Perkins v. Gorski

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Perkins v. Gorski

State: Ohio

Court: Ohio Southern District Court

Docket No: 2013-Ohio-265

Case Date: 01/31/2013

Plaintiff: Perkins

Defendant: Gorski

Preview:[Cite as Perkins v. Gorski, 2013-Ohio-265.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 98478
MICHAEL W. PERKINS
PLAINTIFF-APPELLEE
vs.
JOHN A. GORSKI, ET AL.
DEFENDANTS-APPELLANTS
JUDGMENT:
REVERSED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-756895
BEFORE:   Celebrezze, J., Boyle, P.J., and S. Gallagher, J.
RELEASED AND JOURNALIZED:      January 31, 2013

ATTORNEYS FOR APPELLANTS
For John A. Gorski and Five Brothers Leasing, L.L.C.
Charles J. Pawlukiewicz
Robert T. Glickman
McCarthy, Lebit, Crystal & Liffman Co., L.P.A.
101 West Prospect Avenue
1800 Midland Building
Cleveland, Ohio                                             44115-1088
For Aerowave, Inc.
Jay C. Marcie
Marcie & Associates, L.P.A.
1001 Jaycox Road
Suite 1
Avon, Ohio                                                  44011
Receiver for ArcAlloy Metal Fabrication Solutions, L.L.C.
Sean Allan
Allan & Gallagher, L.L.P.
1300 Rockefeller Building
614 West Superior Avenue
Cleveland, Ohio                                             44113
ATTORNEYS FOR APPELLEE
Thomas L. Brunn, Jr.
Alison D. Ramsey
The Brunn Law Firm Co., L.P.A.
208 Hoyt Block Building
700 West St. Clair Avenue
Cleveland, Ohio                                             44113
ALSO LISTED
                                                            ArcAlloy Metal Fabrication Solutions (pro se)
910 Cahoon Road
Westlake, Ohio                                              44145

FRANK D. CELEBREZZE, JR., J.:
{¶1} Defendant-appellant, John A. Gorski, appeals the decision of the Cuyahoga
County Court of Common Pleas finding him in contempt of a prior order.    After careful
review of the record and relevant case law, we reverse the trial court’s judgment of
contempt.
{¶2} In July 2008, plaintiff-appellee, Michael W. Perkins, and Gorski formed the
companies  ArcAlloy  Metal  Fabrication  Solutions,  L.L.C.                                      (“ArcAlloy”)  and  Elyria
Investments Ltd.
{¶3}  Following  the  parties’  impasse  regarding  the  continued  operation  and
management of ArcAlloy, Perkins filed a lawsuit against Gorski and defendant ArcAlloy
on June  6,  2011. The complaint alleged that Gorski breached his fiduciary duty and
sought  accounting,  inspection  of  the  books  and  records,  and  judicial  dissolution  of
ArcAlloy.
{¶4} Perkins subsequently moved for the appointment of a receiver, which Gorski
opposed.    Following the initial pretrial on August 18, 2011, the parties agreed on, and
submitted for filing, a proposed entry prohibiting either party from making “extraordinary
expenditures” on behalf of ArcAlloy without the approval of both members or until
further order of the court.    On September  1,  2011, the trial court adopted the jointly
proposed entry and issued an order as follows:

It is hereby ordered that the parties shall establish an interest bearing escrow
account on which James P. Cullen, Esq. and Thomas L. Brunn, Jr., Esq.
shall  be  named  as  account  holders  and/or  signatories.    Deft.  John  A.
Gorski shall promptly deposit Eighty Thousand Dollars ($80,000.00) into
said escrow account, with said money to remain on deposit until further
order of the Court, with the intention that these funds will remain on deposit
until  the  conclusion  of  the  litigation  herein.    Pltf.  Motion  to  Appoint
Receiver is withdrawn.    The parties will continue to exchange financial
information with regard to ArcAlloy Metal Fabrication Solutions, LLC and
Elyria Investments, LLC.[1] No extraordinary expenditures will be made on
behalf of either entity without the approval of both members or until further
order of the Court.
{¶5}  On  December  8,  2011,  the  trial  court  appointed  Sean  Allan,  Esq.  (“the
Receiver”) as the receiver on behalf of ArcAlloy, though his specific duties and authority
were not determined until February 3, 2012.
{¶6} On March  2,  2012, Perkins filed a motion to hold Gorski in contempt of
court.    In his motion, Perkins alleged that, despite the trial court’s September 1, 2011
order prohibiting extraordinary expenditures, and despite Gorski’s representations to the
Receiver that ArcAlloy had ceased operations by the beginning of January 2012, Gorski
caused amounts in excess of $80,000 to be withdrawn from ArcAlloy’s account.    Gorski
opposed the motion, and the matter proceeded to a hearing on May 22, 2012.
1 Through his First and Second Amended Complaints, Perkins also joined defendants Elyria
Investments, L.L.C., Aerowave, Inc., and Five Brothers Leasing, L.L.C.    Perkins sought judicial
dissolution of Elyria Investments, which holds title to the building in which ArcAlloy operated, and
demanded an accounting from Aerowave and Five Brothers Leasing, to which Perkins believed
Gorski improperly diverted assets and employees of ArcAlloy.

