State ex rel. Home Savings Bank v. Gallagher
| Decision Date | 01 May 2018 |
| Docket Number | No. 106457,106457 |
| Citation | 111 N.E.3d 698,2018 Ohio 1747 |
| Parties | STATE of Ohio, EX REL. HOME SAVINGS BANK, Relator v. Honorable Kelly Ann GALLAGHER, et al., Respondents |
| Court | Ohio Court of Appeals |
Richard J. Thomas, Jerry R. Krzys, Henderson Covington Messenger Newman & Thomas Co., L.P.A., 6 Federal Plaza Central, Suite 1300, Youngstown, Ohio 44503, ATTORNEYS FOR RELATOR
Michael C. O'Malley, Cuyahoga County Prosecutor, By: Charles E. Hannan, Assistant County Prosecutor, The Justice Center, 1200 Ontario Street, Cleveland, Ohio 44113, ATTORNEYS FOR RESPONDENTS
Nicole R. Woods, Daniel R. Swetnam, Ice Miller L.L.P., 250 West Street, Columbus, Ohio 43215, ATTORNEYS FOR RECEIVER, For Matthew L. Fornshell, Esq.
JOURNAL ENTRY AND OPINION
{¶ 1} Relator, Home Savings Bank, successor by merger to The Home Savings and Loan Company of Youngstown, Ohio ("HSB"), seeks a writ of prohibition to prevent respondent, Judge Kelly Ann Gallagher, and respondent court, the Cuyahoga County Court of Common Pleas, from paying administrative expenses of a receivership while a direct appeal is pending with this court. After careful review of the issues raised, this court grants summary judgment in favor of respondents and denies the writ.
{¶ 2} The litigation in the underlying civil case was spawned by a Ponzi scheme perpetrated by Joanne and Alan Schneider. As the scheme came to light, plans for a large commercial development in Parma Heights, Ohio collapsed. This led to litigation involving numerous parties, including the city of Parma Heights ("Parma Heights"), Cleveland Construction Inc. ("Cleveland Construction"), and HSB. The litigation that ensued has lasted the better part of two decades. The claims of these three creditors were disposed of by the trial court in separate orders and cases, and ultimately directed Matthew L. Fornshell, the receiver appointed to oversee the assets mainly generated from the sale of real estate, to disburse funds to HSB and other parties.
{¶ 4} Two days later, HSB filed its notice of appeal. All three cases were separately assigned case numbers but ultimately consolidated in this court.
{¶ 5} The receiver filed four applications for the payment of administrative claims during the pendency of the appeal: April 6, 2016, October 17, 2016, December 8, 2016, and April 6, 2017. These were all granted by the trial court. HSB contested only one application.
{¶ 6} While these appeals were still pending, on November 3, 2017, HSB filed the instant action seeking a writ of prohibition to prevent the court from making further distributions from assets under receivership for administrative claims, and seeking to void the previous four payments made to the receiver. HSB's complaint for writ of prohibition alleges that the trial court lacked subject-matter jurisdiction to grant any of the receiver's fee applications during the pendency of the appeals because the orders directly interfered with the appellate court's jurisdiction "to review, affirm, reverse, or modify" the underlying judgments. According to HSB, "all monies traceable to the Cornerstone Properties sale proceeds"—including the Secured Creditor Allocation Account—are directly at issue in the companion appeals, and therefore, the trial court patently and unambiguously lacks jurisdiction to approve any application for administrative fees (which includes the receiver's fees) that arise from this account.
{¶ 7} This court granted an alternative writ and set a briefing schedule on November 6, 2017. Respondent judge and the receiver filed answers. Respondent, the receiver, and HSB filed motions for summary judgment on December 15, 2017. This court issued a decision resolving all three appeals on December 21, 2017. The parties subsequently filed their briefs in opposition to the motions for summary judgment on January 18, 2018. Aside from arguing that HSB was not entitled to a writ of prohibition because there is no showing that the trial court patently and unambiguously lacks jurisdiction, respondents and receiver argue that the action is now moot because this court decided the appeals, approving the Secured Creditor Allocation and holding that the trial court "did not abuse its discretion by approving the receiver's payments of various administrative fees and costs from the Secured Creditor Allocation." HSB moved for reconsideration, which this court ultimately granted, but reached the same result as the earlier issued opinion. See Williams v. Schneider , 2018-Ohio-968, 109 N.E.3d 124 (8th Dist.).
