DN Community Fed. Credit Union v. Joliat ( 2024 )

[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
COURT OF APPEALS
STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT
DN COMMUNITY FEDERAL CREDIT : JUDGES:
UNION :
:
: Hon. Patricia A. Delaney, P.J.
Plaintiff-Appellee : Hon. Craig R. Baldwin, J.
: Hon. Andrew J. King, J.
-vs- :
: Case No. 2023 CA 00133
:
JEFFREY T. JOLIAT, ET AL. :
:
:
Defendants-Appellants : OPINION
CHARACTER OF PROCEEDING: Appeal from the Stark County Court of
Common Pleas, Case No.
2022CV01508
JUDGMENT: AFFIRMED
DATE OF JUDGMENT ENTRY: June 21, 2024
APPEARANCES:
For Plaintiff-Appellee: For Defendants-Appellants:
STEVEN E. SEASLY JON A. TROYER
ANDREW J. WOLF 4580 Stephens Circle NW
200 Public Square, Suite 2800 Suite 100
Cleveland, OH 44114 Canton, OH 44718
AMY CLUM HOLBROOK
965 Keynote Circle
Cleveland, OH 44131
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
Delaney, P.J.
{¶1} Defendants-Appellants Jeffrey T. Joliat, Shale Brewing Company, LTD.,
Shale Craft Coffee, LLC., and New Berlin Dough Company, LLC appeal the September
12, 2023 judgment entry of the Stark County Court of Common Pleas.
FACTS AND PROCEDURAL HISTORY
Promissory Note and Security Agreement
{¶2} On April 23, 2021, Plaintiff-Appellee DN Community Federal Credit Union
(hereinafter “DN Credit Union”) executed a Promissory Note and Security Agreement with
Defendants-Appellants Jeffrey T. Joliat and Shale Brewing Company, LTD (hereinafter
“Joliat”). Pursuant to the terms of the Promissory Note, DN Credit Union provided funds
totaling $423,448.33 to Joliat. Joliat was to make 180 monthly payments in the amount of
$2936.00 starting June 10, 2021. The funds agreed to in the Promissory Note were
secured by the Security Agreement. The Security Agreement states in pertinent part:
1. Definitions. The following terms as used in this Agreement shall have
the meanings set forth below:
“Collateral” shall mean all of the property set forth in Exhibit A attached
hereto and made a part hereof, and all property of the same class and
character acquired by Debtor subsequent to the date hereof, and all
proceeds thereof, and all substitutions, replacements and accessions
thereto.
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
Schedule A was attached to the Security Agreement.1 Schedule A was a March 24, 2020
appraisal of equipment assets for Shale Brewing completed by Kiko Auctioneers. The
total appraisal of the equipment assets was $324,750.
{¶3} After the Promissory Note and Security Agreement were signed, DN Credit
Union filed a UCC financing statement with the Secretary of State. The UCC filing stated
as to collateral information that the financing statement covered the following collateral:
“All assets of debtor (The ‘Assets’). This includes assets of every kind in nature, whether
now owned or hereafter acquired, and wherever located, including without limitation the
assets listed on Schedule A attached hereto, and all proceeds of any sales of the assets.”
Default on the Promissory Note
{¶4} Joliat defaulted on the Promissory Note.
{¶5} On September 16, 2022, DN Credit Union filed a complaint and emergency
motion for possession of personal property with the Stark County Court of Common
Pleas, Case No. 2022CV01508. DN Credit Union alleged that after Joliat’s default on the
Promissory Note, it made a demand to Joliat to surrender the property listed in Schedule
A of the Security Agreement. Joliat allegedly failed to do so and DN Credit Union believed
that Joliat was removing and transferring the Schedule A assets to his other businesses,
Shale Craft Coffee and New Berlin Dough Company. DN Credit Union also filed a
separate motion, entitled “Plaintiff’s Emergency Motion for Possession of Personal
Property (Replevin).” Pursuant to R.C. 2737.19 and supported by an affidavit from the DN
Credit Union Branch Manager, DN Credit Union requested an emergency order for
1
While the terms of the Security Agreement refer to the appraisal of equipment assets from Shale Brewing
prepared by Kikos Auctioneers as “Exhibit A,” the document itself states “Schedule A.” In these
proceedings, the parties refer to the document as “Schedule A.” We will refer to the document as “Schedule
A.”
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
possession of the Schedule A assets without notice to Joliat and without conducting a
hearing.
{¶6} On September 19, 2022, the trial court granted DN Credit Union’s
emergency motion for possession of personal property in replevin. The trial court found
that DN Credit Union was entitled to immediate possession of the assets listed in
Schedule A. It ordered Joliat and the other named defendants to deliver possession of
the Schedule A collateral to DN Credit Union, and the Stark County Sheriff was to follow
the steps authorized by statute to deliver possession of the property to DN Credit Union
after DN Credit Union posted a bond in the amount of $649,000.00. The trial court set the
matter for a hearing on September 29, 2022.
{¶7} On September 19, 2022, DN Credit Union filed a Complaint on Cognovit
Promissory Note against Jeffrey T. Joliat and Shale Brewing Company, LTD. in the Stark
County Court of Common Pleas, Case No. 2022CV01510. On September 23, 2022, DN
Credit Union obtained, pursuant to the cognovit provisions of the Promissory Note, a
judgment by confession in the amount of $395,100.36 plus interest.
