2115-2121 ONTARIO BUILDING, L.L.C. v. DOLORES ANTER, ET AL.
Nos. 98255 and 98296
Cоurt of Appeals of Ohio, EIGHTH APPELLATE DISTRICT, COUNTY OF CUYAHOGA
July 11, 2013
[Cite as 2115-2121 Ontario Bldg., L.L.C. v. Anter, 2013-Ohio-2993.]
JOURNAL ENTRY AND OPINION; JUDGMENT: AFFIRMED; Civil Appeal from the Cuyahoga County Court of Common Pleas, Case No. CV-752119; BEFORE: E.T. Gallagher, J., Boyle, P.J., and Rocco, J.
For Theresa Julia Kratus
Philip Wesley Lambert
James F. Koehler
Koehler Neal, L.L.C.
1301 East Ninth Street
3330 Erieview Tower
Cleveland, Ohio 44114
For Dolores Anter, et al.
David C. Eisler
P.O. Box 1721
Medina, Ohio 44258
ATTORNEYS FOR APPELLEES
Richard P. Goddard
Alexander B. Reich
Calfee, Halter & Griswold, L.L.P.
The Calfee Building
1405 East Sixth Street
Cleveland, Ohio 44114
{¶1} In this consolidated appeal, defendants-appellants William H. Maloof, Angela Maloof, S.A.M. Inc., Nora Maloof, Macron Investment Company, Joseph Edward Anter, Dolоres Anter, and Theresa Julia Kratus (collectively “appellants“) appeal the trial court‘s decision granting summary judgment in favor of plaintiff-appellee 2115-2121 Ontario Building, L.L.C. (“Ontario“). In her consolidated appeal, appellant Theresa Julia Kratus also appeals the trial court‘s judgment taxing certain court repоrter fees as costs. We find no merit to the appeals and affirm the trial court‘s judgments.
{¶2} This dispute involves the validity of a single share of stock in Macron Investment Company (“Macron“). Ontario filed its complaint seeking: (1) a declaratory judgment that it is the owner of 32 of 64 outstanding Macron shares; (2) an injunction ordering Macron to deliver to Ontario a share certificate representing 32 shares of Macron common stock; and (3) an accounting. Ontario alleged that it purchased 32 shares and 50 percent of the issued and outstanding shares of Macron stock in good faith and without knowledge of any defect in any of the purchased shares.
{¶3} Appellant Theresa Julia Kratus (“Kratus“) filed a counterclaim for declaratory relief, requesting a declaration that 63, not 64 shares of Macron common stock are issued and outstanding. Appellants contend that Ontario purchased only 31 shares of Macron stock and held a position as a minority shareholder. Appellants assert that the disрuted share (“share 64“) is invalid because it was never properly issued by the corporation.
{¶5} After Julia Macron died in 1974, Macron‘s shareholders elected Nora Maloof, Dolores Anter, and Wesley C. Smith as the directors of the corporation. None of the directors were ever shareholders, and there is no evidence that the composition of the board of directors ever chаnged.
{¶6} On June 29, 1990, after all shareholders had reached the age of majority, Macron issued stock certificates to each shareholder in his or her own name. These certificates were numbered 101 through 109 and represented a total of 64 shares of stock. Certificate No. 101, representing eight shares, was issued to William Maloof and states that it is a transfer from “Nora Maloof, Custodian,” even though he was an adult when Julia Macron gifted the shares to him in 1967. The same notation appears on certificate No. 105, representing seven shares, and certificate No. 109, representing one share, both of which were issued to Kimberly. Two of the three directors of the corporation, president Nora Maloof and secretary Dolores Anter, executed each of the nine share
{¶7} On July 31, 2010, Macron issued share certificate No. 110 to Kimberly to reflect her purchase of eight shares of stock from Julie Anter. On August 2, 2010, Macron issued share certificates Nos. 111 and 112 to Samir Haikal, Kimberly‘s husband, to reflect his purchase of 16 shares from Virginia Marie Maloof and Faye Judith Maloof.1 Together, Kimberly and Samir Haikal owned share certificate Nos. 105, 109, 110, 111, and 112, which represented a total of 32 of the 64 shares, or 50 percent of Macron stock.
{¶8} Ontario was formed for the purpose of buying the Stanley Block Building located at 2115-2121 Ontario Street. In the fall of 2010, Louis Frangos (“Frangos“), president of USA Parking Systems, Inc. (“USA Parking“) and Ontario‘s managing member, attеmpted to purchase the Stanley Block Building. When negotiations failed to result in a sale, USA Parking entered into a stock purchase agreement with Kimberly and Samir Haikal to purchase their 50 percent ownership interest in Macron for $284,375. The sale, which was scheduled to close on January 31, 2011, was contingent on USA Parking‘s satisfactory insрection of the “records of the company.”
The Macron Investment Trust controls Macron Investment. This trust is irrevocable and unbreakable, and my clients’ shares control the trust. Mr. Haikal neither controls the corporation, nor does he havе an equal share of the stock. We will be demanding the Corporate Record Book and the check book in the immediate future as controlling shareholders.
{¶10} Macron refused to execute and deliver to Ontario the stock certificates to reflect its purchase of 32 shares of Macron stock, and Ontario filed thе instant action. Meanwhile, the Stanley Block Building was condemned by the city of Cleveland and accumulated fines against Macron in the amount of $15,000 per day. Fines totaled over $1,000,000.
