Dan W. Vossman, Plaintiff-Appellant,
AirNet Systems, Inc. et al., Defendants-Appellees. Russell A. Kelm et al., Appellants,
from the Franklin County Court of Common Pleas (C.P.C. No.
Offices of Russell A. Kelm, and Russell A. Kelm, for
Russell A. Kelm.
Elfvin, Klingshirn, Royer & Torch, LLC, and Neil E.
Klingshirn, for Amicus Curiae Ohio Employment Lawyers
Sater, Seymour and Pease LLP, David A. Campbell, and Gregory
C. Schneiderer, for appellees.
1} Plaintiff-appellant, Dan W. Vossman
("Vossman"), along with his attorneys, Russell A.
Kelm and Joanne Detrick (collectively
"appellants"), appeal the November 7, 2016 judgment
entry of the Franklin County Court of Common Pleas which made
final and appealable the court's: (1) February 12, 2015
decision and entry finding defendants-appellees, AirNet
Systems, Inc. ("AirNet"), Thomas Schaner, and Quinn
Hamon (collectively "appellees"), are entitled to
recover attorney fees from appellants, pursuant to R.C.
2323.51(A)(2)(a)(ii), for the time period April 26 through
December 10, 2012, and (2) October 19, 2016 decision and
entry finding the amount of attorney fees owed to be $45,
714.53. For the following reasons, we reverse.
2} The facts of this case are summarized in
Vossman v. AirNet Sys., Inc., 10th Dist. No.
12AP-971, 2013-Ohio-4675, and will only be repeated herein as
relevant to the analysis of the assignments of error. On June
15, 2011, Vossman filed suit against appellees asserting a
single cause of action for age discrimination under R.C.
4112.14. On July 12, 2011, appellees filed a motion to
dismiss, pursuant to Civ.R. 12(B)(6), asserting Vossman
failed to state a claim upon which relief could be granted.
On September 22, 2011, the trial court denied appellees'
motion to dismiss.
3} On October 19, 2012, upon appellees' motion,
the trial court entered a decision granting summary judgment
in favor of appellees. The trial court reasoned that: (1)
there was no evidence age discrimination was the basis for
Vossman's termination, and (2) Vossman admitted he does
not believe age discrimination was the cause of the
allegations and investigations into his conduct. Vossman
appealed. On October 22, 2013, this court affirmed the trial
court's granting of summary judgment in favor of
appellees. Vossman. Vossman appealed to the Supreme
Court of Ohio. On March 26, 2014, the Supreme Court declined
to accept jurisdiction of the appeal. Vossman v. AirNet
Sys., Inc., 03/26/2014 Case Announcements,
Motion for Attorney Fees
4} On November 7, 2012, appellees moved for an award
of attorney fees against appellants in the trial court,
alleging Vossman's claim was frivolous and Vossman's
counsel vigorously continued to pursue the frivolous claim
pursuant to R.C. 2323.51 and Civ.R. 11. In the motion for
attorney fees, appellees stated the allegations made by
Vossman in his complaint and relied on to overcome
appellees' motion to dismiss were ultimately revealed to
be untruthful when appellees' counsel deposed Vossman.
Appellees argued the following allegations made by Vossman
were unsubstantiated: (1) his co-worker's allegations
regarding his flying behavior was false and based on his age,
(2) the investigation into his behavior revealed his
co-worker's allegations were unsubstantiated, (3) he was
never directed to keep the investigation confidential, and
(4) he was pretextually terminated because of his age. In
support of its argument, appellees pointed to Vossman's
own admissions in his deposition testimony that: (1) there
was truth to his co-worker's allegations of his flying
behavior, (2) he was directed to keep the investigation
confidential, (3) he violated the confidentiality directive,
and (4) he never believed his co-worker's allegations
against him were age based. Appellees argued Vossman's
own admissions made the initial complaint lack evidentiary
support and that his initial filing of the complaint and
subsequent pursuit of the case through baseless arguments
served only to harass and impose litigation costs on
appellees. Appellees argued Vossman's pursuit of the case
through baseless and untrue allegations was in violation of
Civ.R. 11 and constituted frivolous conduct in violation of
R.C. 2323.51. Therefore, appellees argued the case was
frivolous as it could not be supported by a good-faith
5} On May 22, 2013, the magistrate conducted a
hearing on the motion for attorney fees. On June 3, 2014, the
magistrate rendered a decision which granted appellees'
motion for an award of attorney fees, in part. The magistrate
found, pursuant to R.C. 2323.51(A)(2)(a)(ii), appellees were
entitled to recover reasonable attorney fees they incurred
from April 26 through December 10, 2012 from appellants. The
magistrate reasoned: "It was absolutely clear, under
existing age-discrimination law, that no reasonable attorney
would have continued to prosecute [Vossman's]
age-discrimination cause of action after April 26, 2012,
" the date appellees' counsel deposed Vossman. (June
3, 2014 Mag. Decision at 14.)
6} On June 17, 2014, appellants filed objections to
the magistrate's decision. Along with the objections,
appellants submitted three affidavits, one from Vossman's
trial counsel, Kelm, one from attorney Paul Tobias of
Cincinnati, and one from attorney Frederick Gittes of
Columbus. All the affiants are employment law practitioners
in Ohio. Appellees did not file a response.
