Gallagher v. Cochran ( 2024 )


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  • [Cite as Gallagher v. Cochran, 
    2024-Ohio-3403
    .]
    COURT OF APPEALS OF OHIO
    EIGHTH APPELLATE DISTRICT
    COUNTY OF CUYAHOGA
    WILLIAM J. GALLAGHER,                             :
    Plaintiff-Appellant,              :
    No. 113554
    v.                                :
    EDWARD W. COCHRAN, ET AL.,                        :
    Defendants-Appellees.             :
    JOURNAL ENTRY AND OPINION
    JUDGMENT: AFFIRMED
    RELEASED AND JOURNALIZED: September 5, 2024
    Civil Appeal from the Cuyahoga County Court of Common Pleas
    Case No. CV-18-908626
    Appearances:
    Brian J. Halligan, for appellant.
    Koehler Fitzgerald LLC and Christine M. Cooper, for
    appellees.
    FRANK DANIEL CELEBREZZE, III, J.:
    Appellant William J. Gallagher (“Gallagher”) challenges the judgment
    of the Cuyahoga County Court of Common Pleas striking his jury demand, limiting
    his potential remedy to specific performance, and dismissing his claims against
    Edward W. Cochran (“Cochran”) and Cleveland Plating LLC (“Cleveland Plating”)
    (collectively “appellees”) under Civ.R. 41(B)(2). After a thorough review of the
    applicable law and facts, we affirm the judgment of the trial court.
    I. Factual and Procedural History
    The substantive facts of this case were summarized by this court in a
    prior appeal as follows:
    This case concerns Gallagher’s attempt to recoup over $500,000
    dollars, money that he loaned to Barker Products Company (“Barker
    Products”) while he was employed there. Barker Products was an
    electroplating company that provided national services. Cochran is a
    business investor who purchased the assets of Barker Products and
    formed Cleveland Plating. Gallagher alleges that Cochran offered him
    employment and an equity stake with Cleveland Plating so that he
    could be repaid over time. Cochran alleges that he made no such
    agreement and that Cleveland Plating did not inherit the liabilities of
    Barker Products.
    ...
    After resigning from Ashland University as its Track & Field coach in
    2005, Gallagher joined Barker Products at the behest of his friend
    Benjamin Dagley, (“Dagley”). Gallagher had no previous business
    experience, having worked as the head coach at Ashland for twenty-five
    years. Despite that, Dagley, who was an athlete at Ashland, wanted to
    bring Gallagher in to perform managerial tasks. Gallagher began work
    as a general manager implementing various procedures and
    performing administrative tasks for the company.
    In 2007, Barker Products began to experience severe financial
    problems. Dagley had wholly leveraged Barker Products with Chase
    Bank, its secured lender, and Barker Products was in need of capital to
    address its financial concerns. Gallagher, at Dagley’s request, loaned
    Barker Products over $400,000 over a period of years. He has not been
    repaid and as of 2014, the interest on his loans in addition to the
    principal equaled $511,850.
    Sometime in early 2014, Barker Product’s accountant, Brian Mackert
    (“Mackert”) reached out to Dagley and Gallagher informing them that
    he knew of a potential investor, Cochran, with whom Mackert had
    worked previously. Cochran was an experienced business person who
    had success purchasing failing companies. According to Dagley’s
    affidavit, Mackert had introduced Cochran to Dagley in 2007; Mackert
    informed Dagley that Cochran had made millions from various deals in
    which Mackert had assisted Cochran.
    On behalf of Cochran, Mackert invited Gallagher and two other Barker
    Products employees, Elba and Diane Wade, to meet Cochran at
    Cochran’s house on September 9, 2014. Dagley was not invited. At the
    meeting, Cochran questioned Gallagher and the Wades about Barker
    Products, and specifically asked about Gallagher’s debt. According to
    Gallagher, Cochran told the group that he was interested in purchasing
    or investing in the company. Cochran asserts in his affidavit that no
    contract was made and that he only listened to what the group had to
    say. In fact, Cochran alleges that it was Gallagher and the Wades who
    led the discussion.
