[Cite as Rippe & Kingston Co., PSC v. Kruse, 2014-Ohio-2428.]

IN THE COURT OF APPEALS 

FIRST APPELLATE DISTRICT OF OHIO 

HAMILTON COUNTY, OHIO

RIPPE & KINGSTON CO. PSC, 

Plaintiff-Appellee, 

 vs. 

RICHARD J. KRUSE, CPA, 

 Defendant-Appellant. 

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: 

: 

: 

APPEAL NO. C-130587 

 TRIAL NO. A-1301305 

 

 O P I N I O N.

Civil Appeal From: Hamilton County Court of Common Pleas 

Judgment Appealed From Is: Affirmed 

Date of Judgment Entry on Appeal: June 6, 2014 

Kohnen & Patton LLP and Joseph L. Dilts, for Plaintiff-Appellee, 

James M. Moore, for Defendant-Appellant. 

Please note: this case has been removed from the accelerated calendar. 
OHIO FIRST DISTRICT COURT OF APPEALS 

 

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FISCHER, Judge. 

{¶1} Defendant-appellant Richard Kruse appeals the judgment of the 

Hamilton County Court of Common Pleas staying this shareholder action below 

pending arbitration. Because we find no merit in Kruse’s sole assignment of error, 

we affirm the judgment of the trial court. 

I. Facts and Procedural History 

{¶2} Rippe & Kingston Co. PSC (“R&K”), an accounting corporation, 

employed Kruse as a certified public accountant. While an employee of the company, 

Kruse also became a shareholder of R&K, and entered into a written agreement (the 

“Shareholder Agreement”) in October 2000. The Shareholder Agreement provided 

that if a shareholder’s employment were terminated for reasons other than death or 

total disability, and the shareholder failed to furnish R&K with a release of legal 

claims against the company, R&K could purchase the shareholder’s shares 30 days 

from sending a written notification to the shareholder (the “Call Option”). 

{¶3} In August 2001, R&K terminated Kruse’s employment, allegedly for 

cause. Nearly 12 years later, in December 2012, R&K sent Kruse written notification 

exercising its rights under the Call Option, which set a closing date for the purchase 

of Kruse’s shares 30 days from the date of the written notification. When Kruse did 

not attend the closing and refused to deliver his shares, R&K filed the instant action 

in the Hamilton County Court of Common Pleas. 

{¶4} The Shareholder Agreement also contained an arbitration clause in 

paragraph 28, which provided that 

[a]ny dispute or controversy existing among [R&K] and one or more of 

the Shareholders regarding any of the terms of this Agreement or the 
OHIO FIRST DISTRICT COURT OF APPEALS 

 

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breach thereof, the determination of which is not otherwise provided 

for by this Agreement, on a written demand of any of the parties 

hereto, shall be submitted to and determined by binding arbitration * * 

*. Notwithstanding any provision herein relating to arbitration, [R&K] 

or the Shareholders shall have the right to petition a court of 

competent jurisdiction for specific performance or injunctive relief as 

provided in Paragraphs (9) and (22) * * *. 

{¶5} Paragraph 22 of the Shareholder Agreement provided parties the right 

to seek specific performance to compel performance of the Shareholder Agreement. 

{¶6} In its suit against Kruse, R&K alleged that Kruse had breached the 

Shareholder Agreement by refusing to deliver his shares, and sought specific 

performance to compel Kruse to deliver those shares. R&K also alleged that Kruse 

had breached the Shareholder Agreement by soliciting to provide financial or 

accounting services for R&K’s clients in violation of a nonsolicitation provision. 

Finally, R&K alleged that Kruse owed it for unreimbursed COBRA payments, which 

he had allegedly promised to pay following his termination. 

