JIHAD LAHOUD, ET AL. v. TRI-MONEX, INC., ET AL.
No. 96118
Court of Appeals of Ohio, EIGHTH APPELLATE DISTRICT, COUNTY OF CUYAHOGA
RELEASED AND JOURNALIZED: August 18, 2011
2011-Ohio-4120
BEFORE: Rocco, J., Stewart, P.J., and Celebrezze, J.
Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-702167
JUDGMENT: AFFIRMED
Aleksandar Rakic
1787 Pearl Road
Brunswick, Ohio 44212
ATTORNEYS FOR APPELLEES
Michael J. Downing
75 Public Square, Suite 920
Cleveland, Ohio 44113
Tania T. Nemer
McGinty, Hilow & Spellacy Co., LPA
1300 The Rockefeller Building
614 W. Superior Avenue
Cleveland, Ohio 44113
KENNETH A. ROCCO, J.:
{¶ 1} Defendants-appellants Tri-Monex, Inc., Hanan Khoury (hereinafter referred to by her first name), Kameel Khoury, and Victor Jada (hereinafter referred to by his first name) appeal from the trial court order that found Hanan to be in contempt of court for refusing to answer certain
{¶ 2} Appellants present three assignments of error in which they argue the trial court‘s order should be reversed because: 1) the order impermissibly required Hanan to incriminate herself; 2) the trial court did not first review the documents to determine whether they were incriminating before sеtting forth the purge condition; and 3) the trial court did not first determine whether Hanan could obtain some of the documents appellees requested before finding her in contempt.
{¶ 3} Upon a review of the record, this court disagrees. The trial court‘s order, consequently, is affirmed.
{¶ 4} The record reflects appellees filed a complaint against appellants and two other named defendаnts1 in August 2009 that alleged five causes of action, viz., illegal sales of securities, violation of Ohio‘s “Corrupt Activities Act” (the “CAA“),2 fraud, conversion, and civil conspiracy against the individual appellants, and “punitive damages.” The complaint stated that Hanan was “owner/president of Tri-Monex.” In November 2009, appellants
{¶ 5} On June 3, 2010, appellees filed a motion seeking an order finding appellants Hanan and Victor in contempt for failing to appear at a scheduled deposition. Appellees asserted that appellants sought to reschedule the deposition twice previously, and requested an additional order from the court “compelling their appearance to answer questions under oath.”
{¶ 6} The court held a hearing on appellees’ motion that same day. At the outset, the court noted that the parties had agreed to a monetary settlement, whereby Hanan and her sister would pay appellees “$50,000 by June 25th” and then a “balance of the amount due, which is $750,000, * * * by September 1st.”
{¶ 7} The trial court warned the defendants responsible for the payment to appellees that it would “рut an order on” with respect to the settlement‘s terms, and that “failure to comply with it can result in contempt proceedings which includes * * * jail, if it is direct contempt. And, you could end up staying in jail till you pay” the settlement.
{¶ 8} On June 7, 2010, the trial court issued a journal entry that stated as follows:
{¶ 10} On September 9, 2010, appellees filed a motion for an order compelling discovery. Appellees asserted they scheduled a deposition for appellants Hanan and Victor on September 14, 2010, and since prior attempts to depose them had been unsuccessful, they sought the court‘s assistance.
{¶ 11} Contemporaneously, appellees also filed a motion to hold the same two appellants “in contempt of court for failure to comply with the court‘s order of June 7, 2010.” Appellees asserted Hanan and Victor never made the second payment due on the settlement.
{¶ 12} After the parties filed memoranda in support of their respective positions on the issue, the court issued a journal entry that scheduled “the depositions to be held on 11/3/10 at 1:00 p.m.” in the court‘s jury room. When the depositions proceeded on that day, appellees eventually called upon the trial court “to discuss the propriety of * * * objections” appellants were making as to some of the questions posed by appellees.
{¶ 13} In particular, appellants declined to either answer any questions about either the location where the money appellees gave to Tri-Monex was
{¶ 14} The trial court wanted the record to “show that we‘ve been here a number of times with regards to this matter * * *
{¶ 15} “* * * [O]n the 9th of September, * * * the money hadn‘t been paid back. And [Hanan] said it was gonna’ come within a few days.
{¶ 16} “I believe we came back * * * maybe the 28th of October, and she said that the money was in * * * Toronto, Canada, and she would have it back immediately.
{¶ 17} “* * *
{¶ 18} “And [on June 3, 2010,] I did tell Miss Khoury that if, in fact, she did not pay she may be held in * * * contempt of Court. * * * ”
{¶ 19} At that point, the trial court asked appellees which questions Hanan and Victor had refused to answer. Counsel fоr appellees stated that his clients each had “deposited” certain sums “with Tri-Monex, and were issued promissory
{¶ 20} notes, ostensibly signed by Miss Khoury,” and appellees wanted to know “where those deposits were made, what bank, and what records does she have as an officer of Tri-Monex.”
