COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 68529 : CHARLES C. REDMOND, ET AL. : : JOURNAL ENTRY Plaintiffs-Appellees : : and -vs- : : OPINION : NICHOLAS J. SBERNA, ET AL. : : Defendants-Appellants : : DATE OF ANNOUNCEMENT MAY 23, 1996 OF DECISION: CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court Case No. 223656 JUDGMENT: Judgment modified and affirmed as modified. DATE OF JOURNALIZATION: __________________________ APPEARANCES: For Plaintiffs-Appellees: For Defendants-Appellants: CHARLES C. REDMOND, Pro Se LEWIS A. ZIPKIN, ESQ. OWEN C. NEFF, ESQ. MARY E.R. BARTHOLIC, ESQ. Snyder, Neff & Chamberlin ADRIAN B. FINK, JR., ESQ. 1422 Euclid Avenue GEOFFREY W. WEAVER, ESQ. Cleveland, Ohio 44115-2001 Zipkin & Fink 2460 Fairmount Blvd., #224 Cleveland Hts., Ohio 44106 -2- PATRICIA ANN BLACKMON, J.: Defendants-appellees, Nicholas and Vincie Sberna, appeal a judgment granted in favor of plaintiffs-appellees, Charles C. 1 Redmond and Owen C. Neff, and assign six errors for our review. Having reviewed the record of the proceedings and the legal arguments presented by the parties, the decision of the trial court is modified and affirmed as modified. The apposite facts follow. Vincie Sberna purchased a 1985 Mercedes-Benz 500 SEL automo- bile from Crestmont Cadillac. Before making the actual purchase, she took the car for an inspection to Dowd Imports, Inc., a licensed Mercedes-Benz dealer. Based upon the inspection by Dowd Imports, Inc., she purchased the car for $39,000 from Crestmont Cadillac. Within twenty-four hours, the car experienced mechanical difficulty. The Sbernas returned it to Crestmont Cadillac and demanded their money back; Crestmont refused their request. There- after, on twenty-two separate occasions the car had to be returned to Dowd for repairs. On each occasion Dowd's mechanics were unable to make the repairs. The Sbernas retained Attorney Charles Redmond to represent them. Although no fee arrangement was ever discussed, the Sbernas did pay $1,550 to Redmond in the first year of his representation. Redmond filed the original action on behalf of the Sbernas against Mercedes Benz of North America, Dowd Imports, Inc., and Crestmont Cadillac, Inc. The complaint alleged causes of action for breach 1 See Appendix for complete list of assigned errors. -3- of warranty, products liability, and sought damages for physical, mental, and emotional injury as well as compensatory damages. Ultimately, Redmond asked Owen Neff to assist him in the case and the Sbernas agreed. During the course of the proceedings, Crestmont Cadillac moved for summary judgment, which was granted. In response, Redmond requested the case be certified for an appeal under Civ.R. 54(B), but the trial court refused. Nicholas Sberna became unhappy with the trial judge and insisted Redmond try to get the trial judge removed from the original action. Nicholas Sberna repeatedly failed to appear for several depositions. He also refused to allow his psychiatrist's deposition to be taken, and ultimately the claims related to mental and emotional injury were dropped from the complaint. Ultimately, Redmond advised Vincie Sberna that Neff had received a $30,000 settlement offer from counsel for Mercedes Benz. She refused the offer and said she would not settle for less than $200,000. On four separate occasions, the trial date was continued after the date for trial was agreed upon by the parties. After the third continuance, the trial judge ruled there would be no more continuances. A new trial date was set and once again the Sbernas asked Redmond to request a continuance. Redmond informed them the trial court would not allow it. When they insisted, he told them the only way to obtain a continuance was to discharge their lawyers. Subsequently, they wrote a letter discharging Redmond and -4- Neff. After their discharge, Redmond asked the Sbernas for $8,000 in legal fees, which the Sbernas refused to pay. The Sbernas retained new legal counsel who dismissed the original action and refiled against Mercedes Benz and Dowd. Eventually, the Sbernas settled their claims against all parties for $10,000. Redmond and Neff filed this action against the Sbernas for breach of contract and damages under the theory of quantum meruit. The Sbernas counterclaimed against Redmond and Neff for legal malpractice. Summary judgment was awarded in favor of the Sbernas on the claim for breach of contract, and the Sbernas' counterclaim for malpractice was dismissed. At trial, Redmond testified he worked 216 hours on the original case and his normal rate for those services was $125 per hour. Redmond arrived at the number of hours by reviewing the pleadings, depositions, court appearances, correspondence, and investigative reports in which he was personally involved. Neff performed a total of 114-1/4 hours and submitted a chronological record of legal services he performed. John Jewitt testified as an expert witness for Redmond and Neff. After reviewing their files for the original action and their time sheets, he opined that Redmond was entitled to $15,000, and Neff was entitled to $7,000. The trial court awarded Redmond $8,000 because that was the amount he asked the Sbernas to pay after he was