[Cite as Shertok v. Wallace Group Gen. Dentistry For Today, Inc.,

.]

IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO

DANIEL SHERTOK, D.D.S., : APPEAL NOS. C-190457 C-190464 Plaintiff-Appellant/ : TRIAL NO. A-1702101 Cross-Appellee, : vs. O P I N I O N. : WALLACE GROUP GENERAL DENTISTRY FOR TODAY, INC., : and : NANCY WALLACE, : Defendants-Appellees/ Cross-Appellants. :

Civil Appeals From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Affirmed

Date of Judgment Entry on Appeal: September 9, 2020

Avonte Campinha-Bacote, for Plaintiff-Appellant/Cross-Appellee,

Jacobs, Kleinman, Seibel & McNally, LPA, and Mark J. Byrne, for Defendants- Appellees/Cross-Appellants. OHIO FIRST DISTRICT COURT OF APPEALS

MYERS, Judge.

{¶1} Daniel Shertok, D.D.S., appeals the trial court’s judgment awarding

$2,200 in attorney fees to Nancy Wallace and Wallace Group General Dentistry For

Today, Inc., (“Wallace Group”), upon its finding that Shertok and his attorney

engaged in frivolous conduct for attempting to file an unauthorized-practice-of-law

claim against Wallace. Wallace and Wallace Group appeal the trial court’s judgment,

arguing that the court should have awarded them $48,585.75 in attorney fees

incurred as a result of defending Shertok’s other claims, which they contend were

frivolous. For the reasons that follow, we affirm the trial court’s rulings on both

issues.

I. Factual Background {¶2} In September 2015, Wallace’s husband, William Wallace, D.D.S.,

executed an agreement with ddsmatch.com of Dental Capital Holdings, LLC, and its

broker Matthew Conrad to help with the sale of his dental practice, Wallace Group.

Around that time, Shertok was actively looking to buy a dental practice.

{¶3} After Dr. Wallace passed away in December 2015, Shertok expressed

interest in purchasing the Wallace Group, so Conrad arranged a meeting between

Shertok and Wallace. They met in January 2016 for Shertok to view the practice. In

late February 2016, Shertok made an offer of $655,000 to purchase Wallace Group.

Wallace rejected that offer and counter-offered $700,000. On March 2, Conrad sent

Shertok a letter of intent, unsigned by Wallace, listing a purchase price of $700,000.

The letter of intent indicated that the offer would expire on March 11. On March 9,

Conrad sent Shertok a second unsigned letter of intent with a later expiration date.

Shertok did not sign or return either letter of intent to Wallace.

2 OHIO FIRST DISTRICT COURT OF APPEALS

{¶4} Negotiations continued. On March 23, Shertok made a counter-offer

of $670,000 to purchase the practice. On March 30, Conrad responded to Shertok,

indicating that Wallace was firm on a $700,000 purchase price.

{¶5} On April 30, Conrad, Shertok, and Wallace met. During that meeting,

Wallace indicated that she wanted to raise the purchase price to $730,000 because

she was in the process of making some improvements to the office. At that point,

Shertok testified, his understanding from discussions with Wallace was that “the

purchase price was going to be $700,000 and then at that meeting [Wallace] seemed

to make it sound like she wanted it to be closer to $730,000 and that came as a

surprise to both me and [Conrad].”

{¶6} On May 27, Shertok made a final offer of $700,000. On June 2,

Conrad communicated to Shertok that Wallace said “it is ok to proceed and start

moving forward.” According to Shertok, it was at this point that Wallace accepted

his offer of $700,000. On June 10, Conrad emailed Shertok a third unsigned letter

of intent, which indicated a purchase price of $700,000.

{¶7} Throughout June, Wallace sent financial records to Shertok. Shertok’s

lawyer made changes to Conrad’s June letter of intent, and Shertok forwarded the

revised letter of intent to Conrad in July. By its terms, the third letter of intent would

expire on July 31. Wallace did not respond.

{¶8} On August 8, despite the fact that the third letter of intent already

expired, Shertok sent Conrad a notice that his offer would expire on August 12.

Shertok received no response.

