PNC BANK, NATIONAL ASSOCIATION v. J & J SLYMAN, L.L.C., ET AL. [Appeal By Idella Palmer]
No. 101777
Court of Appeals of Ohio, EIGHTH APPELLATE DISTRICT, COUNTY OF CUYAHOGA
July 23, 2015
2015-Ohio-2951
BEFORE: E.T. Gallagher, P.J., Stewart, J., and Boyle, J.
Civil Appeal from the Cuyahoga County Court of Common Pleas Case Nos. CV-11-761173 and CV-14-825591
RELEASED AND JOURNALIZED: July 23, 2015
Nicole C. Longino
11811 Shaker Blvd, #420
Cleveland, Ohio 44120
ATTORNEYS FOR APPELLEES
Megan D. Stricker
Collins Roche Utley & Garner, L.L.C.
800 Westpoint Parkway, Suite 1100
Cleveland, Ohio 44145
Gary C. Safir
Collins Roche Utley & Garner, L.L.C.
655 Metro Place South, Suite 200
Dublin, Ohio 43017
{¶1} Plaintiff-appellant, Idella Palmer (“Palmer“),1 appeals the trial court‘s judgment dismissing her complaint against defendants-appellees, J & J Slyman, L.L.C., c/o David J. Slyman, statutory agent; Jack Cornachio, C.P.M., in his capacity as president and CEO of Midwest Realty Advisors, L.L.C.; Jack Cornachio, C.P.M., in his capacity as receiver for the real property of J & J Slyman, L.L.C. at Garfield Mall a.k.a. Garfield Commons; and Garfield Mall a.k.a. Garfield Commons (collectively “appellees“). Palmer raises two assignments of error for review:
- The trial court erred as a matter of law when it granted appellees’ motion to dismiss pursuant to
Civ.R. 12(B)(6) stating that appellant‘s claims were barred by the applicable statute of limitations when appellant clearly timely filed her cause of action in the trial court within the two-year statute of limitations period. - The trial court erred as a matter of law when it failed to recognize that appellant‘s amended complaint, filed after receiving leave of court, “related back” to the date of appellant‘s original complaint filing when appellees’ capacities were corrected and correctly named and identified on appellant‘s amended complaint.
I. Factual and Procedural History
{¶3} This is a personal injury matter that arose when Palmer allegedly fell after stepping into a pothole outside the premises located at 12678 Rockside Road in Garfield Heights, Ohio (hereinafter referred to as the “subject property“) on April 19, 2012.
{¶4} On April 18, 2014, one day before the applicable two-year statute of limitations for her claims expired, Palmer filed a complaint (“original complaint“) in Cuyahoga C.P. No. CV-14-825591 against Jack Cornachio, C.P.M., individually and in his capacity as president and CEO of Great Lakes Realty, Inc., Great Lakes Realty Inc., and Garfield Shopping Center.
{¶5} The original complaint identified Cornachio and Great Lakes Realty Inc., as owners of the subject property and asserted three claims (1) bodily injury resulting from negligence; (2) bodily injury resulting from negligence per se; and (3) negligent infliction of emotional distress.
{¶6} After being served with the original complaint, Cornachio contacted Palmer‘s attorney and informed her that he was not the owner of the subject property. Rather, Cornachio was serving as a court-appointed receiver following a judgment entry and decree of foreclosure against the true owner of the subject property, J & J Slyman, L.L.C. and in favor of PNC Bank, National Association in Cuyahoga C.P. No. CV-11-761173.
No legal action * * * shall be taken or continued against the Receiver, the Premises, the business operation conducted on the Premises, and other assets of Defendant J & J, or any part thereof without leave of this Court first having being obtained.
{¶7} Based on this newly discovered information, Palmer filed an amended complaint on May 2, 2014 in CV-14-825591, raising the same allegations, but naming appellees as defendants. Subsequently, Palmer voluntarily dismissed the parties named in her original complaint. On May 8, 2014, Palmer filed a motion for leave of court to file her amended complaint in CV-11-761173. On May 14, 2014, the trial court in CV-11-761173 granted Palmer‘s motion for leave.