discharged. Neff was awarded $7,000. The Sbernas now appeal that judgment. -5- In their first assignment of error, the Sbernas assert the trial court erred in granting a motion to dismiss in favor of Redmond and Neff on its counterclaim for legal malpractice. The Sbernas' argument is premised upon the well established rule of law that a trial court cannot consider matters outside of the pleadings when reviewing a motion to dismiss under Civ.R. 12(B)(6). Therefore, the Sbernas assert the dismissal must be reversed because the trial court considered matters outside the pleadings. The threshold question in this assignment of error is whether the trial court considered matters outside the pleadings when it dismissed the Sbernas' counterclaim. A motion to dismiss for failure to state a claim under Civ.R. 12 (B)(6) cannot be granted on the basis of matters outside the pleadings. See Petrey v. Simon (1983), 4 Ohio St.3d 154. Where matters outside the pleadings are not excluded by the court, the motion must be treated as a motion for summary judgment and disposed of under Civ.R. 56. Id. The Sbernas' counterclaim alleged Redmond and Neff committed malpractice and sought damages in the amount of $25,000. Redmond and Neff's motion was premised upon the assertion that a party's settlement of an original action prior to the completion of an appeal extinguishes the right to a malpractice claim against counsel who represented that party in the original action. See Sawchyn v. Westerhaus (1991), 72 Ohio App.3d 25; Estate of Callahan v. Allen (1994), 97 Ohio App.3d 749. Under the authority of this court's holding in Sawchyn, Redmond and Neff had to show the Sbernas settled the original claim, and extinguished any -6- malpractice claim by virtue of the settlement in order to prevail on their motion to dismiss or, in the alternative, for summary judgment. A careful review of the pleadings in this case does not reveal the Sbernas settled the original claim. Therefore, in order for Redmond and Neff to prevail, the trial court had to consider the journal entry from the original action which revealed the Sbernas settled that action for $10,000. Accordingly, it was error for the trial court to grant a motion to dismiss under Civ.R. 12(B)(6) when it considered evidence outside the pleadings. Although the trial court erred in considering matters outside the pleadings when it dismissed the Sbernas' counterclaim, this court must decide whether the error was reversible. In order to fully appreciate this issue, it is necessary to understand the difference between a motion to dismiss and a motion to dismiss or, in the alternative, for summary judgment. In considering a motion to dismiss a trial court cannot consider facts outside the pleadings, unless the parties are first provided with notice the motion is being converted into a motion for summary judgment and afforded an opportunity to respond in accordance with Civ.R. 56. Petrey at 155. Notice is required to give parties a reasonable opportunity to demonstrate whether a genuine issue of fact exists. Id. at 156. However, there is no conversion of a motion to dismiss when a party moves to dismiss or, in the alternative, for summary judgment. Applegate v. Fund for Constitutional Govt. (1990), 70 -7- Ohio App.3d 813, 816. The "in the alternative" styled motion provides all the notice necessary to the non-moving party because, on its face, it constitutes a motion to dismiss and a motion for summary judgment. Therefore, notice is not necessary when a motion to dismiss or, in the alternative, for summary judgment is filed, and the non-moving party acknowledges the dual nature of the motion and responds with countervailing evidentiary materials. Id. Accordingly, a trial court may grant either a dismissal or summary judgment in accordance with the applicable rule. In this case, Redmond and Neff filed a motion to dismiss or, in the alternative, for summary judgment. The Sbernas responded acknowledging the dual nature of the motion and supported their brief in opposition with evidentiary materials including affidavits, deposition testimony, and pleadings from the original action. The trial court granted a motion to dismiss in favor of Redmond and Neff. In view of the dual nature of the "in the alternative" motion, this court is guided by App.R. 12(B) in determining whether the trial court's error was reversible. App.R. 12(B) provides: (B) Judgment as a Matter of Law. When the court of appeals determines that the trial court committed no error prejudicial to the appellant in any of the particulars assigned and argued in appellant's brief and that the appellee is entitled to have the judgment or final order of the trial court affirmed as a matter of law, the court of appeals shall enter judgment accordingly. When the court of appeals determines that the trial court committed error prejudicial to the appellant and that the appellant is entitled to have judgment or final order rendered in his favor -8- as a matter of law, the court of appeals shall reverse the judgment or final order of the trial court and render the judgment or final that the trial court should have rendered or remand the cause to the court with instructions to render such