[Cite as Cintrifuse Landlord, L.L.C. v. Panino, L.L.C.,

.]

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

CINTRIFUSE LANDLORD, LLC, : APPEAL NO. C-240062 TRIAL NO. A-2000757 Plaintiff/Counterclaim Defendant- : Appellee, O P I N I O N. vs. :

PANINO, LLC, :

and :

NINO LORETO, :

Defendants/Counterclaim : Plaintiffs/Third-Party Plaintiffs- Appellants, :

and :

REMO A. LORETO, et al., :

Defendants, :

and :

CINCINNATI CENTER CITY : DEVELOPMENT CORPORATION,

Third-Party Defendant. :

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Reversed

Date of Judgment Entry on Appeal: November 6, 2024

Taft Stettinius & Holliser LLP, Nicholas J. Pieczonka and Jada M. Colon, for Plaintiff/Counterclaim Defendant-Appellee,

Croskery Law Offices and Robert Croskery, for Defendants/Counterclaim Plaintiffs/Third-Party Plaintiffs-Appellants. OHIO FIRST DISTRICT COURT OF APPEALS

ZAYAS, Judge.

{¶1} Appellants Panino, LLC, and Nino Loreto, (“Panino and Loreto”) appeal

the judgment of the Hamilton County Court of Common Pleas imposing sanctions

against them and their counsel under R.C. 2323.51 and Civ.R. 11. For the reasons that

follow, we reverse the judgment of the trial court.

I. Factual and Procedural Background

{¶2} The underlying action from which this appeal arises began in February

2020 when appellee Cintrifuse Landlord, LLC, (“Cintrifuse”) filed a “Complaint for

Replevin, Breach of Contract, and Conversion” against Panino and Loreto.1 In relevant

part, the complaint alleged that Cintrifuse leased certain real property to Panino for

the purpose of operating a restaurant and Loreto executed a guaranty of Panino’s

performance under the lease. The complaint further alleged that Panino then failed to

pay certain rents due under the lease agreement and removed certain personal

property in which Cintrifuse had a security interest under the lease agreement upon

vacating the premises after being given notice to leave. In response to the complaint,

Panino and Loreto filed certain counterclaims against Cintrifuse and third-party

claims against Cintrifuse’s parent company, Cincinnati City Center Development

Corporation (“3CDC”), related to fraud in the inducement and breach of contract

based on certain misrepresentations made about the availability of an outdoor

patio/bar area that was thought to be crucial to the success of the restaurant.

{¶3} Cintrifuse later requested summary judgment in its favor “on all claims

in the action.” The trial court granted the motion and ordered that a hearing be held

to ascertain Cintrifuse’s damages. After the damages hearing, the trial court found

1 Cintrifuse subsequently amended its complaint to add Remo and Patricia Loreto, Loreto’s parents, as defendants.

2 OHIO FIRST DISTRICT COURT OF APPEALS

that Cintrifuse was entitled to damages in the amount of $197,161.41. Panino and

Loreto appealed, and Cintrifuse cross-appealed, the trial court’s judgment.

{¶4} On appeal, this court reversed the trial court’s judgment, except as to

Panino and Loreto’s counterclaims for fraudulent inducement and fraudulent

omission, holding that genuine issues of material fact existed as to whether Cintrifuse

satisfied its obligations under the “best efforts” provision in the lease agreement

related to the patio/bar area. See Cintrifuse Landlord, LLC v. Panino, LLC, 2022-

Ohio-4104 (1st Dist.).

{¶5} Upon remand, the case was assigned to the same judge that had

previously granted summary judgment. At an initial hearing held in February 2023,

the trial court attempted to get the parties to settle the case. Panino and Loreto filed

a transcript of this proceeding in the trial court record. At the hearing, the court asked

counsel for Panino and Loreto (“counsel”) how much their claim was for. Counsel

attempted to state that the claim was for “a couple million,” when the trial court stated,

“Right. I already made the determination that there is no way. That’s all speculative.

