[Cite as Dispatch Printing Co. v. Recovery Ltd. Partnership, 2015-Ohio-381.]


                              IN THE COURT OF APPEALS OF OHIO

                                   TENTH APPELLATE DISTRICT

The Dispatch Printing Co. et al.,                    :

                 Plaintiffs-Appellees,               :
                                                                               No. 14AP-473
v.                                                   :                    (C.P.C. No. 05CV-4220)

Recovery Limited Partnership et al.,                 :                (REGULAR CALENDAR)

                 Defendants-Appellees,               :

(California Gold Marketing Group, LLC,               :

                 Appellant).                         :

The Dispatch Printing Co. et al.,                    :

                 Plaintiffs-Appellees,               :
                                                                               No. 14AP-474
v.                                                   :                    (C.P.C. No. 06CV-4469)

Gilman D. Kirk et al.,                               :                (REGULAR CALENDAR)

                 Defendants-Appellees,               :

(California Gold Marketing Group, LLC,               :

                 Appellant).                         :

Michael H. Williamson et al.,                        :

                 Plaintiffs-Appellees,               :
                                                                               No. 14AP-475
v.                                                   :                    (C.P.C. No. 05CV-11795)

Recovery Limited Partnership et al.,                 :                (REGULAR CALENDAR)

                 Defendants-Appellees,               :

(California Gold Marketing Group, LLC,               :

                 Appellant).                         :
Nos. 14AP-473, 14AP-474 & 14AP-475                                                      2




                                   D E C I S I O N

                              Rendered on February 3, 2015


               Kushner & Hamed Co., LPA, Philip S. Kushner, Michael R.
               Hamed and Christian J. Grostic, for appellee receiver Ira
               Owen Kane.

               James E. Arnold & Assocs., LPA, James E. Arnold,
               Gerhardt A. Gosnell II, and Damion M. Clifford; Rutan &
               Tucker, LLP, Richard K. Howell and Caroline R. Djang, for
               appellant.

               APPEALS from the Franklin County Court of Common Pleas

CONNOR, P.J.
       {¶ 1}   Appellant, California Gold Marketing Group, LLC ("California Gold"),
appeals from a judgment of the Franklin County Court of Common Pleas sustaining the
motion of appellee, Ira O. Kane, in his capacity as the receiver for Columbus Exploration,
LLC ("Columbus Exploration") and Recovery Limited Partnership ("RLP"), to repudiate
the exclusive marketing contract entered into between RLP and California Gold.
California Gold assigns the following sole assignment of error for our review:
               The Court of Common Pleas, Franklin County Ohio (the "Trial
               Court") erred in sustaining the Appellee-Receiver's Motion to
               Repudiate Contract with Appellant California Gold Marketing
               Group, LLC.

       {¶ 2} Because the trial court abused its discretion in granting the receiver's
motion to repudiate, we reverse.
I. FACTS AND PROCEDURAL HISTORY

       {¶ 3} These consolidated cases concern two Ohio businesses, Columbus
Exploration and RLP, which are currently in receivership. The events which brought these
companies to their current state of financial crisis began in 1977, when Thomas G.
Thompson, a researcher at the Battelle Memorial Institute in Columbus, Ohio, began
Nos. 14AP-473, 14AP-474 & 14AP-475                                                        3


researching deep ocean shipwrecks and the methods and technologies for locating them.
Thompson became interested in attempting to recover the S.S. Central America, a United
States mail steam-ship that sank off the coast of South Carolina on September 12, 1857
during a hurricane. The S.S. Central America was carrying several tons of gold from the
California gold rush when it sank.
       {¶ 4} In the mid-1980s, Thompson organized RLP to fund the search-and-
recovery project. Thompson sought, and obtained, investments for the recovery project
from several central Ohio businesses, including the Dispatch Printing Co. From 1986 to
1992, Thompson, along with a team, found and recovered portions of the S.S. Central
America. Thompson and his team were able to recover more than a ton of gold and silver,
as well as numerous artifacts from the shipwreck. Although this initial recovery was
substantial, another ton of gold and silver still remained on the ocean floor. In 1987,
Thompson organized Columbus-America Discovery Group, Inc. ("CADG") to act as RLP's
"agent with respect to the management of the Partnership's business, the conduct of
recovery operations, and legal proceedings and press relations incidental thereto."
(Motion to Substitute, exhibit A, Agency Agreement.)
       {¶ 5} Upon discovering the S.S. Central America, Thompson initiated an
admiralty action in the United States District Court for the Eastern District of Virginia to
establish ownership of the shipwreck and all of its contents. The federal court held that
CADG, as RLP's agent, owned 92.5 percent of the salvage rights to the S.S. Central
America. The federal court awarded 7.5 percent of the salvage rights to several insurance
companies who established that their predecessors had insured certain portions of the
gold on board the S.S. Central America when it sank.
       {¶ 6} Although there are several aspects to the litigation surrounding the
receivership entities, we will focus on the facts which are most relevant to the instant
appeal. Particularly important to the instant case are two contracts entered into by CADG
and RLP in the late 1990s. In 1998, CADG entered into a contract with California Gold
(the "1998 Agreement"), whereby the parties defined the terms and conditions under
which California Gold would purchase the portion of the treasure which CADG had
already recovered from the S.S. Central America (the "Up treasure"). Section 1 of the 1998
Agreement noted that Christie's International PLC held a lien against the Up treasure,
Nos. 14AP-473, 14AP-474 & 14AP-475                                                      4


