Court Opinion

ID: 2747267
Source: CourtListenerOpinion
Date Created: 2014-10-31 14:06:57.36149+00
Date Added: 2024-06-11T10:45:15.124189
License: Public Domain

[Cite as Centerburg RE, L.L.C. v. Centerburg Pointe, Inc., 2014-Ohio-4846.]

                                       COURT OF APPEALS
                                      KNOX COUNTY, OHIO
                                   FIFTH APPELLATE DISTRICT

CENTERBURG RE, LLC                                         JUDGES:
                                                           Hon. W. Scott Gwin, P. J.
        Plaintiff-Appellee                                 Hon. Sheila G. Farmer, J.
                                                           Hon. John W. Wise, J.
-vs-
                                                           Case No. 13 CA 28
CENTERBURG POINTE, INC.

        Defendant-Appellant                                OPINION

CHARACTER OF PROCEEDING:                               Civil Appeal from the Court of Common
                                                       Pleas, Case No. 11 OT 11-0622

JUDGMENT:                                              Affirmed

DATE OF JUDGMENT ENTRY:                                October 30, 2014

APPEARANCES:

For Defendant-Appellant                                For Plaintiff-Appellee

DOUGLAS V. BARTMAN                                     EZIO A. LISTATI
THE BARTMAN LAW OFFICE                                 J. JAREDD FLYNN
1991 Crocker Road, Suite 600                           THRASHER, DINSMORE & DOLAN
Cleveland, Ohio 44145                                  1400 West 6th Street, Suite 400
Knox County, Case No. 13 CA 28                                                        2

Wise, J.

       {¶1}   Appellant Centerburg Pointe, Inc. appeals from the decisions of the Knox

County Court of Common Pleas denying its motion to dismiss and its motion for

summary judgment and granting summary judgment in favor of Appellee Centerburg

RE, LLC.

                       STATEMENT OF THE FACTS AND CASE

       {¶1}   James Griffiths and Martha Griffiths were married on August 22, 1992.

The marriage was terminated and the final divorce decree was filed on August 25, 2011.

       {¶2}   Appellant Centerburg Pointe, Inc. and Appellee Centerburg RE, LLC are

corporate entities formed and owned by James Griffiths and Martha Griffiths during their

marriage. Appellant Centerburg Pointe, Inc. is an Ohio corporation wholly owned by

James Griffiths ("Husband"). Appellee Centerburg RE, LLC is an Ohio limited liability

company wholly owned by Martha Griffiths ("Wife").

       {¶3}   Appellant and Appellee were parties to a lease for the operation of a

nursing home known as Centerburg Pointe. Appellee was the landlord and Appellant

was the tenant with respect to said nursing home. The Lease, effective January 1, 2008,

was executed by Ms. Griffiths as the sole member for Appellee. The Lease was also

executed by Ms. Griffiths as secretary for Appellant.

       {¶4}   Pursuant to §2.04(a) of the Lease, Appellant was required to pay "all real

estate taxes and assessments levied or assessed against the ... [Property]."

Additionally, pursuant to §6.01 of the Lease, Appellant was required to maintain and

repair the Property.
Knox County, Case No. 13 CA 28                                                           3

          {¶5}   Appellant failed to pay real estate taxes for the Property to the Knox

County Treasurer. Appellant also failed to properly maintain and repair the Property.

          {¶6}   Upon termination of the Griffiths’ marriage, the ownership and obligations

of Appellee and Appellant businesses was allocated by virtue of the domestic relations

proceedings in Cuyahoga County's Domestic Relations Division, Case No. DR-10-

33235.

          {¶7}   The domestic relations court first provisionally allocated Centerburg RE,

LLC and the operations of Centerburg Pointe to Ms. Griffiths in an order dated October

18, 2011, which confirmed an interim award of the arbitrator in the domestic relations

action. The parties agreed, the arbitrator awarded, and the Domestic Relations Court

ordered, that:

          {¶8}   “1. Effective December 1, 2010, Marti Griffiths will manage Centerburg

RE, ...

