COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 67170 TERESE BUCK : : Plaintiff-appellant : : JOURNAL ENTRY vs. : and : OPINION GEORGIAN MANOR INVESTMENTS : : Defendant-appellee : : : DATE OF ANNOUNCEMENT OF DECISION : CHARACTER OF PROCEEDING : Civil appeal from : Lakewood Municipal Court : Case No. 90-CV-1492 JUDGMENT : REVERSED AND REMANDED. DATE OF JOURNALIZATION : _______________________ APPEARANCES: For plaintiff-appellant: CHARLES GRUENSPAN Attorney at Law 3570 Warrensville Center Road Suite 103 Shaker Heights, Ohio 44122 For defendant-appellee: MARK M. GEORGE Attorney at Law 9119 Brookpark Road Parma, Ohio 44129 - 2 - DONALD C. NUGENT, J.: Plaintiff-appellant, Terese Buck, timely appeals the decision of the Lakewood Municipal Court, which entered judgment in her favor in the amount of $895, said amount being double the amount of her security deposit, but denied appellant's request for attorney fees and overruled her motion for sanctions. Appellant was a tenant at the Georgian Manor apartment building when defendant-appellee, Georgian Manor Investments, purchased the building. At trial, it was undisputed that appellant was a tenant of appellee and that appellant had deposited $430 as a security deposit with the previous owners. Appellant had also paid appellee $35 for one month's rental of a garage parking space, but access to the space was limited to thirteen days due to building code violations. Subsequently, appellant terminated the lease agreement and requested a refund of her security deposit and one- half of the money paid for the parking space. However, appellee refused to refund the security deposit or one-half of the money paid for the parking space. Appellant then initiated the present action through the filing of a four-count complaint against her former landlord, defendant- appellee Georgian Manor Investments. Counts one through three, respectively, alleged diminution of value of premises, retaliatory - 3 - conduct and constructive eviction. In count four, appellant alleged that appellee wrongfully withheld appellant's security deposit in violation of R.C. 5321.16. Appellee denied all pertinent allegations in appellant's complaint through its answer. Subsequently, appellee filed an amended answer and counterclaim for lost rent and damages to repair the apartment. Following several continuances, the case was called for a bench trial on May 23, 1991, at which time counsel for appellee withdrew its counterclaim. The case proceeded on appellant's four- count complaint. On May 31, 1991, the trial court issued its 1 decision and judgment entry finding in favor of appellant in the amount of $895 on her claim for unlawful refusal to return a security deposit. The trial court, however, determined, "[b]ased on the evidence presented, the court finds that the plaintiff is not entitled to attorney fees." The trial court also found in favor of appellee on counts one through three of appellant's complaint. Subsequently, on June 10, 1991, appellant filed her request for separate findings of fact and conclusions of law. Each party was then ordered to submit proposed findings of fact and conclusions of law. Thereafter, on June 21, 1991, appellant filed a motion for sanctions and attorney fees pursuant to Civ.R. 11 and R.C. 2323.51. 1 The May 31, 1991 judgment entry, and subsequent findings of fact and conclusions of law, was not time-stamped until March 9, 1994, pursuant to this court's order of December 16, 1993. - 4 - In her motion, appellant raised seventeen instances of alleged frivolous conduct on the part of appellee and counsel. On March 16, 1992, appellant filed a motion to compel discovery and to deem all unanswered requests for admission as admitted by appellee. Appellant asserted that the primary purpose of the requests for discovery was to gather evidence to support appellant's motion for sanctions and to establish whether appellee used forged and fraudulent evidence at trial. On August 24, 1992, the trial court filed its findings of fact 2 and conclusions of law. Also on that same date, in a separate judgment entry, the trial court overruled appellant's motion for 3 sanctions and to compel discovery. This matter is now properly before this court on appeal. Appellant raises the following assignments of error for our review: I. THE TRIAL COURT ERRED IN CONCLUDING AS A MATTER OF LAW THAT PLAINTIFF IS NOT ENTITLED TO REASONABLE ATTORNEY FEES. II. THE TRIAL COURT ERRED IN OVERRULING PLAINTIFF'S MOTION FOR SANCTIONS. III. THE TRIAL COURT ERRED IN OVERRULING PLAINTIFF'S MOTION TO COMPEL DISCOVERY. IV. THE TRIAL COURT ERRED IN CONSIDERING DEFENDANT'S ANSWER, WHICH WAS FILED OUT OF RULE, WITHOUT LEAVE OF COURT, AND WITHOUT SERVICE ON THE OPPOSING PARTY. I. 2 See footnote 1, infra. 