Figetakis v. Smith, Unpublished Decision (3-4-1998)

CourtOhio Court of Appeals
DecidedMarch 4, 1998
DocketC.A. No. 18393.
StatusUnpublished

This text of Figetakis v. Smith, Unpublished Decision (3-4-1998) (Figetakis v. Smith, Unpublished Decision (3-4-1998)) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Figetakis v. Smith, Unpublished Decision (3-4-1998), (Ohio Ct. App. 1998).

Opinion

DECISION AND JOURNAL ENTRY
This cause was heard upon the record in the trial court. Each error assigned has been reviewed and the following disposition is made: Nicholas Figetakis appeals from an order of the Summit County Court of Common Pleas granting summary judgment for D. Lawrence Smith, Jr. ("Smith"), Smith's wife Demetra, 1964, Inc., an Ohio corporation in which Smith is the sole officer, Constance Hesske, Jerome L. Holub, and Alice L. Honeycutt. We affirm in part and reverse in part.

In 1991, Figetakis gave Smith a check payable to 1964, Inc. in the amount of $30,000. The money was intended to be used, and was used, to pay part of the $145,000 purchase price of The Great Steak and Potato Company franchise located at Chapel Hill Mall in Akron (the "business"). Smith provided $70,000-$75,000 of the purchase price. The remainder was financed.

The parties disagree on the characterization of Figetakis's $30,000 contribution. Figetakis believes he became Smith's business partner as the result of his contribution and claims he was to receive 25 percent of the net profits of the business in exchange for his investment. Smith characterizes Figetakis's contribution as a loan but admits that he agreed to pay Figetakis 25 percent of whatever amounts Smith withdrew from the business account for personal use. Smith made no percentage payments directly to Figetakis between 1991 and 1994 but claims that he periodically deposited percentage payments for Figetakis's benefit into a separate interest-bearing account held in the name of 1964, Inc. The parties opened that account in 1992 with a deposit by Figetakis of personal funds in the amount of $27,000.

For the first three years of their business arrangement, the parties executed nothing in writing to memorialize their understanding. Neither Smith nor 1964, Inc. returned any of Figetakis's capital to him nor did the defendants make any payments of interest to Figetakis. In 1995, according to Figetakis, Smith expressed concern that, in the event of Smith's death, Figetakis would have nothing to evidence Smith's $30,000 debt to him. Smith then asked Hesske, an attorney, to draft an agreement relative to the $30,000.

On December 15, 1994, Hesske presented a one-page agreement to Figetakis and to Smith. That agreement provides:

1. Nicholas Figetakis does agree to loan to D. Lawrence Smith the sum of Thirty Thousand Dollars ($30,000) at -0-% interest.

2. D. Lawrence Smith is under no restrictions by Nicholas Figetakis as to how the money is to be used.

3. This Agreement sets forth that repayment of this loan is to be in monthly installments of five hundred dollars ($500.00) per month over a period of five (5) years.

4. Installment payments will commence on January 1, 2000.

The Parties by this Agreement are bound to perform as set forth in this Agreement. Any lack of performance by either part[y] will be considered a Breach of this Agreement.

Figetakis and Smith signed the agreement, although Figetakis maintains that the zero-interest amount was not inserted until after he signed. Hesske and Holub signed the agreement as witnesses. Honeycutt attested as notary public.

Nearly four weeks after signing the agreement, Smith sent Figetakis a letter, notifying him of Smith's intention, effective January 15, 1995, to "terminate our informal business agreement" and advising that "[a]ll business profits will be distributed to the both of us using the agreed upon formula prior to the 15th." The letter also stated that any amounts sent to Figetakis by Smith after January 15, 1995, would be a "partial or full return of your original $30,000 investment."

Smith then sent a letter to Hesske, enclosing a check in the amount of $44,120.42 payable to Figetakis, and advising that the amount represented a return of Figetakis's $27,000 and Figetakis's "share of money and profits from the business." Smith also stated that he would provide a timetable for the return of Figetakis's original $30,000 investment.

Figetakis brought an action against Smith, Smith's wife Demetra, and 1964, Inc. (collectively, the "defendants") for an accounting and breach of contract, alleging that his oral agreement with the defendants entitled him to continue receiving 25 percent of the business profits. Figetakis also alleged that the Smiths conspired against him and breached a fiduciary duty to him.

Figetakis also brought an action against Hesske, alleging that her representation of both the defendants and him created a conflict of interest and that she conspired with the defendants by drafting an agreement that characterized his investment in the business as a loan. Figetakis also named as defendants Jerome L. Holub, claiming that Hesske committed her misdeeds during the course of her employment with Holub, and Honeycutt, a Holub employee, claiming that she notarized the agreement although she had not been present when he and the defendants signed it. Figetakis attached an affidavit to his complaint, acknowledging that he had signed the agreement but that only the defendants and Hesske had been present at execution.

The defendants moved to dismiss and for summary judgment, arguing that: (1) recovery by Figetakis under the oral agreement was barred by the statute of frauds; (2) only the written agreement between the parties was valid; (3) defendants had not breached the written agreement because they were not required to begin making payments until January 1, 2000; and (4) Figetakis could not claim that the written agreement was void on the basis of his lack of capacity because he admitted during his deposition that he understood the meaning of its terms.

Hesske, Holub, and Honeycutt also moved for summary judgment, arguing that: (1) Hesske, as shown by her affidavit, prepared the loan agreement at the request of both Figetakis and Smith; (2) despite having questions about the agreement, Figetakis admitted that he chose not to ask those questions and signed the agreement voluntarily; (3) the only evidence on the issue of whether Hesske was operating in the course of her employment for Holub when she prepared the agreement was Hesske's affidavit in which she averred that she had prepared a will for Figetakis and had handled one matter for another of Smith's companies but that she had never worked for 1964, Inc. and that neither Figetakis nor Smith had ever been a client of Holub; and (4) because Figetakis admitted that he signed the loan agreement, Honeycutt's signature on the agreement was irrelevant.

In response to the motions for summary judgment, Figetakis referred to several sections of Smith's deposition and to the exhibits discussed during that deposition.

The trial court granted summary judgment for the defendants, finding that the contract action against the Smiths and 1964, Inc. was not barred by the statute of frauds but that the only performance required by the defendants was repayment of the $30,000 which was not to begin until the year 2000. The trial court also granted summary judgment for Hesske, Holub, and Honeycutt, finding that: (1) the only evidence regarding whether Hesske was working in an employer-employee relationship with Holub when she drafted the agreement was Hesske's affidavit which said she was not; (2) there was no evidence that Hesske committed malpractice or engaged in a conspiracy in drafting the agreement for Figetakis and Smith; and (3) Honeycutt's signature on the document was irrelevant to the causes of action brought by Figetakis.

Figetakis has appealed, asserting three assignments of error.

I.
THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT IN FAVOR OF D. LAWRENCE SMITH JR., DEMETRA C.

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Bluebook (online)
Figetakis v. Smith, Unpublished Decision (3-4-1998), Counsel Stack Legal Research, https://law.counselstack.com/opinion/figetakis-v-smith-unpublished-decision-3-4-1998-ohioctapp-1998.