State ex rel. Yost v. Omar Ibn El Khattab Mosque, Inc. (Slip Opinion) , 156 Ohio St. 3d 523 ( 2019 )

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as State
ex rel. Yost v. Omar Ibn El Khattab Mosque, Inc., Slip Opinion No. 2019-Ohio-1958.]
NOTICE
This slip opinion is subject to formal revision before it is published in an
advance sheet of the Ohio Official Reports. Readers are requested to
promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65
South Front Street, Columbus, Ohio 43215, of any typographical or other
formal errors in the opinion, in order that corrections may be made before
the opinion is published.
SLIP OPINION NO. 2019-OHIO-1958
THE STATE EX REL. YOST, APPELLEE, v. OMAR IBN EL KHATTAB MOSQUE,
INC., APPELLEE; OMAR IBN EL KHATTAB MOSQUE, INC., APPELLANT.
[Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as State ex rel. Yost v. Omar Ibn El Khattab Mosque, Inc., Slip
Opinion No. 2019-Ohio-1958.]
Quo warranto—Writ of quo warranto may not issue when the party seeking the writ
has not proved entitlement to it—Attorney general must commence a proper
quo warranto action to oust one faction or the other—Motion for
reconsideration granted—Judgment reversed.
(No. 2017-1067—Submitted March 5, 2019—Decided May 23, 2019.)
APPEAL from the Court of Appeals for Franklin County,
No. 15AP-939, 2017-Ohio-4453.
ON MOTION FOR RECONSIDERATION.
________________
SUPREME COURT OF OHIO
Per Curiam.
{¶ 1} This matter is before us as a result of a motion for reconsideration
filed by the Reash/Brey1 respondents-appellants, one of the factions purporting to
represent Omar Ibn El Khattab Mosque, Inc. (“Omar Mosque” or “the
corporation”). Relator-appellee, the Ohio attorney general,2 and respondent-
appellee, the Khan/Ball faction of the corporation, each filed memorandums
opposing reconsideration.
{¶ 2} The Ohio attorney general commenced this case by filing a complaint
for a writ of quo warranto in the Tenth District Court of Appeals seeking to dissolve
the corporation. On December 20, 2018, we affirmed the decision of the Tenth
District granting the writ and remanding the matter to that court with the instruction
to appoint trustees and then return the case to the common pleas court to oversee
the dissolution of the corporation. State ex rel. DeWine v. Omar Ibn El Khattab
Mosque, Inc., ___ Ohio St.3d ___, 2018-Ohio-5112, ___ N.E.3d ___ (“Omar Ibn
El Khattab Mosque I”).
{¶ 3} For the reasons set forth below, however, we grant the motion for
reconsideration, vacate our decision in Omar Ibn El Khattab Mosque I, reverse the
judgment of the court of appeals, and remand the case with instructions to deny the
writ.
I. Background
{¶ 4} Omar Ibn El Khattab Mosque, Inc., is an Ohio nonprofit corporation
that was formed in 2007 as a separate entity from the Islamic Society of Greater
Columbus (“ISGC”) pursuant to a document titled “Referendum on Reorganizing
and Restructuring ISGC” (“the referendum”). According to the pleadings that have
1. The Reash/Brey faction and the opposing group, the Khan/Ball faction, are named for the
attorneys representing each group.
2. The previous Ohio attorney general, Michael DeWine, instituted this case. Dave Yost succeeded
DeWine and is automatically substituted as relator-appellee in this case. See S.Ct.Prac.R. 4.06(B);
App.R. 29(C)(1).
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been submitted by the parties, the referendum established a nonprofit organization,
called the Omar Mosque Association (“OMA”), to be responsible for religious and
philanthropic activities at the mosque. The referendum named seven individuals as
the initial board of directors (“initial board” or “the Reash/Brey faction”) “for a
term ending on 12/31/2009.”3 The referendum then provided, “This Board will be
in charge of Omar Mosque and will write a Constitution and By-Laws for OMA to
be ratified by its members no later than 12/31/2007.”
