Ra v. Ohio Atty. Gen.Ra v. Ohio Atty. Gen.
D E C I S I O N
On brief: Wendy S. Rosett, for appellants Vista REO Settlement Services, LLC, and Parcel Revenue Corporation; Kevin Ra, pro se. Argued: Wendy S. Rosett and Kevin Ra.
On brief: Dave Yost, Attorney General, and Randall W. Knutti, for appellee. Argued: Randall W. Knutti.
APPEAL from the Court of Claims
PER CURIAM
{1} Plaintiffs-appellants, Kevin Ra (“Ra“), Vista REO Settlement Services, LLC (“Vista“), and Parcel Revenue Corporation (“PRC“), appeal the July 11, 2019 judgment of the Court of Claims of Ohio granting summary judgment in favor of defendant-appellee, Ohio Attorney General‘s Office, on appellants’ claims of negligence, tortious interference with business relationships, and intentional infliction of emotional distress and dismissing appellants’ claims for breach of contract, breach of the impliеd covenant of good faith and fair dealing, and declaratory judgment. For the following reasons, we affirm the trial court judgment.
I. FACTS AND PROCEDURAL HISTORY
{2} The following facts are not in dispute unless otherwise indicated. On November 16, 2017, appellee filed an action in the Cuyahoga County Court of Common Pleas asserting various claims against Ra, Vista, Housing Court Assistance Program, Inc. (“HCAP“), and Greater Cleveland Housing Partnership, Inc. (“GCHP“) involving the operation of HCAP and GCHP as charities and Ra‘s use of charitable assets. The same day, a news release entitled “Cleveland-Area Man Accused of Using Nonprofit for Personal Gain” was posted on the “News Releases” page of
{3} The news release announced the commencement of a lawsuit against Ra accusing him of converting nonprofit funds for personal benefit, breaching his fiduciary duties, failing to register charitable trusts with the Attorney General‘s Office, and failing to cooperate with an investigation, among other alleged violations. The news release specified that Ra is accused of using his nonprofit entities—HCAP and GCHP—to benefit himself by allegedly offering free assistance to homeowners facing violations in Ohio housing courts but then using the nonprofits to buy and sell property rather than for charitable purposes. The news release further stated the lawsuit includes “about $50,000 in questionable expenditures” between 2012 and 2014 and four instances where the nonprofit “bought and then quickly sold property in Cleveland but apparently never received the proceeds.” (News Release at 1.) The news release advised the reader that suspected charitable fraud should be reported to appellee and provides contact information to do so.
{4} The parties settled the Cuyahoga County action on January 29, 2018. Pursuant to the settlement agreement, Ra agreed to dissolve and wind down HCAP, never incorporate or create an Ohio nonprofit organization in the future, not hold any position within a charitable or nonprofit organization in Ohio, or otherwise participate in charitable solicitations in Ohio. Ra, HCAP, GCHP, and Vista agreed to “waive and release any and all claims and causes of action against [appellee], and any current or former employee or agent of [appellee], relating to [appellee‘s] investigation of Defendants or the Pending litigation.” (Settlement Agreement at 3, attached as Ex. A to Compl.) The agreement expressly states it does not preclude Ra, either individually or through another entity, from engaging in real еstate transactions or providing services to real property owners as a for-profit business,
subject to certain restrictions. Once Ra‘s commitments were met, appellee agreed to dismiss the pending Cuyahoga County litigation with prejudice. Under the miscellaneous provisions, the parties agreed that the Cuyahoga County Court of Common Pleas retained jurisdiction to enforce the settlement agreement. The agreement is silent regarding the news release.
{5} On February 22, 2019, appellants filed a complaint against appellee contending “[t]he [news] release falsely depicts Ra and his business operations as criminal in nature and contains information couched as ‘accusations’ which [appellee] knows are false and/or misleading and/or baseless.” (Compl. at ¶ 21.) The complaint states appellants became aware of the news release in February 2018 and, at that time, asked appellee to remove it from its website, but appellee refused to do so. According to the complaint, appellee then instituted a “policy” that it “used to destroy Ra‘s and Vista‘s reputation in perpetuity with allegations [appellee] knew were without merit.” (Compl. at ¶ 23.) The complaint defines the policy as appellee‘s: “procedure, and/or custom wherein the [November 16, 2017 news] release was allowed to remain published to [appellee‘s] website, remain available to the public“; appellee‘s programming and/or manipulation of appellee‘s website using Search Engine Optimization (“SEO“)¹1 techniques to display
{6} From these allegations, appellants asserted claims for: (1) breach of contract and breach of the implied covenant оf good faith and fair dealing in regard to the settlement agreement; (2) negligence; (3) tortious interference with business relationships; (4) declaratory judgment; and (5) intentional infliction of emotional distress. Regarding the breach of contract claim, the complaint states appellee breached the settlement agreement by “intentionally and/or maliciously and/or inadvertently” undermining Ra‘s ability to receive the benefit of the parties’ settlement agreement by essentially undermining Ra‘s for-profit business. (Compl. at ¶ 70.) The claim for declaratory judgment also related to the settlement agreement itself and, in particular, concerned the languаge of the waiver and release clause and the implied duty of good faith and fair dealing.
