Opinion
2023-P-0020
12-29-2023
THOMAS LAMBERT, Plaintiff-Appellant/ Cross-Appellee, v. GLOBAL INTERNATIONAL SERVICES, et al.,Defendants, HAPNEL FINANCIAL GROUP, INC., Defendant-Appellee/ Cross-Appellant, (JEFFREY W. KRUEGER, et al., Appellees).
Michael L. Fine, Michael L. Berler, and Ronald I. Frederick, Frederick & Berler, LLC, (For Plaintiff-Appellant/Cross-Appellee). Jeffrey W. Krueger, Krueger and Valente Law, LLC, (For Defendant-Appellee/Cross-Appellant and Appellees).
Civil Appeal from the Court of Common Pleas Trial Court No. 2020 CV 00325
Judgment: Reversed and Remanded
Michael L. Fine, Michael L. Berler, and Ronald I. Frederick, Frederick & Berler, LLC, (For Plaintiff-Appellant/Cross-Appellee).
Jeffrey W. Krueger, Krueger and Valente Law, LLC, (For Defendant-Appellee/Cross-Appellant and Appellees).
OPINION
ROBERT J. PATTON, J.
{¶1} Plaintiff-appellant/cross-appellee, John Lambert ("Lambert") appeals the decision of the Portage County Court of Common Pleas, which granted defendant-appellee's/cross-appellant's, Hapnel Financial Group, Inc. ("Hapnel"), motion to dismiss for lack of personal jurisdiction, denied Lambert's motion to strike and motion for sanctions against Attorney Kreuger, and granted Lambert's motion for fees for sanctions against Hapnel and Nelson Adesegha ("Adesegha"). Hapnel filed a cross appeal. For the following reasons, we reverse and remand the decision of the trial court for further proceedings consistent with this opinion.
{¶2} On May 22, 2020, Lambert, on behalf of himself and similarly situated consumers, filed a class action complaint against Global International Services LLC ("GIS"), Global Management Acquisition Firm, Inc ("GMAF"), Hapnel, and John Does 1-4. The complaint set forth the following claims for relief: Fair Debt Collection Practices Act ("FDCPA") violations, Ohio's Consumer Sales Practices Act ("CSPA") Violations, Telephone Consumer Protection Act ("TCPA") Violations, Invasion of Privacy, and Civil Conspiracy.
{¶3} On September 18, 2020, Hapnel filed a motion to dismiss pursuant to Civ.R. 12(B)(2) and (6). Lambert filed a motion to compel Hapnel to provide responses to discovery and further filed a motion to stay the ruling on Hapnel's motion to dismiss, pending discovery on September 25, 2020. Lambert also filed a motion to deem admitted certain requests for admission. Hapnel sought a protective order or, in the alternative, a stay of discovery until the trial court ruled on Hapnel's motion to dismiss.
{¶4} The trial court granted Lambert's motion to compel and ordered Hapnel to respond to interrogatories and request for production of documents within fourteen (14) days on October 6, 2020. The trial court determined that Lambert's motion to dismiss would be held in abeyance until a hearing was completed and granted Lambert's motion to stay the ruling on the motion to dismiss.
{¶5} The trial court issued the judgment entry on October 6, 2020, prior to the filing of Hapnel's reply in support of its motion for protective order or stay of discovery. Hapnel sought to vacate that order. Lambert opposed the motion to vacate.
{¶6} On November 6, 2020, Lambert filed a Rule 11 motion to strike and request for sanctions and a second motion to compel.
{¶7} The magistrate denied Hapnel's motion to vacate the October 6, 2020 order on December 10, 2020. On that same day, the trial judge granted Lambert's motion to deem admitted certain requests for admission and awarded costs for preparing and filing the motion to Lambert in an amount to be determined by the court on a later date. The trial judge also granted Lambert's second motion to compel and show cause and ordered Nelson Adesegha to personally appear before the court.
{¶8} Hapnel filed its submission in accordance with the trial court's order on December 22, 2020.
