[Cite as Water Street Condominium Owners' Assn., Inc. v. Ferguson, 2024-Ohio-1592.] COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
WATER STREET CONDOMINIUM : OWNERS’ ASSOCIATION, INC. : Plaintiff-Appellant, No. 113183 : v. : TRAMPAS B. FERGUSON, ET AL., : Defendants-Appellees.
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED RELEASED AND JOURNALIZED: April 25, 2024
Civil Appeal from the Cuyahoga County Common Pleas Court Case No. CV-23-980888
Appearances:
Vogler & Associates, Ltd., and Matthew Edward Vogler, for appellant.
Kehoe & Associates, LLC, Robert D. Kehoe, and Kevin P. Shannon, for appellees.
EILEEN T. GALLAGHER, P.J.:
Plaintiff-appellant, Water Street Condominium Owners’ Association,
Inc., appeals from the trial court’s judgment granting the motion to dismiss filed by defendants-appellees Trampas B. Ferguson, Alexander Toth, and Robert D.
Kehoe, Esq. Ferguson and Toth had been previously elected as board members of
the Condominium Association in 2019, and Kehoe had been its counsel. The
complaint was filed by counsel representing board members who were subsequently
elected at special meetings and it requested that the trial court declare the rights of
the “new” board members and enjoin Ferguson and Toth from continuing to hold
themselves out as board members of the Condominium Association. (For ease of
reference, we will refer to defendants Ferguson, Toth, and Kehoe as “the Defendant
Board” and plaintiff as “the Plaintiff Board.”) The trial court granted the motion to
dismiss on the ground that the proper vehicle to resolve the instant dispute is a quo
warranto action, as well as on grounds of res judicata. While res judicata is not a
proper ground for a Civ.R. 12(B) dismissal, we conclude that this matter must be
resolved in a quo warranto action and, therefore, the trial court lacks subject-matter
jurisdiction. Accordingly, we affirm the trial court’s judgment granting the motion
to dismiss.
Background
The subject lawsuit is one of several lawsuits involving the dispute
surrounding the board members of the Condominium Association. Both the
Plaintiff Board and the Defendant Board claim to be the legitimate Board of
Directors for the Condominium Association. The allegations in the complaint filed by the Plaintiff Board establish the following facts, including the filing of several
prior lawsuits.
Water Street Condominiums consists of 99 condominium units and
were developed by 1033 Water Street, L.L.C. (“the Developer”). In 2016, a unit
owner filed a lawsuit against the Developer over the Developer’s failure to turn over
the control of the Condominium Association to the unit owners. In Mangano v.
1033 Water St., L.L.C., 8th Dist. Cuyahoga No. 106861, 2018-Ohio-5349, this court
affirmed the trial court’s decision barring the Developer “or any of its agents from
voting for members of the Association’s board, participating in or influencing the
election in any way, or from serving on the board.” Id. at ¶ 61.
As a result of the Mangano decision, the control of the Board
transferred from the Developer to the unit owners. In 2019, certain board members
were elected, including Toth.1 Having lost the control of the Board, on October 7,
2019, the Developer sold the remaining 35 units it owned, and 34 units were
eventually acquired by Apartment 92-Water Street L.L.C. (“Apartment 92”
hereafter), which was managed by Michael Apt. After the sale, the Board informed
1 The complaint alleges Ferguson is a previously elected board member who continued to
hold himself out as a board member, but it is unclear from the complaint when he was elected. Apartment 92 that the Board considered Apartment 92 to be a “successor” to the
Developer and therefore Mangano’s holding would extend to it as well.
The Prior Consolidated Lawsuits
On November 6, 2019, the Condominium Association sued the
Developer over its mismanagement of the condominiums in Water St.
Condominium Owners’ Assn., Inc. v. 1033 Water St., L.L.C., Cuyahoga C.P. No. CV-
19- 924640. On November 8, 2019, the Developer sued the Condominium
Association in 1033 Water St., L.L.C. v. Water St. Condominium Owners’ Assn.,
Inc., Cuyahoga C.P. No CV-19-924835, to challenge the Condominium Association’s
position that Apartment 92 was a “successor developer” and therefore barred from
serving on the board of directors and from voting in the elections.
On September 11, 2020, Apartment 92 filed its own action in
Apartment 92 - Water St., L.L.C. v. Water St. Condominium Owners’ Assn., Inc.,
Cuyahoga C.P. No. CV-20-937140. The lawsuit sought to enjoin the Board “from
impeding [Apartment 92’s] ability to serve on the [Board], to vote in elections for
Association board members, and otherwise participate in any other votes or
elections that may be held by the Association.” This lawsuit was consolidated with
the first two lawsuits. According to the instant complaint, “the gravamen of the Consolidated Cases originated with the transfer of the control of the Board from the
original developer * * * to the individual owners of the units * * *.”
