[Cite as Cleveland v. Interstate Invest. Group, 194 Ohio App.3d 833, 2011-Ohio-3384.] 

Court of Appeals of Ohio 

EIGHTH APPELLATE DISTRICT 

COUNTY OF CUYAHOGA 

JOURNAL ENTRY AND OPINION 

No. 95449 

CITY OF CLEVELAND

APPELLEE, 

v. 

INTERSTATE INVESTMENT GROUP,

APPELLANT. 

JUDGMENT: 

REVERSED AND REMANDED 

Criminal Appeal from the 

 Cleveland Municipal Court 

Housing Division 

Case Nos. 08 CRB 42924, 09 CRB 02474, 09 CRB 04252, 

09 CRB 23359, 09 CRB 24969, 09 CRB 29344, 09 CRB 30178, 

09 CRB 30563, 09 CRB 37904, 09 CRB 44442 

BEFORE: Boyle, P.J., Cooney, J., and E. Gallagher, J.

RELEASED AND JOURNALIZED: July 7, 2011 
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ATTORNEYS:

Lillie & Holderman, Richard G. Lillie, and Gretchen A. Holderman, for appellant. 

Robert J. Triozzi, Cleveland Director of Law, and Karyn J. Lynn, Assistant 

Director of Law, for appellee. 

MARY J. BOYLE, Presiding Judge. 

{¶ 1} Defendant-appellant, Interstate Investment Group (“Interstate”), appeals its 

conviction and sentence in connection with ten separate criminal cases filed in Cleveland 

Municipal Housing Court, alleging building, housing, and health-code violations. 

Interstate raises six assignments of error, challenging its purported no-contest plea, the 

trial court’s finding of guilt, and the trial court’s imposition of a total fine of 

$11,948,000. Because we find that the record is devoid of Interstate’s ever actually 

changing its not-guilty plea and entering a no-contest plea, we vacate the conviction and 

sentence and remand for further proceedings. 

Procedural History and Facts 

{¶ 2} Interstate is a private, for-profit corporation based in Gilbert, South 

Carolina, that buys and sells real estate. Throughout 2008 and 2009, appellee, the city 

of Cleveland, cited Interstate for multiple building- and housing-code violations, 

including issuing condemnation notices, as a result of the deteriorating and hazardous 

conditions of the properties owned by Interstate. Despite being served with notice of 
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the code violations, Interstate failed to correct the violations. The city subsequently 

filed 18 cases — three minor-misdemeanor tickets and 15 multiple-count complaints for 

failure to correct the violations. 

{¶ 3} According to the record, Interstate failed to appear in court after being 

properly cited and served with summons of the complaints. The trial court ultimately 

held a contempt hearing on Interstate’s repeated failure to appear and entered a finding 

of contempt, resulting in per diem fines totaling $450,000. On November 16, 2009, 

Interstate subsequently appeared, through its counsel, and entered not-guilty pleas on all 

the cases. Following the not-guilty pleas, the court set the matter for a court-supervised 

pretrial with the parties. 

{¶ 4} Through pretrial negotiations, the city recommended that Interstate pay 

$500 for each of the three minor-misdemeanor cases, and in exchange for a plea of no 

contest to the other cases, the city would dismiss all duplicate cases and recommend a 

total of $150,000 in fines but agree to a 90 percent suspension of the fines after Interstate 

remedied the violations and fully reimbursed the city for the costs it incurred in 

demolishing the condemned properties. 

{¶ 5} The court held a change-of-plea hearing on March 18, 2010. At this 

hearing, the court allowed Interstate’s manager, George Kastanes, to appear in court via 

video conferencing. Interstate also provided the court with an affidavit from Kastanes, 

authorizing its attorney, Edward Hayman, to withdraw any previous plea of not guilty 
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and to enter a plea on Interstate’s behalf. At the hearing, the court addressed Kastanes 

first, stating the following: 

{¶ 6} “We have a case here in Cleveland and the authorization is fine, but if 

there is a change from not guilty to no contest, we have to do what we call ‘Wanzo’ 

because it’s named after Mary Wanzo, the defendant. And Mr. Hayman, of course, is 

familiar because he’s a long time practitioner here in court, but the only thing missing is 

that you understand that the corporation, not you personally, but the corporation in the 

criminal cases that are before us would be entering a plea of no contest, which is not an 

admission of guilt, but an admission that the violations did exist; and the corporation 

would be giving up its right to a jury trial; right against self-incrimination; right for 

compulsory process and right to have the City prove their case beyond a reasonable 

doubt; and that Mr. Hayman then will work on the case as outlined in your authorization. 

{¶ 7} “We’ll hear from the prosecutor; hear her recommendation, and it’s my 

intention today not to issue a sentence, but to do a presentence report and work on this 

with Mr. Hayman and the prosecution in trying to come up with a holistic solution to the 

issues that are raised. So I just need to — in that the corporation, both corporations 

Paramount Land Holdings and Interstate know their rights and knowingly and willingly 

give them up, and have authorized Mr. Hayman to act in their behalf today?” 

{¶ 8} After Kastanes answered in the affirmative, the court then proceeded to 

hear from the prosecutor as to the city’s stated recommendation. The city gave a 
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recommendation consistent with what the parties had discussed in pretrial negotiations. 

