COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 73201 HILLIP STARR, ET AL. : : Plaintiffs-Appellants : : JOURNAL ENTRY -vs- : AND : OPINION ILLIAM DOTSIKAS, ET AL. : : Defendants-Appellees : ATE OF ANNOUNCEMENT OF DECISION: AUGUST 6, 1998 HARACTER OF PROCEEDING: CIVIL APPEAL FROM THE COURT OF COMMON PLEAS CASE NO. CV-317271 UDGMENT: AFFIRMED. ATE OF JOURNALIZATION: PPEARANCES: or Plaintiffs-Appellants: TIMOTHY A. SHIMKO (#0006736) JANET I. STICH (#0036983) 2010 Huntington Building 925 Euclid Avenue Cleveland, Ohio 44115 or Defendants-Appellees: JOHN E. MARTINDALE (#0031403) JEFFERY A. KEY (#0003503) JONATHAN R. COOPER (#0034698) Martindale, Brzytwa & Quick 900 Skylight Office Tower 1600 West Second Street Cleveland, Ohio 44113 PELLACY, J.: Plaintiffs-appellants Phillip Starr and David Kamms appellants ) appeal from the denial of their numerous post- -2- ettlement motions. Appellants assign the following errors for our eview: I. THE TRIAL COURT ERRED WHEN IT DENIED THE PLAINTIFFS-APPELLANTS' MOTION TO VACATE SETTLEMENT AGREEMENT. II. THE TRIAL COURT ERRED WHEN IT DENIED PLAINTIFFS-APPELLANTS' MOTION TO VACATE JOURNAL ENTRY DATED JUNE 11, 1997. III. THE TRIAL COURT ERRED WHEN IT DENIED PLAINTIFFS-APPELLANTS' MOTION TO VACATE JOURNAL ENTRY OF JUNE 12, 1997, AND MOTION TO DISCHARGE STEVEN CAINE AS RECEIVER. IV. THE TRIAL COURT ERRED WHEN IT DENIED THE PLAINTIFFS-APPELLANTS' EMERGENCY EX PARTE MOTION. V. THE TRIAL COURT ERRED WHEN IT DENIED PLAINTIFFS-APPELLANTS' MOTION TO FILE A SECOND AMENDED COMPLAINT. VI. THE TRIAL COURT ERRED IN ITS DENIAL OF PLAINTIFFS-APPELLANTS' MOTION TO SHOW CAUSE FILED JULY 21, 1997. VII. THE TRIAL COURT ERRED WHEN IT ACTED IN AN ARBITRARY AND CAPRICIOUS MANNER IN ITS EX PARTE COMMUNICATION WITH THE RECEIVER, THE DEFENDANTS, AND THE NORTH EASTERN OHIO REGIONAL SEWER DISTRICT. VIII. THE TRIAL COURT ERRED IN ITS REFUSAL TO HAVE ANY HEARING ON ANY OF THE MATTERS REQUESTED ABOVE BY PLAINTIFFS-APPELLANTS. In their cross-appeal, appellees raise the following onditional assignment of error for our review: THE TRIAL COURT ERRED IN DENYING DEFENDANTS' MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER. Finding appellants' assignments of error to lack merit and ppellees' cross-appeal to be moot, the judgment of the trial court s affirmed. I. -3- On October 18, 1996, appellants filed a complaint against otsikas, AMC and defendant-appellee Dino Land Properties, Inc. for reach of contract, promissory estoppel, unjust enrichment and raud. In their complaint, appellants allege that, pursuant to a etter of intent signed by appellants and defendant-appellee William otsika s, appellants were to become owners of two-thirds of efendant-appellee American Metal Coatings, Inc. ( AMC ). According o appellants, Dotsikas breached the letter of intent. On October 22, 1996, appellants also filed a motion for a emporary restraining order ( the TRO ). On October 29, 1996, the rial court granted appellants' request for a TRO. Appellants filed n amended complaint on that same date. The TRO included several rovisions, including: (1) that AMC continue to conduct business as ormal; and (2) the parties were prohibited from selling, ncumbering or otherwise compromising AMC or its assets. On January 1, 1997, appellees filed a motion to dissolve the TRO. The trial ourt eventually denied appellee's motion. On January 30, 1997, the rial court appointed Steven Caine as AMC's receiver. On March 14, 1997, the underlying case was settled. In the resence of the trial court, the parties stated the terms of their ettlement agreement ( the Settlement Agreement ) on the record. he terms of the Settlement Agreement were unambiguous. In short, he Settlement Agreement provided that appellants would purchase AMC rom appellees for One Million One Hundred and Seventy-Seven housand Five Hundred Dollars ($1,177,500.00). Pursuant to the Settlement Agreement, appellants were to tender -4- ash to appellees for AMC by July 18, 1997. Specifically, ppellants had sixty days to tender cash to appellees for AMC's ssets if appellants were able to sell the assets to Cambridge nvestments Group, Inc. and Jeff Moffie ( Cambridge ). If Cambridge id not buy the assets withing sixty days, appellants would be ranted an additional sixty days in which to purchase AMC's assets t the same price. Until