Gallagher v. Cochran

2024 Ohio 3403
CourtOhio Court of Appeals
DecidedSeptember 5, 2024
Docket113554
StatusPublished

This text of 2024 Ohio 3403 (Gallagher v. Cochran) 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
Gallagher v. Cochran, 2024 Ohio 3403 (Ohio Ct. App. 2024).

Opinion

[Cite as Gallagher v. Cochran, 2024-Ohio-3403.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

WILLIAM J. GALLAGHER, :

Plaintiff-Appellant, : No. 113554 v. :

EDWARD W. COCHRAN, ET AL., :

Defendants-Appellees. :

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED RELEASED AND JOURNALIZED: September 5, 2024

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-18-908626

Appearances:

Brian J. Halligan, for appellant.

Koehler Fitzgerald LLC and Christine M. Cooper, for appellees.

FRANK DANIEL CELEBREZZE, III, J.:

Appellant William J. Gallagher (“Gallagher”) challenges the judgment

of the Cuyahoga County Court of Common Pleas striking his jury demand, limiting

his potential remedy to specific performance, and dismissing his claims against

Edward W. Cochran (“Cochran”) and Cleveland Plating LLC (“Cleveland Plating”) (collectively “appellees”) under Civ.R. 41(B)(2). After a thorough review of the

applicable law and facts, we affirm the judgment of the trial court.

I. Factual and Procedural History

The substantive facts of this case were summarized by this court in a

prior appeal as follows:

This case concerns Gallagher’s attempt to recoup over $500,000 dollars, money that he loaned to Barker Products Company (“Barker Products”) while he was employed there. Barker Products was an electroplating company that provided national services. Cochran is a business investor who purchased the assets of Barker Products and formed Cleveland Plating. Gallagher alleges that Cochran offered him employment and an equity stake with Cleveland Plating so that he could be repaid over time. Cochran alleges that he made no such agreement and that Cleveland Plating did not inherit the liabilities of Barker Products.

...

After resigning from Ashland University as its Track & Field coach in 2005, Gallagher joined Barker Products at the behest of his friend Benjamin Dagley, (“Dagley”). Gallagher had no previous business experience, having worked as the head coach at Ashland for twenty-five years. Despite that, Dagley, who was an athlete at Ashland, wanted to bring Gallagher in to perform managerial tasks. Gallagher began work as a general manager implementing various procedures and performing administrative tasks for the company.

In 2007, Barker Products began to experience severe financial problems. Dagley had wholly leveraged Barker Products with Chase Bank, its secured lender, and Barker Products was in need of capital to address its financial concerns. Gallagher, at Dagley’s request, loaned Barker Products over $400,000 over a period of years. He has not been repaid and as of 2014, the interest on his loans in addition to the principal equaled $511,850.

Sometime in early 2014, Barker Product’s accountant, Brian Mackert (“Mackert”) reached out to Dagley and Gallagher informing them that he knew of a potential investor, Cochran, with whom Mackert had worked previously. Cochran was an experienced business person who had success purchasing failing companies. According to Dagley’s affidavit, Mackert had introduced Cochran to Dagley in 2007; Mackert informed Dagley that Cochran had made millions from various deals in which Mackert had assisted Cochran.

On behalf of Cochran, Mackert invited Gallagher and two other Barker Products employees, Elba and Diane Wade, to meet Cochran at Cochran’s house on September 9, 2014. Dagley was not invited. At the meeting, Cochran questioned Gallagher and the Wades about Barker Products, and specifically asked about Gallagher’s debt. According to Gallagher, Cochran told the group that he was interested in purchasing or investing in the company. Cochran asserts in his affidavit that no contract was made and that he only listened to what the group had to say. In fact, Cochran alleges that it was Gallagher and the Wades who led the discussion.

Following the meeting on September 9, 2014, Cochran asked Mackert to schedule another meeting for the next day, September 10, 2014. At Cochran’s behest, Mackert invited Gallagher, the Wades, and Dagley to meet with Cochran at Crop Bistro, Cochran’s Ohio City Restaurant.

At this meeting, Cochran asked more questions of the group and, according to Gallagher, Cochran indicated that he had decided to purchase or invest in the company. Cochran told the group that he was going to invest in Barker and that the management team would keep their jobs there. He stated that he wanted 60% equity in the company and that the remaining 40% would be divided up however the Barker Products team wanted. Cochran allegedly asked Gallagher to negotiate with Barker Products suppliers to try and secure a reduction in debt and better credit terms in advance of new ownership. Cochran left the team to figure out the equity terms, which Mackert would memorialize and pass on to Cochran.

Cochran disputes that he was the one making proposals and requesting Gallagher’s assistance; Cochran alleges that, much like at the September 9th meeting, he merely listened to what the Barker Products team had to say. He states that he received an equity ownership proposal from the group after the meeting, but that it was the Barker Products team who proposed it. However, in his deposition, he references being involved in the equity discussion, though he stated it was a hypothetical. The Barker team clearly took the discussions with Cochran seriously as they worked with Mackert to prepare a proposal for Cochran’s review.

On September 10, 2014, Gallagher initially asked to be treated as a debtholder rather than have an equity share. The Wades, Dagley, and Mackert agreed to his request. However, after Mackert passed this along to Cochran, Cochran rejected that idea and allegedly told Mackert that Gallagher would have to recoup his debt through an equity share. Mackert shared this information with Gallagher.

On September 11, 2014, Gallagher spoke with Dagley and the Wades and they agreed that Gallagher would own 33.45% of the company through an equity share, the Wades 6.55% and Dagley zero, consistent with their individual debt with the company. Gallagher shared this plan with Mackert, who stated he would pass it along to Cochran. Mackert told Gallagher that Cochran would agree to this plan because Cochran merely wanted his 60% share and did not care how the other 40% was divided.

On September 22, 2014, Mackert and Cochran submitted a letter to Chase Bank. The letter stated in part: “Pursuant to a re-organization and or [sic] restructuring of Barker Products Inc. I, Edward Cochran, would like to extend the following offer . . . .” In the letter, Cochran offered to satisfy the current debt of Barker Products, as well as satisfy the mortgage. Cochran asked Dagley to sign the letter to give the offer some legitimacy; Dagley complied, believing that he was to be part of the Barker Products team moving forward. Chase Bank did not accept the offer, however.

On the same day that Cochran was attempting to purchase Barker Products directly from Chase Bank without involving Gallagher or the Wades, Gallagher received a phone call from Mackert. Mackert told Gallagher that that Barker Products had an overdue bill with The Illuminating Company and that the electrical company had threatened to shut off the electricity unless $10,000 was immediately paid. Mackert asked that Gallagher help out the company. Elba Wade, the production manager, also called Gallagher asking him to make the payment. Gallagher wrote the check, and Wade drove to his house to pick it up. Gallagher made this payment assuming he would be paid back by his employer. However, Gallagher has not been paid by Barker Products since September 10, 2014, and he has not received another paycheck from the company.

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Bluebook (online)
2024 Ohio 3403, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gallagher-v-cochran-ohioctapp-2024.