COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 71218 : DENNIS PFIZENMAYER : : JOURNAL ENTRY Plaintiff-Appellant : : and -vs- : : OPINION : LEELA NAIR : : Defendant-Appellee : : DATE OF ANNOUNCEMENT JUNE 5, 1997 OF DECISION: CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court Case No. 296188 JUDGMENT: Affirmed in part, Reversed in part and Remanded. DATE OF JOURNALIZATION: __________________________ APPEARANCES: For Plaintiff-Appellant: For Defendant-Appellee: KENNETH B. BAKER, ESQ. DEBRA J. DIXON, ESQ. Javitch, Block, Eisen & Rathbone JAMES L. DEESE, ESQ. 601 Rockwell Building 700 West St. Clair Avenue 6th Floor Suite 216 Cleveland, Ohio 44114-1601 Cleveland, Ohio 44113 -2- PATRICIA ANN BLACKMON, J.: Dennis Pfizenmayer, plaintiff-appellant, appeals a decision of the trial court granting summary judgment in favor of Leela Nair, defendant-appellee, and dismissing his action for recovery of legal fees. Pfizenmayer assigns the following three errors for our review: I. THE TRIAL COURT ERRED IN DENYING PLAINTIFF'S MOTION TO STRIKE DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND BRIEF IN OPPOSITION TO PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT. II. THE TRIAL COURT ERRED IN GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT. III. THE TRIAL COURT ERRED IN DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT. Nair submits the following cross-assignment of error: I. THE TRIAL COURT COMMITTED PREJUDICAL ERROR WHEN IT DENIED THE MOTION OF DEFENDANT FOR LEAVE TO FILE AN AMENDED ANSWER AND COUNTERCLAIM. After reviewing the record and the arguments of the parties, we affirm the summary judgment in favor of Nair, and we reverse the the trial court's decision not to allow Nair the opportunity to amend her answer to include her counterclaim for fraud. The case is remanded for trial on Nair's counterclaim. The apposite facts follow. Leela Nair was divorced in 1982. The divorce decree incorporated a separation agreement in which Nair's ex-husband agreed to pay her $2333 per month plus 25% of his gross income over $60,000. In November 1985, Leela Nair hired attorney Dennis Pfizenmayer to represent her in an action to collect past due -3- payments owed under the divorce decree. Pfizenmayer sent Nair a proposed fee agreement calling for Pfizenmayer to receive 33.33% of any recovery. Nair objected to the proposed agreement. Pfizenmayer sent an altered agreement, which provided as follows: *** the Client hereby agrees to pay to the Attorney an amount equal to one-third (1/3) of all money and property collected representing monies in arrears or past due, whether from the proceeds of any suit and judgment or from a settlement of any claim or claims before or after trial. (Emphasis added.) Nair signed the agreement. Thereafter, Pfizenmayer filed a motion to show cause why Nair's ex-husband should not be held in contempt for failure to make the support payments. The motion was granted by the trial court and the decision was affirmed on appeal to this court. See Nair v. Nair (November 22, 1989), Cuyahoga App. No. 56057, unreported. Pfizenmayer attempted to negotiate a settlement with Nair's ex-husband's attorney. Nair's ex-husband had moved to Pennsylvania. In or around 1987, Nair's ex-husband made payments totalling approximately $39,000. Pursuant to the fee agreement, Pfizenmayer was paid one-third of that amount paid. In January 1991, Pfizenmayer hired a Pennsylvania law firm, Elderkin, Martin, Kelley & Messina ("the law firm"), to collect on the judgment against Nair's ex-husband. The parties differ about how the law firm became involved. Pfirzemayer claimed he hired the law firm with Nair's consent. Though admitting it was never reduced to writing, Pfizenmayer claimed he agreed to pay the firm's legal fees, deduct the amount -4- from any recovery received, and credit the amount paid to the law firm against the fees due to Pfizenmayer under the contingency agreement. Nair claimed she was forced to hire the law firm when Pfizenmayer was unable to settle the case. Nevertheless, it is undisputed that the law firm was to be paid on an hourly basis. In January 1991, after retaining the law firm, Pfizenmayer changed his status with the Ohio Supreme Court from active to inactive and stopped rendering legal services to Nair. In July 1991, the law firm filed an action against Nair's ex-husband seeking to collect the judgment rendered in Ohio. On July 31, 1992, Nair's ex-husband agreed to settle the case for $407,090.70. $100,000 was to be paid immediately and $307,090.70 payable pursuant to a Qualified Domestic