LublinSussman Group, L.L.P. v. Lee

Ohio Court of Appeals

LublinSussman Group, L.L.P. v. Lee

2018 Ohio 666

CourtOhio Court of Appeals

DecidedFebruary 23, 2018

DocketL-17-1077

StatusPublished

This text of 2018 Ohio 666 (LublinSussman Group, L.L.P. v. Lee) 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.

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LublinSussman Group, L.L.P. v. Lee, 2018 Ohio 666 (Ohio Ct. App. 2018).

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Opinion

[Cite as LublinSussman Group, L.L.P. v. Lee, 2018-Ohio-666.]

IN THE COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT LUCAS COUNTY

LublinSussman Group LLP Court of Appeals No. L-17-1077

Appellant Trial Court No. CI0201502420

v.

Terri S. Lee DECISION AND JUDGMENT

Appellee Decided: February 23, 2018

*****

John J. McHugh, III, for appellant.

Christopher F. Parker, for appellee.

SINGER, J.

{¶ 1} Appellant, LublinSussman Group, LLP, appeals the March 16, 2017 judgment

of the Lucas County Court of Common Pleas granting summary judgment in favor of

appellee, Terri Lee. For the reasons that follow, we affirm, in part, and reverse, in part. Assignments of Error

{¶ 2} Appellant sets forth the following assignments of error:

1. The trial court erred prejudicially in entering summary judgment

dismissing LublinSussman Group’s breach of contract claim on its Second

Amended and Restated Partnership Agreement (Partnership Agreement).

2. The trial court erred prejudicially in entering summary judgment

in favor of Terri S. Lee on her wrongful termination and breach of contract

claims arising under the Partnership Agreement.

Factual Background

{¶ 3} Appellant is an accounting firm which was originally formed as a

partnership in August 1997. On October 1, 2010, an amended partnership agreement

(“partnership agreement”) was made “to restate the written partnership agreement” and

“to continue to conduct their professional practice.” Five partners entered into the

partnership agreement, including appellee and Lee D. Wunschel.

{¶ 4} In September 2014, appellant held a meeting which was attended by all of

the partners except appellee, who was not invited. The partners present at the meeting

voted unanimously to remove appellee as a partner. Wunschel, in his affidavit, states the

partners considered and acted upon the following facts in reaching the decision to remove

appellee:

a) [Appellee]’s performance over time did not keep pace with the

increased responsibilities of a partner in [appellant];

2. b) [Appellee] was consistently late in performing and delivering

audit reports for [appellant’s] clients, especially the State of Ohio;

c) [Appellee] was aware that a moratorium had been placed by the

State of Ohio on assignments for [appellant], which was attributed to her

tardiness in delivering reports, yet failed to notify [appellant] of this action,

or to request assistance in curing the delays;

d) [Appellee] was regularly late in providing and reviewing internal

financial statements for [appellant];

e) [Appellee] defaulted on training and development of [appellant]

staff and employees, even though she had volunteered to assume such

responsibility;

f) [Appellee]’s performance in business development was less than

adequate;

g) [Appellee]’s performance in personal leadership inside [appellant]

was unsatisfactory;

h) [Appellee] failed to make any significant improvement in output

or development performance after adverse reviews in May, 2014, with

partners Thomas Jaffe and me; and,

i) [Appellee] appeared to have determined that she would seek

employment elsewhere after the September 30 fiscal year end when she

failed to volunteer to accept responsibility for coordinating the 2014

3. [appellant] peer review, which is a triennial requirement of the

Accountancy Board of Ohio and the AICPA.

{¶ 5} On September 17, 2014, appellant gave appellee written notice she was

removed as a partner, with the effective date of the removal being November 16, 2014.

After she was removed, appellee started her own accounting practice and began servicing

some of appellant’s past clients. Appellant claimed this action subjected appellee to

certain provisions of the partnership agreement, such that appellant concluded appellee

owed the partnership $201,907. Appellant alleged the amount was due to an “excess of

clients over retirement value account” valued at $62,137, a “deficit accrual basis capital”

valued at $137,770 and, an “accounts receivables due and owing” valued at $3,000.

{¶ 6} Appellant sought to recover the amount owed by appellee through informal

negotiations, however, the negotiations were unsuccessful and appellant filed its

complaint for breach of contract on April 28, 2015.

{¶ 7} Appellee answered the complaint and filed a four-count counterclaim. In

Count 1 of the counterclaim, she alleged she was wrongfully expelled as a partner. In

Count 2, appellee alleged appellant and the remaining partners breached their fiduciary

duties when they expelled her from the partnership. In Count 3, she alleged appellant

improperly exercised a right of set-off which was not permitted by the partnership

agreement. In Count 4, appellee sought a declaration that any provision of the

partnership agreement that treated her involuntary expulsion as a voluntary withdrawal

was unenforceable. Appellee sought the balances due from her accrual basis capital

4. (“ABC”) account and retirement value (“RV”) account without set-off. She also

demanded her final three draw installments, which totaled $16,500.

{¶ 8} On January 15, 2016, appellant moved for summary judgment on its claim

for breach of contract, as well as on appellee’s counterclaims. Appellee opposed the

motion and moved for summary judgment on her claims. On August 3, 2016, the trial

court entered partial summary judgment finding against appellant on its breach of

contract claim and in favor of appellee on her wrongful termination and breach of

contract claims. Appellee’s other claims were deemed moot.

{¶ 9} The trial court only entered partial summary judgment because it did not

grant appellee’s demand for her final three account draws. Appellant appealed. The

appeal was dismissed for want of a final appealable order. See LublinSussman Group,

LLP v. Lee, 6th Dist. Lucas No. L-16-1206 (Oct. 27, 2016).

{¶ 10} After remand, appellee amended her counterclaim to eliminate the demand

for the final draws. The summary judgment motions were resubmitted for final decision.

On March 16, 2017, the trial court granted summary judgment in favor of appellee

consistent with its previous judgment, concluding as follows:

[Appellant]’s claim for breach of contract, as well as [appellee]’s

counterclaims, can be decided as a matter of law by this Court under Civ.R.

56. As described above, [appellee] is first entitled to summary judgment on

[appellant]’s claim for breach of contract. Furthermore, [appellee] is

entitled to summary judgment on her counterclaim against [appellant] for

5. wrongful termination, and [appellee]’s further counterclaims for breach of

fiduciary duties and declaratory judgment are moot. Given that [appellee]’s

removal/termination from the partnership was an “involuntary withdrawal”

under the Agreement, she is also entitled to summary judgment on her

counterclaim against [appellant] for breach of contract. [Appellee] is

therefore entitled to the value of her ABC and RVA accounts in the

amounts of $25,080.83 and $10,006.00, respectively.

{¶ 11} Appellant timely appealed.

Standard of Review

{¶ 12} Pursuant to Civ.R. 56, the moving party bears the initial burden of

informing the trial court of the basis for the motion and presenting evidence in support

thereof. Vahila v.

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