DOUGLAS HECHT v. EQUITY TRUST COMPANY
Nos. 110380 and 110650
COURT OF APPEALS OF OHIO EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
January 27, 2022
2022-Ohio-198
MARY J. BOYLE, J.
Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-20-941979
JUDGMENT: AFFIRMED IN PART, REVERSED IN PART, AND REMANDED
RELEASED AND JOURNALIZED: January 27, 2022
Appearances:
Matthew Gilmartin, Attorney at Law, LLC, and Matthew Gilmartin, for appellant.
Ulmer & Berne LLP, Paul R. Harris, and Kathryn Bartolomucci, for appellee.
MARY J. BOYLE, J.:
{¶ 1} Plaintiff-appellant, Douglas Hecht (Hecht), appeals the trial court‘s orders (1) denying Hecht‘s motion for an extension of time to respond to defendant-appellee, Equity Trust Company‘s (Equity Trust), motion to dismiss Hecht‘s
{¶ 2} For the reasons set forth below, we affirm the trial court‘s order denying Hecht‘s motion for an extension of time to respond to Equity Trust‘s motion to dismiss, reverse the trial court‘s order granting Equity Trust‘s motion to dismiss, and remand to the trial court to convert the motion to dismiss to a motion for summary judgment, after giving the parties notice.
{¶ 3} On December 23, 2020, Hecht filed a complaint against Equity Trust, alleging breach of contract (Count 1) and breach-of-fiduciary duty (Count 2). Hecht avers that Equity Trust, the custodian of Hecht‘s individual retirement account (IRA), did not timely or correctly process Hecht‘s deposit and payment directives, which resulted in late fees and diminished value of the IRA. Hecht avers that these oversights constituted a breach of the parties’ custodial-account agreement and a breach of Equity Trust‘s fiduciary duty to Hecht.
{¶ 4} On February 1, 2021, Equity Trust filed a motion to dismiss Hecht‘s complaint pursuant to
We have the right to amend this Agreement at any time. Any amendment we make to comply with the Code and related Regulations does not require your consent. You will be deemed to have consented to any other amendment unless, within 30 days from the date we mail the amendment, you notify us in writing that you do not consent.
Equity Trust points to the 2017 Agreement as one such amendment. The 2017 Agreement provides in pertinent part:
You agree that any claim or cause of action against custodian arising out of or relating in any way to this agreement or our role as custodian must be file[d] within one (1) year after the claim or cause of action accrued, or the shortest duration permitted under applicable law if such period is greater than one (1) year. You agree to waive any statute of limitation[s] to the contrary.
(Emphasis deleted.) Equity Trust contends that this one-year limitations provision bars Hecht‘s claims because Hecht alleged in his complaint that the parties’ contractual relationship ended in March 2018, yet Hecht filed his complaint in December 2020, outside the agreed-upon limitations period. Equity Trust also argues that Hecht‘s complaint fails to allege the essential elements of breach of contract and breach-of-fiduciary duty.
{¶ 5} On February 19, 2021, Hecht moved for an extension of time to respond to Equity Trust‘s motion to dismiss, which contained a stipulation by both parties that Hecht would have until February 22, 2021, to respond to Equity Trust‘s motion to dismiss and that the parties had agreed to stay discovery until the trial court ruled on Equity Trust‘s motion.
{¶ 6} On February 23, 2021, the trial court granted Equity Trust‘s motion as unopposed in its entirety. In its journal entry, the trial court acknowledged that in resolving a
{¶ 7} Later that same day, February 23, the trial court denied Hecht‘s motion for extension of time to respond to Equity Trust‘s motion to dismiss. The trial court observed that Hecht had until February 16, 2021, to file his response to the motion or request leave for additional time to respond and had failed to do either.1
{¶ 8} On March 24, 2021, Hecht moved for relief from judgment and filed a notice of appeal in Hecht v. Equity Trust Co., 8th Dist. Cuyahoga No. 110380, the following day. On March 26, 2021, the trial court stayed proceedings pending the appeal. On April 26, 2021, this court remanded the matter to the trial court for the sole purpose of ruling on Hecht‘s motion for relief from judgment. On June 23, 2021, the trial court denied the motion stating that Hecht missed both the initial February 16, 2021 and stipulated February 22, 2021 deadlines to respond to Equity Trust‘s motion to dismiss and had failed to request leave to respond. On July 12, 2021, Hecht filed a second notice of appeal, which is the matter currently before the court.
