Blue Technologies Smart Solutions, L.L.C. v. Ohio Collaborative Learning Solutions, Inc.Blue Technologies Smart Solutions, L.L.C. v. Ohio Collaborative Learning Solutions, Inc.
Reminger Co., L.P.A., and Eric J. Weiss; Climaco Wilcox Peca & Garofoli and Scott Simpkins, for appellants.
Schneider Smeltz Spieth Bell LLP, Mark M. Mikhaiel, and Aanchal Sharma, for appellees.
JOURNAL ENTRY AND OPINION
JUDGMENT: DISMISSED
RELEASED AND JOURNALIZED: June 9, 2022
EMANUELLA D. GROVES, J.:
{¶ 1} Appellants, Blue Technologies Smart Solutions, LLC (“BTSS“), Blue Technologies, Inc. (“BT“), and Paul Hanna, bring this interlocutory appeal
I. Facts and Procedural History
{¶ 2} The present appeal involves two consolidated cases that resulted from a commercial transaction, most of the details of which are not pertinent to the present appeal. The transaction involved the sale of business assets and collaborative agreements where the parties agreed to work together in various ways in the information technology and procurement fields. The various filings in these cases indicate that an asset purchase agreement, employment agreement, and support agreement were executed in 2013. In 2015, an amended support agreement was executed. By 2018, the business relationships established by these contracts was severely strained. As а result, appellants filed suit against appellees in that year.1
{¶ 3} In Cuyahoga C.P. No. CV-18-902719, appellants brought claims against appellees and other parties for breach of the various contracts that were executed as part of the above business deal. According to the amended complaint, OCLS and other related parties breached the noncompetition clause of the asset purchase
{¶ 4} Several issues arose during the proceedings that interrupted the normal course of litigation. These include the recusal of the trial judge and an appeal of the denial of a motion to compel arbitration. In 2020, after the case was remanded from this court, discovery continued.
{¶ 5} In Cuyahoga C.P. No. CV-20-933999, appellees brought suit against appellants. They alleged appellants intentionally damaged OCLS‘s business. The complaint includes claims for breach of contract for each of the above agreements, as well as claims of misrepresentation, negligent misrepresentation, tortious interference with contractual and business relations, unfair competition, conversion, securities fraud, unjust enrichment, declarаtory judgment, breach of fiduciary duty, fraudulent concealment, misappropriation of trade secrets, civil conspiracy, breach of a duty of loyalty, and sought an accounting and to pierce the corporate veil. Appellants answered and filed a counterclaim.
{¶ 6} On July 30, 2020, the two cases were consolidated. The parties had significant discovery-related disputes that eventually required the intervention of the trial court. For a time, discovery was stayed while the court considered and ruled on appellees’ motion to dismiss appellants’ counterclaim. Discovery resumed on
The parties are ordered to confer to determine which of the documents requested are relevant to the issues pending in this case. The parties are further ordered to confer on which of the relevant documents are confidential. If there is a disagreement on the relevancy and confidentiality of the requested documents, then the parties may seek the court‘s intervention via an updated motion.
{¶ 7} On March 19, 2021, appellees filed a motion to compel appellants to respond to certain discovery requests. In the motion, appellees asserted that appellants improperly denied discovery requests, refused to answer proper interrogatories, and withheld documents and other materials for improper reasons. Appellеes also alleged that appellants did not produce any privilege log or other method of demonstrating what was being withheld from discovery and for what reason. Appellants opposed the motion, in part, on attorney work-product grounds. However, they did not produce a privilege log or otherwise describe documents or evidence withheld based on any claimed privilege. Appellants also sought a protective order by motion, filed January 22, 2021, relative to a subpoena duces tecum served on a bank where BLSS and BT purportedly had accounts.
{¶ 8} A hearing was conducted on these two motions on April 28, 2021, and a transcript of this hearing was provided to the court.2 The trial court heard lengthy discussions and arguments about several issues in the motion to compel and motion
{¶ 9} The trial court granted appellants’ motion for a protective order on April 29, 2021. On May 7, 2021, the court issued an order granting in part and denying in part appellees’ motion to compel. The court rulеd,
As to first interrogatory request no. 11 to BT; int. no. 12 to BTSS; int no. 13 to Hanna, the motion is granted and defendants are ordered to comply with the requests.
As to first interrogatory request no. 14 to BTSS; int. no. 13 to BT, the motion is denied.
As to document request no. 1 to all defendants, the defendants are ordered to amend their response to the request.
