KSMAC Holdings, Ltd. v. Ice Zone Realty, Ltd.

[Cite as KSMAC Holdings, Ltd. v. Ice Zone Realty, Ltd., 2022-Ohio-1456.]
IN THE COURT OF APPEALS OF OHIO
SEVENTH APPELLATE DISTRICT
MAHONING COUNTY
KSMAC HOLDINGS, LTD.,
Plaintiff-Appellant,
v.
ICE ZONE REALTY, LTD, et al.,
Defendants-Appellees.
OPINION AND JUDGMENT ENTRY
Case No. 21 MA 0001
Civil Appeal from the
Court of Common Pleas of Mahoning County, Ohio
Case No. 2018 CV 03013
BEFORE:
Cheryl L. Waite, Gene Donofrio, David A. D’Apolito, Judges.
JUDGMENT:
Affirmed in part. Reversed in part.
Remanded in part.
Atty. Marshal M. Pitchford and Atty. Kathryn A. Vadas, DiCaudo, Pitchford & Yoder, LLC,
209 South Main St., Third Floor, Akron, Ohio 44308, for Plaintiff-Appellant
–2–
Atty. James F. Lang and Atty. Matthew A. Chiricosta, Calfee, Halter & Griswold LLP, The
Calfee Building, 1405 East Sixth Street, Cleveland, Ohio 44114-1607, for Defendants-
Appellees.
Dated: March 31, 2022
WAITE, J.
{¶1} Appellant, KSMAC Holdings, Ltd., appeals from a Mahoning County Court
of Common Pleas judgment entry granting Appellees’ motion for summary judgment. Ice
Zone Realty, Ltd. (“Ice Realty”); Ice Zone, Ltd. (“Ice Zone”); Phantom Fireworks Eastern
Region, LLC; Phantom Fireworks Western Region, LLC; Phantom Fireworks Store Sales,
LLC; Phantom Fireworks Administrative, LLC; and Bruce J. Zoldan (“Zoldan”) are
collectively the Appellees in this matter. Based on the following, the judgment of the trial
court is affirmed in part, reversed in part and remanded.
Factual and Procedural History
{¶2} This appeal arises from a real estate purchase agreement (“Agreement”)
entered into by Appellant and one of the Appellees, Ice Realty. In November 2015,
Appellant’s predecessor, KAZZMAC, Inc., entered into a five-year lease with Ice Realty
to rent space in the building located at 360 McClurg Road in Boardman, Ohio (“the
Property”) in order to operate a trampoline park. Another Appellee, Ice Zone, operated
an ice rink business in the other half of the building. The lease agreement contained a
purchase option provision giving KAZZMAC, Inc. the option to purchase the Property for
$1.85 million.
{¶3} In October of 2017, Appellant sent Ice Realty a letter formally exercising the
purchase option. Counsel for Appellant drafted the Agreement and, after negotiations
Case No. 21 MA 0001
–3–
between the parties, the Agreement was signed in December of 2017. The Agreement
contains a key provision which is at the core of this appeal. Section 1, entitled Agreement
to Sell, provides:
Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase
and take from Seller, the property located at 360 McClurg Rd., Boardman,
Ohio 44512, as more particularly described on Exhibit A attached hereto
and by this reference incorporated herein, together with all
building(s),fixtures [sic], privileges, entitlements, easements, rights,
appurtenances and improvements thereto (individually, the “Property”). For
purposes of this Agreement “fixtures” includes all items permanently
attached to the building, including but not limited to, ice rink boards,
scoreboard, bleachers, chilling equipment, and lockers.
(Real Estate Purchase Agreement, Section 1.)
{¶4} Along with the Property and fixtures, Appellant also agreed to assume
certain obligations of Ice Realty, incorporated into the Agreement as Attachment 10(g).
The obligations included an elevator service contract and existing skating contracts for:
Adaptive Hockey; Canfield High School; Debiec Hockey; Figure Skating Club; Maria
Koman; Mahoning VSP; YSU Hockey; Youth Hockey; Youth Hockey Games; Phantoms
Hockey; and Phantoms Try Out Camps. The inclusion of these contracts into the
purchase of the Property meant Appellant would be responsible for the continuation of
these existing contracts effective at the time of closing, as noted in Section 10, entitled
“Representations of Seller.” Part (g) of the Agreement reads, in part, “[t]here are no
Case No. 21 MA 0001
–4–
agreements affecting the Property which may be binding on the Property or Buyer after
the Closing other than the contracts specifically attached hereto as Attachment 10(g).”
{¶5} Sometime after the Agreement was signed but before closing, Ice Realty
and Ice Zone removed from the building all of their personal property. According to the
record, employees of Ice Zone and Phantom Fireworks (another Appellee) were present,
along with some employees of Appellant. Appellant’s employees were physically
prohibited from entering certain areas to inspect this removal, including the area where
Appellees undertook the removal of the refrigerant liquid (“refrigerant”) from the Ice Pro
CW Davis Liquid Overfeed System (“Ice Pro System”). In brief, the Ice Pro System
consists of 200 feet of piping evenly spaced under the ice rink flooring, through which the
refrigerant is pushed from one end to the other. The refrigerant carries away heat from
the floor and carries in cold refrigerant in a constant loop to keep the ice rink floor frozen.
The refrigerant was removed over a period of two days by a licensed reclamation
contractor hired by Ice Zone.
{¶6} On December 29, 2017, Appellant closed on its purchase pursuant to the
purchase Agreement and obtained possession of the property. Shortly after closing
Appellant became aware of the lack of refrigerant in the Ice Pro System when it noticed
the ice floor was melting, and one of Appellees’ employees informed Appellant not to turn
on the Ice Pro System or it could “blow up.” (Fortunato Depo., p. 68; MacGregor Depo.,
pp. 23-24). Soon thereafter, Appellant demanded that the refrigerant be transferred back
to Appellant in order to freeze the rink floor. Ice Realty refused the demand, claiming that
the refrigerant was the personal property of Ice Zone and was not included in the sale.
Appellant ordered replacement refrigerant immediately to ensure the Ice Pro System
Case No. 21 MA 0001
–5–
could be operated to refreeze the rink at a cost in excess of $200,000. Appellant also
incurred other expenses related to the lack of refrigerant and complete shut-down of the
Ice Pro System.
{¶7} Appellant filed a complaint against Appellees raising claims of breach of
contract; promissory estoppel; unjust enrichment; liability for civil theft; conversion; fraud;
and negligent misrepresentation, and sought to pierce the corporate veil against all
defendants. Appellees filed a motion to dismiss pursuant to Civ.R. 12(B)(6) on January
30, 2019. Appellant filed a brief in opposition on February 22, 2019, addressing only the
claims for breach of contract, fraud, negligent representation and conversion. The trial
court denied Appellees’ motion to dismiss on October 1, 2019.
