Hanamura-Valashinas v. Transitions by Firenza, L.L.C. , 2020 Ohio 4887 ( 2020 )

[Cite as Hanamura-Valashinas v. Transitions by Firenza, L.L.C., 2020-Ohio-4887.]
IN THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
LAKE COUNTY, OHIO
KIMBERLEE : OPINION
HANAMURA-VALASHINAS, et al.,
:
Plaintiffs-Appellees, CASE NO. 2019-L-057
:
- vs -
:
TRANSITIONS BY FIRENZA, LLC, et al.,
:
Defendants-Appellants.
:
Civil Appeal from the Lake County Court of Common Pleas, Case No. 2017 CV 001631.
Judgment: Affirmed.
James T. Dixon and Teresa G. Santin, Brouse McDowell LPA, 600 Superior Avenue,
East, Suite 1600, Cleveland, OH 44114 (For Plaintiffs-Appellees).
Gerry Davidson and Jeffrey J. Fanger, Fanger & Associates LLC, 36 Alpha Park,
Highland Heights, OH 44143 (For Defendants-Appellants).
MATT LYNCH, J.
{¶1} Defendants-appellants, Transitions by Firenza, LLC, Anthony Fimiani, and
Michael Fimiani, appeal the judgment rendered by the Lake County Court of Common
Pleas in favor of plaintiffs-appellees, Tony Valashinas and Kimberlee Hanamura-
Valashinas, in the amount of $9,000.00 on their claim of fraudulent transfer. For the
following reasons, we affirm the decision of the court below.
{¶2} On October 10, 2017, the Valashinases filed a Complaint for Breach of
Contract; Breach of Implied Duty; Violations of the Home Construction Service Suppliers
Act; Unjust Enrichment; and Slander of Title in the Lake County Court of Common Pleas
against Transitions by Firenza, Inc., and Joseph A. Mannarino. The Complaint was based
on a Construction Agreement between the Valashinases and Transitions, Inc. for the
remodeling of their home in Concord Township.
{¶3} On December 29, 2017, Transitions, Inc. and Mannarino filed an Answer to
Plaintiffs’ Complaint. On the same date, Transitions, Inc. filed a Counterclaim against the
Valashinases, raising claims of Breach of Contract (Count One), Conversion (Count Two),
Unjust Enrichment (Count Three), and Defamation (Count Four).
{¶4} On November 29, 2018, the Valashinases filed a First Amended Complaint
adding Transitions, LLC and the Fimianis as defendants. During the course of the
litigation, the Valashinases discovered that all of Transitions, Inc.’s assets had been
transferred to Transitions, LLC in 2016, and that Transitions, LLC’s members had
dissolved the LLC in October 2018. The Amended Complaint raised the following claims
against Transitions, Inc., Mannarino, and the Fimianis: Breach of Contract (Count I);
Breach of Implied Duty (Count II); Violations of the Home Construction Service Supplier
Act (Count III); Unjust Enrichment (Count IV); Slander of Title (Count V); Fraud (Count
VI); and Violations of the Consumer Sales Practices Act (Count VII). An eighth claim,
Fraudulent Conveyance of Property and Assets (Count VIII), was raised against
Transitions, Inc., Transitions, LLC, Mannarino, and the Fimianis.
{¶5} On December 21, 2018, Transitions, LLC filed a Notice of Dissolution
effective October 24, 2018.
{¶6} On January 17, 2019, Transitions, Inc. filed an Amended Counterclaim.
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{¶7} On January 28, 2019, Transitions, LLC and the Fimianis filed a Motion for
Judgment on the Pleadings.
{¶8} On March 8, 2019, the trial court denied Transitions, LLC and the Fimianis’
Motion for Judgment on the Pleadings.
{¶9} On April 8, 2019, Transitions, LLC and the Fimianis filed a Motion for
Summary Judgment. On the same date, the Valashinases filed a Motion for Summary
Judgment as to the Counterclaim of Transitions, Inc.
{¶10} On May 7, 2019, the trial court ruled on the Motions for Summary Judgment.
The court dismissed the Valashinases’ Fraud claim (Count VI) as to all parties. The court
granted summary judgment in favor of the Fimianis with respect to Counts I through VII
of the Amended Complaint. The court granted summary judgment in favor of Mannarino
with respect to the Valashinases’ Breach of Contract claim (Count I), and with respect to
Counts II through VII “to the extent that those counts rely on piercing the corporate veil of
Transitions by Firenza, Inc. rather than direct liability.” The court dismissed Transitions,
Inc.’s counterclaim for Defamation (Count Four).