{¶9} That was the last correspondence between the parties until Shertok

emailed Wallace on October 17, requesting reimbursement of his legal and

accounting fees. Shertok explained in his email, “[S]ince I conducted business with

The Wallace Group in good faith and did not receive the same in return, I am

requesting that I be reimbursed so that I can use the funds toward purchasing a

3 OHIO FIRST DISTRICT COURT OF APPEALS

practice from a truly motivated seller.” Wallace replied that she had never signed a

letter of intent but was willing to meet to work out the matter in a mutually beneficial

way.

{¶10} On November 14, Shertok emailed Wallace, demanding

reimbursement for expenses of $5,588.75 incurred as a result of her “bad-faith

business dealings.” Thereafter, Shertok’s attorney emailed Wallace twice to let her

know that Shertok would file suit against her if she failed to pay Shertok’s expenses.

II. Procedural Background

{¶11} In January 2017, Shertok filed in the municipal court a pro se complaint against Wallace and Wallace Group for breach of contract, breach of the

implied covenant of good faith and fair dealing, negligent misrepresentation, and

promissory estoppel. Wallace filed pro se motions to dismiss the complaint on

behalf of herself and Wallace Group. Shertok moved to strike Wallace Group’s

motion to dismiss on the ground that Wallace, a nonlawyer, could not represent the

Wallace Group corporation.

{¶12} In March 2017, counsel appeared in the case on behalf of Wallace and Wallace Group and adopted the arguments and pleadings asserted by both

defendants in their motions to dismiss. The defendants filed a memorandum in

opposition to Shertok’s motion to strike Wallace Group’s motion to dismiss, arguing

that Shertok’s motion was moot because counsel now represented Wallace Group.

{¶13} Because the matter exceeded the jurisdictional amount of the municipal court, it was transferred to the court of common pleas, which ordered the

case to mediation. In October 2017, the trial court struck Wallace Group’s motion to

dismiss because it was not filed by an attorney (it had been filed by Wallace) and

overruled Wallace’s motion to dismiss.

4 OHIO FIRST DISTRICT COURT OF APPEALS

{¶14} In November 2017, the defendants filed an answer to Shertok’s complaint. In December, the trial court scheduled the matter for trial in October

2018.

{¶15} In January 2018, three months after the trial court had stricken the Wallace Group’s motion to dismiss, Shertok filed a motion for leave to amend his

complaint to add an unauthorized-practice-of-law cause of action under R.C.

4705.07 against Wallace for her February 2017 filing of a motion to dismiss on behalf

of Wallace Group. The defendants filed a memorandum in opposition, asserting that

the trial court had no subject-matter jurisdiction over a claim brought against a

person pursuant to R.C. 4705.07 until the Supreme Court of Ohio has first made a

finding that the person had engaged in the unauthorized practice of law. Shertok

filed a reply in which he acknowledged that, in order for a party to commence an

action under R.C. 4705.07, the Supreme Court must first find that a violation has

occurred. He requested that the trial court hold his motion to amend in abeyance

pending a finding from the Supreme Court. Citing Shertok’s failure to comply with

R.C. 4705.07, the trial court overruled his motion for leave to amend.

{¶16} Over the next several months, the parties continued to engage in discovery and motion practice. Then, two weeks before the October 2018 trial date,

Shertok voluntarily dismissed the action.

{¶17} The defendants moved for attorney fees and costs as sanctions for frivolous conduct, pursuant to R.C. 2323.51. An evidentiary hearing on the

defendants’ motion was initially scheduled for January 17, 2019, and Shertok’s

counsel, Avonte Campinha-Bacote, responded that he could not appear on that date.

On January 28, the court mailed notice to counsel that the hearing would be

February 21, 2019.

{¶18} On February 13, 2019, a week before the hearing, Campinha-Bacote filed a motion to withdraw in which he asserted that he had provided Shertok with

5 OHIO FIRST DISTRICT COURT OF APPEALS

“copies of all documents sent, received, and generated * * * [and] the client has been

apprised of all pending hearing dates and his obligations relative to such dates.” At

that time, the only pending hearing date was February 21. Campinha-Bacote alleged:

“[Shertok] indicated that he would be securing counsel for the upcoming hearing,

which Counsel understood to be Attorney Mark Woloshin[,] who has been in

communication with [defense counsel]. It is also Counsel’s understanding that the

extension that was granted for the hearing was at the request of Attorney Woloshin

and/or his communications with Defendants’ counsel.” The defendants opposed

Campinha-Bacote’s motion to withdraw.