Relations Order (QDRO). The $307,090.70 was to be transferred from Nair's ex-husband's profit sharing account to a qualified IRA. On August 25, 1992, $20,000 was paid to Pfizenmayer and $8364.57 was paid to the law firm. The check to Pfizenmayer contained a notation that it constituted 1/5 legal fees. Pfizenmayer claimed the notation reflected an agreement by Nair to make five annual payments of $20,000 to Pfizenmayer. Nair denied making such an agreement. At her deposition, Nair gave the following explanation for the $20,000 payment: Q: If you contend that he was only supposed to receive one-third of the $39,000, then why did you permit Mr. Soucie to pay him an additional $20,000? A: Okay. He said then he paid Richardson over $6000. Mr. Dennis Pfizenmayer said to me, I -5- paid Richardson over $6000 and some other expenses. We'll take care of that later. That is the reason the $20,000. [sic] That's what they said. But I never heard anything after that. But he said exactly $6000, but he never did. Q: So why didn't you write him a check for $6000 rather than $20,000? A: I didn't write the check. Q: Then why didn't you object to Mr. Soucis writing him a check for $20,000 instead of writing him a check for $6000? A: No. He said $6000 to Richardson plus so many other things, then $20,000. Then I said okay. I agree because maybe the 400,000 is there. 20 -- I agree. I didn't fight for it. (Nair Depo. at 58-59.) After more than a year passed without any additional payments, Pfizenmayer sent Nair a letter requesting payment. Nair refused and filed a complaint against Pfizenmayer with the Disciplinary Counsel of the Supreme Court of Ohio alleging that she was over- charged. On August 23, 1995, the Disciplanary Counsel found that disciplinary action was not warranted. On October 3, 1995, Pfizenmayer filed a complaint against Nair for the balance of fees owed under the fee agreement. The complaint sought $175,229.56 [$135,561.20 (33.33% of $407,090.70) plus interest from 1992]. On November 3, 1995, Nair answered and raised the affirmative defenses of failure to state a claim upon which relief can be granted, unclean hands, laches, waiver, and estoppel. -6- On June 17, 1996, Pfizenmayer filed a motion for summary judgment. Pfizenmayer argued he was entitled to judgment because the contingency contract was valid and binding. He also argued the attorney-client relationship between Pfizenmayer and Nair did not terminate, and Pfizenmayer claimed he fully performed on his contract. On June 24, 1996, Nair filed her motion for summary judgment alleging she did not owe Pfizenmayer any money because the attorney-client relationship between them terminated on January 8, 1991, when Pfizenmayer changed to inactive status. She also argued that Pfizenmayer failed to substantially perform his obligations under the fee agreement. Moreover, she argued Pfizenmayer had already received payment that exceeded the reasonable value of his services, therefore, he could not recover under a quantum meruit theory. On June 27, 1996, Nair filed a motion for leave to file an amended answer to include a counterclaim for fraud. Additionally, she sought to add the following affirmative defenses to her original answer: Pfizenmayer is barred from recovery because he was not authorized to practice law; Pfizenmayer fraudulently represented to Nair that he was authorized to practice law; Pfizenmayer terminated the attorney-client relationship on January 8, 1991 and forced Nair to hire and pay another attorney to perform services Pfizenmayer agreed to perform; and the fee agreement was illegal and unenforceable. On July 17, 1996, Nair filed her brief in opposition to Pfizenmayer's motion for summary judgment. Nair argued the fee -7- agreement was illegal, unconscionable, violative of public policy and unenforceable. She also reiterated her claim that Pfizenmayer did not substantially perform his obligations under the fee agreement under quantum meruit because he had already been paid the reasonable amount he was entitled to, $160,180.53. On July 26, 1996, the trial court denied Nair's motion to file an amended answer to include her counterclaim. On August 21, 1996, the trial court denied Pfizenmayer's motion for summary judgment and granted summary judgment in favor of Nair. This appeal followed. We will address Pfizenmayer's assigned errors in a different order than presented in his brief. In his second and third assignments of error, Pfizenmayer argues the trial court erred in granting Nair's summary judgment and denying his motion for summary judgment. Under Civ.R. 56, summary