Hummel v. Hummel Group, Inc. ( 2022 )

[Cite as Hummel v. Hummel Group, Inc., 2022-Ohio-4789.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF WAYNE )
BURKE HUMMEL C.A. No. 22AP0019
Appellant
v. APPEAL FROM JUDGMENT
ENTERED IN THE
HUMMEL GROUP, INC. COURT OF COMMON PLEAS
COUNTY OF WAYNE, OHIO
Appellee CASE No. 2019 CVC-H 000518
DECISION AND JOURNAL ENTRY
Dated: December 30, 2022
TEODOSIO, Presiding Judge.
{¶1} Burke Hummel appeals the judgment of the Wayne County Court of Common Pleas
granting summary judgment in favor of Hummel Group, Inc. We affirm.
I.
{¶2} Burke Hummel (“Mr. Hummel”) began employment with Hummel Group, Inc.
(“Hummel Group”) in 2002. In 2013, they entered into a Close Corporation Agreement providing
that Mr. Hummel was a shareholder of Hummel Group and that his employment could only be
terminated upon a supermajority vote representing 60% of Hummel Group’s outstanding shares.
In 2015, Mr. Hummel signed the 2015 Employment Agreement, which provides that a terminated
employee would have 180 days to bring a claim.
{¶3} In July 2017, Hummel Group’s President, Vaughan Troyer, decided that Mr.
Hummel’s employment with the Group needed to end based upon Mr. Hummel’s alleged
misconduct, deceit, and poor work performance. On July 28, 2017, President Troyer, Chief
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Executive Officer Michael Sommers, and Mr. Hummel met to discuss the matter of Mr. Hummel
exiting the organization. At the meeting, Mr. Hummel was told he no longer had a role with the
organization and was asked to resign. On August 11, 2017, Mr. Hummel met with the Treasurer
of Hummel Group, David Coil, to discuss performance issues and it was reiterated that there was
no longer a place for him within the organization. Other Hummel Group shareholders were aware
of these conversations regarding ending Mr. Hummel’s employment.
{¶4} Mr. Hummel sought and was granted a leave of absence from Hummel Group from
August 14, 2017, to September 22, 2017. Discussions of taking the leave of absence were held at
the same time that Mr. Hummel was meeting with shareholders regarding his misconduct and
departure from the company, and he took the leave knowing that there might not be a job waiting
for him when he returned.
{¶5} A regular monthly shareholders meeting took place on August 29, 2017, where a
vote to terminate Mr. Hummel’s employment was unanimous (constituting 87% of the ownership
interests, the exception being Mr. Hummel’s own absent vote). Mr. Hummel had been informed
of the shareholders meeting but was not informed that a vote on his termination would be held.
Mr. Hummel admitted he was informed of the meeting and was in town at that time; he simply
chose not to attend. Mr. Hummel was officially informed of his termination in the days after the
shareholder meeting.
{¶6} In 2019, Mr. Hummel filed a complaint for breach of contract against Hummel
Group. Upon the motion of Hummel Group, the trial court granted summary judgment against
Mr. Hummel and in favor of Hummel Group. Mr. Hummel now appeals raising one assignment
of error.
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II.
ASSIGNMENT OF ERROR
THE TRIAL COURT ERRED TO THE PREJUDICE OF APPELLANT BURKE
HUMMEL IN GRANTING THE MOTION FOR SUMMARY JUDGMENT
FILED BY APPELLEE HUMMEL GROUP.
{¶7} In his assignment of error, Mr. Hummel argues the trial court erred in granting
summary judgment in favor of Hummel Group. We do not agree.
{¶8} Appellate review of an award of summary judgment is de novo. Grafton v. Ohio
Edison Co., 77 Ohio St.3d 102, 105 (1996). Summary judgment is appropriate under Civ.R. 56
when: (1) no genuine issue as to any material fact remains to be litigated; (2) the moving party is
entitled to judgment as a matter of law; and (3) viewing the evidence most strongly in favor of the
nonmoving party, reasonable minds can come to but one conclusion and that conclusion is adverse
to the nonmoving party. Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327 (1977), citing Civ.R.
56(C). A court must view the facts in the light most favorable to the non-moving party and must
resolve any doubt in favor of the non-moving party. Murphy v. Reynoldsburg, 65 Ohio St.3d 356,
358–359 (1992). A trial court does not have the liberty to choose among reasonable inferences in
the context of summary judgment, and all competing inferences and questions of credibility must
be resolved in the nonmoving party's favor. Perez v. Scripps–Howard Broadcasting Co., 35 Ohio
St.3d 215, 218 (1988).
{¶9} The Supreme Court of Ohio has set forth the nature of this burden-shifting
paradigm:
[A] party seeking summary judgment, on the ground that the nonmoving party
cannot prove its case, bears the initial burden of informing the trial court of the
basis for the motion, and identifying those portions of the record that demonstrate
the absence of a genuine issue of material fact on the essential element(s) of the
nonmoving party's claims. The moving party cannot discharge its initial burden
under Civ.R. 56 simply by making a conclusory assertion that the nonmoving party
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has no evidence to prove its case. Rather, the moving party must be able to
specifically point to some evidence of the type listed in Civ.R. 56(C) which
affirmatively demonstrates that the nonmoving party has no evidence to support the
nonmoving party's claims. If the moving party fails to satisfy its initial burden, the
motion for summary judgment must be denied. However, if 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.