Joliat’s Counterclaims and Request for Temporary Restraining Order
{¶8} Joliat responded to the replevin action with a motion for a temporary
restraining order and preliminary injunction, filed September 26, 2022. In the motion,
Joliat stated that while he believed that he and DN Credit Union were working together to
wind up his business, he was unaware that DN Credit Union filed the complaint for
emergency replevin. He only became aware of the replevin action when a purported agent
of DN Credit Union came to the Shale Brewing business location and changed the locks
to the premises. Joliat claimed that DN Credit Union, through its agent, took possession
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
of the collateral listed in Schedule A, but impermissibly took control of assets not listed in
Schedule A, including Joliat’s Ford F-350 truck, bicycles on loan from another business,
and other unknown items. The trial court set the matter for a hearing on October 12, 2022.
TRO Hearing
{¶9} On October 12, 2022, the trial court held a hearing on both Joliat’s motion
for a temporary restraining order and DN Credit Union’s emergency motion for possession
of personal property.
{¶10} Jessica Cobbs, the interim CEO/manager of DN Credit Union, testified on
behalf of DN Credit Union as to the Promissory Note and Security Agreement. DN Credit
Union hired Ben Bolog with FAB Transport and Recovery to secure the Schedule A
assets. Cobbs testified that Joliat gave her the door code to the Shale Brewing business
location for the replevin action. Her last interaction with Joliat was when she was called
to the business by Bolog because the building landlords were not aware of the replevin
action. She spoke with the landlords, and they were shown the court papers.
{¶11} Joliat testified as to the removal of the property from Shale Brewing. Joliat
personally owned a flatbed trailer that he had promised to another contractor to pay off
Joliat’s debts. The contractor left the trailer with Joliat, who stored the trailer near the
Shale Brewing business. On September 22, 2022, Joliat realized the flatbed trailer was
missing and believed it was stolen, filing a police report. He reviewed security videos
showing the flatbed trailer being hooked to a truck and presented the stills of the video at
the hearing as Exhibit 1. Joliat was passing the Shale Brewing business location when
he saw what he thought was the flatbed trailer hooked to a FAB Recovery truck. Ben
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
Bolog testified that he did not take the flatbed trailer. He was shown Exhibit 1, and he
denied the truck hooked to flatbed trailer belonged to his business.
{¶12} During his closing argument, Joliat argued DN Credit Union exceeded the
authority of the September 19, 2022 replevin order. At the trial court’s inquiry, Joliat
identified two pieces of property allegedly taken by DN Credit Union and outside the
Schedule A assets: a Ford F-350 truck and the flatbed trailer shown in Exhibit 1. There
was no further identification at the hearing as to the property items allegedly taken by DN
Credit Union.
Joliat Counterclaims
{¶13} On October 14, 2022, Joliat filed an answer to the complaint and a
counterclaim alleging ten causes of action: breach of contract, civil conspiracy,
conversion, theft, willful deterioration of assets, violation of good faith and fair dealing,
tortious interference with an existing and prospective business relationship, violations of
Fair Debt Collection Practices Act, violations of Fair Credit Billing Act, and punitive
damages.
{¶14} On November 15, 2022, DN Credit Union requested leave to file a
responsive pleading, which the trial court granted and allowed it until December 15, 2022
to file. On December 6, 2022, DN Credit Union filed its second motion for leave to file a
responsive pleading until January 3, 2023.
Motion to Show Cause and Motion for Default Judgment
{¶15} On December 21, 2022, Joliat filed a motion to show cause, for attorney
fees, and for default judgment. Joliat first argued that DN Credit Union was in violation of
numerous court orders. As stated in its motion for temporary restraining order, answer,
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
and counterclaims, Joliat contended that DN Credit Union was in violation of the
September 19, 2022 replevin order by taking items that were not listed in Schedule A.
Joliat referenced two conferences with the trial court, for which there were no transcripts
or journalized entries, where the trial court allegedly ordered DN Credit Union to limit the
collateral to Schedule A and to provide an accounting of the recovered assets. For the
property it had taken, Joliat alleged that DN Credit Union was not maintaining the property
in a secure or safe location. Joliat next contended that DN Credit Union should be found
in contempt of court because a DN Credit Union representative failed to attend the court-
ordered mediation scheduled for November 30, 2022. Joliat finally argued that he was
entitled to a default judgment on his counterclaims for DN Credit Union’s failure to file a
timely answer.
{¶16} On January 1, 2023, DN Credit Union filed a motion for leave to respond to
Joliat’s counterclaims. DN Credit Union filed its answer to Joliat’s counterclaims on
January 3, 2023. On January 23, 2023, the trial court granted DN Credit Union’s motion
for leave to respond to the counterclaims until January 24, 2023. DN Credit Union filed
an amended answer on January 24, 2023.
{¶17} DN Credit Union filed a response to Joliat’s show cause motion on February
16, 2023. In support of its motion, DN Credit Union filed the transcript of the October 12,
2022 TRO Hearing. DN Credit Union also attached copies of emails between Greg
Grosklos, the former CEO of DN Credit Union, and Joliat discussing Joliat’s credit
situation. One of the attached exhibits showed that on September 22, 2022, Joliat sent
an email to Jessica Cobbs that stated, “As of this message, I have provided access to
Ben Bolog to catalog and remove everything from 7253 Whipple Ave. I have provided him
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
and surrendered the JLG boom lift, the 2017 Ford F-350, and the pizza truck. The keys
are at the brewery and Ben Bolog has been provided them.”