{¶ 5} The corporation filed initial articles of incorporation with the Ohio
secretary of state’s office on June 21, 2007. Also in 2007, the board began to raise
money for a construction/expansion project to improve the mosque. By September
2011, as construction was starting, the board had raised around $400,000 for the
project. The funds were deposited into Omar Mosque’s account at JP Morgan
Chase Bank, N.A. (“Chase Bank”), and constituted 90 percent of the corporation’s
funds.
{¶ 6} The dispute underlying this writ action is a schism between the
Reash/Brey faction and the Khan/Ball faction that resulted in an inability to access
those funds. The factions disagree about the underlying cause of the schism. In
the view of Ghassan Bin Hammam, a member of the Reash/Brey faction, the
dispute began as a personal conflict between Ayed, one of the initial board
members, and a concerned community member, Nasir Hassan. According to Bin
Hammam, as the conflict escalated, “Mr. Hassan started to challenge the legitimacy
of the Board.” The “challenge [to] the legitimacy of the Board” concerned the fact
that after the initial board was appointed, there were no further elections. The
referendum purportedly stated that the term of the initial board would expire at the
end of 2009, but the initial board continued to govern beyond that date. Bin
3. The initial board members included the members of the Reash/Brey faction: Mounir Ayed,
Ghassan Bin Hammam, Nasser Kashou, Quassai Marashdeh, and Noorgul Dada.
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Hammam, however, attested that the initial board governed past 2009 without
complaint and “with [the] consensus of the community” because certain essential
tasks, such as establishing a formal membership roll, had not been completed due
to the press of other Omar Mosque projects. Basil Mohamed Gohar, who—
according to the Reash/Brey faction—is the current president of the board of
directors, attributes the division primarily to opposition from the Khan/Ball faction
to the expansion project.
{¶ 7} For its part, the Khan/Ball faction failed to properly admit its
evidence, but generally argues that the schism was caused by complaints from
members of the Khan/Ball faction about the initial board’s lack of transparency,
failure to follow corporate formalities, refusal to hold elections, and the allegedly
excessive salary paid to the Imam.
{¶ 8} In response to the concerns raised by members of the Khan/Ball
faction, the initial board scheduled a special meeting for October 8, 2011. At the
meeting, members could vote for one of two potential resolutions: either retain the
initial board members and add four new seats by election or elect a completely new
board. At the October 8 meeting, the majority of attendees voted for the first option.
Dissatisfied with the outcome of the October 8 election, two weeks later—on
October 22—members of the Khan/Ball faction convened its own meeting, at
which attendees elected their own schismatic board of directors (“the second
board”).4
{¶ 9} The second board then drafted a resolution allowing it to assume
control of the corporation’s bank accounts at Chase Bank. Upon presentation of
the second board’s credentials as officers, Chase Bank transferred signing authority
to those officers.
4. The second board included members of the Khan/Ball faction: Hamid Salim, Dr. Khaled
Khamees, Mohammed Allouche, Dina Ali, Hagar Diab, Nihad Al Khalidi, and Fouad El Faour.
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{¶ 10} On November 23, 2011, members from the initial board (a.k.a. the
Reash/Brey faction) filed suit in the Franklin County Common Pleas Court in the
name of Omar Mosque against the individual members of the second board (a.k.a.
the Khan/Ball faction), seeking damages and equitable relief and alleging that they
were the lawful board members. Masjid Omar Ibn El Khattab Mosque v. Salim,
Franklin C.P. No. 11-CV-14615. The Khan/Ball faction counterclaimed and sought
a declaratory judgment stating that the second board was the legitimate board of
directors of the corporation.
{¶ 11} On February 16, 2012, the court of common pleas filed an agreed
entry allowing Chase Bank to interplead and deposit with the clerk of courts
$432,313.19, the amount on deposit from Omar Mosque’s three bank accounts.
Masjid Omar Ibn El Khattab Mosque v. Salim, Franklin C.P. No. 11-CV-14615,
2012 Ohio Misc. LEXIS 5679 (Mar. 2, 2012).
{¶ 12} On August 16, 2012, the court of common pleas sua sponte
dismissed case No. 11-CV-14615. 2012 Ohio Misc. LEXIS 5674 (Aug. 16, 2012).
