Ron Scheiderer & Associates v. City of London

[This opinion has been published in Ohio Official Reports at 

81 Ohio St.3d 94

.]




  RON SCHEIDERER & ASSOCIATES ET AL.; SHIFFLET, APPELLANT, v. CITY OF
                         LONDON, OHIO, ET AL., APPELLEES.
      [Cite as Ron Scheiderer & Assoc. v. London, 

1998-Ohio-453

.]
Frivolous conduct in civil actions—Former R.C. 2323.51(B)(3) and 2323.51(B)(4),
        construed—Award of attorney fees made by court pursuant to former R.C.
        2323.51 may include fees incurred in prosecuting a motion for sanctions—
        Parties against whom award may be made.
An award of attorney fees made by a court pursuant to former R.C. 2323.51 may
        include fees incurred in prosecuting a motion for sanctions. Such an award
        may be made against a party, the party’s counsel of record, or both. (Former
        R.C. 2323.51[B][3] and 2323.51[B][4], construed.)
   (No. 96-2384—Submitted December 3, 1997—Decided February 18, 1998.)
   CERTIFIED by the Court of Appeals for Madison County, No. CA95-08-022.
                                  __________________
        {¶ 1} In 1993, Ron Scheiderer & Associates and Ron Scheiderer
(“Scheiderer”) filed a pro se complaint in the Madison County Court of Common
Pleas against Madison County Prosecutor David A. Sams, the city of London, Ohio,
and various city officials. The complaint contained claims of defamation and
breach of contract by the defendants.             Scheiderer demanded compensatory
damages, unspecified special and general damages, and punitive damages from
each defendant. Subsequent to the filing of the complaint, attorney Daniel E.
Shifflet filed a notice of appearance on behalf of Scheiderer. The case was
thereafter scheduled for trial.
        {¶ 2} Prior to trial, Scheiderer asserted an additional claim alleging
“complicity and/or conspiracy to compound a crime,” and sought additional
compensatory and punitive damages based on this new charge. At trial, Scheiderer
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claimed that he had suffered a loss of business as a result of the alleged defamation.
Upon cross-examination, however, Scheiderer refused to identify any clients of his
business, claiming such information was privileged. Scheiderer further denied the
existence of a master list of clients that he had mentioned in a deposition prior to
trial. Following a ruling by the trial court that the identity of Scheiderer’s clients
was not privileged, Scheiderer opted to dismiss all of his claims with prejudice.
       {¶ 3} The city of London and its officials named as defendants then filed a
motion with the trial court seeking attorney fees pursuant to former R.C. 2323.51
and Civ.R. 11. Sams filed a separate motion, but subsequently withdrew it. At the
hearing, the parties stipulated the evidence presented at trial.
       {¶ 4} The trial court ruled that Scheiderer and Shifflet had engaged in
frivolous conduct in pursuing the suit against the defendants, and after a second
hearing, awarded attorney fees to the defendants pursuant to former R.C. 2323.51.
The order found Scheiderer and Shifflet jointly and severally liable for attorney fees
in the amount of $45,035.55, and found that Scheiderer was solely liable for
$2,347.68 in fees that were incurred prior to the appearance of Shifflet as the
attorney for Scheiderer.
       {¶ 5} Scheiderer and Shifflet separately appealed the judgment of the trial
court, arguing, inter alia, that the trial court erred in determining that they had
engaged in frivolous conduct, and that the award of attorney fees by the trial court
was improper. The Court of Appeals for Madison County affirmed the judgment
of the trial court, holding that Shifflet was properly found by the trial court to be
jointly and severally liable, under former R.C. 2323.51, for the attorney fees
incurred by the defendants during the time that he represented Scheiderer in the
proceedings. The Court of Appeals for Madison County certified a conflict with
the decision of the Court of Appeals for Hamilton County in Riley v. Langer (1994),

95 Ohio App.3d 151

, 

642 N.E.2d 1

, on the following question:




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         “[W]hether an award for frivolous conduct under R.C. 2323.51 should
include attorney fees incurred in prosecuting the motion for sanctions brought under
R.C. 2323.51.”
         {¶ 6} The cause is now before this court upon our determination that a
conflict exists.
                                     __________________
         Kevin P. Collins, for appellant Daniel E. Shifflet.
         James R. Reuss and Michael R. Szolosi, Jr., for appellee city of London.
                                     __________________
         MOYER, C.J.
         {¶ 7} The question presented is whether attorney fees incurred by a party
moving for sanctions under former R.C. 2323.51 may be included in an award
pursuant to the statute.1 Our analysis of the plain language of the statute compels
the conclusion that former R.C. 2323.51 permits an award based upon a finding of
frivolous conduct to include attorney fees incurred in prosecuting a motion for
sanctions. Pursuant to former R.C. 2323.51(B)(4), this award may be made against
a party, the party’s counsel of record, or both. Therefore, we affirm the judgment
of the court of appeals.