{¶8} On June 4, 2014, appellees filed a motion to consolidate case numbers CV-14-825591 and CV-11-761173. On June 23, 2014, the trial court granted appellees’ motion and consolidated the cases under case number CV-11-761173.
{¶9} On June 6, 2014, appellees filed a motion to dismiss Palmer‘s amended complaint pursuant to
{¶10} On July 8, 2014, the trial court granted appellees’ motion, stating “[p]laintiff‘s claims are hereby dismissed as being barred by the applicable statute of limitations.”
II. Law and Analysis
{¶11} In her first assignment of error, Palmer argues the trial court erred by granting appellees’ motion to dismiss pursuant to
A. Standard of Review
{¶12} A motion to dismiss a complaint for failure to state a claim upon which relief can be granted, pursuant to
B. Statute of Limitations and Civ.R. 15(C)
{¶13} The statute of limitations is an affirmative defense and is generally not properly raised in a
{¶14} In the case at hand, the parties stipulate that the applicable statute of limitations period for each of Palmer‘s claims is two years. See
{¶15}
(C) Relation Back of Amendments. Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. An amendment changing the party against whom a claim is asserted relates back if the foregoing provision is satisfied and, within the period provided by law for commencing the action against him, the party to be brought in by an amendment, (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him.
{¶16} The primary purpose of
{¶17} Within her brief, Palmer raises persuasive arguments relating to the application of
{¶18} A receivership is an equitable remedy by which a court appoints a disinterested third party for the purpose of conserving the property and assets that are the subject of diverse claims. See Heartland Bank v. LNG Res., LLC, 10th Dist. Franklin No. 08AP-410, 2008-Ohio-6226, ¶ 4. Thus, the receivership court has a valid interest in both the value of the claims themselves and the costs of defending any suit as a drain on receivership assets. See SEC v. Universal Fin., 760 F.2d 1034, 1038 (9th Cir.1985). To this extent, the receivership court may issue a blanket injunction, staying litigation against the named receiver and the entities under his control unless leave of that court is first obtained. Barton v. Barbour, 104 U.S. 126, 128, 26 L.Ed. 672 (1881). Moreover, a district court may impose a litigation stay on a non-party to a receivership as part of its inherent power as a court of equity to fashion effective relief. U. S. v. JHW Greentree Capital, L.P., D.Conn. No. 3:12-CV-00116, 2014 U.S. Dist. LEXIS 79277, *9 (June 11, 2014), citing S.E.C. v. Byers, 609 F.3d 87, 91 (2d Cir.2010).
{¶19} In furtherance of these principles, the trial court‘s August 4, 2011 order required leave of court before a legal action could be filed against “the Receiver, the Premises, the business operation conducted on the Premises, and other assets of Defendant J & J, or any part thereof.”
{¶21} We recognize, as noted by the dissent, that the United States Court of Appeals for the Sixth Circuit stated in Liberte Capital Group, L.L.C. v. Capwill, 462 F.3d 543 (6th Cir.2006), that nonparties to the underlying litigation may be bound by a blanket stay that requires leave of court before litigation can be pursued against the receiver or the entities under his or her control, “so long as the nonparties have notice of the injunction.”
{¶22} Finally, we note that the trial court‘s reliance on the August 4, 2011 order did not improperly convert the
{¶23} Construing the allegations in favor of the nonmoving party, which we must do under
{¶24} Palmer‘s first and second assignments of error are overruled.
III. Conclusion
{¶25} The trial court did not err in granting appellees’ motion to dismiss Palmer‘s personal injury complaint pursuant to
{¶26} The judgment of the trial court is affirmed.