{¶8} On August 7, 2020, Appellees filed a motion for summary judgment
addressing all of the claims raised by Appellant in the complaint. In their motion,
Appellees argued that the doctrine of economic loss barred Appellant’s claims of liability
for civil theft, conversion and fraud. Appellees also contended that the claims of liability
for civil theft, conversion, fraud and negligent misrepresentation were improperly
duplicative of the breach of contract claim. Appellees asserted that Appellant failed to
present evidence showing there were any misstatements made by Appellees (or there
was any legally actionable reliance by Appellant on any misstatements) to establish
claims of promissory estoppel, fraud or negligent representation. Appellees argued that
a claim for negligent misrepresentation does not apply to ordinary business transactions
and that the claims for conversion and civil theft must fail because it is legally impossible
for Appellees to steal their own property. In the motion they argued that the promissory
estoppel and unjust enrichment claims must be dismissed because they are quasi-
Case No. 21 MA 0001
–6–
contractual in nature and can be maintained only where no express contract exists.
Appellees contended that piercing of the corporate veil is a remedy and not a stand-alone
claim. Finally, Appellees argued that Appellant’s breach of contract claim must fail
because refrigerant is not encompassed by the term “chilling equipment” under the
definition of “fixture” in the unambiguous language of the Agreement.
{¶9} Appellant filed a motion in opposition on September 13, 2020 addressing
only their claims of breach of contract, conversion, fraud, and piercing the corporate veil.
Appellant asserted that the term “chilling equipment,” found under the term “fixtures”
within the unambiguous language of the Agreement, included the refrigerant. Thus,
Appellees breached the contract by illegally removing the refrigerant from the Ice Pro
System. Appellant contended that its claims for fraud and conversion are actionable
because Appellees removed the refrigerant, which was a fixture, from the Property prior
to Appellant taking possession. Appellant also argued that the economic loss doctrine
did not apply to preclude the claims for conversion and fraud because the removal of the
refrigerant caused physical damage to the Ice Pro System, resulting in an economic loss
to Appellant. Finally, Appellant maintained that their demand to pierce the corporate veil
was still viable, but that additional discovery was needed and the trial court should hold
that issue in abeyance pending the ability of Appellant to obtain the requested discovery
from Appellees. On December 9, 2020, the trial court granted Appellees’ motion for
summary judgment in its entirety on all the claims contained in the complaint.
{¶10} Appellant filed this timely appeal.
Standard of Review
Case No. 21 MA 0001
–7–
{¶11} This appeal is from a trial court judgment resolving a motion for summary
judgment. An appellate court conducts a de novo review of a trial court’s decision to grant
summary judgment, using the same standards as the trial court set forth in Civ.R. 56(C).
Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). Before
summary judgment can be granted, the trial court must determine that: (1) no genuine
issue as to any material fact remains to be litigated, (2) the moving party is entitled to
judgment as a matter of law, (3) it appears from the evidence that reasonable minds can
come to but one conclusion, and viewing the evidence most favorably in favor of the party
against whom the motion for summary judgment is made, the conclusion is adverse to
that party. Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327, 364 N.E.2d 267 (1977).
Whether a fact is “material” depends on the substantive law of the claim being litigated.
Hoyt, Inc. v. Gordon & Assoc., Inc., 104 Ohio App.3d 598, 603, 662 N.E.2d 1088 (8th
Dist.1995).
{¶12} “[T]he moving party bears the initial responsibility of informing the trial court
of the basis for the motion, and identifying those portions of the record which demonstrate
the absence of a genuine issue of fact on a material element of the nonmoving party’s
claim.” (Emphasis deleted.) Dresher v. Burt, 75 Ohio St.3d 280, 296, 662 N.E.2d 264(1996). If the moving party carries its burden, the nonmoving party has a reciprocal
burden of setting forth specific facts showing that there is a genuine issue for trial. Id. at
293. In other words, when presented with a properly supported motion for summary
judgment, the nonmoving party must produce some evidence to suggest that a
reasonable factfinder could rule in that party’s favor. Brewer v. Cleveland Bd. of Edn.,
122 Ohio App.3d 378, 386, 701 N.E.2d 1023 (8th Dist.1997).
Case No. 21 MA 0001
–8–
{¶13} The evidentiary materials to support a motion for summary judgment are
listed in Civ.R. 56(C) and include the pleadings, depositions, answers to interrogatories,
written admissions, affidavits, transcripts of evidence, and written stipulations of fact that
have been filed in the case. In resolving the motion, the court views the evidence in a
light most favorable to the nonmoving party. Temple, 50 Ohio St.2d at 327, 364 N.E.2d
267.
{¶14} On appeal, Appellant challenges the trial court’s decision to grant summary
judgment regarding the breach of contract claim in its first two assignments of error and
the fraud and conversion claims in its third assignment of error. The first and second
assignments will be addressed together for clarity.
ASSIGNMENT OF ERROR NO. 1
THE TRIAL COURT'S DECISION COMPLETELY IGNORES THE TERMS
OF THE PURCHASE AGREEMENT.
ASSIGNMENT OF ERROR NO. 2
THE TRIAL COURT ERRED IN DECIDING THE REFRIGERANT
CONSTITUTES PERSONAL PROPERTY.
{¶15} In its first assignment of error, Appellant challenges the trial court’s decision
to grant summary judgment on Appellant’s breach of contract claim. Specifically, the trial
court erred when it held, “[t]he Court concludes that the unambiguous phrase ‘chilling
equipment’ cannot be reasonably construed to include the refrigerant.” (12/09/20 J.E., p.
11.) At the outset, we recognize Appellant raised the claim for breach of contract against
Case No. 21 MA 0001
–9–
all named defendants in the action. However, the only parties to the Agreement were
Appellant and Ice Realty. Thus, Appellant had a potentially viable claim for breach of
contract only against Ice Realty and none of the other named defendants, because they
were not parties to the Agreement.
{¶16} Appellee Ice Realty contends the trial court properly determined, as a matter
of law, that refrigerant is not encompassed by the term “chilling equipment” in the
Agreement and summary judgment was appropriate on the breach of contract claim.
{¶17} Both parties maintain the language of the Agreement is clear and
unambiguous, arguing respectively that refrigerant is, and is not, encompassed in the
contract under the term “chilling equipment.” Appellant contends the unambiguous
language of Section 1 of the Agreement makes it clear that the refrigerant is
encompassed under the term “chilling equipment,” meaning that the refrigerant was a
fixture that was included in the purchase. Therefore, Appellee breached the contract by
removing the refrigerant or allowing it to be removed with Ice Zone. Appellee asserts the
opposite: that the unambiguous language of the contract clearly shows that refrigerant is
not part of the term “chilling equipment” and, so, was the personal property of Ice Zone
and not subject to the Agreement. While not parties to the purchase Agreement, all
Appellees advance the contention that the refrigerant was Ice Zone’s personal property.
