Bellamy v. MontgomeryBellamy v. Montgomery
Rendered on September 20, 2012
Cooper & Elliott, LLC, Charles H. Cooper, and Rex H. Elliott, for appellant.
Ron O‘Brien, Prosecuting Attorney, Nick A. Soulas, Jr., and Denise L. DePalma, for appellees Robert G. Montgomery, Brad Hennebert, and Franklin County.
APPEAL from the Franklin County Court of Common Pleas.
FRENCH, J.
{¶ 1} Appellant, Cooper & Elliott, LLC (“Cooper & Elliott“), appeals the judgment of the Franklin County Court of Common Pleas, which imposed sanctions against Cooper & Elliott, pursuant to
{¶ 2} On January 5, 2006, pursuant to
{¶ 3} Cooper & Elliott appealed the dismissal of Bellamy‘s complaint and the imposition of sanctions, and defendants filed a cross-appeal, challenging the trial court‘s denial of their motion for summary judgment. In Bellamy v. Montgomery, 188 Ohio App.3d 76, 2010-Ohio-2724 (10th Dist.) (”Bellamy I“), this court held that Cooper & Elliott lacked standing to challenge the dismissal of Bellamy‘s complaint and, consequently, determined that defendants’ cross-appeal was moot. This court went on, however, to reverse the award of sanctions and to remand for further proceedings to limit the award to fees incurred as a result of noncompliance with discovery orders and for more complete findings as to Cooper & Elliott‘s level of responsibility, if any, for the failure to produce the requested tax documents.
{¶ 4} On remand, the trial court held another evidentiary hearing with respect to the amount and apportionment of expenses; Bellamy did not attend. In a Decision and Final Order filed November 1, 2011, the trial court reduced the amount of expenses to $13,095.26, and it assigned 25 percent of the responsibility to Cooper & Elliott. The court therefore ordered that Cooper & Elliott is responsible for fees of $3,273.82, while Bellamy is responsible for the remaining $9,821.44.
II. ASSIGNMENT OF ERROR
{¶ 5} Cooper & Elliott has again appealed and now asserts the following assignment of error:
The trial court erred by holding Cooper & Elliott liable for monetary sanctions assessed against Cooper & Elliott‘s former client, Franklin Bellamy, as a result of Bellamy‘s failure to timely produce his tax returns.
III. DISCUSSION
{¶ 6} Cooper & Elliott‘s assignment of error challenges the trial court‘s award of sanctions against Cooper & Elliott pursuant to
(2) If any party * * * fails to obey an order to provide or permit discovery, * * * the court in which the action is pending may make such orders in regard to the failure as are just, and among others the following:
* * *
(c) An order * * * dismissing the action or proceeding or any part thereof * * *;
* * *
In lieu of any of the foregoing orders or in addition thereto, the court shall require the party failing to obey the order or the attorney advising him or both to pay the reasonable expenses, including attorney‘s fees, caused by the failure, unless the court expressly finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.
(Emphasis added.)
{¶ 7} A trial court has broad discretion when ruling upon a motion for sanctions pursuant to
{¶ 8} Cooper & Elliot argue that the trial court abused its discretion by applying an improper standard and by imposing sanctions against it where Cooper & Elliott informed Bellamy of his discovery obligation and repeatedly urged him to produce the requested discovery. This court addressed the standard for imposing
{¶ 9} In its final order, the trial court correctly described the issue before it as the level of responsibility attributable to Cooper & Elliott for Bellamy‘s failure to comply with the court‘s discovery orders. Nevertheless, the court did not discuss the standard
{¶ 10} Cooper & Elliott argue that the trial court‘s “lack of appropriate respect” standard conflicts with the standard set forth in Bellamy I and is so subjective and vague as to preclude attorneys from knowing what conduct will subject them to personal liability. We agree that the trial court failed to apply the standard set forth in Bellamy I, which requires highly culpable conduct, amounting to condonance or participation in the client‘s disobedience of discovery orders. The trial court‘s application of an improper standard constitutes a breach of discretion. See State ex rel. Perry v. Indus. Comm., 10th Dist. No. 06AP-312, 2007-Ohio-4687, ¶ 16 (hearing officer‘s application of incorrect legal standard was an abuse of discretion); State v. Wyke, 10th Dist. No. 92AP-1137 (Apr. 8, 1993) (trial court abused its discretion by applying incorrect legal standard to appellant‘s motion to withdraw a plea). We do not suggest that the trial court lacks authority from other sources to sanction an attorney for a demonstrated lack of respect, but
{¶ 11} As part of its determination that Cooper & Elliott exhibited a lack of respect toward the court, the trial court found that Cooper & Elliott failed in its responsibility to ensure Bellamy‘s compliance with the court‘s orders. A party‘s failure to obey a court order obligates the court to order the payment of the opposing party‘s reasonable expenses unless the court finds the failure justified or that an award of expenses would be unjust.
