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State ex rel. DeWine v. Omar Ibn El Khattab Mosque, Inc.

Court of Appeals of Ohio, Tenth District

June 22, 2017

State of Ohio ex rel. Michael DeWine, Ohio Attorney General, Relator,
v.
Omar Ibn El Khattab Mosque, Inc., Respondent.

         IN QUO WARRANTO ON OBJECTIONS TO THE MAGISTRATE'S DECISION

         On Brief:

          Michael DeWine, Attorney General, and Matthew T. Green, for relator.

          Reash Law Offices, LLC, and Maryellen Reash; Taft, Stettinius & Hollister LLP, and Donald C. Brey, for respondents Omar Ibn El Khattab Mosque, Inc.

          Blaugrund Kessler Myers & Postalakis, Incorporated, and Fazeel S. Khan;Rosenberg & Ball Co., LPA, and David Ball, for respondents Omar Ibn El Khattab Mosque, Inc.

         Argued:

          Matthew T. Green.

          Donald C. Brey.

          David Ball.

          DECISION

          TYACK, P.J.

         {¶ 1} A faction of Omar Ibn El-Khattab Mosque, Inc. ("Omar Mosque, Inc."), objects to the November 29, 2016 magistrate's decision that granted relator, Michael DeWine, Ohio Attorney General's motion for summary judgment. That judgment entitled relator to a writ of quo warranto to pursue the dissolution of Omar Mosque, Inc. and oversee the conception of a successor entity. Due to the fact that two factions both claim to represent Omar Mosque, Inc., we shall refer to the two sets of respondents as the "Reash/Brey" respondents and the "Khan/Ball" respondents based on the names of their counsel.

         I. History of the Cases and Parties of the Omar Mosque, Inc.

         {¶ 2} The Omar Mosque, Inc., is an Ohio nonprofit corporation that operates a place of worship located at 580 Riverside Drive, Columbus, Ohio, for its associated religious organization, the congregation of Masjid Omar Ibn El-Khattab. As this court has done in prior entries and decisions, we will maintain a strict distinction between these two entities: the nonprofit corporation that is the subject of this quo warranto action, and the religious congregation that it serves.

         {¶ 3} The two respondents both claiming to represent Omar Mosque, Inc. have litigated numerous times and have an adversarial history reaching back over five years. In 2007, the Islamic Society of Greater Columbus incorporated Omar Mosque, Inc. and selected the members of Omar Mosque, Inc.'s board of directors. Originally, each board member was to serve only two years until December 31, 2009. Five of the original seven board members, however, remained in their offices beyond the expiration of their original terms. Two members left the board, but were not replaced. This is the "Initial Board" chronologically which the Reash/Brey respondents support.

         {¶ 4} The Initial Board decided to renovate and expand the mosque building. By September 2011, they had raised approximately $360, 000 for the construction project and had chosen a general contractor.

         {¶ 5} The Khan/Ball faction began to challenge the board's decisions. They demanded an election of new board members to replace the Initial Board. In response, the Initial Board scheduled an election for October 8, 2011. In the election, mosque members would vote for one of two options. Under the first option, Omar Mosque, Inc. would hold an election in April 2012 to add four more members to the already existing board. Under the second option, Omar Mosque, Inc., would hold an election in April 2012 to elect nine new board members to replace the existing board. The majority of members who voted in the October 8, 2011 election chose the first option.

          {¶ 6} Dissatisfied with the October 8, 2011 election, the Khan/Ball faction scheduled a special meeting of mosque members for October 22, 2011. At that meeting, mosque members held an election for all new board members and elected the Khan/Ball faction members to what we characterize as the "Second Board" chronologically.

         {¶ 7} Pursuant to a resolution of the Second Board, JPMorgan Chase Bank, N.A. ("Chase Bank"), at which Omar Mosque, Inc. maintained bank accounts, was notified of the election of a new board and transferred signing authority for Omar Mosque, Inc.'s bank accounts. The general contractor was also informed that the Initial Board no longer had authority to act on Omar Mosque, Inc.'s behalf.

         {¶ 8} When the president of the Initial Board discovered what had occurred, he contested the Second Board's actions. In response, Chase Bank froze Omar Mosque, Inc's accounts. This prohibited the Initial Board from paying the general contractor as invoices for services became due.

