COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 68159 : BARBARA L. KEENER, ET AL. : : : JOURNAL ENTRY Plaintiffs-Appellees : : and -vs- : : OPINION GARY VON AGENCY, INC., ET AL. : : : Defendants-Appellants : : : DATE OF ANNOUNCEMENT OF DECISION: NOVEMBER 9, 1995 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court Case No. CV-258596 JUDGMENT: Affirmed. DATE OF JOURNALIZATION: __________________________ APPEARANCES: For Plaintiffs-Appellees: For Defendants-Appellants: KEVIN M. SPELLACY, ESQ. WILLIAM H. THESLING, ESQ. McGINTY, GIBBONS & HILOW CO., LPA 5566 Pearl Road One Cleveland Center Parma, Ohio 44192-2541 1375 East Ninth Street, Suite 1920 Cleveland, Ohio 44114 - 2 - KARPINSKI, J.: Defendants-appellants, Gary Von Agency Inc. and Margaret Thesling, appeal from the judgment of the trial court finding Gary Von Agency and Margaret Thesling, as sole shareholder, jointly and severally liable to plaintiffs-appellees, Barbara Keener and Tabitha Keener, in the amount of $3,900. Of this amount, $3,000 is for punitive damages and $900 is for compensatory damages. On appeal, defendants argue that (1) the trial court should not have held a trial because neither party appealed the arbitration decision, (2) the decision of the trial court was against the manifest weight of the evidence, and (3) the award of punitive damages was an abuse of discretion. For the following reasons, the judgment of the trial court is affirmed. Defendant-Gary Von Agency, Inc., was incorporated in December, 1982. All the shares of this corporation are owned by defendant-Margaret Thesling. The corporation went out of business in December of 1991. This corporation operated a modelling agency, which advertised in local papers. In July 1991, plaintiff Tabitha Keener approached the agency to discuss the possibility of becoming a model with the agency. Plaintiff entered into a contract to obtain photographs through the agency. As part of this contract plaintiff paid the agency $770.00. In return, Margaret Thesling promised plaintiff (1) she would be placed in a commercial, (2) she would be photographed - 3 - and given a portfolio by a professional photographer, and (3) she would participate in a "runway" fashion show. However, plaintiff was never placed in a commercial and never received a professional portfolio. Regarding the third promise, defendant told plaintiff to appear at a bar called "The Glitz." At this bar, plaintiff was given lingerie to wear and instructed to dance on the stage. She was further advised to expect members of the all-male crowd to place money in the garter belt she was required to wear. In July of 1991, the Glitz was originally owned and operated by Gary Von Agency, Inc. The Gary Von Agency sold the bar to Rainbow Investment Trust, who later sold the bar to Sunshine Investments. Defendant's husband Gary Thesling was the beneficiary of Rainbow Investment Trust and 1 Sunshine Investments. On October 17, 1991, plaintiff filed a complaint in common pleas court. This complaint was dismissed without prejudice on January 23, 1993, when plaintiff failed to appear at the scheduled trial date. Plaintiff refiled this action on September 23, 1993. This complaint alleged causes of action sounding, inter alia, in breach of contract and fraudulent representation. Plaintiff also argued that the corporate structure of defendant- Gary Von Agency should be disregarded and that defendant-Margaret Thesling, sole shareholder, should be held personally liable for the damages resulting from this complaint. During a case 1 Margaret, in divorce proceedings against Gary Thesling, claimed to have an interest in Rainbow Trust and Sunshine Investments. - 4 - management conference on February 28, 1994, the case was referred to arbitration by agreement of the parties. The order of the trial court states as follows: CMC held. All discovery is to be completed by April 22, 1994. Case referred to arbitration on April 27, 1994. If the case is not timely arbitrated or award is appealed then final Pre-Trial set for September 7, 1994 at 8:30 A.M. Bench Trial set for September 14, 1994, at 9:00 A.M. Parties are to submit to the court trial briefs and witness lists seven (7) days before trial. The arbitration was heard on August 29, 1994, and an award was issued on August 30, 1994. Neither party appealed this award to common pleas court. When the trial court indicated that the trial would proceed, defendant orally moved to dismiss because the parties had already received an arbitrator's award and no notice of appeal had been filed. The trial court denied the motion to dismiss and a bench trial went forward on September 14, 1994. On October 24, 1994, the trial court issued its decision which states as follows: Verdict for plaintiff Tabitha Keener in the amount of $770.00 and $130.00 against defendant Margaret Thesling and Gary Von Agency, Inc., joint [sic] and severally [sic] and $3,000.00 in punitive damages in favor of plaintiff Tabitha Keener against defendant Margaret Thesling and Gary Von Agency, Inc. Thereafter, defendant timely appealed to this court. Defendant's first assignment of error states as follows: THE COURT ERRED AND ABUSED ITS DISCRETION BY DENYING DEFENDANTS [SIC] MOTION TO DISMISS AND BY