Court Opinion

ID: 4515878
Source: CourtListenerOpinion
Date Created: 2020-03-13 13:10:02.570851+00
Date Added: 2024-06-11T08:53:15.060800
License: Public Domain

[Cite as 435 Elm Invest., L.L.C. v. CBD Invests. Ltd. Partnership I, 2020-Ohio-943.]

                   IN THE COURT OF APPEALS
               FIRST APPELLATE DISTRICT OF OHIO
                    HAMILTON COUNTY, OHIO

435 ELM INVESTMENT, LLC,1                            :          APPEAL NO. C-190133
                                                                TRIAL NO. A-1603148
          Plaintiff-Appellee,                        :
                                                                     O P I N I O N.
    vs.                                              :

CBD   INVESTMENTS                     LIMITED :
PARTNERSHIP I,
                                                     :
    and
                                                     :
RONALD J. GOLDSCHMIDT,
                                                     :
          Defendants-Appellants,
                                                     :
    and
                                                     :
RSJJ INVESTMENTS LIMITED,
                                                     :

CBD INVESTMENTS, INC.,                               :

                                                     :
CITY OF CINCINNATI,
                                                     :
    and
                                                     :
ROBERT A. GOERING

          Defendants.                                :

1435 Elm Investment, LLC, substituted as party plaintiff for U.S. Bank National Association on September
20, 2017.
                      OHIO FIRST DISTRICT COURT OF APPEALS

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Reversed and Cause Remanded

Date of Judgment Entry on Appeal: March 13, 2020

Frost Brown Todd LLC, Ryan Goellner and Vincent E. Mauer, for Plaintiff-Appellee,

Statman Harris & Eyrich LLC and William B. Fecher, for Defendants-Appellants.

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                       OHIO FIRST DISTRICT COURT OF APPEALS

BERGERON, Judge.

       {¶1}   In this latest chapter of a meandering quest to execute on a judgment, the

plaintiff here zeroed in on various entities allegedly owned by the judgment debtors. One

potential weapon in a creditor’s arsenal in such situations is a “charging order” under R.C.

1705.19(A), which enables creditors of a member of a limited liability company (“LLC”) to

obtain a judicial order charging the membership interest of the member with payment of

the unsatisfied amount of the judgment. The plaintiff here sought, and secured, such an

order, but there were two problems. First, several of the entities were not LLCs at all,

placing them beyond the purview of the statute at hand. And second, for the actual LLCs

involved, the plaintiff failed to tender requisite evidence that our precedent requires to

substantiate the judgment debtors’ membership interests in the LLCs. For these reasons,

we must reverse the judgment below.

                                             I.

       {¶2}   We start with the Cliff Notes version of the facts of this sprawling real estate

dispute, highlighting only the matters germane to this appeal. Defendant-appellant Ronald

Goldschmidt and an accompanying chorus of entities intertwined with him sit at the center

of this appeal.   More than two decades ago, the city of Cincinnati leased both CBD

Investments Limited Partnership I (“CBD LP”) and RSJJ Investments Limited (“RSJJ”)

portions of its real property, referred to as the “Convention Place Mall,” located in

downtown Cincinnati, for development purposes. In turn, CBD LP granted U.S. Bank

National Association (“U.S. Bank”) certain rights arising from its lease with the city in

exchange for a mortgage loan. Subsequently, further securing the loan, CBD Investments,

Inc., (“CBD Investments”) as the general partner of CBD LP, and Mr. Goldschmidt, as the

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                       OHIO FIRST DISTRICT COURT OF APPEALS

president of CBD Investments, executed and signed guaranties with U.S. Bank, placing

them on the hook as well.

        {¶3}   Years later, in 2016, U.S. Bank initiated suit against Mr. Goldschmidt and

various entities involved with him, seeking a money judgment against him and CBD LP, as

well as a foreclosure of its leasehold mortgage and security interest granted by CBD LP.

Because the suit implicated the city’s lease with CBD LP, the city eventually sought

termination of the leases between RSJJ and CBD LP, thus joining the litigation. To make a

long, procedurally-convoluted story short, eventually, in September 2017, the city obtained

a declaratory judgment (in hand with a writ of forcible entry and detainer) terminating CBD

LP’s and RSJJ’s leaseholder interests in the property, and therefore subjecting CBD LP to

certain rights held by U.S. Bank. CBD LP and RSJJ appealed, among other things, the

court’s grant of partial summary judgment and a writ of forcible entry and detainer, but we

affirmed. See U.S. Bank Natl. Assn. v. City of Cincinnati, 2019-Ohio-1866, 136 N.E.3d 794

(1st Dist.).