appellants' purchase of AMC was closed, the ourt-appointed receiver would continue to run the business. The ettlement Agreement also provided that appellants would continue o work at AMC for One Thousand Dollars ($1,000.00) per month until heir purchase of AMC closed. At the time of the Settlement Agreement, AMC had outstanding nvironmental citations from the Northeast Ohio Regional Sewer istrict ( NEORSD ), with fines in excess of One Hundred and Fifty housand Dollars ($150,000.00). Pursuant to the Settlement greement, appellants would pay half of the fines and penalties that ere assessed to AMC by NEORSD, and Dotsikas would pay the other alf.After negotiations, AMC was able to reach a settlement with EORSD. On June 11, 1997, the trial court approved AMC's ettlement with NEORSD. On May 30, 1997, appellants informed appellees that the ambridge deal had failed. Appellants advanced the position that he Settlement Agreement was contingent upon the closing of the ambridge deal. As such, appellants refused to tender cash for AMC. On June 11, 1997, the trial court entered a journal entry. In -5- his journal entry, the trial court ordered that Caine continue to erve in his capacity as receiver and granted Caine additional uthority over AMC. On June 12, 1997, the trial court entered nother journal entry. In this journal entry, the trial court uthorize d Caine to retain an attorney to represent Caine in any egal matter against him in his capacity as receiver. The court rdered that Caine's legal fees be paid from AMC's assets. This rder was necessitated by the unsubstantiated allegations and hreats of legal action against Caine from appellants' attorneys. On June 13, 1997, appellants filed a motion to vacate the ournal entry dated June 11, 1997, a motion to vacate the journal ntry dated June 12, 1997, and a motion to discharge Caine as AMC's eceiver. The trial court denied these motions on August 25, 1997. On June 26, 1997, appellants filed a motion to vacate the ettlement agreement. In this motion, appellants claimed that the ettlement Agreement was contingent on the closing of the Cambridge eal. The trial court denied appellants' motion to vacate the ettlement agreement on August 25, 1997. On July 18, 1997, appellants had still not paid appellees the ash required under the Settlement Agreement and appellants were in reach of that agreement. Therefore, appellees' counsel sent a etter to appellants' attorney on that date informing him that ppellants were no longer going to be permitted access to AMC. ppellants were denied access to AMC's premises after July 21, 1997. On July 21, 1997, appellants filed a motion to show cause, equest ing that the trial court hold appellees in contempt. -6- ccording to appellants, appellees' conduct in denying appellants ccess to AMC was in violation of the trial court's orders and the ettlement Agreement. This motion was denied. On July 21, 1997, ppellants also filed a motion for an emergency ex parte order to rohibit appellees from barring appellants from AMC. On July 24, 997, the trial court denied appellants' motion for an emergency ex arte order. On July 25, 1997, appellants filed a motion for leave to file second amended complaint. In this motion, appellants sought to mend their complaint to add claims for breach of the Settlement greeme nt, conversion, breach of fiduciary duty and usurping of usines s opportunities. The trial court denied this motion on ugust 25, 1997. On August 18, 1997, the trial court found that Caine's duties s AMC's receiver had been faithfully completed, excused Caine from is duties as AMC's receiver. On August 25, 1997, the trial court enied appellants' various outstanding motions. II. In their first assignment of error, appellants claim that the rialcourt erred in denying their motion to vacate the Settlement greement. Specifically, appellants argue that: (1) the trial ourt was required to conduct an evidentiary hearing on their motion o vacate; (2) the Settlement Agreement was contingent upon the imultaneous closing of appellants' deal with Cambridge; (3) the EORSD settlement significantly changed AMC's value; and (4) the -7- greement should have been vacated based upon appellees' subsequent raud. In Rulli v. Fan Co. (1997), 79 Ohio St.3d 374, syllabus, the upreme Court of Ohio stated: Where the meaning