{¶19} Shertok was represented by counsel Mark Woloshin at the February 21, 2019 evidentiary hearing at which Campinha-Bacote did not appear. At the

hearing, defense counsel Mark Byrne testified that Frank Recker was the lawyer who

was originally contacted by Wallace and that Recker’s total fees in the case were

$14,868.75. Byrne testified that he became involved in the case in March 2017. He

testified as to his extensive experience and standing in the legal community and

noted that he regularly engaged in expensive, protracted civil litigation. He testified

that his hourly rate in this case was lower than his regular rate and lower than he had

been awarded when he was an expert witness. He testified that his own fees were

$32,820.

{¶20} Byrne testified to the work expended on behalf of the defendants, stating that “everything in the case was contested.” In his opinion, his and Recker’s

bills were “both reasonable, and the hourly rate and the services that were required

were necessary in order to adequately protect [Wallace and Wallace Group] in this

litigation.” Shertok did not cross-examine Byrne or object to Byrne’s testimony or

evidence.

{¶21} In March 2019, the trial court overruled Campinha-Bacote’s motion to withdraw as counsel. In its entry, the court noted that its decision on the defendants’

6 OHIO FIRST DISTRICT COURT OF APPEALS

R.C. 2323.51 frivolous-conduct motion remained pending and indicated that

Campinha-Bacote might be found liable for attorney fees and costs.

{¶22} Shertok filed a supplemental memorandum in opposition to the defendants’ motion for attorney fees. Shertok asserted that his conduct in moving

for leave to amend the complaint to add an unauthorized-practice-of-law claim was

not frivolous. Shertok attached to his memorandum an unsworn statement by

Campinha-Bacote, who alleged that he had alerted the court to Wallace’s

unauthorized practice of law by filing a motion to strike Wallace Group’s motion to

dismiss and by reporting her conduct to the bar:

I solicited the advice of several attorneys and peers experienced in

ethical issues, and also called the Columbus Bar Association’s ethics

hotline. I was advised by all of these individuals that reporting the

action to the Court and the Bar was either the correct thing to do, or an

acceptable thing to do.

{¶23} In addition, Shertok asserted that Campinha-Bacote had never been informed by the court or anyone that the January 17 hearing date was being

continued. Shertok stated that by the time Campinha-Bacote learned of the February

21 hearing date, Campinha-Bacote did not have ample time to object or move for a

continuance.

{¶24} The court held an additional hearing on May 9, 2019, to allow Shertok’s attorney to appear. At that hearing, the court limited evidence to that

relating to Shertok’s attempt to amend his complaint to add an unauthorized-

practice-of-law claim. The court indicated that it did not believe that Shertok’s other

claims were frivolous: “[W]ith regard to the contract claims, I think that they are

standard, and I don’t think they require damages or sanctions.” Shertok and

Campinha-Bacote testified at the hearing.

7 OHIO FIRST DISTRICT COURT OF APPEALS

{¶25} In July 2019, the trial court granted the defendants’ motion for attorney fees as it related to the attempt to amend the complaint to add an

unauthorized-practice-of-law claim. The court found that Shertok’s attempt to

amend his complaint was frivolous under R.C. 2323.51(A)(2)(a)(i) because it was an

attempt to harass the defendants, and under R.C. 2323.51(A)(2)(a)(ii) because he

had not first obtained the prerequisite determination by the Supreme Court of Ohio

that Wallace had engaged in the unauthorized practice of law. The court found that

Wallace, in filing a motion to dismiss on behalf of Wallace Group, had made a

common error “whereby an individual pro se co-defendant, not licensed to practice

law, will file an answer on behalf of herself and also file an answer on behalf of her

affiliated business entity.” The court noted that it had struck the motion to dismiss,

and found, therefore, that Wallace’s error in filing on behalf of her business “was

harmless and quickly rectified.” The court found that the defendants “were

financially adversely affected by having to respond to [Shertok’s] motion,” and

awarded the defendants $2,200 for their legal expenses related to Shertok’s motion.

The court further ordered that Shertok and Campinha-Bacote were jointly liable for

the amount awarded to the defendants. The defendants and Shertok now appeal.

{¶26} In six assignments of error, Shertok argues that the trial court erred (1) by awarding fees against him and his counsel when it found that attempting to

amend the complaint constituted frivolous conduct; (2) in awarding fees by failing to

use the lodestar method; (3) by not letting him object to fees; (4) by awarding

defendants an unreasonable amount of fees; (5) by relying on a hearing that included

impermissible testimony concerning a confidential mediation; and (6) in relying

upon the February 19, 2019 hearing, which violated his constitutional rights.

