COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 69778 : FRANK NOVAK & SONS, INC. : : ACCELERATED DOCKET Plaintiff-Appellee : : JOURNAL ENTRY -vs- : : and GREATER CLEVELAND GROWTH : ASSOCIATION, COUNCIL OF : OPINION SMALLER ENTERPRISES : : PER CURIAM Defendant/Third-Party : Plaintiff-Appellee : : -vs- : : GATES, MCDONALD & COMPANY : : Third-Party : Defendant-Appellant : DATE OF ANNOUNCEMENT AUGUST 1, 1996 OF DECISION: CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court Case No. 285842 JUDGMENT: Dismissed. DATE OF JOURNALIZATION: __________________________ APPEARANCES: For Plaintiff-Appellee: For Defendants-Appellants: DENNIS O'TOOLE, ESQ. ANNE SFERRA, ESQ. 502 Broadway MICHAEL D. SMITH, ESQ. Lorain, Ohio 44052 Bricker & Eckler 100 South Third Street -2- Columbus, Ohio - i - Appellees: Council of Smaller Enterprises: HAROLD E. FARLING, ESQ. Squire, Sanders & Dempsey 4900 Society Center 127 Public Square Cleveland, Ohio 44114-1304 DANIEL D. MASON, ESQ. Warhola, O'Toole, Loughman, Alderman & Stumphauzer 502 Broadway Lorain, Ohio 44052 Greater Cleveland Growth Assn.: IRWIN M. FELDMAN, ESQ. Squire Sanders & Dempsey 4900 Society Tower 127 Public Square Cleveland, Ohio 44114-1304 -2- PATRICIA ANN BLACKMON, J.: The issue in this appeal is whether the trial court's order denying a motion to dismiss and to compel arbitration is a final appealable order. A final appealable order is "an order that affects a substantial right in an action which in effect determines the action and prevents a judgment, an order that affects a substantial right made in a special proceeding or upon a summary application in an action after judgment, or an order that vacates or sets aside a judgment or grants a new trial." Bell v. Mt. Sinai Medical Ctr. (1993), 67 Ohio St.3d 60, 62; R.C. 2505.02. An order affecting a substantial right is one which would foreclose future relief if not immediately appealable. Id. at 63. Generally, denial of a motion to dismiss does not result in the foreclosure of future relief. Lakewood v. Pfeifer (1992), 83 Ohio App.3d 47. The error can always be assigned on appeal at the end of trial. Consequently, a denial of a motion to dismiss and to compel arbitration is not a final appealable order. However, the denial or granting of a stay pending arbitration is a final appealable order under R.C. 2711.02. R.C. 2711.02 also provides that the trial court must be satisfied that the action should be referred to arbitration. The arbitration agreement in this case was between third party defendant-appellant Gates, McDonald & Company and defendant-appellee COSE, who was sued by Frank Novak & Sons, Inc. Frank Novak & Sons, Inc. was a participant in a group program that offered affordable workers compensation coverage to small -3- employers by pooling their risks with those of other small businesses. The program was sponsored by COSE and serviced by Gates under a Service agreement with COSE. On March 6, 1995, Novak filed a complaint against COSE alleging breach of contract, fraud, breach of fiduciary duty, promissory estoppel, and misrepresentation. On May 23, 1995, COSE filed a third party complaint for indemnification against Gates. The Service Agreement between Gates and COSE included the following provision: All disputes and controversies of every kind and nature between Gates and COSE that may arise as to the existence, construction, validity, interpretation or meaning, performance, nonperformance, enforcement, operation, breach, continuance or termination of this agreement shall be submitted to arbitration * * * An award rendered by a majority of the arbitrators pursuant to this agreement shall be final and binding on all parties to the proceeding during the period of this agreement*** The parties stipulate that the provisions hereof shall be a complete defense to any suit, action or proceeding instituted in any federal, state or local court or before any administrative tribunal with respect to any controversy or dispute arising during the period of this agreement and which is arbitratable (sic) as herein set forth. On July 24, 1995, Gates moved to dismiss the third party complaint filed by COSE. Gates alleged that, under the Service Agreement, any disputes between Gates and COSE had to be submitted to arbitration. Thereafter, on August 15, 1995, COSE amended its third party complaint to include "common law" claims for -4- contribution and indemnification. On September 1, 1995, Gates moved to dismiss the amended complaint arguing that it did not state any claims not covered by the arbitration clause. On October 5, 1995, the trial court denied the motion to dismiss. This appeal followed, and Gates assigned the following error: THE TRIAL COURT SHOULD HAVE DISMISSED OR STAYED THE CLAIMS OF THE APPELLEE IN FAVOR OF ARBITRATION PURSUANT TO A WRITTEN ARBITRATION AGREEMENT BETWEEN THE PARTIES. Having concluded that the denial of the motion to dismiss did not constitute a final appealable order, we hereby dismiss this appeal. However, before we end the matter there are some issues of concern. Gates argues the request for an alternative stay, which was in a footnote in its motion to dismiss, triggers the mandate of R.C. 2711.02. R.C. 2711.02 provides that, if the trial court is satisfied that the dispute between the parties is subject to arbitration, the court "shall" order a stay of the proceedings pending arbitration when one of the parties moves for a stay. This court has held the use of the word "shall" means the issuance of such a stay is mandatory once requested. Krafcik v. USA Energy Consultants (October 19, 1995), Cuyahoga App. No. 68692, unreported. Because the trial court never ruled on the stay, we are not obliged to reach the R.C. 2711.02 issue. Our concern is whether the motion to dismiss is a final appealable order, which we say it is not. -5- Additionally, it would be inappropriate for us to conclude that the denial of a motion to dismiss is tantamount to a ruling on the stay, which was buried in a footnote. In order for R.C. 2711.02 to apply, the party who seeks arbitration must request the stay, which means that the trial court must rule on the stay. Phillips v. Lee Homes (February 17, 1994), Cuyahoga App. No. 64353, unreported. The only motion ruled on by the trial court was the motion to dismiss. The motion to dismiss was based upon the argument that the dispute between the parties was subject to arbitration. By denying the motion to dismiss, the trial court held that it was not subject to arbitration. While Gates may disagree with this finding, nothing would prevent them from raising this issue on appeal after final judgment is rendered on the complaint. In fact, unless and until COSE is found to be liable to Novak on the complaint, Gates and COSE have no dispute, which partially explains why the trial court denied the arbitration request. We recognize the dilemma for Gates in this case. If arbitration is a sound and preferred practice to be encouraged, it seems antithetical to require the movant to wait until after the trial to appeal the correctness of the trial court's denial of the request to arbitrate. However, the legislature seems to have given some relief from this dilemma by requiring the movant to seek a stay. Under R.C. 2711.02, the denial of a stay is a final order and may be appealed. In this case, Gates did not pursue the stay -6- and the trial court has not ruled on it. Thus, this court is powerless to act. For the foregoing reasons, COSE's motion is granted, and this appeal is hereby dismissed. Appeal dismissed. -7- It is ordered that Appellee recover of Appellant its costs herein taxed. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. Exceptions. LEO SPELLACY, CHIEF JUSTICE PATRICIA ANN BLACKMON, JUDGE SARA J. HARPER, JUDGE (CONCURS IN JUDGMENT ONLY) 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- .