Bowman v. City of Olmsted Falls et al

Filing 19

Memorandum of Opinion and Order: Defendant Luke McConville's Motion for Summary Judgment (Doc. 12 ) and the Motion of Defendant Neal P. Grossman for Summary Judgment (Doc. 13 ) are GRANTED. The claims asserted against these defendants are dismissed for lack of subject matter jurisdiction. Judge Patricia A. Gaughan on 12/19/16. (LC,S)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

Ted Bowman,
Plaintiff,
Vs.

City of Olmsted Falls,
Defendant.

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CASE NO. 16 CV 2084
JUDGE PATRICIA A. GAUGHAN

Memorandum of Opinion and Order

INTRODUCTION
This matter is before the Court upon defendant Luke McConville’s Motion for Summary
Judgment (Doc. 12). Also pending is the Motion of Defendant Neal P. Grossman for Summary
Judgment (Doc. 13). This matter arises out of the sale of property owned by plaintiff. For the
reasons that follow, the motions are GRANTED. The claims asserted against defendants
McConville and Grossman are dismissed for lack of subject matter jurisdiction.
FACTS
Plaintiff Ted Bowman brings this action against defendants, City of Olmsted Falls (the
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“City”), Robert W. McLaughlin, Luke F. McConville, and Neal P. Grossman, alleging
wrongdoing in connection with the taking of certain property owned by defendant (“Property”).
Only those facts necessary for a resolution of the instant motions are set forth herein. The City
instituted a nuisance action against plaintiff in state court. The state court appointed defendant
McConville to act as the court appointed receiver. McConville, in turn, appointed defendant
Grossman to act as the auctioneer in connection with the state court proceeding.
According to the complaint, defendants McConville and Grossman (sometimes,
collectively “Moving Defendants”) removed dozens of pieces of machinery and equipment from
the Property. McConville failed to timely file inventory and expense reports. According to the
complaint, the reports eventually filed by McConville failed to account for certain items
removed from the Property. On March 1, 2016, Grossman conducted an auction at which
plaintiff’s property was sold. Plaintiff alleges that at no point did he receive prior notice of the
sale. In addition, plaintiff alleges that Grossman failed to follow certain required procedures.
For example, plaintiff claims that the items identified for sale were not presented to the state
court for approval. In addition, the auction generated returns that were significantly below
market value and the proceeds were entirely subsumed by the Moving Defendants’ fees.
Thereafter, plaintiff filed the instant action asserting three claims for relief. Count one is
a claim for violation of 42 U.S.C. § 1983 and is filed against defendants McLaughlin and the
City.1 Count two is a Fifth Amendment takings claim and appears to be asserted against the

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The Moving Defendants note that it is not clear whether the claim
is asserted against them. Reading the complaint in the light most
favorable to the plaintiff, the Court finds that the claim is not
asserted against the Moving Defendants. See, e.g. Compl. ¶ 62
(expressly alleging claim against the City and McLaughlin and
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City. Count three alleges breach of fiduciary duty and is asserted against the Moving
Defendants.
The Moving Defendants seek summary judgment against plaintiff and plaintiff opposes
the motions.

STANDARD OF REVIEW2
When a court’s subject matter jurisdiction is challenged under Rule 12(b)(1) of the
Federal Rules of Civil Procedure, the party seeking to invoke jurisdiction bears the burden of
proof. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 (1936); Rogers v.
Stratton, 798 F.2d 913, 915 (6th Cir. 1986). This burden is not onerous. Musson Theatrical, Inc.
v. Federal Express Corp., 89 F.3d 1244, 1248 (6th Cir. 1996). The party need only show that the
complaint alleges a substantial claim under federal law. Id.
A 12(b)(1) motion to dismiss may constitute either a facial attack or a factual attack.
United States v. Ritchie, 15 F.3d 592, 598 (6th Cir. 1994). Facial attacks question the sufficiency
of the jurisdictional allegations in the complaint. Id. Thus, those allegations must be taken as
true and construed in the light most favorable to the nonmoving party. Id. Factual attacks,
however, challenge the actual fact of the court’s jurisdiction. Id. In such cases, the truthfulness
of the complaint is not presumed. McGee v. East Ohio Gas Co., 111 F.2d 979, 982 (S.D. Ohio

making no mention of the Moving Defendants).
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As set forth herein, although couched in terms of summary
judgment, the Moving Defendants’ arguments challenge this
Court’s subject matter jurisdiction. Accordingly, the Court applies
this standard in assessing the motions.
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2000) (citing Ohio Nat’l Life Ins. Co. v. United States, 922 F.2d 320 (6th Cir. 1990)). Instead,
the Court may weigh any evidence properly before it. Morrison v. Circuit City Stores, Inc., 70
F.Supp.2d 815, 819 (S.D. Ohio 1999) (citing Ohio Nat’l, 922 F.2d 320; Rogers, 798 F.2d 913).
When presented with a facial attack, the non-moving party “can survive the motion by
showing any arguable basis in law for the claim made.” Musson Theatrical, 89 F.3d at 1248.
Thus, such a motion will be granted only if, taking as true all facts alleged in the complaint, the
Court is without subject matter jurisdiction to hear the claim. Matteson v. Ohio State University,
2000 WL 1456988 *3 (S.D. Ohio Sept. 27, 2000).
ANALYSIS
The Moving Defendants argue that the claims against them must be dismissed under
Barton v. Barbour, 104 U.S. 126 (1881). The Barton doctrine provides that suit cannot be filed
against a receiver without first obtaining leave from the appointing court. The Moving
Defendants point out that plaintiff did not obtain leave from the state court before filing this
lawsuit. In response, plaintiff argues that an exception to the Barton doctrine exists if the
plaintiff asserts claims against the receiver in his personal capacity.
Upon review, the Court agrees with the Moving Defendants. It is well-settled that leave
must be obtained from the appointing court before filing suit against a receiver. Barton, 104
U.S. 126. Ohio law is in accord. See, e.g., PNC Bank, N.A., v. Kidz Real Estate Group, LLC,
2013 WL 1385638 (Ohio Ct. App. April 5, 2013)(noting that “the trial court relied on longestablished Ohio case law which holds that a party must have leave of court to bring suit against
a receiver”); Fusion Oil, Inc., v. American Petroleum Retail, Inc., 2006 WL 2010770 (N.D. Ohio
July 17, 2006)(“Under Ohio law, it is well-settled that a receiver cannot be sued, in the absence