Election of the Plaintiff Board
On April 13, 2021, Apartment 92 obtained a preliminary injunction in
the consolidated cases. The court ruled that the Board “is prohibited from
proceeding with the election of any members of the [Board] — including, but not
limited to, any annual meeting of the Association — unless [Apartment 92] is
permitted to vote and otherwise fully participate in said election.”2
Subsequently, the Defendant Board refused to schedule an annual
meeting for Board elections. As a result, Michael Apt called a special meeting on
January 27, 2023, citing the Bylaws of the Condominium Association as permitting
the special meeting. On February 27, 2023, a special meeting was held and Tyler
Brummett, Olivia Kellogg, and Philip Bowman were elected. On April 14, 2022,
another special meeting was held and Michael Apt, whose company has 35 percent
2 As pointed out by the Defendant Board in its motion to dismiss, in the same decision,
the trial court also stated that “until the litigation is concluded, the Association could choose not to vote on any substantive issues thereby alleviating any possibility of substantial changes with the way Water Street is managed.” While this statement is not cited in the complaint, it is acknowledged by the Plaintiff Board in its brief on appeal. interest of the subject property, was elected as a board member as well. These
individuals comprise the Plaintiff Board.
The Instant Lawsuit Filed by the Plaintiff Board
On June 13, 2023, Matthew Vogler, Esq., a unit owner, filed the instant
lawsuit, Water St. Condominiums Owners’ Assn. Inc. v. Trampas B. Ferguson,
Cuyahoga C.P. No. CV-23-980888, as authorized by the Plaintiff Board. The
complaint sets forth the foregoing allegations and sought relief in three counts.
Count I seeks a declaratory judgment of “rights of newly elected board members.”
It states that
[t]here exists an actual controversy and genuine dispute between the Association and defendants [Ferguson, Toth, and Kehoe] concerning defendants’ refusal to acknowledge the results of the special election which occurred on February 27, 2023, and their continued efforts to hold themselves out as members of the Board or as representing the Association.
Under Count I, the Plaintiff Board asks the court
to adjudicate and declare the rights of the current members of the Board * * * and declare that the Board is currently comprised of Michael Apt, Tyler Brummett, Olivia Kellogg, and Philp Bowman, who have all been duly elected at previously held and proper meetings of the Association, to wit, those on April 12, 2022, and February 27, 2023.
Count II of the complaint seeks preliminary and permanent injunctive
relief. It requests the court to enjoin the Defendant Board from holding themselves out as members of the Board or exercising any authority over the Association. Count
III seeks a temporary restraining order against the Defendant Board.
The Defendant Board’s Motion to Dismiss
In the motion to dismiss, the Defendant Board contended that the
February 27, 2023 special meeting, during which members of the Plaintiff Board
were elected, was void for several reasons: Michael Apt was not empowered to call
a special meeting; Olivia Kellog was not a unit owner and therefore not eligible to be
a member of the Board; and some voters were not eligible to vote because they were
delinquent.
The Defendant Board argued the case should be dismissed on several
grounds. First, they argued that the lawsuit was not authorized by the Board on
behalf of the Association and, therefore, the Plaintiff Board lacks standing to file the
lawsuit. Second, they argued the trial court has no jurisdiction to decide a dispute
over a party’s right to hold office in a nonprofit organization such as a condominium
owner’s association because the proper vehicle for resolving the dispute is a quo
warranto action brought by the state’s attorney general or a county prosecuting
attorney, pursuant to R.C. 2733.05. Third, they contended a quo warranto action
must be brought at either a court of appeals or the Supreme Court of Ohio, pursuant
to R.C. 2733.03. Fourth, the Defendant Board claimed res judicata precluded the instant lawsuit because the jurisdictional issue had been decided on two occasions
in the consolidated cases.
Trial Court’s Dismissal of the Instant Lawsuit; Plaintiff Board’s Appeal
The trial court granted the Defendant Board’s motion to dismiss on
the grounds of res judicata and a lack of jurisdiction. Its journal entry states, in
pertinent part:
Defendants’ motion to dismiss the complaint, filed 07/14/2023, is granted. Plaintiff’s complaint is duplicative of the claims raised before another court, therefore, res judicata precludes these claims being brought by the same party seeking the same relief as Case CV 937140. * * * In Case 37140, the parties are litigating the same issues and seek to have this court resolve which party properly constitute the board of the Condominium Association. This court lacks jurisdiction to substitute board members, [and] such action must be brought via an extraordinary writ of quo warranto through the State Attorney or the County Prosecutor.