7} On February 12, 2015, the trial court overruled
appellants' objections to the magistrate's decision
and found the magistrate properly determined the factual
issues and applied the law correctly. The court reasoned
"there is no evidence, direct or indirect, that
[Vossman's] age actually motivated [appellees] to
terminate him or that his age played any role in his
termination." (Feb. 12, 2015 Decision at 8.) The court
The record indicates that by April 26, 2012, [Vossman] and
his counsel knew: (1) [appellees] had a legitimate reason to
investigate and suspend [Vossman], (2) [Vossman] was the only
employee under suspension, under investigation, and issued a
confidentiality directive, and (3) [appellees'] stated
reason for terminating [Vossman's] employment was true.
Nevertheless, with no proof that age was a factor behind his
termination, [Vossman] and his counsel continued to prosecute
(Feb. 12, 2015 Decision at 8-9.) Finally, the trial court
held: "Upon review, this Court finds that [Vossman] and
his counsel definitively knew by April 26, 2012, that there
was no evidence of similarly situated employees being treated
more favorably than [Vossman]. [Vossman] and his counsel also
knew, by April 26, 2012 at latest, that there was no
evidence, circumstantial or direct, indicating that age
actually motivated [appellees'] decision to terminate
[Vossman's] employment." (Feb. 12, 2015 Decision at
9.) The trial court adopted the magistrate's decision and
held appellees were entitled to recover attorney fees from
appellants, pursuant to R.C. 2323.51(A)(2)(a)(ii), which were
incurred from April 26 through December 10, 2012. The court
referred the matter back to the magistrate to determine the
reasonable amount of attorney fees due to appellees.
8} On June 18, 2015, the magistrate conducted an
evidentiary hearing to determine the amount of attorney fees
owed to appellees. Appellees presented expert testimony as
well as several exhibits which were admitted into evidence.
(See Deft.'s Ex. A through H.) Appellants
presented the testimony of Schaner and Vossman's own
trial counsel, Kelm. Appellants presented several exhibits,
only some of which were admitted into evidence. (See
Pltf.'s Ex. 8 through 15.) The magistrate found appellees
incurred reasonable attorney fees in the amount of $45,
714.53 from April 26 through December 10, 2012. The
magistrate further found that AirNet is the real party in
interest pursuant to the receiver (appointed by the United
States District Court for the Northern District of Georgia,
Atlanta Division, in case N.D.Ga. No. 1:14-cv-00178-WSD),
having authorized AirNet's counsel to prosecute
AirNet's claim for attorney fees and conclude this
litigation. The court found the receiver confirmed
appellees' counsel's authority in an e-mail
9} On August 3, 2015, appellants submitted their
objections to the magistrate's decision on grounds that
the decision: (1) granted attorney fees for illegal activity
by appellees and their counsel, (2) granted attorney fees to
AirNet now in receivership, in violation of a federal court
ordered stay of proceedings, and (3) granted attorney fees to
appellees who are not the real party in interest, since these
claims are owned by a federal court receiver. On August 31,
2015, appellees filed a memorandum contra appellants'
objections to the magistrate's decision.
10} On October 19, 2016, the trial court overruled
appellants' objections and adopted the magistrate's
decision in its entirety. The trial court found
appellants' objections to be not well-taken. The court
found appellees were entitled to recover attorney fees in the
amount of $45, 714.53, pursuant to R.C. 2323.51(A)(2)(a)(ii),
Final Appealable Order
11} On November 7, 2016, the trial court filed a
final judgment entry thereby making final and appealable the
court's judgment entries filed February 12, 2015 and
October 19, 2016. Appellants filed a notice of appeal to this
Assignments of Error
12} Appellants appeal and assign the following three
assignments of error for our review:
I. THERE WERE SUFFICIENT FACTS AVAILABLE TO PLAINTIFF AT
TRIAL TO MAKE IT ERROR TO AWARD SANCTIONS FOR FRIVILOUS
CONDUCT FOR PROCEEDING WITH THE CASE.
II. DEFENDANTS AND COUNSEL ENGAGING IN ILLEGAL CONDUCT SHOULD
NOT BE AWARDED SANCTIONS WHICH WOULD REWARD THEIR CONDUCT IN
OBTAINING SUMMARY JUDGMENT THROUGH PERJURED TESTIMONY.
III. OWNERSHIP OF A RECEIVERSHIP ASSET CANNOT BE PROVEN BY
HEARSAY TESTIMONY AS TO WHAT THE RECEIVER TOLD THEM.
13} Before discussing appellants' assignments of
error, it is important to consider what was actually appealed
and what can be considered on appeal. In simplest terms, this
case breaks down to three trial court determinations. First,
the trial court determined to grant summary judgment on the
complaint in favor of appellees. It made this determination
in the October 19, 2012 decision granting appellees'
motion for summary judgment. As noted previously, we affirmed
this determination in Vossman, and the Supreme Court
declined to review this determination. The appeal before us
today will not address this first determination as it has
already been reviewed and affirmed by this court. We will
refer to this determination as the "merits
14} Second, the trial court determined appellees are
entitled to recover attorney fees from appellants. The court
made this determination in the February 12, 2015 decision
overruling appellants' objections to the magistrate's
June 3, 2014 decision. We will refer to this determination as
the "entitlement determination."
15} Third, the trial court determined the amount of
attorney fees to which appellees were entitled from
appellants. The court made this determination in the October
19, 2016 decision and entry adopting the magistrate's
June 19, 2015 decision and overruling appellants'
objections to the magistrate's decision. We will refer to
this determination as the "amount determination."
16} On November 7, 2016, the trial court entered a
final judgment entry making the entitlement determination and