Buy Rite Office Prods., L.L.C. v. Evans

[Cite as Buy Rite Office Prods., L.L.C. v. Evans, 2013-Ohio-824.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 98647
BUY RITE OFFICE PRODUCTS, L.L.C.
PLAINTIFF-APPELLEE
vs.
RICHARD EVANS
DEFENDANT-APPELLANT
JUDGMENT:
AFFIRMED
Civil Appeal from the
Shaker Heights Municipal Court
Case No. 11 CVF 00927
BEFORE: Boyle, J., Stewart, A.J., and S. Gallagher, J.
RELEASED AND JOURNALIZED: March 7, 2013
ATTORNEY FOR APPELLANT
James R. Flaiz
Carrabine & Reardon Co., L.P.A.
7445 Center Street
Mentor, Ohio 44060
ATTORNEY FOR APPELLEE
Loren Gordon
850 Euclid Avenue
Suite 1013
Cleveland, Ohio 44114
MARY J. BOYLE, J.:
{¶1} Defendant-appellant, Richard Evans, appeals from the trial court’s decision
finding in favor of plaintiff-appellee, Buy Rite Office Products, L.L.C., on its breach of
contract claim. He raises a single assignment of error:
The trial court erred when it found Defendant-Appellant personally liable
for repayment of funds received from a drawing account.
{¶2} Finding no merit to the appeal, we affirm.
Procedural History and Facts
{¶3} Buy Rite filed the underlying action in Shaker Heights Municipal Court,
seeking to collect from Evans $2,400 that it had advanced to him under an employment
relationship but had not received repayment. The matter proceeded to a bench trial
where the following evidence was presented.
{¶4} Buy Rite sells office supplies, office furniture, and janitorial supplies.
Michelle Ryb, owner of Buy Rite, testified that the first time she discussed a sales
position with Evans he turned it down because he could not take “an all commissioned
sales job” at that time. He later approached Ryb again about the job, asking if there
were any openings or arrangements that could be made to have him work for Buy Rite.
Ryb testified that she liked Evans and wanted to help him. She told him that the job was
commissioned sales but offered to advance him $600 a week. Ryb explained the
arrangement as follows:
{¶5} “So we worked out that I would pay him $600 a week and he would begin
selling and he knew that he owed that back to me, because in no way, shape, or form
was I in a position to pay that out without sales coming in.”
{¶6} Evans received two checks from Buy Rite, signed by Ryb, totaling $2,400
for a two-month period. Evans never reported any sales and never repaid the money.
According to Ryb, Evans ultimately informed her, shortly after receiving the second
payment of $1,200, that he was ill and unable to work, resulting in the termination of his
employment.
{¶7} On May 14, 2010, Evans sent Ryb an email expressing remorse over how
things ended while indicating that he “would make up for the draw with sales or will pay
you back somehow.” In June 2011, Ryb received another email from Evans, stating that
he felt she was harassing him for the repayment and informing her to communicate with
him only through emails. He further indicated that, although he told her months ago that
he felt “horrible and would try to repay,” he was no longer interested because she started
harassing him. Buy Rite offered both emails into evidence as exhibits C and D.
{¶8} On cross-examination, Ryb denied that she ever offered Evans a “draw”
against future commissions. She testified that she does not operate on a draw system but
acknowledged that she answered an interrogatory as to the employment relationship,
stating that “[Evans] offered to take a draw $600 per week against commission.” She
testified that she understood “draw” to be a different meaning than that being implied by
Evans’s counsel, i.e., not one limited to be paid by commissions from future sales.
{¶9} Evans did not present any witnesses at trial but submitted a single exhibit in
support of his defense, i.e., Buy Rite’s responses to the interrogatories, which included
Ryb’s statement that the employment agreement consisted of Evans taking “a draw of
$600.00 per week against commission.”
{¶10} The trial court ultimately found in Buy Rite’s favor, awarding it “$2,400
with interest at 3% per annum from the date of judgment and costs” against Evans. In
reaching this decision, the trial court noted the following:
[T]he testimony of the Plaintiff’s President indicates to the court that, while
termed a “draw,” the parties understood that such was not actually the case.
Defendant’s correspondence to Plaintiff confirms that he felt repayment
was part of the bargain. The court finds upon the uncontroverted
testimony of the Plaintiff and the comments contained in Exhibits C & D,
the plaintiff has overcome the case law presumption and Defendant is
personally liable for repayment of funds.
{¶11} Evans now appeals that judgment, raising one assignment of error.
Governing Law
{¶12} In his sole assignment of error, Evans argues that the trial court erred in
finding him personally liable on payments made under a drawing account. He argues
that Ohio law does not impose personal liability under such an arrangement and that the
emails sent by Evans did not alter the parties’ oral contract. We find Evans’s arguments
to lack merit.
{¶13} While it is true that “Ohio law presumes that the repayment of a drawing
account must come from the commissions only, without personal liability,” this
presumption may be overcome “by proof of an agreement that the advances shall
constitute personal indebtedness.” Dore v. McCluskey, 2d Dist. No. 95CA16, 1995 Ohio
App. LEXIS 4959 (Nov. 8, 1995), citing Bade v. Duffy, 57 Ohio App.2d 170, 171-172,
385 N.E.2d 1346 (1st Dist.1978). Indeed, this court has previously recognized that “an
employer and employee may enter into an agreement whereby the employee is paid on
commission and is personally liable for advances exceeding earned commission.”