3 Id. - 5 - In appellant's first assignment of error, appellant complains the trial court erred in failing to award her attorney fees on her claim for wrongfully refusing to return her security deposit in violation of R.C. 5321.16, which provides in part: (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 the provisions of R.C. 5321.16(B) and (C) are mandatory if a landlord wrongfully withholds a portion of a tenant's security deposit. Klemas v. Flynn (1993), 66 Ohio St.3d 248, 251; Smith v. Padgett (1987), 32 Ohio St.3d 344, paragraph three of the syllabus. In Padgett, the supreme court held that "R.C. 5321.16(B) & (C) do not require bad faith on the part of the - 6 - landlord. *** We will not inject a requirement of bad faith into this statute where the legislature has chosen not to do so." Id. at 349. In the present case, the trial court entered the following conclusions as to appellant's claim for return of her security deposit: 4. The damage to the plaintiff's apartment, as claimed by the defendant, did not exceed ordinary wear and tear. Consequently, the defendant was not entitled to retain the plaintiff's security deposit. The plaintiff is entitled to the return of her security deposit in the amount of $430.00 and one half of the parking garage fee in the amount of $17.50 for a total of $447.50. In accordance with Section 5321.16 of the Ohio Revised Code, the plaintiff is entitled to an equal amount as damages, for a total of $895.00. 5. The plaintiff is not entitled to an award of attorneys fees. To begin with, the plaintiff prevailed on only one (1) of four (4) claims, and the smallest of the four (4) claims. In addition, the plaintiff failed to present evidence in accordance with the requirements of Swanson v. Swanson 48 Ohio App.2d 85 (1976). The requirements of Swanson, supra, are applicable to landlord/tenant cases. Cuyahoga Metro. Housing Auth. v. Watkins, 23 Ohio App.3d 20 (1984). Even assuming that the plaintiff met the evidentiary requirements of Swanson, supra, the Court finds that there was no intentional or malicious conduct by the defendant. The record shows that the defendant acted in good faith, even though incorrectly, by failing to timely refund the security deposit to other plaintiff (sic). Moreover, the defendant's attempts to later refund the security deposit was (sic) refused by the plaintiff. While the - 7 - defendant maybe (sic) liable for double the amount of the security deposit if not timely refunded, such good faith may preclude an award of attorney's fees. Forquer v. Colony Club, 26 Ohio App.3d 178, 180 (1985). A review of the record reveals that appellant did attempt to present evidence concerning attorney fees. The trial court, however, denied admission into evidence of a bill for attorney fees, ruling that "[i]n the event that the court determines that the plaintiff is entitled to attorney's fees, which obviously will not be determined until there is an issue of liability resolved, we'll set this for a separate hearing." (Tr. at 4). Appellant now contends it was error for the trial court to deny its claim for attorney fees. Appellee counters by arguing that an award of attorney fees cannot be rendered absent a finding that the landlord acted in bad faith in wrongfully withholding a tenant's security deposit. This court, however, has rejected a similar contention and held that an award of attorney fees, pursuant to R.C. 5321.16(B) and (C), is not contingent on a showing of bad faith in wrongfully withholding a security deposit. In Trepka v. Blake (Jan. 21, 1993), Cuyahoga App. No. 61633, unreported, this court held: In the instant case, the trial court concluded that the appellee wrongfully withheld $488.17 of the tenants' security deposit. Thus, pursuant to the double damage provision contained in R.C. 5321.16(C), the trial court properly awarded the appellee $976.34. However, we conclude that the trial court improperly refused to award and determine the amount of reasonable attorney fees pursuant to - 8 - R.C. 5321.16(C). Our