Court of Appeals of Ohio, First District, Hamilton
SUZANNE D. BAIRD, Plaintiff-Appellee,
L.A.D. HOLDINGS, LLC, Individually and derivatively on behalf of NEWPORT PAVILION, LLC, Intervening Defendant-Appellant, and 9549 MONTGOMERY ROAD, LLC, et al., Defendants.
Appeals From: Hamilton County Court of Common Pleas TRIAL NO.
Buechner Haffer Meyers & Koenig Co., LPA, Brian R. Redden
and David W. Burleigh, for Plaintiff-Appellee.
Connell, Vollmar & Armstrong, LLC, and Thomas B. Bruns,
for Intervening Defendant-Appellant.
Intervening defendant-appellant L.A.D. Holdings, LLC,
("LAD") on behalf of itself, and derivatively on
behalf of defendant Newport Pavilion, LLC, appeals the trial
court's judgment releasing funds held in escrow to
plaintiff-appellee Suzanne Baird in the appeal numbered
C-160265. In the appeal numbered C-160409, LAD appeals the
trial court's judgment denying its motion for leave to
amend its cross-claim against defendant Timothy S. Baird in
order to add a counterclaim against Suzanne Baird and to
assert a constructive trust over the released escrow funds.
We have consolidated these appeals for review. Because the
appeals are moot, we dismiss them.
In August 2011, Suzanne Baird obtained a judgment from the
domestic relations court in the amount of $2, 000, 000
against her ex-husband Tim Baird after he defaulted on a
promissory note that he had executed in her favor as part of
their separation agreement. In an effort to collect on this
judgment, Suzanne Baird also obtained a charging order
permitting her to charge Tim Baird's membership in
numerous limited liability companies with payment on her
judgment. But given that Tim Baird was one of the majority
owners and comanaged almost all of the companies, the
distributions to members stopped and Suzanne Baird was unable
to collect on her judgment. Tim Baird's companies
acquired, developed and sold commercial real estate, namely
Because the charging orders were ineffective, in February
2012, Suzanne Baird filed a declaratory judgment action
against Tim Baird and all of the companies ("the
LLCs") in which he was a member, asking the court to
declare that she is authorized to take control of Tim
Baird's memberships in the LLCs. She also alleged claims
for conversion and fraudulent transfer of assets, and sought
injunctive relief prohibiting Tim Baird from diverting funds
in the LLCs that were subject to the charging order.
In November 2013, Suzanne obtained another judgment against
Tim Baird in the amount of $3, 000, 000 after he failed to
make the second payment under the promissory note he had
executed in her favor. During the course of this litigation,
she also obtained a charging order from the domestic
relations court with respect to this judgment.
A month later, the trial court granted Suzanne's motion
to remove Tim Baird from management of the defendant LLCs,
and appointed George Fels, a certified public accountant,
"to manage, operate, and govern each of the LLCs subject
to the Charging Order." Fels and Matthew Daniels, the
comanager of most of the defendant LLCs, then began to lease
and sell the shopping centers owned by the LLCs.
During the extensive discovery in this case, Suzanne Baird
learned that Tim Baird carried a "profits interest"
in an asset-a shopping center complex-owned by NP Acquisition
II, LLC, ("NP Acquisition"). This shopping center
was previously owned by defendant Newport Pavilion, LLC,
("Newport") which had sold it to NP Acquisition
prior to the commencement of this lawsuit. The majority
owners of Newport at the time of the sale were Tim Baird and
Daniels. (Daniels, who is LAD's manager, later
transferred his interest in Newport to LAD.) In negotiating
the sale of the shopping center on behalf of Newport, Tim
Baird was to receive a $70, 000 yearly consulting fee to help
manage/develop the shopping center on behalf of NP
Acquisition, and was to receive money if NP Acquisition sold
the shopping center ("profits interest"). Daniels
received a payment for his interest at the time of the sale.
At the time of the sale, Daniels was not privy to the fact
that Tim Baird had negotiated to retain a profits interest in
the shopping center as both Daniels and Tim Baird had
negotiated confidential agreements with NP Acquisition.
Upon learning that NP Acquisition was selling the shopping
center, Suzanne Baird filed a fourth amended complaint
asserting a creditor's bill and seeking an injunction
ordering that any monies payable to Tim Baird from NP
Acquisition due to the sale of the shopping center be subject
to a creditor's bill. On September 2, 2014, the trial
court entered upon its journal an agreed order that "any
monies that are or will be due and payable to [Tim Baird]
from [NP Acquisition] on account of the sale of the [shopping
center] shall be subject to a creditor's bill ("the
agreed order")." The agreed order required the
money to be deposited into an escrow account.
A month later, Newport moved the court to modify the agreed
order to direct that any money deposited in the escrow
account not be disbursed, because Newport believed it had a
claim to those funds. Specifically, Newport thought that
consideration for its interest in the sale of the shopping
center, which would have thereafter been distributed to the
members of Newport, was instead improperly paid to Tim Baird
as a "profits interest" or carried interest. In
essence, Newport believed Tim Baird, in negotiating the deal
with NP Acquisition breached his fiduciary duty to the other
members of Newport by keeping a profits interest for himself.
In May 2015, Suzanne Baird moved the court for an initial
distribution of the escrow funds in the amount of $800, 000,
which the trial court granted over Tim Baird's