Court Opinion

ID: 3720055
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:51:26.377741+00
Date Added: 2024-06-11T09:19:29.193150
License: Public Domain

{¶ 39} With regard to appellant's assignments of error III and IV, relating to the court granting appellees' motion for sanctions against him, I concur with the majority's decision to overrule these claimed errors because of appellant's failure to provide this court with either a transcript from the sanctions hearing or any of the other items specified in App.R. 9.1 *Page 621 
 {¶ 40} On assignments one and two, however, I dissent. The majority ignores what, to my mind, is a glaring procedural error committed by the trial court and which, left unremedied by this court, strips appellant, Kenneth F. Seminatore, of his right to object to the special master's report and thus of his right to a  judicial determination of whether the special master committed any errors in this case.
 {¶ 41} The first and only pertinent question in this appeal is whether appellant should have been permitted an opportunity to file his objections and have them reviewed by the trial court. For the reasons set forth below, this question must be answered in the affirmative. Because the trial court did not provide appellant an opportunity to make meaningful objections to the special master's report, I would reverse the judgment of the trial court.
 {¶ 42} Between 1976 and 1999, appellant and appellees were partners in CCSLG, a general partnership. On November 15, 1999, pursuant to Ohio's Partnership Act, as codified in R.C. 1775.01 et seq., appellant filed a complaint for dissolution of the general partnership. In his complaint, appellant demanded an accounting of CCSLG's assets and liabilities and made a fraud claim under R.C. 1777.99, which was repealed on July 1, 1996.
 {¶ 43} Despite the fact that the criminal tax statute embodied in R.C. 1777.99 had been repealed, appellant filed a motion for summary judgment on that claim. Appellees opposed the motion and simultaneously filed a motion for sanctions, in which they argued that appellant should be sanctioned, pursuant to R.C. 2323.51, for filing a claim that no longer existed under Ohio law. The trial court denied appellant's motion for summary judgment and granted appellees' motion for sanctions. Following a sanctions hearing, the court granted sanctions against appellant in the amount of $1732.50, dismissed appellant's claim for fraud, ordered dissolution of the partnership, including an accounting pursuant to R.C. 1775.21, and appointed a non-court employee, Patrick D'Angelo, as a special master to wind up the affairs of the partnership.
 {¶ 44} Instead of a hearing, the parties, by agreement, submitted evidence to the special master regarding the wind up of the partnership's affairs. In their respective briefs, the parties provided evidence relating to the valuation of the partnership's assets. On November 7, 2000, the special master filed his final report, in which appellant was to be discharged from any partnership liabilities and was found to have no claim to any of the partnership assets. Two days later, the trial court adopted the findings of the special master's report and dismissed the entire case. On November 21, 2000, appellant filed a Motion For Court to Vacate Order Adopting The Final Report Of The Special Master. In that motion, appellant argued that because the trial court did not wait the fourteen-day period specified in Civ.R. 53(E)(3)(a) before it adopted the special master's report, he was effectively robbed of his ability to file substantive objections *Page 622 
to that report. In that same motion, appellant also requested an extension of time within which to file objections to the report. The court denied appellant's motion as moot. On December 5, 2000, this appeal was filed.
 {¶ 45} In his complaint, appellant requested judicial dissolution of the partnership and an accounting of its assets. Judicial dissolution of a partnership is a  special proceeding. R.C. 2505.02; Celebrezze v. Netzley (1990), 51 Ohio St.3d 89, 554 N.E.2d 1292, citing Tilberry v. Body (1986), 24 Ohio St.3d 117, 493 N.E.2d 954. This request seeks relief in equity and is governed by R.C. 1775.01 et seq. As required by R.C.1775.21, once the trial court entered its decree of judicial dissolution of the partnership, the court ordered an accounting of the partnership assets. For this purpose the court appointed Mr. D'Angelo as special master to conduct the accounting and wind up the partnership's affairs.
 {¶ 46} The trial court and the parties maintain that they conformed their conduct according to Civ.R. 53, which states as follows:
 {¶ 47} (A) Appointment
 {¶ 48} A court of record may appoint one or more magistrates who shall be attorneys at law admitted to practice in Ohio. A magistrate appointed under this rule may also serve as a magistrate under Crim.R. 19 or as a traffic magistrate. (Emphasis added.)
 {¶ 49} This rule neither specifically mentions special masters nor authorizes the type of special master appointed in this case. Civ.R. 53 applies solely to magistrates.
