[Cite as Nguyen v. Chen, 2014-Ohio-5188.]
IN THE COURT OF APPEALS
TWELFTH APPELLATE DISTRICT OF OHIO
BUTLER COUNTY
PHOUNG T. NGUYEN, et al., : CASE NO. CA2013-10-191 Plaintiffs-Appellees, : OPINION : 11/24/2014 - vs - :
GONG CHEN, et al., :
Defendants-Appellants. :
CIVIL APPEAL FROM BUTLER COUNTY COURT OF COMMON PLEAS Case No. CV 2010 04 1526
Dennis L. Adams, 10 Journal Square, Suite 400, Hamilton, Ohio 45012, for plaintiffs- appellees
Scott N. Blauvelt, 246 High Street, Hamilton, Ohio 45011, for defendants-appellants
M. POWELL, J.
{¶ 1} Defendants-appellants, Gong Chen and Nhung Thi Dinh, appeal a decision
from the Butler County Court of Common Pleas granting judgment in favor of plaintiffs-
appellees, Phuong T. Nguyen and Uyen T. Luong, on their fraud and wrongful eviction
claims, and awarding damages and prejudgment interest to appellees.
I. Facts Butler CA2013-10-191
{¶ 2} This case arises out of the purported sale of a nail salon business, United Nails,
located in West Chester, Ohio. Appellants, Chen and Dinh, are married and currently
operate United Nails. Appellees, Nguyen and Luong, are also married. Luong met
appellants when she began working at United Nails in the late spring of 2008. The dispute
between the parties arises out of events occurring in June 2008 through January 2009.
Essentially, appellees claim there was a sale of the business, whereas appellants assert
there was only a loan agreement between the parties. On April 5, 2010, appellees filed a
complaint against appellants asserting six claims related to the purported sale of the
business, including claims for: (1) breach of contract; (2) breach of agreement; (3) wrongful
eviction; (4) conversion; (5) fraud; and (6) loss of business. Appellants answered the
complaint and also alleged four counterclaims: (1) loss of income; (2) breach of contract; (3)
conversion; and (4) tortious interference with business relations. Appellees never filed an
answer to the counterclaims. The case proceeded to a bench trial on March 5, 2013. At trial,
both sides provided drastically different accounts of the parties' business arrangement.
A. Appellees' Version of Events
{¶ 3} At trial, Luong testified that she had been working at United Nails for a few
months when appellants approached her about purchasing the salon. Luong spoke to her
husband, Nguyen, about the offer. Nguyen testified that the four then began discussing a
potential sale. According to Nguyen, the parties ultimately agreed on a $65,000 purchase
price. Nguyen explained that he was unable to come up with the full $65,000 purchase price.
Consequently, appellants agreed to accept a $15,000 down payment in cash, and the
remaining funds would be paid at a later date. Based on the parties' agreement, Nguyen
testified all four went to a Fifth Third Bank location to execute a document to reflect the
$50,000 balance Nguyen and Luong owed appellants. Nguyen stated that a promissory note
was drawn up on June 16, 2008, by a Fifth Third Bank employee as dictated by Chen. The -2- Butler CA2013-10-191
document was entered into evidence and states: "We, Gong G. Chen and Nhung Dinh, have
agreed to lend Phuong Nguyen and To Uyen Luong $50,000 on June 16, 2008. We have
asked that Phuong Nguyen and To Uyen Luong repay the entire loan in full prior to April 16,
2009." All four parties signed this document and the signatures were notarized. There was
also some testimony regarding a second promissory note. This note was executed on
September 4, 2008, and was notarized and signed only by Nguyen and Dinh. It states: "I,
Nhung Dinh agree to lend Phuong Nguyen and [sic] $35,000 on September 4, 2008. I have
asked that Phuong Nguyen to [sic] repay the entire loan in full, prior to April 16, 2009."
Nguyen testified this second note was not a new note, but rather a replacement note
indicating that he only owed appellants $35,000 instead of $50,000 because he had already
paid $15,000 towards the $50,000 loan.
{¶ 4} According to Nguyen, there was no loan as appellants never actually gave
appellees any money. After the June 16, 2008 note was executed, the parties went back to
the nail salon where Nguyen requested that the parties execute a sale and lease agreement
transferring the business to appellees. Nguyen testified that Chen indicated they would
execute those documents the following day. According to Nguyen, he agreed to this
arrangement because "they told me, you know, they let us owe them – they let us owe—owe
them $50,000, they don't worry why we worry, * * * we believed in them." However, the
following day, when Nguyen again asked about the sale and lease agreement, Chen
informed Nguyen that he was leaving the country in a few days, and his wife, Dinh, would
take of care of it since Dinh was the owner of the shop. Nguyen further testified that Chen
stated Dinh was the owner of the shop as she held the state license. Nguyen again agreed
to wait.
{¶ 5} On June 24, 2008, in accordance with his earlier discussion with Chen, Nguyen
testified he and Dinh went back to Fifth Third Bank to have the "sale agreement" executed.