ALLOWING THE CASE TO GO TO TRIAL WITHOUT PLAINTIFF FILING A "NOTICE OF APPEAL" OR PAYING ARBITRATION FEES AS REQUIRED BY LOCAL RULE 29 PART VII (a). The issue presented in this assignment of error is whether the trial court had the authority to conduct a trial when no - 5 - notice of appeal from court-ordered arbitration was filed. Pursuant to a line of authority holding that local rules are rules of procedure, not rules of jurisdiction, the trial court had the authority to go forward with the trial in this case. In Was v. A.J.L.S., Inc. (1985), 21 Ohio App.3d 280, the court held that decisions by the trial court regarding appeals from court- ordered arbitration are within the discretion of the trial judge. Since the authority for referring cases to arbitration comes from these rules, and since these rules are procedural, the trial court's jurisdiction over the case was not affected. Thus, the thirty-day requirement for filing an appeal from an arbitration award must be procedural not jurisdictional. See, generally, Richardson Brothers, Inc. v. Dave's Towing Service (1983), 14 Ohio App.3d 1; and McKinnis v. Stropes (App.1980), 19 O.O.3d 344. Accordingly, the trial court erred in ruling it lacked jurisdiction over this case due to the late filing of the notice of appeal. This court has previously held that the failure to comply with the procedural requirements for appealing an arbitration award is grounds for dismissal. This decision is within the trial court's discretion. However, by erroneously ruling that the thirty-day time period was jurisdictional, the trial court never exercised its discretion in this case. Accordingly, this case must be remanded for that purpose. (Citations omitted.) Additionally, other courts have held that local rules concerning arbitration are procedural and not jurisdictional. Cole v. Central Ohio Transit Auth. (1984), 20 Ohio App.3d 312; and Longhauser v. Beatty, Inc. (1988), 55 Ohio App.3d 215. In Longhauser, the court held that when a party fails to appeal an arbitration award timely, the trial court, within its discretion, may extend that thirty-day limit or may dismiss the case. Consequently, even though no notice of appeal had been filed as - 6 - required by the local rules, the trial court had the discretionary authority to conduct the de novo trial. Both parties were afforded a full adversarial and evidentiary trial in this case. Neither party was prejudiced by the actions of the trial court. Because the trial court did not abuse its discretion by conducting the trial, this assignment of error is overruled. Defendant's second, third, and fourth assignments of error state as follows: THE COURT ERRED TO DEFENDANTS [SIC] PREJUDICE IN ITS FINDING OF FACT THAT DEFENDANT INDUCED PLAINTIFF INTO PAYING SEVEN HUNDRED SEVENTY DOLLARS ($770.00) BY MAKING FALSE REPRESENTATIONS THAT IMMEDIATE TELEVISION MODELING WAS AVAILABLE IN THAT SUCH FINDING IS AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE. THE COURT ERRED TO DEFENDANTS [SIC] PREJUDICE IN ITS FINDING OF FACT THAT DEFENDANT COERCED PLAINTIFF INTO PURCHASING ONE HUNDRED THIRTY DOLLARS (130.00) IN USED CLOTHING AND ITS FINDING OF FACT THAT DEFENDANT ATTEMPTED TO HAVE PLAINTIFF PERFORM AS AN EXOTIC DANCER IN EXCHANGE FOR CASH FROM MALE CUSTOMERS AT THE BAR, "GLITZ", BECAUSE SUCH FINDING IS AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE. THE COURT ERRED TO DEFENDANTS [SIC] PREJUDICE IN ITS CONCLUSION OF LAW THAT "DEFENDANT THESLING INDUCED PLAINTIFF TO PAY A SUM OF MONEY TO A SOON TO BE DEFUNCT CORPORATION IN ORDER TO OBTAIN CASH AND HER SERVICES AS A SEMI-NUDE DANCER IN A BAR WHICH THESLING AND HER HUSBAND OWNED" AS SUCH CONCLUSION IS AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE. In these assignments of error, defendant contends that the verdict is against the manifest weight of the evidence. In a civil case, judgments supported by some competent, credible evidence going to all the essential elements of the case will not be reversed by a reviewing court as being against the manifest - 7 - weight of the evidence. C.E.Morris Co. v. Foley Construction Co. (1978), 54 Ohio St.2d 279. Moreover, in either a civil or criminal case, "the weight to be given the evidence and the credibility of the witnesses are primarily for the trier of facts." State v. DeHass (1967), 10 Ohio St.2d 230, syllabus paragraph one. Competent credible evidence was presented that defendant induced plaintiff into paying $770.00 for and that defendant coerced plaintiff into spending an additional $130 on used clothing. Plaintiff paid the $770.00 after being promised (1) a professionally photographed portfolio, (2) television commercial opportunities, and (3) a runway fashion show. The testimony at trial showed that none of these promises was fulfilled. Additionally, competent, credible evidence was presented to support the trial court's conclusion that "Defendant Thesling induced Plaintiff to pay a sum of money to a soon to be defunct corporation in order to obtain cash and her services as a semi- nude dancer in a bar which Thesling and her husband owned." As a result of Margaret Thesling's representation, plaintiff arrived at "The Glitz," thinking it was for a fashion show. It turned out, however, that