{7} Regarding the negligence claim, appellants asserted in their complaint:
Post-settlement, [appellee] owed [appellants] a duty of care to ensure any information published on [appellee‘s] website about [appellants‘] business affairs is true and accurate and/or [appellee] owed [appellants] a duty of care to ensure any information published on [appellee‘s] website about [appellants‘] business affairs is not false and/or misleading and/or materially misleading. [Appellee] also owes [аppellants] a duty of care, once it issues a [news] release about a business or individual and later learns that the information set forth in said [news] release is false, inaccurate, misleading, and/or offered in bad faith, to immediately update or remove said [news] release so as not to cause undue harm to others (e.g., [appellants]).
(Emphasis sic.) (Compl. at ¶ 74.) Appellants believed this duty of care was breached by appellee‘s “implementation of the policy and/or other unlawful actions which will be proven at trial” and, as a result of the breach, appellant suffered economic and non-economic injuries. (Compl. at ¶ 75.)
{8} Regarding the tortious interference with business relationships claim, appellants stated appellee had actual knowledge of appellants’ potential business relationships with owners of abandoned and blighted properties, real estate investors and landlords, angel investors and venture capitalists, municipal governments, and real estate agents, and, without privilege or justification, “acted intentionally, improperly, and maliciously interfered with and
established and/or prospective business relationships. (Compl. at ¶ 84.) As to intentional infliction of emotional distress, appellants asserted that appellee‘s actions were intended to cause Ra serious emotional distress by intentionally subjecting Ra to false allegations of criminal behavior and conduct which appellee knew or should have known Ra did not commit. Further, appellants contended the purpose of appellee‘s creation and implementation of “the policy” was designed to annoy and harass Ra and to unjustly and unfairly ridicule him in front of his community, family, and industry peers. (Compl. at ¶ 96.) In addition to seeking the declaratory judgment on thе settlement agreement, appellants asked for damages in the amount of $1.6 billion for Counts One, Two and Three, plus an additional amount to be determined at trial on Count Five, court costs and attorney fees, and any additional relief deemed equitable by the trial court.
{9} On March 25, 2019, appellee filed a motion to dismiss pursuant to
{10} The trial court converted appellee‘s motion to dismiss into a motion for summary judgment, pursuant to
otherwise.” (Ra Aff. at ¶ 26.) Ra and PRC board member Ross Brankatelli also attest to the news release being a “driving force” behind loss of business. (Brankatelli Aff. at ¶ 4.)
{11} On July 11, 2019, the trial court issued a decision and judgment in favor of appellee. First, the trial court found that, under the express language of the settlement agreement, the Cuyahoga County Court of Common Pleas retained jurisdiction to adjudicate appellants’ claims of breach of contract, breach of implied covenant of good faith and fair dealing, and appellants’ request for declarаtory judgment. Therefore, the trial court dismissed those claims. Next, the trial court found appellee is entitled to summary judgment on appellants’ tort claims—negligence, tortious interference with business relationships, and intentional infliction of emotional
{12} Appellants filed a timely appeal.
II. ASSIGNMENTS OF ERROR
{13} Appellant assigns the following as trial court error:
- Reviewing the matter de novo, the Court of Claims erred to the prejudice of the Appellants-Plaintiffs by granting partial summary judgment in favor of the Appellee-Defendant Ohio Attorney General‘s Office erroneously holding that the Appellants’ tort claims were all “disguised defamation claims[.]”
- Reviewing the matter de novo, the Court of Claims erred to the prejudice of the Appellants-Plaintiffs by granting partial summary judgment in favor of the Appellee-Defendant Ohio Attorney General‘s Office erroneously holding that the Appellee was entitled to “absolute privilege” to publish material that is defamatory.