{¶7} Kruse filed a counterclaim against R&K, seeking an order from the 

trial court that the Shareholder Agreement was void, and that the company owed 

him in excess of $35,000 for the value of his shares. Kruse also alleged that R&K 

owed him $20,000 plus interest for payments he had made to the company in 

conjunction with obtaining a one-third ownership. Moreover, Kruse alleged that 

R&K owed him for unreimbursed medical expenses and an unpaid bonus for his 

work the year prior to his termination. 
OHIO FIRST DISTRICT COURT OF APPEALS 

 

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{¶8} R&K filed a motion requesting summary judgment on its claim for 

specific performance regarding its rights under the Call Option and requesting a stay 

pending arbitration. As to its specific-performance claim, R&K argued that the 

record showed that Kruse had signed the Shareholder Agreement, that Kruse’s 

employment had been terminated, that Kruse had failed to provide R&K a release of 

legal claims, and that he had not responded to R&K’s letter exercising its rights 

under the Call Option. Therefore, R&K argued it was entitled to specific 

performance ordering Kruse to sell his shares. R&K further argued that Kruse was 

not entitled to any compensation for his shares, as determined by paragraph 16 of 

the Shareholder Agreement. 

{¶9} In arguing for a stay of the remaining claims pending arbitration, R&K 

did not rely on the arbitration provision as set forth in paragraph 28 of the 

Shareholder Agreement, but on an amended version of that provision. The amended 

version, which had been adopted after Kruse’s termination, stated: 

Any claims, disputes or controversies * * * existing among [R&K] and 

one or more of the Shareholders regarding any of the terms of this 

Agreement or the breach thereof, or arising out of the or relating to a 

Shareholder’s employment with the [R&K], shall be settled and 

determined exclusively by final and binding arbitration * * * including 

without limitation, any Claims by a Shareholder * * * for violation of 

any state or federal laws prohibiting discrimination on any basis, tort 

claims, contract claims, whether express or implied, breach of 

fiduciary duty, wrongful discharge, violation of public policy, or any 

other statutory or common law claim. * * * Notwithstanding any 
OHIO FIRST DISTRICT COURT OF APPEALS 

 

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provision herein relating to arbitration, [R&K] or the Shareholders 

shall have the right to petition a court of competent jurisdiction for 

specific performance or injunctive relief as provided in Paragraphs (9) 

and (22). 

{¶10} Kruse filed a memorandum in opposition to R&K’s motion, in which 

Kruse argued that judgment on R&K’s specific-performance claim and an order 

staying the action pending arbitration would be premature because discovery had 

not yet been completed. Kruse argued that he had requested information from R&K 

after the complaint had been filed in January 2013, regarding its corporate workings 

pursuant to R.C. 1701.37(C), which had not yet been answered. Kruse also argued 

that his discovery requests had remained unanswered. Kruse also disputed R&K’s 

calculation of the value of his shares. As to R&K’s request to stay the action pending 

arbitration, Kruse argued that the amended arbitration provision did not apply to 

him because he had not agreed to the amendment. He further argued that his 

counterclaims were not encompassed by the arbitration provision in paragraph 28 of 

the Shareholder Agreement because they did not arise out of the agreement. 

{¶11} The trial court granted R&K’s request for summary judgment on its 

specific-performance claim to the extent that the trial court ordered that Kruse must 

deliver his shares under the Call Option. The trial court specifically stated that the 

parties must arbitrate the issue of the value of Kruse’s shares. The trial court then 

ordered the remaining issues stayed pending arbitration. 

 
OHIO FIRST DISTRICT COURT OF APPEALS 

 

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II. Trial Court Stays the Action Pending Arbitration 

{¶12} In his sole assignment of error, Kruse argues that the trial court erred 

by ordering a stay of proceedings and referring the remaining claims to arbitration. 

Kruse did not appeal the trial court’s order of specific performance. 

{¶13} R.C. 2711.02(B) requires a trial court to stay an action if the issues 

involved are subject to arbitration. The statute provides: 

If any action is brought upon any issue referable to arbitration under 

an agreement in writing for arbitration, the court in which the action is 

pending, upon being satisfied that the issue involved in the action is 

referable to arbitration under an agreement in writing for arbitration, 

shall on application of one of the parties stay the trial of the action 

until the arbitration of the issue has been had in accordance with the 

agreement, provided the applicant for the stay is not in default in 

proceeding with arbitration. 

{¶14} An order granting or denying a stay of trial pending arbitration issued 

under R.C. 2711.02(B) is a final, appealable order under R.C. 2711.02(C), and need 

not meet the requirements of Civ.R. 54(B). Mynes v. Brooks, 124 Ohio St.3d 13, 

2009-Ohio-5946, 918 N.E.2d 511, ¶ 1. We review orders issued under R.C. 

