argument in support of proposition of law ... montello is not a party to or mentioned in this...
TRANSCRIPT
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IN THE SUPREME COURT OF OHIO
Sam Montello
Appellant,
On Appeal from the LakeCounty Court of Appeals,Eleventh Appellate District
v.
Thomas Ackerman
Appellee
Court of Common PleasCase No.: 08 CV 001678
Court of AppealsCase No.: 2010-L-007
MEMORANDUM IN SUPPORT OF JURISDICTIONOF APPELLANT SAM MONTELLO
David M. Lynch (0006380) (COUNSEL OF RECORD)29311 Euclid AvenueSuite 200Wickliffe, Ohio 44092(440) 278-4246Fax No. (440)278-4249dmlesqLa2davidmlynch.net
COUNSEL FOR APPELLANT, SAM MONTELLO
Charles V. LongoCharles V. Longo, CO., L.P.A.25550 Chagrin Boulevard #320Beachwood, Ohio 44122(216) 514-1919Fax No. (216) 593-0914
COUNSEL FOR APPELLEE, THOMAS ACKERMAN
CLERK OF COURTB su^^^^^ Cou^^ o^ ®H[® ^
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TABLE OF CONTENTS
Page
EXPLANATION OF WHY THIS CASE IS A CASE OF PUBLICOR GREAT GENERAL INTERST AND INVOLVES A SUBSTANTIAL,CONSTITUTIONAL QUESTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ^
STATEMENT OF THE CASE AND FACTS . . . . . . . . . . . . . . . . . . . . . . . . 2 _ 3
ARGUMENT IN SUPPORT OF PROPOSITION OF LAW . . . . . . . . . . . . 4-5 - 6
CONCLUSTION .............................................. 7
CERTIFICATE OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
APPENDIX
Item Letter Desi ng ation
Appendix Item One
Appendix Item One is the Judgment Entry of the Trial Court alongWith the Findings of Fact and Conclusions of Law . . . . . . . . . . . . . . . . . . . A
Appendix Item Two
Appendix Item Two is the Journal Entry and Opinion of the Courtof Appeals ................................................... B
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EXPLANATION OF WHY TIIIS CASE IS A CASE OF PUBLIC OR GREATGENERAL INTEREST AND INVOLVES A SUBSTANTIAL
CONSTITUIONAL QUESTION
This case presents a very important question for all persons who enter into real
estate development agreements. Can the continuation of the project long after a partner
identifies fraud mean that the fraud cannot be claimed toward the end of the project?
We urge the Supreme Court to Say "No!" to this question by accepting jurisdiction
and allowing the trial Court to hear this case.
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STATEMENT OF CASE AND FACTS
STATEMENT OF CASE
This matter is a refilling of a verbal agreement case wherein Sam Montello sues
Thomas Ackerman because Ackerman promised to pay a portion of the proceeds from
"Cali Woods" housing development.
The development of "Cali Woods" has been ongoing for many years. Ackerman is
the project manager who failed to provide either an accounting or deliver the promised
proceeds to Mr. Montello (Montello having contributed to the support of the project).R. 2.
Ackerman filed for Summary Judgment claiming Statute of Limitations, Statue of
Frauds, and Res Judicata. R. 40.
The Trial Court granted Summary Judgment for the Plaintiff-Appellee based on
these claims by Ackerman. R. 65 Montello, Appellant, appealed because he believes
Summary Judgment should not have been granted. The Court of Appeals denied this
appeal.
STATEMENT OF FACTS
Sam Montello and Joseph Cali began a residential project for single family homes
called "Cali Woods" in Concord, Ohio back in 1995 by virtue of a "handshake agreement".
The project manager was Defendant/Appellee Thomas Ackerman, who entered into a
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written agreement with Cali to do so. Montello is not a party to or mentioned in this
written agreement.R. 2.
Montello, however, met with Ackerman and established that Ackerman would
share the revenue from the project with Montello based on Montello's contributions in
cash and real estate.
Montello then litigated against Joseph Cali in Florida because of Cali's failure to
honor his promises to him in various matters, including Cali Woods. This Florida case was
settled in June of 2006, releasing Cali and "any business entity" that Cali "has an interest
in" of all liability.R. 40.
Montello brought this action in 2007 against project manager Thomas Ackerman
because of Ackerman's verbal agreement to distribute revenue to Montello, Cali Woods
still being operated by Ackerman in 2007 as a still uncompleted project. R. 2.
The Trial Court granted Summary Judgment to Ackerman, stating that the action
was barred by Statute of Limitations, and by the Statute of Frauds as the agreement was
verbal. The Trial Court also said the Florida settlement with Cali protected Ackerman
from suit. R. 65.
Montello has appealed this ruling to this Court of Appeals and now turns to the
Ohio Supreme Court.
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ARGUMENT IN SUPPORT OF PROPOSITION OF LAW
STATUTE OF LINIITATIONS
The Appeals Court relies on deposition testimony from Montello that he had
suspicions regarding Ackerman's failure to distribute revenue that date back to as far back
as 1998.
However, the deposition of Montello and the Affidavit of Montello describe the
project as ongoing and continuing as of 2007. R. 45. The underlying project was a housing
development of around 110 acres that like many such projects, took a very long time to
mature and come to fruition.
