Christen v. Continental Ents., Ltd.

Ohio Court of Appeals
Christen v. Continental Ents., Ltd., 154 N.E.3d 1192 (2020)
2020 Ohio 3665
Kilbane

Christen v. Continental Ents., Ltd.

Opinion

[Cite as Christen v. Continental Ents., Ltd.,

2020-Ohio-3665

.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JOHN CHRISTEN, :

Plaintiff-Appellee, : No. 108736 v. :

CONTINENTAL ENTERPRISES, : LTD., ET AL., : Defendants-Appellants.

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED AND REMANDED RELEASED AND JOURNALIZED: July 9, 2020

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-17-879680

Appearances:

The Law Office of Michael Dylan Brennan L.L.C., and Michael Dylan Brennan, for appellee.

Ted S. Friedman, for appellants.

MARY EILEEN KILBANE, J.:

Defendants-appellants, Continental Enterprises Ltd. (“Continental”),

appeals from the order of the trial court that awarded attorney fees to plaintiff-

appellee, John Christen (“Christen”). For the reasons that follow, we affirm the trial court and remand for

a final determination of the final amount of fees owed.

I. FACTUAL BACKGROUND

Alan Pearlman (“Pearlman”) is the managing member of Continental,

which owns two 66-unit apartment buildings at 3341 and 3351 Warrensville Center

Road, Shaker Heights, Ohio 44122.1 Christen is a resident of Virginia and an

employee of General Electric. His work sometimes required him to stay in the

Cleveland area for extended periods of time, which led him to rent an apartment in

the area.

Christen and Continental entered into a written lease for Christen’s

rental of apartment 406 located at 3351 Warrensville Center Road, Shaker Heights,

Ohio. Christen was the tenant and Continental the landlord. Pursuant to the lease,

rent was $1,050 per month. Christen tendered a security deposit to Continental in

the amount of $925. The security amount included a $75 deposit for a garage door

opener. Apartment 406 is on the top floor of the flat-roofed apartment building.

The lease term began on November 5, 2014. It ran for thirteen

months and automatically renewed for another year on December 31, 2015, unless

Christen provided written notice of termination by October 31, 2015. Christen did

not seek to terminate the lease in October 2015, so the lease automatically renewed

1 Christen named Pearlman a defendant in his personal capacity in the underlying complaint because it was unclear whether Pearlman had failed to maintain formalities as the managing member of Continental and might, therefore, be personally liable to Christen. Before trial, the trial court granted Christen’s oral motion to dismiss Pearlman. Pearlman is not party to this appeal. for a one-year term that automatically terminated on December 31, 2016. It is

undisputed that Christen paid all rent due under the lease.

Around March 30, 2016, Christen noticed some water damage that

originated in the ceiling of the bathroom and leaked down the wall. Christen

reported this damage to Pearlman by email. Christen also informed Pearlman that

his garage door opener was not working and that he expected to be in Cleveland for

work less often and asked when he could call Pearlman to discuss possibly

terminating the lease early. Pearlman responded by email the next day, writing “You

can call me when you have the garage door opener with you and I will tell you how

to reprogram it. We will investigate the roof leak.”

On April 4, 2016, Christen emailed Pearlman to ask whether anyone

had looked at the damage in his apartment and checked the roof. The same day,

Pearlman replied that he was waiting for the water on the roof to dry up in order to

find the “small opening that is causing the leak into your apartment.” Pearlman did

not repair the interior water damage in Christen’s apartment. Pearlman testified

that he intended to wait to repair the damage until Christen moved out at the end of

the year.

In the summer of 2016, Christen’s work took him to Cleveland less

often. During one of his infrequent stays at his apartment, he noticed that the

interior water damage had not been repaired. Other tenants also emailed Pearlman

to complain about water damage in their apartments, but the emails themselves

were inadvertently permanently deleted before this litigation began. Christen also noticed that his air conditioner was out of service and testified that it blew hot air

into his apartment. He often did not stay at the apartment that summer due to the

broken air conditioning.

On June 29, 2016, Christen emailed Pearlman for an update on the

leaky ceiling, although he did not notice any new damage at that time. Christen

again informed Pearlman that the air conditioning was still not working. Neither

Pearlman nor Continental responded to this email. Christen believed someone

eventually repaired the air conditioning and it worked periodically thereafter.

