MP Equip. Leasing, Inc. v. Pack

2024 Ohio 5495, 257 N.E.3d 1234
CourtOhio Court of Appeals
DecidedNovember 21, 2024
Docket24AP-103
StatusPublished
Cited by1 cases

This text of 2024 Ohio 5495 (MP Equip. Leasing, Inc. v. Pack) 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.

Bluebook
MP Equip. Leasing, Inc. v. Pack, 2024 Ohio 5495, 257 N.E.3d 1234 (Ohio Ct. App. 2024).

Opinion

[Cite as MP Equip. Leasing, Inc. v. Pack, 2024-Ohio-5495.]

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

MP Equipment Leasing, Inc. et al., :

Plaintiffs-Appellees, : No. 24AP-103 v. : (C.P.C. No. 18CV-6740)

James M. Pack, : (REGULAR CALENDAR)

Defendant-Appellant. :

D E C I S I O N

Rendered on November 21, 2024

On brief: Sander Law, LLC, and Neil C. Sander for appellees.

On brief: James M. Pack, pro se.

APPEAL from the Franklin County Court of Common Pleas

EDELSTEIN, J. {¶ 1} Defendant-appellant, James M. Pack, appeals from a judgment of the Franklin County Court of Common Pleas, granting summary judgment in favor of plaintiffs-appellees, MP Equipment Leasing, Inc. (“MP”), Chad M. Peterson, and Curtis Patnode (collectively, plaintiffs). For the reasons that follow, we reverse and remand. I. Facts and Procedural History

{¶ 2} On August 7, 2018, plaintiffs filed a complaint against Mr. Pack, Rush Creek Logistics, LLC (“Rush Creek”), and Peterson Trucking, LLC (“Peterson Trucking”) (collectively, defendants) alleging a single claim for breach of contract. The events giving rise to the complaint resulted from Rush Creek’s 2016 acquisition of Peterson Trucking. {¶ 3} Prior to 2016, Peterson Trucking was a Wisconsin limited liability company operating a trucking business in Arkansaw, Wisconsin. MP, a Wisconsin corporation, was the sole member of Peterson Trucking. Mr. Peterson and Mr. Patnode were the No. 24AP-103 2

shareholders and officers of MP. In the spring of 2016, Mr. Pack formed Rush Creek, an Ohio limited liability company, to acquire the membership units of Peterson Trucking from MP. Mr. Pack was the sole member of Rush Creek. {¶ 4} Effective July 1, 2016, Rush Creek entered into a Membership Interest Purchase Agreement with MP agreeing to purchase all of MP’s membership interest in Peterson Trucking. (Compl., Ex. A “Purchase Agreement.”) The parties closed on the Purchase Agreement on August 25, 2016. Thereafter, Mr. Pack became the sole member of Peterson Trucking. {¶ 5} To effectuate the sale, Rush Creek issued a $500,000 promissory note to MP payable in monthly installments. (Compl., Ex. B “Rush Creek Note.”) Peterson Trucking also issued a $46,715.45 promissory note to Mr. Peterson payable in monthly installments with interest accruing at the rate of 4.95 percent per year. (Compl., Ex. C “Peterson Trucking Note.”) The Rush Creek and Peterson Trucking Notes both provided that, upon default, the holder could declare the remainder of the debt due and payable and recover reasonable attorney fees and litigation costs from the maker. {¶ 6} In the Purchase Agreement, MP “represent[ed] and warrant[ed] to [Rush Creek] as of the Effective Date and the Closing Date” that “[t]o the best knowledge of MP[], * * * no employee or manager or officer has any plans to terminate employment with [Peterson Trucking].” (Purchase Agreement at section 2.8.) Rush Creek acknowledged that the vehicles and trailers in the possession of Peterson Trucking were “leased and not owned by [Peterson Trucking],” and Rush Creek and Peterson Trucking agreed to “undertake reasonable efforts to remove Chad M. Peterson and Curtis Patnode as personal guarantors of any lease between [Peterson Trucking] and any third party.” (Purchase Agreement at section 4.4.) If Rush Creek and Peterson Trucking were “unable to effectuate such a release, James M. Pack [agreed] to indemnify Chad M. Peterson and Curtis Patnode from any loss or damage sustained by Chad M. Peterson or Curtis Patnode as a result of the personal guaranty(ies) issued by them with respect to any such lease” (the “Guaranty Indemnification”). (Purchase Agreement at section 4.4.) Additionally, if either party had to file suit to enforce the Purchase Agreement, the prevailing party would be entitled to recover their reasonable attorney fees and court costs in such action. (Purchase Agreement at section 7.5.) No. 24AP-103 3

