Court Opinion

ID: 2701987
Source: CourtListenerOpinion
Date Created: 2014-08-04 19:44:18.74821+00
Date Added: 2024-06-11T12:54:15.109693
License: Public Domain

[Cite as Cleveland Clinic Found. v. Orange Technologies, L.L.C., 2014-Ohio-211.]

                 Court of Appeals of Ohio
                               EIGHTH APPELLATE DISTRICT
                                  COUNTY OF CUYAHOGA

                              JOURNAL ENTRY AND OPINION
                                  Nos. 100011 and 100059

                  CLEVELAND CLINIC FOUNDATION
                                                  PLAINTIFF-APPELLEE

                                                    vs.

            ORANGE TECHNOLOGIES, L.L.C., ET AL.
                                                  DEFENDANTS-APPELLANTS

                                           JUDGMENT:
                                            DISMISSED

                                     Civil Appeal from the
                            Cuyahoga County Court of Common Pleas
                                     Case No. CV-776992

        BEFORE: Kilbane, J., Boyle, A.J., and Jones, J.

        RELEASED AND JOURNALIZED:                         January 23, 2014
ATTORNEYS FOR APPELLANTS

For Orange Technologies, L.L.C., et al.

Dennis P. Zapka
Sean T. Lavin
McLaughlin Law, L.L.P.
1111 Superior Avenue
Suite 1350
Cleveland, Ohio 44114

For Melanie Gruden

Christopher A. Holecek
Peter A. Holdsworth
Wegman, Hessler & Vanderburg
6055 Rockside Woods Boulevard
Suite 200
Cleveland, Ohio 44131

ATTORNEYS FOR APPELLEE

Richard Gurbst
Amy C. Hocevar
Squire Sanders (US) L.L.P.
4900 Key Tower
127 Public Square
Cleveland, Ohio 44114
MARY EILEEN KILBANE, J.:

        {¶1}    Defendants-appellants, Orange Technologies L.L.C., Global Hosting

Solutions L.L.C., Solon Design L.L.C., Bright Marketing L.L.C., JKC Marketing L.L.C.,

Exact Targeting SEO L.L.C., North Coast Technologies L.L.C., and Christopher Gruden

(“Gruden”), in 8th Dist. Cuyahoga No. 100011, challenge the order of the trial court that

imposed a preliminary injunction on various accounts held by the defendant. In 8th Dist.

Cuyahoga No. 100059, defendant-appellant, Melanie Gruden (“Melanie”), appeals from

the same order. These cases have been consolidated for hearing and disposition, but

because the appeals do not stem from final appealable orders, and for the reasons set forth

below, both matters are dismissed.

        {¶2} On February 29, 2012, the Cleveland Clinic Foundation (“Clinic”) filed suit

against Orange Technologies, L.L.C., Gruden and Melanie, and eight other defendants.

The Clinic alleged that from 2008 to 2012, Gruden acted contrary to the Clinic’s conflict

of interest policy by failing to disclose his relationships to the defendant companies and

used his position with the Clinic to recommend that the Clinic engage in business with

them.    The Clinic alleged that the defendants received a total of $2.4 million in

contravention of the conflict of interest policy.      The Clinic set forth claims for

misappropriation of funds, breach of contract, unjust enrichment, conversion, fraud, civil

conspiracy, and civil racketeering.    The Clinic prayed for treble damages, punitive

damages, and attorney fees, and prayed for a temporary restraining order, a preliminary

injunction, and “a permanent injunction to the Cleveland Clinic Foundation, preserving
the status quo * * * to prevent further concealment, disposal, and movement of assets”

and other relief.

       {¶3} On February 29, 2012, the trial court granted the Clinic a temporary

restraining order, precluding the defendants from accessing their various accounts (except

to make mortgage payments, and other reasonable and necessary expenses) unless the

account “retains a total of $2.4 million after the use of the account[.]”

       {¶4} On June 13, 2012, the Clinic filed an amended complaint to add new party

defendant Patrick McCaffrey. On June 19, 2012, defendants filed answers. Two of the

defendants, JKC Marketing, L.L.C. and Bright Marketing L.L.C., filed counterclaims

against the Clinic for unpaid services.

       {¶5} Over the course of several days, from July 29, 2012 to March 26, 2013, the

trial court held hearings on the plaintiff’s motion for prejudgment attachment and motion

for a preliminary injunction.

       {¶6} On May 23, 2013, the trial court issued the following order:

       Because of the defendants’ actions in fraudulently obtaining funds from the
       Cleveland Clinic foundation, the court hereby grants the request for a
       preliminary injunction and therefore creates a constructive trust for the
       benefit of the Cleveland Clinic.

       {¶7} On June 12, 2013, the trial court issued findings of fact and conclusions of

law in support of the preliminary injunction.