The common pleas court determined that “[w]hen a dispute arises between factions
of a congregation over who has a legitimate right to control the congregation as a
corporate entity, the action must be brought as an action seeking a writ of quo
warranto.” Id. at *5.
{¶ 13} The court of appeals affirmed in part and reversed in part. Masjid
Omar Ibn El Khattab Mosque v. Salim, 10th Dist. Franklin No. 12AP-807, 2013-
Ohio-2746. The court of appeals agreed with the common pleas court that
irrespective of how the parties framed the relief they were seeking, the core issue
that would have to be decided was the validity of the election of the second board,
which made it a quo warranto action. Id. at ¶ 21. However, the court of appeals
also held that the case should have been stayed instead of dismissed, because the
common pleas court still held Omar Mosque’s funds and by dismissing the case,
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the common pleas court made it impossible for the rightful faction (whichever one
that turned out to be) to reclaim those funds. Id. at ¶ 29.
{¶ 14} On April 20, 2012, the Khan/Ball faction commenced a quo
warranto action in the Tenth District Court of Appeals. The court’s magistrate
recommended dismissing the complaint for lack of standing because a quo warranto
action must be filed by the attorney general, a prosecuting attorney, or a person
claiming an individual right to an office. State ex rel. Salim v. Ayed, 10th Dist.
Franklin No. 12AP-356, 2013-Ohio-4880, ¶ 60. The court of appeals agreed with
and adopted the magistrate’s conclusions of law and dismissed the complaint. Id.
at ¶ 22. We affirmed. State ex rel. Salim v. Ayed, 141 Ohio St. 3d 129, 2014-Ohio-
4736, 22 N.E.3d 1054, ¶ 1.
{¶ 15} Meanwhile, on October 29, 2014, in the previously stayed Franklin
County Common Pleas case No. 11-CV-14615, the Reash/Brey faction filed
numerous motions asking the common pleas court to reactivate the case and to
release Omar Mosque’s funds. The common pleas court denied all the motions.
See Masjid Omar Ibn El Khattab Mosque v. Salim, Franklin C.P. No. 11-CV-14615
(Dec. 15, 2014). The court explained that it could not release the funds until a
determination was made as to which group was the legitimate governing authority
of Omar Mosque. Id. The Tenth District Court of Appeals stayed consideration of
that appeal to allow the attorney general time to decide whether to file a quo
warranto action. Masjid Omar Ibn El Khattab Mosque v. Salim, 10th Dist. Franklin
No. 15AP-22 (Feb. 18, 2015).
{¶ 16} On October 13, 2015, the attorney general filed suit against Omar
Mosque in the Tenth District Court of Appeals. The complaint requested a writ of
quo warranto dissolving the corporation and appointing a receiver. Pursuant to
R.C. 2733.01(A), the attorney general could have proceeded against one faction or
the other seeking to remove—or oust—one of the factions from the corporation.
But instead of choosing sides, the attorney general elected to proceed under R.C.
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2733.02, which authorizes a quo warranto action against a corporation in certain
situations:
(A) When it has offended against a law providing for its
creation or renewal * * *;
***
(C) When it has committed or omitted an act which amounts
to a surrender of its corporate rights, privileges, and franchises;
(D) When it has misused a franchise, privilege, or right
conferred upon it by law * * *.
{¶ 17} Specifically, the complaint alleged that Omar Mosque violated three
rules of corporate governance: (1) failing to maintain a record of its members, (2)
failing to maintain complete accounting records and minutes, and (3) failing to hold
annual meetings. Based on these alleged violations, the attorney general asked the
court of appeals to issue a writ of quo warranto under R.C. 1702.52 and 2733.20,
judicially dissolving the corporation. In addition, the attorney general asked the
court to waive the statutory requirement of appointing a trustee and instead to
appoint a receiver and to refer the matter to the Franklin County Court of Common
Pleas to oversee all subsequent proceedings. Both the Reash/Brey faction and the
Khan/Ball faction filed answers, purportedly on behalf of Omar Mosque.