{¶ 12} In Inter-Trade, which this court relied upon in Bellamy I, the District of Columbia Court of Appeals reversed an award of sanctions against an attorney that was based upon the client‘s failure to attend a deposition. The court held that the client‘s failure, in and of itself, did not give rise to sanctions against the attorney. Rather, the court held that attorneys should be held accountable only for their own conduct. The court agreed that ” ’ “an award ought to be made against the attorney only when it is clear that discovery was unjustifiably opposed principally at his instigation.” ’ ” Inter-Trade at 840, quoting Crawford v. Am. Fedn. of Govt. Emps., 576 F.Supp. 812, 815 (D.D.C.1983), quoting Humphreys Exterminating Co., Inc. v. Poulter, 62 F.R.D. 392 (D.Md.1974). See also Goldman v. Alhadeff, 131 F.R.D. 188, 194 (W.D.Wa.1990) (assessing sanctions against the plaintiff and the three law firms representing him for their “deliberate actions in violating the court‘s orders“). In Inter-Trade, the district court was not entitled to sanction counsel because it did not know whether the client had consulted with counsel in forming his position regarding attendance at his deposition.
{¶ 13} “Rule 37 treats the client and his attorney separately.” Weisberg at 874. “[A]n award of costs under Rule 37 against an attorney ought to be justified by reasons distinct from those justifying an award against the client.” Id., citing Crawford. Accordingly, neither a party‘s failure to comply with a discovery order nor the trial court‘s reasoning for imposing sanctions upon the party is sufficient to justify sanctions against the party‘s attorney. Rather, separate and distinct reasons must support sanctions against the attorney, and the court must explain those reasons. In Weisberg at 874, the D.C. Circuit explained that “[t]his requirement of findings to support an award of expenses against an attorney is prompted by the structure of Rule 37, by
{¶ 14} Addressing language in
{¶ 15} Before determining whether to remand this matter again, we will consider whether the trial court‘s findings would support an award of sanctions under the proper standard. If so, under our deferential standard of review, we may affirm the trial court‘s judgment despite the court‘s use of an improper standard. Consideration of the trial court‘s findings requires a thorough examination of the facts and, especially, the testimony concerning Cooper & Elliott‘s actions with respect to discovery of Bellamy‘s tax returns.
{¶ 16} In July 2004 and March 2005, defendants requested production of Bellamy‘s federal and state tax returns from 2001 to 2004. Cooper & Elliott, on Bellamy‘s behalf, objected to defendants’ requests as irrelevant and as intending merely to harass Bellamy. Defendants subsequently requested that Bellamy produce his 1995 to 2004 federal and state tax returns at his deposition on April 7, 2005; Bellamy refused. On April 29, 2005, having received no tax documents from Bellamy, defendants issued a subpoena duces tecum to the Ohio Tax Commissioner for Bellamy‘s 1995 to 2004 Ohio tax returns.
{¶ 17} Bellamy moved the court for a protective order and to quash the subpoena, again arguing that his tax information was irrelevant and that the subpoena was intended merely to harass him and to obtain his personal information. Defendants, in
{¶ 18} Defendants received copies or computer transcripts of Bellamy‘s Ohio tax returns for 1999 to 2004 from the Ohio Tax Commissioner in May 2005. The Tax Commissioner certified that Bellamy did not file Ohio tax returns from 1995 to 1998.
{¶ 19} Cooper & Elliott associate Sheila Vitale (“Vitale“) was Cooper & Elliott‘s “point person” on this case. (Sept. 12, 2011 Tr. 21.) At both the 2006 and the 2011 hearings, Vitale testified about Cooper & Elliott‘s response to the trial court‘s orders and, more generally, about its actions regarding discovery in this case. In July 2005, around the time the trial court granted defendants’ motion to compel, Bellamy moved from Columbus to Youngstown, Ohio. Bellamy informed Cooper & Elliott that he would be staying with family members in Youngstown and instructed Cooper & Elliott to send written correspondence to his mother‘s address in Youngstown, although he was not living there. Bellamy‘s cell phone remained active for only a brief period after he moved, but, on July 11, 2005, Bellamy provided Vitale with his son‘s cell phone number and instructed that she could leave messages for him there. Vitale informed Cooper & Elliott office staff that, if Bellamy called the office, they were to interrupt her so she could speak with him immediately. Vitale described Bellamy, prior to his move, as accessible and willing to assist and discuss his case. In contrast, Vitale claimed it was difficult to contact Bellamy after his move.