However, he testified that the water damage to the wall remained in the same

condition throughout his tenancy as when he first noticed the damage in March

2016.

On December 22, 2016, Christen notified Pearlman by email that he

was moving out and asked where he should leave the keys. Pearlman responded

that he should leave the keys in the rental deposit box in an envelope with his name

on it. Christen hired cleaners to clean the apartment before he moved out. He

vacated the premises on the 22 or 23 of December 2016 and left the keys in the box

as instructed. Christen testified that he included a note with the keys that provided

his forwarding address for the return of his security deposit. Before leaving the

apartment, Christen took a photograph of the still-unrepaired water damaged wall

that had been in that condition since March 2016.

On January 31, 2017, Pearlman emailed Christen to inform him that

his security deposit of $925 would not be returned. Pearlman claimed $75 for the unreturned garage door opener; $700 to repair and replace the water-damaged wall;

and $150 to refinish the stained bathtub. Pearlman claimed the water damage was

due to Christen’s failure to notify Pearlman of the damage when it first occurred.

Christen was willing to pay the $75 for the garage door opener, but disputed the

deductions for the water-damaged wall and bathtub repairs. He claimed that his

emails in March, April, and June notified Pearlman of the water damage and that

the bathtub was not stained when he vacated the apartment. Pearlman refused to

return the security deposit.

II. PROCEDURAL BACKGROUND

Christen believed he was entitled to the security deposit and engaged

counsel at a rate of $250 per hour on April 21, 2017, to recover his deposit. Around

April 25, 2017, Christen’s counsel sent a letter to Pearlman that requested payment

of the $925 security deposit, $925 in statutory damages, and $500 in legal fees to

that date. It is not clear based on the record whether Pearlman or Continental

(collectively “Landlords”) responded, but they did not return the security deposit at

that time.

On May 2, 2017, Christen filed a complaint against Continental and

Pearlman. Christen brought one count against Continental and a second against

Pearlman personally. Both counts sought to recover the $925 security deposit,

damages, and reasonable attorney fees under R.C. 5321.16.

On July 6, 2017, Landlords filed an answer and counterclaim on July

6, 2017. They denied Christen’s allegations and sought damages in the amount of $5,000.00 for Christen’s alleged violations of R.C. 5321.05(A)(1) and (5). They also

sought reasonable attorney fees pursuant to R.C. 5321.05(C)(1). Landlords claimed

they were entitled to damages for the cost of the bathtub and water damage repairs

and also to several months’ rent payments during which the apartment allegedly

could not be rented due to the condition in which Christen left the apartment. Both

parties filed motions to dismiss. The trial court denied both motions.

By telephone conference on July 24, 2017, the trial court ordered that

discovery be completed by October 24, 2017, and set trial for April 4, 2018. At a

pretrial hearing on October 24, 2017, the court extended the discovery deadline to

December 15, 2017. The parties failed to settle at the final pretrial hearing on

February 22, 2018. At Landlords’ unopposed request for continuance, the trial was

postponed and reset for June 20, 2018.

On May 25, 2018, Christen moved for a protective order and to

compel written discovery responses from Landlords. Christen attached

correspondence between the parties’ counsel that detailed the deficiencies. He

sought a protective order preventing Landlords from taking the deposition of

Christen before they had answered his written discovery, which he served on

September 14, 2017.

The motion to compel sought separate discovery responses from

Continental and Pearlman. Christen claimed that Continental provided incomplete

responses and that Pearlman had not responded at all to Christen’s document

requests, requests for admission, and interrogatories. In particular, Christen sought from Continental documents related to the history and maintenance of the

apartment building roof, documents relating to alleged repairs, and documents

related to the counterclaim. Christen claimed that Continental had failed to produce

any documents except for a few photos. Christen further claimed he had to postpone

depositions of Continental and Pearlman due to their delinquent written discovery

responses.

The court held another telephone conference on June 6, 2018.

Afterwards, the court extended the written discovery deadline to June 22, 2018, and

ordered that depositions be completed by August 3, 2018. The court postponed the

trial date to September 24, 2018.