{¶ 18} The attorney general filed a motion for summary judgment. The
evidence in support of the motion consisted of pleadings from prior cases, Omar
Mosque’s initial articles of incorporation and pertinent meeting minutes, and bank
records. In his motion, the attorney general abandoned the theory of the
complaint—i.e., that quo warranto was proper due to the failure to observe
corporate formalities. Rather, the motion asserted that
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the basis of the present lawsuit is the $432,313.19 in interpleaded
funds. It is Omar Mosque, Inc.’s complete inability to access these
funds that constitutes the charitable “abuse” and supports a finding
that Omar Mosque, Inc. has forfeited its rights, privileges, and
franchises under R.C. 2733.02 and 2733.20.
(Emphasis added.)
{¶ 19} On August 19, 2016, both factions filed responses to the motion for
summary judgment. The Reash/Brey faction opposed the motion and submitted
various items of evidence, including the affidavit of Basil Mohamed Gohar, the
current president of the board of directors. The Khan/Ball faction supported the
attorney general’s position, asking the court to grant the motion, dissolve the
corporation, and appoint a receiver. The Khan/Ball faction’s memorandum
included no evidence, although an affidavit from Hassan, one of the early
opponents of the initial board, was later placed into the record as an attachment to
an unsuccessful motion to strike portions of Gohar’s affidavit.
{¶ 20} On November 8, 2016, the Reash/Brey faction filed its own motion
for partial summary judgment, seeking a declaration that the members of the second
board had not been validly elected.
{¶ 21} On November 10, 2016, the magistrate issued a decision
recommending that the court grant the attorney general’s summary-judgment
motion. The magistrate expressed a desire to avoid favoring either faction in the
dispute, agreeing with the attorney general that selecting one board for removal
risked “treading closer to the exclusive religious domain of the religious entity
* * *, given the possibility that the differences between the factions may reflect
some element of spiritual or doctrinal conflict.” State ex rel. DeWine v. Omar Ibn
El Khattab Mosque, Inc., 10th Dist. Franklin No. 15AP-939, 2017-Ohio-4453, ¶ 82.
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Hewing to the purely secular, the magistrate made 23 findings of fact, of which the
following are pertinent:
(4) The 2007 articles of incorporation for Omar Mosque, Inc.
name an initial board of directors for a two-year term. The initial
board continued to govern the mosque beyond 2009.
(5) Differences between members of the congregation arose
in relation to construction of improvements to the mosque building,
culminating in separate meetings in October 2011 at which two
competing boards were elected by the respective factions.
***
(17) Paragraphs 8, 9, and 10 of the complaint allege that,
pursuant to the 2007 articles of incorporation, the initial board was
to serve through the end of 2009, but nonetheless continued to
govern beyond that term. The answer filed by the Reash/Brey board
admits this to the extent that the two-year terms are stated in the
articles of incorporation, and that the board continued to serve, but
denies that the extended terms did not comply with the corporation’s
bylaws or constitution.
(18) Paragraph 13 of the complaint alleges that “no special or
annual meeting of the members of Omar Mosque, Inc. was held in
either 2009 or 2010 for purposes of electing individuals to serve on
the board of directors for Omar Mosque, Inc. in either 2010 or
2011.” The answer filed by the Reash/Brey board admits this
allegation.
Id. at ¶ 81.
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{¶ 22} Based on these facts, the magistrate concluded that Omar Mosque
“did not conform with the[] statutorily required corporate formalities.” Id. at ¶ 92.
Specifically, the corporation did not maintain a record of its members, as required
by R.C. 1702.13 and 1702.15, or hold annual meetings of voting members “for the
election of directors and the consideration of reports,” as required by R.C. 1702.16.
Id. at ¶ 91-92. And the magistrate connected the theories presented by the attorney
general in the complaint and in the summary-judgment motion by concluding that
the corporation’s failure to adhere to corporate formalities caused the resulting
schism and subsequent inability to reclaim the corporation’s funds:
The magistrate further finds * * * that the present situation is a direct
result of the organization’s failure to comply with requisite
corporate formalities, and this failure underlies the subsequent
impasse in corporate governance. Together, the failure to conform
to corporate requirements and the resulting loss of control over
charitable funds may support issuance of the writ requested by the
attorney general.