The Court concludes that Montello is time barred from suing on this project in 2007
because his concerns began in 1998. With Cali Woods continuing the development in
2007, did Montello waive his litigation rights because he wanted to see if Ackerman would
make Montello's distribution as the project proceeded? Is a real estate investor now
required to bring suit before a project is completed if he is concerned at early stages of the
project?
The Supreme Court of Ohio has answered this question. In Weber v. Billman, the
Ohio Supreme Court tells us "that where a contract ..... is a continuing one with no fixed
date of termination, the Statute of Limitations does not begin to run until the services
rendered under such contract actually end. 165 Ohio St. 431 at 433 (1956).
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STATUTE OF FRAUDS
Defendant claims that Mr. Montello's Agreement, being verbal, violates Ohio's
Statute of Frauds.
Again, the case law specifically looks at this sort of Agreement as outside the
Statute of Frauds and therefore not requiring a written agreement.
This very specific type of case came before the Court of Appeals in Furth v.
Farkasch, 26 Ohio App 258 (1927). The Eighth District Court of Appeals stated in its
syllabus, "Oral contract creating partnership relation between parties to share in money
realized from commissions for sale of real estate, which had been earned by one party, held
not within Statute of Frauds". Id at 258. This is Mr. Montello's case almost exactly!
Ohio jurisprudence, Third Edition restates the status of Ohio law:
A parole partnership agreement or joint enterprise, enteredinto by two or more individuals for the purpose of dealingand trading in lands or interests in lands for profit, is notwithin the provision of the Statute of Frauds relating tointerests concerning lands, and the existence of thepartnership and the extent of each partner's interest may beshown by parole.
Clearly, the Agreement was not to transfer land as would require
writing. This was an Agreement requiring the project manager to pay
monies to Mr. Montello, clearly outside the Statute of Frauds
RES JUDICA TA
Plaintiff argues that a previous Settlement Agreement with Joe Cali,
attached hereto as Exhibit 3, releases Thomas Ackerman and therefore is Res
Judicata, barring the instant lawsuit.
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We ask this Court to see exactly who was released in the Settlement
Agreement by reviewing the Agreement.
Thomas Ackerman was not named in that previous suit in Florida
and the only persons listed as released are indicated with the following
language:
The parties hereby release each other as well as any businessentity that they may have an interest in and each other'sblood relatives from any and all causes of action or claimsfrom the beginning of the world to the date of this agreementwith the exception of the obligations in the settlementagreement.
R. 40, Settlement attached to Plaintiff's sum. Judgementmotion.
It is impossible to read this Agreement as applying to Thomas
Ackerman unless you call him a "business entity".
Given the high hurdles inherent in Summary Judgment law, the Res
Judicata argument of Defendant must fail as well.
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CONCLUSION
The Summary Judgment rule requires the Trial Court to consider the motion "most
strongly" in favor of Mr. Montello, when reviewing the Motion and the underlying
evidence.
Given this, how can Defendant be entitled to Summary Judgment on an ongoing
project when the case law favors Montello's chance to have his day in Court? We urge this
Court to reverse the Appeal Court's ruling on Summary Judgment and remand this matter
for a full Trial on the merits.
David M. Lxiich (0006380)29311 Euclid AvenueSuite 200Wickliffe, Ohio 44092440-278-4246440-278-4249 (Fax.)dmlesqkdavidmlynch.net
CERTIFICATE OF SERVICE
I certify that a copy of this Memorandum in Support of Jurisdiction of Appellant
Sam Montello was sent via regular mail this 9th day of September 2010 to Charles V.
Longo, Charles V. Longo, Co., L.P.A., 25550 Chagrin Boulevard #320, Beachwood, Ohio
44122.
COUNSEL FOR APPELLANT,SAM MONTELLO
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IN THE COURT OF COMMON PLEAS
RR. 'ii°f=: "^"^SAM MOI^I^f.LO,
25 LAKE COUNTY, OHIO
vs.
THOMAS ACKERMAN,
Defendant
CASE NO. 08CV001678
JUDGE VINCENT A. CULOTTA
JUDGMENT ENTRY
This matter comes before the Court for consideration of Defendant Thomas Ackerman's
Motion for Summary Judgment, Plaintiffs Response to Defendant's Motion for Summary
Judgment, and Defendant Thomas Ackerman's Reply in Support of His Motion for Sunnnary
Judgment.
STATEMENT OF THE CASE
Plaintiff, Sam Montello, initiated this action against Thomas Ackerman alleging that
Plaintiff and Joseph Cali entered into an agreement in 1984 for the acquisition of land and
building of homes in "Ca1i Woods." Plaintiff indicates that he and Joseph Cali created a verbal
partnership in which Plaintiff would receive one-half of the proceeds from "Cali Woods."
Plaintiff further alleges that Defendant Thomas Ackerman became the project manager for the
"Cali Woods" project and in 1995, verbally acknowledged that Plaintiff would receive one-half
of the proceeds from "Cali Woods" and verbally agreed to ensure that distributions of the
proceeds to Plaintiff would take place. Plaintiff indicates that he justifiably relied on said
representations. Plaintiff alleges that Defendant has defrauded Plaintiff of any proceeds from
"Cali Woods" and instead, has retained the proceeds for himself. Plaintiff asks for the
appointment of a receiver to manage the affairs of "Cali Woods," judgment in excess of
$50,000.00, interest, costs and attorney's fees.