Show Cause Hearing
{¶18} The matter came on for a March 2, 2023 hearing before the magistrate as
to Joliat’s December 21, 2022 motion, which included a motion to show cause and motion
for default judgment. Joliat testified that he leased the property for Shale Brewing and the
landlord ordered Joliat to vacate the premises by September 1, 2022, but extended the
time to the end of September 2022. Joliat testified that in February, DN Credit Union
provided Joliat with an inventory and photographs of the recovered assets. The inventory
and photographs were prepared by Ben Bolog and his recovery company. Joliat
presented Exhibit K that highlighted the recovered items that were on Schedule A. Joliat
presented Exhibit L, which was a list he compiled from memory as to the items that were
recovered but did not appear on the inventory prepared by Ben Bolog and/or Schedule
A. The recovered Ford F-350 truck did not appear on any of the lists, but at the hearing,
Joliat testified he did not contest DN Credit Union’s seizure of the Ford F-350 truck, even
though he initially argued it was improperly recovered.
{¶19} Ben Bolog of FAB Transport and Recovery testified at the hearing. He met
with Joliat three times. The first time Bolog met Joliat was at Bolog’s business office.
Jessica Cobbs arranged the meeting to see if Bolog could assist Joliat with financing
outside of DN Credit Union. The second time Bolog met with Joliat was after Joliat had
closed Shale Brewing and Jessica Cobbs told Bolog that Joliat might be interested in
selling assets. Bolog and Joliat met at Shale Brewing to look at the assets, but no sales
were made. The third time Bolog met with Joliat was in Bolog’s capacity as a recovery
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
agent for DN Credit Union. Bolog was provided with the September 19, 2022 replevin
order on September 20th or 21st. Bolog testified that Jessica Cobbs told him to take
everything that had to do with the brewery system and Shale Brewing. On September 23,
2022, Bolog met with Joliat at Shale Brewing to get the door code to the facility. Joliat
was removing assets from the property that Joliat claimed were personal assets. Bolog
testified that Joliat said that Jessica could “F” herself and the Bank could have it all. On
September 24, 2022, Bolog showed Joliat a copy of the September 19, 2022 replevin
order. Joliat denied that he was served with the court order or that Bolog showed him a
copy of the court order.
{¶20} Bolog acknowledged the bicycles owned by Ernie’s Bike Shop and
recovered from Shale Brewing. He stated that the bicycles were separated from the
recovered assets and would be released to the proper owners upon a court order. At the
time of the recovery, Joliat had placed stickers on eight items he stated belonged to him.
Those eight items were at Bolog’s facility but separated from the inventoried assets.
{¶21} Joliat argued that Bolog did not properly secure the assets after their
recovery, demonstrating with photographic evidence. Bolog testified as to the unusually
short recovery period and subsequently, all recovered assets were inventoried,
photographed, and moved to two secure storage facilities where they remained locked,
secured, and protected from the elements. Bolog also testified that he would find assets
placed outside the door of the Shale Brewing location. Joliat testified that he returned
assets to the business and left them so he would not have contact with the recovery
agents.
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
{¶22} On March 6, 2023, the magistrate issued her decision, recommending
dismissal of Joliat’s motion for contempt. The trial court approved and adopted the
magistrate’s decision. The magistrate first noted that while Joliat alleged several
violations, including (1) DN Credit Union’s failure to follow the trial court’s orders as to
seizure and storage of the property, (2) DN Credit Union’s failure to participate in
mediation, and (3), DN Credit Union’s failure to timely answer Joliat’s counterclaim, Joliat
only presented evidence and argument at the show cause hearing as to Alleged Violation
#1. The magistrate accordingly declined to address the second and third alleged
violations based on Joliat’s failure to present any evidence on those claims.
{¶23} The magistrate further noted that Joliat did not specify the type of contempt
or sanction he was pursuing against DN Credit Union, either civil or criminal contempt.
The magistrate analyzed the matter under both civil and criminal contempt. The
magistrate found that upon the record, Joliat did not meet his burden under either
standard of proof.
{¶24} Joliat filed objections to the magistrate’s decision, arguing the magistrate
used the incorrect standard of review for contempt and disputing the finding that Joliat
voluntarily surrendered the assets. On March 27, 2023, the trial court overruled the
objections.
Summary Judgment
{¶25} On July 14, 2023, DN Credit Union filed a motion for summary judgment on
all of Joliat’s counterclaims. In support of its motion, DN Credit Union filed the transcripts
of the TRO hearing and motion to show cause hearing, and the exhibits DN Credit Union
had previously used to respond to other motions.
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
{¶26} Joliat filed his response to the motion for summary judgment on August 11,
2023. The five-page response to the motion for summary judgment did not address any
issues of law as to his ten counterclaims. Rather, Joliat argued that DN Credit Union did
not meet its evidentiary burden under Civ.R. 56 to show there was no genuine issue of
material fact.
{¶27} DN Credit Union filed its reply on August 18, 2023.
{¶28} On September 12, 2023, the trial court granted DN Credit Union’s motion
for summary judgment as to Joliat’s ten counterclaims. In a comprehensive and
thoroughly analyzed thirty-one-page judgment entry, the trial court found as to each
counterclaim that DN Credit Union was entitled to judgment as a matter of law. The trial
court first found that evidence presented by DN Credit Union in support of its motion for
summary judgment was permissible under Civ.R. 56. The trial court next analyzed each
of Joliat’s ten counterclaims to find in favor of DN Credit Union.
Voluntary Dismissal and Appeal
{¶29} On September 14, 2023, DN Credit Union filed a Civ.R. 41(A) notice of its
voluntary dismissal of its claims against Joliat without prejudice.
{¶30} Joliat filed his notice of appeal on October 12, 2023.