2711.02(B) for an abuse of discretion. See Stoll v. United Magazine Co., 10th Dist. 

Franklin No. 03AP-752, 2004-Ohio-2523, ¶ 18; W.K. v. Farrell, 167 Ohio App.3d 14, 

2006-Ohio-2676, 853 N.E.2d 728, ¶ 15 (2d Dist.). An abuse of discretion implies 

that the court’s attitude is unreasonable, arbitrary or unconscionable. Blakemore v. 

Blakemore, 5 Ohio St.3d 217, 450 N.E.2d 1140 (1983). 

 
OHIO FIRST DISTRICT COURT OF APPEALS 

 

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A. Enforceability of the Arbitration Provision 

{¶15} Kruse argues that he should be relieved from complying with the 

arbitration provision altogether because R&K materially breached its obligations to 

Kruse, and thus the Shareholder Agreement is void. 

{¶16} R.C. 2711.01(A) provides that an arbitration provision in a written 

contract “shall be valid, irrevocable, and enforceable, except upon grounds that exist 

at law or in equity for the revocation of any contract.” Grounds for revocation of an 

arbitration provision include, for example, when the parties did not agree to the 

arbitration provision, or when the arbitration clause is found to be unconscionable. 

Small v. HCF of Perrysburg, Inc., 159 Ohio App.3d 66, 2004-Ohio-5757, 823 N.E.2d 

19 (5th Dist.). 

{¶17} Kruse contends that he was promised a one-third share in the 

ownership of R&K in exchange for his $20,000 in payments, and that he did not 

receive what he had been promised. Kruse also argues that R&K breached its 

common-law fiduciary duty to Kruse as a minority shareholder, and breached its 

statutory duty under R.C. 1701.37(C) to allow Kruse to inspect the corporation’s 

records. 

{¶18} As to the alleged breaches of common-law and statutory duties owed 

to Kruse, Kruse did not bring a counterclaim asserting his statutory rights under R.C. 

1701.37(C), and a breach of the fiduciary duty owed by the majority shareholders in a 

close corporation to Kruse as a minority shareholder would be a claim brought 

against those majority shareholders, not the corporation itself. See Crosby v. Beam, 

47 Ohio St.3d 105, 108, 548 N.E.2d 217 (1989). Kruse’s argument regarding the 

alleged breach by R&K to provide him a one-third ownership does not call into 
OHIO FIRST DISTRICT COURT OF APPEALS 

 

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question the validity of the arbitration provision in the Shareholder Agreement. 

Therefore, Kruse has not shown that the trial court abused its discretion in staying 

the action and enforcing the arbitration provision in the written contract. 

B. Applicability of the Arbitration Provision to the Action 

{¶19} Apart from the validity of the arbitration provision, Kruse argues that 

the trial court erred in determining that the action “arose out of” the Shareholder 

Agreement, and thus Kruse contends that the trial court erred in applying the 

arbitration provision to the action. 

{¶20} Whether a controversy is arbitrable under a contract requires the court 

to invoke principles of contract interpretation, and thus presents a question of law, 

which we review de novo. See Dunkelman v. Cincinnati Bengals, Inc., 158 Ohio 

App.3d 604, 2004-Ohio-6425, 821 N.E.2d 198, ¶ 19-20 (1st Dist.); see also Carew v. 

Seeley, 1st Dist. Hamilton No. C-050073, 2005-Ohio-5721, ¶ 12. Because arbitration 

is a matter of contract, a party cannot be forced to arbitrate a dispute that it has not 

agreed to submit to arbitration. Taylor v. Ernst & Young, LLP, 130 Ohio St.3d 411, 

2011-Ohio-5262, 958 N.E.2d 1203, ¶ 20. Nevertheless, Ohio has a strong policy 

favoring arbitration, so that any ambiguity in the language of an arbitration 

provision should be resolved in favor of arbitration. Id. at ¶ 20-21, citing Williams v. 

Aetna Fin. Co., 83 Ohio St.3d 464, 471, 700 N.E.2d 859 (1998). 

