COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 77753 ALAN SUTTLE, ET AL., Plaintiffs-appellants JOURNAL ENTRY vs. AND MICHAEL A. DECESARE, ET AL., OPINION Defendants-appellees DATE OF ANNOUNCEMENT OF DECISION: JULY 5, 2001 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court, Case No. CV-332761 JUDGMENT: Affirmed in Part, Reversed and Remanded in Part. DATE OF JOURNALIZATION: APPEARANCES: For plaintiffs-appellants: JOSEPH J. JACOBS, ESQ. JACOBS LEGAL GROUP 15614 Detroit Avenue Suite 6 Lakewood, Ohio 44107 For defendants-appellees: IRWIN S. HAIMAN, ESQ. CHARLENE R. MILETI, ESQ. MCCARTHY LEBIT CRYSTAL & HAIMAN 1800 Midland Building 101 Prospect Avenue, West Cleveland, Ohio 44115-1088 -2- KARPINSKI, A.J.: This appeal arises from arbitration proceedings involving a residential home construction dispute. Plaintiffs-appellants Alan and Nancy Suttle (the Suttles ) appeal from a judgment on an arbitration award in favor of defendants-appellees N.T.M. Home Builders, Inc. dba Arlington Homes of Westlake ( NTM ) and its president, Michael DeCesare. The Suttles entered into a Residential Purchase Agreement with NTM for the construction and sale of the residence. The first clause of the preprinted form agreement as completed provided as follows: This Agreement is made at Westlake, Ohio, this 10th day of February, 1995 by and between N.T.M. Home Builders, Inc. dba Arlington Homes of Westlake, an Ohio corporation, hereafter referred to as the Seller , and Al & Nancy Suttle, hereafter referred to as the Buyer , upon the following terms, provisions and conditions: DeCesare signed the agreement as president of NTM in his corporate capacity only, as follows: N.T.M., INC. ARLINGTON HOMES By: Michael A DeCesare, President DeCesare did not sign this agreement or any other agreement with the Suttles in his individual capacity. Paragraph 13 of the agreement between the Suttles ( Buyer ) and NTM ( Seller ) contained the following arbitration clause: 13. ARBITRATION: Any claim or controversy which hereafter arises out of the construction of the dwelling house or its improvements and which cannot be settled by the Seller and Buyer, shall, at the instance of either party, be referred to the American Arbitration Association in Cleveland, Ohio and shall be arbitrated in accordance -3- with its industry arbitration rules. Any judgment upon an award rendered by arbitration may be entered in any court having jurisdiction thereof. The Suttles were dissatisfied with the construction of the house and ultimately filed a twenty-page, nine-count complaint in the trial court against both NTM and DeCesare. The complaint asserted both tort and contract claims, including: a claim to disregard the corporate entity and a claim that the arbitration clause was unconscionable, as well as claims for fraud, breach of contract, unworkmanlike construction, failure to correct unworkmanlike construction, breach of express and implied warranties, and violations of the Ohio Consumer Sales Practices Act ( CSPA ) under R.C. Chapter 1345. A copy of the agreement was attached to the complaint, which revealed on its face only NTM was a party to the agreement, not DeCesare in his personal capacity. NTM and DeCesare filed a joint answer, which asserted the existence of the arbitration clause. They subsequently filed a motion to stay proceedings to permit arbitration. The Suttles filed various documents to challenge the arbitrability of their claims and sought a hearing on the validity of the clause. The trial court granted NTM and DeCesare's application to stay proceedings. The Suttles did not file an immediate appeal from the order granting the stay. The claims against NTM and DeCesare ultimately proceeded to arbitration. The arbitrators awarded the Suttles a total amount of $64,412.42. The award included $22,925 in damages for repairs to approximately thirty items throughout the house specified in six -4- pages of exhibits. It also included $23,932.47 in attorney fees, $7,891.25 in engineering and expert witness fees, and $9,663.70 in arbitration fees.1 The arbitration award made various specific findings, including findings that DeCesare was not personally liable, and that respondent, apparently NTM, was liable for the amounts awarded. The Suttles filed a motion in the trial court to modify the arbitration