-3- Butler CA2013-10-191
This document states: "I, Nhung Thi Dinh, have sold my salon business United Nails * * * to
Phuong T. Nguyen and To Uyen T. Luong for the price of $15,000." This document is
notarized and is signed by Dinh, Nguyen, and Luong. According to Nguyen, Dinh dictated
the document to the Fifth Third employee. Nguyen explained that this document provided for
a $15,000 purchase price rather than the agreed $65,000 because appellants did not "want
to pay too much tax." Nguyen also testified that he and Luong made additional payments to
appellants. Specifically, Nguyen testified the following payments were made: (1) $5,000 by
check on July 31, 2008; (2) $7,900 by two checks on September 3, 2008; (3) $3,000 in cash
sometime in September or October 2008; and (4) $2,100 appellants received in credit card 1 revenue from the first few days appellees owned the salon. Appellees introduced as
exhibits the three canceled checks to support these payments. According to Nguyen, the
payments to appellants, including the $15,000 down payment, totaled $33,000.
{¶ 6} Nguyen further testified that on June 17, 2008, he began running United Nails
as its new owner. As the new owner, Nguyen testified he conducted activities such as
opening up a business checking account, setting up a new credit card machine and account,
filing incorporation documents with the Ohio Secretary of State for a limited liability company
entitled, "Phuong Nguyen, LLC," applying for and receiving an Employer Identification
Number from the IRS for "Phuong Nguyen, LLC, United Nail," hiring employees and issuing
W-2's, paying utilities, and paying rent.
{¶ 7} In August 2008, a representative of R.L. Deville Enterprises Cincinnati, LLC
(Deville), the landlord for the building where the nail salon was located, came looking for
Chen. Nguyen indicated he was the new owner of the salon. Nguyen was provided with a
1. Nguyen testified that although he opened up a credit card account for the salon on June 17, 2008, the day after the purported purchase, the account took several days to process. According to Nguyen, he and Chen agreed that Nguyen would use Chen's prior credit card account during that time and that the funds received during that time would be applied to the balance of the loan. -4- Butler CA2013-10-191
document which indicated the shop was past due on rent for the months of June, July, and
August. Nguyen expressed confusion as he had submitted payments to Deville for those
months' rent. At trial, Nguyen submitted as exhibits, copies of monthly rent checks for July
2008 through January 2009 paid to and cashed by Deville. When Nguyen confronted Chen
regarding the past due rent, Nguyen testified Chen told him not to contact Deville and he
would take care of the matter. Nguyen attempted to have the lease transferred to him.
Deville indicated a transfer of the lease was not possible until the account was brought
current. Nguyen testified that he told Chen he would not make any additional payments until 2 appellants signed over the lease and took care of the past due rent.
{¶ 8} According to Nguyen, Nguyen and Luong operated United Nails as its owners
until January 2009. In January 2009, appellants demanded the remaining balance of the
$65,000 purchase price despite the parties' understanding that it was not due until April 16,
2009. On January 6, 2009, appellants presented appellees with a "Notice to Leave
Premises." On January 10, 2009, appellees closed the salon as usual, and appellants came
by and changed the locks on the front and back doors. At trial, appellees submitted an
exhibit of the personal property they claim remained in the salon when appellants changed
the lock on January 10, 2009.
B. Appellants' Version of the Events
{¶ 9} Appellants contend they never sold the salon to appellees. Chen testified that
he and Dinh agreed to loan appellees $50,000. According to Chen, they agreed to provide
the loan because "they say they work for me as my loyal employees and asked me to trust
them; loan them the sum of money so that they can invest in [real estate] – back home in
Vietnam." According to Chen, the agreement was that appellees would manage United Nails
2. The record at trial does not indicate if, or how, the dispute with Deville regarding past due rent was ever resolved. -5- Butler CA2013-10-191
while he was out of the country caring for his father in China. Chen testified he left for China
in the afternoon on June 16, 2008, after the loan agreement was executed. Chen further
testified that there were never any discussions about selling the business. Rather, Chen
agreed he would pay appellees a commission for running his business, where appellees
were permitted to use business revenues to pay rent and other expenses of the business on
Chen's behalf and the remaining revenue would be divided as a "60 and 40 percent split."
Chen also testified that he was not present on June 17, 2008, when an employee of PNC
Bank came to the salon and changed the credit card machine to an account belonging to
Nguyen. Chen stated that he never gave Nguyen permission to "leave all the money in his
account." As to the June 24, 2008 sale agreement signed by Dinh, Chen testified that he
never agreed to sell the salon, he was unaware that Dinh had been asked to sign the
agreement, and did not learn of it until after it had been signed by the parties. Both Chen
and Dinh testified that she did not read or write English. Dinh further testified that she was
unaware of the contents of the documents she signed on June 24, 2008 and September 4,
2008. Dinh stated that Nguyen told her the documents were necessary to secure credit for
their investment back in Vietnam.