{¶11} On May 13-17, 2019, the case was tried before a jury. At the close of the
trial, Transitions, Inc. withdrew its claims for Conversion (Count Two) and Unjust
Enrichment (Count Three). The jury found in the Valashinases’ favor and against
Transitions, Inc. on the Breach of Contract (Count I) claim in the amount of $43,516.00
and for Violations of the Home Construction Service Supplier Act (Count III) in the amount
of $6,400.00 ($1,400.00 compensatory damages and $5,000.00 non-economic
damages). The jury found in favor of the Valashinases and against Mannarino,
Transitions, LLC, and the Fimianis on their Fraudulent Conveyance (Count VIII) claim in
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the amount of $9,000.00 but denied an award of punitive damages. The jury found in
favor of Transitions, Inc. on the Fraudulent Conveyance (Count VIII) claim and in favor of
the Valashinases on Transitions, Inc.’s Counterclaims for Breach of Contract (Count
One).
{¶12} On June 6, 2019, the trial court entered its Judgment Entry on the verdict.
{¶13} On June 11, 2019, the Valashinases filed a Motion for Award of Attorney’s
Fees.
{¶14} On June 13, 2019, Transitions, LLC and the Fimianis (subsequently joined
by Transitions, Inc. and Mannarino) filed a Motion for Judgment Notwithstanding the
Verdict.
{¶15} On June 27, 2019, the Valashinases filed a Motion for Judgment
Notwithstanding the Verdict.
{¶16} On July 3, 2019, Transitions, LLC and the Fimianis filed a Notice of Appeal.
{¶17} On August 26, 2019, the trial court denied the Motions for Judgment
Notwithstanding the Verdict filed by Transitions, LLC and the Fimianis and by the
Valashinases.
{¶18} On August 26, 2019, the trial court awarded the Valashinases attorney fees
against Transitions, Inc. in the amount of $5,375.50.
{¶19} On September 13, 2019, Transitions, LLC and the Fimianis filed an
Amended Notice of Appeal.
{¶20} On appeal, Transitions, LLC and the Fimianis raise the following
assignments of error:
{¶21} “[1.] The trial court erred in determining that a fraudulent transfer occurred
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due to the fact that plaintiffs were not present or future creditors of defendants Anthony
Fimiani, Michael Fimiani or Transitions by Firenza LLC and therefore as a matter of law
a fraudulent transfer could not have occurred.”
{¶22} “[2.] The trial court erred in awarding judgment of $9,000 in damages for a
fraudulent transfer against Michael Fimiani, Anthony Fimiani, and Transitions by Firenza
LLC as said award was speculative as to these defendants and against the manifest
weight of the evidence.”
{¶23} “[3.] The trial court erred in determining that Michael Fimiani and/or Anthony
Fimiani engaged in a fraudulent transfer as said determination was against the manifest
weight of the evidence with respect to the elements of an asset being transferred by or to
Michael Fimiani and/or Anthony Fimiani and with respect to the element of intent to
defraud, hinder or delay by Michael Fimiani and/or Anthony Fimiani and the plaintiffs
therefore failed to meet their burden of proof as to these defendants.”
{¶24} Under the first assignment of error, the appellants challenge the jury’s
verdict finding them liable under the Ohio Uniform Fraudulent Transfer Act.
{¶25} “In civil cases the jury deals only with probabilities, and the burden of proof
is ordinarily carried by a preponderance of the evidence.” Cincinnati, Hamilton & Dayton
Ry. Co. v. Frye, 80 Ohio St. 289, 88 N.E. 642 (1909), syllabus.
{¶26} “In any civil action or proceeding that was tried to a jury, and when upon
appeal all three judges hearing the appeal find that the judgment or final order rendered
by the trial court on the jury’s verdict is against the manifest weight of the evidence and
have not found any other prejudicial error of the trial court in any of the particulars
assigned and argued in the appellant’s brief, and have not found that the appellee is
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entitled to judgment or final order as a matter of law, the court of appeals shall reverse
the judgment or final order of the trial court and remand the case to the trial court for
further proceedings.” App.R. 12(C)(2); Article IV, Section 3(B)(3), Ohio Constitution (“[n]o
judgment resulting from a trial by jury shall be reversed on the weight of the evidence
except by the concurrence of all three judges hearing the cause”).