judgment or final order. In all other cases where the court of appeals determines that the judgment or final order of the trial court should be modified as a matter of law it shall enter its judgment accordingly. After hearing argument on the motion and considering matters outside the pleadings, the trial court could have granted a motion for summary judgment rather than a motion to dismiss. Had the trial court granted summary judgment, there would have been no error because there is no dispute that Redmond and Neff are entitled to summary judgment where the action which was the basis 2 of the malpractice claim was settled. Therefore, this court finds the trial court erred only to the extent that it granted a dismissal instead of summary judgment. Accordingly, the judgment of the trial court is modified as a matter of law, under App.R. 12(B), to reflect summary judgment is granted in favor of Redmond and Neff on the Sbernas counterclaim for malpractice. In their second assignment of error, the Sbernas argue the trial court erred in admitting Redmond's attorney time sheet into evidence because it was inadmissible hearsay. "A trial court is vested with broad discretion in determining the admissibility of evidence in any particular case, so long as such discretion is 2 The Sbernas brief in opposition does not dispute they settled their claims in the original action, nor do they dispute whether the holdings in Sawchyn and Estate of Callahan are applicable to the facts of this case. -9- exercised in line with the rules of procedure and evidence." Rigby v. Lake Cty. (1991), 58 Ohio St.3d 269, 271. Appellate review is limited to a determination of whether the lower court abused its discretion. E.g. Peters v. Ohio State Lottery Comm. (1992), 63 Ohio St.3d 296, 299. The term "abuse of discretion" connotes more than an error of law or judgment, it implies the court's attitude is unreasonable, arbitrary, or unconscionable. E.g. Blakemore v Blakemore (1983), 5 Ohio St.3d 217, 219. The sole basis of the Sbernas' argument is Redmond's time sheet is not a business record within the meaning of Evid.R. 803(6). Nonetheless, Redmond and Neff concede that point; they argue the time sheet was used as a recorded recollection within the meaning of Evid.R. 803(5). Evid.R. 803(5) provides: Recorded recollection. A memorandum or record concerning a matter about which a witness once had knowledge but now has insufficient recol- lection to enable him to testify fully and accurately, shown by the testimony of the witness to have been made or adopted when the matter was fresh in his memory and to reflect that knowledge correctly. If admitted, the memorandum or record may be read into evidence but may not itself be received as an exhibit unless offered by an adverse party. In this case, Redmond's time sheet was offered as an exhibit to refresh Redmond's recollection as to the number of hours he spent working on behalf of the Sbernas. However, rather than having the information read into the record in accordance with Evid.R. 803(5), the trial court permitted the time sheet to be received as an exhibit, which Evid.R. 803(5) specifically prohibits. Receiving Redmond's time sheet as an exhibit in -10- contravention of Evid.R. 803(5) was error, but it was harmless error. This case was tried to a judge who is presumed to know the purpose for which an exhibit is offered. Consequently, no prejudice resulted when the trial court received Redmond's time sheet as an exhibit. Thus, there was no abuse of discretion. In their third assignment of error, the Sbernas argue the trial court erred by allowing John Jewitt, Redmond and Neff's expert witness to render an opinion regarding reasonable legal fees without proper foundation. The Sbernas first argue the expert based his opinion in part on the attorneys' time sheets. While an expert opinion must be based upon facts or data perceived by him or admitted in evidence under Evid.R. 703, an expert may rely upon summaries of facts and data within the meaning of Evid.R. 1006. See Horning-Wright Co. v. Great American Ins. Co. (1985), 27 Ohio App.3d 261. Redmond's time sheets were based upon the pleadings from the original action which were admitted into evidence. Neff's time sheets are not disputed. To the extent the time sheets represented summaries of the evidence, Jewitt could rely upon them as a basis for his opinion. Secondly, the Sbernas argue the expert's opinion with respect to the appropriate amount of compensation to quantum meruit was "wholly misguided." Although the expert's opinion as to a fair amount of compensation for Redmond and Neff may have been "wholly misguided" that was a decision for the trier of fact to make "by weighing the testimony, applying the usual test of credibility, finding the presence or absence of facts constituting the hypothe- -11- sis, and by drawing its own inferences and conclusions from the principles explained." Evid.R. 702 Staff Notes. Accordingly, the trial court did not abuse its discretion in permitting the expert's testimony. In their fourth assignment of error, the Sbernas argue the trial court erred as a matter of law in rendering judgment by applying the wrong legal standard for quantum meruit. The