    Following the meeting on September 9, 2014, Cochran asked Mackert
    to schedule another meeting for the next day, September 10, 2014. At
    Cochran’s behest, Mackert invited Gallagher, the Wades, and Dagley to
    meet with Cochran at Crop Bistro, Cochran’s Ohio City Restaurant.
    At this meeting, Cochran asked more questions of the group and,
    according to Gallagher, Cochran indicated that he had decided to
    purchase or invest in the company. Cochran told the group that he was
    going to invest in Barker and that the management team would keep
    their jobs there. He stated that he wanted 60% equity in the company
    and that the remaining 40% would be divided up however the Barker
    Products team wanted. Cochran allegedly asked Gallagher to negotiate
    with Barker Products suppliers to try and secure a reduction in debt
    and better credit terms in advance of new ownership. Cochran left the
    team to figure out the equity terms, which Mackert would memorialize
    and pass on to Cochran.
    Cochran disputes that he was the one making proposals and requesting
    Gallagher’s assistance; Cochran alleges that, much like at the
    September 9th meeting, he merely listened to what the Barker Products
    team had to say. He states that he received an equity ownership
    proposal from the group after the meeting, but that it was the Barker
    Products team who proposed it. However, in his deposition, he
    references being involved in the equity discussion, though he stated it
    was a hypothetical. The Barker team clearly took the discussions with
    Cochran seriously as they worked with Mackert to prepare a proposal
    for Cochran’s review.
    On September 10, 2014, Gallagher initially asked to be treated as a
    debtholder rather than have an equity share. The Wades, Dagley, and
    Mackert agreed to his request. However, after Mackert passed this
    along to Cochran, Cochran rejected that idea and allegedly told Mackert
    that Gallagher would have to recoup his debt through an equity share.
    Mackert shared this information with Gallagher.
    On September 11, 2014, Gallagher spoke with Dagley and the Wades
    and they agreed that Gallagher would own 33.45% of the company
    through an equity share, the Wades 6.55% and Dagley zero, consistent
    with their individual debt with the company. Gallagher shared this plan
    with Mackert, who stated he would pass it along to Cochran. Mackert
    told Gallagher that Cochran would agree to this plan because Cochran
    merely wanted his 60% share and did not care how the other 40% was
    divided.
    On September 22, 2014, Mackert and Cochran submitted a letter to
    Chase Bank. The letter stated in part: “Pursuant to a re-organization
    and or [sic] restructuring of Barker Products Inc. I, Edward Cochran,
    would like to extend the following offer . . . .” In the letter, Cochran
    offered to satisfy the current debt of Barker Products, as well as satisfy
    the mortgage. Cochran asked Dagley to sign the letter to give the offer
    some legitimacy; Dagley complied, believing that he was to be part of
    the Barker Products team moving forward. Chase Bank did not accept
    the offer, however.
    ...
    On the same day that Cochran was attempting to purchase Barker
    Products directly from Chase Bank without involving Gallagher or the
    Wades, Gallagher received a phone call from Mackert. Mackert told
    Gallagher that that Barker Products had an overdue bill with The
    Illuminating Company and that the electrical company had threatened
    to shut off the electricity unless $10,000 was immediately paid.
    Mackert asked that Gallagher help out the company. Elba Wade, the
    production manager, also called Gallagher asking him to make the
    payment. Gallagher wrote the check, and Wade drove to his house to
    pick it up. Gallagher made this payment assuming he would be paid
    back by his employer. However, Gallagher has not been paid by Barker
    Products since September 10, 2014, and he has not received another
    paycheck from the company.
    At this point, both Gallagher and Cochran suggest that there was no
    further communication between the two. In a letter submitted by
    Gallagher, sent in January 2015, Gallagher asks Cochran whether the
    Barker Products team is still in Cochran’s plans. Gallagher emphasized
    that the group was enthused by Cochran’s strategy to purchase Barker
    Products. Cochran never replied.
    Meanwhile, having failed in his initial attempt, Cochran was pursuing
    different avenues to acquire Barker Products. In October 2014,
    Mackert introduced Cochran to Kevin Crawford, a customer of Barker
    Products. Cochran and Crawford decided to purchase Barker and
    rename it Cleveland Plating. Crawford, Cochran, and Chase Bank came
    to an agreement where the duo would purchase Barker Products’ assets
    in a secured party sale and purchase the Barker Products property
    during a foreclosure sale.
