[Cite as Mentor Way Real Estate Partnership, 2016-Ohio-4692.]


                Court of Appeals of Ohio
                              EIGHTH APPELLATE DISTRICT
                                 COUNTY OF CUYAHOGA


                             JOURNAL ENTRY AND OPINION
                                     No. 103267



        MENTOR WAY REAL ESTATE PARTNERSHIP
                                                         PLAINTIFF-APPELLEE

                                                   vs.

                           JOSEPH HERTANU, ET AL.
                                                         DEFENDANTS-APPELLANTS




                                          JUDGMENT:
                                           DISMISSED


                                     Civil Appeal from the
                            Cuyahoga County Court of Common Pleas
                                   Case No. CV-14-830361

        BEFORE: Stewart, P.J., S. Gallagher, J., and Laster Mays, J.

        RELEASED AND JOURNALIZED: June 30, 2016
ATTORNEYS FOR APPELLANTS

Geoffrey E. Webster
Bryan M. Pritkin
Webster & Associates Co., L.P.A.
17 South High Street, Suite 770
Columbus, OH 43215


ATTORNEYS FOR APPELLEE

David R. Mayo
Michael J. Meyer
Benesch, Friedlander, Coplan & Aronoff, L.L.P.
200 Public Square, Suite 2300
Cleveland, OH 44114

Ronald L. House
Benesch, Friedlander, Coplan & Aronoff, L.L.P.
41 South High Street, Suite 2600
Columbus, OH 43215

David S. Brown
Weltman Weinberg & Reis Co., L.P.A.
Lakeside Place, Suite 200
323 West Lakeside Avenue
Cleveland, OH 44113

Also Listed

Leo and Sylvia Feigenbaum
6652 North Monticello
Lincolnwood, IL 60712

Jack and Ingrid Smilovitz
4287 Churchill Boulevard
Cleveland, OH 44118
MELODY J. STEWART, P.J.:

      {¶1} This is an appeal from an order compelling a party who had guaranteed

payment of a cognovit note to execute an IRS form to authorize the disclosure of unpaid

withholding taxes owed to the federal government. Because the appellant has failed to

establish that an immediate appeal is necessary to afford a meaningful and effective

remedy, we dismiss the appeal.

      {¶2} In January 2001, plaintiff-appellee Mentor Way Real Estate Partnership

(“MWREP”), the real estate arm of Mentor Way Care Center, entered into a lease

agreement with Mentor Way Nursing and Rehabilitation Center, Inc. (“Mentor Way”) to

operate a nursing home at the MWREP facility. In 2007, MWREP extended the lease

with defendant-appellant Joseph Hertanu, a 20 percent shareholder in Mentor Way,

agreeing to guarantee Mentor Way’s payment of the lease. In August 2014, the Internal

Revenue Service (“IRS”) issued a tax levy against MWREP in the amount of $1.9 million

for withholding taxes predating December 31, 2007. Because Hertanu’s guaranty stated

that he would guarantee all “unpaid wage and other employment-related withholding

taxes existing as of the date of the guaranty,” MWREP demanded that he make good on

the guaranty. When he refused to do so, MWREP considered him in breach of guaranty

and brought suit.

      {¶3} Claiming that the notice of levy might not be sufficient by itself to show the

total amount guaranteed by Hertanu, MWREP served a subpoena on the IRS and asked

for documents that would establish the current total owed by Hertanu. The IRS told
MWREP that it was prohibited by federal law from releasing the information to a third

party, but could divulge the information if Mentor Way filed an IRS Form 8821 to

designate third-party authorization to receive tax information. With Hertanu claiming to

own a 20 percent interest in Mentor Way, MWREP asked him to voluntarily execute the

Form 8821 on behalf of Mentor Way. Hertanu refused, claiming that as of December 31,

2007, he had no ownership interest in Mentor Way.