         {¶ 9} On November 23, 2011, Omar Mosque, Inc., at the instigation of the Initial Board, filed suit against the members of the Second Board. The Initial Board alleged that the Second Board fraudulently attempted to gain control over Omar Mosque, Inc.'s governance and bank accounts, and unlawfully interfered with Omar Mosque, Inc.'s business relationships with Chase Bank and the general contractor. The members of the Second Board answered the complaint and filed a counterclaim. The counterclaim requested that the court of common pleas issue a declaratory judgment stating that the legitimate board of the Omar Mosque, Inc. was the Second Board, and not the Initial Board.

         {¶ 10} On February 16, 2012, the court of common pleas directed Chase Bank to deposit with the clerk of courts the funds in Omar Mosque, Inc.'s accounts, which amounted to $432, 313.19. These funds were interpleaded by Chase Bank in Franklin C.P. No. 11-CV-14615. The court of common pleas also stated that the Initial Board and the Second Board should proceed to establish their respective claims to the funds.

         {¶ 11} In early April 2012, the Initial Board announced that an election for new board members would be held on April 21, 2012. At the April 21, 2012 election, mosque members elected a new board of seven members. No member of the Initial or Second Board was elected to this "Third Board."

         {¶ 12} The Second Board challenged the validity of the Third Board on the basis that the Initial Board did not have the authority to hold the April 21, 2012 election. Immediately prior to the April 21, 2012 election, the Second Board filed a complaint seeking a writ of quo warranto in this court. State ex rel. Salim v. Ayed, 10th Dist. No. 12AP-356, 2013-Ohio-4880.

         {¶ 13} In a judgment issued August 16, 2012, the court of common pleas sua sponte dismissed the action for lack of subject-matter jurisdiction. The court of common pleas held that the core issue that would determine the action was which board had the authority to govern Omar Mosque, Inc. The court of common pleas found only a quo warranto action could resolve that issue. Because jurisdiction over quo warranto actions is restricted to courts of appeals and the Supreme Court of Ohio, the court of common pleas found that it did not possess the jurisdiction necessary to decide the parties' dispute. See State ex rel. Battin v. Bush, 40 Ohio St.3d 236, 238 (1988).

         {¶ 14} The decision to sua sponte dismiss for a lack of subject-matter jurisdiction was appealed to this court. On June 27, 2013, we affirmed the dismissal by the court of common pleas for lack of subject-matter jurisdiction, reiterating the rule when relief must be pursued through a quo warranto action:

To determine whether a party seeks relief that must be pursued through a quo warranto action, courts identify the core issues raised by the parties for judicial resolution. If 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. * * * Moreover, courts examine the core of relief sought and/or granted. If that relief 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.

(Internal citations omitted.) Masjid Omar Ibn El Khattab Mosque v. Salim, 10th Dist. No. 12AP-807, 2013-Ohio-2746, ¶ 20. We found that the Initial Board wanted an order that would, "in essence, force the members of the second board to oust themselves from the offices they claim title to. Omar Mosque can only achieve that remedy through a quo warranto action." Id. at ¶ 21.

         {¶ 15} The right to bring a quo warranto is a right of the state and, except where title to a public office is involved, the use of quo warranto remains in the state or with its officers. State ex rel. Cain v. Kay, 38 Ohio St.2d 15, 17 (1974). Therefore, only the attorney general or a prosecuting attorney may bring a quo warranto action challenging the holder of an office or a nonprofit corporation. R.C. 2733.05; Masjid Omar at ¶ 23. "The attorney general and prosecuting attorney have a duty to review allegations that a person has usurped a corporate office and determine whether those allegations warrant a quo warranto action." Id., citing State ex rel. Morris v. Soltez, 11th Dist. No. 2002-T-0016, 2002-Ohio-3714, ¶ 19. The court of common pleas does not possess the authority necessary to determine which board of directors is validly in office. Masjid Omar at ¶ 25.

         {¶ 16} In the Second Board's quo warranto action, they requested that this court determine that it is the legitimate board of Omar Mosque, Inc. and oust the members of the other boards from the Second Board's seats. On November 5, 2013, we found that the Second Board lacked the ability to pursue a quo warranto action in their individual capacities and that a corporate director serves the interests of the corporation, not the public. We, therefore, concluded that the director or a nonprofit corporation is not a public office. State ex rel. Salim at ¶ 21-22. The Second Board lacked standing to institute a quo warranto action in their individual capacity and would need to bring the dispute to the attention of either the Ohio Attorney General or the Franklin County Prosecuting Attorney. State ex rel. Salim at Appendix. Our judgment was affirmed by the Supreme Court of Ohio: "[P]rivate persons claiming to be lawful directors of a religious not-for-profit corporation lack standing to oust others claiming to be the lawful directors by way of an action in quo warranto." State ex rel. Salim v. Ayed, 141 Ohio St.3d 129, 2014-Ohio-4736, ¶ 13, citing State ex rel. Hawthorn v. Russell, 107 Ohio St.3d 269, 2005- Ohio-6431.

