BST Ohio Corp. v. Wolgang (Slip Opinion)BST Ohio Corp. v. Wolgang (Slip Opinion)
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as BST Ohio Corp. v. Wolgang, Slip Opinion No. 2021-Ohio-1785.]
NOTICE
This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.
SLIP OPINION NO. 2021-OHIO-1785
BST OHIO CORPORATION ET AL., APPELLANTS, v. WOLGANG ET AL., APPELLEES.
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as BST Ohio Corp. v. Wolgang, Slip Opinion No. 2021-Ohio-1785.]
Neither
(No. 2020-0015—Submitted January 27, 2021—Decided May 27, 2021.)
APPEAL from the Court of Appeals for Cuyahoga County, No. CA-19-108130, 2019-Ohio-4785.
I. INTRODUCTION
{¶ 1} Appellants, BST Ohio Corporation, Pop‘s Girl Corporation, Doctorbill Management Corporation, WWS Massillon, L.L.C., NSHE Sossaman, L.L.C., SBW Massillon, L.L.C., WC Massillon, L.L.C., William Sperling, Erica Westheimer, Randi Archuleta, Steven Gurevitch, Joyce Gerbosi Divita, Michael Gerbosi Divita, Fred Westheimer, Susan Westheimer, Russell Geyser, Wendy Courtney, and Maya Ruby Smith (individually, in combination, and collectively, “BST“), appeal the judgment of the Eighth District Court of Appeals involving the issue whether under
{¶ 2}
II. FACTS AND PROCEDURAL HISTORY
{¶ 3} In 2017, under the terms of an operating agreement between the parties, BST initiated binding arbitration proceedings in Cuyahoga County concerning actions of Wolgang, alleging mismanagement of a warehouse property run by a company owned jointly by Wolgang and BST. Wolgang counterclaimed, accusing BST of not meeting certain payment obligations. On December 6, 2018, after considerable arbitration proceedings, including a nine-day hearing and several rounds of briefing, the arbitrator awarded equitable and monetary relief to various entities involved in the matter.
{¶ 4} The same day the arbitrator‘s award was issued, December 6, 2018, BST applied to the Cuyahoga County Common Pleas Court to confirm the award. The following day, December 7, 2018, Wolgang filed a petition to vacate or correct the arbitration award in the Superior Court of California, County of Los Angeles.1 Wolgang does not assert in this appeal that the California case has any bearing on the issues in this case. Wolgang did not directly oppose the application to confirm the award in Cuyahoga County.
{¶ 5} On December 22, 2018, just over two weeks after BST filed its application for confirmation and Wolgang filed its motion to vacate or correct the arbitration award in California, the Cuyahoga County Common Pleas Court scheduled a hearing on confirmation for December 27 at 3:00 p.m. On December 24, two days after the court entered its order scheduling the hearing, Wolgang moved to stay or continue the proceedings in Cuyahoga County. At no time before the trial court‘s confirming the arbitration award did Wolgang move to vacate, modify, or correct the arbitration award in Ohio.
{¶ 6} In seeking a stay or continuance of the hearing on BST‘s application to confirm the arbitration award, Wolgang argued that it had not received
sufficient notice of the hearing (especially considering the Christmas holiday) to make necessary travel and other arrangements, that its California petition was pending, and that under
{¶ 7} BST opposed Wolgang‘s motion for stay or continuance on December 26, arguing that Wolgang had received plenty of notice of the proceeding (having been served with a copy of the application to confirm on December 6), that the California petition amounted to forum shopping, and that Ohio law does not require a court to delay confirming an arbitration award until after the expiration of the three-month limitation period for filing motions to vacate, modify, or correct.2 The same day that BST filed its brief in opposition to Wolgang‘s stay motion, Wolgang replied, arguing that Ohio‘s statute guaranteed it three months to make its motion.
