State v. Kdr Holdings, 06ca009003 (8-13-2007)

2007 Ohio 4106
CourtOhio Court of Appeals
DecidedAugust 13, 2007
DocketNo. 06CA009003.
StatusPublished
Cited by2 cases

This text of 2007 Ohio 4106 (State v. Kdr Holdings, 06ca009003 (8-13-2007)) 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
State v. Kdr Holdings, 06ca009003 (8-13-2007), 2007 Ohio 4106 (Ohio Ct. App. 2007).

Opinions

DECISION AND JOURNAL ENTRY
This cause was heard upon the record in the trial court. Each error assigned has been reviewed and the following disposition is made:

{¶ 1} Plaintiff-Appellant John Macken has appealed from the judgment of the Lorain County Court of Common Pleas which granted Defendant-Appellee's motion for directed verdict on both of Appellant's causes of action. This Court affirms in part and reverses in part.

I
{¶ 2} During 1998, Clay Krcal and Thomas Dodak and a third individual formed KDR Holdings, Ltd. ("KDR"). During its existence, KDR engaged in numerous activities such as job placement and a business called factoring, and eventually engaged in the purported development of a subdivision called Clayton's *Page 2 Pointe. Krcal and Dodak explained that factoring consisted of buying receivables from companies at a discount and then pursuing the receivables to earn a profit. During 1998 and 1999, Appellant invested monies into this factoring business with KDR through Dodak and Krcal totaling roughly $46,000. For his investment, Appellant was promised a yearly return of 52%.

{¶ 3} Around the time Appellant's investment was received, KDR received investments from numerous other individuals for its various alleged business pursuits. In 1999, KDR also negotiated to purchase undeveloped land which it planned to use to create a subdivision. KDR negotiated with the landowner and agreed to make a small down payment on the property. The remainder of the purchase price would be paid from proceeds generated by subdividing and developing the land which was to become Clayton's Pointe.

{¶ 4} In June of 1999, KDR contracted to build a home for Robert and Patricia Rolen in Clayton's Pointe. Through an agreement between the parties, the Rolens gave KDR $120,000 in earnest money. In September of 1999, Timothy and Vicki Jenkins agreed to purchase a home from KDR in Clayton's Pointe and gave KDR $30,000 in earnest money. The Jenkins had their earnest money secured with a mortgage that was prepared by Appellee, Wickens, Herzer Panza. Finally, worried about the delay in the construction of their home, the Rolens received a mortgage deed from KDR that was prepared by Appellee. *Page 3

{¶ 5} Shortly after his investment, Appellant learned that Krcal had a criminal record and began to worry about the security of his investment. Accordingly, Appellant approached Krcal and Dodak about the possibility of securing his investment in some manner. On April 13, 2000, Dodak executed a mortgage deed on behalf of KDR in favor of Appellant ("the Macken deed"), purportedly involving a portion of the land KDR had contracted to purchase and granting Appellant a security interest in the amount of $75,000. This amount was chosen through mutual agreement of the parties based upon the principal amount invested by Appellant and included the accrued interest under the parties' agreement. The Macken deed had a block of text on it which stated that it was prepared by "Attorney Marsha L. Collett, Wickens, Herzer Panza."

{¶ 6} Appellant accepted the mortgage deed as security for his investment. In March of 2000, Appellant learned that Krcal and Dodak had been indicted for theft. Specifically, Appellant learned that the two had used KDR to generate investments totaling over $500,000, but had never had the development approved to begin construction. Appellant later learned that due to this indictment Krcal had left the State of Ohio, prior to Dodak executing the Macken deed.

{¶ 7} The actions of Krcal and Dodak were the subject of many media reports. In addition, the Rolens filed suit against KDR, Dodak, and Krcal, alleging fraud because their home was never constructed, the property was never even subdivided, and KDR refused to return their earnest money. During that case, *Page 4 Dodak and Krcal were deposed and discussed the involvement of Appellee with regard to the preparation of legal documents on behalf of KDR. Appellant contends that Dodak testified in the Rolens' case that Appellee generally prepared all of the legal documents that KDR needed to conduct its business.

{¶ 8} Once he became aware of the above facts, Appellant sought legal advice about the validity of the Macken deed. Appellant was informed that the deed contained inconsistent legal descriptions of the alleged mortgaged property. Specifically, the first page of the deed referred to Lot #37 and described the property as consisting of 2.019 acres. It is undisputed that the process of subdividing the land was never completed, so that Lot #37 has never legally existed. Moreover, the legal description of the land as detailed in Exhibit A to the deed describes the entire tract of land that was to be Clayton's Pointe, stating that the land consists of 30.14 acres. Appellant was informed that as a result of these inconsistencies, the mortgage deed was likely unenforceable.

{¶ 9} On August 19, 2004, Appellant filed the instant action against KDR, Dodak, Krcal, and Defendant-Appellee Wickens, Herzer Panza. Appellant was unable to obtain service on KDR and subsequently dismissed his claims against that entity. Appellant, however, moved forward with claims against Dodak and Krcal including fraud and securities violations. In addition, Appellant moved forward with claims against Appellee which included legal malpractice and civil conspiracy. Specifically, Appellant alleged that Appellee acted in collusion with *Page 5 Dodak and Krcal to prepare a fraudulent deed to aide Dodak and Krcal in retaining Appellant's $46,000 investment.

{¶ 10} On November 15, 2005, Appellee moved for summary judgment on Appellant's claims. Based upon the evidence before it, the trial court concluded that an issue of fact remained surrounding the authorship of the mortgage deed.

{¶ 11} On August 10, 2006, a jury trial commenced on Appellant's causes of action. During the trial, both Dodak and Krcal testified that Appellee was not involved in creating the Macken deed. Moreover, Attorney Marsha Collett, whose name appeared on the Macken deed, testified that she had no involvement in creating Appellant's mortgage deed. At the close of Appellant's case, Appellee moved for a directed verdict on both of Appellant's claims against it. The trial court granted that motion. Specifically, the trial court found that Appellant had presented no evidence that Appellee was involved with the creation of the Macken deed. The trial court continued, noting that Appellant's testimony at trial was markedly inconsistent with his pretrial affidavit opposing summary judgment. Thereafter, Appellant moved for a new trial. The trial court denied that motion. Appellant has timely appealed the trial court's judgment, raising five assignments of error. For ease of analysis, we have consolidated Appellant's first three assignments of error. *Page 6

II
Assignment of Error Number One
"THE TRIAL COURT IMPROPERLY GRANTED APPELLEE'S MOTION FOR DIRECTED VERDICT WHERE CONFLICTING EVIDENCE PRECLUDED THE GRANTING OF SUCH A MOTION."

Assignment of Error Number Two
"THE TRIAL COURT IMPROPERLY APPLIED THE STANDARD FOR GRANTING A MOTION FOR A DIRECTED VERDICT."

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Carter v. Univ. Park Dev. Corp.
2022 Ohio 3462 (Ohio Court of Appeals, 2022)
Norton v. Dominion Energy Servs., Inc.
2021 Ohio 1278 (Ohio Court of Appeals, 2021)

Cite This Page — Counsel Stack

Bluebook (online)
2007 Ohio 4106, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-kdr-holdings-06ca009003-8-13-2007-ohioctapp-2007.