Chattree v. Chattree

2011 Ohio 1925

• Court: Ohio Court of Appeals
• Decided: April 21, 2011
• Docket: 95051
• Status: Published

Opinion

[Cite as Chattree v. Chattree, 2011-Ohio-1925.]

Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION No. 95051

ARUN K. CHATTREE

PLAINTIFF-APPELLEE

vs.

RITU CHATTREE DEFENDANT-APPELLANT

JUDGMENT: AFFIRMED

Civil Appeal from the Cuyahoga County Common Pleas Court Case No. CV-696460 2

BEFORE: Boyle, J., Blackmon, P.J., and Cooney, J.

RELEASED AND JOURNALIZED: April 21, 2011

FOR APPELLANT

Ritu Chattree, Pro Se 61 Jane Street Apartment 14-B New York, New York 10014

ATTORNEYS FOR APPELLEE

Lisa Pierce Reisz Vorys, Sater, Seymour and Pease LLP 52 East Gay Street P.O. Box 1008 Columbus, Ohio 43216-1008

Heather M. Lutz Vorys, Sater, Seymour and Pease LLP 2100 One Cleveland Center 1375 East Ninth Street Cleveland, Ohio 44114-1724

MARY J. BOYLE, J.:

{¶ 1} Defendant-appellant, Ritu Chattree, appeals the trial court’s grant of directed

verdict in favor of her father, plaintiff-appellee, Arun Chattree, on his single claim for breach

of contract. We affirm.

Procedural History and Facts 3

{¶ 2} In June 2009, Arun refiled the underlying action against his daughter, Ritu,

seeking to collect under a cognovit promissory note signed by Ritu. Arun alleged that, on

September 19, 2005, Ritu executed a cognovit promissory note in the principal amount of

$187,000 with interest at two percent over prime. Arun further alleged that Ritu has failed to

satisfy her obligations under the note, despite his demand for payment.

{¶ 3} Ritu answered the complaint, admitting that she signed the note but stating that

she did so under duress. Ritu further asserted several defenses, including that Arun’s claim

was barred by the doctrine of res judicata and the doctrine of economic duress. Specifically,

Ritu argued that Arun’s claim should have been brought in the federal case that he filed on

August 22, 2008, which involved the same cooperative apartment at issue in the instant case,

namely, the 61 Jane Street property.

{¶ 4} This case proceeded to a jury trial where the evidence revealed that Arun

assisted Ritu in purchasing the 61 Jane Street property, a cooperative apartment in New York

City. Specifically, Arun gave Ritu $450,000 in cash and later co-signed an $843,750

mortgage loan for the purchase of the apartment. Ritu subsequently asked for additional

money to cover the costs of renovations needed for the apartment, which exceeded her original

budget. Arun agreed to loan Ritu the money provided that she first execute a promissory

cognovit note for the full amount of the loan, which was $187,000 plus interest. 4

{¶ 5} Ritu testified that Arun did not force her to sign the note but that she was very

surprised that her father would want her to sign it; she believed that he was going to assist her

with all the renovations. She further testified that she later presented the note to her attorney

and that her attorney witnessed her signing the note in September 2005. Ritu also

acknowledged that she understood that she would have to pay back the amount of money

subject to the promissory cognovit note but “just never dreamt [she] would have to pay it three

months after [she] moved in [and] in one lump sum.” Arun made a demand of repayment on

July 6, 2006, and Ritu admitted that she has not repaid any of the loan.

{¶ 6} At the close of evidence, the trial court granted Arun’s motion for directed

verdict, finding that Arun established all of the elements on his breach of contract claim,

thereby awarding him $187,000 plus interest at two percent above prime. The trial court

further held that Ritu failed to establish the three- prong test of economic duress to excuse her

nonperformance and that Arun’s claim was not barred by the doctrine of res judicata.

{¶ 7} Ritu appeals this decision, raising the following four assignments of error:

{¶ 8} “[I.] A directed verdict could not have been entered because reasonable minds

could have come to more than one conclusion based upon the evidence.

{¶ 9} “[II.] Genuine issues of material fact exist on the validity of the note to support

appellant’s contention that a directed verdict is barred. 5

{¶ 10} “[III.] Appellant has meritorious defenses such that the cognovit note is invalid

and judgment should be vacated.

{¶ 11} “[IV.] A directed verdict is barred as a matter of law under the doctrine of res

judicata.”

