Court Opinion

ID: 2699887
Source: CourtListenerOpinion
Date Created: 2014-08-04 18:11:01.572316+00
Date Added: 2024-06-11T12:51:57.231513
License: Public Domain

[Cite as Zeigler v. Trio Realty Group, L.L.C., 2011-Ohio-5515.]

                                         COURT OF APPEALS
                                        STARK COUNTY, OHIO
                                     FIFTH APPELLATE DISTRICT

GARY D. ZEIGLER, TREASURER                              :         JUDGES:
OF STARK COUNTY, OHIO,                                  :         Hon. W. Scott Gwin, P.J.
                                                        :         Hon. William B. Hoffman, J.
        Plaintiff-Appellee,                             :         Hon. Sheila G. Farmer, J.
                                                        :
v.                                                      :
                                                        :
TRIO REALTY GROUP, LLC, ET AL.,                         :         Case No. 2011CA00008
                                                        :
        Defendants-Appellants.                          :         OPINION

CHARACTER OF PROCEEDING:                                          Appeal from the Court of Common
                                                                  Pleas, Case No. 2008CV05383

JUDGMENT:                                                         Affirmed, in part; Reversed, in part;
                                                                  and Remanded

DATE OF JUDGMENT:                                                 October 24, 2011

APPEARANCES:

For Plaintiff-Appellee                                            For Defendants-Appellants

JOHN F. ANTHONY, II                                               JOHN J. RAMBACHER
110 Central Plaza South, Suite 510                                825 South Main Street
Canton, OH 44702                                                  North Canton, OH 44720

For Appellee Bambini Company, LLC                                 JOSEPH M. ZEGLEN
                                                                  P.O. Box 104
DONALD P. KOTNIK                                                  Baltic, OH 43804
600 West Maple Street
North Canton, OH 44720
Stark County, Case No. 2011CA00008                                                           2

Hoffman, J.

       {¶ 1} On December 22, 2008, Appellee, Gary Zeigler, Stark County Treasurer,

filed a complaint in foreclosure for unpaid real estate taxes on commercial property

owned by Appellant, Trio Realty Group, LLC. Parties holding mortgages to the property

were Appellee, Bambini Company, LLC, and Appellant, The Elum Music Company.

       {¶ 2} On May 15, 2009, the trial court granted appellee Zeigler default judgment

against Appellant Trio Realty for its failure to answer or otherwise defend.

       {¶ 3} On May 22, 2009, Appellee Bambini filed a motion for appointment of

receiver to collect the rental income generated from the subject property. On same date,

the trial court issued a decree of foreclosure and order of sale, directing the property be

sold at Sheriff's sale. By order filed May 27, 2009, the trial court appointed a receiver.

       {¶ 4} On July 16, 2009, Appellee Bambini filed a cross-claim against Appellant

Trio Realty seeking payment of its mortgage and foreclosure of the subject property.

       {¶ 5} On September 14, 2009, the trial court granted Appellee Bambini default

judgment on its cross-claim against Appellant Trio Realty for its failure to answer or

otherwise defend.

       {¶ 6} On September 28, 2009, a praecipe was filed ordering the sale of the

property at Sheriff's sale. A Sheriff's sale was scheduled for December 1, 2009. On

December 3, 2009, a notice was filed advising the trial court that the Sheriff's sale had

been cancelled because Appellant Trio Realty had agreed to a repayment plan with

Appellee Zeigler.

       {¶ 7} On February 9, 2010, Appellee Bambini filed a motion to authorize the

receiver to take possession of the subject property and "do such acts which are

necessary to generate funds pursuant to the Order in these proceedings and hold said
Stark County, Case No. 2011CA00008                                                          3

funds pursuant to further Orders of this Court, which acts would include offering for public

auction the property***."

       {¶ 8} By order filed February 26, 2010, the trial court empowered the receiver to

take certain actions, including offering the property for public auction.

       {¶ 9} On September 22, 2010, the receiver offered the property for sale at public

auction and signed a purchase agreement with a buyer.

       {¶ 10} On October 27, 2010, the receiver filed a report of sale requesting that the

trial court approve the sale. On November 8, 2010, Appellants filed a motion requesting

the trial court to terminate the receiver and declare the sale null and void, and objected to

the receiver's request for approval of the sale. By judgment entry filed November 22,

2010, the trial court denied Appellants' motion.

       {¶ 11} On December 20, 2010, Appellants filed objections to the receiver's

proposed sale. On December 21, 2010, the trial court entered a confirmation of sale.

