AM & JV, L.L.C. v. MyFlori, L.L.C. ( 2018 )

[Cite as AM & JV, L.L.C. v. MyFlori, L.L.C., 2018-Ohio-600.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
AM and JV, LLC et al., :
Plaintiffs-Appellees, :
No. 16AP-713
v. : (C.P.C. No. 13CV-4488)
MyFlori, LLC et al., : (REGULAR CALENDAR)
Defendants-Appellants, :
John Does 1-5, :
Defendants-Appellees. :
D E C I S I O N
Rendered on February 15, 2018
On brief: The Donnell Law Group, and Titus G. Donnell,
for appellees AM and JV, LLC, and Aleksandar G. Mitrevski.
Argued: Titus G. Donnell.
On brief: Anthony Law LLC, Michael J. Anthony,
Vincent P. Zuccaro, and Andrew D. Randol, for appellants
MyFlori, LLC, and Jim Velio. Argued: Andrew D. Randol.
APPEAL from the Franklin County Court of Common Pleas
DORRIAN, J.
{¶ 1} Defendants-appellants, Jim Velio ("Velio") and MyFlori, LLC ("MyFlori")
(collectively "appellants"), appeal the September 14, 2016 decision and entry of the
Franklin County Court of Common Pleas. For the following reasons, we affirm.
I. Facts and Procedural History
{¶ 2} This matter arises out of a dispute between Velio and Aleksandar G.
Mitrevski ("Mitrevski"), joint owners of the business venture AM and JV, LLC ("AM and
No. 16AP-713 2
JV"). Prior to entering into business with Velio, Mitrevski operated a used car dealership
at 1940 South High Street in Columbus ("the property"), a property which he owned.
{¶ 3} In 2008, Velio approached Mitrevski about becoming a partner in
Mitrevski's dealership. Following negotiations, Mitrevski and Velio formed AM and JV as
joint owners pursuant to an operating agreement that both signed. Velio agreed to
provide Mitrevksi with $195,000 and to invest an additional $50,000 in the business. In
exchange, Mitrevski transferred the title for the property to AM and JV and agreed to
invest $50,000 in the business. Mitrevski was responsible for the day-to-day operations
of the dealership and was to receive a salary. Profit from the business was to be split
equally between Mitrevski and Velio. The operating agreement specifically provided that
"[t]he unanimous consent of the Members shall be required before the Company may * * *
[a]quire, sell, lease or other transfer or disposition of, or mortgage, pledge or the placing
or suffering of any other encumbrance on or affecting all of the Company's property or
any portion thereof." (Appellant's Sept. 14, 2015 Motion for New Trial, Ex. B, Operating
Agreement at 5-6.)
{¶ 4} According to Mitrevski, in January 2010, Toty Auto Repair ("Toty") began
renting part of the property for $2,000 per month, which he split with Velio. In June
2010, Mitrevski and Velio agreed to sell the property because the business was failing.
While they waited for the property to sell, Mitrevski claimed that Velio agreed to take all
the rent money, and Mitrevski would take any income from the used car dealership.
{¶ 5} Around October 2010, Mitrevski claimed that Velio ordered him to leave the
property. As a result, Mitrevski took some of AM and JV's cars from the property to a new
lot across the street at 1872 South Pearl Street and began operating a used car dealership
as a separate, new business from AM and JV. According to Mitrevski, Velio agreed to split
with Mitrevski the rent he received from the property because Mitrevski had moved.
Thereafter, Mitrevski attempted to sell the property to Spartak Selimaj ("Selimaj").
Mitrevski stated that Selimaj paid both him and Velio earnest money as a down payment
for the property, but canceled the deal after discovering the property had been transferred
from AM and JV to MyFlori, a company owned by Velio. Mitrevski testified he was
shocked to discover that the property had been transferred to MyFlori.
No. 16AP-713 3
{¶ 6} According to Velio, in 2010, Toty began renting part of the property for
$1,500 per month, and later began paying $2,000 per month. Velio claimed that, in June
2010, Mitrevski bought a car for himself and told Velio to take the rent for himself. In
February 2011, Velio confronted Mitrevski because he believed he was stealing from the
business. According to Velio, Mitrevski told him to "[k]eep the property." (Tr. Vol. II at
279.)
