Garlock v. Silver Dollar Camp , 2021 Ohio 1690 ( 2021 )

[Cite as Garlock v. Silver Dollar Camp, 2021-Ohio-1690.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
HANCOCK COUNTY
PATRICIA A. GARLOCK, ET AL.,
CASE NO. 5-20-35
PLAINTIFFS-APPELLANTS,
v.
SILVER DOLLAR CAMP, ET AL., OPINION
DEFENDANTS-APPELLEES.
Appeal from Hancock County Common Pleas Court
Trial Court No. 2019 CV 300
Judgment Affirmed
Date of Decision: May 17, 2021
APPEARANCES:
Bret A. Spaeth for Appellants
Matthew T. Kemp for Appellee Walter Adeler
Case No. 5-20-35
WILLAMOWSKI, P.J.
{¶1} Although originally placed on our accelerated calendar, we have elected
pursuant to Loc.R. 12(5) to issue a full opinion in lieu of a summary judgment entry.
{¶2} Plaintiff-appellant Patricia A. Garlock (“Patricia”), individually and as
executrix of the estate of Todd J. Garlock, appeals the judgment of the Hancock
County Court of Common Pleas, alleging that the trial court erred in finding that the
defendant-appellee Walter Adeler (“Adeler”) (1) could continue the business of the
Silver Dollar Camp and (2) could buyout a deceased partner’s interest in the
business pursuant to the terms of the partnership agreement. For the reasons set
forth below, the judgment of the trial court is affirmed.
Facts and Procedural History
{¶3} In 1987, Todd Garlock (“Todd”), Shannon Clark (“Clark”), Joe Umbs
(“Umbs”), and Randy Peters (“Peters”) agreed to form a partnership called the
Silver Dollar Camp. Doc. 28. Through this partnership, these individuals intended
to purchase a one-hundred-acre tract of land in New York and then operate a hunting
resort on this property. Doc. 28. On August 3, 1987, Todd, Clark, and Umbs signed
a partnership agreement.1 Doc. 28. Todd, Clark, Umbs, and Peters then effectuated
the purchase of the property in New York. Doc. 28.
1
The original copy of this partnership agreement has not been located. Doc. 28. However, a copy of the
partnership agreement was filed with the trial court. Doc. 28, Ex. A. This copy is signed by Todd, Clark,
and Umbs. Doc. 28, Ex. A. For some reason, the signature line for Peters was blank on this copy. Doc. 28,
Ex. A. In this action, neither party disputes that the partnership agreement that was filed with the trial court
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{¶4} On December 28, 1987, Peters passed away, leaving Todd, Clark, and
Umbs as the remaining partners of the Silver Dollar Camp partnership. Doc. 28.
Peters’s interest in the partnership was later transferred to the remaining partners.
Doc. 28, Ex. B. Subsequently, Clark decided to withdraw as a partner, and Clark’s
interest in the partnership was transferred to Adeler. Doc. 28. On February 27,
1989, Todd, Clark, Umbs, and Adeler signed an agreement that addressed the terms
of Clark’s withdrawal from the partnership. Doc. 28, Ex. E. Clark, Todd, and Umbs
also conveyed their individual interests in the property to the Silver Dollar Camp
partnership. Doc. 28, Ex. D.
{¶5} In June of 2000, Umbs withdrew as a partner. Doc. 28. After paying
Umbs the amount of his capital contribution, Todd and Adeler decided to continue
the business as the only partners in the Silver Dollar Camp partnership. Doc. 28.
On August 15, 2007, Todd married Patricia. Doc. 28. On August 4, 2018, Todd
passed away. Doc. 28. Patricia then became the executrix of Todd’s estate. Doc.
1. On September 27, 2018, Adeler sent Patricia a notice of intent to purchase Todd’s
interest in the partnership for the amount of Todd’s capital contribution pursuant to
Article XIII of the partnership agreement. Doc. 28, Ex. G.
was, in fact, the agreement that governed the Silver Dollar Camp partnership. Doc. 28. Rather, the parties
dispute what portions of the partnership agreement remain enforceable after Todd’s death.
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{¶6} On August 9, 2019, Garlock filed a complaint with the trial court in her
individual capacity and as the executrix of Todd’s estate. Doc. 1. In this complaint,
she requested the judicial dissolution and winding up of the business partnership,
including the sale of the property in New York. Doc. 1. On October 15, 2019,
Adeler filed an answer and counterclaim. Doc. 20. He requested specific
performance of the agreement. Doc. 20.