of terms of a settlement agreement is disputed, or where there is a dispute that contests the existence of a settlement agreement, a trial court must conduct an evidentiary hearing prior to entering judgment. ppellants contend that the trial court was required to conduct a earing on their motion to vacate because the terms of the ettlement Agreement were disputed. Specifically, appellants claim hat the Settlement Agreement was contingent upon appellants' deal ith Cambridge. Upon review of the record, we find appellants' contention that he Settlement Agreement was contingent upon the closing of the ambridge deal to be unfounded. During the settlement conference, ppellants' attorney clearly stated: If Moffie or Cambridge Investment Group does not close within 60 days, the plaintiffs agree to close within 60 days on their own after that. Tr. 14.) After appellants' deal with Cambridge fell through, ppella nts attempted to renege on the Settlement Agreement by isputin g that this language was part of the agreement. We note hat the holding of Rulli only applies when the substance or the xistence of that agreement is legitimately disputed. (Emphasis dded.) Rulli, 79 Ohio St.3d at 376. In light of the unambiguous ontents of the transcript from the settlement conference, we doubt -8- he legitimacy of appellants' argument. Therefore, the trial court as not required to conduct an evidentiary hearing on appellants' otion to vacate the Settlement Agreement. Appella nts also contend that the trial court should have acated the Settlement Agreement because the AMC's settlement of its utstanding NEORSD citations significantly changed AMC's value. his argument is unpersuasive. Appellants were aware that AMC was ubject to liability for environmental violations when they entered nto the Settlement Agreement. In fact, as part of the Settlement greement, appellants agreed to pay half of any outstanding NEORSD enalties and fines. Therefore, the trial court did not abuse its iscretion in rejecting this argument. Finally, appellants' contention of fraud on the part of ppellees was only supported by appellants' own self-serving ffidavits. Appellants' assertions that appellees embezzled funds, emoved equipment and tools, and transferred assets were unsupported y independent, credible evidence. Without any meaningful evidence o support appellants' assertions of fraud, the trial court was nable to give these unsubstantiated claims serious consideration. Accordingly, appellants' first assignment of error is without erit and is overruled. III. In their second and third assignments of error, appellants rgue that the trial court erred when it denied their following -9- otions: (1) appellants' motion to vacate the journal entry dated une 11, 1997; (2) appellants' motion to vacate the journal entry f June 12, 1997; and (3) appellants' motion to discharge Steven aine as receiver. In the disputed journal entries, the trial court rdered that AMC's court-appointed receiver, Steven Caine, continue o serve in his capacity as receiver and granted him additional uthority. It is well-established that a trial court is vested with sound iscretion to appoint a receiver. State ex rel. Celebrezze v. Gibbs 1991), 60 Ohio St.3d 69, 73. Likewise, a trial court has broad iscret ion to expand a receiver's powers as the court deems ppropriate. State ex rel. Celebrezze, 60 Ohio St.3d at 73, citing .C. 2735.04. We hold that the question of whether or not to remove receiver also lies within the discretion of the trial court. hus, a trial court's decision to deny a motion to discharge a eceiver will not be disturbed unless there is a clear abuse of ound judicial discretion. Cf. State ex rel. Celebrezze, 60 Ohio t.3d at 74. Appellants argue that the trial court should have vacated its ournal entries expanding the receiver's authority and removed Caine s AMC's receiver because of: (1) Caine's alleged misconduct as the eceiver ; and (2) the fact that Caine allegedly did not take the ath mentioned in R.C. 2735.03. We note that, aside from ppellants' unsubstantiated assertions, there is nothing in the ecord that indicates that Caine failed to faithfully and ffectively discharge his duties as AMC's receiver. -10- Appellants correctly assert that R.C. 2735.03 requires that a eceive r take an oath and execute a bond. However, in