that California Gold had offered to pay $36 million for the Up treasure, and that
California Gold would use the offer money to obtain "a release of Christie's entire right,
title, claim and interest, of any kind, in the Recovered Gold Collectibles [i.e. the Up
treasure]." (1998 Agreement, Section 1(b).)
      {¶ 7} In Section 2 of the 1998 Agreement, CADG granted to California Gold "the
exclusive right to market any gold and silver coins and numismatic items (including,
without limitation, bars) [CADG] * * * recover[s] and own[s], or ha[s] the legal right to
market, from the SS Central America at any time following the date of this Agreement
(the 'Other Gold Collectibles')." (1998 Agreement, Section 2, referred to herein as the
"marketing contract".) "Other Gold Collectibles" thus described the other ton of treasure
which remained on the ocean floor at the time the parties entered into the 1998
Agreement (the "Down treasure"). Section 2 of the 1998 Agreement also set forth the
commission California Gold would receive for each item of Down treasure it successfully
marketed and sold. The agreement stated that, if California Gold was successful in
purchasing the Up treasure, its commission for the sale of an item of the Down treasure
would be five percent of the bullion/melt value of the item sold plus 20 percent of the
amount by which the sale price exceeded the bullion/melt value. The 1998 Agreement was
later amended to add RLP as a party to the agreement.
      {¶ 8} In 1999, CADG, RLP, and California Gold entered into an Asset Purchase
Agreement, whereby California Gold purchased the Up treasure from CADG and RLP (the
"1999 Agreement"). In the recitals section of the 1999 Agreement the parties stated that
the 1998 Agreement had expired, that the 1999 Agreement concerned "only" the Up
treasure "and supercede[d] all prior agreements concerning the" Up treasure, and that the
provisions of the 1998 Agreement "which concern[ed] solely the [Down treasure]" would
"continue to survive" and would be "made a part of" the 1999 Agreement. (Recital B, 1999
Agreement.) The remainder of the 1999 Agreement detailed the terms and conditions by
which California Gold would purchase the Up treasure.
      {¶ 9} Following the 1999 Agreement, California Gold exhibited and marketed the
Up treasure for sale. It conducted an impressive marketing campaign which included,
among other promotional endeavors, producing a documentary regarding the shipwreck
which aired on the History Channel, publishing a book titled A California Gold Rush
Nos. 14AP-473, 14AP-474 & 14AP-475                                                    5


History, constructing a 40-foot replica of the S.S. Central America which toured the
United States, and creating a museum exhibit titled Gold! Gold! which toured museums
world wide and featured the 80 pound Eureka Bar from the S.S. Central America, the
largest and heaviest gold numismatic item known to exist. As a result of its extensive
marketing campaign, California Gold achieved "exponential sale price[s] over the melt
value of [the] gold." (Memo in Opposition to Motion to Repudiate, 13.)
      {¶ 10} In 2005, the Dispatch Printing Co. and Donald C. Fanta filed separate
actions against the directors of Columbus Exploration and the partners of RLP. The
plaintiffs noted that Thompson had organized Columbus Exploration in the late 1990s to
take over from RLP the recovery and marketing of the treasure. RLP's partners were
granted ownership interests in Columbus Exploration based on their respective
ownership interests in RLP. The complaints alleged that the companies had not provided
their investors with any return on their investments, and further alleged that the
businesses were refusing to provide the investors with any financial information
regarding the businesses.
      {¶ 11} The plaintiffs eventually filed a motion asking the court to appoint a
receiver for Columbus Exploration and RLP. On June 14, 2013, the court granted the
motion and issued an entry appointing a receiver for Columbus Exploration and RLP. In
the entry, the court found the appointment of a receiver necessary, as RLP and
Columbus Exploration were in a state "of great disarray and insolvency, coupled with a
lack of functional management." (Entry Appointing Receiver, 2.) The court appointed
Mr. Kane to serve as receiver for the two entities. The court stated that the receiver's
powers would be derived from R.C. 2735.04 generally, as well as Loc.R. 66 of the
Franklin County Court of Common Pleas, and Ohio common law.
      {¶ 12} On June 20, 2013, the receiver accepted his appointment. On
September 30, 2013, the receiver applied to the court for approval of the receiver's
initial receivership plan and report, which the court ultimately approved. In the plan,
the receiver stated that the ultimate goal of the receivership was "the recovery,
conservation and successful monetization of the Down Treasure." (Receiver's Initial
Receivership Plan and Report, 2.) The receiver also noted in the plan that "[e]xecutory
contractual obligations will be reviewed by the Receiver to determine whether such
Nos. 14AP-473, 14AP-474 & 14AP-475                                                       6


contractual obligations are unprofitable or undesirable and, based on that
determination, to affirm or repudiate such agreements accordingly, subject to the
approval of the Court." (Receiver's Initial Receivership Plan and Report, 11.)
       {¶ 13} On November 20, 2013, the receiver sent a letter to California Gold's
president, Dwight Manley, asking California Gold to submit a proof of any claim it may
have against the receivership entities. On January 3, 2014, California Gold responded to
the receiver's request, and asserted that it had a claim based on its "rights to market the
down treasure." (Motion to Repudiate, exhibit A.)
       {¶ 14} On March 14, 2014, the receiver filed a motion to repudiate the marketing
contract with California Gold. The receiver asserted that the marketing contract was an
executory contract which was undesirable for the receivership entities, as the marketing
contract gave the receivership entities "no control whatsoever with regard to the
marketing of the Down Treasure." (Receiver's Motion to Repudiate, 6.) Accordingly, the
receiver argued that the marketing contract was not in the best interests of the
receivership entities, and should therefore be rejected.
       {¶ 15} On April 15, 2014, California Gold filed a memorandum in opposition to
the receiver's motion to repudiate. California Gold asserted that the marketing contract
was not executory, as California Gold had already substantially performed its
obligations under the marketing contract. California Gold asserted that its previous
marketing campaign served "to enhance the prestige and value of both the Up and Down
Treasure." (Memo in Opposition, 8.) California Gold also noted that the receiver had
failed to present evidence indicating that rejection of the marketing contract would
benefit the receivership estate. California Gold asserted that, as repudiation of the
marketing contract would give California Gold a claim for breach of contract, the
damages which would result from such a claim could potentially "exceed the amount
realized by the Receiver's monetization of the remaining Receivership Estate assets,
especially after paying professionals and commissions." (Memo in Opposition, 3.)
       {¶ 16} California Gold asserted that, in light of its previous expenditures and its
experience in marketing the treasure, the receiver's desire to replace California Gold
with another marketing agent was contrary to the receiver's duty to maximize the value
of the estate. California Gold attached several affidavits to its memorandum in
Nos. 14AP-473, 14AP-474 & 14AP-475                                                                       7


