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McCarthy v. Anderson

Court of Appeals of Ohio, Fifth District, Licking

May 21, 2018

JERRY J. McCARTHY, et al. Plaintiffs-Appellants
v.
PHILLIP ANDERSON, et al. Defendants-Appellees

          Civil Appeal from the Court of Common Pleas, Case No. 17 CV 189

          For Plaintiff-Appellant Legacy LAREN E. KNOLL KNOLL LAW FIRM LLC

          For Defendants-Appellees MICHAEL HRABCAK BENJAMIN B. NELSON HRABCAK & COMPANY, LPA

          Hon. John W. Wise, P. J. Hon. William B. Hoffman, J. Hon. Earle E. Wise, Jr., J.

          OPINION

          Wise, John, P. J.

         {¶1} Plaintiff-Appellant Legacy Apparel and Promo, Inc. appeals the decision of the Court of Common Pleas, Licking County, which ordered a corporate dissolution and the appointment of a receiver upon motions filed by Defendants-Appellees Philip Anderson, et al. The relevant facts leading to this appeal are as follows.

         {¶2} In July 2015, Jerry J. McCarthy (co-plaintiff) and Appellee Anderson decided to incorporate and operate a new apparel and promotional products company called Legacy Apparel & Promo, Inc., assuming the titles of directors and officers. According to McCarthy, he and appellee were to be 50/50 owners of the new company, and profits were to be split equally. Appellee had previously operated another apparel and promotions business known as Vision Apparel, but appellee allegedly told McCarthy that he was no longer operating Vision Apparel, and that the company had been shut down.

         {¶3} Due to his concerns with Legacy Apparel's finances and certain expenditures, McCarthy met with appellee in the fall of 2016, seeking an accounting and to direct operations in a profitable manner. McCarthy allegedly informed appellee that he would be taking a more active role in the management of the business. According to appellant, in late 2016 and early 2017, appellee repeatedly locked out appellant from the company computer systems and denied access to programs and systems utilized by Legacy Apparel.

         {¶4} On February 10, 2017, Appellant Legacy and McCarthy filed a civil complaint in the Licking County Court of Common Pleas against Appellee Anderson, Appellee Vision Apparel, and other "John Doe" defendants, alleging counts of fraud, breach of fiduciary duty, breach of duties of loyalty and care, tortious interference with business relations and contract, conversion, unfair competition and uniform trade secrets violations, and unjust enrichment. Appellant and McCarthy also therein requested inter alia a temporary restraining order and a preliminary injunction.

         {¶5} Appellees filed their answer to the complaint on March 6, 2017. Furthermore, on April 3 and 4, 2017, Appellee Anderson filed motions seeking judicial dissolution and the appointment of a receiver.

         {¶6} In the meantime, on April 25, 2017, the trial court issued a judgment entry, stating inter alia that a receiver would be appointed in the near future and that the parties had agreed to "restrain from altering, deleting, or modifying any data or electronically stored information concerning the operation of either company." Judgment Entry, April 25, 2017, at 1.

         {¶7} A hearing was conducted before the trial court on April 28, 2017.

         {¶8} On May 2, 2017, the trial court issued a judgment entry finding the parties "deadlocked in management, " granting dissolution of Legacy Apparel and Promo, Inc., and naming Attorney Justin Lodge as the receiver. On the same day, the court issued an order quashing certain subpoenas to Park National Bank, Fifth Third Bank, and Customer Focus Software.

         {¶9} On May 30, 2017, Appellant Legacy filed a notice of appeal as to the three aforesaid judgment entries.[1] It herein raises the following five Assignments of Error:

         {¶10} "I. THE TRIAL COURT ERRED WHEN IT FAILED TO RESTRAIN MR. ...


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