Fayette Drywall, Inc. v. Oettinger
| Decision Date | 11 December 2020 |
| Docket Number | No. 28636,28636 |
| Parties | FAYETTE DRYWALL, INC., et al., Plaintiffs-Appellees v. John R. OETTINGER, Trustee, et al., Defendants-Appellants |
| Court | Ohio Court of Appeals |
GERHARDT A. GOSNELL II, Atty. Reg. No. 0064919 & DAMION M. CLIFFORD, Atty. Reg. No. 0077777, 115 West Main Street, 4th Floor, Columbus, Ohio 43215, Attorneys for Plaintiffs-Appellants Flapjack2 Holding Company, LLC and Michael Dixson.
DALE H. MARKOWITZ, Atty. Reg. No. 0016840 & BRIDEY MATHENY, Atty. Reg. No. 0070998, 100 Seventh Avenue, Suite 150, Chardon, Ohio 44023, Attorneys for Defendant-Appellee John R. Oettinger, Trustee.
DAVID K. LOWE, Atty. Reg. No. 0003179, 1500 West Third Avenue, Suite 310, P.O. Box 12310, Columbus, Ohio, 43212 Chardon, Ohio 44023, Attorney for Defendant-Appellee Restaurant Specialties, Inc.
{¶ 1} Flapjack2 Holding Company, LLC ("Flapjack") and its principal, Michael Dixson, jointly appeal from the trial court's order that determined Flapjack had waived its right to arbitration, vacated the stay in this matter, and returned the case to that court's active docket. The order of the trial court will be affirmed.
{¶ 2} In October 2017, Fayette Drywall, Inc. and Hotopp Excavating, Inc. filed suit in the Montgomery County Court of Common Pleas against John R. Oettinger, Trustee of the Oettinger 1979 Trust ("the Trust"), along with Flapjack and Restaurant Specialties Inc. ("RSI").1 Among other causes of action, the suit included claims for breach of contract and to foreclose on mechanics liens, all related to the plaintiffs' having not been paid for their roles in the construction of an IHOP restaurant for which RSI was the general contractor and Flapjack was the restaurant developer. Flapjack originally owned the property on which the restaurant was constructed, but it sold that property to the Trust before the lawsuit was filed. In response to the complaint, the Trust filed a third-party complaint against Dixson.
{¶ 3} When this litigation began, RSI and Flapjack already were embroiled in a dispute about the construction contract governing the IHOP project. RSI moved to stay the current suit brought by Fayette Drywall and Hotopp in its entirety, to allow RSI and Flapjack to arbitrate their dispute before this case proceeded. (See 1/22/18 Motion to Stay Proceedings Pending Arbitration.) Flapjack supported that request. (2/9/18 [Flapjack's] Response * * * to [RSI]'s Motion to Stay Proceedings Pending Arbitration.) RSI's motion relied on an arbitration provision within the construction contract, which states in part as follows:
In those instances where the parties are otherwise unable to resolve their dispute through mediation and then [sic] the parties' dispute shall be resolved through arbitration. Arbitration shall be administered by the American Arbitration Association in accordance with its Construction Industry Arbitration Rules in effect on the date of the Contract unless the parties mutually agree to administrate [sic] under different rules. Demands for arbitration shall be made in writing and must be sent to the other Party, and filed with the person or entity administering the arbitration. * * *
{¶ 4} Determining that the dispute between RSI and Flapjack was "separate and distinct" from the plaintiffs' claims, the trial court denied the motion to stay. (6/15/18 Decision, Order and Entry Overruling [RSI]'s Motion to Stay Proceedings Pending Arbitration.) RSI and Flapjack appealed. On January 11, 2019, we reversed the trial court's order, stating:
The trial court erred by overruling RSI's motion for a stay. Therefore, the trial court's order of June 15, 2018, is reversed, and this case is remanded to the trial court with instructions to enter a stay until the arbitration of the dispute between RSI and Flapjack has been completed.
Fayette Drywall, Inc. v. Oettinger , 2d Dist. Montgomery No. 28059, 2019-Ohio-48, 2019 WL 169134, ¶ 16. On January 25, 2019, the trial court issued an order imposing a stay as directed by this Court.
{¶ 5} Shortly before the stay order was issued, RSI moved in the trial court to waive arbitration and vacate the stay of proceedings. (1/21/19 Motion to Waive Arbitration and Vacate Stay.) In support, RSI offered the affidavit of its trial counsel, who attested that RSI and Flapjack had agreed in February 2018 to arbitrate their dispute through an agreed independent arbitrator, but Flapjack then failed to pay its required initial deposit toward the arbitration fee in accordance with the arbitration agreement. (Affidavit of David K. Lowe, Esq. ¶ 3-7.) RSI's counsel further attested that Flapjack's trial attorney moved to withdraw on August 9, 2018, and that no new attorney appeared on Flapjack's behalf before the scheduled arbitration date of September 17, 2018. (Id. at ¶ 8-10.) As a result, the arbitration was rescheduled to the week of January 14, 2019. However, on December 7, 2018, Dixson indicated to the arbitrator and RSI's attorney that Flapjack did not wish to proceed with arbitration, and Flapjack also had not acquired new counsel or taken other measures in furtherance of arbitration. (Id. at ¶ 11-15.) According to the affidavit, on January 27, 2019, the arbitrator, on whom the parties had agreed, advised RSI that he would not serve in that capacity because he never received Flapjack's deposit. (Id. at ¶ 16.)