          {¶9}   “2. Effective December 1, 2010 Marti Griffiths will form a corporation to

replace the operating entities for Centerburg Pointe ... of which Jim Griffiths is the sole

shareholder. Jim Griffiths will continue to operate [that entity] through November 30,

2010 and as such will pay the related mortgages due by [that entity] through and

including November 30, 2010 ...

          {¶10} “On or after December 1, 2010, Marti Griffiths may, in her sole discretion,

choose to directly, or through an outside operator, operate the facilities at Centerburg

Pointe ...

          {¶11} “ ***
Knox County, Case No. 13 CA 28                                                           4

       {¶12} “17. On or before October 27, 2010, the parties shall reconvene in order to

address the true-up of payables with respect to the entities operated by each of them ...”

       {¶13} The Operations Transfer Agreement ("OTA") referenced in Appellee's

complaint in this case was entered into by Appellant and Centerburg Pointe Healthcare

Group, Inc., the successor operator and tenant of the Centerburg Pointe nursing home,

to effectuate the Interim Award's requirement that Appellant turn over the operations of

Centerburg Pointe. In accordance with the Interim Award, Appellant ceased operating

Centerburg Pointe and the Lease terminated on December 1, 2010.

       {¶14} In the final divorce decree, the domestic relations court adopted the terms

settled upon by Mr. Griffiths and Ms. Griffiths in the SPSA:

       {¶15} “The Court further finds that the parties have entered into a Separation

Agreement and Addendum, which are fair, just and equitable and orders the Agreement

and Addendum, which are attached and for identification purposes marked as Exhibit A,

be included herein as if fully rewritten and its terms entered into execution.” (Decree,

2012 Stipulation Ex. 5, p. 2).

       {¶16} Specifically, the domestic relations court ordered that Appellee Centerburg

RE, LLC, was to be the sole property of, retained by, Ms. Griffiths.

       {¶17} The Decree further provided that Appellant Centerburg Pointe, Inc., was to

be the sole property of, and retained by, Mr. Griffiths. (SPSA, 2012 Stipulation Exhibit 3,

at Section 2.3(a) and Section 2.18).

       {¶18} The Decree’s terms, pursuant to the agreement of the Griffiths in the

SPSA, included the following:
Knox County, Case No. 13 CA 28                                                            5

       {¶19} In Section 2.3, that Centerburg RE would be Ms. Griffiths sole property

and that Ms. Griffiths would hold Mr. Griffiths harmless from any "expenses, losses,

claims, or liabilities whatever arising from, or in any way connected with, Centerburg RE

[and] Centerburg Pointe ..." (SPSA, Ex. 3 to 2012 Stipulation, sections 2.3(a) and 2.3(d);

Decree, Ex. 5 to 2012 Stipulation).

       {¶20} In Section 2.18, that Centerburg Pointe, Inc. would be the sole property of

Mr. Griffiths and that Centerburg RE, LLC would be the sole property of Ms. Griffiths.

(Amendment, Ex. 4 to 2012 Stipulation; Decree, Ex. 5 to 2012 Stipulation).

       {¶21} In Section 2.18, that "[e]xcept as is otherwise provided above in this

Agreement, and except as is otherwise provided in the three Operations Transfer

Agreements executed by Husband and Wife on November 30, 2010, in which case

those other provisions shall govern, Wife shall indemnify, defend and hold Husband and

Husband's Entities harmless from any and all debts and obligations (including but not

limited to personal guarantees and reasonable attorneys' fees) incurred by or on behalf

of Wife's entities." Id.

       {¶22} In Article VII, that "[a]ny and all intercompany loans, infusions of capital or

obligations due and owing from Wife (or any entity or property that becomes Wife's

separate property pursuant to this Agreement) to Husband (or any entity or property that

becomes Husband's separate property pursuant to this Agreement) shall be forgiven

and of no further force or effect. Similarly, any and all intercompany loans, infusions of

capital or obligations due and owing from Husband (or any entity or property that

becomes Husband's separate property pursuant to this Agreement) to Wife (or any

entity or property that becomes Wife's separate property pursuant to this Agreement)
Knox County, Case No. 13 CA 28                                                           6

shall be forgiven and of no further force or effect." (SPSA, Ex. 3 to Stipulation, pp. 35,

36; Decree, Ex. 5 to 2012 Stipulation).