amount which a party can recover under the theory of quantum meruit is subject to a double limitation: "(1) plaintiff cannot recover more than the actual value of the services rendered for defendant, including the value of materials and fair profit if and when applicable; and (2) plaintiff cannot recover more than the amount defendant was enriched by his rendering of services." Sonkin & Melena Co., L.P.A. v. Zaransky (1992), 83 Ohio App.3d 169, 176. The ultimate amount of quantum meruit recovery by a discharged attorney is a matter to be resolved within the trial court's discretion after considering all the facts and circumstances of the particular case. See Reid, Johnson, Downes, Andrachik & Webster v. Lansberry (1994), 68 Ohio St.3d 570, 577. In this case, Redmond and Neff had to provide an inordinate amount of services to the Sbernas for the following reasons: Nicholas Sberna refused to appear for depositions on more than one occasion. The Sbernas requested several continuances of trial. The Sbernas insisted Redmond try to get the trial judge to recuse himself because they did not like him. Redmond spent substantial time preparing a claim for mental and emotional injury, but -12- Nicholas Sberna refused to allow his psychiatrist to be deposed and ordered Redmond to drop the claim. As a result of their work, Redmond and Neff obtained a reasonable settlement offer from Mercedes Benz for $30,000, but the Sbernas rejected it. After reviewing the work performed by Redmond and Neff, and considering their ability to procure a reasonable settlement offer, we conclude the actual value of their services rendered was worth the $15,000 awarded by the trial court, and the Sbernas were enriched to that extent. Accordingly, the trial court did not abuse its discretion in granting Redmond and Neff judgment under the theory of quantum merrit. In the fifth assignment of error, the Sbernas argue the trial judge erred to their prejudice by failing to recuse himself from the case to avoid the appearance of impropriety because he was engaged in an ex parte conversation with one of the opposing parties. "A trial judge is presumed not to be biased or prejudiced, and the party alleging bias or prejudice must set forth evidence to overcome the presumption of integrity." State v. Wagner (1992), 80 Ohio App.3d 88, 93. Canon 2 of the Code of Judicial Conduct provides: "A judge should avoid impropriety and the appearance of impropriety in all his activities." Canon 3(A)(4) of the Code of Judicial Conduct provides: "A judge should accord to every person who is legally interested in a proceeding, or his lawyer, full right to be heard according to law, and, except as authorized by law, neither initiate nor consider ex parte or other communications concerning a -13- pending or impending proceeding. ***Nothing contained herein, however, shall preclude a judge from non-substantive ex parte communications on procedural matters and matters affecting prompt disposal of the business of the court." See, also, State v. Jenkins (1984), 15 Ohio St.3d 164 (held non substantive ex parte communication between judge and jury harmless). In this case, Vincie Sberna saw Neff in the judge's chambers on two separate occasions when counsel for the Sbernas was not present. While those occasions may have given the wrong appearance to Vincie Sberna, there was no evidence the trial judge and Neff were discussing substantive matters. Accordingly, the Sbernas were not prejudiced, and the trial judge did not abuse its discretion in refusing to recuse himself. In their sixth assignment of error, the Sbernas argue the evidence was against the manifest weight of the evidence. Judgments supported by competent, credible evidence going to all the material elements of the case must not be reversed, as being against the manifest weight of the evidence. E.g. Karches v. Cincinnati (1988), 38 Ohio St.3d 12 at 19. The Sbernas assert Redmond and Neff failed to produce any evidence that their services provided a benefit to them. The measure of the benefit provided by the services of the attorneys in a quantum meruit action such as this is measured by the benefit provided to the client. See Reid, Johnson, Downes, Andrachik & Webster at 577. Clients who receive monetary settlements after discharging their attorneys benefit from the services their -14- attorneys performed prior to discharge. The extent to which they benefitted is left to the discretion of the trial judge. Id. In this case, there is no dispute Redmond and Neff provided legal services, brought a $30,000 a settlement offer from one of the defendants in the original action, and worked up until the time of trial when they were discharged. Ultimately, the Sbernas recovered $10,000 in their settlement. Thus, there was competent, credible evidence the Sbernas benefitted from the legal services of Redmond and Neff. Judgment modified and affirmed as modified. -15- This cause is modified and affirmed as modified. It is ordered that Appellants and Appellees share the 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. O'DONNELL, J., and KARPINSKI, J., CONCUR. PATRICIA ANN BLACKMON PRESIDING JUDGE 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 journaliza- .