{¶ 6} On February 7, 2019, new counsel appeared for Flapjack and Dixson and responded to RSI's motion to waive arbitration. Flapjack and Dixson argued that RSI's request was precluded by "judicial estoppel and the law of the case doctrine." (2/7/19 [Flapjack] and [Dixson]'s Memorandum in Opposition to [RSI]'s Motion to Waive Arbitration, p. 1.) They further asserted that Flapjack "did not knowingly and intentionally agree to waive its contractual right to arbitration." (Id. at p. 4.) In reply, RSI contended that Flapjack did waive its right to arbitration by breaching the terms of the arbitration agreement.
{¶ 7} RSI sought to waive arbitration, to have the stay vacated, and to proceed with the pending lawsuit. Similar testimony was elicited from the witnesses RSI presented at a hearing before the trial court on the subject motion. (See Tr. of 6/5/19 hearing.) Flapjack and Dixson introduced no evidence at that hearing.
{¶ 8} Finding that Flapjack "did not do its part to ensure that the arbitration was conducted," the trial court concluded that Flapjack "ha[d] waived its right to arbitrate the dispute with RSI." (11/19/19 Decision, Order and Entry Sustaining Defendant [RSI]'s Motion to Waive Arbitration and Vacate Stay; Vacating Stay, p. 6, 7.) The court therefore vacated the existing stay and directed the matter to proceed on the court's active docket. (Id. at p. 7.)
{¶ 9} Flapjack and Dixson appeal from that decision,2 setting forth these two assignments of error:
{¶ 10} Flapjack and Dixson first argue that the trial court erred because both the law of the case doctrine and the doctrine of judicial estoppel require that this matter proceed to arbitration. More specifically, they urge that the trial court lacked authority to deviate from this Court's remand instructions, and that RSI's prior request for a stay pending the completion of arbitration precludes it from now advancing a contrary position.
{¶ 11} A review to determine whether a court properly applied the law of the case doctrine presents a question of law to which a de novo standard of review applies. Giancola v. Azem , 153 Ohio St.3d 594, 2018-Ohio-1694, 109 N.E.3d 1194, ¶ 13, citing Arnott v. Arnott , 132 Ohio St.3d 401, 2012-Ohio-3208, 972 N.E.2d 586, ¶ 17. However, because "judicial estoppel is an equitable doctrine that a court may invoke at its discretion," Independence v. Office of the Cuyahoga Cty. Executive , 142 Ohio St.3d 125, 2014-Ohio-4650, 28 N.E.3d 1182, ¶ 29, we review decisions regarding the application of that doctrine for an abuse of discretion. See Saha v. Research Inst. at Nationwide Children's Hosp. , 10th Dist. Franklin No. 18AP-661, 2019-Ohio-1792, 2019 WL 2068493, ¶ 31, citing Independence . The term "abuse of discretion" implies that the court's attitude is unreasonable, arbitrary or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983).
{¶ 12} Pursuant to the law of the case doctrine, "the decision of a reviewing court in a case remains the law of that case on the legal questions involved for all subsequent proceedings in the case at both the trial and reviewing levels." Nolan v. Nolan , 11 Ohio St.3d 1, 3, 462 N.E.2d 410 (1984). That doctrine "precludes a litigant from attempting to rely on arguments * * * which were fully pursued, or available to be pursued ," in a prior proceeding. (Emphasis added.) Hubbard ex rel. Creed v. Sauline , 74 Ohio St.3d 402, 404-405, 659 N.E.2d 781 (1996). Thus, "[t]he doctrine of law of the case comes into play only with respect to issues previously determined." Quern v. Jordan , 440 U.S. 332, 347, 99 S.Ct. 1139, 59 L.Ed.2d 358 (1979), fn. 18, citing In re Sanford Fork & Tool Co. , 160 U.S. 247, 16 S.Ct. 291, 40 L.Ed. 414 (1895). On remand, "a trial court * * * confronted with substantially the same facts and issues as were involved in the prior appeal * * * is bound to adhere to the appellate court's determination of the applicable law," Nolan at 3, 462 N.E.2d 410, but that court "may consider and decide any matters left open by the mandate of court." Quern at 347, fn.18, 99 S.Ct. 1139, quoting Sanford Fork & Tool at...
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