Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Norman v. Schumacher Homes of Circleville, Inc.

Court of Appeals of Ohio, Fourth District

June 25, 2013

JESSICA M. NORMAN, Plaintiff-Appellant,
v.
SCHUMACHER HOMES OF CIRCLEVILLE, INC., Defendant-Appellee.

Jason Shugart and D. Dale Seif, Jr., Seif & Shugart, LLC, Waverly, Ohio for appellant.

David E. Butz and Aletha M. Carver, Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A., Canton, Ohio for appellee.

DECISION AND JUDGMENT ENTRY

William H. Harsha, Judge.

{¶1} Jessica Norman appeals the trial court's judgment granting Schumacher Homes of Circleville, Inc.'s (Schumacher Homes) motion to stay proceedings pending arbitration and argues that the arbitration provision in the parties' purchase agreement is unenforceable.

{¶2} First, Norman argues that the arbitration provision is ambiguous about the number of arbitrators that will hear the claim and points to the provision's use of both the terms "arbitrator and "arbitrator(s)." However, the use of both of these terms together does not create any ambiguity, as the provision states that the parties agree to "binding arbitration by an arbitrator." And when read in conjunction with this statement, the term "arbitrator(s)" clearly refers to the singular form. Because the provision is not reasonably subject to two interpretations it is not ambiguous.

{¶3} Norman next claims that costs of arbitration are prohibitive and she cannot afford to commence arbitration. She also contends that the trial court erred by finding that she did not prove that arbitration was cost prohibitive because she failed to submit evidence showing the cost differential between arbitration and litigation. We agree with Schumacher Homes that it would be unsound to find an arbitration provision unenforceable due to prohibitive costs when the costs of litigation may be just as high or higher, especially in light of Ohio's strong public policy favoring arbitration. And because Norman failed to submit any evidence of the expected costs and fees of litigation, we agree she did not meet her burden to demonstrate that costs of arbitration are prohibitive.

{¶4} In addition, Norman argues that in determining she failed to prove arbitration was cost prohibitive, the trial court erred by finding that her claim of damages in excess of $1, 000, 000.00 is highly speculative. The fees for arbitration increase with the amount of the claim and Norman calculated her arbitration fees based on this value. Thus, a court considering a party's contention that arbitration is cost prohibitive must take into account the amount of the party's claim. And considering Norman's estimation is over seven times the purchase price of her home, the trial court did not err by finding Norman's estimation of damages is speculative.

{¶5} Norman also argues that Schumacher Homes fraudulently induced her into signing the purchase agreement because it misrepresented that her home would include a full basement. However, an arbitration clause is essentially a contract within a contract. Therefore, a party must show that they were fraudulently induced into signing the clause itself, rather than the contract in general. And because Norman's allegation of fraud relates only to the purchase agreement in general and she makes no claim that Schumacher Homes made any misrepresentations about the arbitration provision itself, this argument is meritless.

{¶6} Next Norman claims that based on Schaefer v. Allstate Ins. Co., 63 Ohio St.3d 708, 590 N.E.2d 1242 (1992), the parties' arbitration provision has no meaning under Ohio law because it requires "non-binding" arbitration in certain circumstances. In Schaefer, the Ohio Supreme Court held that for a dispute resolution procedure to be classified as arbitration, the decision rendered must be final, binding and without any qualification or condition as to the finality of an award. However unlike the arbitration provision in Schaefer, the provision here provides that any decision rendered by the arbitrator is "final and binding" and that non-binding arbitration is only available in the event that binding arbitration is legally precluded. Therefore, Schaefer does not support Norman's argument; we reject her contention that the provision is unenforceable on this basis.

{¶7} Finally, she argues that R.C. 2711.03(B) requires the trial court to hold a hearing before ruling on a motion to compel arbitration; thus the trial court erred by granting Schumacher Homes' motion to stay proceedings pending arbitration without first conducting such a hearing. However, a motion to stay proceedings pending arbitration made under R.C. 2711.02 is distinct from a motion to compel arbitration made under R.C. 2711.03. Although a trial court may in its discretion hold a hearing when considering whether a stay is proper under R.C. 2711.02, that statute does not require a hearing. Here Schumacher Homes captioned its motion as a motion to stay proceedings pending arbitration, but cited both R.C. 2711.02 and 2711.03. However, even assuming that Schumacher Homes made the motion under R.C. 2711.03, Norman made no request for an oral hearing. And because a trial court need not hold an oral or evidentiary hearing regarding an R.C. 2711.03 motion absent a proper request, the trial court did not err by failing to hold an oral hearing before ruling on Schumacher Homes' motion.