decision is compelled by the Ohio Supreme Court's interpretation and application of R.C. 5321.16(C) contained in Smith, supra [and now in Klemas, supra], where it was held that if a trial court determines that a landlord has wrongfully withheld a portion of the tenant's security deposit, it shall determine a reasonable amount of attorney fees to be awarded on the basis of the evidence presented. Consequently, this cause must be remanded to the trial court for a hearing on the issue of the amount of attorney fees to be awarded the appellants. Id. at 6; see, also, Perry v. Guttman (Sep. 28, 1988), Hamilton App. Nos. C-870530 & C-870568, unreported; and Ulle-Mance v. Berardinelli (Sep. 30, 1993), Lake App. No. 92-L-210, unreported. Thus, the trial court need only determine that a landlord has wrongfully withheld a portion of a tenant's security deposit to entitle the tenant to attorney fees. There is no requirement that the landlord act in bad faith. Conversely, a showing of good faith is no defense. The trial court further noted that "subsequent to the commencement of the action the defendant made an offer to return the plaintiff's security deposit and an equal amount. This offer was refused by plaintiff's counsel on the grounds that the plaintiff's attorney's fees were not included." As a result, the trial court concluded that "such good faith may preclude an award of attorney fees. Forquer v. Colony Club (1985), 26 Ohio App. 178, 180." The trial court's reliance on Forquer is misplaced. In Forquer, the court held that "the landlord may relieve himself of - 9 - responsibility for attorney fees if the failure to make timely payment of the security deposit is the result of oversight, and he immediately, upon learning of the oversight, makes payment both of the amount wrongly withheld and the statutory penalty (an amount equal to the amount wrongfully withheld)." Id., paragraph one of the syllabus. However, in Forquer, the court upheld an award of attorney fees since the "defendants attempted to avoid their statutory obligation ***, which resulted in this litigation, which defendants vigorously defended." Id. at 180. Likewise, in the present case, there is no evidence that appellee made immediate payment of the security deposit plus the statutory payment; rather, appellee offered to return the security deposit and an equal amount after appellant had retained the services of an attorney and after commencement of the action. Such eleventh hour maneuvering should not be sanctioned by failing to award reasonable attorney fees. Moreover, appellee vigorously defended the action and prosecuted a counterclaim up to the date of trial. We pause to add that damages afforded by R.C. 5321.16 "serve to compensate injured tenants *** for the time and inconvenience [as well as cost] of having to sue for the recovery of money wrongfully withheld. In addition, the possibility of double damages [including attorney fees] creates an incentive for landlords to comply with the law." Klemas, supra, at 251-52. We agree that the trial court was correct in noting that the guidelines of Swanson v. Swanson (1976), 48 Ohio App.2d 85, should - 10 - be utilized in determining a reasonable award of attorney fees. Cuyahoga Metro. Housing Auth., supra. We add, however, that a reasonable award of attorney fees may be rendered for defending a landlord's counterclaim if such award "relate[s] solely to the fees attributable to the tenant's security deposit under R.C. 5321.16." Lacare v. Dearing (1991), 73 Ohio App.3d 238, 241, quoting Padgett, supra; and, see, also, Opsomer v. Gray (May 28, 1986), Henry App. No. 7-84-20, unreported, wherein the court stated: We do not adhere to defendant's argument that attorney fees are not recoverable when arising out of a landlord's counterclaim against the tenant. Such a holding would subvert the intent of R.C. Chapter 5321, commonly known as the Ohio Landlord-Tenant Act. In order for the tenant to benefit from his claim, he must necessarily rebut the allegations of the landlord's counterclaim, thus making the two actions virtually indivisible. To prohibit the recovery of attorney fees expended in the defense of a landlord's counterclaim would effectively nullify the legislative intent of providing a means of redress to wronged tenants. Accordingly, we hold the trial court erred in failing to award appellant reasonable attorney