ASSIGNMENTS OF ERROR
{¶31} Appellants raise three Assignments of Error:
I. THE COURT ERRED IN GRANTING SUMMARY JUDGMENT ON
CONVERSION BECAUSE PLAINTIFF DID NOT AFFIRMATIVELY
DEMONSTRATE THAT DEFENDANTS WERE NOT DAMAGED.
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
II. THE COURT ERRED IN DENYING DEFENDANTS’ MOTION FOR
DEFAULT JUDGMENT.
III. THE COURT ERRED IN DENYING DEFENDANTS’ MOTION TO
SHOW CAUSE AND FOR ATTORNEY FEES.
ANALYSIS
{¶32} For ease of analysis, we address Joliat’s Assignments of Error out of order.
Default Judgment
{¶33} In his second Assignment of Error, Joliat argues the trial court erred in
denying his motion for default judgment on his counterclaims due to DN Credit Union’s
failure to file a timely answer. We disagree.
{¶34} Joliat filed his answer and counterclaims on October 14, 2022. Joliat
contends the answer to his counterclaims was due on November 15, 2022. On November
15, 2022, DN Credit Union filed a motion for leave to respond until December 15, 2022,
which the trial court granted. On December 6, 2022, DN Credit Union filed a second
motion for leave to respond until January 3, 2023, which the trial court granted on January
23, 2023.
{¶35} On December 21, 2022, Joliat filed his motion requesting that DN Credit
Union show cause as to why it should not be held in contempt for violation of court orders
and for default judgment against DN Credit Union for failing to timely answer his
counterclaims.
{¶36} DN Credit Union filed its answer on January 3, 2023 and an amended
answer on January 24, 2023.
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
{¶37} On March 2, 2023, the magistrate held a hearing on Joliat’s December 21,
2022 motions. The magistrate issued her decision on March 6, 2023. In the decision, the
magistrate declined to address the default judgment. In his March 20, 2023 objections to
the magistrate’s decision, Joliat did not assign as error the magistrate’s decision to not
address his motion for default judgment.
{¶38} Joliat’s second Assignment of Error raises multiple issues, but none in his
favor. First, there is no dispute that DN Credit Union appeared in the action prior to Joliat’s
motion for default judgment. As such, Civ.R. 55(A) applies to this matter where notice and
hearing must be given to the appearing but allegedly defaulting party before default
judgment may be granted. Lillibridge v. Pica, 2021-Ohio-1480, ¶ 29 (5th Dist.) citing
Guiley v. Dewalt, 2017-Ohio-4151 (5th Dist.); Fifth Third Mortgage v. Fantine, 2011-Ohio-
4968 (5th Dist.). That hearing was held on March 2, 2023. At that hearing, Joliat presented
no evidence as to his motion for default judgment. That lack of evidence resulted in the
March 6, 2023 magistrate’s decision where the magistrate declined to rule on the matter
because Joliat failed to meet his evidentiary burden.
{¶39} Second, it is well settled that “[i]f a trial court fails to mention or rule on a
pending motion, the appellate court presumes that the motion was implicitly overruled.”
Batten v. Batten, 2010-Ohio-1912, ¶ 82 (5th Dist.) quoting Swinehart v. Swinehart, 2007–
Ohio–6174, ¶ 26 (5th Dist.). Joliat filed objections to the March 6, 2023 magistrate’s
decision but a review of his objections shows that he did not raise the magistrate’s
decision as to default judgment.
{¶40} As we explained in Lemon v. Lemon, 2011-Ohio-1878 ¶ 63–65 (5th Dist.):
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
Civ.R. 53(D)(3)(b)(iv) provides that “[a] party shall not assign as error on
appeal the court's adoption of any factual findings or legal conclusion * * *
unless the party has objected to that finding or conclusion * * *.” See, e.g.,
Stamatakis v. Robinson (January 27, 1997), Stark App.No. 96CA303;
Kademenos v. Mercedes–Benz of North America, Inc. (March 3, 1999),
Stark App. No. 98CA50.
Civ.R. 53(D)(3)(b)(iv) further provides: “Except for a claim of plain error, a
party shall not assign as error on appeal the court's adoption of any factual
finding or legal conclusion, whether or not specifically designated as a
finding of fact or conclusion of law under Civ.R. 53(D)(3)(a)(ii), unless the
party has objected to that finding or conclusion as required by Civ.R.
53(D)(3)(b).”
However, the plain error doctrine is not favored and may be applied only in
the extremely rare case involving exceptional circumstances where error,
to which no objection was made at the trial court, seriously affects the basic
fairness, integrity, or public reputation of the judicial process, thereby
challenging the legitimacy of the underlying judicial process itself. Dorsey v.
Dorsey, Fifth Dist. App. No. 2009-CA-00065, 2009-Ohio-4894; Goldfuss v.
Davidson, 79 Ohio St.3d 116, 679 N.E.2d 1099, 1997-Ohio-401, at syllabus.
{¶41} Under the plain error review, we do not find this is an exceptional case. DN
Credit Union appeared in the matter, filed motions for leave to answer that were granted
by the trial court, and filed its answer. The trial court held a hearing pursuant to Civ.R.
55(A) and Joliat did not raise the issue.
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
{¶42} Based upon the failure of Joliat to object to the magistrate's decision as to
the issue of default judgment, and that there was no plain error, we reject Joliat’s second
Assignment of Error and overrule the same.
Contempt
{¶43} Joliat contends in his third Assignment of Error that the trial court erred
when it found that DN Credit Union was not in contempt of the September 19, 2022
replevin order. We disagree.