    On February 23, 2015, Crawford and Cochran formed Cleveland
    Plating. On March 13, 2015, Cochran, on behalf of Cleveland Plating,
    executed a Bill of Sale for $85,000 to purchase the assets of Barker
    Products. On March 16, 2015, the following Monday, Cleveland Plating
    began operating at the property under a lease agreement with Barker
    Products.
    Around this time, Gallagher, who was aware of the sale, reached out via
    email to both Cochran and Crawford asking about his future
    employment with the company. Crawford responded that he looked
    forward to meeting with Gallagher and discussing his role with the
    company. Gallagher states that this meeting never occurred.
    Gallagher alleges he was in the dark as to his ultimate fate until
    November 27, 2015, when Gallagher spoke with Mackert. At that point
    Gallagher was informed he was not a part of either the ownership group
    or the management team of Cleveland Plating, formerly Barker
    Products. He proceeded to file suit.
    Gallagher v. Cochran, 
    2020-Ohio-4917
    , ¶ 2-20 (8th Dist.) (“Gallagher I”).
    Gallagher originally filed suit in the Wayne County Court of Common
    Pleas and eventually obtained a judgment for over one million dollars against
    Dagley. Cleveland Plating, Crawford, Cochran, Mackert, and the Wades were also
    named as defendants. Gallagher later dismissed his claims against Cleveland
    Plating, Cochran, and Crawford, and refiled suit against Cleveland Plating and
    Cochran in the Cuyahoga County Court of Common Pleas. The suit alleged the
    following:
    Cochran and Cleveland Plating are liable to Gallagher for the sum of
    $511,850 that was loaned for the benefit of Barker. (Claim One)
    Cochran and Cleveland Plating breached their agreement to repay
    Gallagher through an equity position. Gallagher is also owed $10,000
    for the money he advanced to Barker to pay the electrical bill. (Claim
    Two)
    Cochran and Mackert, as Cochran’s agent, promised Gallagher
    employment at Cleveland Plating and an equity ownership interest.
    Through their actions they also fraudulently misrepresented
    themselves to Gallagher and he reasonably relied on their promises.
    (Claim Three)
    Cleveland Plating is the successor in interest of Barker Products and
    Cochran is liable to Gallagher as a result. (Claim Four).
    Cochran and Cleveland Plating are liable to Gallagher for civil
    conspiracy. (Claim Five).
    Id. at ¶ 23.
    Appellees denied the allegations in the complaint and raised certain
    defenses, including the statute of frauds. They eventually moved for summary
    judgment, and Gallagher filed a cross-motion for summary judgment as to liability
    only. The trial court granted the appellees’ motion for summary judgment and
    denied Gallagher’s motion.
    Gallagher appealed to this court, asserting that the trial court had erred
    in granting summary judgment on his claims.
    This court determined that genuine issues of material fact existed with
    regard to the application of the statute of frauds defense, Mackert’s status as an
    agent for Cochran, Gallagher’s first claim (breach of contract), and Gallagher’s
    fourth claim (successor liability).
    The Gallagher I panel further determined that the trial court did not err
    in granting summary judgment on the claims of unjust enrichment, fraudulent
    misrepresentation, and civil conspiracy.
    The matter was remanded to the trial court for further proceedings. On
    remand, appellees moved to strike Gallagher’s jury demand, arguing that
    Gallagher’s breach-of-contract claim sought specific performance as a sole remedy.
    Because specific performance is an equitable remedy, appellees argued that no right
    to a jury trial existed.   Gallagher opposed the motion, asserting that he was
    requesting monetary damages and not equitable relief on either of his surviving
    claims.
    Appellees also filed a motion in limine, seeking to exclude from trial all
    references, testimony, and evidence pertaining to money damages because they
    asserted that Gallagher’s remedy was limited to specific performance. Gallagher
    opposed the motion, again arguing that he was seeking monetary damages and not
    equitable relief.
    The trial court granted the motion to strike and the motion in limine,
    holding that based upon this court’s opinion in Gallagher I, specific performance
    was the only relief that Gallagher was permitted to seek.