         {¶23} On November 28, 2011, Appellee filed a Complaint in the Common Pleas

Court of Knox County, alleging a claim for breach of contract against Appellant. The

complaint alleges that Appellant failed to pay property taxes and failed to perform

building maintenance with respect to the Centerburg Pointe nursing home owned by

Appellee and formerly operated by Appellant. Appellee's complaint alleges specifically

that the unpaid taxes and unperformed maintenance related to the period up to

December 1, 2010, after which Appellant no longer operated the nursing home pursuant

to an interim order ("Interim Award") entered in the Domestic Relations Action.

         {¶24} On January 25, 2012, Appellant filed a motion to dismiss Appellee's

complaint for lack of subject matter jurisdiction. The Motion to Dismiss asserted that the

claims of Appellee were subject to the continuing jurisdiction of the Domestic Relations

Court.

         {¶25} On February 15, 2012, the trial court denied the Motion to Dismiss.

         {¶26} On July 31 and August 1, 2012, the parties submitted cross-motions for

summary judgment.

         {¶27} On August 13, 2012, the parties filed a stipulation as to certain documents

and facts relevant to the issues raised in those motions for summary judgment, the

"2012 Stipulation".

         {¶28} Appellant's motion argued that Appellee's claims were foreclosed by the

release of obligations between Mr. Griffiths, Ms. Griffiths, and their business entities in

the Decree.
Knox County, Case No. 13 CA 28                                                          7

        {¶29} Appellee's motion sought summary judgment on liability and damages.

        {¶30} On November 26, 2012, the trial court entered two judgment entries: one

denying Appellant's motion for summary judgment, and the other granting Appellee's

motion for summary judgment and entering judgment in favor of Appellee. In that

second judgment entry, the trial court entered judgment in favor of Appellee and

awarded Appellee the damages it sought for taxes and maintenance.

        {¶31} On December 5, 2012, Appellee filed a motion for attorneys' fees. After

Appellant filed a notice of appeal on December 26, 2012, Appellee filed a motion to

dismiss the appeal for lack of a final appealable order. That motion was granted, and

the case returned to the trial court for consideration of Appellee's motion for attorneys'

fees.

        {¶32} On June 21, 2013, the parties stipulated that the reasonable amount of

attorneys' fees incurred by Appellee was $64,000.

        {¶33} On August 7, 2013, the trial court issued a final appealable order

incorporating the November 26, 2012, judgment entries and awarding Appellee $64,000

in attorneys' fees.

        {¶34} Appellant filed an appeal and this matter is now before this Court for

consideration. Appellant assigns the following errors for our review:

        {¶35} "I. THE TRIAL COURT ERRED WHEN IT DENIED APPELLANT'S

MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION.

        {¶36} “II. THE TRIAL COURT ERRED IN DENYING APPELLANT'S MOTION

FOR SUMMARY JUDGMENT.
Knox County, Case No. 13 CA 28                                                               8

       {¶37} “III. THE TRIAL COURT ERRED BY GRANTING APPELLEE'S MOTION

FOR SUMMARY JUDGMENT.”

                                               I.

       {¶38} Under its First Assignments of Error, Appellant claims the trial court lacked

subject matter jurisdiction in this matter. We disagree.

       {¶39} The standard of review for dismissal for want of subject matter jurisdiction

pursuant to Civil Rule 12(B)(1) is whether any cause of action cognizable by the forum

has been raised in the complaint. Prosen v. Dimora, 79 Ohio App. 3d 120, 606 N.E.2d
1050 (1992); State ex rel. Bush v. Spurlock, 42 Ohio St. 3d 77, 537 N.E.2d 641 (1989).

This determination involves a question of law that we review de novo. Shockey v. Fouty,

106 Ohio App. 3d 420, 666 N.E.2d 304 (1995). Under a de novo analysis, we must

accept all factual allegations of the complaint as true and all reasonable inferences must

be drawn in favor of the nonmoving party. Byrd v. Faber, 57 Ohio St. 3d 56, 565 N.E.2d
584 (1991).