{¶27} “Weight of the evidence concerns ‘the inclination of the greater amount of
credible evidence, offered in a trial, to support one side of the issue rather than the other.
It indicates clearly to the jury that the party having the burden of proof will be entitled to
their verdict, if, on weighing the evidence in their minds, they shall find the greater amount
of credible evidence sustains the issue which is to be established before them. Weight
is not a question of mathematics, but depends on its effect in inducing belief.’” State v.
Thompkins, 78 Ohio St. 3d 380, 387, 678 N.E.2d 541 (1997), quoting Black’s Law
Dictionary 1594 (6th Ed.1990).
{¶28} “[I]n determining whether the judgment below is manifestly against the
weight of the evidence, every reasonable intendment and every reasonable presumption
must be made in favor of the judgment and the finding of facts. * * * If the evidence is
susceptible of more than one construction, the reviewing court is bound to give it that
interpretation which is consistent with the verdict and judgment, most favorable to
sustaining the verdict and judgment.” Seasons Coal Co., Inc. v. Cleveland, 10 Ohio St. 3d
77, 80, 461 N.E.2d 1273 (1984), fn.3, quoting 5 Ohio Jurisprudence 3d, Appellate Review,
Section 60, at 191-192 (1978); Eastly v. Volkman, 132 Ohio St. 3d 328, 2012-Ohio-2179,
972 N.E.2d 517, ¶ 21.
{¶29} The Uniform Fraudulent Transfer Act provides:
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(A) A transfer made or an obligation incurred by a debtor is fraudulent
as to a creditor, whether the claim of the creditor arose before, or
within a reasonable time not to exceed four years after, the transfer
was made or the obligation was incurred, if the debtor made the
transfer or incurred the obligation in either of the following ways:
(1) With actual intent to hinder, delay, or defraud any creditor of the
debtor;
(2) Without receiving a reasonably equivalent value in exchange for
the transfer or obligation, and if either of the following applies:
(a) The debtor was engaged or was about to engage in
a business or a transaction for which the remaining
assets of the debtor were unreasonably small in
relation to the business or transaction;
(b) The debtor intended to incur, or believed or
reasonably should have believed that the debtor would
incur, debts beyond the debtor’s ability to pay as they
became due.
R.C. 1336.04.
{¶30} With respect to recovery on a claim, the Act provides that “the creditor * * *
may recover a judgment for the value of the asset transferred * * * or the amount
necessary to satisfy the claim of the creditor * * * whichever is less.” R.C. 1336.08(B)(1).
{¶31} The judgment may be entered against either of the following:
(a) The first transferee of the asset or the person for whose benefit
the transfer was made;
(b) Any subsequent transferee other than a good faith transferee who
took for value or from any subsequent transferee.
Id.
{¶32} At trial, there was evidence presented that Transitions, Inc. is an Ohio
corporation of which Mannarino and the Fimianis were shareholders. Around December
2015 or January 2016, Transitions, Inc. ceased operating and its business and assets
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were transferred to Transitions, LLC, of which Mannarino and the Fimianis were
members. In May 2017, Transitions, Inc. entered into a Construction Agreement with the
Valashinases. In October 2017, the Valashinases filed suit against Transitions, Inc. for,
inter alia, breach of contract. In October 2018 (while the present litigation was pending),
the members of Transitions, LLC resolved to dissolve the company.
{¶33} The appellants argue that they cannot be found liable under the Fraudulent
Transfer Act because the jury did not find Transitions, Inc. liable and the Valashinases
were never creditors with respect to them.
While there was evidence of a transfer of assets by Defendant
Transitions by Firenza Inc. to Defendant Transitions by Firenza LLC
during a period of time prior to the Plaintiffs’ claims, the jury did not
find that transfer to be a fraudulent transfer since they found no
fraudulent transfer by Defendant Transitions by Firenza Inc.
Therefore, all of the evidence submitted during the trial regarding that
transaction was determined by the jury as the finder of fact to be
insufficient to establish a fraudulent transfer. Therefore, as a matter
of law, there cannot be a fraudulent conveyance by Defendants
Transitions by Firenza LLC, Anthony Fimiani, or Michael Fimiani.
Appellants’ brief at 12-13.
