Lakhi v. Meritra Health Care, L.L.C.

[Cite as Lakhi v. Meritra Health Care, L.L.C., 2022-Ohio-3062.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Rani Lakhi et al., :
Plaintiffs-Appellees, : No. 21AP-480
(C.P.C. No. 19CV-554)
v. :
(REGULAR CALENDAR)
Meritra Health Care, LLC, et al., :
Defendants-Appellants. :
D E C I S I O N
Rendered on September 1, 2022
On brief: Allen Stovall Neuman & Ashton LLP, Todd H.
Neuman, and Jeffrey R. Corcoran. Argued: Jeffrey R.
Corcoran.
On brief: Giorgianni Law, LLC, and Paul Giorgianni, for
appellants. Argued: Paul Giorgianni.
APPEAL from the Franklin County Court of Common Pleas
LUPER SCHUSTER, P.J.
{¶ 1} Appellants, Meritra Health Care LLC ("Meritra"), Naveen Bekkam, Pavani
Baddam, Chandra Veerla, Suhasini Veerla, Jagruti Patel, Niranjan Patel (collectively
"guarantor appellants"), Meritra Health Care Main, LLC, Meritra Health Care Morse, LLC,
Meritra Health Care Phillipi, LLC, and Meritra Health Care Granville Pike, LLC (collectively
"real estate appellants"), appeal from a decision of the Franklin County Court of Common
Pleas granting the motion for summary judgment of appellees, Rani Lakhi (individually
"Lakhi"), Amar Lakhi, Nisha Lakhi, Urgent Care Main, LLC, Urgent Care Morse, LLC, and
Urgent Care Phillipi, LLC (collectively "Lakhi appellees"), and from a decision and entry
denying appellants' motion for reconsideration from the trial court's decision granting
summary judgment. For the following reasons, we affirm.
No. 21AP-480 2
I. Facts and Procedural History
{¶ 2} On January 22, 2019, Lakhi filed a complaint against appellants for breach of
a promissory note, breach of a personal guarantee, unjust enrichment, and promissory
estoppel. Pursuant to the complaint, Lakhi was the sole member of Premier Medical Care,
LLC, an urgent care medical business, as well as an owner of Addiction Recovery Clinics of
Ohio, LLC and Urgent Care Assurance Company Risk Retention Group. On May 16, 2017,
Lakhi and Meritra executed a purchase agreement under which Lakhi transferred her
interest in Premier Medical Care, LLC, Addiction Recovery Clinics of Ohio, LLC, and Urgent
Care Assurance Company Risk Retention Group to Meritra. That same day, Meritra
executed a promissory note for $1,100,000 in favor of Lakhi. Additionally that same day,
the guarantor appellants executed a personal guarantee of the promissory note of Meritra.
In the complaint, Lakhi alleged Meritra failed to make payments as required under the
promissory note and that the guarantor appellants refused to perform on the personal
guarantee.
{¶ 3} Appellants initially filed a joint answer on May 2, 2019 asserting several
affirmative defenses. Subsequently, on September 30, 2019, appellants filed a joint motion
for leave to file an amended answer to raise additional affirmative defenses, assert
counterclaims, and join additional parties. The trial court granted appellants' motion to
file an amended answer and counterclaim on November 14, 2019. The parties then filed a
joint stipulation on December 12, 2019 providing appellants leave to again file an amended
counterclaim to withdraw certain counterclaims.
{¶ 4} On January 23, 2020, appellants filed their amended counterclaim asserting
claims of (1) fraud, (2) breach of contract, (3) negligent nondisclosure, and (4) unjust
enrichment. In the amended counterclaim, appellants stated that while Lakhi negotiated
the terms of the sale of Premier Medical, Lakhi contemporaneously negotiated with
Bekkam for Meritra to purchase four separate real estate parcels leased by Premier Medical
and from which Premier Medical conducted its business. Ultimately, Meritra Real Estate
Holdings, LLC, of which Bekkam was the sole member, agreed to purchase the four real
estate parcels through four separate real estate LLCs, the real estate appellants, with a
separate real estate purchase contract relating to each property. Appellants alleged in the
counterclaim that Meritra relied on Lakhi's tax returns from 2013 through 2015 as its due
No. 21AP-480 3
diligence for both the Premier Medical purchase agreement and for the four separate real
estate transactions. Appellants alleged it justifiably relied on Lakhi's representations when
it agreed to the combined $4,100,000 it agreed to pay for Premier Medical and the four
parcels of real property, and that the amount was in excess of the combined commercial
value of Premier Medical and the four properties. Of that cumulative total, pursuant to the
terms of the purchase agreement, Lakhi sold her entire membership interest in Premier
Medical to Meritra for $1,100,000. Meritra paid a total of $3,000,000 under the four
separate real estate purchase contracts.
