Danziger v. Rieman
143 N.E.3d 570
Ohio Ct. App.2020Background
- Appellant Samuel Danziger (pro se) sued Croghan Bancshares, Inc., through its president Kendall Rieman, seeking preliminary and permanent injunctions to force inclusion of two shareholder proxy proposals in Croghan’s 2019 proxy materials and to enjoin the 2019 annual meeting until resolved.
- Danziger moved for a preliminary injunction; Rieman opposed, arguing the dispute was moot because Croghan included the proposals in its 2019 Proxy Statement and that Danziger had no legal right to compel inclusion.
- The trial court denied the preliminary injunction, finding Danziger failed to show a substantial likelihood of success on the merits, irreparable harm, or public benefit, and that imposing SEC-style requirements on a non-SEC company would burden Croghan/shareholders.
- Rieman then moved to dismiss under Civ.R. 12(B)(6); the court granted dismissal for the same legal reasons and as moot (voluntary inclusion).
- Danziger’s post-judgment motions (Civ.R. 60 request, omnibus reconsideration and amendment) were denied; he appealed the April 17 and April 22, 2019 entries.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a hearing was required before denying a preliminary injunction | Civ.R. 65 implies a hearing; due process requires one | No hearing required where no TRO issued and plaintiff cannot show likely success | Denial without hearing not an abuse where plaintiff failed to show likelihood of success |
| Whether Danziger showed substantial likelihood of success on the merits for a preliminary injunction | Shareholder may force inclusion of simple proposals (gender diversity, director term limits); relied on Carter | No statutory or common-law right; Croghan not SEC-regulated so SEC rules do not apply | No likelihood of success; court properly denied injunctive relief |
| Whether the 12(B)(6) motion converted to summary judgment (requiring Civ.R. 56 notice) | Inclusion of affidavit/exhibit converted motion; plaintiff entitled to notice and evidence opportunity | Court did not rely on outside evidence; dismissal proper under 12(B)(6) because no legal basis for relief | Any conversion error harmless; dismissal proper because plaintiff could prove no set of facts entitling relief |
| Whether denial of leave to amend was erroneous | Sought to amend to challenge omission from proxy cards | Trial court denied; appellant failed to timely appeal denial | May 16 denial not timely appealed to this court; assignment not preserved |
Key Cases Cited
- Garono v. State, 37 Ohio St.3d 171 (Ohio 1988) (standard of review for injunctions; trial court discretion)
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (Ohio 1983) (definition of abuse of discretion)
- Procter & Gamble Co. v. Stoneham, 140 Ohio App.3d 260 (Ohio Ct. App. 2000) (four-factor test for preliminary injunction)
- Carter v. Portland Gen. Elec. Co., 362 P.2d 766 (Or. 1961) (refusal to apply SEC proxy rules to non-SEC corporations)
- Sec. & Exch. Comm’n v. Transamerica Corp., 163 F.2d 511 (3d Cir. 1947) (application of SEC proxy rules)
- Sea Lakes, Inc. v. Sea Lakes Camping, Inc., 78 Ohio App.3d 472 (Ohio Ct. App. 1992) (hearing required before granting preliminary injunction as due process protection)
- Johnson v. Morris, 108 Ohio App.3d 343 (Ohio Ct. App. 1996) (no abuse in denying PI without hearing where plaintiff not entitled to injunction)
- Moffitt v. Auberle, 167 Ohio App.3d 120 (Ohio Ct. App. 2006) (standard for Civ.R. 12(B)(6) dismissal)