        {¶4}   As the litigation meandered along, in July 2017, U.S. Bank transferred all of

its rights and interests to plaintiff-appellee 435 Elm Investment, LLC, (“Elm Investment”).

Roughly contemporaneously with the time that RSJJ and CBD LP filed their appeal against

the city, Elm Investment substituted in for U.S. Bank as the party plaintiff.       And in

September 2018, while awaiting this court’s decision regarding CBD LP’s appeal, Elm

Investment filed its own motion for partial summary judgment, seeking a monetary

judgment against Mr. Goldschmidt and CBD Investments in the amount of their unpaid

debt. Based upon the loan guaranty contracts Mr. Goldschmidt and CBD Investments

executed back in 1999 and the evidence tendered by Elm Investment, the trial court granted

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                         OHIO FIRST DISTRICT COURT OF APPEALS

the motion and entered judgment against the defendants in the amount of $1,553,253.26,

plus interest.

       {¶5}      Eager to recover the unpaid judgment, Elm Investment moved for a charging

order pursuant to R.C. 1705.19 in an effort to prevent Mr. Goldschmidt and CBD

Investments from evading execution. The two-page motion requested that the court order

(1) CBD Investments, (2) RSJJ, (3) Tri Star Commercial Group, Inc., (“Tri Star”), (4) CBD

LP, (5) Elm Street Deli (“Elm Street”), and (6) Bauer Farm Kitchen (“Bauer Farm”) to

directly pay any obligation owed to Mr. Goldschmidt or CBD Investments to Elm

Investment.      Notably, Elm Investment never attached any supporting evidence to its

motion. In response, CBD Investments and Mr. Goldschmidt maintained that the court

could not charge these six entities pursuant to R.C. 1705.19 because Elm Investment offered

no evidence that any of the entities were LLCs, as required by the statute, nor did it comply

with other aspects of the statute (such as requiring payments to be limited to membership

interests).

       {¶6}      Upon considering the competing arguments, the trial court, without holding a

hearing, sided with Elm Investment and granted the motion for a charging order, anchoring

its order to what Elm requested in the motion (i.e., relief based on R.C. 1705.19). The court

accordingly ordered that the six entities identified above “shall not transfer any cash or

other item of value to either Mr. Ronald J. Goldschmidt or CBD Investments, Inc.” and that

they must cough up “any cash or other assets that would otherwise be transferred to a

Judgment Debtor or for the benefit of a Judgment Debtor.”

       {¶7}      CBD LP and Mr. Goldschmidt now appeal the trial court’s judgment, raising

three assignments of error. In their first two assignments of error, CBD LP and Mr.

Goldschmidt challenge different aspects of the court’s decision to grant Elm Investment’s

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                        OHIO FIRST DISTRICT COURT OF APPEALS

motion for a charging order—both the order’s sweeping in non-LLCs as violative of the

statute (first assignment) and the fact that the order went beyond the acceptable bounds of a

charging order (second). In their third assignment of error, they assert that the court erred

when it failed to convene a hearing prior to granting the motion. We ultimately find the first

assignment dispositive and accordingly turn our attention there.

                                               II.

       {¶8}    In the first assignment of error, the appellants challenge the trial court’s

issuance of a charging order pursuant to R.C. 1705.19, asserting that because this statute

only applies to LLCs, the order oversteps its bounds by encompassing non-LLCs. We review

questions of statutory interpretation like this de novo. See Vontz v. Miller, 2016-Ohio-8477,

111 N.E.3d 452, ¶ 26 (1st Dist.) (“[W]e review de novo issues of law upon which the trial

court based its decision, such as the sufficiency of the evidence to support a judgment and

the interpretation of * * * statutory provisions.”).