 {¶ 50} In a previous decision in Allstate Insurance Co. v. Gaul (1999), 131 Ohio App.3d 419, 722 N.E.2d 616, this court explained that, following the 1995 amendments to Civ.R. 53, * * * the current rule * * * eliminated any alleged authority for the appointment of a non-court-employed special master in an individual case. Allstate at p. 434. The Allstate case relied upon the Staff Note to the 1995 amendment to Civ.R. 53(D):
 {¶ 51} Prior language largely drawn from Federal Civil Rule 53 relative to special masters and largely applicable to situations where special masters were appointed for individual cases and were not court employees is eliminated. * * *
 {¶ 52} The Staff Note makes it clear that any case referred by a trial court under the rule must be to a magistrate, that is, a public civil officer.
 {¶ 53} Mr. D'Angelo, so far as I can tell from the record, is an attorney in private practice. He is not a court employee or public civil officer and, therefore, by definition, he cannot be a magistrate as defined by Civ.R. 53. Civ.R. 53, therefore, does not apply to either the proceedings Mr. D'Angelo conducted or the *Page 623 
final report he prepared, because he is not a magistrate. The majority, however, claims Seminatore waived this issue on appeal because he did not comply with Civ.R. 53(E)(4)(c). This rule applies only to a magistrate's decision. Since Mr. D'Angelo is not a magistrate, the rule cannot impose any requirement on Seminatore.
 {¶ 54} The next question is whether Civ.R. 53 should exclusively govern appointment of a person to monitor the wind up of a partnership's affairs and whether a trial court may refer the winding up of a partnership's affairs to a non-judicial person. Judicial dissolution of a partnership is a special statutory proceeding. Civ.R. 1(C), provides, in part:
 {¶ 55} These rules, to the extent that they would by their nature be clearly inapplicable, shall not apply to procedure * * * (7) in all other special statutory proceedings * * *.
 {¶ 56} As stated in Price v. Westinghouse Elec. Corp. (1982),70 Ohio St.2d 131, 435 N.E.2d 1114:
 {¶ 57} The civil rules should be held to be clearly inapplicable only when their use will alter the basic statutory purpose for which the specific procedure was originally provided in the special statutory action.
 {¶ 58} The question, then, is whether the rule alters the basic statutory purpose embodied in Chapter 1775 et seq., which governs the dissolution and winding up of partnerships. At the outset, it must be noted that part of the purpose of the statute is to allow parties, that is, partners and partnerships, to obtain prompt, orderly, and accurate determinations relating to dissolution and the winding up of the partnership's affairs. This legislative goal with regard to dissolution and winding up, however, would be thwarted if Civ.R. 53 were the exclusive means by which a settlement of the partnership's accounts could be accomplished.
 {¶ 59} Requiring only court-employed magistrates to deal with the settlement and final accounting of partnership accounts would burden the already over-crowded dockets of these civil officers. It is not clear, moreover, that the winding-up process even requires judicial powers. What is needed is more akin to accounting experience. I believe there would be little argument by litigants that the winding-up process should be conducted by someone with special expertise in such matters. I do not believe, therefore, that Civ.R. 53 is the exclusive means at the court's disposal in the specific matter of settling the final accounts of a partnership. *Page 624 
 {¶ 60} In some special proceedings, particularly a judicial dissolution of a corporation or other type of association, the appointment of a master commissioner is expressly authorized. E.g. R.C.1702.50 (corporate dissolution); R.C. 1729.61 (association dissolution).2 Unlike other sections of Title 17, the section governing partnerships, however, does not expressly permit appointment of a master commissioner, although R.C.1775.36 states, in pertinent part, that partners may obtain winding-up by the court.
 {¶ 61} R.C. 1702.50 was revised and became effective on April 10, 2001 and R.C. 1729.61 on August 5, 1998. The revision of both code sections went into effect after the changes in Civ.R. 53 became effective on July 1, 1998. The section on winding up a partnership, however, has not been revised since 1953. The nature of the proceeding that was referred here that is, a winding up is a process synonymous with the process of an accounting of or settling of the partnership accounts. Moreover, it is also an action in equity. 13 Ohio Jur.3d (1995), Business Relationships, Section 1241. I can see no reason to distinguish between the winding up of a partnership and the same process for a corporation or association dissolution.
 {¶ 62} It has been well established:
 {¶ 63} Where a petition for an accounting is one in which relief can be afforded only by a court of equity, the plaintiff is not entitled to a trial by jury and the court has the power to send the case to a referee. 1 Ohio Jur.3d (1998), Accounts and Accounting, Sections 38 and 41, citing Kinkopf v. Scherer (1932), 11 Ohio L. Abs. 422.