***
The magistrate further finds that the dispute would not have
arisen, or at least not caused the corporation to lose control of its
funds, had the corporation complied with statutory requirements
regarding membership and annual meetings.
Id. at ¶ 89, 91. The magistrate therefore recommended the issuance of a writ of quo
warranto, the appointment of trustees, and referral of the case to the common pleas
court to oversee the constitution of a successor entity. Id. at ¶ 93.
{¶ 23} On June 22, 2017, the court of appeals adopted the magistrate’s
findings of fact and conclusions of law and issued a writ of quo warranto. The court
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of appeals referred the case to the common pleas court to oversee the dissolution of
the corporation and to appoint a receiver or trustees to oversee the constitution of a
successor entity. Id. at ¶ 70.
{¶ 24} The Reash/Brey faction timely appealed. We issued a decision
affirming the judgment of the court of appeals. Omar Ibn El Khattab Mosque I,
___ Ohio St.3d ___, 2018-Ohio-5112, ___ N.E.3d ___. The Reash/Brey faction
then moved for reconsideration pursuant to S.Ct.Prac.R. 18.02, which permits us to
“correct decisions which, upon reflection, are deemed to have been made in error.”
State ex rel. Huebner v. W. Jefferson Village Council, 75 Ohio St. 3d 381, 383, 662
N.E.2d 339 (1995) (considering former S.Ct.Prac.R. XI).
II. Legal analysis
{¶ 25} Quo warranto “is an extraordinary remedy invoked against a
corporation, where public interests are involved and the corporation has exercised
a franchise, privilege or right in contravention of law, or misused a right conferred
upon it by law.” State ex rel. Brown v. Regional Pub. Safety Serv. Corp., 47 Ohio
App.2d 300, 303, 353 N.E.2d 851 (10th Dist.1975). In an appeal involving an
extraordinary writ, once the appellant has established some error in the decision of
the court of appeals, this court has plenary power to consider the case de novo.
State ex rel. Miller v. Brady, 123 Ohio St. 3d 255, 2009-Ohio-4942, 915 N.E.2d
1183, ¶ 14; see also State ex rel. Natl. Elec. Contrs. Assn. v. Ohio Bur. of Emp.
Servs., 88 Ohio St. 3d 577, 579, 728 N.E.2d 395 (2000) (“The court’s plenary
authority generally refers to our ability to address the merits of a writ case without
the necessity of a remand if the court of appeals erred in some regard”).
{¶ 26} The standard for assessing whether the court of appeals erred in this
case is the same one employed whenever a court of appeals reviews a trial court’s
decision granting a motion for summary judgment: summary judgment is
appropriate “when an examination of all relevant materials filed in the action
reveals that ‘there is no genuine issue as to any material fact and that the moving
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party is entitled to judgment as a matter of law.’ ” Smith v. McBride, 130 Ohio
St.3d 51, 2011-Ohio-4674, 955 N.E.2d 954, ¶ 12, quoting Civ.R. 56(C).
{¶ 27} Quo warranto will lie when a corporation has “misused a franchise,
privilege, or right conferred upon it by law.” R.C. 2733.02(D). In an action for
quo warranto based on a misuse of the corporate franchise, courts may order a
partial or total ouster of the offending corporation. State ex rel. Falke v.
Montgomery Cty. Residential Dev. Inc., 40 Ohio St. 3d 71, 73, 531 N.E.2d 688
(1988); State ex rel. Corrigan v. W. Shore Ctr., 31 Ohio St. 2d 192, 193, 287 N.E.2d
803 (1972).
{¶ 28} In recommending dissolution of Omar Mosque, the magistrate
concluded that Omar Mosque failed to comply with statutorily mandated corporate
formalities and that these failures caused the entity to lose control of its charitable
funds. DeWine, 2017-Ohio-4453, at ¶ 68, 91-92.
{¶ 29} The magistrate identified several statutory violations by the initial
board, including overstaying the term of office, failing to hold annual meetings, and
failing to maintain membership lists and books and records of account. The court
of appeals agreed with the magistrate, and although the Reash/Brey faction disputes
that these violations occurred, we do not need to decide that issue.
