Avondale Community Council v. Galarza

2012 Ohio 186

• Court: Ohio Court of Appeals
• Decided: January 20, 2012
• Docket: C-110221
• Status: Published

Opinion

[Cite as Avondale Community Council v. Galarza, 2012-Ohio-186.]

IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO

AVONDALE COMMUNITY COUNCIL, : APPEAL NO. C-110221 TRIAL NO. A-1003520 SINCLAIR LEWIS, :

GLENDA JONES, : O P I N I O N.

and : SHERICA MITCHELL, : Plaintiffs-Appellees, : vs. : JOSEPH LENTINE III, et al., : Defendants, : and : NIKKI GALARZA, : Defendant-Appellant, : and : GEORGE W. FELS, CPA, RECEIVER, : Defendant-Appellee. :

Civil Appeal From: Hamilton County Common Pleas Court

Judgment Appealed From Is: Affirmed

Date of Judgment Entry on Appeal: January 20, 2012 OHIO FIRST DISTRICT COURT OF APPEALS

Legal Aid Society of Southwest Ohio, LLC, and Nicholas J. Dinardo, for Plaintiffs- Appellees,

Strip, Hoppers, Leithart, McGrath & Terlecky Co., LPA, and Kenneth R. Goldberg, for Defendant-Appellant,

Greenbaum, Doll & McDonald PLLC and Richard Boydston, for Defendant-Appellee.

Please note: This case has been removed from the accelerated calendar.

2 OHIO FIRST DISTRICT COURT OF APPEALS

S YLVIA S IEVE H ENDON , Judge.

{¶1} Defendant-appellant Nikki Galarza (“Galarza”) appeals the trial court’s order

granting a motion by the court-appointed receiver, defendant-appellee George W. Fels, CPA,

to approve the sale of two properties. For the reasons that follow, we affirm the trial court’s

judgment.

{¶2} In September 2009, defendants Joseph Lentine III and Galarza’s son, John

Galarza, purchased at a sheriff’s sale three apartment buildings in the Avondale

neighborhood of Cincinnati.

{¶3} Lentine and John Galarza failed to make payments for gas and electric

services to the buildings, so the services were disconnected in April 2010.

{¶4} Plaintiff-appellees are the Avondale Community Council and tenants of the

properties, Sinclair Lewis, Glenda Jones, and Sherica Mitchell. They initiated an action

against Lentine and John Galarza in the Hamilton County Common Pleas Court for

declaratory and injunctive relief. They sought a declaratory judgment that the properties

constituted a public nuisance, and that Lentine and John Galarza had violated state and

local laws by failing to maintain the properties, to supply gas and electric services to the

properties, and to ensure that the properties were in compliance with building and health

codes. The plaintiffs-appellees also sought the appointment of a receiver to take control of

the properties.

{¶5} The court granted preliminary injunctive relief to the plaintiffs-appellees, and

appointed Fels as receiver for the three properties. Over the next seven months, the court

approved each of the monthly reports filed by the receiver. Each of the reports was served

on Lentine and John Galarza.

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{¶6} In July 2010, Nikki Galarza caused to be recorded in the Hamilton County

Recorder’s Office a statutory mortgage on the Avondale apartment buildings dated July 6,

2010, in the principal amount of $325,000 from Lentine and Galarza.

{¶7} In December 2010, the receiver filed a motion for an order approving the sale

of two of the properties and for distribution of the sale proceeds. The receiver served the

motion on all parties, including Galarza, and on Ivan Galarza, John Galarza’s father.

Shortly thereafter, Lentine filed a document entitled, “Motion Concurring With Sale of

Property.”

{¶8} In January 2011, the court approved the receiver’s eighth report. The court’s

approval order was served on Galarza. The court permitted the plaintiffs-appellees to file a

second amended complaint, naming Galarza as a defendant. In her answer, Galarza claimed

an interest in the properties.

