2115-2121 Ontario Bldg., L.L.C. v. Anter
2013 Ohio 2995
Ohio Ct. App.2013Background
- Ontario sued Macron and several shareholders, claiming Ontario purchased 32 of 64 company shares (50%) and seeking declaratory relief, issuance of share certificates, and an accounting.
- Kratus counterclaimed that only 63 shares existed and Ontario owned at most 31 shares; the trial court granted summary judgment to Ontario declaring it a 50% shareholder and ordering issuance of certificates and an accounting.
- While the appeal of that judgment was pending, Ontario moved to appoint a receiver because Macron’s sole asset (the Stanley Block building) was code-deficient, subject to municipal fines and injunctions, and Ontario sought demolition to abate the nuisance.
- At the receivership hearing Kratus consented to appointment of a receiver solely to carry the judgment into effect (transfer shares and obtain accounting) but opposed broader powers to control, manage, and demolish the building as exceeding the court’s post-judgment jurisdiction.
- The trial court appointed a receiver and issued a lengthy order granting broad powers over the Stanley Block, and provided a provision (Section 4.3) addressing who must advance receiver fees if the estate produced no funds; receiver fees later exceeded $150,000.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court had jurisdiction to appoint a receiver while the judgment was on appeal | Ontario: Trial court retained power to enforce its judgment post-appeal and may appoint a receiver to carry judgment into effect | Kratus: Once on appeal, trial court lacked jurisdiction except to act in aid of appeal; no stay was sought but broader relief exceeded jurisdiction | Court: Trial court retained jurisdiction to appoint a receiver to enforce its judgment because no stay was obtained; appointment for that limited purpose was proper |
| Whether the trial court could grant the receiver broad powers over corporate property unrelated to enforcement of the judgment | Ontario: Receiver needed broad authority to preserve/maximize value and abate nuisance (demolition) | Kratus: Those powers exceeded enforcement of the underlying judgment and effectively sought to dissolve or liquidate the corporation without separate statutory process | Court: Granting authority beyond enforcement of the judgment was an abuse of discretion; such broader powers require a separate cause or different statutory basis |
| Who must pay receiver fees for duties outside enforcement of the judgment | Ontario: (implicitly) receiver expenses should be borne by the receivership estate or as ordered | Kratus: Fees for actions beyond enforcing the judgment should not be charged to Macron; plaintiff who sought broader receivership should bear them | Court: Fees and costs for enforcing the judgment are chargeable to Macron; fees for duties unrelated to enforcement must be paid by Ontario per Section 4.3 |
Key Cases Cited
- Equity Ctrs. Dev. Co. v. S. Coast Ctrs., Inc., 83 Ohio App.3d 643 (8th Dist. 1992) (party seeking receivership must show by clear and convincing evidence)
- State ex rel. Celebrezze v. Gibbs, 60 Ohio St.3d 69 (1991) (appointment of receiver is within trial court discretion)
- Malloy v. Malloy Color Lab, Inc., 63 Ohio App.3d 434 (10th Dist. 1989) (appellate review confined to whether evidence sustains appointment)
- Howard v. Catholic Social Servs. of Cuyahoga Cty., Inc., 70 Ohio St.3d 141 (1994) (trial court retains jurisdiction after appeal to act in aid of judgment enforcement)
- McAuley v. Smith, 82 Ohio St.3d 393 (1998) (trial court divested of jurisdiction on appeal except actions in aid of appeal)
- State ex rel. Klein v. Chorpening, 6 Ohio St.3d 3 (1983) (trial court retains jurisdiction to enforce its judgment absent a stay)
- Hagood v. Gail, 105 Ohio App.3d 780 (11th Dist. 1995) (trial court's post-appeal authority to enforce its judgment)