Puruczky v. Corsi , 110 N.E.3d 73 ( 2018 )

[Cite as Puruczky v. Corsi, 2018-Ohio-1335.]
IN THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
GEAUGA COUNTY, OHIO
DALE PURUCZKY, et al., : OPINION
Plaintiffs-Appellees, :
CASE NO. 2017-G-0110
- vs - :
EDMUND CORSI, :
Defendant-Appellant. :
Civil Appeal from the Geauga County Court of Common Pleas, Case No. 2017 P
000046.
Judgment: Reversed, vacated, and remanded.
Patrick D. Quinn and Ronald A. Annotico, Quinn Legal Associates, 2802 SOM Center
Road, Suite 102, Willoughby Hills, OH 44094 (For Plaintiffs-Appellees).
Mark S. O’Brien, 2460 Fairmount Boulevard, Suite 301B, Cleveland Heights, OH
44106 (For Defendant-Appellant).
DIANE V. GRENDELL, J.
{¶1} Defendant-appellant, Edmund Corsi, appeals from the judgment of
the Geauga County Court of Common Pleas, granting plaintiff-appellee, Dale
Puruczky, a preliminary injunction against Corsi. The issues to be determined in
this case are whether an injunction prohibiting contact with various entities and
the public as a whole acts as a prior restraint on free speech and whether service
of the Complaint two business days before a preliminary injunction hearing
constitutes notice to satisfy the requirements of due process. For the following
reasons, we reverse and vacate the February 15, 2017 Order of the Court and
remand for further proceedings consistent with this opinion.
{¶2} On January 18, 2017, Puruczky and Puruczky Wealth Management
LLC filed a Complaint for Injunctive Relief and Damages against Corsi. The
Complaint alleged that Corsi sold Puruczky supplements and treatment for his
wife’s various illnesses. Puruczky alleged that Corsi had misrepresented his
products and that Puruczky “discontinued the business relationship with
Defendant, cancelled orders, and stopped payment on checks issued to
Defendant * * *.” The Complaint contended that Corsi had written a letter
containing false, defamatory, libelous and slanderous statements to various
entities with which Puruczky did business as a financial planner.
{¶3} The Complaint raised claims for Defamation and Defamation Per
Se (Count One); Tortious Interference with Contract, based on the contention
that the letter authored by Corsi interfered with Puruczky’s business relationships
(Count Two); Unfair Business Practices (Count Three); and Preliminary
Injunction (Count Four).
{¶4} On the same date, Puruczky filed a Motion for Temporary
Restraining Order, requesting that Corsi be prohibited from making untruthful,
libelous, and slanderous statements about him. He attached an affidavit outlining
the various ways the letter would impact his career. Also attached was a copy of
the “Notice”/letter purported to be sent by Corsi, which stated that Puruczky failed
to pay for some products. It further stated: “After trusting this man, he has lied to
me, deceived me, stolen from me, and passed bad checks to me. * * * I will not
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stop exposing this man throughout the entire financial community in which I have
ties, through public media and the appropriate federal and state agencies until
justice is served. I hope there is no negative impact to your company as a result
of all the bad publicity Mr. Puruczky will cause.”
{¶5} A Temporary Restraining Order was issued on January 23, 2017. It
“restrained and enjoined” Corsi from contacting entities in relation to Puruczky
and “specifically restrains and enjoins defendant from engaging in malicious,
defamatory, libel and tortious conduct against Plaintiff.” It also set a hearing on
the request for a preliminary injunction for January 31, 2017, which was
continued at the plaintiffs’ request due to failure to obtain service of the
Complaint.
{¶6} After a request to renew, a second Temporary Restraining Order
was issued on January 30, 2017, which set the hearing on the preliminary
injunction for February 14, 2017.
{¶7} Puruczky requested an order designating a special process server
on February 8, 2017, which was granted on February 9, 2017. On the same
date, a document entitled “Instructions for Service” was filed, which stated that
pleadings to be served by the process server included the Complaint, Motion for
Temporary Restraining Order and the Journal Entry-Notice of Hearing. On
February 13, 2017, a copy of a summons return was filed, which indicated that
Corsi had been served on February 10, 2017. It did not state which documents
were served and the docket states “Service: Summons with Complaint.”
{¶8} A hearing on the preliminary injunction was held on February 14,
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2017, at 9:00 a.m. Puruczky and his counsel were present, but Corsi and his
counsel did not appear.