{¶ 5} Additionally in the amended counterclaim, appellants joined additional
parties. More particularly, appellants joined as defendants the additional parties of the
Lakhi appellees. However, while the amended counterclaim sets forth factual allegations
related to the four real estate transactions, the substance of appellants' four counterclaims
did not assert specific claims against the Lakhi appellees and instead asserted the four
counterclaims solely against Lakhi in connection with her sale of Premier Medical. The
amended counterclaim also added as "joined plaintiffs" the additional parties of the real
estate appellants. The amended counterclaim set forth four additional claims—fraud,
breach of contract, negligent nondisclosure, and unjust enrichment—as "joined plaintiffs'
claims against Rani Lakhi and additional joined defendants." (Jan. 23, 2020 Am.
Counterclaim at 12.) These claims related to the real estate purchase transactions though
they relied on the same allegations of wrongdoing against Lakhi that appellants asserted in
their four counterclaims. The joined plaintiffs' claims asked the court to rescind the real
estate purchase contracts.
{¶ 6} Also on January 23, 2020, appellants filed a motion for judgment on the
pleadings as to Lakhi's claims for breach of the personal guarantee, unjust enrichment, and
promissory estoppel. The trial court ultimately denied the motion for judgment on the
pleadings in an October 23, 2020 decision and entry.
{¶ 7} Appellees then filed a motion for summary judgment on March 16, 2020
seeking judgment in their favor on Lakhi's claims of breach of the promissory note and
breach of the personal guarantee. Additionally, appellees sought summary judgment on all
of appellants' counterclaims. Appellants filed a memorandum in opposition to the motion
No. 21AP-480 4
for summary judgment on March 30, 2020, and appellees filed a reply in support of their
motion for summary judgment on April 6, 2020.
{¶ 8} During an October 5, 2020 status conference, appellants requested
additional time to complete discovery and file supplemental briefing. The trial court
granted appellants leave to file supplemental briefing. Appellants then filed a supplemental
memorandum in opposition to the motion for summary judgment on October 26, 2020. In
this supplemental memorandum, appellants, for the first time, referred to the report of
their expert witness, Robert Evans. Appellees then filed a reply on November 12, 2020,
asserting, among other arguments, that the trial court could not consider Evans' report
because appellants failed to properly authenticate the report.
{¶ 9} In an April 15, 2021 decision and entry, the trial court granted appellees'
motion for summary judgment. The trial court determined it could not consider Bekkam's
affidavit as it was self-serving, and that even if it assumed Bekkam's affidavit was not self-
serving, appellants nonetheless did not demonstrate a genuine issue of material fact as to
whether appellants were defrauded because the affidavit was inconsistent with Bekkam's
deposition testimony. Further, the trial court determined it would not consider Evans'
expert report because appellants failed to submit a properly framed affidavit incorporating
the expert report. Ultimately, the trial court determined Lakhi was entitled to summary
judgment on her claims of breach of contract and breach of the personal guarantee, and the
trial court further determined appellees were entitled to summary judgment on appellants'
counterclaims of breach of contract, fraud, negligent nondisclosure, and unjust
enrichment. The trial court directed counsel for appellees to prepare, circulate, and submit
an appropriate judgment entry consistent with the decision.
{¶ 10} Following the trial court's decision granting summary judgment, appellants
filed a motion for reconsideration of the decision. Appellants argued the trial court erred
in failing to consider the Evans report and the Bekkam affidavit. Appellees opposed the
motion for reconsideration in a May 6, 2021 memorandum contra.
{¶ 11} On September 20, 2021, the trial court issued a decision and entry denying
appellants' motion for reconsideration. That same day, the trial court issued a final
judgment entry journalizing its decision granting summary judgment in favor of appellees
No. 21AP-480 5
and finding appellants jointly and severally liable to Lakhi in the amount of $1,126,124.70
plus interest. Appellants timely appeal.
II. Assignments of Error
{¶ 12} Appellants assign the following errors for our review:
1. The court erroneously refused to consider the report of
expert witness Robert Evans.
2. The court erroneously refused to consider the sworn
deposition testimony of expert witness Robert Evans.
3. The court erroneously refused to consider Dr. Bekkam's
affidavit.
3.a The court erred by applying the "self-serving affidavit"
doctrine to Dr. Bekkam's affidavit.
