[Cite as Helms v. Thomas, 2018-Ohio-1534.]

 

IN THE COURT OF APPEALS OF OHIO 

SECOND APPELLATE DISTRICT 

 MONTGOMERY COUNTY 

GEORGE HELMS 

Plaintiff-Appellee 

v. 

LISA THOMAS, et al. 

Defendant-Appellant 

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Appellate Case No. 27744 

Trial Court Case No. 16-CV-3740 

(Civil Appeal from 

 Common Pleas Court) 

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O P I N I O N 

Rendered on the 20th day of April, 2018. 

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EDWARD D. PLATO, Atty. Reg. No. 002294, 30500 Northwestern Highway, Suite 425, 

Farmington Hills, MI 48334, WILLIAM A. POSEY, Atty. Reg. No. 0021821, MICHAEL T. 

CAPPEL, Atty. Reg. No. 0079193, and JOSEPH E. LEHNERT, Atty. Reg. No. 89492, 

One E. Fourth Street, Suite 1400, Cincinnati, Ohio 45202 

 Attorneys for Plaintiff-Appellee George Helms 

 

KENNETH IGNOZZI, Atty. Reg. No. 0055431, 131 N. Ludlow Street, Suite 1400, Dayton, 

Ohio 45402 

 Attorney for Defendant-Appellant Lisa Thomas 

JOHN C.SCOTT, Atty. Reg. No. 0029518, and TRACY SCHWETSCHENAU, Atty. Reg. 

No. 0091578,1 W. Fourth Street, Suite 2050, Cincinnati, Ohio 45202 

 Attorneys for Defendant-Appellee R Boulevard Properties, LLC 

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HALL, J. 

{¶ 1} Defendant Lisa Thomas appeals the trial court’s order appointing a receiver 

with respect to residential property that is a subject of this action. We find no error with 

the appointment, so we affirm. 

I. Background 

{¶ 2} Thomas and plaintiff George Helms were previously romantically involved. 

They first met in 2007, when Helms hired Thomas as an escort. According to Thomas, in 

October 2013, they agreed that Thomas would provide exclusive escort services to Helms 

in exchange for lifetime financial support. She claims that he agreed to pay her $30,000 

a month. During all this, and known to Thomas, Helms was married. 

{¶ 3} In October 2013, Helms and Thomas formed an Ohio Limited Liability 

Company, defendant R Boulevard Properties, LLC of which they are each fifty percent 

members. They executed an operating agreement, which required a capital contribution 

by each member. Helms and Thomas purchased the residential property at 9397 Ridings 

Boulevard in Dayton, Ohio, in the LLC’s name. This property is the LLC’s only asset. The 

parties differ on the reason for the LLC and the reason for purchasing the property. Helms 

claims that the LLC was formed to invest in real estate and that they purchased the 

property as an investment. But Thomas claims that the LLC was formed to carry out the 

agreement for exclusive escort services, to conceal the parties’ relationship from Helms’s 

wife, and to avoid taxes. She says that the property was purchased for her in exchange 

for her services. Thomas further claims that Helms gave her the property for her own 

personal use. Indeed, Thomas currently lives on the property. 

{¶ 4} In February 2016, Helms’s wife filed for divorce for the second time. The 
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following month, Helms and Thomas engaged a realtor to sell the property. Also that 

month, after supporting Thomas financially for nearly three years, Helms allegedly 

stopped all payments and support. Thomas had moved out of the house and into an 

apartment in Michigan, but she decided unilaterally to move back into the Dayton house, 

which interfered with the attempt to sell it. When an offer was made in June 2016 to 

purchase the property, Thomas refused to accept it. 