judgment should be granted if the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts, and stipulations of fact filed in the action show there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Summary judgment should be denied unless, after construing the evidence most strongly in favor of the non-movant, it appears that reasonable minds can come to but one conclusion and that conclusion is adverse to the nonmovant. The moving party may not simply make a conclusory assertion that the nonmoving party has no evidence to prove its case. Rather -8- the moving party must be able to specifically point to some evidence of the type listed in Civ.R.56(C) which affirmatively demonstrates that the nonmoving party has no evidence to support the nonmoving party's claims. If the moving party fails to satisfy its initial burden, the motion for summary judgment must be denied. However, if the moving party has satisfied its initial burden, the nonmoving party then has a reciprocal burden outlined in Civ.R. 56(E) to set forth specific facts showing that there is a genuine issue for trial and, if the nonmovant does not so respond, summary judgment, if appropriate, shall be entered against the nonmoving party. Dresher v. Burt (1996), 75 Ohio St.3d 280; Civ.R. 56(C); Wing v. Anchor Media, Ltd. (1991), 59 Ohio St.3d 108, 111. When evaluating a motion for summary judgment, the trial court must construe the evidence and resolve all doubts in favor of the non- movant. Id.; Murphy v. Reynoldsburg (1992), 65 Ohio St.3d 356, 358-359. When evaluating the trial court's granting of summary judgment, we must apply a de novo standard of review and follow the standards of Civ.R. 56(C). Bressan v. Secura Ins. Co. (April 28, 1994), Cuyahoga App. No. 64997, unreported at 6. In her motion for summary judgment, Nair alleged Pfizenmayer was not entitled to recover on the contract because his representation of Nair ended long before any money was recovered on Nair's behalf. The evidence revealed that Pfizenmayer was on inactive status as of January 8, 1991. Pfizenmayer admitted he performed no other work for Nair after that date. The settlement -9- with Nair's ex-husband was not reached until July 31, 1992. Gov.Bar R. 6, Section 2 provides as follows: Until the attorney requests and is granted reinstatement of active status, an inactive attorney shall not be entitled to practice law in Ohio; hold himself or herself out as authorized to practice law in Ohio, hold nonfederal judicial office in Ohio, render any legal service for an attorney granted active status; occupy a nonfederal position in this state in which the attorney is called upon to give legal advice or counsel or to examine the law or pass upon the legal effect of any act, document, or law; be employed in the Ohio Judicial system in a position required to be held by an attorney; or practice before any nonfederal court or agency in this state on behalf on any person except himself or herself. Due to his inactive status after January 8, 1991, Pfizenmayer was not entitled to practice law in Ohio. Also, by his own admission, he was never licensed to practice law in Pennsylvania and consequently, he was not authorized to practice law in that state. Pfizenmayer's deposition testimony made it clear that he did not represent Nair after the case went to the law firm. Q: Is it your -- at the time that you received this correspondence [of 3/25/92], did you have an understanding that you continued to represent Leela Nair? A: Mrs. Nair was represented by Mr. Richardson in Pennsylvania where the action was taking place at that time. Q: My question was: Earlier you had said that, with respect to Defendant's Exhibit H [dated 10/30/91], that this correspondence, Defendant's H, was sent to you as the Ohio attorney for Mrs. Nair? -10- A: Again, I handled the Ohio action. I had gone as far as I could go with it. It had to go to Pennsylvania for enforcement. Yes, I was copied on everything. (Tr. 134.) The evidence reveals that Pfizenmayer was compensated for the work he performed on the case prior to the involvement of the law firm. In his deposition, Pfizenmayer admitted receiving one-third of the money he collected during his representation of Nair. Q: Am I understanding your testimony that you negotiated some partial payment of arrearages due and owing to Mrs. Nair in -- with Mr. Arnold? A: They made, pursuant to settlement discussions, he made some payment; yes. *** Q: When the payments were received by you from Mr. Arnold, or Mr. Arnold's office, did those checks come made out to both Leela Nair and Dennis Pfizenmayer, her