1. Subsequent to the filing of this action, the General Assembly amended the statute. The current
version provides that upon a finding of frivolous conduct, “the court may award * * * reasonable
attorney’s fees * * * to a party to the civil action or appeal who was adversely affected by frivolous
conduct.” R.C. 2323.51(B)(1). The statute further provides in divisions (B)(3) and (B)(4):
          “(3) The amount of an award made pursuant to division (B)(1) of this section that
represents reasonable attorney’s fees shall not exceed, and may be equal to or less than, whichever
of the following is applicable:
          “(a) If the party is being represented on a contingent fee basis, an amount that corresponds
to reasonable fees that would have been charged for legal services had the party been represented
on an hourly fee basis or another basis other than a contingent fee basis;
          “(b) In all situations other than that described in division (B)(3)(a) of this section, the
attorney’s fees that were reasonably incurred by a party.
          “(4) An award made pursuant to division (B)(1) of this section may be made against a
party, the party’s counsel of record, or both.”




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       {¶ 8} Former R.C. 2323.51 provided that prior to the commencement of a
trial in a civil action, a court may award “reasonable attorney’s fees to any party to
that action adversely affected by frivolous conduct.” Former R.C. 2323.51(B)(1).
Former R.C. 2323.51(B)(3) provided the following guidelines for determining the
amount of an award of attorney fees:
       “The amount of an award that is made pursuant to division (B)(1) of this
section shall not exceed, and may be equal to or less than, whichever of the
following is applicable:
       “(a) If the party is being represented on a contingent fee basis, an amount
that corresponds to reasonable fees that would have been charged for legal services
necessitated by the frivolous conduct had the party been represented on an hourly
fee basis or another basis other than a contingent fee basis.
       “(b) In all situations other than that described in division (B)(3)(a) of this
section, the attorney’s fees that were both reasonably incurred by a party and
necessitated by the frivolous conduct.”
       {¶ 9} These guidelines make no distinctions as to whether attorney fees that
are related to a certain portion of a case may or may not be included in an award
pursuant to a determination of frivolous conduct. Rather, the statute grants courts
the authority to award any reasonable attorney fees incurred by a party adversely
affected by frivolous conduct. A plain reading of the statute reveals that reasonable
attorney fees incurred by a party in prosecuting a motion for sanctions may be
awarded to that party upon a finding of frivolous conduct.
       {¶ 10} Shifflet nonetheless asserts that as counsel of record to the party
found to have engaged in frivolous conduct, he cannot be held liable because to do
so would place him in an “untenable position.” Shifflet claims that imposing
liability on attorneys for fees sought in a motion for sanctions under R.C. 2323.51
would force the attorney either to forgo arguing against the motion and agreeing to
pay the fees, or to oppose the motion, which would further expose the attorney to



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potential liability.   Therefore, Shifflet argues, the attorney would then face
improper conflicts of interest with a client due to the attorney’s personal liability,
and could not fulfill his duty to represent a client “zealously within the bounds of
the law,” Canon 7 of the Code of Professional Responsibility.
        {¶ 11} We disagree with these contentions. The statute plainly states that
an award “may be made against a party, his counsel of record, or both.” Former
R.C. 2323.51(B)(4). The General Assembly gave courts the discretion to hold those
engaging in frivolous conduct responsible for their actions. The language of the
statute is a clear indication that the General Assembly chose not to make any
distinctions based upon the policy arguments which Shifflet asserts here.
        {¶ 12} Additionally, we observe that the risk of a motion for sanctions under
the statute is one that an attorney should anticipate when filing a complaint. We
have no desire to cause a chilling effect on the duty of counsel to vigorously
represent their clients.   Counsel, however, must balance that duty with their
concomitant obligation to the bar, the court, and their client to perform responsibly
“within the bounds of the law.” See Canon 7; EC 7-1. When a trial court has
determined that reasonable inquiry by a party’s counsel of record should reveal the
inadequacy of a claim, a finding that the counsel of record has engaged in frivolous
conduct is justified, as is an award, made within the statutory guidelines, to any
party adversely affected by the frivolous conduct.
        {¶ 13} Accordingly, we hold that the trial court did not abuse its discretion
in awarding attorney fees to the defendants that include fees incurred for the
prosecution of the motion for sanctions. An award of attorney fees made by a court
pursuant to former R.C. 2323.51 may include fees incurred in prosecuting a motion
for sanctions. Such an award may be made against a party, the party’s counsel of
record, or both. (Former R.C. 2323.51[B][3] and 2323.51[B][4], construed.)
        {¶ 14} The judgment of the court of appeals is affirmed.
                                                                 Judgment affirmed.




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       DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, COOK and LUNDBERG
STRATTON, JJ., concur.
                          __________________




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