judgment entry making the entitlement determination and the amount determination final and appealable.

{¶ 17} Appellants' notice of appeal states they are appealing from: (1) the court's final judgment entry dated November 7, 2016 (which encompasses the entitlement and amount determinations), and (2) the October 19, 2016 decision adopting the magistrate's June 19, 2015 decision and overruling appellants' objections to the magistrate's decision (the amount determination).

{¶ 18} Although appellants specifically state in the notice of appeal they are appealing the amount determination, the assignments of error address the entitlement determination only. Appellants do not challenge the amount determination. For that reason, we will focus our analysis on the trial court's second determination-that appellees are entitled to recover attorney fees from appellants.

A. First Assignment of Error

{¶ 19} In their first assignment of error, appellants argue the trial court erred by awarding sanctions for frivolous conduct because there were sufficient facts for them to proceed with the case.

1. Authority for Trial Court's Determination of Frivolous Conduct

{¶ 20} The trial court awarded attorney fees, pursuant to R.C. 2323.51(B), having found that appellants engaged in frivolous conduct as defined in R.C. 2323.51(A)(2)(a)(ii). R.C. 2323.51(A)(2)(a)(ii) defines frivolous conduct as:

[Conduct which] is not warranted under existing law, cannot be supported by a good faith argument for an extension, modification, or reversal of existing law, or cannot be supported by a good faith argument for the establishment of new law.

2. Standard of Review

{¶ 21} Here, we apply the standard of review as previously outlined in Vossman . In Vossman , we stated:

Pursuant to R.C. 2323.51, a court may "award * * * court costs, reasonable attorney's fees, and other reasonable expenses incurred in connection with a civil action or appeal * * * to any party to the civil action or appeal who was adversely affected by frivolous conduct." R.C. 2323.51(B)(1). "Conduct" includes "[t]he filing of a civil action, the assertion of a claim, defense, or other position in connection with a civil action, the filing of a pleading, motion, or other paper in a civil action, * * * or the taking of any other action in connection with a civil action." R.C. 2323.51(A)(1)(a). "Frivolous conduct" is conduct that (1) obviously serves merely to harass or maliciously injure another party to the civil action; (2) is not warranted under existing law and cannot be supported by a good-faith argument for an extension, modification, or reversal of existing law; or (3) consists of allegations or other factual contentions that have no evidentiary support or are not likely to have evidentiary support after a reasonable opportunity for further investigation. R.C. 2323.51(A)(2)(a).
"No single standard of review applies in R.C. 2323.51 cases; the inquiry is one of mixed questions of law and fact." [ Judd v. Meszaros , 10th Dist. No. 10AP-1189, 2011-Ohio-4983, 2011 WL 4489049,] at ¶ 18, citing Wiltberger v. Davis , 110 Ohio App.3d 46, 51 [673 N.E.2d 628] (10th Dist.1996). Initially, the court must conduct a factual inquiry to determine whether the party's conduct was frivolous. Judd at ¶ 18. "Review of a trial court's factual determinations involves some degree of deference, and we will not disturb a trial court's findings of fact where the record contains competent, credible evidence to support such findings."
Id. , citing Wiltberger at 52 [673 N.E.2d 628].
" 'A determination that conduct is not warranted under existing law and cannot be supported by a good faith argument for an extension, modification, or reversal of existing law requires a legal analysis.' " Stuller v. Price , 10th Dist. No. 03AP-30, 2003-Ohio-6826 [2003 WL 22966820], ¶ 14, quoting Sain v. Roo , 10th Dist. No. 01AP-360 [2001 WL 1263665] (Oct. 23, 2001). See also Riston v. Butler , 149 Ohio App.3d 390, 2002-Ohio-2308 [777 N.E.2d 857], ¶ 20-21, (1st Dist.) ; Judd at ¶ 19. We review pure questions of law under a de novo standard. Id. at ¶19.

Id. at ¶ 40-42.

3. Standard for Trial Court to Award Attorney Fees

{¶ 22} Appellants cite McCallister v. Frost , 10th Dist. No. 07AP-884, 2008-Ohio-2457, 2008 WL 2133078, ¶ 31, to support the argument that "only" where there is an absolute dearth of any evidence are sanctions appropriate. (Appellants' Brief at 15.) We disagree that this court has set such a high standard for the award of sanctions. Appellants mischaracterize McCallister . McCallister does not use the term "only" and does not require an absolute dearth of evidence before sanctions are awarded. Rather, the McCallister court, regarding the specific circumstances before it, commented that there was an absolute dearth of evidence to support the plaintiff's claim.

