Berry v. Lupica

2011 Ohio 5381, 965 N.E.2d 318, 196 Ohio App. 3d 687
Ohio Court of Appeals·Decided October 18, 2011·No. 95393·Published·Cited by 27 cases

Opinion

ON RECONSIDERATION. 1

Melody J. Stewart, Judge.

{¶ 1} Plaintiff-appellant, Robert Berry, brought suit against his supervisor, defendant-appellee James Lupica, and their employer, defendant-appellee Wacho-via Securities, alleging that Wachovia had breached an agreement to pay the full amount of an arbitration award between Berry and his former employer, Merrill Lynch. Wachovia counterclaimed, alleging that Berry had breached an agreement that he would compensate Wachovia for certain amounts that it advanced to Merrill Lynch in partial satisfaction of Berry’s obligation under the arbitration award. A jury ruled against Berry on all of his claims and ruled in favor of Wachovia on its counterclaim. Berry unsuccessfully filed postjudgment motions seeking a remittitur, a new trial, and judgment notwithstanding the verdict. In this appeal, he offers overlapping arguments that he was neither legally nor factually obligated to repay the amounts that Wachovia advanced to Merrill *691 Lynch and that the jury’s award of damages beyond that specifically requested by Wachovia constituted grounds for a new trial.

I

{¶ 2} Berry worked for Merrill Lynch as a financial advisor before being hired by Wachovia (he was actually hired by First Union Corporation, which was taken over by Wachovia, which in turn was taken over by Wells Fargo, but the parties have agreed to use the name “Wachovia” in this litigation, so we use it too). The terms of Berry’s employment agreement with Merrill Lynch contained a noncom-petition agreement. When Berry started working for Wachovia, Merrill Lynch claimed that he did so in violation of the noncompetition agreement; Berry claimed that Merrill Lynch made defamatory statements about him regarding the violation of the noncompetition agreement. Berry and Merrill Lynch took their dispute to binding arbitration before the National Association of Securities Dealers (“NASD”). An NASD panel ruled in favor of Merrill Lynch on its claims against Berry and awarded it $250,000. The NASD panel also found for Berry on his defamation claim against Merrill Lynch and awarded him $125,000 in damages.

{¶ 3} Wachovia paid Merrill Lynch the $250,000 judgment against Berry. Two days later, Merrill Lynch issued a check to Berry for $125,000. Berry endorsed the Merrill Lynch check and gave it to his Wachovia branch manager with a note saying:

{¶ 4} “As we discussed attached is the award I received from Merrill Lynch. Please place this check on deposit with First Union Corporation to offset the interest due on our contract. The $125,000 is to be returned on demand. Thank you for your consideration and cooperation.”

{¶ 5} The branch manager forwarded the check to the Wachovia legal department, and the check was deposited into a Wachovia account dedicated to legal settlements. Berry later demanded to have the check returned to him, but Wachovia refused to return it.

{¶ 6} Berry brought this action raising a number of claims that collectively accused Wachovia of breaching the agreement to hold Berry’s Merrill Lynch proceeds and produce them on demand. Wachovia counterclaimed, arguing that Berry breached a settlement agreement under which he would set off the $250,000 Wachovia paid to Merrill Lynch by delivering to Wachovia the $125,000 he received from Merrill Lynch — Wachovia would pay the remaining $125,000 of the arbitration award as a courtesy to Berry. It claimed as damages the attorney fees it had expended or would be required to expend in enforcing the settlement.

*692 {¶ 7} At trial, the issue was whether the parties had an agreement that the proceeds from the $125,000 Merrill Lynch award to Berry should be applied as a setoff for the $250,000 that Wachovia paid to Merrill Lynch. Berry claimed that at the time he was hired, Wachovia represented to him not only that it would pay for any legal fees associated with the Merrill Lynch arbitration, but also that it would pay any damage award. Berry also offered testimony that the financial-industry standard was for a current employer to make a transferring broker like Berry whole from any claims asserted by a former employer. Wachovia conceded that it agreed to pay for Berry’s legal defense in the arbitration, but denied that it agreed, prior to the arbitration, to pay any damage award from the arbitration. It presented witnesses who testified that Wachovia and Berry agreed after the arbitration that Wachovia would pay the entire $250,000 Merrill Lynch judgment on the condition that Berry pay over to Wachovia his $125,000. Wachovia thus said it agreed to pay a net total of $125,000, an amount that it had been willing to pay to settle the arbitration.

{¶ 8} The jury found against Berry on all his claims. The jury found in favor of Wachovia on its counterclaim and awarded $432,000 in damages for the attorney fees Wachovia had expended in enforcing the settlement agreement. Berry filed a motion for judgment notwithstanding the verdict and a new trial, arguing that the verdict was against the manifest weight of the evidence because the $432,000 damage award exceeded the $130,000 that Wachovia claimed as damages. The excessive award, Berry argued, showed that the jury’s verdict had been the product of passion or prejudice. Berry also asked the court for remittitur. All postjudgment motions were denied.

II

{¶ 9} Berry argues that the court erred both by failing to direct a verdict and to grant judgment notwithstanding the verdict on Wachovia’s counterclaim because it was barred by the statutes of fraud and limitations.

A

{¶ 10} The court must issue a directed verdict when, “after construing the evidence most strongly in favor of the party against whom the motion is directed, [the court] finds that upon any determinative issue reasonable minds could come to but one conclusion upon the evidence submitted and that conclusion is adverse to such party.” Civ.R. 50(A)(4). This is the same legal standard applied to motions for judgment notwithstanding the verdict, Ayers v. Woodard (1957), 166 Ohio St. 138, 140 N.E.2d 401, and tests the legal sufficiency of the evidence. This is a question of law that does not require the reviewing court to weigh the *693 evidence or test the credibility of witnesses. See Ruta v. Breckenridge-Remy Co. (1982), 69 Ohio St.2d 66, 430 N.E.2d 935.

B

{¶ 11} The statute of frauds is set forth in R.C. 1335.05 and states: “No action shall be brought whereby to charge the defendant, upon a special promise, to answer for the debt, default, or miscarriage of another person; * * * unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged therewith or some other person thereunto by him or her lawfully authorized.”

{¶ 12} As Wachovia notes, its counterclaim was not brought in order to force Berry to pay a debt that he owed to another person — it brought the counterclaim seeking compensation for Berry’s breach of the settlement agreement.

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Berry v. Lupica, 2011 Ohio 5381, 965 N.E.2d 318, 196 Ohio App. 3d 687 (Ohio Ct. App. 2011).

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