FAYETTE DRYWALL, INC., et al., Plaintiffs-Appellees v. JOHN R. OETTINGER, TRUSTEE, et al., Defendants-Appellants
Appellate Case No. 28059
IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT MONTGOMERY COUNTY
January 11, 2019
2019-Ohio-48
Trial Court Case No. 2017-CV-4804 (Civil Appeal from Common Pleas Court)
Rendered on the 11th day of January, 2019.
RICHARD L. CARR, JR., Atty. Reg. No. 0003180 and MATTHEW J. BAKOTA, Atty. Reg. No. 0079830, 110 North Main Street, Suite 1000, Dayton, Ohio 45402 Attorneys for Plaintiffs-Appellees, Fayette Drywall, Inc. and Hotopp Excavating, Inc.
THOMAS B. TALBOT, JR., Atty. Reg. No. 0002615, P.O. Box 384, Dayton, Ohio 45409 Attorney for Defendant-Appellee, Ernst Enterprises, Inc.
KEVIN C. ROUCH, Atty. Reg. No. 0030174, P.O. Box 12571, Columbus, Ohio 43212 Attorney for Defendant-Appellee, Del Tedesco Tile & Construction
JAMES G. KORDIK, Atty. Reg. No. 0022700 and CHANNING M. KORDIK, Atty. Reg. No. 0090931, 40 North Main Street, Suite 2160, Dayton, Ohio 45423 Attorneys for Defendant-Appellee, JMD Architectural Products, Inc.
RAYMOND W. LEMBKE, Atty. Reg. No. 0003044, 602 Main Street, Suite 703, Cincinnati, Ohio 45202 Attorney for Defendant-Appellant, Flapjack2 Holding Company, LLC and Third-Party Defendant, Michael Dixson
TUCKER, J.
{¶ 1} On January 22, 2018, Defendant-appellant, Restaurant Specialties, Inc. (“RSI“), with the support of Defendant-appellant, Flapjack2 Holding Company, LLC (“Flapjack“), moved the trial court for a stay of all proceedings until the arbitration of a contractual dispute between itself and Flapjack could be completed. The trial court overruled the motion in its final order of June 15, 2018, finding that the dispute between Flapjack and RSI was a discrete matter relative to the claims of the other parties. Appealing from the order, Flapjack and RSI argue that the trial court erred because, pursuant to
I. Facts and Procedural History
{¶ 2} Beginning in or around September 2016, RSI served as general contractor for the construction of an International House of Pancakes restaurant in Huber Heights, on a parcel owned—at the time—by Flapjack. Compl. ¶ 3-4; Answer and Cross-claims
{¶ 3} Plaintiffs-appellees, Fayette Drywall, Inc. (“Fayette Drywall“) and Hotopp Excavating, Inc. (“Hotopp Excavating“), worked on the project as subcontractors. See Compl. ¶ 1-2 and 4. On October 13, 2017, they filed a complaint against Flapjack; RSI; Dayton Fire Protection, Inc.; Del Tedesco Tile & Construction Corp.; Ernst Enterprises, Inc.; J.M.D. Architectural Products, Inc.; the Montgomery County Treasurer; John R. Oettinger, Trustee of the Oettinger 1979 Trust; and Stevenson Utilities Construction, LLC. Id. at ¶ 3-5. Presenting causes of action for breach of contract, unjust enrichment, foreclosure on mechanic‘s liens, and violation of
{¶ 4} Flapjack subsequently asserted cross-claims against RSI, and RSI reciprocated with cross-claims against Flapjack. Flapjack‘s Am. Answer 12-19; RSI‘s
{¶ 5} RSI formally invoked Article 13.3 of the Contract on or about January 5, 2018, by serving Flapjack with a written demand for arbitration, and on January 22, 2018, RSI moved under
{¶ 6} On July 12, 2018, Flapjack and RSI filed a notice of appeal. Each has filed a brief on its own behalf, as has Defendant-appellee, Ernst Enterprises, Inc.4 Plaintiffs-appellees, Fayette Drywall and Hotopp Excavating, have filed a joint brief, and
II. Analysis
{¶ 7} Flapjack raises one assignment of error, contending that:
THE TRIAL COURT ERRED BY DENYING THE MOTION OF DEFENDANT RESTAURANT SPECIALTIES, INC. FOR A STAY PENDING ARBITRATION AND BY NOT STAYING THIS ACTION IN ITS ENTIRETY PENDING A DECISION IN THE ARBITRATION BETWEEN RESTAURANT SPECIALTIES, INC. AND DEFENDANT FLAPJACK2 HOLDING COMPANY, LLC.
{¶ 8} RSI nominally raises two assignments of error. In the first of these, RSI contends that:
THE TRIAL COURT ERRED IN OVERRULING THE MOTION FOR STAY [sic] PENDING ARBITRATION OF RSI PURSUANT TO
R.C. § [sic] 2711.02(B) .