{¶9} On March 5, 2021, a hearing was held before the magistrate on Lambert's motion for sanctions, the show cause order for Adesegha, and Hapnel's motion to dismiss. Lambert, represented by Attorney Michael Fine, Hapnel's representative, Nelson Adesegha, and Hapnel's attorney, Jeff Krueger, were present for the hearing. The hearing was concluded when Adesegha alleged that certain information regarding the identification of Nelson Anderson could not be divulged to the court.
{¶10} The parties reconvened on July 8, 2021, August 18, 2021, and November 17, 2021. The hearing continued before the magistrate with Adesegha present via Zoom on November 17, 2021. The parties reconvened for the final time on January 24, 2022, where the hearing concluded, and parties agreed to submit post-hearing briefing. Transcripts were filed in the trial court on July 14, 2022.
{¶11} The trial judge filed her journal entry the following day on July 15, 2022. The trial court concluded that the plaintiff failed to prove by a preponderance of the evidence that there was personal jurisdiction over Hapnel and granted Hapnel's motion to dismiss. The trial court also awarded several monetary amounts for fees on sanctions against Hapnel and Adesegha.
{¶12} On August 12, 2022, Lambert requested that the trial court issue a Civ.R. 54(B) certification. The motion was granted on August 17, 2022, prior to a response from Hapnel. Hapnel subsequently sought to vacate the August 17, 2022 entry.
{¶13} While that motion was pending, Lambert filed a notice of appeal and Hapnel filed its notice of cross appeal. Because of the pending motions in the trial court, the parties asked for a remand for disposition on those motions. On remand, the trial court granted Hapnel's motion to vacate the certification. As a result, this Court was unable to review the initial appeal for lack of a final order and this Court dismissed that appeal. Lambert v. Global Internatl. Servs., 11th Dist. No. 2022-P-0050, 2023-Ohio-350.
{¶14} On April 4, 2023, the trial court again certified the July 5, 2022 entry as final with no just cause for delay as to Adesegha, Hapnel, and their counsel. Lambert filed his notice of appeal on April 19, 2023, and Hapnel filed its notice of appeal on April 28, 2023. The record and supplemental record were filed on June 7, 2023, and June 15, 2023, which consisted of five (5) transcripts of proceedings. Upon review, it appears the transcript submission contains both the incorrect cover page and an incorrect copy of a written transcript.
{¶15} Lambert raises the following assignments of error:
[1]. "The trial court erred in ruling on matters referred to and heard by its magistrate without the benefit of a decision by the magistrate as required by Civ. R. 53;"
[2]. "The trial court erred in dismissing Hapnel for want of personal jurisdiction * * *"
[3]. "The trial court erred in failing to sanction Attorney Jeffrey Krueger under Civ R. 11 * * *"
[4]. "The trial court erred in failing to sanction Appellees under R.C. 2323.51 when they provided misleading information to the Court, misrepresented facts in discovery and filings, and committed perjury in affidavits and testimony."
[5]. "The trial court erred in awarding insufficient sanctions, failing to set forth the basis of its award against Adesegha for contempt and Hapnel for discovery abuses."
{¶16} On April 28, 2023, Hapnel filed its notice of cross appeal and raises a single assignment of error:
[1] "Having determined that it lacked personal jurisdiction over Hapnel, the trial court abused its discretion in refusing to vacate the void judgments against Hapnel."
{¶17} During oral arguments, appellant's counsel urged the Court to take a position regarding the professionalism of trial counsel. While this Court declines to take such a position, this Court would note that gamesmanship or behavior which runs afoul of the professionalism required by attorneys is a serious matter that this Court does not condone.
{¶18} In Lambert's first assignment of error, he contends that the trial court erred when it issued a decision on matters referred to a magistrate without the magistrate first issuing a decision.
{¶19} Civ.R. 53(D)(1) provides in relevant part: "[a] court of record may, for one or more of the purposes described in Civ.R. 53(C)(1), refer a particular case or matter or a category of cases or matters to a magistrate by a specific or general order of reference or by rule." Courts may limit a reference to a magistrate by "by specifying or limiting the magistrate's powers, including but not limited to, directing the magistrate to determine only particular issues, directing the magistrate to perform particular responsibilities, directing the magistrate to receive and report evidence only, fixing the time and place for beginning and closing any hearings, or fixing the time for filing any magistrate's decision on the matter or matters referred." Civ.R. 53(D)(1)(b).
