Court Opinion

ID: 4502556
Source: CourtListenerOpinion
Date Created: 2020-01-29 17:08:33.094857+00
Date Added: 2024-06-11T15:40:30.572029
License: Public Domain

[Cite as Dervin v. Christopher Cox Ins. & Invests., Inc., 2020-Ohio-260.]

                                        COURT OF APPEALS
                                       STARK COUNTY, OHIO
                                    FIFTH APPELLATE DISTRICT

ALBERT H. DERVIN                                    :            JUDGES:
                                                    :            Hon. John W. Wise, P.J.
        Plaintiff-Appellee                          :            Hon. Craig R. Baldwin, J.
                                                    :            Hon. Earle E. Wise, Jr., J.
-vs-                                                :
                                                    :
CHRISTOPHER COX INSURANCE &                         :
INVESTMENTS, INC., ET AL.                           :            Case No. 2019CA00116
                                                    :
        Defendant-Appellant                         :            OPINION

CHARACTER OF PROCEEDING:                                         Appeal from the Court of Common
                                                                 Pleas, Case No. 2019CV00999

JUDGMENT:                                                        Affirmed

DATE OF JUDGMENT:                                                January 27, 2020

APPEARANCES:

For Plaintiff-Appellee                                           For Defendant-Appellant

KAREN C. LEFTON                                                  JACK MORRISON, JR.
TIMOTHY D. SMITH                                                 THOMAS R. HOULIHAN
3480 W. Market Street                                            THOMAS A. MARINO II
Suite 304                                                        One Cascade Plaza
Akron, OH 44333                                                  Suite 1510
                                                                 Akron, OH 44308
Stark County, Case No. 2019CA00116                                                       2

Wise, Earle, J.

       {¶ 1} Defendant-Appellants Christopher Cox Insurance and Investments, Inc., et

al, (Cox) appeal the July 16, 2019 judgment of the Court of Common Pleas, Stark County,

Ohio denying appellant's motion to stay proceedings pending arbitration, and granting

appellee's motion for leave to plead. Plaintiff-Appellee is Albert H. Dervin (Dervin).

                         FACTS AND PROCEDURAL HISTORY

       {¶ 2} In 2001, Cox and Dervin formed Christopher Cox Insurance and

Investments, Inc., each as a 50% shareholder. The parties executed a 5-page

Shareholders Agreement to govern the business.

       {¶ 3} On May 6, 2019, following years of disagreement between the parties,

Dervin filed a Complaint for Judicial Dissolution pursuant to O.R.C. 1701.91(A)(4).

       {¶ 4} Cox did not answer the complaint. Rather, on June 6, 2019, he filed a Motion

to Dismiss for Lack of Subject Matter Jurisdiction, citing a mandatory arbitration clause

within the Shareholders Agreement. On June 28, 2019, Cox filed a Motion to Stay

Proceedings Pending Arbitration.

       {¶ 5} The trial court denied both motions. On June 25, 2019, the trial court found

the matter was properly before it pursuant to O.R.C. 1701.91. On July 16, 2019, the trial

court denied Cox's Motion to Stay Proceedings Pending Arbitration. It is from this

judgment entry that Cox appeals. He raises two assignments of error as follow:

                                             I

       {¶ 6} "THE TRIAL COURT ERRED BY DENYING A MOTION TO STAY

PROCEEDINGS PENDING ARBITRATION WITHOUT SETTING FORTH ANY

FINDINGS OR REASONING."
Stark County, Case No. 2019CA00116                                                      3

       {¶ 7} In his first assignment of error, Cox argues the trial court erred in denying

his motion to stay proceedings pending arbitration without setting forth any findings or

reasoning. We disagree.

       {¶ 8} The trial court's judgment entry states in its entirety:

              This matter is before the Court on Defendant's Motion to Stay

              Proceedings Pending Arbitration, and in the Alternative, for Leave to

              Plead. Said motion was filed on June 28, 2019. Plaintiff filed a

              Memorandum in Opposition on July 12, 2019.

              Upon Review, Defendant's motion to stay proceedings pending

              arbitration is DENIED. Defendant's motion for leave to plead is

              GRANTED up to and including August 5, 2019.

       {¶ 9} Cox argues we should remand this matter, and order the trial court to enter

a new judgment entry with specific reasoning. In support of his argument, Cox relies on

this court's opinion in Premier Homes, Inc. v. Hanna-Commercial, LLC, 5th Dist. Stark

No. 2017CA00135, 2018-Ohio-1126. That matter, however, was far more complicated

than the matter at bar. Memorandums before the trial court in Premier set forth multiple

arguments on both sides, and we were unable to determine which reason or reasons the

trial court relied upon in denying the parties motions to stay. Premier ¶ 19-20.

       {¶ 10} Such is not the case here. As noted by Dervin, the matter here is a simple

contract dispute, limited to the question of whether or not the Shareholder's Agreement

compelled the parties to arbitrate the dissolution of their corporation. In denying Cox's
Stark County, Case No. 2019CA00116                                                        4

motion to stay proceedings pending arbitration, we may confidently infer the trial court

found the matter was not subject to arbitration.