Pearlman moved for summary judgment on May 30, 2018. The court

denied summary judgment on September 19, 2018, stating that “defendant filed the

motion out of rule.”

The court held a pretrial on July 12, 2018, at which the court ordered

Pearlman’s deposition to take place on July 27, 2018, at the courthouse. The court

also noted that it would hold Christen’s motion to compel in abeyance until after

Pearlman’s deposition.

On September 19, 2018, the trial was cancelled and the case was

referred to arbitration to occur on October 23, 2018. The arbitration panel found

for Christen on the complaint and counterclaim, but did not award attorney fees.

Afterwards, Christen’s counsel sent correspondence to Landlords’ counsel dated

November 16, 2018. The letter was a post-arbitration settlement demand that requested the security deposit, statutory amount, and attorney fees incurred to date.

Christen’s November 2018 demand sought payment of $1,700 plus $13,862.20 in

attorney fees for a total of $15,562.20. Again, the record does not clarify whether

Landlords responded, but it is clear that the parties did not settle at that time. On

November 21, 2018, Christen appealed the arbitration on the grounds that the

arbitration panel failed to award attorney fees pursuant to R.C. 5321.16.

The court set trial for March 25, 2019. The parties failed to settle at

the final pretrial held on March 7, 2019. Both parties filed trial briefs. The bench

trial proceeded as scheduled between Christen and Continental after the court

granted Christen’s oral motion to dismiss Pearlman. The court heard testimony

from Christen and Pearlman and entered judgment for Christen on count one of the

complaint, the only count against Continental. The trial court also found for

Christen on Continental’s counterclaim.

The court awarded Christen the $925.00 security deposit, less the

$75.00 cost of the garage door opener that he failed to return. The court also

awarded Christen damages in the amount of $850.00 pursuant to R.C. 5321.16(C)

for the amount of the security deposit wrongfully withheld. In total, the court

awarded Christen $1,700.00 and reasonable attorney fees pursuant to the same

statute. Continental did not appeal from this judgment.

A separate hearing on attorney fees proceeded on May 29, 2019.

Christen testified at the hearing. He stated that he had engaged counsel at a rate of

$250 per hour on April 21, 2017, and that he had received three invoices from counsel: (1) an invoice dated May 2017 in the amount of $2,031.95; (2) an invoice

dated June 27, 2017, in the amount of $550; and (3) an invoice dated April 24, 2019,

in the amount of $20,180.25. The invoices included amounts for attorney fees and

expenses. He also testified that counsel informed him that Christen was responsible

for the expert witness’s fees in the amount of $1,720. On cross-examination,

Christen testified that he had paid in full the amounts in the first two invoices.

Christen presented Douglas Whipple (“Whipple”), a litigation

attorney with nearly forty years’ experience, as an expert witness. Whipple testified

that he reviewed Christen’s case file, including the engagement letter; pleadings;

statutes, rules, and case law related to attorney fees; motions; journal entries; trial

briefs; the final judgment entry; and all three invoices for attorney fees and

expenses. He also testified that he reviewed Christen’s counsel’s background and

civil litigation experience.

Whipple offered opinions to a reasonable degree of professional

certainty. He acknowledged that the attorney fees far exceeded the amount of the

security deposit Christen sought to recover, but considered the fees reasonable

because it was Landlords that caused the attorney fees to be so much higher than

the security deposit. He specifically referenced that Continental refused to return

the security deposit at any time before trial and brought a counterclaim. Both of

those actions, in his opinion, rendered the attorney fees reasonable even though they

exceeded the amount of the security deposit. He also opined Christen’s counsel had

to file a protective order, a motion to compel, and had the additional burden of conducting Pearlman’s deposition in the trial court’s jury room because it had to be

held under the court’s supervision. Further, according to Whipple’s testimony,

Continental and Pearlman had been civil defendants on seventeen prior occasions.

Whipple also considered that arbitration and trial would not have

been necessary had Landlords returned the security deposit in the first instance or

agreed to return the deposit and pay statutory damages and attorney fees at some

earlier date. He specifically referenced the letters from Christen’s counsel to

Pearlman dated April 25, 2017, and November 16, 2018, in which Christen requested

payment of the security deposit, damages, and legal fees to that date.

