Cleveland Clinic Found. v. Orange Technologies, L.L.C. , 2014 Ohio 211 ( 2014 )

[Cite as Cleveland Clinic Found. v. Orange Technologies, L.L.C., 2014-Ohio-211.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
Nos. 100011 and 100059
CLEVELAND CLINIC FOUNDATION
PLAINTIFF-APPELLEE
vs.
ORANGE TECHNOLOGIES, L.L.C., ET AL.
DEFENDANTS-APPELLANTS
JUDGMENT:
DISMISSED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-776992
BEFORE: Kilbane, J., Boyle, A.J., and Jones, J.
RELEASED AND JOURNALIZED: January 23, 2014
ATTORNEYS FOR APPELLANTS
For Orange Technologies, L.L.C., et al.
Dennis P. Zapka
Sean T. Lavin
McLaughlin Law, L.L.P.
1111 Superior Avenue
Suite 1350
Cleveland, Ohio 44114
For Melanie Gruden
Christopher A. Holecek
Peter A. Holdsworth
Wegman, Hessler & Vanderburg
6055 Rockside Woods Boulevard
Suite 200
Cleveland, Ohio 44131
ATTORNEYS FOR APPELLEE
Richard Gurbst
Amy C. Hocevar
Squire Sanders (US) L.L.P.
4900 Key Tower
127 Public Square
Cleveland, Ohio 44114
MARY EILEEN KILBANE, J.:
{¶1} Defendants-appellants, Orange Technologies L.L.C., Global Hosting
Solutions L.L.C., Solon Design L.L.C., Bright Marketing L.L.C., JKC Marketing L.L.C.,
Exact Targeting SEO L.L.C., North Coast Technologies L.L.C., and Christopher Gruden
(“Gruden”), in 8th Dist. Cuyahoga No. 100011, challenge the order of the trial court that
imposed a preliminary injunction on various accounts held by the defendant. In 8th Dist.
Cuyahoga No. 100059, defendant-appellant, Melanie Gruden (“Melanie”), appeals from
the same order. These cases have been consolidated for hearing and disposition, but
because the appeals do not stem from final appealable orders, and for the reasons set forth
below, both matters are dismissed.
{¶2} On February 29, 2012, the Cleveland Clinic Foundation (“Clinic”) filed suit
against Orange Technologies, L.L.C., Gruden and Melanie, and eight other defendants.
The Clinic alleged that from 2008 to 2012, Gruden acted contrary to the Clinic’s conflict
of interest policy by failing to disclose his relationships to the defendant companies and
used his position with the Clinic to recommend that the Clinic engage in business with
them. The Clinic alleged that the defendants received a total of $2.4 million in
contravention of the conflict of interest policy. The Clinic set forth claims for
misappropriation of funds, breach of contract, unjust enrichment, conversion, fraud, civil
conspiracy, and civil racketeering. The Clinic prayed for treble damages, punitive
damages, and attorney fees, and prayed for a temporary restraining order, a preliminary
injunction, and “a permanent injunction to the Cleveland Clinic Foundation, preserving
the status quo * * * to prevent further concealment, disposal, and movement of assets”
and other relief.
{¶3} On February 29, 2012, the trial court granted the Clinic a temporary
restraining order, precluding the defendants from accessing their various accounts (except
to make mortgage payments, and other reasonable and necessary expenses) unless the
account “retains a total of $2.4 million after the use of the account[.]”
{¶4} On June 13, 2012, the Clinic filed an amended complaint to add new party
defendant Patrick McCaffrey. On June 19, 2012, defendants filed answers. Two of the
defendants, JKC Marketing, L.L.C. and Bright Marketing L.L.C., filed counterclaims
against the Clinic for unpaid services.
{¶5} Over the course of several days, from July 29, 2012 to March 26, 2013, the
trial court held hearings on the plaintiff’s motion for prejudgment attachment and motion
for a preliminary injunction.
{¶6} On May 23, 2013, the trial court issued the following order:
Because of the defendants’ actions in fraudulently obtaining funds from the
Cleveland Clinic foundation, the court hereby grants the request for a
preliminary injunction and therefore creates a constructive trust for the
benefit of the Cleveland Clinic.
{¶7} On June 12, 2013, the trial court issued findings of fact and conclusions of
law in support of the preliminary injunction.
{¶8} In its merit brief, plaintiff-appellee argues that, pursuant to R.C. 2505.02(B),
there is no final appealable order from the order granting the preliminary injunction.
Appellee further argues that the trial court’s order simply preserved the status quo
pending final judgment. Appellee also argues that defendants have a meaningful
opportunity for review at the time of a final judgment.
