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Ginn v. Stonecreek Dental Care

Court of Appeals of Ohio, Twelfth District, Fayette

August 12, 2019

DAVID R. GINN, DDS, Appellant and Cross-Appellee,
v.
STONECREEK DENTAL CARE, Appellee and Cross-Appellant.

          CIVIL APPEAL FROM FAYETTE COUNTY COURT OF COMMON PLEAS Case No. 12-CVH-459

          Law Offices of Russell A. Kelm, Russell A. Kelm, Ian M. King, for appellant and cross-appellee

          Carpenter Lipps & Leland LLP, Michael H. Carpenter, Katheryn M. Lloyd, Jonathan N. Bond, for appellee and cross-appellant

          OPINION

          HENDRICKSON, P.J.

         {¶ 1} Plaintiff/Appellant/Cross-Appellee, David R. Ginn, D.D.S., and Defendant/Appellee/Cross-Appellant, Stonecreek Dental Care ("Stonecreek Dental"), appeal various findings and rulings made by the trial court below regarding a jury verdict rendered in favor of Dr. Ginn and against Stonecreek Dental. For the reasons set forth below, we affirm the trial court's rulings.

         {¶ 2} This is the fourth appeal involving a lawsuit that was initially filed in 2012. The dispute arose from the sale of Defendant R. Douglas Martin, D.D.S.' dental practice in Washington Courthouse to Dr. Ginn. One of the terms of the sale and purchase agreement was a noncompete clause that prohibited Dr. Martin from practicing dentistry within 30 miles of Dr. Ginn's office.

         {¶ 3} It is undisputed that Dr. Martin eventually entered into an employment contract with the Chillicothe office of Stonecreek Dental, which then began to air radio commercials using Dr. Martin's voice, which were broadcast in the Washington Courthouse area. This resulted in Dr. Ginn filing a complaint against Dr. Martin for breach of contract (noncompete) and against Stonecreek Dental for tortious interference with business relationships (between Dr. Ginn and his clients) and tortious interference with a contract (interfering with the noncompete clause of Dr. Ginn's purchase agreement with Dr. Martin).[1]

         {¶ 4} The matter proceeded to a jury trial in May 2014. After Dr. Ginn presented his case in chief, both Dr. Martin and Stonecreek Dental moved for a directed verdict claiming Dr. Ginn failed to (1) offer sufficient evidence to prove certain elements of his claims, (2) show that damages were proximately caused by the alleged breach of contract and, (3) establish damages to a reasonable degree of certainty. The trial court denied Dr. Martin's motion but granted Stonecreek Dental's motion finding that Dr. Ginn failed to show Stonecreek Dental possessed the requisite intent to interfere. The jury ultimately rendered a verdict in favor of Dr. Ginn in the sum of $125, 000 against Dr. Martin for breach of the noncompete provision. Dr. Martin then filed a motion for judgment notwithstanding the verdict which was denied by the trial court. Dr. Martin appealed in Ginn I and this court affirmed the trial court's rulings and the verdict as it applied to Dr. Martin.[2]

         {¶ 5} In Ginn II, Dr. Ginn appealed the trial court's decision granting Stonecreek Dental's motion for a directed verdict. In April of 2015, this court upheld the trial court's ruling as to Dr. Ginn's tortious interference with business relationships claim but reversed the lower court's ruling on Dr. Ginn's tortious interference with a contract claim and remanded the matter for further proceedings.[3]

         {¶ 6} On remand, Stonecreek Dental moved for summary judgment claiming the trial court would be relitigating damages already awarded from the previous trial, and the trial court granted summary judgment. As it relates to this present appeal, Dr. Ginn appealed and in June 2017, in Ginn III, this court reversed the trial court's decision granting summary judgment in favor of Stonecreek Dental and remanded the matter for further proceedings.[4]

         {¶ 7} On the second remand, Dr. Ginn moved to compel responses to his discovery demands for the financial records of various business entities and individuals that own or have used the trade name "Stonecreek Dental Care."[5] Dr. Ginn claimed he needed this information to establish his punitive damage claim against Stonecreek Dental. In denying the motion, the trial court concluded that Dr. Ginn had the opportunity to discover this information earlier in the case and had not presented good cause for reopening discovery.

         {¶ 8} The matter proceeded to a second jury trial solely on Dr. Ginn's tortious interference with a contract claim against Stonecreek Dental. The jury rendered a verdict in favor of Dr. Ginn and awarded him $1, 500, 000 in compensatory damages. Subsequently, Dr. Ginn presented evidence related to his claim for punitive damages, which consisted of brief testimony from Dr. J. Clarke Sanders, one of the managers and owners of Stonecreek Dental. Dr. Sanders testified as to the total revenue of all five dental offices that operated under the Stonecreek Dental Care trade name. The jury did not award punitive damages.

