COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 71708 AUTO-OWNERS INSURANCE CO. : ACCELERATED DOCKET : Plaintiff-appellant : : JOURNAL ENTRY -vs- : AND : OPINION DAVID A. KULWICKI, ET AL. : : Defendant-appellees : PER CURIAM : DATE OF ANNOUNCEMENT : JULY 17, 1997 OF DECISION : CHARACTER OF PROCEEDING : Civil appeal from Court of Common Pleas : Case No. CV-298681 JUDGMENT : AFFIRMED IN PART AND REVERSED IN PART. DATE OF JOURNALIZATION : APPEARANCES: For plaintiff-appellant: For defendant-appellees: MAL HANSEN, ESQ. DAVID A. KULWICKI, PRO SE McNeal, Schick, Archibald 76 South Main Street & Biro Co. Suite 1612 700 Skylight Office Tower Akron, OH 44308 1660 West Second Street Cleveland, OH 44113-1454 - 2 - PER CURIAM: This cause came on to be heard upon the accelerated calendar pursuant to App. R. 11.1 and Loc. R. 25, the records from the court of common pleas and the briefs and oral arguments of counsel. This is an appeal from a summary judgment rendered in favor of defendant-attorney David Kulwicki on plaintiff-insurer Auto-Owners Insurance Company's complaint for subrogation relating to medical payments that Kulwicki allegedly guaranteed to Auto-Owners. The underlying facts are undisputed. Kulwicki, associated with the Dennis Seaman law firm, represented Stephanie White, whose vehicle was negligently struck by one Prosser. White maintained an insurance policy with Auto-Owners which paid White a total of $1,548.03 under the medical payments provision of the policy. Auto-Owners contacted Prosser's insurer, Milwaukee Insurance Company, and preserved its rights to subrogation. White retained Kulwicki to represent her and he negotiated an $8,500 settlement with Milwaukee. Auto-Owners contacted Milwaukee, concerned about its subrogation rights. Milwaukee informed the Auto-Owners that it notified Kulwicki of Auto-Owners' rights in a settlement draft made payable jointly to White, Kulwicki and Auto- Owners. Instead of accepting the draft, Kulwicki sent the draft back to Milwaukee with the request that it remove Auto-Owners' name from the draft. In a letter accompanying the request, Kulwicki wrote: Thank you for your letter dated February 13, 1995. I will satisfy any and all claims that - 3 - Auto Owners Insurance Company may have in connection with Mrs. White's claims. There- fore, it is not necessary to list them as a joint payee on the settlement check. Milwaukee reissued the check, this time naming only Kulwicki and White as payees. Auto-Owners subsequently made a demand on Kulwicki for subrogation of the medical payments. Kulwicki responded by stating that, "we, for our part, inadvertently distributed funds from our escrow account to our client that should have been used to satisfy this subrogation obligation." Auto-Owners continued to look to Kulwicki for subrogation. When he did not reimburse those medical payments, Auto-Owners brought this subrogation action against Kulwicki and his firm seeking to recover those payments. Kulwicki and the firm initially answered the complaint by denying that the White matter had been settled. Kulwicki and firm also counterclaimed against Auto-Owners for quantum meruit compensation for legal services he allegedly performed on behalf of Auto-Owners. Based on this answer, Auto-Owners sought sanctions pursuant to Civ.R. 11 because the White matter had, in fact, settled. The court submitted the matter to arbitration, and the panel found in favor of the Auto-Owners, against Kulwicki only. The arbitrators found against Kulwicki on his counterclaim, but made no mention of the firm's counterclaim. Kulwicki filed an appeal de novo in the court of common pleas purporting to encompass both him and the firm. Only Kulwicki and Auto-Owners filed motions for summary judgment. The trial court granted Kulwicki's motion for summary - 4 - judgment, and dismissed his counterclaim. The court denied Auto- Owners's motion for summary judgment and this appeal followed. The assigned errors challenge the denial of the Auto-Owners's motion for summary judgment and the denial of the motion for Civ.R. 11 sanctions. We find the trial court not only erred by granting Kulwicki summary judgment, it should never have allowed the Kulwicki to file an appeal de novo from the arbitration proceedings because he failed to attend the arbitration. Loc.R. 29, Part V(B)(2) of the Court of Common Pleas of Cuyahoga County states: "(2) The failure of a party to appear either in person or by counsel and participate in an Arbitration proceeding shall be considered as a waiver of the right to file an appeal de novo (Part VII hereof) and a consent to the entry by the Court of judgment on the report and award of the panel." We have upheld decisions in which the trial court refused to accept appeals de novo when the party seeking to appeal the arbitration decision did not attend the arbitration. See e.g., John Prochazka Plumbing v. Potts (Nov. 3, 1994), Cuyahoga App. No. 67107, unreported; Brown