Johnson v. Stone

[Cite as Johnson v. Stone, 2021-Ohio-894.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
ALLEN COUNTY
JERRY M. JOHNSON,
PLAINTIFF-APPELLEE, CASE NO. 1-20-31
v.
R. JEFFREY. STONE, ET AL.,
OPINION
DEFENDANTS-APPELLANTS.
Appeal from Allen County Common Pleas Court
Trial Court No. CV 2019 0244
Judgment Affirmed
Date of Decision: March 22, 2021
APPEARANCES:
Steven L. Diller and Adam J. Motycka for Appellant
J. Alan Smith and Dalton J. Smith for Appellee
Case No. 1-20-31
SHAW, J.
{¶1} Defendants-Appellants, R. Jeffrey Stone, et al., appeal the July 1, 2020
judgment of the Allen County Court of Common Pleas granting the motion for
summary judgment filed by Plaintiff-Appellee, Jerry M. Johnson (“Johnson”). On
appeal, Appellants claim the trial court erred in granting Johnson’s motion for
summary judgment prior to them filing a reply to Johnson’s response to their cross-
motion for summary judgment.
Procedural Background
{¶2} On July 25, 2019, Johnson filed a complaint seeking a creditor’s bill,
pursuant to R.C. 2333.01, individually against R. Jeffery Stone (“Stone) and against
two entities affiliated with Stone, R.J. Stone Development Group, Inc. (“RJSDG”)
and Logan Landing Development Group (“Logan Landing”), to satisfy a judgment
Johnson had previously obtained against Stone in the amount of $663,656.11.1
1
“[A] creditor’s bill is an action in equity by which a judgment creditor seeks to subject an interest of the
judgment debtor that cannot be reached on execution to the payment of the creditor’s existing judgment.”
In re Estate of Mason, 109 Ohio St. 3d 532, 2006-Ohio-3256, ¶ 18. Moreover, R.C. 2333.01 states:
When a judgment debtor does not have sufficient personal or real property subject
to levy on execution to satisfy the judgment, any equitable interest which he has in
real estate as mortgagor, mortgagee, or otherwise, or any interest he has in a banking,
turnpike, bridge, or other joint-stock company, or in a money contract, claim, or
chose in action, due or to become due to him, or in a judgment or order, or money,
goods, or effects which he has in the possession of any person or body politic or
corporate, shall be subject to the payment of the judgment by action.
There are three elements to a claim for a creditor’s bill under R.C. 2333.01: (1) the existence of a valid
judgment against a debtor, (2) the existence of an interest in the debtor of the type enumerated in the statute,
and (3) a showing that the debtor does not have sufficient assets to satisfy the judgment against him. See
Capital One Bank (USA), N.A. v. Caspary, 7th Dist. Mahoning No. 17 MA 0092, 2018-Ohio-358, ¶ 11.
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Johnson alleged that Stone did not have sufficient real or personal property to satisfy
Johnson’s judgment. Johnson claimed that Stone had repeatedly represented that
he was a 50% shareholder of Logan Landing. Johnson alleged that this was an
uncertified stock, and Stone’s interest could not be physically levied upon by a writ
of execution. Therefore, Johnson sought to have the value of the stock applied to
the payment of his judgment via a creditor’s bill.
{¶3} Stone subsequently filed an answer asserting that he is not a shareholder
of Logan Landing, but that the entity is 100% owned by Bay Point Properties, LLC
(“Bay Point”), of which Stone holds 50% of the membership interests, “and which
as a result holds only equitable interest of 50% in Logan Landing Development
Group, Inc.” (Doc. No. 13 at ¶ 2).
{¶4} Thus, at issue between the parties in this litigation is the nature of
Stone’s ownership interest in Logan Landing and whether the value of that interest
could be reached to satisfy Johnson’s judgment against Stone through a creditor’s
bill. Notably, Stone consented to a creditor’s bill against RJSDG, however, this
asset was insufficient to satisfy Johnson’s judgment.
{¶5} On May 1, 2020, the parties filed a Joint Motion for Extension of Time
to File Summary Judgment, requesting the trial court grant them an additional thirty
days to file motions for summary judgment. The trial court subsequently granted
the motion.
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{¶6} On June 1, 2020, Johnson filed a motion for summary judgment
asserting that there is no genuine issue of material fact that he is entitled to collect
his judgment against the equity of Stone’s shares in Logan Landing via a creditor’s
bill. Specifically, Johnson maintained that Stone owned stock in Logan Landing
based upon Stone’s previous admissions, stipulations, and other documentation.
{¶7} On June 2, 2020, Stone filed a cross-motion for summary judgment in
support of his position that Johnson is not entitled to a creditor’s bill to reach the
equity in Logan Landing because Stone is not a shareholder in Logan Landing,
therefore, does not have any legal interest in the entity’s assets.
{¶8} On June 17, 2020, Stone filed a response in opposition to Johnson’s
motion for summary judgment, asserting arguments identical to the ones stated in
his cross-motion for summary judgment.
{¶9} On June 23, 2020, Johnson filed a reply in support of his motion for
summary judgment.
{¶10} On June 29, 2020, Johnson filed a response in opposition to Stone’s
cross-motion for summary judgment.
{¶11} On July 1, 2020, the trial court issued an order granting Johnson’s
motion for summary judgment and denying Stone’s cross-motion for summary
judgment.