{¶18} “If a contract is clear and unambiguous, then its interpretation is a matter of
law and there is no issue of fact to be determined. * * * However, if a term cannot be
determined from the four corners of a contract, factual determination of intent or
reasonableness may be necessary to supply the missing term.” Inland Refuse Transfer
Co. v. Browning-Ferris Indus. of Ohio, Inc., 15 Ohio St.3d 321, 322, 474 N.E.2d 271Case No. 21 MA 0001
– 10 –
(1984). “Unlike determinations of fact which are given great deference, questions of law
are reviewed by a court de novo.” Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm,
73 Ohio St.3d 107, 108, 652 N.E.2d 684 (1995).
{¶19} The overriding purpose of contract construction is to determine the intent of
the parties, which is presumed to reside in the language of the Agreement. Graham v.
Drydock Coal. Co., 76 Ohio St.3d 311, 313, 667 N.E.2d 949 (1996). Extrinsic evidence
is admissible in determining the intent of the parties if the contract is unclear or ambiguous
or if the circumstances surrounding the agreement give the plain language special
meaning. Id. at 313-314, citing Shifrin v. Forest City Ent., Inc., 64 Ohio St.3d 635, 638,
597 N.E.2d 499 (1992). “If we are able to determine the intent of the parties from the
plain language of the agreement, then there is no need to interpret the contract.”
Saunders v. Mortensen, 101 Ohio St.3d 86, 2004-Ohio-24, 801 N.E.2d 452, ¶ 9.
{¶20} “[C]ommon words appearing in a written instrument are to be given their
plain and ordinary meaning unless manifest absurdity results or unless some other
meaning is clearly intended from the face or overall contents of the instrument.”
Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241, 245-246, 374 N.E.2d 146 (1978).
“Even though most words in the English language have multiple meanings, ambiguity
should not be created where it does not exist.” Dominish v. Nationwide Ins. Co., 129 Ohio
St.3d 466, 2011-Ohio-4102, 953 N.E.2d 820, ¶ 7. A court should not read particular
words or phrases in isolation. Id. at ¶ 8. If intent of the parties cannot be determined from
the contract or if a provision is “reasonably susceptible of more than one meaning,” then
it is ambiguous. Lightning Rod. Mut. Ins. Co. v. Southworth, 151 Ohio St.3d 70, 2017-
Ohio-7438, 86 N.E.2d 274, ¶ 12. If the language of the contract is ambiguous, the intent
Case No. 21 MA 0001
– 11 –
of the parties becomes a question of fact. Savoy Hosp., L.L.C. v. 5839 Monroe St.
Assocs., L.L.C., 6th Dist. Lucas No. L-14-1144, 2015-Ohio-4879, ¶ 31, citing Beverly v.
Parilla, 165 Ohio App.3d 802, 808, 2006-Ohio-1286, 848 N.E.2d 881, ¶ 26 (7th Dist.). If
an ambiguity exists, courts are permitted to consider extrinsic evidence in order to
determine the parties’ intent. Wells Fargo Bank, N.A. v. TIC Acropolis, L.L.C., 2d Dist.
Greene No. 2015-CA-32, 2016-Ohio-142, ¶ 47. Extrinsic evidence includes the
circumstances surrounding the parties at the time the contract was entered and the
objectives intended to be accomplished by entering into the contract. Oryann, Ltd. v. SL
& MB, L.L.C., 11th Dist. Lake No. 2014-L-119, 2015-Ohio-5461, ¶ 26. This includes the
consideration of the parties’ negotiations. Id., citing Pharmacia Hepar, Inc. v. Franklin,
111 Ohio App.3d 468, 475, 676 N.E.2d 587 (12th Dist.1996). If the use of extrinsic
evidence fails to clarify the meaning of the contract, then the contract is strictly construed
against the drafter. Cadle v. D’Amico, 2016-Ohio-4747, 66 N.E.3d 1184, ¶ 33 (7th Dist.).
Construing the written contract against the drafter is a secondary rule of contract
construction. Id. We also note that an appellate court will not reverse a factual finding of
the trial court as long as it is supported by some competent, credible evidence. C.E.
Morris Co., v. Foley Constr. Co., 54 Ohio St.2d 279, 376 N.E.2d 578 (1978), syllabus.
{¶21} With these construction principles in mind, we turn our attention to the
language of the Agreement and the trial court’s judgment.
{¶22} The pertinent provision, as cited above, is found in Section 1 and entitled,
“Agreement to Sell.” The final sentence of the clause is at the heart of the dispute. It
reads, “[f]or purposes of this Agreement, ‘fixtures’ includes all items permanently attached
Case No. 21 MA 0001
– 12 –
to the building, including but not limited to ice rink boards, scoreboard, bleachers, chilling
equipment, and lockers.” (Real Estate Purchase Agreement, Section 1.)
{¶23} The trial court concluded, “the unambiguous phrase ‘chilling equipment’
cannot be reasonably construed to include the refrigerant.” (12/9/20 J.E., p. 11.)
{¶24} In their second assignment of error, Appellant argues that, in reaching this
conclusion, the trial court failed to interpret and/or define the actual term in the contract,
“chilling equipment,” and instead improperly inserted the word “refrigerant” into the
language of the contract by concluding it was not encompassed in the term “chilling
equipment.” Essentially, Appellant argues that the trial court determined what “chilling
equipment” is not, refrigerant, without first setting forth a definition for the actual term
“chilling equipment.”
{¶25} Appellees contend the trial court’s finding is correct, and analogize
refrigerant to gasoline or oil in a car. A review of the record reveals the trial court used
the same language, verbatim, that Appellees set forth in their motion for summary
judgment to decide this issue. (8/7/20 Defendants’ Motion for Summary Judgment.) In
fact, the lion’s share of the language in the trial court’s December 9, 2020 judgment entry
is taken verbatim from the motion for summary judgment. Appellees also assert that since
it was Appellant’s counsel who drafted the majority of the Agreement, this language must
be construed against the drafter, so that Appellees are entitled to judgment in their favor.
We must note at the outset that we disagree with Appellees’ contention in this regard, as
construing a contract against the drafter is a secondary rule of contract construction.
Again, it is only applicable when the primary rules of contract construction (plain language
Case No. 21 MA 0001
– 13 –
of the document and then extrinsic evidence) fail to clarify the meaning of the contract
and/or the intent of the parties. Cadle at ¶ 33.
{¶26} The basis of the dispute, and all of Appellant’s claims, involve a
determination and definition of the term “chilling equipment” in the Agreement. If the
definition of “chilling equipment” encompasses the liquid refrigerant that cools the system,
then Appellees removed a fixture from the property, Appellant’s claims have merit, and
summary judgment is not proper. If the definition of “chilling equipment” does not include
the refrigerant, then the refrigerant is the personal property of Ice Zone and not subject
to the sale, and summary judgment on Appellant’s claims regarding this issue was
appropriate.