         {¶ 17} On October 13, 2015, relator, Michael DeWine, Ohio Attorney General, brought this original action in quo warranto seeking a writ to dissolve the current corporate structure of Omar Mosque, Inc. and the appointment of a receiver to oversee the creation of a successor-in-interest to Omar Mosque, Inc. On May 6, 2016, the attorney general moved for summary judgment and submitted with its memorandum evidentiary materials. The attorney general's motion relies on certain purported admissions to the extent that the material allegations in the complaint are not denied in the Reash/Brey respondents' answer.

         {¶ 18} The Reash/Brey respondents filed an answer to oppose the motion and also filed a motion for partial summary judgment. The Reash/Brey respondents submitted one additional affidavit that was not submitted by the attorney general. The Khan/Ball respondents filed an answer to the attorney general's complaint, essentially agreeing that the quo warranto action is the only judicial means by which resolution to the overall dispute may be achieved and requesting that the summary judgment be granted.

         {¶ 19} On November 29, 2016, this court's magistrate rendered a decision addressing all responses and motions by the respondents and the attorney general and granting summary judgment in favor of relator. The magistrate noted that the materials submitted or that are properly before the court do not contain the constitution or bylaws for Omar Mosque, Inc. which were averred to be in effect at the time that the competing boards were elected.

         {¶ 20} The magistrate made numerous findings of fact and concluded that the present situation is a direct result of the Omar Mosque, Inc.'s failure to comply with requisite corporate formalities. This failure, along with the resulting loss of control over charitable funds, shows corporate dysfunction. "[W]ithout definition of voting membership, regular board meetings, and up-to-date membership roster, the direction of the corporate entity is no longer supported through recordable action." (Nov. 29, 2016 Mag.'s Decision at 14.)

         {¶ 21} The magistrate found that the attorney general is entitled to a writ of quo warranto pursuant to R.C. 2733.02 and 2733.20 to purse the judicial dissolution of Omar Mosque, Inc. under R.C. 1702.52(A)(1), 2733.21, and 2733.22. The magistrate also ordered the attorney general to consult with the respondent factions and submit a list of proposed trustees. This court would then appoint trustees and remand the matter to the court of common pleas under Franklin C.P. No. 11CV-14615 for further proceedings. The court of common pleas would then oversee the dissolution of Omar Mosque, Inc. and the constitution of a successor entity.

         {¶ 22} The Reash/Brey respondents filed objections to the magistrate's decision. The attorney general and the Khan/Ball respondents both filed responses in opposition to the Reash/Brey respondents' objections. Following an oral argument on the objections to the magistrate's decision, we now undertake an independent review of the factual issues and also decide whether the law was appropriately applied in the magistrate's decision. Civ.R. 53(D)(4)(d).

         II. Legal Standards Applied

         {¶ 23} First, we reiterate what the magistrate expressed-that the distinction in this case between a controversy subject to civil law and any possible underlying theological dispute is paramount.

Civil courts do not inhibit free exercise of religion merely by opening their doors to disputes involving church property. And there are neutral principles of law, developed for use in all property disputes, which can be applied without "establishing" churches to which property is awarded.

(Emphasis sic.) Serbian Orthodox Church Congregation of St. Demetrius v. Kelemen, 21 Ohio St.2d 154, 157 (1970), citing Presbyterian Church in United States v. Mary Elizabeth Blue Hull Mem. Presbyterian Church, 393 U.S. 440, 449 (1969).

         {¶ 24} If civil courts undertake to resolve religious doctrine and practice controversies in order to adjudicate the property dispute, "the hazards are ever present of inhibiting the free development of religious doctrine and of implicating secular interests in matters of purely ecclesiastical concern. Because of these hazards, the First Amendment enjoins the employment of organs of government for essentially religious purposes." Presbyterian Church at 449, citing School Dist. of Abington Twp. v. Schempp, 374 U.S. 203 (1963). Therefore, the First Amendment commands civil courts to decide church property disputes "without resolving underlying controversies over religious doctrine. Hence, States, religious organizations, and individuals must structure relationships involving church property so as not to require the civil courts to resolve ecclesiastical questions." Presbyterian Church at 449. We are bound therefore to only resolve questions of civil law and whether quo warranto action is appropriate.

