Jezerinac v. Dioun

• Decision Date: 28 February 2019
• Docket Number: No. 18AP-479,18AP-479
• Citation: 132 N.E.3d 238,2019 Ohio 726
• Parties: Ronald M. JEZERINAC, et al., Plaintiffs-Appellees, v. Mo M. DIOUN, et al., Defendants-Appellants.
• Court: Ohio Court of Appeals

132 N.E.3d 238

2019 Ohio 726

Ronald M. JEZERINAC, et al., Plaintiffs-Appellees,

v.Mo M. DIOUN, et al., Defendants-Appellants.

No. 18AP-479

Court of Appeals of Ohio, Tenth District, Franklin County.

Rendered on February 28, 2019

DECISION

BRUNNER, J.

{¶ 1} Defendants-appellants, Mo M. Dioun and Mina L. Dioun, appeal several decisions of the Franklin County Court of Common Pleas culminating in a decision entered on June 4, 2018 denying a receiver's motion to accept a $ 4.2 million offer from Taste Hospitality Group Ltd. to purchase the partnerships and corporations that own Barley's Brewing Company, and ordering the receiver to instead accept an offer from LLJBucksBrew, LLC for $ 1.875 million. Because we find that the lease between Barley's Brewing Company and its current landlord is assignable without the landlord's agreement to certain parties based on a January 2, 2013 amendment and is assignable with the landlord's permission (which shall not unreasonably be withheld) to any interested party pursuant to lease provision 9.01(a), we sustain Dioun's second and third assignments of error. We decline to address the first assignment of error on the grounds that it is unripe. We therefore reverse and remand with instructions.

I. INTRODUCTION & PARTIES

{¶ 2} Before addressing the facts and procedural history of this case, it is helpful for the sake of clarity to review the relevant entities and their relation to one another as matters undisputedly existed when this litigation began. Barley's Brewing Company and Brewcadia (collectively, "Barley's") are the names given to a restaurant, pub, and classic video game arcade operated out of a certain premises located at 467 North High Street, Columbus, Ohio, 43215. Those businesses are owned by Brewpub Restaurant Limited Partnership ("BRLP"). BRLP is composed of several limited partner investors and one general partner, Brewpub Restaurant Corporation ("BRC"), which owns 50 percent of BRLP. BRLP's general partner, BRC, is owned 50/50 by the Dioun and plaintiff-appellee Ronald M. Jezerinac families. Dioun and Jezerinac also apparently own some additional limited partnership stakes in BRLP, but the record is not clear as to the extent or percentages of the families' ownership further, indirect ownership interests in BLRP. The final entity relevant to this appeal is intervenor-appellee Brewery Real Estate Partnership ("BREP").¹ BREP owns the building at 467 North High Street and leases it to BRLP. BREP is composed of many of the same partners as the partners who compose BRLP, including Jezerinac (who apparently owns more than a third of BREP) but not including Dioun. This appeal concerns the sale of BRC and BRLP and whether the lease between BREP and BRLP should be interpreted to permit BREP to effectively limit who may buy BRLP and BRC.

II. FACTS AND PROCEDURAL HISTORY

{¶ 3} By a complaint filed on August 23, 2016, plaintiffs, including Ronald Jezerinac and Tiffany Sexton (collectively, "Jezerinac"), in their individual capacities and derivatively as interest holders in various businesses, sued Mo Dioun, Mina Dioun, and their daughter and son-in-law, Adam and Sheila Trautner (collectively, "Dioun"), as well as various business entities associated with the individual plaintiffs and defendants. (Aug. 23, 2016 Compl.) Most of the specific allegations in the complaint are not relevant to this appeal, but essentially, the complaint accused Dioun of various business betrayals and sought a business divorce between the Jezerinac and Dioun families. Id. In service of that goal, the complaint repeatedly suggested that the appointment of a receiver might be appropriate to effectuate the disentangling of the two families' business interests. Id. at ¶ 136, 141, 145, 149, 153. On October 17, 2016, Dioun answered and counterclaimed, accusing Jezerinac of financial betrayals and an attempt to squeeze him out of some of their business ventures. (Oct. 17, 2016 Answer & Counterclaim at ¶ 4-9.)² Among the many claims in the counterclaim, Dioun also moved the trial court to appoint a receiver to untangle and, if necessary, dissolve and liquidate the parties' jointly owned businesses and their assets, including BRC and BRLP. Id. at ¶ 170-72, 180-82.

{¶ 4} Both sides then moved for the appointment of a receiver. (Jan. 24, 2017 Dioun Mot. for Receiver; Feb. 6, 2017 Jezerinac Mot. for Receiver.) The parties agreed that Barley's was a thriving enterprise and that this was not the typical case in which a receiver is appointed to liquidate a failing business. Nonetheless, both sought the appointment of a receiver under R.C. 2735.01(A)(7). (Jan. 24, 2017 Dioun Mot. for Receiver at 6; Feb. 6, 2017 Jezerinac Mot. for Receiver at 15.) Dioun sought for the receiver to, among other tasks, be appointed to manage BRC and its assets, including BRLP, in order to formulate and implement a bidding or sale process to monetize and disentangle the two families' interests. (Dioun Mot. for Receiver at 2.)

