Olive Branch Holdings, L.L.C. v. Smith Technology Development, L.L.C.Olive Branch Holdings, L.L.C. v. Smith Technology Development, L.L.C.
{¶ 1} Plaintiff-appellant, H. Brian Haney, appeals from the November 15, 2007 and April 30, 2008 judgments of the Franklin County Court of Common Pleas in four consolidated cases involving attempts by Haney and plaintiff-appellee, Olive Branch Holdings, L.L.C. (“Olive Branch”), to subject certain patents owned by defendant-appellee, Smith Technology Development, L.L.C. (“Smith Technology”), to the satisfaction of money judgments against Smith Technology.
{¶ 2} On April 27, 2004, the Franklin County Court of Common Pleas confirmed an arbitration award in favor of Haney and against Smith Technology in the amount of $1,238,443.11, plus interest, and entered judgment accordingly. See
Haney v. Smith Technology Dev., L.L.C.,
Franklin Cty. C.P. No. 03CVH12-13231 (the “confirmation action”). On November 15, 2004, in the confirmation action, Haney filed a motion to apply property on execution under
{¶ 3} Without holding a hearing, and despite the absence of a certificate of service, the trial court granted Haney’s
{¶ 4} On January 11, 2005, Smith Technology filed a motion to vacate the December 7, 2004 order, arguing that
{¶ 5} Over the next year, Smith Technology and Haney entered into a series of agreed orders, by which the trial court continued the scheduled hearing, left the patents in Matthew 6’s possession, and maintained the injunction prohibiting the parties from taking action against the patents. Each agreed order stated that it should not be construed, as an admission or waiver of any claim or defense by either party. The final agreed order, filed February 2, 2006, continued the hearing regarding the proper statutory procedure for subjecting the patents to the satisfaction of Haney’s judgment, including the applicability of
{¶ 6} On January 19, 2006, during the period encompassed by the agreed orders, Olive Branch obtained a judgment against Smith Technology in the United States District Court for the Eastern District of Texas. Thereafter, on January 20 and 24, 2006, to satisfy its own judgment, Olive Branch filed actions in the Franklin County Court of Common Pleas for a creditor’s bill and for a writ of execution relating to the ten patents identified in Haney’s
{¶ 7} On May 3, 2006, the trial court ordered the parties to file simultaneous briefs regarding the proper procedure for subjecting the patents to satisfaction of
{¶ 8} On May 16, 2007, Haney filed a creditor’s bill complaint to reach an 11th patent owned by Smith Technology. See
Haney v. Smith Technology Dev., L.L.C.,
Franklin Cty. C.P. No. 07CVH05-6644. Haney also filed a motion in the consolidated action to apply the 11th patent on execution pursuant to
{¶ 9} On November 15, 2007, the trial court issued its decision and entry on the proper method of execution on patents and an order to transfer possession of the patents to Smith Technology. The court noted that since vacating the December 7, 2004 order, it had not made any determination as to Haney’s right to the patents under
{¶ 10} Subsequent to the trial court’s decision and entry, Haney filed several motions, including a motion for leave to file a creditor’s bill counterclaim and cross-claim instanter and a motion for the addition of
{¶ 11} Haney filed a notice of appeal on May 29, 2008, and he asserts the following assignments of error:
I. Assignment of Error # 1: The trial court erred when it found that a creditor’s bill is the only way to attach a patent.
II. Assignment of Error # 2: The trial court erred when it determined that * * * Haney was not the most diligent judgment creditor.
III. Assignment of Error # 3: The trial court erred when it refused to allow * * * Haney to refile his motion to apply patents on execution.
IV. Assignment of Error # 4: The trial court erred when it found the patents must be assigned back to Smith Technology.
(¶ 12} As an initial matter, we consider the argument made by Smith Technology and Olive Branch that the trial court’s addition of
{¶ 13} A trial court’s order is final and appealable only if it meets the requirements of
{¶ 14} If an order satisfies
In the absence of a determination that there is no just reason for delay, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties, shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.
When, as here, an order adjudicates fewer than all claims in a case, it must meet the requirements of both
{¶ 15} It is well established that when an order is not final under
{¶ 16} Appellees cite
Downtown Properties v. Meyers, Hentemann & Rea Co., L.P.A.