3.b The court erroneously found disqualifying conflict between
Bekkam's affidavit and Bekkam's deposition testimony.
4. The court erroneously granted summary judgment.
5. The court erroneously overruled Appellants' motion for
reconsideration.
III. Standard of Review and Applicable Law
{¶ 13} An appellate court reviews summary judgment under a de novo standard.
Estate of Sample v. Xenos Christian Fellowship, Inc., 10th Dist. No. 20AP-563, 2021-Ohio-
3898, ¶ 9. Summary judgment is appropriate only when the moving party demonstrates
(1) no genuine issue of material fact exists, (2) the moving party is entitled to judgment as
a matter of law, and (3) reasonable minds could come to but one conclusion and that
conclusion is adverse to the party against whom the motion for summary judgment is made,
that party being entitled to have the evidence most strongly construed in its favor. Civ.R.
56(C); State ex rel. Grady v. State Emp. Relations Bd., 78 Ohio St.3d 181, 183 (1997).
{¶ 14} Pursuant to Civ.R. 56(C), the moving party bears the initial burden of
informing the trial court of the basis for the motion and identifying those portions of the
record demonstrating the absence of a material fact. Dresher v. Burt, 75 Ohio St.3d 280,
293 (1996). However, the moving party cannot discharge its initial burden under this rule
No. 21AP-480 6
with a conclusory assertion that the nonmoving party has no evidence to prove its case; the
moving party must specifically point to evidence of the type listed in Civ.R. 56(C)
affirmatively demonstrating that the nonmoving party has no evidence to support the
nonmoving party's claims. Id.; Vahila v. Hall, 77 Ohio St.3d 421, 429 (1997). Once the
moving party discharges its initial burden, summary judgment is appropriate if the
nonmoving party does not respond, by affidavit or as otherwise provided in Civ.R. 56, with
specific facts showing that a genuine issue exists for trial. Dresher at 293; Vahila at 430;
Civ.R. 56(E).
IV. First, Second, Third, and Fourth Assignments of Error – Evidentiary
Rulings and Motion for Summary Judgment
{¶ 15} Appellants' first, second, third, and fourth assignments of error are
interrelated, and we address them jointly. In their first assignment of error, appellants
argue the trial court erred in refusing to consider Evans' expert report. In their second
assignment of error, appellants argue the trial court erred in refusing to consider Evans'
deposition testimony. In their third assignment of error, appellants argue the trial court
erred in refusing to consider Bekkam's affidavit. In their fourth assignment of error,
appellants argue the trial court erred in granting appellees' motion for summary judgment.
{¶ 16} The crux of appellants' fourth assignment of error is that had the trial court
properly considered the Evans report, the Evans deposition testimony, and the Bekkam
affidavit, the trial court would have been compelled to conclude there remained genuine
issues of material fact as to Lakhi's claims of breach of the promissory note and breach of
the personal guarantee and appellants' counterclaims of breach of contract, fraud, negligent
nondisclosure, and unjust enrichment and, thus, should have denied the motion for
summary judgment. We will assume arguendo that the trial court should have considered
the Evans report, the Evans deposition testimony, and the Bekkam affidavit, and we will
consider the disputed evidence in our determination of whether the trial court erred in
granting appellees' motion for summary judgment under appellants' fourth assignment of
error.
A. Breach of Promissory Note
{¶ 17} Lakhi asserted a claim of breach of the promissory note against Meritra. "As
a matter of law, a promissory note is considered a contract." Morgan v. Mikhail, 10th Dist.
No. 21AP-480 7
No. 08AP-87, 2008-Ohio-4598, ¶ 66 (noting a promissory note is a written promise to
unconditionally pay a certain sum of money at a future time), citing Gray Printing Co. v.
Blushing Brides, LLC, 10th Dist. No. 05AP-646, 2006-Ohio-1656, ¶ 30 (a promissory note
constitutes a separate enforceable contract and is an independent entity). To succeed on a
claim of breach of contract, a plaintiff must demonstrate (1) the existence of a contract,
(2) plaintiff's performance, (3) defendant's breach, and (4) damages or loss to the plaintiff.
Thyssen-Krupp Elevator Corp. v. Constr. Plus, Inc., 10th Dist. No. 09AP-788, 2010-Ohio-
1649, ¶ 13, citing Jarupan v. Hanna, 173 Ohio App.3d 284, 2007-Ohio-5081, ¶ 18 (10th
Dist.).
{¶ 18} Here, the parties do not dispute that the promissory note existed and was a
valid contract and that Meritra has not paid the promissory note and still owes Lakhi
$1,126,124.70 on the promissory note. The issue here is whether appellants' allegations of
fraud excuse Meritra's nonpayment of the promissory note.
