Court Opinion

ID: 2761693
Source: CourtListenerOpinion
Date Created: 2014-12-17 13:05:15.13979+00
Date Added: 2024-06-11T11:27:08.495473
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

TED T. AYOUB,                                                         UNPUBLISHED
                                                                      December 16, 2014
               Plaintiff-Appellant,

v                                                                     No. 317375
                                                                      Oakland Circuit Court
ROBERT SZANTNER and RSA DESIGN                                        LC No. 2013-133083-CK
GROUP, LLC.,

               Defendants-Appellees,
and

YAMASAKI RSA,

               Defendant.

Before: JANSEN, P.J., and TALBOT and SERVITTO, JJ.

PER CURIAM.

        Plaintiff appeals as of right the trial court’s order dismissing his lawsuit on the basis that
he failed to obtain leave to file the lawsuit as required by a receivership order entered in a
separate case. We affirm.

       Ayoub is a majority shareholder and corporate officer of Yamasaki Associates, Inc.
(YAI), and the sole shareholder of Yamasaki International, Inc. (YII). Defendant Szantner is a
minority shareholder and former employee of YAI, and owner of defendant RSA Design (RSA).
The instant lawsuit stems from Ayoub’s interactions and dealings with Szantner spanning several
years. According to Ayoub, various acts of fraud, civil conspiracy, and breaches of fiduciary
duty and employment contracts, among other things, divested Ayoub of his corporate holdings,
work product, business expectancies, profits, and other monies rightfully owed to him and the
corporate entities, and led to the downfall of him and those corporate entities.

        In May 2009, Citizens Bank filed a lawsuit against Ayoub, YAI, and Szantner, among
others, to enforce its rights under a bank loan which had allegedly been defaulted on. That case
was filed in the Oakland Circuit Court, and was assigned to Oakland Circuit Judge Martha D.
Anderson. Despite being served with process in that case, Ayoub did not participate, for
whatever reason. Accordingly, in April 2010, Judge Anderson entered a default judgment
against Ayoub and YAI. A default judgment against YII was later entered. In May 2010, Judge

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Anderson appointed a receiver for Ayoub and YAI. The receivership order gave the receiver
“full powers” over all of the assets and property of Ayoub and YAI; granted the receiver the
authority to “sue for, collect, receive, and take possession of” any and all assets of Ayoub and
YAI; and granted the receiver the authority to “initiate, defend, compromise, adjust, intervene in,
dispose of, or become a party to any actions or proceedings in state, federal or foreign court
necessary to preserve or increase the assets of” Ayoub and YAI. Finally, the receivership order
restrained all parties (including Ayoub and YAI) from taking any action to enforce any claim or
right for, against, or on behalf of Ayoub and YAI or taking any action that interfered with the
receiver’s powers and duties, including commencing litigation, without leave of court. A second
receivership order was subsequently entered for YII.

        Notwithstanding the receivership orders, Ayoub, on behalf of himself, YAI, and YII,
filed a federal lawsuit against Szantner, RSA, and others in October 2012. Although the lawsuit
was later voluntarily dismissed due to jurisdictional concerns, Judge Anderson issued an order
requiring Ayoub to show cause why he should not be held in contempt for violating the
receivership orders by filing the federal suit. After a hearing, Judge Anderson found Ayoub in
contempt, ordered him not to re-file the federal lawsuit until the default judgments were set aside
or leave to re-file the federal suit was granted, and generally ordered him not to do anything that
would interfere with the receiver’s duties and functions. Ayoub subsequently sought leave to re-
file the federal lawsuit, which was denied. He also moved to set aside the default judgments
against him, YAI, and YII, which was also denied. Nonetheless, on March 27, 2013-
approximately two months after being held in contempt and approximately one month after his
request for leave to re-file the federal suit was denied-Ayoub filed the instant lawsuit in Oakland
Circuit Court. Ayoub’s amended complaint contained 11 counts against Szantner and RSA,
many of which were substantially similar, if not identical, to the claims raised in the federal
lawsuit. Ayoub sought relief in the form of, among other things, “all the lost profits and business
expectancy” of YAI and/or YII, and also sought the reassignment of corporate trademarks which
had previously been transferred to Szantner in the Citizens Bank case. The case was assigned to
Judge Grant.