       {¶9}    R.C. 1705.19 is nestled into R.C. Chapter 1705, entitled “Limited Liability

Companies.” Pursuant to R.C. 1705.19(A), “any judgment creditor of a member of a limited

liability company [may apply] to a court of common pleas to charge the membership

interest of the member with payment of the unsatisfied amount of the judgment with

interest[.]” (Emphasis added.) Based on this language, an order pursuant to this statute

not only requires that the entity involved be an LLC, but also necessitates that the debtor be

a member of that LLC. See Stanfield v. On Target Consulting, LLC, 2017-Ohio-8830, 90
N.E.3d 962, ¶ 12 (1st Dist.) (reversing court’s order granting appellees’ motion for a

charging order because the appellees failed to prove appellant was a member of the relevant

LLCs); FirstMerit Bank, N.A. v. Xyran Ltd., 8th Dist. Cuyahoga No. 102905, 2016-Ohio-

699, ¶ 25 (“R.C. 1705.19 governs charging orders against members of limited liability

                                                       6
                       OHIO FIRST DISTRICT COURT OF APPEALS

companies.”). For purposes of R.C. 1705.19(A), a “member” is “a person whose name

appears on the records of the limited liability company as the owner of a membership

interest in that company.” R.C. 1705.01(G). In turn, R.C. 1705.01(H) defines “membership

interest” as “a member’s share of the profits or losses of a limited liability company and the

right to receive distributions from that company.”

       {¶10} As noted above, the charging order here encompassed “(1) CBD Investments,

Inc., (2) RSJJ Investments Limited, (3) Tri Star Commercial Group, Inc., (4) CBD

Investments Limited Partnership I, (5) Elm Street Deli, and (6) Bauer Farm Kitchen[.]”

Based on the names alone, at least three of the entities are not LLCs—two categorized as

corporations and one as a limited partnership (points Elm Investment does not quibble with

now). As to the other three entities, Elm Investment never established in its two-page

motion that RSJJ, Elm Street, or Bauer Farm hold LLC status. Nor does it include or attach

evidence that either Mr. Goldschmidt or CBD Investments is a member of any of these

entities. In its motion before the trial court, Elm Investment merely offers vague assurances

of these points, barren of any record citation: “[p]leading and testimony in this case

demonstrate that Goldschmidt owns all or part of [the six entities].” On appeal, Elm

Investment likewise fails to substantiate these contentions with any record citations.

       {¶11} Belatedly appreciating the statutory limits on a court’s authority under R.C.

1705.19, Elm Investment insists that the trial court’s order did not actually charge

membership interests in the six entities pursuant to the statute, but instead accomplished

the same result via its inherent equitable powers. Elm Investment provides scant support

for some free-wheeling equitable authority to issue charging orders over non-LLCs, but we

need not decide that matter today. Instead, we find its argument unpersuasive because it

defies what occurred in the record. Elm Investment’s motion requested relief only in

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                          OHIO FIRST DISTRICT COURT OF APPEALS

accordance with R.C. 1705.19: “Plaintiff is entitled to an order under Ohio Revised Code

Section 1705.19 providing that any of the above-listed entities should not transfer any cash

to any Judgment Debtor[.]” We see no inkling of an equity argument in its motion, and

certainly no citations to equitable principles or cases. Nor does the trial court invoke equity

in its order granting relief. Against that backdrop, we are unwilling to speculate that the

trial court sub silentio exercised equitable powers that no party requested it to summon, and

it certainly possessed no statutory authority under R.C. 1705.19 to issue a charging order to

non-LLC entities.

        {¶12} During oral arguments, Elm Investment adjusted its argument, maintaining

that the court relied upon R.C. 1705.19 to charge membership interests in three of the

entities (that it contends actually were LLCs), and only utilized its inherent equitable powers

with respect to the remaining three. That again demands a gloss on the trial court’s order

that finds no support in its plain language. Nevertheless, we did consider Elm Investment’s

argument that the order, if defective for the non-LLCs, could be salvaged in part based on

the existence of three actual LLCs.2

        {¶13} In response to our queries at oral arguments, Elm Investment properly

directed us towards portions of the record where, indeed, the defendants admitted below

that RSJJ, Elm Street, and Bauer Farm are all LLCs. We will accept an admission by an

adverse party as dispensing with the need to offer proof on this point.                     See Uebel v.

Edgewood City School Dist. Bd. of Edn., 12th Dist. Butler No. CA2003-10-257, 2004-Ohio-

2487, ¶ 13 (resolving that appellant need not prove the fact that she was older because “the

[defendant-appellee], in its answer to appellant’s second amended complaint, admitted that

‘the [defendant] has hired a male treasurer who is younger than [appellant].’ ”). But even

2 A legitimate question arises as to whether Elm Investment waived its equitable argument by not

presenting it below or waived this modified version of it, but we need not tackle that matter today in light
of our disposition of the merits.