{¶ 23} We agree with appellants, however, that even where there is not enough evidence to survive a motion for summary judgment, this does not necessarily translate into a frivolous claim. See Homewood Homes, Inc. v. Helwig , 10th Dist. No. 08AP-406, 2009-Ohio-1699, 2009 WL 960775, ¶ 33. We also agree that the inquiry into whether a claim is frivolous may be informed by an examination of a lawyer's obligations pursuant to the Ohio Rules of Professional Conduct. Appellants point us in particular to Rule 3.1 and the official comment thereto, which read in relevant part:

RULE 3.1: MERITORIOUS CLAIMS AND CONTENTIONS
A lawyer shall not bring or defend a proceeding, or assert or controvert an issue in a proceeding, unless there is a basis in law and fact for doing so that is not frivolous, which includes a good faith argument for an extension, modification, or reversal of existing law. A lawyer for the defendant in a criminal proceeding, or the respondent in a proceeding that could result in incarceration, may nevertheless so defend the proceeding as to require that every element of the case be established.
Comment
[1] The advocate has a duty to use legal procedure for the fullest benefit of the client's cause, but also a duty not to abuse legal procedure. The law, both procedural and substantive, establishes the limits within which an advocate may proceed. However, the law is not always clear and never is static. Accordingly, in determining the proper scope of advocacy, account must be taken of the law's ambiguities and potential for change.
[2] The filing of an action or defense or similar action taken for a client is not frivolous merely because the facts have not first been fully substantiated or because the lawyer expects to develop vital evidence only by discovery. What is required of lawyers, however, is that they inform themselves about the facts of their clients' cases and the applicable law and determine that they can make good faith arguments in support of their clients' positions. Such action is not frivolous even though the lawyer believes that the client's position ultimately will not prevail. The action is frivolous, however, if the lawyer is unable either to make a good faith argument on the merits of the action taken or to support the action taken by a good faith argument for an extension, modification, or reversal of existing law.

{¶ 24} Finally, both parties agree that in order for a trial court to award attorney fees, pursuant to R.C. 2323.51(A)(2)(a)(ii), the court must find that "no reasonable lawyer would have brought the action in light of the existing law." We have previously stated that:

R.C. 2323.51 employs an objective standard in determining whether sanctions may be imposed for frivolous conduct. Stevenson v. Bernard , 11th Dist. No. 2006-L-096, 2007-Ohio-3192 [2007 WL 1810487], ¶ 41. Therefore, a finding of frivolous conduct under R.C. 2323.51 is determined without reference to what the individual knew or believed. Wauseon v. Plassman , 6th Dist. No. F-96-003 [1996 WL 673521] (Nov. 22, 1996). Accordingly, R.C. 2323.51 is broader in scope than Civ.R. 11. State Farm Ins. Cos. v. Peda , 11th Dist. No. 2004-L-082, 2005-Ohio-3405 [2005 WL 1538623], ¶ 25.

Stafford v. Columbus Bonding Ctr. , 177 Ohio App.3d 799, 2008-Ohio-3948, 896 N.E.2d 191, ¶ 6 (10th Dist.).

4. Law of Employment Discrimination

{¶ 25} Taking all this into consideration, we now examine the existing law of employment discrimination. In Vossman , we stated:

"To prevail in an employment discrimination case, a plaintiff must prove discriminatory intent" and may establish such intent through either direct or indirect methods of proof. Ricker v. John Deere Ins. Co. , 133 Ohio App.3d 759, 766 [729 N.E.2d 1202] (10th Dist.1998), citing Mauzy v. Kelly Servs., Inc. , 75 Ohio St.3d 578, 583 [664 N.E.2d 1272] (1996). Absent direct evidence of age discrimination, a plaintiff may indirectly establish discriminatory intent using the analysis promulgated in McDonnell Douglas Corp. v. Green , 411 U.S. 792, 93 S.Ct. 1817 [36 L.Ed.2d 668] (1973), as adopted by Supreme Court of Ohio in Barker v. Scovill, Inc. , 6 Ohio St.3d 146 [451 N.E.2d 807] (1983), and modified in Coryell v. Bank One Trust Co. N.A. , 101 Ohio St.3d 175, 2004-Ohio-723 [803 N.E.2d 781].

Id. at ¶ 15.

a. Law of Establishing a Prima Facie Case

{¶ 26} Appellants stated they intended to prove discriminatory intent on the part of appellees indirectly, using circumstantial evidence. The Supreme Court of Ohio outlined the test for proving such intent indirectly in Coryell v. Bank One Trust Co., N.A., 101 Ohio St.3d 175, 2004-Ohio-723, 803 N.E.2d 781 :

[A]bsent direct evidence of age discrimination, in order to establish a prima facie case of a violation of R.C. 4112.14(A) in an employment discharge action, a plaintiff-employee must demonstrate that he or she (1) was a member of the statutorily protected class, (2) was discharged, (3) was qualified for the position, and (4) was replaced by, or the discharge permitted the retention of, a person of substantially younger age.

Id. at ¶ 20.

{¶ 27} Alternatively, a plaintiff can establish the fourth prong by demonstrating that a " 'comparable non-protected person was treated better.' " Vossman at ¶ 16, quoting Mitchell v. Toledo Hosp. , 964 F.2d 577, 582-83 (6th Cir.1992) ; Clark v. Dublin , 10th Dist. No. 01AP-458, 2002 WL 465013. Establishing a prima facie case " 'creates a presumption that the employer unlawfully discriminated against the employee.' " Williams v. Akron , 107 Ohio St.3d 203, 2005-Ohio-6268, 837 N.E.2d 1169, ¶ 11, quoting Texas Dept. of Community Affairs v. Burdine , 450 U.S. 248, 254, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981).