{¶7} On February 26, 2020, the parties filed a stipulated set of facts and a
copy of the Silver Dollar Camp partnership agreement. Doc. 28. On February 27,
2020, Patricia filed a motion for summary judgment. Doc. 29. On February 28,
2020, Adeler filed a motion for partial summary judgment. Doc. 30. The dispute
between the parties concerns the enforceability of several provisions of Article XIII
in the Silver Dollar Camp partnership agreement. These disputed provisions read,
in their relevant parts, as follows:
XIII. DISSOLUTION, WINDING UP; LIQUIDATION
A. Causes of Dissolution. The partnership shall be dissolved on
the happening of any of the following events:
***
3. Death, disability, or bankruptcy of any partner; * * *
***
B. Right to Continue Business After Dissolution. On dissolution
of the partnership, the remaining partners shall have the right to
elect to continue the business of owning, operating, and
maintaining the real estate of the partnership under the same
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name, by themselves, or with any additional persons they may
choose. * * *.
C. Payment If Partnership Continued After Dissolution. If, on
dissolution, the remaining partners elect to continue the
partnership under Article XIII(B), they shall pay to the
withdrawing, or expelled partner, or the estate of the deceased
partner, the value of the partner’s interest as determined in
Article XIII(D), as of the date of dissolution. Such payment shall
be made within six (6) months of dissolution. It is specifically
agreed that on the death of any partner, an inventory and
appraisal of the partnership property and sale of the deceased
partner’s interest in the partnership, as provided by the Ohio
Revised Code, shall be dispensed with, and that in lieu of the mode
for the settlement of such deceased partner’s interest and
disposition thereof provided for in Sections 1779.04 and 1779.06
of the Ohio Revised Code, such deceased partner’s interest shall
be settled and disposed of solely under the provisions of this
agreement.
D. Value of Partner’s Interest. In the event any partner resigns
from the partnership, or dies during the continuance of this
Agreement, or disassociates themselves from the partnership for
any reason, including expulsion, the remaining partners shall
have the right to purchase the interest of the former partner by
paying for such interest the value determined as being the
partner’s capital contribution * * *, provided that written notice
of such intention to purchase shall be served by the remaining
partners upon the former partner, his heirs, executors,
administrators, or assigns within sixty (60) days after such
partner disassociates himself from the partnership for any reason.
* * *. During such sixty (60) day period the former partner, his
heirs, executors, administrators, and assigns shall have no right
in the partnership.
Doc. 28, Ex. A.
{¶8} Patricia argued that the provisions in Article XIII(B), (C), and (D)
became unenforceable when the partnership dissolved upon Todd’s death. Doc. 29.
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In response, Adeler argued that Todd’s death did dissolve the partnership but did
not render the provisions in Article XIII(B), (C), and (D) of the partnership
agreement unenforceable. Doc. 30. Thus, he argued that he had the right to continue
the partnership pursuant to Article XIII(B) and the right to purchase Todd’s interest
in the partnership pursuant to the terms set forth in the provisions in Article XIII (C)
and (D). Doc. 30.
{¶9} On July 10, 2020, the trial court issued a judgment entry that denied
Patricia’s motion for summary judgment and granted Adeler’s partial motion for
summary judgment. Doc. 33. The trial court found that the provisions in Article
XIII(B), (C), and (D) were enforceable and governed this dispute. Doc. 33. The
trial court concluded that Adeler had the right to purchase Todd’s interest in the
partnership and the right to continue the business under Article XIII of the
partnership agreement. Doc. 33.
Assignment of Error
{¶10} The appellant filed her notice of appeal on November 20, 2020.2 Doc.
46. On appeal, Patricia raises the following assignment of error:
Plaintiff/Appellant [Patricia] Garlock, individually and in her
fiduciary capacity, asserts that the trial court erred in finding that
Appell[ee] Adeler was able to continue the business of the
partnership after dissolution under Article XIII subsection (B),
2
Patricia filed a notice of appeal on August 6, 2020. Doc. 36. However, this Court dismissed this prior
appeal for lack of a final appealable order in Case #5-20-26. On October 27, 2020, the trial court issued a
Civ.R. 54(B) order that rendered its judgment entry of July 10, 2020 a final appealable order. Doc. 40.
Patricia then filed notice of appeal on November 20, 2020 in Case #5-20-35. Doc. 46.