    The matter then proceeded as a bench trial. Gallagher presented the
    testimony of Crawford, as the representative of Cleveland Plating, and Cochran,
    both as if on cross-examination, and Gallagher testified on his own behalf. After
    Gallagher had rested, appellees moved for dismissal of the case, arguing that the
    evidence demonstrated that a contract had never been formed. The court agreed
    and dismissed the case.
    Gallagher then filed the instant appeal, raising four assignments of
    error for our review:
    1. The trial court erred as a matter of law in granting appellees’ motion
    to strike Gallagher’s jury demand.
    2. The trial court erred as a matter of law in determining that Gallagher
    was only entitled to the remedy of specific performance.
    3. The trial court’s granting of appellees’ motion to dismiss under Ohio
    Civ.R. 41(B)(2) was against the manifest weight of the evidence and
    contrary to law.
    4. The trial court erred as a matter of law and/or abused its discretion
    in failing to address or recognize Gallagher’s fourth claim for relief
    despite this Court’s revival of that claim for successor liability (which is
    a claim solely for money damages).
    II. Law and Analysis
    A. Motion to Strike Jury Demand and
    Limitation of Remedy to Specific Performance
    Gallagher’s first and second assignments of error are intertwined and
    will be addressed together. In his first assignment of error, Gallagher argues that
    the trial court erred in striking his jury demand. In his second assignment of error,
    Gallagher asserts that the trial court erred in determining that he was only entitled
    to the remedy of specific performance.
    In its order granting appellees’ motion to strike Gallagher’s jury
    demand and granting the motion in limine excluding evidence relating to monetary
    damages, the trial court noted that there was no right to a jury trial if the only relief
    sought was equitable.     Thus, the first issue that we must address is whether
    Gallagher’s remedy was limited to the equitable relief of specific performance. As
    noted by the trial court in its decision, the arguments surrounding this motion arise
    from the parties’ differing interpretations of the statute of frauds issue in Gallagher
    I.
    The statute of frauds issue relates to Gallagher’s first claim, where he
    alleged that Cochran (himself or through his agent, Mackert) promised him that he
    would be repaid over time. Ohio’s Statute of Frauds, codified as R.C. 1335.05,
    provides, in relevant part:
    No action shall be brought whereby to charge the defendant, upon a
    special promise, to answer for the debt, default, or miscarriage of
    another person . . . or upon an agreement that is not to be performed
    within one year from the making thereof; unless the agreement upon
    which such action is brought, or some memorandum or note thereof, is
    in writing and signed by the party to be charged therewith or some
    other person thereunto by him or her lawfully authorized.
    Gallagher alleged that an oral contract existed between himself and
    Cochran involving Cochran giving Gallagher employment and an equity position
    with Barker Products or the potential new company. Appellees argued that the
    alleged oral contract violated the statute of frauds because (1) it purported to answer
    the debt of another (Barker Products), and (2) could not be completed within one
    year of its making.
    This court found these arguments to be meritless. The court first
    determined that the debt provision was not implicated because Gallagher did not
    allege that Cochran agreed to pay him directly and instead asserted that he was
    promised that he would be reimbursed through an equity stake in the company or
    employment. In addition, this court found that “[i]t is possible for an equity
    sharehold to be given to a person or to reach the required value in less than a year,
    therefore the statute of frauds is not implicated” and further found that “a period of
    employment can be completed within a year.” Gallagher I at ¶ 38-39.
    Following the issuance of Gallagher I, Cochran moved this court for
    reconsideration, arguing in part that the court had erroneously concluded that an
    “indirect payment,” in the form of employment or an equity stake, did not implicate
    the statute of frauds. The panel found no merit to Cochran’s assertion and stated as
    follows:
    In our opinion, we found that Cochran offered Gallagher an equity
    stake or employment in order for Gallagher to make his money back,
    but that Cochran did not agree to answer for Barker Products’ debts. If
    Gallagher were unable to recoup the entirety of his debts through either
    employment or an equity share there is no suggestion that Cochran
    would be on the hook for the rest of the debt. According to Gallagher’s
    claim, Cochran is not obligated to do anything more than grant him an
    equity share and employment. Further, this court is not saying that
    Gallagher has proven his claims.