{¶ 19} " 'A claim of fraudulent inducement arises when a party is induced to enter
into an agreement through fraud or misrepresentation.' " Am. Outdoor Advertising Co.,
LLC v. P&S Hotel Group, Ltd., 10th Dist. No. 09AP-221, 2009-Ohi0-4662, ¶ 31, quoting
ABM Farms, Inc. v. Woods, 81 Ohio St.3d 498, 502 (1998). In a claim of fraudulent
inducement, the fraud relates to the facts inducing the execution of the agreement rather
than to the nature or purport of the agreement itself. Id., citing ABM Farms at 502, citing
Haller v. Borror Corp., 50 Ohio St.3d 10, 14 (1990). To prove fraudulent inducement as an
affirmative defense, appellants must establish that (1) Lakhi made a knowing, material
misrepresentation, (2) with the intent of inducing appellants' reliance, and (3) appellants
relied upon that misrepresentation to their detriment. Id., citing ABM Farms at 502, citing
Beer v. Griffith, 61 Ohio St.2d 119, 123 (1980).
{¶ 20} Appellants base their affirmative defense of fraudulent inducement upon the
allegation that Lakhi misled appellants into paying an above-market price for Premier
Medical by refusing to provide financial records and failing to disclose Premier Medical's
declining revenue after 2015. However, even considering the disputed evidence that the
trial court did not consider, appellants fail to demonstrate there remains a genuine issue of
material fact on the elements of fraudulent inducement. Appellants point to Bekkam's
October 29, 2019 deposition testimony that Lakhi "simply wouldn't" provide the requested
No. 21AP-480 8
financial documentation for Premier Medical from 2016 as proof of Lakhi's material
misrepresentation. (Bekkam Dep. at 84.) As Bekkam admitted in his March 30, 2020
affidavit, however, Lakhi did eventually provide the requested financial information.
{¶ 21} Moreover, even if we were to somehow construe Lakhi's delayed disclosure
of the requested financial documentation as constituting a misrepresentation for purposes
of a claim of fraudulent inducement, appellants do not point to any Civ.R. 56 evidence that
they relied on these misrepresentations in agreeing to purchase Premier Medical. As noted
above, a claim for fraudulent inducement will fail where the party cannot demonstrate it
relied on the material misrepresentation. Am. Outdoor Advertising Co. at ¶ 31. Here,
Bekkam testified at his deposition that even though he viewed Lakhi as not cooperating
with the financial disclosures, he nonetheless decided to proceed with the purchase of
Premier Medical despite the possible risks. The following exchange occurred during his
deposition:
Q. So why did you go forward with it at that point if you weren't
getting what you asked for?
A. That's why the -- you know, it was part of negotiations, that
the risk was increasing because she wouldn't provide any
information, so our cash down went down. We said, "If you
don't want to provide anything, you can put zero down." That's
part of the negotiations.
Q. So because she wasn't providing the couple documents that
you were asking for, you negotiated the price down because you
felt you had more risk?
A. And zero down. You know, we weren't going to put anything
down.
Q. Is that how that all came to be though I mean?
A. Pretty much.
Q. So you understood that because you weren't getting the
documents that you asked for, you were incurring more risk so
you wanted to change the financial arrangement of the deal?
A. Yes.
No. 21AP-480 9
Q. And part of that assumption of more risk was you put no
money down?
A. Yes.
Q. Was there other changes other than that?
A. That's the big one.
Q. Okay. But were there others, though? I understand it was a
big one.
A. I don't recall the details, but it -- the discussions evolved to
the point where we didn't want to, you know, risk too much by
putting money down.
Q. Okay. So when you're not getting the bank statements and
the billing records that you asked for, despite having this due
diligence provision that says you're entitled to it, you knew at
that point you were assuming a lot more risk, right?
A. Of course, yes.
Q. Okay. But you felt in your mind it wasn't enough risk to stop
going forward? You were still comfortable going forward?
A. Yeah. We went through with it, yeah.
(Bekkam Dep. at 84-85.) Bekkam additionally testified that Meritra had the opportunity
to inspect and analyze Premier Medical's financial information before completing the
purchase. Thus, the evidence provided on summary judgment demonstrates appellants did
not rely on Lakhi's failure to provide financial documentation.