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and that the Buy Out provisions of subsections (C) and (D) are
enforceable.
Patricia argues that the language of the partnership agreement does not permit
Adeler to continue the business or purchase Todd’s interest in the partnership.
Legal Standard
{¶11} A partnership is “an association of two or more persons to carry on as
co-owners a business for-profit * * *.” R.C. 1776.01(M). As a general matter, a
“partnership agreement governs relations among the partners and between the
partners and the partnership.” R.C. 1776.03(A). See R.C. 1776.01(N). “To the
extent the partnership agreement does not otherwise provide, [Ohio’s Uniform
Partnership Act in R.C. 1776.01, et seq.] * * * governs relations among the partners
and between the partners and the partnership.” R.C. 1776.03(A). See R.C. 1776.01,
et seq.
{¶12} “The construction of a written agreement is a matter of law for the
court.” LublinSussman Group LLP v. Lee, 2018-Ohio-666, 107 N.E.3d 724, ¶ 19
(6th Dist.).
When confronted with an issue of contract interpretation, our
role is to give effect to the intent of the parties. We will examine
the contract as a whole and presume that the intent of the parties
is reflected in the language of the contract. In addition, we will
look to the plain and ordinary meaning of the language used in
the contract unless another meaning is clearly apparent from the
contents of the agreement. When the language of a written
contract is clear, a court may look no further than the writing
itself to find the intent of the parties. ‘As a matter of law, a
contract is unambiguous if it can be given a definite legal
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meaning.’ Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-
Ohio-5849, 797 N.E.2d 1256, ¶ 11.
Sunoco, Inc. (R & M) v. Toledo Edison Co., 129 Ohio St.3d 397, 2011-Ohio-2720,
953 N.E.2d 285, ¶ 37.
Legal Analysis
{¶13} On appeal, Patricia argues that this business may continue pursuant to
Article XIII(B) only if multiple partners remain after a dissolution of the
partnership. She points to the fact that Article XIII(B) uses plural language, stating
that the “remaining partners shall have the right to elect to continue the business *
* *.” (Emphasis added.) Doc. 28, Ex. A. Since only one partner remained after
Todd’s death, Patricia asserts that Adeler cannot continue the business under the
terms of Article XIII(B).
{¶14} Patricia’s argument revolves around the use of plural language—
“partners,” “they,” and “themselves”—in Article XIII of the partnership agreement.
But in interpreting written agreements, Ohio courts have applied the following rule:
The singular and the plural forms [of terms] are often used in
contracts interchangeably, and courts should construe the plural
and singular forms interchangeably so long as such a construction
is consistent with the evident purposes of the contract. * * * That
principle obtains with even greater force where, as here, the noun
number selected, plural or singular, is intended to cover
hypothetical situations that have not yet arisen.
(Brackets sic.) Grange Life Ins. Co. v. Bics, 9th Dist. Lorain No. 01CA007807,
2001 WL 1044081, *3 (Sept. 12, 2001), quoting Ohio Development Co. v. Ellis, 2d
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Dist. Montgomery No. CA 10340, 1987 WL 18831, *5 (Oct. 22, 1987), citing
Stetson Shoe Co. v. Proctor Hall Co., 17 Ohio Law Abs. 278, 281 (7th Dist. 1934).
See also R.C. 1.43 (stating that, in matters of statutory construction, “[t]he singular
includes the plural, and the plural includes the singular”).
{¶15} In Ohio Development Co. v. Ellis, the Second District Court of
Appeals applied this rule in a factually similar case. Ellis at *4. In Ellis, three
partners operated the Ohio Development Company. Id. at *1. Two of the partners
decided to withdraw from this partnership. Id. The third partner, Thomas Williams
(“Williams”), then announced his intention to purchase the interests of the
withdrawing partners.
Paragraph 14 of the [Partnership] Agreement provide[d] that
upon a partner’s withdrawal from the partnership, the remaining
partners may either: (1) cause the partnership to buy out the
withdrawing partner’s interest; or (2) terminate or liquidate the
partnership.
Finally, paragraph 16 provide[d], in its entirety, as follows:
‘16. Purchase by Individual Partners’
‘(a) If the Partnership declines to exercise any right which it may
have under this Agreement to purchase the Partnership interest
of any Partner, the other voting Partners may individually
exercise such right of purchase on a pro rata basis, but only if such
Partnership interest is thereby purchased in its entirety.’
