Cruz v. English Nanny & Governess Sch., 2020-1247

CourtUnited States State Supreme Court of Ohio
Writing for the CourtStewart, J.
Citation2022 Ohio 3586
PartiesCruz et al., Appellants, v. English Nanny & Governess School et al., Appellees
Docket Number2020-1247
Decision Date12 October 2022

2022-Ohio-3586

Cruz et al., Appellants,
v.

English Nanny & Governess School et al., Appellees

No. 2020-1247

Supreme Court of Ohio

October 12, 2022


Submitted January 25, 2022

Appeal from the Court of Appeals for Cuyahoga County, No. 108767, 2020-Ohio-4216.

The Pattakos Law Firm, L.L.C., Peter Pattakos, and Rachel Hazelet, for appellants.

Mark A. Novak; and Dinn, Hochman & Potter, L.L.C., and Edgar H. Boles, for appellees.

Paul W. Flowers Co., L.P.A., Louis E. Grube, and Paul W. Flowers, urging reversal for amicus curiae Ohio Association for Justice.

The Mellino Law Firm, L.L.C., and Calder Mellino, urging reversal for amicus curiae Cleveland Academy of Trial Attorneys.

Law Offices of John C. Camillus, L.L.C., and John C. Camillus, urging reversal for amicus curiae Ohio Employment Lawyers' Association.

Stewart, J.

{¶ 1} In this discretionary appeal, we are asked to decide whether prevailing parties who were awarded reasonable attorney fees along with a punitive-damages

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award in a tort case involving malicious conduct may also recover the attorney fees that they incur in successfully defending their judgment. The Eighth District Court of Appeals held that they may not and reversed the trial court's award of attorney fees relating to the prevailing parties' appeal. 2020-Ohio-4216, ¶ 58-60. The Eighth District concluded that "Ohio law does not permit recovery of appellate attorney fees except in cases involving remedial statutes," and because "[plaintiffs' claims were not based on any remedial statute," they were "not entitled to recovery of attorney fees generated in defending their judgment." Id. at ¶ 58. We disagree and therefore reverse the Eighth District's judgment.

I. FACTS AND PROCEDURAL HISTORY

{¶ 2} In November 2011, plaintiffs-appellants, Christina Cruz and Heidi Kaiser, filed a complaint against defendants-appellees, English Nanny & Governess School (the "School"), English Nannies, Inc. (the "Placement Agency"), Sheilagh Roth, and Bradford Gaylord (collectively, "defendants" or the "EN&G defendants"). Cruz alleged claims of negligent and intentional infliction of emotional distress, wrongful termination against public policy, defamation, and breach of contract. Kaiser alleged claims of wrongful termination against public policy and defamation.

{¶ 3} In May 2015, the case proceeded to a 26-day jury trial. The following evidence was presented at trial.

{¶ 4} Roth founded the School, which had been training certified professional nannies and governesses since 1985. Roth was the executive director of the School, and Gaylord was the director of operations for the Placement Agency, which placed graduates of the School with families requesting a nanny or a governess. All graduates of the School entered into an "exclusive placement agreement," whereby the Placement Agency promised to "make all possible efforts to arrange interviews for students with perspective employers," and the students

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agreed to give "exclusive placement rights" to the agency for three months following graduation.

{¶ 5} Cruz graduated from the School in June 2011, and Kaiser worked as a placement coordinator at that time, matching students who had graduated from the School with families looking for a nanny. Shortly after Cruz graduated, Kaiser arranged for her to spend a weekend interviewing with a single father and his two minor daughters. While on the interview, Cruz witnessed what she believed was the father engaging in sexual activity with one of his daughters. As soon as Cruz returned home, she called Kaiser and told her about the suspected sexual abuse. Kaiser then relayed Cruz's account of the suspected sexual abuse to Gaylord.

{¶ 6} Kaiser testified that Roth and Gaylord told her to tell Cruz "not to report" the abuse to social services. Kaiser refused to do so and warned Cruz that Roth and Gaylord "wanted [Cruz] blackballed." Roth and Gaylord terminated Kaiser approximately one week after Kaiser told Gaylord that Cruz saw what she believed was sexual abuse.

{¶ 7} Roth and Gaylord discouraged Cruz from reporting the sexual abuse to social services. Gaylord purportedly stated that if Cruz reported the abuse, he would make sure that she did not work in the nanny profession. Roth and Gaylord ultimately withheld employment opportunities from Cruz. A licensed social worker at the School, who also taught a course on recognizing and preventing child abuse, testified that Roth told her that Cruz could not be trusted and was "unstable." At trial, Roth testified that she had stopped attempting to place Cruz based on alleged concerns over Cruz's mental health and because Cruz had supposedly asked to be released from the exclusive-placement agreement. However, in an August 2011 letter that Roth sent to Cruz, Roth blamed the inability to find a placement for Cruz on "the current economy," which Roth said had made the business "extremely slow."