{¶ 5} In July 2016, Helms filed an action against Thomas asserting the following 

claims: (1) dissolution of the LLC, (2) injunctive relief, (3) declaratory judgment, (4) breach 

of fiduciary duty, (5) breach of fiduciary duties, (6) accounting, (7) conversion, and (8) civil 

theft. Helms claims that he contributed a total sum of $1,709,876.41 to the LLC. He says 

that Thomas failed to make any contributions. Helms alleges that Thomas has 

misappropriated, wasted, and/or diverted the assets of the LLC for her personal benefit. 

He seeks dissolution of the LLC, injunctive relief enjoining Thomas from misappropriating 

LLC assets, a declaration of the parties’ rights and obligations under the operating 

agreement, an accounting, compensatory damages, punitive damages, attorney fees, 

and costs. Thomas filed counterclaims against Helms for (1) breach of contract, (2) 

breach of implied-in-fact contract, (3) promissory estoppel, (4) inter vivos gift, (5) breach 

of fiduciary duty, and (6) breach of the duty of good faith. She also filed a cross-claim 

against the LLC for fraudulent and improper organization. 

{¶ 6} Helms filed a motion to dismiss Thomas’s counterclaims and filed a motion 

for judicial dissolution and appointment of a liquidating trustee on the grounds that the 

parties are at an impasse as to the purpose of the LLC. In response, Thomas filed a 

motion for continuance and/or stay, arguing that dissolution is premature. Thomas then 
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filed a motion for summary judgment on her counterclaims against Helms and a motion 

for summary judgment on her claim against the LLC. 

{¶ 7} In May 2017, the trial court ruled on the parties’ pending motions. The court 

overruled Helms’s motion to dismiss Thomas’s counterclaims. But the court concluded 

that her claim for breach of the duty of good faith was included in her claim for breach of 

fiduciary duty, so it dismissed the former claim. The court granted Thomas’s motion for a 

stay, staying Helm’s motion for dissolution. The court overruled Thomas’s motions for 

summary judgment. The court dismissed Thomas’s cross-claim against the LLC, with the 

agreement of the parties. The court noted that the LLC would remain a nominal party. 

{¶ 8} In April, before the trial court’s above ruling, the LLC asked the trial court to 

appoint a receiver under R.C. 1701.91 and R.C. 2735.01 to perform an accounting and 

to preserve its property during this litigation. The court held an evidentiary hearing in 

August on the appointment of a receiver at which both Helms and Thomas testified. Both 

parties admitted that they signed the operating agreement and that the agreement 

requires unanimous agreement. They both admit that they are deadlocked as to the 

management of the company: they cannot agree on the purpose of the LLC; the 

management of its assets, including paying the insurance, maintenance, and property 

taxes associated with the LLC’s sole property; nor even what assets exist. 

{¶ 9} The evidence showed that only $187.31 remained in the LLC’s bank account. 

This means that the LLC was unable to pay its bills, including homeowners’ insurance 

and property taxes. Helms testified that he was willing to contribute capital to pay for fifty 

percent of the insurance, but Thomas refused to make any contribution towards the cost 

of the insurance. More than $50,000 in property taxes are due, part of which is penalties 
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and interest. Thomas testified that she has been paying other bills related to the 

property. But she also testified that she has been using money from the LLC’s bank 

account to pay personal expenses. 

{¶ 10} After considering the testimony and exhibits, the complaint, and the parties’ 

affidavits, the trial court ordered the appointment of a receiver. The court found that “the 

members of R Boulevard LLC are hopelessly deadlocked and that the appointment of a 

Receiver is warranted to, among other things, preserve the value of the existing assets 

of R Boulevard LLC.” The court ordered the receiver to begin taking steps to pay the 

LLC’s outstanding liabilities, including property taxes, and left open the possibility of 

selling or leasing the property. 

{¶ 11} Thomas appealed. 

II. Analysis

{¶ 12} Thomas’s sole assignment of error states: 

THE TRIAL COURT ABUSED ITS DISCRETION IN APPOINTING A 

RECEIVER TO PRESERVE THE VALUE OF THE EXISTING ASSETS OF 

R BOULEVARD PROPERTIES, LLC. 