Whipple further pointed out that Christen’s counsel was unable to

work on other cases for other clients while working on Christen’s case. He testified

that $250 per hour plus expenses was a reasonable fee. He stated that he would have

expected a reasonable fee to range between $225 to $280 per hour and noted that

he would not have taken the case for less than $250 per hour.

Regarding the invoices, Whipple testified that he reviewed each

invoice line by line and that each invoice was reasonable and the charges necessary.

He did not find any instance in which the hours were unreasonable for the task. He

noted that Christen’s counsel charged a lot of hours to depose Pearlman, but opined

that the hours were reasonable because Landlords did not cooperate toward the

completion of the deposition. Continental cross-examined Christen, Whipple, and

Christen’s counsel at the fee hearing; Continental did not offer any of its own

witnesses. On June 7, 2019, the court stated that it had considered all exhibits,

Whipples’ expert report, case law, and witness testimony and entered judgment in

Christen’s favor. The court found that $23,500.00 in attorney fees reasonable under

R.C. 5321.16(C). The June 7, 2019 judgment entry stated:

Hearing held on 5/29/2019 regarding attorney’s fees for plaintiff’s counsel. Counsel for plaintiff present. Plaintiff John Christen present. Counsel for defendant present. Defendant Alan Pearlman present. Court reporter present. The court has considered all exhibits, plaintiff’s expert report, case law referenced and testimony including that from plaintiff’s expert. The court finds attorney’s fees reasonable in the amount of $23,500.00. It is so ordered. Court cost assessed to the defendant(s). Notice issued

On June 10, 2019, the court provided another judgment entry

directing Continental to pay the $23,500.00 “to plaintiff’s counsel.” The June 10,

2019 judgment entry states:

This entry is to further clarify the courts 6/7/2019 entry. The court finds plaintiff’s attorney’s fees are reasonable in the amount of $23,500.00 the court further directs defendant [C]ontinental [E]nterprises [L]td[.], et al[.] to pay this amount to plaintiff’s counsel. Notice issued.

It is from the award of attorney fees that Continental now appeals.

Continental assigned three assignments of error:

Assignment of Error One

The trial court erred when it determined that the Plaintiff was entitled to $23,000.00 in attorney fees pursuant to R.C. § 5321.16(C), based on a claim to recover a $850.00 security deposit. This award included attorney fees attributable to all claims that were litigated in the case. However, R.C. § 5321.16(C) only entitled the Plaintiff to attorney fees that were solely attributable to the Plaintiff’s security deposit claim. Assignment of Error Two

The trial court’s award of $23,500.00 in attorney fees was an abuse of discretion because the award was disproportionate and unreasonable compared to the $850.00 security deposit that the Plaintiff sought to recover.

Assignment of Error Three

The trial court’s clarification entry of 6/10/2019 is an abuse of discretion as Plaintiff’s counsel is not a party to this action.

For the reasons that follow, we affirm the trial court.

III. STANDARD OF REVIEW

“Determination of the amount to be awarded for reasonable attorneys

[sic] fees under § 5321.16 lies within the sound discretion of the trial judge.”

Hoerner v. Gms Mgt. Co., 8th Dist. Cuyahoga No. 46736,

1983 Ohio App. LEXIS 14501

, 5-6 (Dec. 15, 1983). “We review a trial court’s award of attorney fees for abuse

of discretion.” Davis v. Wesolowski, 8th Dist. Cuyahoga No. 108606, 2020-Ohio-

677, ¶ 27. A trial court abuses its discretion where its decision is unreasonable,

arbitrary or unconscionable. Bales v. Forest River, Inc., 8th Dist. Cuyahoga No.

107896,

2019-Ohio-4160, ¶ 21

, citing Blakemore v. Blakemore,

5 Ohio St.3d 217, 219

,

450 N.E.2d 1140

(1983).

“A decision is unreasonable if there is no sound reasoning process

that would support that decision.”

Id.,

quoting AAAA Ents. Inc. v. River Place

Community Urban Redevelopment,

50 Ohio St.3d 157, 161

,

553 N.E.2d 597

(1990).