opposition from individuals in the numismatic community, all praising the job
California Gold did in marketing and selling the Up treasure.1 California Gold also noted
that, as it was simply the exclusive marketing agent for the Down treasure, the receiver,
as the owner of the Down treasure, retained full "control over the Down Treasure,"
including control over "when to sell, whether to sell or not to sell, at what price to sell,
and whether to accept or reject offers for sale of the Down Treasure." (Memo in
Opposition, 5.)
        {¶ 17} On April 24, 2014, the receiver filed a memorandum in support of his
motion to repudiate the marketing contract. The receiver quoted from Recital C of the
1999 Asset Purchase Agreement, which stated that California Gold would market the
treasure "in a diligent, professional and dignified manner consist [sic] with the scientific
and historical significance of the Central America project," but further stated that
California Gold would have the "power to manage the marketing of the Treasure in its
sole and absolute discretion and without any liability or obligation to the Seller or any
other person." (Recital C of the 1999 Agreement.) As the receiver believed Recital C
applied to the marketing of the Down treasure, the receiver asserted that the marketing
contract was undesirable because California Gold would be immune from liability for its
actions under the marketing contract. The receiver also asserted that, as Recital B of the
1999 Agreement incorporated only the provisions of the 1998 Agreement which
concerned solely the Down treasure, the fiduciary obligations and indemnification
provisions contained in the 1998 Agreement were not incorporated by reference into the
1999 Agreement. (See 1998 Agreement, Sections 3 and 4.)
        {¶ 18} The court informed the parties that it would accept additional briefing on
the repudiation issue. Accordingly, on May 12, 2014, California Gold filed a
supplemental memorandum in opposition to the receiver's motion to repudiate.


1 For instance, Adam Crum, the vice president of numismatics at Monaco Rare Coins, an entity which

purchased a large portion of the Up treasure, averred that he had witnessed California Gold's "sensational
and extremely well-received marketing efforts" regarding the Up treasure, and stated that he had
"profound concerns if the marketing of the remaining Treasure is turned over to another entity other than
[California Gold] and Dwight Manley." (Crum Affidavit, ¶ 10-11.) Similarly, David Hall, an expert in the
field of numismatics and the founder of Professional Coin Grading Service, averred that the California
Gold's marketing of the Up treasure was "the greatest marketing job that I have ever seen in the history of
numismatics," and stated that replacing California Gold with another marketing agent "would be a costly
mistake." (Hall Affidavit, ¶ 13, 15.)
Nos. 14AP-473, 14AP-474 & 14AP-475                                                      8


California Gold asserted that the receiver's reliance on the recitals of the 1999
Agreement was misplaced, as Recital B of the 1999 Agreement stated that the 1999
Agreement "concern[ed] only the [Up treasure]." (Recital B of the 1999 Agreement.)
Accordingly, California Gold asserted that the limitation of liability in Recital C of the
1999 Agreement applied only to California Gold's marketing of the Up treasure.
California Gold noted that the liability disclaimer was placed in Recital C because a
purchaser of assets "would not typically have any liability or obligation to the seller of
such assets with respect to the marketing of those assets because the seller no longer
owns the assets." (Supplemental Memo in Opposition, 6.) California Gold supported its
supplemental memorandum with the affidavit of Dwight Manley.
      {¶ 19} On May 15, 2014, the receiver filed a response to California Gold's
supplemental memorandum. The receiver asserted that Recital A of the 1999 Agreement
defined "Treasure" to mean "the gold and silver 'that CADG has recovered, and intends
to recover, from the SS Central America.' " (Receiver's response, 3.) Accordingly, the
receiver asserted that the limitation of liability in Recital C applied to both the Up and
Down portions of the treasure.
      {¶ 20} On May 19, 2014, the trial court issued a Decision and Entry sustaining the
receiver's motion to repudiate the marketing contract with California Gold. The court
noted that the motion to repudiate depended on two questions: (1) whether the contract
was executory, and (2) whether, in the receiver's opinion, it would be unprofitable or
undesirable to adopt the contract. The court found the marketing contract to be "wholly
executory," as it was "a contract by which a party agrees to do * * * something in the
future." (Decision, 3.) The court then found, without analysis, that Recital C applied to
the Down treasure. The court noted that the phrase sole and absolute discretion in
Recital C, was "a very clear and unambiguous statement of authority, and, therefore, this
Court has to conclude that the Receiver would have no recourse in the event that
[California Gold] did not act in the best interests of the Receiver." (Emphasis sic.)
(Decision, 4.) The court stated that Recital C effectively removed from the receiver "the
ability to use his best judgment as to what shall be done with any recovered Down
Treasure." (Decision, 4.) Accordingly, the court concluded that the contract was
executory and that the receiver was within his rights to repudiate the contract.
Nos. 14AP-473, 14AP-474 & 14AP-475                                                          9


       {¶ 21} After sustaining the motion, the court stated that it felt compelled to
"make a few comments." (Decision, 5.) The court initially stated that the law was "clear
that where a receiver repudiates an executory contract, the affected party may file * * * a
claim with the receiver." (Decision, 5.) The court observed that "[t]hat claim, in this
case, has the potential to be very large indeed." (Decision, 5.) The court also noted that,
based on the evidence in the record, it appeared that California Gold "did an exceptional
job in handling, conserving, marketing, selling, etc., the Up Treasure," and that such
work "should not be cavalierly disregarded or ignored." (Decision, 5.) The court
concluded its "comments" by recognizing the "exceptional job" California Gold had done
in marketing the Up treasure, and stated "[i]t may very well be in the best interests of
the Receiver and those for whom he labors * * * that he continue to work with
[California Gold]." (Decision, 6.)
II. TRIAL COURT ERRED IN SUSTAINING THE RECEIVER'S MOTION TO
    REPUDIATE MARKETING CONTRACT

       {¶ 22} California Gold asserts that the trial court applied an incorrect standard of
review to determine whether the receiver could repudiate the marketing contract, as the
trial court failed to determine whether repudiation would benefit the receivership estate.
California Gold also contends that the marketing contract is not an executory contract
subject to repudiation. Finally, California Gold asserts that the limitation of liability in
Recital C of the 1999 Agreement applied only to the Up treasure, and thus did not apply
to the marketing contract.
       A. Standard of Review
       {¶ 23} A "receiver" is " 'a trustee or ministerial officer representing the court,' "
who is " 'appointed by the court to receive and preserve the property or fund in
litigation, and receive its rents, issues, profits, and apply or dispose of them at the
direction of the court.' " State ex rel. Celebrezze v. Gibbs, 60 Ohio St.3d 69, 74 (1991), fn.
4, quoting Black's Law Dictionary 1268 (6 Ed.1990). A trial court has discretion to
appoint a receiver. Norris v. Dudley, 10th Dist. No. 07AP-425, 2007-Ohio-6646, ¶ 19.
R.C. 2735.01 provides that a common pleas court may appoint a receiver when a
company is in imminent danger of insolvency or has forfeited its corporate rights. R.C.
2735.01(E). "Under the control of the court which appointed him," a receiver has the
Nos. 14AP-473, 14AP-474 & 14AP-475                                                                  10