{¶ 8} The following day, BST filed a motion (which the trial court elected to treat as a surreply) again arguing that Ohio law does not require a trial court to delay confirmation for three months to permit the
{¶ 9} On December 27, 2018, the trial-court hearing took place as scheduled, and the parties appeared through counsel, either in person or telephonically. BST argued that Wolgang was served with notice of the confirmation proceeding on December 6, that despite that notice, it had not substantively responded (other than by filing the California petition), and that the award, therefore, should be confirmed. Wolgang argued that Ohio law permits a party to arbitration to file a motion to vacate, modify, or correct an arbitration
award within three months of the award and therefore the confirmation proceeding was premature. Wolgang indicated that it believed California had proper jurisdiction and venue, but if the Cuyahoga County Common Pleas Court were to determine otherwise, Wolgang would, within the three months permitted, move to modify or vacate the award in Ohio. After hearing the arguments, the trial judge stated that regardless of the three-month limitation period in which to move to vacate, modify, or correct an award, the judge believed that the filing of the application to confirm in Cuyahoga County Common Pleas Court should have generated a response in the same court in the form of a motion to vacate, modify, or correct. Wolgang did not file any such motion before the trial judge issued his decision.
{¶ 10} Approximately two weeks after the hearing, on January 14, 2019, the trial court denied Wolgang‘s motion to stay or continue. The following day, January 15, 2019, the trial court confirmed the arbitration award.
{¶ 11} Wolgang appealed to the Eighth District Court of Appeals the next day, on January 16, 2019. During the appeal, Wolgang sought to supplement the appellate record with an Ohio-filed motion to vacate the arbitrator‘s award that Wolgang had filed in a separate, new Cuyahoga County Common Pleas Court case on March 5, 2019, 89 days after delivery of the arbitration award and subsequent to the trial court‘s confirmation order. The Eighth District denied the motion to supplement because the material was not available to the trial court at the time it made the decision Wolgang had appealed. On November 21, 2019, the Eighth District issued the decision now under review by this court.
{¶ 13} BST timely appealed to this court, and we accepted the appeal, 158 Ohio St.3d 1434, 2020-Ohio-877, 141 N.E.3d 242. For the following reasons, we reverse the judgment of the Eighth District.
III. DISCUSSION
{¶ 14} This case requires us to resolve a legal question regarding the way certain arbitration statutes are to be construed together. We review questions of law de novo. State v. Pettus, ___ Ohio St.3d ___, 2020-Ohio-4836, ___ N.E.3d ___, ¶ 10.
{¶ 15}
{¶ 16} Parties seeking to alter the results of arbitration may move to vacate, modify, or correct the arbitration award, and
{¶ 17} The same statute also provides discretion to the trial court in handling potentially conflicting pleadings or proceedings concerning an
arbitration award: “For the purposes of the motion, any judge who might make an order to stay the proceedings in an action brought in the same court may make an order, to be served with the notice of motion, staying the proceedings of the adverse party to enforce the award.” Id. The trial court denied Wolgang‘s motion to stay or continue because Wolgang had not filed a motion to vacate, correct, or modify the arbitration award in the Cuyahoga County Common Pleas Court.
{¶ 18} We read the time-deadline provisions of
{¶ 19} If we were to adopt Wolgang‘s argument, which essentially applies Warren, 18 Ohio St.3d 170, 480 N.E.2d 456, in a vacuum, a hard, three-month limitation on trial courts’ confirming arbitration awards would be created in the caselaw, even if not opposed by the filing of a motion to vacate, modify, or correct under
{¶ 20} Wolgang‘s motion to stay or continue the confirmation hearing, which is the only motion Wolgang filed in this case in Ohio, perhaps could have been granted by the trial court in its discretion. But the fact remains that no motion to vacate, modify, or correct under
{¶ 21} We agree with the Eighth District‘s determination that it could not consider the motion to vacate, modify, or correct that Wolgang filed in the trial court after Wolgang filed its notice of appeal of the confirmation of the award, even though the motion was filed within three months of delivery of the arbitration award. But we disagree with its holding that
confirmation to wait until after the court has held a hearing on an application for confirmation before filing a motion to vacate, modify, or correct the award, even if within three months of the award.
{¶ 22} In short,
{¶ 23} Accordingly, we view the limitation period in
A reading of
R.C. 2711.09 and2711.13 , in such a way as to harmonize their provisions, reveals that the periods provided for therein are periods of limitation within which certain actions must be taken. As with any other period of limitation, appropriate action authorized by statute may be taken at any time within the
period. Such action may thereafter require a response which is omitted at one‘s peril.