{¶20} "Subject to the terms of the relevant reference, a magistrate shall prepare a magistrate's decision respecting any matter referred under Civ.R. 53(D)(1)." Civ.R. 53 (D)(3)(a). Magistrate decisions "may be general unless findings of fact and conclusions of law are timely requested by a party or otherwise required by law."
{¶21} Rule 14.6(A) of the Portage County Court of Common Pleas General Division Local Rules provides:
Magistrates may handle any matter allowed by law pursuant to Ohio Civil Rule 53 and Ohio Criminal Rule 19. Magistrates may also handle any matter submitted to him/her without further order, including, but not limited to civil status conferences, criminal status conferences, discovery hearings, all civil hearings, all criminal hearings, debtor examinations,
hearings on administrative appeals, criminal arraignments, plea proceedings under Criminal Rule 11, bail proceedings under Criminal Rule 46, trials without a jury, trials with a jury where the parties consent in writing and any other matter referred by the Court.
{¶22} This Court held has held that "the failure to comply with Civ.R. 53 will permit an appellate court to reverse the judgment of the trial court in situations where there was a deviation from the rule and the deviation prejudiced the appellant." In re Bortmas, 11th Dist. Trumbull No. 98-T-0147, 1999 WL 959842, *2 (Oct. 15, 1999).
{¶23} In Frohman v. Frohman, 11th Dist. Trumbull No. 98-T-0131, 2000 WL 522337, *2-3, this Court reversed a trial court's decision where the magistrate failed to file a decision. This Court stated:
[T]he magistrate never filed findings of fact or conclusions of law despite appellant's request to do so. Thus, without having had the benefit of hearing any of the evidence or seeing any of the witnesses, and without the opportunity to review any findings by the magistrate, since none existed, the trial court judge came up with his own findings of fact and conclusions of law with the help of appellee's counsel. This is unacceptable. It is crucial that at some point in the proceedings, a neutral magistrate actually hear the evidence, determine the credibility of the witnesses, and render findings of fact and conclusions of law. That did not happen in this case. Until that happens, this court has nothing to review.
{¶24} In the instant case, the hearing was held on Hapnel's motion to dismiss, Lambert's motion to strike and request for sanctions pursuant to Civ.R. 11 and R.C. 2323.51, and Lambert's request for sanctions against Hapnel and Adesegha, before the magistrate over the course of several days. There is nothing in the record or the Portage County Local Rules which specifically limited the magistrate's role.
{¶25} The magistrate did not provide a decision pursuant to Civ.R. 53. Instead, the trial court issued a decision finding that it lacked personal jurisdiction over Hapnel and awarding various fees as sanctions against Hapnel and Adesegha. The trial court noted in its entry that it reviewed "the motions and the arguments of counsel." There is no indication that the trial court reviewed a recommendation or a report from the magistrate or that the trial court conducted an independent hearing prior to its determination.
{¶26} Lambert did not request findings of fact and conclusions of law prior to the magistrate issuing a decision; however, Lambert was precluded from seeking such because the trial court issued a decision prior to the magistrate filing a general decision. While the transcripts of the proceedings were filed on July 14, 2022, the day before the issuance of the trial court's entry, the trial court did not refer to those transcripts in any way or indicate that the court conducted an independent review of the proceedings held before the magistrate.
{¶27} As such, the procedure below did not comply with Civ.R. 53. This Court has held such a deviation from Civ.R. 53 warrants reversal. Bortmas, supra.
{¶28} Lambert seeks a reversal on this assignment of error but also requests we review his remaining claims.
{¶29} In his second assignment of error, Lambert asserts that the trial court erred when it concluded, after a hearing, that the trial court lacked personal jurisdiction over Hapnel.