                                                         8
                       OHIO FIRST DISTRICT COURT OF APPEALS

so, this only gets Elm Investment halfway across the goal line, as it fails to draw our

attention to evidence within the record that establishes Mr. Goldschmidt and CBD

Investments are actually members of any of these three LLCs.

       {¶14} Although R.C. 1705.01(G) sheds little light on what “the records of the limited

liability company” means, we discussed this point at length in Stanfield, 2017-Ohio-8830,

90 N.E.3d 962, detailing the necessary proof that a party must offer to prove membership

interest in a LLC for purposes of securing a charging order.          In Stanfield, this court

considered which documents a party could marshal to establish membership, turning to

other statutory provisions governing LLCs, including R.C. 1705.28(A), for guidance. Id. at

¶ 9. R.C. 1705.28(A) requires that an LLC retain certain records in its principal office,

including copies of the articles of organization, the operating agreement, tax returns,

financial statements, and a current list of the members. As we explained, these documents

provide reliable information about an LLC’s “corporate governance” that assist in answering

questions of membership. Id. at ¶ 10. Accordingly, this court held that “when determining

if an individual is a member of a limited-liability company for the purpose of R.C. 1705.19,

the trial court must consider records maintained by the company for the purpose of its

corporate governance that name those owners entitled to receive distributions and share in

the profits and losses of the company.” Id.

       {¶15} Appellants challenged issues regarding any “membership interest” by CBD

Investments or Mr. Goldschmidt both below and on appeal—yet Elm Investment never

responded with any documents (i.e., articles, operating agreements, lists of the members)

maintained by any three of the LLCs for “purpose of its corporate governance” that confirm

membership status of the judgment debtors. Elm Investment had adequate opportunity to

steer us in the right direction by providing appropriate citations on this point in its brief if

                                                   9
                         OHIO FIRST DISTRICT COURT OF APPEALS

they existed but failed to do so.3 See Barnett v. Combs, 2d Dist. Montgomery No. 24134,

2011-Ohio-5947, ¶ 29 (holding that because the appellate court did not have transcripts, the

court could not “speculate what the testimony was at trial,” but “only review the exhibits

presented by the parties during the bench trial”). And, based on our review, nowhere in the

pleadings or charging order motion did we observe any documents of the caliber described

in Stanfield that would validate Mr. Goldschmidt’s or CBD Investments’s membership

interests. Therefore, because Elm Investment never confirmed via proof or admission that

Mr. Goldschmidt and/or CBD Investments are members who “share in the profits and

losses” of, and “receive distributions” from, RSJJ, Bauer Farm, or Elm Street, the court

erred in granting the charging order pursuant to R.C. 1705.19 with respect to those entities.

                                                  III.

        {¶16} For all of the foregoing reasons, we sustain Mr. Goldschmidt and CBD LP’s

first assignment of error, reverse the court’s order granting Elm Investment’s motion for a

charging order, and remand the cause to the trial court for further proceedings consistent

with this opinion. Based on our disposition that the court should have denied the motion,

we find that the remaining two assignments of error are moot. See App.R. 12(A)(1)(c).

                                                          Judgment reversed and cause remanded.

CROUSE, J., concurs.

ZAYAS, P. J., concurs in part and dissents in part.

ZAYAS, P. J., concurring in part and dissenting in part.

3 Contrary to the dissent’s argument, it is incumbent upon the proponent of the motion (here Elm
Investment) to establish entitlement to relief. Given that we recently clarified the types of evidence
required, Elm Investment should have known what it needed to substantiate its claim for relief. We see
no need to engage in speculation about what certain transcripts might or might not show, given that Elm
Investment has never specifically argued that requisite proof of membership interests was adduced at any
hearing. The dissent also contends that we are sua sponte granting Mr. Goldschmidt relief, but he
opposed the motion, filed a notice of appeal, and briefed the matter.