Standard of Proof: Civil or Criminal
{¶44} Joliat first argues the trial court used the incorrect standard of proof when it
considered his motion to show cause as to why DN Credit Union should be held in
contempt for violating the September 19, 2022 replevin order. Joliat argues he asked the
trial court to find DN Credit Union in civil contempt for its failure to follow the September
19, 2022 replevin order. In the March 6, 2023 magistrate’s decision, the magistrate
analyzed the matter pursuant to the standards of proof for both criminal and civil contempt
because the magistrate found it was unclear whether Joliat was requesting to coerce DN
Credit Union to obey or to punish DN Credit Union for a violation of the order. Joliat
objected to the magistrate’s decision, arguing the magistrate used the incorrect standard
of proof because he was only requesting relief in civil contempt. The trial court overruled
the objections, finding the magistrate applied the correct standard of proof for both civil
and criminal contempt to the evidence, finding that under either standard, Joliat failed to
establish that DN Credit Union was in contempt.
{¶45} There are several types of contempt: direct, indirect, civil, criminal, and
summary. The fundamental distinction between direct contempt and indirect contempt
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
lies in the location of the act of contempt -- whether it takes place within the presence of
the judge, or elsewhere. Meek v. Geneva, 2017-Ohio-7975, ¶ 32 (5th Dist.) citing A.P.
Lee & Co., v. R.R. Bowler, 10th Dist. Franklin No. 14AP-599, 2015-Ohio-2535, 2015 WL
3917570, ¶ 31.
{¶46} Civil contempt is defined as that which exists in failing to do something
ordered to be done by the court in a civil action for the benefit of the opposing party
therein. Tincher v. Tincher, 2020-Ohio-3352, ¶ 81 (5th Dist.) citing Mohr v. Mohr, 2017-
Ohio-1044, ¶ 15 (5th Dist.), quoting McKinney v. McKinney, 5th Dist. Stark No.
2014CA00118, 2015 WL 1331886, ¶ 11–12 quoting Beach v. Beach, 99 Ohio App. 428,
431, 130 N.E.2d 164 (1955). The burden of proof for civil contempt is clear and convincing
evidence. Geary v. Geary, 2015-Ohio-259, ¶ 34 (5th Dist.), citing Flowers v. Flowers,
2011-Ohio-5972 (10th Dist.). The party seeking to enforce a court order must establish,
by clear and convincing evidence, the existence of a court order and the nonmoving
party's noncompliance with the terms of that order. Meek v. Geneva, 2017-Ohio-7975, ¶
33 citing Ward v. Ward, 2016-Ohio-5178, ¶ 41 (5th Dist.).
{¶47} The evidence must show beyond a reasonable doubt that a person is guilty
of indirect criminal contempt. Meek v. Geneva, 2017-Ohio-7975, ¶ 34 (5th Dist.) citing
Gulbrandsen v. Summit Acres, Inc., 2016-Ohio-1550, ¶ 45 (4th Dist.) citing Liming v.
Damos, 133 Ohio St.3d 509, 2012-Ohio-4783, 979 N.E.2d 297 at ¶ 11, citing Gompers v.
Buck's Stove and Range Co., 221 U.S. 418, 444, 31 S.Ct. 492, 55 L.Ed. 797 (1911).
Additionally, in cases of indirect criminal contempt, the evidence must show “that the
alleged contemnor intended to defy the court.” Id. quoting Midland Steel Prods. Co. v.
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
Internatl. U.A.W. Local 486, 61 Ohio St.3d 121, 573 N.E.2d 98 (1991), paragraph two of
the syllabus.
{¶48} Upon our review of the parties’ motions, the evidence presented at the show
cause hearing, the magistrate’s decision, Joliat’s objections to the magistrate’s decision,
and the judgment entry overruling the objections to the magistrate’s decision, we find the
trial court made no error as to the standard of proof on Joliat’s show cause motion. The
magistrate correctly cited both the civil and criminal contempt standards of proof in the
decision and diligently applied both standards of proof to the evidence.
No Civil Contempt of the September 19, 2022 Replevin Order
{¶49} Joliat next argues the trial court erred when it found that DN Credit Union
was not in contempt of the September 19, 2022 replevin order. A trial court's decision
regarding contempt will not be reversed absent an abuse of discretion. Tincher v. Tincher,
2020-Ohio-3352, ¶ 82 (5th Dist.) citing Gunawardena v. Gunawardena, 2015-Ohio-2566,
¶ 1 (5th Dist.), citing Beltz v. Beltz, 2006-Ohio-1144 (5th Dist.). In order to find an abuse
of discretion, we must determine the trial court's decision was unreasonable, arbitrary, or
unconscionable and not merely an error of law or judgment. Blakemore v. Blakemore, 5
Ohio St.3d 217, 219 (1983).
{¶50} Joliat contends the evidence at the show cause hearing demonstrated that
DN Credit Union violated the September 19, 2022 replevin order when it recovered more
assets from the Shale Brewing business location than were listed on Schedule A. DN
Credit Union argues that Joliat, through his emails and verbal communications with DN
Credit Union and its agents, voluntarily surrendered the assets at the Shale Brewing
business location to DN Credit Union. We examine the parties’ arguments under our
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
limited abuse of discretion standard of review to determine whether the trial court erred
in finding there was no civil contempt of the September 19, 2022 replevin order. There
are two issues for this Court to consider: the evidence of what happened when the
September 19, 2022 replevin order was enforced and the terms of the Promissory Note
and Security Agreement. We discuss each issue in turn.