award. Their motion argued that the award improperly failed to find violations of the CSPA, grant treble damages, or impose personal liability against DeCesare. The motion argued that NTM was insolvent, that DeCesare had its assets, and that they would obtain no recovery. NTM and DeCesare opposed the motion to modify the arbitration award. They reiterated the arbitrators' findings and argued that the Suttles did not produce a transcript of the arbitration hearing to provide any basis to modify the award. The trial court thereafter denied the motion to modify the award. This court dismissed the Suttles appeal from the order denying the motion to modify the arbitration award for lack of a final appealable order. Alan Suttle et al. v. DeCesare et al. (Sept. 15, 1999), Cuyahoga App. No. 76839, unreported. The Suttles thereafter filed a motion to confirm the arbitration award for purposes of obtaining a final appealable order. The Suttles' motion also requested the trial court enter an award of prejudgment interest. NTM and DeCesare filed a brief in 1 The arbitration award did not calculate the amount of arbitration fees, but the Suttles submitted evidence to demonstrate the total amount of such fees. -5- opposition to the request for prejudgment interest, but did not oppose confirmation of the arbitration award. The trial court thereafter confirmed that arbitration award and denied prejudgment interest. The Suttles timely appeal raising six assignments of error. Before addressing the merits of these arguments, however, we must address a subject matter jurisdictional issue. The record unambiguouslyshows that DeCesare was not a party to the agreement in his personal capacity and the claims against him were improperly arbitrated. It is well established that parties cannot be compelled to arbitrate disputes that they have not agreed in writing to arbitrate. E.g., ACRS, Inc. v. Blue Cross & Blue Shield (1998), 131 Ohio App.3d 450, 457. The agreement between the Suttles and NTM in the record shows on its face that the Suttles did not agree in writing to arbitrate their disputes against DeCesare. This issue arises with some frequency in the construction industry when all the parties to the litigation were not parties to the construction agreement containing an arbitration clause. For example, this court recognized these principles in St. Vincent Charity Hospital v. URS Consultants, Inc. (1996), 111 Ohio App.3d 791, when it held that the property owner could not be compelled to arbitrate its dispute against an entity that was not a party to agreement containing an arbitration clause. Id. The St. Vincent Court cited two cases which are particularly instructive in the case at bar. -6- The first, Kline v. Oak Ridge Builders (1995), 102 Ohio App.3d 63, involved similar claims by a married couple purchasing a house, the Klines, against the home builder, Oak Ridge, as well as its president (and his wife), the Morrises. The Klines entered into the underlying agreement with Oak Ridge to construct the house. The agreement, which contained an arbitration clause, was signed by the president of Oak Ridge, James Morris, in his corporate capacity only. Id. at 64. His wife, Kathy Morris, signed no agreement of any kind. As in the case at bar, the trial court stayed all proceedings, and all claims against the builder and its president and wife were submitted to arbitration. Upon review, the appellate court reversed the trial court's order to stay and arbitrate the homebuyers' claims against the builder's president and wife, who were not parties to the arbitration agreement. The Court stated: Absent statutory authority, a party to a lawsuit cannot be compelled to arbitrate a dispute that it has not agreed in writing to arbitrate. Teramar v. Rodier Corp. (1987), 40 Ohio App.3d 39, 40, 531 N.E.2d 721, 722-23.2 The Klines never agreed in writing to submit any claims they might have against the Morrises to arbitration. The Morrises were not parties to the Agreement between Oak Ridge and the Klines, nor do the Morrises argue that any separate written arbitration agreement between the Klines and them exists. Accordingly, we affirm the trial court's decision staying the trial proceedings and ordering arbitration of the controversies between the Klines and Oak Ridge. We reverse the trial court's decision insofar as it stayed the trial proceedings and ordered arbitration of controversies between the Klines and Morrises. 