FINAL APPEALABLE ORDER
{¶9} Courts of appeal have jurisdiction to review final orders. Article IV,
Section 3(B)(2), Ohio Constitution; R.C. 2505.03. In general, where a prayer for relief
requests a particular type of damages and the court fails to specifically adjudicate that
aspect of the damages requested, no final appealable order exists. See Miller v. First
Internatl. Fidelity & Trust Bldg., Ltd., 165 Ohio App.3d 281, 2006-Ohio-187, 846 N.E.2d
87; Britton v. Gibbs Assoc., 4th Dist. Highland No. 06CA34, 2008-Ohio-210.
{¶10} A provisional remedy is a proceeding ancillary to an action, such as a
proceeding for a preliminary injunction, attachment, discovery of privileged matter, or
suppression of evidence. R.C. 2505.02(A)(3).
{¶11} Pursuant to R.C. 2505.02(B):
An order is a final order that may be reviewed, affirmed, modified, or
reversed, with or without retrial, when it is one of the following:
(4) An order that grants or denies a provisional remedy and to which both of
the following apply:
(a) The order in effect determines the action with respect to the provisional
remedy and prevents a judgment in the action in favor of the appealing
party with respect to the provisional remedy.
(b) The appealing party would not be afforded a meaningful or effective
remedy by an appeal following final judgment as to all proceedings, issues,
claims, and parties in the action.
{¶12} The first of these requirements, R.C. 2505(B)(4)(a), has been deemed to be
unmet where the trial court’s order granting a preliminary injunction only serves to
maintain the status quo pending litigation of the trial on the merits. McHenry v.
McHenry, 5th Dist. Stark No. 2013 CA 00001, 2013-Ohio-3693, citing Cleveland
Firefighters, IAFF Local 500 v. E. Cleveland, 8th Dist. Cuyahoga No. 88273,
2007-Ohio-1447, ¶ 5; Hootman v. Zock, 11th Dist. Ashtabula No. 2007-A-0063,
2007-Ohio-5619, ¶ 13; Deyerle v. Perrysburg, 6th Dist. Wood No. WD-03-063,
2004-Ohio-4273, ¶ 15.
{¶13} As to the second requirement, the McHenry court explained:
The appealing party must demonstrate that it “would have no adequate
remedy from the effects of that [interlocutory] order on appeal from final
judgment.” Empower Aviation [LLC v. Butler Cty. Bd. of Commrs., 185
Ohio App.3d 477, 2009-Ohio-6331, 924 N.E.2d 862, ¶ 18,] quoting State v.
Muncie (2001), 91 Ohio St.3d 440, 451, 2001-Ohio-93, 746 N.E.2d 1092.
The absence of an adequate remedy after final judgment has been held to be
present in cases involving orders compelling the production of documents
containing trade secrets or privileged communications, and in cases
involving the denial of requests to enforce covenants not to compete. Id.See also Premier Health Care Serv., Inc. v. Schneiderman, Montgomery
No. 18795, 2001 Ohio App. LEXIS 5170, 2001 WL 1479241.
{¶14} This second requirement is generally found where the court will be unable to
fashion a meaningful or effective remedy at the end of the litigation. Wells Fargo Ins.
Servs. USA v. Gingrich, 12th Dist. Butler No. CA2011-05-085, 2012-Ohio-677.
Calculable monetary losses and losses incurred during the pendency of the case can be
remedied by money damages at the conclusion of the case, so there is generally no right to
an immediate appeal from the ruling on the preliminary injunction. Id., citing Cooper v.
Cleveland Boat Club Ltd. Partnership, 8th Dist. Cuyahoga No. 81995, 2003-Ohio-2874, ¶
18; N. Fairfield Baptist Church v. G129, L.L.C., 12th Dist. Butler No. CA2009-11-281,
2010-Ohio-2543, ¶ 24 (finding the denial of a preliminary injunction not a final
appealable order where defendant failed to prove monetary damages would not
sufficiently compensate it for any determined loss); see also Simmons v. Trumbull Cty.
Engineer, 11th Dist. Trumbull No. 2004-T-0016, 2004-Ohio-1663, ¶ 11 (finding the
denial of a temporary restraining order was not a final appealable order because there was
no indication that monetary damages would not adequately compensate for any loss).
{¶15} In accordance with all of the foregoing, the order granting a preliminary
injunction is not a final appealable order under R.C. 2505(B)(4).
{¶16} Appeal dismissed.
It is ordered that appellee recover from appellants costs herein taxed.
It is ordered that a special mandate be sent to said court to carry this judgment into
execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
MARY EILEEN KILBANE, JUDGE
MARY J. BOYLE, A.J., and
LARRY A. JONES, SR., J., CONCUR