{¶ 13} A trial court has authority under R.C. 1701.91 and R.C. 2735.01 to appoint 

a receiver. Under R.C. 1701.91, “[u]pon the filing of a complaint for judicial dissolution [of 

a corporation],” the court may “appoint a receiver with such authority and duties as the 

court from time to time may direct, to take such other proceedings as may be necessary 

to protect the property or the rights of the complainants or of the persons interested, and 

to carry on the business of the corporation until a full hearing can be had.” R.C. 

1701.91(C). And under R.C. 2735.01, the court may appoint a receiver in cases such as 
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these: 

(1) In an action * * * between partners or others jointly owning or interested 

in any property or fund, on the application of the plaintiff, or of a party whose 

right to or interest in the property or fund, or the proceeds of the property or 

fund, is probable, and when it is shown that the property or fund is in danger 

of being lost, removed, or materially injured; 

* * * 

(6) When a corporation, limited liability company, partnership, limited 

partnership, or other entity has been dissolved, is insolvent, is in imminent 

danger of insolvency, or has forfeited its corporate, limited liability company, 

partnership, limited partnership, or other entity rights; 

(7) In all other cases in which receivers have been appointed by the usages 

of equity. 

R.C. 2735.01(A). “R.C. 2735.01 is a procedural statute and is to be liberally construed.” 

State ex rel. Petro v. Gold, 166 Ohio App.3d 371, 2006-Ohio-943, 850 N.E.2d 1218, ¶ 66 

(10th Dist.). 

{¶ 14} “The decision to appoint a receiver is within the trial court’s sound discretion. 

* * * Absent an abuse of discretion, an appellate court will not reverse a decision on 

whether to appoint a receiver.” U.S. Bank, N.A. v. 2900 Presidential Drive, LLC, 2d Dist. 

Greene No. 2013 CA 60, 2014-Ohio-1121, ¶ 12. 

{¶ 15} Thomas argues that the trial court should not have appointed a receiver 

over the property for five reasons: (1) the court failed first to determine the rights and 

interests of the parties in the property, (2) the receivership order is inconsistent with the 
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court’s summary-judgment decision with respect to the parties’ interests in the property, 

(3) there is no clear and convincing need for a receiver, (4) an adequate legal remedy 

exists to protect the LLC’s interests, and (5) Thomas will suffer irreparable harm from the 

appointment of a receiver. 

A. A preliminary determination of rights and interests was not required.

{¶ 16} Thomas argues that before appointing a receiver the trial court should have 

determined the rights and interests of the parties in the property. In essence, Thomas 

argues that the merits of the parties’ claims needed to be decided before a receiver could 

be appointed. We disagree. 

{¶ 17} The law does not require a preliminary determination of parties’ rights and 

interests before appointing a receiver. “The appointment of a receiver is an ancillary 

proceeding. Community First Bank & Trust v. Dafoe, 108 Ohio St.3d 472, 2006-Ohio1503, 844 N.E.2d 825, ¶ 26. It is a ‘separate procedure[ ] tied to a main action, acting in 

furtherance of the main action, but with [its] own li[fe].’ Id.” U.S. Bank, N.A. v. Courthouse 

Crossing, Acquisitions, LLC, 2017-Ohio-9232, __N.E.3d__, ¶ 10 (2d Dist.). The 

appointment of a receiver “aids the principal proceeding—the underlying litigation—for 

the receiver conserves the interests of litigants with respect to property that is in the 

custody of the court during the course of that principal litigation.” State v. Muncie, 91 Ohio 

St.3d 440, 449, 746 N.E.2d 1092 (2001). “[A] receiver is necessary to protect the 

corporation’s business and assets while these allegations are sorted out, regardless of 

the actual merits of either party’s claims.” Collins v. Collins, 8th Dist. Cuyahoga No. 