{¶ 10} According to Chen, it was Luong who was primarily hired by appellants. He
further stated that once he became aware that Nguyen was involved in running the business,
that bills were not being paid, and that utility bills were being transferred out of his name,
Chen attempted to contact appellees. However, appellees refused to speak with Chen and
would only speak with Dinh. In order to fire appellees and remove them from the business,
Chen testified that he handed them the "Notice to Leave the Premises" letter. The letter
directed appellees to leave the premises on or before January 10, 2009. When appellees
refused to leave on January 10, 2009, that is when appellants changed the locks on the
salon.
-6- Butler CA2013-10-191
C. Trial Court's Decision
{¶ 11} On September 26, 2013, the trial court entered its decision and entry finding in
favor of appellees as to their claims for wrongful eviction and fraud. As to damages, the trial
court awarded $6,129.73 on the wrongful eviction count and $33,900 on appellees' fraud
claim. The trial court also awarded prejudgment interest in the amount of six percent 3 beginning on January 10, 2009. The trial court denied the remaining claims. Appellants
timely appealed and raise five assignments of error for our review.
II. Analysis
A. Appellees' Claim of Fraud
{¶ 12} Assignment of Error No. 1:
{¶ 13} THE TRIAL COURT ERRED TO THE PREJUDICE OF APPELLANTS IN
RENDERING A VERDICT FINDING APPELLANTS LIABLE FOR COUNT FIVE-FRAUD,
AND FOR AWARDING DAMAGES THEREON.
{¶ 14} In their first assignment of error, appellants claim the trial court erred because
the theory of fraud upon which appellees recovered was not pleaded in their complaint and
because the evidence did not support such an award. We find no merit to these arguments.
1. Unplead Claim of Fraud
{¶ 15} Appellants assert that the theory of fraud alleged in the complaint was fraud in
the removal of appellees from the nail salon and appellants' representation that they were
"rightful owners." Accordingly, appellants argue the trial court was not permitted to find them
liable for fraud in the sale of the business as such fraud was never pleaded. Although
appellees agree that this particular theory of fraud was an unpleaded issue, appellees
contend the trial court did not err because fraud in the sale of the business was tried by the
implied consent of the parties.
-7- Butler CA2013-10-191
{¶ 16} Civ.R 15(B) allows for the amendment of the pleadings to conform to evidence
3. At the close of appellees' evidence at trial, appellees withdrew their claim for loss of business. -8- Butler CA2013-10-191
presented at trial, and therefore, "treats issues that were not raised in the pleadings as if they
were so raised, as long as they were tried with the express or implied consent of the parties
and substantial prejudice will not arise from the result." Aztec Internatl. Foods, Inc. v.
Duenas, 12th Dist. Clermont No. CA2012-01-002, 2013-Ohio-450, ¶ 25; State ex rel. Evans
v. Bainbridge Twp. Trustees, 5 Ohio St.3d 41 (1983), paragraph one of the syllabus. "The
rule expresses a liberal policy toward the allowance of amendments * * * [and] was
promulgated to provide the maximum opportunity for each claim to be decided on its merits
rather than on procedural niceties." Stafford v. Aces & Eights Harley-Davidson LLC, 12th
Dist. Warren No. CA2005-06-070, 2006-Ohio-1780, ¶ 21, quoting Hall v. Bunn, 11 Ohio St.3d
118, 121 (1984).
{¶ 17} "Under Civ.R. 15(B), implied consent is not established merely because
evidence bearing directly on an unpleaded issue was introduced without objection; it must
appear that the parties understood the evidence was aimed at the unpleaded issue."
Stafford at ¶ 25, quoting Evans at paragraph one and two of the syllabus. In determining
whether the parties impliedly consented to litigate an issue, various factors should be
considered, including: "whether [the parties] recognized that an unpleaded issue entered the
case; whether the opposing party had a fair opportunity to address the tendered issue or
would offer additional evidence if the case were to be tried on a different theory; and, whether
the witnesses were subjected to extensive cross-examination on the issue." Textiles, Inc. v.
Design Wise, Inc., 12th Dist. Madison Nos. CA2009-08-015 and CA2009-08-018, 2010-Ohio-
1524, ¶ 18, quoting Evans at paragraphs one and two of the syllabus.
{¶ 18} A trial court is permitted to sua sponte consider whether an unpleaded issue
was tried by the consent of the parties, as long as the decision to do so complies with Civ.R.
15(B). Stafford at ¶ 22 (affirming the trial court's decision to sua sponte apply Civ.R. 15(B)
and amend pleadings even though the parties never moved to amend their pleadings); see -9- Butler CA2013-10-191
also Textiles at ¶ 17. Whether the parties impliedly consented to try an unpleaded issue is a
decision left to the sound discretion of the trial court and, therefore, will not be reversed
absent an abuse of discretion. Textiles at ¶ 17. An abuse of discretion is more than an error
of judgment; it means that the trial court was unreasonable, arbitrary, or unconscionable in its
ruling. Motorists Mut. Ins. Co. v. Roberts, 12th Dist. Warren No. CA2013-09-089, 2014-Ohio-
1893, ¶ 12, citing Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983).