Defendant, Thomas Ackerman, has filed a Counterclaim alleging that Plaintiff's claims
amount to a frivolous lawsuit meant to harass, annoy and create unnecessary expense for
Defendant. Defendant further alleges intentional and/or negligent infliction of emotional
distress.APPENDIX ITEM 1(Exhibit A)
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At this time, Defendant Thomas Ackerman is seeking an Order granting summary
judgment in his favor and against Plaintiff on Plainfiff's claims against him. Defendant contends
that he is entitled to judgment as a matter of law on Plaintiff s breach of oral contract and
fraudulent misrepresentation because those claims are barred by the applicable statute of
limitations, the Statute of Frauds and by the application of resjudicata.
Plaintiff opposes Defendant's motion and Defendant has filed a reply.
The Court will consider the motion on an issue by issue basis.
SUMMARYJUDGMENTSTANDARD
Pursuant to Civ.R. 56, summary judgment is proper, when, after construing the evidence
in a light most favorable to the nonmoving party, there remains no genuine issue of material fact
and the moving party is entitled to judgment as a matter of law.
The 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. Dresher v. Burt
(1996), 75 Ohio St.3d 280. If the moving party satisfies this burden, then the nonmoving party
has the burden pursuant to Civ.R. 56(E) to provide evidence demonstrating a genuine issue of
material fact. Id. If the nonmoving party does not satisfy this burden then summary judgment is
appropriate. Id.
COURT'S ANALYSIS
Statute of Limitations
It is Defendant's position that regardless of whether Plaintiff s cause of action is based in
contract or in tort, Plaintiff claims are untimely and fail as a matter of law. Specifically,
Defendant asserts that PlainfifPs breach of an oral contract claim is governed by R.C. §2305.07,
which provides:
Contract not in writing
Except as provided in sections 126.3011 and 1302.982 of the Revised Code, an actionupon a contract not in writing, express or implied, or upon a liability created by statute
'This section is the Limitation of action for failure to make distribution or payment and is not relevant here.' This section sets forth the Statute of limitations in contracts for sale and is not relevant here.
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other than a forfeiture or penalty, shall be brought within six years after the cause thereofaccrued.
Defendant maintains that according to Plaintiff s own deposition testimony, Plaintiff's
breach of contract claim arises out of a verbal contract between Plaintiff and Defendant which
was entered into sometime in 1995. Defendant also maintains that according to Plaintiff
deposition testimony, Plaintiff was aware of Defendant's breach of the alleged oral contract in
1998, but that he did not assert a claim against Defendant until March 30, 2007.
In opposing Defendant's motion relative to the statute of limitations argument for oral
contract, Plaintiff asserts that Cali Woods was an on-going project and Defendant was still
developing homes as late as April, 2007. It is Plaintiffs position that the statute oflimitations
begins to run at the end of the contract, and not when the payee becomes unhappy. Plaintiff
relies on Weber v. Billman (1956), 165 Ohio St. 431 and Snider v. Rollins (1921), 102 Ohio St.
372, to support his position. Plaintiff also relies on his own affidavit which states that the oral
contract was continuous in nature and that Defendant was operating Cali Woods in 2007.
In reply, Defendant asserts that Plaintiff s position is absurd and flies against established
case law regarding the accraal of a breach of an oral contract claim. Specifically, Defendant
relies on Aluminum Line Products Co. v. Brad Smith Roofing Co., Inc. (1996) 109 Ohio App.3d
246 (cause of action for breach of an oral contract accrues when the plaintiff discovers the
omission to perform as agreed in the oral contract) and Children's Hospital v. Ohio Dept. of
Public Welfare (1982) 69 Ohio St.2d 523 (cause of action for breach of contract accrues when
money is actually withheld).
Defendant fiuther distinguishes the cases relied on by Plaintiff to support his continuous
contract argument from the instant case arguing that the cases relied on by Plaintiff involve
service agreements which were to continue indefinitely with services performed throughout the
relationship.
Defendant further asserts that Plaintiffs affidavit does not create a genuine issue of
material fact as to the running of the statute of limitations.
Likewise, Defendant maintains that Plaintiff's fraudulent misrepresentation claim is
governed by the R.C. §2305.09, which provides, in relevant part:
Except as provided for in division (C) of this section, an action for any of thefollowing causes shall be brought within four years after the cause thereof accrued:
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(C) For relief on the ground of fraud, except when the cause of action is a violation ofsection 2913.493 of the Revised Code, in which case the action shall be brought withinfive years after the cause thereof accrued;
If the action is for trespassing. under ground or injury to niines, or for the wrongfultaking of personal property, the causes thereof shall not accrue until the wrongdoer isdiscovered; nor, if it is for fraud, until the fraud is discovered.
Defendant maintains that a cause of action for fraud accrnes when the injured party
discovers the fraud or when, in exercise of reasonable diligence, the fraud should have been
discovered. See Marshall v. Silsby (Oct. 21, 2005), Lake App. No. 2004-L-094, unreported.
