Appeal from Marion County Common Pleas Court Trial Court No. 09-CV-0218
J.C. Ratliff and Adam H. Karl for Appellant
Jasper N. Burt and Keith Shumate for Appellee, Sims Bros., Inc.
(¶1} Plaintiff-appellant, Semco, Inc. ("Semco"), appeals the Marion County Court of Common Pleas' October 12, 2011 and November 2, 2012 judgment entries. In its October 12, 2011 judgment entry, the trial court granted summary judgment in favor of defendant-appellee, Sims Bros., Inc. ("Sims Bros."), concluding that Sims Bros. was entitled to summary judgment on Semco's conversion claim because Semco failed to demand return of its property and on its civil-theft claim because no issue of fact existed as to whether Sims Bros. knew or had reasonable cause to believe that the property was stolen. In its November 2, 2012 judgment entry, the trial court granted Sims Bros.'s motion for attorney fees on Semco's dismissed Consumer Sales Practices Act ("CSPA") claim, awarding Sims Bros. its requested attorney fees of $26, 130. For the reasons that follow, we affirm.
(¶2} This case involves a dispute between a foundry, Semco, and a metal recycler, Sims Bros. It stems from the repeated thefts of Semco's metal materials by two of its employees, and the thieves' sale of those materials at Sims Bros.'s drive-through recycling center. (Doc. Nos. 80, 83).
(¶3} On March 17, 2009, Semco filed a complaint against Sims Bros. and two other metal-recycler defendants who settled with Semco and are not parties to this appeal. (Doc. Nos. 1, 121, 122). Semco's complaint contained four counts: violation of the CSPA under R.C. 1345.01 et seq.; civil theft under R.C. 2913.61, based on a theory of receiving stolen property; conversion; and, unjust enrichment. (Id.). Sims Bros. filed its answer on May 8, 2009. (Doc. No. 7).
(¶4} On August 21, 2009, Sims Bros. and the other two defendants filed a joint motion for judgment on the pleadings as to all of the counts of the complaint. (Doc. No. 13). Semco did not respond to that motion and instead moved for leave to file an amended complaint. (Doc. No. 15). Three days later, the trial court granted Semco's motion for leave to file an amended complaint and noted that the defendants could renew their motion for judgment on the pleadings after Semco filed its amended complaint. (Doc. No. 16).
(¶5} Semco filed its amended complaint on October 2, 2009. (Doc. No. 17). In it, Semco included additional factual allegations and the same four counts as it did in its original complaint. (Id.). On October 30, 2009, Sims Bros. and the other two defendants filed a joint motion to dismiss the CSPA and unjust-enrichment counts. (Doc. No. 20). Also on that day, Sims Bros. filed its answer to Semco's amended complaint. (Doc. No. 21). Semco opposed the defendants' joint motion to dismiss on November 20, 2009, and the defendants filed a reply in support on December 10, 2009. (Doc. Nos. 24, 26). On January 26, 2010, the trial court granted the defendants' motion to dismiss the CSPA and unjust-enrichment counts. (Doc. No. 28).
(¶6} On February 16, 2010, Sims Bros. moved pursuant to R.C. 1345.09(F)(1) for attorney fees that it incurred in defending against Semco's CSPA claim. (Doc. No. 32). Semco opposed the motion, and Sims Bros. filed a reply in support. (Doc. Nos. 37, 41). The trial court did not rule on Sims Bros.'s motion.
(¶7} On August 19, 2011, Sims Bros. moved for summary judgment on the remaining counts in Semco's amended complaint-civil theft and conversion. (Doc. No. 80). Semco filed its opposition to Sims Bros.'s motion on September 6, 2011. (Doc. No. 83).
(¶8} On September 14, 2011-nine days after the date by which Semco was to file its response to Sims Bros.'s motion-Semco filed a motion for leave to file an affidavit in support of its memorandum in opposition to Sims Bros.'s motion for summary judgment. (Doc. No. 103). The affidavit was of Dennis Potts, a private investigator who interviewed three Sims Bros. employees-Otis Britton, Hibbard Smith, and Chad Rayburn-who were present when, on multiple occasions, the metal materials were brought to Sims Bros. for sale. (Potts Aff, Doc. No. 103, attached). Potts attached to his affidavit investigation reports that he prepared after interviewing Britton, Smith, and Rayburn. (Id.). In the investigation reports, Potts documented statements by Britton and Smith that they believed the materials may have been stolen, and statements by Rayburn that the materials included finished copper products known as plunger tips. (Id.).
(¶9} On September 16, 2011, Sims Bros. filed its reply in support of its motion for summary judgment. (Doc. No. 106). A week later, Sims Bros. filed a memorandum in opposition to Semco's motion for leave to file Potts' affidavit. (Doc. No. 107). On September 29, 2011, Sims Bros. filed a "supplemental submission" in opposition to Semco's motion for leave after deposing Semco's damages expert witness that day. (Doc. No. 109). Also that day, Semco filed its reply in support of its motion for leave. (Doc. No. 111). The next day, Sims Bros. filed supplemental authority in support of its motion for summary judgment. (Doc. No. 113). On October 5, 2011, Semco filed memoranda in opposition to Sims Bros.'s "supplemental submission" and supplemental authority. (Doc. Nos. 115, 116).