{¶9} Puruczky testified that his wife had received treatment and vitamins
from Corsi, which he described as similar to holistic treatment, although he did
not believe Corsi was licensed. At some point, he and his wife decided to
discontinue her treatment since they were dissatisfied and stopped payment on a
check. Puruczky referenced the letter he believed to be written by Corsi, which
described him as passing a bad check, an allegation Puruczky denied. He also
denied lying, cheating Corsi out of money, or defrauding him, also referenced in
the letter which Puruczky believes was sent to various entities with which he
interacts as a wealth advisor, including boards and professional organizations.
Regarding the effect that the letter had on his business, Puruczky provided one
example, in which a prospective client stated that he had seen “some disturbing
information” in the newspaper, which related to this lawsuit, filed by Puruczky.
The client had called to discuss investing and Puruczky testified that he was
“very” concerned the client would no longer invest. He did not, however, testify
that the client made a decision to that effect. Regarding any other loss of
potential clients or business, Puruczky testified “there is no way for me to know.”
{¶10} On the afternoon of February 14, 2017, hours after the hearing,
counsel for Corsi filed a Motion to Dismiss Count for Preliminary Injunction and a
Motion to Vacate Temporary Restraining Order. On February 15, 2017, an Order
of the Court was filed, finding that the restraining order should be continued “until
further order of the Court” and making findings in favor of Puruczky on the
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preliminary injunction, including that irreparable harm existed, he had a likelihood
of success, the injunction was in the public interest, and the balance of hardships
favored Puruczky. The same restrictions outlined above were set forth, including
Corsi not being permitted to contact entities associated with Puruczky or to
engage in “malicious, defamatory, libel, and tortious conduct” against him.
{¶11} Corsi filed his Notice of Appeal on February 24, 2017, and raises
the following assignments of error:1
{¶12} “[1.] The trial court erred in granting Appellees’ motion for
temporary restraining order and preliminary injunction because the temporary
restraining order and the preliminary injunction violate Appellant’s right to free
speech.
{¶13} “[2.] The trial court erred in granting Appellees’ motion for
temporary restraining order and preliminary injunction because the temporary
restraining order and the preliminary injunction were not supported by the
evidence presented by Appellees at the preliminary injunction hearing.
{¶14} “[3.] The trial court erred in scheduling and holding the preliminary
injunction hearing only four days (two business days) after Appellant was served
with the summons and complaint and by failing to give Appellant clear notice of
the fact that the hearing had been scheduled.”
{¶15} As an initial matter, we will address the finality of the trial court’s
order, although it is not challenged by Puruczky. “[T]he granting of a temporary
or preliminary injunction, in a suit in which the ultimate relief sought is a
permanent injunction, is generally not a final appealable order.” (Citation
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. Corsi filed a Motion to Vacate Preliminary Injunction in the trial court on the same date.
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omitted.) RKI, Inc. v. Tucker, 11th Dist. Lake No. 2017-L-004, 2017-Ohio-1516, ¶
10. However, in some scenarios, such orders are appealable. It has been held
that “a preliminary injunction that constitutes a prior restraint on speech requires
immediate appellate review.” Connor Group v. Raney, 2d Dist. Montgomery No.
26653, 2016-Ohio-2959, ¶ 1; Internatl. Diamond Exchange Jewelers, Inc. v. U.S.
Diamond & Gold Jewelers, Inc., 70 Ohio App.3d 667, 671, 591 N.E.2d 881 (2d
Dist.1991), citing Natl. Socialist Party of America v. Skokie, 432 U.S. 43, 44, 97
S.Ct. 2205, 53 L.Ed.2d 96 (1977) (where an injunction seeks to “impose a
restraint [on First Amendment rights],” there must be “strict procedural
safeguards * * *, including immediate appellate review”). This court has also
noted the exception that “the granting of a preliminary injunction is a final
appealable order when the court’s order constitutes an abuse of discretion
affecting a substantial right.” Woodbridge Condominium Owners’ Assn. v.
Friedland, 11th Dist. Lake No. 2003-L-073, 2004-Ohio-14, ¶ 5. Since Corsi
alleges that the injunction substantially impacts his rights and constitutes a prior
restraint on his speech, we will proceed to a review of the merits of his appeal.
{¶16} In the third assignment of error, which is dispositive of the appeal,
Corsi argues that his right to due process was violated when the preliminary
injunction hearing was held “only two business days after service was perfected.”
{¶17} “The question of whether the due process requirements have been
satisfied presents a legal question we review de novo.” McRae v. State Med.