         {¶ 9} Later, Dr. Ginn moved for an award of prejudgment interest on the jury verdict, which the trial court denied. The trial court then entered final judgment in favor of Dr. Ginn and against "Defendant, Stonecreek Dental Care." After the entry of the verdict, Stonecreek Dental moved the trial court to correct the judgment entry to reflect that the defendant's legal name was "Stonecreek Dental Care Chillicothe - J. Clarke Sanders, D.D.S., LLC," the limited liability company that operated the Stonecreek Dental office in Chillicothe. This was also the entity that had entered into the employment contract with Dr. Martin. Stonecreek Dental argued that "Stonecreek Dental Care" was merely a trade name and any judgment against the trade name was void. Dr. Ginn opposed this motion arguing that he had intentionally sued the trade name for strategic purposes and that he had not sued, nor intended to sue, the Chillicothe limited liability company. The trial court denied Stonecreek Dental's motion to correct the judgment entry.

         {¶ 10} Dr. Ginn appeals, raising three assignments of error and Stonecreek Dental also appeals raising three cross-assignments of error.

         {¶ 11} Assignment of Error No. 1:

         {¶ 12} THE TRIAL COURT ERRED IN OVERRULING DR. GINN'S MOTION TO AWARD PREJUDGMENT INTEREST AGAINST STONECREEK ON THE JURY VERDICT.

         {¶ 13} Dr. Ginn argues that the trial court erred in failing to award him prejudgment interest on the jury verdict because his claim against Stonecreek Dental arose out of a contract and therefore he was statutorily entitled to prejudgment interest pursuant to R.C. 1343.03(A). Dr. Ginn further contends that he was entitled to prejudgment interest based on Stonecreek Dental's failure to engage in good faith settlement efforts, pursuant to R.C. 1343.03(C).

         R.C. 1343.03(A)

         {¶ 14} Initially, Dr. Ginn concedes that prejudgment interest under R.C. 1343.03(A) is ordinarily limited to interest accruing on breach of contract claims. However, he argues that his claim against Stonecreek Dental for tortious interference with a contract, "arose out of" his contractual agreement with Dr. Martin and therefore falls within the ambit of R.C. 1343.03(A).

         {¶ 15} R.C. 1343.03(A) provides:

In cases other than those provided for in sections 1343.01 and 1343.02 of the Revised Code, when money becomes due and payable upon any bond, bill, note, or other instrument of writing, upon any book account, upon any settlement between parties, upon all verbal contracts entered into, and upon all judgments, decrees, and orders of any judicial tribunal for the payment of money arising out of tortious conduct or a contract or other transaction, the creditor is entitled to interest at the rate per annum determined pursuant to section 5703.47 of the Revised Code, unless a written contract provides a different rate of interest in relation to the money that becomes due and payable, in which case the creditor is entitled to interest at the rate provided in that contract.

(Emphasis added).

         {¶ 16} The statute does not use the terms "prejudgment" or "postjudgment." Instead, it provides for interest at the statutory rate beginning when "money becomes due and payable" on written instruments, accounts, settlements, verbal agreements, as well as on judicial decrees or judgments for the payment of money arising out of tort or contract. Effectively, the statute incentivizes one to keep financial promises or otherwise interest will be added to the past-due amount from the date of nonpayment. The statute further encourages payment of money judgments resulting from tort or contract claims because, again, failure to do so will result in added interest. In this regard, this court and others have held that R.C. 1343.03(A) only provides for postjudgment interest on tort claims. Hance v. Allstate Ins. Co., 12th Dist. Clermont No. CA2008-10-094, 2009-Ohio-2809, ¶ 7, fn 2; Shelly Materials, Inc. v. Great Lakes Crushing, Ltd., 11th Dist. Portage No. 2013-P-0016, 2013-Ohio-5654, ¶ 59.

         {¶ 17} There was no written instrument, account, settlement, or verbal agreement entered between Dr. Ginn and Stonecreek Dental and thus no money could become "due and payable" with respect to any of those items. Dr. Ginn did obtain a money judgment against Stonecreek Dental "arising out of tortious conduct." However, this money judgment only became due and payable after the jury found Stonecreek Dental liable and the entry of its verdict. Therefore, pursuant to Hance, Dr. Ginn could only be entitled to postjudgment interest on the money judgment.

         {¶ 18} Dr. Ginn argues that "R.C. 1343.03(A) provides that a trial court has the mandatory obligation to award prejudgment interest starting from the date that the claim begins to accrue, i.e., the date that the defendant acted against the plaintiff causing injury, until the entry of the judgment." Dr. Ginn does not cite any specific portion of the statute or any other authority for this assertion and there is no support for this interpretation based on a plain reading of the statute. The statute does not refer to injuries or claims as the basis for an award of interest but permits interest on judgments resulting from tortious claims.

