from the Franklin County C.P.C. No. 14CV-4769 Court of Common
Scherner & Sybert LLC, and Dave Lackey, for
Timothy S. Rankin and Ilya L. Polyakov, for
Timothy S. Rankin.
1} Defendant-appellant, Anthem Contractors, Inc.
("Anthem"), appeals a judgment of the Franklin
County Court of Common Pleas that sanctioned
plaintiff-appellee, Southard Supply, Inc.
("Southard"), for its frivolous conduct under R.C.
2323.51. Southard has filed a cross-appeal from the same
judgment. For the following reasons, we affirm the trial
2} Southard sells plumbing, heating, and industrial
supplies. Anthem is a construction contractor who has
purchased materials from Southard on account.
3} In early 2012, Anthem began renovating the
fitness center at the federal courthouse in Columbus, Ohio.
Anthony McCleery, the president of Anthem, hired Jerry Ball
to perform plumbing work during the courthouse project. In
April 2012, McCleery discovered that Ball had used
Anthem's credit account with Southard to purchase
materials for himself. Anthem refused to pay for the
materials Ball purchased because it never authorized Ball to
order on credit.
4} On May 2, 2014, Southard filed suit against
Anthem, asserting claims for breach of contract and unjust
enrichment. In its complaint, Southard alleged that
Anthem had authorized Ball to purchase materials using
Anthem's credit account. Southard sought to recover $16,
531.93 for the materials that Ball had purchased on credit.
5} The parties then conducted discovery, during
which Anthem served interrogatories on Southard. In response
to those interrogatories, Southard stated that Anthem had
given Southard verbal approval for Ball to order materials on
credit. (Pl.'s Resp. to Def's First Set of Interrogs.
and Reqs. for Produc. of Docs. at No. 22.)
6} After the completion of discovery, Southard
voluntarily dismissed its complaint. Anthem then moved for
sanctions against Southard and its attorney under R.C.
2323.51. In its motion, Anthem argued that the deposition
testimony of Southard's employees contradicted the
factual contention, made in the complaint and in
interrogatory responses, that Anthem had authorized Ball to
order materials using Anthem's credit.
7} At a hearing on Anthem's sanctions motion,
Anthem introduced the contract governing Anthem's credit
account with Southard. The contract consisted of Anthem's
application for credit, which Southard had approved. The
contract included an "Approved Buyers List" and
provided that "[o]nly the names listed below will be
approved to purchase" using the credit account.
(Def.'s Ex. 2.) The list contained only two names,
Anthony McCleery and Theresa Smith, and stated, "all
others call for approval." Id.
8} McCleery testified at the sanctions hearing that
Anthem had never authorized Ball to order materials on
Anthem's credit account with Southard. Michael Lawrence,
Southard's credit manager, conceded that Anthem had not
provided Southard with either written or verbal approval for
Ball to purchase materials using Anthem's credit.
However, Lawrence maintained that Anthem had authorized Ball
to purchase on Anthem's credit because: (1) Ball had
previously accompanied McCleery to Southard's office,
where McCleery had placed orders and Ball had assisted
McCleery by telling him what supplies were needed to complete
the work on the courthouse project, and (2) McCleery had
allowed Ball to pick up ordered materials and sign invoices
to acknowledge the delivery of the materials, and Anthem had
paid invoices that Ball had signed.
9} In a judgment issued June 23, 2016, the trial
court found that Southard had engaged in frivolous conduct
under R.C. 2323.51(A)(2)(a)(iii), which defines
"frivolous conduct" as "conduct consisting] of
allegations or other factual contentions that have no
evidentiary support or, if specifically so identified, are
not likely to have evidentiary support after a reasonable
opportunity for further investigation or
discovery." The trial court determined that
Southard's allegation that Anthem had authorized Ball to
purchase materials on Anthem's account had no merit from
the outset. Additionally, the trial court found that, if
Southard had investigated the matter more thoroughly, it
would have realized that its own actions had created the debt
that it sought to collect from Anthem. The trial court then
concluded that sanctions against Southard in the amount of
$5, 000 were reasonable, and it ordered Southard to pay that
amount to Anthem.
10} Anthem now appeals the trial court's June
23, 2016 judgment, and it assigns the following errors:
[1.] The Trial Court Failed to Find that Southard's
Claims were not Warranted Under Existing Law and that
Southard and Lackey had an Obligation not to Pursue such
[2.] The Trial Court Failed to Find that Lackey was Jointly
and Severally Liable for Southard's Frivolous Conduct
Involving Allegations and Factual Contentions which had no
Evidentiary Support from the Outset, or at any Time Prior to
[3.] The Trial Court Abused its Discretion by Failing to
Award all of Appellant's Legal Fees, or in the
Alternative, the Trial Court Misapplied R.C. 2323.51(2)(A)
[sic] to Require Malicious Conduct, which is Inherently
Arbitrary and Unreasonable Per Se.
11} Southard cross appeals, and it assigns the
1. The trial court erred when it granted Anthem Contractor,
Inc.'s ("Anthem") motion for sanctions against