{¶7} Following the hearing, the trial court issued an order on May  31,  2012,
finding Gorski in contempt and ordering him to pay $61,189.92.    In its order, the trial
court found the following expenditures to be in violation of the September 1, 2011 order:
Gorski’s payment to himself on November  10,  2011 beyond the payroll
amount of $6,000 is extraordinary and was not with the permission of either
Mr. Perkins or the Court.    Therefore, the amount of  $2,154 beyond his
payroll to himself is not permissible.
The November 28, 2011 payment to GNC Technology in the amount of
$10,000  for  website  development  was  extraordinary  and  without  the
permission of Mr. Perkins or the Court.
The  November  16,  2011  purchase  from  HGR  Industrial  Supplies  for
$10,885 is impermissible.2
Business  ceased  after  January                                                              3,   2012.    The  Spot  Welder  bought  on
December 23, 2011 for $19,500, and which was delivered after January 3,
2012,  was  extraordinary and  without  permission  of  Mr.  Perkins  or  the
Court.
The  further  payroll  related  expenses  for  January  19,  2012  ($2,867.89);
February                                                                                      1,   2012                                     ($4,538.51);  and  February   2,   2012  payment  for
($2,097.02) are extraordinary.    This totals $52,042.42.
Further,  the  expenses  of  Thomas  Brunn,  Jr.  in  connection  with  the
Contempt Motion total 26.80 hours at $200.00 an hour totals $5,360.00.
Further, the expenses for Professional Services for Sean Allan total 9.35
hours at $250.00 an hour totals $2,337.50.
Further expenses for Clifford W. Croley in connection with the Contempt
Motion total 7.5 hours for a total of $1,450 in fees.
2 The transaction with HGR Industrial Supplies included the purchase of a dust collector, a
layout table, a swivel vice, a vertical rotary table, and a welding positioner.

{¶8} Gorski now brings this timely appeal, raising two assignments of error for
review:
I.                                                                                               The  trial  court’s  May  31,   2012  order  finding  defendant  Gorski  in
contempt of court of its September  1,  2011 order was error because the
September 1 order was unclear, indefinite, and ambiguous.
II.    The trial court’s May 31 contempt order is contrary to law because
there  was  not  clear  and  convincing  evidence  demonstrating  defendant
Gorski’s failure to comply with the September 1 order.
Law and Analysis
Standard of Review
{¶9} Contempt is a disobedience or disregard of a court order or command. State
ex rel. Corn v. Russo, 90 Ohio St.3d 551, 554, 2001-Ohio-15, 740 N.E.2d 265.                     “The
purpose  of  contempt  proceedings  is  to  secure  the  dignity  of  the  courts  and  the
uninterrupted and unimpeded administration of justice.”    Windham Bank v. Tomaszczyk,
27 Ohio St.2d 55, 271 N.E.2d 815 (1971), paragraph two of the syllabus.    A finding of
civil contempt requires clear and convincing evidence that the alleged contemnor has
failed  to  comply  with  the  court’s  prior  orders.  Flowers  v.  Flowers,                    11th  Dist.  No.
10AP-1176, 2011-Ohio-5972, ¶ 9.    In order to be clear and convincing, evidence must
leave the trier of fact with the firm conviction or belief that the allegations involved are
true.    Patino v. Foust, 8th Dist. No. 90475, 2008-Ohio-6280.    Further, we review a trial
court’s finding of civil contempt for an abuse of discretion.    Id. at ¶ 17.    Therefore, we
will not disturb the trial court’s finding of contempt unless we find such finding to be
arbitrary, unreasonable, or unconscionable.    Id.