(Sept. 13, 2001), Cuyahoga App. No. 78192,
{¶ 17} In its opposition to Haney’s request for
{¶ 18} Like the trial court in
Downtown Properties,
{¶ 19} During oral arguments, appellees agreed that Haney’s
{¶ 20} We must next determine whether the trial court’s entry complied with the requirements of
{¶ 21} “The phrase ‘there is no just reason for delay’ in
{¶ 22} In this case, the trial court did not act reflexively in certifying that there was “no just reason for delay.” Rather, the court acted only after Haney moved for
{¶ 23} Turning now to the merits of Haney’s appeals, we note that Haney’s arguments under his first and second assignments of error are interrelated. Therefore, we will address them together. By his first assignment of error, Haney asserts that the trial court erred by finding that a creditor’s bill is the only appropriate means to subject a patent to satisfaction of a judgment. By his second assignment of error, Haney contends that the trial court erred by determining that he was not the most diligent judgment creditor and was, therefore, not entitled to priority over Olive Branch. Both assignments of error revolve around the applicability of Haney and Olive Branch’s chosen procedures to subject Smith Technology’s patents to the satisfaction of their judgments. Because these assignments of error involve purely legal issues, we review the trial court’s resolution of those issues de novo, without deference to the trial court’s conclusions. See
Graham v. Drydock Coal Co.
(1996),
{¶ 24} It is undisputed that a judgment creditor may reach patents owned by a debtor as a means of satisfying its judgment. The United States Supreme Court has emphasized that the patent act, “securing a sole and exclusive
{¶ 25} Haney argues, first, that a creditor’s bill was not a proper proceeding by which Olive Branch, as a judgment creditor, could reach Smith Technology’s patents, an argument we reject. A creditor’s bill is “[a]n equitable suit in which a judgment creditor seeks to reach property that cannot be reached by the process available to enforce a judgment.” Black’s Law Dictionary (7th Ed.1999) 376. See also
Terry v. Claypool
(1945),
{¶ 26} In
Ager,
{¶ 27} Having concluded that patents are subject to payment of a creditor’s judgment, the Supreme Court noted the difficulties “of seizing and selling a patent * * * upon an execution at law, which is ordinarily levied only upon property * * * that has itself a visible and tangible existence within the jurisdiction of the court and the precinct of the [executing] officer.”
Ager
at 130-131,
{¶ 28} The court went on, however, to note that the difficulties of subjecting incorporeal property to a seizure and sale on execution at law do not attend decrees of a court of equity. Id., citing
Massie v. Watts
(1810),
{¶ 29} Ohio courts have long recognized the availability of an equitable creditor’s bill. For example, in 1855, the Supreme Court of Ohio mentioned the “well known equitable remedy” of “[a] bill to reach property not liable to legal process, and subject it to the payment of a
judgment,”
noting that such a remedy needed no statute to support it. (Emphasis sic.)
Joseph Bowry & Sons v. Odell & Bro.
(1855),
When a judgment debtor does not have sufficient personal or real property subject to levy on execution to satisfy the judgment, any equitable interest which he has in real estate as mortgagor, mortgagee, or otherwise, or any interest he has in a banking, turnpike, bridge, or other joint-stock company, or in a money contract, claim, or chose in action, due or to become due to him, or in a judgment or order, or money, goods, or effects which he has in the possession of any person or body politic or corporate, shall be subject to the payment of the judgment by action.
{¶ 30} Despite the United States Supreme Court’s statement in
Ager
at 131,
{¶ 31} Haney also argues that a creditor’s bill is inappropriate because the patents themselves constitute personal property subject to levy upon execution, thus rendering
{¶ 32} Haney next argues that a creditor’s bill applies only when the debtor’s property is held by a third person. Because Smith Technology itself possessed the patents, Haney argues that he could not utilize a creditor’s bill to reach them. While
{¶ 33} For the foregoing reasons, we find that a creditor’s bill is an appropriate method by which a judgment creditor may subject its debtor’s rights in a patent to satisfaction of a judgment. Here, Olive Branch commenced its creditor’s bill action by filing a complaint on January 20, 2006, and perfecting service of process on the named defendants. Upon commencement of a creditor’s bill, the judgment creditor not only acquires a lien on the debtor’s equitable assets, but also achieves priority over creditors of the judgment debtor without specific liens upon the debtor’s interest in the property.