a journal ntry dated August 22, 1997, the trial court stated: In the instant ase the oath was subsequently administered and the court finds that t relates back to the date of appointment. This is the only redible, independent evidence of whether or not the receiver's oath as administered.1 In Cadle Company No. 2 v. Rendezvous Realty Sept. 2, 1993), Cuyahoga App. Nos. 63565, 63724, unreported, this ourt found that if a receiver executes a bond after he is appointed eceiver, the bond relates back to the receiver's appointment. ikewise, we now hold that the when a receiver takes his oath after is appointment, the oath relates back to the date of his ppointment. Accordingly, appellants' second and third assignments of error re without merit and are overruled. IV. In their fourth assignment of error, appellants argue that the rial court erred when it denied appellants' emergency ex parte otion. In this motion, appellants' requested that the trial court ssue an emergency ex parte order prohibiting appellees from denying ppellants access to AMC's premises. In short, appellants argued hat appellees' actions were in violation of the temporary estraining orderthat the trial court granted on October 29, 1996. n addition, appellants asserted that appellees were transferring 1Moreover, the record is devoid of any evidence to indicate that the timing of the receiver's oath affected a substantial right of appellants. -11- ssets, embezzling funds and sabotaging production at AMC.2 The Supreme Court of Ohio has held that a settlement agreement xtingu ishes the original rights, claims and obligations of the arties. Board of Commrs. of Columbiana Cty. v. Samuelson (1986), 4 Ohio St.3d 62, 63. Therefore, the claims in appellants' amended omplaint were extinguished by the Settlement Agreement. It ogically followsthat if appellants' claims had been extinguished, hen the trial court's temporary restraining order which arose from hese claims was also nullified. Therefore we find that the trial court did not abuse its iscretion in denying appellants' emergency ex parte motion. ccordingly, appellants' fourth assignment of error is without merit nd is overruled. V. In their fifth assignment of error, appellants claim that the rial court erred when it denied appellants' motion to file a second mended complaint. When reviewing the denial of a motion to amend a complaint, the eviewing court's role is to determine whether the trial judge's ecision was an abuse of discretion. Wilmington Steel Products, nc. v. Cleveland Elec. Illuminating Co. (1991), 60 Ohio St.3d 120, 22, citing State, ex rel. Wargo, v. Price (1978), 56 Ohio St.2d 65. he Supreme Court of Ohio has repeatedly held that the term "abuse 2 In support of these unsubstantiated claims, appellants merely offer their own self-serving affidavits. -12- f discretion" connotes more than an error of law or of judgment; t implies that the court's attitude is unreasonable, arbitrary or nconscionable. Wilmington Steel Products, Inc., 60 Ohio St.3d at 22, citing Huffman v. Hair Surgeon, Inc. (1985), 19 Ohio St.3d 83, 7. Where a plaintiff fails to make a prima facie showing of upport for new matters sought to be pleaded, a trial court acts ithin its discretion to deny a motion to amend the pleading. ilmington Steel Products, Inc. v. Cleveland Elec. Illuminating Co. 1991), 60 Ohio St.3d 120, syllabus, citing Solowitch v. Bennett 1982), 8 Ohio App.3d 115 ( [T]here must be at least a prima facie howing that the movant can marshal support for the new matters ought to be pleaded ***. ). In order to receive leave of court o amend his complaint, the plaintiff must make a prima facie howing that he can produce evidence in support of the new matters ought to be pleaded ***. Bloomer v. Van-Kow Enterprises (May 5, 994), Cuyahoga App. No. 64970, unreported, citing Solowitch, 8 Ohio pp.3d at 117. In the instant case, we note that appellants presented no perative facts in support of their new allegations of breach of the ettlement Agreement, conversion, breach of fiduciary duty, and surping of business opportunities. Instead, appellants only offer ald assertions, including: (1) that the Settlement Agreement was onting ent upon the closing of the Cambridge deal; (2) that ppellants' deal with Cambridge failed because of the actions of ppelle es and the