{¶ 7} Velio stated that Toty, in March 2011, agreed to lease the property from
Velio for a duration of three years for $2,500 per month, increasing 3 percent annually.
Toty made payments under the lease directly to Velio. According to Velio, in March 2011,
Mitrevski had "remove[d] himself completely from the property" and "was in [a] different
property and business." (Tr. Vol. II at 216-17.) Velio did not share any of the rent he
received under the lease with Mitrevski. Velio stated that, in April 2012, after the deal
with Selimaj failed, he transferred the property to his real estate holding company,
MyFlori.
{¶ 8} Selimaj testified that, in June 2011, Mitrevski approached him with an offer
to sell the property. In January or February 2012, Selimaj paid earnest money as a down
payment for the property, but stated the sale was delayed because there was a tenant
occupying the property. In April 2012, Selimaj discovered the property had been
transferred from AM and JV to another company and, as a result, demanded his earnest
money back. Selimaj testified Mitrevski reacted with surprise when Selimaj informed him
that the property had been transferred from AM and JV to another company. Selimaj
ultimately received his earnest money back from both Mitrevski and Velio.
{¶ 9} On April 22, 2013, plaintiffs-appellees, Mitrevski and AM and JV
(collectively "appellees"), filed a complaint in the trial court asserting the following three
causes of action: quiet title against MyFlori, conversion against appellants, and
conversion of rental income against appellants. On June 7, 2013, appellants filed an
answer and counterclaim. Appellants made the following counterclaims: breach of
contract, breach of fiduciary duty, fraud, conversion, negligent misrepresentation, and
promissory estoppel. Appellants also sought punitive damages and a declaration that
Velio was the sole member of AM and JV. On July 8, 2013, appellees filed an answer to
appellants' counterclaims.
No. 16AP-713 4
{¶ 10} On July 9, 2014, appellees filed a motion for partial summary judgment. On
August 22, 2014, appellants filed a memorandum contra appellees' motion for partial
summary judgment. On September 2, 2014, appellees filed a reply to appellants'
memorandum contra appellees' motion for partial summary judgment. On September 5,
2014, the trial court issued an order referring the matter to a magistrate. On
September 8, 2014, the magistrate filed a decision denying appellees' motion for partial
summary judgment.
{¶ 11} On September 19, 2014, appellees filed an objection to the magistrate's
decision. On October 30, 2014, appellants filed a reply to appellees' objection. On
February 2, 2015, the trial court denied appellees' objection to the magistrate's decision
and adopted such decision as its own.
{¶ 12} On February 9, 2015, the matter proceeded to a jury trial at which the
magistrate presided. On February 17, 2015, the jury rendered the following verdict:
(1) the property remained an asset of AM and JV, (2) rent in the amount of $110,727
which had been received by Velio should be returned to AM and JV, and (3) Velio was
entitled to damages in the amount of $43,282.75 on the claims of conversion of property
and breach of fiduciary duty with regard to Mitrevski's conversion of motor vehicles
belonging to AM and JV. On February 18, 2015, the magistrate filed a decision following
the jury trial.
{¶ 13} On September 4, 2015, appellants filed a motion for new trial or, in the
alternative, a motion for additur and remittitur. On the same date, appellants filed a
separate motion for judgment notwithstanding the verdict or, in the alternative, a motion
for new trial. On October 16, 2015, appellees filed responses to appellants' September 4,
2015 motions. On November 6, 2015, appellants filed replies to appellees' October 16,
2015 responses. On December 23, 2015, the magistrate filed a decision denying
appellants' September 4, 2015 motions.
{¶ 14} On March 1, 2016, appellants filed objections to the magistrate's
February 18, 2015 decision following jury trial. On the same date, appellants separately
filed objections to the magistrate's December 23, 2015 decision. On March 30, 2016,
appellees filed responses to appellants' March 1, 2016 objections. On April 5, 2016,
appellants filed replies to appellees' March 30, 2016 responses. On September 14, 2016,
No. 16AP-713 5
the trial court filed a decision and entry overruling appellants' objections to the
magistrate's February 18, 2015 decision following jury trial and overruling appellants'
objections to the magistrate's December 23, 2015 decision denying appellants' motions for
new trial, motion for additur and remittitur, and motion for judgment notwithstanding
the verdict.
