Taddeo v. Bodanza ( 2014 )

[Cite as Taddeo v. Bodanza, 2014-Ohio-3719.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 100704
RAY J. TADDEO
PLAINTIFF-APPELLANT
vs.
MICHAEL A. BODANZA, ET AL.
DEFENDANTS-APPELLEES
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-11-753685
BEFORE: Rocco J., Boyle, A.J., and E.A. Gallagher, J.
RELEASED AND JOURNALIZED: August 28, 2014
-i-
ATTORNEYS FOR APPELLANT
Mary Davis
Gregory D. Seeley
Seeley, Savidge, Ebert & Gourash
26600 Detroit Road, 3rd Floor
Westlake, Ohio 44145
ATTORNEYS FOR APPELLEES
For Michael Bodanza, et al.
Karl E. May
Kadish Hinkel & Weibel
1360 East 9th Street
Suite 400
Cleveland, Ohio 44114
For O.N. Equity Sales Company, et al.
Kris Banvard
Marion H. Little
Zeiger, Tigges & Little L.L.P.
41 S. High Street
Suite 3500
Columbus, Ohio 43215
KENNETH A. ROCCO, J.:
{¶1} Plaintiff-appellant Ray J. Taddeo, Jr., as executor of Ray J. Taddeo’s estate,
appeals from the trial court’s grant of summary judgment in favor of defendants-appellees
Michael Bodanza, Preferred Financial Services, Inc. (“PFS”), O.N. Equity Sales
Company (“ONESCO”), and John J. Takacs.1 For the reasons that follow, we affirm the
trial court’s final judgment.
{¶2} In January 2004, Taddeo opened two securities accounts with ONESCO,
through Bodanza, who at that time was a registered representative of ONESCO and the
sole owner of PFS. Takacs also did business in the PFS office under the PFS name and
was a registered representative of ONESCO.
{¶3} In 2006, Bodanza advised ONESCO that he wanted to engage in private
securities transactions to raise capital for an oil and gas venture. ONESCO advised
Bodanza that, under its rules, Bodanza could not participate in the private securities
transactions. Bodanza opted to resign from ONESCO and to surrender his securities
license so that he could pursue the private securities transactions. Bodanza then began
marketing activities on behalf of Preferred Financial Holdings Co., L.L.C. (“PFH”), a
venture in oil and gas drilling. Meanwhile, Takacs became the ONESCO supervisor for
PFS.
1
The underlying lawsuit was filed in 2011 by Ray J. Taddeo who died on May 21, 2012, while
the case was pending. Thereafter, Ray J. Taddeo, Jr., executor of plaintiff’s estate was substituted as
plaintiff. All references to Taddeo in this opinion are to the original plaintiff, the late Ray J. Taddeo.
{¶4} In December 2007, Taddeo met with Bodanza, and Bodanza informed
Taddeo that he had relinquished his securities license and that Taddeo’s accounts were
held by ONESCO as house accounts. Bodanza asked Taddeo if he was interested in
PFH. Taddeo was interested. Taddeo asserts that Bodanza presented an offer to
purchase PFH “bonds.” But, in fact, Taddeo had purchased two promissory notes
from PFH in the total amount of $230,000. Taddeo further alleged that Takacs came to
Taddeo’s house to obtain Taddeo’s signature on one of the promissory notes and to pick
up checks for the investment.
{¶5} When the notes became due in October 2010, PFH could not pay them. On
April 21, 2011, Taddeo filed his initial complaint in the trial court setting forth several
causes of action within three broad categories: (1) as insurance agents (false and
fraudulent representation, negligent misrepresentation, breach of fiduciary duty, breach of
the duty to exercise reasonable care in advising client, common law fraud, negligent
supervision, unjust enrichment, and bad faith); (2) as securities registered representatives
(fraud by seller under R.C. 1707.41, advisor liability under R.C. 1707.42, sale of
unlicensed securities under R.C. 1707.43, conversion, negligent supervision, and unjust
enrichment); and as tax preparer (negligence).
{¶6} Following discovery, the defendants filed four separate motions for summary
judgment on all of Taddeo’s claims.2 On November 5, 2013, the trial court entered
Two of those motions were filed by defendants who are not parties to this appeal.
2
summary judgment, followed by a nunc pro tunc entry on November 22, 2013, which
clarified that summary judgment was granted to all defendants on all claims.
{¶7} Taddeo now appeals, asserting six assignments of error for our review:
I. The trial court erred when it granted summary judgment to Bodanza when
Bodanza sold unregistered securities, making him strictly liable for
reimbursement to the purchasers thereof.
II. The trial court erred when it granted summary judgment to ONESCO
when there was an expert report that opined that ONESCO was liable for
Bodanza’s actions.
III. The trial court erred when it granted summary judgment to Takacs when
Takacs participated in and aided the sale of the unregistered securities in
Ohio by taking the documents for signature to the home of Taddeo, picking
up the checks for investment and Takacs provided services to clients under
the name PFS.
IV. The trial court erred when it granted summary judgment to PFS when
PFS participated in and aided the sale of unregistered securities as it was an
umbrella organization under which business was conducted at the same
address as PFH, and Taddeo was a client of PFS.
V. The trial court erred when it granted summary judgment to ONESCO
when ONESCO admittedly had authority over operations and publicity at
PFS.
VI. The trial court erred when it granted summary judgment to Bodanza and
ONESCO on the tax claims when the evidence demonstrates that Bodanza
led Taddeo to believe he was transferring funds from one retirement plan to
another.