v. Huff (Dec. 22, 1994), Cuyahoga App. No. 67378, unreported. This court has not consistently determined whether the notice of appeal de novo requirements are jurisdictional or not. Compare Robert Silverman, Inc. v. Platel (Oct. 4, 1990), Cuyahoga App. No. 57532, unreported ("where an appeal de novo is filed outside the - 5 - thirty-day time limit, the court of common pleas lacks jurisdiction to entertain the appeal or to set the matter for trial") and Condon v. Barthiw (Oct. 15, 1987), Cuyahoga App. No. 53849, unreported (same) with Keener v. Gary Von Agency, Inc. (Nov. 8, 1995), Cuyahoga App. No. 68159, unreported ("local rules concerning arbitration are procedural and not jurisdictional"). We need not resolve this contradiction in this appeal. Loc.R. 29, Part V(B)(2) uses the mandatory language "shall" in referring to the waiver principle incorporated into the rule. In this context, the waiver applied by Part V(B)(2) is different than the requirements relating to the jurisdictional nature of the notice of appeal de novo from the arbitration award. "Waiver" is usually referred to as the voluntary relinquishment of a known right. State ex rel. Ryan v. State Teachers Retirement Sys. (1994), 71 Ohio St.3d 362, 368. The waiver referred to in the rule, however, is procedural in nature. It is akin to the type of waiver utilized in appellate procedure when, for example, we deem errors not raised in the trial courts 1 waived for purposes of appeal. Importantly, this kind of waiver 1 There at least two other kinds of waiver. One kind of waiver is commonly found in association with constitutional or statutory rights, mainly in criminal law. For example, an accused may waive any number of constitutional rights related to trial, due process, searches and seizure, etc. See Crim.R. 11(C). The other kind of waiver is typically raised in the nature of an affirmative defense under Civ.R. 8, and involves rights that do not rise to the level of constitutional or statutory rights, but usually involve behavior in which the party entitled to assert some right against another decides to forego that right in exchange for some benefit. - 6 - is not jurisdictional in the sense that a court could never consider the appeal; the court retains jurisdiction to consider whether the error alleged had been raised and, if not, whether the interests of justice so require consideration despite the waiver. Procedural waivers are not absolute, but they should not be ignored. In arbitration matters, the waiver incorporated into Loc.R. 29, Part V(B)(2) is presumptive. Referring matters to the arbitration process serves the beneficial purpose of encouraging disposition of lawsuits without tying up judicial resources. In fact, the Rules of Superintendence for Courts of Common Pleas explicitly require the courts of common pleas to consider a plan for the mandatory arbitration of civil cases. See C.P.Sup.R. 15(A)(1). To that end, the supreme court has frowned upon actions by losing parties to arbitration that would render arbitration a nullity or a waste of time for the courts or the parties. See Kuenzer v. Teamsters Union Local 507 (1981), 66 Ohio St.2d 201, 203-204, fn. 5. Kulwicki did not attend the arbitration. Although the arbitrator's report does not mention this fact, Kulwicki admitted it in his brief in opposition to the Auto-Owners's motion for summary judgment. In fact, Kulwicki argued that his failure to attend the arbitration justified the appeal de novo. He apparently claimed that because the firm had been represented by its own - 7 - 2 counsel and not found to bear any liability for the subrogation interest, had he attended the arbitration and represented himself, he too, presumably would not have been liable for the subrogation interest. This is exactly the type of behavior the waiver rule seeks to prohibit. Were we to permit trial courts to ignore the waiver associated with a party who fails to attend an arbitration, we would render arbitration proceedings a nullity and a waste of time for both the court and the parties. In our opinion, the trial court should have refused to hear the appeal de novo and certified the arbitrator's report and award as the judgment of the court. Loc.R. 29, Part V(B)(2) is not absolute. Loc.R. 29, Part V(B)(3) permits the trial court, upon good cause shown, to allow an appeal de novo by a party who failed to attend the arbitration. But nothing before us indicates Kulwicki had good cause for not appearing at the arbitration. In his brief below, he maintained that he had a conflict and attempted to reschedule the arbitration, but that the arbitrators refused to do so. The record does not contain a motion for a continuance 2 A notice of appearance by the firm's counsel is in the record, but it was not filed with the court. Nonetheless, it does not appear that the firm's attorney represented the attorney's interests, and the attorney does not make this assertion. Indeed, the