R.L.R. Invests., L.L.C. v. Cross Street Partners, L.L.C.

2024 Ohio 2292
Ohio Court of Appeals·Decided June 14, 2024·No. 30034·Published·Cited by 1 cases

Opinion

[Cite as R.L.R. Invests., L.L.C. v. Cross Street Partners, L.L.C., 2024-Ohio-2292.]

IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT MONTGOMERY COUNTY

R.L.R. INVESTMENTS LLC :

:

Appellant : C.A. No. 30034 :

v. : Trial Court Case No. 2023 CV 04657 :

CROSS STREET PARTNERS LLC : (Civil Appeal from Common Pleas : Court)

Appellee :

:

...........

OPINION

Rendered on June 14, 2024 ...........

ANTHONY C. WHITE and THOMAS W. PALMER, Attorneys for Appellant

TOBY K. HENDERSON, BRYAN K. PENICK and COREY H. BUSHLE, Attorneys for Appellee

.............

TUCKER, J.

{¶ 1} R.L.R. Investments, LLC (“RLR”) appeals from the trial court’s decision and entry granting a motion for preliminary injunction filed by defendant Cross Street Partners, LLC (“CSP”).

{¶ 2} The trial court entered the injunction to prevent RLR from proceeding with a pending arbitration against an entity known as SP Rotunda, LLC (“Rotunda”). RLR contends the trial court erred in granting CSP injunctive relief for numerous reasons. In particular, RLR argues that (1) CSP lacked standing to enjoin an arbitration to which it is not a party, (2) CSP failed to assert a legal claim for which injunctive relief could be a remedy, (3) CSP did not show a likelihood of success on the merits of its defense, (4) CSP failed to demonstrate irreparable harm absent an injunction, (5) the trial court erroneously ruled on the merits of an emergency arbitration motion, and (6) the trial court failed to provide specificity regarding the scope of its injunction.

{¶ 3} Upon review, we find RLR’s first argument to be persuasive. Accordingly, the trial court’s order enjoining RLR from proceeding with its pending arbitration against Rotunda will be reversed, and the injunction will be dissolved.

I. Background

{¶ 4} The present dispute concerns an easement traversing the downtown Dayton Arcade building. The easement included an enclosed walkway connecting an office building on one side of the Arcade to a parking garage on the other side. RLR owns the office building and the parking garage, and its tenants have a right to use the pedestrian easement. The Arcade is owned by Rotunda. CSP is a real-estate developer acting as Rotunda’s agent to perform construction activities and renovate the Arcade.

{¶ 5} In May 2023, CSP informed RLR that the walkway would be closed temporarily during the construction period. In June 2023, RLR commenced an arbitration proceeding against CSP, alleging breach of the easement agreement and trespass. CSP

responded that it was not a party to the easement agreement and was not bound by an arbitration clause contained therein. In August 2023, RLR dismissed CSP from the arbitration and named Rotunda as a party to it. That same month, RLR filed a complaint against CSP in the Montgomery County Common Pleas Court. The complaint included a cause of action for trespass based on CSP’s alleged interference with RLR’s rights under the easement agreement. RLR sought injunctive relief and damages against CSP.

{¶ 6} In October 2023, the trial court granted RLR a temporary restraining order preventing CSP from closing the easement. In November 2023, a magistrate granted RLR a preliminary injunction prohibiting CSP from closing or restricting access to the easement until January 6, 2024. The basis for the ruling was that a period of required prior notice to RLR would not exist until that date. Both parties filed objections to the magistrate’s decision. On January 17, 2024, CSP also moved for its own injunctive relief to prevent RLR from arbitrating against Rotunda.

{¶ 7} On January 23, 2024, the trial court filed separate rulings resolving (1) the parties’ objections to the magistrate’s decision granting RLR a preliminary injunction and (2) CSP’s motion for injunctive relief to halt RLR’s arbitration against Rotunda. With regard to the former issue, the trial court noted that a 90-day notice requirement to close the walkway had been satisfied as of January 7, 2024. The trial court then rejected RLR’s argument that temporary closure of the walkway during construction was unnecessary. As a result, the trial court overruled RLR’s motion for a preliminary injunction against CSP. The trial court noted, however, that the preliminary injunction hearing before the magistrate had not been consolidated with a trial on the merits. Therefore, the trial court

emphasized that its denial of preliminary injunctive relief to RLR did “not affect the merits of any party’s claims or defenses” beyond its denial of preliminary injunctive relief.

{¶ 8} With regard to CSP’s motion for an injunction to prevent RLR from arbitrating with Rotunda, the trial court noted that RLR had invoked its jurisdiction and had sought injunctive relief against CSP to prevent temporary closure of the walkway based on a lack of necessity. The trial court also noted that RLR had filed a supplemental brief in support of its objections to the magistrate’s decision. Therein, RLR had claimed that there was a planned permanent encroachment on the easement by constructing a hotel room in it. The trial court opined that RLR was not entitled to arbitrate this issue against Rotunda because its supplemental brief had placed the permanent-encroachment issue squarely within the common pleas court case.

{¶ 9} The trial court proceeded to find that the alleged permanent encroachment based on Rotunda’s constructing a hotel room in the footprint of the easement was “indefinite, uncertain, and speculative.” The trial court added: “The basis for arbitration is contingent upon encroachment. Plaintiffs have little or no evidence that encroachment will occur. * * * Thus, the basis for AAA [arbitration] activity is weak or non-existent. There really is no basis. Thus, there is no grounds to go to the AAA.” See January 23, 2023 Decision and Entry Granting Defendant’s Motion for Preliminary Injunction at 5. Ultimately, the trial court held that the permanent-encroachment issue was not “ripe.” Id. The trial court then concluded as follows:

Defendant is likely to succeed on the merits of its defense. RLR has not shown any grounds for violation of the easement. There is no

encroachment on the easement. Thus, Plaintiff has no right to arbitrate that issue. Plaintiff has litigated the issues of encroachment, necessity, and notice before the state court, Montgomery County, Ohio. The law restricts litigating the same issues simultaneously or successively before multiple for[u]ms. Defendant has shown a substantial likelihood to succeed on this component.

Defendants [sic] will suffer irreparable harm if Plaintiff can pursue the same claim before AAA. Defendants [sic] are proceeding with construction. Delay in construction will potentially cause great financial loss in terms of financing, tax credits, funding, and numerous construction contracts. A[n] AAA proceeding may result in an order which would suspend construction. This threatens irreparable harm to Defendants [sic].

An injunction in this court serves the public interest. It furthers the interest of third parties such as contractors. The interest[s] of third parties are advanced. This injunction promotes that.

All residual rights remain in the possessory or servient estate, the servient land owner may make any use of his property that does not unreasonably interfere with the easement holder’s use of the easement, unless the easement agreement provides otherwise. Under the facts of this case, Defendant is making use of the property that does not unreasonably interfere with Plaintiff’s use of the easement. Plaintiff’s effort to obtain relief from AAA could be contrary to the court’s order permitting construction by

the servient estate owner. Plaintiff’s action vitiates the court’s prior order permitting construction on the servient estate where there has been a finding that the easement provisions have been met. There is compliance with the terms of the easement.

Accordingly, Defendant’s Motion for Preliminary Injunction is GRANTED.

Id. at 5-6.

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R.L.R. Invests., L.L.C. v. Cross Street Partners, L.L.C., 2024 Ohio 2292 (Ohio Ct. App. 2024).

2024 Ohio 2292 (R.L.R. Invests., L.L.C. v. Cross Street Partners, L.L.C.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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