Capitol Communications, Inc. v. GBS Corp.Capitol Communications, Inc. v. GBS Corp.
D E C I S I O N
Rendered on December 7, 2010
Hahn Loeser & Parks LLP, and Marc J. Kessler, for appellee Capitol Communications, Inc. dba Farrel Printing Corp.
Harris, McClellan, Binau & Cox, P.L.L., John H. Kozich, Dan J. Binau, Michael A. Coleman and Emily J. Jackson, for appellant Sterling Paper Co.
APPEALS from the Franklin County Court of Common Pleas.
BRYANT, J.
{¶1} Plaintiff-appellant, Sterling Paper Co. (“Sterling“), appeals from judgments of the Franklin County Court of Common Pleas (1) determining the security interest of appellee, the Lawrence E. Farrel Trust (“the trust“) had priority over Sterling‘s creditor‘s bill in the funds escrowed in related litigation and (2) ordering the immediate release of the escrowed funds for distribution to the trust. Because Sterling‘s appeals are moot, we dismiss.
I. Facts and Procedural History
{¶2} On June 28, 2007, Capitol Communications, Inc. (“Capitol“), doing business as Farrel Printing Corporation (“FPC“), filed a complaint against GBS Corp. (“GBS“) to collect unpaid invoices and to resolve a dispute over a 2005 transitioned accounts agreement. While Capitol‘s action against GBS was pending, Sterling, a paper supplier, filed a separate complaint on March 5, 2008 against Capitol and FPC, alleging an unpaid account, breach of contract, and unjust enrichment and seeking $272,744.94 in damages. On November 19, 2008, the trial court journalized an agreed judgment entry in which Capitol and FPC consented to a $272,744.94 judgment in favor of Sterling and Sterling agreed to forego any pre- or post-judgment interest from Capitol.
{¶4} On January 30, 2009, Lawrence E. Farrel, trustee of the trust, moved pursuant to
{¶5} On March 5, 2009, the trial court permitted the trust to intervene as plaintiff in the consolidated actions and accepted its complaint. Sterling timely filed an answer and counterclaim to the trust‘s complaint and included a jury demand. The trial court conducted a bench trial on April 3, 2009, and the parties submitted post-trial briefs.
{¶6} On November 24, 2009, the trial court entered a decision determining the trust‘s security interest held priority over the settlement funds and ordering the release of all escrowed funds to the trust for distribution. The trial court journalized its decision in a December 8, 2009 order and judgment.
{¶7} Sterling timely appeals, assigning the following errors:
ASSIGNMENT OF ERROR NO. 1
THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY TRYING THIS MATTER BEFORE THE BENCH WHEN A JURY TRIAL WAS DEMANDED AND NOT WAIVED PURSUANT TO THE OHIO CIVIL RULE OF PROCEDURE 39(A).
ASSIGNMENT OF ERROR NO. 2
THE TRIAL COURT COMMITTED REVERSIBLE ERROR BY DETERMINING, AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE, THAT PLAINTIFF/APPELLEE [TRUST] WAS ENTITLED, BY VIRTUE OF A SECURITY INTEREST, TO ALL SETTLEMENT PROCEEDS RESULTING FROM RESOLUTION OF LITIGATION WHICH INCLUDED COMMERCIAL TORT CLAIMS, EVEN THOUGH THE TRIAL COURT SPECIFICALLY DETERMINED THE SECURITY INTEREST OF PLAINTIFF/APPELLEE [TRUST] DID NOT ATTACH TO THE COMMERCIAL TORT CLAIMS, ALL TO THE PREJUDICE OF THE LIEN INTEREST OF APPELLANT BEING ENFORCED AGAINST THE SETTLEMENT PROCEEDS BY APPELLANT‘S CREDITOR‘S BILL.
ASSIGNMENT OF ERROR NO. 3
THE TRIAL COURT COMMIT [sic] REVERSIBLE ERROR BY FAILING TO DETERMINE, AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE, THAT A SALE OF THE BUSINESS ASSETS FROM APPELLEE CAPITOL TO DEFENDANT/APPELLEE FARREL OCCURRED, THEREBY CREATING A WAIVER OF THE CLAIMED SECURITY INTEREST OF PLAINTIFF/APPELLEE [TRUST] IN THE ASSETS OR PROCEEDS RESULTING FROM A SALE THEREOF, TO THE DETRIMENT OF THE PRIORITY OF THE LIEN INTEREST OF APPELLANT IN THE ASSETS BEING ENFORCED AGAINST THE SETTLEMENT PROCEEDS BY APPELLANT‘S CREDITOR‘S BILL.
