Harbor Island Assn., Inc. v. Stecks Buckeye Storage Units, L.L.C. , 2021 Ohio 2969 ( 2021 )

[Cite as Harbor Island Assn., Inc. v. Stecks Buckeye Storage Units, L.L.C., 2021-Ohio-2969.]
IN THE COURT OF APPEALS OF OHIO
SIXTH APPELLATE DISTRICT
OTTAWA COUNTY
Harbor Island Association, Inc. Court of Appeals No. OT-20-012
Appellee Trial Court No. 2017 CVH 160
v.
Stecks Buckeye Storage Units, LLC,
et al. DECISION AND JUDGMENT
Appellants Decided: August 27, 2021
*****
Richard R. Gillum, for appellee.
Nicholas T. Stack and Mark D. Wagoner, for appellants.
*****
OSOWIK, J.
{¶ 1} This is an appeal from a judgment of the Ottawa County Court of Common
Pleas, which granted plaintiff-appellee’s emergency motion for appointment of receiver
without hearing. For the reasons set forth below, this court reverses the judgment of the
trial court.
Background
{¶ 2} On May 12, 2017, and as amended on September 13, 2017, appellee Harbor
Island Association, Inc. filed a complaint against defendants-appellants, Stecks Buckeye
Storage Units LLC (also known as Steck’s Buckeye Storage Units, LLC, hereafter
“Stecks”) and Rick J. Stechschulte, the owner of Stecks, plus 73 co-defendants.
{¶ 3} The complaint is captioned as an action for declaratory judgment, mandatory
injunction, and money damages. The plaintiff was seeking various declarations and relief
relating to the Harbor Island bridge—which is the only means of ingress and egress for
persons traveling to or from Harbor Island and lies within a parcel of real property owned
by appellant Stecks Buckeye Storage Units, LLC. In its amended complaint, the
Association sought the following relief:
Count 1 (equity/ “fair share” formula): The Association asserted
that “each owner of real estate on Harbor Island has an obligation, in
equity, to pay for their ‘fair share’ of the maintenance and/or replacement
of the bridge” and the Association asked the court to “establish a formula”
to determine what a fair share is between the various owners.
2.
Count 2 (bridge should be replaced, not repaired): The
Association sought a declaration that “a new bridge is necessary and is the
most efficient and cost effective” solution to the problem.
Count 3 (Declaration of Restrictions): The Association asserted
that the Declaration of Restrictions for Harbor Island gave the Association
“the right* * * to replace the bridge,” and asked the court for a declaration
to that effect. The Association expressly recognized that some defendants
believed that the Association does not have that right under the Declaration
of Restrictions.
Count 4 (payment schedule): The Association asked the court to
determine the actual amount of replacement costs and “set up a schedule for
the parties [to] make the necessary payments for the bridge repair by a date
certain.”
Count 5 (appointment of a receiver): The Association asked the
court to appoint a receiver to (a) collect the “fair share” from each of the
parties; (b) contract with companies for the repair or replacement of the
bridge; (c) manage and oversee the bridge repair/replacement, and (d) “take
all other necessary acts” to ensure the repair/replacement of the bridge.
{¶ 4} On February 5, 2019, the Association moved for summary judgment “as to
Counts One and Two of Plaintiff’s Complaint.” In its motion, the Association submitted
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various evidence through affidavit testimony and argued that “equity dictates * * * those
property owners who benefit from the use of the real estate of improvements in common
with other owners have an equitable obligation to pay for their fair share of the
maintenance and replacement of [the bridge]” and that “[t]he bridge is clearly in need of
replacement.” Appellant Stecks opposed the motion, arguing—among other things—that
the bridge is located upon its property, which is expressly exempted from the Declaration
of Restrictions of Harbor Island because it is located within “Reserve A.” For that
reason, Stecks maintained that it—not the Association—had the right to control any
repair or maintenance of the bridge on its property, and that it was willing to do so.
{¶ 5} In its reply brief, the Association did not directly address the argument that
Stecks—rather than the Association—had the right to control the bridge work due to the
“Reserve A” exemption of the Declaration of Restrictions. Instead, the Association
reiterated that its motion for summary judgment was not “meant to be dispositive of the
entire case, the purpose thereof is simply to establish the legal obligation to contribute
their fair share, and to establish the condition of the bridge and the need for replacement.”