{¶11} The trial court granted summary judgment in favor of Ontario and denied appellants’ joint motion for summary judgment. The court determined that Macron‘s
{¶12} Appellants filed separate appeals, which this court consolidated. In both appellants’ briefs, they argue the trial court erred in denying their motions for summary judgment and in granting summary judgment in favor of Ontario. They contend that: (1) Macron never ratified the issuance of share 64, and (2) Ontario was not a good faith purchaser of stock certificate No. 109 for value.
Mootness
{¶13} As a preliminary matter, we find that this appeal is not moot, even though the receiver issued the stock certificates reflecting Ontario‘s purchase of the 32 sharеs of Macron stock in accordance with the trial court‘s judgment.
{¶14} An appeal is moot when there is no actual controversy to be resolved by the appeal, which would result in this court issuing a mere advisory opinion on abstract questions. Thomas v. Cleveland, 140 Ohio App.3d 136, 142, 746 N.E.2d 1130 (8th Dist. 2000). Thus, an appeal is moot if it is impossible for this court to decide the cаse in favor of the appellant and provide the appellant any effectual relief. State ex rel. Eliza Jennings, Inc. v. Noble, 49 Ohio St.3d 71, 74, 551 N.E.2d 128 (1990).
{¶15} In this case, the court‘s judgment declared that the disputed 64th share was valid. The validity of the disputed 64th share is still an issue in this case because this court could reverse the trial court‘s declaratory judgment and find the share invalid. Therefore, this appeal is not moot.
{¶16}
Ratification
{¶17} Appellants argue that Macron never issued the 64th share because the board never issued the share at a formal board meeting. They contend the trial court erred in finding that Macron directors and shareholders ratified the unauthorized issuance of share 64.
{¶19} The consequences of ratification are the same as if the original act had been authorized. Integrated Payment Sys. v. A&M 87th Inc., 8th Dist. Nos. 91454 and 91473, 2009-Ohio-2715, citing Restatement of the Law 2d, Agency, Section 82, Comment b (1984).
{¶20} Appellants argue the trial court erroneously relied on Kimball v. Kimball Bros., Inc., 143 Ohio St. 500, 56 N.E.2d 60 (1944), when it found that Macron ratified Nora Maloof and Julie Anter‘s issuance of the 64th share. They claim Kimball is inapplicable to the instant сase because it involved ratification of a contract and not the unauthorized issuance of a share of stock. However, in reaching its holding, the Kimball court applied established principles of agency law, which are not limited to contracts and apply to a variety of unauthorized acts of corporate agents.
{¶22} Other Ohio courts have reached the same conclusion. In Perfection Graphics, 11th Dist. No. 93-G-1776, 1995 Ohio App. LEXIS 783, the court held that a formal mеeting is unnecessary to bind a corporation when the number of directors is relatively small and they are personally involved in the operation of the business. In Piening v. Titus, Inc., 113 Ohio App. 532, 179 N.E.2d 374 (2d Dist. 1960), the court held that an agreement to purchase the shares of a dissenting shareholder at a certain price was binding on the corporation even though a formal meeting of the directors had never been held. In reaching this conclusion, the court emphasized that the corporation conducted business informally. Id. at 537.
{¶23} In this case, although Macron issued the 64th share to Kimberly without a formal meeting, two of the three directors (Nora Maloof and Dolores Anter) consented to the actiоn, as evidenced by their signatures on the share certificate. The third director, Wesley Smith, who has been the custodian of the share certificates since their issuance in 1990, never objected to the issuance of certificate No. 109. Indeed none of the other
{¶24} Accordingly, appellants’ first assignment of error is overruled.
Costs
{¶25} In Theresa Julia Kratus‘s second assignment of error, she argues the trial court erred by including Ontario‘s litigation costs in its ordеr, taxing costs against the appellants. Kratus contends the trial court erred in taxing court reporter and videographer fees as costs. However, the court only awarded the cost of Ontario‘s fee for filing the complaint and the costs of four deposition transcripts. It did not tax videographer fees as costs. Beсause appellants do not dispute the court‘s authority to tax the filing fee as costs, we need only determine whether the trial court abused its discretion by taxing court reporter fees for four deposition transcripts as costs.
{¶26}
{¶28} However, in Naples v. Kinczel, 8th Dist. No. 89138, 2007-Ohio-4851, ¶ 13, this court held that a deposition transcript may be taxable as costs pursuant to
When it is necessary in an appeal, or other civil action to procure a transcript of a judgment or proceeding, оr exemplification of a record, as evidence in such action or for any other purpose, the expense of procuring such transcript or exemplification shall be taxed in the bill of costs and recovered as in other cases.
As this court explained in Naples,
{¶29} In its motion to tax costs, Ontario sought an award of costs totaling over $5,000. The bill of costs included fees for videographers, attemptеd depositions, court reporter fees for attending depositions, and deposition transcripts. The court awarded only the filing fee and the costs of four deposition transcripts as costs. The deposition transcripts were necessary to support Ontario‘s motion for summary judgment.
{¶30} Kratus‘s second assignment of error is overruled.
{¶31} Judgments affirmed.
It is ordered that appellee recover from appellants costs herein taxed.
The court finds there were reasonable grounds for this appeal.
A certified сopy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
EILEEN T. GALLAGHER, JUDGE
MARY J. BOYLE, P.J., and
KENNETH A. ROCCO, J., CONCUR