{¶8} After Sterling filed its notice of appeal, the trust moved this court, pursuant to
{¶9} The trust argues Sterling‘s appeal is moot because Sterling failed to obtain a stay of execution of the trial court‘s judgment and release of the escrowed funds to the trust. As a result, the trust contends, the requested relief cannot be granted. See Blodgett v. Blodgett (1990), 49 Ohio St.3d 243, 245 (stating “[i]t is a well-established principle of law that a satisfaction of judgment renders an appeal from that judgment moot“). See also Redmon v. City Council of City of Columbus, 10th Dist. No. 05AP-466, 2006-Ohio-2199; Schuster v. Avon Lake, 9th Dist. No. 03CA008271, 2003-Ohio-6587. The trust is correct that “[w]here the trial court rendering judgment has jurisdiction of the subject matter of the action and of the parties, and where fraud has not intervened, and the judgment is voluntarily paid and satisfied, payment puts an end to the controversy and takes away from the defendant the right to appeal or prosecute error or even to move for vacation of judgment.” Kevin O‘Brien & Assoc. v. Baum, 10th Dist. No. 03AP-1010, 2004-Ohio-2713, ¶7, citing In re Appropriation for Highway Purposes: Rauch v. Noble (1959), 169 Ohio St. 314, 316, quoting Lynch v. Lakewood City School Dist. Bd. of Edn. (1927), 116 Ohio St. 361, paragraph three of the syllabus.
{¶10} Although the mootness doctrine has exceptions, Sterling does not argue its case falls into one of the recognized exceptions. See, e.g., Bankers Trust Co. of
{¶11} Contrary to Sterling‘s argument, case law indicates that determinations of voluntariness do not turn on who satisfies the judgment. Some Ohio courts thus have determined “a party is deemed to have acted voluntarily in satisfying a judgment when the party fails to seek a stay order prior to the judgment‘s being satisfied.” Marotta Bldg. Co. v. Lesinski, 11th Dist. No. 2004-G-2562, 2005-Ohio-558, ¶19, citing Hagood v. Gail (1995), 105 Ohio App.3d 780, 790. See also Harbourtown Properties, Inc. v. Citizens Fed. Bank (Nov. 10, 1997), 10th Dist. No. 97APE03-328, citing Kelm v. Hess (1983), 8 Ohio App.3d 448. In Marotta Bldg. Co., the appellate court concluded appellants’ failure to obtain a stay of execution rendered their appeal moot, because the appellee successfully obtained a satisfaction of judgment from a collateral foreclosure action. Even though the
{¶12} Similarly, Villas at the Pointe of Settlers Walk Condominium Assn., Inc. v. Coffman Dev. Co., Inc., 12th Dist. No. CA2009-12-165, 2010-Ohio-2822, involved an appellant, a judgment lien holder, who appealed from a decision of the trial court determining the order of lien priority. The appellant never requested either a stay of the sale of the property to satisfy the debts or a stay of the trial court‘s judgment in favor of the other judgment creditor. During the pendency of the appeal, the property was sold and the funds were distributed to the other judgment creditor. The Twelfth District determined that “after the matter has been extinguished through satisfaction of the judgment, the individual subject matter of the case is no longer under the control of the court and the court cannot afford relief to the parties to the action.” Id. at ¶11, quoting Bankers Trust Co. of California at ¶16; see also Dietl v. Sipka, 185 Ohio App.3d 218, 2009-Ohio-6225 (finding case moot where proceeds were distributed after foreclosure and forced sale); Aurora Loan Servs. v. Kahook, 9th Dist. No. 24415, 2009-Ohio-2997, ¶7 (dismissing appeal as moot where trial court dispersed funds to satisfy a previous judgment so that “no live controversy exist[ed]“).
{¶13} In both Marotta Bldg. Co. and Villas at the Pointe of Settlers Walk, the appellant did not actually pay the appellee. Nonetheless, the judgments in both cases were voluntarily satisfied and the appeals rendered moot because the appellants in both cases failed to seek a stay of execution. Moreover, as here, both cases involved claims to
{¶14} Sterling points to case law suggesting satisfaction of a judgment does not always render the issues on appeal moot. See, e.g., Favret Co. v. West (1970), 21 Ohio App.2d 38; Hurban v. Haas (Dec. 29, 1999), 9th Dist. No. 2725-M; Fed. Land Bank v. Wilcox (1991), 74 Ohio App.3d 474; Bob Krihwan Pontiac-GMC Truck, Inc. v. Gen. Motors Corp. (2001), 145 Ohio App.3d 671. In all of the cases Sterling cites, however, the appellant sought or would have sought a stay but, for various reasons, was not granted one. Here, Sterling undisputedly did not seek a stay of execution to prevent the distribution of the escrowed funds to the trust. Sterling‘s reliance on these cases thus is misplaced. See Villas at the Pointe of Settlers Walk at ¶16 (distinguishing the appellant there from other appellants “who moved for a stay but were unable to” obtain one and noting appellant “did not request a stay and stood by idly as the property was sold and the proceeds distributed“). The dispute between Sterling and the trust involved priority to
IV. Disposition
{¶15} Because Sterling did not move to stay execution of the trial court‘s judgment, and the escrowed funds were distributed to the trust pursuant to the trial court‘s order, Sterling‘s appeals are moot. We grant the trust‘s motion to dismiss and dismiss these appeals.
Motion to dismiss granted; appeals dismissed.
TYACK, P.J., and SADLER, J., concur.
____________________