 {¶ 64} Even if there is no express statutory authority to appoint a non-employee master in the particular instance of a partnership winding up, a court in equity deciding a case as a special statutory proceeding in which the parties are not entitled to a trial by jury still retains its inherent power to refer a special proceeding to a special master. See Cassidy v. Glossip (1967), 12 Ohio St.2d 17, 231 N.E.2d 64. Such a person shall hear the evidence and prepare findings of fact and conclusions of law * * *. McCann v. Maxwell (1963), 174 Ohio St. 282, 283,189 N.E.2d 143.3 *Page 625 
 {¶ 65} Accordingly, because the dissolution and winding up of a partnership's affairs are matters in equity and the fundamental work that needs to be done is more akin to an audit or an accounting, I conclude that a trial court may refer such matters to special masters, and that special masters do not fall under Civ.R. 53; they are non-judicial persons, not magistrates.4 McConnell v. Hunt Sports Enters. (1999),132 Ohio App.3d 657, 725 N.E.2d 1193 (liquidating trustee appointed to wind up partnership affairs); see, also, R.C. 2311.04; Allstate, at p. 431, citing Dillon v. City of Cleveland (1927), 117 Ohio St. 258, 268; See Nowak v. Nowak (May 4, 1977), Belmont App. No. 1199, unreported, 1977 Ohio App. LEXIS 10233; 80 Jurisprudence 3d (1988) 625, References, Section 4.
 {¶ 66} The central dispute in the case at bar is appellant's missed opportunity to object to the special master's report. Because Civ.R. 53 does not control the proceedings below, the trial court cannot be held to the procedure the rule provides for appellant's objections to that report.
 {¶ 67} There is no provision in R.C. 1775 et seq. as to when objections should be filed to a final accounting of a partnership's affairs. Absent such authority, one cannot simply borrow the 14 days specified in Civ.R. 53 and arbitrarily impose it on litigants who want to file objections. There is clear legal authority, however, for the proposition that parties are entitled not only to file objections to a special master's final report, but also to receive a full review of any objections made, along with a decision from the trial court that affirmatively and finally determines the rights of the parties. McCann v. Maxwell (1963), 174 Ohio St. 282, 189 N.E.2d 143, citing Crane v. Check (1970), 27 Ohio App.2d 27 (advisory jury verdict, based upon issues of fact presented to them, is not conclusive or binding upon the court whose duty it is to determine finally the issues tried by the jury, their verdict being merely evidence.)
 {¶ 68} There is no authority allowing a trial court to simply adopt the final accounting report of a special master without first providing the parties with a reasonable period of time, following the filing of the report, within which to file objections, if any.5 See, Burckhardt v. Burckhardt (1885), *Page 626 42 Ohio St. 474. Then, if objections are submitted, the trial court must review and determine the validity of the report as it would any evidence in light of any objections made. The trial court may not delegate its duty to decide the case to a special master, especially because the special master is not a  court employee and invested with no judicial power.6 McCann, supra; Burckhardt, supra; Lavelle v. Lavelle (June 13, 1985), Cuyahoga App. Nos. 48978, 48982, 49010, unreported, 1985 Ohio App. LEXIS 8047; See 1 Am. Jur.2d, Accounts and Accounting, Section 63 (1964 ed.).
 {¶ 69} The record here, scant as it is, indicates that appellant filed a Motion to Vacate the court's order adopting the special master's report and simultaneously requested an opportunity to file objections. The request for additional time to file substantive objections is, itself, a clear indication appellant objected to the special master's report. I, therefore, disagree with the majority's conclusion that appellant failed to object and thus waived that issue here on appeal. The trial court erred in adopting the special master's final report before the parties, especially appellant, had an opportunity to submit objections to the findings set forth in that report. Accordingly, I would sustain appellant's assignments of error I and II.
1 The parties in this case expressly waived any hearing on the merits before the special master. Because they agreed to submit their case on briefs, there was no hearing to transcribe and the only record required by App.R. 9 is the written documents the parties submitted to the special master. Everything the parties submitted and everything the special master reviewed in making his report is in this court's file.
2 Allstate, supra, expressly acknowledged that the appointment of a special master under these two statutes and certain others is valid.
3 In Allstate, supra, this court denied the sua sponte appointment of an agent in a personal injury case to gather information on behalf of one of the parties at the cost of the opposing parties. Reversing that appointment, this court distinguished between those facts and those in McCann, supra, in which a court in equity referred to a Master Commissioner an action in which the parties were not entitled to a trial by jury.
4 At this juncture, it should be noted that persons appointed by trial courts to wind up the affairs of corporations or partnerships have been called by many names: special masters, referees, liquidating trustees, master commissioners, and special master commissioners. To achieve a uniform nomenclature in making such appointments, it is preferable that the term magistrate be reserved for the type of person specified in Civ.R. 53, that is, a court employee.
5 I refrain from suggesting a specific period of time which would be reasonable, but do note that a trial court's adoption of a final report, as in this case, without allowing for the filing or consideration of any possible objections is patently unreasonable.
6 A special master, unlike a magistrate, does not take an oath. Magistrates, on the other hand, are invested with executive or judicial power. Black's Law Dictionary, 5th Ed. West Publishing Co., 1989, p. 857.