Champlin v. Kraftmaid Cabinetry Inc.

• Decision Date: 05 November 2010
• Docket Number: No. 2009–T–0019.,2009–T–0019.
• Citation: 190 Ohio App.3d 202,941 N.E.2d 124
• Parties: CHAMPLIN et al., Appellees,v.KRAFTMAID CABINETRY, INC., et al., Appellants.
• Court: Ohio Court of Appeals

190 Ohio App.3d 202

941 N.E.2d 124

2010 -Ohio- 5398

CHAMPLIN et al., Appellees,

v.KRAFTMAID CABINETRY, INC., et al., Appellants.

No. 2009–T–0019.

Court of Appeals of Ohio, Eleventh District, Trumbull County.

Decided Nov. 5, 2010.

Thrasher, Dinsmore & Dolan, Chardon, and John R. Liber II, Cleveland; and Martin F. White Co., L.P.A., and Martin F. White, Warren, for appellees.McDonald Hopkins, L.L.C., and Michael L. Snyder, Cleveland, for appellants.RICE, Judge.

[Ohio App.3d 204] {¶ 1} Appellants, Kraftmaid Cabinetry, Inc., its affiliate insurer Masco Corporation, and Joseph D. DeVito Jr., appeal the judgment of the Trumbull County Common Pleas Court, granting appellees Charlene Champlin and Ronald Champlin's motion for prejudgment interest. For the reasons that follow, we modify the trial court's judgment and affirm the judgment as modified.

{¶ 2} On December 20, 1999, Kraftmaid's employee, appellant Joseph D. DeVito, was driving a company truck when he pulled out in front of appellees and hit their vehicle, causing a tremendous impact. Appellees were taken by ambulance to Geauga Hospital. While Ronald sustained injury and sprains in his knees, resulting in medical expenses of $5,000, Charlene's injuries were far more serious. As a result of those injuries, she was life-flighted to Metro General Hospital in Cleveland. She sustained a fractured sternum; fractured ribs; abdominal trauma and bleeding; a fractured left hand, which required surgery; and head trauma. She also had complaints of dizziness. Charlene ultimately incurred medical expenses of approximately $30,000. She returned to her job as a nurses' aide at Briar Hill Nursing Home in Middlefield, Ohio, in May 2000, but [Ohio App.3d 205] due to problems associated with dizziness, she was unable to work. Due to her complaints of dizziness, Charlene's family physician referred her to an otology specialist, Arnold Schuring, M.D.

{¶ 3} Appellees filed suit on October 31, 2001. In May 2003, the parties agreed to submit the matter to private, binding arbitration. After the hearing, the arbitrators entered an award in favor of appellees in the amount of $725,000, which appellants paid.

{¶ 4} Thereafter, appellees moved the trial court to confirm the arbitration award pursuant to R.C. 2711.09, and on May 6, 2004, the trial court confirmed the award.

{¶ 5} Appellants appealed the court's judgment confirming the arbitration award in Champlin v. Kraftmaid, 11th Dist. No. 2004–T–0052, 2005-Ohio-3772, 2005 WL 1714189 (“ Champlin I”). While that appeal was pending, appellees moved for prejudgment interest in the trial court pursuant to R.C. 1343.03(C). Because Champlin I was pending when appellees filed their motion, this court stayed the trial court's proceedings on that motion.

{¶ 6} In Champlin I, appellants argued that the trial court did not have jurisdiction to confirm the arbitrators' award because it had already been paid. On July 22, 2005, this court affirmed the trial court's judgment, holding that the court was required to confirm the award. On December 14, 2005, the Supreme Court of Ohio refused to accept appellants' request that the court exercise jurisdiction of an appeal in Champlin I.

{¶ 7} After the matter was once again before the trial court on appellees' motion for prejudgment interest, the trial court held a hearing on the motion. Appellees' attorney John Liber testified that soon after he was retained by appellees in 2000, because of Charlene's inability to work, he referred her to Ernie DeChellis, O.D., for a disability evaluation. In his report, dated June 20, 2001, Dr. DeChellis stated that because of her posttraumatic vertigo, Charlene would be unable to perform most activities of daily living without assistance. He stated that Charlene would not be able to perform her job duties as a nurses' aide and that she would not be able to work in any hazardous environment because of posttraumatic vertigo.

{¶ 8} On July 3, 2001, Liber sent a demand letter to Masco's claims adjuster. The letter included Dr. DeChellis's report and all of appellees' medical reports and bills. Liber made settlement demands on Charlene's behalf for $635,000 and on Ronald's behalf for $25,000. After not hearing from appellants for two months, on August 30, 2001, Liber wrote to them asking for a settlement offer. In late September 2001, Masco offered $10,000 for Ronald and $45,000 for Charlene.