As to document request no. 6 to all defendants, the motion is denied. Plaintiffs are free to rewrite this discovery request with specificity as to whom they are seeking the information from and what information they are seeking.
As to document request nos. 14-17, 22-23 to all defendants; [request for production of document (“RPD“)] nos. 19-21, 44-45, 81 to BTSS; RPD nos. 21-23, 26, 28, 47-48, 85 to BT; RPD nos. 19-21, 24, 26, 45, 82 to Hanna, the motion is partially granted. Defendants are ordered to produce tax returns from the years 2013-2020.
As to document request nos. 11, 24 & 26 to all dеfendants; RPD nos. 32-33, 35 to BTSS; RPD nos. 35 & 39 to Hanna; RPD no. 37 to BT, the motion is granted and defendants are ordered to comply with the requests.
As to document request nos. 74 & 78 to BTSS; no. 75 to Hanna, the motion is denied. As to document request no. 79 to BTSS; no. 83 to BT; no. 80 to Hannah, the motion is denied.
As to second set of interrogatory request nos. 8-143 to BT and BTSS; int nos. 11-14 to Hanna, the motion is granted and defendants are ordered to comply with the request. As to second set of document request nos. 1 and 5 to all defendants, the motion is granted and defendants are ordered to comply with the request.
As to second set of document request nos. 1 and 5 to all defendants, the motion is granted and defendants are ordered to comply with the request.
As to second set of document request nos. 6-634 to all defendants, the motion is granted and the defendants are ordered to comply with the request.
As to the award of reasonable attorneys’ fees, the motion is denied.
Dеfendants shall forward discovery responses to plaintiffs by 05/21/2021.
(Emphasis added.) (A notice of appeal followed on May 14, 2021.)
I. The Trial Court erred when it granted the Motion to Compel and ordered Appellants to respond to the “Second Set of Interrogatory Request Nos. 8-14 to BT and BTSS; Int Nos. 11-14 to Hanna,” which seek information protected by the work-product doctrine.
II. The Trial Court erred when it granted the Motion to Compel and ordered Appellants to respond to the “Second Set of Document Request Nos. 6-63 to All Defendants,” which seek information protected by the work-product doctrine.
III. The Trial Court erred when it granted the Motion to Compel and ordered each Appellant to produce their respective tax returns for the years 2013 to 2020.
II. Law and Analysis
A. Jurisdiction – Final, Appealable Order
{¶ 11} Appellees raise a jurisdictional question that has been briefed by the parties in their respective appellate briefs, which we must address before reviewing appellants’ assignments of error. Appellees argues that this court lacks jurisdiction to entertain the present appeal because the trial court‘s order is not appealable pursuant to
{¶ 12} Appellate courts are courts of limited jurisdiction confined to reviewing only final orders of inferior courts. See
{¶ 13}
{¶ 15} In these cases, orders that required parties to produce documents for in camera inspections were immediately appealed. An in camera inspection is not an order that requires the disclosure of materials to another party. Therefore, orders for an in camera inspection do not constitute final orders. Daher v. Cuyahoga Community College Dist., 155 Ohio St.3d 271, 2018-Ohio-4462, 120 N.E.3d 830.
{¶ 16} In Daher, the Supreme Court of Ohio held that an order that mandated the production of grand jury transcripts for an in camera inspection was not an order that grants or denies a provisional remedy, but “an order mandating the production of the materials could be.” (Emphasis sic.) Id. at ¶ 16. Here, the trial court has ordered the production of documents claimed to be confidential or privileged. The order is not subject to further order or in camera inspection as was the case in the authority relied on by appellees. Therefore, we reject appellees’ first argument related to our jurisdiction to hear this appeal.
1. Work Product
{¶ 17} Appellants claim that the trial court erred when it required them to produce document and information that was covered by the work-product doctrine.
The work-product doctrine emanates from the United Stаtes Supreme Court decision in Hickman v. Taylor, 329 U.S. 495, 67 S.Ct. 385, 91 L.Ed. 451 (1947). Hickman was concerned that the attorney-client privilege was not broad enough to protect the memoranda, briefs, notes, and other writings prepared by counsel for his or her own use during the course of pursuing a case. Id. at 508 * * *. The court reasoned that if such materials did not receive some protection during the discovery phase of litigation, much of what is normally put down in writing, such as interviews, statements, legal theories, opinions, and mental impressions, would never be written down, ultimately causing the interests of the client to suffer. Id. at 511 * * *. The Hickman work product doctrine now protects all materials prepared in anticipation of litigation, and gives almost absolute protection to the opinions, conclusions, judgments, and legal theories of a client‘s attorney. Id. at 511 * * *; State v. Hoop, 134 Ohio App.3d 627, 642, 731 N.E.2d 1177 [(12th Dist.1999)]; Frank W. Schaefer, Inc. v. C. Garfield Mitchell Agency, Inc., 82 Ohio App.3d 322, 329, 612 N.E.2d 442 [(2d Dist.1992)].