fees. Appellant's first assignment of error is well taken. This action is reversed and remanded for a hearing on appellant's claim for reasonable attorney's fees pursuant to R.C. 5321.16(B) and (C). II. In appellant's second assignment of error, appellant argues the trial court erred in summarily overruling her motion for - 11 - sanctions brought pursuant to R.C. 2323.51 and Civ.R. 11. In a related matter, appellant, through her third assignment of error, contends the trial court erred in overruling her motion to compel discovery. The requested discovery dealt with the issue of whether appellee submitted forged and fraudulent documents as evidence at trial. As such, appellant's motion to compel discovery was filed to support her claim for sanctions pursuant to R.C. 2323.51 and Civ.R. 11. R.C. 2323.51 provides, in pertinent part: (A) As used in this section: (1) "Conduct" means filing a civil action, asserting a claim, defense, or other position in connection with a civil action, or taking any other action in connection with a civil action. (2) "Frivolous conduct" means conduct of a party to a civil action or of his counsel of record that satisfies either of the following: (a) It obviously serves merely to harass or maliciously injure another party to the civil action; (b) It is not warranted under existing law and cannot be supported by a good faith argument for an extension, modification, or reversal of existing law. (B) (1) Subject to divisions (B)(2) and (3), (C), and (D) of this section, at any time prior to the commencement of the trial in a civil action or within twenty-one days after the entry of judgment in a civil action, the court may award reasonable attorney's fees - 12 - to any party to that action adversely affected by frivolous conduct. The award may be assessed as provided in division (B)(4) of this section. 4 Civ.R. 11 provides further: Rule 11. Signing of pleadings Every pleading of a party represented by an attorney shall be signed by at least one attorney of record in his individual name, whose address shall be stated. A party who is not represented by an attorney shall sign his pleading and state his address. Except when otherwise specifically provided by these rules, pleadings need not be verified or accompanied by affidavit. The signature of an attorney constitutes a certificate by him that he has read the pleading; that to the best of his knowledge, information, and belief there is good ground to support it; and that it is not interposed for delay. If a pleading is not signed or is signed with intent to defeat the purpose of this rule, it may be stricken as sham and false and the action may proceed as though the pleading had not been served. For a willful violation of this rule an attorney may be subjected to appropriate action. Similar action may be taken if scandalous or indecent matter is inserted. Recently, this court, in Pisani v. Pisani (Jan. 19, 1995), Cuyahoga App. No. 67599, unreported, joined a majority of our sister appellate courts and held that the filing of a motion for sanctions pursuant to R.C. 2323.51 and Civ.R. 11 does not automatically entitle a litigant to a hearing on its motion. We explained: 4 Civ.R. 11 was amended, effective 7-1-94, to expressly include an award of attorney fees as an appropriate sanction against an attorney or a pro se party for a willful violation of the rule. - 13 - A party should not be found to have engaged in frivolous conduct (an extraordinary event) and assessed attorney fees without the benefit of a due process hearing. On the other hand, the court may know from its own experience with the case that the motion is without merit on its face. This distinction was recently noted in GMS Management v. Seminaro (July 22, 1993), Cuyahoga App. No. 63007, unreported at 4: R.C. 2323.51(B) clearly requires that before attorney fees may be assessed for frivolous conduct, the trial court must conduct a hearing. Spangler v. Redick (1991), 74 Ohio App.3d 798; Belfiore v. Natl. Eng. & Contracting (1991), 71 Ohio App.3d 142. Moreover, this court has held that once a motion for frivolous conduct has been filed, a trial court abuses its discretion in denying the motion prior to conducting a hearing. Bradley & Assoc., Ltd. v. Agri World Trade Dev. Corp. (1991), 76 Ohio App.3d 699, 700; see, also, Youssel v. Jones (1991), 77 Ohio App.3d 500. However, there may be some circumstances