{¶27} In a single assignment of error, the defendants argue that the trial court erred by denying their motion for sanctions in the amount of $48,585.75 where

8 OHIO FIRST DISTRICT COURT OF APPEALS

the evidence demonstrated that all of Shertok’s claims against them were legally

groundless and therefore frivolous as defined in R.C. 2323.51(A)(2)(a)(ii).

III. Frivolous Conduct {¶28} We begin with Shertok’s first assignment of error and the defendants’ sole assignment of error because they challenge the trial court’s frivolous-conduct

findings.

{¶29} A motion for sanctions under R.C. 2323.51 requires a trial court to determine whether the challenged conduct constitutes frivolous conduct as defined

by the statute, and, if so, whether any party has been adversely affected by the

frivolous conduct. Riston v. Butler,

,

,

(1st Dist.). As relevant here, R.C. 2323.51(A)(2)(a) defines frivolous

conduct as conduct that satisfies at least one of the following conditions:

(i) It obviously serves merely to harass or maliciously injure another

party to the civil action or appeal or is for another improper purpose,

including, but not limited to, causing unnecessary delay or a needless

increase in the cost of litigation[;]

(ii) It is not warranted under existing law, cannot be supported by a

good faith argument for an extension, modification, or reversal of

existing law, or cannot be supported by a good faith argument for the

establishment of new law[.]

R.C. 2323.51(A)(2)(a)(i) and (ii).

{¶30} The standard of review to be applied to a trial court’s decision on a request for sanctions under R.C. 2323.51 depends on whether there are questions of

law or of fact or mixed questions of law and fact. Fed. Natl. Mtge. Assn. v.

Hirschhaut, 1st Dist. Hamilton No. C-180473,

, ¶ 26. We review

questions of law de novo. Riston at ¶ 22. On factual issues, we give deference to the

trial court’s factual determinations, which we will not disturb if they are supported

9 OHIO FIRST DISTRICT COURT OF APPEALS

by competent, credible evidence. Pitcher v. Waldman, 1st Dist. Hamilton No. C-

160245,

.

{¶31} The ultimate decision as to whether to grant sanctions under R.C. 2323.51 rests within the sound discretion of the trial court. 217 Williams, LLC v.

Worthen, 1st Dist. Hamilton No. C-180101,

; Gianetti v.

Teakwood, Ltd., 10th Dist. Franklin Nos. 17AP-606 and 17AP-618,

(“If a trial court finds frivolous conduct, the decision whether to assess a penalty

lies within the sound discretion of that court.”). An abuse of discretion occurs if the

trial court’s decision is “unreasonable, arbitrary, or unconscionable.” Blakemore v.

Blakemore,

,

(1983).

A. R.C. 2323.51(A)(2)(a)(ii) (Not Warranted by Law)

{¶32} The trial court found that Shertok’s attempt to amend his complaint to add an unauthorized-practice-of-law claim constituted frivolous conduct under R.C.

2323.51(A)(2)(a)(ii), as conduct that was “not warranted under existing law, cannot

be supported by a good faith argument for an extension, modification, or reversal of

existing law, or cannot be supported by a good faith argument for the establishment

of new law.” But the trial court declined to find that Shertok’s conduct in bringing

his remaining claims was frivolous. Because legally groundless frivolous conduct

involves a question of law, we review it de novo. Riston,

, 2002-

Ohio-2308,

. The test is whether no reasonable lawyer would

have brought the action in light of existing law.

.

{¶33} This standard requires courts to perform an objective review of the allegedly frivolous conduct. Calypso Asset Mgt., LLC v. 180 Indus., LLC, 2019-Ohio-

2,

(10th Dist.). “ ‘As a matter of law, an attorney’s ignorance of

the law or failure to investigate the law is not deemed objectively reasonable.’ ”

quoting Kozar v. Bio-Medical Applications of Ohio, Inc., 9th Dist. Summit No.

