Ettayem v. Ramsey
2019 Ohio 675
Ohio Ct. App.2019Background
- Plaintiff Ashraf Ettayem (sole shareholder of Limited Investment Group) alleged defendants (court-appointed receiver David Ramsey and related Guaranteed entities, plus Huntington Bank) mishandled and disposed of property and assets tied to two Limited Investment properties after loan default and foreclosure.
- Limited Investment borrowed from Huntington in 2008; loan partially funded, later halted; Huntington foreclosed on the Central Avenue property housing a Shop N Save.
- Ramsey was appointed receiver in consolidated Franklin County cases; plaintiff sued Ramsey, Guaranteed entities, Huntington, and others in 2016 asserting breach of fiduciary duty, conversion, unjust enrichment, tortious interference, fraud, theft, emotional distress, and veil-piercing claims.
- Defendants moved to dismiss under Civ.R. 12(B)(6). The trial court granted dismissal on February 2, 2017.
- On appeal, the court affirmed dismissal, holding (inter alia) plaintiff lacked leave from the appointing court to sue the receivers (Barton doctrine), lacked standing to assert corporate claims personally, failed to plead key tort elements and contract evidence, and failed to plead facts to pierce the corporate veil or facts supporting extreme or serious emotional distress.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff may sue the receiver and related entities without prior leave of the appointing court (Barton doctrine) | Ettayem argued leave was not required because receivers acted ultra vires and §959 permits suits for acts "carrying on business" | Defendants argued Barton bars suits against receivers absent leave; no leave obtained; §959 inapplicable | Court: Barton doctrine bars the suit; plaintiff did not obtain leave; §959 does not apply here |
| Whether 28 U.S.C. §959 permits suit without leave for alleged receiver misconduct | Ettayem invoked §959 as an exception allowing suit for acts in "carrying on business" | Defendants contended §959 is limited to trustees/receivers carrying on debtor's business and does not cover estate administration alleged here | Court: §959 inapplicable; it does not negate the leave requirement for these facts |
| Whether Ettayem (sole shareholder) has standing/capacity to assert claims belonging to Limited Investment or Shop N Save | Ettayem claimed personal ownership of store property and asserted corporate claims on behalf of Shop N Save | Defendants argued the claims belong to the corporations (Limited Investment or Shop N Save); Ettayem, a non‑attorney, cannot sue for corporate injuries or on behalf of Shop N Save | Court: Ettayem lacks standing/capacity to bring corporate claims; shareholder cannot assert corporate-only injuries personally |
| Whether pleadings suffice for tort elements, emotional‑distress claims, and veil piercing | Ettayem alleged conversion, tortious interference, fraud, IIED, NIED, and veil piercing facts (shared offices, signatures, alleged fraud) | Defendants argued plaintiff failed to plead contract evidence, particularity for interference, conduct sufficiently extreme for IIED, serious distress for NIED, or facts meeting Belvedere/Dombroski veil‑piercing tests | Court: Pleadings insufficient—no contract produced, no particularized business‑opportunity allegations, IIED/NIED elements not met, and veil piercing not alleged with required facts |
Key Cases Cited
- Barton v. Barbour, 104 U.S. 126 (U.S. 1881) (establishes rule that a receiver generally cannot be sued without leave of the appointing court)
- Allard v. Weitzman (In re DeLorean Motor Co.), 991 F.2d 1236 (6th Cir.) (§959 does not apply to claims arising from estate administration)
- Satterfield v. Malloy, 700 F.3d 1231 (10th Cir.) (ultra vires allegations do not necessarily avoid Barton bar for acts related to trustee duties)
- Murphy v. Holbrook, 20 Ohio St. 137 (Ohio 1870) (leave of appointing court required to sue receivers; receivers liable for injuries when leave granted)
- Fred Siegel Co., L.P.A. v. Arter & Hadden, 85 Ohio St.3d 171 (Ohio 1999) (elements of tortious interference with contract)
- Yeager v. Local Union 20, 6 Ohio St.3d 369 (Ohio 1983) (standard for "extreme and outrageous" conduct in IIED claims)
- Paugh v. Hanks, 6 Ohio St.3d 72 (Ohio 1983) (definition of "serious" emotional distress for NIED)
- Belvedere Condominium Unit Owners' Assn. v. R.E. Roark Cos., Inc., 67 Ohio St.3d 274 (Ohio 1993) (tests for piercing corporate veil)
- Dombroski v. WellPoint, Inc., 119 Ohio St.3d 506 (Ohio 2008) (modifies Belvedere prong regarding unlawful acts to pierce corporate veil)