       {¶4} With Hertanu refusing to cooperate, MWREP filed a Civ.R. 45 motion to

compel Hertanu to execute the Form 8821. MWREP told the court that even though

Hertanu claimed to have sold his interest in Mentor Way at the end of 2007, Mentor Way

tax documents filed in 2010 still listed him as a 20 percent owner of Mentor Way.1 In

opposition to the motion to compel, Hertanu conceded that he is a “minority” owner of

Mentor Way, but argued that he was under no obligation to sign the Form 8821 because

doing so would destroy the confidentiality of tax returns promised under federal tax law.

       {¶5} The court granted the motion to compel, ordering Hertanu to file a Form 8821

and authorize production of documents from the IRS. The court further ordered that

Hertanu’s failure to execute the Form 8821 would result in a Civ.R. 37 sanction in the

form of an evidentiary presumption that Mentor Way’s unpaid withholding totaled

$1,911,660.39 as of December 31, 2007. This appeal followed.


          Prior to ruling on the motion to compel Hertanu to execute the Form 8821, the court entered
       1


default judgments against the remaining shareholders of Mentor Way, defendants Jack and Ingrid
Smilovitz and Leo and Sylvia Feigenbaum. Hertanu maintained that as a minority shareholder, he
did not have the ability to execute the Form 8821, but MWREP claimed that it could not locate those
defendants to have them execute the form.
       {¶6} Prior to oral argument in this case, this court’s administrative judge ordered

Hertanu to show cause why this appeal should not be dismissed for want of a final order

under R.C. 2505.02.        After both parties filed briefs in support of their respective

positions, the administrative judge issued a sua sponte order directing that “the appeal

shall go forward.”

       {¶7} Although prehearing administrative orders relating to the finality of

judgments issued by this court are binding on the parties, they are not binding on panels

hearing the appeal on the merits. See Sup.R. 4.02 (“The judges of a court or a division of

a court, by majority vote, may modify or vacate the actions of the administrative judge of

the court or division.”)2 And when prehearing administrative rulings involve the finality

of appeals, they are subject to additional consideration by the merit panel. See, e.g., State

v. Dotson, 31 Ohio App.3d 200, 200-201, 510 N.E.2d 817 (8th Dist.1987) (recognizing

that while another panel granted leave to appeal, merit panel could find that leave was

improvidently granted because the court of appeals had no jurisdiction to authorize an

appeal from the contested order).

       {¶8} Article IV, Section 3(B)(2) limits appellate jurisdiction to “judgments or final

orders” of the inferior courts. Supportive Solutions, L.L.C. v. Electronic Classroom of

Tomorrow, 137 Ohio St.3d 23, 2013-Ohio-2410, 997 N.E.2d 490, ¶ 10. R.C. 2505.02


          Apart from extraordinary cases in which a court of appeals sits en banc, an appellate panel
       2


consist of three judges. See Section 3(A), Article IV of the Ohio Constitution. For purposes of
Sup.R. 4.02(A), the “court” consists of the three-judge panel assigned to hear the appeal on the
merits.
defines what constitutes a “final” order.         R.C. 2505.02(A)(3) states that an order

compelling discovery of allegedly privileged material is a “provisional remedy.” An

order granting or denying a provisional remedy is final if it “determines the action with

respect to the provisional remedy and prevents a judgment in the action in favor of the

appealing party with respect to the provisional remedy.”           R.C. 2505.02(B)(4)(a).

Further, the order must foreclose “a meaningful or effective remedy by an appeal

following final judgment as to all proceedings, issues, claims, and parties in the action.”

R.C. 2505.02(B)(4)(b).

