Court of Appeals of Ohio, Twelfth District, Fayette
DAVID R. GINN, DDS, Appellant and Cross-Appellee,
STONECREEK DENTAL CARE, Appellee and Cross-Appellant.
APPEAL FROM FAYETTE COUNTY COURT OF COMMON PLEAS Case No.
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
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).
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.
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.
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
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." 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).
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.
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
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).
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
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
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 ...