{¶21} If a court determines that any of the claims in an action are subject to 

arbitration under R.C. 2711.02(B), the court must stay the entire proceeding, despite 

the presence of nonarbitrable claims. See Cheney v. Sears, Roebuck & Co., 10th Dist. 

Franklin No. 04AP-1354, 2005-Ohio-3283, ¶ 12; Hussein v. Hafner & Shugarman 

Ent. Inc., 176 Ohio App.3d 127, 2008-Ohio-1791, 890 N.E.2d 356, ¶ 47 (6th Dist.); 
OHIO FIRST DISTRICT COURT OF APPEALS 

 

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McGuffey v. Lenscrafters, Inc., 141 Ohio App.3d 44, 749 N.E.2d 825, 831 (12th 

Dist.2001); Garber v. Buckeye Chrysler-Jeep-Dodge of Shelby, LLC, 5th Dist. 

Richland No. 2007-CA-0121, 2008-Ohio-3533, ¶ 18; Murray v. David Moore 

Builders, 177 Ohio App.3d 62, 2008-Ohio-2960, 893 N.E.2d 897, ¶ 11 (9th Dist.); 

Harsco Corp. v. Crane Carrier Co., 122 Ohio App.3d 406, 417, 701 N.E.2d 1040 (3d 

Dist.1997). 

{¶22} Kruse contends that he did not expressly agree to the amended version 

of the arbitration provision, which he alleges is more expansive in coverage than the 

arbitration provision contained in the Shareholder Agreement. He further contends 

that his defenses and counterclaims do not arise out of the Shareholder Agreement, 

and therefore the arbitration provision does not apply. 

{¶23} Kruse did not appeal the trial court’s order of specific performance to 

sell his shares; therefore, a main point of contention remaining between the parties 

concerns the value of Kruse’s shares. R&K contends that, under paragraph 16 of the 

Shareholder Agreement, Kruse is not entitled to any compensation for his shares. 

Kruse contends that his shares are worth in excess of $35,000. At a minimum, the 

share-valuation controversy requires reference to the terms of the Shareholder 

Agreement, which then must be arbitrated even under the original arbitration 

provision that Kruse undisputedly signed. Therefore, the arbitration provision 

applies to an issue in the action, and the trial court did not err under R.C. 2711.02(B) 

in staying all remaining claims pending arbitration, although some of the issues 

involved in the parties’ dispute may fall outside the scope of the Shareholder 

Agreement. See, e.g., Cheney at ¶ 12. 

 
OHIO FIRST DISTRICT COURT OF APPEALS 

 

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C. Opportunity for Discovery Prior to Stay 

{¶24} Finally, Kruse argues that the trial court’s decision staying the action 

pending arbitration was premature. Kruse contends that he should have had the 

opportunity to conduct discovery and to uncover information through his R.C. 

1701.37 request because doing so would have given him information on the value of 

his shares, whether R&K had breached the Shareholder Agreement, and 

opportunities given to majority shareholders. 

{¶25} A trial court can stay an action pending arbitration under R.C. 2711.02 

prior to discovery. See Giltner v. Mitchell, 9th Dist. Summit No. 21039, 2002-Ohio5771, ¶ 15; see also Melia v. OfficeMax N. Am., Inc., 8th Dist. Cuyahoga No. 87249, 

2006-Ohio-4765, ¶ 38. Moreover, Kruse’s arguments advocate more time for 

discovery with regard to the merits of his defenses and counterclaims, and he does 

not argue that any information in response to his discovery requests would have 

affected the enforceability or the applicability of the arbitration provision. Therefore, 

we do not find merit in Kruse’s arguments, and we determine that the trial court did 

not abuse its discretion in ordering a stay of the action pending arbitration. 

III. Conclusion 

{¶26} In conclusion, we overrule Kruse’s sole assignment of error. The 

judgment of the trial court staying the action pending arbitration is affirmed. 

Judgment affirmed. 

CUNNINGHAM, P.J., and HILDEBRANDT, J., concur. 
OHIO FIRST DISTRICT COURT OF APPEALS 

 

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Please note: 

 The court has recorded its own entry on the date of the release of this opinion.