{¶ 28} The trial court determined Vossman established a prima facie case, and we affirmed that determination in Vossman .

b. Law of Articulating a Legitimate Non-discriminatory Reason for Terminating Vossman's Employment

{¶ 29} If a plaintiff establishes a prima facie case, the burden of production shifts to the employer to articulate some legitimate, non-discriminatory reason for discharging the employee. Caldwell v. Ohio State Univ. , 10th Dist. No. 01AP-997, 2002-Ohio-2393, 2002 WL 992379, ¶ 61, citing Burdine at 253, 101 S.Ct. 1089. "The employer meets its burden of production by submitting admissible evidence that ' "taken as true , would permit the conclusion that there was a nondiscriminatory reason for the adverse action" ' * * * that the prima facie case establishes." (Emphasis sic.) Vossman at ¶ 17, quoting Williams at ¶ 12, quoting St. Mary's Honor Ctr. v. Hicks , 509 U.S. 502, 509, 113 S.Ct. 2742, 125 L.Ed.2d 407 (1993).

{¶ 30} Appellants did not contest that appellees established a legitimate, non-discriminatory reason for Vossman's termination: "because [Vossman] violated a known directive [that Vossman cease communicating with other AirNet employees regarding the complaint by continuing to communicate with other co-employees regarding the continuing investigation]." Id. at ¶ 24.

c. Law of Pretext

{¶ 31} If the employer meets its burden of production by articulating a legitimate non-discriminatory reason for termination, a plaintiff must prove by a preponderance of the evidence that the employer's legitimate, non-discriminatory reason was merely a pretext for unlawful discrimination. Barker v. Scovill, Inc. , 6 Ohio St.3d 146, 148, 451 N.E.2d 807 (1983). " 'The ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff.' " Ohio Univ. v. Ohio Civ. Rights Comm. , 175 Ohio App.3d 414, 2008-Ohio-1034, 887 N.E.2d 403, ¶ 67 (4th Dist.), quoting Burdine at 253, 101 S.Ct. 1089. " '[A] reason cannot be proved to be "a pretext for discrimination " unless' " plaintiff demonstrates " 'both that the reason was false, and that discrimination was the real reason.' " (Emphasis sic.) Williams at ¶ 14, quoting St. Mary's Honor at 515, 113 S.Ct. 2742.

{¶ 32} The trial court found that "[Vossman] and his counsel * * * knew, by April 26, 2012 at [the] latest, that there was no evidence, circumstantial or direct, indicating that age actually motivated [appellees'] decision to terminate [Vossman's] employment." (Feb. 12, 2015 Decision at 9.) In particular, the court found that after the April 26, 2012 deposition, Vossman and his counsel knew "[appellees'] stated reason for terminating [Vossman's] employment was true [and] no proof that age was a factor behind his termination." (Feb. 12, 2015 Decision at 9.) The trial court also found that Vossman and his counsel "definitively knew by April 26, 2012, that there was no evidence of similarly situated employees being treated more favorably than [Vossman]." (Feb. 12, 2015 Decision at 9.)

{¶ 33} In support of the trial court's finding, appellees point this court to Vossman's own testimony and admission that he was instructed to cease communications with other AirNet employees regarding the investigation and that he violated this instruction. Appellees argue, therefore, that given Vossman's own testimony, Vossman and his counsel were aware that they could not meet the first criteria for proving pretext-that the reason given by the employer was false. We will consider the same in light of the existing law of pretext and whether a reasonable lawyer would have continued to pursue the action.

{¶ 34} Appellants point to the general law outlined in St. Mary's Honor , and Manzer v. Diamond Shamrock Chems. Co. , 29 F.3d 1078, 1084 (6th Cir.1994), as case law supporting the continued pursuit of this case after Vossman's deposition. In St. Mary's Honor , the United States Supreme Court clarified the court's role at the pretext stage:

[Once t]he defendant's "production" (whatever its persuasive effect) [has] been made, the trier of fact proceeds to decide the ultimate question: whether plaintiff has proved "that the defendant intentionally discriminated against [him]" because of his [age], Burdine , 450 U.S. 248, 253 [101 S.Ct. 1089]. The factfinder's disbelief of the reasons put forward by the defendant (particularly if disbelief is accompanied by a suspicion of mendacity) may, together with the elements of the prima facie case, suffice to show intentional discrimination. Thus, rejection of the defendant's proffered reasons will permit the trier of fact to infer the ultimate fact of intentional discrimination, and * * * upon such rejection, "no additional proof of discrimination is required ," * * * (emphasis added). But the Court of Appeals' holding that rejection of the defendant's proffered reasons compels judgment for the plaintiff disregards the fundamental principle of Rule 301 that a presumption does not shift the burden of proof, and ignores our repeated admonition that the Title VII plaintiff at all times bears the "ultimate burden of persuasion."
* * *
But a reason cannot be proved to be "a pretext for discrimination " unless it is shown both that the reason was false, and that discrimination was the real reason.

(Emphasis sic.) Id. at 511, 515, 113 S.Ct. 2742.

