Court of Appeals of Ohio, Eighth District, Cuyahoga
Appeal from the Cuyahoga County Court of Common Pleas Case
ATTORNEY FOR APPELLANT/CROSS-APPELLEE Michael O'Shea
Lipson O'Shea Legal Group.
ATTORNEY FOR APPELLEE/CROSS-APPELLANT John R. Christie Lewis
BEFORE: E.A. Gallagher, P.J., E.T. Gallagher, J., and Laster
JOURNAL ENTRY AND OPINION
A. GALLAGHER, PRESIDING JUDGE.
This appeal involves the trial court's ruling on a
request for sanctions under Ohio's frivolous conduct
statute, R.C. 2323.51, awarding third-party
defendant-appellant/cross-appellee Michael Dolan $0 in
attorney fees for the frivolous conduct of third-party
plaintiff-appellee/cross-appellant Anthony O. Calabrese, III
and his counsel, John Christie. Calabrese challenges the
trial court's determination that he and Christie engaged
in frivolous conduct under R.C. 2323.51. Dolan contends that
the trial court erred in awarding him no attorney fees for
the frivolous conduct. Finding no merit to the appeal or
cross-appeal, we affirm the trial court's judgment.
and Procedural Background
In November 2013, Kathleen Marshall ("Marshall")
filed a complaint asserting claims of breach of contract,
conversion, fraud and civil conspiracy to commit fraud
against Calabrese, the Calabrese Law Firm, L.L.C., Cooper
& Elliott, L.L.C., Rex Elliot and Charles Cooper,
Marshall alleged that her ex-husband, Timothy Marshall, had
not received his proper share of attorney fees awarded in the
settlement of a class action on which he had worked together
with Cooper & Elliott and Dolan. Marshall claimed that
there had been an agreement between Timothy Marshall, Cooper
& Elliott and Dolan that any attorney fees awarded in the
settlement of the class action would be split equally between
them, with one-third of the award going to each and that
Cooper & Elliott improperly diverted a portion of the
fees due Timothy Marshall to Calabrese in order to keep the
funds out of Timothy Marshall's possession during the
pendency of his divorce from Marshall, depriving her of
access to those funds.
In July 2014, Calabrese filed an answer, a counterclaim
against Marshall and a third-party complaint asserting claims
for breach of contract, unjust enrichment and slander against
Dolan. Calabrese alleged that the parties had agreed to a
four-way split of any attorney fee award - 50% to Cooper
& Elliott, 25% to Calabrese and 25% to Timothy Marshall
and Dolan. Calabrese sought to recover any amount Calabrese
might be required to pay Marshall on her claims as
contribution from Dolan as well as compensatory and punitive
damages on his slander claim. Calabrese's third-party
complaint did not identify the alleged defamatory statements
or other facts upon which his slander claim was allegedly
Dolan filed an answer to Calabrese's third-party
complaint and a counterclaim against Calabrese for fraud and
tortious interference with Dolan's employment as an
assistant county prosecutor for Cuyahoga County. Calabrese
filed an answer denying the material allegations of
On April 1, 2015, the trial court granted summary judgment in
favor of Cooper & Elliott and Calabrese on the claims
asserted in Marshall's complaint. Marshall filed for
bankruptcy and Calabrese's counterclaim against her was
stayed. Accordingly, all that remained for trial was
Calabrese and Dolan's claims against each other. Trial
was scheduled to begin on August 3, 2015. On the morning of
trial, Calabrese and Dolan voluntarily dismissed their claims
against one another without prejudice pursuant to Civ.R.
On August 28, 2015, Dolan filed a motion for attorney fees
and sanctions pursuant to Civ.R. 11 and R.C. 2323.51 against
Calabrese, Christie and Christie's law firm, Stefanick
& Christie, L.L.C. Dolan claimed that Calabrese and
Christie had engaged in frivolous conduct under R.C.