{¶ 5} Jezerinac sought a receiver for BRC and BRLP yet simultaneously pointed to the fact that, under BRLP's partnership agreement, such an action triggers a withdrawal of BRC as general partner and a dissolution of BRLP. (Jezerinac Mot. for Receiver at 2-4.) That is, BRLP's "Agreement of Limited Partnership" includes provisions automatically withdrawing the general partner in the event of three occurrences: first, if the general partner seeks, consents to, or acquiesces in the appointment of a receiver; second, if a receiver is appointed for the general partner and not dismissed within 90 days; or third, if the general partner is the subject of an action seeking reorganization, liquidation, or dissolution and the action is not dismissed within 120 days. (BRLP Partnership Agreement at 9.3(f-g), Ex. B attached to Jezerinac Mot. to Appoint Receiver.) In the event the sole general partner withdraws, the agreement provides that BRLP is dissolved unless, within 90 days, the remaining limited partners agreed to continue the business and to appoint at least one new general partner. Id. at 10.1(e). Despite these agreed to deadlines and contingencies, the trial court stayed the running of the business deadlines in the case. (Nov. 29, 2016 Order at 1; Jan. 4, 2017 Order at 1.)

{¶ 6} After considerable briefing by the two main factions and additional briefs by other, intervening limited partners, the trial court appointed a receiver (the individual proposed by Jezerinac) "for the purpose of protecting and preserving, managing and operating, and collecting the necessary profits of * * * Brewpub Restaurant Corporation [BRC] [and] Brewpub Restaurant Limited Partnership [BRLP] * * * during the pendency of this action." (Mar. 10, 2017 Decision & Entry at 7.) It also forbade any "willful[ ] interfere[nce] with the authority of the [r]eceiver" as well as the commencement or continuation of any action or proceedings against the business or against the receiver without leave of court, and it continued to stay all activity against the businesses. Id. at 11-12.

{¶ 7} Approximately three months after the trial court appointed a receiver, BREP sought to intervene and moved for leave to terminate the lease between BREP and BRLP. (June 15, 2017 BREP Mot. to Intervene; May 26, 2017 BREP Mot. to Terminate.)

The lease was initially for a five-year term with the option to renew two times for five years each at the discretion of the tenant. (BRLP & BREP Lease at 1.02, Ex. A attached to Aug. 1, 2017 BREP Brief on Termination.) The lease addressed assignment as follows, whether voluntary or involuntary, and as requiring "prior written approval of [BREP as] landlord":

Tenant shall not: (i) assign or otherwise transfer * * * this Lease * * * or (iii) permit the assignment or other transfer of this Lease * * * by operation of law. * * * The sale of * * * the partnership interests of any Tenant which is a partnership, that results in the change of ownership control of Tenant shall be deemed a transfer of this Lease under [this section] and shall require the prior written approval of Landlord, which shall not be reasonably[sic] withheld.

(BRLP & BREP Lease at 9.01(a).) But an amendment (executed on January 2, 2013) adds a sentence to the end of subsection 9.01(a) of the lease, basically easing the effect of assignment if the Jezerinacs and persons known to them for at least three years are involved:

The foregoing sentence not withstanding, [sic] Landlord's approval is not required if the change of ownership control results from a transfer of stock or partnership interests owned by Lillian Jezerinac or Ronald Jezerinac to a person or persons personally known to them for a period of not less than three (3) years prior to such transfer.

(BRLP & BREP Lease at Jan 2, 2013 Amendment at 1.) Another amendment executed at around the same time amends the term of the lease to provide an option to renew five times for five years each at the discretion of the tenant. (BRLP & BREP Lease at Dec. 31, 2012 Amendment at 1.03.)

{¶ 8} The lease also provides that it is a default under the lease, "If a receiver * * * shall be appointed * * * for Tenant [BRLP] * * * and such receivership * * * shall not be set aside within thirty (30) days after such appointment." (BRLP & BREP Lease at 11.01(c).) In the event of default, BREP is empowered by the lease to terminate the agreement on ten days' notice to the tenant. Id. at 11.02(a). An additional ground of termination arises if a transfer of the lease occurs that requires notice to the landlord, and upon receipt of such notice the "Landlord shall have the right * * * to terminate this Lease." Id. at 9.01(b).

{¶ 9} In July 2017, the trial court held a hearing and decided to require briefing on two questions:

1) May the Receiver assign to a third party or may the landlord terminate the lease between Brewpub Restaurant Limited Partnership, as tenant, and Brewery Real Estate Partnership, as landlord?

2) Does the Court have the power to stay/enjoin

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