       {¶8} In its merit brief, plaintiff-appellee argues that, pursuant to R.C. 2505.02(B),

there is no final appealable order from the order granting the preliminary injunction.

Appellee further argues that the trial court’s order simply preserved the status quo
pending final judgment.      Appellee also argues that defendants have a meaningful

opportunity for review at the time of a final judgment.

                             FINAL APPEALABLE ORDER

       {¶9} Courts of appeal have jurisdiction to review final orders.         Article IV,

Section 3(B)(2), Ohio Constitution; R.C. 2505.03. In general, where a prayer for relief

requests a particular type of damages and the court fails to specifically adjudicate that

aspect of the damages requested, no final appealable order exists. See Miller v. First

Internatl. Fidelity & Trust Bldg., Ltd., 165 Ohio App.3d 281, 2006-Ohio-187, 846 N.E.2d

87; Britton v. Gibbs Assoc., 4th Dist. Highland No. 06CA34, 2008-Ohio-210.

       {¶10} A provisional remedy is a proceeding ancillary to an action, such as a

proceeding for a preliminary injunction, attachment, discovery of privileged matter, or

suppression of evidence. R.C. 2505.02(A)(3).

       {¶11} Pursuant to R.C. 2505.02(B):

       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:

       (4) An order that grants or denies a provisional remedy and to which both of
       the following apply:

       (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.

       (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.
      {¶12} The first of these requirements, R.C. 2505(B)(4)(a), has been deemed to be

unmet where the trial court’s order granting a preliminary injunction only serves to

maintain the status quo pending litigation of the trial on the merits.       McHenry v.

McHenry, 5th Dist. Stark No. 2013 CA 00001, 2013-Ohio-3693, citing Cleveland

Firefighters, IAFF Local 500 v. E. Cleveland, 8th Dist. Cuyahoga No. 88273,

2007-Ohio-1447, ¶ 5; Hootman v. Zock, 11th Dist. Ashtabula No. 2007-A-0063,

2007-Ohio-5619, ¶ 13; Deyerle v. Perrysburg, 6th Dist. Wood No. WD-03-063,

2004-Ohio-4273, ¶ 15.

      {¶13} As to the second requirement, the McHenry court explained:

      The appealing party must demonstrate that it “would have no adequate
      remedy from the effects of that [interlocutory] order on appeal from final
      judgment.” Empower Aviation [LLC v. Butler Cty. Bd. of Commrs., 185
      Ohio App.3d 477, 2009-Ohio-6331, 924 N.E.2d 862, ¶ 18,] quoting State v.
      Muncie (2001), 91 Ohio St.3d 440, 451, 2001-Ohio-93, 746 N.E.2d 1092.
      The absence of an adequate remedy after final judgment has been held to be
      present in cases involving orders compelling the production of documents
      containing trade secrets or privileged communications, and in cases
      involving the denial of requests to enforce covenants not to compete. Id.
      See also Premier Health Care Serv., Inc. v. Schneiderman, Montgomery
      No. 18795, 2001 Ohio App. LEXIS 5170, 2001 WL 1479241.

      {¶14} This second requirement is generally found where the court will be unable to

fashion a meaningful or effective remedy at the end of the litigation. Wells Fargo Ins.

Servs. USA v. Gingrich, 12th Dist. Butler No. CA2011-05-085, 2012-Ohio-677.

Calculable monetary losses and losses incurred during the pendency of the case can be

remedied by money damages at the conclusion of the case, so there is generally no right to

an immediate appeal from the ruling on the preliminary injunction. Id., citing Cooper v.
Cleveland Boat Club Ltd. Partnership, 8th Dist. Cuyahoga No. 81995, 2003-Ohio-2874, ¶

18; N. Fairfield Baptist Church v. G129, L.L.C., 12th Dist. Butler No. CA2009-11-281,

2010-Ohio-2543, ¶ 24 (finding the denial of a preliminary injunction not a final

appealable order where defendant failed to prove monetary damages would not

sufficiently compensate it for any determined loss); see also Simmons v. Trumbull Cty.

Engineer, 11th Dist. Trumbull No. 2004-T-0016, 2004-Ohio-1663, ¶ 11 (finding the

denial of a temporary restraining order was not a final appealable order because there was

no indication that monetary damages would not adequately compensate for any loss).

      {¶15} In accordance with all of the foregoing, the order granting a preliminary

injunction is not a final appealable order under R.C. 2505(B)(4).

      {¶16} Appeal dismissed.

      It is ordered that appellee recover from appellants costs herein taxed.

      It is ordered that a special mandate be sent to said court to carry this judgment into

execution.

      A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of

the Rules of Appellate Procedure.

MARY EILEEN KILBANE, JUDGE

MARY J. BOYLE, A.J., and
LARRY A. JONES, SR., J., CONCUR