receiver, including their ratification of the -13- EORSD settlement3; and (3) that appellees embezzled from AMC. heseunsubstantiated claims clearly failed to constitute a prima acieshowing that appellant could produce evidence in support of he new matters sought to be pleaded. Bloomer, supra. We find that the trial court did not abuse its discretion in enying appellants' motion to amend, there being no disclosed basis o support their new allegations. Accordingly, appellants' fifth ssignment of error is hereby overruled. VI. In their sixth assignment of error, appellants argue that the rialcourt erred in denying their motion to show cause. In their otion to show cause, appellants requested that the trial court find ppellees in contempt for allegedly violating the Settlement greement and previous orders of the court. A finding of civil contempt can be made only upon clear and onvincing evidence. ConTex, Inc. v. Consolidated Technologies, nc. (1988), 40 Ohio App.3d 94, 95. The refusal to punish for ontempt is, in general, a matter wholly within the discretion of he trial court. Favorito v. Kleckner (Feb. 11, 1993), Cuyahoga pp. No. 64113, unreported, citing Lentz v. Lentz (1924), 19 Ohio pp. 329. 3 We find it curious that appellants would blame the failure of their deal with Cambridge on the NEORSD settlement. In a letter dated May 30, 1997, appellants' attorney notified appellees that the Cambridge deal had failed. The NEORSD settlement was neither finalized nor became effective until it was approved by the trial court on July 11, 1997, well after appellants had acknowledged that they had failed to procure Cambridge as a buyer of AMC's assets. -14- In the instant case, appellants argue that appellees violated he trial court's orders and the Settlement Agreement4 by denying ppellants access to AMC after July 18, 1997. As we stated in our eview of appellants' fourth assignment of error, the trial court's rders arising from appellants' original claims were extinguished y the subsequent Settlement Agreement. Cf. Board of Commrs. of olumbiana Cty., 24 Ohio St.3d at 63. Therefore, we hold that the rial court did not abuse its discretion in refusing to find ppelle es in contempt of the trial court's orders because such rders had already been nullified by the Settlement Agreement. Accordingly, appellants' sixth assignment of error is without erit and is overruled. VII. In their seventh assignment of error, appellants argue that the rialcourt erred in participating in ex parte communications with he receiver, appellees, and NEORSD. We note that the record is evoid of any indication that the trial court engaged in ex parte ommunications with appellees or NEORSD. Therefore, we will limit ur review to appellants' challenge of the ex parte communications etween the trial court and the receiver. Canon 3(B)(7) of the Code of Judicial Conduct prohibits a court rom partaking in ex parte communications concerning pending or 4 We note that appellants were in breach of the Settlement Agreement when they failed to tender One Million One Hundred Seventy-Seven Thousand Five Hundred Dollars ($1,177,500.00) to appellees for AMC by July 18, 1997. Therefore, the trial court did not abuse its discretion by deciding not to hold appellees in contempt of the Settlement Agreement after appellants had already breached that agreement. -15- mpending cases. Canon 3(B)(7) provides, in pertinent part: A judge shall not initiate, receive, permit, or consider communications made to the judge outside the presence of the parties or their representatives concerning a pending or impending proceeding except: *** (c) A judge may consult with court personnel whose function is to aid the judge in carrying out the judge's adjudicative responsibilities or with other judges. ursuant to Canon 3(B)(7)(c), judicial communications with court ersonnel are excepted from the general proscription of ex parte ommunications. Obviously, a receiver qualifies as court personnel whose unction is to aid the judge in carrying out the judge's djudicative responsibilities. Jud. Cond. Canon 3(B)(7)(c). We ote that a receiver performs his duties under the control of the ourt which appointed him. R.C. 2735.04. Therefore, ex parte ommunications between a court and its appointed receiver fall ithin the court personnel exception to the