Opinion
CV 12 786776
02-07-2014
GENERAL MOTORS, LLC, Plaintiff v. DUANE THORNHILL, Sr., Defendant
JOURNAL ENTRY GRANTING THE PLAINTIFFS' MOTION TO DISMISS THE COUNTERCLAIM AND GRANTING AND DENYING IN PART THE DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS
STATEMENT OF THE CASE
This lawsuit began with a complaint by plaintiff General Motors alleging that the defendant Duane Thornhill, Sr., a GM employee, misused GM's employee discount program by giving the discount to people who did not qualify for it. Thornhill then asserted counterclaims for fraud, negligent misrepresentation, defamation and declaratory judgment. Each counterclaim includes a request for class action certification. The proposed class essentially encompasses all defendants in similar lawsuits by GM.
--------- Notes: The actual proposed class is: all people who have been named as a defendant in a lawsuit filed by GM for the repayment of discounts on vehicles purchased through the General Motors vehicle purchase programs where the cost of each vehicle sold exceeded $500, the agreement had a duration of more than a year, and the defendant did not sign a writing affirmatively agreeing to be bound by such agreement. [2]Exhibit 2 to the counterclaim shows that on October 4, 2006, the program was expanded to let employees give the discounts to " two friends or acquaintances per month." To reflect that expansion the name of the program was changed from " GM in the Driveway" to " GM Supplier Discount for Friends." But " GM Supplier Discount for Friends" still fell under the rubric " GM Family First." Although not described in the complaint, the counterclaim alleges that there were two tiers of discounts offered: employee discounts and supplier discounts. The defendant alleges that the employee discounts could be used only by relatives and the supplier discounts could be extended to friends and acquaintances. Thornhill refers to the employee discounts as GMS and the supplier discounts as GMU. [3]This process is described in Exhibit 1 to the defendant's counterclaim, a copy of a brochure apparently provided to GM employees. [4]Complaint, ¶ 1. [5] Id., ¶ 25. [6]Counterclaim, p. 4-5. [7] Id., ¶ 62. [8] Id., ¶ 71. [9] Id., p. 17-18, ¶ ¶ 75-78. [10]See Exhibit 7 to the counterclaim. This is a GM form letter to another employee/defendant, Calvin Arnold, listing the questioned purchases by V.I.N., purchaser name, delivery date, model and model year. [11]Motion for judgment on the pleadings, page 6. [12]Brief in opposition to the motion for judgment on the pleadings, p. 16. [13]Complaint, ¶ 25. [14] Id., ¶ ¶ 25-26. [15]Motion for judgment on the pleadings, p. 7. [16]Br. in opp., p. 5. [17]The complaint describes five unqualified buyers but Exhibit 2 is a list of six transactions. Presumably, one buyer bought two cars. [18]Complaint, ¶ 10. [19]Motion for judgment on the pleadings, p. 9. [20] Id. [21]Counterclaim, ¶ 4 and ¶ 6. In describing the so-called abuse of the program by dealers Thornhill never alleges that the authorization numbers were stolen or otherwise used without his knowledge. [22]Counterclaim, ¶ 11. [23] Id., ¶ 59. [24] Id., ¶ 61. [25] Id., ¶ 62. [26]Defendant's brief in opposition to the motion to dismiss, p. 9. As an aside, all of Thornhill's allegedly ineligible transactions took place in 2006 and 2007, years when no " representation" to encourage use of the discount program was made. [27] Id. [28] Id. [29]Counterclaim, ¶ 56. [30]The request for additional information in connection with the audit not only cannot constitute a false representation of fact, but Thornhill doesn't allege that it is. [31]Counterclaim, ¶ 67. [32] Id., ¶ 68. [33] Id., ¶ 70. [34] Id., ¶ 71. [35] Id., ¶ 75. [36] Id. ---------
Thornhill has now filed a motion for judgment on the pleadings and GM has filed a motion to dismiss the counterclaims. Both motions are fully briefed and this entry follows.
