Irvin J. Tessler v. Donald R. Ayer and A. & T. Partnership
| Decision Date | 25 October 1995 |
| Docket Number | C-940574,95-LW-0052,C-940780,C-940632 |
| Parties | IRVIN J. TESSLER, Plaintiff-Appellee, v. DONALD R. AYER and A & T PARTNERSHIP, Defendants-Appellants. APPEAL |
| Court | Ohio Court of Appeals |
DONALD R. AYER, Plaintiff-Appellant,
v.
IRVIN J. TESSLER, Defendant-Appellee.
Kohnen & Patton and David C. DiMuzio, Esq., No. 0034428, 1400 Carew Tower, 441 Vine Street, Cincinnati, Ohio 45202, for Appellants.
These appeals concern a partnership, the property of the partnership and one partner who has failed to comply with a judgment requiring that he return a 1/6 interest in the partnership to the other.(fn1)
In 1985, Irvin J. Tessler and Donald R. Ayer, in order to invest in commercial real estate, formed A & T Partnership ("the Partnership"), pursuant to the laws of Ohio. Ayer owned a 5/6 ownership interest in the Partnership and Tessler owned the remaining 1/6 interest. Contained within the Partnership Agreement was an arbitration clause which stated, in part, "[a]ny and all controversies, disputes or claims arising out of or relating to the interpretation, application or performance of this Agreement shall be decided by final and binding arbitration in accordance with the existing rules of the American Arbitration Association and judgment upon the award rendered by the arbitrator(s) may be entered by any Court of competent jurisdiction." The Partnership Agreement also gave the arbitrator the power to "decree any and all relief of an equitable nature" and to award damages.
Tessler's interest in the Partnership was financed by a loan from Ayer for $100,000 and secured by his 1/6 interest in the Partnership. While the promissory note reflecting the terms of the loan stated that the loan note was payable upon demand and that the interest thereon was due annually upon the anniversary of the note, the payments on the note were, in fact, paid out of Tessler's share of the Partnership's cash flow from the Partnership's inception until September of 1991. On May 20, 1991, negotiations began between Tessler and Ayer for Ayer to purchase Tessler's partnership interest. A controversy arose as to the value to be accorded the interest and negotiations broke down. Consequently, Ayer, allegedly without notice and in contravention of the parties' course of conduct, repossessed Tessler's 1/6 interest in the Partnership for an alleged default on the loan.
On April 30, 1992, Tessler filed a complaint in the Hamilton County Court of Common Pleas seeking: (1) a declaration that Tessler did not default on the note, that Ayer wrongfully repossessed his 1/6 interest in the Partnership, and that Tessler retained his 1/6 interest in the Partnership; (2) damages for the allegedly wrongful repossession of his 1/6 interest or an injunction requiring Ayer to dispose of the interest according to R.C. Chapter 1309 and to account for excess proceeds based upon the difference between fair market value of the interest and the amount due on the note, and punitive damages; and (3) a permanent injunction requiring Ayer to return Tessler's 1/6 interest and prohibiting Ayer and the Partnership from doing certain things to the Partnership's assets pending return of Tessler's 1/6 interest or prohibiting Ayer and the Partnership from trading on Tessler's credit in the future if the repossession of the 1/6 interest was found to be valid.
Ayer moved the trial court to stay the action pending arbitration pursuant to paragraph 19 of the Partnership Agreement. The motion was granted and, on August 26, 1992, arbitration was had on the complaint before an arbitrator agreed to by the parties. The arbitrator determined, in pertinent part, that: (1) Tessler was to pay Ayer $50,714.70 on the demand note with interest at 9% per annum from September 10, 1991, until the full sum was paid; (2) upon payment by Tessler, Ayer was to return Tessler's 1/6 interest in the Partnership; and (3) the award was in full settlement of all claims submitted to the arbitration. Subsequently, Tessler paid Ayer the amount required by the arbitrator.
Ayer filed a motion to modify or vacate the arbitrator's award pursuant to R.C. 2711.10(D). Tessler moved the trial court to enter judgment upon the arbitration award and submitted a proposed judgment entry which stated, in part, that Tessler had paid to Ayer the amount necessary to retire the note and declared that "Irvin J. Tessler remains as a 1/6 partner in the A & T Partnership." The trial court denied Ayer's motion to modify or vacate the arbitrator's award, granted Tessler's motion to enter judgment on the award, and signed the judgment entry submitted by Tessler.