Defendant relies on Plaintiffs deposition testimony wherein he stated that he believed
that he was the victim of fraud in 1998, and that he believed that Defendant was participating in
defrauding Plaintiff in 1998. Defendant further notes that Plaintiff adniitted in deposition that it
was his understanding back in 2000, when he filed a case against Joe Cali and Cali Woods4 that
Defendant was involved in defrauding Plaintiff. It is Defendant's position that Plaintiff's
fraudulent misrepresentation claim is time-barred because Plaintiff knew or should have known
of the alleged fraud on October 17, 2000, when he filed a case against Joe Cali and Cali Woods,
but did not file an action against Defendant until March 30, 2007.5
In response to Defendant's argument relative to the Statute of Limitations for fraud
actions, Plaintiff makes the same argument that the oral contract at issue here is a continuous
contract wherein the cause of action does not accrue until the termination of the contract.
Plaintiff again relies on his own affidavit which states that the oral contract was continuous in
nature and that Defendant was operating Cali Woods in 2007.
Upon consideration, it is the opinion of this Court that Plaintiff's breach of oral contract
and fraudulent misrepresentation claims are timed-barred. Defendant has provided evidence that
Plaintiff was aware of a breach of the oral contract in 1998 and aware of the fraud in 1998 or
2000, but brought this action initially in 2007. Plaintiff has not met his burden pursuant to
' This section deals with Identity fraud and is not relevant here.° Lake County Court of Common Pleas Case No. OOCV001661.5 Lake County Case No. 07CV000923, which was voluntarily dismissed and re-filed as the instant action.
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Civ.R. 56(E), to provide evidence demonstrating a genuine issue of material fact. Plaintiff's
affidavit states that he believes that Defendant conunitted a breach andlor fraud up to 2007,
however, Plaintiff's affidavit does not state when the breach and/or fraud first occurred and/or
was discovered. The Court further finds that the cases relied on by Plaintiff relative to an on-
going contract, are distinguishable. Specifically, both Snider and Weber involved continuing
employment contracts that were to be performed during the lifetime of the employer. In both
cases, the Supreme Court of Ohio held that the statute of limitations did not begin to run until the
employer's death. The instant case does not involve a continuous employment contract whereby
one party performed services for the other with the expectation of payment.
An action for breach of an oral contract must be brought within six years after the cause
of action accrues, i:e. when the breach occurs, pursuant to R.C. §2305.07. The cause of action
accrues when the complaining party suffers actual damage as a result of the alleged breach. See
Miclwest Specialists. Inc. v. Firestone Tire & Rubber Co. (1988), 42 Ohio App.3d 6, 8. Further,
an action for fraud must be brought within four years of discovery of the fraud pursuant to R.C.
§2305.09.
In this case, Plaintiff testified at deposition that he filed suit against Joseph and Sarah
Cali in the late 1990's seeking damages for breach of contract for their alleged failure to pay him
profits for the Cali Woods project. Plaintiff fiirther testified at his deposition that he made an
oral contract with Defendant Ackerman in 1995 regarding payment of the proceeds of Cali
Woods. Plaintiff testified that he became aware of the alleged breach of the oral contract in
1998, and began contemplating a lawsuit at that time. Plaintiff testified at deposition that he
knew that Defendant Ackerman was not looking out for Plaintiff's best interest and that he was
participating in the alleged fraud against Plaintiff with regard to the Cali Woods project in 1998.
Plaintiff admitted at deposition that Defendant Ackerman was not giving Plaintiff "nothing, not
even information" in violation of the alleged oral agreement in 2000 when Plaintiff sued Joe Cali
for fraud, breach of contract and corrupt activity in October, 2000. It is the opinion of this Court,
based upon Plaintiff's own testimony, that Plaintiff's causes of action for breach of an oral
contract and for fraud against Defendant Ackerman accrued in 1998 or 1999 and certainly no
later than 2000 because that is when Plaintiff alleges he knew that he was not being paid profits
by Defendant Ackerman for the Cali Woods project. Inasmuch as Plaintiff first filed this action
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on March 30, 2007, the claims are time-barred regardless of whether Plaintiff's cause of action is
based in contract or in tort.
Statute of Frauds
Defendant maintains that any agreement relative to the development of real estate would
fall within R.C. §1331.05.
R.C. §1335.05 provides, in relevant part:
Certain agreements to be in writing
No action shall be brought whereby to charge the defendant, upon a special promise, toanswer for the debt, default, or miscarriage of another person; nor to charge an executoror administrator upon a special promise to answer damages out of his own estate; nor tocharge a person upon an agreement made upon consideration of marriage, or upon acontract or sale of lands, tenements, or hereditaments, or interest in or concerning them,or upon an agreement that is not to be performed within one year from the makingthereof; unless the agreement upon which such action is brought, or some memorandumor note thereof, is in writing and signed by the party to be charged therewith or someother person thereunto by him or her lawfully authorized.
Defendant maintains that it is uncontroverted that there is no signed writing referencing
Plaintiff's right or interest in the Cali Woods development. Defendant notes that the only signed
writing proffered by Plaintiff in this case is a contract between Defendant and Joseph Cali and
Sarah Cali, to which Plaintiff is not a party. Thus, Defendant contends that Plaintiffs claim for
breach of oral contract fails as a matter of law because there is no signed writing.