         {¶ 19} Dr. Ginn also cites an Eighth District Court of Appeals case where prejudgment interest was awarded on a tortious interference with business relationships claim. Chandler & Assoc. v. America's Healthcare Alliance, 125 Ohio App.3d 572 (8th Dist.1997). However, the statutory basis upon which the trial court awarded prejudgment interest is not indicated in that decision. The appeals court cited both the (A) and (C) subsections of R.C. 1343.03. Id. at 591. Regardless, the specific issue of whether prejudgment interest was permitted on a tort claim under R.C. 1343.03(A) was not addressed by the court. In sum, this court concludes that Dr. Ginn was not entitled to prejudgment interest under a plain reading of R.C. 1343.03(A).

         R.C. 1343.03(C)

         {¶ 20} Next, Dr. Ginn argues that the trial court abused its discretion in declining to award him prejudgment interest pursuant to R.C. 1343.03(C), i.e., because of Stonecreek Dental's alleged failure to make a good faith effort to settle his claim prior to trial.

         {¶ 21} R.C. 1343.03(C) provides that a court may order prejudgment interest on money judgments in tortious civil actions where the court determines, after a hearing, "that the party required to pay the money failed to make a good faith effort to settle the case and that the party to whom the money is to be paid did not fail to make a good faith effort to settle the case* * *." The purpose of R.C. 1343.03(C) is "to promote settlement efforts, to prevent parties who have engaged in tortious conduct from frivolously delaying the ultimate resolution of cases, and to encourage good faith efforts to settle controversies outside a trial setting." Kalain v. Smith, 25 Ohio St.3d 157, 159 (1986).

         {¶ 22} The Ohio Supreme Court has held that "[a] party has not 'failed to make a good faith effort to settle' under R.C. 1343.03(C) if he has (1) fully cooperated in discovery proceedings, (2) rationally evaluated his risks and potential liability, (3) not attempted to unnecessarily delay any of the proceedings, and (4) made a good faith monetary settlement offer or responded in good faith to an offer from the other party. If a party has a good faith, objectively reasonable belief that he has no liability, he need not make a monetary settlement offer." Id. at syllabus.

         {¶ 23} The burden of proof is on the party seeking prejudgment interest. Moskovitz v. Mt. Sinai Medical Ctr., 69 Ohio St.3d 638, 659 (1994).

[I]t is incumbent on a party seeking an award to present evidence of a written (or something equally persuasive) offer to settle that was reasonable considering such factors as the type of case, the injuries involved, applicable law, defenses available, and the nature, scope and frequency of efforts to settle. Other factors would include responses -- or lack thereof -- and a demand substantiated by facts and figures. Subjective claims of lack of good faith will generally not be sufficient. These factors, and others where appropriate, should also be considered by a trial court in making a prejudgment interest determination.

Id. This court's review of a trial court's decision on a motion for prejudgment interest under R.C. 1343.03(C) is for an abuse of discretion. Id. at 658.

         {¶ 24} The trial court found that Stonecreek Dental cooperated in discovery and complied with its discovery motions. Dr. Ginn argues that Stonecreek Dental did not cooperate in discovery because it refused to supply requested financial information concerning all of the various "owners and users" of the Stonecreek Dental Care trade name. However, Dr. Ginn moved the trial court to compel discovery with respect to this specific discovery dispute. After a hearing, the trial court denied Dr. Ginn's motion on the basis that it was untimely. Therefore, Stonecreek Dental acted in compliance with the trial court's discovery ruling.

         {¶ 25} The trial court also found that Stonecreek Dental did not delay the proceedings and that any delay of the proceedings was not the fault of Stonecreek Dental. The trial court further found that Stonecreek Dental did not fail to make a good faith effort to settle based on its evaluation of its potential liability. There is evidence in the record to support this finding, i.e., the claims against Stonecreek Dental were twice dismissed and only revived after appellate review. Finally, and most significantly, the evidence admitted during the hearing revealed that neither Dr. Ginn nor Stonecreek Dental ever exchanged a single settlement offer. At best, Dr. Ginn implied to Stonecreek Dental that it would take a substantial monetary offer to settle the case prior to trial. This does not indicate a good faith effort to settle the case on Dr. Ginn's part. This court finds nothing that would suggest that the trial court abused its discretion in denying Dr. Ginn's motion for prejudgment interest under R.C. 1343.03(C). This court overrules Dr. Ginn's first assignment of error.

         {¶ 26} Assignment of Error No. 2:

         {¶ 27} THE TRIAL COURT ERRED BY DENYING DR. GINN'S MOTION TO COMPEL DISCOVERY AS TO STONECREEK ...


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