10 OHIO FIRST DISTRICT COURT OF APPEALS

21949,

, ¶ 17. A finding that counsel engaged in frivolous conduct is

justified where reasonable inquiry by counsel should have revealed the inadequacy of

a claim. Ron Scheiderer & Assoc. v. London,

,

(1998).

i. Unauthorized Practice of Law

{¶34} In January 2018, Shertok sought leave to amend his complaint to add a claim against Wallace for unauthorized practice of law under R.C. 4705.07(A)(3),

which provides: “No person who is not licensed to practice law in this state shall * *

* [c]ommit any act that is prohibited by the supreme court as being the unauthorized

practice of law.” He alleged that Wallace, a nonlawyer, committed the unauthorized

practice of law in February 2017 when she filed a pro se motion to dismiss on behalf

of Wallace Group, and that he suffered damage as a result.

{¶35} Under R.C. 4705.07(B)(2), “[o]nly the supreme court may make a determination that any person has committed the unauthorized practice of law in

violation of division (A)(3) of this section.” R.C. 4705.07(C)(2) allows civil recovery

for actual damages caused by the unauthorized practice of law, Greenspan v. Third

Fed. S. & L. Assn.,

,

,

, but

the statute requires a determination by the Supreme Court that a person has

committed the unauthorized practice of law before an action may be filed against the

person based upon that conduct. R.C. 4705.07(C)(2) provides:

Any person who is damaged by another person who commits a

violation of division (A)(3) of this section may commence a civil action

to recover actual damages from the person who commits the violation,

upon a finding by the supreme court that the other person has

committed an act that is prohibited by the supreme court as being the

unauthorized practice of law in violation of that division. The court

11 OHIO FIRST DISTRICT COURT OF APPEALS

in which that action for damages is commenced is bound by the

determination of the supreme court regarding the unauthorized

practice of law and shall not make any additional determinations

regarding the unauthorized practice of law.

(Emphasis added.) “Clearly, the statute requires a finding by the Supreme Court that

the unauthorized practice of law occurred, prior to commencement of a civil action

based on that finding.” Sarum Mgt., Inc. v. Alex N. Sill Co., 9th Dist. Summit No.

23167,

.

{¶36} Shertok argues that neither he nor his counsel was aware that a prerequisite for filing an unauthorized-practice-of-law claim was a determination by

the Supreme Court that Wallace had engaged in the unauthorized practice of law. He

asserts that his filing of a motion to add the claim without a prior finding by the

Supreme Court was a simple mistake. However, R.C. 2323.51 employs an objective

standard in determining whether a party or the party’s attorney has engaged in

frivolous conduct, without reference to what the individual knew or believed.

Walters v. Carter, 8th Dist. Cuyahoga No. 108555,

, ¶ 14; Southard

Supply, Inc. v. Anthem Contrs., 10th Dist. Franklin No. 16AP-545,

, citing State ex rel. Striker v. Cline,

,

,

, ¶ 21.

{¶37} Under the clear language of R.C. 4705.07(C)(2), no action could be commenced against Wallace for committing an act prohibited by the Supreme Court

as being the unauthorized practice of law before the Supreme Court made a finding

that Wallace had committed such an act. A reasonable inquiry by counsel would

have revealed the inadequacy of an unauthorized-practice-of-law claim against

Wallace in the absence of such a finding by the Supreme Court. See Ron Scheiderer

& Assoc.,

,

. In addition, as the trial court

pointed out, Shertok suffered no damage as a result of Wallace’s filing because the

12 OHIO FIRST DISTRICT COURT OF APPEALS

court had stricken the pleading well before Shertok tried to amend his complaint to

add an unauthorized-practice-of-law claim.

{¶38} Therefore, we agree with the trial court’s determination that the attempt to amend Shertok’s complaint to add an unauthorized-practice-of-law claim

without first obtaining a finding by the Supreme Court that Wallace engaged in the

unauthorized practice of law in violation of R.C. 4705.07(A)(3) constituted frivolous

conduct under R.C. 2323.51(A)(2)(a)(ii) because it was not warranted under existing

law, cannot be supported by a good faith argument for an extension, modification, or

reversal of existing law, and cannot be supported by a good faith argument for the

establishment of new law.1 We overrule Shertok’s first assignment of error.

ii. Breach of Contract and Breach of Implied Covenant of Good Faith and Fair Dealing {¶39} Next, we address the defendants’ arguments that Shertok’s conduct in filing claims for breach of contract, breach of the implied covenant of good faith and

fair dealing, negligent misrepresentation, and promissory estoppel constituted

frivolous conduct under R.C. 2323.51(A)(2)(a)(ii).