    In his brief in opposition to the motion for reconsideration, Gallagher
    acknowledged that he was “not seeking that [a]ppellees answer for the debt of
    Barker [Products], but rather that Cochran promised that Gallagher would be repaid
    with an equity share over time through his employment . . . . ”
    On remand, the trial court was bound by our legal determinations in
    Gallagher I. Under the law-of-the-case doctrine, “the decision of a reviewing court
    in a case remains the law of that case on the legal questions involved for all
    subsequent proceedings in the case at both the trial and reviewing levels.” Nolan v.
    Nolan, 
    11 Ohio St.3d 1
    , 3-4 (1984).
    In its order striking Gallagher’s jury demand, the trial court stated as
    follows:
    Simply put, the Court of Appeals held that the Statute of Frauds did not
    apply because Plaintiff did not allege that Defendants agreed to pay
    Plaintiff directly the debt owed by the third party, but that the Plaintiff
    was promised an equity stake in the company or employment to
    reimburse him for his debts. To now allow the Plaintiff to seek
    monetary damages from the Defendants for the debt owed by a third
    party would be to ignore the Statute of Frauds, and the holding of the
    Court of Appeals. This Court is not inclined to do so.
    Consequently, in the trial of this matter, the only damages that the
    Plaintiff can argue for is specific performance of either employment
    from the Defendants, or an equity stake in the Defendants’ company.
    We agree with the trial court’s application of Gallagher I and find that
    the trial court did not err in limiting Gallagher’s remedy to specific performance.
    Gallagher’s second assignment of error is therefore overruled.
    We now turn to Gallagher’s first assignment of error and the question
    of whether he was entitled to a jury trial. We find that he was not. Where a plaintiff
    seeks primarily equitable relief with attendant and incidental money damages
    neither party is entitled to a trial by jury. Tipp City v. Watson, 
    2003-Ohio-4836
    ,
    ¶ 17 (2d Dist.), citing Pyromatics, Inc. v. Petruziello, 
    7 Ohio App.3d 131
    , 134 (8th
    Dist. 1983), citing Converse v. Hawkins, 
    31 Ohio St. 209
     (1877); Rowland v.
    Entrekin, 
    27 Ohio St. 47
     (1875); and Harden Chevrolet Co. v. Pickaway Grain Co.,
    
    92 Ohio Law Abs. 161
     (Pickaway C.P. 1961). “A trial court possesses discretion to
    determine whether a certain matter is triable to a jury.” State ex rel. Gallagher v.
    Collier-Williams, 
    2022-Ohio-1177
    , ¶ 18 (8th Dist.).
    Because the trial court correctly determined that the only relief
    available on Gallagher’s claims was the equitable relief of specific performance, it
    did not err in striking Gallagher’s demand for a jury trial and proceeding with a
    bench trial. Gallagher’s first assignment of error is overruled.
    B. Motion to Dismiss pursuant to Civ.R. 41(B)(2)
    In his third assignment of error, Gallagher argues that the trial court’s
    dismissal of the case under Civ.R. 41(B)(2) was against the manifest weight of the
    evidence and contrary to law.
    Civ.R. 41(B)(2) states:
    After the plaintiff, in an action tried by the court without a jury, has
    completed the presentation of the plaintiff’s evidence, the defendant . . .
    may move for a dismissal on the ground that upon the facts and the law
    the plaintiff has shown no right to relief. The court as trier of the facts
    may then determine them and render judgment against the plaintiff or
    may decline to render any judgment until the close of all the evidence.
    This court has noted:
    “Civ.R. 41(B)(2) allows a trial court to determine the facts by weighing
    the evidence and resolving any conflicts therein. Whitestone Co., 2007-
    Ohio-233, 
    2007 WL 155299
    , at ¶ 13; Sharaf, 
    2003-Ohio-4825
    , 
    2003 WL 22100140
    , at ¶ 8. If, after evaluating the evidence, a trial court
    finds that the plaintiff has failed to meet her burden of proof, then the
    trial court may enter judgment in the defendant’s favor. Daugherty,
    Franklin App. No. 98AP-1580, 
    1999 Ohio App. LEXIS 6457
    , 
    1999 WL 1267342
    . Therefore, even if the plaintiff has presented evidence on
    each element of her claims, a trial court may still order a dismissal if it
    finds that the plaintiff’s evidence is not persuasive or credible enough
    to satisfy her burden of proof. Tillman, 
    2007-Ohio-2429
    , 
    2007 WL 1454781
    , at ¶ 11. An appellate court will not overturn a Civ.R. 41(B)(2)
    involuntary dismissal unless it is contrary to law or against the manifest
    weight of the evidence. Whitestone Co. at ¶ 13; Sharaf, ¶ 8.”