{¶ 19} After a review of the record, we find there is evidence from which the trial court
could rationally conclude that the parties impliedly consented to try the fraud claim premised
upon the sale of the business. In their complaint, appellees first set forth the factual
allegations related to their breach of contract claim, including the allegation that appellants
offered to sell the business to appellees and appellees later made payments to appellants
based on this "agreement." Appellees' fraud count was pleaded after the breach of contract
claim and specifically incorporated all the preceding allegations. The incorporation of all the
prior allegations, specifically, those related to the breach of contract claim, and sale of the
business, sufficiently notified appellants that the evidence related to the purported sale of the
business served a dual purpose and would be relied upon in the prosecution of both
appellees' breach of contract claim and fraud claim. Furthermore, the record demonstrates
that appellants never challenged the particularity of appellees' pleaded fraud claim under
Civ.R. 9(B), never requested a more definite statement pursuant to Civ.R. 12(E), and never
moved to dismiss the fraud count under Civ.R. 12(B)(6). Had appellants wished to challenge
the specificity of the fraud claim as pleaded, they certainly could have done so. Accordingly,
the record indicates appellants were aware of the claim of fraud in the sale of the business.
{¶ 20} Furthermore, the record demonstrates that appellants were given a fair
opportunity to address the issue of fraud as it related to the purported sale of the business
and to cross-examine witnesses on the matter at trial. The testimony at trial centered - 10 - Butler CA2013-10-191
completely around the two parties' versions of the transaction between them. In particular,
Nguyen provided detailed testimony regarding the purported sale of United Nails. Appellants
were entitled and did, in fact cross-examine Nguyen regarding his testimony. Moreover,
appellants presented their own case and claimed that the transaction was merely a loan.
While no one said the magic words "fraud in the sale of the business" in their pre-trial
statement, opening statement, or closing argument, it is evident from the record that the
parties were aware and tried the issue of appellants' alleged fraud in the sale of the business.
{¶ 21} In this particular circumstance, and under the facts presented in this case, we
find that the theory of fraud in the sale of the business was tried by the implied consent of the
parties such that the trial court did not abuse its discretion when it amended the pleadings
under Civ.R. 15(B) and granted judgment in favor of appellees.
2. Manifest Weight of the Evidence
{¶ 22} Appellants also assert within their first assignment of error that the trial court's
judgment is against the manifest weight of the evidence. Appellants claim there was
insufficient evidence regarding appellees justifiable reliance on any alleged representation
made by Chen or Dinh. Specifically, appellants assert "it was wholly unreasonable for
[a]ppellees to rely on any claimed representation that this business was being sold and to
pay money toward the purchase."
{¶ 23} When evaluating whether a judgment is against the manifest weight of the
evidence in a civil case, the standard of review is the same as in the criminal context.
Duenas, 2013-Ohio-450 at ¶ 35, citing Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-
2179, ¶ 17. "[W]e weigh the evidence and all reasonable inferences, consider the credibility
of witnesses, and determine whether in resolving conflicts in the evidence, the finder of fact
'clearly lost its way and created such a manifest miscarriage of justice that the [judgment]
must be reversed and a new trial ordered.'" Marinich v. Lumpkin, 12th Dist. Warren No. - 11 - Butler CA2013-10-191
CA2011-11-124, 2012-Ohio-4526, ¶ 20, quoting Eastley at ¶ 20. In weighing the evidence,
we are mindful of the presumption in favor of the finder of fact. Eastley at ¶ 21. If the
evidence presented to the trial court is susceptible to more than one interpretation, we are
bound to give it the construction that is consistent with the trial court's judgment and finding
of facts. Jones v. Homes, 12th Dist. Butler No. CA2012-07-133, 2013-Ohio-448, ¶ 24. "A
reviewing court should not reverse a decision simply because it holds a different opinion
concerning the credibility of the witnesses and evidence submitted before the trial court."
Duenas at ¶ 35, quoting Seasons Coal Co., Inc. v. Cleveland, 10 Ohio St.3d 77, 81 (1984).
{¶ 24} In order to establish a claim for fraud, appellees were required to demonstrate
the following elements:
(a) a representation or, where there is a duty to disclose, a concealment of a fact, (b) which is material to the transaction at hand, (c) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred, (d) with the intent of misleading another into relying upon it, (e) justifiable reliance upon the representation or concealment, and (f) a resulting injury proximately caused by the reliance.
Duenas at ¶ 36, quoting Groob v. KeyBank, 108 Ohio St.3d 348, 2006-Ohio-1189, ¶ 47.
{¶ 25} Appellants have specifically challenged the trial court's finding of justifiable
reliance on the part of appellees. "The question of justifiable reliance is one of fact and
requires an inquiry into the relationship between the parties." Crown Property Dev., Inc. v.
Omega Oil Co., 113 Ohio App.3d 647, 657 (12th Dist.1996). "The factors a court should
consider include the nature of the transaction, the materiality of the representation or fact
concealed, the parties' relationship, and their respective intelligence, experience, age, mental
and physical condition, knowledge, and means of knowledge." Duenas at ¶ 47. Reliance is
justified if the representation does not appear unreasonable on its face and if, under the
circumstances, there is no apparent reason to doubt the veracity of the representation.
