Ra v. Ohio Attorney General's Office

153 N.E.3d 759

2020 Ohio 1346

Kevin RA et al., Plaintiffs-Appellants,

v.OHIO ATTORNEY GENERAL'S OFFICE, Defendant-Appellee.

No. 19AP-533

Court of Appeals of Ohio, Tenth District, Franklin County.

Rendered April 7, 2020

On brief: Wendy S. Rosett, for appellants Vista REO Settlement Services, LLC, and Parcel Revenue Corporation; Kevin Ra, pro se. Argued: Wendy S. Rosett and Kevin Ra.

On brief: Dave Yost, Attorney General, and Randall W. Knutti, Columbus, for appellee. Argued: Randall W. Knutti.

DECISION

PER CURIAM

{¶ 1} Plaintiffs-appellants, Kevin Ra ("Ra"), Vista REO Settlement Services, LLC ("Vista"), and Parcel Revenue Corporation ("PRC"), appeal the July 11, 2019 judgment of the Court of Claims of Ohio granting summary judgment in favor of defendant-appellee, Ohio Attorney General's Office, on appellants' claims of negligence, tortious interference with business relationships, and intentional infliction of emotional distress and dismissing appellants' claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and declaratory judgment. For the following reasons, we affirm the trial court judgment.

I. FACTS AND PROCEDURAL HISTORY

{¶ 2} The following facts are not in dispute unless otherwise indicated. On November 16, 2017, appellee filed an action in the Cuyahoga County Court of Common Pleas asserting various claims against Ra, Vista, Housing Court Assistance Program, Inc. ("HCAP"), and Greater Cleveland Housing Partnership, Inc. ("GCHP") involving the operation of HCAP and GCHP as charities and Ra's use of charitable assets. The same day, a news release entitled "Cleveland-Area Man Accused of Using Nonprofit for Personal Gain" was posted on the "News Releases" page of appellee's website. (News Release at 1, attached as Ex. B to Compl.)

{¶ 3} The news release announced the commencement of a lawsuit against Ra accusing him of converting nonprofit funds for personal benefit, breaching his fiduciary duties, failing to register charitable trusts with the Attorney General's Office, and failing to cooperate with an investigation, among other alleged violations. The news release specified that Ra is accused of using his nonprofit entities—HCAP and GCHP—to benefit himself by allegedly offering free assistance to homeowners facing violations in Ohio housing courts but then using the nonprofits to buy and sell property rather than for charitable purposes. The news release further stated the lawsuit includes "about $50,000 in questionable expenditures" between 2012 and 2014 and four instances where the nonprofit "bought and then quickly sold property in Cleveland but apparently never received the proceeds." (News Release at 1.) The news release advised the reader that suspected charitable fraud should be reported to appellee and provides contact information to do so.

{¶ 4} The parties settled the Cuyahoga County action on January 29, 2018. Pursuant to the settlement agreement, Ra agreed to dissolve and wind down HCAP, never incorporate or create an Ohio nonprofit organization in the future, not hold any position within a charitable or nonprofit organization in Ohio, or otherwise participate in charitable solicitations in Ohio. Ra, HCAP, GCHP, and Vista agreed to "waive and release any and all claims and causes of action against [appellee], and any current or former employee or agent of [appellee], relating to [appellee's] investigation of Defendants or the Pending litigation." (Settlement Agreement at 3, attached as Ex. A to Compl.) The agreement expressly states it does not preclude Ra, either individually or through another entity, from engaging in real estate transactions or providing services to real property owners as a for-profit business, subject to certain restrictions. Once Ra's commitments were met, appellee agreed to dismiss the pending Cuyahoga County litigation with prejudice. Under the miscellaneous provisions, the parties agreed that the Cuyahoga County Court of Common Pleas retained jurisdiction to enforce the settlement agreement. The agreement is silent regarding the news release.