       {¶40} Appellant herein argues that the trial court did not have subject matter

jurisdiction in this case because Appellee’s claims relate to the marital debt and

therefore fall within the jurisdiction of the domestic relations court.

       {¶41} In this case, we find that based on the subject matter of the dispute herein,

the general division and the domestic relations division had concurrent jurisdiction.

       {¶42} Once a court acquires jurisdiction of a cause of action, its authority

continues until the matter is “completely and finally disposed of.” Thus, a court of

concurrent jurisdiction is not at liberty to interfere with the first court's proceedings. John
Knox County, Case No. 13 CA 28                                                             9

Weenink & Sons Co. v. Court of Common Pleas of Cuyahoga Cty. (1948), 150 Ohio St.
349, 82 N.E.2d 730, paragraphs two and three of syllabus.

       {¶43} The jurisdictional priority rule provides that “as between [state] courts of

concurrent jurisdiction, the tribunal whose power is first invoked by the institution of

proper proceedings acquires jurisdiction, to the exclusion of all other tribunals, to

adjudicate upon the whole issue and to settle the rights of the parties.” State ex rel.

Racing Guild of Ohio v. Morgan (1985), 17 Ohio St. 3d 54, 56, 476 N.E.2d 1060, quoting

State ex rel. Phillips v. Polcar (1977), 50 Ohio St. 2d 279, 364 N.E.2d 33, syllabus.

Hence, “where a suit is commenced in one jurisdiction which involves the ‘whole issue’

between the parties, a second court may not interfere with the resolution of the issue

filed in the first court.” Davis v. Cowan Sys., Cuyahoga App. No. 83155, 2004-Ohio-515;

see, also, CWP Ltd. Pshp. v. Vitrano (May 15, 1997), Cuyahoga App. No. 71314.

       {¶44} “The determination of whether two cases concern the same ‘whole issue’

is a two-step analysis. First, there must be cases pending in two different courts of

concurrent jurisdiction involving substantially the same parties; and second, the ruling of

the court subsequently acquiring jurisdiction may affect or interfere with the resolution of

the issues before the court where suit was originally commenced.” Id.

       {¶1}   First, we find that the parties involved in the instant action are different

than the parties in the divorce action. Second, we find that a ruling of the General

Division will not affect or interfere with the resolution of the Griffiths’ divorce action in

the Domestic Relations Court
Knox County, Case No. 13 CA 28                                                           10

          {¶45} The basis of the Complaint filed in the general division of the common

pleas court alleges a breach of a contractual lease agreement between Appellant

Centerburg Pointe, Inc. and Appellee Centerburg RE, LLC.

          {¶46} Appellee and Appellant are business entities which exist separate and

apart from Mr. and Mrs. Griffiths. “A corporation is a separate legal entity from its

shareholders, even where there is but one shareholder.” Stuffleben v. Cowden, 8th Dist.

No. 82537, 2003-Ohio-6334, 2003 WL 22805065, ¶ 25, quoting LeRoux's Billyle Supper

Club v. Ma, 77 Ohio App. 3d 417, 420, 602 N.E.2d 685 (6th Dist.1991); see also

Belvedere, 67 Ohio St. 3d at 287, 617 N.E.2d 1075.

          {¶47} R.C.§ 3105.011 sets forth the jurisdiction of domestic relations courts. It

states:

          {¶48} “The court of common pleas, including divisions of courts of domestic

relations, has full equitable powers and jurisdiction appropriate to the determination of

all domestic relations matters. This section is not a determination by the general

assembly that such equitable powers and jurisdiction do not exist with respect to any

such matter.”

          {¶49} In Tanagho v. Tanagho (Feb. 23, 1993), 10th Dist. No. 92AP-1190, 1993

Ohio App. LEXIS 1201, 1993 WL 50950, the domestic relations court decided a quiet

title action brought against a third-party defendant within the context of a divorce action.

