Gracetech Inc. v. Perez

2012 Ohio 700
Ohio Court of Appeals·Decided February 23, 2012·No. 96913·Published·Cited by 14 cases

Opinion

Court of Appeals of Ohio

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION No. 96913

GRACETECH INC., ET AL.

PLAINTIFFS-APPELLANTS

vs.

THEODORE A. PEREZ, ET AL.

DEFENDANTS-APPELLEES

JUDGMENT:

AFFIRMED IN PART,

REVERSED IN PART, AND REMANDED

Civil Appeal from the

Cuyahoga County Court of Common Pleas Case No. CV-633275

BEFORE: S. Gallagher, J., Boyle, P.J., and Sweeney, J.

RELEASED AND JOURNALIZED: February 23, 2012

ATTORNEY FOR APPELLANTS

William T. Wuliger The Brownell Building 1340 Sumner Court Cleveland, OH 44115

ATTORNEY FOR APPELLEES

Michael P. Harvey Michael P. Harvey Co., L.P.A. 311 Northcliff Drive Rocky River, OH 44116

SEAN C. GALLAGHER, J.:

{¶1} Plaintiffs-appellants Gracetech, Inc., and Marjie Dorr appeal the final judgment in favor of defendants-appellees Theodore Perez and Precision Security Agency (collectively “appellees”) on appellants’ claims for breach of fiduciary duty, tortious interference with business relations or a contract, conversion, and Ohio trade secrets violations and the judgment in favor of appellants on their breach of contract claim for $2,500. Appellees did not file a cross-appeal. For the following reasons, we affirm in part, reverse in part, and remand the case for further proceedings.

{¶2} John Grace was the sole shareholder of Gracetech, which provided security services solely to Dave’s Supermarket (“Dave’s”) stores in and around Cleveland, Ohio. Grace managed the operations until his untimely death on July 16, 2007. At that time, the shares of Gracetech transferred to Grace’s mother, Dorr. Perez worked for Gracetech since 2000 as an independent contractor providing security services. Perez signed a noncompete agreement with Gracetech that prohibited him from providing security services with Dave’s for a period of one year after terminating his employment with Gracetech. We note that while Perez continually denies that the noncompete agreement is valid, the trial court determined, in the August 15, 2009 journal entry, that it was and that Perez breached the noncompete agreement. Perez did not appeal this determination.

{¶3} On July 17, 2007, Perez and Dorr talked about the future of Gracetech.

Perez indicated that the corporation needed someone to take charge of the daily affairs, including payroll and scheduling, a “go-to person.” According to Perez, he agreed to handle that responsibility and was told by Dorr that “until further notice,” he was in charge of Gracetech’s operations. Perez continually disputed whether his responsibility was that of a manager, but admitted to no limitations on his authority. Perez also stated that he was only in charge of payroll and scheduling, but his testimony consistently flipped back and forth on the issue. See, e.g., Tr. 508:4-14; Tr. 198:12-16 (Perez admitted that he was unequivocally authorized to be in charge of Gracetech). Perez called the state of Ohio sometime between July 17 and 21, 2007, to inform the state licensing agency of Grace’s death. Pursuant to R.C. 4749.03(G), Gracetech had until July 26, 2007, to notify the state, by certified mail, of the fact that Grace was no longer associated with Gracetech. If that occurred, Gracetech had until August 16, 2007, to proffer another individual to be named holder of the license Gracetech needed to operate. Grace was buried on July 21. On July 20, Perez began filing the appropriate applications to start Precision Security Agency (“Precision”) with the intent to provide security services to Dave’s.

{¶4} Perez began providing security services to Dave’s on August 12, 2007, although he was not licensed to provide security services until August 28. Sometime prior to August 12, Perez also told the co-owner of Dave’s that Gracetech was not meeting the deadlines to maintain the appropriate licensing and that the new shareholder, Dorr, was not communicating with Perez. Perez talked with Gracetech’s security personnel and told them that Dave’s Supermarket was ceasing its business with Gracetech and would be transferring its business to Perez’s newly formed Precision. Gracetech’s security personnel all joined Precision for the August 12, 2007 operations. On August 20, 2007, appellants filed a complaint1 and request for injunctive relief to enforce the noncompete agreement. The trial court never held a hearing on the injunctive relief issue, despite holding that the noncompete agreement was enforceable against and breached by Perez.

{¶5} Despite several procedural missteps by both parties, trial commenced on appellants’ claims against appellees for their tortious interference with business relations between Gracetech and Dave’s, tortious interference with noncompete agreements between Gracetech and its employees, conversion of Gracetech’s assets, and Ohio trade secrets violations. Prior to trial, the trial court allowed appellants to also assert a claim

1

Appellants also asserted causes of action that were all disposed of prior to trial against Gracetech’s former security personnel and another Precision employee. No party appealed the various dispositions. The only parties at trial, therefore, were appellants, Perez, and Precision. The trial court’s November 23, 2011 nunc pro tunc entry that corrected the judgment entered upon the jury verdict to reflect both plaintiffs, therefore, disposed of all claims that were heard and submitted at trial and for breach of fiduciary duty against Perez at trial. Appellees have not appealed this decision either. Appellants submitted the issue of damages on their breach of contract claim against Perez, referring to the noncompete agreement, despite the fact the trial court awarded appellants $2,500 in damages based on a liquidated damages clause within the noncompete agreement.

{¶6} The trial court instructed the jury and provided verdict forms for all claims except the breach of contract. On that issue, the trial court instructed the jury that the noncompete agreement was enforceable and was breached by Perez. The court then told the jury that if they chose to award damages on the breach of contract, to put the damages on the general damage form despite no correlating breach of contract verdict form. After deliberating, the jury returned a verdict finding no liability on behalf of appellees for all claims and left the damages verdict form blank. Upon the arguments of the parties, the trial court told the jury to re-deliberate on the contract damages issue and fill in the appropriate amount of damages. The trial court did not give any instruction as to the appropriate measure of damages on the breach of contract claim. The jury came back and awarded $2,500 in favor of appellants on the breach of contract claim. The trial court entered judgment accordingly based on the verdict, having denied the motions for judgment notwithstanding the verdict. The trial court also denied appellants’ motion for a new trial.

constituted the final order of the trial court.

{¶7} It is from this decision that appellants appeal, raising four assignments of error, which provide as follows:

I. The trial court committed reversible error by failing to grant summary judgment for appellant Gracetech on its claims for tortious interference with a business relationship, and conversion.

II. The trial court committed reversible error by failing to grant a directed verdict for appellant Gracetech on its claims for tortious interference with a contract, tortious interference with a relationship, and breach of fiduciary duty.

III. The trial court committed reversible error by sua sponte awarding damages on the breach of contract claim in the amount of $2,500.

IV. The trial court committed reversible error by denying appellant’s motion for judgment notwithstanding the verdict/motion for new trial.

For the sake of simplicity, we will address appellants’ first, second, and fourth assignments of error together before addressing their third assignment of error.

{¶8} Before addressing the merits of the appeal, we must discuss appellees’

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