THE COMPLAINT AND COUNTERCLAIM
General Motors manufactures cars. The defendant is an employee of GM. As one of the defendant's employee benefits he is entitled to participate in the General Motors Vehicle Purchase Program, which allows him and his relatives to get discounts when buying a General Motors vehicle. The terms of the purchase program are described in a document captioned " General Motors Vehicle Purchase Programs Rules and Guidelines, " attached as Exhibit 1 to the complaint.
To participate in the program, an eligible employee gets an authorization number from GM and then provides it to a GM dealer, who applies the discount on a sale to a " sponsored purchaser, " i.e. the employee's relative or friend. The complaint alleges that Thornhill " violated the program rules by providing the discount to individuals who do not qualify for the program." According to GM, Thornhill obtained discounts for seven vehicles from 2006 to 2007, but five of those buyers were people who did not qualify as sponsored purchasers. These violations were not uncovered until a 2009 audit revealed them. Before filing the lawsuit GM sought additional information from Thornhill to substantiate the purchasers' eligibility for the discount. Thornhill did not respond and the lawsuit was filed.
The complaint includes three causes of action: fraud or negligent misrepresentation, conversion and breach of contract. For the fraud claim GM asserts that the defendant knew his buyers were not eligible for the discount but represented that they were. GM then relied on those representations and gave the discounts, to their detriment. GM alleges that the representations were intentional or made with reckless disregard of their truth or falsity.
For conversion, the plaintiff claims that Thornhill obtained " discounts for five separate vehicles, which, based upon information and belief, he converted for his own benefit and financial gain." As damages, GM claims the difference between the manufacturer's suggested retail price and the discounted price.
Finally, for the breach of contract claim, GM asserts that Thornhill broke the terms of the program by getting the discount for people who did not qualify and then refused to honor the contractual obligation that he reimburse GM for any discount extended to an unqualified purchaser.
Thornhill counterclaimed with four causes of action. He alleges that he was " victimized by unscrupulous dealers who used the GMS authorization numbers to extend discounts to illegible ( sic ) consumers without" his knowledge. According to Thornhill, GM knew its dealers were improperly using the authorization numbers for ineligible buyers but, instead of stopping that abuse and seeking restitution from the dealers, GM hounded him. Additionally, Thornhill denies ever signing a contract with the discount program's terms and conditions.
Thornhill's first counterclaim alleges fraud, claiming, in essence, that GM knows he did nothing wrong because the underlying sales were either made to eligible buyers or were procured through the dealers' fraud, but is persisting " through its collection and legal efforts . . . to extort additional profits from its present and former employees."
The defendant's second counterclaim alleges negligent misrepresentation. Here, Thornhill says GM did not exercise due care in investigating the transactions that its audit revealed might be fraudulent, and because of that failure GM has asserted " false claims" against him for excessive damages.
The third counterclaim cause of action is defamation. Thornhill supports this tort claim as follows:
75. GM's claims that the vehicle transactions identified in its audits of Counterclaim Plaintiff and other similarly situated were fraudulent and in violation of the terms of the GMVPP's were either partly or completely false.
76. On the basis of these false claims of fraud on the part of Counterclaim Plaintiff and other class members, GM filed lawsuits in Ohio courts, which are publicly available documents, and are a matter of public record.
77. Records of lawsuits and any resulting judgments are routinely scanned by credit reporting agencies and other data base aggregators that furnish information to employers for background checks.
78. As the proximate result of the publication of GM's claims and their subsequent acquisition by information vendors, Counterclaim Plaintiff and the other class members' ability to obtain credit and employment has been damaged.
(All spelling, punctuation and grammar sic .)