{¶ 20} The trial court found that Cooper & Elliott “made numerous phone calls and sent numerous letters to [Bellamy] instructing him to comply with the Court‘s order.” Vitale mailed a copy of the trial court‘s July 8, 2005 decision to Bellamy at his
{¶ 21} On August 10, 2005, defendants filed a motion to dismiss, for sanctions, and for an award of expenses, based on Bellamy‘s failure to produce his tax returns. The next day, Bellamy produced to Vitale the limited tax documents in his possession, which consisted of the first page of his federal tax returns for 2001, 2002, and 2003. Vitale immediately forwarded those documents to defense counsel, along with a cover letter, in which she acknowledged the incompleteness of the response and stated that she had advised Bellamy to continue looking for additional records. Vitale again met with Bellamy on August 22, 2005, and explained the possibility of him signing a release to permit defense counsel to retrieve his federal tax returns from the Internal Revenue Service (“IRS“). Two days later, Vitale confirmed to defense counsel that Bellamy had no additional, responsive tax documents, but indicated that he was willing to sign a release, submitted by defendants, to permit retrieval of his federal tax returns. On August 29, 2005, Vitale filed a memorandum in opposition to defendants’ motion to dismiss, for sanctions, and for expenses, stating that Bellamy had complied with the July 8, 2005 decision by providing all tax records in his possession.
{¶ 22} Defense counsel agreed to prepare and utilize releases to obtain Bellamy‘s tax returns from the IRS. Vitale received releases, requiring Bellamy‘s signature, from defense counsel on September 14, 2005, and forwarded them to Bellamy on September 20, 2005. In response to an email from Bellamy on October 5, 2005, stating that he had lost the releases, Cooper & Elliott resent the releases to Bellamy. From October 6 until November 22, 2005, Vitale made seven telephone calls to Bellamy, either on his son‘s cell phone or on another number obtained from Bellamy‘s son on October 28, 2005. Vitale testified that, when she was able to speak with Bellamy, she inquired about the status of the releases and reiterated the urgency of signing and
{¶ 23} On October 11, 2005, the trial court held a status conference, at which defense counsel submitted a motion to show cause or to hold Bellamy in contempt for failure to produce his tax returns. In response, Cooper & Elliott stated that it had produced all documents within Bellamy‘s possession and informed the court of Bellamy‘s agreement to execute releases for defense counsel to obtain his tax returns. Defense counsel did not express any unwillingness to accept the executed releases.
{¶ 24} The trial court granted defendants’ motion to show cause on November 18, 2005. The court ordered Bellamy to produce actual copies of his 1995 to 2004 tax returns within 21 days (i.e., on or before December 9, 2005) and stated that “[s]igning a waiver and asking Defendants to retrieve them is not enough” unless defendants accept a waiver in lieu of the actual documents. The court warned that noncompliance would result in sanctions against Bellamy, up to and including dismissal of his complaint.
{¶ 25} Cooper & Elliott received the signed releases from Bellamy on November 22, 2005, and immediately had the releases hand-delivered to defense counsel.1 Later that day, Vitale received the trial court‘s show cause order. Despite their agreement with Cooper & Elliott and their receipt of signed releases from Bellamy, defense counsel informed Vitale that defendants were no longer willing to accept the signed releases in lieu of Bellamy‘s actual tax returns.
{¶ 26} Faced with the December 9, 2005 deadline and defendants’ refusal to accept the releases, Vitale sent new releases to Bellamy via Federal Express on November 22, 2005, and spoke with Bellamy to emphasize that he needed to immediately sign and return the releases in the enclosed Federal Express envelope. These new releases were required for the IRS to produce Bellamy‘s tax returns to Cooper & Elliott, as opposed to defense counsel. Vitale received the signed releases on Monday,
{¶ 27} On December 7, 2005, Vitale filed a Notice of Status of Compliance, in which she informed the court of Cooper & Elliott‘s efforts to comply with the show cause order and stated that she would provide defendants with all documents upon receipt from the IRS. On January 4, 2006, Vitale submitted to defense counsel the tax documents she had received the previous day from the IRS, along with a copy of a Notice of Service of Federal Income Tax Documents, which she filed with the trial court.