attorney's motion for summary judgment argued he lacked personal liability and that the firm itself would have liability due to its contractual relationship with White. Given the competing interests at stake in an arbitration proceeding, the attorney could not ethically argue that the firm's attorney could have proceeded on his behalf. See generally DR 5-101. - 8 - demonstrating this point, although the record does contain an earlier motion for a continuance of the arbitration filed by Kulwicki that had been granted. We note that Kulwicki failed to attend oral argument in this court, even after being given oral notification of the argument. Because he gave his personal assurance that he would attend the argument, we tried without success to contact him and waited for thirty minutes before proceeding with argument in his unexplained absence. The failure to attend scheduled pretrial proceedings may constitute contempt of court. Cleveland v. Ramsey (1988), 56 Ohio App.3d 108, 109. Arbitration proceedings are court proceedings, deserving the same respect the parties must show before the trial judge. Under the circumstances, we find no reasons to suggest that the waiver provisions of Loc.R. 29, Part V(B)(2) should not be employed. We therefore reverse the judgment of the trial court and remand with instructions to enter judgment on the report and award of the arbitrators. We also find that the merits of the action do not constitute grounds for vacating the report and award of the arbitrators. Under principles of suretyship, we find that Kulwicki's letter to Milwaukee constituted a binding agreement to reimburse Auto-Owners for its medical payments to White. A suretyship is the contractual relationship whereby one person, the surety, agrees to answer for the debt of another, known as the principal. Hopkins v. INA Underwriters Ins. Co. (1988), 44 - 9 - Ohio App.3d 186, 188. As with any contract, the agreement between the parties must contain a lawful subject matter, a sufficient consideration, and an actual agreement to do or forebear from doing a particular thing. Local Tel. Co. v. Mutual Tel. Co. (1921), 102 Ohio St. 524, 530. In Solon Family Physicians, Inc. v. Buckles (1994), 96 Ohio App.3d 460, we considered a very similar question to that presented here. A lawyer representing a personal injury plaintiff wrote a treating physician and said, "*** this office will protect any outstanding bill for your services to the above referenced individual and we will see to it that your fee is paid promptly from the proceeds of the settlement." We held this letter constituted a "a guarantee of payment [which] created a suretyship" under which the lawyer became liable to the doctor. Id. 464. Like Buckles, Kulwicki's letter to Milwaukee constituted a form of suretyship in which he stated, "I will satisfy any and all claims that Auto Owners Insurance Company may have in connection with Mrs. White's claims." Kulwicki now argues that he did not enjoy a benefit from this bargain and that the agreement lacked consideration. We reject these arguments. The first argument, relating to the lack of benefit enjoyed by Kulwicki, can be easily disposed. By his own admission, Kulwicki asked Milwaukee to tear up the initial draft because he believed it would take months for him and the firm to see their money. By - 10 - ensuring he would receive his fee sooner, Kulwicki enjoyed a benefit resulting from the contract. The second argument, that no consideration supported the guarantee, is likewise without merit. Kulwicki's consideration was the guarantee that he would ensure Auto-Owners' subrogation claim. In exchange for that consideration, Milwaukee agreed to tear up the original draft and issue a second draft that omitted Auto-Owners' name. While this consideration might seem nominal, it is well settled that courts will not look into the amount of consideration supporting a valid contract. See Brads v. First Baptist Church of Germantown, Ohio (1993), 89 Ohio App.3d 328, 336. Absent Kulwicki's promise to see that Auto-Owners received its medical payment reimbursement, it seems likely Milwaukee would not have agreed to take Auto-Owners' name off the settlement draft and destroy the subrogation rights that it initially sought to protect. Kulwicki argues that Auto-Owners cannot show consideration because it had no right to be named on the Milwaukee settlement draft. This is besides the point. Whether or not Milwaukee had a legal duty to name Auto-Owners on the settlement, the fact remains that it did name Auto-Owners on the draft as an accommodation to Auto-Owners' subrogation rights. When Kulwicki asked that Milwaukee remove Auto-Owners's name from the draft, he asked Milwaukee to forebear an act. By tearing up the original draft and issuing a new draft, Milwaukee gave sufficient consideration for the suretyship contract. This was akin to a third party - 11 - beneficiary relationship, because both Kulwicki and Milwaukee