                                                         10
                       OHIO FIRST DISTRICT COURT OF APPEALS

       {¶17} I concur with the majority that the trial court erred in granting a charging

order pursuant to R.C. 1705.19 for entities that were not limited liability companies—

namely, CBD Investments (a corporation), Tri Star Commercial Group (a corporation), and

CBD LP (a limited partnership). R.C. 1705.19 clearly only provides judgment creditors with

the ability to recoup debt through a limited liability company—via the membership interest

of a member of the limited liability company. However, I must respectfully dissent from the

majority’s conclusion for the remaining entities that were limited liability companies—RSJJ

Investments Limited, Elm Street Deli, and Bauer Farm Kitchen.

       {¶18} It was not the appellees’ responsibility to demonstrate the error of which

appellants complain. See Farmers Prod. Credit Assn. of Ashland v. Stoll, 37 Ohio App. 3d
76, 523 N.E.2d 899 (9th Dist.1987) (the appellant must demonstrate the error of which he

complains); App.R. 9(B). By requiring a show of proof of membership interest from the

appellees—something that was allegedly admitted by the appellants in the proceedings

below—the majority upends the presumption of regularity, rewards the appellants for their

self-serving omission of the transcripts of the proceedings, and permits noncompliance with

the appellate rules regarding notice of transmission of the record.

       {¶19} In this case, the trial court determined that granting appellees’ charging order

was “[b]ased on the evidence and testimony in this matter.” The appellants contend, in

part, that the trial court’s reliance on the evidence and testimony was erroneous.

Ordinarily, appellate review of errors concerning facts, testimony, and evidentiary matters

must be demonstrated from a record that is transmitted to this court. That was not done in

this case. The appellants never transmitted any transcripts, including those containing the

testimony on which the trial court apparently relied. Thus, we must presume regularity and

the validity of the trial court’s judgment for the assignments of error relating to evidentiary

                                                  11
                        OHIO FIRST DISTRICT COURT OF APPEALS

matters. For the remaining assignments of error, our review is limited to errors of law or

other defects on the face of the trial court’s decision.

       {¶20} Under this limited standard of review, I would reverse and remand this cause

by sustaining the appellants’ first assignment of error, in part, as explained above, and by

sustaining the second assignment of error, holding that the trial court exceeded its authority

in ordering pursuant to R.C. 1705.19 that “any cash or other assets that would otherwise be

transferred” to the judgment debtor should instead be paid to judgment creditor. This is an

error on the face of the decision. R.C. 1705.19 limits judgment creditors to the rights of an

assignee of the membership interest—it does not permit a broad charging order

encompassing “any cash or other assets” that are not tied to a member’s membership

interest.

                            No Transcripts Limits Appellate Review

       {¶21} “It is well-established that the duty to provide a transcript for appellate review

falls upon the appellant.” Knapp v. Edwards Laboratories, 61 Ohio St. 2d 197, 400 N.E.2d
384 (1980); see App.R. 9. Without a transcript of the proceedings or its alternatives, we

must “presume regularity and the validity of judgment of the trial court.” (Internal citation

omitted.) Ostrander v. Parker-Fallis Insulation, 29 Ohio St. 2d 72, 74, 278 N.E.2d 363

(1972); see In re I.W., 1st Dist. Hamilton No. C-180095, 2019-Ohio-1515. Allegations raised

in an appellate brief are not sufficient to overcome the presumption of regularity in a trial

court’s proceedings and the judgment entered by the court.           Zashin, Rich, Sutula &

Monastra Co., L.P.A. v. Offenburg, 90 Ohio App. 3d 436, 629 N.E.2d 1057 (8th Dist.1993).

       {¶22} Here, the record certified to this court contains the original papers and copies

of the journal entries. But, missing from the record are transcripts of the proceedings

below. The appellants indicated on the docket statement filed with the clerk that partial

transcripts would be provided—by checking the box that says “There will be a partial

                                                    12
                         OHIO FIRST DISTRICT COURT OF APPEALS

transcript of proceedings filed”—but ultimately never indicated which parts were going to be

transcribed, did not provide notice of which parts to appellees, and never provided

transcripts at all.    Under the appellate rules, if the appellants had provided partial

transcripts, then the burden to provide any other part of the transcripts would have shifted

to the appellees. However, because the appellants did not provide any transcripts, the duty

to provide even partial transcripts never shifted to the appellees—it remained the

appellants’ responsibility. See App.R. 9(B). Appellants also never filed an App.R. 9(B)

statement to indicate that a transcript is not needed in order to consider this appeal. Thus,

in the absence of an adequate record, our standard of review is limited to errors of law or

other facial defects in the decision of the trial court.