III. STANDARD OF REVIEW
{14} Pursuant to
Co., 54 Ohio St.2d 64, 66 (1978). “When seeking summary judgment on grounds that the non-moving party cannot prove its case, the moving party bears the initial burden of informing the trial court of the basis for the motion and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact on an essential element of the non-moving party‘s claims.” Lundeen v. Graff, 10th Dist. No. 15AP-32, 2015-Ohio-4462, ¶ 11, citing Dresher v. Burt, 75 Ohio St.3d 280, 293 (1996). “Once the moving party meets its initial burden, the nonmovant must set forth specific facts demonstrating a genuine issue for trial.” Dunlop v. Ohio Dept. of Job & Family Servs., 10th Dist. No. 19AP-58, 2019-Ohio-3632, ¶ 6, citing Dresher at 293.
{15} Appellate review of summary judgment is de novo. Gabriel v. Ohio State Univ. Med. Ctr., 10th Dist. No. 14AP-870, 2015-Ohio-2661, ¶ 12, citing Byrd v. Arbors E. Subacute & Rehab. Ctr., 10th Dist. No. 14AP-232, 2014-Ohio-3935, ¶ 5. “When an appellate court reviews a trial court‘s disposition of a summary judgment motion, it applies the same standard as the trial court and conducts an independent review, without deference to the trial court‘s determination.” Gabriel at ¶ 12, citing Byrd at ¶ 5, citing Maust v. Bank One Columbus, N.A., 83 Ohio App.3d 103, 107 (10th Dist.1992). “We must affirm the trial court‘s judgment if any of the grounds raised by the movant in the trial court are found to support it, even if the trial court failed to consider those grounds.” Eichenberger v. Woodlands Assisted Living Residence, L.L.C., 10th Dist. No. 14AP-272, 2014-Ohio-5354, ¶ 10, citing Coventry Twp. v. Ecker, 101 Ohio App.3d 38, 41-42 (9th Dist.1995).
A. Appellants’ First Assignment of Error
{16} Under the first assignment of error, appellants contend the trial court erred to their prejudice by holding the tort claims were “disguised defamation claims” and, on that basis, granting partial summary judgment to appellee. (Appellants’ Brief аt viii.) For the following reasons, we disagree.
{17} Defamation is the publication of a false statement ” ‘made with some degree of fault, reflecting injuriously on a person‘s reputation, or exposing a person to public hatred, contempt, ridicule, shame or disgrace, or affecting a person adversely in his or her trade, business or profession.’ ” Jackson v. Columbus, 117 Ohio St.3d 328, 2008-Ohio-1041, ¶ 9, quoting A & B-Abell Elevator Co. v. Columbus/Cent. Ohio Bldg. & Constr. Trades
Council, 73 Ohio St.3d 1, 7 (1995). A trial court may characterize a claim presented by a plaintiff as one for defamation if the grounds for bringing the action support such a characterization. Singh v. ABA Publishing Am. Bar Assn., 10th Dist. No. 02AP-1125, 2003-Ohio-2314, ¶ 25-27, citing Worpenberg v. The Kroger Co., 1st Dist. No. C-010381 (Mar. 2, 2002). Whether a plaintiff‘s claim is actually “disguised defamation” is determined on a case-by-case basis. See Worpenberg; Breno v. Mentor, 8th Dist. No. 81861, 2003-Ohio-4051, ¶ 10; Singh at ¶ 25-27.
{18} Where the “prеdominant subject matter” of a plaintiff‘s action is “the alleged damage to the [plaintiff‘s] reputation caused by the circulation of allegedly false information,” a trial court does not err in determining the claim is actually one for defamation rather than the claims listed in the complaint. Singh at ¶ 25-27, citing Worpenberg. See also Breno at ¶ 12 (“where a claim is expressly premised upon a ‘communication’ of false information, it is properly characterized as a ‘disguised defamation’ claim“).
{19} However, where the plaintiff‘s stated claim is based on separate conduct or conduct of a different nature than the publication of defamatory material, some courts hаve found the claim should not be reclassified as a defamation claim. See Kienow v. Cincinnati Children‘s Hosp. Med. Ctr., 1st Dist. No. C-140720, 2015-Ohio-4396, ¶ 13 (finding, on the facts of that case, a tortious interference claim was distinguishable from a defamation claim based on the conduct of the defendant); Breno at ¶ 13 (noting that “where a claim for reputational harm sounds in defamation, some courts have allowed a negligence claim to survive in spite of the communication if the complaint addresses other noncommunicative negligent conduct by the defendant“); Hester v. Case W. Res. Univ., 8th Dist. No. 107492, 2019-Ohio-1991, ¶ 20 (determining whether the court‘s disposition of the plaintiff‘s defamation claim governed its disposition of the tortious interference claim rested on whеther those claims were “predicated on the same conduct“).