       {¶ 11} The first assignment of error is overruled.

                                               II

       {¶ 12} "THE TRIAL COURT ERRED BY DENYING A MOTION TO STAY

PROCEEDINGS         PENDING      ARBITRATION        PURSUANT       TO    A   VALID     AND

ENFORCEABLE          ARBITRATION        PROVISION           IN   THE    SHAREHOLDERS'

AGREEMENT."

       {¶ 13} In his final assignment of error, Cox argues the trial court erred by denying

his motion to stay pending arbitration because the Shareholder Agreement mandates

arbitration of the dissolution. We disagree.

       {¶ 14} In the case of contracts and other written instruments, the construction of

the writing is a matter of law which we review de novo. See, Martin v. Lake Mohawk

Property Owner's Ass'n., 5th Dist. No. 04 CA 815, 2005-Ohio-7062, ¶ 23, citing Long

Beach Assn., Inc. v. Jones, 82 Ohio St.3d 574, 576, 697 N.E.2d 208 (1998). Under a de

novo review, an appellate court may interpret the language of the contract substituting its

interpretation for that of the trial court. Witte v. Protek Ltd., 5th Dist. No. 2009CA00230,

2010-Ohio-1193, 2010 WL 1076070, ¶ 6, citing Children's Medical Center v. Ward, 87

Ohio App.3d 504, 622 N.E.2d 692 (1993).

       {¶ 15} “Both the Ohio General Assembly and Ohio courts have expressed a strong

public policy favoring arbitration.” Hayes v. Oakridge Home, 122 Ohio St.3d 63, 2009-

Ohio-2054, 908 N.E.2d 408. R.C. 2711.01(A) provides an arbitration agreement “shall be

valid, irrevocable, and enforceable, except upon grounds that exist at law or in equity for
Stark County, Case No. 2019CA00116                                                       5

the revocation of any contract.” Arbitration, however, is a matter of contract. A party

cannot be forced to arbitrate that which the party has not agreed to arbitrate. AT & T

Technologies, Inc. v. Communications Workers of Am., 475 U.S. 643, 648-649, 106 S.Ct.

1415, 89 L.Ed.2d 648 (1986).

      {¶ 16} Dervin filed his complaint for judicial dissolution pursuant to R.C.

1701.91(A)(4). That section states:

             (A) A corporation may be dissolved judicially and its affairs wound

             up:

             ***

             (4) By an order of the court of common pleas of the county in this

             state in which the corporation has its principal office, in an action

             brought by one-half of the directors when there is an even number of

             directors or by the holders of shares entitling them to exercise at least

             two-thirds of the voting power, when it is established that the

             corporation has an even number of directors who are deadlocked in

             the management of the corporate affairs and the shareholders are

             unable to break the deadlock, or when it is established that the

             corporation has an uneven number of directors and that the

             shareholders are deadlocked in voting power and unable to agree

             upon or vote for the election of directors as successors to directors

             whose terms normally would expire upon the election of their

             successors. Under these circumstances, dissolution of the
Stark County, Case No. 2019CA00116                                                       6

             corporation shall not be denied on the ground that the corporation is

             solvent or on the ground that the business of the corporation has

             been or could be conducted at a profit.

      {¶ 17} Cox argues Christopher Cox Insurance and Investments, Inc. may not be

judicially dissolved because the matter is subject to arbitration per the Shareholder

Agreement. In support of this argument, Cox relies upon two portions of the Shareholder

Agreement. First, Section 9(f) which states:

      {¶ 18} "All issues on which the shareholders are deadlocked in voting power or on

which the directors or other parties managing the corporation are deadlocked shall be

arbitrated according to Section 13 of this agreement."

      {¶ 19} Section 13 states:

      {¶ 20} "Arbitration. In the event differences arise among the parties hereto as to

the rights, obligations, meaning, interpretation, or application of the provisions of this

Agreement or in the event of a deadlock as provided in Section 9(f) hereof, those

differences shall be settled or the deadlock resolved by arbitration in accordance with the

Commercial Arbitration Rules of the American Arbitration Association. Judgment may be

entered on any award at arbitration in any court of competent jurisdiction."

       {¶ 21} As Dervin notes, while addressing death, disability, or retirement of a

shareholder, nowhere in the Shareholder's Agreement is a mechanism for winding up the

corporation mentioned. Although Cox argues the above language of the Shareholder

agreement requires all disputes and issues on which shareholders are deadlocked be
Stark County, Case No. 2019CA00116                                                        7

subject to arbitration, the winding up of the corporation is not a "dispute" contemplated by

the Shareholder Agreement.

       {¶ 22} We find, therefore the trial court did not err in denying Cox's motion to stay

proceedings pending arbitration.

       {¶ 23} The judgment of the Stark County Court of Common Pleas is affirmed.

By Wise, Earle, J.

Wise, John, P.J. and

Baldwin, J. concur.

EEW/rw