2019 Ohio 4261
Ohio Ct. App.2019Background
- Plaintiffs Nancy and Jason Ralls and Simany Suon each owned 50% of 2222 International, LLC, which owned real property at 2222 St. Clair Ave. and operated a nightclub (The Dstrkt).
- Plaintiffs alleged that Suon and others usurped control of revenues, withheld distributions, and committed fraud, conversion, and breach of fiduciary duty; they sought dissolution, accounting, and other relief.
- On the same day they filed the complaint (Dec. 28, 2018), Plaintiffs moved to appoint a receiver to take control of the business and assets pending investigation or liquidation.
- After a hearing, the trial court denied the motion to appoint a receiver; Plaintiffs appealed that denial.
- Defendants moved to dismiss the appeal for lack of a final appealable order; the appellate court dismissed the appeal, holding the denial was not a final, appealable order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether denial of motion to appoint a receiver is a final appealable order under R.C. 2505.02(B)(2) (substantial right in a special proceeding) | Ralls: they have a statutory right to a receiver under various statutes and denial affects a substantial right and forecloses relief | Defendants: Plaintiffs have no statutory entitlement; statutes are discretionary, so denial does not affect a substantial right | Held: Denial does not affect a substantial right; statutes cited are discretionary, so appealability under (B)(2) fails |
| Whether denial is final under R.C. 2505.02(B)(4) (grants/denies a provisional remedy) | Ralls: appointment of a receiver is the only practical relief and denial prevents meaningful remedy absent immediate appeal | Defendants: denial does not determine the action or prevent judgment; Plaintiffs can obtain relief later | Held: Denial does not determine the action or prevent judgment and does not meet (B)(4)(a)/(b); not appealable |
| Whether Plaintiffs will be foreclosed from meaningful relief if they wait for final judgment | Ralls: assets may be dissipated or concealed, making later relief ineffective | Defendants: delay and litigation costs do not render later remedies meaningless | Held: Court found delay/litigation risk insufficient to show absence of meaningful post-judgment remedy |
Key Cases Cited
- In re Adams, 873 N.E.2d 886 (Ohio 2007) (explains appellate jurisdiction is limited to review of final orders)
- Prudential Ins. Co. of Am. v. Corporate Circle, 658 N.E.2d 1066 (Ohio Ct. App. 1995) (appointment/removal of receivers as special proceeding affecting substantial right)
- Community First Bank & Trust v. Dafoe, 844 N.E.2d 825 (Ohio 2006) (order granting receiver is a final, appealable provisional remedy)
- State ex rel. Niles v. Bernard, 372 N.E.2d 339 (Ohio 1978) (usage of "may" in statutes indicates discretionary authority)
- United States v. Cain, 583 F.3d 408 (6th Cir. 2009) (distinguishes having statutory authority from mandatory exercise of authority)
- State v. Beard, 27 N.E.2d 184 (Ohio Ct. App. 1940) ("shall" in statute refers to court power, not mandatory exercise)