in which a hearing is not required, as where the court has sufficient knowledge of the circumstances for the denial of the requested relief and the hearing would be perfunctory, meaningless or redundant. See Huddy v. Toledo Oxygen & Equipment Co. (May 8, 1992), Lucas App. No. L-91-328, unreported. In the latter circumstances, it makes for judicial economy and fairness to vest the trial judge with the sound discretion as to whether or not a hearing should be held. In order to reconcile our own decisions and those of our sister appellate courts, we now hold that a hearing is mandatory under R.C. 2323.51 only when sanctions are imposed and is not necessary when the court determines, upon consideration of the motion and in its discretion, that it lacks merit. We agree with the analysis contained in McKinney v. Aultman Hospital (Apr. 17, 1992), Stark App. No. 8603, unreported, which state as follows at 3: - 14 - We concur with appellee's analysis that the subject statute does not mandate that a hearing be held but does require that if attorney fees are to be ultimately awarded, then a hearing indeed must have been conducted in accord with subsections (a), (b) and (c) of R.C. 2323.51(B)(2). Admittedly the statute contains inscrutable language creating conflicting results. However the Court of Appeals of Summit County has effectively "translated" (at least in our eyes) it in the following unambiguous format: When a frivolous conduct motion is filed, pursuant to R.C. 2323.51, the party against whom the motion is directed should be given opportunity to respond, as with any motion. See Civ. R. 8; Ohio Furniture Co. v. Mindala (1986), 22 Ohio St.3d 99, 100, footnote 4. If the motion has merit, whether the party against whom it is directed responds or not, then the trial court must set a hearing as provided in R.C. 2323.51(B)(2)(a). Such a hearing date provides an opportunity for each party to submit briefs and evidentiary materials which may support their respective positions. The hearing is not required to be an oral hearing. Whether the hearing is to be conducted on the submitted matters or orally remains discretionary with the trial court. (Citations omitted.) If the motion lacks merit, whether the party against whom it is directed responds or not, then no hearing date need be set in order for the trial court to deny the motion. In the instant case, where the court has had the opportunity over several years and forty days of actual trial to observe the parties in action and analyze their motives, we believe it is safe to say that it had ample evidence on which to judge whether or not there has been a prima facie showing of frivolous conduct warranting a hearing. It would be a rare case where a mother's fight to retain custody of her minor children would be found to be frivolous - 15 - conduct. We find no abuse of discretion in the trial court's denial of the motion without holding a hearing. Id. at 6-9. In the present case, appellant filed her motion for sanctions within twenty-one days of the trial court's judgment entry, wherein she raised seventeen instances of alleged misconduct. Among the issues raised by appellant in her motion were (1) that appellee denied many allegations in appellant's complaint but later stipulated or admitted to such allegations at trial, (2) that appellee used forged or fraudulent evidence at trial, including an alleged security deposit letter which contained numerous discrepancies, (3) that appellee amended its answer to include a counterclaim, which was later dismissed on the eve of trial, and, further, that said allegations in the counterclaim were later denied at trial, (4) that appellee's counsel failed to return telephone calls and/or respond to discovery requests, then later attempted to introduce evidence not produced pursuant to the discovery requests, and (5) that a last-minute withdrawal by defense counsel improperly delayed commencement of trial when it was apparent all along that defense counsel would testify at trial. A review of the record herein, coupled with the issues raised in appellant's motion for sanctions, leads this court to conclude that the trial court abused its discretion in overruling appellant's motion without conducting an evidentiary hearing. We believe appellant's motion, coupled with the record and evidence produced at trial, presents a prima facie showing of frivolous - 