Lublinsussman Grp. LLP v. Lee

107 N.E.3d 724, 2018 Ohio 666
CourtCourt of Appeals of Ohio, Sixth District, Lucas County
DecidedFebruary 23, 2018
DocketNo. L–17–1077
StatusPublished
Cited by16 cases

This text of 107 N.E.3d 724 (Lublinsussman Grp. LLP v. Lee) is published on Counsel Stack Legal Research, covering Court of Appeals of Ohio, Sixth District, Lucas County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lublinsussman Grp. LLP v. Lee, 107 N.E.3d 724, 2018 Ohio 666 (Ohio Super. Ct. 2018).

Opinion

SINGER, J.

*726{¶ 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];
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 [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.

*727After 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 ("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 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.

*728Standard 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. Hall

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Cite This Page — Counsel Stack

Bluebook (online)
107 N.E.3d 724, 2018 Ohio 666, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lublinsussman-grp-llp-v-lee-ohctapp6lucas-2018.