Blank v. Bluemile, Inc.

174 N.E.3d 859

Todd BLANK, Plaintiff-Appellant,

v.BLUEMILE, INC. et al., Defendants-Appellees.

No. 20AP-200

Court of Appeals of Ohio, Tenth District, Franklin County.

Rendered on June 15, 2021

On brief: Wolinetz & Horvath, LLC, Barry H. Wolinetz, and Adam C. Sims, for appellant. Argued: Barry H. Wolinetz.

On brief: Kegler Brown Hill + Ritter, Jason H. Beehler, and Sasa Trivunic, Columbus, for appellees. Argued: Jason H. Beehler.

DECISION

PER CURIAM.

{¶ 1} Plaintiff-appellant, Todd Blank, appeals from a judgment of the Franklin County Court of Common Pleas in favor of defendants-appellees, Bluemile, Inc. et al. For the reasons that follow, we affirm.

I. FACTS AND PROCEDURAL HISTORY

{¶ 2} On May 28, 2014, appellant filed a complaint against appellees, Bluemile, Inc., Thomas James Busic, Jr., Michael Marlowe, David A. Ferris, and Wideopenwest Finance, LLC ("WOW"), alleging claims for unjust enrichment, alter ego, fraudulent conveyance, tortious interference, civil conspiracy, monies had and received, fraud, conversion, breach of contract, and promissory estoppel.

{¶ 3} The material facts in the case are largely undisputed but the parties disagree on the legal significance of those facts as they pertain to the issues of standing and the statute of limitations. Prior to 2005, appellant, Bourne, and Ferris owned an entity known as IPOutlet, LLC ("IPO"). Appellant and Bourne each owned 47.5 percent of the shares in IPO, and Ferris owned the remaining 5 percent of the shares. In 2005, a company known as US Wireless acquired both IPO and MJS Holdings, Inc. ("MJS"), an Ohio corporation owned by Busic and Marlowe.

{¶ 4} Not long after the purchase was consummated, US Wireless elected to divest itself of IPO and MJS. Ferris then incorporated Bluemile for the purpose of recovering the assets formerly belonging to IPO and MJS. To that end, on May 5, 2006, Bluemile entered into a definitive agreement with MJS, Busic, Marlowe, IPO, Ferris, and Bourne. Appellant, however, was not a party to the definitive agreement.

{¶ 5} The definitive agreement provides, in relevant part, as follows:

This Definitive Agreement confirms and effectuates certain transactions, the crux of which involves the sale and transfer by Busic and Marlowe of all issued and outstanding shares of stock in MJS to Bluemile and the sale and transfer by Bourne and Ferris of their entire interests in [IPO] to Bluemile.

(Definitive Agreement at ¶ 2, attached as Ex. A to July 28, 2014 Answer & Counterclaim.) The definitive agreement also provides that "[c]oncurrent with the transaction described herein, Bluemile extended a firm written offer for its cash purchase of the remaining 47.5% ownership interest in [IPO] from [appellant], which offer is under consideration and open for acceptance." Definitive Agreement at ¶ 7. Under the terms of the definitive agreement, all of MJS's rights and obligations in customer and vendor accounts transferred to Bluemile but those of IPO were to be transferred to Bluemile only on Bluemile's acquisition of appellant's interest in IPO. Appellant, however, did not accept Bluemile's offer of $400,000, and he submitted a counteroffer of $500,000.¹ Bluemile rejected the counteroffer.

{¶ 6} Even though Bluemile had not yet acquired appellant's interest in IPO, there is no dispute that subsequent to the execution of the definitive agreement, Bluemile took over operations of IPO. Furthermore, even though Bluemile had yet to acquire appellant's interest in IPO, on November 30, 2006, appellees Bluemile, MJS, IPO, Busic, and Marlowe executed a settlement agreement and release with US Wireless.² The settlement agreement and release memorialized the transfer of all outstanding membership interests in IPO to Bluemile. Bourne executed the settlement agreement on behalf of IPO representing in the document itself that he had the authority to do so. Appellant was not a party to the settlement agreement.

{¶ 7} For a brief period of time in 2006, appellant was employed by Bluemile, but the employment relationship ended acrimoniously later that year.³ Bourne eventually left Bluemile in 2007; Ferris left the company in 2008. There is no evidence appellant ever personally transferred his 47.5 percent share in IPO to Bluemile or any other person or entity, and there is no evidence appellant received any compensation from Bluemile or any other person or entity for his share of IPO. Appellant has acknowledged Bluemile immediately assumed IPO's business relationships on execution of the settlement agreement, including servicing all customer and vendor accounts.

{¶ 8} In September 2013, Bluemile executed an asset purchase agreement with WOW, whereby WOW purchased Bluemile's assets, including Bluemile's interest in IPO. Appellant commenced an action against appellees in September 2013, but he dismissed the complaint by filing a notice of voluntary dismissal.⁴ Appellant refiled the complaint against appellees on May 28, 2014.

{¶ 9} Each of the parties named as defendants in appellant's complaint filed an answer and a counterclaim against appellant. Bluemile also filed a third-party complaint against IPO.⁵ The discovery process in the refiled action was extensive, contentious, and time consuming, including depositions of all the principals and voluminous document production. Much of the discovery concerned matters not germane to the judgment giving rise to this appeal.