Directed Verdict

{¶ 12} In her first three assignments of error, Ritu argues that the trial court erred in

granting a directed verdict in favor of Arun. We disagree.

{¶ 13} We review a trial court’s decision regarding a motion for directed verdict de

novo. Schafer v. RMS Realty (2000), 138 Ohio App.3d 244, 257, 741 N.E.2d 155. Civ.R.

50 sets forth the standard of granting a motion for directed verdict:

{¶ 14} “When a motion for directed verdict has been properly made, and the trial

court, after construing the evidence most strongly in favor of the party against whom the

motion is directed, finds that upon any determinative issue reasonable minds could come to

but one conclusion upon the evidence submitted and that conclusion is adverse to each party,

the court shall sustain the motion and direct a verdict for the moving party as to that issue.”

{¶ 15} In setting forth the standard for a directed verdict, the Ohio Supreme Court has

recognized: “it is well established that the court must neither consider the weight of the

evidence nor the credibility of the witnesses in disposing of a directed verdict motion. * * *

Thus, if there is substantial competent evidence to support the party against whom the motion 6

is made, upon which evidence reasonable minds might reach different conclusions, the motion

must be denied.” (Internal quotations and citations omitted.) Wagner v. Roche

Laboratories, 77 Ohio St.3d 116, 121, 1996-Ohio-85, 671 N.E.2d 252. However, when the

party opposing the motion has failed to produce any evidence on one or more of the essential

elements of a claim, a directed verdict is appropriate. Hargrove v. Tanner (1990), 66 Ohio

App.3d 693, 586 N.E.2d 141.

{¶ 16} Ritu argues in her first assignment of error that a directed verdict should not

have been granted because genuine issues of material fact exist as to the validity of the

underlying cognovit promissory note. Specifically, she contends that the previous federal

action between her and Arun, whereby her father was granted injunctive relief and recognized

as a “beneficial owner” of the apartment, materially altered the terms of the note. She further

argues in her second and third assignments of error that her lack of residency in Ohio renders

the note invalid and that the trial court failed to consider that she had a meritorious defense

against the enforcement of the cognovit note, namely, that the cognovit note was not properly

executed in accordance with R.C. 2323.13(A).

{¶ 17} Initially, we note that Ritu does not dispute that Arun presented sufficient

evidence to satisfy all of the elements on his breach of contract claim. Instead, she raises

arguments attacking the validity of the note under Ohio law. Ritu, however, never raised

these arguments below. She has therefore waived all but plain error on appeal. See Peffer 7

v. Cleveland Clinic Found., 8th Dist. No. 94356, 2011-Ohio-450. And we find that these

arguments fail to demonstrate any error, let alone plain error.

{¶ 18} First, contrary to Ritu’s assertion, we find no basis to conclude that the material

terms of the note were altered, thereby excusing Ritu’s obligation to repay the loan. Second,

Ritu’s reliance on R.C. 2323.13 as grounds to excuse her obligation under the note is

misplaced. This statute deals with the confession of judgment pursuant to a cognovit note

and warrant of attorney provision. But Arun never sought to enforce the cognovit provisions

of the note. Indeed, there was never a confession of judgment entered. Instead, Ritu was

given the opportunity to defend herself on Arun’s breach of contract claim, and this matter

proceeded on the merits to a jury trial. See Precision Seed Co., Inc. v. Ebony Fuel, Inc., 10th

Dist. No. 04AP-46, 2005-Ohio-752, ¶11 (recognizing that “the holder of a cognovit note may

proceed in a conventional action upon the note, without resort to confession of judgment under

the warrant of attorney, in any court of competent jurisdiction”).

{¶ 19} Our review of the record reveals that the trial court properly granted a directed

verdict on Arun’s breach of contract claim. To prevail on his claim, Arun had to demonstrate

the following elements: (1) the existence of a contract; (2) his performance under the contract;

(3) breach by Ritu; and (4) damages he sustained. See Jarupan v. Hanna, 173 Ohio App.3d

284, 2007-Ohio-5081, 878 N.E.2d 66, ¶18. The record conclusively demonstrates that Arun

loaned Ritu $187,000 consistent with the terms of the promissory note and that Ritu has failed 8

to repay the loan despite Arun’s demand. Although Ritu asserted an economic distress

defense at trial, she has abandoned that on appeal. We find that reasonable minds could only

reach one conclusion and that such conclusion is consistent with the trial court’s judgment.