Goldsmith v. On-Belay, Inc., 10th Dist. Franklin No. 90AP-301, 1990 WL 135879, *2 (Sept. 20, 1990); see also Amanda Scott Publishing v. Legacy Marketing Group, Inc., 10th Dist. Franklin No. 92AP-233, 1992 WL 203232, *2 (Aug. 11, 1992) (quoting Goldsmith); Perrot v. Swad Chevrolet, Inc., 10th Dist. Franklin No. 90AP-736, 1990 WL 174020, *2 (Nov. 6, 1990) (quoting Goldsmith).
{¶ 24} In opposition to this view, Wolgang draws our attention to Schwartz v. Realtispec, Inc., 11th Dist. Lake No. 2002-L-098, 2003-Ohio-6759, in which the court stated:
Read together,
R.C. 2711.09 andR.C. 2711.13 set forth an intelligible procedural scheme. To wit,R.C. 2711.09 requires a hearing on an application to confirm. As a matter of law, a motion to confirm must be granted unless a timely motion to modify or vacate is made and cause to modify or vacate is demonstrated. A party seeking to modify or vacate an arbitration award has up to three months from the date of the award to file its motion. Therefore, the proper way to approach a situation such as the one sub judice, is to conduct a hearing after an adverse party files a motion to modify or vacate. However, if three months have elapsed since the award and a motion to modify or vacate has not been filed, a court should continue forward with a hearing on the motion to confirm.
Id. at ¶ 10. We discern no error in that language from Schwartz and note that a trial court has discretion to wait to proceed on a confirmation application until after three months have elapsed since the arbitration award or after a motion to modify, vacate, or correct has been filed within that period,
{¶ 25} BST applied to confirm the award the same day it was issued and provided notice to Wolgang. Rather than respond to the application substantively in
{¶ 26} At the trial-court hearing on December 27, the court made its position abundantly clear about Wolgang‘s duty to file a response if it wished to oppose confirmation:
[Counsel for Wolgang]: In this case—in our case, that three-month period of time has not elapsed, and we still have the right to file a motion to vacate.
THE COURT: That‘s what you say. I‘m the one ruling on the case, and what I have is a party that has moved to confirm, which should have generated then a motion to vacate or modify, right? And, in fact, you filed in California when, in my view, you should have filed it here.
***
* * * All you had to do is file your motion to vacate here.
Now you want additional time and additional time after that. What is the reason that it wasn‘t already done? I know you said that California has a different system.
You have got two very competent attorneys here from Ohio that could have worked on this I‘m sure and used Ohio law to file this motion to vacate. You all have had—you have been dealing with this thing for a couple of years.
***
[Counsel for Wolgang]: Well, perhaps a motion to vacate could still be filed before the end of the day today, but that would be a motion to vacate that would just set forth the names of the parties and say we move to vacate; and since the hearing will be held, we would have to file briefs and everything else to explain why the arbitrator exceeded her authority or the award is otherwise improper, and that‘s something that, as I have said, we certainly can do.
***
We are going to do what is required to be done under the statute, which is to timely file a motion to modify or vacate within the 90 days under the Ohio statute.
THE COURT: Well, it doesn‘t say that you have 90 days to file it. It says, a notice of a motion to vacate, modify or correct an award must be served upon the adverse party or its attorney within three months.
You could have filed it the day after. You filed one on December 7th in California. You could have filed it here and we wouldn‘t‘t be having this discussion. We would all be briefing the
issues that are being raised now with respect to the arbitrator exceeding her powers.
[Counsel for Wolgang]: Well, the time has not elapsed for us to do that. We certainly can do that under the statute. * * * [T]he point is that under the statute we have 90 days. That time has not elapsed.
A motion to vacate would be appropriate. It would be timely, and then we‘re going to have two competing
situations even in Ohio, because we will file a motion to vacate and this motion to confirm will be there and we will resolve it when it‘s all properly before the Court. I understand what you‘re saying, Your Honor, but I do not view the other side‘s filing of their application to confirm as a curtailment of our statutory rights to move to vacate within 90 days.