    Am. Family Ins. Co. v. Johnson, 
    2010-Ohio-1855
    , ¶ 9-10 (8th Dist.), quoting
    Jarupan v. Hanna, 
    2007-Ohio-5081
    , ¶ 9 (10th Dist.).
    At the conclusion of Gallagher’s case, appellees moved for dismissal,
    arguing that Gallagher had failed to demonstrate that a contract had been formed
    between the parties.    The court granted the motion and dismissed the case,
    reasoning that Cochran made an offer to split 40 percent of the company between
    Dagley, the Wades, and Gallagher. Gallagher did not accept Cochran’s original offer
    because he wanted instead to be a debt holder, which Cochran ultimately rejected.
    The court determined that an oral contract had not been formed and dismissed
    Gallagher’s claims.
    ‘“A breach of contract occurs when a party demonstrates the existence
    of a binding contract or agreement; the nonbreaching party performed its
    contractual obligations; the other party failed to fulfill its contractual obligations
    without legal excuse; and the nonbreaching party suffered damages as a result of the
    breach.’” All Star Land Title Agency, Inc. v. Surewin Invest., Inc., 
    2006-Ohio-5729
    ,
    ¶ 19 (8th Dist.), quoting Phillips v. Spitzer Chevrolet Co., 
    2006-Ohio-4701
     (5th
    Dist.).
    In his brief, Gallagher asserts that he presented evidence of every
    element necessary to prove breach of contract. He argues that he memorialized the
    terms of the management in emails sent to Cochran, which he argues Cochran never
    challenged. He further testified that he accepted Cochran’s offer and believed that
    he had an offer of employment and that he would continue to render services for
    Barker Products.
    The formation of a contract requires a bargain in which there is a
    manifestation of mutual assent, which “ordinarily takes the form of an offer or
    proposal by one party followed by an acceptance by the other party or parties.”
    (Emphasis added.) Harmon v. Philip Morris, Inc., 
    120 Ohio App.3d 187
    , 190 (8th
    Dist. 1997), citing Restatement of the Law 2d, Contracts, § 22 and 71 (1981). “‘[F]or
    there to be a proper offer and acceptance, parties to a negotiation must have a
    meeting of the minds.’” Alliant Food Servs. v. Powers, 
    2003-Ohio-4193
    , ¶ 26 (8th
    Dist.), quoting Gall v. Trumbull Mem. Hosp., 
    2000 Ohio App. LEXIS 3053
     (11th
    Dist. July 7, 2000). Parties entering into a contract “must have a distinct and
    common intention which is communicated by each party to the other.” McCarthy,
    Lebit, Crystal & Haiman Co., L.P.A. v. First Union Mgt., Inc., 
    87 Ohio App.3d 613
    (8th Dist. 1993).
    The trial court determined that the terms set forth at the September 10
    meeting did not create a contract. The record supports this assertion. Even in
    Gallagher’s own testimony, he states that Cochran “rejected” his “offer” to be a
    debtor. He further characterizes this as a “proposal.” Gallagher did not present
    competent, credible evidence to demonstrate that an offer had been accepted and
    that a contract had been formed in this matter.
    Gallagher further argues that he presented evidence to demonstrate
    his fourth claim for relief, successor liability, and that the court improperly
    dismissed his claim.
    Whether a corporation who purchased the assets of another
    corporation may be held liable for the contractual obligations of the seller
    corporation was analyzed by the Supreme Court of Ohio in Welco Industries, Inc. v.