II. Assignments of Error
{¶ 15} Appellants appeal and assign the following two assignments of error for our
review:
I. The Trial Court Erred in Failing to Grant Defendant-
Appellants' Motion for New Trial, or in the Alternative,
Motion for Additur.
II. The Trial Court Erred in Failing to Grant Defendants'
Motion for Remittitur.
III. Discussion
{¶ 16} In their two assignments of error, appellants argue the trial court erred by
overruling their objections to the magistrate's decision denying their motion for new trial
or, in the alternative, their motions for additur and remittitur.
A. Applicable Law
{¶ 17} Civ.R. 59 governs motions for a new trial. Pursuant to Civ.R. 59(A)(6), a
trial court may order a new trial on all or part of the issues if "[t]he judgment is not
sustained by the weight of the evidence." "When presented with a motion premised on
Civ.R. 59(A)(6), a trial court must weigh the evidence and consider the credibility of the
witnesses to determine whether the manifest weight of the evidence supports the
judgment." Ellinger v. Ho, 10th Dist. No. 08AP-1079, 2010-Ohio-553, ¶ 61, citing
Salvatore v. Findley, 10th Dist. No. 07AP-793, 2008-Ohio-3294, ¶ 24. "Unlike directed
verdicts and judgments notwithstanding the verdict, an order for a new trial does not
dispose of litigation; instead, its purpose is to prevent ' "miscarriages of justice which
sometimes occur at the hands of juries," ' by presenting the same matter to a new jury."
Malone v. Courtyard by Marriott Ltd. Partnership, 74 Ohio St. 3d 440, 448 (1996),
quoting Rohde v. Farmer, 23 Ohio St. 2d 82, 93 (1970), quoting Holland v. Brown, 15
Utah 2d 422, 426 (1964).
No. 16AP-713 6
B. Standard of Review
{¶ 18} Civ.R. 53 governs proceedings before a magistrate, including objections to a
magistrate's decision. In ruling on objections to a magistrate's decision, the trial court
must undertake an independent review of the matters objected to in order "to ascertain
[whether] the magistrate has properly determined the factual issues and appropriately
applied the law." Civ.R. 53(D)(4)(d). In accordance with Civ.R. 53, a trial court reviews a
magistrate's decision de novo. James v. My Cute Car, LLC, 10th Dist. No. 16AP-603,
2017-Ohio-1291, ¶ 13. "The standard of review on appeal from a trial court judgment that
adopts a magistrate's decision varies with the nature of the issues that were (1) preserved
for review through objections before the trial court and (2) raised on appeal by
assignment of error." In re Guardianship of Schwarzbach, 10th Dist. No. 16AP-670,
2017-Ohio-7299, ¶ 14. We review the trial court's decision on a motion for new trial under
Civ.R. 59(A)(6) for an abuse of discretion. Kenner v. Grant/Riverside Med. Care Found.,
10th Dist. No. 15AP-982, 2017-Ohio-1349, ¶ 23; Mannion v. Sandel, 91 Ohio St. 3d 318,
321 (2001), quoting Rohde at paragraph one of the syllabus; Ellinger at ¶ 61, citing Harris
v. Mt. Sinai Med. Ctr., 116 Ohio St. 3d 139, 2007-Ohio-5587, ¶ 39. An abuse of discretion
occurs when a court's judgment is unreasonable, arbitrary or unconscionable. Blakemore
v. Blakemore, 5 Ohio St. 3d 217, 219 (1983).
{¶ 19} In the context of a motion for new trial, "the abuse of discretion standard
requires a reviewing court to 'view the evidence favorably to the trial court's action rather
than to the original jury's verdict.' " Malone at 448, quoting Rohde at 94. "This deference
to a trial court's grant of a new trial stems in part from the recognition that the trial judge
is better situated than a reviewing court to pass on questions of witness credibility and the
'surrounding circumstances and atmosphere of the trial.' " Id., quoting Rohde at 94.