Ambiguity of Order
{¶10} In his first assignment of error, Gorski argues that the trial court’s May 31,
2012 order finding him in contempt of court was error because the trial court’s September
1, 2011 order failed to adequately define the term “extraordinary expenditure,” causing
confusion and dispute amongst the parties over the term’s interpretation.
{¶11} In support of his position, appellant relies on this court’s decision in In re
Contempt of Gilbert, 8th Dist. Nos. 64299 and 64300, 1993 Ohio App. LEXIS 5999 (Dec.
16, 1993).    In Gilbert, we stated, “if a contempt order is premised on a party’s failure to
obey an order of the court, then the order must be clear and definite, unambiguous and not
subject to dual interpretations, and the contemner must have knowledge of the order.”
Id. at *5, citing Ahmed v. Reiss S.S. Co., 580 F. Supp. 737 (N.D.Ohio 1984).    This court
explained, however, that “where the meaning of a court’s order is plain on its face, a
party’s  misunderstanding  of  that  order  and  its  mandate  does  not  make  the  order
ambiguous nor a defense to a contempt proceeding.”    Gilbert, 1993 Ohio App. LEXIS
5999,  at  *6;  see  also  Chilcote  v.  Gleason  Const.  Co.,  5th  Dist.  No.  01COA01397,
2002-Ohio-746, ¶ 11.
{¶12} In the case at hand, Gorski does not dispute the fact that he had knowledge
of the September 1, 2011 order.   Rather, Gorski contends that the order’s use of the term
“extraordinary expenditure” is unclear, indefinite, ambiguous, and subject to more than
one interpretation.   We agree.

{¶13} Significant to our conclusion is the trial court’s failure to provide the parties
guidance as to what constituted an “extraordinary expenditure.”   As acknowledged by the
trial court in its contempt order,  “the term  ‘extraordinary expenditures’ has not been
defined  by the  courts.”    Without  proper  instruction  from  the  trial  court,  the  term’s
meaning is highly subjective in this instance.
{¶14} Further, the trial court did not expressly indicate how Gorski was required to
conduct  the  ongoing  day-to-day  business  operations  of  ArcAlloy.  Under  these
circumstances, and without further direction by the court, we find that it was reasonable
for Gorski to believe that, despite the September  1,  2011 order, he was permitted to
perform  the                                                                                       “ordinary”  day-to-day  business  operations  of  ArcAlloy  until  ordered
otherwise.
{¶15}  “A trial court cannot impose contempt sanctions on a party if the party
cannot know whether or not its actions violate the trial court’s order. Merely because the
trial court knew what its order meant does not mean the parties knew what the order
meant.” Contos v. Monroe Cty., 7th Dist. No. 04 MO 3, 2004-Ohio-6380,                              ¶ 24.                                                                        “Thus,
although general arguments that the alleged contemnor lacked intent or misunderstood the
court order are invalid defenses, where the trial court’s order is subject to more than one
reasonable interpretation, contempt is not the proper remedy.”                                     (Emphasis sic.)   Rohr v.
Williams, 7th Dist. No. 06 MA 171, 2007-Ohio-7207, ¶ 38.
{¶16} In this case, the challenged expenditures involved purchases of equipment
and  services  that  are  commonly  used  in  the  course  and  scope  of  operating  and

maintaining a successful metal fabrication business.    Thus, the expenditures at issue
appear  to  be  ordinary,  not  extraordinary.    For  these  reasons,  we  find  that  it  was
reasonable for Gorski to believe he was acting in compliance with the terms of the trial
court’s September 1, 2011 order.
{¶17} Based on the foregoing, we conclude that the trial court’s use of the term
“extraordinary   expenditures,”   without   further   direction,   was   subject   to   duel
interpretations,  and  therefore  ambiguous.     Accordingly,  the  trial  court  abused  its
discretion in finding Gorski in contempt of the September 1, 2011 order.
{¶18}  Appellant’s  first  assignment  of  error  is  sustained.     The  trial  court’s
judgment is reversed.
{¶19} Based on our resolution of appellant’s first assignment of error, appellant’s
remaining assignment of error is rendered moot.
{¶20}  This  cause  is  reversed  and  remanded  to  the  lower  court  for  further
proceedings consistent with this opinion.
It is ordered that appellant recover of said appellee costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into
execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.

FRANK D. CELEBREZZE, JR., JUDGE
MARY J. BOYLE, P.J., CONCURS;
SEAN C. GALLAGHER, J., CONCURS WITH SEPARATE OPINION
SEAN C. GALLAGHER, J., CONCURRING:
{¶21} I concur with the judgment and analysis of the majority, but write separately
to address my concerns with how this case proceeded that resulted in our decision to
reverse the judgment of the trial court.
{¶22} The record reflects that a receiver was requested by Perkins immediately
after  the  filing  of  this action.    The parties then decided to enter into an agreement
prohibiting  either  party  from  making                                                      “extraordinary  expenditures”  without  clearly
defining that term.
{¶23} Had either the receiver been appointed and empowered from the start or the
term “extraordinary expenditures” been clearly defined, my decision in this case might
well have been different.

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