    Applied Cos., 
    67 Ohio St.3d 344
     (1993). In Welco, the Supreme Court of Ohio
    reiterated the well-established general rule of successor liability: the purchaser of a
    corporation’s assets is not liable for the debts and obligations of the seller
    corporation, unless one of the exceptions applies. Id. at 346-347. A successor
    corporation may be held liable when “(1) the buyer corporation expressly or
    impliedly agrees to assume such liability; (2) the transaction amounts to a de facto
    consolidation or merger; (3) the buyer corporation is merely a continuation of the
    seller corporation; or (4) the transaction is entered into fraudulently for the purpose
    of escaping liability.” Id. at 347.
    The Court in Welco elaborated on the concepts of “mere continuation”
    and explained that the basis of this theory is the continuation of the corporate entity,
    not the business operation, after the transaction. Such would be the case when “one
    corporation sells its assets to another corporation with the same people owning both
    corporations. Thus, the acquiring corporation is just a new hat for, or reincarnation
    of, the acquired corporation. This is actually a reorganization.” The Welco Court
    noted that this type of transaction is executed to escape liabilities of the predecessor
    corporation. Because the goal is to escape liability, inadequacy of consideration is
    one of the indicia of mere continuation. Albright v. Varicon, L.L.C., 
    2014-Ohio-209
    ,
    ¶ 21-24 (8th Dist.), citing 
    id. at 350
    .
    Gallagher appears to argue in his brief that Cleveland Plating was a
    “mere continuation” of Barker Products. However, the only evidence that he points
    to in support of this assertion is his testimony that he received an email from
    Cleveland Plating using the same geographical address as Barker Products but that
    the company at that address had been Barker Products the day prior. Gallagher
    stated that to the best of his knowledge, the doors at Barker Products never shut
    before it became Cleveland Plating and that he was “assuming” that it was the same
    entity. He acknowledged that he did not have any direct knowledge regarding the
    entity. The record reflects that Gallagher did not present competent, credible
    evidence to demonstrate successor liability.
    The trial court did not err in dismissing the case, and Gallagher’s third
    assignment of error is overruled.
    C. Successor Liability
    In his fourth assignment of error, Gallagher argues that the trial court
    erred as a matter of law and/or abused its discretion in failing to address his fourth
    claim for relief despite this court’s revival of his claim for successor liability.
    Gallagher does not present a separate argument in support of this
    assigned error but instead advises the court to “See above, assignment of error #3.”
    The successor liability portion of his argument in support of the third assignment of
    error consists of one paragraph and cites just a few lines from the transcript. As we
    have already determined that Gallagher did not present competent, credible
    evidence in support of his successor-liability claim, we also overrule his fourth
    assignment of error.
    III. Conclusion
    The trial court did not err in granting appellees’ motion to dismiss
    Gallagher’s claims pursuant to Civ.R. 41(B)(2) or in striking Gallagher’s jury demand
    and limiting his remedy to specific performance. The judgment of the trial court is
    affirmed.
    It is ordered that appellees recover from appellant costs herein taxed.
    The court finds there were reasonable grounds for this appeal.
    It is ordered that a special mandate be sent to said court to carry this judgment
    into execution.
    A certified copy of this entry shall constitute the mandate pursuant to Rule 27
    of the Rules of Appellate Procedure.
    FRANK DANIEL CELEBREZZE, III, JUDGE
    MICHAEL JOHN RYAN, P.J., and
    SEAN C. GALLAGHER, J., CONCUR
    KEYWORDS
    #113554 – Gallagher v. Cochran
    Motion to strike jury demand; equitable relief; specific performance; statute of
    frauds; R.C. 1335.05; oral contract for employment; equity stake; dismiss; Civ.R.
    41(B)(2); manifest weight of the evidence; competent, credible evidence;
    formation of contract; offer; acceptance; meeting of the minds; successor liability;
    mere continuation of seller corporation.
    The trial court did not err in granting appellees’ motion to dismiss appellant’s
    claims pursuant to Civ.R. 41(B)(2) or in striking appellant’s jury demand and
    limiting his remedy to specific performance.
    

Document Info

Docket Number: 113554

Judges: Celebrezze

Filed Date: 9/5/2024

Precedential Status: Precedential

Modified Date: 9/5/2024