{¶ 10} On January 31, 2018, appellant moved the trial court for summary judgment as to Count 1 of appellant's second amended complaint alleging unjust enrichment. On that same date, Busic and Marlowe filed their joint motion for summary judgment as to each of appellant's clams against them. Bluemile also filed a motion for summary judgment on January 31, 2018 as to each of appellant's claims against it. Because of the intervening discovery process, the trial court did not hear oral argument on the cross-motions for summary judgment until February 7, 2020.

{¶ 11} On March 6, 2020, the trial court issued a decision and entry granting appellees’ motions for summary judgment and denying appellant's motion for summary judgment. The decision contains the finding, pursuant to Civ.R. 54(B), "there is no just reason for delay." (Mar. 6, 2020 Decision & Entry at 20.)

{¶ 12} Appellant timely appealed to this court from the March 6, 2020 judgment.

II. ASSIGNMENTS OF ERROR

{¶ 13} Appellant assigns the following as trial court error:

1. THE TRIAL COURT ERRED IN FINDING THAT APPELLANT DID NOT HAVE STANDING TO BRING A DIRECT CLAIM FOR UNJUST ENRICHMENT AGAINST APPELLEE BLUEMILE, OR, ALTERNATIVELY, FAILED TO PROPERLY PLEAD A DERIVATIVE CLAIM AGAINST APPELLEE BLUEMILE.

2. THE TRIAL COURT ERRED IN FINDING THAT APPELLANT'S CLAIM FOR UNJUST ENRICHMENT AGAINST APPELLEE BLUEMILE WAS TIME-BARRED BY THE STATUTE OF LIMITATIONS.

III. STANDARD OF REVIEW

{¶ 14} "Summary judgment under Civ.R. 56(C) may be granted only when there remains no genuine issue of material fact, the moving party is entitled to judgment as a matter of law, and reasonable minds can come to but one conclusion, that conclusion being adverse to the party opposing the motion." Nalluri v. Jones , 10th Dist. No. 19AP-779, 2020-Ohio-4280, 2020 WL 5203223, ¶ 13, citing Tokles & Son, Inc. v. Midwestern Indemn. Co. , 65 Ohio St.3d 621, 629, 605 N.E.2d 936 (1992), citing Harless v. Willis Day Warehousing Co. , 54 Ohio St.2d 64, 375 N.E.2d 46 (1978). The moving party cannot discharge its burden under Civ.R. 56 simply by making conclusory allegations that the nonmoving party has no evidence to prove its case. Nalluri at ¶ 13, citing Dresher v. Burt , 75 Ohio St.3d 280, 293, 662 N.E.2d 264 (1996). Rather, the moving party must point to some evidence that affirmatively demonstrates the nonmoving party has no evidence to support each element of the stated claims. Nalluri at ¶ 13. " ‘[I]f the moving party has satisfied its initial burden, the nonmoving party then has a reciprocal burden outlined in Civ.R. 56(E) to set forth specific facts showing that there is a genuine issue for trial and, if the nonmovant does not so respond, summary judgment, if appropriate, shall be entered against the nonmoving party.’ " Id. , quoting Dresher at 293, 662 N.E.2d 264.

{¶ 15} An appellate court's review of summary judgment is de novo. Hill v. Ohio Dept. of Rehab. & Corr. , 10th Dist., 2021-Ohio-561, 168 N.E.3d 583, ¶ 14, citing Hudson v. Petrosurance, Inc. , 127 Ohio St.3d 54, 2010-Ohio-4505, 936 N.E.2d 481, ¶ 29. " ‘Thus, we conduct an independent review of the record and stand in the shoes of the trial court.’ " Hill at ¶ 14, quoting Nalluri at ¶ 14, citing Abrams v. Worthington , 169 Ohio App.3d 94, 2006-Ohio-5516, 861 N.E.2d 920, ¶ 11 (10th Dist.). Our review permits no deference to the trial court's determination. Zurz v. 770 W. Broad AGA, LLC , 192 Ohio App.3d 521, 2011-Ohio-832, 949 N.E.2d 595, ¶ 5 (10th Dist.) ; White v. Westfall , 183 Ohio App.3d 807, 2009-Ohio-4490, 919 N.E.2d 227, ¶ 6 (10th Dist.).

IV. LEGAL ANALYSIS

A. First Assignment of Error

{¶ 16} In appellant's first assignment of error, appellant contends the trial court erred in finding appellant did not have standing to assert a claim for unjust enrichment against appellees in his individual capacity and in further finding appellant failed to plead a derivative claim against appellees on behalf of IPO. We agree with the trial court.

{¶ 17} "Standing" is defined as " ‘[a] party's right to make a legal claim or seek judicial enforcement of a duty or right.’ " Ohio Pyro, Inc. v. Ohio Dept. of Commerce , 115 Ohio St.3d 375, 2007-Ohio-5024, 875 N.E.2d 550, ¶ 27, quoting Black's Law Dictionary 1442 (8th Ed.2004). "A party must establish standing to sue before a court can consider the merits of a legal claim." Torrance v. Rom , 8th Dist., 2020-Ohio-3971, 157 N.E.3d 172, ¶ 23, citing Ohio Contrs. Assn. v. Bicking , 71 Ohio St.3d 318, 320, 643 N.E.2d 1088 (1994). "To have standing, a party must have a personal stake in the outcome of a legal...