How do you come up with a couple million dollars? How do you know what the profits

would have been had he added on this patio?” Counsel then was explaining the “two

avenues to damages,” when the trial court said, “People still go to McDonald’s without

patios.” Counsel then mentioned that the patio would have been really good during

Covid, and the court said, “Right. Still whether I have a patio or not my main

restaurant still should be making money. So you can’t say the lack of a patio. I’m just

telling you the problems you’re going to have.” Nevertheless, the court said, “But if

you want to go to trial, we’ll go to trial.”

{¶6} During further discussions, the court made other comments such as, “If

the food’s not good, then nobody’s going to eat it. A patio is not going to make it so,”

3 OHIO FIRST DISTRICT COURT OF APPEALS

and “You want everybody in the restaurant to be paid as if they were a nurse or working

at a hotel?” But the court also made clarifying remarks such as, “I’m just telling you

the problems you’re going to have,” or “I mean just me speaking out loud because I do

that all the time.” At one point, the court said, “If your clients are stuck on that 2

million dollar number then I’m not going to waste anymore [sic] time and we’ll set it

for trial and we’ll do the Motion in Limine and then I’ll start wiping things away and

we’ll come down to you’re still paying attorney fees. He’s still charging his client

attorney fees.” After further discussion, the court concluded, “Let’s set it for Motion

in Limine. Everybody file their Motion in Limine and I’ll tell you what you can and

can’t present at trial and that may change the number drastically.”

{¶7} In October 2023, the parties stipulated to the dismissal, with prejudice,

of Cintrifuse’s claims against Panino and Loreto. Consequently, the only claims

remaining thereafter were Panino and Loreto’s counterclaims against Cintrifuse for

breach of contract and abuse of process, and against 3CDC for conspiracy to commit

abuse of process.

{¶8} On October 30, 2023, the parties appeared for what was supposed to be

a trial on the remaining claims. At the start of the proceeding, the court asked counsel,

“[D]id you want to say something?” Counsel responded:

I do. We had an off-the-record discussion in open court earlier

today. During that discussion the court indicated the following:

Number one, that it valued my client’s case as a ‘goose egg.’

Number two, the Court believed it had read everything and would not

change its finding whatever evidence was presented, and it knew as

much about this case as Counsel. Number three, the Court believed it

was right in finding on a breach of contract action that the Court of

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Appeals was wrong, that it wished the case had gone to the Supreme

Court. Number four, that even if the jury came back with a sizeable

verdict the Court had the power of remitter and would not hesitate to

use it, and even if it was reversed it would drag on for years.

{¶9} The court responded, “I agree.” Counsel then expressed to the court

that the court’s off-the-record comments were violative of “Judicial Canons Rule

2.10(A) and (B),” and therefore the judge could not be impartial and “you should

recuse yourself.” The following exchange then occurred:

Court: Those were not impartial [sic]. Those were my findings

of the case law, the facts in this case. Those were nothing

impartial [sic]. I have nothing against your client or

whoever the Plaintiff is. It does not matter.

Counsel: Your honor –

Court: Let me speak. You’re accusing me of something that I –

basically you want me off this case because you know that

you need somebody in your favor and I’m not in

anybody’s favor. I read the facts. I read the case. And

I’m telling you I already made the ruling. That’s why I

made the ruling that summary judgment was

appropriate, so me saying that is nothing new. I’ve

already said that in my decision a while ago. So

everything you said, there’s nothing new. Everything you

said is absolutely correct. It’s not bias. It’s just my

opinion of the case and I’m allowed to have that opinion.

5 OHIO FIRST DISTRICT COURT OF APPEALS

Counsel: Your honor, the difference is this. For four of those five

statements you might be accurate, but to make a

statement whatever is presented in evidence during the

case will not change your mind is a statement that you

cannot be impartial.

Court: Here’s what you forget, Counsel. I don’t have to make

that decision. I’m not going to make a decision. The jury

is going to make that decision. So what I think really does

not matter. The jury is going to make that decision.

...