                                 First Assignment of Error

       {¶23} Appellants’ first assignment of error alleges that “the trial court erred in

issuing a charging order which encompassed non-limited liability companies.” Within this

assignment is the argument that “no evidence was presented that CBD Investments was a

member of any of the named entities,” and thus the trial court erred in precluding transfers

to CBD Investments.

       {¶24} I agree with the majority that R.C. 1705.19(A) is specific to limited liability

companies and requires that a debtor be a member of a limited liability company. I also

agree with the majority that the charging order listed entities that were not limited liability

companies. It is readily ascertainable from the pleadings that CBD Investments, Tri Star

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                          OHIO FIRST DISTRICT COURT OF APPEALS

Commercial Group, and CBD LP were not limited liability companies.4 That part of the

charging order should indeed be reversed.

        {¶25} I disagree with the majority for the remaining entities that were admitted to

be limited liability companies in the pleadings and response motions filed by the appellants.

As explained by the majority, an admission needs no proof. The majority begrudgingly

accepts that the admissions suffice to demonstrate that the entities were limited liability

companies, but strangely refuses to apply the same reasoning to the appellants’ secondary

argument regarding the membership interests in the limited liability companies. This

inconsistency is the basis of my disagreement.

        {¶26} The record of this case for appellate review is only made up of the journal

entries filed below—again, there are no transcripts. In those entries, appellees and the city

of Cincinnati alleged in motions and pleadings that Goldschmidt admitted in a September

19, 2018 contempt hearing to an ownership interest in at least Elm Street Deli and Bauer

Farm Kitchen, which were tenants of the disputed real estate.                    And, regarding RSJJ

Investments Limited, Goldschmidt admitted to having a membership interest in the

company in two separate sworn entries.5 The admissions regarding Elm Street Deli and

4  Elm Investment filed their initial complaint on May 31, 2016, alleging in paragraph 2 that “CBD
Investments Limited Partnership I (“CBD LP”) is an Ohio limited partnership,” and in paragraph 3 that
“CBD Investments, Inc. (“CBD Inc.”) is an Ohio corporation.” Ronald Goldschmidt and CBD Investments
filed an answer to this complaint on July 29, 2016, admitting to the allegations.
Cincinnati filed an amended complaint on December 29, 2017, alleging in paragraph 3 that Tri Star
Commercial Group, Inc., is a limited liability company. Tri Star, along with Goldschmidt and CBD
Investments, answered the complaint on February 8, 2018, correcting Tri Star’s status to “a corporation.”

5 Cincinnati filed a cross-claim against CBD Investments Limited Partnership I and a third-party

complaint against RSJJ Investments Limited and Joseph Reis on August 31, 2016, alleging in paragraph 6
that “RSJJ is either directly or directly (sic) owned and controlled by Goldschmidt.” Ronald Goldschmidt
and CBD Investments filed an answer to this cross-claim/third-party complaint on October 4, 2016,
admitting to the allegation.
Cincinnati moved for partial summary judgment against CBD Investments and RSJJ Investments on
November 8, 2016. CBD Investments and RSJJ Investments responded in opposition on November 21,
2016, including an affidavit of Ronald Goldschmidt. Paragraph 1 of this affidavit of Goldschmidt states: “I
am the principal of both CBD Investments Limited Partnership I (“CBD”) and RSJJ Investments Limited
(“RSJJ”).”

                                                        14
                       OHIO FIRST DISTRICT COURT OF APPEALS

Bauer Farm Kitchen formed the basis of the city’s motion to amend its complaint to include

the entities, which was granted. The admissions regarding RSJJ Investments Limited, Elm

Street Deli and Bauer Farm Kitchen formed the basis of the appellees’ motion for the

charging order now before us. As stated above, the trial court based its charging order “on

the evidence and testimony in this matter.” A trial court can take judicial notice of the

record before it. See Evid.R. 201; Helfrich v. Madison, 5th Dist. Licking No. 11 CA 26, 2012-

Ohio-551. The trial court did not need to cite specific parts of the record to support its own

charging order.