2 Citation to additional authority omitted. -7- Id. at 66-67. Teramar Corp. v. Rodier Corp. was an appeal to this appellate court from an order confirming an arbitration award as in the case at bar. Rodier sued both Teramar and its president Stakich and sought to compel arbitration of its claims against them. Rodier succeeded by assignment to a franchise agreement. The franchise agreement contained an arbitration clause and was signed on behalf of Teramar by its president, Stakich, in her corporate capacity. Stakich had also signed a guaranty agreement in her personal capacity, but the document did not contain an arbitration clause. Stakich objected to the court-ordered arbitration of the claims against her. The trial court, however, subsequently confirmed the arbitration award against both Teramar and Stakich individually. On appeal, this court found that the arbitration panel lacked subject matter jurisdiction to arbitrate the claims against Stakich in her individual capacity, because she had never signed a written agreement containing an arbitration clause. Id. The Teramar court held that: [t]he necessity of a written arbitration clause has been deemed by this court as jurisdictional. Id. at 40. This court held, moreover, that such a subject matter jurisdictional defect was not waived by Stakich's failure to file a timely motion to modify the arbitrator's award, stating as follows: Lack of subject matter jurisdiction may be raised at any stage in the proceedings, although not previously asserted in the action, including raising it for the first time on appeal. -8- Id. at 41 (citations omitted.) As in ACRS, St. Vincent, Kline, and Teramar, the record in the case at bar likewise does not contain a written arbitration agreement executed by DeCesare in his individual capacity. Neither the Suttles nor DeCesare agreed to submit disputes between them to arbitration and the arbitrators lacked subject matter jurisdiction to determine the Suttles' claims against DeCesare in his individual capacity. Because the arbitrator's award and findings in favor of DeCesare cannot stand, we shall address the Suttles' six assignments of error concerning the award against NTM. Before doing so, we note that the shotgun fashion by which the Suttles have raised their arguments in the trial court has made it difficult to appropriately resolve their claims. This appeal is similar in many respects to that in Patton v. Capital Builders and Supply, Inc. (Feb. 22, 2000), Stark App. No. 1999CA00195, unreported, which rejected a series of similar naked legal claims without timely and appropriate underlying factual support. I The Suttles' first three assignments of error challenge the referral of this matter to arbitration: THE TRIAL COURT ERRED IN GRANTING DEFENDANTS' MOTION TO STAY PROCEEDINGS AND COMPEL ARBITRATION SINCE DEFENDANTS WAIVED THEIR RIGHT TO COMPEL ARBITRATION BY WAITING 6 MONTHS AFTER THE FILING OF PLAINTIFFS' COMPLAINT TO ACT CONSISTENTLY WITH THEIR RIGHT TO ARBITRATE. THE TRIAL COURT ERRED IN GRANTING DEFENDANTS' MOTION TO STAY PROCEEDINGS AND COMPEL ARBITRATION SINCE PLAINTIFFS WERE NEVER PROVIDED AN OPPORTUNITY PURSUANT TO OHIO REVISED CODE S2711.03 TO DEMONSTRATE THAT THEY WERE -9- FRAUDULENTLY INDUCED INTO THE AGREEMENT OF THE ARBITRATION CLAUSE [SIC]. THE TRIAL COURT ERRED IN GRANTING DEFENDANTS' MOTION TO COMPEL ARBITRATION BY FAILING TO FIND THE ARBITRATION CLAUSE UNCONSCIONABLE AS APPLIED. These assignments are overruled. The Suttles contend categorically that none of their claims should have been referred to arbitration. They argue that the request to arbitrate them was untimely, that the trial court improperly denied a hearing to show they were fraudulently induced to enter into the arbitration clause, and that the arbitration clause was unconscionable. Under the circumstances, we lack jurisdiction to review these arguments. It is well established that an order granting a stay of court proceedings pending arbitration is a final appealable order. Id. at 4. R.C. 2711.02 provides in pertinent part as follows: An order under this section that grants or denies a stay of a trial of any action pending arbitration, including, but not limited to, an order that