Court Opinion

ID: 6788718
Source: CourtListenerOpinion
Date Created: 2022-07-21 01:07:28.737036+00
Date Added: 2024-06-11T16:02:59.971367
License: Public Domain

Lanzinger, J.,
dissenting.
{¶ 33} I disagree with the majority’s holding that a court’s stáy of an action pending determination of bankruptcy is not a final appealable order under R.C. 2505.02(B)(4). Here, the appellate court held that such an order did not deny a provisional remedy, and the majority agrees, stating that a stay cannot be considered an ancillary proceeding because it is not a proceeding “with its own life.” To the contrary, the granting of such an order does provide a provisional remedy within the contemplation of R.C. 2505.02(B)(4).
{¶ 34} The General Assembly expressly defined “provisional remedy” in R.C. 2505.02(A)(3) as “a proceeding ancillary to an action, including, but not limited to, a proceeding for a preliminary injunction, attachment, discovery of privileged matter, suppression of evidence.” (Emphasis added.) In rejecting the characterization of a stay as similar in effect to a preliminary injunction and thus “ancillary,” the majority distinguishes it by stating that a stay “is not an offshoot of the main action” but rather the “main action postponed” or a mere “halting of proceedings.” A stay, however, need not be considered identical to a preliminary injunction to be considered a provisional remedy.
{¶ 35} We approved the definition of “ancillary” used in Sorg v. Montgomery Ward & Co., Inc. (Dec. 17, 1998), Erie App. No. E-98-057, 1998 WL 904945, as something “ ‘ “attendant upon or which aids another proceeding considered as principal.” ’ ” State v. Muncie (2001), 91 Ohio St.3d 440, 449, 746 N.E.2d 1092, *478quoting Sorg, *3, quoting Black’s Law Dictionary (5th Ed.1979) 78. We have also described a “provisional remedy” as a “remedy other than a claim for relief.” State ex rel. Butler Cty. Children Servs. Bd. v. Sage (2002), 95 Ohio St.3d 23, 25, 764 N.E.2d 1027. Thus, we have held that final appealable orders include forced-medication orders, Muncie, 91 Ohio St.3d at 449, 746 N.E.2d 1092, and appointments of a receiver. Forest City Invest. Co. v. Haas (1924), 110 Ohio St. 188, 192, 143 N.E. 549. In my view, by filing a motion for stay based on Tendasoft’s bankruptcy, the guarantors also sought a provisional remedy, one that would aid them in the underlying collection case. The trial court’s decision to deny Community First Bank & Trust the opportunity to pursue the nonbankrupt guarantors on their personal guarantees is ancillary to Community’s underlying substantive claims.
{¶ 36} The majority also concludes that the nonbankrupt guarantors did not receive a “remedy.” To the contrary, they have received the benefit of Tendasoft’s filing of a Chapter 11 bankruptcy petition as of June 26, 2002, when the trial court ordered all matters, including the claims against them as guarantors, stayed. Although denial of the stay would have allowed the action to progress and would have provided the guarantors full remedy on appeal after the continued litigation is completed, the granting of, or refusal to lift, the stay is different. When a stay is granted, the objecting party has no remedy until possibly years later. Litigation is stopped, and when an appeal finally occurs, a holding that the stay should not have been granted or should not have been continued months or years earlier will be, as Sorg noted, “a hollow victory.” Sorg, Erie App. No. E-98-057, 1998 WL 904945, *3. See, also, Cleveland v. Zakaib (Oct. 12, 2000), Cuyahoga App. Nos. 76928, 76929, and 76930, 2000 WL 1513736 (denial of motion for stay is not a final appealable order, as party challenging denial of a stay can obtain a meaningful and effective remedy in an appeal following a final judgment, unlike a party seeking to appeal the granting of a stay). Tendasoft’s bankruptcy may take years to complete, and in the meantime, Community may be harmed by the delay and thus will not have a meaningful or effective remedy if forced to wait to proceed against the guarantors.
{¶ 37} R.C. 2505.02(B) states, “An order is a final order that may be reviewed, affirmed, modified, or reversed, with or without retrial, when it is one of the following:
“{¶ 38} * * *
{¶ 39} “(4) An order that grants or denies a provisional remedy and to which both of the following apply:
{¶ 40} “(a) The order in effect determines the action with respect to the provisional remedy and prevents a judgment in the action in favor of the appealing party with respect to the provisional remedy.
Faulkner, Garmhausen, Keister & Shenk, James R. Shenk, and Bryan A. Niemeyer, for appellant.
{¶ 41} “(b) The appealing party would not be afforded a meaningful or effective remedy by an appeal following final judgment as to all proceedings, issues, claims, and parties in the action.”
{¶ 42} The trial court’s order granting the nonbankrupt guarantors a stay does determine the action with respect to the stay’s filing and prevents Community from obtaining a favorable judgment on it. R.C. 2505.02(B)(4)(a). Furthermore, Community does not have a meaningful or effective remedy if it is prohibited from appealing the stay until after the conclusion of Tendasoft’s bankruptcy. R.C. 2505.02(B)(4)(b). I respectfully dissent and would hold that a court’s order staying an action, including the claims against nonbankrupt parties, pending determination of the bankruptcy of another party is a final appealable order under R.C. 2505.02(B)(4). I would reverse the appellate court’s decision and remand the cause to that court for consideration of the substantive assignments of error.
Lundberg Stratton, J., concurs in the foregoing dissenting opinion.