Counsel: I respectfully submit, your Honor, that that comment that

whatever comes in as evidence you are not going to

change your mind is not consistent with impartiality, and

that, therefore, you should recuse yourself. And if you’re

not willing to do that, Your Honor –

Court: I’m not willing to do it because I’m not making the

decision. It’s not my decision to make.

The Court of Appeals already told me it’s not my decision

to make; it’s the jury’s decision to make. So it doesn’t

matter what I think. I will follow the rules. I will allow

the evidence in as I see fit. But I’m not making the

decision as to who wins this case. The jury is. Do you

agree with me?

Counsel: No, sir, I do not.

Court: Who is going to make the decision?

6 OHIO FIRST DISTRICT COURT OF APPEALS

Counsel: Here’s why I disagree with you. I disagree with you

because the comments that you made in open court and

off the record this morning, that comment itself violates

Rule. 2.10.

Court: I disagree. But if you want to take me to the Supreme

Court, please do so.

Counsel: In that case I would need a continuance of a day to file an

Affidavit of Disqualification with the Supreme Court.

Court: Counsel.

P. Counsel: We’re here to try this. We want to finally bring this case

to an end.

Counsel: I want to try it too.

P. Counsel: I can’t prevent him from doing it. I don’t agree that there

is any basis.

Court: I stick by what I said. And if the Supreme Court says I’m

wrong for saying that, I’ve already made that decision.

I’ve already written it down and it went to the Court of

Appeals. They told me to let the jury decide. That’s

exactly what I’m going to do. So if I already made that

decision, what is improper about what I said?

Counsel: As I said, Your Honor. I believe that what you said is

violative of the appearance of impartiality. I could be

wrong.

Court: That’s what happens all the time. When people feel like

they’re at a disadvantage and they may lose they want to

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attack the messenger rather than attack the case. And I

get that all the time. I’m okay with that. Attack the

messenger. I mean, get me kicked off the case and start

over.

Counsel: Your Honor, I believe we’re going to win. What I’m

worried about is if we win the case and we’re faced with a

directed verdict or a remitter or something that comes in

because you have already made up your mind, and you’ve

already said you made up your mind.

...

Counsel: It’s not that I don’t like what you’re thinking, Your Honor.

It’s that I believe that what you are saying is inconsistent

with the appearance of impartiality. That’s a distinction.

I’m not saying anything against you, but I don’t know you

very well. I’ve had a lot of fine play with many judges over

many years and I’ve never filed an affidavit of

disqualification, but I believe in this case its warranted. I

hate to do that. I’d rather go to trial too, but I just believe

it would not be fair to my clients to go to trial knowing I

have a judge that whatever is said at trial is not going to

change his mind, that believes the case is worth a goose

egg and is going to hold the power of remitter over their

heads and also say this could drag on for years.

{¶10} The court and counsel then engaged in further back-and-forth about

whether everything the trial court said was “true.” The court said that the case was

8 OHIO FIRST DISTRICT COURT OF APPEALS

going to “drag on for another year,” and counsel said, “I hope not. I hope we can get

you off the case quickly and get it retried.” After the court further explained its point

of view on the case, it said, “If you’re asking for a continuance, then ask for the

continuance.” Counsel then requested a continuance “long enough to file an Affidavit

of Disqualification,” and Cintrifuse’s counsel opposed the continuance. The court then

stated, “I have no choice. If he wants me off, he wants me off. I just think it’s a delay

tactic, but that’s my opinion.” The court again explained, “I was telling you what I

have the power of, which is all accurate, to help you see where we are and where

everybody else is. Maybe then we would come to a resolution that both parties are not

happy with but they’re willing to walk away with.” Counsel again stated his belief that

the court should recuse itself based on the earlier comments and said, “Since you’re

unwilling to do that, it’s my duty as an officer of the Court, as I see it, to file an Affidavit

of Disqualification. They may tell me I’m wrong. I’ve been told I’m wrong before.”