{¶ 6} On July 25, 2019, the trial court determined that each of the landowners has
an implied easement for ingress and egress over the bridge and, in equity, “each
Defendant would be responsible for a fair share of the cost of maintenance and repair of
the Bridge. Thus, there is no issue of material fact and Plaintiff is entitled to judgment as
a matter of law as to Count One of Plaintiff’s Complaint.”
4.
{¶ 7} The next day, however, the trial court scheduled an evidentiary hearing for
September 24, 2019 because, after discussion with counsel, the court determined that two
issues “remain[ed] pending”: (1) “whether the bridge, which is the subject of this
litigation, needs repaired or replaced” (i.e., Count Two, which was the subject of the
summary-judgment motion) and (2) “the issue of apportionment of the costs” (i.e., the
undecided portion of Count One, which was also the subject of the summary-judgment
motion). In other words, the trial court scheduled an evidentiary hearing to resolve the
outstanding factual issues related to the Association’s motion for summary judgment on
Count One and Count Two of the amended complaint, despite having already granted
summary judgment in favor of the plaintiff on Count One.
{¶ 8} On September 24, 2019, the trial court held the evidentiary hearing, and
considered evidence regarding whether the bridge needs to be repaired or replaced (i.e.,
Count Two) and the apportionment of costs for such repair or replacement (i.e., the
unresolved portion of Count One). All the evidence and testimony was limited to these
two issues.
{¶ 9} On January 16, 2020, the trial court issued its post-hearing judgment. It
began its ruling by stating that “[t]his cause comes before this Court after a hearing on
two issues before the Court: (1) whether the Harbor Island Bridge needs to be repaired or
replaced and (2) the allocation of the cost between the owners.” The trial court accepted
the testimony of the Association’s expert witness, Jeffery Yoder, and concluded that “a
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replacement of the Harbor Island Bridge is necessary.” The trial court also concluded
61.05% of the costs to replace the bridge should be allocated to the Association, 6.32% to
the Waterford Way subdivision properties, 8.42% to the Nor’Easter Cove condominium
properties, and 24.21% to the Nor’Easter club.1
{¶ 10} Thus, the January 16, 2020 judgment resolved the remaining factual issues
that were raised by the Association’s motion for summary judgment on Count One and
Count Two. As the Association itself stated in its reply brief in support of summary
judgment, its motion was not “meant to be dispositive of the entire case, the purpose
thereof is simply to establish the legal obligation to contribute their fair share, and to
establish the condition of the bridge and the need for replacement”—which were the
exact issues that the trial court decided on January 16, 2020 after evidentiary hearing. So,
as of January 16, 2020 Count Three (regarding who had “the right * * * to replace the
bridge” under the written Declaration of Restrictions) and Count Four (seeking “a
schedule for the parties to make necessary payments for the bridge repair by a date
certain”) and Count Five (seeking the appointment of a receiver) remained pending.
{¶ 11} Then on May 4, 2020, pursuant to R.C. 2735.01(A)(4) and Civ.R. 66,
appellee filed an emergency motion for appointment of receiver without hearing.
1
The trial court added the Nor’Easter club to its apportionment order on May 22, 2020
via a nunc pro tunc entry.
6.
{¶ 12} Three days later, on May 7, 2020, by way of an amended nunc pro tunc
judgment entry, the trial court granted appellee’s motion and made nine findings of fact
to support its decision:
1. This Court issued a Decision and Judgment Entry on January 20,
2020 (sic) which established the Bridge in question as at or near the end of
its useful life and is in need of replacement. The Bridge as it currently
stands, poses a substantial risk to the health and safety of the residents and
guests of Harbor Island generally.
2. The Plaintiff, Harbor Island Association has a right to replace the
bridge under the terms of the subdivision declaration which was originally
filed for record in Deed Vol 207 at page 679 of the Ottawa County
Common Pleas Court, and subsequent amendments and additions to the
Plat.
3. Defendant Stecks Buckeye Storage Units, LLC claims a right to
replace the bridge due to his ownership of the fee title to the real estate
upon which the bridge is located.
4. To ensure that the bridge is completed by the 2021 season,
without significant interruption, the Bridge Design must begin in May of
2020. Delaying the Bridge design and replacement could place the Harbor
Island community, as a whole, in danger of Bridge failure.
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5. It will be more economical for all parties hereto to pursue a single
bridge replacement, rather than pursuing competing bridge replacement
ideas, and litigating them.
6. Jeffrey Yoder, PE of Poggemeyer Design Group, Inc. is qualified
to design the bridge and provide general oversight of the construction of the
new Bridge.