{¶ 5} On February 22, 2019, appellants filed a complaint against appellee contending "[t]he [news] release falsely depicts Ra and his business operations as criminal in nature and contains information couched as ‘accusations’ which [appellee] knows are false and/or misleading and/or baseless." (Compl. at ¶ 21.) The complaint states appellants became aware of the news release in February 2018 and, at that time, asked appellee to remove it from its website, but appellee refused to do so. According to the complaint, appellee then instituted a "policy" that it "used to destroy Ra's and Vista's reputation in perpetuity with allegations [appellee] knew were without merit." (Compl. at ¶ 23.) The complaint defines the policy as appellee's: "procedure, and/or custom wherein the [November 16, 2017 news] release was allowed to remain published to [appellee's] website, remain available to the public"; appellee's programming and/or manipulation of appellee's website using Search Engine Optimization ("SEO")¹ techniques to display the news release each time a person types Ra's name or email address into Google; and appellee's use of certain " ‘snippets’² to ensure that any Google search containing Ra's name displays knowingly false allegations that Ra violated Ohio law." (Compl. at ¶ 23-24, 32.) The complaint alleges the domain name associated with Ra's email address (@parcelrevenue.com) was not purchased until March 23, 2018 and, therefore, could not have existed at the time the settlement agreement was signed and its use by appellee in SEO and snippets occurred post-settlement and in bad faith. Appellants contend this policy was approved and implemented sometime in February 2018, after the settlement agreement was signed and after Ra asked appellee to remove the news release from appellee's website.

{¶ 6} From these allegations, appellants asserted claims for: (1) breach of contract and breach of the implied covenant of good faith and fair dealing in regard to the settlement agreement; (2) negligence; (3) tortious interference with business relationships; (4) declaratory judgment; and (5) intentional infliction of emotional distress. Regarding the breach of contract claim, the complaint states appellee breached the settlement agreement by "intentionally and/or maliciously and/or inadvertently" undermining Ra's ability to receive the benefit of the parties' settlement agreement by essentially undermining Ra's for-profit business. (Compl. at ¶ 70.) The claim for declaratory judgment also related to the settlement agreement itself and, in particular, concerned the language of the waiver and release clause and the implied duty of good faith and fair dealing.

{¶ 7} Regarding the negligence claim, appellants asserted in their complaint:

Post-settlement , [appellee] owed [appellants] a duty of care to ensure any information published on [appellee's] website about [appellants'] business affairs is true and accurate and/or [appellee] owed [appellants] a duty of care to ensure any information published on [appellee's] website about [appellants'] business affairs is not false and/or misleading and/or materially misleading. [Appellee] also owes [appellants] a duty of care, once it issues a [news] release about a business or individual and later learns that the information set forth in said [news] release is false, inaccurate, misleading, and/or offered in bad faith , to immediately update or remove said [news] release so as not to cause undue harm to others (e.g. , [appellants] ).

(Emphasis sic.) (Compl. at ¶ 74.) Appellants believed this duty of care was breached by appellee's "implementation of the policy and/or other unlawful actions which will be proven at trial" and, as a result of the breach, appellant suffered economic and non-economic injuries. (Compl. at ¶ 75.)

{¶ 8} Regarding the tortious interference with business relationships claim, appellants stated appellee had actual knowledge of appellants' potential business relationships with owners of abandoned and blighted properties, real estate investors and landlords, angel investors and venture capitalists, municipal governments, and real estate agents, and, without privilege or justification, "acted intentionally, improperly, and maliciously interfered with and caused the termination of [appellants'] business relationships" as well as prevented appellants from acquiring and/or continuing established and/or prospective business relationships. (Compl. at ¶ 84.) As to intentional infliction of emotional distress, appellants asserted that appellee's actions were intended to cause Ra serious emotional distress by intentionally subjecting Ra to false allegations of criminal behavior and conduct which appellee knew or should have known Ra did not commit. Further, appellants contended the purpose of appellee's creation and implementation of "the policy" was designed to annoy and harass Ra and to unjustly and unfairly ridicule him in front of his community, family, and industry peers. (Compl. at ¶ 96.) In addition to seeking the declaratory judgment on the settlement agreement, appellants asked for damages in the amount of $1.6 billion for Counts One, Two and Three, plus an additional amount to be determined at trial on Count Five, court costs and attorney fees, and any additional relief deemed equitable by the trial court.

{¶ 9} On March 25, 2019, appellee filed a motion to dismiss pursuant to Civ.R. 12(B)(1) and (6). Within it, appellee argued that Ra's, Vista's, and PRC's claims were quintessential "disguised defamation" claims since they all "hinge on their contention that the news release was false and caused them reputational harm." (Mot. to Dismiss at 1.) As a result, appellee contended the claims fail both because appellee is immune from liability for defamation relating to its work and because the one-year statute of limitations had expired. Appellee additionally...