Auto Sale, L.L.C. v. Am. Auto Credit, L.L.C.

[Cite as Auto Sale, L.L.C. v. Am. Auto Credit, L.L.C., 2015-Ohio-4763.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 102438
AUTO SALE, L.L.C.
PLAINTIFF-APPELLEE
vs.
AMERICAN AUTO CREDIT, L.L.C., ET AL.
DEFENDANTS-APPELLANTS
JUDGMENT:
REVERSED AND REMANDED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-13-817074
BEFORE: Laster Mays, J., E.A. Gallagher, P.J., and McCormack, J.
RELEASED AND JOURNALIZED: November 19, 2015
ATTORNEY FOR APPELLANTS
Jay F. Crook
Shryrock, Crook & Associates, L.L.P.
30601 Euclid Avenue
Wickliffe, Ohio 44092
FOR APPELLEE
Auto Sale, L.L.C.
6302 Richmond Road
Oakwood, Ohio 44146
ANITA LASTER MAYS, J.:
{¶1} Defendants-appellants American Auto Credit, L.L.C. (“American”) and
Olga Bitenbinder (“Bitenbinder”), a member of the American limited liability company
who was sued in her individual capacity, appeal from the trial court’s grant of summary
judgment in favor of plaintiff-appellee Auto Sale, L.L.C. (“Auto”) for breach of contract
and unjust enrichment, and against appellee on appellee’s counterclaim. We reverse and
remand.
I. BACKGROUND AND FACTS
{¶2} American and Auto were in a business consignment relationship whereby
American would buy vehicles at auction, repair the vehicles, and sell them through
American’s dealership. Auto funded the purchase and repair of the vehicles, paid related
fees and, upon the sale of the vehicles, American was to pay Auto the proceeds of the
sale, less commission.
{¶3} In May 2013, American sold a 2012 Kia Soul (“Kia”) and a Jeep (“Jeep”)
for which American was to pay Auto $10,400 and $950, respectively. The $10,400
check that American issued to Auto for the Kia was returned for insufficient funds. Auto
filed suit November 13, 2013, against American and Bitenbinder for $11,350. The
complaint set forth nine causes of action, including two counts of breach of contract, two
counts of unjust enrichment, promissory estoppel, conversion, insufficient funds, and
fraud.
{¶4} American and Bitenbinder filed an answer and counterclaim conceding the
business relationship but asserting it had not breached the agreement. The response
further alleged that the parties had agreed for American to repair certain vehicles for a
total of $22,762.77 and that Auto allegedly paid only $4,941 towards those repairs.
{¶5} Auto filed for summary judgment on the breach of contract and unjust
enrichment claims for the Kia and Jeep. Auto supported its filing with an affidavit from
a limited liability company member of American, Vyacheslav Mogilnitskiy (“Steve”),
who was, at that point, engaged in litigation against the other American members, Olga
and Alex Bitenbinder, 1 and certain third party defendants. Steve stated he had
knowledge of the facts regarding the Kia and Jeep and that American owed Auto for the
vehicles. Also attached to the motion was an agreed judgment entry from the other
lawsuit that references the sale and payment of the Kia and Jeep. The entry lacked a
judicial signature and/or certification. Auto additionally attached as evidence invoices
for the vehicles.
{¶6} American and Bitenbinder responded to the motion for summary judgment
but did not file a cross-motion. The affidavit of Bitenbinder, countering Steve’s
affidavit, including Steve’s knowledge of the transactions and his role and authority with
American, was attached. The affidavit disputed the validity of the invoices and
1
Mogilnitskiy v. Bitenbinder, Cuyahoga C.P. No. CV-13-808569.
documentation proffered by Auto relating to the Kia and Jeep and stated that the
insufficient check at issue in the case was signed by Steve, without authority, while
litigation was pending between Steve and Bitenbinder.
{¶7} Finally, Bitenbinder denied any personal involvement that would result in
piercing the corporate veil. Also attached to the response were copies of the form of
invoices employed by the parties that differed from those presented by Auto.
{¶8} Auto replied that there was no dispute of fact as to the validity of the
agreement between the parties and that American and Bitenbinder owed the money. Auto
also argued that American and Bitenbinder’s answer and counterclaim conceded the
breach.