Cintrifuse’s counsel then noted that it “may be filing a motion this is just being done

to interpose delay, so we may be filing a motion to ask for attorney fees paid for having

to prepare for trial, ready to go and just another again moving target which we’ve been

dealing with this entire litigation.” Counsel responded, “Believe me, we don’t want to

delay this trial.” The court then noted that it had jurors ready to go, but concluded by

saying, “File your motion.”

{¶11} On November 1, 2023, the Ohio Supreme Court entered an order

depriving the trial judge of any authority to preside over the proceedings until the chief

justice ruled on the affidavit of disqualification, filed on October 31, 2023, which

sought to disqualify the judge from the matter.

{¶12} On November 2, 2023, Cintrifuse filed a motion for sanctions against

Panino, Loreto, and counsel for “frivolous conduct and delay tactics,” based on what

9 OHIO FIRST DISTRICT COURT OF APPEALS

occurred at the October 30 hearing, under Civ.R. 11 and R.C. 2323.51. The motion

asserted that the “day-of-trial demand” that the trial court recuse itself and that the

trial be continued while defendants file an affidavit of disqualification was “improper

and clearly made for the improper purpose of delay and forum shopping and [was] not

supported or warranted under existing law.”

{¶13} On December 11, 2023, the Ohio Supreme Court entered a decision

finding that counsel did not establish that the trial judge should be disqualified from

the matter. The Court found that counsel failed to establish that the judge would not

ultimately accept the authority of this court and failed to establish that the off-the-

record remarks demonstrated a “fixed anticipatory judgment” requiring

disqualification. Further, the Court found that whether the judge violated the Judicial

Canons was “beyond the scope” of the chief justice’s authority to decide in an affidavit

of disqualification.

{¶14} The parties thereafter appeared before the trial court on December 20,

2023. When discussing setting a hearing on the motion for sanctions, Cintrifuse’s

counsel said, “I don’t think it’s going to be much in the way of evidence. I think we can

stipulate the evidence, which would be transcript, the affidavit and our attorney fees.”

The judge responded, “We already know that the affidavit is frivolous, so now it’s just

a matter of how much I’m going to give you for your attorney fees.” Panino and

Loreto’s counsel then said, “Your honor, I would contest the affidavit was filed

frivolous [sic]. The actual finding was that it did not rise to the standard of meeting

the burden of proof.” The judge responded, “You’re going to keep arguing with me,

I’m just going to keep making my decision.” Regarding the hearing, counsel said, “I

don’t need a hearing on the sanctions. I’ll tell you that right now. If they want one

obviously they’re entitled to one, but I don’t need one. And what their fees are, they

10 OHIO FIRST DISTRICT COURT OF APPEALS

are.” Counsel then started to raise an issue related to bifurcation of the proceedings

at trial. The judge then said, “There are no more problems. So you want more delay

tactics. Is that what you’re doing? You’re just going to keep delaying this and every

time I’m going to be right because I do read the law and I do do things by the law. As

the Supreme Court said, I did everything right. So keep delaying. I’ll keep giving them

fees. I don’t care. So file whatever motions you need.” After further back-and-forth,

the court confirmed that counsel was waiving the hearing on the motion for sanctions,

and counsel agreed, saying “Yes. I don’t need a hearing.”

{¶15} After further responsive briefing, the trial court granted the motion for

sanctions on January 4, 2024. The judge found that counsel’s request for him to

disqualify himself from future proceedings was done for the purpose of improper delay

in violation of Civ.R. 11 and R.C. 2323.51. The judge then found that Cintrifuse

incurred attorney fees in the amount of $40,521.94 “as a result of the violations of

Civ.R. 11 and R.C. 2323.51,” and ordered that Panino, Loreto, and their counsel “jointly

and severally” pay Cintrifuse this amount “immediately” upon entry of the order. The

court expressly found that this amount was reasonable based on the affidavit from

Nicholas J. Pieczonka.

{¶16} The affidavit of Pieczonka asserted that his law firm (1) advised

Cintrifuse, (2) prepared for the trial scheduled for October 30, 2023, and (3) drafted,

filed, and litigated a motion for sanctions, and claimed that only 25 percent of the time

spent preparing for trial “will not be wasted.” The affidavit then opined that the

amount requested based on the attached time report—$40,521.91—was reasonable.