Dennis v. State Farm Ins. Co., 143 Ohio App.3d 196, 200, 757 N.E.2d 849 (7th Dist.2001).
{¶ 20} An order that requires the disclosure of privileged information, such as that protected by the attorney-client privilege, is immediately appealable. Burnham v. Cleveland Clinic, 151 Ohio St.3d 356, 2016-Ohio-8000, 89 N.E.3d 536. The court reasoned “an order requiring the production of information protected by the attorney-client privilege causes harm and prejudice that inherently cannot be meaningfully or effectively remedied by a later appeal.” However, privilege based on the work-product doctrine has been treated differently. Chen, 142 Ohio St.3d 411, 2015-Ohio-1480, 31 N.E.3d 633.
{¶ 21} Whether an order that requires the disclosure of information alleged to be protected by the work-product doctrine constitutes a final order has received much attention in recent years. See In re Special Grand Jury Investigation of Medicaid Fraud & Nursing Homes, 10th Dist. Franklin No. 18AP-730, 2019-Ohio-2532, ¶ 12-22 (summarizing development in this this area of the law). Despite the disagreements on this issue between the justices of the Supreme Court of Ohio as outlined in In re Special Grand Jury Investigation, for each case, the court has relied on an application and analysis of the statutory text of
{¶ 22} In Glenn, the court applied the requirements found in
{¶ 23} Therefore, there is no bright-line rule that all such orders are immediately appealable. The “burden of establishing the appellate court‘s jurisdiction over an interlocutory appeal ‘falls on the party who knocks on the courthouse doors asking for interlocutory relief.‘” Id. at ¶ 22, quoting Chen, 142 Ohio St.3d 411, 2015-Ohio-1480, 31 N.E.3d 633, at ¶ 8.
{¶ 24} This court hаs recently addressed whether an appeal from a similar situation constituted a final order subject to immediate appeal. N.E. Monarch Constr., Inc. v. Morganti Ent., 8th Dist. Cuyahoga No. 109845, 2021-Ohio-2438. There, a party to civil litigation made a discovery request similar to those at issue here: “‘Identify any and all evidence within your possession and/or knowledge that supports each and every response and/or affirmative defense as contained in your First Amended Answer and each and every allegation in your Counterclaim.‘” Id. at ¶ 2. This is very similar to the second set of document requests six through 63 made to all defendants, except that instead of one combined request, they are individual requests for the same information from each affirmative defense and counterclaim made in the answer and counterсlaims filed by appellants. This is also similar to the other requests, exemplified by the second set of interrogatories, request eight to BT:
“With respect to affirmative defense no. 8 of Your Answer, which provides, ‘Plaintiffs’ claims are barred by the economic loss doctrine,’ please identify, describe and/or set forth all evidence in support of this affirmative defense.”
{¶ 25} This court, relying in part on Decuzzi, 191 Ohio App.3d 816, 2010-Ohio-6169, 947 N.E.2d 1229 (8th Dist.), found that the objection to the request sufficiently raised the work-product issue and the trial court‘s decision to compel production was a final order pursuant to
{¶ 26} Aсcording to the Supreme Court of Ohio, each case requires an individualized analysis where an appellant must demonstrate that the factors of the test for a final order regarding a provisional remedy found in
{¶ 27} The first requirement is that appellants must demonstrate a colorable claim that the discovery order at issue requires the production of material covered by the work-product doctrine. Appellees claim that appellants have not made this showing because they did not comply with the procedure in
{¶ 28} Appellees assert that appellants’ boilerplate objections lack any specificity, fail to identify or describe any materials withheld, and fail to provide even a privilege log to them or the trial court so that the issue could be fairly litigated.5 While appellees are correct, we do not conclude that the failure to produce a privilege log should preclude a party from demonstrating that a discovery order requires the disclosure of privileged material. Appellants assert that this court has found the type оf discovery requests at issue here call for the disclosure of attorney work product. Sawyer, 8th Dist. Cuyahoga No. 65306, 1994 Ohio App. LEXIS 4954 (Nov. 3, 1994); Decuzzi, 191 Ohio App.3d 816, 2010-Ohio-6169, 947 N.E.2d 1229 (8th Dist.). Sawyer does not directly deal with this issue. There, this court found the discovery requests at issue unduly burdensome and would allow a party to take undue advantage of the other party‘s efforts. Sawyer at 18-21. However, Decuzzi and N.E. Monarch, 8th Dist. Cuyahoga No. 109845, 2021-Ohio-2438, did conclude that the type of discovery request here sufficiently raised the work-product doctrine to support a colorable claim that such discovery requests could require the
{¶ 29} We must note, however, that Sawyer and Decuzzi were decided before significant changes were made to Ohio‘s discovery rules that took effect on July 1, 2020.