{¶40} The duty of good faith and fair dealing is integral to any contract, so the breach of that duty is integral to a breach-of-contract claim. Hillier v. Fifth Third

Bank, 2d Dist. Miami No. 2019-CA-21,

. “In essence, a claim

for breach of contract subsumes the accompanying claim for breach of the duty of

good faith and fair dealing.”

quoting Krukrubo v. Fifth Third Bank, 10th Dist.

Franklin No. 07AP-270,

. Because a claim for breach of the

covenant of good faith and fair dealing is not a separate action from a breach-of-

1Because we have determined that the trial court properly found the conduct in attempting to amend the complaint to be frivolous conduct as defined in R.C. 2323.51(A)(2)(a)(ii), we do not reach the trial court’s finding of the same conduct to be frivolous under R.C. 2323.51(A)(2)(a)(i).

13 OHIO FIRST DISTRICT COURT OF APPEALS

contract claim, we address those claims together. See Richardson v. Clinical

Computing P.L.C.,

,

, ¶ 39 (1st Dist.).

{¶41} The essential elements of a contract include an offer, acceptance, contractual capacity, consideration, a manifestation of mutual assent, and legality of

object and of consideration. R & A Lawn Care, LLC v. Back, 1st Dist. Hamilton No.

C-160682,

, citing Kostelnik v. Helper,

, 2002-

Ohio-2985,

, ¶ 16. The terms of an oral contract are often not as easily

discernable as the terms of a written contract.

citing Kodu v. Medarametia, 1st

Dist. Hamilton No. C-160319,

. Thus, the terms of an oral

contract may be determined based on the parties’ words, deeds, acts, and silence.

{¶42} Shertok’s breach-of-contract claim alleged that the defendants breached their contract with him by failing to sell the dental practice to him, contrary

to the defendants’ oral and written assertions. Shertok asserted that the defendants

breached their duty of good faith and fair dealing by failing to make honest

representations concerning the sale of the practice and by “recruiting, luring,

encouraging, or otherwise allowing [Shertok] to incur expense as it related to the sale

of Wallace Group.”

{¶43} Three letters of intent had been sent to Shertok, the final one expiring by its terms on July 31, 2016. Then Shertok, through his lawyer, revised the final

letter of intent. Neither Wallace nor Shertok signed any of the letters of intent, each

of which contained the following language:

Binding Effect. This Letter does not constitute a binding agreement by

any party to purchase or sell the Assets but merely expresses the

parties’ good faith intent to discuss, determine the feasibility of and

negotiate the terms [of] the Transaction.

{¶44} Because the letters of intent were nonbinding by their own terms and had not been signed by either party, there was no written contract between the

14 OHIO FIRST DISTRICT COURT OF APPEALS

parties. Even Shertok’s counsel acknowledged that no such written contract existed.

In his November 23, 2016 letter to Wallace, advising her to seek counsel, Campinha-

Bacote stated:

[S]uffice it to say that parties do not have to be in a contract with one

another to be subject to a lawsuit. A breach of contract (which is

probably what you are referring to) has nothing to do with the claims

we will be suing you and your practice for, because like you correctly

note, there was no written contract here. There are several laws which

govern the conduct of parties (without the need for a written contract),

as well as many other equitable claims such as promissory estoppel.

{¶45} According to Shertok, after he made an offer of $700,000, Conrad communicated that Wallace agreed that it was okay to then start moving forward,

and Conrad sent Shertok a letter of intent indicating a $700,000 purchase price. It

may have been reasonable for Shertok to believe that he and Wallace had an oral

agreement on a $700,000 purchase price and that Wallace breached the agreement

when she indicated that she was increasing the price to $730,000. Although

Shertok’s claims for breach of contract and breach of the covenant of good faith and

fair dealing may not have survived a summary-judgment motion or been successful

at trial, we cannot say that they were legally groundless.

iii. Negligent Misrepresentation

{¶46} “The elements of negligent misrepresentation are as follows: ‘One who, in the course of his business, profession or employment, or

in any other transaction in which he has a pecuniary interest, supplies

false information for the guidance of others in their business

transactions, is subject to liability for pecuniary loss caused to them by

their justifiable reliance upon the information, if he fails to exercise

15 OHIO FIRST DISTRICT COURT OF APPEALS

reasonable care or competence in obtaining or communicating the

information.’ ”

Veterinary Dermatology, Inc. v. Bruner, 1st Dist. Hamilton No. C-040648, 2005-

Ohio-5552, ¶ 40. A claim for negligent misrepresentation requires an affirmative

false statement. Id. at ¶ 41.

