Court Opinion

ID: 3778860
Source: CourtListenerOpinion
Date Created: 2016-07-06 07:28:23.363564+00
Date Added: 2024-06-11T18:12:10.981459
License: Public Domain

In my opinion, this court lacks jurisdiction over this matter. Therefore, I would dismiss this appeal.
Despite the majority's best efforts to recast this action as a part of the liquidation proceeding, it is, in fact, a derivative action pursuant to Civ.R. 23.1, by definition, an action brought by "one or more legal or equitable owners of shares to enforce a right of a corporation, the corporation having failed to enforce a right which may properly be asserted by it." Shareholder derivative actions were recognized in equity and are not special proceedings.Polikoff v. Adams (1993), 67 Ohio St. 3d 100. Therefore, the denial of the liquidator's motion to be substituted as the sole plaintiff in a derivative action cannot be characterized as "[a]n order that affects a substantial right made in a special proceeding" under R.C. 2505.02(B)(2), as the majority suggests at page 13 of its opinion.
The majority's reliance on Morris v. Investment Life Ins. Co.
(1966), 6 Ohio St. 2d 185, is misplaced. The denial of a stockholder's motion to intervene in a conservatorship proceeding is not equivalent to the denial of a liquidator's motion for substitution as plaintiff in shareholder litigation. The fact that the former may be characterized as an order affecting a substantial right in a special proceeding does not have any bearing on the question whether the latter is such an order.
The majority's effort to characterize the order as a denial of a provisional remedy, appealable under R.C. 2505.02(B)(4), can only be described as forcing a square peg in a round hole. The liquidator's effort to assume control over the case simply cannot be viewed as the functional equivalent of an injunction against the further prosecution of a legal action pursuant to R.C.3903.05(A)(6). If the liquidator's motion were successful, the action would not be enjoined; it would proceed with the liquidator as the new plaintiff. The ruling would not preclude these shareholders from prosecuting claims on behalf of the corporation. Nor can the liquidator's motion be viewed as the equivalent of a motion for an injunction against the appropriation of a corporate asset pursuant to R.C. 3903.05(A)(7). A derivative claim does not appropriate a corporate asset; it seeks to enforce a right onbehalf of the corporation that the corporation refuses to pursue. Finally, the majority's dire predictions that corporate assets will be wasted or lost if the liquidator is not permitted to appeal immediately is unsubstantiated; no corporate assets are being used to pursue the action.
A provisional remedy is defined as a proceeding ancillary to an action, such as a preliminary injunction, attachment, discovery of privileged matter, or suppression of evidence. R.C. 2505.02(A)(3). A motion for substitution as a party cannot be considered ancillary or collateral — it proposes a change in the underlying structure of the action; it does not request an interim remedy to protect a party's *Page 32 
ability to enforce a judgment or to prevent irreparable harm during the pendency of the action. Therefore, I cannot in good conscience agree that the denial of a motion for substitution as a party is appealable as the denial of a provisional remedy.
In short, there is absolutely no reason why the trial court's order denying the liquidator's motion for substitution should be considered final and appealable.1 So long as this action remains pending before the trial court, the liquidator can raise the issues discussed in its motion for substitution again through a variety of procedural devices. The majority has short-changed the trial process by addressing this issue before it has fully ripened. Therefore, I dissent.
1 Of course, this was not a judgment "as to one or more but fewer than all of the claims or parties" that could be made final by a Rule 54(B) certification. Therefore, the Rule 54(B) certification entered here had no effect on the finality of this part of the trial court's order.