         {¶ 25} The attorney general brings this original action in quo warranto pursuant to R.C. Chapter 2733. The attorney general claims that Omar Mosque, Inc.'s past actions and omissions constitute violations of R.C. 1702.13, 1702.15, and 1702.16. The attorney general alleges that Omar Mosque, Inc. has: offended against law providing for its creation or renewal; committed or omitted acts which amount to a surrender of its corporate rights, privileges, and franchises; and misused a franchise, privilege, or right conferred upon it by law, allowing a quo warranto action to be brought. See R.C. 2733.02.

         {¶ 26} "The corporation itself can only exist under the sovereignty of the state." State ex rel. Crabbe v. Thistle Down Jockey Club, Inc., 114 Ohio St. 582, 591 (1926). The state has abundant power to regulate and control its corporations and to forfeit their powers entirely. Id. at 600. "Corporations owe their existence to the written laws of the state. They are organized under general laws, and may be regulated, and their existence may be terminated in accordance with general laws and by means of processes provided by general laws." Id. at 592-93. "[U]nder the common law, the basic purpose of a quo warranto proceeding was to protect the public against the abuse of corporate power and the usurpation of the state's sovereign authority; hence, this type of proceeding could only be maintained by the state itself and its officers." Stewart v. Bur. of Workers' Comp., 11th Dist. No. 2209-P-0003, 2009-Ohio-4255, ¶ 9. The writ of quo warranto is now governed in Ohio by R.C. Chapter 2733.

         {¶ 27} Our magistrate recommended that the attorney general's motion for summary judgment be granted and the Reash/Ball respondents' motions for summary judgment be denied. Civ.R. 56(C) states that summary judgment shall be rendered forthwith if:

[T]he pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence, and written stipulations of fact, if any, timely filed in the action, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. No evidence or stipulation may be considered except as stated in this rule. A summary judgment shall not be rendered unless it appears from the evidence or stipulation, and only from the evidence or stipulation, that reasonable minds can come to but one conclusion.

         {¶ 28} Accordingly, summary judgment is appropriate only where: (1) no genuine issue of material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) viewing the evidence most strongly in favor of the nonmoving party, reasonable minds can come to but one conclusion and that conclusion is adverse to the nonmoving party. Tokles & Son, Inc. v. Midwestern Indemn. Co., 65 Ohio St.3d 621, 629 (1992), citing Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64, 65-66 (1978). "[T]he moving party bears the initial responsibility of informing the trial court of the basis for the motion, and identifying those portions of the record * * * which demonstrate the absence of a genuine issue of fact on a material element of the nonmoving party's claim." Dresher v. Burt, 75 Ohio St.3d 280, 292 (1996). Once the moving party meets its initial burden, the nonmoving party must then produce competent evidence showing that there is a genuine issue for trial. Id. at 293.

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the party's pleadings, but the party's response, by affidavit or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the party does not so respond, summary judgment, if appropriate, shall be entered against the party.

Civ.R. 56(E). "Even the inferences to be drawn from the underlying facts contained in the evidentiary materials, such as affidavits and depositions, must be construed in a light most favorable to the party opposing the motion." Hannah v. Dayton Power & Light Co., 82 Ohio St.3d 482, 485 (1998). Summary judgment is a procedural device to terminate litigation, so it must be awarded cautiously with any doubts resolved in favor of the nonmoving party. Murphy v. Reynoldsburg, 65 Ohio St.3d 356, 358-59 (1992).

         {¶ 29} In the summary judgment context, a "material" fact is one that might affect the outcome of the suit under the applicable substantive law. Turner v. Turner, 67 Ohio St.3d 337, 340 (1993). When determining what is a "genuine issue, " the court decides if the evidence presents a sufficient disagreement between the parties' positions. Id.

         {¶ 30} Further, a genuine issue of material fact is not created by the contradictory evidence submitted from a nonmoving party in a summary judgment motion absent some sufficient explanation of the contradiction. When an inconsistent affidavit is presented in support of, or in opposition to a motion for summary judgment, a trial court must consider whether the affidavit contradicts or merely supplements the affiant's earlier sworn testimony. A movant's contradictory affidavit will prevent summary judgment in that party's favor. A nonmoving party's contradictory affidavit must sufficiently explain the contradiction before a genuine issue of material fact is created. Byrd v. Smith, 110 Ohio St.3d 24, 2006-Ohio-3455, ¶ 29. While Byrd addressed an affidavit that contradicted a prior deposition, the logic of rule can extend to two inconsistent depositions offered by the same party.