On appeal, the Tenth District held that the domestic relations court had exceeded its

jurisdiction in deciding the quiet title action. The court reasoned that “in an action for

divorce, the common pleas court, or its domestic relations division, is limited in its

jurisdiction to the determination of domestic relations matters and any collateral claims
Knox County, Case No. 13 CA 28                                                            11

must be brought in a separate action in the appropriate court or division thereof, where

the claim involves determination of the rights of a third-party.” Id. at 6, 855 N.E.2d 136.

       {¶50} In Lisboa v. Karner (2006), 167 Ohio App. 3d 359, 855 N.E.2d 136, 2006-

Ohio-3024, the relator filed a writ of prohibition to prohibit the domestic relations judge

from ruling on a contract fee dispute among third-party creditors, the marital estate and

the relator in her underlying divorce action. The Eighth District granted the writ of

prohibition and held that “R.C. 3105.011 * * * has been consistently interpreted as

excluding collateral claims and non-domestic relations matters from the domestic

relations court.” Id. at ¶ 13, 855 N.E.2d 136.

       {¶51} Upon review, we find that the instant case involves the rights of third

parties. Further, the subject of the instant case is breach of a lease agreement, which

falls within the scope of the general division court's jurisdiction.

       {¶52} While it is true that ownership of Appellant and Appellee was allocated to

Mr. and Mrs. Griffiths individually by way of the separation agreement and subsequent

divorce decree, as the businesses were marital property, Appellant and Appellee were

not parties to the divorce action. The issues of determining whether or not these

business entities were assets that should be included in the marital estate and the

valuation for purposes of property distribution were primarily domestic relations issues.

However, a separate breach of contract action between the business entities

themselves would not be.

       {¶53} Although there is no provision of law which specifically requires all other

civil cases to be brought within or assigned to the general division of the common pleas

court, it may reasonably be concluded that when a case is not primarily of a domestic
Knox County, Case No. 13 CA 28                                                           12

relations nature, it should be originally brought in the general division, or assigned to a

judge thereof. In re Dunn (1995), 101 Ohio App. 3d 1, 5, 654 N.E.2d 1303, 1305.

       {¶54} Contract cases are not within the exclusive jurisdiction of the domestic

relations division. The general division judge who was assigned to his case, therefore,

had jurisdiction to consider Appellee’s claims. The general division court was the court

whose jurisdiction was first invoked and that “[a]s between courts of concurrent

jurisdiction, the tribunal whose power is first invoked by the institution of proper

proceedings acquires jurisdiction, to the exclusion of all other tribunals, to adjudicate

upon the whole issue and to settle the rights of the parties.” Citing State, ex. rel. Racing

Guild of Ohio v. Morgan (1985), 17 Ohio St. 3d 54, 476 N.E.2d 1060.

       {¶2}   Appellant’s First Assignment of Error is denied.

                                              II., III.

       {¶3}   In its Second and Third Assignments of Error, Appellant claims the trial

court erred in denying its motion for summary judgment and granting Appellee’s motion

for summary judgment. We disagree.

                                 “Summary Judgment Standard”

       {¶4}   Summary judgment proceedings present the appellate court with the

unique opportunity of reviewing the evidence in the same manner as the trial court.

Smiddy v. The Wedding Party, Inc. (1987), 30 Ohio St. 3d 35, 36. Civ.R. 56(C) provides,

in pertinent part:

       {¶5}   “Summary judgment shall be rendered forthwith if the pleadings,

depositions, answers to interrogatories, written admissions, affidavits, transcripts of

evidence in the pending case, and written stipulations of fact, if any, timely filed in the
Knox County, Case No. 13 CA 28                                                          13

action, show that there is no genuine issue as to any material fact and that the moving

party is entitled to judgment as a matter of law. * * * A summary judgment shall not be

rendered unless it appears from such evidence or stipulation and only therefrom, that

reasonable minds can come to but one conclusion and that conclusion is adverse to the

party against whom the motion for summary judgment is made, such party being

entitled to have the evidence or stipulation construed most strongly in his favor.”

