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Heinrichs v. 356 Registry, Inc.

Court of Appeals of Ohio, Tenth District

September 24, 2013

R. Stephen Heinrichs, Plaintiff-Appellee,
v.
356 Registry, Inc., Defendant-Appellant.

APPEAL from the Franklin County Court of Common Pleas C.P.C. No. 12CV-12434

Bailey Cavalieri LLC, and Tiffany C. Miller, for appellee.

Chieffo Law Office, and Dominic J. Chieffo; Isaac, Wiles, Burkholder and Teetor, and Donald L. Anspaugh, for appellant.

DECISION

T. BRYANT, J.

(¶ 1} Defendant-appellant, 356 Registry, Inc. ("Registry"), appeals from a judgment of the Franklin County Court of Common Pleas granting the motion of plaintiff-appellee, R. Stephen Heinrichs, to compel the production of documents requested in civil discovery. Because the trial court did not abuse its broad discretion in so holding, we affirm.

I. FACTS

(¶ 2} Registry is an Ohio non-profit corporation comprised of an international group of Porsche 356 series automobile owners and enthusiasts who seek to preserve and perpetuate the car. Registry publishes certain financial information in its magazine entitled "Porsche 356 Registry, " which is distributed to its members. Heinrichs is a Porsche historian, collector, restoration expert, author, and event coordinator who had been a dues-paying Registry member for over 25 years.

(¶ 3} According to Heinrichs, after noticing that financial information for Registry's 2010-2011 fiscal year had not been published in its magazine, he logged onto the online discussion forum open to Registry members and started a discussion thread noting the missing financial information and requesting that Registry publish it. Heinrichs then made several demands requesting that Registry permit him to inspect and copy its books and records.

(¶ 4} After Registry allegedly refused Heinrichs' requests or placed an illegal restriction on his right of inspection, on October 1, 2012, Heinrichs filed a complaint in the Franklin County Court of Common Pleas requesting a declaration that Registry has an obligation to allow him to inspect and copy the requested records and an order compelling Registry to turn over those records for inspection and copying. Registry filed an answer and counterclaim. In its counterclaim, Registry raised claims of intentional interference with business relations and defamation. It requested compensatory and punitive damages and declaratory and injunctive relief against Heinrichs. In addition, shortly after Heinrichs filed his original complaint, Registry's board of trustees voted to permanently terminate his membership because of its determination that his actions were "detrimental to the good order of our Club." (R. 42, at 5.)

(¶ 5} On November 2, 2012, Heinrichs filed an amended complaint in which he added claims of breach of fiduciary duty and defamation to his claim for the inspection of Registry's books and records. For his records claim, Heinrichs specified that he had requested to inspect the following books and records, to the extent they exist: (1) annual financial statements and information for 2008 through the fiscal year completed on August 31, 2012 and interim financial statements for 2012; (2) general ledger; (3) expense records, including for the magazine, the Goodie Store, trustees' expenses, insurance, and grants and gifts for holiday meetings; (4) all minutes for meetings of trustees, board, committee and Registry members; (5) contract with the Goodie Store; (6) contract for the magazine; (7) material employment and independent contractor records; (8) contract or agreement with Porsche; (9) check register; and (10) a list of all Registry members and their mailing addresses. Registry filed an answer in which it reasserted its demands in its answer and counterclaim, and Heinrichs submitted a reply to the counterclaim.

(¶ 6} On November 21, 2012, Heinrichs served his first request for production of documents, pursuant to Civ.R. 26 and 34, to Registry. He requested the production of 36 categories of records, including those records that are the subject of his records claim. Registry objected to the requested discovery because "the very heart of the litigation is the issue of examining and or producing books and records." (R. 38, exhibit B.) Registry claimed that Heinrichs had not yet established his entitlement to inspect the requested records under R.C. 1702.15. In addition, Registry objected to the production of any documents that are: "confidential; privileged; not subject to disclosure by contract or representations to members or prospective members; subject to protection; the subject of confidential[it]y agreements; contrary to representation to members and prospective members that the information will not be shared, rented, sold, divulged or distributed and beyond the requirements of the laws of the State of Ohio." (R. 38, exhibit B.) Finally, Registry objected to the production of any documents that would constitute a breach of its fiduciary duties. Registry did not provide any of the requested records.

(¶ 7} After the parties exchanged more correspondence that did not break the discovery impasse, Heinrichs filed a motion to compel Registry to immediately respond to his request for production of documents. In its memorandum in opposition, Registry claimed that the matter was governed by R.C. 1702.15, which takes precedence over conflicting discovery rules, the production of the requested records would violate R.C. 1702.15 and constitute a breach of Registry's fiduciary duties to its members, and Heinrichs had no right to certain requested records, which are privileged or confidential.

(¶ 8} On April 16, 2013, the common pleas court granted Heinrichs' motion to compel the production of the requested documents. The court determined that the requested records appeared reasonably calculated to lead to the discovery of admissible evidence to defend against Registry's counterclaims of intentional interference with a business relation and defamation so that Registry could not use Heinrichs' claim under R.C. 1702.15 "to shield it from ...


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