“A trial court also acts unreasonably and abuses its discretion when ‘the amount of fees determined is so high or so low as to shock the conscience.’”

Id.,

quoting Bittner

v. Tri-County Toyota, Inc.,

58 Ohio St.3d 143, 146

,

569 N.E.2d 464

(1991).

“[E]vidence of reasonableness ‘may take the form of testimony,

affidavits, answers or other forms of sworn evidence. As long as sufficient evidence

is presented to allow the trial court to arrive at a reasonable attorney fee award, the

amount of the award will not be disturbed absent an abuse of discretion.’” Cleveland

v. CapitalSource Bank, 8th Dist. Cuyahoga No. 103231,

2016-Ohio-3172, ¶ 13

,

quoting R.C.H. Co. v. 3-J Machining Serv., 8th Dist. Cuyahoga No. 82671, 2004-

Ohio-57, ¶ 25.

IV. LAW AND ANALYSIS

As an initial matter, we note that the trial court did not set forth the

exact reasons for only awarding $23,500 rather than the claimed $24,482.20.

However, the court did hold a separate hearing on attorney fees and stated that it

reviewed all the evidence and relevant case law. In particular, the court heard expert

testimony from Whipple, who opined that the fees were reasonable in light of the

factors set forth in Prof.Cond.R. 1.5(a). We find that the record is sufficient for us to

address Continental’s assignments of error and make the determination that the

trial court did not abuse its discretion. See Hoerner v. Gms Mgt. Co., 8th Dist.

Cuyahoga No. 46736,

1983 Ohio App. LEXIS 14501

, 7-8 (Dec. 15, 1983) (affirming

attorney fee award where the trial court heard expert testimony at a fee hearing and

mentioned code provisions relevant to fee awards in the judgment opinion.);

Blisswood Village Home Owners Assn. v. Cleveland Community Reinvestment, LLC, 8th Dist. Cuyahoga No. 105450,

2018-Ohio-2299

, ¶ 23 (affirming award of

attorney fees as discovery sanction and under R.C. 5311.18(A)(1)(b) where nothing

in the record indicated the award was unreasonable, arbitrary, or unconscionable

and the trial court relied on an affidavit attesting to the award’s reasonableness).

A. Assignment of Error One

In its first assignment of error, Continental argues that the attorney

fee award is unreasonable because it exceeds the amount of the security deposit

wrongfully withheld. Continental contends that the fee award must relate solely to

the fees attributable to Christen’s security deposit claim under R.C. 5321.16 against

Continental and not to any fees incurred in pursuing the security deposit claim

against Pearlman, who was dismissed before trial. In particular, Continental claims

that R.C. 5321.16 does not allow Christen to recover fees incurred in pursuing the

security claim against Pearlman because the claim against Pearlman involved

separate elements and separate facts apart from Christen’s claim against

Continental. We find no merit to Continental’s first assignment of error.

R.C. 5321.16(B) and (C) provides:

(B) Upon termination of the rental agreement any property or money held by the landlord as a security deposit may be applied to the payment of past due rent and to the payment of the amount of damages that the landlord has suffered by reason of the tenant's noncompliance with section 5321.05 of the Revised Code or the rental agreement. Any deduction from the security deposit shall be itemized and identified by the landlord in a written notice delivered to the tenant together with the amount due, within thirty days after termination of the rental agreement and delivery of possession. The tenant shall provide the landlord in writing with a forwarding address or new address to which the written notice and amount due from the landlord may be sent. If the tenant fails to provide the landlord with the forwarding or new address as required, the tenant shall not be entitled to damages or attorneys fees under division (C) of this section.

(C) If the landlord fails to comply with division (B) of this section, the tenant may recover the property and money due him, together with damages in an amount equal to the amount wrongfully withheld, and reasonable attorneys fees.

“It is well settled that attorney fees are mandatory when a security

deposit is wrongfully withheld.” Davis v. Wesolowski, 8th Dist. Cuyahoga No.

108606,

2020-Ohio-677

, ¶ 30, quoting Smith v. Padgett,

32 Ohio St.3d 344

,

513 N.E.2d 737

(1987), paragraph three of the syllabus; see also Jensen v. Blvd. Invest.

