State ex rel. Yost v. FirstEnergy Corp.

• Decision Date: 27 September 2022
• Docket Number: 21AP-443,21AP-444,21AP-445
• Citation: 2022 Ohio 3400
• Parties: State of Ohio ex rel. Dave Yost, Ohio Attorney General, Plaintiff-Appellee, v. FirstEnergy Corp. et al., Defendants-Appellees, Samuel C. Randazzo and Sustainability Funding Alliance of Ohio, Inc., Defendants-Appellants City of Cincinnati and City of Columbus, Plaintiffs-Appellees, v. FirstEnergy Corp. et al., Defendants-Appellees, Samuel C. Randazzo and Sustainability Funding Alliance of Ohio, Inc., Defendants-Appellants State of Ohio ex rel.Dave Yost, Ohio Attorney General, Plaintiff-Appellee, v. Energy Harbor Corp. et al., Defendants-Appellees, Samuel C. Randazzo and Sustainability Funding Alliance of Ohio, Inc., Defendants-Appellants
• Court: Ohio Court of Appeals

2022-Ohio-3400

State of Ohio ex rel. Dave Yost, Ohio Attorney General, Plaintiff-Appellee, v. FirstEnergy Corp. et al., Defendants-Appellees, Samuel C. Randazzo and Sustainability Funding Alliance of Ohio, Inc., Defendants-Appellants City of Cincinnati and City of Columbus, Plaintiffs-Appellees, v. FirstEnergy Corp. et al., Defendants-Appellees, Samuel C. Randazzo and Sustainability Funding Alliance of Ohio, Inc., Defendants-Appellants State of Ohio ex rel.Dave Yost, Ohio Attorney General, Plaintiff-Appellee, v. Energy Harbor Corp. et al., Defendants-Appellees, Samuel C. Randazzo and Sustainability Funding Alliance of Ohio, Inc., Defendants-Appellants

Nos. 21AP-443, 21AP-444, 21AP-445

Court of Appeals of Ohio, Tenth District

September 27, 2022

APPEALS from the Franklin County Court of Common Pleas C.P.C. Nos. 20CV-6281, 20CV-7005, 20CV-7386

On brief:

Dave Yost, Attorney General, Charles M. Miller, Jonathan D Blanton, L. Martin Cordero, Margaret O'Shea, and Bradford Tammaro, for plaintiffs-appellees. Argued: Charles M. Miller.

On brief:

Roger P. Sugarman, Allen Stovall Neuman & Ashton LLP, Richard K. Stovall, Jeffrey R. Corcoran, and Tom Shafirstein, for defendants-appellants. Argued: Roger P. Sugarman.

DECISION

BEATTY BLUNT, J.

{¶ 1} Defendants-appellants, Samuel C. Randazzo ("Randazzo") and Sustainability Funding Alliance of Ohio, Inc. ("SFAO") (collectively "appellants"), appeal from three orders issued by the Franklin County Court of Common Pleas: the August 12 2021 Order Granting Plaintiffs Ex-Parte Motion for Prejudgment Attachment of Property Other than Personal Earnings; the August 12, 2021 Order Granting Plaintiffs Ex-Parte Motion for Prejudgment Attachment of Accounts of Property Other than Personal Earnings; and the August 23, 2021 Order denying the Defendants' Motion to Vacate the Attachment Orders and the related garnishment orders. For the reasons that follow, we reverse and vacate the orders.

I. Facts and Procedural History

{¶ 2} This dispute arises out of litigation initiated by plaintiff-appellee, the State of Ohio ex rel. Dave Yost (the "State"), against multiple defendants in connection with the passage of HB 6 of the 133rd General Assembly. The matters before this court, however, involve discrete issues concerning pre-judgment attachments orders issued ex parte pursuant to R.C. 2715, et seq., and post judgment garnishment orders issued pursuant to Chapter 2716.

{¶ 3} The facts and procedural events pertinent to this appeal are not in dispute. For ease of reference, these are set forth in the following timeline:

• September 23, 2020-The State initiates the first of three cases by filing a complaint against FirstEnergy and multiple other defendants.

• October 27, 2020-City of Cincinnati and City of Columbus file a complaint against FirstEnergy and multiple other defendants.

• November 13, 2020-The State files a complaint against Energy Harbor Corporation and multiple other defendants.

• December 14, 2020-All three of the foregoing cases are consolidated. (Dec. 14, 2020 Order of Consolidation.)

• February 8, 2021-Trial court enters agreed order stating the three consolidated cases are "STAYED in all respects pending final resolution of all criminal proceedings in USA v. Householder et al, Case No. 1:20-cr-00077-TSB (S.D. Ohio)." (Feb. 8, 2021 Agreed Order)

• August 5, 2021-The State files a motion for leave to file a second^[1] amended complaint to add appellants and other parties as defendants, attaching as an exhibit a copy of the proposed second amended complaint. (Aug. 5, 2021 Mot. for Leave to Amend Compl.; Ex. A.)

• August 12, 2021-The State moves, ex parte, for an order attaching certain property of appellants in the form of accounts held with various entities. (Aug. 12, 2021^[2] Ex-Parte Mot. for Prejudgment Attachment.) The motion was supported by the affidavit of Charles M. Miller, counsel for the State. (Aug. 12, 2021 Aff. of Charles M. Miller.)

• August 11, 2021-Trial court holds hearing on the State's Ex-Parte Motion for Prejudgment Attachment, grants the motion at the conclusion of the hearing, and orders the State to submit a proposed order. (Aug. 11, 2021 Tr. at 10-12.) Trial court further states it will "permit the Attorney General's Office to file an amended complaint naming Randazzo as a named defendant in the hearings or in the cases that are scheduled in 20-6281 and 20-7386, and allow him to be added as a party in that case, as well." Id. at 11. It is undisputed that appellants were not provided notice of the hearing.