The last of the counterclaims seeks three declaratory judgments: that GM and Thornhill had no written contract and therefore the breach of contract claim is barred by the statute of frauds; that the complaint's fraud cause of action is barred by the statute of limitations; and that GM is estopped from claiming the damages sought in this lawsuit because it did not include the prospective recovery here as an asset in its 2009 bankruptcy filing.
THE DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS
Judgment on the pleadings standard
Thornhill's motion is made under Rule 12(C) of the Ohio Rules of Civil Procedure, but it is considered under the same standard as a Civil Rule 12(B)(6) motion to dismiss for failure to state a claim: the trial court is required to accept as true all the material allegations in the complaint, and to draw all reasonable inferences from those allegations in favor of the nonmoving party. Peterson v. Teodosio , 34 Ohio St. 2d 161, 165-166, 297 N.E.2d 113 (1973). A complaint should not be dismissed on the pleadings unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Dottore v. Vorys, Sater, Seymour & Pease, L.L.P ., 8th Dist. No. 98861, 2014-Ohio-25, ¶ 95.
The fraud and misrepresentation claims
The defendant argues that GM's fraud and misrepresentation claims must be dismissed because the fraud claim has not been pled with the specificity required by Civil Rule 9 and unlawfully places the burden to negate the existence of fraud on Thornhill, and because the elements of negligent misrepresentation have not been alleged.
The elements of fraud are (a) a representation or, where there is a duty to disclose, concealment of a fact, (b) which is material to the transaction at hand, (c) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred, (d) with the intent of misleading another into relying upon it, (e) justifiable reliance upon the representation or concealment, and (f) a resulting injury proximately caused by the reliance. Glazer v. Chase Home Fin. L.L.C ., 8th Dist. Nos. 99875 and 99736, 2013-Ohio-5589, ¶ 80.
According to Civil Rule 9(B), the circumstances constituting fraud shall be stated with particularity. Failure to do so subjects the complaint to dismissal. Here, Thornhill complains that GM hasn't alleged which purchasers did not qualify for the discount and when and where Thornhill made false representations to GM that certain purchasers qualified for the discount.
The complaint alleges that after its 2009 audit, GM sought more detailed information from Thornhill about five of the purchasers who used his authorization number. Although not specifically averred, it is reasonable to infer that the details of those purchases, including the buyer's name and the date sold, were made known to Thornhill at that time. The complaint also includes as an exhibit a list of the purchases which shows the date and dealership where the authorization number was used and the vehicle identification number of the car that was bought. The particularity requirement of Civil Rule 9(B) means that the pleading must contain allegations of fact which tend to show each and every element of a cause of action for fraud. CitiMortgage, Inc. v. Hoge , 196 Ohio App.3d 40, 2011-Ohio-3839, ¶ 23, 962 N.E.2d 327 (8th Dist.). It does not mean that every single detail of the fraud must be included. Indeed, since fraud by its nature is hidden it is rarely possible to include every detail at the pleading stage. GM alleged that Thornhill represented that certain purchasers were eligible for a discount when they were not. GM, relying on those false representations, extended the discounts to its ultimate detriment. These allegations are sufficient to state a fraud cause of action, and Thornhill is free to fill in more details through discovery.
In arguing that GM has failed to allege the elements of negligent misrepresentation, Thornhill cites to the elements of a tort first discussed by the Ohio Supreme Court in Haddon View Inv. Co. v. Coopers & Lybrand , 70 Ohio St. 2d 154, 436 N.E.2d 212 (1982). That tort, which I refer to as professional negligent misrepresentation, is committed when, in the course of one's business, a person supplies false information for the guidance of others in their business transactions which results in a loss caused to them by their justifiable reliance upon the information, if the person fails to exercise reasonable care or competence in obtaining or communicating the information. Id., at 157. But that is not the tort alleged by GM. Instead, GM includes in its fraud cause of action a claim that Thornhill made the statements about the buyers' eligibility with reckless disregard for their truth as an alternative to the allegation that he made the false statement intentionally and maliciously. In short, there is no separate cause of action pled. That being the case, there is nothing to dismiss.