The city also moved to nolle those cases that were duplicates, which the trial court 

granted and dismissed. 

{¶ 9} On March 23, 2010, a judgment entry was journalized, reflecting that on 

March 18, 2010, Interstate appeared through its counsel and withdrew its plea of not 

guilty and entered a plea of no contest and that the court then entered a finding of guilt. 

This judgment entry was not signed by the trial judge. Consequently, on June 18, 2010, 

the trial court entered another judgment entry and order, journalizing its finding of guilt 

against Interstate. On this same day, the trial court also issued a detailed sentencing 

order, imposing the maximum penalty allowed under law for each of the offenses in the 

ten cases, for a total of $11,948,000. 

{¶ 10} Interstate now appeals, raising six assignments of error, which are set forth 

in the attached appendix. 

No Contest Plea 

{¶ 11} In its first assignment of error, Interstate argues that the trial court failed to 

ever properly take a no-contest plea, and therefore its conviction and sentence cannot 

stand. We agree. 

{¶ 12} Initially, we note that a trial court’s obligations under Crim.R. 11 in 

accepting a plea depend upon the level of offense to which the defendant is pleading. 

State v. Watkins, 99 Ohio St.3d 12, 2003-Ohio-2419, 788 N.E.2d 635, ¶ 25. 
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{¶ 13} For a petty offense, such as the offenses at issue in this case and defined in 

Crim.R. 2(D) as “a misdemeanor other than [a] serious offense,” the court is instructed 

that it “may refuse to accept a plea of guilty or no contest, and shall not accept such pleas 

without first informing the defendant of the effect of the plea of guilty, no contest, and 

not guilty.” Crim.R. 11(E). To satisfy the requirement of informing a defendant of 

the effect of a plea, a trial court must inform the defendant of the appropriate language 

under Crim.R. 11(B). State v. Jones, 116 Ohio St.3d 211, 2007-Ohio-6093, 877 N.E.2d 

677. Thus, “for a no contest plea, a defendant must be informed that the plea of no 

contest is not an admission of guilt but is an admission of the truth of the facts alleged in 

the complaint, and that the plea or admission shall not be used against the defendant in 

any subsequent civil or criminal proceeding.” Id. at ¶ 23, citing Traf.R. 10(B)(2) and 

Crim.R. 11(B)(2). Conversely, the trial court need not inform the defendant of the 

maximum sentence and the right to a jury trial to satisfy this requirement. Id. at ¶ 22. 

{¶ 14} Our review of the record reveals that Interstate never actually entered a 

plea of no contest at the change-of-plea hearing on March 18, 2010. Indeed, the city 

concedes that neither Kastanes nor Interstate’s attorney ever actually entered a no-contest 

plea. We find that this omission is fatal to any subsequent finding of guilt, which is 

also conspicuously missing from the transcript of the proceedings held on March 18.1

 

 1

 We note that prior to entering a guilty finding, the trial court never discussed any of the 

circumstances regarding the stated violations in the seven cases involving first-degree misdemeanors, 

as required under R.C. 2937.07. 
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Indeed, we find that the applicable plea requirements set forth in Crim.R. 11(E) 

necessitate that the defendant first communicate a plea of no contest to the court. The 

failure first to obtain such a plea precludes a trial court from subsequently making a 

guilty finding and entering a conviction. See Cleveland v. McCoy, 8th Dist. No. 90763, 

2009-Ohio-2247. 

{¶ 15} Accordingly, based on the record before us, we sustain the first assignment 

of error, vacate the convictions and sentence, and remand for further proceedings. Our 

disposition of the first assignment of error renders the remaining five moot. 

Judgment reversed 

and cause remanded. 

 COONEY and GALLAGHER, JJ., concur. 

_________________

APPENDIX

Assignment of Error I 

{¶ 16} “The trial court committed reversible error in failing to have the 

defendant-appellant enter a valid plea, in violation of the United States and Ohio 

constitutions and Ohio Criminal Rule 11.”

Assignment of Error II 
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{¶ 17} “Defendant-appellant did not knowingly and voluntarily waive its 

constitutional rights with full knowledge of the maximum penalty included as required 

by Ohio Criminal Rule 11(C)(2)(a).” 

Assignment of Error III 

{¶ 18} “The trial court failed to make a finding of guilt based on an explanation of 

the circumstances of the offense in violation of Ohio Revised Code Section 2937.07.” 

Assignment of Error IV 

{¶ 19} “The trial court failed to advise the defendant-appellant that it had a right 

to confront witnesses against it.”

Assignment of Error V 

{¶ 20} “The total fine of $10,948,000.00 is excessive, unrelated, and grossly 

disproportionate to the offenses to which defendant-appellant pled no contest, and 

constitutes an excessive fine in violation of the defendant-appellant’s rights as 

guaranteed by the Eighth Amendment to the United States Constitution and Section 9 

Article 1 of the Ohio Constitution.” 

Assignment of Error VI 

{¶ 21} “The defendant-appellant’s numerous/multiple convictions for building 

and housing code violations involved allied offenses of similar import, thus precluding 

the trial court’s imposition of multiple sentences.”