On February 1, 1993, Ayer and the Partnership filed a motion to stay execution of the judgment pending appeal, which was denied. After filing their notice of appeal on February 24, 1993, Ayer and the Partnership filed with this court a motion for stay of execution and for an injunction. This court granted the motion in part, issuing a stay of execution conditioned upon the posting of a $100,000 bond. Meanwhile, on February 8, 1993, Tessler filed motions with the trial court to appoint a receiver for certain Partnership properties, to add Ayer Electric, Inc., as a party defendant, and to set aside a $2.1 million mortgage Ayer had granted on the Partnership's property to Ayer Electric, Inc., after the arbitration award. On March 24, 1993, the trial court overruled Tessler's motions on jurisdictional grounds. Tessler then moved this court to appoint a receiver or to instruct the trial court to proceed on the motions filed February 8, 1993. Tessler filed his notice of appeal on April 22, 1993, from the trial court's order denying his motions filed February 8, 1993. On April 26, 1993, this court overruled Tessler's motion for the appointment of a receiver.
In appeal number C-930133, Ayer and the Partnership raised two assignments of error. First, they asserted that the trial court erred to their prejudice by denying their motion to vacate or modify the arbitration award when the award was indefinite, was impossible to execute, and exceeded the powers of the arbitrator. Second, they contended that the trial court erred to their prejudice by entering a judgment that did not conform to the arbitration award.
In appeal number C-930314, Tessler raised one assignment of error, contending that the trial court erred to his prejudice in not exercising its discretion in overruling Tessler's motion for appointment of a receiver.
The appeals were heard together and this court entered judgment on May 18, 1994, overruling both of Ayer's assignments of error, and sustaining Tessler's assignment of error. Tessler v. Ayer (May 18, 1994), Hamilton App. No. C-930314, unreported.
Ayer then filed a motion in this court to certify a conflict, which was denied. This was followed by a motion for a discretionary appeal to the Ohio Supreme Court, which was also denied. Tessler v. Ayer (1994), 70 Ohio St.3d 1457, 639 N.E.2d 795 ().
On remand, the trial court entered judgment appointing Koll Management Services as receiver for the Hillcrest Tower property pursuant to R.C. Chapter 2735. Ayer and the Partnership filed a motion for reconsideration of the Entry Granting Receivership, which was denied. On July 22, 1994, Ayer and the Partnership filed a notice of appeal from the trial court's Entry Appointing Receiver and the order supplementing the entry, which was given appeal number C-940574. Ayer and the Partnership filed in this court a motion to stay the execution of the receivership order. This motion was overruled by this court on August 12, 1994.
Ayer and the Partnership next filed a motion for relief from judgment under Civ.R. 60(B)(4) on July 22, 1994. The judgment in question required Ayer to return to Tessler a 1/6 interest in the Partnership. Ayer claimed that the partnership had already been dissolved and according to the partnership agreement, Tessler was entitled only to the book value of the 1/6 interest, equaling $96,072 (with interest). Ayer claimed he made a good-faith effort to satisfy the judgment by tendering a check in this amount to Tessler, which was refused. The trial court overruled this motion on September 29, 1994, and Ayer filed a notice of appeal the next day, which was given the appeal number C-940780.
On July 22, 1994, Ayer and the Partnership filed a notice of subpoena for the attendance of William S. Abernethy, the arbitrator, at a deposition. Tessler filed a motion for a protective order, which was granted by the trial court on July 26, 1994. Ayer and the Partnership filed a notice of appeal from the protective order on August 10, 1994, and the appeal was given the number C-940632.
During this time, Ayer filed a new demand for arbitration with the American Arbitration Association, seeking as relief the answers to the following questions: "(1) Has the A & T Partnership been dissolved, and if so, when?, (2) Has [sic] A & T Partnership's affairs been wound-up, and if so, when?, and (3) Is Mr. Tessler's partnership interest to be valued at book value or market value?" Ayer and the Partnership also filed a motion to stay the trial court proceedings pending the new arbitration, which was overruled by the trial court and subsequently appealed under the number C-940780.
On August 16, 1994, Ayer filed an...
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