prohibition against x parte communications. Accordingly, appellants' seventh assignment of error is without erit and is overruled. VIII. In their eighth assignment of error, appellants assert that the rial court erred in refusing to conduct evidentiary hearings on ppellants' numerous post-settlement motions.5 5 We note that appellants filed no less than seven motions between June 13, 1997, and July 24, 1997. These motions, for the -16- A trial court is not obligated to hold a hearing to determine motion. Mahoney v. Robert Thomas Securities, Inc. (June 15, 995), Cuyahoga App. No. 67881, unreported. Loc.R. 11(A) of the ourt of Common Pleas of Cuyahoga County, General Division6 reads s follows: Motions, in general, shall be submitted and determined upon the motion papers. Oral arguments of motions may be permitted on application and proper showing. Loc.R. 11(A) provides that a motion must be determined without hearing unless a hearing is requested. Casalicchio v. Northeast hio Regional Sewer Dist. (June 28, 1990), Cuyahoga App. Nos. 57200, 7201, unreported. This rule clearly gives the trial court the iscret ion as to whether or not to render a ruling on a motion ithout a hearing if the parties apply for an oral argument. ahoney, supra. Although appellants requested that the trial court conduct earing s on their various motions, appellants failed to make a proper showing that conducting evidentiary hearings would be ither helpful or necessary to the court's rulings on the motions. oc.R. 11(A). Therefore, pursuant to Loc.R. 11(A), the trial court as required to rule on appellants' motions without conducting earings. most part, were based on the same unsubstantiated factual arguments. 6 Loc.R. 11(A) was drafted pursuant to Civ.R. 7(B), which provides for a court to "make provision by rule or order for the submission and determination of motions without oral hearing upon brief written statements of reasons in support and opposition in order to expedite its business. -17- Assuming arguendo that appellants made a proper showing in heir applications for evidentiary hearings, the trial court had iscretio n as to whether or not to render rulings on appellants' otions without conducting hearings. As noted above, the term abuse of discretion" connotes more than an error of law or of udgment; it implies that the court's attitude is unreasonable, rbitrary or unconscionable. Huffman v. Hair Surgeon, Inc. (1985), 9 Ohio St.3d 83, 87; Wargo v. Price (1978), 56 Ohio St.2d 65. We find that the trial court's actions were not unreasonable, rbitrary or unconscionable, and that the court did not abuse its iscretion by ruling on appellants' numerous post-settlement motions ithout conducting hearings. We note that appellants failed to ndicate in any of their motions that they had evidence, beyond heir own self-serving affidavits and testimony, to support their otions . Therefore, the trial court had sufficient reasons to uestion the value of conducting evidentiary hearings on appellants' any motions. Accordingly, appellants' eighth assignment of error is without erit and is overruled. IX. In their cross-appeal, appellees assert that the trial court rred in denying their motion to dissolve the temporary restraining rder. In our review of appellants' fourth assignment of error, we eld that the temporary restraining order was extinguished by the ettlement Agreement. Therefore, appellees' conditional assignment -18- f error is moot. Judgment affirmed. It is ordered that appellees recover of appellants their osts herein taxed. The court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this court irecting the Common Pleas Court to carry this judgment into xecution. A certified copy of this entry shall constitute the mandate ursuant to Rule 27 of the Rules of Appellate Procedure. NN DYKE, P.J. and ICHAEL J. CORRIGAN, J. CONCUR. -19- LEO M. SPELLACY JUDGE .B. This is an announcement of the court's decision. See App.R. 2(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be ournalized and will become the judgment and order of the court ursuant to App.R. 22(B) unless a motion for reconsideration with upporting brief, per App.R. 26(A), is filed within ten (10) days f the announcement of the court's decision. The time period for eview by the Supreme Court of Ohio shall begin to run upon the .