is based upon a determination of the court that a party has waived arbitration under the arbitration agreement, is a final order and may be reviewed, affirmed, modified, or reversed on appeal ***. See also Stewart v. Shearson Lehman Brothers, Inc. (1992), 71 Ohio App.3d 305. The trial court entered its order granting a stay of proceedings in the case at bar on November 10, 1997. The Suttles did not appeal from this order within thirty days as required by App. R. 4(A). The Suttles' notice of appeal in the case at bar was not filed until more than two years later on March 17, 2000, and it did not even designate the trial court's grant of the stay as one -10- of the challenged rulings. By failing to timely appeal from the trial court's order granting a stay in the case at bar, the Suttles have waived these claims of error. Even if the Suttles had properly raised these arguments, however, they lack merit. The trial court did not err or abuse its discretion by finding a six-month delay in filing a motion to stay proceedings waived their right to arbitration. E.g., ACRS, Inc. v. Blue Cross & Blue Shield, supra at 457 (same for 18-month delay). The trial court, furthermore, properly denied the Suttles' argument concerning fraudulent inducement to enter into the arbitration clause, because they failed to satisfy their burden of producing evidence to support their claim. E.g., ABM Farms, Inc. v. Woods (1998), 81 Ohio St.3d 498, syllabus. The trial court likewise properly denied the Suttles' argument that the arbitration clause was unconscionable, because they produced no evidence to support such a claim. E.g., Williams v. Aetna Fin. Co. (1998), 83 Ohio St.3d 464, 472. Accordingly, the Suttles' first, second, and third assignments of error are overruled. II The Suttles' fourth assignment argues that the trial court improperly refused to modify the arbitration award as follows: THE TRIAL COURT ERRED IN DENYING PLAINTIFFS' MOTION TO MODIFY THE ARBITRATION AWARD, BY FAILING TO ENFORCE THE CONSUMER'S RIGHTS UNDER THE OHIO CONSUMERS SALES ACT [SIC], SINCE IT WAS SELF-EVIDENT FROM THE AWARD THAT BUILDER'S WORK WAS UNWORKMANLIKE. This assignment is well taken in part. -11- The Suttles contends that the arbitration award was unlawful because the arbitrators found NTM breached the construction agreement, but did not find that any of its actions violated the CSPA. It is well established that there are very limited circumstances when a court may depart from an arbitration award which the parties expressly agreed to submit to final and binding arbitration. E.g., Lake Cty. Bd. of Mental Retardation & Dev. Disabilities v. Professional Assn. for Teaching of the Mentally Retarded (1994), 71 Ohio St.3d 15, 19. Dissatisfied with the results in the case at bar, the Suttles essentially request this court substitute its judgment for that of the common pleas court and/or the arbitration panel because they disagree with the substance of the award. Contrary to their argument, however, we lack such authority. See e.g., Sparks v. Barnett (1992), 78 Ohio App.3d 448. In the case at bar, the record provides sufficient grounds for the trial court to deny the Suttles' motion to modify the arbitration award. First, the motion was not filed within ninety days of the award. R.C. 2711.13. Moreover, their motion was not supported by a transcript or other adequate record of the evidence presented during the arbitration hearing. E.g., Patton v. Capital Builders and Supply, Inc., supra at 5. Under the circumstances, they have failed to show that any substantive aspect of the award was unlawful or in manifest disregard of the law to warrant modification under R.C. 2711.11(C). -12- As noted in the introduction above, however, the trial court should have modified the award to exclude any purported disposition of their claims against DeCesare. As in Teramar, the record unambiguously shows that the arbitrators lacked subject matter jurisdiction over these claims. Id. at 41. The Suttles did not agree to submit these claims to arbitration. Neither the Suttles nor DeCesare signed a written arbitration agreement to resolve such claims. The trial court, therefore, improperly submitted them for arbitration. This court has expressly held that the absence of a properly executed agreement to arbitrate constitutes a subject