{¶ 22} After appellants’ counsel objected, appellees’ counsel interjected that they also wanted to see the documents that had not been produced. In answer to the court‘s question, appellees’ counsel stated that the documents had been “subpoenaed [on] two separate occasions“; the listed documents included “corporate records of Tri-Monex, bank statements, copies of all brokerage account statements or other investment accounts and copies of personal financial tax returns.”
{¶ 23} According to appellees’ counsel, although Hanan “admitted that Tri-Monex did have a bank account,” she invoked her Fifth Amendment right and
{¶ 25} The trial court stated its belief that the matter had nothing to do with the Fifth Amendment, because Hanan had “already appeared in court saying she had the money. * * * [M]oney was received by Tri-Monex * * * inasmuch as she is аn officer of Tri-Monex,” the court reiterated its order to answer and to provide the information appellees requested or be held in contempt.
{¶ 26} When Hanan‘s attorney once again stated that his client declined to do so, the trial court found her in contempt of court and stated it would impose a fine of a thousand dollars a day until she provided the information to appelleеs. The court set a date “to come back in two weeks to pay the amount of money that is due at that point,” and subsequently requested appellees to “prepare the order” concerning the hearing.
{¶ 27} The next entry that appears on the court‘s docket, dated November 5, 2010, indicates a “contempt hearing [wa]s set” for November 19, 2010. On November 8, 2010, however, the trial court issued a journаl entry that stated
{¶ 29} “This matter came on for hearing on November 3, 2010. During a {¶ 30} deposition conducted this day * * * , [Hanan] was asked to answer questions concerning the deposit of certain funds belonging to [appellees] in this case.
{¶ 31} “[Appellees‘] counsel also requested * * * certain documents listed * * * in the notice of deposition. [Hanan], having refused to answer said questions, claiming Fifth Amendment protectiоn, or provide the requested documents, after being ordered to do so by the judge in open court, is hereby found to be in Contempt of Court and is assessed a fine of One Thousand Dollars ($1,000.00) per day for each day until she provides * * * the answers * * *, and * * * documents.”
{¶ 32} Appellants filed a timely appeal of that order. They present the following assignments of error.
{¶ 33} “I. The trial court erred in denying Appellants’ right to assert their fundamental right against self-incrimination in violation of the Fifth Amendment by requiring them to answer all questions posed by Appellees.
{¶ 35} “III. The trial court erred in finding that Appellants did not have a Fifth Amendment right where Appellants’ production of documents would have been personal, testimonial and self-incriminating.”
{¶ 36} Appellants argue the trial court‘s contempt order was improper because: 1) the order impermissibly required Hanan to incriminate herself; 2) the trial court did not first review the documents to determine whether they were incriminating before setting forth the purge condition; and 3) the trial court did not first determine whether Hanan could obtain some of the documents appellees requested before finding her in contempt. This court disagrees that the trial court erred in making its contempt finding.
{¶ 37} Contempt is defined as a disregard of, or disobedience to, an order or command of judicial authority. State v. Flinn (1982), 7 Ohio App.3d 294, 455 N.E.2d 691. This court cannot reverse a finding of contempt by a trial
{¶ 39} In Strauss v. Strauss, Cuyahoga App. No. 94129, 2010-Ohio-6166, ¶ 9-10, this court recently distinguished direct and indirect contempt as follows:
{¶ 40} “A court may find the offending party in contempt for either direct or indirect actions that constitutе disobedience to an order. Pirtle v. Pirtle, 2nd Dist. No. 18613, 2001-Ohio-1539. While a direct contempt occurs within the court‘s presence or with the court‘s personal knowledge of facts relating to the act, indirect contempt is ‘misbehavior that occurs outside the actual or constructive presence of the court.’ Id. One accused of indirect contempt is entitled to a ‘hearing on the charge, at which the сourt must investigate the charge, hear any answer or testimony that the accused makes or offers, and then determine whether the accused is guilty.’ Id.
{¶ 43} The importance of classifying the types of contempt is thus the effect the classification has on the rights of the contemnor. Direct contempt of court occurs in a way so closely related to the court itself that a finding may occur summarily; the court is not required to deal with direct contempt by providing the contemnor with a hearing. In re Purola (1991), 75 Ohio App.3d 306, 596 N.E.2d 1140.
{¶ 44} In contrast, indirect contempt of court does not occur in the presence of the court, and a hearing is required to provide the contemnor with the opportunity to explain his actions. Furthermore, if the indirect contempt is criminal in nature, then intent to defy the court must be proven beyond a reasonable doubt. Brown v. Executive 200, Inc.