{¶ 22} Additionally, appellants argue Evans' expert report demonstrates a genuine
issue of material fact as to whether they were fraudulently induced to agree to the purchase
of Premier Medical. Specifically, appellants rely on Evans' statement in his report that "the
large decrease in revenue [in 2016 and 2017] * * * was so material as to deserve detailed
and explicit disclosure. Based on my experience, buyers would expect disclosure and sellers
would disclose it in order to avoid potential liability." (Ex. 1, Evans' Report at 4, attached
to Defs.' Oct. 26, 2020 Memo Contra.) Despite Evans' opinion that Lakhi should have
specifically disclosed the large decrease in revenue, appellants still cannot demonstrate
No. 21AP-480 10
they relied on Lakhi's representations of Premier Medical's financial information. To the
contrary, Lakhi provided Civ.R. 56 evidence that she informed appellants that Premier
Medical did not perform well in 2016. The original draft of the Purchase Agreement
contained a representation that Premier Medical had gross revenues "in excess of
$1,500,000 per calendar year," that "patient count for 2016 was in excess of 15,000
patients," and that "to date in 2017 no events have occurred to significantly change the 2016
gross revenue or patient count." (Dep. Ex. 3, Original Purchase Agreement Draft, Section
13(a), attached to Pls.' Mar. 16, 2020 Mot. for Summ. Jgmt.) In a May 10, 2017 email to
Bekkam, Lakhi specifically stated that this representation needed to be removed, writing
"[y]ou are aware we did not do well for 2016 and [section] 13(a) needs to be removed."
(Dep. Ex. 4, May 10, 2017 Email, attached to Pls.' Mar. 16, 2020 Mot. for Summ. Jgmt.)
The parties removed the representation from the final version of the Purchase Agreement.
{¶ 23} Thus, even taking into account the disputed evidence, appellants are unable
to demonstrate there remain any genuine issues of material fact on their affirmative defense
of fraudulent inducement. As the evidence demonstrates there remain no genuine issues
of material fact on Lakhi's claim for breach of the promissory note, the trial court did not
err in granting summary judgment to Lakhi on this claim.
B. Breach of the Personal Guarantee
{¶ 24} Lakhi also sought summary judgment on her claim of breach of the personal
guarantee against the guarantor appellants.
{¶ 25} "Under Ohio law, '[a] guaranty is a contract through which one party
guarantees payment for debts incurred by another person or entity.' " LB-RPR REO
Holdings, LLC v. Ranieri, 10th Dist. No. 11AP-471, 2012-Ohio-2865, ¶ 23, quoting Thayer
v. Diver, 6th Dist. No. L-07-1415, 2009-Ohio-2053, ¶ 77. "Generally, a guaranty is an
independent contract separate from and collateral to the original contract of the principal."
Altercare of Canal Winchester Post-Acute Rehab. Ctr., Inc. v. Turner, 10th Dist. No. 18AP-
466, 2019-Ohio-1011, ¶ 17, citing LB-RPR REO Holdings at ¶ 23. Here, there is no dispute
that the personal guarantee was a contract and that the guarantor appellants had failed to
make payments under the terms of the guarantee. The issue, again, was whether the
guarantor appellants' claim of fraudulent inducement excused their nonperformance.
No. 21AP-480 11
{¶ 26} Appellants again argue there remain genuine issues of material fact as to
whether they were fraudulently induced into providing the personal guarantee, relying on
the same evidence they pointed to in response to Lakhi's claim of breach of the promissory
note. For the same reasons that we explained in our resolution of Lakhi's breach of the
promissory note claim, appellants are unable to point to any evidence demonstrating a
genuine issue of material fact that they were fraudulently induced to provide the personal
guarantee. Accordingly, the trial court did not err in granting Lakhi summary judgment on
her claim of breach of the personal guarantee.
C. Counterclaim – Breach of Contract
{¶ 27} Appellants argue the trial court erred in granting Lakhi summary judgment
on their counterclaim of breach of contract.
{¶ 28} The construction and interpretation of written contracts involve questions of
law that this court reviews de novo. McKeny v. Ohio Univ., 10th Dist. No. 17AP-392, 2017-
Ohio-8589, ¶ 19, citing Alexander v. Buckeye Pipeline Co., 53 Ohio St.2d 241 (1978),
paragraph one of the syllabus. The purpose of the contract construction is to realize and
give effect to the intent of the parties. Id., citing Skivolocki v. E. Ohio Gas Co., 38 Ohio
St.2d 244 (1974), paragraph one of the syllabus. "[T]he intent of the parties to a contract
resides in the language they chose to employ in the agreement." Shifrin v. Forest City Ents.,
Inc., 64 Ohio St.3d 635, 638 (1992). When " 'the terms in a contract are unambiguous,
courts will not in effect create a new contract by finding an intent not expressed in the clear
language employed by the parties.' " Holdeman v. Epperson, 111 Ohio St.3d 551, 2006-
Ohio-6209, ¶ 12, quoting Shifrin at 638.