matter jurisdictional defect which cannot be waived and that an order confirming an award against a non-signatory must be reversed. Id. at 41-42. Accordingly, the Suttles' fourth assignment of error is sustained in part and overruled in part. III The Suttles' fifth assignment of error challenges the trial court's denial of prejudgment interest on the arbitration award as follows: THE TRIAL COURT ERRED IN FAILING TO PROVIDE A HEARING ON PLAINTIFFS' MOTION FOR PREJUDGMENT INTEREST AND IN DENYING PLAINTIFFS' MOTION FOR PREJUDGMENT INTEREST. This assignment is well taken. The Suttles argue that the trial court improperly denied their motion for prejudgment interest on the $62,412.42 arbitration award against NTM. The Ohio Supreme Court has recognized that parties recovering -13- for breach of construction contracts are entitled to prejudgment interest on the damage award during the time from accrual of the claim until judgment as an element of compensation to make the aggrieved party whole. Royal Elec. Constr. Corp. v. Ohio State Univ. (1995), 73 Ohio St.3d 110, 117. Failure to make such an award would deny the party compensation to which it is entitled for its injury. The existence of a good faith effort to settle is not a predicate for an award of prejudgment interest for breach of contract under R.C. 1343.03(A) as it is for tort claims under R.C. 1343.03(C). Id.; Landis v. Grange Mut. Ins. Co. (1998), 82 Ohio St.3d 339. Under the circumstances, we reverse and remand the Suttles' prejudgment interest claim for the trial court to determine when their claim for breach of contract against NTM accrued and damages became due and payable on the contract under R.C. 1343.03(A). Id. at 342; Royal Elec. Constr. Corp., supra. Accordingly, the Suttles' fifth assignment of error is sustained. IV The Suttles' sixth assignment of error challenges an order protecting DeCesare from discovery in connection with their motion for prejudgment interest. It provides as follows: THE TRIAL COURT ERRED IN GRANTING DEFENDANTS' MOTION FOR A PROTECTIVE ORDER [SIC] PLAINTIFFS' DISCOVERY REQUESTS. This assignment lacks merit. The Suttles argue the trial court improperly granted DeCesare a protective order from their post-judgment discovery requests. -14- The record shows that the arbitration monetary award confirmed by the trial court was made against NTM and not DeCesare personally3. As a result, their claim for prejudgment interest was against NTM only. The trial court permitted the Suttles to conduct discovery against NTM the party against whom the underlying award was made but not against DeCesare personally. It is well established that trial courts have discretion when deciding the relevance of information sought during discovery. E.g., Van-American Ins. Co. v. Schiappa (1999), 132 Ohio App.3d 325, 331. Under the circumstances, because the Suttles did not show how discovery of DeCesare's personal finances was relevant to any pending issue or that prejudgment interest could be awarded against him personally, denial of discovery against him was not unreasonable, arbitrary or unconscionable. Accordingly, the Suttles' sixth assignment of error is overruled. The judgment of the trial court is affirmed in part, reversed in part, and remanded. Consistent with our opinion in Teramar v. Rodier Corp., supra at 42, the judgment of the trial court confirming the arbitration award against NTM is affirmed, but the judgment, award, and findings are reversed as to DeCesare personally. The order of the trial court denying the award of prejudgment interest against NTM is reversed. The claims against DeCesare personally and the claim for prejudgment interest against 3 The Arbitration panel did not award any money against DeCesare personally, but the panel did make findings of fact regarding him personally. -15- NTM are remanded for further proceedings. Judgment accordingly. -16- It is ordered that appellees and appellant shall share the costs herein taxed equally. 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. TIMOTHY E. McMONAGLE, J., CONCURS; MICHAEL J. CORRIGAN, J., CONCURS IN JUDGMENT ONLY. DIANE KARPINSKI ADMINISTRATIVE 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. 22. 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 clerk per App.R. 22(E). See, also, S.Ct.Prac.R. II, Section 2(A)(1). .