- 12 - Butler CA2013-10-191
Crown Property Dev., Inc. at 657.
{¶ 26} After a review of the record, we find the trial court's finding of fraud is supported
by the manifest weight of the evidence. Nguyen testified that in June 2008, appellants
offered to sell United Nails to him and Luong for $65,000. The parties ultimately agreed to an
arrangement in which appellees would provide a $15,000 cash down payment and repay the
remaining balance of $50,000 on or before April 16, 2009. Based on this agreement, the
parties executed the June 16, 2008 note. On appeal, appellants claim it was unreasonable
for appellees to rely on the representations that a legitimate sale was being offered in light of
the lack of formalities surrounding the transaction. Specifically, appellants argue that the first
note in no way mentions the sale of the business and that the June 24, 2008 sale agreement
stated the business was sold for $15,000 rather than the agreed $65,000. Accordingly,
appellants assert there was no justifiable reliance in this case. However, as noted by the trial
court, appellants should not benefit from their deliberate lack of formalities.
{¶ 27} Rather, we find the totality of the circumstances in this case demonstrates that
Nguyen and Luong had no apparent reason to doubt the veracity of the appellants'
representations regarding the sale of United Nails. The record indicates that the relationship
between the parties was such that they "trusted" one another and were not overly concerned
with formalizing their agreement. Moreover, although the record indicates Chen has
previously operated several nail salons, the record does not demonstrate that either of the
parties were familiar with the requirements necessary to effectuate a legal sale of a business.
In addition, appellees took substantial steps in order to establish their own business. For
instance, Nguyen provided testimony that he opened a business checking account, set up a
new credit card machine and account, filed incorporation documents with the Ohio Secretary
of State for Phuong Nguyen, LLC, applied for and received an Employer Identification
Number from the IRS, hired employees and issued W-2s, and paid the rent and utilities for - 13 - Butler CA2013-10-191
the salon. As of August 2008, Chen at the very least was aware that the credit card machine
and the utilities for the salon had been changed into Nguyen's name. At no time prior to
January 2009 did Chen ever object to any of the actions taken by Nguyen and Luong in
operating United Nails as the new owners. Accordingly, we find it was not unreasonable for
appellees to believe appellants' representation that they were selling them the business.
Although Chen and Dinh provided conflicting testimony, asserting that they never offered to
sell the business to Nguyen and Luong, the trial court, as the trier of fact, was in the best
position to weight the credibility of the witnesses. In light of the facts and circumstances of
this case, we find the trial court clearly did not lose its way and create such a manifest
miscarriage of justice such that its judgment finding appellants liable for fraud must be
reversed.
{¶ 28} As the issue of fraud in the sale of the business was tried by the consent of the
parties and the finding of fraud is supported by the weight of the evidence, we overrule
appellants' first assignment of error.
B. Appellees' Wrongful Eviction Claim
{¶ 29} Assignment of Error No. 2:
{¶ 30} THE TRIAL COURT ERRED TO THE PREJUDICE OF APPELLANTS IN
RENDERING A VERDICT FINDING APPELLANTS LIABLE FOR COUNT THREE-
WRONGFUL EVICTION, AND FOR AWARDING DAMAGES THEREON.
{¶ 31} In their second assignment of error, appellants assert the trial court erred in
granting judgment on appellee's wrongful eviction claim. Appellants take issue with the trial 4 court's award of damages for the wrongful eviction of appellees from the premises.
4. In their issue presented for review, appellants state that "the evidence failed to demonstrate a sublease between the parties." Beyond this statement, appellants fail to provide any argument, citation to authority, or references to the record to support this claim. Accordingly, we decline to address this argument. See App.R. 16(A); App.R. 12(A); Kitchen v. Teeters, 12th Dist. Clermont No. CA2011-06-048, 2012-Ohio-4343, ¶ 15. - 14 - Butler CA2013-10-191
Appellants assert that the trial court's judgment on the wrongful eviction claim and
subsequent award of damages was inconsistent with its decision to deny appellees'
conversion claim. Appellants contend that in denying appellees' conversion claim the trial
court concluded that appellants did not exercise wrongful control over property belonging to
appellees. Yet, in awarding damages on the wrongful eviction claim, the trial court
necessarily concluded that certain property did in fact belong to appellees and appellees
suffered a loss of such property in the amount of $6,129.73. Appellants argue that even if
appellees owned the property subject to this damages award, appellees were not entitled to
recover any damages because appellees abandoned such property.
{¶ 32} The determination of damages is within the discretion of the trial court and will
be sustained by a reviewing court unless the award is against the manifest weight of the
evidence. City of Hamilton v. Abcon Const., 12th Dist. Warren No. CA97-03-027, 1997 WL
727641, *2 (Nov. 24, 1997).