(¶10} On October 12, 2011, the trial court issued its judgment entry granting Sims Bros.'s motion for summary judgment. (Doc. No. 120). The trial court concluded that Semco's admitted failure to demand return of the stolen materials sold to Sims Bros. by Semco employees was fatal to its conversion claim. (Id.). As for Semco's civil-theft claim, the trial court "considered the [Potts] affidavit and its contents despite the fact that the affidavit was, to say the least, untimely filed" and concluded that it contained "nothing more than hearsay-opinion statements from the three Sims Bros.'s employees which directly contradict their sworn testimony contained in their depositions." (Id.). Given its contents, the trial court said Semco could not use Potts' affidavit to create an issue of fact. (Id.). The trial court therefore issued summary judgment in Sims Bros.'s favor. (Id.).
(¶11} On November 3, 2011, Semco filed a notice of appeal. (Doc. No. 123). We dismissed that appeal on January 6, 2012 for want of jurisdiction because the trial court's summary judgment entry did not resolve Sims Bros.'s motion for attorney fees that it filed on February 16, 2010. (June 4, 2012 Tr. at 4). Following our dismissal of that appeal, the trial court held a hearing on Sims Bros.'s motion on June 4, 2012. (Id.); (Doc. No. 128). On November 2, 2012, the trial court granted Sims Bros.'s motion and awarded it $26, 130 in attorney fees under R.C. 1345.09(F). (Doc. No. 129).
(¶12} Semco filed a notice of appeal on November 29, 2012, appealing the trial court's October 12, 2011 summary judgment entry and its November 2, 2012 entry granting Sims Bros.'s motion for attorney fees. (Doc. No. 133). Semco raises three assignments of error for our review.
Assignment of Error No. I
The trial court erred in granting defendant-appellee Sims Bros., Inc's [sic] motion for summary judgment when there were numerous genuine issues of material fact as to whether Sims Bros., Inc. knew or had reason to know the Semco materials that it purchased were stolen.
(¶13} In its first assignment of error, Semco argues that the trial court erred when it granted summary judgment in favor of Sims Bros. on Semco's civil-theft claim. The trial court concluded that the "central element" of Semco's civil-theft claim—"that Sims [Bros.] knew, or reasonably could have known, that the materials at issue were stolen"—was not present. The trial court considered the affidavit of private investigator Dennis Potts, "despite the fact that the affidavit was, to say the least, untimely filed, " but concluded that it was "replete with hearsay statements" and, therefore, "useless in defending a motion for summary judgment." (Doc. No. 120). Specifically, the trial court concluded that Sims Bros.'s employees' statements contained in Potts' investigation reports attached to his affidavit were not admissions of a party-opponent under Evid.R. 801(D), because they were opinion statements and admissions of liability against their employer and, therefore, outside the scope of their employment. The trial court also noted that the statements contradicted the employees' sworn deposition testimony. Semco argues that the employees' statements in Potts' investigation reports were factual assertions, not opinions, made within the scope of employment.
(¶14} We review a decision to grant summary judgment de novo. Doe v. Shaffer, 90 Ohio St.3d 388, 390 (2000). Summary judgment is proper where there is no genuine issue of material fact, the moving party is entitled to judgment as a matter of law, and reasonable minds can reach but one conclusion when viewing the evidence in favor of the non-moving party, and the conclusion is adverse to the non-moving party. Civ.R. 56(C); State ex rel Cassels v. Dayton City School Dist. Bd. of Edn., 69 Ohio St.3d 217, 219 (1994).
(¶15} Through a trail of statutes, Ohio law provides for a civil action based on the crime of receiving stolen property. "Under R.C. 2307.60(A)(1), any person who has been injured by a criminal act may bring a civil action to recover damages." Commonwealth Land Title Ins. Co. v. Choice Title Agency, Inc., 9th Dist. Lorain Nos. 11CA009981 and 11CA009983, 2012-Ohio-2824, ¶ 21. R.C. 2307.61 allows a property owner who brings a civil action under R.C. 2307.60(A) "to recover damages from any person who willfully damages the owner's property or who commits a theft offense, as defined in section 2913.01 of the Revised Code, involving the owner's property * * *." R.C. 2307.61(A). R.C. 2913.01 defines theft offenses to include violations of R.C. 2913.51, the receiving-stolen-property statute. R.C. 2913.51(A) provides, "[n]o person shall receive, retain, or dispose of property of another knowing or having reasonable cause to believe that the property has been obtained through commission of a theft offense."
(¶16} In a criminal receiving-stolen-property case, this Court listed the factors a court may consider in determining whether reasonable minds could conclude that the defendant knew or should have known the property was stolen:
(a) the defendant's unexplained possession of the merchandise, (b) the nature of the merchandise, (c) the frequency with which such merchandise is stolen, (d) the nature of the defendant's commercial activities, and (e) the relatively limited ...