2023 Ohio 4019
Ohio Ct. App.2023Background
- In October 2020 the Snyders contracted with Old World Classics, LLC to build a home; the written contract required private mediation and, if unresolved, binding arbitration.
- In January 2023 the Snyders sued Old World alleging fraud, violations of the Home Construction Service Suppliers Act, promissory estoppel, slander of title, lien release, and breach of contract.
- Old World filed a motion to stay the court case and compel arbitration under the contract.
- The trial court set a “non-oral hearing” and briefing deadline; the Snyders filed an opposition on March 24, 2023, arguing Old World fraudulently induced them to agree to the arbitration clause.
- On March 27, 2023 the trial court summarily granted Old World’s motion without conducting an oral hearing.
- The Ninth District reversed, holding the trial court erred by not holding an oral hearing under R.C. 2711.03 and remanded for an oral hearing on the motion to compel arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether R.C. 2711.03 requires a trial court to hold an oral/evidentiary hearing on a motion to compel arbitration | Snyder: statute and circumstances (fraud allegation) require an oral hearing to resolve factual disputes | Old World: court may rule based on submitted briefs; no oral hearing required | Court: reversed—under this Court's precedent an oral hearing is required; remand for oral hearing |
| Whether the arbitration clause is void for fraudulent inducement | Snyder: clause was fraudulently induced and therefore unenforceable | Old World: arbitration clause is valid and should be enforced | Court: did not decide merits; remanded so the trial court can decide after the required oral hearing |
Key Cases Cited
- Shillingburg v. Turtle Creek Assets, Ltd., 2019-Ohio-1156 (Ninth Dist. holding that R.C. 2711.03 requires a hearing on motions to compel arbitration)
- Chrysler Fin. Servs. v. Henderson, 2011-Ohio-6813 (Fourth Dist. holding a trial court need not hold an oral hearing absent a proper request)
- Mattox v. Dillard’s, Inc., 2008-Ohio-6488 (Eighth Dist. holding an oral hearing is not mandatory absent a request)
- AJZ’s Hauling, L.L.C. v. TruNorth Warranty Programs of N. America, 2023-Ohio-3097 (Ohio Supreme Court opinion acknowledging the conflict among districts but deciding the case on res judicata grounds)