Plaintiff maintains that the agreement at issue in this case is outside of the Statute of
Frauds. Plaintiff relies on Furth v. Farluzsch (1927), 26 Ohio App. 258, wherein the Eighth
District Court of Appeals held that an oral contract creating a partnership relationship between
two parties to share in commissions for sale of real estate did not have to be in writing. Thus,
Plaintiff maintains that the agreement for Defendant to pay Plaintiff monies is outside of the
Statute of Frauds.
In reply, Defendant notes that R.C. §1335.05 provides:
No action shall be brought whereby to charge the defendant, upon a special promise toanswer for a debt, default or miscarriage of another person... upon an agreement that isnot to be performed within one year from the making thereof; unless the agreement uponsuch action is brought ... is in writing and signed by the party to be charged.
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Defendant asserts that Plaintiff's. own affidavit states that the oral contract continued into
2007, and, therefore, was not completed within one year. Thus, Defendant maintains that the
contract does fall within the Statute of Frauds. Defendant relies on Olympic Holding Co., LLC v.
ACE Ltd. (May 7, 2009), _ N.E.2d _, 2009-Ohio-2057, wherein the Supreme Court of Ohio
held that while a joint venture agreement can be oral, it must comply with all of the applicable
requirements of contract law, including the Statute of Frauds. The Supreme Court fittther noted
that when the parties to the oral joint venture agreement do not intend for the agreement to be
performed in less than one year, the Statute of Frauds renders it unenforceable. Id. Thus,
inasmuch as the Plaintiff"'s own affidavit states that the oral contract was to be continued into
2007, Defendant maintains that Plaintiff's claims fail as a matter of law.
Agreements that do not comply with the statute of frauds are unenforceable. Htemmel v.
Hummel (1938), 133 Ohio St. 520, paragraph one of the syllabus. See also Shepherd v. Westlake
(1991), 76 Ohio App.3d 3, 10; DeCavitch v. Thomas Steel Strip Corp. (1990). 66 Ohio App.3d
568. 572.
The Court notes that Defendant's original motion argues that any agreement relative to
the development of real estate must be in writing to satisfy the Statute of Frauds while PlaintifPs
opposition asserts that the case is outside the Statute of Frauds because it involves an oral
contract creating a partnership agreement for the parties to share in real estate commissions.
Defendant does not address Plaintiff's argument relative to the creation of a partnership
agreement to share in real estate conunissions, but instead asserts another argument that if the
contract cannot be performed within one year it must be in writing to satisfy the Statute of
Frauds. Defendant notes that Plaintiff's arguments and affidavit asserting that the contract was
ongoing, which were presented relative to Defendant's Statute of Limitations arguments,
confirmed that the purported agreement was in violation of the Statute of Frauds. Specifically,
Defendant notes that if the alleged contract is ongoing and cannot be completed in one year, then
it must be in writing to satisfy the Statute of Frauds. Inasmuch as the alleged contract is not in
writing, Defendant argues that he is entitled to judgment as a matter of law.
Upon consideration, and without making a finding regarding whether or not the alleged
agreement involves a transaction for the transfer of real estate, the Court finds that by the
Plaintiff's own admissions as well as his own affidavit, the alleged contract between Plaintiff and
Defendant could not be performed within one year. Therefore, the agreement must be in writing
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to be enforceable. The alleged contract in this case does not comply with the Statute of Frauds
because it cannot be performed within one year and it is not in writing. Defendant is entitled to
judgment as a matter of law.
Res Judicata
Under the doctrine of resjudicata, a valid, final judgment rendered upon the merits bars
all subsequent actions based upon any claims arising out of the transaction or occurrence that
was the subject matter of the previous action. See Grava v. Parkman Township (1995), 73 Ohio
St.3d 379.
Defendant asserts that PlaintifPs claims against him are barred by the doctrine of res
judicata because Plaintiff admitted in deposition that on June 1, 2006, Plaintiff reached a
settlement agreement in the February 23, 1999, case filed in Collier County, Florida against Cali
Woods, Inc., Cali & Associates, Joseph Cali and Sarah Cali. Defendant further notes that
Plaintiff admitted in deposition that pursuant to that agreement, Plaintiff settled and released all
claims that he had or has against Cali Woods including any claim he may haye or had against
any business entity that they may have an interest in and from any and all causes of acrion or
claims from the beginning of the world to the date of the agreement. It is Defendant's position
that Plaintiff is now trying to re-litigate claims that he released and for which he already received
$550,000.00. Thus, it is Defendant's position that PlaintifPs claims are barred by the doctrine of
resjudicata.
In opposition, Plaintiff asserts that the previous Settlement Agreement between Plaintiff
and Joe Cali did not release Defendant from PlaintifPs claims. Plaintiff asserts that the
Agreement released Joe Cali and any business entity that they have an interest in and each
other's blood relatives, and since Defendant is not a business entity, the Agreement does not
apply to him.
In reply, Defendant maintains that Plaintiff ignores that fact that Defendant was an
employee of Joseph Cali and Cali Woods, Inc., and, therefore, the Settlement Agreement did
apply to him. Moreover, Defendant maintains that the claims asserted by Plaintiff against Joseph
Cali and Cali Woods, Inc. involve the same transaction as his subsequent action against
Defendant. Defendant asserts that the doctrine of resjudicata is a complete bar to any
subsequent action on the same claim or cause of action between parties or those in privity with
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them. See Brown v. Dayton (2000), 89 Ohio St.3d 245. Defendant maintains that inasmuch as
he was the project manager for Cali Woods, Inc., he was in privity with Cali Woods, Inc.