{¶ 27} Despite that exchange with the trial court, Wolgang still did not file a motion—even a placeholder motion, as discussed during the hearing—to insert some substantive response on the record and pave the way for relevant briefing. Although Wolgang now asserts, “In th[e] Motion to Stay, Wolgang notified the Trial Court that he intended to file and serve a motion to vacate under
Although counsel said, “[W]e are stating to you right now we intend to move to modify or vacate this award,” counsel expressly conditioned that intent on whether the court considered their California filing to be “a sufficient exercise of our rights to seek to vacate or modify this award.” Ultimately, the trial court waited more than two additional weeks after the hearing before ruling on the application to confirm. But on January 15, 2020, at which time Wolgang still had not definitively (even in conclusory or placeholder fashion) moved to vacate, modify, or correct the arbitration award, the trial court, complied with the statutory scheme, confirmed the award and entered judgment accordingly.
{¶ 28} Nothing in
{¶ 29}
{¶ 30} When BST applied to confirm the arbitration award, Wolgang failed to substantively respond, at its peril. See Goldsmith, 1990 WL 135879 at *2. Even though the statutory three months to move to have the award vacated, modified, or corrected had not yet expired, once the application to confirm was filed, Wolgang needed to put the trial court on notice that it contested the
arbitrator‘s award and, before confirmation, explain to the trial court why. The application to confirm the arbitrator‘s award triggered the need to act
{¶ 31} When a party files an application to confirm within the three-month period following an arbitration award, a party that wishes to file a motion to vacate, modify, or correct the award needs to make its intentions known soon thereafter.
IV. CONCLUSION
{¶ 32}
hearing on the application to confirm. Failing to do so may result in the award‘s being confirmed. Because the Eighth District held otherwise, we reverse its judgment.
Judgment reversed.
O‘CONNOR, C.J., and DONNELLY, J., concur.
FISCHER, J., concurs in judgment only, with an opinion joined by KENNEDY and DEWINE, JJ.
STEWART, J., concurs in part and dissents in part, with an opinion.
FISCHER, J., concurring in judgment only.
{¶ 33} Ohio public policy favors arbitration because it is supposed to provide parties with “a relatively expeditious and economical means of resolving a dispute.” Schaefer v. Allstate Ins. Co., 63 Ohio St.3d 708, 711-712, 590 N.E.2d 1242 (1992) (plurality opinion). To that end, nearly a century ago, the General Assembly enacted the Ohio Arbitration Act, which is now codified in
{¶ 34}
{¶ 35} As relevant here,
{¶ 36} Given the text of these provisions, when the Eighth District concluded that an arbitration award could not be confirmed under
{¶ 37} Courts in this state are not, however, free to rewrite laws passed by the General Assembly. Wheeling Steel Corp. v. Porterfield, 24 Ohio St.2d 24, 27-28, 263 N.E.2d 249 (1970). Instead, when the language used by Ohio‘s legislature is plain and unambiguous, the courts of this state must humbly apply the law as written. Zumwalde v. Madeira & Indian Hill Joint Fire Dist., 128 Ohio St.3d 492, 2011-Ohio-1603, 946 N.E.2d 748, ¶ 22-23.
{¶ 38} As this court rightly decides,
{¶ 39} Consequently, I respectfully concur in this court‘s judgment reversing the Eighth District‘s judgment in this case.
KENNEDY and DEWINE, JJ., concur in the foregoing opinion.
STEWART, J., concurring in part and dissenting in part.
{¶ 40} I agree with the majority‘s holding that
otherwise control their dockets to fairly and appropriately rule on competing motions. However, I disagree with the lead opinion‘s conclusion that a motion to vacate, modify, or correct an arbitration award must be filed prior to a hearing on an application to confirm. Furthermore, when an application to confirm is filed within three months of an arbitration award‘s being issued—that is, during the time in which a party may move to vacate, modify, or correct the award the central question becomes: What is the trial court‘s responsibility in reconciling the parties’ competing rights under the statutes? I think the clearest and most equitable answer is that the court must set a reasonable deadline for the filing of a motion to vacate, modify, or correct the award.
