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For those who have been following the conn case. Here's the latest from the
court concerning the case. It says what I've been saying all along that I was not responsible personally for conns deposit to the old company. Just more "proof positive" that zoom and jaun are not credible sources of info. conn has 14 days to respond so I'm just gonna cool my heels and eat turkey and drink a little ML. I'll post any new news. Still putting my ducks in a row. See ya Chuck S RAH-15/1 ret "credibility it was always about credibility" chuck s __________________________________________________ _____________________________ IN THE GARFIELD HEIGHTS MUNICIPAL COURT CUYAHOGA COUNTY, OHIO GEORGE R. CONN, JR. Case No.: CVH0300308 Plaintiff, CGS AVIATION, INC., MAGISTRATE'S DECISION WITH FINDINGS OF FACT Defendant. AND CONCLUSIONS OF LAW This matter came before the Court when Plaintiff filed an Aid in Execution as well as a Motion to Enforce a Florida judgment against Charles Slusarczyk. Defendant filed a motion in response to quash the debtor's exam. Both Plaintiff and Defendant were asked by Magistrate Richard A. Kray to brief the issue of whether or not Charles Slusarczyk should be held personally responsible for a judgment rendered in 1984 against CGS Aviation, Inc. FINDINGS OF FACT On December 12,1984 a default judgment in the amount of $2,980.05 was granted in favor of Plaintiff George Conn against Defendant CGS Aviation, Inc. in Lake County. Florida. On February 3,2003, Plaintiff transferred this judgment to the Garfield Heights Municipal Court and proceeded to file an Aid in Execution and Motion to Enforce Judgment against an officer of CGS Aviation, Inc., Charles Slusarczyk. Plaintiff, in his brief, indicated Mr. Slusarczyk should be held personally liable because he was a principle of the corporation and he continued, after the cancellation of the Articles of Incorporation, to do business as CGS Aviation. As justification for holding Mr. Slusarczyk personally liable for this corporate debt. Plaintiff cited two cases which interpret R.C. 1701.88 of the General Corporate Act. Both cases held that when articles of a corporation are cancelled, the authority of the corporation to do business ceases and after such termination, officers who carry on new business do so as individuals and lose the protection of the corporate shield, making them personally liable for such obligations as they occur. Defendant, in his response brief, interpreted the cases cited by Plaintiff to mean that an officer, once the articles of incorporation are cancelled, loses the protection of the corporate shield if this officer continues to do business in the corporate name and is personally responsible for any new debt incurred. Applying this reasoning to the instant case. Defendant took the position that since the judgment originally entered in 1984 was against (lie Defendant's Corporation while it was still in existence and not Mr. Slusarczyk personally, Mr. Slusarczyk cannot be held responsible for this debt. Mr. Slusarczyk could only be held responsible for debts incurred under the corporate name after the Articles of Incorporation were cancelled or if Mr. Slusarczyk personally guaranteed payment on the original debt and judgment at that time was rendered against him in the original Complaint. Therefore, any Aid in Execution and Motion to Enforce Judgment against Mr. Slusarczyk must fail. CONCLUSIONS OF LAW CGS Aviation, Inc. was a corporation formed in Michigan in 1979. A judgment was obtained only against CGS Aviation, Inc. on December 12,1984. At the time this judgment was obtained, CGS Aviation, Inc. was a valid corporation in good standing in both Michigan and Ohio. Evidence presented by the Defendant showed the Corporation dissolved in Michigan on May 15, 1989. The issue before the Court is whether or not, based on Ohio law, a judgment rendered against a corporate entity can be enforced against an officer of the now defunct corporation because of Mr. Slusarczyk's active role in operating CGS Aviation after the cancellation of the Articles of Incorporation of CGS Aviation, Inc. The case law which was presented in Plaintiffs brief and which interprets R.C. Section 1701.88 is clear that officers of a dissolved corporation can only be liable for debt incurred in the corporate name after the date of dissolution. Chatman v. Day (Ohio App.2d 1982), 7 Ohio App.3d 281. Additional cases cited by Plaintiff interpret R.C. Section 1701.88 in the same way and make a determination that if an officer of a dissolved corporation continues to transact business in the corporate name, that officer loses the protection afforded by the corporation and must be held liable for any debt arising out of that transaction. Nabakowski v. 5400 Corp., (Ohio App. 8 Dist. 1986), Allied Pipe Products. Inc. v. Petina, 1988 WL 3741 (Ohio App. 8 Dist. Jan. 14, 1988), Unreported. These three cases, cited by Plaintiff, held that personal liability does attach, once the corporation was dissolved, to debts incurred by officers continuing to use the corporate name. In the present case, a judgment was taken against CGS Aviation, Inc. A review of the Plaintiffs initial Complaint shows that the corporate entity was the only Defendant listed. At no time was there any attempt to include Mr. Slusarczyk as a party defendant. Whether or not Mr. Slusarczyk continued doing business as CGS Aviation, Inc. or CGS Aviation after the cancellation of the Articles of Incorporation is irrelevant. The judgment, which is the subject of tills case, was obtained before the Articles of Incorporation were cancelled. Therefore, in keeping with Ohio law, as cited above, an individual cannot be held liable for this corporate debt. Mr. Slusarczyk can only be held liable for debts as they occur, after the cancellation of the corporation. Whether the Defendant agreed, at a later point in time, to work out a payment on behalf of this corporation on this debt, does not validate the debt to be assigned to him personally. If Plaintiff thought Mr. Slusarczyk responsible for this debt, he should have included this individual in his original complaint against CGS Aviation, Inc. DECISION Based on oral arguments and case law provided to the Court, Defendant, Charles Slusarczyk's Motion to Quash the Aid in Execution is granted and Plaintiffs Motion to Enforce Judgment against Charles Slusarczyk personally is denied. All objections to the Magistrate's Decision must be filed with the Clerk of Courts within fourteen (14) days of the filling of this Decision. If any party timely files objections, any other party may also file objections not later than ten (10) days after the first objections are filed. The filing of timely objections shall operate as an automatic stay of execution of the judgment. A party shall not assign as error on appeal, the Court's adoption of any finding of fact or conclusion of law unless the party timely and specifically objects to that finding or conclusion as required by Civ. R. 53(E)3. (Signed) Richard A. Kray Magistrate 11/18/03 |
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