       {¶27} While the majority contends that presuming the trial court heard what it said

it heard amounts to speculating on the testimony below, I submit that it does not. On the

contrary, the majority’s assertion—that the trial court erred in basing its charging order on

the testimony presented—does amount to speculating on the testimony below, as it relies on

an assumption that the trial court did not hear what it said it heard. For support, the

majority cites Barnett v. Combs, 2nd Dist. Montgomery No. 24134, 2011-Ohio-5947, ¶ 29—

for the proposition that we should not speculate what the testimony was at trial—but

neglects the remainder of the paragraph which states that the duty to provide transcripts

rests with the appellant and that without transcripts, the appellate court is “constrained to

presume the regularity of the proceedings below unless the limited record for our review

affirmatively demonstrates error.”

       {¶28} With an admission, there was no need for Elm Investments to submit proof of

the membership interests in the manner described in Stanfield v. On Target Consulting,

LLC, 2017-Ohio-8830, 90 N.E.3d 962 (1st Dist.). In Stanfield, documents in the record,

which was transmitted to the appellate court for review, plainly established that the

judgment debtor did not have a membership interest in the LLCs subject to the charging

order. See ¶ 12. Conversely, this court did not receive a complete record to review. Without

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                       OHIO FIRST DISTRICT COURT OF APPEALS

a complete record—i.e., one with transcripts, in this case—to definitively confirm or reject

the allegation that membership interests were admitted, we must presume regularity in the

trial court and the validity of the trial court’s judgment. See In re I.W., 1st Dist. Hamilton

No. C-180095, 2019-Ohio-1515, ¶ 8. We cannot say, as the majority does, that the trial court

erroneously relied on an admission as the basis for its charging order when we cannot

review the record.

       {¶29} Finally, the appellants did not appeal the charging order with respect to

Goldschmidt. On appeal, they only alleged that the charging order was improper as to CBD

Investments: “no evidence was presented that CBD Investments was a member of any of the

named entities.” (Emphasis added.) Therefore, the majority’s sua sponte reversal of the

charging order with respect to Goldschmidt is improper. See McMaster v. Akron Health

Dept., Hous. Div., 189 Ohio App. 3d 222, 2010-Ohio-3851, 937 N.E.2d 1094 (9th Dist.) (an

appellate court will not sua sponte undertake a plain-error analysis if a defendant fails to do

so).

       {¶30} Therefore, I would overrule the appellants’ first assignment of error with

respect to the three limited liability companies.

                                  Second Assignment of Error

       {¶31} Appellants’ second assignment of error alleges that the trial court erred in

issuing a charging order that directed all cash payable to a judgment debtor should instead

be paid to the judgment creditor. The appellants claim that the trial court exceeded the

remedy available to a judgment creditor as set forth in the statute. I would agree.

       {¶32} Under R.C. 1705.19(B), “[a]n order charging the membership interest of a

member of a limited liability company is the sole and exclusive remedy that a judgment

creditor may seek to satisfy a judgment against the membership interest of a member or a

member’s assignee.”     The statute makes clear that a judgment creditor is entitled to

                                                    16
                       OHIO FIRST DISTRICT COURT OF APPEALS

“distributions of cash and other property and the allocations of profits, losses, income,

gains, deductions, credits, or similar items” pertaining to a member’s financial interest.

R.C. 1705.18(A); FirstMerit Bank, N.A. v. Xyran, Ltd., 8th Dist. Cuyahoga No. 98740, 2013-

Ohio-1039, ¶ 5, 9. The scope of a charging order may not exceed the statutory boundaries.

Knollman-Wade Holdings, LLC v. Platinum Ridge Properties, LLC, 10th Dist. Franklin No.

14AP-595, 2015-Ohio-1619, ¶ 16.

       {¶33} The charging order in this case provides that:

       The Charged Parties shall transfer to Plaintiff’s counsel for credit against

       Plaintiff’s judgment in this matter any cash or other assets that would

       otherwise be transferred to a Judgment Debtor or for the benefit of a

       Judgment Debtor.

Nothing within the order limits the scope to the membership interests of Goldschmidt or

CBD Investments. Accordingly, the charging order is impermissibly broad.

       {¶34} Therefore, I would sustain the appellants’ second assignment of error, and

reverse and remand this cause with instructions for the trial court to charge only the

membership interest of the appellants for payment of the unsatisfied judgment.

Please note:
       The court has recorded its own entry this date.

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