{¶ 20} Finally, to the extent that Ritu raises an issue with the trial court’s compliance

with Civ.R. 50(E), we find no error. Civ.R. 50(E) states that “[w]hen in a jury trial a court

directs a verdict * * *, the court shall state the basis for its decision in writing prior to or

simultaneous with the entry of judgment. Such statement may be dictated into the record or

included in the entry of judgment.” Our review of the record reveals that, consistent with

Civ.R. 50(E), the trial court stated the basis for its decision in writing, which was

memorialized in the judgment entry.

{¶ 21} The first three assignments of error are overruled.

Res Judicata

{¶ 22} In her final assignment of error, Ritu argues that the trial court erred in failing

to grant her motion for summary judgment or motion for directed verdict on the grounds that

Arun’s claim was barred by the doctrine of res judicata. She contends that Arun should have

brought his claim for breach of the promissory note in his federal action because they both

involved the acquisition and renovation of the very same cooperative apartment. We find her

argument unpersuasive. 9

{¶ 23} In Grava v. Parkman Twp., 73 Ohio St.3d 379, 381, 1995-Ohio-331, 653

N.E.2d 226, the Ohio Supreme Court set forth the standard for res judicata of a claim as

follows: “[A] valid, final judgment rendered upon the merits bars all subsequent actions based

upon any claim arising out of the same transaction or occurrence that was the subject matter of

a previous action.” Id. at 382. Relying on federal law, the Ohio Supreme Court has

identified four elements necessary to bar a claim under the doctrine of res judicata: (1) there is

a final, valid decision on the merits by a court of competent jurisdiction; (2) the second action

involves the same parties or their privies as the first; (3) the second action raises claims that

were or could have been litigated in the first action; and (4) the second action arises out of the

transaction or occurrence that was the subject matter of the previous action. Portage Cty. Bd.

of Commrs. v. Akron, 109 Ohio St.3d 106, 2006-Ohio-954, 846 N.E.2d 478, at ¶84, citing

Hapgood v. Warren (C.A.6, 1997), 127 F.3d 490, 493.

{¶ 24} The sole issue is whether Arun’s claim to recover on the promissory note

asserted in the underlying action arose from the same transaction or series of connected

transactions out of which his 2008 federal court action arose. As to this issue, the Ohio

Supreme Court has observed that a “transaction” is a “common nucleus of operative facts.”

Grava at 382, quoting 1 Restatement of the Law 2d, Judgments (1982), Section 24, Comment

b. And while the common nucleus of operative facts requirement is not avoided by seeking a

different remedy in the subsequent action or by presenting grounds or theories of the case not 10

presented in the first, the same facts, however, must be at issue in the two actions. Miami

Valley Hosp. v. Purvis, 2d Dist. No. 21740, 2007-Ohio-4721, ¶15, citing Brown v. Dayton,

89 Ohio St.3d 245, 2000-Ohio-148, 730 N.E.2d 958; see, also, Truax v. Em Industries, Inc.

(1995), 107 Ohio App.3d 210, 668 N.E.2d 524 (despite employee’s claims arising out of her

employment, court found that the employee’s earlier arbitration did not bar employee’s

subsequent unlawful retaliation suit because they did not involve the same transaction or

occurrence).

{¶ 25} We find that the trial court properly determined that res judicata does not apply

in this case. Here, the federal court action relates to the titling of the 61 Jane Street property

and Ritu’s actions in excluding Arun’s name on the title prior to purchasing and closing on the

property in May 2005. Specifically, in the federal action, Arun asserted claims for breach of

fiduciary duty, fraud, and breach of contract, seeking damages and an order of specific

performance reforming the title to add his name to the 61 Jane Street property. The facts

relevant to Arun’s claim in the federal action, however, occurred on or before the May 31,

2005 closing date. Conversely, the underlying action relates to the execution of a promissory

note on September 19, 2005, almost four months after the closing and titling of the 61 Jane

Street property. Further, the evidence and facts relevant to Arun’s claim on the promissory

note are separate and distinct from his claims relating to the title of the property and Ritu’s

actions in deceiving him on his investment in the apartment. 11

{¶ 26} Accordingly, the fourth assignment of error is overruled.

Judgment affirmed.

It is ordered that appellee recover from appellant costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to said 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.

MARY J. BOYLE, JUDGE

PATRICIA ANN BLACKMON, P.J., and COLLEEN CONWAY COONEY, J., CONCUR