{¶27} The term “chilling equipment” is not defined within the Agreement.
Therefore, we must determine the common meaning of the phrase. One common online
dictionary defines the root word, chill, as “to make cold or chilly.” Merriam-Webster
Dictionaries, https://www.merriam-webster.com/dictionary/chill (accessed January 4,
2022). A common definition of “equipment” is “the set of articles or physical resources
serving to equip a person or thing: such as (1) the implements used in an operation or
activity, (2) all the fixed assets other than land and buildings of a business enterprise.”
Merriam-Webster Dictionaries, https://www.merriam-webster.com/dictionary/equipment
(accessed January 4, 2022). Although not a word to be directly interpreted as it is not
specifically stated anywhere in the Agreement, it is interesting to note that the dictionary
defines “refrigerant” as “a refrigerant agent or agency: such as a substance used in
refrigeration.” https://www.merriam-webster.com/dictionary/refrigerant (accessed
January 4, 2022). Although the parties and the trial court resorted to extrinsic evidence
Case No. 21 MA 0001
– 14 –
to assist in defining the phrase, we note it would certainly be possible to conclude, based
on the plain, ordinary usage of the words, that chilling equipment is defined as a set of
articles or physical resources serving to equip a thing, including all fixed assets other than
land and buildings, in order to make it cold or chilly. Under that definition, it appears
reasonable to conclude that refrigerant is encompassed by the term “chilling equipment”
in the Agreement when utilizing the plain, ordinary usage of the words. However, such
an analysis is not entirely straightforward, as the dictionary definitions do not specifically
and directly lead to the inescapable conclusion that refrigerant is chilling equipment.
Thus, it is apparent that deciphering the meaning of the words “chilling equipment” in the
contract provision leads to the conclusion they are “reasonably susceptible of more than
one meaning” and are ambiguous. Lightning Rod. Mut. Ins. Co. v. Southworth, 151 Ohio
St.3d 70, 2017-Ohio-7438, 86 N.E.2d 274, ¶ 12.
{¶28} Interestingly, both parties assert, and the trial court concluded, that the
language of the contract is unambiguous. However, both parties and the trial court made
ample use of extrinsic evidence in order to clarify this supposedly unambiguous term,
directly contrary to the principles of contract construction. Inland Refuse, at 322. In its
judgment entry the trial court also states the term “chilling equipment” cannot “be
reasonably construed” to include the refrigerant. (12/9/20 J.E., p. 11.) However, a
determination as to the reasonableness of a term is only undertaken when the intent of
the parties becomes a question of fact in an ambiguous contract. Inland Refuse, at 322.
The judgment entry is replete with extrinsic factual evidence cited by the court regarding
the parties’ negotiations and intent. This clearly shows that, despite its stated
determination as a matter of law that the contract was unambiguous, the court actually
Case No. 21 MA 0001
– 15 –
found the language to be ambiguous and was required to consider extrinsic evidence to
reach its conclusion. Because the trial court employed extrinsic evidence to reach its
conclusion based on reasonableness, the trial court did find the term “chilling equipment”
was ambiguous, despite its misuse of the word “unambiguous” in the judgment entry.
Thus, the trial court made a factual determination which in most circumstances precludes
summary judgment. However, if there are undisputed facts in the record on which the
trial court relied in order to determine the issue as a matter of law and the trial court was
not forced to weigh competing evidence, the trial court’s decision may still be correct.
Hence, we must examine the record in order to determine whether there are issues of
material fact in question, preventing the trial court from interpreting this ambiguous term
as a matter of law.
{¶29} In the judgment entry, the trial court captioned one section as “Relevant
Factual Background.” The entry begins by discussing the 2015 lease agreement and
refers to the fact that the lease provided Appellant with the option to purchase only the
real estate and not any personal property or fixtures. However, the 2015 lease is
irrelevant to this matter. The lease agreement was an entirely separate contract between
the parties. The only relevance of the lease to this case is that it provided Appellant the
option to purchase, which it exercised. Once Appellees were formally notified of
Appellant’s intent to exercise the purchase option, new negotiations began relative to the
purchase Agreement. Further, the Agreement contains an integration clause, clearly
making any intent or understanding by the parties under the lease agreement irrelevant.
It is undisputed that the relevant Agreement ultimately provided that Appellant would
purchase fixtures and other intangibles beyond purchase of the Property, such as the
Case No. 21 MA 0001
– 16 –
lengthy list of existing ice rink rental contracts. Under the principles of contract
construction, the extrinsic evidence to be considered by the court when interpreting an
ambiguous contract is the evidence concerning the circumstances and objectives of the
parties at the time the contract was executed, and not evidence regarding prior irrelevant
contracts between the parties. Oryann, Ltd. at ¶ 26.
{¶30} According to the record and the testimony of Appellant’s employee Jesse
MacGregor (“MacGregor”), counsel for Appellant submitted a first draft of the Agreement
in October of 2017. At that time the relevant provision provided:
AGREEMENT TO SELL. Seller agrees to sell and convey to Buyer, and
Buyer agrees to purchase and take from Seller, the property located at 360
McClurg Rd., Boardman, Ohio 44512, as more particularly described on
Exhibit A attached hereto and by this referenced incorporated herein,
together with all privileges, entitlements, easements, rights, appurtances
and improvements thereto (individually, the “Property”).
(MacGregor Depo., Exh. 7.)
{¶31} The final sentence regarding fixtures was not present in the first draft. In
the second draft sent by Appellant’s counsel on November 7, 2017, the single word
“fixtures” was added to read: “Seller agrees to sell and convey * * * the [P]roperty
* * * together with all fixtures, privileges, entitlements, easements, rights, appurtenances
and improvements thereto.” (MacGregor Depo., Exh. 9.)
{¶32} Appellant’s counsel emailed a third draft of the Agreement to Appellees’
counsel on November 15, 2017. In this draft the final sentence of Section 1 appears:
Case No. 21 MA 0001
– 17 –
“For purposes of this Agreement ‘fixtures’ includes all items permanently attached to the
building, including but not limited to, ice rink boards, scoreboard, bleachers, chilling
equipment and lockers.” (MacGregor Depo., Exh. 10.) This is the final version and the
sentence at the heart of the dispute in this matter.