Bd., 2014-Ohio-667, 9 N.E.3d 398, ¶ 36 (10th Dist.); see Gemmell v. Anthony,
2016-Ohio-2686, 51 N.E.3d 663, ¶ 27 (4th Dist.). See also In re Foreclosure of
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Liens, 11th Dist. Lake No. 2014-L-012, 2015-Ohio-1258, ¶ 15 (questions of law
are reviewed de novo).
{¶18} Puruczky’s main argument as to this issue is that it was waived by
Corsi below, since it was not raised in his February 14, 2017 motions. We find
this argument unpersuasive. Those motions were filed just hours after the
hearing that Corsi’s counsel did not attend, presumably because he was
unaware of the hearing or lacked sufficient notice to attend, as will be addressed
below. Regardless, these filings related to vacating the previously-issued
temporary restraining order and dismissal of the preliminary injunction count.
The preliminary injunction had not yet been ruled upon by the trial court, which
was granted a day later. The due process argument raised here relates solely to
the contention that it was improper to grant a preliminary injunction without Corsi
being able to attend the hearing. It would be illogical to raise such an argument
before the injunction was even ruled upon, especially considering it would be
moot if the ruling was favorable to Corsi. After the injunction was granted, Corsi
immediately appealed, raising the due process argument. Although not presently
before this court for review, Corsi filed a Motion to Vacate on the same date, also
raising the due process argument. Since Corsi raised this argument at the first
relevant opportunity, it was not waived and we will consider whether he was
denied due process.
{¶19} “[T]he fundamental requisite of due process of law is the
opportunity to be heard.” (Citation omitted.) Ohio Valley Radiology Assoc., Inc.
v. Ohio Valley Hosp. Assn., 28 Ohio St.3d 118, 124, 502 N.E.2d 599 (1986). In
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relation to preliminary injunctions, this court has found “Civ.R. 65 strongly implies
that a hearing must be held before a preliminary injunction can be granted,” also
noting that an injunction cannot be granted without reasonable notice to the
adverse party under Civ.R. 65(B)(1). Sea Lakes, Inc. v. Sea Lakes Camping,
Inc., 78 Ohio App.3d 472, 476, 605 N.E.2d 422 (11th Dist.1992); State ex rel.
Fisher v. Nacelle Land and Mgt. Corp., 90 Ohio App.3d 93, 99, 628 N.E.2d 67(11th Dist.1993) (“[i]t is generally held that a hearing must be conducted prior to
the issuance of a preliminary injunction”). This is due to the “fundamental
constitutional principle” of providing the opposing party an opportunity to present
evidence. (Citation omitted.) Sea Lakes at 476. “Since the opposing party will
be enjoined from performing certain acts for a period usually much longer than
that associated with a temporary restraining order, that party must be accorded a
legitimate opportunity to oppose the injunction.” Id. at 477. Federal courts have
interpreted the similar federal rule to also require notice and a hearing for a
preliminary injunction. Cty. Sec. Agency v. Ohio Dept. of Commerce, 296 F.3d
477, 484 (6th Cir.2002).
{¶20} “An elementary and fundamental requirement of due process in any
proceeding * * * is notice reasonably calculated, under all the circumstances, to
apprise interested parties of the pendency of the action and afford them an
opportunity to present their objections. * * *” Ohio Valley at 124, citing Mullane v.
Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed.
865 (1950). “[T]he right to notice and an opportunity to be heard ‘must be
granted at a meaningful time and in a meaningful manner.’” (Citation omitted.)
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Fuentes v. Shevin, 407 U.S. 67, 80, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972). “The
determination of whether a certain form of notice violates due process must be
made on a case-by-case basis.” Nalbach v. Cacioppo, 11th Dist. Trumbull No.
2001-T-0062, 2002 WL 32704, *4 (Jan. 11, 2002).
{¶21} In the present matter, a consideration of all of the circumstances
leads to the conclusion that Corsi was not given a reasonable notice of the
hearing date which would provide him with meaningful time to prepare for the
hearing. Corsi was not served with any notice of the present proceedings, even
the Complaint, until four days, and only two business days, before the hearing for
the preliminary injunction. The record also does not clearly indicate what
documents were served on Corsi on that date and whether such documents
included the notice of the hearing. There is no way of knowing what documents
were served, aside from the Complaint. The service return does not specify what
was served, with the summons stating only that the defendant was being served
with a Complaint and had 28 days to respond with an answer. While the
instructions for service filed separately do specify that the notice of hearing
should be served, it is unclear whether this occurred, and the docket states only
that the Complaint was served. Defense counsel’s actions seemed to be
consistent with the contention that he was unaware of the hearing, as he filed
several motions on the date of the hearing, which did not acknowledge the
hearing, and he did not appear.