C. Motion for New Trial or Additur
{¶ 20} In their first assignment of error, appellants assert the trial court erred in
denying their motion for new trial or, in the alternative, motion for additur because the
jury's award of $40,000 to Velio as a result of Mitrevski's conversion of business assets
was inadequate.
{¶ 21} "In Ohio, additur is only available where agreed to by the defendant as an
alternative to the trial court's granting a plaintiff's motion for a new trial." Fares v.
No. 16AP-713 7
Scheussler, 10th Dist. No. 93APE10-1373 (Mar. 31, 1994), citing McCormac, Ohio Civil
Rules of Practice, Section 13.30 at 383 (2d Ed.1992). See Allen v. Znidarsic Bros., Inc.,
11th Dist. No. 99-L-088 (Dec. 29, 2000), citing Midwest Elastomers, Inc. v. Piqua Steel
Co., 3d Dist. No. 2-82-15 (Aug. 16, 1983). Therefore, in order to obtain additur, a plaintiff
must first demonstrate entitlement to a new trial under Civ.R. 59. Fares.
{¶ 22} "Generally, a new trial should be granted pursuant to Civ.R. 59(A)(6) where
it appears that the jury awarded inadequate damages because it failed to consider an
element of damages established by uncontroverted expert testimony." Dillon v. Bundy,
72 Ohio App. 3d 767, 773 (10th Dist.1991). See Fares; Baum v. Augenstein, 10 Ohio
App.3d 106, 108 (10th Dist.1983) ("A new trial is warranted on the ground of inadequacy
of damages where it appears that the jury failed to consider some elements of damages.").
See Frazier v. Swierkos, 183 Ohio App. 3d 77, 2009-Ohio-3353, ¶ 22 (7th Dist.), quoting
Bailey v. Allberry, 88 Ohio App. 3d 432, 435 (2d Dist.1993) (" '[I]n order to set aside a
damage award as inadequate and against the manifest weight of the evidence, a reviewing
court must determine that the verdict is so gross as to shock the sense of justice and
fairness, cannot be reconciled with the undisputed evidence in the case, or is the result of
an apparent failure by the jury to include all the items of damage making up the plaintiff's
claim.' "). (Emphasis omitted.) "However, if the verdict is supported by substantial
competent, credible evidence, a trial court abuses its discretion in granting a new trial
based upon the weight of the evidence." Dillon at 773-74, citing Hancock v. Norfolk &
Western Ry. Co., 39 Ohio App. 3d 77, 81 (8th Dist.1987).
{¶ 23} Appellants make two arguments in support of their contention that the
jury's award of damages for Mitrevski's conversion was inadequate. First, appellants
argue that Velio is entitled to half of AM and JV's ending inventory for 2010. Specifically,
appellants contend that:
Because jury interrogatories Nos. 9-15 specifically found that
Velio was deprived of his ownership interest in the vehicles,
funds, and monies held by [AM and JV] after August or
September of 2010, Velio should be entitled to one half of the
$80,000 on [AM and JV's] 2010 [tax] return, which is a
reflection of the assets of that business at the end of 2010.
Thus, the jury should have awarded Velio one half of these
assets i.e. $40,000.
No. 16AP-713 8
(Appellants' Brief at 20-21.) Consistent with appellants' contention, the jury awarded
Velio $40,000 in damages for his counterclaim for conversion.
{¶ 24} Second, appellants argue that "Velio is entitled to $78,004.60" because
"[e]xhibits introduced at trial prove that between August of 2010 and March of 2011,
Mitrevski sold $156,009.21 worth of vehicles back to auto auctioneers, under the dealer
license used for [AM and JV], with the proceeds going directly to [Mitrevski's new
dealership's bank] accounts, which Velio had no knowledge of." (Appellants' Brief at 24;
21.) The exhibits to which appellants point were admitted as evidence at trial and
considered by the trial court in reviewing appellants' motion for new trial. "[A] jury is
entitled to 'believe all, part or none of a witness's testimony.' " State v. Simmons, 10th
Dist. No. 15AP-708, 2017-Ohio-1348, ¶ 35 (10th Dist.), quoting State v. Raver, 10th Dist.