{¶33} There is evidence in the record that between November and late December
of 2017 the parties also engaged in side negotiations regarding a proposed purchase by
Appellant of additional personal assets owned by Ice Zone, with Ice Realty acting as the
agent for Ice Zone. According to exhibits 12 and 13 to the MacGregor deposition (emails
between parties’ counsel), Appellees offered additional personal property, not included in
the Agreement, consisting of one Zamboni machine and all of the rental ice skates, in
exchange for additional monetary consideration and six months of rent-free leasing by
Appellee Ice Zone. There was also a proposal that the Ice Zone operator should continue
to operate the ice facility for a time. This was purportedly designed to assist Appellant in
transitioning into the ice rink business. According to the record, the parties were not able
to reach an agreement on this additional personal property or operator and they were not
included in the Agreement. Importantly, nowhere in the record was there a list of any
other personal property Appellees offered to include at that time. Particularly, there is no
mention of refrigerant. Refrigerant is never raised in any communications between the
parties during negotiations for the real estate purchase or during the separate
negotiations for the potential purchase of personal assets. It was not offered as an asset
by Ice Zone or included in the later list of items, such as Zambonis and ice skates.
According to Appellant counsel’s testimony, “[t]he basis of [the offer] refusal was that
Case No. 21 MA 0001
– 18 –
seemed like a lot of money for Zambonies and skates, which we considered to be what
that was contemplating.” (Fortunato Depo., p. 69).
{¶34} As noted, Appellant closed on the purchase of the Property on December
29, 2017. Prior to the closing, Appellees removed property from the building, including
their two-day removal of the refrigerant from the building by a third-party contractor.
According to the deposition testimony of James Fleeger, employee for Appellee Ice Zone
who was in charge of securing a contractor to remove the refrigerant, he did not himself
believe the refrigerant was personal property but maintained it was an “asset of the
building.” (Fleeger, Depo., p. 68.) Moreover, according to Appellant counsel’s testimony,
on the day the personal property was removed, Appellant and counsel were at the
Property and a man identified by Fleeger as Vice President of Phantom Fireworks was:
walking around with a baseball bat tapping it on the floor, not allowing
people to walk down hallways, standing in the hallway with a bat, very much
intimidating not only our employees, his own employees, along with the
youth organizations that were in the building at the time witnessing the
situation.
(MacGregor Depo., p. 32.) Also of note, both MacGregor and Fortunato testified in their
depositions that a Phantom Fireworks employee warned them not to start the Ice Pro
System because it would explode without refrigerant. (Fortunato Depo., p. 68;
MacGregor Depo., pp. 23-24).
{¶35} In its judgment entry the trial court concluded that, as a matter of law,
refrigerant is not encompassed by the term “chilling equipment.” It concluded:
Case No. 21 MA 0001
– 19 –
As a matter of law, the refrigerant is personal property with its own discrete
identity because it fits within the Ohio Supreme Court’s definition of
“personal property”: a “movable or intangible thing that is subject to
ownership and not classified as real property.” Hope Acad. Broadway
Campus v. White Hat Mgmt., L.L.C., 145 Ohio St. 3d 29, 2015-Ohio-3716,
¶ 22 fn. 6. [Appellant’s] designee admitted that the refrigerant satisfies
these criteria, J. MacGregor Dep. 11:15-21, 12:21-23, 13:15-20. Thus, as
a matter of law, this Court holds that the unambiguous term “chilling
equipment” does not encompass the refrigerant and, therefore, [Appellees]
did not breach the Purchase Agreement by removing the discrete refrigerant
from the chilling equipment.
(12/9/20 J.E., p. 11.)
{¶36} In support of its decision, the trial court relied on three sources. First, the
trial court concluded its holding was analogous to the federal decision in Libbey, Inc. v.
Factory Mut. Ins. Co., No. 3:06-CV-2412, 2007 WL 9757792, at *3 (N.D. Ohio June 21,
2007), which held that oil used in a machine never becomes part of the machine even if
it is essential to its operation because an essential material is not analogous to an actual
part of the machine. Id. Appellees also cited to Libbey in their motion for summary
judgment. In Libbey, a company sought coverage under an all-risk policy for damage to
its glass blowing machine as a result of a defective lubricating oil. The insurance
company denied coverage based on a policy exclusion that excluded coverage for “faulty
workmanship, material, construction or design from any cause.” Id. at *2. In a somewhat
circular and confusing fashion, the district court held that lubricating oil is not a “material”
Case No. 21 MA 0001
– 20 –
under the ordinary and natural meaning and, therefore, the loss is not excluded under the
“faulty material” exclusion. Id. at *3. The court looked to the definition of “materials” and
determined it meant the elements or substances that composed the machinery at issue.
Simply holding, without apparent authority, that oil always retains its own identity, the
court determined that it was not a material that “made up” the machine despite being
essential to its operation. As it was not “material” to the glassblowing machine, it did not
encompass a material excluded from coverage.
{¶37} Citing to various treaties on thermodynamics, Appellant contends that the
oil at issue in Libbey is not analogous to the refrigerant here because the glass blowing
machine in Libbey was an “open system” and the Ice Pro System is a “closed system”.
The distinction being, according to Appellant, that the internal mass or fluid in an open
system changes its properties over time, as opposed to the fluid in a closed system, which
remains constant. (Appellant’s Brf., p. 29.) Appellees argue that whether it is an open or
closed system is irrelevant to the holding in Libbey, which recognizes that any substance
added internally to a machine to operate it is fundamentally different from the machine
itself. While we may be persuaded that there is a distinction between an open and closed
system, we conclude that Libbey is not controlling authority and the holding in Libbey is
not directly analogous. The district court in Libbey determined that the policy language
was unambiguous and, thus, interpreted the meaning of “material” as it related to the
language in the insurance policy to determine that the language which specifically
excluded coverage for “material,” excluded the oil as a matter of law. Again, we must
note that the trial court came to its conclusion as to the nature of oil, in general, absent
any authority.
Case No. 21 MA 0001
– 21 –
{¶38} The second source cited by the trial court in support of its decision is a
Missouri tax letter that concluded oil and antifreeze in a motor vehicle are personal
property because they do not have “a degree of permanence and durability to [a] motor
vehicle” but instead are tangible personal property that can be separated from the
machinery or equipment and be replaced. Motor Oil and Antifreeze Are Not Parts, 2018
Mo. Tax. Ltr. Rul. LEXIS 41, *1. (Plaintiff’s Opposition to Defendant’s Motion for Summary
Judgment, Exh. D.) Appellant again argues that motor oil and antifreeze operate in an
open system and change properties over time whereas the refrigerant remains stable
within the closed system in which it flows. Appellees do not address the Missouri tax
letter in their brief. The tax letter from the Missouri Department of Revenue is certainly
not controlling authority. The facts of the case are not analogous to the case at issue
here, as Appellants point out. Importantly, the matter involved interpretation of Missouri
tax codes, and not the intent of the parties to a contract.
{¶39} The third source relied on by the trial court is a case from a New York
appellate court which held that paper filters added to a machine do not constitute part of
the machine itself. Fredonia Prods. Co. v. Procaccino, 53 A.D.2d 275 (N.Y. App. Div.
