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Ohio Plumbing, Ltd. v. Fiorilli Construction, Inc.

Court of Appeals of Ohio, Eighth District, Cuyahoga

May 3, 2018

OHIO PLUMBING, LTD. PLAINTIFF-APPELLEE
v.
FIORILLI CONSTRUCTION, INC. DEFENDANT-APPELLANT

          Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-17-880991

          ATTORNEYS FOR APPELLANT Brian T. Winchester Patrick J. Gump McNeal, Schick, Archibald & Biro Co., L.P.A.

          ATTORNEY FOR APPELLEE David J. Horvath

          BEFORE: E.A. Gallagher, A.J., Stewart, J., and Celebrezze, J.

          JOURNAL ENTRY AND OPINION

          EILEEN A.GALLAGHER, ADMINISTRATIVE JUDGE

         {¶1} Defendant-appellant Fiorilli Construction, Inc. ("Fiorilli") appeals from the trial court's decision denying its motion to stay pending arbitration. For the reasons that follow, we reverse the trial court.

         Factual and Procedural Background

         {¶2} In September 2016, Fiorilli, the contractor, contracted with plaintiff-appellee Ohio Plumbing, Ltd. ("Ohio Plumbing"), the subcontractor, to provide plumbing services in connection with the construction of a SteinMart discount department store in Bainbridge, Ohio (the "contract" or the "agreement"). The contract contains a dispute resolution provision, which sets forth a multistage dispute resolution process, including discussions between project managers, discussions between party executives, premediation and mediation. After non-binding dispute resolution attempts are concluded, "any dispute not resolved" is to be decided "by either arbitration or litigation * * * at Fiorilli Construction, Inc.'s sole discretion."

         {¶3} Section 8.04(3) provides in relevant part:

Binding Dispute Resolution: Upon the full conclusion of all good faith direct discussions, pre-mediation, and mediation attempts to resolve a dispute, any dispute not resolved shall be decided by either arbitration or litigation. Upon a failed mediation, the Subcontractor hereby expressly waives any and all rights to institute or pursue litigation, unless at the sole discretion of Fiorilli Construction, Inc., litigation is expressly determined in writing as the course of action for further dispute resolution proceedings. Both Fiorilli Construction, Inc. and Subcontractor understand and agree that any such decision as to whether to have disputes decided by arbitration or litigation is at Fiorilli Construction, Inc's sole discretion and is a condition precedent to any legal or equitable proceedings being initiated under this Agreement.

         {¶4} On May 30, 2017, Ohio Plumbing filed a complaint against Fiorilli in the Cuyahoga County Court of Common Pleas, asserting claims of breach of contract and violation of the Ohio Prompt Payment Act, R.C. 4113.61, based on Fiorilli's alleged failure to pay Ohio Plumbing for work performed under the agreement. Ohio Plumbing alleged that it had fully performed under the agreement, that it had obtained a final inspection approval of its work under the agreement and that Fiorilli had confirmed that Ohio Plumbing had completed its work and was due money under the agreement but that Fiorilli refused to pay Ohio Plumbing. Ohio Plumbing sought to recover $5, 337 it claimed it was due under the agreement, 18% interest per annum from the date Fiorilli received payment from the owner and attorney fees. Ohio Plumbing attached a copy of the agreement to its complaint.

         {¶5} On July 26, 2017, Fiorilli filed a motion for change of venue, attorney fees, dismissal and/or stay of proceedings pursuant to Civ.R. 3(C), Civ.R. 12(B) and R.C. 2711.02. Fiorilli claimed that venue was improper in Cuyahoga County because the agreement included a forum selection provision that stated that any litigation relating to the contract would be filed in Medina County, Ohio. Fiorilli requested that the court transfer the case to the Medina County Court of Common Pleas and that it be awarded its attorney fees under Civ.R. 3(C)(2). It also requested that Ohio Plumbing's complaint be dismissed or the action stayed under R.C. 2711.02(B) pending arbitration of the parties' dispute.

         {¶6} Ohio Plumbing opposed the motion. It argued that there was "nothing to arbitrate" under the agreement because - based on the allegations of its complaint - there was no "dispute" and the only issue to be litigated was "whether or not [Fiorilli] has paid [Ohio Plumbing] pursuant to the invoices that were submitted and approved by [Fiorilli]." Ohio Plumbing also argued the agreement was unconscionable and that the forum selection and dispute resolution provisions were, therefore, unenforceable.

         {¶7} On August 17, 2017, the trial court summarily denied Fiorilli's motion. Fiorilli appealed, raising the following assignment of error for review:

The trial court erred in not enforcing a valid and irrevocable arbitration clause encompassed in a commercial contract between two commercial entities.[1]

         Law and Analysis

         {¶8} In its sole assignment of error, Fiorilli argues that the trial court erred in denying its motion to stay pending arbitration because the parties had a valid arbitration agreement and Ohio Plumbing's claims were within the scope of the arbitration provision. Ohio Plumbing responds that the trial court properly denied Fiorilli's motion to stay because (1) Ohio Plumbing's claims involve a payment issue that is not "suitable for arbitration"; (2) Fiorilli had not served a demand for arbitration or otherwise initiated arbitration proceedings prior to filing ...


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