I. FACTS

{¶8} This case involves a dispute about the construction of Jessica Norman's home and the enforceability of the arbitration clause in the purchase agreement. Norman and Schumacher Homes entered into a purchase agreement for the construction of a new home on Norman's property. Under the terms of the agreement, Schumacher Homes was to construct the home with a full basement. However during construction, water accumulated in the basement and a dispute arose about whether to construct a crawl space rather than a full basement.

{¶9} Norman filed a complaint for declaratory judgment asking the trial court to decide whether Schumacher Homes could enforce the arbitration provision in the purchase agreement. Schumacher Homes responded by filing a motion to dismiss, or in the alternative, to stay proceedings pending arbitration. The trial court granted Schumacher Homes' motion to stay, finding that the arbitration clause was neither unconscionable nor outside the scope of Norman's claims. Norman now appeals the trial court's judgment.

II. ASSIGNMENTS OF ERROR

{¶10} Norman raises seven assignments of error for our review:

1. THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY ORDERING PLAINTIFF-APPELLANT'S CLAIMS TO ARBITRATION, WHEN THE ARBITRATION CLAUSE FAILS TO IDENTIFY THE NUMBER OF ARBITRATOR(S) WHICH WILL REVIEW THE CLAIMS.
2.THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY ORDERING PLAINTIFF-APPELLANT'S CLAIMS TO ARBITRATION, WHEN THE ARBITRATION CLAUSE IS AMBIGUOUS AND MISLEADING AS TO FEES BECAUSE IT DEFINES ONLY WHO WILL PAY ARBITRATOR'S FEES, BUT DOES NOT DEFINE WHICH PARTY WILL PAY THE ARBITRATION FILING FEE AND CASE SERVICE FEE.
3.THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY ORDERING PLAINTIFF-APPELLANT'S CLAIMS TO ARBITRATION, WHEN THE SIGNATURES ON THE ARBITRATION CLAUSE WERE OBTAINED THROUGH MISREPRESENTATION AND PLAINTIFF-APPELLANT CHALLENGED THE VERY EXISTENCE OF THE CONTRACT, WHICH WOULD RENDER THE ARBITRATION CLAUSE VOID.
4.THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY ORDERING PLAINTIFF-APPELLANT'S CLAIMS AGAINST DEFENDANT-APPELLEE SCHUMACHER HOMES OF CIRCLEVILLE, INC. TO ARBITRATION, WHEN THE ARBITRATION CLAUSE REQUIRED PARTIES TO SUBMIT TO NON-BINDING ARBITRATION.
5.THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY ORDERING PLAINTIFF-APPELLANT'S CLAIMS TO ARBITRATION, WHEN THE TRIAL COURT REQUIRED PLAINTIFF-APPELLANT TO PROVIDE EVIDENCE COMPARING THE COST OF ARBITRATION TO THE COST OF LITIGATION WHEN THE OHIO SUPREME COURT REQUIRES ONLY SPECIFIC EVIDENCE OF LIKELY ARBITRATORS' FEES AND PLAINTIFF'S FINANCIAL INABILITY TO PAY THOSE FEES, INCLUDING PLAINTIFF'S PARTICULAR FINANCIAL SITUATION.
6.THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY ORDERING PLAINTIFF-APPELLANT'S CLAIMS TO ARBITRATION, WHEN THE TRIAL COURT ARBITRARILY DETERMINED THAT PLAINTIFF-APPELLANT'S CLAIM FOR DAMAGES WAS HIGHLY SPECULATIVE.
7.THE TRIAL COURT COMMITTED REVERSIBLE ERROR AND BREACHED PLAINTIFF-APPELLANT'S DUE PROCESS RIGHTS BY FAILING TO FOLLOW THE PROCEDURAL REQUIREMENTS UNDER R.C. 2711.03 TO CONDUCT DISCOVERY AND BRIEF THE ISSUE OF THE VALIDITY OF THE ARBITRATION CLAUSE WHEN DEFENDANTS-APPELLEES MOVED FOR A STAY PURSUANT TO R.C. 2711.02 AND R.C. 2711.03.

III. LAW AND ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.