The Recovery of Assets
{¶51} DN Credit Union argues it complied with the September 19, 2022 replevin
order because Joliat voluntarily surrendered assets, as supported by the words and
actions of Joliat. Joliat claimed that if he voluntarily surrendered property to DN Credit, he
did so under false pretenses because he did not understand Ben Bolog’s role as a
recovery agent. Ben Bolog met with Joliat three times, first as a possible financier
arranged by Jessica Cobbs, second as a possible purchaser of the assets, and third as
the recovery agent for DN Credit Union. On September 22, 2022, Joliat emailed Jessica
Cobbs and stated that he had provided access to Ben Bolog to catalog and remove
everything from the Shale Brewing business location. (Plaintiff’s Exhibit 1). He further
stated in the email that he provided Ben Bolog and surrendered the JLG boom lift, the
2017 Ford F-350, and the pizza truck. The evidence shows that as of September 22,
2022, Joliat understood Ben Bolog’s role as recovery agent for DN Credit Union.
{¶52} In Joliat’s motion for a temporary restraining order, Joliat stated that DN
Credit Union impermissibly recovered the Ford F-350 because it was not listed on the
Schedule A list of assets. At the show cause hearing, Joliat stated that while the Ford F-
350 was not on the Schedule A list of assets, he did not object to DN Credit Union
recovering the truck. Ben Bolog acknowledged that he was in possession of the bicycles
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
not owned by Joliat and referenced by Joliat in his motion for temporary restraining order,
but those bicycles were moved to a separate space for the owner’s repossession, once
released by the court.
{¶53} At the show cause hearing, Joliat presented a list he had drafted from
memory as to the items that were not on the Schedule A list and allegedly removed from
the property. Ben Bolog presented the inventory list of removed assets and testified that
the assets were inventoried, photographed, boxed, and moved to two secure storage
facilities, where they remained locked, secured, and protected from the elements. One
issue that was raised at the show cause hearing was the involvement of the landlord for
the building where Shale Brewing was located. The landlord ordered Joliat to vacate the
premises by September 1st but extended the time to the end of September. Ben Bolog
testified that he told Joliat that he would take the property back to the way the landlord
wanted it, an open room. When Ben Bolog met with Joliat to get the door codes, Joliat
was marking his personal property with stickers but did not remove that property. Ben
Bolog testified that he had taken those items and moved them to a separate space for
Joliat’s repossession, once released by the court.
The Contract Language
{¶54} We next examine the contractual language of the Promissory Note and
Security Agreement. In his motion to show cause, Joliat focused only on the assets listed
on Schedule A, arguing that the assets removed by DN Credit Union did not match the
assets listed on Schedule A, therefore DN Credit Union was in contempt of the September
19, 2022 replevin order. The trial court noted that in his objections to the magistrate’s
decision, Joliat argued for the first time that pursuant to the language of the Promissory
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
Note and Security Agreement, and Ohio UCC statutory provisions, Joliat could not
voluntarily surrender property not subject of a security interest to satisfy the Security
Agreement. Joliat did not raise that argument in his motion to show cause or at the show
cause hearing.
{¶55} There is no dispute that the parties are contractually bound by the
Promissory Note and Security Agreement, which includes the Schedule A list of assets.
The funds agreed to in the Promissory Note were secured by the Security Agreement.
The Security Agreement states in pertinent part:
1. Definitions. The following terms as used in this Agreement shall have
the meanings set forth below:
“Collateral” shall mean all of the property set forth in Exhibit A [Schedule A]
attached hereto and made a part hereof, and all property of the same class
and character acquired by Debtor subsequent to the date hereof, and all
proceeds thereof, and all substitutions, replacements and accessions
thereto.
***
2. Creation of the Security Interest. Debtor hereby grants to Secured
Party a security interest in all of the rights, title and interest of Debtor in and
to the Collateral to secure the full and prompt payment and performance of
all of the Obligations.
7. Rights and Remedies. Upon the occurrence of an Event of Default, the
Obligations shall immediately become due and payable in full without notice
or demand. Secured Party shall have all rights and remedies provided by
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
the Uniform Commercial Code in effect in the State of Ohio on the date
hereof. In addition to, or in conjunction with, or substitution for such rights
and remedies, Secured Party may at any time and from and after the
occurrence of an Event of Default hereunder:
(a) with or without notice to Debtor, foreclose the security interest created
herein by any available judicial procedure, or take possession of the
Collateral, or any portion thereof, with or without judicial process, and enter
any premises where the Collateral may be located for the purpose of taking
possession of or removing the same, or rendering the same unusable, or
disposing of the Collateral on such premises, and Debtor agrees not to
resist or interfere therewith;
There is no dispute that Joliat defaulted on the Promissory Note, entitling DN Credit Union
to enforce the Security Agreement. Finally, there is no dispute that the trial court issued
the September 19, 2022 replevin order, which referenced the Promissory Note, Security
Agreement, and the Schedule A list of assets.
{¶56} Joliat contends the Security Agreement’s definition of “collateral” limits DN
Credit Union to the recovery of only the assets listed in Schedule A. He further cites R.C.
1309.102(A)(12) for the UCC definition of “collateral”:
(12) “Collateral” means the property subject to a security interest or
agricultural lien, including:
(a) Proceeds to which a security interest attaches;
(b) Accounts, chattel paper, payment intangibles, and promissory notes that
have been sold; and
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
(c) Goods that are the subject of a consignment.