{¶ 29} Here, appellants argue the trial court erred when it concluded there remained
no genuine issue of material fact that Lakhi did not breach the contract with Meritra when
she failed to disclose Premier Medical's declining financial circumstances. As noted above,
to succeed on a claim of breach of contract, a plaintiff must demonstrate (1) the existence
of a contract, (2) plaintiff's performance, (3) defendant's breach, and (4) damages or loss to
the plaintiff. Thyssen-Krupp Elevator Corp. at ¶ 13.
{¶ 30} The parties agree the Purchase Agreement was a valid contract between Lakhi
and Meritra. The issue on summary judgment was whether appellants demonstrated a
breach of that contract when Lakhi failed to more specifically disclose the declining
No. 21AP-480 12
financial situation of Premier Medical from 2016 to 2017. The pertinent contract language
is found in Section 14(c) of the Purchase Agreement and provides that Lakhi "represents
and warrants to Purchaser that * * * to date in 2017 no significant events have occurred that
could significantly impact the way the business has operated thus far." (Dep. Ex. 6,
Purchase Agreement Section 14(c), attached to Pls.' Mar. 16, 2020 Mot. for Summ. Jgmt.)
Appellants contend the decline in revenue in 2016 and 2017 constitutes a "significant event"
as that term is used in the Purchase Agreement.
{¶ 31} In support of their argument, appellants rely on Evans' report in which Evans
opines that Lakhi's failure to provide "detailed and explicit disclosure" of the "large
decrease in revenue" constituted a failure to satisfy Section 14(c) of the Purchase
Agreement. Appellants argue that, at minimum, Evans' report creates a genuine issue of
material fact as to whether Lakhi breached the Purchase Agreement. However, we are
mindful that in the context of summary judgment, an expert witness may provide opinion
or inferences based on underlying facts or data, but the court need not defer to improper
legal conclusions. See Bliss v. Manville, 6th Dist. No. L-20-1091, 2021-Ohio-1673, ¶ 22
(noting "Civ.R. 56 and the Rules of Evidence regarding expert opinion testimony require
affidavits to set forth facts and not legal conclusions"); Sheet Metal Workers, Local Union
No. 24 v. Architectural Metal Works, Inc., 259 F.3d 418, 424 (6th Cir.2001), fn. 4 (stating
"the construction of unambiguous contract terms is strictly a judicial function; the opinions
of percipient or expert witnesses regarding the meaning(s) of contractual provisions are
irrelevant and hence inadmissible").
{¶ 32} Moreover, we do not agree with appellants that Premier Medical's declining
financial circumstances spanning from 2016 through the midway point of 2017 constitutes
a "significant event" that Lakhi failed to disclose within the meaning of the Purchase
Agreement. First, while the Purchase Agreement does not define the term "significant
event," by its ordinary meaning, an event is "something that happens," or an "occurrence."
See https://www.merriam-webster.com/dictionary/event (accessed Aug. 31, 2022).
Appellants do not point to a particular moment or occurrence that precipitated a change in
the operations of the business. Instead, appellants would have the court construe the entire
financial record-keeping of the business as constituting a significant event. Even by
appellants' own expert witness's testimony, however, the downturn in Premier Medical's
No. 21AP-480 13
business occurred over a number of years, beginning in 2014. We will not construe the
years-long gradual decline in business as constituting a significant event that Lakhi did not
disclose. Rather, as the decline in business revenue began in 2014 and continued through
2017, the revenue decline is more indicative of Premier Medical's normal business
operations rather than evidence of a departure from normal business operations.
{¶ 33} Additionally, as we explained in our resolution of Lakhi's claim for breach of
the promissory note, the undisputed evidence presented on summary judgment
demonstrated that Lakhi did disclose to Meritra that Premier Medical's revenue took a
downward turn during 2016, in part as a result of Lakhi's cancer diagnosis, a fact she also
disclosed to appellants. Bekkam testified that even though he believed Lakhi should have
been more forthcoming about Premier Medical's financial situation, he chose to proceed
with the purchase of Premier Medical even despite the risk that the business was in decline.
By all accounts, Premier Medical's revenue had been in decline beginning in 2014. Though
appellants now assert they were unaware of the severity of the decline in 2016 and 2017,
they cannot salvage their own lack of due diligence by asserting a breach of contract claim.