{¶9} In February 2011, the court approved the receiver’s ninth report. The report

and the court’s approval order were served on Galarza.

{¶10} On February 18, 2011, the receiver filed his tenth report. On February 24,

2011, the receiver filed a notice of a hearing on his motion for an order approving the sale of

the properties. The report and the notice were served on all parties, including Galarza.

{¶11} On March 4, 2011, twelve weeks after the receiver’s motion for an order

approving the sale of the properties, Galarza filed objections to the motion and to the

receiver’s tenth report.

{¶12} On March 14, 2011, counsel for Galarza was present at the hearing on the

receiver’s motion for sale approval. At that hearing, the receiver and a real estate broker

who had listed the properties for sale testified.

{¶13} On March 22, 2011, the court issued an order granting the receiver’s motion

to approve the sale of the properties. The court ordered the sale proceeds to be distributed

4 OHIO FIRST DISTRICT COURT OF APPEALS

to the Hamilton County Treasurer for all real estate taxes due on the two properties, and to

the receiver for his costs and expenses. The court ordered that any remainder be held by the

title company that would conduct the closing of the sale, pending further court order.

{¶14} Galarza now appeals. In a single assignment of error, she argues that the trial

court erred by granting the receiver’s motion for an order approving the sale of the

properties.

{¶15} First, Galarza argues that in the course of receivership proceedings, a receiver

must cause an independent appraisal to be conducted and filed with the court before a

proposed sale of property can be approved. She acknowledges that Ohio statutes governing

receiverships contain no such appraisal requirement. But she contends that the receiver’s

proposed sale was subject to R.C. Chapter 2329, the law governing judicial sales.

Specifically, Galarza argues that R.C. 2329.17(A) required an appraisal to be conducted prior

to the sale of property by the receiver.

{¶16} R.C. Chapter 2329 does not apply to sales of property by receivers, so a trial

court is not required to comply with its provisions before ordering a sale of property by a

receiver. Huntington Natl. Bank v. Motel 4 BAPS, Inc., 191 Ohio App.3d 90, 2010-Ohio-

5792, 944 N.E.2d 1210 (8th Dist.). Accordingly, the trial court did not err by approving the

receiver’s sale without requiring the receiver to file an appraisal pursuant to R.C.

2329.17(A).

{¶17} Receivership proceedings are governed by R.C. Chapter 2735. R.C. 2735.01

allows a trial court to appoint receivers. Primarily, a receiver is appointed to carry out the

court’s orders. Park Natl. Bank v. Cattani, 187 Ohio App.3d 186, 2010-Ohio-1291, 931

N.E.2d 623 (12th Dist.). R.C. 2735.04 provides that a receiver, under the control of the

court that appointed him, may take and keep possession of property, receive rents, make

transfers, and generally take actions respecting the property as the court authorizes. This

5 OHIO FIRST DISTRICT COURT OF APPEALS

statute has been interpreted by the Ohio Supreme Court as “enabling the trial court to

exercise its sound judicial discretion to limit or expand a receiver’s powers as it deems

appropriate.” State ex rel. Celebrezze v. Gibbs, 60 Ohio St.3d 69, 74, 573 N.E.2d 62 (1991).

Absent an abuse of discretion by the trial court, a reviewing court will not disturb its

judgment. Id.

{¶18} In this case, the court conducted an evidentiary hearing on the motion. The

court considered the uncontroverted testimony by the receiver and by a commercial real

estate agent with respect to the reasonableness of the sale. Galarza was represented by

counsel at the hearing, but offered no evidence. Thus, there is nothing in the record to

indicate any impropriety in the sale of the property or any unfairness to Galarza in the trial

court’s approval of the sale. We find no abuse of discretion by the trial court in its approval

of the sale of the properties by the receiver. Consequently, we affirm the judgment of the

trial court.

Judgment affirmed.

DINKELACKER, P.J., and CUNNINGHAM, J., concur.

Please note: The court has recorded its own entry this date.