Southard Supply, Inc. v. Anthem Contrs., Inc.
2017 Ohio 7298
| Ohio Ct. App. | 2017Background
- Southard Supply sued Anthem Contractors seeking $16,531.93 for materials James "Jerry" Ball charged to Anthem's Southard credit account, alleging Anthem authorized Ball to order on account.
- Discovery responses and the complaint asserted Anthem gave verbal approval for Ball to charge purchases.
- Anthem produced the written credit application/contract showing an "Approved Buyers List" limited to two names (Anthony McCleery and Theresa Smith) and requiring prior approval for others.
- Depositions and testimony showed Anthem never gave written or verbal approval to add Ball; Southard's credit manager relied on Ball s prior presence during ordering and Ball s signing for deliveries to infer authority.
- Southard voluntarily dismissed the complaint; Anthem moved for sanctions under R.C. 2323.51 alleging Southard s factual contention (that Anthem authorized Ball) lacked evidentiary support.
- The trial court found Southard s conduct frivolous under R.C. 2323.51(A)(2)(a)(iii) and awarded Anthem $5,000 in fees; both parties appealed.
Issues
| Issue | Plaintiff's Argument (Southard) | Defendant's Argument (Anthem) | Held |
|---|---|---|---|
| Whether Southard's allegation that Anthem authorized Ball to charge purchases had evidentiary support under R.C. 2323.51(A)(2)(a)(iii) | Southard argued facts (Ball assisted McCleery when ordering, picked up and signed for deliveries, some charges were later accepted) gave at least minimal evidentiary support for express or apparent authority | Anthem argued the written credit contract limited approved buyers to named persons and there was no written/verbal approval of Ball; therefore Southard's contention lacked evidentiary support | Court held there was no evidence of express or apparent authority; finding of frivolous conduct under (A)(2)(a)(iii) affirmed |
| Admissibility/use of deposition transcripts at the sanctions hearing | Southard contended the depositions were erroneously admitted | Anthem used depositions to show the record contradicted Southard's claim | Court held depositions were hearsay when used to prove truth but admission was harmless because testimony was cumulative; no reversal |
| Whether the attorney should be jointly and severally liable for sanctions | Southard argued its attorney should not be separately liable | Anthem argued counsel shared responsibility and should be jointly liable | Court found no record basis to apportion fault; trial court did not abuse discretion in sanctioning only Southard |
| Whether the fee award was insufficient (Anthem sought ~$18,000; awarded $5,000) | Southard urged reduction/denial given lack of malice and limited culpability | Anthem sought full recovery of reasonable fees incurred | Court held trial court has discretion to reduce fee awards below reasonable fees; considering absence of malicious harassment, $5,000 was permissible |
Key Cases Cited
- Master Consol. Corp. v. BancOhio Natl. Bank, 61 Ohio St.3d 570 (definition and limits of express and apparent agency authority)
- Bittner v. Tri-County Toyota, Inc., 58 Ohio St.3d 143 (lodestar method for calculating reasonable attorney fees)
- Ron Scheiderer Assocs. v. London, 81 Ohio St.3d 94 (statute allows sanctions against party, counsel, or both to place blame where it lies)
- Penn Traffic Co. v. AIU Ins. Co., 99 Ohio St.3d 227 (ratification discussion and relevance to agency authority)
- State ex rel. Striker v. Cline, 130 Ohio St.3d 214 (R.C. 2323.51 employs an objective standard for frivolous conduct)