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Murman v. Versity Hospitals Health Systems, Inc.

Court of Appeals of Ohio, Eighth District, Cuyahoga

April 6, 2017

VERSITY HOSPITALS HEALTH SYSTEMS, INC., ET AL. DEFENDANTS-APPELLEES [Appeal by Diez-Arguelles & Tejedor, P.A. Plaintiff-Appellant]

         Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-13-818388

          ATTORNEYS FOR APPELLANT Maria Tejedor Carlos Diez-Arguelles Diez-Arguelles & Tejedor, P.A.

          Also Listed Michael E. Murman Murman & Associates

          ATTORNEYS FOR APPELLEES For University Hospitals Health Systems, Inc., et al. George M. Moscarino Kris H. Treu Mary E. White Susan R. Massey Moscarino & Treu, L.L.P.

          For David M. Burkons, M.D. W. Bradford Longbrake Michael Ockerman Douglas G. Leak Hanna, Campbell & Powell, L.L.P.

          BEFORE: Stewart, P.J., Laster Mays, J., and Jones, J.



         {¶1} This is an appeal from an order requiring appellant law firm Diez-Arguelles & Tejedor, P.A. to pay $20, 770 expended by appellee University Hospital ("UH") to defend what the court found was a bad faith motion to vacate a settlement agreement. The law firm maintains that the court erred by awarding sanctions because it did not act in bad faith by filing the motion to vacate, but under a reasonable belief that the settlement agreement had been violated. UH requests that we find this appeal to be frivolous and award it attorney fees for this appeal.

         {¶2} The court found sanctions appropriate under both Civ.R. 11 and R.C. 2323.51.

         {¶3} Civ.R. 11 states that "[e]very pleading, motion, or other document of a party represented by an attorney shall be signed by at least one attorney of record * * *." An attorney's signature "constitutes a certificate by the attorney or party that the attorney or party has read the document; that to the best of the attorney's or party's knowledge, information, and belief there is good ground to support it; and that it is not interposed for delay."

          {¶4} R.C. 2323.51(B)(1) applies more broadly than Civ.R. 11 and permits the court to award attorney fees and costs to any party adversely affected by frivolous conduct of another party or that party's attorney, even if that conduct is not relating to a pleading, motion, or other document. "Frivolous conduct" is defined by R.C. 2323.51(A)(2)(a)(I) as, among other things, conduct that "obviously serves merely to harass or maliciously injure another party to the civil action or appeal or is for another improper purpose, including, but not limited to, causing unnecessary delay or a needless increase in the cost of litigation[.]"

         {¶5} Civ.R. 11 uses a "subjective standard" of "bad faith" that goes beyond mere bad judgment; it sanctions conduct amounting to "dishonest purpose, " "moral obliquity, " "a breach of a known duty through some motive of interest or ill will, " or that "partakes of the nature of fraud * * * with an actual intent to mislead or deceive another." State ex rel. Bardwell v. Cuyahoga Cty. Bd. of Commrs., 127 Ohio St.3d 202, 2010-Ohio-5073, 937 N.E.2d 1274, ¶ 8. "Frivolous conduct, as contemplated by R.C. 2323.51(A)(2)(a), is judged under an objective, rather than a subjective standard * * *." State ex rel. DiFranco v. S Euclid, 144 Ohio St.3d 571, 2015-Ohio-4915, 45 N.E.3d 987, ¶ 15, citing State ex rel. Striker v. Cline, 130 Ohio St.3d 214, 2011-Ohio-5350, 957 N.E.2d 19, ¶ 21.

          {¶6} Under both Civ.R. 11 and R.C. 2323.51, we review a trial court's decision to award sanctions for an abuse of discretion. If competent, credible evidence exists to support an award of sanctions, the award must stand. Striker at ¶ 9; DiFranco at ¶ 13. In addition, the abuse of discretion standard means that we cannot substitute our judgment for that of the trial court. Bardwell at ¶ 9, citing State ex rel. Grein v. Ohio State Hwy. Patrol Retirement Sys., 116 Ohio St.3d 344, 2007-Ohio-6667, 879 N.E.2d 195, ¶ 1.

         {¶7} The evidence shows that Leah Apel, through her court-appointed guardian Michael Murman, brought this medical malpractice action against UH and certain physicians and nurses involved with her birth. At the time the complaint was filed, Apel lived in Florida and was represented by Maria D. Tejedor of the law firm of Diez-Arguelles & Tejedor, P.A. Tejedor appeared in the court of common pleas pro hac vice by way of local counsel. During the pretrial phase, Murman gave notice of appearance as additional counsel on behalf of himself as Apel's guardian. Local counsel then gave "notice of substitution of counsel" asking the court to take notice that Murman "replaced" original local counsel and that original local counsel "are no longer counsel on this case and should be removed from all certificates of services [sic]."

          {¶8} On the eve of trial, Apel and UH settled - trial would go forward against a single remaining defendant. The settlement would not, however, be immediately reduced to judgment. During the 14-day period between reaching the settlement and filing a stipulation of dismissal, Tejedor and Murman became involved in a fee dispute: Murman claimed an entitlement to a contingency fee on the settlement proceeds; Tejedor claimed Murman was to be paid on an hourly basis. Murman had the upper hand in this dispute: according to Tejedor, Murman, as Apel's court-appointed guardian, knew that all ...

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