Ltd., 8th Dist. Cuyahoga No. 103658,

2016-Ohio-532

. “[T]he award of attorney fees

must relate solely to the fees attributable to the tenant’s security deposit claim under

R.C. 5321.16, and not to any additional claims.” Smith v.

Padgett at 349

. A “tenant

may not use R.C. 5321.16(C) to recover attorney fees attributable to the additional

claims.”

Id. at 349-350

. See also Lloyd v. Roosevelt Properties, 8th Dist. Cuyahoga

No. 105721,

2018-Ohio-3163, ¶ 42

, citing

Padgett at 349

. However, “courts have

awarded attorney fees that relate to both the security deposit claim and to defending

against a landlord’s counterclaim for alleged damages and/or unpaid rent when

such claims are virtually indivisible.”

Lloyd at ¶ 41

, citing Lacare v. Dearing,

73 Ohio App.3d 238, 241-242

,

596 N.E.2d 1097

(11th Dist. 1991); Buck v. Georgian

Manor Invests., 8th Dist. Cuyahoga No. 67170,

1995 Ohio App. LEXIS 1254

(Mar.

30, 1995).

Continental primarily relies on Lloyd v. Roosevelt Properties, Ltd. for

its argument, but its reliance is misplaced. In Lloyd, the tenant filed a complaint asserting negligence, wanton misconduct, breach of warranty of habitability,

constructive eviction, breach of contract, and return of security deposit under R.C.

5321.16. The landlord filed a counterclaim for unpaid rental payments. The trial

court awarded the tenant attorney fees. On appeal, the court held that the trial

court’s award of attorney fees was too broad because it included fees incurred in

connection with all the other claims that were distinguishable from the tenant’s

security deposit claim. Id. at ¶ 44-48. Lloyd reasoned that the other claims were

distinguishable from the security deposit claim because, unless there was property

damage, the tenant was entitled to the security deposit; no property damage was

alleged. Id. at ¶ 46-47.

Continental argues that Christen’s claim against Pearlman involved

separate elements and facts that prohibit Christen from recovering fees in pursuit of

that claim. Continental contends that this assertion is supported by the fact that

Christen served separate discovery requests to Christen and Pearlman. We find that,

unlike in Lloyd, all of Christen’s attorney fees were incurred to recover his security

deposit under R.C. 5321.16. Although the discovery requests to Continental and

Pearlman were not identical, they were substantially similar and it is unlikely that

Christen’s fees would have been significantly different had he only prepared one set

of discovery. More importantly, serving separate discovery requests does not change the fact that Christen conducted all discovery in this case to pursue his

security deposit claim.2

Similarly, that Christen’s claim against Pearlman was voluntarily

dismissed before trial also does not change that all Christen’s fees were incurred in

pursuit of his security deposit claim. Christen represented that he raised the claim

against Pearlman because it was unclear whether Pearlman had maintained the

appropriate formalities as managing member of Continental to avoid personal

liability for the security deposit claim. Regardless of Pearlman’s personal liability

and, even if he had not been a named defendant in the complaint, Christen certainly

would have deposed Pearlman as managing member of Continental.

There is no support in the record or relevant case law that would allow

us to conclude that Christen cannot recover attorney fees for his security deposit

claim against Pearlman. Accordingly, we find that the trial court did not abuse its

discretion in awarding fees related to Christen’s pursuit of his security deposit claim

against Pearlman. Continental’s first assignment of error is overruled.

B. Assignment of Error Two

Continental argues in its second assignment of error that the trial

court’s fee award of $23,500 was an abuse of discretion because the award is

2 We also note that Christen is entitled to recover fees spent defending against the counterclaim. Unlike in Lloyd, the counterclaim did not include a claim for unpaid rents and the determination of Christen’s security deposit claim was indivisible from Continental’s counterclaim. In order to prevail on his security deposit claim and against Continental’s counterclaim, Christen had to show that he was not responsible for the property damage alleged in Continental’s counterclaim. disproportionate to the $925 security deposit Christen sought to recover, of which

the court awarded $850. Continental identifies four grounds for its contention that

the fee award is unreasonable: (1) the invoices of Christen’s counsel include four

entries that include block-billing; (2) counsel submitted duplicate bills; (3) the

invoices included charges for 42 emails over the course of the litigation that

amounted to $2,100.00; and (4) the invoices included charges for nonrecoverable

items like expert witness reports and expenses related to the issue of attorney fees

that were not related to recovering the security deposit. None of Continental’s

arguments reveal an abuse of discretion.