7. Until Bridge Design is undertaken, it is unknown whether it is
economically more feasible to construct a bridge along-side of the current
bridge and reroute the easements/plats for the access to the island or to
install a temporary bridge along-side the existing bridge and construct the
new Bridge in same location as the existing Bridge.
8. The wing wall repaired by Defendant Steck’s continues to move.
The further the wing wall moves out of plumb, the danger of bridge failure
increases exponentially, and
9. There is an overriding public safety interest in ensuring a new
safe bridge is constructed.
{¶ 13} The trial court attempted to resolve Count Three when it concluded that the
the Association “has a right to replace the bridge under the terms of [the Declaration of
Restrictions]. However, the record demonstrates that the trial court was never presented
with any motion, argument, or evidence regarding the disputed issue of who has the
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“right to replace the bridge” under the Declaration of Restrictions. Indeed, the
Association’s emergency motion to appoint receiver did not address the issue at all.
Rather, the Association merely reiterated that it had “prevailed on both the issue of
necessity of replacement of the Bridge as well as apportionment of the costs thereof,” and
argued that the appointment of a receiver was the next logical step and most efficient
means to accomplish the timely replacement of the bridge. But the Association’s motion
missed a critical step: the need to resolve the disputed issue of who has the right to
undertake the replacement work, i.e. Count Three.
{¶ 14} It is important to remember that when Stecks attempted to raise this issue in
response to the Association’s motion for summary judgment on Counts One and Two—
by arguing in its opposition brief that Stecks (not the Association) had the authority to
replace the bridge on its property because “Reserve A” is exempted from the Declaration
of Restrictions upon which the Association relies—the Association did not respond to the
merits of that argument but, essentially, implied that issue was for another day. From that
point forward, all of the argument and evidence relating to the summary-judgment
motion and the corresponding evidentiary hearing was limited to Counts One and Two.
Simply put, Count Three was barely mentioned, let alone meaningfully addressed, at any
time before the trial court’s ruling on May 7, 2020.
{¶ 15} The trial court then proceeded to appoint a receiver “with all powers and
authorities vested in a receiver pursuant to chapter 2735 of the Revised Code, and all
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powers and duties described herein,” including to contract for the design and construction
of a new bridge and additional services necessary and customary in the construction
process, to assess and collect from all parties and Harbor Island property owners their
“fair share of the costs of the bridge design, construction, construction management,
escrow fees, receiver fees and court costs of this action, obtain any necessary insurance
policies, as well as any other costs or expenses the Receiver deems necessary for
completion of Bridge Construction,” and to take all actions necessary in the receiver’s
opinion in furtherance of the trial court’s order.
{¶ 16} On May 22, 2020, the trial court issued two nunc pro tunc judgment
entries—one of which added Civ. R. 54(B) language to its January 16, 2020 post-hearing
judgment, while the other added Civ.R. 54(B) language to its May 7, 2020 judgment
appointing a receiver.
Appeal
{¶ 17} Appellants filed this appeal setting forth three assignments of error:
1. The Trial Court erred as a matter of law by appointing a receiver
pursuant to R.C. 2735.01(A)(4) prior entry of a final judgment.
2. The Trial Court abused its discretion, and erred as a matter of
law, by denying Appellants an opportunity to be heard on Appellee’s
request for the appointment of a receiver.
10.
3. The Trial Court abused its discretion by granting Appellee’s
request for the appointment of a receiver without clear and convincing
evidence demonstrating the need for a receiver and by deciding ultimate
issues without notice.
Final Judgment
{¶ 18} We find the assignments of error are related and they will be considered
together for ease of discussion. Appellants argue the trial court erred by appointing a
receiver pursuant to R.C. 2735.01(A)(4), which first requires the existence of a final
judgment. Appellants argue that at the time of the trial court’s decision appointing a
receiver, “at least two claims remained pending”: Count Three and Count Four. In
response, appellee argues Counts Three and Four “are essentially rendered moot by the
appointment of a Receiver.
{¶ 19} R.C. 2505.02(B)(1) describes the type of final order relevant to this appeal:
“An order is a final order that may be reviewed, affirmed, modified, or reversed, with or
without retrial, when it is * * * (1) An order that affects a substantial right in an action
that in effect determines the action and prevents a judgment.” “‘For an order to
determine the action and prevent a judgment for the party appealing, it must dispose of
the whole merits of the cause or some separate and distinct branch thereof and leave
nothing for the determination of the court.’” State ex rel. O'Malley v. Russo, 156 Ohio
St.3d 548, 2019-Ohio-1698, 130 N.E.3d 256, ¶ 18, quoting Hamilton Cty. Bd. of Mental
11.