{¶ 34} Thus, because appellants cannot demonstrate there remains any genuine
issues of material fact on their counterclaim of breach of contract, summary judgment in
favor of Lakhi was appropriate.
D. Counterclaim – Fraud
{¶ 35} Appellants next argue the trial court erred in granting summary judgment in
favor of Lakhi on their counterclaim of fraud.
{¶ 36} To prevail on a fraud claim, "a plaintiff must prove: (1) a representation, or if
a duty to disclose exists, concealment of a fact, (2) that is material to the transaction at
issue, (3) 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, (4) with the
intent to mislead another into relying on it, (5) justifiable reliance upon the representation
or concealment, and (6) a resulting injury proximately caused by the reliance." Andrew v.
Power Marketing Direct, Inc., 10th Dist. No. 11AP-603, 2012-Ohio-4371, ¶ 49, citing Burr
v. Stark Cty. Bd. of Commrs., 23 Ohio St.3d 69, 73 (1986).
{¶ 37} Appellants assert Lakhi concealed the full extent of Premier Medical's
revenue decline with the intent of misleading Meritra into completing the purchase of the
No. 21AP-480 14
business. Again, we reiterate that the undisputed evidence at summary judgment was that
Lakhi did disclose that patient counts and revenue were declining in 2016 and 2017.
Further, as we explained in our resolution of Lakhi's claim for breach of the promissory
note, even if we were to agree with appellants that Lakhi concealed the financial state of the
business, there is no evidence that appellants relied on Lakhi's depiction of the financial
situation of the business. Instead, in his deposition testimony, Bekkam agreed he was
entitled to the financial documents of Premier Medical, had the opportunity to review the
documents, and decided to move ahead with the purchase despite the risks. Accordingly,
appellants fail to demonstrate there remains a genuine issue of material fact with respect
to their counterclaim of fraud. The trial court did not err in granting summary judgment
to Lakhi on this counterclaim.
E. Counterclaim – Negligent Nondisclosure
{¶ 38} Appellants additionally asserted a counterclaim of negligent nondisclosure.
As this court recently noted, "[n]egligent misrepresentation occurs when one supplies false
information for the guidance of others in their business transactions." Jones v. Carpenter,
10th Dist. No. 17AP-401, 2019-Ohio-619, ¶ 55, citing Interstate Gas Supply, Inc. v. Calex
Corp., 10th Dist. No. 04AP-980, 2006-Ohio-638, ¶ 90, citing Manno v. St. Felicitas
Elementary School, 161 Ohio App.3d 715, 2005-Ohio-3132, ¶ 34 (8th Dist.). However, " '[a]
negligent misrepresentation does not lie for omissions; there must be some affirmative false
statement.' " Id., quoting Manno at ¶ 34.
{¶ 39} Here, even construing appellants' allegations that Lakhi negligently
misrepresented the financial situation of Premier Medical in the negotiation process, we
reiterate again that the undisputed Civ.R. 56 evidence demonstrated that Lakhi informed
appellants that Premier Medical was in decline in 2016 and 2017, that appellants had the
opportunity to obtain Premier Medical's financial information prior to closing the sale, and
that Meritra decided to proceed with the sale despite risks related to Premier Medical's
financial situation. Appellants cannot demonstrate a genuine issue of material fact as to
whether Lakhi supplied them with false information as guidance on the business
transaction. The trial court did not err in granting Lakhi summary judgment on appellants'
counterclaim.
No. 21AP-480 15
F. Counterclaim – Unjust Enrichment
{¶ 40} Appellants' final counterclaim is one for unjust enrichment. "The doctrine of
unjust enrichment 'applies when a benefit is conferred and it would be inequitable to permit
the benefitting party to retain the benefit without compensating the conferring party.' "
Garb-Ko, Inc. v. Benderson, 10th Dist. No. 12AP-430, 2013-Ohio-1249, ¶ 25, quoting
Meyer v. Chieffo, 193 Ohio App.3d 51, 2011-Ohio-1670, ¶ 16 (10th Dist.). The elements of
an unjust enrichment claim are (1) the plaintiff conferred a benefit on the defendant, (2) the
defendant knew of the benefit, and (3) it would be unjust to allow the defendant to retain
the benefit without payment to the plaintiff. Id., citing Meyer at ¶ 37, citing Maghie &
Savage, Inc. v. P.J. Dick Inc., 10th Dist. No. 08AP-487, 2009-Ohio-2164, ¶ 33.
{¶ 41} Because unjust enrichment is an equitable remedy, this doctrine does not
apply when a contract exists between the parties covering the same subject. Pohmer v.