Continental first claims that it was an abuse of discretion to award

fees based on block-billed time entries in violation of State ex rel. Harris v. Rubino,

156 Ohio St.3d 296

,

2018-Ohio-5109

,

126 N.E.3d 1068

. We find that Rubino does

not preclude an award of fees based on block-billed entries in this case.

In Rubino, the Ohio Supreme Court clarified that it “will no longer

grant attorney-fee applications that include block-billed time entries.”

Rubino at ¶ 7

. The court explained that block billing makes it difficult to determine whether

time spent on a particular task was reasonable. Id. at ¶ 6. While we note that the

best practice is to submit bills with separate time entries for each task, any block-

billing that occurred in this case would not have prevented the trial court from

determining that the time spent in pursuit of the security deposit claim was

reasonable. See

Rubino at ¶ 6

. As discussed, all the claims and counterclaims in this

case involved issues solely related to Christen’s security deposit claim under R.C. 5321.16 and reasonable fees were to be awarded in pursuit of that claim. Thus, the

award of block-billed fees cannot constitute an abuse of discretion under these

circumstances.

Second, Continental argues that the fee award was unreasonable

because the invoices reflect duplicate charges for the same tasks. Continental

identified one such duplication for a task completed on October 17, 2017. The

duplication amounted to $75. Our review of the invoices reveals two other duplicate

charges, one on May 30, 2018, for $50 and another on October 20, 2018, for $50.

Christen presented evidence and sought a fee award of $24,482.20, but the trial

court awarded $23,500 in fees. The record demonstrates that the trial court reduced

the award by more than the duplicative amount of $175. The mere existence of a few

duplicative charges on the bill does not demonstrate that the award was

unreasonably, arbitrarily, or unconscionably high where, as here, the record

supports that the trial court deducted enough from the award to account for the

duplicative amounts.

Third, we find no basis to find that awarding fees for email

communications between counsel and his client was an abuse of discretion. We first

note that counsel was required to maintain reasonable contact with Christen

throughout the case pursuant to Prof.Cond.R. 1.4(a). In addition, Whipple testified

at the fee hearing that the charges for the email correspondence were reasonable

given the length and complexity of the case. Christen engaged counsel on April 21,

2017. The bench trial occurred nearly two years later on March 25, 2019, after an arbitration on October 23, 2018. Considering Whipple’s testimony, the length of the

case, and the necessity that attorneys communicate with their clients, the trial court

did not abuse its discretion to the extent it awarded fees based on email

correspondence between Christen and his counsel.

Finally, we find no abuse of discretion regarding costs and expenses

incurred to recover attorney fees, such as obtaining Whipple’s expert report. The

Ohio Supreme Court has held a “commonly accepted view of the purpose underlying

this statute [R.C. 5321.16] is that attorney fees are provided for in order to ensure

the return of wrongfully withheld security deposits at no cost to tenants.” Christe v.

Gms Mgt. Co.,

88 Ohio St.3d 376, 378

,

2000-Ohio-351

,

726 N.E.2d 497

. See also

Bales v. Forest River, Inc., 8th Dist. Cuyahoga No. 107896,

2019-Ohio-4160, ¶ 43

(awarding portion of fees and costs incurred in seeking recovery of attorney fees,

including fees related to expert costs).

Further, preparing for and attending the fee hearing, including

obtaining Whipple’s expert report, relate to Christen’s recovery of reasonable

attorney fees under R.C. 5321.16 in connection with his security deposit claim. “It is

well established that the time spent in establishing entitlement to an amount of

attorney fees is compensable. Counsel is also entitled to fees for his representation

during the appellate process.” (Citations omitted.) Turner v. Progressive Corp.,

140 Ohio App.3d 112, 117-118

,

746 N.E.2d 702

(8th Dist. 2000). To deny Christen

recovery for such fees would violate the purpose of the statute and require Christen, an out-of-state plaintiff who twice prevailed on the merits of his security deposit

claim, to bear the costs of recovering his security deposit from Continental.