Conversion
Thornhill has moved to dismiss the conversion claim on the basis that GM " is not seeking the return of specifically identifiable funds."
Conversion is the wrongful control or exercise of dominion over property belonging to another inconsistent with or in denial of the rights of the owner. Pointe at Gateway Condo. Owners' Ass'n v. Schmelzer , 8th Dist. Nos. 98761 and 99130, 2013-Ohio-3615, ¶ 64. In order to prove the conversion of property, an owner must demonstrate (1) he or she demanded the return of the property from the possessor after the possessor exerted dominion or control over the property, and (2) that the possessor refused to deliver the property to its rightful owner. Id. The measure of damages in a conversion action is the value of the converted property at the time it was converted. Id.
In Wiltberger v. Davis , 110 Ohio App.3d 46, 673 N.E.2d 628 (1996), the Tenth District Court of Appeals considered a plaintiff's claim for conversion based on the defendant's failure to pay him sales commissions. The court reviewed the " scant authority" on the question of whether a claim for conversion exists where the property allegedly converted is money and concluded that " existing law generally allows actions for conversion to be based only upon the taking of identifiable, tangible personal property." Id., at 55. GM tries to get around this obstacle to a conversion claim for the recovery of money by arguing that its claim is for Thornhill's conversion of " discount codes." But that is not what the complaint alleges. Instead, GM asserted that Thornhill " used the [p]rogram to obtain discounts . . . which . . . he converted for his own benefit and financial gain., " causing damage to GM of $20, 767.41 -- the total value of the discounts -- and " GM is entitled to recover these monies from" Thornhill (emphasis added).
There is no question that GM seeks the return of money and, under the current state of the law, has not pled the elements of conversion.
Breach of contract
For the complaint's breach of contract claim, Thornhill argues that the statute of frauds requires its dismissal because the alleged contract is not in writing and 1) cannot be performed within one year or 2) involves the purchase of goods for five hundred dollars or more. As Thornhill puts it:
[T]he program contemplates that employees will participate throughout their employment, even into their retirement. As such, there is no possible way for the entire " contract" identified by GM to be performed within a single year.
GM responds to this argument by describing the contract not as the provision of the discount program itself but as a given employee's specific request to use the discount:
Under the Program, GM promised to " provide [] certain discount benefits to defendant[s]" in return for a promise that they will comply " with all of the terms and conditions of the Program." (Comp. at ¶ 29.) Each time an employee obtained a discount through the Program, he or she accepted GM's offer for the discount and in return promised to abide by the terms of the Program, participate in periodic audits, and reimburse GM for " any sales that do not meet The Program guidelines."
The plaintiff more accurately describes the alleged contract than the defendant. The elements of a contract include an offer, an acceptance, contractual capacity, consideration (the bargained-for legal benefit or detriment), a manifestation of mutual assent, and legality of object and of consideration. Kostelnik v. Helper , 96 Ohio St.3d 1, 2002-Ohio-2985, ¶ 16, 770 N.E.2d 58. The offer is the chance to use a discount for any single transaction in accordance with the program conditions and acceptance of the offer is demonstrated by the employee's use, for a given transaction, of the authorization number. The consideration, from GM's perspective, is the employee's service to the company. In Thornhill's case, GM is actually alleging six separate contracts, all of which were performed in less than one year - where performance is gauged from the time an authorization number is used until the car is transferred - and do not fall within the requirement that contracts not to be performed within one year must be in writing.
Because the provision of a discount in connection with the sale of a car is not itself a contract for the sale of goods, Thornhill's alternative argument under the statute of frauds is unpersuasive.
Statute of limitations
Thornhill's final justification for dismissing parts of the complaint is that the claims are barred by the applicable statute of limitations. He contends that the four-year statute of limitations for claims of fraud for each allegedly unauthorized purchase began to run on the date of the purchase and that GM is not entitled to the benefit of the " discovery rule" in the statute of limitations.