87986, 2007-Ohio-283, ¶ 10, citing Malloy v. Malloy Color Lab., Inc., 63 Ohio App.3d 434, 

579 N.E.2d 248 (10th Dist.1989). 
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{¶ 18} Here, Helms’s complaint asks for dissolution of the LLC, and a trial court 

has the authority to appoint a receiver in corporate dissolution actions, R.C. 1701.91(C). 

Also, the evidence here shows that the LLC has only $187.31 in cash but owes over 

$50,000 in property taxes. And a court may appoint a receiver when a limited-liability 

company “is insolvent [or] is in imminent danger of insolvency.” R.C. 2735.01(A)(6). No 

preliminary determination of the parties’ rights and interests is needed. 

{¶ 19} Thomas relies on Westbrook v. Swiatek, 5th Dist. Delaware Nos. 07 CAE 

09 0046, 07 CAE 11 0058, 2008-Ohio-6477, and Tessler v. Ayer, 1st Dist. Hamilton Nos. 

C-940574, C-940632, C-940780, 1995 WL 621316 (Oct. 25, 1995). But neither of these 

cases supports her contention that the trial court in this case should have made a 

determination of parties’ rights and interests before appointing a receiver. Both cases 

were decided under what is now R.C. 2735.01(A)(1), a different section of R.C. 

2735.01(A) that allows the appointment of a receiver over property that is jointly owned. 

B. The receivership order is not inconsistent with the summary-judgment decision.

{¶ 20} Thomas next argues that the order appointing the receiver is inconsistent 

with the trial court’s summary-judgment decision. She says that the court did not decide 

in that decision the rights and interests of the parties but does appear to have decided 

these issues in the receivership order. 

{¶ 21} Thomas claims she is the sole owner of the property by way of contract, 

implied-in-fact contract, promissory estoppel, or inter vivos gift. The trial court specifically 

concluded in its summary-judgment decision that genuine issues of fact remain as to each 

of her claims. The court concluded that “genuine issues of material fact remain as to the 

nature of the parties’ relationship, and therefore, the Court cannot determine the purpose 
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and, ultimately the validity of the LLC at this time.” The court further said that “numerous 

issues remain to be determined before the Court may properly declare the LLC dissolved 

pursuant to RC 1705.47. The Court must, first, determine whether the LLC is a valid and 

enforceable entity.” 

{¶ 22} The appointment order here does not determine the rights and interests of 

the parties. As we indicated above, the appointment of a receiver is ancillary to the merits 

of the parties’ claims. The court here appointed the receiver because it believed that a 

receiver is necessary to protect the LLC’s assets while the parties’ allegations are sorted 

out, “regardless of the actual merits of either party’s claims,” Collins, 2007-Ohio-283, at ¶ 

10. 

C. There is evidence of the need for a receiver.

{¶ 23} The trial court here determined that a receiver is needed to, among other 

things, preserve the value of the existing assets of the LLC. Thomas argues that the 

evidence does not show that a receiver is needed for this purpose. She says that there is 

no evidence that the property is being, or will be, wasted or that its value is declining or 

will decline. 

{¶ 24} “ ‘The appointment of a receiver is the exercise of an extraordinary, drastic 

and sometimes harsh power which equity possesses and is only to be exercised where 

the failure to do so would place the petitioning party in danger of suffering irreparable loss 

or injury.’ ” Crawford v. Hawes, 2d Dist. Montgomery No. 23209, 2010-Ohio-952, ¶ 33, 

quoting Hoiles v. Watkins, 117 Ohio St. 165, 174, 157 N.E. 557 (1927). Accordingly, 

“[o]wing to the extreme nature of the remedy is the requirement that the movant must 

demonstrate the need for a receiver by clear and convincing evidence.” (Citation omitted.) 
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Id. Accord 2115-2121 Ontario Bldg., L.L.C. v. Anter, 8th Dist. Cuyahoga No. 98627, 2013-