{¶9} The trial court granted summary judgment to Auto for $11,350 against
American and Bitenbinder, and dismissed American and Bitenbinder’s counterclaims. No
opinion or explanation regarding the findings was provided.
{¶10} This appeal ensued. Auto has not filed an appellee brief in this case.
II. ASSIGNMENTS OF ERROR
{¶11} American and Bitenbinder present two assignments of error. In the first
assignment of error, appellants argue that the trial court erred in finding no issue of
material fact existed as to whether Auto had performed all actions required of it under the
oral contract when awarding damages to plaintiff and dismissing defendants’
counterclaim. The second assignment of error states that the judgment was improper as
to Bitenbinder in finding her personally liable for breach of the oral contract by
American.
III. STANDARD OF REVIEW
{¶12} We review a trial court’s entry of summary judgment de novo using the
same standard as the trial court. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105,
671 N.E.2d 241 (1996). Summary judgment may only be granted when the following are
established: (1) that there is no genuine issue as to any material fact; (2) that the moving
party is entitled to judgment as a matter of law; and (3) that 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 its favor. Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64, 67, 375
N.E.2d 46 (1978); Civ.R. 56(C).
{¶13} The party moving for summary judgment bears the initial burden of
apprising the trial court of the basis of its motion and identifying those portions of the
record which demonstrate the absence of a genuine issue of fact on an essential element
of the nonmoving party’s claim. Dresher v. Burt, 75 Ohio St.3d 280, 293, 662 N.E.2d
264 (1996). “Once the moving party meets its burden, the burden shifts to the
nonmoving party to set forth specific facts demonstrating a genuine issue of material fact
exists.” Willow Grove, Ltd. v. Olmsted Twp., 8th Dist. Cuyahoga No. 101996,
2015-Ohio-2702, ¶ 14-15, citing Dresher. “To satisfy this burden, the nonmoving party
must submit evidentiary materials showing a genuine dispute over material facts.”
Willow Grove at ¶ 15, citing PNC Bank, N.A. v. Bhandari, 6th Dist. Lucas No. L-12-1335,
2013-Ohio-2477.
IV. ANALYSIS
{¶14} We find that both assignments of error have merit. For the purpose of
judicial economy and efficiency, we present a combined response.
{¶15} Auto filed for summary judgment solely on the breach of contract and
unjust enrichment issues, the latter of which constitutes a claim in equity should the legal
claim fail.
“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.”
Plain Dealer Publishing Co. v. Wilson Mills Foods, Inc., 8th Dist. Cuyahoga No. 91985,
2009-Ohio-2042, ¶ 15, quoting All Star Land Title Agency, Inc. v. Surewin Invest., Inc.,
8th Dist. Cuyahoga No. 87569, 2006-Ohio-5729, citing Phillips v. Spitzer Chevrolet Co.,
5th Dist. Stark No. CA00002, 2006-Ohio-4701.
{¶16} The parties agree that there is a business relationship consisting of an
oral agreement governing the causes of action in this case and that there were repairs to
and a sale of the Kia and Jeep. However, the parties have introduced conflicting
evidence as to the terms and conditions applicable to the transactions in issue.
{¶17} Auto had the initial burden of supporting its position and demonstrating
that no genuine issue of material fact existed. Dresher, 75 Ohio St.3d at 293, 662 N.E.2d
264. Auto supported its position with the affidavit of Steve, a member of American who
was then in litigation against American and Bitenbinder. Included as supporting
evidence are eight invoices that Steve asserted represented transactions between the
parties.
{¶18} The affidavit offers that the invoices were issued by American and had all
been paid by Auto. The format of the submitted invoices lack uniformity. Invoice Nos.
101 and 102 do not match the others, and the dates do not match the numeric sequence.
Invoice No. 101 for $8,167 is dated June 6, 2013, and invoice No. 102 for $15,418.88 is
dated May 25, 2013. Invoice No. 21 is dated December 14, 2012, invoice No. 22 is
dated January 6, 2013, and invoice No. 58 is dated December 3, 2012. Some of the
invoices contain two signatures and dates, some have one signature, and others have no
dates by the signatures.
