Background
In 2018, Vandercar purchased the Millennium Hotel property in downtown Cincinnati and agreed to assign its interest to the Port of Greater Cincinnati Development Authority under an assignment agreement. The Port agreed to pay Vandercar $2.5 million at closing and $5 million when revenue bonds for redevelopment were issued. The Port paid the initial fee but refused the redevelopment fee, arguing that demolition was a “predevelopment” activity, not “redevelopment” as contemplated by the contract.
Vandercar sued for breach of contract and bad faith. In 2022, in Vandercar I, this court affirmed the breach-of-contract judgment but reversed the dismissal of the bad-faith claim, remanding for determination of whether bad faith occurred and whether attorneys’ fees were warranted. On remand, one judge denied the attorneys’ fees motion. A second judge then granted Vandercar’s motion for relief from judgment under Civ.R. 60(B). The Port appealed that grant while Vandercar appealed the denial of fees.
The Court’s Holding
The court affirmed the trial court’s denial of attorneys’ fees but reversed the grant of post-judgment relief. On the attorneys’ fees issue, the court held that while Vandercar prevailed on the breach claim, it failed to establish bad faith at the exceptional level required in Ohio. Bad faith in contract cases requires “dishonest purpose, moral obliquity, conscious wrongdoing, breach of a known duty due to ulterior motive, ill will comparable to fraud, or actual intent to mislead or deceive.” The Port’s conduct—including website alterations, aggressive discovery tactics, and questionable affirmative defenses—was characterized as “aggressive” and “sharp” but did not rise to this threshold. The court also held that the Port properly objected to Vandercar’s requests for admissions asking it to adopt conclusive definitions of “redevelopment” and “demolition,” terms undefined in the contract.
On the post-judgment motion, the court reversed, holding that Civ.R. 60(B) cannot be used as a substitute for direct appeal. All of Vandercar’s arguments concerning bad faith and attorneys’ fees could have been raised on appeal and were not the type of injustice that Civ.R. 60(B) is designed to remedy. The trial court erred as a matter of law in granting the motion.
Key Takeaways
- Attorneys’ fees in Ohio breach-of-contract actions are reserved for only exceptional cases involving actual bad faith, not merely aggressive litigation tactics.
- A party cannot use a Civ.R. 60(B) motion to relitigate issues that were or could have been presented on direct appeal.
- A party can properly object to discovery requests demanding admission of definitional statements for terms not defined in the contract, even if those terms are central to the dispute.
Why It Matters
This decision reinforces Ohio’s restrictive approach to fee-shifting in commercial disputes. While breach-of-contract claims may succeed, the path to recovering attorneys’ fees is narrow and limited to exceptional circumstances involving clear bad faith. The ruling protects defendants from fee liability for ordinary litigation conduct, even when characterized as aggressive. For parties in commercial disputes, this means that unfavorable contract interpretations and even questionable litigation tactics may not trigger fee liability.
The decision also establishes important procedural boundaries. By holding that post-judgment motions cannot serve as a backdoor appeal mechanism, the court promotes finality and prevents parties from circumventing the appellate process through successive motions and reassignments. This provides certainty for both litigants and the judicial system regarding when disputes are truly resolved.