{20} In this case, appellants argue their three tort claims (negligence, tortious interference with business relationships, and intentional infliction of emotional distress) are based on appellee‘s post-settlement conduct and should not have been consolidated into a defamation action. Appellants contend courts do not routinely characterize actions as disguised defamation and generally only do so within the context of determining the
proper application of the statute of limitations. Appellants believe the trial court misapplied Worpenberg and Schaumleffel v. Muskingum Univ., S.D. Ohio No. 2:17-cv-463 (Mar. 6, 2018), and assert the facts of this case are distinguishable from cases that involved claims based solely on a purportedly false communication and instead align with cases such as Kienow that involve separate conduct. Specifically, appellants argue that, here:
The [news] Release, through the Appellee‘s intentional acts of failing to remove, amend or update it when asked to do so by Appellant Ra and Appellant Vista, became associated with the internet name used by Appellant PRC. Now a Google search of Appellant Ra‘s for-profit company‘s email address (a common investigatory tactic undertaken by individuals looking to gain insight on another individual) reveals the outdated, false, and incorrect [news] Release that contains information that the Appellee knows is inaccurate, outdated, misleading, and/or completely false. * * * Most notably, the [news] Release states that the “investigation” and civil actions against Appellant Ra and Appellant Vista are open and ongoing, which they are no longer and did not end in any court findings or judgment.33 Based thereon, reasonable minds can only conclude that the Appellee‘s motive in continuing to maintain the [news] Release, especially without any updates, is to interfere with the Appellants’ business relationships and that the Appellee intended to inflict damages beyond that of a typical breach.
* * * As it relates to the outdated, inaccurate, and misleading [news] Release, reasonable minds can conclude that the Appellee‘s only purpose is to interfere with said relationships.
(Appellants’ Brief at xx-xxi.)
{21} Appellee counters all appellants’ claims rest on the alleged falsity of the new release or the complaint it summarized, and when claims are based on a communication that is alleged to be false, the “essential character of the underlying tort action” is defamation, as stated in Breno at ¶ 10. Moreover, appellee states that this case does involve a statute of limitations issue, as appellants filed their case more than one year after the news release was posted. Appellee notes that under
website updates and SEO efforts do not constitute a “republication” that would trigger a new statute of limitations start date. (Appellee‘s Brief at 10.) In other words, appellee contends this case does not include conduct independent of the news release to support appellants’ tort claims with longer statutes of limitations.
{22} We agree with appellee. The crux of this case is whether appellants cited “post-settlement conduct” serves as grounds to support their claims for negligence, tortious interference with business relationships, and intentional infliction of emotional distress, or whether the trial court was correct in concluding appellants’ claims essentially constitute disguised defamation claims aimed at the news release. (Appellant‘s Brief at xii.) Having reviewed the complaint and considered the arguments of the parties, we cannot say the trial court erred.
{24} Second, appellants have not convinced this court that the post-settlement conduct alleged here—failing to remove or update the news release and the SEO and snippet activity—is so separate or different in nature from the defamation claim to support the tort claims styled in the complaint. In Worpenberg, the First District Court of Appeals found that a plaintiff‘s claim grounded in the defendant‘s failure to take remedial steps after dissemination of a defamatory statement was properly characterized by the trial court as a disguised defamation claim since the claim was premised on an alleged false communication. Id. As provided above, like Worpenberg, we find the claims here to be
premised on an alleged false communication and find appellants’ attempt to distinguish this case from Worpenberg based on the parties’ contractual relationship to each other to be of no consequence. Moreover, the cases cited by appellants, in particular Kienow, are distinguishable. As provided by the Eighth District Court of Appeals in Smith v. Natl. W. Life, 8th Dist. No. 104898, 2017-Ohio-4184, ¶ 17, in Kienow:
[T]he defamation and tortiоus interference in that case were based on two different acts: the defamation claim consisted of allegedly false information contained in Kienow‘s personnel file; the tortious interference claim consisted of remarks made to the hiring manager of a prospective employer more than one year later. For this reason, the First District held that the tortious interference claim was specifically intended to hinder a prospective and known business relationship.
In this case, appellants do not allege appellee communicated to prospective business partners aside from posting thе news release on its public website. Instead, the tort claims here are all premised on appellee‘s continued publication of the allegedly false news release on appellee‘s public website and appellee‘s manipulation of SEO and snippets of that same exact news release. As a result, we do not believe Kienow controls the outcome here.