{¶ 35} In Manzer , the federal court held:

To make a submissible case on the credibility of his employer's explanation, the plaintiff is "required to show by a preponderance of the evidence either (1) that the proffered reasons had no basis in fact , (2) that the proffered reasons did not actually motivate his discharge, or (3) that they were insufficient to motivate discharge." McNabola v. Chicago Transit Authority , 10 F.3d 501, 513 (7th Cir.1993) (emphasis added and quotation marks omitted). The first type of showing is easily recognizable and consists of evidence that the proffered bases for the plaintiff's discharge never happened, i.e. , that they are "factually false." [ Anderson v. Baxter Healthcare Corp. , 13 F.3d 1120, 1123-24 (7th Cir.1994).] The third showing is also easily recognizable and, ordinarily, consists of evidence that other employees, particularly employees not in the protected class, were not fired even though they engaged in substantially identical conduct to that which the employer contends motivated its discharge of the plaintiff. These two types of rebuttals are direct attacks on the credibility of the employee's [sic] proffered motivation for firing plaintiff and, if shown, provide an evidentiary basis for what the Supreme Court has termed "a suspicion of mendacity." Hicks , 113 S.Ct. at 2749. As Hicks teaches, such a showing permits, but does not require, the factfinder to infer illegal discrimination from the plaintiff's prima facie case.
The second showing, however, is of an entirely different ilk. There, the plaintiff admits the factual basis underlying the employer's proffered explanation and further admits that such conduct could motivate dismissal. The plaintiff's attack on the credibility of the proffered explanation is, instead, an indirect one. In such cases, the plaintiff attempts to indict the credibility of his employer's explanation by showing circumstances which tend to prove that an illegal motivation was more likely than that offered by the defendant. In other words, the plaintiff argues that the sheer weight of the circumstantial evidence of discrimination makes it "more likely than not" that the employer's explanation is a pretext, or coverup.

(Emphasis sic.) Id. at 1084.

{¶ 36} This court cited this holding from Manzer in Vossman and discussed therein whether, pursuant to the third prong of Manzer , the trial court erred in granting summary judgment to appellees. Now, however, appellants assert they were justified in continuing to pursue the claim of age discrimination following Vossman's deposition under the second prong of Manzer -that the proffered reasons did not actually motivate his discharge. As noted above, under the second prong of Manzer , a plaintiff may admit the facts underlying an employer's proffered explanation and concede that such conduct could motivate discharge, yet still pursue the case by attacking the credibility of the employer's explanation. Appellants point to several pieces of evidence to support this claim.

{¶ 37} First, appellants claim there was evidence that appellees changed their explanation for terminating Vossman. Specifically, appellants point to: (1) appellees' initial statements that Vossman was terminated pursuant to an official policy regarding investigations, although there was no evidence of such policy and appellees later claimed that Vossman was terminated for violating a verbal directive, and (2) appellees' statement that Vossman was twice told to refrain from speaking about the investigation, although the evidence reflected only one instance in which Vossman was verbally told to refrain from discussions.

{¶ 38} Appellants provided several evidentiary materials attached to their objections to the magistrate's entitlement decision to support these contentions. In response to an interrogatory seeking "each and every reason Plaintiff's employment with AirNet was terminated, the factual basis for the reason(s), and identify all persons who made that decision on behalf of AirNet," appellees responded:

Subject to and without waiving any objections, [appellees] state that as a result of complaints relating to his unsafe flying practices, [Vossman] was placed on paid leave while [AirNet] investigated the allegations against him. These allegations, if proven true through AirNet's investigation, warranted disciplinary action up to and including discharge. Pursuant to Company policy , AirNet requested [Vossman's] cooperation with the investigation and specifically asked that [Vossman] keep the fact of the investigation confidential on no less than two occasions . Nonetheless, [Vossman] repeatedly breached this confidentiality by openly discussing the ongoing investigation. [Vossman's] efforts made it impossible for AirNet to properly investigate the complaints made against [Vossman]. In addition, [Vossman's] efforts caused other AirNet employees to suffer retaliation. As a result, [Vossman] was terminated. Quinn Hamon, Kim Miller and Thomas Schaner were involved in the decision to terminate [Vossman]. Amy Blackburn, Mike Troy, and Keith McGeorge presented complaints to AirNet regarding [Vossman] failure to comply with AirNet's policies and procedures. Further answering, see documents produced herewith.

(Emphasis added.) (Appellants' Objs. to Mag.'s Entitlement Determination, Ex. E at 4-5.) Appellants also pointed to a personnel action form purportedly authored by Schaner, which stated:

During the course of the investigation, Dan spoke to individuals not directly associated with the investigating team. His actions compromised the investigation, may have subjected other parties associated with the investigation to attempts of retribution and his sharing of information was indirect [sic] violation of company policy . The policy states that such violations are grounds for termination of employment. Consistent with the stated policy Dan's employment with AirNet was terminated.

(Emphasis added.) (Appellants' Objs. to Mag.'s Entitlement Determination, Ex. D.)