         {¶6}   Pursuant to the above rule, a trial court may not enter a summary

judgment if it appears a material fact is genuinely disputed. The party moving for

summary judgment bears the initial burden of informing the trial court of the basis for its

motion and identifying those portions of the record that demonstrate the absence of a

genuine issue of material fact. The moving party may not make a conclusory assertion

that the non-moving party has no evidence to prove its case. The moving party must

specifically point to some evidence which demonstrates the non-moving party cannot

support its claim. If the moving party satisfies this requirement, the burden shifts to the

non-moving party to set forth specific facts demonstrating there is a genuine issue of

material fact for trial. Vahila v. Hall, 77 Ohio St. 3d 421, 429, 1997-Ohio-259, citing

Dresher v. Burt, 75 Ohio St. 3d 280, 1996-Ohio-107.

         {¶7}   It is based upon this standard that we review Appellant’s assignments of

error.

         {¶8}   Pursuant to the Operating Transfer Agreement (OTA), signed by Appellant

Centerburg Pointe, Inc. and Appellee Centerburg RE, LLC, effective December 1, 2010,

Appellant and Appellee were required to terminate the existing Lease in this matter
Knox County, Case No. 13 CA 28                                                          14

“provided, however, said termination shall not be deemed a waiver or release of any

claims or defenses that may exist under the … Lease.”

       {¶9}   Based on the foregoing language, Appellant retained all liabilities and

obligations related to the Property prior to the date of the signing of the OTA.

       {¶10} The Separation Agreement in this matter was signed by Jim Griffiths and

Martha Griffiths, and while it does incorporate the OTA, Section 2.18 of the Separation

Agreement specifically states:

       {¶11} “***

       {¶12} “Except as is otherwise provided above in this Agreement and except as is

otherwise provided in the three Operations Transfer Agreements executed by Husband

and Wife on November 30, 2010, in which case those other provisions shall govern,

Husband shall indemnify, defend and hold Wife and Wife's entities harmless from any

and all debts and obligations (including but not limited to personal guarantees and

reasonable attorneys' fees) incurred by or on behalf of Husband's Entities.

       {¶13} “***

       {¶14} “Nothing in this Agreement shall diminish any of the defenses or indemnity

obligations owed by any person or entity set forth in the Operations Transfer

Agreements dated November 30, 2010 for the ... Centerburg Pointe nursing facilities.”

       {¶15} The relevant provision of the OTA states:

       {¶16} “Operator hereby agrees, indemnifies and holds New Operator and New

Operator's affiliates, and their respective partners, members, shareholders, officers,

employees, agents, successors and assigns (each, an "Indemnified Party") harmless

(on a joint and several basis from and against any and all losses, damages, claims,
Knox County, Case No. 13 CA 28                                                             15

causes of action, judgments, costs and expenses (including reasonable fees of

attorneys) that may be suffered or incurred by or asserted or awarded against New

Operator or any Indemnified Party, in each case arising out of the following:

       {¶17} “***

       {¶18} “(iii) any liability arising out of the operation of the [Centerburg] Facility

prior to the Commencement Date.”

       {¶19} Additionally, we find that the obligation in this action, i.e. real estate taxes,

was not an obligation due and owing from Husband to Wife as addressed in the

Separation Agreement. Rather, said real estate taxes were an obligation owed to the

Knox County Treasurer, and pursuant to Section 2.04 of the Lease, “Appellant must pay

… all real estate taxes.”

       {¶20} We further find that trial court did not err in finding the tax bill and repair

bill attached to both Appellee’s Motion for Summary Judgment and Appellee’s

Complaint, along with Appellant’s response’s to Appellee’s Request for Admissions,

supported Appellee’s motion for summary judgment and provided sufficient evidence of

damages.

       {¶21} Based on the foregoing, we find the trial court did not err in granting

summary judgment in favor of Appellee for breach of the lease agreement and awarding

damages for same.
Knox County, Case No. 13 CA 28                                                  16

      {¶22} Appellant’s Second and Third Assignments of Error are denied.

      {¶23} For the foregoing reasons, the judgment of the Court of Common Pleas of

Knox County, Ohio, is affirmed.

By: Wise, J.

Gwin, P. J., and

Farmer, J., concur.

JWW/d 1020
Knox County, Case No. 13 CA 28   17