{25} Third, appellants’ argument that disguised defamation cases are usually reserved for cases that implicate the avoidance of a statute of limitations supports, rather than detracts, from our conclusion. The statute of limitations is implicated in this case. In their complaint, aрpellants did not attempt to directly bring a defamation claim based on the November 16, 2017 publication of the news release itself. As argued by appellee, had they tried to do so, their claim would have been deemed
for purposes of the statute of limitations.“); Spitzer v. Knapp, 5th Dist. No. 19 CAE 01 0006, 2019-Ohio-2701, ¶ 26, quoting Friedler v. Equitable Life Assur. Soc. of the United States, 86 F.Appx. 50 (6th Cir.2003) (” ‘Ohio courts have consistently rejected efforts to restart the statute of limitations in a defamation action where allegedly defamatory information, which has already been published or spoken, is republished or retransmitted to new consumers.’ “).
{26} Because appellants filed their complaint beyond the one-year statute of limitations fоr defamation based on appellee‘s November 16, 2017 publication of the allegedly false news release and there is no allegation that the news release was changed or republished, a defamation claim based on the news release is untimely. Appellants, instead of filing a timely defamation claim, filed a complaint premised on appellee‘s conduct in connection with the allegedly false news release but with claims defined in terms of torts with statute of limitations that would theoretically allow the lawsuit to proceed. These circumstances support the trial court‘s conclusion that appellants’ tort claims essentially constitute a claim for defamation. Therefore, considering all the above, we find the trial court did not err by holding the tort claims were “disguised defamation claims” and, on that basis, granting summary judgment to appellee on the tort claims. (Trial Ct. Decision at 7.)
{27} Accordingly, appellants’ first assignment of error is overruled.
B. Appellants’ Second Assignment of Error
{28} Under the second assignment of error, appellants contend the trial court erred to their prejudice by holding appellee was entitled to “absolute privilege” to publish material that is defamatory. (Appellants’ Brief at ix.) Finding no prejudice to appellants on this issue, we disagree.
{29} In the first assignment of error, wе held the trial court did not err by holding the tort claims were “disguised defamation claims.” (Trial Ct. Decision at 7.) In doing so, we addressed the parties’ arguments regarding the statute of limitations and concluded this case did implicate a statute of limitations issue. We determined the disguised defamation claim is untimely because, under Ohio law, the one-year statute of limitations for bringing an action based on allegedly defamatory material is triggered on the initial date of publication, and merely increasing the circulation of a publication already publicly available on the internet, without changing the original content or singling it out for republication,
does not provide a basis to depart from this general rule. Singh at ¶ 22; T.S. at ¶ 8-12; Smith at ¶ 9, fn. 1; Spitzer at ¶ 26.
{30} Having done so, assuming for sake of argument, but not deciding, that the trial court‘s holding as to appellee‘s privilege to publish the alleged defamatory material was in error, such a holding did not prejudice appellants since the untimeliness of the claim supports the trial court judgment. See Smith at ¶ 18 (finding that, where all claims were based on the same conduct underlying a claim for defamation and the claims were untimely filed, summary judgment in favor of the defendant was appropriate even where the trial court did not discuss the statute of limitations issue); Singh at ¶ 22-28 (affirming summary judgment in favor of defendant where plaintiff‘s action was untimely under the statute of limitations for defamation). We note appellee raised the statute of limitations issue to the trial court as an alternative means to grant summary judgment on the tort claims. Considering the legitimate alternative basis from which to grant summary judgment in appellee‘s favor here, appellants’ argument they were prejudiced by the trial court‘s finding regarding privilege lacks merit.
{31} Accordingly, appellants’ second assignment of error is overruled.
C. Appellee‘s Cross-Assignments of Error
{32} Appellee presents three cross-assignments of error. First, appellee argues Vista and Ra waived their right to bring this suit based on language in the settlement agreement. Second, appellee argues that neither appellee‘s filing of its lawsuit in Cuyahoga County nor its settlement of that case give rise to tortious interference claims as a matter of law. Third, appellee argues the implied duty of good faith in contracts applies only to matters that could not have been contemplated at the time of drafting.
{33} As a preliminary issue, we must determine whether we may consider the cross-assignments of error.
appeal within the appeal time period otherwise prescribed by this rule or within ten days of the filing of the first notice of appeal.”
{34} “The time requirements for filing a cross-appeal pursuant to
{35} To the extent appellee‘s cross-assignments of error do not seek to change the trial court judgment but, rather, offer arguments in support of alternative reasons to affirm the trial court‘s judgment under
V. CONCLUSION
{36} Having overruled appellants’ first and second assignments of error and determined appellee‘s three cross-assignments of error to be moot, we affirm the judgment of the Court of Claims of Ohio.
Judgment affirmed.
SADLER, P.J., BROWN and LUPER SCHUSTER, JJ., concur.