power to "bring and defend actions in his own name as receiver, take and keep
possession of property, receive rents, collect, compound for, and compromise demands,
make transfers, and generally do such acts respecting the property as the court
authorizes." R.C. 2735.04.2
         {¶ 24} The Supreme Court of Ohio has interpreted R.C. 2735.04 "as enabling the
trial court to exercise its sound judicial discretion to limit or expand a receiver's powers
as it deems appropriate." Celebrezze at 74. "R.C. Chapter 2735 does not contain any
restrictions on what the court may authorize when it issues orders regarding
receivership property." Quill v. Troutman Ent., Inc., 2d Dist. No. 20536, 2005-Ohio-
2020, ¶ 34. "[A]n appellate court will not disturb a trial court's judgment regarding a
receiver's powers absent a showing of an abuse of discretion." Campbell Investors v.
TPSS Acquisition Corp., 152 Ohio App.3d 218 (6th Dist.2003), ¶ 34, citing Celebrezze at
73-74.
         {¶ 25} Under this standard, the trial court does have "a duty to independently
monitor and evaluate the Receiver's conduct in relation to the duties the Receiver owed
the parties and the assets under their control." Fifth Third Bank v. Q.W.V. Properties,
LLC, 12th Dist. No. CA2010-09-245, 2011-Ohio-4341, ¶ 19. See also Hummer v.
Hummer, 8th Dist. No. 96132, 2011-Ohio-3767, ¶ 18 (noting that "[w]hile there are no
limits on the powers that may be given, a receiver's authority is not unbridled," as the
receiver is subject to the court's order and direction). The receiver's purpose is to carry
out the orders of the appointing court, "for the 'appointing court defines the powers of
the receiver and, therefore, controls his actions.' " Park Natl. Bank v. Cattani, Inc., 187
Ohio App.3d 186, 2010-Ohio-1291 (12th Dist.), ¶ 10, quoting Javitch v. First Union
Secs., Inc., 315 F.3d 619, 626 (6th Cir.2003).
         {¶ 26} In the order appointing the receiver, the court obligated the receiver to
"make every effort to further the corporate goal of [Columbus Exploration], which [was]
to use the technology and inventions developed by RLP and conduct such maritime
operations that are designed to make a positive financial return for the companies."
(Entry Appointing the Receiver, 2.) The court further stated that the receiver would

2
  R.C. 2735.04 was amended on December 19, 2014 by Am.Sub.H.B. No. 9. The amendments do not affect this
case.
Nos. 14AP-473, 14AP-474 & 14AP-475                                                         11


"have wide authority to achieve this goal," and that he would have "full control over the
assets of the Companies in order to accomplish the purposes of this Receivership."
(Entry Appointing the Receiver, 2, 4.)
       {¶ 27} California Gold asserts that the trial court applied the incorrect standard
for determining whether the receiver could reject the contract at issue. An Ohio receiver
" 'is not bound to adopt the contracts * * * or otherwise step into the shoes of the
assignor, if in his opinion it would be unprofitable or undesirable to do so.' " Norris at
¶ 23, quoting United States Trust Co. v. Wabash W. Ry. Co., 150 U.S. 287, 299 (1893).
See also 80 Ohio Jurisprudence 3d, Receivers, Section 134 (similarly stating that, in
Ohio, "[a] receiver is not bound to adopt the executory contracts * * * if, in the receiver's
opinion, it would be unprofitable or undesirable to do so"). In Dissolution of Charles F.
Johnson, Inc., 22 Ohio Law Abs. 534 (2d Dist.1936) (Franklin County) this court
similarly held that the " ' general rule is undisputed that a receiver is not bound to adopt
or perform executory contracts, or otherwise step into the shoes of the person for whom
he is appointed receiver, if, in his opinion, it would be unprofitable or undesirable to do
so.' " Id., quoting 34 Ohio Jurisprudence 1020.
       {¶ 28} Despite the foregoing authority, California Gold asserts, relying on Norris,
that, under the proper standard of review, a trial court must ascertain "the benefits and
risks to the receivership estate posed by the repudiation of the Contract." (Appellant's
brief, 41.) As noted above, however, Norris upheld the general proposition that a
receiver may reject an executory contract if, in the receiver's opinion, the contract is
unprofitable or undesirable.
       {¶ 29} Although California Gold asserts that "numerous executory contract cases
stand for the proposition that a party seeking rejection of an executory contract must
show * * * that rejection of the executory contract 'will likely benefit the estate,' " the
cases California Gold relies on to support its contention all concern proceedings in
bankruptcy, not Ohio receiverships. (Emphasis sic.) (Appellant's brief, 39.) See In re
Sun City Invest., Inc., 89 B.R. 245, 248-249 (Bankr.M.D.Fla. 1988) (noting that the
"decision to assume or reject an executory contract is left entirely to the debtor" in
bankruptcy, and that the court will approve the debtor's decision "subject only to review
under the business judgment rule" which requires "a showing by the Trustee or debtor-
Nos. 14AP-473, 14AP-474 & 14AP-475                                                        12