{¶ 8} Initially, we emphasize the Ohio Supreme Court's admonition that "[a] writ of prohibition is an extraordinary remedy that is granted in limited circumstances with great caution and restraint." State ex rel. Corn v. Russo , 90 Ohio St.3d 551, 554, 740 N.E.2d 265 (2001). Prohibition should not issue in a doubtful case. State ex rel. Merion v. Tuscarawas Cty. Court of Common Pleas , 137 Ohio St. 273, 28 N.E.2d 641 (1940).
{¶ 9} To be entitled to a writ of prohibition, HSB must establish that (1) the trial court is about to or has exercised judicial power, (2) the exercise of that power is unauthorized by law, and (3) denying the writ would result in injury for which no other adequate remedy exists in the ordinary course of law. State ex rel. Huntington Natl. Bank v. Kontos , 145 Ohio St.3d 102, 2015-Ohio-5190, 47 N.E.3d 133, ¶ 16. "Ordinarily, ‘a tribunal having general subject-matter jurisdiction of a case possesses authority to determine its own jurisdiction, and a party challenging its jurisdiction has an adequate remedy by postjudgment appeal from its holding that it has the requisite jurisdiction.’ " State ex rel. Dailey v. Dawson , 149 Ohio St.3d 685, 2017-Ohio-1350, 77 N.E.3d 937, ¶ 14, quoting State ex rel. Rootstown Local School Dist. Bd. of Edn. v. Portage Cty. Court of Common Pleas , 78 Ohio St.3d 489, 491, 678 N.E.2d 1365 (1997). "However, there is a narrow exception—the availability of appeal ‘does not constitute an adequate remedy and does not bar extraordinary relief if the tribunal patently and unambiguously lacks jurisdiction over the case.’ " Id. , quoting Rootstown Local School Dist. Bd. of Edn. at 492, 678 N.E.2d 1365. Under this exception, "prohibition will lie both to prevent the future unauthorized exercise of jurisdiction and to correct the results of previously jurisdictionally unauthorized actions." State ex rel. Litty v. Leskovyansky , 77 Ohio St.3d 97, 98, 671 N.E.2d 236 (1996).
{¶ 10} Moreover, this court has discretion in issuing the writ of prohibition. State ex rel. Gilligan v. Hoddinott , 36 Ohio St.2d 127, 304 N.E.2d 382 (1973).
{¶ 11} The thrust of HSB's complaint and motion for summary judgment is that the respondent is patently and unambiguously without jurisdiction to approve the receiver's application for administrative expenses of the receivership while the cases are pending on appeal.1 HSB does not dispute the existence of an adequate remedy of law; instead, it argues that the narrow exception applies in this case. We find, however, HSB's arguments unpersuasive, and under the facts of this case, we cannot conclude that the trial court patently and unambiguously lacked jurisdiction.
{¶ 12} Once an appeal is filed, a trial court lacks jurisdiction to take any action that will interfere with the determinations of an appellate court. State ex rel. Sullivan v. Ramsey , 124 Ohio St.3d 355, 2010-Ohio-252, 922 N.E.2d 214, ¶ 17, quoting State ex rel. Rock v. School Emp. Retirement Bd. , 96 Ohio St.3d 206, 2002-Ohio-3957, 772 N.E.2d 1197, ¶ 8. It may only act in aid of the jurisdiction of the appellate court. State ex rel. Lisboa v. Galvin , 8th Dist. Cuyahoga No. 92525, 2009-Ohio-969, 2009 WL 546422, ¶ 6, citing State ex rel. Special Prosecutors v. Judges, Court of Common Pleas , 55 Ohio St.2d 94, 97, 378 N.E.2d 162 (1978).
{¶ 13} The Supreme Court of Ohio, however, has noted some of those instances where the trial court may tread without offending this proposition of law: "it has been stated that the trial court does retain jurisdiction over issues not inconsistent with that of the appellate court to review, affirm, modify or reverse the appealed judgment, such as the collateral issues like contempt, appointment of a receiver and injunction." Special Prosecutors at 97, 378 N.E.2d 162, citing In re Kurtzhalz , 141 Ohio St. 432, 48 N.E.2d 657 (1943) ; Goode v. Wiggins , 12 Ohio St. 341 (1861) ; Fawick Airflex Co. v. United Elec. Radio & Machine Workers , 90 Ohio App. 24, 103 N.E.2d 283 (8th Dist.1951). Moreover, "[u]ntil and unless a supersedeas bond...
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