Retardation & Dev. Disabilities v. Professionals Guild of Ohio, 46 Ohio St.3d 147, 153,
545 N.E.2d 1260 (1989). “R.C. 2505.02 does not require a trial court to indicate its
express intent to create a final order. What does matter is whether the order itself
satisfies any of the circumstances listed in R.C. 2505.02(B).” Id. at ¶ 17.
{¶ 20} Since we have found that Counts Three, Four and Count Five remained
pending as of the January 16, 2020 decision, that order was not a final, appealable order
under R.C. 2505.02(B).
Appointment of the Receiver
{¶ 21} Appellate review of a trial court’s decision on the appointment of a receiver
is for an abuse of discretion. State ex rel. Celebrezze v. Gibbs, 60 Ohio St.3d 69, 73, 573
N.E.2d 62 (1991). Abuse of discretion “‘connotes more than an error of law or judgment;
it implies that the court’s attitude is unreasonable, arbitrary or unconscionable.’”
Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983), quoting State
v. Adams, 62 Ohio St.2d 151, 157, 404 N.E.2d 144 (1980).
{¶ 22} On May 4, 2020, the Association filed an emergency motion for
appointment of receiver without a hearing. In its motion, the Association argued that it
had “prevailed on both the issue of necessity of replacement of the Bridge as well as the
apportionment of the costs thereof” and “[t]he most efficient and equitable manner to
implement this Order in a safe and efficient manner is to appoint a Receiver to carry the
Court’s Order.” The Association argued that there was an “urgent need to replace the
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Bridge during the off-season” given the “seasonable nature of the bridge usage” and,
therefore “the process must be in early to mid-May of this year to ensure minimal
disruption to the parties hereto and to the members of the Nor’Easter Club.” The
Association did not argue why it had the right to replace the bridge under the Declaration
of Restrictions (i.e., Count Three)—indeed, it did not address the Declaration of
Restrictions, or acknowledge the parties’ dispute regarding their respective rights under
that document. Nor did the trial court address this continuing dispute that appellee
Stecks—rather than the Association—had the right to control the bridge work due to the
“Reserve A” exemption of the Declaration of Restrictions.
{¶ 23} Three days later, on May 7, 2020, the trial court granted the Association’s
motion for receiver—not only without a hearing, but without allowing appellants any
opportunity to be heard on the motion whatsoever. Moreover, the trial court included a
“finding of fact” in its May 7, 2020 decision stating that the Association “has a right to
replace the bridge under the terms of [the Declaration of Restrictions]”—thereby
resolving Count Three—even though the Association did not move for judgment on that
claim, and even though appellants were given no opportunity to respond.
{¶ 24} On May 22, 2020, the trial court issued two nunc pro tunc judgment
entries—one of which added Civ. R. 54(B) language to its January 16, 2020 post-hearing
judgment, while the other added Civ.R. 54(B) language to its May 7, 2020 judgment
appointing a receiver.
13.
{¶ 25} The addition of the Civ. R. 54(B) language to the May 7, 2020 decision—
which did not resolve all claims because Count Four remained pending—was appropriate
because court appointment of a receiver is a final order under R.C. 2505.02(B)(2).
Debartolo v. Dussault Moving, Inc., 8th Dist. Cuyahoga No. 96667, 2011-Ohio-6282, ¶
8, quoting Hummer v. Hummer, 8th Dist. Cuyahoga No. 96132, 2011–Ohio–3767, ¶
8 (“‘It is well settled that an order appointing a receiver is a final, appealable order that
affects a substantial right in a special proceeding.’”). Moreover, “where additional
claims remain pending, an order appointing a receiver is a final appealable order only if
the trial court makes an express determination under Civ.R. 54(B) that there is no just
reason for delay.” McCarthy v. Anderson, 5th Dist. Licking No. 17 CA 33, 2018-Ohio-
1994, ¶ 23; see also Koehler Bros. v. Swihart, 3d Dist. Hancock No. 5-78-16, 1979 WL
207934, (May 1, 1979).
{¶ 26} Nevertheless, in this case, the process utilized by the trial court to appoint
the receiver was flawed for several reasons.
{¶ 27} The Ohio Supreme Court has held that “[t]he appointment of a receiver * *
*, cannot be lawfully made without notice, unless the delay required to give such notice
will result in irreparable loss.” Railway Co. v. Jewett, 37 Ohio St. 649 (1882), paragraph
two of the syllabus.