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{¶ 8} The jury found in favor of Cruz and against the defendants on her claim of intentional infliction of emotional distress and awarded her $150,000 in compensatory damages ($75,000 for noneconomic damages and $75,000 for economic damages). The jury also found in favor of Cruz on her breach-of-contract claim against the Placement Agency but awarded her only $10 in compensatory damages. Additionally, the jury awarded Cruz punitive damages against the Placement Agency in the amount of $50,000, against Roth in the amount of $68,750, and against Gaylord in the amount of $50,000, plus reasonable attorney fees.[1]

{¶ 9} With respect to Kaiser, the jury found in her favor against the School and the Placement Agency on her claim of wrongful discharge in violation of public policy. The jury awarded her $20,000 in compensatory damages. The jury also awarded Kaiser punitive damages against the School and the Placement Agency in the amount of $54,000 each, plus reasonable attorney fees.

{¶ 10} The parties filed several postverdict motions, including Cruz and Kaiser's motion for attorney fees and expenses and defendants' motion for a mistrial, motion to cap plaintiffs' punitive-damages awards, motion for judgment notwithstanding the verdict, and motion for a new trial and remittitur. The trial court denied defendants' motions for a mistrial, judgment notwithstanding the verdict, and for a new trial, but it granted defendants' motions for remittitur and to cap punitive damages. The court reduced Cruz's economic damages from $75,000 to zero, reduced her punitive damages against the Placement Agency from $50,000 to zero, and reduced her punitive damages against Gaylord from $50,000 to

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$28,258. The court also reduced Kaiser's punitive damages against the Placement Agency to zero and against the School to $10,311.

{¶ 11} Regarding attorney fees, Cruz and Kaiser's attorneys requested fees in the amount of $540,277.11 based on the lodestar calculation (i.e., reasonable hourly rate multiplied by the number of hours worked). After a subsequent hearing on attorney fees, the trial court determined that the lodestar amount should be $191,000 plus expenses, for a total of $208,782.87. But because Cruz and Kaiser had signed a contingency-fee agreement, the trial court ordered defendants to pay only $95,308.97 in attorney fees and expenses.[2] However, on plaintiffs' motion for reconsideration, the trial court awarded an additional $30,195.48 in litigation expenses, bringing the total award of attorney fees and expenses to $125,504.45.

{¶ 12} The EN&G defendants appealed and Cruz and Kaiser cross-appealed. See Cruz v. English Nanny & Governess School, Inc., 2017-Ohio-4176, 92 N.E.3d 143 (8th Dist). Defendants appealed the trial court's decision denying their motions for directed verdict and judgment notwithstanding the verdict with respect to Cruz's claim for intentional inflection of emotional distress and Kaiser's claim for wrongful discharge. Id. at ¶ 1. Cruz appealed the trial court's decision granting defendants' motion for remittitur regarding her economic damages, and Cruz and Kaiser appealed the trial court's judgment regarding attorney fees. Id. at ¶ 2.

{¶ 13} The Eighth District overruled the EN&G defendants' assignments of error but found merit to Cruz's argument in her cross-appeal that the trial court erred when it granted defendants' motion for remittitur. Id. at ¶ 62, 83, 90. The

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appellate court reversed the trial court's judgment and remanded for the trial court to reconsider the remittitur motion under the correct criteria. Id. at ¶ 90, 126.

{¶ 14} The Eighth District also concluded that the trial court abused its discretion when it calculated the reasonable amount of attorney fees, because the trial court had limited its review to attorney fees incurred by only one attorney even though the evidence showed that other members of the plaintiffs' litigation team also worked on the case. Id. at ¶ 105. The appellate court further held that the trial court erred when it "deviated] from the lodestar amount based solely on the contingency fee agreement." Id. The court reversed the trial court's decision regarding attorney fees and instructed the trial court to reconsider Cruz's and Kaiser's motion for attorney fees. Id. at ¶ 126.

{¶ 15} On remand, Cruz and Kaiser moved to modify their motion for attorney fees, which included a request for "fees incurred in appellate litigation."[3]The EN&G defendants opposed Cruz and Kaiser's motion to modify attorney fees.

{¶ 16} The trial court denied the EN&G defendants' motion for remittitur and reinstated the jury's $75,000 award for Cruz's economic damages. The court also awarded Cruz and Kaiser $463,677.08 in attorney fees and expenses, which included attorney fees that they incurred for 480.4 hours of posttrial work from July 8, 2015, to September 14, 2017.

{¶ 17} The EN&G defendants appealed a second time, challenging the trial court's decision regarding...

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