{¶19} American and Bitenbinder responded with an affidavit from Bitenbinder
saying that Steve was not involved with the invoicing and that he lacked knowledge and
authority to perform the financial tasks he attested to. Bitenbinder also said that the
documentation attached to Steve’s affidavit does not accurately reflect the transactions.
{¶20} Attached to the American and Bitenbinder submission are emails regarding
a dispute between American and Auto, requesting information from Bitenbinder to Auto
regarding the Kia and Jeep. American’s invoices evidencing the transaction differ from
Auto’s submission. For example, invoice No. 101 is dated October 3, 2013, relates to the
Jeep, and is for $4,899.97, directly contradicting invoice No. 101 submitted by Auto.
There are numerous exhibits offered relating to the vehicles in question as well as
elements of the counterclaim. The submission clearly supports the existence of genuine
issues of material fact.
{¶21} Not only is the evidence in direct conflict as to the breach of contract and
unjust enrichment claims, there is no evidence or argument in the motion for summary
judgment as to the personal liability of Bitenbinder and establishing the three-prong test
required to pierce the corporate veil:
In Belvedere [Condominium Unit Owners’ Assn. v. R.E. Roark Cos., Inc.,
67 Ohio St.3d 274, 617 N.E.2d 1075 (1993)], this court established a
three-pronged test for courts to use when deciding whether to pierce the
corporate veil, based on a test developed by the United States Court of
Appeals for the Sixth Circuit in Bucyrus-Erie Co. v. Gen. Prods. Corp., 643
F.2d 413, 418, 1981 U.S. App. LEXIS 19572 (6th Dist.). Belvedere at
288-289. This test focuses on the extent of the shareholder’s control of the
corporation and whether the shareholder misused the control so as to
commit specific egregious acts that injured the plaintiff: “The corporate
form may be disregarded and individual shareholdersheld liable for
wrongs committed by the corporation when (1) control over the corporation
by those to be held liable was so complete that the corporation has no
separate mind, will, or existence of its own, (2) control over the
corporation by those to be held liable was exercised in such a manner as to
commit fraud or an illegal act against the person seeking to disregard the
corporate entity, and (3) injury or unjust loss resulted to the plaintiff from
such control and wrong.” Id. at paragraph three of the syllabus. All three
prongs of the test must be met for piercing to occur.
Dombroski v. Wellpoint, Inc., 119 Ohio St.3d 506, 2008-Ohio-4827, 895 N.E.2d 538, ¶
18; State ex rel. Petro v. Pure Tech Sys., 8th Dist. Cuyahoga No. 101447,
2015-Ohio-1638, ¶ 42.
{¶22} Finally, there is the issue of the counterclaims. We find no evidence or
argument in the motion for summary judgment as to the validity of the counterclaims that
the trial court also summarily dismissed.
{¶23} We have previously held as to the purpose for summary judgment:
Summary judgment is a proceduraldevice to terminate litigation and to
avoid a formal trial where there is nothing to try. It must be awarded with
caution, resolving doubts and construing evidence against the moving
party, and granted only when it appears from the evidentiary material that
reasonable minds can reach only an adverse conclusion as to the party
opposing the motion. A successful motion for summary judgment rests on
the two-part foundation that there is no genuine issue as to any material fact
and the moving party is entitled to judgment as a matter of law. Norris v.
Ohio Std. Oil Co., 70 Ohio St.2d 1, 433 N.E.2d 615 (1982).
(Emphasis added.) Lemmo v. House of Larose Cleveland, Inc., 8th Dist. Cuyahoga No.
82182, 2003-Ohio-4346, ¶ 8. The policy supporting summary judgment is not supported
here. Accordingly, since genuine issues of material fact exist, we find the that the lower
court erred in granting summary judgment in this case.
{¶24} The trial court’s entry granting summary judgment to Auto and dismissing
the pending counterclaims is reversed, and this case is remanded for further proceedings.
It is ordered that appellants recover from appellee 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.
__________________________________________
ANITA LASTER MAYS, JUDGE
EILEEN A. GALLAGHER, P.J., and
TIM McCORMACK, J., CONCUR