{¶ 28} On January 5, 2006, the day after Vitale served Bellamy‘s tax returns, the trial court dismissed Bellamy‘s complaint and imposed sanctions. The trial court‘s decision focused primarily on Bellamy‘s actions. It accepted that Bellamy lacked actual copies of his tax returns beyond those he produced, held that Bellamy‘s delay in signing the releases prepared by defense counsel “has cost him greatly,” and stated that Bellamy “squandered” the second chance the court provided via its November 18, 2005 order. With respect to Cooper & Elliott, the trial court stated as follows:
The actions of Plaintiff‘s counsel have shown a pattern of deceit, neglect and negligence that is unacceptable to this Court. Plaintiff‘s counsel has been faced with the orders of this Court and has acted to stall and delay the progress of this case. All the while attempting to blame that delay on the actions of Defendants. As stated earlier, it was not Defendants who were ordered to retrieve the requested tax returns, it was Plaintiff. Being lawyers, Plaintiff‘s counsel are expected to be competent and knowledgeable of the Rules of Civil Procedure. Pursuant to these rules Plaintiff‘s counsel should be aware that sanctions can be imposed against them
for their failure to comply with them and their failure to comply with direct Court orders. Plaintiff‘s counsel has ignored these rules and for almost six months has been violating the direct orders of this Court. These violations will no longer be tolerated. Therefore, this Court imposes the sanctions of dismissal of Plaintiff‘s Complaint, and the awarding to Defendants of reasonable expenses, including attorney‘s fees, caused by Plaintiff[‘s] failures.
{¶ 29} As we noted, after its January 5, 2006 judgment entry, a visiting judge conducted a three-day hearing, issued findings of fact and conclusions of law, and issued a judgment entry, holding Bellamy and Cooper & Elliott jointly and severally liable for defendants’ reasonable expenses stemming from Bellamy‘s noncompliance with the discovery orders. Upon remand in 2011, the trial court conducted a second hearing regarding the amount and allocation of
{¶ 30} Upon review of the entire file and the trial court‘s findings, we discern no support for a finding that Cooper & Elliott engaged in highly culpable conduct that amounted to condonance of or participation in Bellamy‘s noncompliance with the trial court‘s discovery orders. The court acknowledged that Bellamy moved to Youngstown around the time of the court‘s July 8, 2005 decision. The court found no evidence that Cooper & Elliott advised Bellamy to ignore the court orders; to the contrary, the trial court recognized that Cooper & Elliott instructed him to comply on numerous occasions. The trial court did not find that Cooper & Elliott attempted to keep Bellamy‘s tax returns from defendants after the trial court‘s July 8, 2005 decision. In fact, the undisputed evidence demonstrates that Vitale transmitted the limited documents in Bellamy‘s possession to defense counsel, without delay, upon her receipt of those documents, and offered a release for defense counsel to procure Bellamy‘s remaining tax returns from the IRS.
{¶ 31} In its decision, the trial court identified two factual bases for assigning responsibility to Cooper & Elliott. Those include Cooper & Elliot‘s habit of displacing
{¶ 32} We first consider what the trial court described as Cooper & Elliott‘s habit of blaming Bellamy and/or defendants for the failure to comply with discovery orders. The court stated that Cooper & Elliott “would tell [Bellamy] that he had to comply [with the discovery orders] and then wash its hands of the matter.” Vitale‘s testimony and the court‘s own findings that Cooper & Elliott made numerous efforts to encourage and expedite production, however, contradict the court‘s statement. Within a week of the trial court‘s July 8, 2005 decision, which overruled Cooper & Elliott‘s objections, Vitale mailed the court‘s decision to Bellamy, called Bellamy four times, and spoke with Bellamy twice for a total of 47 minutes. The following week, Vitale called Bellamy seven times and spoke with him three times for a total of 35 minutes. Vitale also met with Bellamy on two occasions in August 2005 regarding production of his tax returns and produced all tax documents Bellamy was able to locate. Vitale also offered to have Bellamy sign releases for defendants to obtain his remaining tax return from the IRS, and defendants concede that they agreed to that arrangement. The trial court‘s findings that Cooper & Elliott simply told Bellamy to comply “and then wash[ed] its hands of the matter,” and that Cooper & Elliott acted without urgency prior to the trial court‘s order to show cause is unsupported by any evidence in the record and is erroneous.