Ohio-2995, ¶ 14 (“Because the appointment of a receiver is such an extraordinary 

remedy, the party requesting the receivership must show by clear and convincing 

evidence that the appointment is necessary for the preservation of the complainant’s 

rights.”). “[An] order for an interim receiver may be reviewed only for the purposes of 

determining whether there is evidence tending to prove the facts essential to sustain the 

order, and a reviewing court may not consider the weight of the evidence. Such order 

may be reversed only when there is failure of proof which would be essential to support 

the order * * *.” Malloy, 63 Ohio App.3d at 436, 579 N.E.2d 248; Collins at ¶ 9 (quoting 

the same). 

{¶ 25} Helms alleges, among other things, that Thomas breached fiduciary duties 

and misused LLC assets. And he seeks, among other things, dissolution of the LLC, 

injunctive relief enjoining Thomas from misappropriating LLC assets, and an accounting. 

Helms further alleges that Thomas moved into the house without the LLC’s consent and 

refuses to leave. For her part, Thomas alleges that Helms breached fiduciary duties. The 

evidence shows that the LLC has only $187.31 in its bank account. And Thomas admits 

that she has been taking money from the LLC’s bank account to pay personal expenses. 

The LLC alleges that there is not enough money to purchase homeowners’ insurance for 

the property. And Helms and Thomas have been unable to agree to additional capital 

contributions so that the LLC could purchase the insurance. The LLC also does not have 

enough money to pay over $50,000 of property taxes and penalties due and owing. And 

Helms and Thomas cannot agree to additional capital contributions to cover these taxes. 

This raises at least the possibility that the county could foreclose on the property. The 
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LLC says that the property could be generating income to pay for these expenses. 

Thomas admits that property taxes remain outstanding but asserts that this debt has no 

impact on the “structural value” of the property. And she says that the insurance policy on 

the home has been paid and is current. 

{¶ 26} In light of the preceding evidence, we cannot say that the trial court abused 

its discretion in finding that the LLC met its evidentiary burden. The mutual allegations of 

Helms and Thomas—the LLC’s equal members—support the court’s finding of deadlock, 

“which ma[k]e[s] normal operation of the LLC during the pendency of these proceedings 

impractical, if not impossible,” Collins at ¶ 10. Therefore the court reasonably determined 

that a receiver is needed to preserve the value of the LLC’s assets. 

D. The appointment of a receiver is a legal remedy.

{¶ 27} Thomas argues that appointing a receiver is not necessary because an 

adequate legal remedy exists to protect the LLC’s interests in the form of money 

damages. 

{¶ 28} The trial court’s appointment of a receiver here is a legal remedy. The court 

did not appoint the receiver under the equitable catch-all provision in R.C. 2735.01(A)(7), 

which authorizes a court to appoint a receiver “[i]n all other cases in which receivers have 

been appointed by the usages of equity.” Rather, the trial court appears to have acted (it 

does not cite a statute in the receivership order) under R.C. 1701.91(C), which allows the 

appointment of a receiver in corporate dissolution actions, or under R.C. 2735.01(A)(6), 

which allows appointment when insolvency threatens. With respect to division (A)(1) of 

R.C. 2735.01, it has been said that “[h]aving an available remedy at law thus does not 

bar the appointment of a receiver because this pertinent subsection provides a legal 
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rather than an equitable remedy.” Gemmell v. Anthony, 2016-Ohio-2686, 51 N.E.3d 663, 

¶ 41 (4th Dist.), citing Victory White Metal Co. v. N.P. Motel Sys., Inc., 7th Dist. Mahoning 

No. 04 MA 245, 2005-Ohio-2706, ¶ 74-75 (distinguishing the general precedent that 

equitable relief is appropriate only if the movant demonstrates that no adequate remedy 

at law exists, and holding that having an adequate remedy at law did not bar the 

appointment of a receiver under R.C. 2735.01(A)(1)). The same is true of R.C. 1701.91(C) 

and division (A)(6) of R.C. 2735.01. 