Defendant further maintains that even if this Court were to determine that he was not in
privity with Cali Woods, Inc., the action would be barred under the doctrine of resjudicata
because Plaintiff's claims arise out of the transaction that was the subject matter of the previous
Florida action. Defendant relies on Grava v. Parkman Twp., supra, wherein the Supreme Court
of Ohio held that a valid, final judgment rendered upon the merits bars all subsequent actions
based upon any claim arising out of the transaction that was the subject matter of the previous
action. Defendant further relies on U.S. BankNat'ZAss'n v. Gullotta 120 Ohio St.3d 401 and
National Amusements, Inc. v. City of Springdale (1990),. 53 Ohio St.3d 60, wherein the Supreme
Court of Ohio has held that an existing final judgment or decree between the parties to the
litigafion is conclusive to all claims which were or might have been litigated in the first lawsuit.
Defendant asserts that according to PlaintifPs deposition testimony, the Florida action involved
claims for monies he believed to be wrongfully withheld surrounding his transaction with Joseph
Cali and/or Cali Woods, Inc. Thus, Defendant argues that Plaintiff should have litigated his
claims against Defendant in the Florida case, and because he did not, his claims are barred under
the doctrine of resjudicata.
It is the opinion of this Court that Defendant is also entitled to an Order granting
judgment as a matter of law in his favor based on the doctrine or resjudicata. It is
uncontroverted that Plaintiff entered into a settlement agreement with Joseph Cali et. al.
regarding the Cali Woods project, received monies and signed a release which released Joseph
Cali, Cali Woods, Inc., Cali & Associates and Sarah Cali from any future claims, including any
claim he may have or had against any business entity that they may have an interest in and from
any and all causes of action or claims from the beginning of the world to the date of the
agreement. It is the opinion of this Court that the claims of Plaintiff arise out of the same
transaction that was the subject matter in the Florida case, and, therefore, should have been
brought in the Florida case. Accordingly, Plaintiff is barred from bringing the same claims now.
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COURT'S CONCLUSION
Based upon the foregoing, the Court finds that Defendant Thomas Ackerman's Motion
for Summary Judgment is well taken and granted.
IT IS SO ORDERED.
^VINCENT C T A JUDGE
Copies:
David M. Lynch, Esq.Charles V. Longo, Esq.
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STATE OF OHIO ))SS.
IN THE COURT OF APPEALS
COUNTY OF LAKE ) ELEVENTH DISTRICT
SAM MONTELLO, JUDGMENT ENTRY
Plaintiff-Appellant, CASE NO. 2010-L-007
- vs -
THOMAS ACKERMAN,
Defendant-Appellee.
FILEDCOURT OF APPEALS
JUL 2 6 2010MAUREEN G. KELLYCLERK OF COURT
LAKE COUNTY, OHIO
For the reasons stated in the opinion of this court, the sole assignment of
error lack merit. It is the judgment and order of this court that the judgment of the
Lake County Court of Common Pleas is affirmed.
It is the further order of this court that appellant is assessed costs herein
taxed. The court finds there were reasonable grounds for this appeal.
MARY JANE TRAPP, P.J., concurs,
DIANE V. GRENDELL, J., concurs in judgment only.
APPENDIX ITEM 2
(Exhibit B)
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THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
LAKE COUNTY, OHIO
SAM MONTELLO,
Plaintiff-Appellant,
-vs-
THOMAS ACKERMAN,
Defendant-Appellee.
OPINION
CASE NO. 2010-L-007
^ MIDCOURT OF APPEALS
IUL 26 2010MAUREEN G. KELLYCLERK OF COURT
LAKE CUUNTY, ®t1!®
Civil Appeal from the Court of Common Pleas, Case No. 08 CV 001678.
Judgment: Affirmed.
David M. Lynch, 29311 Euclid Avenue, #200, Wickliffe, OH 44092 (For Plaintiff-Appellant).
Charles V. Longo and Matthew D. Greenwell, Charles V. Longo, Co., L.P.A., 25550Chagrin Boulevard, #320, Beachwood, OH 44122 (For Defendant-Appellee).
COLLEEN MARY O'TOOLE, J.
(¶1} Sam Montello appeals from the grant of summary judgment to Thomas
Ackerman by the Lake County Court of Common Pleas in his action for breach of
contract and/or fraud regarding the proceeds from a real estate development, "Cali
Woods," located in Concord Township, Lake County, Ohio. The trial court found any
action by Mr. Montello was barred by the applicable statutes of limitations, the Statute of
Frauds, and res judicata. We affirm.
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{112} According to Mr. Montello, in June 1984, he and a friend, Joseph Cali,
entered a verbal agreement to acquire land in Lake County, Ohio, to be developed into
residential real estate. In return for providing capital, Mr. Montello was to receive one
half of any proceeds from the development, which was named Cali Woods. While
described as a "verbal partnership" in Mr. Montello's complaint, the parties do not
appear to dispute that Cali Woods was organized at some point into a corporation, "Cali
Woods, Inc."