in-possession that rejection of the contract will likely benefit the estate"); In re Prestige
Motorcar Gallery, Inc., 456 B.R. 541, 544-45 (Bankr.N.D.Fla. 2011) (noting that "the
threshold requirement and burden of the trustee is to produce credible evidence that his
decision to assume or reject would benefit the estate or result in a successful
reorganization").
       {¶ 30} Although the business judgment rule from the bankruptcy context is not
applicable to an Ohio receiver, we note that the receiver herein was obligated to always
act "in the best interests of the estate." Loc.R. 66.04(C)(6). Indeed, when Mr. Kane
accepted his appointment as receiver, he acknowledged in writing that he would "act in
the best interests of the receivership." (Receiver's Acceptance of Appointment, 1.)
Accordingly, when a receiver identifies an executory contract which the receiver finds
undesirable or unprofitable, the receiver is not at liberty to reject the contract unless
rejection is also in the best interests of the receivership estate.
       {¶ 31} Here, the receiver has only argued that the marketing contract was
undesirable and has never contended that the contract was unprofitable. The trial court
concluded that the receiver was " within his rights to repudiate the contract" because the
limitation of liability in Recital C of the 1999 Agreement would effectively leave the
"entire handling of the Down Treasure to the unfettered and unregulated discretion of
[California Gold]." (Decision, 4). Thus, the trial court found the marketing contract to
limit the discretion of the receiver.
       B. Executory Contract
       {¶ 32} In Dissolution of Charles F. Johnson, Inc., the court stated that " '[a]n
executory contract is one in which a party binds himself to do or not to do a particular
thing in the future.' " Id., quoting 13 Ohio Jurisprudence 245. In Norris, this court noted
that Black's Law Dictionary 321 (7th Ed.1999) defined an executory contract as " '[a]
contract that remains wholly unperformed or for which there remains something still to
be done on both sides, often as a component of a larger transaction.' " Norris at ¶ 31,
quoting Black's Law Dictionary. The Norris court also noted that the Supreme Court of
Ohio had defined an executory contract as " 'one in which a party binds himself to do, or
not to do, a particular thing, whereas an executed contract is one in which the object of
Nos. 14AP-473, 14AP-474 & 14AP-475                                                       13


the agreement is performed and everything that was to be done is done.' " Norris at ¶ 31,
quoting Cassella v. Tiberio, 150 Ohio St. 27, 30 (1948).
       {¶ 33} In Norris, the court concluded that the lease at issue therein did not fit
neatly into any of these definitions. The court analyzed the facts of the case and
concluded that "both parties had performed their substantial obligations under the
contract," as "Who Land LLC [lessor/party in receivership] granted a 50-year lease for a
limited use of the 20-foot by 80-foot property, and the Fees [lessees] paid for that
limited use as part of the property sale." Id. at ¶ 33. Although other, non-substantial
obligations had not yet expired under the 50-year lease, because the parties had
performed their substantial obligations under the lease, the Norris court held that the
lease "was not an executory contract the receiver was free to reject." Id. at ¶ 33. See also
Dissolution of Charles F. Johnson, Inc. (holding that a contract was executory "in part,
at least," as it "required the payment of the $124,000 by the corporation" in the future).
       {¶ 34} California Gold asserts that the marketing contract is not executory
because California Gold "made considerable expenditures in marketing and promoting
both the Up and Down" portions of the treasure during its previous marketing
campaign. (Appellant's brief, 48.) Although we agree that California Gold's previous
marketing campaign served in some respects to market the treasure from the S.S.
Central America as a whole, the previous marketing campaign did not satisfy California
Gold's substantial obligations under the marketing contract for the Down treasure.
       {¶ 35} California Gold's marketing contract obligates it to market the Down
treasure, and obligates RLP and CADG to pay California Gold a set amount in
commission for each item of Down treasure which California Gold sells. Thus, until the
Down treasure is recovered and curated, California Gold cannot begin to truly market
the Down treasure for sale. Indeed, until the Down treasure is recovered, California
Gold has no way of knowing exactly how many gold bars, gold ingots, or other
numismatic items there will be to offer for sale. As the previous marketing campaign
occurred almost 15 years ago, new marketing efforts will have to be undertaken once the
Down treasure is recovered and curated. Because California Gold has yet to sell a piece
of Down treasure, and the receiver accordingly has not paid California Gold any amount
Nos. 14AP-473, 14AP-474 & 14AP-475                                                        14


in commission, neither party has fulfilled its substantial obligations under the
marketing contract. As such, the contract is executory.
       C. Undesirability and Interpretation of the 1999 Agreement
       {¶ 36} The trial court found the marketing contract undesirable in large part
because of the limitation of liability contained in Recital C of the 1999 Agreement.
California Gold asserts that the trial court erred in finding Recital C applicable to the
Down treasure. The 1999 Agreement expressly provides that the "Agreement and the
legal relations between the parties hereto shall be governed by and construed in
accordance with the internal laws of the State of California." (1999 Agreement, Section
7.7.) Accordingly, we are bound to apply California law to interpret the contract.
       {¶ 37} Under California law, a written contract must be read as a whole, and
every part must be interpreted with reference to the whole. In re Crystal Properties,
Ltd., L.P., 268 F.3d 743, 747 (9th Cir.2001). The language of a contract is to govern its
interpretation, if the language is clear and explicit, and does not involve an absurdity.
Cal.Civ.Code 1638. Contractual clauses are not to be construed in isolation, rather,
"[t]he whole of a contract is to be taken together, so as to give effect to every part, if
reasonably practicable, each clause helping to interpret the other." Cal.Civ.Code 1641.
       {¶ 38} The fundamental canon of interpreting written instruments is the
ascertainment of the intent of the parties. Ticor Title Ins. Co. v. Rancho Santa Fe Assn.,
177 Cal.App.3d 726, 730, 223 Cal.Rptr. 175 (1986). See also Cal.Civ.Code 1636 (stating
that "[a] contract must be so interpreted as to give effect to the mutual intention of the
parties as it existed at the time of contracting, so far as the same is ascertainable and
lawful"). See also People v. Rabanales, 168 Cal.App.4th 494, 505, 85 Cal.Rptr.3d 607,
616 (2008), quoting Ben-Zvi v. Edmar Co., 40 Cal.App.4th 468, 473, 47 Cal.Rptr.2d 12,
14 (1995) (stating that, " '[w]here the parties have reduced their agreement to writing,
their mutual intention is to be determined, whenever possible, from the language of the
writing alone' ").
       {¶ 39} "[C]ourts must interpret contractual language in a manner which gives
force and effect to every provision, and not in a way which renders some clauses
nugatory, inoperative or meaningless." City of Atascadero v. Merrill Lynch, Pierce,
Fenner & Smith, Inc., 68 Cal.App.4th 445, 473, 80 Cal.Rptr.2d 329 (1998). "An
Nos. 14AP-473, 14AP-474 & 14AP-475                                                      15