{¶ 7} On August 25, 2016, Peterson Trucking executed an Equipment Lease Agreement agreeing to lease three 2015 Timpte Trailers from MP and pay MP monthly rent. (Compl., Ex. D “Equipment Lease.”) On September 1, 2016, Peterson Trucking executed a Real Estate Lease Agreement agreeing to lease from MP a portion of the building located at N6598 County Road D, Arkansaw, Wisconsin, and pay MP monthly rent. (Compl., Ex. E “Real Estate Lease.”) {¶ 8} On May 11, 2018, MP sent a demand letter to Rush Creek, Peterson Trucking, and Mr. Pack, demanding payment due under the Purchase Agreement, Rush Creek Note, Peterson Trucking Note, Equipment Lease, and Real Estate Lease. (Compl., Ex. F “Demand Letter.”) The Demand Letter advised the defendants that, if they did not pay the past due amounts or respond to the letter by May 16, 2018, plaintiffs would be forced to commence a lawsuit against them. {¶ 9} In the complaint they eventually filed in common pleas court, plaintiffs alleged defendants had “defaulted under the terms of the Purchase Agreement, the Notes, the Guaranty Indemnification, the Equipment Leases, and the Real Estate Lease (collectively, the ‘Obligations’) by failing to make payments when due.” (Compl. at ¶ 14.) Plaintiffs stated that Mr. Pack failed to remove Mr. Peterson and Mr. Patnode from their personal guaranties of Peterson Trucking’s lease agreements with third party lessors, which resulted in Mr. Peterson and Mr. Patnode owing a deficiency under their lease guaranties. Mr. Peterson and Mr. Patnode alleged they were able to settle their lease guaranty claims for $188,512.48 after they incurred over $7,439 in legal fees. Plaintiffs also alleged the vehicles leased by Peterson Trucking sustained damage in the amount of $10,909.33, MP incurred over $20,000 in truck and trailer general maintenance costs, and Peterson Trucking owed MP over $19,000 related to past due payments under the Equipment Lease and Real Estate Lease. Plaintiffs sought judgment against defendants for: (1) $485,000 plus continuing costs and attorney fees against Rush Creek, pursuant to the terms of the Rush Creek Note; (2) $40,518.01 plus continuing interest, costs, and attorney fees against Peterson Trucking, pursuant to the terms of the Peterson Trucking Note; (3) $188,512.48 plus $7,439 in attorney fees against Mr. Pack, pursuant to the terms of the Guaranty Indemnification; (4) $51,746.47 plus continuing costs and attorney fees against Peterson Trucking, pursuant to the terms of the Equipment Lease and Real Estate Lease. No. 24AP-103 4

{¶ 10} On December 14, 2018, Mr. Pack filed a pro se answer and counterclaim. In his counterclaim, Mr. Pack alleged plaintiffs breached section 2.8 of the Purchase Agreement because, at the time they executed the agreement, they knew Peterson Trucking’s “General Manager Travis Stewart planned to terminate his employment with Peterson Trucking.” (Countercl. at ¶ 21.) Mr. Pack stated Mr. Stewart left Peterson Trucking in October of 2016 to work for a competing trucking company and took a significant number of Peterson Trucking’s drivers, owner operators, and customer accounts with him when he left. {¶ 11} On May 14, 2019, plaintiffs moved for summary judgment and asked the court to enter judgment in their favor in the amounts alleged in their complaint. Plaintiffs also asked the court to summarily dismiss Mr. Pack’s counterclaim. Plaintiffs claimed they did not breach their representations in section 2.8 of the Purchase Agreement because they had “no knowledge, prior to or during the time the Purchase Agreement was being executed, of any employees intending to terminate their employment with [Peterson Trucking].” (Mot. for Summ. Jgmt. at 7.) {¶ 12} Plaintiffs supported their motion for summary judgment with affidavits from Mr. Patnode and Mr. Peterson. In his affidavit, Mr.

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Cite This Page — Counsel Stack

Bluebook (online)
2024 Ohio 5495, 257 N.E.3d 1234, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mp-equip-leasing-inc-v-pack-ohioctapp-2024.