Cornell v. Shain, 2021 Ohio 2094

Background

Clint Cornell and Alan Bee (with Dr. David Ellison as a party) operated companies that ran a healthcare practice jointly owned with W. Curtis Shain; disputes over diversion of assets led to litigation and receiver appointment.
On April 8, 2019 the trial court (after a receiver’s accounting request) ordered Cornell and Bee to pay $260,931.41 into the receivership and to have their new entities assume certain leases/financing.
Cornell and Bee did not comply; they later retained new counsel, disputed the receiver’s valuations, and claimed inability to pay.
The court found them in civil contempt on November 12, 2019, rejected their inability-to-pay defense as not credible, and gave a purge condition: pay $260,931.41 into the receivership within ten days (with threat of criminal contempt).
Cornell and Bee appealed the contempt finding. The appellate court held it had jurisdiction to review the contempt but concluded the underlying April 2019 order was a final, appealable order (so they waived collateral attack by not appealing it).
The appellate court affirmed the contempt finding (no abuse of discretion) but ruled the 10-day purge deadline was unreasonable and noted a miscalculation in the receiver’s valuation; it reversed the purge condition and remanded to set a reasonable purge mechanism/deadline and correct the valuation error.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the April 2019 receivership order could be collaterally attacked on appeal from contempt	Cornell/Bee argued the order unlawfully took their property and thus could not support contempt	Court (appellate) characterized this as waiver because they failed to timely appeal the April 2019 order	The April 2019 order was final and appealable under R.C. 2505.02(B)(2); failure to appeal waived collateral attack
Whether the trial court abused its discretion in finding civil contempt	Cornell/Bee claimed ambiguity and lack of a deadline, and inability to pay	Trial court found the order clear, plaintiffs admitted nonpayment earlier, and their inability-to-pay testimony was not credible	Affirmed: contempt finding upheld (clear order, noncompliance, inability-to-pay defense rejected)
Whether the purge condition (pay full amount in 10 days) was reasonable	Cornell/Bee argued 10 days was impossible/unreasonable given likely need to borrow/sell assets	Trial court imposed 10-day purge with no explanation	Reversed as to purge condition: 10-day deadline was unreasonable; remand to set reasonable purge terms and correct valuation error
Whether the receiver’s valuation supporting the purge amount was accurate	Cornell/Bee disputed the receiver’s valuation of equipment and funds	Appellate review found miscalculation in receiver’s accounting for owned vs. leased equipment	Appellate court directed trial court on remand to correct the miscalculation before setting new purge terms

Key Cases Cited

Docks Venture, L.L.C. v. Dashing Pacific Group, Ltd., 141 Ohio St.3d 107 (recognizing contempt orders are final and appealable)
State ex rel. Cincinnati Enquirer v. Hunter, 138 Ohio St.3d 51 (explaining contempt orders must be based on clear, definite, and unambiguous court orders)
In re Appropriation for Juvenile and Probate Div. for 1979, 62 Ohio St.2d 99 (holding failure to timely appeal a final order waives collateral attack via contempt appeal)
In re Appeal of Smith v. Chester Twp. Bd. of Trustees, 60 Ohio St.2d 13 (permitting review of an underlying interlocutory order when contempt stems from a non-appealable order)
Blakemore v. Blakemore, 5 Ohio St.3d 217 (abuse-of-discretion standard defined)
North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601 (discussing prejudgment takings and risk of irreparable injury that can justify immediate review)
Pugh v. Pugh, 15 Ohio St.3d 136 (burden for inability-to-pay defense in contempt: preponderance of evidence)