{¶34} The appellants’ argument is undercut by the provisions of the Act. A
fraudulent transfer is defined in terms of a creditor (the Valashinases) and a debtor
(Transitions, Inc.) with the debtor acting as a transferor. R.C. 1336.04(A). Recovery,
however, is defined in terms of a transferee (Transitions, LLC and the Fimianis). R.C.
1336.08(B)(1). Transitions, Inc. was never a transferee and, therefore, the verdict in its
favor is not inconsistent with a valid claim under the Act. Likewise, while the Act requires
the transferor to be a debtor with respect to the creditor, there is no such requirement that
transferees also be debtors. The basic elements of a Fraudulent Transfer claim are (1)
the transfer of an asset by the debtor (2) with an intent to defraud, hinder, or delay, and
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(3) the existence of present or future creditors. Fade v. Morris, 11th Dist. Ashtabula No.
2015-A-0009, 2015-Ohio-5337, ¶ 29. If these elements are satisfied, as they are in the
present case, then the creditor “has the right to sue the original transferee and any
subsequent transferee for the value of the transferred property.” Yoo v. Ahn, 8th Dist.
Cuyahoga No. 105406, 2018-Ohio-1291, ¶ 12; McKinley Fed. S. & L. v. Pizzuro Ents.,
Inc., 65 Ohio App. 3d 791, 798, 585 N.E.2d 496 (1990) (the transferee’s knowledge of the
debtor’s fraudulent intent “is not necessary in an action under R.C. 1336.07, wherein such
knowledge is not an essential prerequisite”).
{¶35} Accordingly, it has been observed that “[w]hen * * * the debtor no longer
retains any interest in the transferred property but has conveyed its entire interest to the
transferee, courts have concluded that they may fully determine the transferee’s rights
without the debtor’s being a party to the action.” Brown Bark II, L.P v. Coakley, 188 Ohio
App.3d 179, 2010-Ohio-3023, 934 N.E.2d 991, ¶ 20 (10th Dist.) (cases cited); Premier
Therapy, LLC v. Childs, 2016-Ohio-7934, 75 N.E.3d 692, ¶ 132 (7th Dist.) (“[t]he
necessary party would be the transferee * * * from whom recovery is sought”). If, strictly
speaking, Transitions, Inc. was not a necessary party with respect to the Valashinases’
fraudulent transfer claim against Transitions, LLC and the Fimianis, it can hardly be
maintained that a judgment against Transitions, Inc. was a necessary concomitant to a
judgment against Transitions, LLC and the Fimianis.
{¶36} The case of Parmatown S. Assoc. v. Atlantis Realty Co., Ltd., 8th Dist.
Cuyahoga No. 106503, 2018-Ohio-2520, cited by the appellants, does not stand for the
proposition that a creditor-debtor relationship must exist with the transferee under the Act.
In that case, the trial court upheld a grant of summary judgment against the party making
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a Fraudulent Transfer claim because it did not meet the definition of a creditor as a
“person who has a claim.” Id. at ¶ 14, quoting R.C. 1336.01(D). The party did not have
a claim because “the facts” did not demonstrate a transfer made with an intent to defraud,
hinder, or delay and, therefore, the Act did “not apply as a matter of law.” Id.
{¶37} The first assignment of error is without merit.
{¶38} In the second assignment of error, the appellants contend that the
$9,000.00 judgment on the Fraudulent Transfer claim is against the manifest weight of
the evidence.
{¶39} The trial court instructed the jury as follows with respect to damages:
Damages include the value of the asset transferred or the amount
necessary to satisfy the claim of the creditor, whichever is less. In
addition, a person injured by a fraudulent transfer is entitled to such
damages as will fairly compensate them for the wrong suffered -- that
is, the damages sustained by reason of the fraud or deceit, which
have naturally and proximately resulted from the defendant’s
conduct. Such damages may include any damages proven by the
evidence, which the circumstances may require.
{¶40} As noted by the court, this jury instruction was submitted by Transitions,
LLC and the Fimianis and was based on the model instruction from the Ohio State Bar
Association. The instruction is consistent with R.C. 1336.08(B)(1), quoted above, and
this court’s decision in D.A.N. Joint Venture III, L.P. v. Med-XS Solutions, Inc., 11th Dist.
Lake No. 2011-L-056, 2012-Ohio-980: “A party injured by a fraudulent transfer ‘is entitled
to recover such damages as will fairly compensate him for the wrong suffered; that is, the
damages sustained by reason of the fraud or deceit, and which have naturally and
proximately resulted therefrom.” (Citation omitted.) Id. at ¶ 46. “The amount of damages
recoverable on a fraudulent transfer claim ‘will depend on the facts of each case and what
is necessary to compensate the creditor for harm flowing from the fraud.” (Citation
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omitted.) Id.