{¶17} On January 11, 2024, the Ohio Supreme Court again entered an order

depriving the trial judge of authority to preside over the matter based on another

11 OHIO FIRST DISTRICT COURT OF APPEALS

affidavit of disqualification that was filed on January 10, 2024, requesting that he be

disqualified from presiding over the matter.

{¶18} That same day, Panino and Loreto filed a motion in the trial court to

stay enforcement of the sanctions order “until the sanctions can be appealed at the

conclusion of trial.” The trial court denied the motion on January 22, 2024, several

days after the Ohio Supreme Court’s order depriving the trial judge of authority to

preside over the matter was filed in the trial court record (the order was filed in the

trial court on January 17, 2024).

{¶19} Panino and Loreto thereafter filed a notice of appeal on January 25,

2024, from the trial court’s judgment ordering sanctions. That same day, they filed a

motion with this court seeking a stay of the trial court’s order granting sanctions. This

court granted the stay on February 15, 2024, conditioned on the posting of a

supersedeas bond.

{¶20} The result of the second affidavit of disqualification that was filed is not

in the record before this court.

II. Law and Analysis

{¶21} Panino and Loreto now present three assignments of error to this court,

each asserting various ways in which the trial court supposedly erred in awarding

sanctions against them and their counsel. However, because we ultimately hold that

the second assignment of error is dispositive of the appeal, we address the second

assignment of error first.

{¶22} In their second assignment of error, Panino and Loreto argue, in

essence, that the trial court erred in imposing sanctions against them and their counsel

where the record does not reveal that they took any actions for the purpose of causing

unnecessary delay.

12 OHIO FIRST DISTRICT COURT OF APPEALS

{¶23} “Ohio law provides an aggrieved party with two separate mechanisms

to recover attorney fees for frivolous conduct.” Feagan v. Bethesda North Hosp.,

(1st Dist.), citing Marconi v. Savage,

(8th

Dist.). “‘“Although both authorize an award of attorney fees as a sanction for frivolous

conduct, they have separate standards of proof and differ in application.”’”

quoting

. We address each mechanism in turn.

A. Frivolous Conduct Under R.C. 2323.51

{¶24} “First, R.C. 2323.51(B)(1) authorizes a court to award court costs and

reasonable attorney fees to a party adversely affected by ‘frivolous conduct’ in a civil

action or appeal.” Id. at ¶ 10. Relevant to our purposes here, frivolous conduct under

this statute includes a party’s assertion of a position or the taking of any action in

connection with the civil action when the position or action is taken for the improper

purpose of causing unnecessary delay. R.C. 2323.51(A)(1)(a) and (A)(2)(a)(i).

{¶25} “‘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 question of

law or fact or mixed questions of law or fact.’” Feagan,

(1st

Dist.), citing Fannie Mae v. Hirschhaut,

, ¶ 26 (1st Dist.). “‘We review

purely legal questions de novo.’”

citing

. “‘On factual issues,

we give deference to the trial court’s factual determinations, which will not be

disturbed if they are supported by competent, credible evidence.’”

citing

. “‘The ultimate decision as to whether to grant sanctions under R.C.

2323.51 rests within the sound discretion of the trial court.’”

citing

. “‘An abuse of discretion occurs if the trial court’s decision is ‘unreasonable,

arbitrary, or unconscionable.’”

citing

.

13 OHIO FIRST DISTRICT COURT OF APPEALS

{¶26} In this case, the trial court found that “the request that the Court

disqualify itself from future proceedings in this matter” was frivolous conduct under

R.C. 2323.51 as it was done for the purpose of causing unnecessary delay.

{¶27} However, after a thorough review of the record, we fail to find any

evidence to support the determination that counsel’s request was made for the

improper purpose of causing unnecessary delay.