       {¶9} In Smith v. Chen, 142 Ohio St.3d 411, 2015-Ohio-1480, 31 N.E.3d 633, the

Ohio Supreme Court held that provisional orders are final only if they have the effect of

determining the action with respect to the provisional remedy and the appealing party

would not be afforded a meaningful or effective remedy by an appeal following final

judgments in all proceedings. Id. at ¶ 5. Smith was a medical malpractice action where

the defendant physician was ordered, over work product objections, to produce as

discovery a surveillance video of the plaintiff that the physician intended to use as

impeachment during trial.      The Supreme Court agreed that the order of production

“determined the discovery issue” against the physician, but found that the physician

“never argued, much less established” that a direct appeal following judgment of all

issues in the case would not afford him a meaningful or effective remedy. Id. at ¶ 6.

The failure caused the Supreme Court to find that the court of appeals had no final order,

so it could not reach the merits of the appeal.
      {¶10} An even more analogous case is Walker v. Taco Bell, 1st Dist. Hamilton No.

C-150182, 2016-Ohio-124, where the First District recently considered a very similar

issue involving an order compelling a claimant with a workers’ compensation claim to

sign medical record releases in favor of the Bureau of Workers’ Compensation. On

appeal, the claimant argued that the releases involved privileged material, the knowledge

of which constituted a “bell that could not be unrung.” The court of appeals, citing

Smith, held that the claimant failed to establish that an immediate appeal was necessary to

afford the appellant a meaningful and effective remedy. Id. at ¶ 7.         Rejecting the

“unrung bell” argument, the court of appeals noted that Smith clearly found no merit to

that argument as a basis for showing why an immediate appeal was necessary. Id. at ¶ 8.

 The court of appeals dismissed the appeal for want of a final order. See also Howell v.

Park E. Care & Rehab., 8th Dist. Cuyahoga No. 102111, 2015-Ohio-2403.

      {¶11} Hertanu makes no argument that being ordered to sign the Form 8821 or that

the disclosure of Mentor Way’s tax information would deny him a meaningful and

effective remedy by direct appeal after a final judgment. With regard to the disclosure of

the tax information, Hertanu is asserting confidentiality rights belonging to Mentor Way.

While Hertanu may be a minority shareholder in Mentor Way, he noted in his opposition

to MWREP’s motion to compel that “he has never held any officer or director position

with [Mentor Way.]” Hertanu is named as an individual in the complaint based on his

personal guaranty of Mentor Way’s tax liability, not as an officer or shareholder of

Mentor Way. If there is a claim of confidentiality to be made, it must be made by
Mentor Way, not Hertanu. So even if the “bell cannot be unrung,” it is clear that the bell

is ringing only for Mentor Way, not Hertanu. Because Hertanu cannot show that he is

denied a meaningful and effective remedy by direct appeal after a final judgment, we lack

a final order under R.C. 2505.02(B)(4)(b).

       {¶12} Appeal dismissed.

       It is ordered that appellee recover of said appellants costs herein taxed.

       It is ordered that a special mandate issue out of this court directing the common

pleas court to carry this judgment into execution.

       A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of

the Rules of Appellate Procedure.


______________________________________________
MELODY J. STEWART, PRESIDING JUDGE

SEAN C. GALLAGHER, J., CONCURS;
ANITA LASTER MAYS, J., DISSENTS (WITH SEPARATE OPINION)

ANITA LASTER MAYS, J., DISSENTING:

       {¶13}   I respectfully dissent from the majority’s opinion. Defendant-appellant

Joseph Hertanu (“Hertanu”) has shown that the trial court’s decision does not afford

Hertanu a meaningful and effective remedy following a final judgment and thus the

“proverbial bell has rung.”

       {¶14} I preface this analysis by establishing that, while this is an interlocutory

appeal, the order before us is a final appealable order (“FAO”). The order meets the

requirements of R.C. 2505.02(B)(4) as it is:
       (4) An order that grants or denies a provisional remedy3 and to which both
       of the following apply:

       (a) The order in effect determines the action with respect to the provisional
       remedy and prevents a judgment in the action in favor of the appealing
       party with respect to the provisional remedy.

       (b) The appealing party would not be afforded a meaningful or effective
       remedy by an appeal following a final judgment as to all proceedings,
       issues, claims and parties in the action.

