Marie Joseph v. Ronald Joseph

CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 18, 2022
Docket19-4258
StatusUnpublished

This text of Marie Joseph v. Ronald Joseph (Marie Joseph v. Ronald Joseph) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Marie Joseph v. Ronald Joseph, (6th Cir. 2022).

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 22a0335n.06

No. 19-4258

UNITED STATES COURT OF APPEALS FILED FOR THE SIXTH CIRCUIT Aug 18, 2022 DEBORAH S. HUNT, Clerk

) MARIE JOSEPH, ) Plaintiff-Appellant, ) ) ON APPEAL FROM THE v. ) UNITED STATES DISTRICT ) COURT FOR THE SOUTHERN RONALD JOSEPH, GREGORY JOSEPH, ) DISTRICT OF OHIO GEORGE JOSEPH, RICHARD JOSEPH, and ) RONALD JOSEPH, JR., ) Defendants-Appellees. )

Before: BOGGS, WHITE, and READLER, Circuit Judges.

HELENE N. WHITE, Circuit Judge. Plaintiff-Appellant Marie Joseph (“Marie”)

appeals the grant of summary judgment to her brother Ronald Joseph (“Ron”) in this action

concerning access to corporate books and records.

In 2016, Marie filed suit against Ron over disputes concerning Columbia Oldsmobile

Company (“Columbia”), a closely held Ohio corporation founded in 1938 by their father, George

Joseph. Marie alleged that Ron manipulated the affairs of Columbia, oppressed her as a minority

shareholder, and violated his fiduciary duties by participating in related-party transactions. The

additional claim involved here—that Ron denied her access to Columbia’s corporate books and

records—was bifurcated from her other claims.

Ron and Marie filed cross-motions for summary judgment on the corporate-records claim.

The district court granted Ron’s motion and denied Marie’s cross-motion. For the reasons that

follow, we AFFIRM. No. 19-4258, Joseph v. Joseph

I.

A.

On October 12, 2015, Marie’s prior counsel emailed a request for corporate records

pursuant to Ohio Rev. Code §1701.37 to counsel for Ron and Columbia (“2015 Records Request”).

Marie’s counsel stated in the email that Marie was concerned that Columbia had failed to account

for income it had received from its subsidiaries and holdings, and that Ron was breaching his

fiduciary duties by failing to pay dividends and usurping corporate opportunities, and was derelict

in his duties to minority shareholders. The email continued:

[P]ursuant to Ohio Revised Code §§ 1701.37 and 1701.38, I hereby request on Marie’s behalf, copies of the following Columbia books and records: 1. The “complete books and records of account, together with minutes of the proceedings of Columbia’s shareholders, directors, and committees of the directors.” This request seeks, among other things: a. Copy of the ground lease for the 5th and Sycamore (6 parcels of land); b. The financials of Columbia Motors Acceptance Corporation (2005-2015); c. The financials of Joseph Chevrolet (2005-2015); d. Financial records (2005-2015) and appraisals of the following lots owned by Columbia: (i) 813 Sycamore St, (ii) 7th and Sycamore (11 parcels); and (iii) 415 Court St.; e. The financials (2005-2015) for 716 Main St.; f. The appraisal, if any, of 3449 St. John’s Place owned by Columbia; g. Financial records (2005-2015) of rent received on 9750 and 9678 Montgomery Rd.; h. The financial records (2005-2015) for Columbia Hyundai; i. The financial records (2005-2015) for Columbia Acura; and j. Financial records (2005-2015) regarding finance and insurance (“F&I”) monies of all dealerships owned by Columbia. 2. The records of Columbia’s shareholders and the number and class of shares issued or transferred of record to or by them since 1992; 3. Any Appraisals of Columbia stock used to reach the valuation of Najla’s[1] shares at $17,885.39 and $16,991.12 per voting share and non-voting share respectively;

1 Najla is Marie and Ron’s mother.

-2- No. 19-4258, Joseph v. Joseph

4. A copy of the Stock Ledger for Columbia; 5. Financial statements, including balance sheets containing a summary of the assets, liabilities, stated capital, if any, and surplus (showing separately any capital surplus arising from unrealized appreciation of assets, other capital surplus, and earned surplus) for each year from 1992 to the present; and 6. All statements of profit and loss and surplus, including a summary of profits, dividends or distributions paid, and other changes in the surplus accounts, for the period 1992- present.

R.244-2, PID 17873 –74.

In response to the records request, counsel for Ron and Columbia replied:

A substantial amount of the information you requested is either not available or is within the public domain. In particular, I refer to the real estate appraisals and related materials you requested. As to the other information set forth in your emails, I have no authorization to respond or otherwise provide these items.

R.240-2, PID 17720.

After Marie initiated this lawsuit, Ron provided Marie with copies of certain of Columbia’s

corporate records through discovery. For example, Ron produced copies of: Columbia

Automotive Inc.’s general ledger, Columbia Development’s general ledger, the financial

statements of Columbia Automotive and Columbia Oldsmobile Company, Columbia Oldsmobile

Company’s tax returns, Columbia Oldsmobile Company’s stock registers and shareholders’ lists,

and Columbia stock certificates.

However, Ron has refused to provide Marie with access to the following: Columbia’s

“source documents,” which Marie defined as “document[s] such as . . . receipt[s] and invoice[s]

or . . . purchase order[s]” that “support[] or back[] up a given transaction,” R.242, PID 17795;

access to Columbia’s “actual” general ledgers, which Marie defined as Columbia’s general ledger

“as it is actually maintained in Columbia Automotive, Inc.’s system,” R.243-1, PID 17834; and

access to Columbia’s “original” stock ledgers, stock certificates, and shareholder records, R.250,

PID 18421. Although Ron has permitted Marie to inspect the original copies of Columbia’s stock

-3- No. 19-4258, Joseph v. Joseph

certificates, he has conditioned that access on Marie agreeing to various confidentiality

restrictions.

During a “meet and confer” conference on November 8, 2018, Marie’s counsel told Ron’s

counsel that Marie sought to review “source documents” for the transactions listed in a spreadsheet

that Marie’s counsel first sent to Ron’s counsel via email on September 5, 2018. R.238, PID

17650–51. In that September 5, 2018, email, Marie’s counsel inquired whether Ron’s counsel

would be willing to agree to various stipulations regarding the transactions listed in the

spreadsheet, which she planned to challenge at trial. Marie’s counsel again sent the spreadsheet

to Ron’s counsel on November 20, 2018.

During the pendency of this lawsuit, Marie made three additional records requests to Ron

and Columbia; the first on April 14, 2017, the second on January 18, 2018, and the third on April

20, 2018. Marie also filed a motion for equitable relief seeking access to Columbia’s books and

records in the Court of Common Pleas of Hamilton County, Ohio on July 30, 2019. None of these

requests are at issue in this appeal.

B.

Marie filed this action asserting claims for breach of fiduciary duties, access to corporate

records, and entitlement to an accounting against Ron. Marie then filed an amended complaint

asserting an additional claim for fraud and concealment against Ron, a claim for fraudulent breach

of fiduciary duties against Ron and his sons Gregory Joseph, George Joseph, Richard Joseph, and

Ronald Joseph, Jr. (“Ron’s Sons”), and a faithless-servant claim against Ron’s Sons. All claims

asserted against Ron’s Sons were dismissed on summary judgment. The district court

subsequently granted Ron’s motion for separate trial, directing that Marie’s breach-of-fiduciary-

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Marie Joseph v. Ronald Joseph, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marie-joseph-v-ronald-joseph-ca6-2022.