plaintiff was required to wear scant clothing and dance for tips from an all-male crowd. Accordingly, defendant's second, third, and fourth assignments of error are overruled. Defendant's fifth assignment of error states as follows: THE COURT ERRED TO DEFENDANTS [SIC] PREJUDICE IN AWARDING PUNITIVE DAMAGES TO PLAINTIFF BECAUSE THE - 8 - AWARD WAS IN VIOLATION OF SECTION 2315.21 OF THE OHIO REVISED CODE. The trial court awarded punitive damages pursuant to R.C. 2315.21, which states in pertinent part as follows: (B) Subject to division (D) of this section, punitive or exemplary damages are not recoverable from a defendant in question in a tort action unless both of the following apply: (1) The actions or omissions of that defendant demonstrate malice, aggravated or egregious fraud, oppression, or insult, or that defendant as principal or master authorized participated in, or ratified actions or omissions of an agent or servant that so demonstrate; (2) The plaintiff in question has adduced proof of actual damages that resulted from actions or omissions as described in division (B)(1) of this section. In the instant case, the award pursuant to R.C. 2315.21 was justified. Both of the requirements of this statute are satisfied. First, the cold-hearted actions of the defendant, in fraudulently inducing an eighteen-year-old girl to dance in a negligee at a bar for tips, amount to "egregious fraud" and "insult." Second, the record shows plaintiff presented proof of damages: $770.00 for services and results that she never received, and $130.00 for used clothing of no value to a legitimate model. Accordingly, defendant's fifth assignment of error is overruled. Defendant's sixth and seventh assignments of error state as follows: THE COURT ERRED TO DEFENDANTS [SIC] PREJUDICE IN CONCLUDING THAT DEFENDANT MARGARET THESLING IS LIABLE FOR ONE HUNDRED THIRTY DOLLARS ($130.00) IN DAMAGES, AND SUCH DISCRETION CONSTITUTES AN ABUSE OF DISCRETION. THE COURT ERRED IN CONCLUDING THAT DEFENDANT, MARGARET THESLING IS LIABLE FOR SEVEN HUNDRED SEVENTY DOLLARS - 9 - ($770.00) IN DAMAGES, AND SUCH CONCLUSION CONSTITUTES AN ABUSE OF DISCRETION. In these two assignments of error, defendant argues that the trial court abused its discretion when it "pierced the corporate veil" and found the defendant Margaret Thesling liable for $900 in damages. In Belvedere Condominium Unit Owners' Assn. v. R.E. Roark Cos., Inc. (1993), 67 Ohio St.3d 274, the Ohio Supreme Court noted that the general rule is that shareholders will not be held liable for the debts of the corporation; however, under some circumstances, the shareholders will be held individually liable: Under this exception, the "veil" of the corporation can be "pierced" and individual shareholders held liable for corporate misdeeds when it would be unjust to allow the shareholders to hide behind the fiction of the corporate entity. Courts will permit individual shareholder liability only if the shareholder is indistinguishable from or the "alter ego" of the corporation itself." Belvedere at 287. The court went on to delineate the elements necessary to pierce the corporate veil as follows: Thus, the corporate form may be disregarded and indi- vidual shareholders held liable for corporate misdeeds when (1) control over the corporation by those to be held liable was so complete that the corporation has no separate mind, will, or existence of its own, (2) control over the corporation by those to be held liable was exercised in such a manner as to commit fraud or an illegal act against the person seeking to disregard the corporate entity; and (3) injury or unjust loss resulted to the plaintiff from such control or wrong. Id. at 289. In the instant case, the trial court did not err in finding that the plaintiff satisfied the elements needed to pierce the corporate veil and thereby hold defendant Margaret Thesling - 10 - personally liable for the judgment. First, Margaret Thesling was the sole shareholder of the Gary Von Agency. She did all the recruiting and ran all the day-to-day operations on behalf of the agency. Secondly, Margaret Thesling used her total control over the corporation to fraudulently induce plaintiff to pay the agency money and dance at the bar of Margaret Thesling's husband. Thirdly, plaintiff was injured because she thought she was starting a modelling career, whereas no such career was beginning nor was there evidence a future career was likely. Rather, she lost money and was exploited by Margaret Thesling and Gary Von Agency. Furthermore, she was subjected to providing a performance in immodest clothes in an environment insulting to her decency. Defendant's sixth and seventh assignment of errors are overruled. Judgment affirmed. - 11 - It is ordered that appellees recover of appellants their costs herein taxed. The court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this court directing the Common Pleas 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. PORTER, P.J., and CORRIGAN,* J., CONCUR. DIANE KARPINSKI JUDGE *Judge John V. Corrigan, Retired, of the Eighth District Court of Appeals, sitting by assignment. N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement 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 .