       {¶ 12} Appellants filed an appeal and this matter is now before this court for

consideration. Assignments of error are as follows:

                                               I

       {¶ 13} "THE TRIAL COURT ERRED WHEN THE TRIAL COURT DENIED

APPELLANTS' MOTION TO TERMINATE THE COURT-APPOINTED RECEIVER

AND/OR TO DECLARE THE RECEIVER'S ACTIONS TO BE NULL AND VOID;

INCLUDING, WITHOUT LIMITATION, THE RECEIVER'S ACTIONS TO SELL REAL

PROPERTY (OTHERWISE SUBJECT TO A FORECLOSURE SALE) WHERE THE

RECEIVER WAS NOT SWORN AND WHERE THE RECEIVER DID NOT EXECUTE A

BOND AS REQUIRED UNDER OHIO REVISED CODE SECTION 2735.03."
Stark County, Case No. 2011CA00008                                                          4

                                              II

       {¶ 14} "THE     TRIAL     COURT       ERRED      WHEN       THE     TRIAL    COURT

EMPOWERED/AUTHORIZED THE COURT-APPOINTED RECEIVER TO OFFER REAL

PROPERTY (OTHERWISE SUBJECT TO A FORECLOSURE SALE) FOR PUBLIC

AUCTION AND/OR WHEN THE TRIAL COURT ORDERED THE RECEIVER TO SELL

THE REAL PROPERTY FREE AND CLEAR OF THE OWNER'S INTEREST AND/OR A

MORTGAGEE'S INTEREST OTHER THAN THROUGH A SALE UPON EXECUTION

(I.E. SHERIFF'S FORECLOSURE SALE)."

                                              I

       {¶ 15} Appellants claim the trial court erred in denying their motion to terminate the

receivership and further declare the receiver's actions to be null and void based upon the

receiver's failure to take an oath and execute a bond. We agree, in part.

       {¶ 16} R.C. 2735.03 governs oath and bond of a receiver and states the following:

       {¶ 17} "Before a receiver appointed as provided in section 2735.01 of the Revised

Code enters upon his duties, he must be sworn to perform his duties faithfully, and, with

surety approved by the court, judge, or clerk, execute a bond to such person, and in such

sum as the court or judge directs, to the effect that such receiver will faithfully discharge

the duties of receiver in the action, and obey the orders of the court therein."

       {¶ 18} In Larson v. Kaley (2000), 138 Ohio App.3d 120, 122-123, our brethren

from the Eleventh District addressed the issue of a receiver's failure to execute a bond

vis-à-vis subsequent acts:

       {¶ 19} "R.C. 2735.03 provides that before a receiver can begin to perform his

duties, he must take an oath and execute a bond. In considering these elementary

requirements, the courts of this state have indicated that, although the failure to be sworn
Stark County, Case No. 2011CA00008                                                        5

or execute a bond deprives the receiver of his authority to act, it has no effect upon the

validity of the order of appointment. See Stiver v. Stiver (1939), 63 Ohio App. 327, 328,

17 O.O. 96, 96-97, 26 N.E.2d 595, 596. If the first appointed receiver never fulfills the

requirements, the trial court can simply name a new receiver under its original

appointment order. Id.

       {¶ 20} Based upon the statute and Larson, we find the trial court did not err in

denying Appellants' motion to terminate the receivership but did error in not declaring the

receiver's actions to be null and void.

       {¶ 21} Assignment of Error I is overruled, in part, and sustained, in part.

                                              II

       {¶ 22} Based upon our disposition of Appellants’ first assignment of error, we

sustain Appellants’ second assignment of error because the receivers actions were null

and void.

       {¶ 23} The judgment of the Court of Common Pleas of Stark County, Ohio is

affirmed, in part, reversed, in part, and remanded for further proceedings in accordance

with our opinion and the law.

By Hoffman, J.

Gwin, P.J. concurs

Farmer, J. dissents                          s/ William B. Hoffman ______________
                                             HON. WILLIAM B. HOFFMAN

                                              s/ W. Scott Gwin__________________
                                              HON. W. SCOTT GWIN

                                              _______________________________
                                              HON. SHEILA G. FARMER
Stark County, Case No. 2011CA00008                                                        6

Farmer, J., dissents

      {¶24} I respectfully dissent from the majority's decision that the receiver's actions

were null and void.

      {¶25} I view the decision in Larson to stand for the proposition that the acts are

not void, but voidable, and a trial court has just cause to remove a receiver. Although I

sympathize with appellant's position that it appears harsh to permit a receiver to sell a

property subject to foreclosure, that right is included in the statutory scheme designed by

the Ohio General Assembly. The best way to alleviate this perceived injustice is a review

of the legislation by the Ohio General Assembly.

                                         s/ Sheila G. Farmer_____________
                                         HON. SHEILA G. FARMER

                IN THE COURT OF APPEALS FOR STARK COUNTY, OHIO
                            FIFTH APPELLATE DISTRICT

GARY D. ZEIGLER, TREASURER                :
OF STARK COUNTY, OHIO,                    :
                                          :
      Plaintiff-Appellee,                 :
                                          :
v.                                        :         JUDGMENT ENTRY
                                          :
TRIO REALTY GROUP, LLC, ET AL.,           :
                                          :
      Defendants-Appellants.              :         CASE NO. 2011CA00008

      For the reasons stated in our accompanying Opinion, the judgment of the Court

of Common Pleas of Stark County, Ohio is affirmed, in part, reversed, in part, and the

matter remanded to the trial court for further proceedings in accordance with our

Opinion and the law. One-half costs assessed to Appellee and the other one-half costs

assessed and divided equally between Appellants Trio Realty Group, LLC and The

Elum Music Company.

                                           s/ William B. Hoffman _____________
                                           HON. WILLIAM B. HOFFMAN

                                           s/ W. Scott Gwin _________________
                                           HON. W. SCOTT GWIN

                                           _______________________________
                                           HON. SHEILA G. FARMER