{¶30} "When a nonresident defendant seeks dismissal pursuant to Civ.R. 12(B)(2), the plaintiff bears the burden of demonstrating proper jurisdiction." InFrasys, Inc. v. Bros. Pavement Products, Corp., 6th Dist. No. E-19-047, 2020-Ohio-1157, 152 N.E.3d 1274, ¶ 27 citing Ashton Park Apts., Ltd. v. Carlton-Naumann Constr, Inc., 6th Dist. Lucas No. L-08-1395, 2009-Ohio-6335, 2009 WL 4446934, ¶ 12; Jurko v. Jobs Europe Agency, 43 Ohio App.2d 79, 334 N.E.2d 478 (8th Dist.1974). "When a defendant challenges the trial court's personal jurisdiction and the court holds an evidentiary hearing, it is the plaintiff's burden to prove jurisdiction exists by a preponderance of the evidence." Goddard v. Goddard, 11th Dist. No. 2021-G-0015, 2022-Ohio-3113, 195 N.E.3d 1106, ¶ 14, citing State ex rel. DeWine v. 9150 Group, LP., 2012-Ohio-3339, 977 N.E.2d 112, ¶ 8 (9th Dist).
{¶31} A trial court's determination on personal jurisdiction is reviewed de novo. Kauffman Racing Equip., LLC. v. Roberts, 126 Ohio St.3d 81, 2010-Ohio-2551, 930 N.E.2d 784, ¶ 27.
{¶32} A trial court, when determining if the plaintiff has met this burden, is "required to view allegations in the pleadings and the documentary evidence in a light most favorable to the plaintiffs, resolving all reasonable competing inferences in their favor." Goldstein v. Christiansen, 70 Ohio St.3d 232, 236, 638 N.E.2d 541 (1994). The trial court's determination involves a two-step assessment: "(1) whether the long-arm statute and the applicable rule of civil procedure confer jurisdiction and, if so, (2) whether the exercise of jurisdiction would deprive the nonresident defendant of the right to due process of law under the Fourteenth Amendment to the United States Constitution." Kauffman Racing at ¶ 28.
{¶33} Ohio's long-arm statute, R.C. 2307.382 (A) provides in relevant part:
(A) A court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a cause of action arising from the person's: * * *
(3) Causing tortious injury by an act or omission in this state; * * *
(6) Causing tortious injury in this state to any person by an act outside this state committed with the purpose of injuring persons, when the person might reasonably have expected that some person would be injured thereby in this state; * * *
{¶34} Civ.R. 4.3. (A)(9) further provides "[s]ervice of process may be made outside of this state, * * *, upon a person who, * * * has caused an event to occur out of which the claim that is the subject of the complaint arose, from the person's * * * [c]ausing tortious injury in this state to any person by an act outside this state committed with the purpose of injuring persons, when the person to be served might reasonably have expected that some person would be injured by the act in this state."
{¶35} "R.C. 2307.382(A)(6) and Civ.R. 4.3(A)(9) permit a court to exercise personal jurisdiction over a nonresident defendant and provide for service of process to effectuate that jurisdiction if the cause of action arises from a tortious act committed outside Ohio with the purpose of injuring persons, when the nonresident defendant might reasonably have expected that some person would be injured thereby in Ohio." Kubyn v. Follett, 11th Dist. Geauga No. 2019-G-0194, 2019-Ohio-3152, 141 N.E.3d 512, ¶¶ 12-15 quoting Clark v. Connor, 82 Ohio St.3d 309, 313, 695 N.E.2d 751 (1998).
{¶36} The trial court failed to engage in this analysis and tersely concluded that it lacked personal jurisdiction over Hapnel. Both Lambert and Hapnel were denied the opportunity to object to the magistrate's decision prior to the trial court's decision. Due to this procedural flaw, this Court declines to review this assignment of error.
{¶37} Furthermore, we cannot engage in an effective appellate review of the remaining assignments of error without the magistrate and the trial court establishing a basis for its conclusory evaluation of the fees awarded based upon the sanctions.
{¶38} Because Lambert's first assignment of error has merit, this matter is remanded to the trial court for further proceedings in compliance with Civ.R. 53. This Court declines to review Lambert's remaining assignments of error and cross-assignment of error.
{¶39} As noted above, there appears to be an error in the paper transcripts filed as part of the record. In the event the parties were inclined to appeal from the trial court's eventual decision, the parties should correct any error in the record by filing the appropriate transcripts.
{¶40} For the reasons stated above, the judgment of the Portage County Court of Common Pleas is hereby reversed and remanded.
MARY JANE TRAPP, J., EUGENE A. LUCCI, J., concur.