1976). In Fredonia, the appellate court was charged with reviewing the determination of
the New York State Tax Commission that sheet pulp, known as filter paper and used for
processing grape juice, was not equipment, but constituted “supplies used in connection
with…machinery, equipment or apparatus” and, hence, was subject to sales tax. Id. at
*275. Similar to Libbey, the Fredonia court concluded, after reviewing the record, that the
paper was used during various stages of producing grape juice to assist in the operation
of various pieces of equipment but was not itself equipment because it did not “operat[e]
Case No. 21 MA 0001
– 22 –
independently within petitioner’s production chain.” Id. at *277. Neither party addresses
the Fredonia case in their appellate briefs. However, it is apparent, beyond recognizing
that the facts are not analogous, the New York court’s interpretation of New York state
tax code requires a completely different analysis than the interpretation of contract under
Ohio law and using Ohio’s principles of contract construction. Here, we must consider
the intent of the parties to this contract, rather than the intent of the New York legislature
in enacting the New York tax code.
{¶40} After considering these three sources in support of its determination, the
trial court stated, “[t]he Court has not located any contrary legal authority in Ohio or
elsewhere, and KSMAC has cited none.” (12/9/20 J.E., p. 11.) However, both in its
motion in opposition to summary judgment and on appeal, Appellant relies on a Texas
bankruptcy case in support of its argument that the refrigerant is part of the chilling
equipment. In re San Angelo Pro Hockey Club, Inc., 292 B.R. 118 (Bkrtcy.N.D.Tex 2003).
In San Angelo, a bankruptcy debtor sought to recover for the city’s retention of certain
items that were either affixed to, or present in, a leased municipal stadium after
termination of the debtor’s lease. The bankruptcy court had ordered that the debtor was
to retain its personal property and trade fixtures. Id. at 129. The court undertook an
analysis of items of property leading to the dispute by the parties. The items included, for
purposes of this matter, glycol, which is the liquid refrigerant that flowed through the pipes
under an ice rink floor. The court determined the following:
The evidence established that many gallons of Glycol flow through the pipes
under the ice floor. The Glycol is cooled by the ice plant to temperatures
below freezing. Whether in use or not in use, the Glycol rests in the pipes
Case No. 21 MA 0001
– 23 –
under the ice floor; the ice plant merely circulates and cools the Glycol.
While it is uncontested that the Glycol may be removed from the pipes by
blowing compressed air through one end of the pipes and collecting the
Glycol in barrels at the other end, it is illogical to argue that the Glycol is
personalty or a trade fixture. The Glycol is an integral component part of
the ice floor which, as previously noted, is an improvement.
The ice floor is composed of more than its two-dimensional surface. It
consists of the surface, the concrete, the piping and the Glycol. Removing
the Glycol from the ice floor renders the ice floor inoperable, and no longer
an ice floor. * * * Similarly, when the parties contemplated the idea of an ice
floor, they necessarily included within that idea not only such items as
concrete and pipes, but also coolant. This argument can be taken to
extremes: if the Glycol is an integral part of the ice floor, then why aren’t
the ice resurfacers integral parts of the ice floor, since the ice floor requires
both to function as an ice floor? The difference, however, is that the Glycol
rests in the ice floor. The Glycol is an internal part of an improvement, as
opposed to some external part on which such improvement relies. The
Glycol, therefore, is not a trade fixture or an item of personalty.
San Angelo, at 131.
{¶41} The San Angelo case appears to present the single instance where a court
was faced with the determination of whether liquid refrigerant in an ice rink floor is a
fixture. It is unclear why the trial court in this matter chose to completely ignore San
Case No. 21 MA 0001
– 24 –
Angelo in making its determination. We recognize San Angelo is also not completely
analogous, as the court was not interpreting contract language, but enforcing the
bankruptcy judgment entry stating the debtor was entitled to retain its “personal property
and trade fixtures.” Id. at 129. However, the San Angelo holding utilizes the logic that
the refrigerant is a fixture based on its physical location and function as integral to the
improvement to the property. Similar to the instant matter, the refrigerant was contained
in pipes under the flooring as part of a permanently installed ice rink cooling system. The
Texas court addressed the same argument made by Appellees here, that the refrigerant
could be removed from the Ice Pro System. Appellees argue that, by definition, this
makes it personalty. The San Angelo court was not persuaded by this identical argument,
partially reasoning that the removal of the refrigerant was not typical and required an effort
not normally required in removing personal property. This fact is evident in the present
case, since Appellees were required to hire a third-party reclamation contractor and it
took two days to remove the refrigerant. The Texas case, while not on all fours with the
current matter, appears closely analogous in that the refrigerant at issue in this case was
made a part of the ice flooring, remained within the system, and was not easily removable:
all characteristics of a fixture rather than personalty.
{¶42} The trial court also completely disregarded the sole expert testimony
presented by Appellant from Christos Geatrakas (“Geatrakas”). For approximately 35
years, Geatrakas had been the owner and partner of CW Davis, the company that
designed, built, installed, and maintained the Ice Pro System in question. Geatrakas
testified, inter alia, that:
Case No. 21 MA 0001
– 25 –
[COUNSEL] What is the only component in this entire system that has
chilling qualities?
[GEATRAKAS] The refrigerant and the changing of state of the refrigerant,
based on every piece of the system together, compressors, condensers,
the storage vessel. Everything together they marry up to allow the
refrigerant to transfer the heat and do the chilling.
***
[COUNSEL] Without the refrigerant, the freon was removed, did the buyers
acquire chilling equipment?
***
[GEATRAKAS] They bought components, minus the refrigerant, that could
not chill without the refrigerant.
***
[GEATRAKAS] One thing I should add, could add, would like to add: The
R-22 was a refrigerant that the entire system was designed around. If one
were to want to substitute the R-22 with something else, the system will not
operate as efficiently, may not even operate at all. So that’s -- the system,
the components, the -- that thing that makes up the ice rink and making it
cold is designed around the R-22.
Case No. 21 MA 0001
– 26 –
***
[GEATRAKAS] Refrigerant itself is -- it’s the -- it would be an element. It
would be a part. It would be a piece. Without it, the rest of the parts and
pieces are just parts and pieces. It could sit on your desk and do absolutely
nothing by themselves without the R-22.
(Geatrakas Depo., pp. 138-139; 64-65; 69-70.)
{¶43} Again, Appellees maintain that the contract language is unambiguous and,
as such, the expert testimony is inadmissible. The trial court did not refer to the
uncontroverted expert testimony in its judgment entry. However, as previously discussed,
despite claiming the contract is unambiguous, the trial court was forced to rely on extrinsic
evidence in support of its position, although in a highly selective fashion.
{¶44} When reviewing ambiguous contract language, a court is permitted to
consider extrinsic evidence, including a review of any negotiations that occurred between
the parties as well as the circumstances surrounding the parties at the time the contract
was entered to clarify what the parties intended. In this case, the court needed to
determine what was intended by the term “chilling equipment” in the parties’ Agreement.