It is ordered that appellees recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to the common pleas court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to
EILEEN T. GALLAGHER, PRESIDING JUDGE
MARY J. BOYLE, J., CONCURS;
MELODY J. STEWART, J., CONCURS IN JUDGMENT ONLY IN PART, AND DISSENTS IN PART
MELODY J. STEWART, J., CONCURRING IN JUDGMENT ONLY IN PART; DISSENTING IN PART:
{¶27} I agree with the majority that J & J Slyman, L.L.C. and Garfield Mall Shopping Center, a.k.a. Garfield Commons, were properly dismissed. However, I dissent from the majority‘s conclusion that the statute of limitations bars Palmer‘s lawsuit in toto. I find that Palmer correctly changed, through amendment under
The Original Complaint as a Nullity
{¶28} Palmer filed her lawsuit in conformity with the statutory requirements for filing a personal injury complaint. Although the trial court had issued a court order that required leave of court before filing a lawsuit against the receiver for J & J Slyman, L.L.C., the business, and its business assets, Palmer was unaware of the trial court‘s order. I can find no Ohio authority that allows a court order to nullify a properly filed
{¶29} While the majority cites Matthews v. Rader, 11th Dist. Lake No. 2003-L-092, 2005-Ohio-3271, and Internatl. Bhd. of Elec. Workers, Local Union No. 8 v. Kingfish Elec., L.L.C., 6th Dist. Williams No. WM-11-006, 2012-Ohio-2363, for the proposition that Palmer‘s original complaint was a nullity because it was filed without leave of court, those cases are from other districts and concern violations of statutory requirements necessitating leave of court before filing a specific pleading. See Matthews (upholding trial court‘s entry of default judgment where defendant failed to seek leave of court before filing an answer outside the statutory time frame contained in
{¶30} In relying on the above cases to find that Palmer‘s complaint was a nullity and therefore could not be amended, the majority ignores decisions from this district that
{¶31} The defendants in this case never moved the court to strike the complaint as being filed in derogation of a court order. Not only did the court not strike the complaint, but the court granted Palmer leave to amend it. The court‘s grant of leave to amend evidences the fact that it did not consider the original filing a nullity.2 Therefore,
Amendment under Civ.R. 15(C)
{¶32} Further, Palmer properly changed Cornachio‘s capacity in the amended the complaint.
{¶33} Under
{¶34} While Cornachio was served with notice in his individual capacity and in his capacity as president and CEO of Great Lakes Realty, and Great Lakes Realty, Inc. was also served, the record reflects that service was not perfected on Garfield Mall Shopping Center. Thus, there is no evidence that Garfield Mall Shopping Center a.k.a. Garfield Commons ever received notice of the original suit. Nor is there any evidence that J & J Slyman, L.L.C. was on notice of the suit prior to the filing of the amended complaint. J & J Slyman, L.L.C. was not a party to the original filing, and while a valid argument might arise that J & J Slyman would have notice of the lawsuit as the owner of Garfield Mall Shopping Center, notice cannot be imputed because Garfield Mall Shopping Center was never served with the original compliant.
{¶36} As an officer of the court and not the parties, Cornachio cannot be considered a receiver of process for J & J Slyman, L.L.C., or Garfield Mall Shopping Center, and notice may not be imputed onto these parties simply because Cornachio may have received notice of a suit pending against him in his professional capacity. Indeed, Ohio courts have made clear that a plaintiff may not bring a corporation into court through service of summons upon its receiver, absent an order of the court requiring the receiver to defend the company‘s lawsuits.3 Wade v. Franklin, 50 Ohio App. 174, 176, 197 N.E. 796 (6th Dist.1934); accord C. & M. RR. Co. v. Orme, 1 Ohio C.D. 285 (Ohio Cir. 1885) (now the 5th District). Accordingly, without more, Palmer‘s conclusory allegations that these entities had notice cannot support her contentions that she properly changed all parties through amendment under
{¶38} While the defendants maintain that Palmer improperly “added” parties to the lawsuit when she changed Cornachio‘s capacity on the amended complaint to his capacity as receiver of J & J Slyman, L.L.C. and president and CEO of Midwest Realty Advisors, L.L.C., a simple comparison of the two complaints shows that this is not true. In the amended complaint, rather than suing Cornachio in his capacity as president and CEO of Great Lakes Realty, Inc., Palmer changed Cornachio‘s capacity to president and CEO of Midwest Realty Advisors, L.L.C. The amended complaint also establishes that Palmer changed Cornachio‘s designation as a party in his individual capacity, to a party in his capacity as receiver for J & J Slyman, L.L.C. and its business assets. Consequently, this
{¶39} Therefore, I would reverse and remand the trial court‘s grant of appellees’