16 - conduct. A hearing on the motion, therefore, would not be perfunctory, meaningless and/or redundant. Moreover, we note that the trial court did not have the benefit, as in Pisani, supra, of several years and forty days in trial to observe the parties' conduct and analyze their motives. The complaint in this matter was filed on May 5, 1990, and trial, lasting three partial days, commenced May 23, 1991. Further, although appellant, in her pleadings, raised the issue of frivolous conduct, the court duly noted at trial that there were no outstanding motions for sanctions and that such matter would be better suited for a separate hearing. (Tr. 60-63). This court agrees and therefore remands this cause for an appropriate hearing on appellant's motion for sanctions pursuant to Civ.R. 11 and R.C. 2323.51. III. A remaining issue for our resolution, as raised in appellant's third assignment of error, is whether the trial court erred in overruling appellant's motion to compel discovery. However, because this court finds merit to appellant's second assignment of error, we need not address this issue. App.R. 12. We add, though, that while the issue of whether a party may conduct discovery in furtherance of a motion for sanctions has apparently not been decided by an appellate court, a trial court retains discretion in overseeing the conduct of discovery. Civ.R. 26 and 37; Smith v. - 17 - Klein (1985), 23 Ohio App.3d 146. Moreover, we note that discovery is permitted in other post-verdict proceedings such as pre-judgment interest proceedings. Cf., Bell v. Mt. Sinai Med. Ctr. (1993), 67 Ohio St.3d 60; Moskowitz v. Mt. Sinai Med. Ctr. (1994), 69 Ohio St.3d 638. Appellant's third assignment of error is, therefore, found to be moot. IV. In appellant's final assignment of error, appellant argues the trial court abused its discretion in allowing appellee to file its answer out of rule, without leave of court, and without a showing of excusable neglect. Appellant's complaint was filed on May 8, 1990; service was completed on May 16, 1990; and a motion for default judgment was filed the same day appellee filed its answer, on June 15, 1990. Since appellee's answer was due on June 13, 1990, twenty-eight days after service, Civ.R. 12(A), appellee's answer was out of rule. "An answer may not be filed out of rule without a motion showing excusable neglect as required by Civ.R. 6(B)(2)." Mack Constr. Development Corp. v. Austin Smith Constr. Co. (1989), 65 Ohio App.3d 402. The issue is "whether the trial court abused its discretion in allowing the defendant to file his [or her] answer beyond the rule date without regard to the requirements of the Ohio Rules of Civil Procedure." Miller v. Lint (1980), 62 Ohio St.2d 209, 213-14. In the present case, we cannot say the trial court - 18 - abused its discretion in allowing appellee to file its answer two days outside the rule date. The judgment of the Lakewood Municipal Court is, therefore, reversed and remanded. - 19 - This cause is reversed and remanded to the lower court for further proceedings consistent with this opinion. It is, therefore, considered that said appellant recover of said appellee her costs herein. 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. LEO M. SPELLACY, P.J. (See concurring opinion attached) PATRICIA BLACKMON, J. CONCUR (Concurs with concurring opinion) JUDGE DONALD C. NUGENT N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announce- ment of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journalization, at which time it will become the judgment and order of the court and time period for review will begin to run. COURT OF APPEALS OF OHIO EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 67170 TERESE BUCK : : Plaintiff-Appellant : : -vs- : CONCURRING OPINION : GEORGIAN MANOR INVESTMENTS : : Defendant-Appellee : : DATED LEO M. SPELLACY, P.J., CONCURRING: I would have found the trial court abused its discretion by not holding a hearing even if there had not been a prima facie showing of frivolous conduct. This court has required a hearing whenever a motion is filed under R.C. 2323.51. Wiltsie v. Teamor (1993), 89 Ohio App.3d 380, 390; Bradley Assoc., Ltd. v. Agri World Trade Dev. Corp. (1991), 76 Ohio App.3d 699, 700; Belfiore v. Natl. Eng. & Contracting Co. (1991), 71 Ohio App.3d 142, 145. These decisions are controlling authority. See S.Ct.R.Rep.Op. 2(F)(2). .