2323.51(A)(2)(a)(ii)-(iii) by falsely alleging that Dolan was
contractually obligated to pay attorney fees to Timothy
Marshall despite admissions by Calabrese to the contrary, by
litigating Calabrese's attorney fees claims even though
Calabrese and Christie were aware that attorney fee disputes
were to be arbitrated or mediated by the local bar
association or the Ohio State Bar Association pursuant to
Prof.Cond.R. 1.5 and because (1) the third-party complaint
did not allege facts necessary to support a claim of slander,
(2) Calabrese had conducted no discovery relating to his
slander claim and (3) his trial brief and jury instructions
contained no mention of his slander claim. In support of the
motion, Dolan attached a series of email exchanges between
his counsel, Michael O'Shea and Christie, in which
O'Shea advised Christie of Dolan's intention to seek
sanctions if Calabrese's claims against Dolan were not
dismissed and otherwise indicating the terms upon which the
parties would agree to resolve their dispute. Calabrese
opposed the motion, arguing that the evidence at trial would
have established that his claims were meritorious and that,
even if he could not prevail on his claims, a "mere
inability to prevail" did not constitute frivolous
conduct. Calabrese disputed that he had, in fact, admitted
many of the "admitted facts" referenced in
Dolan's motion and claimed, with respect to his slander
claim, that he would have established at trial that Dolan had
"encouraged and convinced" Marshall to bring her
action against Calabrese by "speaking falsehoods"
about him and had also made "many oral comments" to
one of Calabrese's associates in an attempt to encourage
him to terminate his business relationship with Calabrese.
On March 28, 2016, the trial court held the first of two
hearings on Dolan's motion for attorney fees and
sanctions. A transcript of the hearing is not part of the
record on appeal.
On May 6, 2016, the trial court issued a journal entry
granting Dolan's motion for attorney fees and sanctions
against Calabrese and Christie pursuant to R.C.
2323.51. The trial court found that Calabrese and
Christie had engaged in frivolous conduct under R.C.
2323.51(A)(2)(a)(i) and (ii) by filing and maintaining fee
dispute claims despite their "clear knowledge of the
law" that Calabrese was obligated under Prof. Cond.R.
1.5 to arbitrate or mediate any fee dispute with the local
bar association or the Ohio State Bar Association. The court
indicated that Calabrese and Christie's "deliberate
decision to ignore Calabrese's obligation to follow the
law and Rules of Professional Conduct" constituted
"bad faith, " "serve[d] an improper purposes
including needless litigation" and "showed a lack
of a good faith argument in law." The trial court
further found that Calabrese and Christie had engaged in
frivolous conduct under R.C. 2323.51(A)(2)(a)(i), (iii) and
(iv) by filing and maintaining a slander claim that was
"not supported by credible evidence" and that
Calabrese and Christie "demonstrated no intent on
pursuing." The trial court found that Dolan had been
adversely affected by the frivolous conduct and indicated
that a further hearing would be scheduled "to determine
what sanctions are to be awarded to [Dolan]."
The hearing on the amount of sanctions to be awarded Dolan
was held on August 15, 2016. O'Shea
testified that he had spent 87.6 hours from July 18,
2014 through August 10, 2016 defending the third-party
complaint and pursuing sanctions relating to
same. In support of his testimony, O'Shea
submitted time sheets identifying the tasks he had performed
and the time spent on each. No hourly rate was listed on the
time sheets. O'Shea also testified regarding his
background and expertise in litigation matters and indicated
that, in his experience, a $275 hourly rate was
"reasonable" and "very normal" for an
attorney in Cuyahoga County for legal work of this type.
O'Shea further testified that he had no written fee
agreement with Dolan to represent him on the third-party
complaint, had never had any discussions with Dolan about
what his hourly rate or fees would be and had not yet billed
Dolan for any of the work he had performed on the case. He
explained that he had a long-term personal and professional
relationship with Dolan and that pursuant to an
"arrangement" with Dolan, what amount, if any,
Dolan paid O'Shea for his work on this matter would be
determined at some point in the future based upon the outcome
of the sanctions motion and the collectibility of Calabrese
and Christie. As he explained:
It's not a contingency fee case.
I will disclose to the Court that in fact Mr. Dolan and I
have an arrangement where he has not had to pay me a penny
for the representation to date that I have; we were going to
wait to see how we do relative to the sanctions matter here
and then determine if the Court makes such a ruling the
collectibility factor of both Mr. Christie and Mr. Calabrese.
O'Shea further explained that although he ultimately
expected to bill Dolan for all the legal work he performed in
this matter, if Dolan received even a nominal sanctions
award, he expected to "write off a significant portion
of his fees:
Q. I want to make sure I understood your testimony earlier.
Mr. Dolan [has] never gotten a bill for this matter?
Q. And if the Judge were to award one dollar in sanctions,
would Mr. Dolan get a bill?
Q. And would that bill consist of the 80-some-odd hours that
you're asking this Court to award?
A. The bill itself absolutely would.
Q. But you would write off a significant portion of it, would
you not, sir?
A. It depends. I would think so, Mr. Christie, to be honest
with you because he's a friend of mine, but I don't
believe Mr. Dolan would allow me to write all of that off;
he's that kind of guy.
THE COURT: Now, you said that you were - I was a little
unclear on the impact of this Court's ruling on