{¶41} The appellants’ arguments regarding the damage award focus on the fact
that the Valashinases did not prove the actual amount or value of assets transferred from
Transitions, Inc. to Transitions, LLC. “There is no evidence of a $9,000 asset being
transferred in the record by Defendants Michael Fimiani, Anthony Fimiani or Transitions
by Firenza LLC and since there is no evidence of a $9,000 asset being transferred, * * *
the Plaintiffs cannot prevail as a matter of law as they have not met their evidentiary
burden of establishing an asset in the amount of $9,000 was transferred.” Appellants’
brief at 21.
{¶42} At trial, Anthony Fimiani testified that at the beginning of 2016 the
remodeling business conducted by Transitions, Inc. was moved to Transitions, LLC.
Anthony did not recall that Transitions, Inc. had any assets at this time. Michael Fimiani
testified that “the only assets were money that was transferred from Inc. to LLC” but could
not say what that value was. Transitions, Inc.’s tax return for 2015 was introduced into
evidence and showed gross receipts in the amount of $2,375,345.00 and gross profit in
the amount of $603,654.00.
{¶43} With respect to Transitions, LLC, there was no testimony as to its value at
any time during its existence. In May and June 2017 (during the time of the remodeling
of the Valashinases’ home), the Valashinases made $111,705.20 in payments under the
Construction Agreement directly to Transitions, LLC although Transitions, Inc. was the
contracting party. At the time of Transitions, LLC’s dissolution in October 2018, provision
was made for the disposition of corporate assets and for the completion of ongoing
construction projects.
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{¶44} We do not find the absence of evidence regarding the values of the assets
transferred fatal to an award of damages for fraudulent transfer. Both the Fraudulent
Transfer Act and the case law recognize that damages may be based on the amount of
the creditor’s claim rather than the value of the asset transferred. The present case does
not involve the transfer of particular assets. The evidence was that Transitions, Inc.
ceased doing business at the end of 2015 or the beginning of 2016 and Transitions, LLC
continued that business including whatever assets and/or liabilities existed. Likewise, the
dissolution of Transitions, LLC resulted in the dispersal of all its assets including whatever
assets and/or liabilities it had received from Transitions, Inc. (such as the Valashinases
payments under the Construction Agreement). Moreover, the Valashinases presented
evidence that their inability to be able to assign value to the transfers was the result of the
appellants’ refusal to cooperate and/or provide financial records. As this court has
observed, where a defendant’s actions have impeded the precise computation of
damages, a plaintiff should not be denied a recovery for that reason. D.A.N. Joint
Venture, 2012-Ohio-980, at ¶ 38.
{¶45} As to the actual figure of $9,000.00, we note that a similar figure was
mentioned at several points in the testimony, particularly in Kimberlee Hanamura-
Valashinas’ testimony regarding certain inflated invoices which Transitions, Inc.
submitted for payment. The appellants dispute this claim as a valid basis for damages
on the grounds that any amounts Transitions, Inc. overcharged the Valashinases for
materials was offset by Kimberlee’s partial payment of the invoices submitted (such
reduction being known as “retainage”). This argument is unavailing. The $111,705.20
paid by the Valashinases represented their actual payments, not the amount invoiced
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(which was $124,104.79). Moreover, the recovery of retainage was part of Transitions,
Inc.’s counterclaim with regard to which the jury found in favor of the Valashinases.
Finally, we note that the verdict was a general verdict and no interrogatories were
submitted which would allow a precise qualification of the damages awarded. Black v.
Stouffer Realty, Inc., 9th Dist. Summit No. 26550, 2013-Ohio-5723, ¶ 14 (“[w]hile [the
cross-appellants] offer suggestions as to what specific damages the jury awarded, no
interrogatories were submitted to the jury, and, therefore, the breakdown of the damages
* * * is speculative since there is no evidence in the record to indicate what injuries
constituted the damage award”).
{¶46} In sum, the award of $9,000.00 did not exceed an amount that would fairly
compensate for Valashinases for their damages. The second assignment of error is
without merit.