{¶ 30} Even if the initial board failed to maintain certain corporate
formalities, the attorney general is not entitled to the requested writ dissolving the
corporation unless he also demonstrates that “by an act done or omitted, [the]
corporation has surrendered or forfeited its corporate rights, privileges, and
franchises.” R.C. 2733.20. The magistrate and the court of appeals found that the
initial board’s failure to observe corporate formalities had caused the schism and
that the schism had resulted in the corporation’s inability to recover the interpleaded
funds. The magistrate and the court of appeals then held that the corporation’s
statutory violations together with the loss of control over the funds led to the
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corporation’s surrender of its rights, privileges, and franchises. But their reasoning
is not persuasive given the evidence in the record.
{¶ 31} According to the magistrate, “the dispute would not have arisen, or
at least not caused the corporation to lose control of its funds, had the corporation
complied with statutory requirements regarding membership and annual meetings.”
DeWine, 2017-Ohio-4453, at ¶ 91. But the only evidence in the record
demonstrates that the dispute arose over the collection and disbursement of the
renovation funds. In fact, the magistrate reached this conclusion in the findings of
fact. DeWine, 2017-Ohio-4453, at ¶ 81 (5) (“Differences between members of the
congregation arose in relation to construction of improvements to the mosque
building, culminating in separate meetings in October 2011 at which two competing
boards were elected by the respective factions”). Based on the facts before this
court, we find no basis to believe that a formal membership list and regular elections
would have prevented the Khan/Ball faction from deciding to conduct its own
meeting, elect its own officers, and attempt to assert its control over the
corporation’s funds.
{¶ 32} The initial board lost control of the renovation funds when the
second board convinced Chase Bank to give the second board control over Omar
Mosque’s accounts. Perhaps more stringent corporate bookkeeping would have
allowed Chase Bank to assess the rightful owner of the corporate funds, had the
bank been inclined to undertake the inquiry. But it is abundantly clear that the bank
did not want to place itself in the middle of the dispute. In an agreed entry to
interplead the funds, the parties stated that Chase Bank had closed the accounts
because the account agreement between Chase Bank and the corporation provided
that Chase Bank “ ‘may file an action in interpleader with respect to any Account
where we have been notified of disputed claims to that Account. If any person
asserts that a dispute exists, we are not required to determine whether that dispute
has merit * * * .’ ” Masjid Omar Ibn El Khattab Mosque v. Salim, Franklin C.P.
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No. 11-CV-14615, 2012 Ohio Misc. LEXIS 5679, *2 (Mar. 2, 2012), quoting the
account agreement. The suggestion that Chase Bank would have turned over the
funds to one faction or the other if the corporate documents had been clearer is
unreasonable.
{¶ 33} Nor would compliant corporate documents have induced the
common pleas court to release those funds. The trial court, the court of appeals,
and this court dismissed the previous cases involving these factions and their claims
to ownership of the charitable funds for lack of subject-matter jurisdiction, not
because the factions were unable to prove their right to the money. And the money
remains frozen because a proper lawsuit to resolve the dispute has yet to be filed.
{¶ 34} The attorney general argues that although there is no precedent for
issuing a writ of quo warranto to dissolve a corporation under the facts of this case,
it is necessary for the court to do so here because “the current case is unique.” He
assures this court that
[i]n most instances, a corporation’s failure to maintain a record of
its members or hold annual meetings would not amount to a
surrender of its corporate rights, privileges, and franchises. In most
instances, however, such a failure would not have resulted in a
corporation being legally incapable of accessing $432,313.19 in
corporate funds.
But there is no evidence in the record to suggest that Chase Bank would have acted
differently had the initial board properly maintained a membership list or conducted
elections in 2010 and 2011. Nor is there any basis from which to conclude that had
the requisite formalities been observed, the initial board would have been able to
recover the funds.