[Ohio App.3d 206] {¶ 9} Shortly after appellees rejected appellants' offer in September 2001, Liber suggested mediation, and appellants agreed. Prior to the mediation, Liber retained Dr. John Burke, a well-known economist in Cleveland, to provide a report concerning Charlene's projected lost earnings. Based on Charlene's age, 50, Dr. Burke concluded that her projected lost earnings exceeded $300,000. Liber provided Burke's report to appellants' claims adjuster at that time. The mediation was conducted on or about October 29, 2001. Liber testified that appellants did not take the mediation seriously. Instead of discussing the issues in the case, appellants' counsel spent the entire session discussing irrelevant matters, such as Ronald's retirement and appellees' bankruptcy. Consequently, the mediation did not result in settlement, and appellees filed suit on October 31, 2001.

{¶ 10} Meanwhile, Charlene was still seeing Schuring for her continued complaints of dizziness. On April 8, 2002, he prepared a report concerning her injuries stating that Charlene had been complaining of dizziness since the traffic crash. He said she has permanent dizziness that was caused by trauma to her inner ear during the collision, which is referred to as “traumatic labyrinthitis.” Schuring said this was a permanent injury for which there would be no recovery. Upon receipt of this report, Liber sent it to appellants' counsel.

{¶ 11} Liber testified that no one on the defense team had ever heard of traumatic labyrinthitis, and none of appellants' attorneys made a real effort to learn about the condition. Instead, they simply dismissed Charlene's claim that she was unable to work. Prior to suit, appellants had offered appellees $87,500 in settlement. After receiving Schuring's report, appellants did not increase their settlement offer.

{¶ 12} Appellants' counsel took appellees' depositions on April 23, 2002, and reported to their clients that Charlene would come across to the jury as a sympathetic and innocent victim. However, appellants did not increase the amount of their settlement offer.

{¶ 13} Due to the complete lack of movement on this case, on May 29, 2002, Liber sent a letter to appellants' counsel proposing mediation by the Trumbull County Magistrate, but appellants refused. Thereafter, in a further attempt to reach a settlement, by letter dated July 7, 2002, Liber proposed that the case be submitted to binding arbitration with high/low parameters, but appellants refused.

{¶ 14} Then, by his letter of September 11, 2002, which was still six months prior to trial, Liber identified DeChellis, Schuring, and Burke as appellees' experts. In this letter, Liber noted that he had not received a response to appellees' recent settlement demand of $543,000 for Charlene and $17,500 for Ronald and asked for a response. By his letter of September 17, 2002, appellants'[Ohio App.3d 207] counsel Stephen Merriam said he wanted to take the depositions of DeChellis and Schuring. Merriam also stated, “In light of the difference of opinion over the value of your clients' cases, KraftMaid is not presently in a position to make any response to your latest settlement demands in the amount of $543,000 and $17,500 for Charlene and Ronald Champlin, respectively.”

{¶ 15} Appellants took the discovery depositions of DeChellis and Schuring in December 2002. Merriam reported to his clients that both doctors would make excellent expert witnesses for appellees.

{¶ 16} On December 10, 2002, Liber wrote a letter to Merriam stating: “With the depositions of Drs. Schuring and DeChellis complete, we have confirmed that Charlene Champlin's injuries from the collision * * * are permanent, and disabling. There is no further legitimate basis for denying my clients the fair compensation which they deserve. * * * I would like to know if KraftMaid/MASCO is willing to make a fair and reasonable effort at resolving this matter so that we can at least end the Champlins' financial suffering.” In response, Merriam told Liber that he had settlement authority in the amount of only $160,000. As a result, this attempt to settle by Liber likewise proved futile.

{¶ 17} Although Schuring had stated in his April 8, 2002 report that Charlene's condition was permanent, Merriam testified that appellants still had a problem accepting that Charlene would not be able to return to work. As a result, Liber asked Schuring for a supplemental report addressing this specific question. On April 8, 2003, Schuring prepared a report in which he stated that Charlene was no longer employable. Liber provided this report to Merriam at that time.

{¶ 18} The final pretrial took place on April 24, 2003. Liability was not disputed. In Masco's claim abstract, its adjuster described appellees' medical experts, who had testified in deposition that Charlene's injuries were permanent, as “excellent” and “superb.” There was no dispute about the appropriateness of Charlene's care or the reasonableness of her medical expenses. Appellants did not dispute that Charlene had sustained lost wages or the projected amount of that loss as determined by Burke. At the final pretrial, appellees reduced their settlement demand to $450,000. Although appellees later learned that appellants had given their defense team settlement authority of $300,000, the highest offer made by defense counsel at this final pretrial was $250,000, which, they said, would be available for only one day. The amount offered did not even cover the amount of Charlene's economic damages, let alone any of...