{¶57} DN Credit Union contends that regardless of the terms of the Promissory
Note and Security Agreement, Joliat voluntarily surrendered the recovered assets to DN
Credit Union. Joliat argued before the trial court and on appeal that as a matter of law, a
debtor cannot voluntarily surrender assets beyond those identified as “collateral” to satisfy
a secured debt. In its judgment entry overruling the objections to the magistrate’s
decision, the trial court stated, “Defendants have cited no legal authority to support this
argument, and the Court is not persuaded that an individual cannot voluntarily turn over
to a creditor whatever property he chooses, in order to satisfy a debt.” (Judgment Entry,
March 27, 2023). In his argument on appeal, Joliat has likewise failed to cite any case
law or statute, beyond the definition of “collateral,” to support his argument that a debtor
is prohibited from voluntarily surrendering assets to satisfy a debt. The absence of law on
this issue is telling. If we take Joliat’s argument to its logical extreme, a debtor would be
prohibited from satisfying a defaulted secured debt in any other manner than the recovery
of the secured assets. We decline Joliat’s invitation to develop law out of whole cloth as
to whether a debtor can voluntarily surrender assets to satisfy a debt.
Clear and Convincing Evidence
{¶58} The trial court interpreted the terms of the Promissory Note and Security
Agreement and weighed the evidence as to the parties’ actions to find Joliat failed to
establish by clear and convincing evidence that DN Credit Union was in contempt of the
September 19, 2022 replevin order. As stated above, the standard of proof in a civil
contempt action is clear and convincing evidence. “Clear and convincing evidence is that
measure or degree of proof which will produce in the mind of the trier of facts a firm belief
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
or conviction as to the allegations sought to be established.” Cross v. Ledford, 161 Ohio
St. 469, 477 (1954). “Where the proof required must be clear and convincing, a reviewing
court will examine the record to determine whether the trier of facts had sufficient
evidence before it to satisfy the requisite degree of proof.” State v. Schiebel, 55 Ohio
St.3d 71, 74 (1990). As an appellate court, we are not fact finders; we neither weigh the
evidence nor judge the credibility of witnesses.
{¶59} In this case, based on the terms of the Promissory Note and Security
Agreement considered in conjunction with the evidence presented as to the actions of the
parties during the recovery of the assets, we find there was sufficient evidence for the trial
court to find DN Credit Union was not in contempt of the September 19, 2022 replevin
order. The trial court did not abuse its discretion to deny Joliat’s motion to show cause.
{¶60} Joliat’s third Assignment of Error is overruled.
Summary Judgment
{¶61} Joliat argues in his first Assignment of Error that the trial court erred in
granting summary judgment in favor of DN Credit Union on Joliat’s counterclaim for
conversion.2 We disagree.
Conversion
{¶62} Joliat brought a claim of conversion in his counterclaim against DN Credit
Union, arguing DN Credit Union removed and maintained control over personal and
business property belonging to Joliat without the proper legal authority to do so. The tort
of conversion is defined as “the wrongful exercise of dominion over property to the
2
Joliat brought ten counterclaims against DN Credit Union. DN Credit Union’s motion for summary
judgment argued it was entitled to judgment as a matter of law on all ten counterclaims. The trial court
granted the summary judgment in favor of DN Credit Union on all ten counterclaims. In his appeal, Joliat
only raises as error the trial court’s judgment as to his counterclaim for conversion.
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
exclusion of the rights of the owner, or withholding it from his possession under a claim
inconsistent with his rights.” Heflin v. Ossman, 2005-Ohio-6876, ¶ 20 (5th Dist.), quoting
Joyce v. General Motors Corp., 49 Ohio St.3d 93, 96, 551 N.E.2d 172 (1990). Thus, the
elements required for conversion are: (1) a defendant's exercise of dominion or control;
(2) over a plaintiff's property; and (3) in a manner inconsistent with the plaintiff's rights of
ownership. Id., citing Cozmyk Ent., Inc. v. Hoy, Franklin App. No. 96APE10–1380, 1997
WL 358816 (June 30, 1997). The Eighth District Court of Appeals uses different language
to describe the same elements of the tort of conversion: (1) plaintiff's ownership or right
to possession of the property at the time of conversion; (2) defendant's conversion by a
wrongful act or disposition of plaintiff's property rights; and (3) damages. 6750 BMS,
L.L.C. v. Drentlau, 2016-Ohio-1385, ¶ 28 (8th Dist.); Crockett Homes, Inc. v. Tracy, 2024-
Ohio-1464, ¶ 169 (7th Dist.); Haddad v. Maalouf-Masek, 2024-Ohio-1983, ¶ 59 (8th Dist.).
{¶63} The Eighth District has further delineated the elements of conversion if the
defendant came into possession of the property lawfully so that the plaintiff must prove
two additional elements * * *: (1) that the plaintiff demanded the return of the property
after the defendant exercised dominion or control over the property; and (2) that the
defendant refused to deliver the property to the plaintiff. 6750 BMS, L.L.C. v. Drentlau,
2016-Ohio-1385, ¶ 28 (8th Dist.); R & S Distrib., Inc. v. Hartge Smith Nonwovens, L.L.C.,
2010-Ohio-3992, ¶ 23 (1st Dist.); Crockett Homes, Inc. v. Tracy, 2024-Ohio-1464, ¶ 169
(7th Dist.); Accord Fid. & Deposit Co. of Maryland v. Farmers & Citizens Bank of
Lancaster, 72 Ohio App. 432, 434, (5th Dist.1943). The measure of damages in a
conversion action is the value of the converted property at the time it was converted.
Tabar v. Charlie's Towing Serv., 97 Ohio App.3d 423, 427–428, (8th Dist.1994).
