Joseph sibling sues over control of auto group – Cincinnati.com
A Union, Kentucky, woman has sued her oldest sibling, Joseph Auto Group CEO Ron Joseph, claiming he has been working for many years to consolidate ownership of the family’s automobile dealerships and real estate holdings at the expense of his six siblings.
In a lawsuit filed last Tuesday in U.S. District Court in Cincinnati, Marie Joseph, 64, accuses Ron Joseph of breaching his duty to minority shareholders. She is demanding compensatory and punitive damages and the opportunity to review financial reports.
“Ron Joseph was placed in a fiduciary position where he owed a high level of trust to his siblings, and part of that trust was to run the business that they all owned, not just him,” said Marie Joseph’s attorney Kevin Murphy, who leads his own Lakeside Park-based law practice. “He violated that trust by taking corporate opportunities that were supposed to go to the business and took them for himself and his family to the detriment of Marie.”
An attorney representing Ron Joseph, 79, said he is aware of the lawsuit.
“We intend to defend it and we will respond accordingly,” attorney Jim Frooman of Frost Brown Todd said.
In less than a week, the case has already bounced around the dockets of two federal judges, including Judge William Bertlesman, who requested recusal from the matter. A third judge, Judge Timothy Black, is now presiding over the case.
Family auto sales business founded in 1938
George J. Joseph, the siblings’ father, founded Columbia Oldsmobile Co. in 1938 and led the Cincinnati-based company until his death in 1966. Ron Joseph has led the company in the half-century since.
The single-brand dealership grew to become Joseph Auto Group, which sells vehicles under 16 nameplates at 19 dealerships in Greater Cincinnati, Dayton and Columbus. Columbia also has extensive real-estate holdings including the former Chiquita Center now known as Columbia Plaza; several parking lots around Downtown Cincinnati; and the Dennison Hotel.
The vacant hotel’s fate has riled historic preservation advocates: Columbia has proposed razing the 124-year-old building for an office tower.
Marie Joseph’s lawsuit alleges Ron Joseph took advantage of his mother and his siblings in the business decisions he made.
George Joseph had gifted his ownership interest in the company to his seven children – Marie, Michael, Renee, Robert, Ron, Shirley and Teresa, according to the lawsuit. When he died, his wife Najla Joseph also inherited shares plus a trust designed to provide income to the children and her.
The lawsuit claims Najla Joseph’s estate plan created a share distribution strategy that would have made each child an equal owner in Columbia. It alleges Ron Joseph used various corporate maneuvers to prevent Columbia from distributing any income to Najla for more than a decade, leaving her “cash poor” in the words of the legal filing.
Najla Joseph died in 2012. Ron Joseph was able to buy her shares at a discount and deprive his siblings of larger ownership stakes, the lawsuit states.
Ron Joseph’s ownership of Columbia shares rose from 13 percent in 2000 to more than 30 percent by 2012, the lawsuit estimates.
No other siblings have joined youngest sibling Marie’s lawsuit. Her attorney, Murphy, said he doesn’t know if any will.
Brother’s firm had filed eviction case against younger sister
The federal lawsuit is not the first legal action involving Marie and Ron Joseph.
Pineridge LLC, an entity controlled by Ron Joseph and his wife Marcia, filed a lawsuit in Hamilton County Municipal Court last year to evict Marie Joseph and her son Derek from a Mount Lookout home it planned to sell. The lawsuit claimed she’d rebuffed requests to leave since summer 2014. The home is located one block from where Ron and Marcia Joseph live.
Marie Joseph, formerly Marie Housteau, began living in the home on Pineridge Avenue in 1994, according to the eviction lawsuit. She moved in two years after making a filing in U.S. Bankruptcy Court over her debts, records show.
In a response to her brother’s lawsuit, Marie Joseph claimed she had a right to stay because her mother Najla Joseph had negotiated for Columbia to purchase the home on her behalf. She said she needed a place to stay with her three children because of the activities of her ex-husband Thomas Housteau, who would later be convicted and sentenced to prison in connection with fraudulent commercial activities.
Marie Joseph ended a challenge to the eviction a week ago, the same date the lawsuit was filed in federal court.
Her lawsuit lists her residence as a home in Union.