interpretation which renders part of the instrument to be surplusage should be
avoided." Ticor Title Ins. Co. at 730. "Particular clauses of a contract are subordinate to
its general intent." Cal.Civ.Code 1650. "However broad may be the terms of a contract, it
extends only to those things concerning which it appears that the parties intended to
contract." Cal.Civ.Code 1648. Additionally, in California, "[s]everal contracts relating to
the same subject matters, between the same parties, and made as parts of substantially
one transaction are to be taken together." Cal.Civ.Code 1642.
       {¶ 40} If the terms of a promise are ambiguous or uncertain, courts may consider
the circumstances surrounding the agreement to establish the "sense in which the
promisor believed * * * that the promisee understood it." Cal.Civ.Code 1649; People v.
Shelton, 37 Cal.4th 759, 767 (2006). "To say that language is ambiguous is to say there is
more than one semantically permissible candidate for application, though it cannot be
determined from the language which is meant." In Re Estate of Dye, 92 Cal.App.4th
966, 976, 112 Cal.Rptr.2d 362 (2001). In the face of ambiguity, a court may admit parol
evidence to interpret the contract. Adams v. MHC Colony Park Ltd. Partnership, 224
Cal.App.4th 601, 620, 169 Cal.Rptr.3d 146 (2014). See Cal.Civ.Code 1647 (an ambiguous
contract "may be explained by reference to the circumstances under which it was made,
and the matter to which it relates").
       {¶ 41} If a trial court considers the terms of the agreement, as well as the
surrounding circumstances and the intent of the parties, a reviewing court may not
substitute another interpretation, though the other interpretation seems equally
tenable. Pope v. Allen, 225 Cal.App.2d 358, 365, 37 Cal.Rptr. 371 (1964). If, however,
" ' the trial court's interpretation of a written instrument depends solely on the language
of the document and no other evidence [was] before the court, a reviewing court is not
bound by the trial court's construction, but may determine the contract's meaning as a
matter of law.' " Id., quoting 12 California Jurisprudence 2d 119, 326-27.
       {¶ 42} The trial court and the receiver both assumed that the "Treasure" in the
1999 Agreement included the Down treasure. On appeal, the receiver continues to assert
that Recital A "defines the 'Treasure' as the gold and silver 'that CADG has recovered,
and intends to recover, from the SS Central America," and thus asserts that Recital C
Nos. 14AP-473, 14AP-474 & 14AP-475                                                       16


"applies to both the Up Treasure and the Down Treasure." (Emphasis sic.) (Appellee's
brief, 14.) The recitals from the 1999 Agreement state, in their entirety, as follows:
                                   RECITALS

              A. Certain of the Members of [California Gold] previously
              entered into an agreement in November 1998 with CADG for
              the purchase and/or marketing of certain gold and silver
              coins, gold bars, and other numismatic items (hereafter the
              "Treasure") that CADG has recovered, and intends to
              recover, from the SS Central America.

              B. The November 1998 Agreement with CADG had been
              amended by Amendment No. 1 dated February 24, 1999,
              Amendment No. 2 dated in February 1999, and Amendment
              No. 3 dated August 1999, all of the foregoing documents are
              collectively hereafter referred to as the "Columbus
              Agreement" and is attached hereto, in its entirety, and as
              amended, as Exhibit 0.1 and has expired. While the
              Columbus Agreement [i.e. the 1998 agreement] concerned
              Recovered Gold Collectibles and Other Gold Collectibles
              (each as defined in the Columbus Agreement), this
              Agreement concerns only the Recovered Gold Collectibles
              and supercedes [sic] all prior agreements concerning the
              Recovered Gold Collectibles. Those provisions of the
              Columbus Agreement which concern solely the Other Gold
              Collectibles shall continue to survive and are, by this
              reference, made a part of this Agreement.

              C. Purchaser recognizes Seller's interest in and desire for
              marketing of the Treasure in a diligent, professional and
              dignified manner consist [sic] with the scientific and
              historical significance of the Central America Project, its
              public identification with innovation, scientific discovery,
              entrepreneurship      and     historic  preservation      and
              maximization of the cultural value of its recoveries.
              Notwithstanding the foregoing nonbinding statement of
              desire set forth above in this paragraph, Purchaser or any
              assignee, or successor thereof, shall have the power to
              manage the marketing of the Treasure in its sole and
              absolute discretion and without any liability or obligation to
              the Seller or any other person.

              D. Christie's International PLC holds a lien against the
              Treasure. Pursuant to an Asset Purchase Agreement (the
              "Christie's Agreement") to be executed concurrently
Nos. 14AP-473, 14AP-474 & 14AP-475                                                       17


              herewith, it will remove its lien. A copy of Christie's
              Agreement is attached as Exhibit 0.2.

              E. Union Bank of California ("Union Bank") holds a
              judgment against CADG ("Union Bank Judgment").
              Pursuant to a Discounted Payoff Agreement (the "Union
              Bank Agreement") previously executed and dated August 27,
              1999, and as amended, October 29, 1999, and on the date
              hereof, Union Bank will, upon payment of $3,673,500
              (inclusive of amounts previously paid pursuant to the Union
              Bank Agreement remove its judgment lien). A copy of the
              Union Bank Agreement is attached as Exhibit 0.3.

              F.     The Seller desires to sell to the Purchaser, and the
              Purchaser desires to purchase from the Seller, all of the
              assets, properties and rights concerning those certain
              Recovered Gold Collectibles as specifically set forth on
              Schedule A attached hereto (collectively, the "Assets").

              NOW, THEREFORE, for and in consideration of the
              premises [sic] and mutual covenants and agreements
              contained herein, and intending to be legally bound hereby,
              the hereto hereby agree as follows[.]

(Recitals of the 1999 Agreement.)