Dresher v. Burt, 75 Ohio St.3d 280, 293 (1996).
{¶10} The trial court’s entry granting summary judgment provides, in pertinent part:
The court finds that the plaintiff was an employee-at-will. He was terminated by
defendant after a regularly scheduled meeting of the shareholders of which he had
notice. The other shareholders all agreed to terminate his employment. His
termination was in compliance with the Close Corporation Agreement. In addition
to the Close Corporation Agreement, the plaintiff signed an employment agreement
on September 29, 2015, which requires that an action arising out of the termination
of his employment be brought within 180 days. Plaintiff waited for over two years
to file this lawsuit.
{¶11} Mr. Hummel argues the trial court committed two errors: one based upon the Close
Corporation Agreement and the other based upon the contractual limitation of actions as provided
in the Employment Agreement. We turn first to the Close Corporation Agreement, as we find it
dispositive of this appeal
{¶12} Termination of the employment of a shareholder is addressed in the Close
Corporation Agreement:
The following action shall be taken only upon the affirmative vote of sixty percent
(60%) of the outstanding shares of the Corporation entitled to vote: (i) termination
of a shareholder as an officer or employee of the Corporation for any or no reason;
***
The Shareholders acknowledge and agree that a Shareholder may be terminated as
an officer or employee of the Corporation for any or no reason upon the affirmative
vote of Shareholders owning at least 60% of all outstanding shares and such
termination shall not be deemed a breach of fiduciary duty owed to such terminated
Shareholder.
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{¶13} Mr. Hummel argues that Hummel Group breached the Close Corporation
Agreement because the officers and other shareholders had decided to terminate him prior to any
shareholder vote and explicitly told him so. He contends that he was told he no longer had a job
before any vote took place, and was consequently terminated before a shareholder vote, in violation
of the Close Corporation Agreement. It is on this basis that he argues that there is a genuine issue
of material fact remaining to be litigated, and that summary judgment should not have been
granted.
{¶14} Although Mr. Hummel contends that two other shareholders (Darrick Hummel and
David Taylor) believed that the decision to terminate him was made prior to the shareholder’s
meeting, the evidence indicates the shareholders were aware that his termination could only be
done by a vote of the shareholders. Moreover, we find no argument to suggest any contractual
relevance to the fact that there were conversations regarding the termination of Mr. Hummel prior
to the shareholders’ vote. Pursuant to the Close Corporation Agreement, termination could only
be achieved by a 60% vote. Because that threshold was met, Mr. Hummel was properly
terminated. There are no facts to dispute this vote or its result. Consequently, we find no error in
the trial court’s determination that no genuine issues of material fact remained to be litigated.
{¶15} The trial court alternatively determined that Mr. Hummel’s legal action against
Hummel Group arose outside of the 180-day limitation period provided for by the Employment
Agreement, which contained the following provision:
17. Contractual Limitation of Actions
17.01. Employee covenants and agrees that any claim or cause of action arising
from the terms of the Agreement including, but not limited to, any claim or cause
of action arising out of or contesting Employee’s termination of employment for
any reason shall be brought within 180 days from the date of the breach on activity
upon which such claim or cause of action is based. In the event such claim or cause
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of action is not timely filed, it is the intent of the parties by this provision to bar the
filing or prosecution of such claim or cause of action thereafter.
{¶16} Mr. Hummel argues that the underlying litigation includes no claims that arise from
the terms of the Employment Agreement, and therefore the 180-day limitation period has no
relevance. In support of this argument, Mr. Hummel notes that the Employment Agreement is
silent regarding the 60% supermajority requirement for termination of a shareholder’s
employment, as that provision only appears in the Close Corporation Agreement and not the
Employment Agreement.
{¶17} Because we conclude the trial court did not err in determining that Mr. Hummel’s
termination was in compliance with the Close Corporation Agreement and that summary judgment
was proper on those grounds, we decline to address the issue of the 180-day limitation on actions.
{¶18} Mr. Hummel’s assignment of error is overruled.
III.
{¶19} Mr. Hummel’s assignment of error is overruled and the judgment of the Wayne
County Court of Common Pleas is affirmed.
Judgment affirmed.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Wayne, State of Ohio, to carry this judgment into execution. A certified copy of
this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period
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for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is instructed to
mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the
docket, pursuant to App.R. 30.
Costs taxed to Appellant.
THOMAS A. TEODOSIO
FOR THE COURT
HENSAL, J.
CONCURS.
CARR, J.
CONCURS IN JUDGMENT ONLY.
APPEARANCES:
JUSTIN D. FLAMM, Attorney at Law, for Appellant.
D. WESLEY NEWHOUSE, Attorney at Law, for Appellee.
STEVEN J. SHROCK, Attorney at Law, for Appellee.