{113} Mr. Montello alleges that he was introduced to Mr. Ackerman in 1995, and
that Mr. Ackerman was project manager for the development of Cali Woods. He alleges
that Mr. Ackerman entered into a verbal contract with him, to assure that Mr. Montello
received his one half of any proceeds from the project. Attached to Mr. Montello's
complaint is a written agreement between Joseph Cali, his wife, Sarah, and Mr.
Ackerman, dated June 1995, by which the Calis and Mr. Ackerman agreed to form a
development corporation for the lands constituting Cali Woods, with the Calis to own
one half of the corporation, Mr. Ackerman, the other half. Essentially, the Calis were to
provide the land for the development, and Mr. Ackerman, the expertise in running it. Mr.
Montello was not a party to this agreement, nor mentioned in it.
{¶4} In his deposition, Mr. Montello stated that he knew as early as 1998, that
Mr. Cali and Mr. Ackerman were failing to live up to their duty to provide him his money
from Cali Woods, or any accounting of its affairs. In 1999, Mr. Montello filed suit in the
Circuit Court for the Twentieth Judicial Circuit, Collier County, Florida, against Mr. Cali,
Cali and Associates, Inc., and others. Mr. Ackerman was not a party to that action. In
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June 2006, this Florida action was settled pursuant to arbitration, with Mr. Montello
receiving $550,000. In relevant part, the settlement agreement states as follows:
{¶5} "5. The parties hereby release each other as well as any business entity
that they may have an interest in and each others (sic) blood relatives from any and all
causes of action or claims from the beginning of the world to the date of this agreement
with the exception of the obligations in this settlement agreement."
{¶6} March 30, 2007, Mr. Montello filed his initial complaint against Mr.
Ackerman in the trial court, that being Case No. 07-CV-000923. Mr. Ackerman
answered and counterclaimed. April 9, 2008, Mr. Montello moved to dismiss the case
without prejudice, which motion the trial court granted in part, leaving Mr. Ackerman's
counterclaim pending.
{¶7} May 20, 2008, Mr. Montello refiled the instant case. Mr. Ackerman
answered and counterclaimed, which answer and counterclaim were, eventually
amended. Mr. Ackerman moved for summary judgment April 17, 2009, which motion
Mr. Montello opposed. Mr. Ackerman further filed a response to Mr. Montello's
opposition. August 6, 2009, the trial court granted the motion for summary judgment.
Mr. Montello timely noticed this appeal, assigning a single error:
{¶8} "The Trial Court errored (sic) in granting Summary Judgment for the
Defendant."
{¶9} "'Pursuant to Civ.R. 56(C), summary judgment is appropriate when there
is no genuine issue of material fact and the moving party is entitled to judgment as a
matter of law.' Holik v. Richards, 11th Dist. No. 2005-A-0006, 2006-Ohio-2644, ¶12,
citing Dresher v. Burt (1996), 75 Ohio St.3d 280, 293, ***. 'In addition, it must appear
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from the evidence and stipulations that reasonable minds can come to only one
conclusion, which is adverse to the nonmoving party.' Id. citing Civ.R. 56(C). Further,
the standard in which we review the granting of a motion for summary judgment is de
novo. Id. citing Grafton v. Ohio Edison Co. (1996), 77 Ohio St.3d 102, 105, "*.
{¶10} "Accordingly, '(s)ummary judgment may not be granted until the moving
party sufficiently demonstrates the absence of a genuine issue of material fact. 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 which demonstrate the absence of a
genuine issue of fact on a material element of the nonmoving party's claim.' Brunstetter
v. Keating, 11th Dist. No. 2002-T-0057, 2003-Ohio-3270, ¶12, citing Dresher at 292.
'Once the moving party meets the initial burden, the nonmoving party must then set
forth specific facts demonstrating that a genuine issue of material fact does exist that
must be preserved for trial, and if the nonmoving party does not so respond, summary
judgment, if appropriate, shall be entered against the nonmoving party.' Id., citing
Dresher at 293.
{¶11} "**•
{¶12} "***
{¶13} "Since summary judgment denies the party his or her'day in court' it is not
to be viewed lightly as docket control or as a 'little trial.' The jurisprudence of summary
judgment standards has placed burdens on both the moving and nonmoving party. In
Dresher v. Burt, the Supreme Court of Ohio held that the moving party seeking
summary judgment bears the initial burden of informing the trial court of the basis for the
motion and identifying those portions of the record before the trial court that
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demonstrate the absence of a genuine issue of fact on a material element of the
nonmoving party's claim. The evidence must be in the record or the motion cannot
succeed. The moving party cannot discharge its initial burden under Civ.R. 56 simply
by making a conclusory assertion that the nonmoving party has no evidence to prove its
case but must be able to specifically point to some evidence of the type listed in Civ.R.
56(C) that affirmatively demonstrates that the nonmoving party has no evidence to
support the nonmoving party's claims. If the moving party fails to satisfy its initial
burden, the motion for summary judgment must be denied. If the moving party has
satisfied its initial burden, the nonmoving party has a reciprocal burden outlined in the
last sentence of Civ.R. 56(E) to set forth specific facts showing there is a genuine issue
for trial. If the nonmoving party fails to do so, summary judgment, if appropriate shall be
entered against the nonmoving party based on the principles that have been firmly
established in Ohio for quite some time in Mitseff v. Wheeler (1988), 38 Ohio St.3d 112,
{¶14} "The court in Dresher went on to say that paragraph three of the syllabus
in Wing v. Anchor Media, Ltd. of Texas (1991), 59 Ohio St.3d 108, **", is too broad and
fails to account for the burden Civ.R. 56 places upon a moving party. The court,
therefore, limited paragraph three of the syllabus in Wing to bring it into conformity with
Mitseff. (Emphasis added.)
