Kavalec v. Ohio Express, Inc.

2016 Ohio 5925
Ohio Court of Appeals·Decided September 22, 2016·No. 103410·Published·Cited by 8 cases

Opinion

Court of Appeals of Ohio

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION No. 103410

STEVEN J. KAVALEC, ET AL.

PLAINTIFFS-APPELLEES

vs.

OHIO EXPRESS, INC., ET AL.

DEFENDANTS-APPELLANTS

JUDGMENT:

AFFIRMED IN PART;

REVERSED IN PART; AND REMANDED

Civil Appeal from the

Cuyahoga County Court of Common Pleas Case No. CV-13-804289

BEFORE: E.A. Gallagher, P.J., E.T. Gallagher, J., and Celebrezze, J.

RELEASED AND JOURNALIZED: September 22, 2016

ATTORNEY FOR APPELLANT

Andrea L. Burdell-Ware The ABW Law Firm 420 North Court Street Medina, Ohio 44256

ATTORNEYS FOR APPELLEE

Daniel L. Powell Mark V. Guidetti Joseph W. Diemert Joseph W. Diemert & Associates 1360 Som Center Road Cleveland, Ohio 44124

Chance Douglas W. Andrew Hoffman Hoffman Legal Group L.L.C. 24100 Chagrin Blvd. Suite 280 Cleveland, Ohio 44122

FOR PHOENIX RISING TRANSPORTATION L.L.C.

Alanna B. Klein 17325 Euclid Ave. Suite 3021 Cleveland, Ohio 44112

EILEEN A. GALLAGHER, P.J.:

{¶1} Defendant-appellant Robert Kavalec appeals from the judgments entered against him in the Cuyahoga County Court of Common Pleas on plaintiff-appellees William Kavalec, Stuart Kavalec and Steven Kavalec’s claims for conversion.1 We affirm in part, and reverse in part.

Facts and Procedural Background

{¶2} This case arises out of a business dispute amongst family members. At one time, William Kavalec operated a trucking company, to wit: Cleveland Cartage Service, Inc. (“Cleveland Cartage”), out of 3600 Ridge Road in Brooklyn, Ohio. In 1993, William retired and left behind all the shop equipment of Cleveland Cartage for his sons, Steven and Stuart, to use in the operation of their own trucking corporation, Hawk Enterprises (“Hawk”).

{¶3} Hawk was incorporated on October 22, 1992, opened in July 1993, and operated out of 3600 Ridge Road until 2010. Hawk’s business suffered a downturn due to the recession and was strained by financial difficulties in 2010. A proposal was made wherein Robert Kavalec, uncle to Steven and Stuart, and brother to William, would open a new corporation, Ohio Express, which would purchase the assets of Hawk and assume certain Hawk liabilities. Robert would be the president of Ohio Express and Steven and Stuart would continue to operate the trucking business under the new corporation.

1 For clarity and ease of discussion the parties are referred to by their first names throughout this opinion.

{¶4} Ohio Express was incorporated in July 2010 and an asset purchase agreement between Hawk and Ohio Express was signed by Robert and Stuart on August 16, 2010. Ohio Express began operating on September 7, 2010. A dispute arose between Robert and the appellees regarding the operation of the business following a motor vehicle accident in the fall of 2011. As a result, Robert’s wife, Ellen Kavalec, began an audit of Ohio Express in October 2011. Following the audit, Robert and Steven had an argument on November 4, 2011, which resulted in the termination of Steven’s employment with Ohio Express.

{¶5} The falling out of the parties intensified the next day when Robert demanded the keys to Ohio Express’s office and sought to exclude Steven and William from the property. Steven was eventually allowed into Ohio Express’s building on November 5 and removed a few items. Automobiles belonging to Steven and Stuart that were left on Ohio Express’s property were later turned over to them. Ellen Kavalec also provided Steven with a check to repay him for a fuel purchase and turned over a computer and cell phones belonging to him.

{¶6} The remaining property located at 3600 Ridge Road, which Robert believed belonged to Ohio Express, was liquidated in an asset purchase agreement with a company called Phoenix Rising Transport.

{¶7} A complaint in this action was filed on November 10, 2011, and was mutually dismissed without prejudice by the parties on April 10, 2012. The complaint was refiled on April 5, 2013. Appellees alleged claims of fraudulent inducement, breach of contract, intentional interference with prospective economic advantage, tortious interference with contract, civil theft and replevin. The complaint also included a declaratory judgment action. Counterclaims for conversion and breach of fiduciary duty were asserted by Robert and Ellen Kavalec.

{¶8} The case proceeded to a jury trial. Following the presentation of the plaintiffs-appellees’ case, appellant moved for a directed verdict. As a result of that motion, the trial court sua sponte and over objection converted appellees’ claims for civil theft and replevin into a single count of conversion. On the conversion claim, the jury returned verdicts against Robert in the amounts of $78,800 in favor of William, $41,679 in favor of Steven and $4,900 in favor of Stuart. Because only the conversion verdicts against Robert personally have been appealed, we limit our discussion to the conversion claim.

{¶9} Following trial, Robert filed motions for a new trial and judgment notwithstanding the verdict. The trial court denied the motion for new trial but granted the motion for judgment notwithstanding the verdict, in part, and denied it in part. The trial court reduced the verdict in favor of Stuart by $2,000, finding that $2,000 of the $4,900 in conversion damages sought by Stuart was established to be property of a separate entity. The trial court otherwise denied the motion for judgment notwithstanding the verdict.

Law and Analysis I. The Trial Court’s Ruling on the Motion for Directed Verdict

{¶10} In his first assignment of error, Robert argues that the trial court erred in failing to grant his motion for directed verdict with respect to appellees’ claims for replevin and civil theft.

{¶11} We find this assignment of error to be moot. Although the trial court stated that it denied Robert’s motion for directed verdict as to appellees’ claims for civil theft and replevin, the court incongruously “converted” those claims into a single claim of conversion and did not allow the theft and replevin claims to be submitted to the jury. In fact, the trial court specifically noted that the required formalities for proceeding under a replevin claim had not been followed by appellees. The trial court’s action in amending the complaint into a single conversion claim and not allowing appellees to proceed with their civil theft and replevin claims had the same effect as granting a directed verdict on those claims.2

{¶12} Therefore, appellant’s first assignment of error is moot.

II. The Trial Court’s Sua Sponte Amendment of the Complaint

{¶13} In his second assignment of error, Robert argues that the trial court erred and abused its discretion in sua sponte amending the pleadings to replace the replevin and civil theft claims with a single count of conversion. Robert argues that he did not have adequate notice that conversion was a claim in the case or an adequate opportunity to

2 We note that appellees have not raised as their own error the trial court’s refusal to submit the claims for replevin and civil theft to the jury.

prepare a defense and question witnesses as to conversion. The trial court rejected this argument as part of its denial of Robert’s motion for judgment notwithstanding the verdict, stating:

The court finds that the elements for theft and replevin are substantially the same as those of conversion. Likewise, the evidence Defendant required to defend against those claims for theft and replevein are substantially the same as those required to defend against claims for theft and replevin.

Therefore, the court’s amendment to the Complaint did not substantially prejudice the Defendant.

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Kavalec v. Ohio Express, Inc., 2016 Ohio 5925 (Ohio Ct. App. 2016).

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