{¶22} While in some instances constructive notice is considered sufficient
by virtue of the hearing being included on the court docket, see Ohio Valley, 28
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Ohio St.3d at 124, 502 N.E.2d 599, that principle would not apply here. Corsi
could not be construed to have constructive notice in advance at the time of the
docketing of the hearing date when he had not been served with the Complaint
and thus was not yet an active participant in the proceedings. Again, even if he
is considered to have had constructive notice as of the date of the service, this
provided him only a few days to obtain counsel and prepare for the hearing.
{¶23} Even assuming Corsi was served with the notice of hearing, the
summons document stated that he had 28 days to file an answer. As a non-
lawyer, he would be placed in the unfair position of having to evaluate multiple
documents and determine a hearing was set for only a few days in the future,
while not yet having obtained the assistance of counsel. It is also unreasonable
to believe that a client and counsel would be adequately prepared to appear at a
hearing on an injunction within only two business days. A similar holding was
reached by the Eighth District, where the court found that a notice of a dispositive
hearing to modify an arbitrator’s award totaling only two business days “was not
‘reasonably calculated under the circumstances’ to apprise appellant * * * of the
pendency of the hearing so as to afford them ample opportunity to present their
objections.” (Emphasis omitted.) Cleveland Firefighters Local 93 v. Cleveland,
8th Dist. Cuyahoga No. 59319, 1991 WL 263713, *2 (Dec. 12, 1991).
{¶24} Any contention that two business days’ notice was reasonable
because this was a preliminary injunction hearing also lacks merit. As explained
above, this court has emphasized the necessity of holding a hearing prior to
granting a preliminary injunction. Sea Lakes, 78 Ohio App.3d at 476, 605 N.E.2d
10422. A hearing for which a party is unprepared is meaningless. Further, the
evidence also does not show that a delay of a few days would have harmed
Puruczky, who presented no evidence that the letter at issue was actually sent to
anyone other than himself. Importantly, Puruczky had received a temporary
restraining order and an extension of such order, protecting him from alleged
harm. Civ.R. 65 allows for a 14-day temporary restraining order and an
additional extension “for one like period.” The first temporary restraining order in
this case was granted on January 23, 2017, and, thus, could have been
extended until February 20, 2017, providing Corsi additional time to prepare
while still protecting Puruczky.2
{¶25} Given the significance of the injunction, which Corsi asserts acts as
a prior restraint on his speech in violation of the First Amendment by essentially
banning him from communicating with all entities that interact with Puruczky, as
well as the public, allowing Corsi to appear and provide a defense was especially
important and necessary. See State ex rel. Toledo Blade Co. v. Henry Cty. Court
of Common Pleas, 125 Ohio St.3d 149, 2010-Ohio-1533, 926 N.E.2d 634, ¶ 21
(there is a “heavy presumption” against the constitutional validity of prior
restraints).
{¶26} The third assignment of error is with merit.
{¶27} While the disposition of the third assignment of error requires
remand, we will briefly address the first assignment of error for purposes of
judicial economy. In the first assignment of error, Corsi alleges that the injunction
2
. We note that the second temporary restraining order was actually issued by the court on January 30, 2017.
Regardless, Corsi should not be subjected to a violation of his due process rights when there are mechanisms in
place to protect his rights as well as those of the party seeking an injunction.
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acts as a prior restraint on his speech and, thus, violates his First Amendment
rights.
{¶28} Generally, a “trial court’s decision to grant or deny a preliminary
injunction is reviewed for abuse of discretion.” Avery Dennison Corp. v. TransAct
Technologies, Inc., 11th Dist. Lake No. 2012-L-132, 2013-Ohio-4551, ¶ 13.
Constitutional questions, including the application of the First Amendment,
however, are reviewed under a de novo standard. Bose Corp. v. Consumers
Union of U.S., Inc., 466 U.S. 485, 508, 104 S.Ct. 1949, 80 L.Ed.2d 502 (1984);
State v. Baranski, 173 Ohio App.3d 410, 2007-Ohio-4072, 878 N.E.2d 1058, ¶ 6
(4th Dist.).
{¶29} “The term prior restraint is used ‘to describe administrative and
judicial orders forbidding certain communications when issued in advance of the
time that such communications are to occur.’” (Citation omitted.) Seven Hills v.
Aryan Nations, 76 Ohio St.3d 304, 307, 667 N.E.2d 942 (1996).