R.C. 2305.09 requires that a claim for fraud must be brought within four years of the date the cause of action accrued, but a claim does not accrue " until the fraud is discovered." The discovery rule operates to extend the time in which a party may file a complaint. Marks v. Keybank N.A ., 8th Dist. No. 84691, 2005-Ohio-769, ¶ 24. Generally, the discovery rule states that the statute of limitations does not begin to run until the plaintiff discovered, or through the exercise of reasonable diligence, should have discovered, the complained of injury. Id. When determining whether, through the exercise of reasonable diligence, a party should have discovered a case of fraud, the relevant inquiry is whether the facts known would lead a fair and prudent man, using ordinary care and thoughtfulness, to make further inquiry. Id.
GM alleges in the complaint that it " discovered for the first time" during a 2009 audit that some buyers who used Thornhill's authorization number may not have been eligible for their discounts. That allegation is taken as true in the context of a motion for judgment on the pleadings. So, if the audit was done on January 1, 2009, or after, this lawsuit would be timely as long as it was filed by January 1, 2014, which it was.
Yet Thornhill argues that " GM pleads no facts that justify applying a discovery rule" and that reasonable diligence would have revealed the fraud at the time it happened since Thornhill did not take " any steps to conceal any fact about the transactions." There are two deficiencies in that argument. First, it ignores the nature of fraud, which is to represent as true something which is not, i.e. to " conceal" the truth. Second, according to the complaint, Thornhill represented that certain buyers were eligible for the discount. Considering the program's rules, GM was entitled to take his representations as true without taking extra steps to make sure they were. In other words, GM had no obligation to question Thornhill's representations at the time they were made. To put it yet another way, should a liar avoid the consequences of his lie by blaming the other person for believing him?
The fraud here was allegedly uncovered less than four years before suit was filed and judgment in Thornhill's favor on the pleadings is not warranted.
THE PLAINTIFF'S MOTION TO DISMISS THE COUNTERCLAIMS
The standard used in considering a motion to dismiss is given above in connection with the motion for judgment on the pleadings and it is not necessary to repeat it here.
The gist of the motion to dismiss is that the counterclaims are barred by the litigation privilege and that, in any event, they do not adequately plead the elements of the stated causes of action. Thornhill defends on the proposition that the litigation privilege does not extend to the facts alleged in the counterclaim, namely a years-long course of out-of-court conduct. He also disagrees that his causes of action are not supported by adequate factual allegations.
Since the motion stands or falls on the specifics of the facts alleged in the counterclaims, it is worth examining those allegations in detail.
Allegations applicable to all three counterclaims
Thornhill alleges that GM " has had a substantial problem" with dealers abusing the discount program by the use of " improperly acquired" authorization numbers, but instead of sanctioning dealers GM is pursuing him and the other defendants in the consolidated cases.
The defendant goes on to claim that GM encouraged the use of the discount program, but used ever-changing incentives and rules to administer it. He alleges that, at one point, the employee discount was extended " to anyone in the general public." But the basics of the program remained the same: employee, or " GMS, " pricing applied to employees and family members, and supplier, or " GMU, " pricing was offered to suppliers and other businesses as well as friends of employees. The difference in available discounts under the two programs was about 3.5%, yet GM made no effort to give easily located information to allow employees to distinguish between the two.
Thornhill goes on to claim that even though GM knows whether the buyers using his authorization number got the GMS discount or the lower GMU discount, it is pursuing him for the higher discount on all of the supposedly ineligible purchases.
The counterclaim pleading also includes sundry allegations applicable to each cause of action: that GM could not have sustained damages since the discount program was open to the general public; that GM is estopped from pursuing claims that were not identified as potential assets in a 2009 bankruptcy filing; and that the claims are barred by the statutes of frauds and limitations.