{¶ 39} In their motion for summary judgment, appellees made no mention of a policy or multiple directives but, instead, stated that "[Vossman] admits that AirNet directed him to maintain the confidentiality of the investigation" and that "[Vossman] admits that he knowingly violated the directive ." (Emphasis added.) (Mot. for Sum. Jgmt. at 12-13.) Schaner, in his affidavit filed in support of the motion for summary judgment, made no mention of the discussion being in violation of company policy or that Vossman violated more than one directive to maintain confidentiality:

Unfortunately, [Vossman] did not permit me to continue the investigation. [Vossman] e-mailed, phoned and texted various AirNet pilots and solicited generic statements on his behalf. These solicitations were particularly harmful to the investigation because [Vossman] advised the potential witnesses of the complaint and underlying issues.
At my request, Ms. Miller contacted [Vossman] on Friday, March 12, 2011, to instruct him to discontinue all discussions with AirNet employees regarding the investigation, the allegations made against him, or his response to the allegations.
Despite this instruction , I learned from two AirNet pilots, Keith McGeorge and Bill Ronk, that [Vossman] contacted them to discuss the ongoing investigation after [Vossman] spoke with Ms. Miller on March 12, 2011.
As a result of Mr. Vossman's complete disregard of a Company directive , which hindered the Company's ability to conduct an investigation, * * * I decided to terminate [Vossman's] employment.

(Emphasis added.) (Mot. for Sum. Jgmt. Ex. A at 4-5.)

{¶ 40} In support of their argument that this evidence demonstrated Vossman's claim was warranted under existing law, appellants cited to several cases arguing the shifting explanations by appellees raised an inference of mendacity. (See Appellants' Brief at 22, quoting Thurman v. Yellow Freight Sys., Inc. , 90 F.3d 1160, 1167 (6th Cir.1996) ; Edwards v. United States Postal Serv. , 909 F.2d 320, 324 (8th Cir.1990) ; and Schmitz v. St. Regis Paper Co. , 811 F.2d 131, 132 (2d Cir.1987) ("An employer's changing rationale for making an adverse employment decision can be evidence of pretext.").

{¶ 41} Second, appellants point to evidence they contend calls into question whether appellees' stated reason for terminating Vossman was the actual reason for his termination. Appellants attached to their objections to the magistrate's entitlement decision a copy of an e-mail exchange between Schaner and Miller. With respect to an e-mail he received from an AirNet employee in support of Vossman, Schaner wrote to Miller: "In addition to this little beauty I have also taken a call from [two other AirNet employees] on this topic. This is lining up as a 'damned if we do, damned if we don't' scenario for us quickly." (Appellants' Objs. to Mag.'s Entitlement Determination, Ex. G.) Miller replied: "Before I left I asked Quinn to make sure that he knows that he cannot retaliate against any pilot or talk to anyone about this. Did he tell [D]an that? I'm assuming these people know because Dan told them? Totally inappropriate of Dan and the others commenting." (Appellants' Objs to Mag.'s Entitlement Determination, Ex. G.)

{¶ 42} Although appellants, in the course of their representation, did not present these evidentiary materials in response to the motion for summary judgment, they did impliedly raise the issue of whether the stated reason actually motivated the challenged employment action. In the memorandum in opposition to the motion for summary judgment, Vossman made the following argument:

In this case, a co-worker complained about [Vossman's] safety on two flights and accused him of violating FAA regulations and company policies. [Vossman ] knew that he did not do what he was being accused of doing . [Vossman] was placed on leave and told an investigation would be conducted. Initially, [Vossman ] was not told the investigation was confidential , so he spoke to other long-term employees who had flown with him many times over the years about the allegations. When [appellees] began receiving letters of support from [Vossman's ] co-workers, [appellees] told [Vossman] not to communicate with anyone during the investigation. Knowing the allegations could not be proven with objective evidence, [appellees ] then terminated [Vossman's ] employment for speaking to his co-workers during the investigation .

(Emphasis added.) (Vossman's Memo. in Opp. to Mot. for Sum. Jgmt. at 12.)

{¶ 43} Appellants further support their argument with the affidavits of three experienced employment lawyers, Vossman's lawyer Kelm, Attorney Tobias, and Attorney Gittes, who averred that no competent employment lawyer would have dismissed this case after Vossman's deposition. Attorney Tobias averred that:

Based on [his 35 years of] experience [practicing employee-side employment law], frequently there is evidence and testimony concerning discrimination from sources other than the plaintiff victim of discrimination, both direct and circumstantial evidence and evidence of pretext, which if believed warrants a finding of discrimination.
* * *
In this case where the plaintiff established a prima facie case and presented substantial evidence of pretext in the reason given for discharge, no competent employment attorney would abandon his client and dismiss the case after the plaintiff testified that he knew of no direct evidence of age discrimination and that the employer was justified in investigating allegations of unsafe flying, particularly when substantial discovery was yet to be conducted.

(Tobias Aff. at ¶ 6, 9.)

{¶ 44} Attorney Gittes averred:

With some exceptions, in employment discrimination cases, it is unusual for a plaintiff's deposition testimony to provide outcome-determinative discovery information. Most employee plaintiffs do not have nearly as much information (either documents or admissible testimony) about the employer's motivation for the challenged employment decision. The discovery process, in employment litigation, is typically an opportunity for the plaintiff employee to obtain documents and testimony from the defendant employer's managers and employees (such as internal emails and memos, personnel file information about the plaintiff and comparator employees, information about past disciplinary actions, investigations, or instances of potential discrimination, and the decision-makers' explanations for their actions, along with their reaction to contradictory evidence). Whether a case develops to the point that the plaintiff's case can survive summary judgment and proceed to a jury trial depends largely on what records the employer produces, whether the employer's decision-making was documented in potentially damaging emails and memos, whether other employees were treated equally under similar circumstances, and whether the employer "gets it story straight" and avoids inconsistencies in key managers' testimony. The plaintiff employee's testimony generally has little impact on any of these areas.