And in the second, it contends that:
THE TRIAL COURT ERRED UNDER
R.C. § [sic] 2711.02(B) DENYING [sic] RSIS’ [sic] MOTION FOR STAY [sic] OF THE ENTIRE ACTION PENDING ARBITRATION BECAUSE OF THE PRESENCE OFNON-ARBITRABLE CLAIMS AND PARTIES.
{¶ 9} Simply put, Flapjack and RSI argue that the trial court erred by overruling RSI‘s motion for a stay, despite its finding that the Contract requires arbitration of their dispute, because the provisions of
{¶ 10} According to
If any action is brought upon any issue referable to arbitration under an agreement in writing for arbitration, the court in which the action is pending, upon being satisfied that the issue involved in the action is referable to arbitration under an agreement in writing for arbitration, shall on application of one of the parties stay the trial of the action until the arbitration of the issue has been had in accordance with the agreement, provided the
applicant for the stay is not in default in proceeding with arbitration.
(Emphasis added.) In other words, to demonstrate that a case should be stayed pursuant to the statute, an applicant must show that it is a party to a contract in writing; that the contract includes an arbitration provision; that an issue presented in the case is referable to arbitration under the contract; and that the applicant itself “is not in default in proceeding with [the] arbitration.” Id. The statute allows a court no discretion to deny an application for a stay where the applicant makes the required showing. See, e.g., Dorrian v. Scioto Conservancy Dist., 27 Ohio St.2d 102, 271 N.E.2d 834 (1971), paragraph one of the syllabus (noting that for purposes of statutory construction, “the word ‘shall’ shall be construed as mandatory unless there appears a clear and unequivocal legislative intent” that the word be interpreted contrary to its “ordinary usage“).
{¶ 11} Here, the trial court found that RSI and Flapjack were parties to the Contract; that the Contract included an arbitration agreement; and that the dispute between RSI and Flapjack had to be submitted to arbitration under the agreement. See Final Order 1. The court nevertheless overruled RSI‘s motion for a stay inasmuch as it deemed the dispute between RSI and Flapjack to be “separate and distinct” from the claims raised by the other parties. Id. at 2.
{¶ 12} No challenge has been offered to the findings of fact implicit in the trial court‘s final order, which in any event, are supported by the record. The Contract, which is in writing, includes an arbitration agreement in Article 13, and neither Flapjack nor RSI contests the validity of the Contract in general, or the enforceability of the arbitration agreement in particular. Furthermore, RSI‘s dispute with Flapjack, which concerns
{¶ 13} Fayette Drywall and Hotopp Excavating argue that the trial court correctly overruled RSI‘s motion because the dispute between RSI and Flapjack is a discrete issue with respect to the other parties’ claims, and because
{¶ 14} Yet, the “presence of non-arbitrable claims and parties who cannot be compelled to arbitrate is not a valid basis to deny a stay pending arbitration.” Estate of Younce v. Heartland of Centerville, 2016-Ohio-2965, 65 N.E.3d 192, ¶ 46 (2d Dist.); see also, e.g., Gustavus, LLC v. Eagle Invests., LLC, 2d Dist. Montgomery No. 24899, 2012-Ohio-1433, ¶ 16-21 and 44; Milling Away at ¶ 16-19; Cheney v. Sears, Roebuck and Co., 10th Dist. Franklin No. 04AP-1354, 2005-Ohio-3283, ¶ 10-12. In the Milling Away case, which is closely analogous to the instant action, the trial court dismissed the case on the motion of defendants-appellees, who had requested a stay pending arbitration as an alternative to dismissal; the Eighth District Court of Appeals held that the trial court erred by dismissing the case on the basis of certain, non-arbitrable claims arising from mechanic‘s liens “instead of staying the matter pending arbitration” of the remaining claims, which were subject to arbitration. Milling Away at ¶ 1-6 and 16-19. Thus, the arguments offered by Fayette Drywall and Hotopp Excavating in support of the trial court‘s final order are unavailing.
{¶ 15} A “trial court has broad discretion to issue procedural orders to regulate * * * litigation,” which includes “staying an action in the interest of administering efficient justice.” Huber v. Lincoln Benefit Life Co., 2d Dist. Montgomery No. 26570, 2015-Ohio-3390, ¶ 4. Although a trial court‘s “discretionary action[s] [are generally] reviewed by [an] appellate court [under the] abuse of discretion standard,” here the parties challenge only the trial court‘s construction of
III. Conclusion
{¶ 16} The trial court erred by overruling RSI‘s motion for a stay. Therefore, the trial court‘s order of June 15, 2018, is reversed, and this case is remanded to the trial court with instructions to enter a stay until the arbitration of the dispute between RSI and Flapjack has been completed.
WELBAUM, P.J., concurs.
HALL, J., concurring in judgment only.
Copies sent to:
Matthew J. Bakota
Richard L. Carr, Jr.
Eric Dauber
Anne Frayne
Joshua Gillum
Gillum Construction, LLC
Richard Heil
Channing M. Kordik
Raymond W. Lembke
Jacob H. Levine
David K. Lowe
Dale Markowitz
Bridey Matheney
Michele Phipps
Kevin C. Rouch
Thomas B. Talbot, Jr.
Hon. Barbara P. Gorman