{¶ 33} As an additional example of Cooper & Elliott‘s supposed pattern of pushing responsibility onto others, the court generally cited Cooper & Elliott‘s interaction with defendants and their counsel. Quoting its January 5, 2006 decision, the trial court stated that Bellamy ” ‘attempts to place the blame for his non-compliance on Defendants’ ” and that Bellamy and Cooper & Elliott ” ‘[try] to ensue [sic] that Defendants’ counsel prevented them from getting a valid release for the tax returns.’ ” The trial court‘s finding is erroneous; we are unable to locate any written assertion by Cooper & Elliott that defendants are responsible for the delay in the production of Bellamy‘s tax returns. At most, Cooper & Elliott insinuate that defendants could have acted more quickly in preparing releases for Bellamy‘s signature, but the delay in that regard was approximately three weeks. To be sure, review of the pleadings reveals a high level of contention between the attorneys in this case, and Cooper & Elliott did, at
{¶ 34} As we noted, this court‘s interpretation of
IV. CONCLUSION
{¶ 35} For these reasons, we conclude that the trial court abused its discretion by utilizing an improper standard, relying on clearly erroneous findings of fact, and by entering judgment for expenses against Cooper & Elliott where the record contains no evidence upon which the court could conclude that Cooper & Elliott engaged in highly culpable conduct that amounted to condonance or participation in Bellamy‘s disobedience of the trial court‘s discovery orders. Accordingly, we sustain Cooper & Elliott‘s assignment of error and reverse the trial court‘s judgment against Cooper & Elliott. We note, however, that the trial court‘s judgment against Bellamy is not before this court, and that judgment is unaffected by our decision in this matter.
Judgment reversed.
CONNOR, J., concurs.
SADLER, J., concurs in part, dissents in part.
SADLER, J., concurring in part, dissenting in part.
{¶ 36} I concur with the majority‘s conclusion that the trial court abused its discretion when it utilized an improper standard in imposing the sanctions herein, as well as the majority‘s reasoning and application of Bellamy v. Montgomery, 188 Ohio App.3d 76, 2010-Ohio-2724 (10th Dist.), for why the standard utilized by the trial court cannot stand. However, I disagree with the majority‘s decision to reverse the trial court‘s judgment without issuing a remand.
{¶ 37} The majority states in paragraph 15 that, “[b]efore determining whether to remand this matter again, we will consider whether the trial court‘s findings would support an award of sanctions under the proper standard. If so, under our deferential standard of review, we may affirm the trial court‘s judgment despite the court‘s use of an improper standard.” Absent from the majority‘s decision, however, is authority for the proposition that after finding the trial court employed an incorrect standard, we, as an appellate court applying an abuse of discretion standard, should simply apply the correct legal standard and conduct a de novo weighing of the evidence in light of the same to reverse the trial court.
{¶ 38} In my view, the proper remedy in this instance is to reverse the trial court‘s judgment and remand this matter to the trial court for application of the correct legal standard. In Krumm v. Upper Arlington City Council, 10th Dist. No. 05AP-802, 2006-Ohio-2829, this court reviewed an appeal concerning the Upper Arlington Board of Zoning and Planning. Because the trial court failed to consider a requisite factor, and because the trial court utilized an incorrect legal standard, this court stated, “given our limited standard of review, we are precluded from simply applying the correct legal standards and reweighing the evidence ourselves. Rather, we are constrained to remand this case to the trial court so that it can review and weigh the evidence in light of * * * the correct legal standards.” Id. at ¶ 38. See also Belvedere Condominium Unit Owners’ Assn. v. R.E. Roark Cos., 67 Ohio St.3d 274 (1993) (explaining that the reason for a remand for further proceedings was the trial court‘s utilization of incorrect legal standards); Flowers v. Ohio Dept. of Job & Family Servs., 5th Dist. No. 05 CA 94, 2006-Ohio-2159, ¶ 10, citing Diversified Benefit Plans Agency, Inc. v. Duryee, 101 Ohio App.3d 495 (9th Dist.1995) (where trial court applies an incorrect legal standard, the “proper remedy is to reverse and remand to the trial court for application of the proper standard“). Based on said authority, I believe the trial court should be the first to weigh the evidence under the correct legal standard to determine whether any responsibility rests with Cooper & Elliott.