On appeal, the Plaintiff Board raises the following two assignments of
error:
1. The trial court erred in holding, in its order dated August 16, 2023, which granted Defendants’ motion to dismiss, that Plaintiff’s claims are barred under the doctrine of res judicata because the same claims are purportedly being brought by the same party in a separate matter presently pending in the Court of Common Pleas, to wit, Case No. 20-CV-937140, because res judicata is not a proper basis for dismissal under Ohio Rule of Civil Procedure 12 pursuant to the Freeman rule. See, e.g., Jefferson v. Bunting, 140 Ohio St.3d 62, 2014-Ohio-3074, 14 N.E. 3d 1036, ¶ 10 (citing State ex rel. Freeman v. Morris, 62 Ohio St.3d 107, 579 N.E.2d 702 (1991)).
2. The trial court erred in holding, in its order dated August 16, 2023, which granted Defendants’ motion to dismiss, that it lacked subject[-]matter jurisdiction over this action because said action must be “sought via an extraordinary writ of quo warranto,” because this action does not sound in quo warranto as it does not seek a judgment of ouster, but rather seeks to declare the rights of a party with respect to actions which have already taken by the Association.
Res Judicata
In the motion to dismiss, the Defendant Board claimed that the
Plaintiff Board’s claims should be dismissed under Civ.R. 12(B)(6), arguing they
were barred by res judicata because the Plaintiff Board’s claims regarding the board
members had been denied for a lack of subject-matter jurisdiction in the
consolidated cases.
Pursuant to the doctrine of res judicata, a valid, final judgment on the
merits bars any subsequent actions based on any claim arising out of the transaction
or occurrence that was the subject matter of the first action. Grava v. Parkman
Twp., 73 Ohio St.3d 379, 653 N.E.2d 226 (1995).
A motion to dismiss for failure to state a claim upon which relief can
be granted pursuant to Civ.R. 12(B)(6) tests the sufficiency of the complaint.
Volbers-Klarich v. Middletown Mgt., Inc., 125 Ohio St.3d 494, 2010-Ohio-2057,
929 N.E.2d 434, ¶ 11. Therefore, when ruling on a Civ.R. 12(B)(6) motion, a court
may not rely on evidence or allegations outside the complaint. State ex rel. Fuqua
v. Alexander, 79 Ohio St.3d 206, 207, 680 N.E.2d 985 (1997). Accordingly, “‘res
judicata is not a defense that can be raised by a motion to dismiss pursuant to
Civ.R. 12(B) because that defense must be proved with evidence outside the pleadings.’” Arnoff v. PAJ Ents., L.L.C., 8th Dist. Cuyahoga No. 110714, 2022-Ohio-
1759, ¶ 13, quoting Kobal v. Kobal, 8th Dist. Cuyahoga No. 110317, 2022-Ohio-812,
¶ 10, citing Commons v. Raaber, 8th Dist. Cuyahoga No. 96867, 2011-Ohio-6084,
¶ 10, citing State ex rel. Freeman v. Morris, 62 Ohio St.3d 107, 579 N.E.2d 702
(1991). See also, e.g., Pfalzgraf v. Miley, 7th Dist. Monroe No. 19 MO 0006,
2019-Ohio-4920 (res judicata is not one of the defenses enumerated in Civ.R. 12(B)
and must be pled in the answer); and Monroe v. Forum Health, 11th Dist. Trumbull
No. 2012-T-0026, 2012-Ohio-6133, ¶ 42 (Res judicata is an affirmative defense
under Civ.R. 8(C) and must be pled and cannot be raised by a motion to dismiss.).
While res judicata is not a proper ground for the dismissal of the
instant complaint under Civ.R. 12(B)(6) and we sustain the first assignment of error,
we nonetheless affirm the trial court’s judgment granting the motion to dismiss for
a lack of jurisdiction because, as we explain in the following, the instant dispute must
be adjudicated in an action in quo warranto.
Quo Warranto
“A trial court must dismiss for lack of subject-matter jurisdiction if the
complaint fails to raise a cause of action cognizable by the forum.” Masjid Omar
Ibn El Khattab Mosque v. Salim, 10th Dist. Franklin No. 12AP-807,
2013-Ohio-2746, ¶ 15, citing State ex rel. Bush v. Spurlock, 42 Ohio St.3d 77, 80,
537 N.E.2d 641 (1989). We review a dismissal under Civ.R. 12(B)(1) for lack of subject-matter jurisdiction de novo. State ex rel. Ohio Civ. Serv. Emps. Assn. v.