{¶ 41} In this case, the trial court denied the motion of appellees, Evan Gary Wolgang and Massillon Management Company (collectively, “Wolgang“), to stay the proceedings and confirmed the arbitration award within the three-month period that
{¶ 42} The lead opinion states that a motion to vacate, modify, or correct an arbitration award must be filed on or before the hearing date on an application to confirm. How the lead opinion reaches this conclusion is unclear. Certainly nothing in
What the lead opinion‘s statement would mean in practice is that, notwithstanding the three-month statutory time period for filing a motion to vacate, modify, or correct an award, a party adverse to confirmation of an award would have only five days to do so, and during that time, in addition to composing the motion, the party would have to research the law and gather and prepare evidence in support of the motion. Under the best of circumstances this would be extremely difficult for even the most sophisticated and resourceful parties. Arguments in support of a motion to vacate, modify, or correct can be difficult to prove. See Goodyear Tire & Rubber Co. v. Local Union No. 200, 42 Ohio St.2d 516, 522, 330 N.E.2d 703 (1975). And when the party who opposes confirmation is a lay person and the party in favor of confirmation is a sophisticated entity, as is commonly the case, the difficulty is compounded to the point of practical impossibility.
{¶ 43} Although the grounds upon which a court may grant a motion to vacate, modify, or correct are limited, see
from doing anything other than confirming an award on the day of the hearing if the adverse party has not filed a motion before then.5 The
{¶ 44} This brings us back to the question: What is required of the trial court when an application to confirm an arbitration award has been filed within three months of the award‘s being issued? That question cannot be answered simply by looking to the language of
Any application to the court of common pleas under section
2711.01 to2711.15 , inclusive, of the Revised Code, shall be made and heard in the manner provided by law for the making and hearing of motions, except as otherwise expressly provided in such sections.
Id.
{¶ 45} Thus, both an application to confirm under
court rules on the application to confirm the award. Doing so is not only in keeping with the rules of motion practice and the laws that guide trial courts in conducting their proceedings but is also fair and equitable to both sides in that the trial court can balance the competing rights the parties have under the statutes. As our holding in this case establishes, a party moving the trial court to confirm an arbitration award is not required to wait three months for an adverse party to file a motion to vacate, modify, or correct the award. On the other hand, a party who has the right to move the court to vacate, modify, or correct must be given a reasonable and fair opportunity to do so and also be given notice of the time frame in which the party must operate when that time period is less than the statutorily prescribed three months. When a trial court provides a clear and reasonable deadline for the filing of such motions, there is no error when it confirms the award within three months of the award‘s issuance. See, e.g., Kanuth v. Prescott, Ball & Turben, Inc., D.D.C. No. 88-1416, 1990 U.S. Dist. LEXIS 7406, *3-8, 11 (June 19, 1990) (denying party‘s request for full three months to file motion to vacate after opposing party filed motion to confirm; instead giving two months to file, which was deemed a “reasonable” amount of time); McLaurin v. Terminix Intl. Co., L.P., S.D.Ala. No 1:19-00553-JB-M, 2020 U.S. Dist. LEXIS 117869, *2-5, 14 (July 6, 2020) (confirming arbitration award within three months of its issuance, after court gave opposing parties two weeks to file motion to vacate or modify but they missed deadline).6
{¶ 47} Although the appellants in this case argue that Wolgang had plenty of time to file a motion and the trial court appears to have been frustrated with Wolgang for not filing a motion to vacate prior to the hearing, the court nevertheless provided no concrete guidance or instruction when it failed to set a
deadline for Wolgang to file its motion. Instead, the court waited an indiscriminate amount of time before denying Wolgang‘s motion to stay and confirming the award. And whether the trial court‘s denial of the motion to stay was an abuse of discretion is a question that is still outstanding and one that the appellate court should decide on remand. Accordingly, I concur in the judgment reversing the judgment of the court of appeals, but I would remand the case for consideration of Wolgang‘s second assignment of error.
Ulmer & Berne, L.L.P., and Michael N. Ungar; and Ciano & Goldwasser, L.L.P., Phillip A Ciano, Brent S. Silverman, and Sarah E. Katz, for appellants.
Calfee, Halter & Griswold, L.L.P., Colleen M. O‘Neil, and Alexandra R. Forkosh; and Hamburg, Karic, Edwards & Martin, L.L.P., and Steven S. Karic, for appellees.