{¶ 46} In this case, it is clear the trial court found Hanan to be in direct, civil contempt for her failure to comply with two earlier orders, viz., the order to pаy appellees the remainder of the settlement amount by September 1, 2010; and also, the order to submit to the deposition conducted by appellees on November 3, 2010. The trial court, therefore, was not required to provide Hanan with a hearing prior to making its finding. Pursuant to
{¶ 47} Appellants argue the trial court‘s finding nеvertheless was improper because the court was requiring Hanan to incriminate herself before determining whether the documents contained incriminating information and before determining whether she could actually produce them. As authority for their position, they cite, inter alia, Curcio v. United States (1957), 354 U.S. 118, 77 S.Ct. 1145, 1 L.Ed.2d 1225. The facts in this case, however, are more analogous to those addressed in United States v. Rylander (1983), 460 U.S. 752, 103 S.Ct. 1548, 75 L.Ed.2d 521, in which the United States Supreme Court distinguished Curcio by observing as follows:
{¶ 48} ”Rylander * * * was held in contempt for failure to comply with a previous order of the District Court * * * This order, unappealed from, necessarily contained an implied finding that no defense of lack of possession or control had been raised and sustained in th[e underlying] proceeding. The only issue open {¶ 49} to Rylander in defending the contempt proceeding was to show inability to then produce, and because of the presumption of continuing possession arising from the enforcement order, [citation omitted], if he sought to defend on that ground he was required to come forward with evidence in support of it. The fact that his refusal to come forward with such evidence was accompanied by a claim of Fifth Amendment privilege may be an adequate reason for the court not compelling him to respond to cross-examinatiоn at the contempt hearing, but the claim of privilege is not a substitute for relevant evidence.” (Emphasis in original; underscoring added.)
{¶ 50} Similarly, in Elec. Workers Pension Trust Fund of Local Union #58, IBEW v. Gary‘s Elec. Service Co. (C.A.6, 2003), 340 F.3d 383. The court stated:
{¶ 53} “In order to hold a litigant in contempt, the movant must produсe clear and convincing evidence that shows that ‘he violated a definite and specific order of the court requiring him to perform or refrain from performing
{¶ 55} “* * *
{¶ 56} “Many decades ago, in a case where a corporate officer who failed to comply with a subpoena duces tecum was held in contemрt, the Supreme Court stated:
{¶ 58} At any event, “Ohio law is clear that the protection against compulsory self-incrimination does not extend to prohibit civil litigation where the possibility of prosecution exists, nor does it require staying a related civil case until a criminal appeal is resolved.” Ohio Bar Liab. Ins. Co. v. Silverman, Franklin App. No. 05AP-923, 2006-Ohio-3016, ¶ 12, citing State ex rel. Verhovec v. Mascio, 81 Ohio St.3d 334, 1998-Ohio-431, 692 N.E.2d 282 and Urban v. State Med. Bd., Franklin App. No. 03AP-426, 2004-Ohio-104 (Emphasis added). See, also, Commonwealth Land Title Ins. Co. v. Davis (1989), 67 Ohio App.3d 521, 579 N.E.2d 503.
{¶ 59} The trial court correctly observed that by entering into a settlement agreement with appellees, she acknowledged liability on appellees’ claims, and became bound by the trial court‘s order. Considering that Hanan had not been either indicted in a criminal matter, or called to testify against
{¶ 60} For the foregoing reasons, appellants’ assignments of error are overruled.
{¶ 61} The trial court‘s order is affirmed.
It is ordered that appellees recover from appellants costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
KENNETH A. ROCCO, JUDGE
MELODY J. STEWART, P.J., CONCURS
FRANK D. CELEBREZZE, JR., J., CONCURS
(SEE ATTACHED CONCURRING OPINION)
FRANK D. CELEBREZZE, JR., J., CONCURRING:
{¶ 63} Here, the whereabouts of money belonging to Tri-Monex is a business record of the corporation and is not subject to Fifth Amendment privilege. Also, questiоns about Tri-Monex‘s corporate structure and business dealings are not subject to Fifth Amendment privilege because the corporation does not enjoy such a right. Wilson v. United States (1911), 221 U.S. 361, 31 S.Ct. 538, 55 L.Ed. 771, at the syllabus. “Since the Fifth Amendment right is a personal right, an individual may not claim such privilege on behalf of a collective entity or organization of which he may be a part. Neither a partnership, a corporation, nor any other collective entity is shielded by the Fifth Amendment from the compelled production of an organization‘s records.” Quinlan v. Ohio Dept. of Commerce, Div. of Consumer Fin. (1996), 112 Ohio App.3d 113, 122, 678 N.E.2d 225, quoting Cincinnati v. Bawtenheimer (1992), 63 Ohio St.3d 260, 264, 586 N.E.2d 1065, fn. 2.
{¶ 64} Appellees asked, “what is the business of Tri-Monex, Inc.,” a question that is purely related to the corporation and not personal under any proper reading of Fifth Amendment law governing corporate and private