       {¶ 43} Thus, the term "Treasure" is defined in Recital A as "certain gold and silver
coins, gold bars, and other numismatic items." (Recital A of the 1999 Agreement.) The
receiver contends that Treasure means the gold and silver that CADG has recovered, and
intends to recover, from the S.S. Central America. However, by using an integrated
definition of the term Treasure, the term includes the words which precede the
parenthetical reference, not the words which follow the parenthetical. See Kenneth A.
Adams, A Manual of Style for Contract Drafting Section 5.34 (2d Ed.2008) (stating
that "an integrated definition constitutes part of the substantive provisions of a contract,
and the defined term is defined by tucking it at the end of the definition, in
parentheses"). Compare Olympus Ins. Co. v. AON Benefield, Inc., 711 F.3d 894, 898
(8th Cir.2013) (finding that the trial court properly "limited the definition of 'Subject
Business' to those words preceding the parenthetical reference," and rejecting the
appellant's contention that the definition "must also encompass the language following
the integrated parenthetical"); Berg v. eHome Credit Corp., 848 F.Supp.2d 841, 846
Nos. 14AP-473, 14AP-474 & 14AP-475                                                                       18


(N.D.Ill.2012) (noting that "one method of defining terms in an agreement is by placing
a defined term in parentheses and quotation marks immediately following the definition
of the term," and that as the term "Borrower" appeared "in parentheses and quotation
marks after Stanley Berg and Ingrid Berg's names" the term "Borrower" included both
Stanley and Ingrid Berg).
        {¶ 44} If the parties had intended for "Treasure" to mean the "certain gold and
silver coins, gold bars, and other numismatic items that CADG has recovered, and
intends to recover, from the SS Central America," the definition of "Treasure" would
have been placed at the end of the sentence. Notably, other defined terms from the 1999
Agreement similarly encompass the words which come before the parenthetical, and not
the words which follow the parenthetical.3 Moreover, in defining the terms Recovered
Gold Collectibles and Other Gold Collectibles in the 1998 Agreement, the parties placed
the recovered or yet to be recovered status of the treasure in front of the parenthetical.
Thus, the parties defined Other Gold Collectibles as "any gold and silver coins and
numismatic items (including, without limitation, bars) [CADG] or its affiliates, assigns,
agents, or representatives recover and own, or have the legal right to market, from the
SS Central America at any time following the date of this Agreement (the 'Other Gold
Collectibles') upon the following terms and conditions." (1998 Agreement, Section 2.)
The parties defined Recovered Gold Collectibles by stating that, "[a]s of the date of this
Agreement, [CADG] has recovered from the SS Central America and retains those items
listed on the inventory which is an Exhibit to the Agreement signed by Columbus and
Dwight Manley on or about July 16, 1998, consisting of gold coins and numismatic items
(the 'Recovered Gold Collectibles')." (1998 Agreement, Section 1.)
        {¶ 45} Using the parties' definition of "Treasure" from Recital A, Recital C does
not clearly apply to any particular portion of the treasure. However, as Recital B states


3 See other terms defined in the recitals. See also other terms defined in the 1999 Agreement, including,

for example, "any and all revenues or other value received by the owner or marketing agent of the Assets
arising from its ownership of the Assets, including revenues from sale and/or promotion of the Assets,
and any reproduction, merchandise or other thing or value made, manufactured or created that is derived
from the Assets (collectively the "Gross Revenues"), less actual or reasonable 'direct costs of sale' ";
"Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code")"; "the Purchaser shall
indemnify and save harmless the Seller and its officers, directors, partners, shareholders, successors and
assigns (collectively, the "Additional Indemnified Party") from and against any loss, claim, liability [and]
damage." (1999 Agreement.)
Nos. 14AP-473, 14AP-474 & 14AP-475                                                           19


that the 1999 Agreement "concerns only the Recovered Gold Collectibles," i.e. the Up
treasure, Recital C's limitation of liability can apply only to the Up treasure. Moreover,
applying the principals of California contract interpretation law, we must look at the
entire agreement and interpret every part of the agreement in reference to the whole.
Aside from the incorporation of the Down treasure provisions in Recital B, the entire
1999 Agreement concerns only the terms of the sale of the Up treasure. Indeed, the
agreement is titled an "Asset Purchase Agreement," and all of the operative provisions in
the contract concern the transfer of the Up treasure, the amount California Gold will pay
for the Up treasure, and the general representation, warranties, and indemnification
provisions relating to the transfer of ownership of the Up treasure. Moreover, to the
extent the limitation of liability in Recital C is a particular clause, it is subordinate to the
1999 Agreement's general intent, which was to sell the Up treasure to California Gold.
See Cal.Civ.Code 1650. Thus, looking at the contract as a whole and not reading Recital
C in isolation, it is apparent that Recital C was intended as a limitation of liability
regarding California Gold's conduct in marketing the Up treasure, which California Gold
purchased through the 1999 Agreement.
       {¶ 46} To the extent that the use of the term "Treasure" in Recital C renders the
meaning of the limitation of liability in Recital C ambiguous, we may look to parol
evidence to help determine the parties' intentions at the time of contracting. However,
the only parol evidence in the record regarding the parties' intentions is the affidavit of
Dwight Manley. Manley stated in his affidavit that he was actively involved in the
negotiations for both the 1999 and 1998 Agreement. He averred that it was his "intent
that the 1999 Asset Purchase Agreement applied only to the Up Treasure, and that all
provisions in the [1998] Agreement relat[ing] to the Down Treasure survived, and
continued to apply." (Emphasis sic.) (May 12, 2014 Affidavit, ¶ 4.) Manley averred that
"[a]ll of the communications between the parties at that time were consistent with this
contractual reality." (May 12, 2014 Affidavit, ¶ 4.) Manley's affidavit thus further
indicates that the parties intended for the limitation of liability in Recital C to apply only
to the Up treasure.
       {¶ 47} The 1998 Agreement also indicates that Recital C was intended to apply
solely to the Up treasure. Section 1 of the 1998 Agreement concerned only the Up
Nos. 14AP-473, 14AP-474 & 14AP-475                                                       20


