Cornell v. Shain

2021 Ohio 2094
CourtOhio Court of Appeals
DecidedJune 23, 2021
DocketC-190722
StatusPublished
Cited by12 cases

This text of 2021 Ohio 2094 (Cornell v. Shain) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cornell v. Shain, 2021 Ohio 2094 (Ohio Ct. App. 2021).

Opinion

[Cite as Cornell v. Shain, 2021-Ohio-2094.] IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO

MR. CLINT CORNELL, P.A., : APPEAL NO. C-190722 TRIAL NO. A-1804130 and :

DR. ALAN BEE, As individuals and : O P I N I O N. also derivatively on behalf of Peak Performance Medical, LLC; : Community First Injury Care, Inc. (d.b.a. Community First Worx); : MYONCALL/MD; Active Health Holdings, Inc.; and : Complete Medical Sales & Services, LLC (“Companies”), :

Plaintiffs-Counterclaim- : Defendants-Appellants, : DR. DAVID ELLISON, : Plaintiff-Counterclaim-Defendant, : vs. : W. CURTIS SHAIN, : Defendant-Counterclaim- Plaintiff-Appellee. :

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Finding of Contempt Affirmed, Purge Condition Set Aside, and Cause Remanded

Date of Judgment Entry on Appeal: June 23, 2021

Wood & Lamping LLP and Dale Stalf, for Plaintiffs-Counterclaim-Defendants- Appellants Clint Cornell and Alan Bee, OHIO FIRST DISTRICT COURT OF APPEALS

Rendigs, Fry, Kiely, & Dennis, LLP, and Brian D. Goldwasser, for Defendant- Counterclaim-Plaintiff-Appellee.

2 OHIO FIRST DISTRICT COURT OF APPEALS

W INKLER , Judge.

{¶1} This is an appeal from an order of the Hamilton County Court of

Common Pleas finding Clint Cornell and Allen Bee in contempt. The contempt

finding related to Cornell’s and Bee’s failure to comply with an order to pay over

$260,000 to a receiver for safekeeping during litigation involving companies owned

in part by Cornell and Bee. Upon finding Cornell and Bee in contempt, the court

provided Cornell and Bee the ability to purge the contempt by paying the overdue

funds within ten days of the contempt finding.

{¶2} Cornell and Bee challenge both the contempt finding and the

underlying order upon which it is based. We conclude they waived their right to

challenge the underlying order by not filing a timely appeal. Further, we hold they

failed to demonstrate error with respect to the finding of contempt. However, we

determine the purge condition was unreasonable. Accordingly, we affirm the finding

of contempt, reverse the part of the order setting forth the purge condition, and

remand the case for further proceedings consistent with this opinion.

Background Facts and Procedure

{¶3} Cornell and Bee along with W. Curtis Shain jointly owed, in varying

percentages, business entities used to operate a health care practice (the “Practice”)

that serviced individual and corporate clients. Shain was the administrator for the

Practice. Bee provided chiropractic treatment. Cornell was a physician’s assistant to

a supervising physician, Dr. David Ellison.1 The relationship between Cornell, Bee

and Shain undisputedly became distrusting and adversarial. Lawsuits were filed on

behalf of the entities comprising the Practice, including this one, pitting Cornell and

1 Dr. Ellison was made a party to the lawsuit but is not a party on appeal.

3 OHIO FIRST DISTRICT COURT OF APPEALS

Bee against Shain. In claims and counterclaims, the parties alleged, among other

things, conversion based on the diversion of Practice assets, unjust enrichment, and

the breach of fiduciary duties.

{¶4} On August 14, 2018, Cornell, Bee and Shain agreed in court to go in

“separate directions,” with Shain to be divested of his ownership interest in the

Practice and retaining no right to revenue generated after that date. Cornell and Bee

were to continue a health care practice with Ellison using the facilities, equipment,

inventory, and the trade names of the Practice, with the exception of one.

{¶5} The parties also agreed to the appointment of Sumner Saeks as a

receiver for the four jointly-owned companies comprising the Practice. Anthony

Muto, Cornell and Bee’s attorney at the time, explained at the August 14th hearing

that the receiver would perform a number of tasks in addition to assisting with the

transition of ownership. These tasks included performing a “full accounting, * * *

reconstruct[ing] the full revenue and expenses of [the receivership companies[,] and

[] determin[ing] whether the money was properly or improperly spent.”

{¶6} While the parties agreed that the receiver would perform an

accounting of the receivership companies through August 14 and collect account

receivables through that date, Muto, who had instructed his clients before that date

to divert Practice assets, asserted that his clients were not agreeing that revenue tied

to patients Cornell and Bee had seen under the “auspices” of new- or old-but-

separate companies were receivership assets.

{¶7} After considering the issue, the trial court agreed to keep the new-

and separate-company assets out of the receivership, but indicated that “the Court

may, in its equitable powers, clawback some of that money, if at the end of the day

4 OHIO FIRST DISTRICT COURT OF APPEALS

the Court determines that it should have been an asset of the one of the companies in

the case.”

{¶8} Two weeks later, the trial court entered an order appointing Saeks as

the receiver of the four jointly-owned companies—Community First Injury Care, Inc.,

d.b.a. Community First Worx, Community First Health Services, Inc., Complete

Medical Sales & Services, LLC, and Peak Performance Medical, LLC, collectively the

“receivership companies.” The order also set August 14, 2018, as the termination

date of Shain’s ownership interest.

{¶9} The limited receivership order authorized the receiver to “conserve

the [receivership] companies until the formal transition of ownership,” “to [c]ollect

and compromise all accounts receivable,” and “[t]ake possession of all cash or funds

belonging to the [receivership] Companies.”

{¶10} Finally, the receivership order required the parties to cooperate with

the receiver on all matters including providing invoices for all services, the

identification of their new or separate companies, and financials for those companies

including bank statements.

{¶11} After the appointment, the receiver began to fulfill his duties and

conveyed his findings in a “First Monthly Report” and a “Supplement to the First

Monthly Report” that he filed with the court. The trial court held multiple hearings

on various matters. Many of these hearings related to Cornell’s, Bee’s, and Muto’s

failure to cooperate with the receiver.

{¶12} A new trial judge was assigned to the case in January 2019 as a

consequence of the original judge leaving the bench. On March 15, 2019, the receiver

filed a “Second Report and Accounting.” In this report, the receiver requested that

Cornell and Bee be directed to do several things, including pay $260,931.41 into the

5 OHIO FIRST DISTRICT COURT OF APPEALS

receivership. In the receiver’s opinion, Cornell and Bee’s new and separate

companies had collected $95,346.41 from individual or corporate clients that

belonged to a receivership entity. The remaining $165,585 represented the value the

receiver assigned to equipment and other physical assets he believed were owned by

the receivership entities on the split date and that effectively “changed hands” to

Cornell and Bee’s new companies on the split date.

{¶13} On March 21, 2019, the trial court held a hearing that addressed

several issues. This included a motion filed by Shain to disqualify Muto as Cornell

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Bluebook (online)
2021 Ohio 2094, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cornell-v-shain-ohioctapp-2021.