 R.C. 2505.02(B)(4)(a) and (b).

       {¶15} Hertanu contends that the order compels the production of confidential

information. An order compelling the production of allegedly privileged or confidential

information to an opposing party is a final appealable order (“FAO”) pursuant to R.C.

2505.02(B)(4).     Csonka-Cherney v. Arcelormittal Cleveland, Inc., 2014-Ohio-836, 9

N.E.3d 515, ¶ 10 (8th Dist.), citing Pinnix v. Marc Glassman, Inc., d.b.a. Marc’s, 8th

Dist. Cuyahoga Nos. 97998 and 97999, 2012-Ohio-3263, citing Cobb v. Shipman, 11th

Dist. Trumbull No. 2011-T-0049, 2012-Ohio-1676, ¶ 34-35; R.C. 2505.02(A)(3) and

2505.02(B)(4).

       {¶16}     Where an order requires the disclosure of confidential information:

       [I]t determines the action with respect to a provisional remedy and prevents
       a judgment in appellant’s favor with respect to the discovery. Bennett v.
       Martin, 186 Ohio App.3d 412, 2009-Ohio-6195, [928 N.E.2d 763,] ¶ 35
       [(10th Dist.)]. An appeal following a final judgment would not be an

           R.C. 2505.2(A)(3): “‘Provisional remedy’ means a proceeding ancillary to an action,
       3


including, but not limited to, a proceeding for a preliminary injunction, attachment, discovery of
privileged matter, suppression of evidence, a prima-facie showing pursuant to section 2307.85 or
2307.86 of the Revised Code, a prima-facie showing pursuant to section 2307.92 of the Revised Code,
or a finding made pursuant to division (A)(3) of section 2307.93 of the Revised Code.”
       effective remedy for the disclosure of privileged and/or confidential
       information.

Fasteners for Retail, Inc. v. Dejohn, 8th Dist. Cuyahoga No. 100333, 2014-Ohio-1729, ¶

16.

       {¶17} The Ohio Supreme Court recently addressed the finality of                    discovery

orders involving privilege in Smith v. Chen, 142 Ohio St.3d 411, 2015-Ohio-1480, 31

N.E.3d     633,   which     this    court   has    interpreted    to    require    that   to   meet

R.C. 2505.02(B)(4)(b), an appellant must affirmatively establish that the immediate

appeal is required to afford a meaningful and effective remedy beyond asserting that the

“proverbial bell has rung.”        Burnham v. Cleveland Clinic, 8th Dist. Cuyahoga No.

102038, 2015-Ohio-2044, ¶ 13, citing Smith at ¶ 8.4 I agree with Justice Kennedy in her

dissent where she holds that Smith “destabilizes the law” and that “[o]rders compelling

discovery of privileged information have been considered final, appealable orders under

R.C. 2505.02(B)(4) in every district” and listed the controlling decisions in each district.

See Smith at ¶ 14-16.

       {¶18} In this case, in addition to the resounding bell, Hertanu also proffers

additional bases for the ineffectiveness of the remedy such as the potential legal

ramifications by the Smilovitz parties, who arguably possess a right of confidentiality


           Burnham has been accepted for discretionary appeal (144 Ohio St.3d 1425,
       4


2015-Ohio-5225, 42 N.E.3d 762). The case was argued May 4, 2016, and an opinion is pending.
The petitioner’s position is that this court is improperly interpreting the Smith v. Chen decision to
justify dismissal of proper interlocutory appeals of orders requiring the production of privileged
material.
regarding the Mentor Way tax documents, and the question of his unilateral authority to

secure Mentor Way’s confidential tax information for disclosure to appellees. Coupled

with Hertanu’s assertion that, if legally accurate, his asserted authority is based on facts in

dispute, I find that Hertanu has affirmatively established the need for an immediate appeal

pursuant to R.C. 2505.02(B)(4)(b).