{¶45} A review of the entire record including depositions, emails, correspondence
and other evidence of negotiations between the parties during the drafting of the
Agreement, as well as other evidence submitted by the parties, reveals the following:
first, the parties may have originally contemplated only a real estate purchase. However,
the final Agreement includes “fixtures” that the Agreement defines as “all items
permanently attached to the building, including but not limited to, ice rink boards,
Case No. 21 MA 0001
– 27 –
scoreboard, bleachers, chilling equipment, and lockers.” Second, there is evidence in the
record that the parties clearly intended to sell a fully operational ice rink. It is not disputed
that Appellant purchased a multitude of ongoing ice rink rental agreements, attached by
exhibit to the Agreement, along with the property and fixtures. In addition, Appellant
submitted the sole expert testimony from Geatrakas, owner of the company that
designed, built, installed and maintained the Ice Pro System in question. Geatrakas
testified that the refrigerant was not just a component of the system but was the only thing
that served to chill the chilling equipment. Appellees did not present any rebuttal
testimony or expert opinion to contradict Geatrakas’ opinion testimony. In addition,
Appellees do not dispute that the parties had also been engaged in separate negotiations
for the possible purchase of specific Ice Zone personal property (Zambonis and rental
skates) in exchange for payment. Apparently also at issue was the opportunity for the
then-current ice rink operator to continue in his capacity for a period of six months after
closing. Appellant argues that its refusal to keep the existing ice rink operator led to
animosity between the parties and instigated Appellees’ decision to remove, or permit
removal of, the refrigerant. There is deposition testimony that may support this
contention. Regardless, if Appellees’ actions lead to the conclusion that they understood
operation of the ice rink was vital to the purchase of the Property, then logically it was
necessary for the ice rink to be operational, which would require refrigerant. There is
undisputed evidence that the parties intended to transfer an operational ice rink rather
than a melted floor. The record reveals that it was only after the side negotiations fell
through that Appellees elected to remove, or permit removal of, the refrigerant from the
Property. There was also testimony that Appellees’ employees purposely shielded
Case No. 21 MA 0001
– 28 –
removal of the refrigerant by denying Appellant’s employees access to the area on the
day the parties agreed to meet for the removal of personalty from the Property. After
closing, the ice floor began to melt and one of Appellees’ employees warned Appellant
not to operate the system because it would “blow up” without the refrigerant. (MacGregor
Depo., p. 23.) When Appellant confronted Appellee Ice Zone about the melting floor and
removal of the refrigerant, Appellee Ice Zone offered to sell the refrigerant back to
Appellant in order for Appellant to be able to operate the equipment.
{¶46} Based on the foregoing, it appears that the trial court’s decision was entirely
based on weighing the material facts in this case instead of on a clear question of law.
The intent of the parties lies at the heart of this ambiguous contract. It is clear that genuine
issues of material fact exist in this matter and reasonable minds may come to more than
one conclusion regarding the intent of the parties in conveying “chilling equipment” under
the Agreement. Where material issues of fact remain in dispute, summary judgment is
not appropriate. ABL, Inc. v. CTW Dev. Corp., 7th Dist. Mahoning No. 15 MA 20, 2016-
Ohio-759, ¶ 35.
{¶47} The trial court erred in determining that as a matter of law “chilling
equipment” does not include its refrigerant. This issue does not involve an agreement on
all necessary facts and simple application of the relevant law to those facts. The court’s
utilization of certain extrinsic evidence and in weighing the facts in this matter precluded
summary judgment. Appellant’s first assignment has merit and is sustained.
{¶48} As Appellant has met its burden in demonstrating that issues of material
fact remain for trial in this case and that summary judgment was improper, Appellant’s
Case No. 21 MA 0001
– 29 –
first and second assignments of error have merit and are sustained as to Appellee Ice
Realty only.
ASSIGNMENT OF ERROR NO. 3
THE TRIAL COURT ERRED WHEN IT GRANTED SUMMARY
JUDGMENT IN FAVOR OF DEFENDANTS AS TO THE FRAUD AND
CONVERSION CLAIMS.
{¶49} Appellant contends that the refrigerant is a fixture. As such, the trial court
erred in granting summary judgment to Appellees on Appellant’s claims for fraud and
conversion. Again, although Appellant raised a number of claims against Appellees in its
complaint on appeal, it challenges the trial court’s determination only as to breach of
contract and the claims of conversion and fraud.
{¶50} In the preceding assignments we have determined the trial court erred in
granting summary judgment to Appellees on the breach of contract claims. Regarding
fraud and conversion, Appellees maintain that summary judgment was proper because:
(1) the refrigerant is personal property and since Appellant did not own the refrigerant
there can be no conversion; (2) Appellant is precluded from asserting claims of fraud and
conversion based on the same underlying actions as the breach of contract claim; (3)
Appellant failed to present evidence that Appellees made any misrepresentations
regarding the refrigerant and also failed to present evidence that Appellant justifiably
relied on any misrepresentations; and (4) the doctrine of economic loss bars the
conversion and fraud claims.
Case No. 21 MA 0001
– 30 –
{¶51} In order to prevail on a claim of fraud, a plaintiff must demonstrate all of the
elements:
(a) a representation or, where there is a duty to disclose, concealment of a
fact,
(b) which is material to the transaction at hand,
(c) made falsely, with knowledge of its falsity, or with such utter disregard
and recklessness as to whether it is true or false that knowledge may be
inferred,
(d) with the intent of misleading another into relying upon it,
(e) justifiable reliance upon the misrepresentation or concealment, and
(f) a resulting injury proximately caused by the reliance.
Cohen v. Lamko, Inc., 10 Ohio St.3d 167, 169, 462 N.E.2d 407 (1984).
{¶52} Appellant alleges fraud, claiming Appellees misrepresented that Appellant
would receive all of the chilling equipment or, in the alternative, that Appellees had a duty
to disclose that they were going to remove or allow removal of the refrigerant. Appellant
further argues that Appellee Zoldan’s removal of the refrigerant was a malicious act
intended to punish Appellant for refusing to allow him to continue to control operation of
the ice rink for an additional six months. In support, Appellant relied on the testimony of
Fortunato, who testified Zoldan believed that Appellant was forcing him out of the Ice
Zone and embarrassing him in the hockey community. (Fortunato Depo., pp. 62-63.)
Case No. 21 MA 0001
– 31 –
Appellant also asserts that counsel for Appellees warned counsel for Appellant about this
alleged ill will and that retaliation may occur. (Fortunato Depo., pp. 61-62.) Appellant
contends that only as a result of being denied the opportunity to continue to operate the
rink did Zoldan decide to characterize the refrigerant as personal property and have it
removed from the premises.