School Specialty v. Race, 8th Dist. No. 83292, 2004-Ohio-1271, ¶ 16.
{¶14} In Bade, the court explained the governing law of repayment of a drawing
account as follows:
* * * the presumption is that the repayment of a drawing account must come
from the commission only, without personal liability, even though such
words as “advance,” “loan” or “draw” are used. This presumption may be
overcome by an express, written agreement that the advances shall
constitute the personal indebtedness of the employee. Such an agreement
may also be proved by other types of evidence, including testimony of oral
understandings and the use of reasonable inferences from circumstantial
evidence.
(Citations omitted.) Id. at 172.
{¶15} The issue in this case, therefore, is whether there was sufficient evidence to
allow the trial court to reasonably conclude that the parties agreed that the $2,400
advances constituted the personal indebtedness of Evans. We find that the record
contains exactly that. Indeed, Ryb testified that the parties agreed that Evans would
repay the $600 that Buy Rite fronted each week. She further testified that Evans knew
that he had to pay back the money. Ryb testified as to the parties’ understanding that she
could not afford to do “draws,” and that the money was “something to get him started
because he had a family to feed.” Ryb’s testimony, coupled with the two emails in which
Evans acknowledges owing the debt, supported the trial court’s finding that the parties’
understood and agreed that Evans was personally liable for repayment of the funds.
{¶16} Notably, Evans did not offer any witnesses to refute Ryb’s testimony. The
only evidence that Evans presented to support his defense was Buy Rite’s responses to the
interrogatories, including Buy Rite’s description of the parties’ oral contract as follows:
“Richard agreed to $600.00 draw a week against commission rate of 40% of the profit of
sales.” Ryb, however, testified as to what she meant by “draw,” which included
repayment from Evans, and not in the manner that Evans’s counsel implied.
{¶17} Evans points to a single response of Ryb’s on cross-examination in support
of his claim that she understood that repayment would be from commissions only, thereby
negating personal liability. But we find his argument misplaced. Ryb’s testimony must
be considered in its entirety, including her other testimony wherein she stated that the
parties understood that Evans was liable to repay the funds — and not just simply from
future commissions. Further, any contradicting testimony is left to the trier of fact to
resolve. See Midstate Educators Credit Union, Inc. v. Werner, 175 Ohio App.3d 288,
2008-Ohio-641, 886 N.E.2d 893, ¶ 35 (10th Dist.).
{¶18} We find that Buy Rite presented sufficient evidence and proved by a
preponderance of the evidence that Evans expressly or impliedly promised to repay the
funds as part of the oral employment agreement. See ESI Mtge. Corp. v. Rich, 8th Dist.
No. 64822, 1994 Ohio App. LEXIS 815 (Mar. 3, 1994). Further, this court cannot
reverse the judgment as being against the weight of evidence; the record contains
competent, credible evidence supporting the trial court’s determination that the parties
understood that Evans would be personally liable to repay the funds. See C.E. Morris
Co. v. Foley Constr. Co., 54 Ohio St.2d 279, 280, 376 N.E.2d 578 (1978).
{¶19} Finally, to the extent that Evans argues that the trial court construed the
emails as separate promises to repay the funds and thereby modifying the oral agreement,
we disagree. Contrary to Evans’s assertion, this was not the only evidence presented to
support the trial court’s finding that he was personally liable for the $2,400. Indeed,
Buy Rite presented Ryb’s testimony, which Evans never contradicted. We find that the
emails merely corroborated Ryb’s testimony, revealing Evans’s understanding that he was
personally liable for repaying the $2,400.
{¶20} The sole assignment of error is overruled.
{¶21} Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into
execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
MARY J. BOYLE, JUDGE
SEAN C. GALLAGHER, J., CONCURS;
MELODY J. STEWART, A.J., CONCURS IN JUDGMENT ONLY
WITH SEPARATE OPINION
MELODY J. STEWART, A.J., CONCURRING IN JUDGMENT ONLY:
{¶22} I agree with the outcome reached by the majority in this case. However, I do
not find that the record clearly demonstrates the parties agreed that the $2,400 draw
constituted a personal indebtedness.
{¶23} As the majority notes, Buy Rite’s responses to discovery interrogatories
state that Evans was given “a draw of $600.00 per week against commission” and
describe the oral agreement between them as “Richard agreed to a $600.00 draw a week
against commission rate of 40% of the profit of sales.” These responses are not
ambiguous. The answers clearly demonstrate that the parties’ agreement was that of a
drawing account where repayment comes from commissions with no contingent personal
liability. Because the answers to the interrogatories were submitted after Buy Rite failed
in its attempt to recoup the $2,400 from Evans, the absence of some indication of
personal liability attaching is puzzling.
{¶24} During trial, Buy Rite presented emails Evans sent that stated he would pay
back the draw with sales or pay it back somehow: that he would “try to
repay.” Although these statements demonstrate a willingness on Evans’s part to attempt
to repay the money, it is unclear whether he felt or understood that he had a legal
obligation to do so. In addition, Buy Rite presented testimony that completely
contradicted its discovery responses regarding the understanding of the agreement
terms. Although I do not find that weighing the evidence tilts so strongly in favor of Buy
Rite as the trial court and majority find, because Evans presented no evidence that refuted
Buy Rite’s testimony and chose simply to rely on interrogatory responses that were
explained away at trial, I cannot say that the trial court erred.