        Szantner and RSA moved for dismissal of the instant lawsuit asserting that Ayoub was
not the real party in interest because the claims set forth in his complaint were for the benefit of
YAI and YII, which were subject to a receivership, and Ayoub therefore lacked standing to
pursue the claims. They also argued that by filing the lawsuit, Ayoub willfully violated Judge
Anderson’s receivership and contempt orders in the Citizens Bank case. Judge Grant dismissed
the lawsuit, reasoning that the claims in this case belonged to the corporate entities, not Ayoub
personally, and since those entities were controlled by the receiver, the lawsuit could not be
initiated without leave from Judge Anderson, which had not been obtained.

      On appeal, Ayoub contends that he was not required to obtain leave from Judge
Anderson to file this lawsuit because of an exception in the receivership order. We disagree.

        As noted above, the receivership order in this case granted the receiver full powers over
all the assets of Ayoub, YAI, and YII, and further granted him the authority to pursue litigation
on behalf of those parties to “preserve or increase” those assets. Consistent with these powers,
the receivership order prohibited Ayoub, YAI, YII, or any other party from “taking any action to
establish or enforce any claim, right or interest for, against, on behalf of, in, or in the name of”

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Ayoub, YAI and/or YII, “including, but not limited to . . . [c]ommencing, prosecuting, litigating
or enforcing any suit, except that actions may be filed to toll any applicable statute of
limitations.” It is the latter part of the last sentence that Ayoub relies upon for his claim of error.

        Ayoub specifically argues, as he did in the trial court, that because his claims involve
conduct dating back to 2009, and are therefore aging, he was entitled to file this lawsuit without
seeking leave from Judge Anderson. While we recognize the plain and unambiguous language
of the exception in the receivership order, we conclude that Ayoub has not sufficiently availed
himself of that exception. Aside from vague assertions both in the trial court and here on appeal
that many of the allegations in this case occurred as early as 2009 and are therefore aging, and
further that it would “not be prudent” to wait an undetermined amount of time until the
receivership is concluded before filing this lawsuit, Ayoub has done little to identify what
specific statutes of limitation are applicable to his various claims or when exactly those claims
accrued.

        Ayoub’s failure to adequately support his statute of limitations concern is indicative that
he raised that concern simply to circumvent the otherwise broad prohibitions in the receivership
order. Such a conclusion is supported by the fact that Ayoub does not appear to have raised such
concerns in January 2013-only two months before the instant lawsuit was commenced-when
Judge Anderson ordered him to show cause why he should not be held in contempt for filing the
federal lawsuit, or in February 2013 when Ayoub sought leave from Judge Anderson to re-file
that federal lawsuit.

         “[T]rial courts possess the inherent authority to sanction litigants and their counsel,
including the right to dismiss an action.” Maldonado v Ford Motor Co, 476 Mich 372, 388; 719
NW2d 809 (2006). Moreover, express authority to dismiss an action is conferred, in relevant
part, by MCR 2.504(B)(1), which provides that “[i]f a party fails to comply with these rules or a
court order, upon motion by an opposing party, or sua sponte, the court may enter a default
against the noncomplying party or a dismissal of the noncomplying party’s action or claims.”
See Maldonado, 476 Mich at 391. We review a trial court’s decision to dismiss under such
circumstances for an abuse of discretion. Id. at 388. Given the circumstances, we conclude that
the trial court did not abuse its discretion in dismissing Ayoub’s complaint.

       Affirmed.

                                                               /s/ Kathleen Jansen
                                                               /s/ Michael J. Talbot
                                                               /s/ Deborah A. Servitto

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