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{¶ 35} Ultimately, a writ of quo warranto to dissolve the corporation may
not issue here because the attorney general has elected to seek a remedy to which
he has not proved entitlement. Despite the attorney general’s understandable
reluctance to take sides in the dispute, by seeking this remedy of dissolution, he is
effectively taking sides. If the Khan/Ball faction is illegitimate, we would be
rewarding its improper actions. The only way to resolve this dispute once and for
all is for the attorney general to commence a proper quo warranto action to oust one
faction or the other.
{¶ 36} Upon further reflection, we find that this court’s initial decision was
in error. Accordingly, for the reasons set forth above, we grant the motion for
reconsideration, vacate our decision in Omar Ibn El Khattab Mosque I, reverse the
judgment of the court of appeals, and remand the cause with instructions to deny
the writ.
Motion for reconsideration granted,
judgment reversed,
and cause remanded.
O’CONNOR, C.J., and FRENCH, FISCHER, DONNELLY, and STEWART, JJ.,
concur.
DEWINE, J., dissents, with an opinion joined by KENNEDY, J.
_________________
DEWINE, J., dissenting.
{¶ 37} Last year, we reviewed the evidence in this case and a majority of
the court decided that a writ of quo warranto should issue. State ex rel. DeWine v.
Omar Ibn El Khattab Mosque, Inc., ___ Ohio St.3d ___, 2018-Ohio-5112, ___
N.E.3d ___ (“Omar Ibn El Khattab Mosque I”). The current court now votes to
reconsider that decision for the sole reason that the court’s new members would
have decided the case differently had they been given the opportunity to do so. I
believe that reconsideration is inappropriate in this case, so I disagree with the
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majority’s decision to review and vacate the court’s decision in Omar Ibn El
Khattab Mosque I. And because I think the majority is wrong on the merits, I
dissent from its judgment on reconsideration as well.
Reconsideration is not appropriate in this case
{¶ 38} It is true that this court has the authority “to correct decisions which,
upon reflection, are deemed to have been made in error.” State ex rel. Huebner v.
W. Jefferson Village Council, 75 Ohio St. 3d 381, 383, 662 N.E.2d 339 (1996). But
this case would seem an unlikely candidate for reconsideration. Unlike the cases
that this court reconsidered two years ago, Omar Ibn El Khattab Mosque I did not
announce watershed new rules having a significant statewide impact. See State v.
Aalim, 150 Ohio St. 3d 489, 2017-Ohio-2956, 83 N.E.3d 883; State v. Gonzales,
150 Ohio St. 3d 276, 2017-Ohio-777, 81 N.E.3d 419. Nor has there been any
assertion that the court failed to consider certain arguments. See, e.g., Aalim at ¶ 1.
And this case has little precedential value, as the outcome is entirely fact specific.
{¶ 39} The motion for reconsideration contains substantially the same
arguments that were originally presented to this court (except the motion now
asserts that our initial decision was riddled with the same errors as those of the
lower courts). Those arguments were fully addressed and decided the first time
around, and there is no cause for their reconsideration here.
On the merits, the majority misses the mark
{¶ 40} The facts of this case are straightforward. Omar Ibn El Khattab
Mosque, Inc. (“the corporation”), failed to comply with corporate formalities in the
years following its inception and as a result lacked procedures for resolving internal
disagreements. Disputes inevitably arose, with some members of the congregation
contesting the initial board’s authority due in part to the board members’ having
remained in office beyond their intended term without holding elections. A
competing board was purportedly elected, and both boards sought control of the
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corporation and its charitable funds. The power struggle ultimately led to the
corporation’s inability to access those funds.
{¶ 41} R.C. 2733.02 permits the state to pursue an action in quo warranto
against a corporation if that corporation has failed in certain respects to perform its
essential functions. Dissolution is required when a court determines that “by an act
done or omitted, [the] corporation has surrendered or forfeited its corporate rights,
privileges, and franchises.” R.C. 2733.20; see also R.C. 2733.02(C).