ASSIGNMENT OF ERROR ONE
The Common Pleas Court erred in denying Douglas A. Hecht an extension to respond to [Equity Trust‘s] 12(B)(6) Motion because Hecht was still within his time to oppose the motion.
ASSIGNMENT OF EROR TWO
The Common Pleas Court erred in granting [Equity Trust‘s] 12(B)(6) Motion because it relied on matters outside of the record and thus violated
ASSIGNMENT OF ERROR THREE
The Common Pleas Court erred in denying Hecht‘s motion for relief from judgment to set aside the judgment per
ASSIGNMENT OF ERROR FOUR
The Common Pleas Court erred in denying Hecht‘s motion to set aside the judgment pursuant to
ASSIGNMENT OF ERROR FIVE
The Common Pleas Court erred in denying Hecht‘s motion to set aside the judgment pursuant to
Extension of Time
{¶ 10} In his first assignment of error, Hecht claims that the trial court erred in denying his request for an extension of time to respond to Equity Trust‘s motion
{¶ 11} We review a trial court‘s order denying a motion for an extension of time for an abuse of discretion. Provident Bank v. Hartman, 8th Dist. Cuyahoga No. 78292, 2001 Ohio App. LEXIS 2329, 6-7 (May 24, 2001). A court abuses its discretion when its decision is unreasonable, arbitrary, or unconscionable. Blackmore v. Blackmore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983). A decision is unreasonable when no sound reasoning process * * * would support that decision. AAAA Ents., Inc. v. River Place Community Urban Redevelopment Corp., 50 Ohio St.3d 157, 161, 553 N.E.2d 597 (1990).
{¶ 12}
{¶ 13} Hecht contends that he missed the filing deadline in reliance on Loc.R. 8(C) of the Court of Common Pleas of Cuyahoga County, General Division
Civil Rule 12, prescribing time requirements for pleadings, will be enforced. However, parties may obtain an extension of time, not to exceed thirty (30) days in which to answer, plead or otherwise move, when no prior extension has been granted, by filing with the Clerk a written stipulation approved by all counsel providing for an extension. The stipulation shall affirmatively state that no prior extension has been granted. Neither the stipulation nor any entry shall be submitted to the Court for the initial extension. If no stipulation is obtained or if an additional extension beyond the initial stipulated period is requested, the party desiring an extension must obtain the approval of the Court.
{¶ 14} Hecht argues that Loc.R. 8(C) does not provide that a stipulation for an extension of time must be filed before the filing deadline passes. We disagree. Loc.R. 8(C) states that the parties may obtain an extension of time * * * by filing with the Clerk a written stipulation approved by all counsel providing for an extension. The rule requires filing the written stipulation before obtaining the extension. Hecht misinterprets what he terms the self-executing nature of the rule that [n]either the stipulation nor any entry shall be submitted to the Court for the initial extension. The first stipulated extension does not require court approval. However, the rule neither states nor implies that the first stipulated extension does not need to be filed or that it may be filed after the deadline that the parties seek to extend by the stipulation. See Ferreri v. Plain Dealer Publishing Co., 142 Ohio App.3d 629, 637-638, 756 N.E.2d 712 (8th Dist.2001) (the parties have no authority to extend a filing deadline by stipulation after the deadline has passed).
{¶ 15} Hecht then turns to
When by these rules or by a notice given thereunder or by order of court an act is required or allowed to be done at or within a specified time, the court for cause shown may at any time in its discretion * * * upon motion made after the expiration of the specific period permit the act to be done where the failure to act was the result of excusable neglect[.]
Ferreri at 637. Hecht argues that
{¶ 16} First, counsel for Hecht maintains that his belief that the stipulation extended the deadline without judicial approval excuses his failure to meet the deadline. However, as explained above, the parties no longer had authority to stipulate to an extended deadline once the deadline passed. Only the trial court could extend the deadline. [O]btaining a stipulation from [an] opposing party in lieu of filing the proper motion for additional time does not constitute excusable neglect within the scope of
{¶ 17} Second, counsel for Hecht states that he was still recovering from an open-heart surgery six months before, had to deal with other health complications during that time, and had a medical procedure scheduled February 19, 2021, the day he filed the stipulation. However, the first time counsel for Hecht raised these health concerns was in his March 24, 2021 motion for relief from judgment, which he filed
{¶ 18} Based on the foregoing, we find the trial court did not abuse its discretion in denying Hecht‘s request for an extension of time to respond to Equity Trust‘s motion to dismiss.