{¶ 30} Under current
{¶ 32} Finally, appellants must show that review after final judgment does not constitutes an adequate remedy. “[A]ppellate courts must decide on a case-by-case basis whether a trial court ruling ordering the disclosure of information allegedly protected by the work[-]product doctrine is appealable based on whether the appellant has shown that a postjudgment appeal would be ‘truly * * * meaningless or ineffective‘; ‘the irreversible nature of the order alone does not satisfy
{¶ 33} As the Glenn and Chen Courts noted, it is the party seeking immediate relief that must demonstrate that appeal after final judgment represents an inadequate remedy. Glenn, 165 Ohio St.3d 432, 2021-Ohio-3369, 179 N.E.3d 1205, at ¶ 22; Chen, 142 Ohio St.3d 411, 2015-Ohio-1480, 31 N.E.3d 633, at ¶ 8. In appellants’ brief to this court, they do not sufficiently address whether appeal after final judgment would constitute an adequate remedy. They claim that other courts have found the required disclosure of privileged or confidential information have
{¶ 34} In the present case, appellants admit at pages 12 and 14 of their April 2, 2021 brief in opposition to the motion to compel that they “have not withheld any documents that are responsive to these requests. Instead, [we] are simply opposed to being compelled to compile a list of the evidence and explain to opposing counsel how they intend to utilize such evidence in defending against specific claims.”
[Appellees] lastly complain that [appellants] refuse to identify and produce the specific documents that “identify, describe, refer to, relate, pertain to, or evidence” specific responses/allegations contained in [appellants‘] Answer and Counterclaim respectively. By the very nature of the requests, [appellants] are being asked to identify the specific evidence that they intend to rely on and/or offer at trial in support of each specific legal claim. In doing so, the requests improperly seek the protected mental impressions, conclusions, opinions and legal theories of the Blue Parties’ counsel — i.e., privileged work product.
(Emphasis added.) Identifying the evidence that a party intends to rely on in support of a legal claim is what the discovery rules require.
{¶ 35} Unlike N.E. Monarch Constr., the trial court held a hеaring on appellees’ motion to compel where appellants advanced only the barest of arguments in support of their claimed privilege. They also did not provide any information that appellees or the court
{¶ 36} The arguments appellants make that appeal from final judgment would be an inadequate remedy is similar to the limited argument rejected in Glenn. There, “[i]n his response to the state‘s motion to dismiss his appeal in the Second District, Glenn offered a single conclusory statement regarding the effective-remedy requirement, asserting that ‘[o]nce the information is released the privilege is viоlated.’ And Glenn‘s arguments in this court are similarly sparse.” Glenn, 165 Ohio St.3d 432, 2021-Ohio-3369, 179 N.E.3d 1205, at ¶ 23. See also Chen, 142 Ohio St.3d 411, 2015-Ohio-1480, 31 N.E.3d 633, ¶ 8. Appellants are required to show why an appeal after final judgment is an inadequate remedy and they have failed to make that showing. Therefore, this portion of the appealed order does not constitute a final order pursuant to
2. Financial Documents
{¶ 37} Appellants also claim that the court erred in requiring appellants to produce tax returns from 2013 through 2020. Appellants admit that tax returns from certain years from certain parties are appropriate, but take issue with the scope of the discovery order.
{¶ 38} Privilege must rest upon some specific constitutional or statutory provision. State ex rel. Grandview Hosp. & Med. Ctr. v. Gorman, 51 Ohio St.3d 94, 95, 554 N.E.2d 1297 (1990). “‘Tax returns, while subject to heightened protection
{¶ 39} Appellants, relying on State ex rel. Fisher v. Cleveland, 109 Ohio St.3d 33, 2006-Ohio-1827, 845 N.E.2d 500, claim that these sensitive documents have been afforded added protections as confidential documents that contain a great deal of personal information that enjoy an expectation of privacy. Essentially, appellants do not assert that the tax returns that were ordered to be produced are privileged, but they are so confidential that they should be afforded the same protections as privileged information.7 Their arguments raised in the assignment of error addressing the tax returns claim that they are not relevant, or they take issue with the scope of the discovery order.