{¶53} Appellant also claims Appellees converted the refrigerant. The elements of
conversion are: (1) the plaintiff’s ownership or right to possession of property at the time
of conversion; (2) defendant’s conversion by a wrongful act or disposition of plaintiff’s
property rights; and (3) damages. Manshadi v. Bleggi, 2019-Ohio-1228, 134 N.E.3d 695,
¶ 35 (7th Dist.). Appellant points out that when it exercised the option to purchase, it was
bound by the terms of the Agreement. Relying on the entirety of the parties’ Agreement,
the Agreement specifically stated Appellant was purchasing chilling equipment and that
one of the terms of the agreement required Appellant to honor the existing ice rink rental
contracts. Appellant’s position is that the contract taken as a whole constituted a promise
by Appellees that Appellant would receive a frozen ice rink and Appellant relied on that
promise to its detriment. In addition, Appellant asserts that as it relied on a frozen and
operational ice rink, Appellees had a duty to disclose the removal of the refrigerant.
Instead, Appellees purposefully concealed the fact that the refrigerant was being
removed.
{¶54} In granting summary judgment to Appellees, the trial court again adopted
the language presented by Appellees almost verbatim and concluded the following as it
pertains to the fraud and conversion claims: (1) the economic loss doctrine precluded
Appellant’s claims for conversion and fraud; (2) the fraud and conversion claims were
Case No. 21 MA 0001
– 32 –
precluded because they were improper recapitulations of the breach of contract claim;
and (3) the fraud claim fails because it is legally impossible for Appellees to steal their
own property.
{¶55} Under the economic loss doctrine, “a party cannot recover purely economic
damages in a tort action against another party based upon the breach of contractually
created duties.” B&H Resources, L.L.C. v. 28925 Lorain Inc., 8th Dist. Cuyahoga No.
105323, 2017-Ohio-7248, ¶ 16. A review of the record reveals the only damages sought
by Appellant is the economic loss associated with the purchase of additional refrigerant.
Although Appellant mentioned possible damage to the Ice Pro System from a lack of
refrigerant, no evidence of damage or loss of equipment was presented.
{¶56} The law in Ohio is that a breach of contract claim does not create a tort
claim. Netherlands Ins. Co. v. BSHM Architects, Inc., 111 N.E.3d 1229, 2018-Ohio-3736,
¶ 27 (7th Dist.). A tort claim founded on the same underlying conduct as a contractual
claim is precluded unless the defendant also breached a duty that was owed
independently of the contractual duties. Id. Appellant is not alleging any independent
duty owed by Appellee Ice Realty other than those duties owed under the contract.
{¶57} Regarding claims that may exist against the other Appellees, as noted, the
breach of contract action can only be asserted against Appellee Ice Realty, the only other
party to the contract. The economic loss doctrine and any attempt to recharacterize
breach of contract claims as tort claims apply to prohibit suit against the remaining
Appellees. A review of the record reveals Appellant presented very limited evidence in
support of its tort claims against the other Appellees in this action. Deposition testimony
of MacGregor alleging Zoldan maintained some animus against Appellant is the only
Case No. 21 MA 0001
– 33 –
evidence in support of these claims. As Appellees correctly note, Appellant’s counsel
testified at his deposition that it was assumed the equipment would be left in working
order, but no representative of Appellee expressly stated the equipment would be fully
functional. (MacGregor Depo., pp. 187, 195.) Based on the record before us, Appellant
has not established that there was a justifiable reliance on any specific
misrepresentations made by the remaining Appellees.
{¶58} As to Appellant’s conversion claim, we have concluded that the trial court
erred in granting summary judgment on Appellant’s breach of contract claim because
genuine issues of material fact exist regarding the meaning of “chilling equipment” in the
Agreement. Again, any tort claim, such as a claim for conversion, against Appellee Ice
Realty is precluded by the existing breach of contract claim. Netherlands, at ¶ 27. An
actionable tort claim against the other Appellees exists only where Appellant can
demonstrate that those Appellees owed an independent duty to Appellant. Id. Appellant
has made no such showing, here. No evidence has been introduced that there was an
existing duty owed Appellant by any other Appellee (beyond Ice Realty), hence, no viable
claim for conversion appears to exist.
{¶59} In its judgment entry, the trial court took a somewhat broad approach and
granted summary judgment in favor of all Appellees on Appellant’s fraud and conversion
claims for several reasons. The trial court concluded the claims were precluded against
all Appellees by the economic loss doctrine; as improper recharacterization of the breach
of contract claim; and because Appellees could not “steal” their own property. The trial
court included all Appellees in its determination. However, as noted, supra, the
discussion of the economic loss doctrine and improper recharacterization applies to Ice
Case No. 21 MA 0001
– 34 –
Realty because the breach of contract claim applies to Ice Realty. Therefore, summary
judgment on the fraud and conversion claims in favor of Appellee Ice Realty is affirmed
based on Appellant’s breach of contract claims. Regarding the remaining Appellees, the
torts of fraud and conversion are only applicable if Appellant had demonstrated that they
owed some separate duty to Appellant outside of the Agreement at issue. Appellant has
not made such a showing. Appellant provided no evidence of reliance or any
misrepresentations by these Appellees. Further, as the breach of contract claim seeks
economic damages against Appellee Ice Zone Realty, it is precluded from seeking the
same damages based on the same set of facts in a tort action. No additional evidence of
damage beyond the damage caused by the breach was offered. Hence, the trial court
was correct in its conclusion on these claims, but not totally accurate in the manner in
which it reached its conclusion.
{¶60} In reviewing this record, the trial court did not err in granting summary
judgment in favor of Appellees on Appellant’s fraud and conversion claims, but for other
reasons. Appellant’s third assignment of error is without merit and is overruled.
{¶61} Based on the foregoing, the judgment of the trial court is reversed as to the
first and second assignments of error regarding summary judgment on Appellant’s breach
of contract claim only as to Appellee Ice Realty. It is clear that questions of material fact
remain for trial in this matter. The remainder of the trial court’s judgment is affirmed. The
matter is remanded to the trial court for further proceedings according to law.
Donofrio, P.J., concurs.
D’Apolito, J., concurs.
Case No. 21 MA 0001
[Cite as KSMAC Holdings, Ltd. v. Ice Zone Realty, Ltd., 2022-Ohio-1456.]
For the reasons stated in the Opinion rendered herein, Appellant’s first and second
assignments of error are sustained as it relates to Appellee Ice Realty, and its third
assignment is overruled. It is the final judgment and order of this Court that the judgment
of the Court of Common Pleas of Mahoning County, Ohio, is affirmed in part and reversed
in part. We hereby remand this matter to the trial court for further proceedings according
to law and consistent with this Court’s Opinion. Costs to be taxed against the Appellee
Ice Realty.
A certified copy of this opinion and judgment entry shall constitute the mandate in
this case pursuant to Rule 27 of the Rules of Appellate Procedure. It is ordered that a
certified copy be sent by the clerk to the trial court to carry this judgment into execution.
NOTICE TO COUNSEL
This document constitutes a final judgment entry.