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of statutory authority, without leave of the court that appointed him.”). This is so because
as the receiver is appointed as an officer of the court, any suit against the receiver is a de
facto suit against the appointing court itself. Further, the receiver ought not be required
to respond to the possibility of conflicting orders of two or more superiors.
Id. (citations and quotations omitted).
There are, however, exceptions to this general rule. By way of example, most federal
courts have held that if the receiver acts “ultra vires,” i.e., outside the receivership order, then
leave need not be obtained. See, e.g., Satterfield v. Malloy, 700 F.3d 1231 (10th Cir. 2012).
Thus, Barton does not apply if, for example, the receiver erroneously takes possession of
property belonging to a third party not subject to the receivership. In such a situation, the third
party need not seek leave before filing suit. This is so because the receiver’s action is outside the
scope of the receivership order.
Here, plaintiff argues that he asserts a claim against the Moving Defendants in their
“personal capacities” and that Ohio courts have recognized such liability. Plaintiff relies on INF
Enterprises, Inc. v. Donnellon, 133 Ohio App.3d 787 (Ohio Ct. App. 1999). That case,
however, simply noted that receivers are not entitled to blanket judicial immunity. Rather, a
receiver can be held personally liable if he “exceeds the authority granted by the court or fails to
use ordinary care.” The case, however, makes no mention of Barton, nor does it address the
circumstances under which leave from the appointing court must be obtained. Similarly, the
court addressed the personal liability of a receiver in PNC Bank. Again, the court did not hold
that leave from the appointing court is not necessary. Rather, the court held that the appointing
court erred in denying leave to file an action against the receiver. Plaintiff points to no law
standing for the proposition that simply by alleging that the suit is filed in a “personal capacity,”

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leave need not be obtained.
Here, plaintiff alleges that the Moving Defendants are liable for “intentionally and
actively causing waste” and by “liquidating property...in an unreasonable matter [sic] and for
substantially less than its value.” Plaintiff alleges that these acts were done intentionally. Upon
review, the Court finds that pursuant to Barton, plaintiff was required to obtain leave from the
appointing court before instituting this action. These actions, even if taken “intentionally,” fall
directly within the scope of the duties imposed on the receiver pursuant to the state court’s
appointment order. The order required defendant McConville to take possession of the property,
transfer it to his name, and sell the assets at the best obtainable price. The order required court
supervision and approval. The actions alleged in the instant complaint all directly implicate the
receivership order and the duties and obligations of the receiver thereunder. This is especially so
in that plaintiff appealed the trial court’s order approving the sale of the assets and the state court
of appeals affirmed:
Once appointed, the receiver remained in contact with the judge and the judge' s staff
attorney. In fact, between the time that the court appointed the receiver in September
2015 and the time that the assets were sold five months later in February 2016, the court
held three different hearings both to discuss the receiver's progress and [plaintiff’s]
uncooperative behavior. The transcript shows that the court had discussions with the
receiver regarding the relative worth of certain items removed from the premises and
whether those items would generate more profit being auctioned or scrapped based on
the auctioneer's appraisals. During this time, the docket also reveals that the court ordered
numerous conference calls to be held between the receiver, the parties, and the court's
staff attorney, where presumably they discussed the progress of the removal and
impending auction as well as any current or foreseeable problems. By the time the court
ordered the sale, it had in its possession the receiver's progress report listing all the items
he had removed from [plaintiff’s] property. Thus, there is simply no indication in the
record that the court failed to properly supervise the receiver and provide oversight for
the sale.
(Doc. 13 at p.11).

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Because plaintiff’s complaints clearly challenge the execution of the receiver’s duties
falling within the confines of the receivership order, Barton requires that plaintiff obtain leave
from the appointing court before filing suit. See, Satterfield, 700 F.3d at 1236 (rejecting
plaintiff’s argument that because he labeled his claims as torts asserted against the receiver in his
personal capacity Barton did not apply). Because plaintiff failed to do so, the claims against the
Moving Defendants must be dismissed.3
CONCLUSION
For the foregoing reasons, defendant Luke McConville’s Motion for Summary Judgment
(Doc. 12) and the Motion of Defendant Neal P. Grossman for Summary Judgment (Doc. 13) are
GRANTED. The claims asserted against these defendants are dismissed for lack of subject
matter jurisdiction.
IT IS SO ORDERED.

/s/ Patricia A. Gaughan
PATRICIA A. GAUGHAN
United States District Judge
Dated: 12/19/16

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Barton is jurisdictional in nature. See, Barton, 104 U.S. at 131
(absent leave, the court “has no jurisdiction to entertain suit”).
Therefore, although the Moving Defendants seek summary
judgment pursuant to Rule 56, the Court dismisses the claims for
lack of subject matter jurisdiction pursuant to Rule 12(b)(1). See,
Satterfield, 700 F.3d at 1234.
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