(Emphasis added.) Id. at *4. The trial court found that the wording of this
partnership “agreement did not contemplate the factual situation of the parties, i.e.,
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a single partner attempting to purchase the interests of the other partners.” Id. *3.
The trial court ordered a liquidation of the partnership’s assets. Id.
{¶16} However, Williams appealed the trial court’s decision, asserting that
the trial court’s decision was inconsistent with the partnership agreement. Ellis,
supra, at *4. On appeal, the Second District reversed the trial court’s decision and
held the following:
In our view, paragraph 16 clearly evidences an underlying
purpose to permit any partner or partners who wish to do so to
continue the business upon the withdrawal of a partner, without
having to liquidate. The defendants argue that the phrase ‘the
other voting Partners’ appearing in 16(a) shows an intent to limit
the application of paragraph 16 to the situation where there are
at least two partners left after the departure of the withdrawing
partners, because of the use of the plural-‘Partners.’ We think
this is reading too much into one word.
***
The partnership agreement clearly evidences an intent to permit
partners remaining after other partners have withdrawn to
continue to operate the business, rather than forcing the
remaining partners to liquidate. We can think of no particular
business reason for the partners to have intended to distinguish
between the situation in which two or more partners remain and
the situation in which only one partner remains to continue the
business. Accordingly, we will not assume that the partners
intended to make that distinction, in the absence of language in
the partnership agreement clearly evidencing that intent.
Id. *4-5. The Second District also found that “[t]he fact that the business cannot be
continued in partnership form * * * does not require liquidation.” Id. at *5. We
find the reasoning of the Second District in Ellis to be persuasive.
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{¶17} Turning to the facts of the case before this Court, Article XIII(B)
expressly provides for a right to continue the business after a dissolution. Doc. 28,
Ex. A. This provision manifests a clear intention to allow the business of the
partnership to continue after a dissolution. Doc. 28, Ex. A. But Patricia’s
interpretation of Article XIII(B) would limit this right, allowing partners to continue
the business but requiring a partner to liquidate the business. Other than pointing
to the plural language in this provision, she offers no other reason for this distinction.
{¶18} However, the context and wording of this provision give no indication
that use of the word “partners” instead of “partner” was intended to impose a
limitation on the right of a partner to continue the business. Further, no provision
in the partnership agreement suggests that the application of the general rule on the
interchangeability of singular and plural terms in a contract would be inconsistent
with the purposes of this partnership agreement. Ellis, supra, at *5 (holding that
“courts should construe the plural and singular forms interchangeably so long as
such a construction is consistent with the purposes of the contract”); Bics, supra, at
*3.
{¶19} If the parties to this agreement wanted to require a liquidation of the
business in the event that only one partner remained at dissolution, they could have
expressly included such a requirement in the partnership agreement. In the absence
of some other evidence in the partnership agreement evidencing such a purpose, we
will not assume that the original parties intended for the business to be liquidated in
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this situation because Article XIII(B) uses the word “partners” instead of “partner.”
Doc. 28, Ex. A. Thus, we conclude that the plural language used in Article XIII(B)
does not preclude Adeler from continuing the business.
{¶20} Patricia further argues that the buyout provisions in Article XIII(C)
and (D) of the partnership agreement are inapplicable because the plural language
in Article XIII(B) precludes a continuation of the business. In her brief, Particia
admits that Adeler can buyout Todd’s interest in the partnership pursuant to the
provisions in Article XIII(C) and (D) if Article XIII(B) is found to be applicable in
this case. Appellant’s Brief, 10. Since we have determined that the plural language
in Article XIII(B) does not preclude Adeler from continuing the business, Patricia’s
legal challenge to the applicability of the provisions in Article XIII(C) and (D) in
this appeal also fails.
{¶21} For the reasons stated in our analysis, we conclude that Adeler has the
right to continue the business pursuant to Article XIII(B) of the partnership
agreement. Further, the buyout provisions in Article XIII(C) and (D) are
enforceable. Thus, the trial court did not err in denying Patricia’s motion for
summary judgment or in granting Adeler’s partial motion for summary judgment.
As such, Patricia’s sole assignment of error is overruled.
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Conclusion
{¶22} Having found no error prejudicial to the appellant in the particulars
assigned and argued, the judgment of the Hancock County Court of Common Pleas
is affirmed.
Judgment Affirmed
ZIMMERMAN and SHAW, J.J., concur.
/hls
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