         {¶ 31} The Supreme Court has held that a party seeking summary judgment on the ground that the nonmoving party cannot prove its case, bears the initial burden to inform the trial court of the basis for the motion and identifying the portions of the record demonstrating an absence of a genuine issue of material fact. Dresher, supra. The moving party does not discharge its burden simply by making a conclusory assertion that the nonmoving party has no evidence to prove its case. Id. Rather, the moving party must specifically point to evidence of the type listed in Civ.R. 56(C) that affirmatively demonstrates the nonmoving party has no evidence to support its claims. Id.

         {¶ 32} Further, when a motion for summary judgment has been supported by proper evidence, the nonmoving party may not rest on the mere allegations of the pleading, but must set forth specific facts, by affidavit or otherwise, demonstrating that there is a genuine triable issue. Jackson v. Alert Fire & Safety Equip., Inc., 58 Ohio St.3d 48, 52 (1991). If the nonmoving party does not demonstrate a genuine triable issue, summary judgment shall be entered against that party. Civ.R. 56(E).

         III. Findings of Fact

         {¶ 33} Based on the evidence, which includes filings with the Ohio Secretary of State, pleadings and decisions from previous cases, affidavits and other evidence submitted, the magistrate recommended we make the following findings of fact. Many of these facts have been previously established in prior cases or admitted to in answers by the respondents:

1. Relator Michael DeWine is the duly elected, qualified and acting Attorney General in the state of Ohio.
2. Relator brings this action pursuant to the authority and procedures set forth in Ohio Revised Code Chapter 2733.
3. Omar Mosque, Inc. was incorporated as a nonprofit corporation on June 21, 2007 to operate an established place of worship under the laws of the state of Ohio with its principal place of business in Franklin County. The initial articles of incorporation do not name anyone to the board of directors.
4.The Initial Board of directors was identified at or near the time of the Omar Mosque, Inc.'s initial formation.
5. An Initial Board of directors was identified and included the Reash/Brey respondents: Mounir Ayed, Ghassan Bin Hammam, Nasser Kashou, Quassai Marashdeh, and Noorgul Dada.
6. The Initial Board was to govern Omar Mosque until the end of 2009 and during that time the board was to create a mechanism for renewing memberships and for adding new members and to prepare a constitution and bylaws to be ratified by the Omar Mosque, Inc. members.
7.Despite the fact that the Initial Board was only to govern until the end of 2009, the Initial Board continued to govern beyond 2009.
8. While the Initial Board continued to govern, some members of Omar Mosque, Inc. began questioning their authority and asking when elections would occur.
9. Despite the fact that some members of Omar Mosque questioned the authority of the Initial Board to continue governing after 2009, no one took any action to organize a push for change until fall 2011.
10. From 2007 through at least September 2011, Omar Mosque, Inc. did not maintain a record of its members containing the name and address of each member, the date of admission to membership, and if members are classified, the class to which the member belongs.
11.Neither respondent faction has factually established that voting membership requirements and procedures were in place for the nonprofit corporation, or to what extent they were enforced or exercised during the period between corporate inception in 2007 to the time of the election of competing boards in late 2011. The affidavit of Basil Mohamed Gohar states that such voting requirements have been defined and respected by the Reash/Brey respondents since 2012, causing the magistrate to conclude that these were absent, ill-defined, or ignored prior to that time.
12. No special or annual meeting of the members of the Omar Mosque, Inc. was held in either 2009 or 2010 for purposes of electing individuals to serve on the board of directors for Omar Mosque, Inc. in either 2010 or 2011.
13. On September 9, 2011, members of the Omar Mosque, Inc. gathered for a meeting to address the concerns raised by certain members.
14. Differences between members of the congregation arose in relation to construction of improvements in the mosque building, culminating in separate meetings in October 2011 at which two competing boards were elected by the respective factions.
15. Ultimately, it was determined that a community vote would take place on October 8, 2011.
16. In the meantime, the Khan/Ball respondents assert that they provided notice of a community meeting to be held on October 1, 2011.
17. At the October 1, 2011 meeting, a majority of the attendees decided to call a special meeting on October 22, 2011 to address the issues of elections, membership, and bylaws.
18.According to the Reash/Brey respondents, on October 8, 2011, 157 people voted, and 113 people chose Option I: the Initial Board would remain in place and four additional ...

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