The fraud counterclaim
For this cause of action, Thornhill alleges that GM encouraged its employees to use the GMS and GMU programs, and that GM knows which program discount was extended to which buyers because the authorization code number for any sale includes a signifier for one program or the other. He then repeats that GM " knew of the rampant abuse" of the employees' authorization numbers by dealers but is going after him instead of them. He also reiterates the charge that GM is pursuing him for the difference between the suggested retail price of the cars and the GMS discount price even though, at most, GM was damaged in an amount equal to the difference between the GMU discount price and the GMS price, since the GMU discount was " available to practically anyone." He then summarizes the fraud claim:
In short, GM, through its collection and legal efforts has attempted to extort additional profits from its present and former employees, for sales it encouraged, through programs it designed, at pricing levels it is aware of, for transactions that were compliant with its policies, or in the alternative were the result of fraudulent use of these employees Pin numbers by GM's dealerships.
(All grammar, punctuation and spelling sic .)
As discussed above, the elements of fraud -- a false representation made with intent to induce reliance, justifiable reliance, causation and damages -- must be pled with particularity. Having read and re-read the counterclaim, I am unable to discern the representation made by GM that Thornhill claims is false. Efforts to uncover an allegation of a false representation in the counterclaim are only confused, not assisted, by Thornhill's brief in opposition to GM's motion to dismiss. There, Thornhill describes two representations when he says that " GM represented that it was encouraging its employees to participate in the employee discount programs in 2005 and 2008." Then, once an employee relied on that first representation and found a buyer to participate in the program, GM made a second representation " to the relevant dealerships and employees that those transactions comported with program rules in place at the time." When " GM later changed its mind with respect to the prior transactions, which it had earlier approved and even actively promoted, the company necessarily rendered its earlier statements" false.
Setting aside the fact that this description of the allegedly false representations is from a brief in opposition and not the pleading, i.e. the counterclaim, there are several reasons these allegations do not plead with particularity any actionable misrepresentation.
First, encouraging employees to avail themselves of the discount program is not the same as making a factual representation. It is one thing to heavily promote the use of the program, which Thornhill claims happened, but quite another to mislead employees about buyer eligibility requirements or other details of the program, which Thornhill does not allege.
Second, and assuming the truth of Thornhill's counterclaim allegation that he used the program to make " purchases for eligible family members, " then the only representation that he facilitated ineligible transactions is contained in the complaint in this lawsuit. If that is the case, he has negated the possible existence of any other element of fraud because there is no way he could have justifiably relied on the allegations in the complaint.
Third, at the core of Thornhill's claim seems to be an implication that once an employee authorization number was approved for any given transaction, that was the end of the matter and GM had no right to an audit or a further inquiry to be sure the buyer was actually eligible for the discount. But the counterclaim contains no allegation to the effect that GM represented that all approvals were final, perhaps because the program rules attached to the complaint describe GM's right to an audit.
Last, to the extent Thornhill is claiming that GM tricked him into recruiting ineligible buyers just so it could get its discount back later by suing him, the fraud counterclaim is not plausible.
Negligent misrepresentation
Count two of the counterclaim is a mishmash of non sequiturs. Thornhill says he made purchases for eligible buyers through the GMS and GMU pricing programs. He then asserts that GM knew which program the discounts were given under because GM issued the authorization numbers, but in doing so " failed to implement procedures to avoid mistyping or misidentification" of the numbers. At that point he boards another train of thought to allege that GMS prices were " highly advertised" to the public and GM knew its dealers were abusing the discount program.
Without ever coupling the two trains, he concludes by saying that GM " failed to exercise due care in investigating suspected fraudulent transactions identified in its audits, " resulting in this false claim against Thornhill for damages that couldn't have been incurred even if the claim were true.
This count simply fails to allege an actionable false statement. The only false statement described is the " false claim" for damages in this lawsuit. If GM's claims in this lawsuit were known to be false at the time the complaint was filed then Thornhill may have recourse under Civil Rule 11 and R.C. 2323.51, the frivolous conduct statute. What he does not have is a cause of action for negligent misrepresentation.