14.
{¶ 28} While the testimony given at the September 24, 2019 hearing was directed
at the necessity of repairs or replacement of the bridge and the apportionment of costs,
none was directed at the urgency of the appointment of a receiver to achieve either goal.
{¶ 29} Although its pleading was captioned “Emergency Motion for Appointment
of Receiver” the motion itself argued that a receiver was the most efficient manner to
implement the court’s January 20, 2020 order. Specifically, the “oversight, decision
making and collection of assessments necessary for the replace of the private bridge.”
{¶ 30} Civil Rule 6(C) states:
(C) Time: Motions.
(1) Motion Responses and Movants’ Replies Generally. Responses
to a written motion, other than motions for summary judgment, may be
served within fourteen days after service of the motion. Responses to
motions for summary judgment may be served within twenty-eight days
after service of the motion. A movant’s reply to a response to any written
motion may be served within seven days after service of the response to the
motion.
(2) Motions Prior to Hearing or Trial. Unless a different period is
fixed under these rules or by order of the court, a written motion for
purposes of a hearing that is not a trial shall be served no later than fourteen
days prior to the hearing, and a written motion for purposes of a trial shall
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be served no later than twenty-eight days prior to the start of trial.
Responses to such motions may be served as provided by Civ.R. 6(C);
however, a movant’s reply to the response is not permitted.
(3) Modification for Good Cause Upon Motion. Upon motion of a
party in an action, and for good cause, the court may reduce or enlarge the
periods of time provided in divisions (C)(1) and (C)(2) of this rule.
{¶ 31} Thus, this rule permits fourteen days for a respondent to reply or otherwise
respond to the motion, unless the trial court found good cause to otherwise reduce or
enlarge the period.
{¶ 32} We are also mindful of the necessity of compliance with the Local Rule of
the Ottawa County Court of Common Pleas. Specifically, Local Rule 20.05(C) Motions
for temporary restraining order or for other urgent relief, which states, in pertinent part:
Such motions will be heard ex parte only upon a showing that an
extraordinary hardship will result to the moving party by any delay in the
proceedings and in appropriate cases a bond will be required.
{¶ 33} The Fourteenth Amendment to the United States Constitution and Section
16, Article I of the Ohio Constitution, require that every party to an action must be
afforded “‘a reasonable opportunity to be heard after a reasonable notice of such
hearing.’” Ohio Valley Radiology Assoc. Inc. v. Ohio Valley Hosp. Ass’n. (1986), 28
Ohio St.3d 118, 125, quoting State ex rel. Allstate Ins. Co. (1936), 130 Ohio St. 347,
16.
paragraph five of the syllabus. Thus, in order to satisfy constitutional due process, some
form of reasonable notice of a trial date is required. Id. at 124. In the absence of a local
rule governing the provision of notice of a trial date, constructive notice by the setting
down of that date on the court’s docket may satisfy the constitutional mandate. Id. See
also Nalbach v. Cacioppo, 11th Dist. Trumbull No.2001-T-0062, 2002-Ohio-53, ¶
24; Grice v. Herbert Laronge, Inc (May 25, 1989), 8th Dist. Cuyahoga Nos. 55333,
55359. Fahey v. Eschrich, 6th Dist., Ottawa No. OT-06-012, 2006-Ohio-5619, ¶ 9
{¶ 34} The record of the case before us discloses that appellant never received
actual notice of the final hearing/trial on the merits of appellee’s petition. Because such
notice is required under Ottawa County’s local rules, appellant was denied his
constitutional right to due process.
{¶ 35} Accordingly, we find that the trial court abused its discretion in granting
the emergency motion for an appointment of a receiver without a hearing. Appellants’
assignments of error are found well-taken.
Conclusion
{¶ 36} On consideration whereof, the judgment of the Ottawa County Court of
Common Pleas is reversed. This matter is remanded for proceedings consistent with this
decision. Appellee is ordered to pay the costs of this appeal pursuant to App.R. 24.
Judgment reversed
and remanded.
17.
Harbor Island Association, Inc.
v. Stecks Buckeye Storage Units, LLC, et al.
OT-20-012
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.
Thomas J. Osowik, J. ____________________________
JUDGE
Christine E. Mayle, J.
____________________________
Myron C. Duhart, J. JUDGE
CONCUR.
____________________________
JUDGE
This decision is subject to further editing by the Supreme Court of
Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
version are advised to visit the Ohio Supreme Court’s web site at:
http://www.supremecourt.ohio.gov/ROD/docs/.
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