{¶30} “Although prior restraints are not unconstitutional per se, there is a
heavy presumption against their constitutional validity.” Toledo Blade, 125 Ohio
St.3d 149, 2010-Ohio-1533, 926 N.E.2d 634, at ¶ 21. “[P]rior restraints on
speech and publication are the most serious and least tolerable infringement on
First Amendment rights.” Nebraska Press Assn. v. Stuart (1976), 427 U.S. 539,
559, 96 S.Ct. 2791, 49 L.Ed.2d 683. “‘Prior restraints are simply repugnant to the
basic values of an open society’ in that they ‘tend to encourage indiscriminate
censorship in a way that subsequent punishments do not.’” (Citation omitted.)
Toledo Blade at ¶ 21.
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{¶31} In the present case, the trial court’s order prevents Corsi from
“contacting in any manner any of the various businesses, individuals, charities,
social organizations, clients, prospective clients, employers, government
agencies, FINRA, State of Ohio, business partners, associates of Plaintiff and the
general public until further order of this court.” (Emphasis added.) Following that
provision, the order states that it “specifically restrains and enjoins Defendant
from engaging in malicious, defamatory, libel and tortious conduct against
Plaintiff” within the United States. It appears that, at the least, Corsi cannot
contact anyone about or in relation to Puruczky, although the order also prevents
him from contacting “the general public,” without specific reference to whether
this relates to Puruczky. Either way, Corsi is totally prevented from exercising his
right to free speech, without regard for what this speech may be.
{¶32} While Puruczky argues that libelous and false speech are not
protected, it bears repeating that the order also prevents him from “contacting”
various individuals, separate from the specific requirements preventing certain
types of speech. Regardless, while it is accurate that some types of speech are
not protected, prevention of such speech typically is permissible after the court
has “regularly conducted an independent review of the record both to be sure
that the speech in question actually falls within the unprotected category and to
confine the perimeters of any unprotected category within acceptably narrow
limits in an effort to ensure that protected expression will not be inhibited.” Bose,
466 U.S. at 505, 104 S.Ct. 1949, 80 L.Ed.2d 502. As the Ohio Supreme Court
has emphasized, “[t]he judicial determination that specific speech is defamatory
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must be made prior to any restraint.” (Emphasis added.) O’Brien v. Univ.
Community Tenants Union, Inc., 42 Ohio St.2d 242, 245, 327 N.E.2d 753 (1975).
Here, the trial court did not make a specific finding that speech which had already
taken place constituted libel or defamation and cannot assume that future speech
will fall into such a category. Corsi is being improperly deprived of the right to
speak before a substantive determination of the permissibility of his speech on
the merits has been made by the court. The likelihood of success determination
for a preliminary injunction does not meet that standard. Id.{¶33} To the extent the lower court granted preliminary, injunctive relief
prior to a final determination that Corsi’s alleged letter is defamatory, the relief
granted is improper. See O’Brien, supra.
{¶34} Further, the injunction prevents Corsi from essentially interacting
with not only various entities but the public as a whole in relation to Puruczky.
This is not a minor restriction on his speech but an all encompassing prohibition
on expressing concerns “to the public” on a matter which Corsi views as of
significant interest, Puruczky’s alleged dishonest and improper conduct. It has
been noted that an individual does not have an interest “in being free from public
criticism of his business practices” by obtaining an injunction against an
individual distributing leaflets or pamphlets criticizing the business. Org. for a
Better Austin v. Keefe, 402 U.S. 415, 419, 91 S.Ct. 1575, 29 L.Ed.2d 1 (1971).
Here, the broad limitations contained in the injunction would prohibit such
conduct by Corsi.
{¶35} Since the trial court’s order acts as a broad, prior restriction on
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Corsi’s speech to the public and private entities, that portion of the injunction
violates his First Amendment rights.
{¶36} The first assignment of error is with merit to the extent discussed
above.
{¶37} In light of our ruling on assignments of error one and three, the
second assignment of error is moot.
{¶38} Given the foregoing, the February 15, 2017 Order of the Court is
reversed and this matter is remanded for the lower court to hold a hearing,
pursuant to O’Brien, supra, on an injunction, excepting public speech, with proper
and adequate notice of the hearing date to be provided to all parties.
{¶39} For the foregoing reasons, the February 15, 2017 Order of the
Geauga County Court of Common Pleas is reversed and vacated. This matter is
remanded for further proceedings consistent with this decision. Costs to be
taxed against appellees.
THOMAS R. WRIGHT, P.J.,
CYNTHIA WESTCOTT RICE, J.,
concur.
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