Morgan Bank,
{¶ 34} While we conclude that a creditor’s bill is an appropriate means of collecting on a monetary judgment by reaching patents owned by a judgment debtor, it does not necessarily follow that a creditor’s bill is the
exclusive
means for doing so. Thus, we must also assess Haney’s attempt to reach the patents in November 2004 through his
(¶ 35} Haney maintains that
The judge may order any property of the judgment debtor that is not exempt by law to be applied toward the satisfaction of the judgment, but the earnings of the judgment debtor for personal services shall be applied only in accordance with sections 2329.66 and 2329.70 and Chapter 2716. of the Revised Code.
Haney argues that
{¶ 36}
On proof by the affidavit of the judgment creditor, or otherwise, to the satisfaction of a judge of the court of common pleas, or a probate judge, of the county in which the debtor is found, that the judgment debtor has property which he unjustly refuses to apply toward the satisfaction of the judgment, such judge, by order, may require the debtor to appear at a time and place in such county to answer concerning it. Such proceedings thereupon may be had for the application of the property of the debtor toward the satisfaction of the judgment, as are prescribed bysections 2333.09 to 2333.27, inclusive, of the Revised Code.
An “order requiring a judgment debtor to appear and submit to the examination provided for by
{¶ 37} Olive Branch and Smith Technology argue that Haney did not properly invoke proceedings for an order pursuant to
{¶ 38} Haney, on the other hand, argues that he was not required to initiate proceedings for a judgment-debtor examination before moving for an order under
{¶ 39} The language of the statutory provisions within
{¶ 40} The Supreme Court of Ohio has directed courts to read statutes relating to the same subject matter together, in an attempt to arrive at a reasonable construction, giving proper force and effect to each statute.
D.A.B.E., Inc. v. Toledo-Lucas Cty. Bd. of Health,
{¶ 41} Here, Haney did not obtain an order for examination of Smith Technology pursuant to
{¶ 42} We now turn to the trial court’s determination that Olive Branch has priority over Haney with respect to the ten patents identified in both Haney’s
{¶ 43} On appeal, Haney maintains that he is entitled to priority over Olive Branch’s lien because he acted first with respect to the patents. Haney asserts that the filing of his
{¶ 44} Haney relies on
Cowen v. Wassman
(1939),
“Now it will be observed, as to these judgment liens, they are equal in extent. They attach to the entire land, or to the entire interest of the judgment debtor in the land. They [the competing judgment liens] are all of equal validity, and the only question in regard to them is as to priority. Inevery other respect they are equal, and there is no injustice, no impropriety in giving the preference to that creditor who is the most diligent in the pursuit of his remedy.”
Cowen, however, is inapposite because, here, the court was not faced with judgment liens of equal validity.
{¶ 45} We discern no merit in Haney’s argument that he is the most diligent judgment creditor and is, therefore, entitled to priority over Olive Branch. Liens may be created only by agreement or by a fixed rule of law.
Great Am. Ins. Co. v. Thompson Trust,
Hamilton App. No. C-040127,
(¶ 46} If, as appellees argue,
{¶ 47} Although Haney was aware, from early January 2005, of Smith Technology’s arguments regarding the invalidity of his attempt to reach the patents, and despite the trial court’s January 7, 2005 finding that his
{¶ 49} By his third assignment of error, Haney contends that the trial court erred in denying his refiled
{¶ 50} By his fourth and final assignment of error, Haney contends that the trial court erred by denying his motion to stay the November 15, 2007 order to transfer the patents back to Smith Technology. Haney’s contention is premised on his belief that he was entitled to a first lien on the patents and that he was, therefore, entitled to preserve his interest in the patents during the course of these appeals. Haney has no legal basis for retaining the patents, given the trial court’s vacation of the judgment entry upon which the transfer was premised. Upon the proper vacation of that judgment entry, there remained no basis for the assignment of the patents to Matthew 6. Having rejected Haney’s contention as to his lien priority, we find no error in the trial court’s refusal to permit Matthew 6 to retain possession of the patents pending appeal. Accordingly, we overrule Haney’s fourth assignment of error.
{¶ 51} In conclusion, we overrule Haney’s four assignments of error and affirm the judgments of the Franklin County Court of Common Pleas.
Judgments affirmed.