{¶ 33} In instant case, the trial court found appellees were damaged as a result of
appellants wrongfully evicting them from the premises and thereafter awarded appellees
damages in the amount of $6,129.73. The trial court indicated this damage award was
based on figures listed in Exhibit 17 and 18. At trial, Nguyen testified that Exhibit 17 was a
list of all the equipment in the nail salon when he purchased the business. According to
Nguyen, the items listed in Exhibit 17 were all initially purchased by appellants but ownership
transferred to him when he and Luong purchased the business. As to Exhibit 18, Nguyen
testified it was a list of items, including materials and supplies, which were left in the shop on
January 10, 2009, and never returned. Exhibit 18 contained corresponding receipts and
invoices for the items listed. The total for the items contained in Exhibit 18 is $6,129.73.
{¶ 34} From this record, it is clear that although the trial court referenced Exhibit 17 in
its award for damages on the wrongful eviction count, the trial court only relied upon Exhibit - 15 - Butler CA2013-10-191
18 to determine the value of the loss appellees suffered as a result of the wrongful eviction.
We find no inconsistencies in this result. As indicated previously, the trial court found
appellees to be more credible than appellants. At trial, Nguyen conceded that the items
listed in Exhibit 17 were originally purchased by Chen. In denying, the conversion claim, the
trial court found that given the lack of formalities in the parties' business arrangement, it was
unable to determine whether parties converted each other's property. It is apparent that the
property the trial court was referring to in denying the conversion claim is the property listed
in Exhibit 17. Exhibit 18, however, contains personal property that appellees testified that
they purchased and stored at the nail salon premises. Such property was never returned and
therefore was withheld as a result of the wrongful eviction. Accordingly, we find the trial
court's judgment is not inconsistent and the weight of the evidence supports the trial court's
conclusion that the precipitous actions of appellants in locking appellees out of the premises
and the refusal to return the items listed in Exhibit 18 caused damages in the amount of
$6,129.73.
{¶ 35} Moreover, we find that the record does not support appellants' assertion that
appellees abandoned the property. "In order for an abandonment to exist, affirmative proof
of the intent to abandon coupled with acts or omissions implementing the intent must be
shown." Hamilton v. Harville, 63 Ohio App. 3d 27, 30 (12th Dist.1989). The record indicates
that appellees, after being locked out of the business, contacted appellants and requested
that their personal belongings be returned. Nguyen testified that the police were present at
the time and they were told it was a civil matter and advised to obtain an attorney.
Thereafter, Nguyen stated that he did not contact appellants regarding the return of the
property and left it up to the lawyers. Based on this record, we do not find that appellees
intended to abandon their property, but rather chose to pursue legal remedies for its return.
{¶ 36} In the present case, we find no abuse of discretion and the trial court's - 16 - Butler CA2013-10-191
damages award for wrongful eviction is supported by the weight of the evidence.
Consequently, appellants' second assignment of error is overruled.
C. Appellants' Counterclaim for Breach of Contract
{¶ 37} Assignment of Error No. 3:
{¶ 38} THE TRIAL COURT ERRED TO THE PREJUDICE OF APPELLANTS IN
RENDERNIG A VERDICT DENYING APPELLANTS' CLAIM FOR BREACH OF CONTRACT.
{¶ 39} In their third assignment of error, appellants assert the trial court erred in
denying their claim that appellees breached the parties' June 16, 2008 contract. Appellants
first contend that because appellees failed to answer the counterclaim, the allegations
contained in the counterclaim should have been deemed admitted and the trial court was
required to grant judgment in their favor. Appellants also assert the trial court violated the
parol evidence rule by admitting evidence outside the written terms of the June 16, 2008
note. Finally, appellants assert the trial court's decision was against the manifest weight of
the evidence. Appellants contend they presented sufficient evidence to support their breach
of contract claim as they demonstrated the existence of a "duly executed agreement stating
that [appellees] had borrowed $50,000.00 from [a]ppellants to be paid back" by April 16,
2009. We find no merit to appellants' arguments.
{¶ 40} As an initial matter, we note that appellants waived any arguments regarding
appellees' failure to answer the counterclaim. The failure to pursue a default judgment
motion in the trial court when an answer is not filed or is untimely filed constitutes a waiver.
Aey Elec. v. Battaglini, 7th Dist. Mahoning No. 03 MA 64, 2004-Ohio-6501, ¶ 27-31 (finding
appellant was not entitled to a directed verdict on his counterclaim based on Civ.R. 8(D)
where appellant failed to request a default judgment in advance of trial); Maier v. Shields,
10th Dist. Franklin No. 07-CA-21, 2008-Ohio-3874, ¶ 59. The record reflects that appellants
never made a motion under Civ.R. 55(A) for a default judgment based on appellees' failure to - 17 - Butler CA2013-10-191
"plead or otherwise defend" against the counterclaim for breach of contract. There is also no
indication in the record that appellants ever filed a motion for summary judgment based on
appellees' failure to file an answer to the counterclaim. Thus, the trial court never considered
finding the allegations in the counterclaim admitted or entering a default judgment on
appellants' breach of contract counterclaim. Accordingly, such claims are waived on appeal.
{¶ 41} Moreover, we find no error in the trial court's decision to admit evidence of the
alleged oral agreement of the parties which varied the terms of the June 16, 2008 note. The
decision whether to admit or exclude evidence is left to the sound discretion of the trial court
and will not be reversed absent an abuse of discretion. Roberts, 2014-Ohio-1893 at ¶ 12.