{¶47} In his complaint, Shertok alleged that the defendants, directly or through their agent/broker, failed to provide complete and accurate information to

him about the sale of their dental practice. Specifically, Shertok testified that when

Wallace mentioned that she was making improvements to the practice and trying to

bring in new doctors, he “believe[d] it was untrue that she was planning to sell me

the practice.” Whether or not Shertok’s negligent-misrepresentation claim would

have been successful, we cannot say that no reasonable lawyer would have brought

the claim.

iv. Promissory Estoppel

{¶48} A successful claim for promissory estoppel requires that “ ‘[t]he party claiming the estoppel must have relied on conduct of an adversary in such a manner

as to change his position for the worse and that reliance must have been reasonable

in that the party claiming estoppel did not know and could not have known that its

adversary’s conduct was misleading.’ ” Olympic Holding Co., L.L.C. v. ACE Ltd.,

,

,

, quoting Shampton v.

Springboro,

,

,

. “Thus,

promissory estoppel is an adequate remedy for a fraudulent oral promise or breach

of an oral promise, absent a signed agreement.” Id. at ¶ 40.

{¶49} In his complaint, Shertok alleged that the defendants made false representations to him regarding the sale, and their intent to sell, their dental

practice. He asserted that he was duped into thinking the defendants were selling

16 OHIO FIRST DISTRICT COURT OF APPEALS

the practice and incurred significant cost and expense in relying on their

representations. Because Shertok allegedly relied on Wallace’s communications, he

may have reasonably believed that she intended to sell him the practice, and he

incurred expenses in doing so.

{¶50} We cannot conclude that no reasonable lawyer would have filed the claims for breach of contract, breach of the covenant of good faith and fair dealing,

negligent misrepresentation, or promissory estoppel, so they were not legally

groundless under R.C. 2323.51(A)(2)(a)(ii). Therefore, we overrule the defendants’

sole assignment of error.

IV. Calculation of Fees

{¶51} In his second assignment of error, Shertok argues that the trial court erred by awarding attorney fees without using the lodestar method. In his fourth

assignment of error, he argues that the court erred by awarding an unreasonable

amount of fees. Because both assignments of error relate to the court’s calculation of

a reasonable award of attorney fees, we address them together.

{¶52} Under R.C. 2323.51(B)(1), sanctions for frivolous conduct may include reasonable attorney fees. 217 Williams, LLC, 1st Dist. Hamilton No. C-180101, 2019-

Ohio-2559, at ¶ 15. A trial court may make an award of attorney fees “against a

party, the party’s counsel of record, or both.” R.C. 2323.51(B)(4).

{¶53} “[T]here is a strong presumption that the reasonable hourly rate multiplied by the number of hours worked, which is sometimes referred to as the

‘lodestar,’ is the proper amount for an attorney-fee award.” Phoenix Lighting Group,

L.L.C. v. Genlyte Thomas Group, L.L.C., Slip Opinion No.

. A

reasonable hourly rate is the prevailing market rate in the community, taking into

consideration the complexity of the issues and the attorney’s experience. Id. at ¶ 11.

Although a trial court exercises broad discretion in applying the lodestar method, it

17 OHIO FIRST DISTRICT COURT OF APPEALS

must state the basis for the fee determination to allow for meaningful appellate

review. Calypso Asset Mgt., LLC,

,

.

{¶54} At the February 2019 hearing, defense counsel testified to the work expended on behalf of the defendants, about his own experience with protracted civil

litigation, and about the reasonableness of his rates and services. Shertok did not

cross-examine defense counsel or object to defense counsel’s testimony. Shertok

offered no expert testimony of his own regarding the reasonableness of the rates or

the hours spent. Nor did Shertok object to the admission of defense counsel’s

invoices or question the reasonableness of the hours expended or of the rates

charged.