{¶8} When reviewing an order granting summary judgment, we apply a de novo
standard, meaning we independently review the record to determine whether summary
judgment is warranted. Baiko v. Mays, 140 Ohio App. 3d 1, 10, 746 N.E.2d 618 (8th
Dist.2000).
{¶9} Civ.R. 56(C) provides that summary judgment is appropriate if (1) there is no
genuine issue as to any material fact; (2) the moving party is entitled to judgment as a
matter of law; and (3) reasonable minds can come to but one conclusion, and that
conclusion is adverse to the party against whom the motion for summary judgment is
made, who is entitled to have the evidence construed most strongly in his favor. Gilbert
v. Summit Cty., 104 Ohio St. 3d 660, 2004-Ohio-7108, 821 N.E.2d 564, ¶ 6.
{¶10} The moving party carries the initial burden of setting forth specific facts that
demonstrate his or her entitlement to summary judgment. Dresher v. Burt, 75 Ohio St. 3d
280, 292-293, 662 N.E.2d 264 (1996). If the movant fails to meet this burden, the court
should not grant summary judgment. If the movant does meet its burden, summary
judgment is warranted only if the nonmovant fails to establish the existence of a genuine
issue of material fact. Id. at 293.
{¶11} We address the first, third, fourth, fifth, and sixth assignments of error
together, because the analysis involved is the same. App.R. 16(A)(7) requires
an argument containing the contentions of the appellant with respect to each
assignment of error presented for review and the reasons in support of the
contentions, with citations to the authorities, statutes, and parts of the record
on which appellant relies.
We may disregard an assignment of error if an appellant fails to cite to any legal authority
in support of an argument as required by App.R. 16(A)(7). See App.R. 12(A)(2). We
may also disregard an assignment of error if an appellant fails to set forth an argument in
support of that assignment of error. Roth v. Roth, 8th Dist. Cuyahoga No. 89141,
2008-Ohio-927, ¶ 71 (“[I]f an argument exists that can support [an] assignment of error, it
is not this court’s duty to root it out.”).
{¶12} In his first assignment of error, Taddeo asserts that the trial court erred by
granting summary judgment to Bodanza when Bodanza sold unregistered securities,
making Bodanza strictly liable for reimbursement to the purchasers of those securities.
Taddeo has not cited to any legal authority nor to any portion of the record in support of
this assignment of error. Further, we are unable to discern what Taddeo is arguing
because he does not link his assignment of error to any cause of action that he asserted in
his complaint. Accordingly, we overrule the assignment of error.
{¶13} In his third assignment of error, Taddeo argues that the trial court erred in
granting summary judgment to Takacs when Takacs participated in and aided the sale of
the unregistered securities in Ohio by taking the documents for signature to the home of
Taddeo, picking up the checks for investment and Takacs provided services to clients
under the name PFS. Assuming that Takacs did everything alleged by Taddeo, Taddeo
fails to explain how Takacs’s actions form the basis of a viable legal claim. Taddeo does
not even identify a cause of action. Because Taddeo fails to make a legal argument
supported with citation to legal authority, we overrule the third assignment of error.
{¶14} Taddeo’s fourth assignment of error contains the same fatal flaw. Here
Taddeo argues that the trial court erred in granting summary judgment to PFS when PFS
participated in and aided the sale of unregistered securities. Taddeo asserts that PFS
business was conducted at the same address as PFH, and that Taddeo was a PFS client.
Taddeo fails to cite to any legal authority to support his conclusory contention that these
facts form the basis of a viable legal claim. Accordingly, we overrule the fourth
assignment of error.
{¶15} In his fifth assignment of error, Taddeo argues that the trial court erred in
granting summary judgment to ONESCO when ONESCO had authority over operations
and publicity at PFS. Once again, Taddeo’s six-line “argument” fails to cite to a single
legal authority. We overrule the fifth assignment of error.
{¶16} Taddeo’s sixth assignment of error asserts that the trial court erred in
granting summary judgment to Bodanza and ONESCO on the tax claims when the
evidence demonstrates that Bodanza led Taddeo to believe that he was transferring funds
from one retirement plan to another. This assignment of error is unsupported by any
argument or citation to legal authority. The sixth assignment of error is overruled.
{¶17} In his second assignment of error, Taddeo argues that the trial court erred
by granting summary judgment to ONESCO, because Taddeo included an expert report in
his motion opposing summary judgment that opined that ONESCO was liable for
Bodanza’s actions. According to Taddeo, the expert’s report creates a genuine issue of
material fact as to ONESCO’s liability.
{¶18} Taddeo argues that ONESCO is liable for Bodanza’s actions under the
theory of respondeat superior, but Taddeo has failed to set forth any argument
establishing Bodanza’s liability.3 Respondeat superior is a form of vicarious liability.
Natl. Union Fire Ins. Co. v. Wuerth, 122 Ohio St. 3d 594, 2009-Ohio-3601, 913 N.E.2d
939, ¶ 20. A principal is vicariously liable for the acts of his agent only when the agent
is directly liable. Id. at ¶22. Because Taddeo has failed to establish that there is a
genuine issue of material fact as to Bodanza’s liability as the agent, it follows that
summary judgment must also be granted to ONESCO as the principal. Accordingly, we
overrule the second assignment of error.
{¶19} Judgment 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.
__________________________________________
KENNETH A. ROCCO, JUDGE
MARY J. BOYLE, A.J., and
EILEEN A. GALLAGHER, J., CONCUR
3
See ¶ 12 supra.