treasure. In Section 1, California Gold offered to pay $36 million for the Up treasure,
and the agreement stated that, "[f]ollowing the transfer of the Recovered Gold
Collectibles to [California Gold], [California Gold] shall be solely responsible for and
shall control all additional marketing and curating costs relating to the Recovered Gold
Collectibles." (1998 Agreement, Section 1(d).) The agreement then stated that California
Gold "shall perform the services and shall manage marketing in a diligent, professional
and dignified manner, consistent with the scientific and historical significance of the
Central America project, its public identification with innovation, scientific discovery,
entrepreneurship, and historic preservation, and maximization of the economic and
cultural value of its recoveries." (1998 Agreement, Section 1(d).)
       {¶ 48} The language from Section 1(d) of the 1998 Agreement tracks, nearly
verbatim, the statement of desire contained in Recital C. Notably, there is no similar
statement of desire contained in Section 2 of the 1998 Agreement, which contained the
marketing contract for the Down treasure. Accordingly, if Recital C is ambiguous, based
on the Manley affidavit and the identical language from Section 1(d) of the 1998
Agreement, we find that the parties intended for the limitation of liability in Recital C to
apply only to the Up treasure.
       {¶ 49} Because Recital C in the 1999 Agreement was intended to apply only to the
Up treasure, the receiver's contention that the marketing contract with California Gold
was undesirable because Recital C rendered California Gold immune from any liability
with respect to the Down treasure, is unfounded. As the trial court similarly based its
decision sustaining the motion to repudiate on the belief that Recital C in the 1999
Agreement applied to the marketing of the Down treasure, we find the trial court erred
in granting the receiver's motion to repudiate.
       {¶ 50} Although the limitation of liability in Recital C was the trial court's basis
for granting the motion to repudiate, we note that the receiver has raised additional
concerns regarding the marketing contract. For instance, the receiver asserts that the
1999 Agreement does not give the receiver the right "to affect the marketing of the Down
Treasure or the price at which it is sold." (Appellee's brief, 20.) Similarly, in the
receiver's motion to repudiate the marketing contract, the receiver stated that the
marketing contract deprived "the Receiver of any control over the disposition of
Nos. 14AP-473, 14AP-474 & 14AP-475                                                      21


substantially all of the receivership assets." (Receiver's Motion to Repudiate, 6.) These
statements reflect a misunderstanding on the part of the receiver regarding the property
rights it possesses in the Down treasure.
       {¶ 51} "A common idiom describes property as a 'bundle of sticks' – a collection
of individual rights which, in certain combinations, constitute property." United States
v. Craft, 535 U.S. 274, 278 (2002). See also Eric A. Kades, Property Rights and
Economic Development, 45 Wm. & Mary L.Rev. 815, 817-18 (2004) (explaining that,
"[p]erhaps most famously, property law scholars speak incessantly of the 'bundle of
sticks' that constitute property: various combinations of the rights to exclude, to use,
and to alienate as the three sticks that, tied together, make up the bundle of rights we
commonly associate with the word 'property' "). Pursuant to the marketing contract,
California Gold possesses a single stick from the much larger bundle of rights which the
receiver, on behalf of the receivership entities, possesses in the Down treasure.
California Gold only has the right to market the Down treasure and offer it for sale. The
receiver, as the owner, is the only individual with the power to dispose of the property.
Accordingly, the receiver has every right to control the disposition of the Down treasure
and determine the price at which the Down treasure will be sold.
       {¶ 52} The receiver also asserts that the 1999 Agreement contains no
performance standard for California Gold and does not require that sales of the Down
treasure occur "at arms' length to bona fide third party purchasers." (Appellee's brief,
20.) As the trial court expressly found that California Gold did "an exceptional job in * *
* marketing, [and] selling, etc., the Up Treasure," the receiver's concerns over California
Gold's performance appear unfounded. (Decision, 5.) Moreover, we note that "[i]t has
long been recognized in California that '[t]here is an implied covenant of good faith and
fair dealing in every contract that neither party will do anything which will injure the
right of the other to receive the benefits of the agreement.' " Kransco v. Am. Empire
Surplus Lines Ins. Co., 23 Cal.4th 390, 400 (2000), quoting Comunale v. Traders &
Gen. Ins. Co., 50 Cal.2d 654, 658 (1958). "The scope of the duty of good faith and fair
dealing depends upon the purposes of the particular contract because the covenant 'is
aimed at making effective the agreement's promises.' " Id., quoting Foley v. Interactive
Data Corp., 47 Cal.3d 654, 683 (1988). "Although breach of the implied covenant often
Nos. 14AP-473, 14AP-474 & 14AP-475                                                      22


is pleaded as a separate count, a breach of the implied covenant is necessarily a breach
of contract." Digerati Holdings, LLC v. Young Money Entertainment, LLC, 194
Cal.App.4th 873, 885, 123 Cal.Rptr.3d 736 (2011). Thus, pursuant to the implied
covenant of good faith and fair dealing, the receiver will have a breach of contract claim
against California Gold if California Gold does anything to injure the receiver's right to
receive the benefits of the marketing contract.
       {¶ 53} The receiver also notes that the 1999 Agreement does not provide for
indemnification regarding the marketing of the Down treasure. However, Section 3 of
the 1998 Agreement provides for indemnification, and states that CADG and California
Gold "each agrees to protect, indemnify, and hold the other harmless from and against
any and all expenses, damages, liabilities, * * * and costs whatsoever," which may be
"incurred or suffered by the other in any claim * * * against a party to this agreement by
a third party alleging any breach of warranty, covenant, representation, or other duty
under this agreement by other party." (1998 Agreement, Section 3.)
       {¶ 54} The receiver asserted below that this provision was not incorporated into
the 1999 Agreement through the reference in Recital B, as it was not a provision which
concerned solely the Down treasure. However, because the provisions regarding the Up
treasure in the 1998 Agreement were superseded by the 1999 Agreement, the only
operative provision remaining in the 1998 Agreement at the time of the 1999 Agreement
was the marketing contract. Thus, at the time of the 1999 Agreement, the
indemnification provision in Section 3 of the 1998 Agreement concerned solely the
Down treasure and was accordingly incorporated by reference into the 1999 Agreement.
Similarly, Section 4 of the 1998 Agreement states that "each party shall act as a fiduciary
to the other in * * * accounting for any gold or silver coins and numismatic items
recovered from the SS Central America." (1998 Agreement, Section 4.) Again, as all of
the provisions relating to the Up treasure had expired and were superseded by the 1999
Agreement, the fiduciary obligation in Section 4 relating to accounting for the gold and
silver recovered from the S.S. Central America concerned solely the Down treasure and
was therefore incorporated by reference into the 1999 Agreement through Recital B.
Nos. 14AP-473, 14AP-474 & 14AP-475                                                   23


III. DISPOSITION
      {¶ 55} Based on the foregoing, we find the trial court erred in accepting the
receiver's erroneous interpretation of Recital C in the 1999 Agreement to support his
sole claim of undesirability.   The relevant contract language does not support the
receiver's contention that the receivership entities have "no control whatsoever with
regard to the marketing of the Down Treasure." Accordingly, we sustain appellant's
assignment of error and reverse the judgment of the Franklin County Court of Common
Pleas. The case is remanded for further proceedings consistent with this decision.
                                                   Judgment reversed; case remanded.

                         SADLER and DORRIAN, JJ., concur.
                             _________________