State, 146 Ohio St.3d 315, 2016-Ohio-478, 56 N.E.3d 913, ¶ 12.
R.C. Chapter 2733 governs quo warranto actions. These actions may
be brought against “a person who usurps, intrudes into, or unlawfully holds or
exercises * * * an office in a corporation created by the authority of this state.”
R.C. 2733.01(A). Furthermore, pursuant to R.C. 2733.05, such an action must be
brought by the attorney general or a prosecuting attorney. And, pursuant to
R.C. 2733.03, an action in quo warranto can be only be brought in the Supreme
Court or in the court of appeals.
A quo warranto action is “‘the proper and exclusive remedy for
determining the legal right of an officer of an incorporated nonprofit association to
hold office.’” State ex rel. Gmoser v. Village at Beckett Ridge Condominium
Owners’ Assn., Inc., 2016-Ohio-8451, 82 N.E.3d 464, ¶ 15 (12th Dist.), quoting
Carlson v. Rabkin, 152 Ohio App.3d 672, 2003-Ohio-2071, 789 N.E.2d 1122, ¶ 35
(1st Dist.). See also Greater Temple Christian Church v. Higgins, 9th Dist. Summit
No. 23022, 2006-Ohio-3284, ¶ 17; Unirea Societatilor Romane Carpatina v. Suba,
130 Ohio App.3d 538, 541, 720 N.E.2d 594 (8th Dist.1998); Strah v. Lake Cty.
Humane Soc., 90 Ohio App.3d 822, 631 N.E.2d 165, (11th Dist.1993) (the trial court
lacks authority to grant quo warranto relief by granting an injunction ousting
directors of a nonprofit corporation on the basis that they were elected at an
unlawfully postponed annual meeting); and Global Launch v. Wisehart, 156 Ohio Misc.2d 1, 2010-Ohio-1457, 925 N.E.2d 698 (C.P.) (The validity of an election of
members of a corporate board falls squarely within the quo warranto remedy.).
The Plaintiff Board nonetheless argues that “in order to be a quo
warranto action, the relief sought must necessarily include ouster” and, “[w]here the
relief sought in a claim is not for ouster, the relief is not in the nature of quo
warranto.”
However, when determining whether a party is seeking quo warranto
relief, courts must “identify the core issues raised by the parties for judicial
resolution.” Masjid Omar Mosque, 2013-Ohio-2746, at ¶ 20. See also State ex rel.
Gmoser, 2016-Ohio-8451, at ¶ 38.
In Masjid Omar Ibn El Khattab Mosque, the issue involved a dispute
about who the legitimate board members of a mosque were. The trial court
determined the core issue was the validity of the election of the new board and held
that such an issue must be resolved through a quo warranto action. On appeal, the
original board argued the trial court had jurisdiction because it was not seeking
ouster of the newly elected board and, therefore, the action was not in the nature of
quo warranto. The Tenth District agreed with the trial court, holding that the
remedy sought by the original board can only be achieved through a quo warranto
action. Id. at ¶ 21.
The Tenth District explained that when deciding whether a party is
seeking quo warranto relief, the court must identify the core issues raised by the parties for adjudication and, “[i]f the principal or primary issue is the validity of the
election of corporate officers, then the action, no matter how pleaded, is actually a
quo warranto action.” Id. at ¶ 20, citing State ex rel. Babione v. Martin, 97 Ohio
App.3d 539, 544, 647 N.E.2d 169 (6th Dist.1994); Goldberg v. Rite Rug Co., 10th
Dist. Franklin No. 82AP-135, 1983 Ohio App. LEXIS 15370 (June 23, 1983); and
Ohio Hosp. Assn. v. Community Mut. Ins. Co., 10th Dist. Franklin No. 85AP-1049,
1986 Ohio App. LEXIS 6994 (June 5, 1986). See also Hendershot v. Conner, 48
Ohio App.2d 335, 357 N.E.2d 386 (9th Dist.1974) (where the core of relief sought by
a plaintiff is the challenge to a person who unlawfully holds corporate office, the
proper remedy is quo warranto and a court of common pleas lacks jurisdiction over
the subject matter of the action). The Tenth District also stated that, if the relief
sought “is a declaratory judgment stating which claimant has a right to office and/or
an injunction ordering the removal of a person from office, then the action must be
pursued through a quo warranto action.” Masjid Omar Mosque, 2013-Ohio-2746,
at ¶ 20, citing Greater Temple Christian Church, 9th Dist. Summit No. 23022,
2006-Ohio-3284, ¶ 17-18; Strah, 90 Ohio App.3d, at 828; Hendershot, 48 Ohio
App.2d, at 337; and Capri v. Johnson, 32 Ohio App.2d 95, 98, 288 N.E.2d 604 (10th
Dist.1972).
