Millican, Inc. v. Mr. Steak, Inc.

38 Ohio Misc. 24, 67 Ohio Op. 2d 169, 1973 Ohio Misc. LEXIS 324
CourtCuyahoga County Common Pleas Court
DecidedAugust 17, 1973
DocketNo. 894,947
StatusPublished
Cited by1 cases

This text of 38 Ohio Misc. 24 (Millican, Inc. v. Mr. Steak, Inc.) is published on Counsel Stack Legal Research, covering Cuyahoga County Common Pleas Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Millican, Inc. v. Mr. Steak, Inc., 38 Ohio Misc. 24, 67 Ohio Op. 2d 169, 1973 Ohio Misc. LEXIS 324 (Ohio Super. Ct. 1973).

Opinion

McMonagle, J.

This is an action in which the plaintiffs ask for both equitable and legal relief from the court. There is no substantial dispute about most of the facts. Mr. Steak, Inc., is a corporation which sells franchises for the operation of a unique type of restaurant under the name of Mr. Steak, and it also owns and operates a large number of such restaurants throughout the United States.

In December of 1968, the defendant, Mr. Steak, was desirous of selling franchises for the establishment of Mr. Steak restaurants in and about Cleveland, Ohio. It placed advertisements in the daily newspapers for the purpose of procuring purchasers and also employed a Mr. Palma as its representative to consummate sales thereof.

In response to one of the ads, Mr. James T. Millican, Jr., president of the plaintiff, James T. Millican, Inc., attended a meeting called by Mr. Steak of prospective purchasers. He met Mr. Palma at this meeting and evidenced to Mr. Palma an interest in the Mr. Steak franchise pro[25]*25posal. The Mr. Steak representative advised Mr. Millican that arrangements had been made so that seven (7) franchises at $15,000.00 each would be issued f©r locations in and about Cuyahoga County, Ohio; that the defendant, Mr. Skoda, who had previously participated in the establishment of Mr. Steak restaurants, was assembling some investors for the purpose of investing in such franchises, and the Mr. Steak representative suggested that if Mr. Millican was interested in such franchises, they could participate with Mr. Skoda’s group. Plaintiffs Ernest E. Vargo and Louis E. Vargo are business associates of Mr. Millican and each plaintiff put up $4,900.00 for the purpose of investing in the said seven (7) Mr. Steak franchises.

Mr. Skoda collected a total of $105,000.00 from various investors, including the $14,700.00 from the plaintiffs, and turned over the said $105,000 to Mr. Steak. Papers evidencing the offers and proposals of the investors were made to Mr. Steak in the name of Tary, Inc.

It is conclusive from the evidence, and the court finds, that Mr. Steak knew, through its representative, that the $105,000.00 that was paid over to it consisted of funds advanced by various investors with the understanding that they would ultimately become shareholders in a separate corporation to be created for the ownership and operation of Mr. Steak restaurants upon the establishment of such restaurants in accordance with paragraph 2, services, contained in the franchise form prepared by Mr. Steak and upon which form the original proposals in the name of Tary, Inc., were made to Mr. Steak.

It is also conclusive from the evidence that the franchises in which the said investments were intended to be made included the following provision:

“(2) Services.
“In consideration of the service fees hereinafter outlined, Mr. Steak hereby agrees to perform the following services and functions and to assume the following obligations ;
‘ ‘ Mr. Steak shall obtain for the associate a location for the construction and establishment of its Mr. Steak Eestau-[26]*26rant within the area so outlined in the paragraph entitled ‘Territory.’ Such location shall be secured by Mr. Steak signing as prime tenant on a lease with the land owner of such location.
“It is hereby agreed that in the event Mr. Steak fails to execute a lease for the activation of the Mr. Steak Restaurant within the area herein designated within one year from the date of this franchise agreement, the associate shall be given the option to terminate this agreement and have his money refunded plus 6% interest.”

When an appreciable period of time after the year specified in the foregoing provision had elapsed, Mr. Steak did offer one franchise to the investor group; this was after the filing of this lawsuit and demand was made for return of the money. The money turned over to Mr. Steak, Inc., belongs to the plaintiffs herein and the other investors. Mr. Steak, Inc., was obliged under the terms of the deposit with it of the $105,000.00 to either perform in accordance with the above cited provision or return the funds together with six percent (6%) per annum. If it is to be considered that the proposal of the investor group had been accepted by Mr. Steak: so that a binding contract came into existence, said contract was breached and the investors are entitled to the return of their money with interest.

If no contract actually came into being, then the defendant Mr. Steak has been merely holding the money of the investors and it should be returned to them.

Mr. Steak has kept the money of the plaintiffs and the other investors for alraost five (5) years without proffering a completed franchise or even formally accepting what might be considered as the offer of the investors. Considering the evidence offered by Mr. Steak as to its meager efforts to obtain and lease, within the specified time, any location for the establishment of a Mr. Steak Restaurant, it is questionable as to whether it took the investors ’ money in good faith to be used for the purpose for which it was intended by them.

Tary, Inc., has been categorized herein as a de facto [27]*27corporation, a limited partnership, a conduit, a vehicle, and a checking account.

In the printed instruments, prepared and used by Mr. Steak, it refers to one seeking to become a franchise holder and a franchisee as an “associate.”

Webster’s New International Dictionary (2 Ed.) defines an “associate” as “one having an interest in common with another, as a partner, a confederate, a colleague in office, etc.” Synonyms are companion, crony, pal, comrade. The court does not deem it necessary to identify Tary, Inc., with some normally identifiable legal classification in order to render a decision herein that is firmly founded in law and equity. Counsel herein has presented exhaustive arguments with reference to relief permissible under the pleadings herein. Citations and arguments deal with actions governed by the former procedural statutes. None are concerned with actions presented under the Ohio Civil Eules. Under the Civil Eules the issues of the case are made up not only on the pleadings but on the pleadings and the evidence. While the prayer of the complaint does not limit the relief that may be granted, it is usually illustrative of the type of claim that is the subject matter of the action.

Civil Eule 8(A) provides:

“Claims for Belief. A pleading which sets forth a claim for relief, whether an original claim, counterclaim, cross-claim or third-party claim, shall contain (1) a short and plain statement of the claim showing that the pleader is entitled to relief, and (2) a demand for judgment for the relief to which he determines himself entitled. * # *”

Civil Eule 8(F) provides:

“Construction of Pleadings. All pleadings shall be so constructed as to do substantial justice.”

The Ohio Civil Eules pertaining to the pleadings and particularly the complaint are patterned after the Federal Eules.

See McCormac, Ohio Civil Eules Practice, at page 92:

“The United States Supreme Court, in discussing what is necessary to show a claim upon which relief could be granted, said: ‘In, appraising the sufficiency of the com[28]

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Related

Fancher v. Fancher
455 N.E.2d 1344 (Ohio Court of Appeals, 1982)

Cite This Page — Counsel Stack

Bluebook (online)
38 Ohio Misc. 24, 67 Ohio Op. 2d 169, 1973 Ohio Misc. LEXIS 324, Counsel Stack Legal Research, https://law.counselstack.com/opinion/millican-inc-v-mr-steak-inc-ohctcomplcuyaho-1973.