{¶ 19} Hecht‘s first assignment of error is overruled. We find Hecht‘s third and fourth assignments of error seeking the same relief under
Civ.R. 12(B)(6)
{¶ 20} In his second assignment of error, Hecht argues that the trial court erred in granting Equity Trust‘s motion to dismiss because the trial court relied on evidence outside the complaint and resolved an issue of fact in favor of Equity Trust. In his fifth assignment of error, Hecht argues that the trial court erred in denying his
{¶ 21} A motion to dismiss a complaint under
{¶ 22} Because Hecht missed the deadline for filing a response to Equity Trust‘s motion to dismiss, the trial court reviewed Equity Trust‘s motion as unopposed. Nevertheless, the trial court still had to comply with
{¶ 23}
{¶ 24} However, Hecht‘s failure to attach a copy of the agreement to the complaint is not fatal for that reason alone. The proper procedure for responding to a plaintiff‘s failure to attach a copy of the written instrument to the complaint or state a valid reason for failing to do so is to move for a more definite statement pursuant to
{¶ 25} Equity Trust did not move for a more definite statement pursuant to
{¶ 26} Equity Trust, however, cites no law to support this interpretation of
{¶ 27} Equity Trust also relies on Lisboa v. Lisboa, 8th Dist. Cuyahoga No. 95673, 2011-Ohio-351, which in turn cites State ex rel. Crabtree, Irvin, and Fillmore, for the proposition that [t]he court may review documents that were incorporated into the complaint, even if not attached to the complaint. Id. at ¶ 38. However, in Lisboa, the trial court‘s jurisdiction to review plaintiff‘s breach-of-contract claim hinged on a separation agreement and court docket attached to defendants’ motions to dismiss the complaint under
{¶ 28} Equity Trust further argues that reading the 2012 Agreement and 2017 Agreement together establishes that Hecht‘s claims are time barred. The 2012 Agreement provides for periodic amendment:
We have the right to amend this Agreement at any time. Any amendment we make to comply with the Code and related Regulations does not require your consent. You will be deemed to have consented to any other amendment unless, within 30 days from the date we mail the amendment, you notify us in writing that you do not consent.
The 2017 Agreement provides the following amendment:
You agree that any claim or cause of action against custodian arising out of or relating in any way to this agreement or our role as custodian must be file[d] within one (1) year after the claim or cause of action accrued, or the shortest duration permitted under applicable law if such period is greater than one (1) year. You agree to waive any statute of limitation[s] to the contrary.
(Emphasis deleted.) Equity Trust contends that Hecht‘s claims are time barred because they are subject to the one-year limitations period provided in the 2017 Agreement. Equity Trust points to Hecht‘s allegation that the parties’ contractual relationship ended in March 2018, which, if true, any claim for breach of contract would have accrued no later than March 2018, making Hecht‘s December 2020 complaint untimely.
{¶ 29} Even if the trial court could properly consider the 2012 Agreement as part of the complaint by reference, it could not properly consider the 2017 Agreement because Equity Trust had not established that it had mailed the
{¶ 30} Equity Trust argues in the alternative that Hecht‘s complaint fails to plead the essential elements of breach of contract and breach-of-fiduciary duty. The trial court dismissed Hecht‘s complaint in its entirety on the no set of facts standard. Ohio is a notice-pleading state, [and] Ohio law does not ordinarily require a plaintiff to plead operative facts with particularity. Cincinnati v. Beretta USA Corp., 95 Ohio St.3d 416, 2002-Ohio-2480, 768 N.E.2d 1136, ¶ 29. Under the requirements of
{¶ 31} A cause of action for breach of contract requires the claimant to establish the existence of a contract, the failure without legal excuse of the other party to perform when performance is due, and damages or loss resulting from the breach. Lucarell v. Nationwide Mut. Ins. Co., 152 Ohio St.3d 453, 2018-Ohio-15, 97 N.E.3d 458, ¶ 41. In his complaint, Hecht alleges that he entered into an
{¶ 32} Therefore, Hecht‘s second assignment of error is sustained, which renders Hecht‘s fifth assignment of error seeking the same relief under
{¶ 33} Accordingly, we affirm the trial court‘s judgment denying Hecht‘s untimely motion for an extension of the time, reverse the trial court‘s judgment dismissing Hecht‘s complaint, and remand to trial court to convert Equity Trust‘s motion to dismiss to a motion for summary judgment, after notifying the parties.
It is ordered that appellant and appellee share costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
MARY J. BOYLE, JUDGE
EILEEN T. GALLAGHER, J., CONCURS;
SEAN C. GALLAGHER, A.J., CONCURS IN JUDGMENT ONLY