JPMorgan Chase Bank, N.A., 10th Dist. N0. 14AP-429, 2015-Ohio-1229, ¶ 21, citing Corbin
v. Dailey, 10th Dist. No. 08AP-802, 2009-Ohio-881, ¶ 10, citing Hummel v. Hummel, 133
Ohio St. 520, 525-28 (1938). Having concluded that the Purchase Agreement, promissory
note, and personal guarantee were valid contracts, appellants' claim for unjust enrichment
fails as a matter of law.
G. Counterclaims – Real Estate Appellants
{¶ 42} Appellants additionally assert that their arguments with respect to each of the
four counterclaims—breach of contract, fraud, negligent nondisclosure, and unjust
enrichment—apply equally to the claims of the real estate appellants brought as joined
plaintiffs' claims against appellees. Through those four joined plaintiffs' claims, the real
estate appellants do not argue that Lakhi or the Lakhi appellees breached any particular
provision of any of the four separate real estate purchase contracts related to the four
parcels of real estate. Instead, the real estate appellants entities assert that the sale of
Premier Medical was integrated with the sale of the four real estate parcels such that any
wrongdoing on behalf of Lakhi with respect to the Purchase Agreement for Premier Medical
would have the effect of invalidating the four separate real estate purchase contracts.
Appellees respond that the real estate purchase contracts were entirely separate
transactions from the Premier Medical Purchase Agreement.
No. 21AP-480 16
{¶ 43} We need not determine whether appellants are correct that Premier Medical
and the real estate parcels were an integrated business. Having already determined that
appellants cannot demonstrate any genuine issue of material fact remains on any of the
four counterclaims asserted against Lakhi for her conduct related to the disclosure of
financial information related to Premier Medical, the four additional joined plaintiffs'
claims must similarly fail as they all depend on the same allegations of wrongdoing.
H. Granting of Motion for Summary Judgment
{¶ 44} In summation, even considering the disputed evidence the trial court refused
to consider, appellants are unable to demonstrate there remain any genuine issues of
material fact on any of Lakhi's claims, their own counterclaims, or the additional joined
plaintiffs' claims. Thus, to the extent the trial court erred in refusing to consider the
disputed evidence, the error was harmless. See Brown v. CDS Transp., Inc., 10th Dist. No.
10AP-46, 2010-Ohio-4606, ¶ 22, fn. 1 ("because our review [of a motion for summary
judgment] is de novo, any error made by the trial court in considering the evidence is
harmless"). Because the trial court ultimately did not err in granting appellees' motion for
summary judgment, we overrule appellants' first, second, third, and fourth assignments of
error.
V. Fifth Assignment of Error – Motion for Reconsideration
{¶ 45} In their fifth and final assignment of error, appellants argue the trial court
erred in denying their motion for reconsideration filed after the trial court issued its
decision granting the motion for summary judgment but before the trial court issued its
final judgment in the case. An appellate court reviews a trial court's decision on a motion
for reconsideration of an interlocutory order for an abuse of discretion. Tatsing v. Njume-
Tatsing, 10th Dist. No. 16AP-827, 2017-Ohio-8460, ¶ 9, citing Groza-Vance v. Vance, 162
Ohio App.3d 510, 2005-Ohio-3815, ¶ 53 (10th Dist.); M.S. v. J.S., 6th Dist. No. L-19-1234,
2020-Ohio-5550, ¶ 10. An abuse of discretion connotes a decision that is unreasonable,
arbitrary, or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983).
{¶ 46} Through their motion for reconsideration, appellants asked the trial court to
reconsider its evidentiary rulings and consider the motion for summary judgment with the
disputed evidence. However, we have determined that even considering the disputed
evidence, summary judgment in favor of appellees was still appropriate. Thus, the trial
No. 21AP-480 17
court did not abuse its discretion in denying appellants' motion for reconsideration and
entering final judgment in favor of appellees, and we overrule appellants' fifth and final
assignment of error.
VI. Disposition
{¶ 47} Based on the foregoing reasons, even considering the disputed evidence, the
trial court did not err in granting summary judgment to Lakhi on her claims of breach of
the promissory note and breach of the personal guarantee, nor did the trial court err in
granting summary judgment to appellees on appellants' counterclaims of breach of
contract, fraud, negligent nondisclosure, and unjust enrichment. Having overruled
appellants' five assignments of error, we affirm the judgment of the Franklin County Court
of Common Pleas.
Judgment affirmed.
JAMISON and NELSON, JJ., concur.
NELSON, J., retired, formerly of the Tenth Appellate District,
assigned to active duty under authority of Ohio Constitution,
Article IV, Section 6(C).