The parol evidence rule only bars the admission of evidence of an oral agreement when
there is a final written integration of the parties' agreement. Galmish v. Cicchini, 90 Ohio St.
3d 22, 28 (2000) ("[t]he parol evidence rule applies * * * only to integrated writings").
Integration is the act of embodying the complete terms of an agreement in a writing. Id. at
27. In the present case, both Nguyen and Chen testified that the June 16, 2008 note did not
include all the terms agreed upon by the parties. Consequently, on this record, we find no
violation of the parol evidence rule.
{¶ 42} Finally, we find the trial court's decision finding no contract between the parties
is supported by the weight of the evidence. As stated above, in conducting a manifest weight
analysis, we weigh the evidence and all reasonable inferences, consider the credibility of
witnesses and determine whether, in resolving conflicts in the evidence, the finder of fact
clearly lost its way and created such a manifest miscarriage of justice that the judgment must
be reversed. Eastley, 2012-Ohio-2179 at ¶ 20.
{¶ 43} To set forth a claim for breach of contract, a plaintiff must prove: (1) the
existence of a contract, (2) plaintiff fulfilled its contractual obligations, (3) defendant failed to
fulfill its contractual obligations, and (4) plaintiff incurred damages as a result. Valley Paint & - 18 - Butler CA2013-10-191
Body v. Natl. Union Fire Ins. Co. of Pittsburgh, 12th Dist. Clermont No. CA2010-08-060,
2011-Ohio-1308, ¶ 19. Essential elements of a contract include an offer, acceptance,
contractual capacity, consideration, a manifestation of mutual assent, and legality of object
and consideration. Artisan Mechanical Inc. v. Beiser, 12th Dist. Butler No. CA2010-02-039,
2010-Ohio-5427, ¶ 26. Mutual assent or "a meeting of the minds" means that both parties
have reached an agreement on the contract's essential terms. Beiser at ¶ 27.
{¶ 44} At trial, appellants claimed the parties reached a loan agreement as evidenced
by the June 16, 2008 note. Chen testified that although some payments on the loan had
been made, appellees still owed appellants $18,000. After hearing all the evidence, the trial
court found appellants' contention that they loaned appellees $50,000 was not credible and
denied their claim for breach of contract. In denying this claim, the trial court also found that
there was no meeting of the minds. After a review of the record, we find no error in the trial
court's decision. At trial, both Nguyen and Luong testified they never actually received
$50,000 from Chen and Dinh. Rather, according to appellees, the June 16, 2008 note
represented the remaining balance they owed on the purchase of United Nails. Moreover,
although appellants testified they gave $50,000 to appellees as a loan, they were unable to
corroborate this testimony with any documentary evidence such as receipts or checks.
Finally, as the parties provided diametrically opposed versions of the terms of the agreement,
the trial court justifiably determined there was no meeting of the minds on the contract's
essential terms. Based on the foregoing, we find the trial court clearly did not lose its way
and create such a manifest miscarriage of justice such that its judgment denying appellants'
breach of contract claim must be reversed.
{¶ 45} Appellants' third assignment of error is overruled.
D. Appellants' Counterclaim for Conversion
{¶ 46} Assignment of Error No. 4: - 19 - Butler CA2013-10-191
{¶ 47} THE TRIAL COURT ERRED TO THE PREJUDICE OF APPELLANTS IN
RENDERING A VERDICT CONTRARY TO APPELLANTS' CLAIM FOR CONVERSION.
{¶ 48} In appellants' fourth assignment of error, they assert the trial court's decision
denying their claim for conversion was against the manifest weight of the evidence. As in
their third assignment of error, appellants also contend the allegations in their counterclaim
should have been deemed admitted based on appellees failure to file an answer, and as a
result, the trial court should have granted judgment in their favor on the conversion claim.
{¶ 49} As noted above, appellants waived any argument based on appellees' failure to
file an answer to their counterclaim. Appellants never sought judgment on their counterclaim
for conversion due to this failure to plead or otherwise defend. See Civ.R. 55(A). Rather,
appellants proceeded with a trial on the merits where the parties presented their respective
versions of the dealings of the parties. Consequently, as appellants failed to raise this issue
to the trial court, we find it has been waived on appeal. See Battaglini, 2004-Ohio-6501 at ¶
30; Maier, 2008-Ohio-3874 at ¶ 59.
{¶ 50} Appellants also argue within their fourth assignment of error that they presented
sufficient evidence which established appellees took wrongful control of the business's
monthly revenue of approximately $10,000 for seven months. Appellants assert they
established appellees "took wrongful control and possession of money belonging to
appellants by changing appellant Chen's credit account and diverting funds to their own
account." Consequently, appellants argue the trial court's finding that appellees were not
liable for conversion was against the manifest weight of the evidence.
{¶ 51} In the present case, both parties brought conversion claims. The trial court
determined that based on the lack of formalities regarding the parties business arrangement,
it was unable to determine which party actually had the ownership interest in the claimed
property. Accordingly, the trial court found "[t]here was no evidence presented by either party - 20 - Butler CA2013-10-191
that the parties exercised wrongful control over each other's property," and thereafter denied
the conversion claims.