{¶12} Specifically, the trial court found that:
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Case No. 1-20-31
There is no genuine issue of fact regarding whether or not plaintiff
has a valid judgment against defendants in the amount of
$663,656.11. Defendants admitted as much. Defendant Stone also
admitted that he was a shareholder in Stone Development and
admitted that he held an equitable interest of 50% in Logan
Landing Development Group, Inc. (Logan Landing) by virtue of
holding 50% of the membership interests of Bay Point Properties,
LLC. Defendants pointed to evidence (tax returns) that showed
Logan Landing was owned by Bay Point Properties, LLC. Stone
admitted he was a member of Bay Point Properties, LLC and Bay
Point Villas, LLC. Plaintiff pointed out that Stone acknowledged
in his answer to the complaint in this case that he (Stone) was not
in possession of any stock certificates for Logan Landing.
Defendants argued that since Logan Landing is wholly owned by
Bay Point Properties LLC, plaintiff is not entitled to a creditor’s
bill versus Logan Landing. Defendants filed for a summary
judgment in their favor that Stone had no interest in Logan
Landing.
In this case, there was no deposition testimony. The testimony of
Stone in another court case was filed and considered and
reference was made to various statements made by Stone in
pleadings. An affidavit from Stone that was filed in CV 2018 0427
was attached to plaintiff’s response to defendants’ motion. In that
affidavit, Stone stated he held 50% of the equity interests in Bay
Point Properties, LLC and Bay Point Villas, LLC and by virtue
of such ownership that he also possessed the same interest in
Logan Landing. Defendants have not sufficiently explained the
contradictions made by Stone as to what he owns.
After reviewing the pleadings and proper Civ. R. 56 evidence in
favor of the non-moving parties with respect to the two motions
for summary judgment, and in light of the rules established by
Turner and Byrd, the Court finds defendant Stone’s contradictory
evidence (created by himself) does not present a genuine issue of
fact. The Court further finds that plaintiff has pointed to
evidence that demonstrates that no genuine issue of fact remains
as to the Plaintiff’s proof of the three essential elements to succeed
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on his complaint for a creditor’s bill and that plaintiff is therefore
entitled to summary judgment.
(Doc. No. 32 at 6-7)(internal footnotes omitted).
{¶13} Appellants filed this appeal, asserting the following assignment of
error.
THE TRIAL COURT ERRED WHEN IT GRANTED
JUDGMENT IN FAVOR OF APPELLEE ON JULY 1ST, 2020,
THEREBY DEPRIVING APPELLANTS OF THE
REMAINING SIX DAYS THEY HAD WITH WHICH TO FILE
THEIR REPLY TO APPELLEE’S RESPONSE TO
APPELLANTS’ MOTION FOR SUMMARY JUDGMENT.
{¶14} In their sole assignment of error, Appellants contend that the trial court
erred in granting summary judgment before their time to file a reply in support their
cross-motion for summary judgment had expired under Civ.R. 6, which provides
that “[a] movant’s reply to a response to any written motion may be served within
seven days after service of the response to the motion.” Civ.R. 6(C)(1). Thus,
Appellants argue that the trial court deprived them of the opportunity to file a reply
to Johnson’s response in opposition to Stone’s cross-motion for summary judgment.
{¶15} The record confirms that the trial court ruled on the motions for
summary judgment before Appellants filed a reply in support of their cross-motion,
however, Appellants fail to demonstrate on appeal how the timing of the trial court’s
ruling prejudiced their case. Blanton v. Volunteers of Am., No. 1-77-16, at *4 (3d
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Dist. Aug. 24, 1977) (“To demonstrate prejudicial error, an appeal requires an
affirmative showing of prejudice.”).
{¶16} Here, the record demonstrates that the parties’ competing motions for
summary judgment involved a very limited set of facts and that the arguments
pertaining to this narrow issue were thoroughly presented, including in Appellants’
cross-motion for summary judgment and their response in opposition to Johnson’s
motion for summary judgment. Despite their unsupported assertions in their brief
speculating that “the factual findings and evidentiary conclusions of the trial court’s
judgment entry would have resulted in a different decision had they been given
adequate time with which to file a reply brief,” Appellants fail to articulate how the
arguments they proposed to make in their reply would have been different than the
arguments they had already made their in cross-motion for summary judgment and
their response in opposition to Johnson’s motion for summary judgment. (Appt. Br.
at 9). In other words, Appellants have failed to establish on appeal that their reply
in support would have added anything new for the trial court to consider, or included
matters that could not have been raised in their cross-motion and their initial
response to Johnson’s motion for summary judgment.
{¶17} This notwithstanding, it is well settled that a party seeking summary
judgment “must specifically delineate the basis upon which summary judgment is
sought in order to allow the opposing party a meaningful opportunity to respond.”
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Mitseff v. Wheeler, 38 Ohio St.3d 112 (1988), syllabus. Accordingly, a movant
cannot raise an issue for the first time in a reply memorandum in support of the
motion for summary judgment because it deprives the non-movant of a meaningful
opportunity to respond. See Ware v. King, 187 Ohio App.3d 291, 2010-Ohio-1637,
¶ 18 (3d Dist.) Moreover, the only case authority cited by Appellants in support of
their argument on appeal is distinguishable, as that case involved a trial court ruling
on a motion for summary judgment before the non-moving party had the
opportunity to file an initial response to the motion for summary judgment. See
Buerkle v. Vanauken, 6th Dist. Erie No. E-19-072, 2020-Ohio-5440.
{¶18} For all these reasons the assignment of error is overruled and the
judgment of the Allen County Common Pleas Court is affirmed.
Judgment Affirmed
ZIMMERMAN and MILLER, J.J., concur.
/jlr
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