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
Standard of Review
{¶64} The matter in this case is before us upon a motion for summary judgment.
Summary judgment proceedings present the appellate court with the unique opportunity
of reviewing the evidence in the same manner as the trial court. Smiddy v. The Wedding
Party, Inc., 30 Ohio St.3d 35, 36, 506 N.E.2d 212 (1987). As such, this Court reviews an
award of summary judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102,
105, 671 N.E.2d 241 (1996).
{¶65} Civ.R. 56 provides summary judgment may be granted only after the trial
court determines: 1) no genuine issues as to any material fact remain to be litigated; 2)
the moving party is entitled to judgment as a matter of law; and 3) it appears from the
evidence that reasonable minds can come to but one conclusion and viewing such
evidence most strongly in favor of the party against whom the motion for summary
judgment is made, that conclusion is adverse to that party. Temple v. Wean United, Inc.,
50 Ohio St.2d 317, 364 N.E.2d 267 (1977).
{¶66} It is well established that the party seeking summary judgment bears the
burden of demonstrating no issues of material fact exist for trial. Celotex Corp. v. Catrett,
477 U.S. 317, 330, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The standard for granting
summary judgment is delineated in Dresher v. Burt, 75 Ohio St.3d 280 at 293, 662 N.E.2d
264 (1996): “* * * a party seeking summary judgment, on the ground that the nonmoving
party cannot prove its case, bears the initial burden of informing the trial court of the basis
for the motion, and identifying those portions of the record that demonstrate the absence
of a genuine issue of material fact on the essential element(s) of the nonmoving party's
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
claims. The moving party cannot discharge its initial burden under Civ.R. 56 simply by
making a conclusory assertion the nonmoving party has no evidence to prove its case.
Rather, the moving party must be able to specifically point to some evidence of the type
listed in Civ.R. 56(C) which affirmatively demonstrates the nonmoving party has no
evidence to support the nonmoving party's claims. If the moving party fails to satisfy its
initial burden, the motion for summary judgment must be denied. However, if the moving
party has satisfied its initial burden, the nonmoving party then has a reciprocal burden
outlined in Civ.R. 56(E) to set forth specific facts showing there is a genuine issue for trial
and, if the nonmovant does not so respond, summary judgment, if appropriate, shall be
entered against the nonmoving party.” The record on summary judgment must be viewed
in the light most favorable to the opposing party. Williams v. First United Church of Christ,
37 Ohio St.2d 150, 309 N.E.2d 924 (1974).
{¶67} In support of its motion for summary judgment, DN Credit Union filed the
transcripts of the TRO hearing and the show cause hearing, in addition to previously filed
exhibits. Joliat’s response to the motion for summary judgment argued only that DN Credit
Union did not meet its evidentiary burden under Civ.R. 56 to show it was entitled to
judgment as a matter of law. Joliat made no other argument as to his ten counterclaims
that there were genuine issues of material fact for trial.
{¶68} The trial court found the transcripts of evidence were proper under Civ. R.
56(C). Civ.R. 56(C) states in pertinent part, “Summary judgment shall be rendered
forthwith if the pleadings, depositions, answers to interrogatories, written admissions,
affidavits, transcripts of evidence, and written stipulations of fact, if any, timely filed in the
action, show that there is no genuine issue as to any material fact and that the moving
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
party is entitled to judgment as a matter of law.” (Emphasis added.) The trial court
determined that DN Credit Union met its evidentiary burden under Civ.R. 56 to point to
some evidence demonstrating that Joliat could not support his claim for conversion. Upon
our de novo review, we agree. DN Credit Union claimed that pursuant to the Promissory
Note and Security Agreement, it was entitled to recover the Schedule A assets upon
Joliat’s undisputed default of the Promissory Note. DN Credit Union next pointed to the
transcripts of evidence from the TRO hearing and show cause hearing to show that DN
Credit Union lawfully obtained possession of the property and that Joliat voluntarily
surrendered the allegedly converted property.
{¶69} The trial court next found that Joliat failed to meet his reciprocal burden
under Civ.R. 56:
In response, Defendants contend that the Court cannot rely upon such
testimony (an argument this Court has already rejected), but Defendants
fail to point to any evidence in the record (nor do they produce any evidence
by affidavit or otherwise) demonstrating the required elements of
conversion. Even if the Court found a genuine issue of material fact
regarding the allegation of voluntary surrender, Defendants have failed to
produce evidence of other remaining elements of the claim, including
damages.
***
Defendants have produced no evidence, nor made any argument, that
would allow their conversion claim to remain viable in light of Plaintiff’s
lawful repossession of the Collateral.
[Cite as DN Community Fed. Credit Union v. Joliat, 2024-Ohio-2380.]
(Judgment Entry, Sept. 12, 2023). The trial court therefore found that Joliat failed to meet
his reciprocal burden under Dresher when he rested upon the mere allegations or denials
of his pleadings, not setting forth any specific facts showing there is a genuine issue for
trial. We reach the same conclusion based on our de novo review of the motion for
summary judgment and Joliat’s response to the motion for summary judgment. Joliat
failed to meet his Dresher and Civ.R. 56(E) burden to set forth specific facts showing
there was a genuine issue for trial on the counterclaim of conversion. Reviewing this
matter in a light most favorable to the non-moving party, we agree with the trial court that
summary judgment on the counterclaim of conversion is appropriate.
{¶70} Joliat’s first Assignment of Error is overruled.
CONCLUSION
{¶71} The judgment of the Stark County Court of Common Pleas is affirmed.
By: Delaney, P.J.,
Baldwin, J. and
King, J., concur.