2021 Ohio 3752
Ohio Ct. App.2021Background
- Toretzky was a member and area manager of The Connor Group (TCG) and purchased an LLC interest under a Membership Interest Purchase and Sale Agreement that contains a fee-shifting clause entitling the "prevailing party" to attorneys' fees and costs (prevailing party = party obtaining substantially all relief sought).
- In December 2017 TCG sued Toretzky for breach of fiduciary duty and faithless-servant claims; Toretzky counterclaimed against TCG and individual defendants for ADA discrimination, unlawful medical examination, hostile work environment, retaliation, and invasion of privacy.
- A jury found for Toretzky on TCG’s claims and for TCG on Toretzky’s counterclaims; no damages were awarded to either side.
- Both sides moved for attorneys’ fees under the contract provision; the trial court denied both motions, concluding no single party was the prevailing party overall.
- Both parties appealed; the Second District affirmed, holding the trial court reasonably found neither party prevailed for purposes of the contractual fee provision.
Issues
| Issue | Plaintiff's Argument (Toretzky) | Defendant's Argument (TCG) | Held |
|---|---|---|---|
| Whether a contractual fee-shifting clause requires awarding fees to the party who successfully defended against claims (i.e., Toretzky) or to the party who successfully defended counterclaims (i.e., TCG) when both sides prevailed on different claims and no damages were awarded | Toretzky: She is the prevailing party because she successfully defended against TCG’s claims and obtained full relief on those claims under the Agreement’s prevailing-party definition | TCG: It (and its individual defendants) are prevailing because they successfully defended against Toretzky’s counterclaims and obtained full relief on those claims | The court affirmed denial of fees to both sides: under an abuse-of-discretion review the trial court reasonably concluded neither party was the overall prevailing party when each prevailed on some claims but neither prevailed entirely or obtained damages |
Key Cases Cited
- Wilborn v. Bank One Corp., 121 Ohio St.3d 546, 906 N.E.2d 396 (contractual attorney-fee agreements are generally enforceable; fees must be fair, just, and reasonable)
- Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241, 374 N.E.2d 146 (interpretation of a written contract is a question of law)
- State ex rel. Reyna v. Natalucci-Persichetti, 83 Ohio St.3d 194, 699 N.E.2d 76 (denying costs to both parties can be appropriate when neither party entirely prevails)