{¶ 52} Conversion is the "wrongful exercise of dominion over property to the exclusion
of the rights of the owner, or withholding it from his possession under a claim inconsistent
with his rights." DLK Co. of Ohio v. Meece, 12th Dist. Warren No. CA2012-07-060, 2013-
Ohio-860, ¶ 27. The essential elements of conversion are: (1) plaintiff's ownership or interest
in the property; (2) plaintiff's actual or constructive possession or immediate right to
possession of the property; (3) defendant's wrongful interference with plaintiff's property
rights; and (4) damages. Id.
{¶ 53} Based on our review of the record, we find there is competent, credible
evidence to support the trial court's factual findings and its decision was not against the
manifest weight of the evidence. At trial, Nguyen testified that as the new owners of United
Nails he and Luong were entitled to the revenue generated by the business from July 2008
through January 2009. However, both Chen and Dinh testified that they only agreed to
permit appellants to manage the business. Chen further stated that he and Luong had only
agreed to allow appellants to keep a portion of the revenue, but the rest of the money had to
be forwarded to Chen. The trial court did not find appellants' version of the events credible.
The trial court, as the trier of fact, was in the best position to weigh the credibility of the
witnesses and resolve conflicts in the evidence. Accordingly, the trial court's conclusion that
appellants failed to demonstrate their ownership interest in the revenue and whether
appellees exercised "wrongful control over" this property was supported by the weight of the
evidence. On this record, the trial court clearly did not lose its way and create such a
manifest miscarriage of justice such that its judgment denying appellants' conversion claim
must be reversed
{¶ 54} Appellants' fourth assignment of error is overruled. - 21 - Butler CA2013-10-191
E. Prejudgment Interest Award
{¶ 55} Assignment of Error No. 5:
{¶ 56} THE TRIAL COURT ERRED IN ORDERING APPELLANTS TO PAY
PREJUDGMENT INTEREST ON THE AWARD OF MONETARY DAMAGES.
{¶ 57} In their fifth and final assignment of error, appellants assert the trial court erred
in ordering prejudgment interest on the monetary damages awarded to appellees. Appellants
contend that the prejudgment interest was improper and failed to meet the requirements of
R.C. 1343.03(C). Specifically, appellants assert appellees did not request prejudgment
interest in their complaint or in a motion and there was no hearing on the issue. Appellees
concede that the trial court erred in awarding prejudgment interest. However, appellees
request the court reverse and remand for further proceedings so that they may file a motion
requesting prejudgment interest pursuant to R.C. 1343.03(C).
{¶ 58} Upon a review of the record, we agree with the parties that the trial court erred
in awarding prejudgment interest in this case. Pursuant to R.C. 1343.03(C), a trial court may
award prejudgment interest, "upon motion of any party to a civil action that is based on
tortious conduct," if the court "determines at a hearing held subsequent to the verdict or
decision in the action that the party required to pay the money failed to make a good faith
effort to settle the case and that the party to whom the money is to be paid did not fail to
make a good faith effort to settle the case." R.C. 1343.03(C). "[T]he plain terms of the
statute require that a hearing be held." Pruszynski v. Reeves, 117 Ohio St.3d 92, 2008-Ohio-
510, ¶ 14. Subsection (C) of the statute is equally clear that an award of prejudgment
interest must be made upon a motion of one of the parties, and only after the trial court has
determined that such an award is proper based on the good faith efforts of the parties to
settle the case. R.C. 1343.03(C).
{¶ 59} In the present case, the trial court awarded prejudgment interest sua sponte. - 22 - Butler CA2013-10-191
There was no motion filed by appellees after the decision in their favor which requested an
award of prejudgment interest.5 Moreover, the trial court failed to hold a hearing. "By the
explicit terms of R.C. 1343.03(C)(1), trial courts do not have discretion to decide whether a
hearing must be held. The language is quite clear that trial courts must conduct a hearing,
and, * * * the hearing must be an evidentiary hearing." Prusznski at ¶ 19. Based on the
foregoing, we find the trial court erred when it circumvented the requirements of R.C.
1343.03(C) and awarded appellees prejudgment interest. Therefore, appellants' fifth
assignment of error is sustained. The prejudgment interest award is reversed and vacated.
The matter is remanded for further proceedings consistent with the requirements set forth in
R.C. 1343.03(C).
III. Conclusion
{¶ 60} In light of the foregoing, to the extent the trial court's decision awarded
prejudgment interest, the judgment is reversed and the matter remanded for further
proceedings consistent with this opinion. In all other respects, the judgment of the trial court
is affirmed.
{¶ 61} Judgment affirmed in part, reversed in part, and remanded for further
proceedings.
RINGLAND, P.J., and S. POWELL, J., concur.
5. The trial court's sua sponte grant of prejudgment interest rendered the filing of such a motion futile. Therefore, we find that the failure to file such a motion does not constitute a waiver of prejudgment interest under the circumstances of this case. - 23 -