expressly agreed that performance between them would occur as long as Kulwicki guaranteed Auto-Owners' subrogation rights. See Hill v. Sonitrol of Southwestern Ohio, Inc. (1988), 36 Ohio St.3d 36, 40, citing Restatement of the Law 2d, Contracts, Section 302(1). Finally, we note that an attorney's failure to pay a client's subrogated medical bills after retaining an amount from the settlement to pay those bills has formed the basis of disciplinary action. See Cincinnati Bar Assoc. v. Shabazz (1994), 69 Ohio St.3d 535. Kulwicki admitted to Auto-Owners that "we, for our part, inadvertently distributed funds from our escrow account to our client that should have been used to satisfy this subrogation obligation." Our conclusion here simply restores Auto-Owners to the position it should have been in had Kulwicki followed through on his promise to see that Auto-Owners' subrogation rights remained protected once Milwaukee agreed to remove it from the settlement draft. Accordingly, the first assignment of error is sustained. The second assignment of error complains that the trial court abused its discretion by failing to impose sanctions on Kulwicki pursuant to Civ.R. 11 and R.C. 2323.51. The substance of this argument is that (1) in his answer to Auto-Owners' complaint, Kulwicki denied that the White matter had settled when, in fact, the matter had settled for $8,500, a fact that Kulwicki admitted in his arbitration brief and (2) that Kulwicki's counterclaim for quantum meriut had no legal basis. - 12 - Civ. R. 11 states in pertinent part: " *** 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." Civ.R. 11 sanctions may be awarded if the court determines that the attorney knew or deliberately failed to discover that there were no good grounds to support the pleading or that the pleading was interposed for purposes of delay. Weiner, Orkin, Abbate & Suit v. Nutter (1992), 84 Ohio App.3d 582. The court's decision to deny Civ.R. 11 sanctions is reviewable for an abuse of discretion. Borowski v. State Chemical Mfg. Co. (1994), 97 Ohio App.3d 635, 646. There is some appeal to Auto-Owners' argument. Kulwicki does not disagree that the White matter settled before he filed his answer denying that fact, but maintains it did not settle "favorably" to White because her preexisting physical ailments caused her to compromise on the settlement amount. This was a very thin hair to split on an already bald legal position and is nothing more than legal sophistry of the kind Civ.R. 11 expressly seeks to prohibit. - 13 - Nonetheless, we cannot say that the trial court abused its discretion by denying the motion for sanctions because Auto-Owners cannot show that Kulwicki's pleading prejudiced it in any way. In other words, despite being less than forthcoming with the particular response in his answer, that equivocation did not unnecessarily prolong the litigation. Even had Kulwicki admitted the settlement, we cannot say that the litigation would have terminated solely upon the complaint. Hence, while we do not condone Kulwicki's actions, we cannot say that they warranted the imposition of sanctions. We likewise find the trial court did not abuse its discretion in denying sanctions under R.C. 2323.51. Sanctions under that section may be imposed if the court determines that the claim served merely to harass or maliciously injure another party to the action or (2) the claim is not warranted under existing law and cannot be supported by a good faith argument for an extension, modification or reversal of existing law. See R.C. 2323.51(A)(2). The counterclaim made the bare allegation that Kulwicki "performed legal services on behalf of Plaintiff Auto Owners." These legal services are not described and we cannot discern what they might be. Again, however, we cannot say that the trial court abused its discretion by denying the motion. It clearly found against Auto-Owners at the time, so its discretion in denying Auto- Owners' motion for sanction would not have been exercised unreasonably. Moreover, Auto-Owners has not shown precisely how it - 14 - has been adversely affected by the issuance of the complaint. See Pisanick-Miller v. Roulette Pontiac (191), 62 Ohio App.3d 757. The second assignment of error is overruled. Judgment affirmed in part; reversed in part. - 15 - This cause is affirmed in part; reversed in part and remanded for further proceedings consistent with the opinion herein. It is ordered that appellant and appellees share equally the costs herein taxed. It is ordered that a special mandate issue out of this Court directing 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. JOHN T. PATTON, PRESIDING JUDGE LEO M. SPELLACY, JUDGE THOMAS J. PARRINO, JUDGE.* Concur. *SITTING BY ASSIGNMENT: Thomas J. Parrino, Retired Judge of Court of Appeals of Ohio, Eighth Appellate District. 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 journalization of this court's announcement of decision by the .