(Gittes Aff. at ¶ 10.) Gittes further pointed the court to the second factor of Manzer and reiterated much of the evidence appellants pointed to as well as evidence suggesting that appellees attempted to suppress positive information about Vossman while collecting negative information. Finally, in reference to another experienced employment law attorney, appellants point to the fact that David Campbell, AirNet's counsel, conceded that appellants did not take too many depositions, but he thought they should have taken two more, or six in total.

{¶ 45} Appellees did not address Manzer in their brief before this court; rather, as noted above, they relied on Vossman's own testimony in support of its argument that the trial court should be affirmed. Nor did the magistrate or the trial court address the law of Manzer in its entitlement determination.

{¶ 46} Although appellants, prior to summary judgment, may not have artfully or fully pursued Vossman's claim in light of existing law, based on the foregoing evidence in the record and under the law of St. Mary's Honor and Manzer , we cannot find that "no reasonable lawyer would have brought the action in light of the existing law." Stafford at ¶ 6. Therefore, we find the trial court erred in awarding sanctions based on a finding that appellants' claims were not warranted under existing law, could not have been supported by a good-faith argument for an extension, modification, or reversal of existing law, or could not have been supported by a good-faith argument for the establishment of new law. Accordingly, we sustain appellants' first assignment of error.

B. Second and Third Assignments of Error

{¶ 47} Having sustained appellants' first assignment of error, appellants' second and third assignments of error are rendered moot.

IV. Conclusions of Law

{¶ 48} Having sustained appellants' first assignment of error and rendered moot appellants' second and third assignments of error, we reverse the judgment of the Franklin County Court of Common Pleas. We remand for the trial court to vacate the judgment entry of November 7, 2016, as well as the decisions of February 12, 2015 and October 19, 2016, finding appellants' engaged in frivolous conduct and awarding attorney fees to appellees for the same.

Judgment reversed and cause remanded with instructions.

BROWN, P.J., concurs.

HORTON, J., dissents.

{¶ 49} I respectfully dissent with the majority's finding any error in the trial court's adoption of the magistrate's June 3, 2014 decision, which rejects appellants' objections. In short, Vossman's own admission elicited from his deposition caused irreparable injury to his case. Furthermore, in light of these facts, I do not believe that appellees or the trial court and magistrate had any obligation to address the Manzer v. Diamond Shamrock Chems. Co. , 29 F.3d 1078 (6th Cir.1994), decision. The magistrate authored a well-reasoned decision and addressed all necessary standards of law.

      Plaintiff's Exhibits 1 through 7 were proffered but not admitted into evidence. Appellants, however, do not assign as error on appeal the trial court's determination to deny the motion to admit such exhibits into evidence. Therefore, they will not be considered as part of the court's record.

      Before the trial court, appellees also argued that appellants' conduct was frivolous because: (1) it served merely to harass or maliciously injure appellees or is for another improper purpose, including, but not limited to, causing unnecessary delay or a needless increase in the cost of litigation, and (2) it consisted of allegations or other factual contentions that have no evidentiary support or, if specifically so identified, are not likely to have evidentiary support after a reasonable opportunity for further investigation or discovery. See R.C. 2323.51(A)(2)(a)(i) and (iii). The trial court did not make any determination, express or implicit, whether appellants' conduct served merely to harass or maliciously injure appellees or was for another improper purpose. We decline to make such a determination in the first instance. The trial court did, however, make an implicit determination that appellants' allegations and factual contentions had no evidentiary support, although the court did not refer to the specific statutory authority in making such findings. Furthermore, appellants' assignment of error specifically argues there existed sufficient facts for them to proceed. Accordingly, we will discuss these determinations as relevant to our analysis of the trial court's finding pursuant to R.C. 2323.51(A)(2)(a)(ii).

      In Coryell , the Supreme Court held that "[a]ccordingly, we hold that a plaintiff may plead a prima facie case of age discrimination by pleading 'a short and plain statement of the claim showing that the party is entitled to relief.' " Id. at ¶ 25, citing Civ.R. 8(A)(1).

      In Vossman , at ¶ 28, we observed:
      Plaintiff contends defendants' reason was insufficient to motivate his discharge under the third prong of Manzer since similarly-situated employees received more favorable treatment despite engaging in the same conduct. To establish that defendants' legitimate, nondiscriminatory reason was insufficient, plaintiff must present "evidence that other employees, particularly employees not in the protected class, were not fired even though they engaged in substantially identical conduct to that which the employer contends motivated its discharge of the plaintiff." Id. at 1084.
      We ultimately held, at ¶ 30:
      Plaintiff specifically claims that AirNet did not equally enforce a policy that investigations were to be confidential because other employees also discussed the investigation as it was ongoing, but were not terminated. However, AirNet did not claim to have a policy that investigations were to be confidential. Rather, Schaner and Miller instructed plaintiff to cease discussing the complaint because, by actively recruiting other employees to lobby on his behalf to management, he was disrupting the ongoing investigation into the truth of Blackburn's complaint. Although plaintiff notes that other pilots also discussed the investigation with one another, he does not contend that any of the alleged comparables were the subject of an ongoing investigation. Further, plaintiff stated he was unaware of any pilot who was asked to maintain confidentiality and then breached that agreement.