{¶ 42} Both the magistrate and the court of appeals concluded that the
corporation’s failure to adhere to the statutory requirements allowed a situation to
develop in which the competing factions vied for control of the corporation’s board
and charitable funds. State ex rel. DeWine v. Omar Ibn El Khattab Mosque, Inc.,
10th Dist. Franklin No. 15AP-939, 2017-Ohio-4453, ¶ 41, 89-92. And the resulting
fight for control over the corporation led to the funds being frozen and transferred
to the Franklin County Clerk of Courts. Id. at ¶ 8-10. As the court of appeals
explained:
These basic statutory requirements that Omar Mosque, Inc.
violated would protect a corporation from the confusion and internal
paralysis that this case has shown resulted when an internal division
arose. Without a defined voting membership, regular meetings, and
up-to-date membership roster, the authority of the board, and thus
the legitimacy of the corporation itself, is no longer supported
through recordable action.
DeWine, 2017-Ohio-4453, at ¶ 41.
{¶ 43} The majority concludes that the subject of the dispute between the
factions was the intended use of the mosque’s funds and not the board’s failure to
conform to the corporate formalities. Majority opinion at ¶ 31-33. Thus, the
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SUPREME COURT OF OHIO
majority finds no causal link between the lack of formal procedures and the
subsequent power struggle and loss of access to the charitable funds. But the
majority overlooks two key points. First, it is undisputed that members of the
congregation raised concerns about the initial board’s failure to adhere to its
statutory requirements—particularly its failure to conduct elections and its
members’ governing beyond their original term—and that these failures caused
members of the congregation to question the initial board’s legitimacy. Second,
isolating the exact origin of the dispute is not necessary. Had the corporation
adhered to the requisite formalities, there would have been a mechanism in place
for addressing concerns, leadership would have been clearly established, and there
would have been no question about who had control over the funds.
{¶ 44} The majority’s conclusion that the only way to resolve this dispute
is for the attorney general to “commence a proper quo warranto action to oust one
faction or the other” is perplexing, given that the majority also recognizes that the
state may pursue an action against the corporation itself rather than against one of
the boards. Majority opinion at ¶ 35. This action was properly commenced
pursuant to R.C. 2733.02, and the resolution sought was a sensible one.
{¶ 45} The corporation has been unable to access the $432,313.19 in
charitable funds raised for the benefit of the mosque and its congregation—which
was a central reason for the nonprofit’s formation in the first place. These funds
“have yet to be used for their intended purpose and have been inaccessible” since
2011. 2017-Ohio-4453 at ¶ 38. Since that time, the competing factions have been
engaged in continuous litigation seeking a declaration as to which of them has sole
access to and control over the funds. See Masjid Omar Ibn El Khattab Mosque v.
Salim, Franklin C.P. No. 11-CV-14615; Masjid Omar Ibn El Khattab Mosque v.
Salim, 10th Dist. Franklin No. 12AP-807, 2013-Ohio-2746; State ex rel. Salim v.
Ayed, 141 Ohio St. 3d 129, 2014-Ohio-4736, 22 N.E.3d 1054. Attempts at
reconciliation have been unsuccessful. DeWine, 2017-Ohio-4453, at ¶ 33 (25).
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January Term, 2019
Without some action by the attorney general, there would appear to be no end in
sight to this dispute.
{¶ 46} I think the court of appeals got it right. It is apparent from the record
that the corporation’s failures to abide by statutory requirements and to establish
formal procedures resulted in organizational chaos, which ultimately led to the loss
of access to the charitable funds. The dysfunction and internal paralysis justify an
extraordinary remedy. Thus, I would uphold the judgment of the court of appeals
granting the writ of quo warranto, ordering the dissolution of the corporation, and
issuing directives for the appointment of a trustee or receiver to oversee the
establishment of a successor entity. Because the majority sees it differently, I
respectfully dissent.
KENNEDY, J., concurs in the foregoing opinion.
_________________
Dave Yost, Attorney General, and Matthew T. Green, Assistant Attorney
General, for appellee Ohio Attorney General Dave Yost.
Blaugrund, Kessler, Myers, & Postalakis, Inc., and Fazeel S. Khan;
Rosenberg & Ball Co., L.P.A., and David Ball, for appellee Khan/Ball faction of
Omar Mosque.
Reash Law Offices, L.L.C., and Maryellen Reash; and Taft, Stettinius &
Hollister, L.L.P, and Donald C. Brey, for appellant.
_________________
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