{¶55} In its entry awarding attorney fees to the defendants, the trial court noted that defense counsel submitted detailed and itemized invoices for legal

services, and that Shertok did not object to the reasonableness of defense counsel’s

fees or invoices. The court incorporated into its entry copies of defense counsel’s

invoices and the court’s own detailed notations on those invoices which reflected the

hourly rate and number of hours worked. Therefore, we are persuaded that the court

appropriately stated the basis for its use of the lodestar method in determining the

award of fees. Given the uncontroverted evidence presented, we cannot say that the

court abused its discretion in awarding the amount of fees that it determined were

related to Shertok’s frivolous conduct. We overrule Shertok’s second and fourth

assignments of error.

V. Shertok’s Failure to Object to Fees

{¶56} In his third assignment of error, Shertok argues that the trial court erred by not allowing him to object to evidence of the defendants’ attorney fees. This

assertion is simply not supported by the record. Shertok was represented by counsel

at the February 2019 hearing and raised no objection to the evidence of the

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defendants’ attorney fees or to the reasonableness of the fees. And Shertok’s counsel,

Campinha-Bacote, appeared at the May 2019 hearing, but did not attempt to

examine defense counsel.

{¶57} The trial court gave Shertok more than enough opportunity to object

to the evidence. We overrule Shertok’s third assignment of error.

VI. Testimony about Mediation

{¶58} In his fifth assignment of error, Shertok argues that the trial court erred in relying on impermissible testimony at the February 2019 hearing from

defense counsel concerning a confidential mediation. He relies on R.C. 2710.03 and

2710.07 for the proposition that mediation communications are privileged and

confidential and generally inadmissible in evidence. Specifically, Shertok objects to

the following statement by defense counsel: “[B]ut it was almost as if it was a shake

down, Judge, because we were talking about * * *, a little bit more than * * *. Even

when we went to the mediation, they wanted * * * for a bill that was * * *?” However,

Shertok failed to object to the testimony at the hearing. He cannot complain on

appeal about an error he did not bring to the court’s attention at a time when the

error could have been avoided or corrected. Griffin v. Griffin, 1st Dist. Hamilton No.

C-180550,

, quoting LeFort v. Century 21-Maitland Realty Co,

,

(1987). Moreover, given that the trial court

awarded the defendants only $2,200 of their claimed $48,000 attorney fees, Shertok

cannot demonstrate that the trial court considered, let alone relied on, defense

counsel’s statement in awarding fees to the defendants. We overrule Shertok’s fifth

assignment of error.

VII. Notice of the February Hearing

{¶59} In his sixth assignment of error, Shertok argues that the trial court erred by “relying on the February 21, 2019 hearing, which violated [his]

19 OHIO FIRST DISTRICT COURT OF APPEALS

constitutional rights.” He asserts that the court should not have relied on evidence

given in the February hearing because his attorney, Campinha-Bacote, did not

receive sufficient notice of the hearing.

{¶60} However, the record demonstrates that Campinha-Bacote did receive sufficient notice of the February 21 hearing. Shertok testified that Campinha-Bacote

had apprised him of the February 21 hearing date in advance of the hearing and told

him that he would not be present at that hearing. Shertok also testified Campinha-

Bacote had spoken to Woloshin about a week or two before the February 21 hearing.

And Campinha-Bacote’s February 13 motion to withdraw indicated that he had

apprised Shertok of “all pending hearing dates.” The only pending hearing date at

that time was the February 21 hearing date.

{¶61} Campinha-Bacote testified that he received the court’s email notice of the February 21 hearing, but said that he “did not access that until after the hearing.”

Campinha-Bacote admitted that he knew of the February 21 hearing before it

occurred, and that he failed to take steps to continue the matter or to otherwise

contact the court. The court asked Campinha-Bacote, “[Y]ou didn’t think to call in

and talk to [courtroom personnel] or email him or anything like that? Because we

are pretty lenient in here about that[.]” Campinha-Bacote replied that he should

have simply filed a motion for continuance and he did not.

{¶62} The record demonstrates that Campinha-Bacote received sufficient notice of the February 21 hearing and that Shertok was represented by counsel at the

hearing. Consequently, Shertok has not demonstrated how the court’s hearing

violated his constitutional rights. We overrule Shertok’s sixth assignment of error.

IV. Conclusion {¶63} Having overruled each of Shertok’s assignments of error and the defendants’ sole assignment of error, we affirm the judgment of the trial court.

Judgment affirmed.

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ZAYAS, P.J., and CROUSE, J., concur.

Please note:

The court has recorded its own entry this date.

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