• August 11, 2021-Trial court approves and manually signs two orders granting the ex-parte motion for pre-judgment attachment presented by the State: one is titled Order Granting Plaintiff's Ex-Parte Motion for Prejudgment Attachment of Property Other Than Personal Earnings (hereinafter "Aug. 12, 2021 Attachment Order No. 1") and the other is titled Order Granting Plaintiff's Ex-Parte Motion for Prejudgment Attachment of Accounts at Property Other Than Personal Earnings (hereinafter "Aug. 12, 2021 Attachment Order No. 2").

• August 12, 2021-Aug. 12, 2021 Attachment Order No. 1 and Aug. 12, 2021 Attachment Order No. 2 are filed with the Clerk of the Franklin County Common Pleas Court. Aug. 12, 2021 Attachment Order No. 2 provides for attachment against the property of appellants to "satisfy State of Ohio/plaintiff's claim in the amount of $8,000,000.00."

• August 12, 2021-Trial court signs three post judgment garnishment orders: one issued to JP Morgan Chase, one issued to Charles Schwab, and one issued to Huntington Bank. Each of the garnishment orders is supported by an affidavit of Charles M. Miller stating that the State as judgment creditor has "recovered or certified a judgment in the Common Pleas Court of Franklin County, Ohio against the judgment debtor named above," with the judgment debtor identified as "First Energy Corp., et al.," and the amount of the judgment as $8,000,000.00. (Aug. 12, 2021 Garnishment Orders.)

• August 12, 2021-Aug. 12, 2021 Garnishment Orders are filed with the Clerk.

• August 13, 2021-Order Granting Motion of Plaintiff State of Ohio ex rel. Dave Yost, Ohio Attorney General for Leave to Amend Complaint Instanter is electronically signed by the trial court and is electronically filed with the Clerk. (Order Granting Leave to Amend.)

• August 17, 2021, 10:18 a.m.-State files Second Amended Complaint.

• August 17, 2021, 10:47 a.m.-Appellants' file Motion to Vacate the August 12, 2021 Orders of Attachment and the Order and Notice of Garnishment and Request for Expedited Consideration. (Mot. to Vacate.)

• August 17, 2021, 3:42 p.m.-State files Affidavit Supplementing Plaintiffs Motion for Prejudgment Attachment and Order Entered August 12, 2021. (Aug. 17, 2021 Supp. Aff. of Charles M. Miller.)

• August 23, 2021-Trial Court holds hearing^[3] on Motion to Vacate and denies the motion at the conclusion. (Aug. 23, 2021 Tr. At 35.)

• August 23, 2021-Order denying Motion to Vacate is electronically signed by the trial court and is electronically filed with the Clerk. (Order Denying Mot. to Vacate.) The order states, in pertinent part:

The Court finds that Randazzo is a party to [these] case[s] as of August 5, 2021, that pre-judgment attachment is proper under R.C. 2715.01 and R.C. 2715.045, and that garnishment is the appropriate means to secure the property under R.C. 2715.09, given the liquid nature of the assets."

(Order Denying Mot. to Vacate at 2.)

• September 8, 2021-Randazzo is served with the Second Amended Complaint.

• September 9, 2021-SFAO is served with the Second Amended Complaint.

{¶ 4} On September 7, 2021, appellants filed this timely appeal.

II. Assignments of Error

{¶ 5} Appellants assert the following three assignments of error for our review:

[I.] The trial court erred in entering the August 12, 2021 Order Granting Plaintiffs Ex-Parte Motion for Prejudgment Attachment of Property Other than Personal Earnings.

[II.] The trial court erred in entering the August 12, 2021 Order Granting Plaintiffs Ex-Parte Motion for Prejudgment Attachment of Accounts of Property Other than Personal Earnings.

[III.] The trial court erred in its August 23, 2021 Order denying the Appellants' Motion to Vacate the Attachment Orders and the related garnishment orders.

III. Law and Analysis

A. Standards of Review

{¶ 6} Appellants' assignments of error are all interrelated, and we therefore review them together. We review appellants' arguments implicating issues of statutory construction, which are issues of law, under a de novo standard of review. State v. Hughes, 10th Dist. No. 19AP-385, 2020-Ohio-3382, ¶ 7, citing Clark v. State Teachers Retirement Sys., 10th Dist. No. 18AP-105, 2018-Ohio-4680, ¶ 16, citing MA Equip. Leasing I, LLC v. Tilton, 10th Dist. No. 12AP-564, 2012-Ohio-4668, ¶ 18. "When conducting such a review, an appellate court does not defer to the trial court's determination." Silver Lining Group EIC Morrow Cty. v. Ohio Dept. of Edn. Autism Scholarship Program, 10th Dist. No. 16AP-398, 2017-Ohio-7834, ¶ 33, citing Akron v. Frazier, 142 Ohio App.3d 718, 721 (9th Dist.2001), citing State v. Sufronko, 105 Ohio App.3d 504, 506, (4th Dist.1995).

{¶ 7} In contrast, we review appellants' arguments concerning the propriety of the issuance of the attachment orders and garnishment orders, which are premised on factual findings, for abuse of discretion. See Reywal Co. v Dublin, 10th Dist. No. 15AP-635, 2017-Ohio-367, ¶ 9, citing State v. Consilio, 114 Ohio St.3d 295, 2007-Ohio-4163, ¶ 8; Americare Healthcare Servs., LLC v. Akabuaku, 10th Dist. No. 12AP-917, 2013-Ohio-3013, ¶ 9 ("While questions of statutory interpretation may be reviewed de novo, the factual findings underlying those determinations are reviewed for...