{¶ 40} Some appellate courts have rejected appellants’ argument that tax returns are confidential, rising to the level оf privileged, for purposes of
{¶ 41} There does not appear to be agreement on any of these points between Ohio apрellate courts. This court has addressed the issue, but only in the context of the denial of a motion to quash a subpoena issued to a third party. See Estate of Wiedemer v. Cleveland Yachting Club Inc., 8th Dist. Cuyahoga Nos. 110432 and 110681, 2022-Ohio-20; Gangale v. Coyne, 8th Dist. Cuyahoga No. 110772, 2022-Ohio-196. The denial of a motion to quash a subpoena directed at a nonparty is, in and of itself, a final order. Godwin v. Facebook, Inc., 2020-Ohio-4834, 160 N.E.3d 372, ¶ 11 (8th Dist.). This is true regardless of whether the discovery order seeks allegedly privileged information because “[t]he denial of a motion to quash requires a nonparty to produce documents, an act that cannot be remedied at the conclusion of the case after the documents have been produced.” Id., citing Future Communications, Inc. v. Hightower, 10th Dist. Franklin No. 01AP-1175, 2002-
{¶ 42} The case relied on by appellants, State ex rel. Fisher, 109 Ohio St.3d 33, 2006-Ohio-1827, 845 N.E.2d 500, does not address this specific issue, either. This taxpayer action did not involve an analysis of
{¶ 43} The parties have not directed us to any case where this court or the Supreme Court of Ohio has held that the ordered disclosure of tax returns in discovery challenged on privilege and relevancy grounds constitutes a final order.8 We have held that a trial court order requiring a party to sign an IRS form that would allow for the release of records that detailed the amount of unpaid withholding taxes owed to the federal government does not constitute a final order. Mentor Way Real Estate Partnership v. Hertanu, 8th Dist. Cuyahoga No. 103267, 2016-Ohio-4692. But this case was decided, at least in part, on the fact that any right to confidentiality belonged to a party that was not asserting it in the appeal.
Generally, an order compelling prоduction of material allegedly protected by a statutory privilege is a final appealable order. See, e.g., Burnham v. Cleveland Clinic, 151 Ohio St.3d 356, 2016-Ohio-8000, 89 N.E.3d 536 (order compelling the production of documents allegedly protected by statutory attorney-client privilege is a final, appealable order); Jacob v. Youngstown Ohio Hosp. Co., 7th Dist. Mahoning No. 11 MA 193, 2012-Ohio-1302, ¶ 20 (provisional remedy
order is final if it compelled the production of documents containing trade secrets or privileged communications).
Squiric v. Surgical Hosp. at Southwoods, 7th Dist. Mahoning No. 20 MA 0015, 2020-Ohio-7026, ¶ 15. But as noted above, appellants have not pointed us to any cases from this district or recognized statutory privilege that establish that tax returns fall within this general rule. Appellants do point to
{¶ 44} We do not need to bind this court to one path or the other in this appeal because we conclude that appellants have failed to satisfy the third prong of the test for a final order in
{¶ 45} Just as in the work-product analysis above, appellants are required to show that appeal after final judgment does not constitute an adequate remedy. Here, they have failed to make that showing.
{¶ 47} In appellants’ brief to this court, they merely state that an order that requires the disclosure of privileged matters presents the same harm as an order requiring the disclosure of confidential matters. They go on to state, “In both cases, injury results from the dissemination of the information itself, which cannot be properly remedied absent an immediate appeal.” Appellants’ Brief filed August 2, 2021, page 8, citing Bennet, 186 Ohio App.3d 412, 2009-Ohio-6195, 928 N.E.2d 763, ¶ 33 (10th Dist.).
{¶ 48} As stated above, they do not more than cursorily address why appeal after final judgment is an inadequate remedy. A conclusory statement is insufficient to demonstrate an order constitutes a final order under
{¶ 49} We find that appellаnts have failed to demonstrate that the order appealed constitutes a final order under
{¶ 50} Appeal dismissed.
It is ordered that appellees recover from appellants costs herein taxed.
A certified copy of this entry shall constitute the mandate pursuant to
EMANUELLA D. GROVES, JUDGE
MARY EILEEN KILBANE, P.J., and
MARY J. BOYLE, J., CONCUR