{¶28} Notably, there is no evidence in the record to indicate that Panino and

Loreto were not appropriately prepared for trial that day. Compare A.H. v. T.H.,

(8th Dist.). Rather, the record shows that, leading up to October 20,

2023, (the date of the request for recusal on the date of trial) Panino and Loreto filed

an expert report in compliance with the trial court’s scheduling order, filed a

supplemental expert report, engaged in extensive motion practice and responsive

briefing, engaged in depositions, filed proposed jury instructions, and filed several

pretrial statements in advance of trial that included exhibit and witness lists, with the

most recent being filed just a few days prior to the date set for trial (filed on October

25, 2023).

{¶29} Further, the record does not show any discovery issues or anything that

could infer a need for a delay, and there is no indication in the record of any benefit

gained by a delay of the proceedings. Compare 217 Williams, LLC v. Worthen, 2019-

Ohio-2559 (1st Dist.). For example, there is no indication that counsel was attempting

to use the delay as leverage to advance settlement negotiations.

{¶30} Rather, the record shows that counsel made the request for the trial

court to recuse itself based on comments the trial court made immediately prior to

going on the record the day the trial was scheduled. While this conduct undoubtedly

caused some delay, there is nothing in the record to support that the request was made

14 OHIO FIRST DISTRICT COURT OF APPEALS

for the purpose of causing unnecessary delay. See Wagner v. Cormeg, Inc., 2011-

Ohio-1205 (5th Dist.).

{¶31} Consequently, the record before us lacks competent, credible evidence

from which the trial court could have found that counsel for Panino and Loreto acted

for the purpose of causing unnecessary delay. Therefore, we hold that the trial court

abused its discretion in awarding sanctions against Panino and Loreto and their

counsel under R.C. 2323.51.

B. Sanctions Under Civ.R. 11

{¶32} The second mechanism to recover attorney fees for frivolous conduct is

an award of sanctions under Civ.R. 11. “In ruling on a motion for sanctions made

pursuant to Civ.R. 11, a court ‘must consider whether the attorney signing the

document (1) has read the pleading, (2) harbors good grounds to support it to the best

of his or her knowledge, information, and belief, and (3) did not file it for the purposes

of delay.’” Feagan,

(1st Dist.), citing Sigmon v. Southwest Gen.

Health Ctr.,

(8th Dist.). “The rule ‘employs a subjective bad-

faith standard to invoke sanctions by requiring that any violation of Civ.R. 11 must be

willful.’”

citing Evans v. Quest Diagnostics, Inc.,

(1st Dist.).

“The standard of review to be applied to a trial court’s decision on a request for

sanctions under Civ.R. 11 is an abuse of discretion.”

citing Fannie Mae, 2019-

Ohio-3636, at ¶ 43 (1st Dist.).

{¶33} The trial court awarded sanctions under Civ.R. 11 based on its same

finding that counsel’s request that the court disqualify itself from future proceedings

was done for the improper purpose of delay. For the same reasons outlined above, the

trial court similarly abused its discretion in awarding sanctions under Civ.R. 11 as the

record does not support that counsel acted for the purpose of causing improper delay.

15 OHIO FIRST DISTRICT COURT OF APPEALS

Consequently, we similarly hold that the trial court abused its discretion in awarding

sanctions against Panino, Loreto, and their counsel under Civ.R. 11.

III. Conclusion

{¶34} Based on all the foregoing, we sustain the second assignment of error

and reverse the judgment of the trial court awarding sanctions against Panino, Loreto,

and their counsel.

{¶35} Further, based on our resolution of the second assignment of error, the

remaining assignments of error are moot, and we decline to address them. See App.R.

12(A)(1)(c); Evans v. Walmart Defiance Supercenter,

(3d

Dist.), quoting Sullinger v. Reed,

(3d Dist.) (“‘Put differently,

an assignment of error is moot when an appellant presents issues that are no longer

live as a result of some other decision rendered by the appellate court.’”); State v.

Gideon,

.

Judgment reversed.

BOCK, P.J., and CROUSE, J., concur.

Please note:

The court has recorded its own entry this date.

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