Defamation
Defamation has five elements. First, there must be a false statement of fact; second, the false statement must be defamatory; third, the false defamatory statement has to be published by the party to be held liable; fourth, the publication must proximately cause injury to the party defamed; and fifth, the party making the statement must have acted with the requisite degree of fault. Temethy v. Huntington Bancshares, Inc ., 8th Dist. No. 83291, 2004-Ohio-1253, ¶ 14. For this counterclaim, Thornhill alleges that " GM's claims" that the sales using his authorization numbers were to ineligible buyers are " either partly or completely false." He says that GM published the false claims by filing this lawsuit, thereby damaging his credit and his ability to get a job since the false claims in the complaint are now known to credit bureaus and purveyors of employment background checks.
Construing all of the allegations of the counterclaim in Thornhill's favor, there are only two potentially false statements made about him by GM: the letter of inquiry to Thornhill triggered by the audit and this lawsuit. Thornhill does not mention the former in the third count of his counterclaim and it was never published to anyone but him; as for the latter, it cannot be the basis of a cause of action because it is absolutely privileged.
In Lang v. Trimble-Webber , 8th Dist. No. 75692 (Mar. 30, 2000), the Eighth District Court of Appeals considered a defamation claim by Charles Lang based on statements in a draft pleading sent by a defendant to a lawyer the defendant thought was representing Lang. The appellate panel noted that Ohio courts have long recognized that the doctrine of absolute privilege in judicial proceedings acts to bar defamation claims, and that the privilege extends to every step in the proceeding, from beginning to end.
The privilege is premised on the idea that conduct which otherwise would be actionable should escape liability because the person making the statement is acting in furtherance of some interest of social importance - namely the thorough discovery and examination of evidence relevant and material to a civil lawsuit - which is entitled to protection even at the expense of uncompensated harm to the plaintiff's reputation. Surace v. Wuliger , 25 Ohio St.3d 229, 231, 25 Ohio B. 288, 495 N.E.2d 939 (1986). There is no doubt that a privilege which operates to bar a defamation claim based on the publication of a draft complaint applies with even greater force to filing an actual complaint with a clerk of courts, and the defamation claim must be dismissed.
Declaratory judgment
For his final cause of action, Thornhill seeks a declaratory judgment that GM's lawsuit is barred by the statutes of fraud and limitations, and by the doctrine of judicial estoppel because GM did not identify the potential recovery against him as an asset in its 2009 bankruptcy.
The judicial estoppel doctrine precludes a party from assuming a position in a legal proceeding inconsistent with a position taken in a prior action. Saha v. Research Inst. at Nationwide Childrens Hosp ., 10th Dist. No. 12AP-590, 2013-Ohio-4203, ¶ 14 . In the bankruptcy context it can bar a claim for money damages by a plaintiff who knew about, but didn't disclose, the claim as a potential asset when filing for bankruptcy. The party asserting judicial estoppel must prove that its adversary (1) took a contrary position; (2) under oath in a prior proceeding; and (3) the prior position was accepted by the court. Wloszek v. Weston, Hurd, Fallon, Paisley & Howley, LLP , 8th Dist. No. 82412, 2004-Ohio-146, ¶ 27.
But estoppel, statute of frauds and statute of limitations are not counterclaims that support causes of action for the recovery of damages or the declaration of parties' rights. Instead, pursuant to Civil Rule 8(C), they are all affirmative defenses. As such, Thornhill is welcome to pursue them in this case but not as counterclaims.
CONCLUSION
For the reasons given here, the defendant's motion for judgment on the pleadings is granted as to GM's cause of action for conversion but is otherwise denied, and the plaintiff's motion to dismiss the counterclaims is granted in its entirety.
IT IS SO ORDERED.