{¶ 29} We note too that the presence of monetary damages might not constitute 

an adequate remedy because in the absence of a receiver, there might be no assets or 

money left for Helms to recover, if he ultimately prevails in the underlying action. The lack 

of insurance puts the property at risk of complete loss, and the failure to pay the property 

taxes puts it at risk of foreclosure. These circumstances justify the appointment of a 

receiver both in law and equity. Compare Gemmell at ¶ 41 (noting that “the presence of 

appellees’ underlying monetary action would not constitute an adequate remedy because 

in the absence of a receiver, there might be no assets or money left for them to recover 

if they ultimately prevail in the underlying action”), and Victory White Metal at ¶ 75 (“The 

remedy at law through the contract action may only become adequate upon appointment 

of the receiver. * * * If no receiver is appointed, there may be no remedy left.”). 

E. Irreparable harm is uncertain.

{¶ 30} Thomas lastly argues that she will suffer irreparable harm if a receiver is 

appointed. 

{¶ 31} Section 3(F) of the trial court’s order here appointing the receiver relevantly 

states: 
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iii. Within thirty (30) days of the date of its appointment, and every ninety 

(90) days thereafter, the Receiver shall file a report on all income and 

expenses, all operations, and all other matters of interest, including any 

liabilities receipts and disbursements under seal with the Clerk of Courts 

and upon all interested parties herein. 

iv. Within ten (10) days of the Receiver’s filing, to the extent that expenses 

exceed income, either Plaintiff Helms or Defendant Thomas may advance 

funds in accordance with Section 5(D) to cover said deficit. If neither party 

elects to advance funds, the Receiver shall proceed to the sale of the 

property in accordance with Section 4. 

What this means, says Thomas, is that if the property taxes are not paid, the receiver has 

the power to sell the property—her home. If she succeeds in proving that she owns the 

property, money damages may not be adequate to get her home back. 

{¶ 32} Thomas’s argument ignores the competing claims of Helms to the LLC’s 

assets, as well as the separate interests of the LLC itself, in whose name the property is 

titled. Also, we note that under Section 3(F)(iv) of the receivership order, quoted above, 

Thomas could give the receiver enough money to pay the taxes. Section 5(D) provides: 

“Either Party may, at its sole discretion, advance funds to the Receiver for expenses of 

the Receivership relating to the Property and this Order. Such advances, if made, shall 

be returned to that Party, regardless of the outcome of the case, at the interest rate of 3% 

and shall be entitled to priority upon the sale of the Property or other settlement of R 

Boulevard LLC’s assets.” Finally, we note that Section 4(A)(ii) of the order states that “[a]ll 

sales, and contracts for sale, shall be made subject to approval by the Court.” 
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{¶ 33} It is not certain, then, that Thomas will be irreparably harmed in the way that 

she claims. Ultimately, the trial court retains the power to stop the sale of the property 

and prevent the irreparable harm that Thomas fears. 

III. Conclusion

{¶ 34} We cannot say that the trial court abused its discretion by appointing a 

receiver to manage the subject property. Consequently the sole assignment of error is 

overruled and the order appointing the receiver is affirmed. 

{¶ 35} On March 22, 2018 Helms filed a motion for this court to require Thomas to 

post a supersedeas bond as a condition of the trial court’s grant of stay pending this 

appeal. In light of our foregoing decision, that motion is moot and overruled. 

. . . . . . . . . . . . . 

WELBAUM, P. J. and FROELICH, J., concur. 

Copies mailed to: 

Edward D. Plato 

William A. Posey 

Michael T. Cappel 

Joseph E. Lehnert 

Kenneth Ignozzi 

John C. Scott 

Tracy E. Schwetschenau 

Christopher Finney 

Julie Gugino 

Hon. Gregory F. Singer