      We note that appellants raise several additional arguments, which we do not discuss in detail in the body of this decision, including: (1) other senior pilots were no longer employed by AirNet within months following Vossman's termination, AirNet previously tried to get Vossman to retire, and that AirNet had a history of seeking to terminate older employees, (2) Schaner notified other employees by e-mail, instructing them to refrain from discussing the matter, and some of those employees, who were substantially younger than Vossman, violated this directive but were not terminated or otherwise disciplined, (3) appellees made several untrue representations to the trial court, including that "Bill Ronk did not know about the investigation of Vossman until after Miller told Vossman not to discuss it, when an e-mail produced in discovery showed otherwise," (4) AirNet changed its story regarding who among its senior staff was involved in the decision to terminate Vossman, and (5) AirNet moved its base to St. Louis in order to terminate two older pilots. (See Appellants' Brief at 19-20, 24, and 29 and Appellants' Reply Brief at 7-8.) As it is not necessary for us to analyze these contentions in order to reach our determination, we decline to address them.

      Our review of the record does not reveal that appellants raised Manzer in briefing or objections filed before the trial court. However, Attorney Gittes discussed Manzer , in particular the second prong of Manzer , in his affidavit which was submitted to the trial court as an attachment to appellants' objections to the magistrate's decision. In its entitlement determination, the trial court acknowledged the submission of affidavits of Attorneys Gittes and Tobias. Accordingly, we determine it is appropriate to address the same.


author: Zayas, Judge.

text:
    RONALD J. SOLOMON, D.D.S., INC., d.b.a. Cornerstone Dental Group, Plaintiff-Appellant, v. Bethany DAVISSON, Defendant-Appellee.
    NO. C-170403
    Court of Appeals of Ohio, First District, Hamilton County.
    Date of Judgment Entry on Appeal: May 23, 2018
    Karen Comisar Prescott, Cincinnati, for Plaintiff-Appellant,
    Bethany Davisson, pro se.
    OPINION.
   Zayas, Judge.

Background

{¶ 1} Defendant-appellee Bethany Davisson went to Ronald J. Solomon, D.D.S., to have dental work performed. She signed a "Financial Responsibility Agreement," which explained "that all fees are due and payable at the time the services are rendered unless prior financial arrangements have been made." In bold print, the next paragraph states "I further understand that a late charge of 1 ½% (18 APR) may be added to my account after sixty (60) days." Solomon performed several procedures over three days in late January of 2016. After Davisson's insurance paid a share of the charges, $1569 was still owed on her account. Davisson did not pay the remainder because she alleged she disputed two of the procedures. After a hearing, the magistrate reduced the amount owed by $178 for one of the dental fillings Davisson questioned. The magistrate entered judgment for "1391.00 + late charges from 1/19/11 at 18% per annum & post judgt. at 18% per annum." No objections to the magistrate's decision were filed.

{¶ 2} The trial judge rejected the magistrate's decision in part, ordered a copy of the transcript of the proceedings and took the matter under review. The court subsequently adopted in part and rejected in part the magistrate's decision. The court adopted the judgment amount of $1391, but rejected the assessment of the 18 percent interest. The decision stated that the judge had reviewed the transcript and the law and concluded that the plaintiff was "not entitled to prejudgment and post-judgment interest at 18% per annum. The Plaintiff sued on an account, not breach of contract claim. The financial agreement was permissive and not mandatory. The Plaintiff did not include the interest in billing. The Plaintiff has been made whole by the judgment." The trial court then entered judgment for Solomon for "$1391.00 plus judgment interest and cost [sic]." Solomon now appeals the trial court's rejection of the part of the magistrate's decision awarding him 18 percent interest.

{¶ 3} Solomon's assignment of error alleges that the trial court erred when it rejected the magistrate's decision in part on the grounds that the written financial responsibility agreement executed by the Davisson was not a contract, that Solomon was not entitled to contractual late fees, and that the late-fee provision was permissive and not mandatory. We agree.

{¶ 4} The trial judge found that Solomon was not entitled to prejudgment and post-judgment interest at 18 percent per annum. R.C. 1343.03(A) permits parties to agree to a contractual rate of interest. It provides that:

when money becomes due and payable upon any bond, bill, note, or other instrument of writing, upon any book account * * * the creditor is entitled to interest at the rate per annum determined pursuant to section 5703.47 of the Revised Code, unless a written contract provides a different rate of interest in relation to the money that becomes due and payable in which case the creditor is entitled to interest at the rate provided in that contract .

(Emphasis added.)