The Second District applied Masjid Omar Mosque’s holding in Kirby
v. Oatts, 2020-Ohio-301, 151 N.E.3d 1083 (2d Dist.). Kirby involved facts similar to
the instant case. A group of homeowners called a special meeting to elect new board members in order to replace an existing board due to concerns about the operation
of the homeowners’ association. The newly elected board filed a lawsuit seeking a
determination of the validity of the election and a declaration that the new board
was duly elected. It sought an order from the court enjoining the prior board from
continuing to act on behalf of the homeowners’ association.
The Second District held that the trial court lacked subject-matter
jurisdiction over the case because the matter must be addressed in an action in quo
warranto. The Second District, citing Masjid Omar Mosque, 2013-Ohio-2746,
found that the core relief sought by the plaintiff board “was to essentially oust the
Defendant Board.” It reasoned as follows:
The Plaintiff Board’s request for a declaratory judgment primarily asked the trial court to determine whether [the election] of the Plaintiff Board was valid. As noted in Masjid Omar Mosque, “[i]f the principal or primary issue is the validity of the election of corporate officers, then the action, no matter how pleaded, is actually a quo warranto action.” (Emphasis added.) Masjid Omar Mosque, 10th Dist. Franklin No. 12AP-807, 2013-Ohio-2746, at ¶ 20.
Kirby at ¶ 28.
The Second District noted that the newly elected board’s complaint
specifically requested that the trial court issue an order for the prior board members
to cease and desist representing themselves as trustees and for the newly elected
board to be recognized by the financial institutions as the trustees of the
homeowners’ association. The Second District determined that “[t]hese requests
clearly indicate that the Plaintiff Board’s request for a declaratory judgment was for purposes of ousting the Defendant Board.” Kirby at ¶ 29. Accordingly, the action is
one for quo warranto and the trial court lacked subject-matter jurisdiction.
Similarly, the complaint in this case alleges that the Plaintiff Board
has been duly elected at properly held meetings of the Condominium Association on
April 12, 2022, and February 27, 2023, but the Defendant Board members
continued to hold themselves out as members of the Board and attempt to exercise
control over the Codominium Association. Paragraph 30 of the complaint states
that plaintiff seeks to have the trial court declare the legal rights of the current Board
members. Paragraph 40 of the complaint requests the court grant injunctive relief
enjoining the Defendant Board from holding themselves out as duly elected
members of the Board and from exercising any authority over the property or
function of the Association. The core issue raised in the complaint is the validity of
the election of the Plaintiff Board and, as such, is to be determined in a quo warranto
action. Kirby, 2020-Ohio-301, at ¶ 28; Masjid Omar Mosque, 2013-Ohio-2746, at
¶ 20.3 Because the complaint fails to raise a cause of action cognizable by the forum,
3 The Plaintiff Board cites a 2000 case from the Second District, N. Dayton First Church
of God v. Berger, 2d Dist. Montgomery No. 18171, 2000 Ohio App. LEXIS 4964 (Oct. 27, 2000), for its contention that a quo warranto action is only proper if a judgment of ouster is being sought and that, in this case, the Plaintiff Board is not seeking ouster. This claim is not supported by the precedent cited in the foregoing analysis. We also note that the Second District discussed N. Dayton in its Kirby decision but ultimately applied Masjid Omar Mosque. The Plaintiff Board also cites this court’s decision in Sworak v. Great Lakes Recreational Vehicle Assn., 8th Dist. Cuyahoga No. 110137, 2021-Ohio-4309, for its claim that a quo warranto action is only proper when ouster is sought. We note that Sworak concerns a motion seeking sanctions — appellant requested sanctions because appellee filed an action that appellant claimed to be a disguised quo warranto action, over we affirm the trial court’s judgment dismissing the instant complaint for a lack of
subject-matter jurisdiction. The second assignment of error is without merit.
Judgment affirmed.
It is ordered that appellees recover of appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the
common pleas 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.
_________________________________ EILEEN T. GALLAGHER, PRESIDING JUDGE
MICHAEL JOHN RYAN, J., and SEAN C. GALLAGHER, J., CONCUR
which the trial court lacked jurisdiction. This court discussed Kirby and N. Dayton and affirmed the trial court’s decision denying sanctions, explaining that it could not conclude appellee lacked a good faith belief that the trial court possessed jurisdiction over claims asserted in the complaint. Contrary to Plaintiff Board’s assertion, there is no holding from this court on the substantive issue regarding quo warranto in Sworak.