No. 02AP-604, 2003-Ohio-958, ¶ 21, citing State v. Antill, 176 Ohio St. 61, 67 (1964).
Even if the jury gave weight to appellants' exhibits, they need not have concluded that
Velio had an ownership interest in the monies deposited in Mitrevski's new bank
accounts. Fares (finding that even though testimony "went unchallenged by defendant,
the jury was still entitled to disbelieve the testimony and award no money damages").
Therefore, we cannot find the trial court erred in denying appellants' motion for new trial
or, in the alternative, motion for additur.
{¶ 25} Accordingly, we overrule appellants' first assignment of error.
D. Remittitur
{¶ 26} In their second assignment of error, appellants assert the trial court erred in
denying their motion for remittitur because the evidence at trial demonstrated that
appellants paid taxes on the property from 2011 through trial in the amount of
$16,872.73, which appellants assert "should have been deducted from the total of
$110,727.00 that [AM and JV] was awarded against Velio for conversion of rental
income." (Appellants' Brief at 25.)
{¶ 27} Although not expressly provided in the Ohio Civil Rules, "[a] court has the
inherent authority to remit an excessive award, assuming it is not tainted with passion or
prejudice, to an amount supported by the weight of the evidence." Wightman v. Consol.
Rail Corp., 86 Ohio St. 3d 431, 444 (1999). See also Moskovitz v. Mt. Sinai Med. Ctr., 69
Ohio St. 3d 638, 653 (1994), fn. 6. The following four factors must be present for a trial
No. 16AP-713 9
court to order remittitur: " '(1) unliquidated damages are assessed by a jury, (2) the
verdict is not influenced by passion or prejudice, (3) the award is excessive, and (4) the
plaintiff agrees to the reduction in damages.' " (Emphasis omitted.) Harris at ¶ 39,
quoting Wightman at 444. "The power to order a remittitur is not limited to trial courts."
Dardinger v. Anthem Blue Cross & Blue Shield, 98 Ohio St. 3d 77, 2002-Ohio-7113, ¶ 184,
citing Shaffer v. Maier, 68 Ohio St. 3d 416 (1994). See Chester Park Co. v. Schulte, 120
Ohio St. 273 (1929), paragraph five of the syllabus. "Thus, an appellate court may order a
remittitur to the amount warranted by the evidence if it determines that a damages award
is not supported by the evidence." Wells v. C. J. Mahan Constr. Co., 10th Dist. No. 05AP-
180, 2006-Ohio-1831, ¶ 39.
{¶ 28} Here, Mitrevski testified he paid property taxes while at the property, but
did not after he left. Velio testified he began paying property taxes on the property in
question in the second half of 2011. Appellants submitted an exhibit showing property
taxes paid from June 2011 through June 2014 in the amount of $16,872.73.
{¶ 29} Appellants contend the above establishes Velio paid the property taxes for
the period in question, and that it was manifest error for the jury to have failed to reduce
the award of damages for conversion of rental income by the amount of taxes paid.
Although Mitrevski stated he did not pay the property taxes after he vacated the property,
the jury need not have accepted Velio's testimony that he, in fact, paid the property taxes.
At trial, and on appeal, appellees argued the testimony and records were insufficient to
establish that Velio paid the taxes.
{¶ 30} Furthermore, at trial, Velio stated that he attempted to evict Toty because it
was "behind on the rent, not paying property taxes." (Tr. Vol. II at 286.) This testimony
raises the question as to whether Velio or Toty was responsible for paying the property
taxes during the period in question. Although Velio points to auditor's records showing
the property taxes were paid, he does not point to his own records showing payments
matching the amounts in question. As a result, we find that the jury was not required to
believe Velio's testimony that he paid property taxes in the claimed amount and,
therefore, cannot find that the trial court erred in denying appellants' motion for
remittitur.
{¶ 31} Accordingly, appellants' second assignment of error is overruled.
No. 16AP-713 10
IV. Conclusion
{¶ 32} Having overruled appellants' first and second assignments of error, we
affirm the judgment of the Franklin County Court of Common Pleas.
Judgment affirmed.
BROWN, P.J., and TYACK, J., concur.