In sum, based on our review of the record, we do not find that the trial

court abused its discretion in awarding $23,500 in attorney fees. Christen presented

three invoices that totaled $22,762.20 and also sought recovery of expert fees in the

amount of $1,720, which brought his total fee request to $24,482.20. The trial court,

upon reviewing the testimony, expert testimony, and exhibits presented at the fee

hearing, determined that a fee award of $23,500 was reasonable. Nothing in the

record indicates the award was unreasonable, arbitrary, or unconscionable.

Christen’s expert, Whipple testified to a reasonable degree of

certainty that Christen’s counsel’s rate and hours were reasonable and necessary.

Further, Continental vigorously defended Christen’s action and prosecuted a

counterclaim up to and including trial. As Whipple testified, the fees in this case are

largely the result of Continental’s contentious behavior throughout the proceedings.

From the start, Christen only sought the return of his $925 security deposit,

statutory double damages, and reasonable fees. The parties apparently could not

reach a reasonable settlement before Christen filed suit or anytime thereafter,

including after the arbitration panel found in Christen’s favor on the merits of the

complaint and counterclaim. During discovery, Christen had to file a motion for

protective order and to compel written discovery from Christen and Pearlman. In

addition, Pearlman’s deposition had to be conducted at the courthouse under the

court’s supervision, due to Pearlman’s lack of cooperation in the discovery process. There is also evidence in the record to support some deduction in the

amount of the award from what Christen claimed. As discussed, there were four

instances of double-billing that amounted to $175 and the trial court’s deduction is

sufficient to cover that amount. Therefore, the award does not constitute an abuse

of discretion and we will not disturb the award.

Accordingly, we overrule Continental’s second assignment of error.

C. Assignment of Error Three

In its third assignment of error, Continental argues that the trial

court’s June 10, 2019 judgment entry is an abuse of discretion because it orders

Continental to pay the fee award to Christen’s counsel rather than to Christen. We

find that this assignment of error lacks merit. “When a tenant has actually incurred

no out-of-pocket attorney fees, the amount of fees determined to be proper should

be awarded directly to the attorney or organization that provided the legal services.”

Gaitawe v. Mays, 2d Dist. Montgomery No. 25083,

2012-Ohio-4749, ¶ 10

, citing

Lewis v. Romans,

70 Ohio App.2d 7, 10

,

433 N.E.2d 622

(8th Dist. 1980) (awarding

fees directly to Legal Aid Society where tenant it represented did not incur any legal

expenses). Christen testified that he has only paid a portion of his counsel’s legal

fees. Accordingly, we do not find an abuse of discretion in the trial court ordering

Continental to pay the fee award to Christen’s counsel directly.

Continental’s third assignment of error is overruled.

Judgment affirmed and remanded for a final determination of the

amount owed. It is ordered that appellee recover from appellants costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to said court to carry this judgment

into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule

27 of the Rules of Appellate Procedure.

___ MARY EILEEN KILBANE, JUDGE

MARY J. BOYLE, P.J., and SEAN C. GALLAGHER, J., CONCUR

Reference

Cited By
11 cases
Status
Published
Syllabus
Landlords tenant R.C. 5321.05 R.C. 5321.16 security deposit attorney fees abuse of discretion. Defendants-appellants were landlords to plaintiff-appellee. Landlords appealed from the trial court order awarding statutory attorney fees to tenant in tenant's action to recover his security deposit wrongly withheld. After a bench trial, the court ruled in favor of tenant and a separate hearing was held for reasonable attorney fees under R.C. 5321.16(C). The trial court's award was upheld. Tenant submitted expert testimony that the fees were reasonable even though they far exceeded the amount of the security deposit where landlords' problematic conduct in discovery contributed to tenant's legal fees. Tenant was also permitted to recover fees expended in connection with all the claims and counterclaims because the claims were indivisible from tenant's claim to recover his security deposit. The trial court also did not err in ordering landlord to pay the fee award to tenant's counsel rather than directly to tenant.