November 2, 2023
A recent Law.com story by Riley Brennan, “Ohio Courts Clarify ‘Prevailing Party’ Owed Attorney Fees in Deceptive Trade Practices Case”, reports that, in a question of first impression for Ohio courts, the First Appellate District looked to define the meaning of the term “prevailing party” in terms of attorney fees pursuant to the Ohio Deceptive Trade Practices Act. The meaning of “prevailing party” was at the center of a case before the court, with the question arising after a jury found in favor of the plaintiffs, Niv Goomai and Bar Hajbi, on their allegations that the defendants, H&E Enterprise and Avi Ohad, violated the Deceptive Trade Practices Act (DTPA) and breach of contract claims. The jury only awarded damages on the breach of contract claim, and therefore, as there were no damages awarded on the DTPA claim.
The trial court denied “statutorily-available attorney fees,” citing the plaintiff’s failure to prevail on the deceptive trade practices claim and denied attorney fees as a result. On appeal, Goomai claimed the lower court erred in failing to properly interpret and apply the DTPA attorney fee provision found in Ohio Revised Code 4165.03(B). Goomai argued that “he was a prevailing party under the DTPA by virtue of the jury’s verdict finding that H&E violated the DTPA,” while H&E argued that in order to be a prevailing party under R.C. 4165.03(B), “a party must obtain not only a judgment in its favor, but also a remedy,” according to the appellate court’s Oct. 27 opinion.
The Court of Appeals for the First Appellate District of Ohio agreed, holding the question in the case regarded the applicability of a statutory fee-shifting provision. In looking at what it means to be a “prevailing party” under R.C. 4165.03(B), the court used “ordinary principles of statutory interpretation” to guide its resolution, according to the opinion authored by Judge Jennifer Kinsley. As the term isn’t defined by the statute, the court looked to Black’s Law Dictionary definition, which defines “prevailing party” as “[a] party in whose favor a judgment is rendered, regardless of the amount of damages awarded.”
According to the court, under this definition, “the relief obtained is immaterial to a party’s status; what matters is whether the party obtained judgment in its favor.” “Our review of R.C. 4165.03 supports this conclusion. In construing statutory terms, courts read statutes as a whole and do not dissociated words and phrases from their context. … Looking at the language of R.C. 4165.03 as a whole, we are persuaded that ‘prevailing’ in the context of the DTPA means that the party obtained judgment in its favor, regardless of whether the party obtained a remedy in furtherance of that judgment,” Kinsley wrote.
“For one, the DTPA permits recovery of attorney fees from a plaintiff who knowingly pursues a groundless DTPA claim,” the judge continued. “In such circumstances, a prevailing defendant would obtain no relief other than a judgment in its favor, but that defendant would still be entitled to attorney fees from the plaintiff under R.C. 4165.03(B). If we were to read the statute as requiring a party to obtain a remedy in order to prevail, we would effectively eliminate the ability of prevailing defendants to obtain attorney fees and undermine the intent of the legislature in the process. And courts do not read language out of statutes.”
According to the court, Subsection B specifies that courts “may award in accordance with this division reasonable attorney’s fees to the prevailing party in either type of civil action authorized by division (A) of this section.” “This clear statutory language defines attorney fees eligibility by the type of action, not by the type of remedy. If the legislature intended to make prevailing party status dependent upon obtaining one of the remedies outlined in R.C. 4165.03(A), it could easily have said so,” Kinsley wrote. “Its decision not to do so is indicative of its intent to untangle attorney fees from any other type of remedy recovered in a DTPA case.”
In 2017, Ohad helped Goomai purchase a property in the Camp Washington neighborhood of Cincinnati, with the two entering into an agreement that Ohad and H&E would renovate the property for $50,000, with the project set to be completed by January 2018. However, after H&E failed to deliver on their promises, and the renovation project never materialized, Goomai sold the property for $50,000, which was at a loss on his investment. Goomai went on to sue H&E, including claims for breach of contract, fraudulent misrepresentation, and violation of the DTPA. H&E filed a counterclaim against Goomai for breach of contract, with only the DTPA claim permitting the recovery of statutory attorney fees if Goomai prevailed.
The jury didn’t receive instructions about the applicability of the attorney fees provision, or the implications of its allocation of damages if it decided to award no damage on the DTPA claim, said the court. The jury ultimately found against Goomai on the fraudulent misrepresentation claim, and agaisnt H&E on its counterclaim, awarding $30,604.09 in damages on the breach of contract claim and no damages on the DTPA claim. However, a Hamilton County judge denied Goomai’s motion for an award of attorney fees, “on the basis that Goomai was not a prevailing party within the meaning of the DTPA, because the jury did not award damages on that claim,” the opinion said.
The three-judge appellate panel court concluded that the term “prevailing party” in R.C. 4165.03(B) “supports the conclusion that obtaining a judgment, even one without an award of damages, entitles a party to see attorney fees.” Judges Robert C. Winkler and Ginger Bock concurred. In reaching this determination, the court sustained Goomai’s assignment of error, reversed the trial court’s decision, and remanded the case back to the trial court to consider the amount of attorney fees Goomai is entitled.