{¶ 5} The trial court found that Solomon sued on an account. "An open book account is a detailed statement that constitutes the principal record of the transactions between the creditor and debtor * * * [t]he statement details the debits and credits in connection with the debtor/creditor relationship." Cusano v. Klein , 264 F.3d 936, 942 (9th Cir.2001) ; Minster Farmers Coop. Exchange Co., Inc. v. Meyer , 117 Ohio St.3d 459, 2008-Ohio-1259, 884 N.E.2d 1056, ¶ 16. An invoice or account statement unilaterally stating interest terms does not meet R.C. 1343.03's requirement of a written contract. Minster at ¶ 28. In order for a written contract to exist for purposes of R.C. 1343.03(A), there must be a writing to which both parties have assented. Id. at ¶ 27. The trial court was presented with plaintiff's exhibit A, which is a copy of Davisson's "Patient History Report." It details her account reflecting Solomon's charges and payments made by Davisson and her insurance company. The trial court was also presented with plaintiff's exhibit D, which is a "Financial Responsibility Agreement."

Prejudgment Interest

{¶ 6} The "Financial Responsibility Agreement" is a document that, according to the transcript of proceedings, Solomon's patients were asked to read and sign. In this agreement, Davisson states that she is financially responsible for any and all treatment, that all fees are due and payable at the time services are rendered, and that a late charge of 1.5 percent (18 percent APR) may be added to her account after 60 days. The agreement is a written contract which evinces that both parties agreed that Davisson would be obligated to pay for the dental treatment she received and late charges after 60 days. "[A] judgment creditor is entitled to a contractual interest rate instead of the statutory rate when (1) the parties have a written contract, and (2) that contract provides a rate of interest with respect to money that becomes due and payable." Hobart Bros. Co. v. Welding Supply Serv., Inc. , 21 Ohio App.3d 142, 144, 486 N.E.2d 1229 (10th Dist.1985). The fact that the agreement stated that a late charge "may" be added to the account after 60 days gave Solomon the discretion to add a late charge. The language of the agreement was not permissive as to whether Davisson had to pay the late charge, if assessed.

{¶ 7} A trial court does not have discretion under R.C. 1343.03(A) in awarding prejudgment interest once a party has been granted judgment on an underlying contract claim. Rather, the party is entitled to prejudgment interest as a matter of law. Dayton Sec. v. Avutu , 105 Ohio App.3d 559, 566, 664 N.E.2d 954 (1995) ; Cafaro Northwest v. White , 124 Ohio App.3d 605, 707 N.E.2d 4 (1997) ;

Dwyer Elec., Inc. v. Confederated Builders, Inc., 3d Dist. Crawford No. 3-98-18, 1998 WL 767442 (Oct. 29, 1998) ; see Royal Elec. Constr. Corp. v. Ohio State Univ. , 73 Ohio St.3d 110, 652 N.E.2d 687 (1995) (holding that a similar statute, R.C. 2743.18(A), entitled parties to prejudgment interest against the state). The trial court rendered judgment for Solomon on the underlying contract for dental services, but did not award him interest at the rate provided in the contract. Pursuant to R.C.1374.03(A), we hold that Solomon was entitled to interest at the 18 percent rate.

When Prejudgment Interest Became Due and Payable

{¶ 8} While the right to prejudgment interest on a contract claim is a matter of law, the amount awarded is based on the court's factual determination of when the money "became due and payable." Fabrizi Trucking and Paving Co., Inc. v. City of Cleveland , 2017-Ohio-531, 85 N.E.3d 279, ¶ 37 (8th Dist.) ; Johncol, Inc. v. Cardinal Concession Services, L.L.C. , 10th Dist., 2017-Ohio-9031, --- N.E.3d ---- ; Royal Elec. at 115, 652 N.E.2d 687 ; Dwyer Elec. The record before us indicates that the magistrate determined that interest should begin to run from "1/19/11." Neither party objected to the magistrate's decision even though the date was more than five years before the contract was signed.

{¶ 9} Civ.R. 53(D)(4)(c) states that "[i]f no timely objections are filed, the court may adopt a magistrate's decision, unless it determines that there is an error of law or other defect evident on the face of the magistrate's decision." Yantek v. Coach Builders Ltd., Inc. , 1st Dist. Hamilton No. C-060601, 2007-Ohio-5126, 2007 WL 2812337 (the scope of the trial court's review depends on whether a party has filed objections).

{¶ 10} The magistrate's decision consisted of one line and assessed late charges from January 11, 2011 . The contract was signed on January 24, 2016, and the dental services were provided on January 25, 27, and 28 of 2016 .

{¶ 11} "Even when no objections are filed, a judge has a duty to review a magistrate's decision before adopting it." In re Weingart , 8th Dist. Cuyahoga No. 79489, 2002 WL 68204 (Jan. 17, 2002), citing Miele v. Ribovich , 90 Ohio St.3d 439, 739 N.E.2d 333 (2000). We find that the trial court did not perform the necessary review of the magistrate's decision for "defects evident on the face of the magistrate's decision." Civ.R. 53(D)(4)(c).

Conclusion

{¶ 12} Accordingly, we sustain Solomon's assignment of error, and reverse the trial court's determination that Solomon was not entitled to prejudgment and post-judgment interest. As neither party appealed the amount of the underlying judgment of $1391, we remand the cause to the trial court to determine the date when the money owed Solomon became due and payable and to calculate the judgment for Solomon using the contractual rate of interest.

Judgment reversed in part and cause remanded.

Mock, P.J. and Miller, J., concur.