attorney? A: I don't recall. Q: Now, you told me that when those payments came in you, quote, took your third, correct? A: A third; yeah. I mean, this was -- Q: Pursuant to the agreement? A: Yeah. In the process, somehow, yes, I was paid a third of those. Absolutely. (Tr. 73-74, 77.) Having concluded that Pfizenmayer had no right to recover one third of the settlement negotiated by the law firm and that he was fully compensated for the services rendered to Nair before the case was turned over to the law firm, we conclude the trial court did -11- not err in granting Nair's motion for summary judgment. Pfizenmayer's second assignment of error is overruled. Because we find the trial court properly entered summary judgment in favor of Nair, we overrule Pfizenmayer's third assignment of error. In his first assignment of error, Pfizenmayer argues that Nair waived the affirmative defenses raised in her motion for summary judgment by not raising them in her answer to his complaint. The failure to initially advance a defense should not prevent its later assertion unless it will seriously prejudice the opposing party. Hoover v. Sumlin (1984), 12 Ohio St.3d 1, 5. A liberal amendment policy provides the maximum opportunity for each claim to be decided on the merits rather than on procedural deficiencies. Second the rule reflects the fact that pleadings are assigned the limited role of providing the parties to a lawsuit with notice of the nature of the pleader's claim or defense. Discovery is available to paint a more detailed picture of the facts and issues. Id. (Citations omitted.) Hoover held that "a party may appropriately raise an affirmative defense in an amended pleading." Id. Civ.R. 15 provides that leave to amend should be given freely when justice so requires. The Hoover court designated abuse of discretion as the standard of review for motions to amend but held that, when the defense is rendered timely and in good faith, and there is no stated or apparent reason for denying leave, the denial of leave to amend is an abuse of discretion. Id. -12- In opposing the motion for leave to amend, Pfizenmayer argued that he would be prejudiced by the amendment. He asserted that discovery had been concluded. However, Nair's motion to amend was filed on June 27, 1996, nearly a week before the discovery cut-off date of July 3, 1996. (See Trial Court's Journal Entry of June 19, 1996) Nair attached an affidavit from the Ohio Supreme Court confirming that Pfizenmayer was on inactive status beginning January 8, 1991. Accordingly, we conclude the motion was filed timely and in good faith. In light of the decision in Hoover, we conclude the denial of the motion to amend constituted an abuse of discretion and that Nair did not waive her right to assert the affirmative defenses raised in her motion for summary judgment. Pfizenmayer's first assignment of error is overruled. In her cross-appeal, Nair argues the trial court erred in denying her motion to amend her answer to include her counterclaim for damages for fraud. We find Nair's cross-assignment of error is well taken. Civ.R. 13(F) states that when a pleader fails to set up a motion for permission to file an untimely counterclaim through oversight, inadvertence, or excusable neglect, or when justice requires, he may by leave of court set up the counterclaim by amendment. St. Francis Health Care Centre v. Hoffman (Aug. 23, 1996), Sandusky App. No. S-95-057, unreported. Under Civ.R. 13(F), the party seeking the amendment must demonstrate why he should be entitled to file an untimely counterclaim. Id. In this case, Nair's motion to amend included an explanation that she was unaware of Pfizenmayer's fraud until after she filed -13- her answer. She also included an explanation of the facts that supported her claim for fraud. Under the circumstances, we conclude the trial court's denial of Nair's motion to amend constituted an abuse of discretion. Accordingly, Nair's cross- assignment of error is well taken. We affirm the trial court's grant of summary judgment in favor of Nair on Pfizenmayer's complaint. The denial of Nair's motion to amend precluded her from asserting her counterclaim for fraud. Therefore, we remand the case to the trial court for further proceedings on Nair's fraud counterclaim. Judgment affirmed in part, reversed in part and remanded. -14- It is ordered that Appellant and Appellee 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. Exceptions. JAMES D. SWEENEY, C.J., and PATTON, J., CONCUR. PATRICIA ANN BLACKMON JUDGE N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the .