{¶47} In their third and final assignment of error, the appellants claim the
fraudulent transfer verdict is against the weight of the evidence because “there simply is
no evidence of a fraudulent transfer by the Defendants Anthony Fimiani, Michael Fimiani
or Transitions by Firenza LLC with respect to the Plaintiffs.” They maintain that the
elements of a fraudulent transfer claim, i.e., the transfer of an asset with the intent to
defraud, hinder, or delay, “must be proven as to each respective defendant.” Appellants’
brief at 22-23. We disagree. As explained under the first assignment of error, the Act
requires a transfer with the intent to defraud, hinder, or delay “made * * * by a debtor.”
R.C. 1336.04(A). Recovery may be made against subsequent transferees, but there is
no requirement that subsequent transferees be debtors.
{¶48} The appellants argue further: “It would constitute an unconstitutional
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violation of the Defendants’ rights to due process * * * for them to be held accountable for
actions of a third party under a claim of fraudulent transfer where they had no participation
in the transfer and were only affiliated with the third party as minority members of a limited
liability company.” Appellants’ brief at 25. Again, this is not an accurate description of
the way the Act operates. Rather, the Act provides: “A transfer or an obligation is not
fraudulent * * * against a person who took in good faith and for a reasonably equivalent
value or against any subsequent transferee or obligee.” R.C. 1336.08(A) and (B)(1)(b)
(“judgment may be entered against * * * [a]ny subsequent transferee other than a good
faith transferee who took for value”).
{¶49} In the present case, Transitions, Inc. was a corporation with five
shareholders. Mannarino owned a fifty-percent interest and each of the four Fimiani
brothers (two of whom were not defendants) owned twelve-and-a-half-percent interests.
Both Anthony and Michael Fimiani were officers in the company (treasurer and president
respectively). When Transitions, Inc. began operating as Transitions, LLC, Mannarino
and the Fimianis continued as members maintaining the same interests as they
previously held as shareholders. This transfer was not for value. Furthermore, several
characteristics of the transfer are identified under that Act as factors to be considered in
determining “actual intent” to defraud, hinder, or delay, such as: the transfer was to
insiders as defined in R.C. 1336.01(G)(2); the transfer was substantially all of the debtor’s
assets; there was no consideration paid or value given for the transfer; and debtor
became insolvent as a result of the transfer. R.C. 1336.04(B)(1), (5), (8), and (9).
{¶50} As noted above, it was after this transfer which rendered Transitions, Inc.
insolvent that Transitions, Inc. entered into the Construction Agreement with the
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Valashinases. The Valashinases were directed to make payments to Transitions, LLC.
When, during the pendency of this litigation, Transitions, LLC decided to dissolve itself,
that decision was made by the same persons who had effected the transfer of assets
from Transitions, Inc. Again, there was not a transfer for value.
{¶51} As transferees who did not take for value, the appellants could be held liable
under the Act regardless of their intent with respect to the fraudulent transfer. The third
assignment of error is without merit.
{¶52} For the foregoing reasons, the judgment of the Lake County Court of
Common Pleas, finding the appellants liable in the amount of $9,000.00 on the
Valashinases’ fraudulent transfer claim, is affirmed. Costs to be taxed against the
appellants.
CYNTHIA WESTCOTT RICE, J., concurs in judgment only,
TIMOTHY P. CANNON, P.J., concurs in judgment only with a Concurring Opinion.
____________________________________________
TIMOTHY P. CANNON, P.J., concurring in judgment only.
{¶53} I concur in judgment only with regard to the application of the Fraudulent
Transfer Act based on the facts and circumstances in this case.
{¶54} Transitions, Inc. was listed as a viable corporation in Ohio when it
contracted for home renovation services with the Valashinases. At the time the contract
was entered into, Transitions, Inc. was not a debtor to the Valashinases. There is no
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requirement that a corporation retain its assets in order to conduct future business. In
essence, and to put it simply, the plaintiffs entered into a contract with a valid corporation
that had no assets.
{¶55} The application of the Fraudulent Transfer Act in a circumstance such as
this should be measured with caution. It should not apply in situations where one entity
transfers its assets simply to proceed with future customers without exposing its assets
to those future creditors. However, the evidence presented in the present matter showing
the Valashinases were directed to make payments to Transitions, LLC, and the timing of
the dissolution just prior to the mediation, lead me to agree the evidence was sufficient to
allow the question to be presented to the jury for consideration of whether a violation of
the Fraudulent Transfers Act had occurred. Therefore, I concur in judgment only that the
decision should be affirmed.
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