{¶15} "The Supreme Court in Dresher went on to hold that when neither the
moving nor nonmoving party provides evidentiary materials demonstrating that there are
no material facts in dispute, the moving party is not entitled to a judgment as a matter of
law as the moving party bears the initial responsibility of informing the trial court of the
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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.' Id. at 276. (Emphasis added.)" Welch v. Ziccarelli, 11th Dist. No. 2006-L-229,
2007-Ohio-4374, at ¶36-37, 40-42. (Parallel citations omitted.)
{¶16} In support of his assignment of error, Mr. Montello raises three issues.
First, he asserts the trial court erred in finding that this action was barred by the statute
of limitations. Second, he asserts that, since his alleged oral agreement with Mr.
Ackerman was for the division of profits from the sale realty arising from a partnership, it
does not fall within the Statute of Frauds. Third, Mr. Montello asserts that the
settlement of his claims against Mr. Cali in the Florida case does not place the bar of
res judicata upon an action against Mr. Ackerman.
{¶17} The statute of limitations concerning (most) oral contracts is six years.
R.C. 2305.07. In this case, Mr. Montello admitted in deposition that he believed neither
Mr. Cali, nor Mr. Ackerman, were performing under the alleged oral agreements in
1998. He did not commence any action against Mr. Ackerman until 2007. A cause of
action for breach of an oral contract accrues "when the plaintiff discovers the omission
to perform as agreed in the oral contract." Aluminum Line Products, Co. v. Brad Smith
Roofing Co., Inc. (1996), 109 Ohio App.3d 246, 258. In the instant case, this would
mean the limitations period expired no later than the end of 2004. Further, as Mr.
Ackerman points out, this court has held that the six year limitations period on oral
contracts to pay money, wherein no specific time for payment is stipulated, begins "to
run from the date the initial promise was made." Mines v. Phillips (1987), 37 Ohio
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App.3d 121, 122. Application of this rule to the instant case would mean the limitations
period expired at the end of 2001.
{¶18} While it appears to us that this case sounds in contract, analysis under a
fraud theory gives Mr. Montello no comfort. The general statute of limitations for fraud
is four years. R.C. 2305.09(C). This court has held that a cause of action for fraud
accrues either: "(1) when the fraud is discovered; or (2) when, in the exercise of
reasonable diligence, the fraud should have been discovered." Marshall v. Silsby, 11th
Dist. No. 2004-L-094, 2005-Ohio-5609, at ¶26. As Mr. Montello discovered the alleged
fraud in 1998, this means the limitations period expired no later than the end of 2002.
{¶19} Mr. Montello cites to the decision of the Supreme Court of Ohio in Weber
v. Billman (1956), 165 Ohio St. 431, in an attempt to avoid the bar of the statute of
limitations. Like the trial court, we find that case distinguishable. The Weber court held:
"Where a contract of employment is a continuing one with no fixed date of termination,
the statute of limitations does not begin to run until the services rendered under such
contract actually end." Weber at paragraph three of the syllabus. Weber involved a
situation where appellee's great uncle promised to see she was taken care of, if she
would devote herself to nursing him during the declining years of his life. As the Weber
court stated, "there was persuasive evidence before the jury to warrant the finding that
there was a continuing contract which terminated only with the death of the decedent."
Id. at 439. In this case, on the contrary, Mr. Montello alleges the existence of a
continuous contract with Mr. Ackerman to turn over proceeds from the Cali Woods
development, which Mr. Ackerman breached as early as 1998. Indeed, if we were to
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apply the reasoning in Weberto this case, we would be required to dismiss it, and order
the trial court to do the same, as no cause of action could yet have accrued.
{¶20} The first issue lacks merit. This action is barred by the applicable statutes
of limitations.
{q21} Under his second issue, Mr. Montello asserts the trial court erred in finding
this action was barred by the Statute of Frauds, as codified at R.C. 1335.05. This
section provides, in pertinent part:
{1122} "No action shall be brought whereby to charge the defendant, upon a
special promise, to answer for the debt, default, or miscarriage of another person; nor to
charge an executor or administrator upon a special promise to answer damages out of
his own estate; nor to charge a person upon an agreement made upon consideration of
marriage, or upon a contract or sale of lands, tenements, or hereditaments, or interest in
or concerning them, or upon an agreement that is not to be performed within one year
from the making thereof; unless the agreement upon which such action is brought, or
some memorandum or note thereof, is in writing and signed by the party to be charged
therewith or some other person thereunto by him or her lawfully authorized."
{¶23} Refusing to reach the question of whether the alleged agreement between
Mr. Montello and Mr. Ackerman involved an interest in realty, the trial court nevertheless
found that R.C. 1335.05 applied, since, according to Mr. Montello's own testimony, the
contract between himself and Mr. Ackerman was not intended to be performed within a
year.
{¶24} As support for this issue, Mr. Montello cites to the decision of the Court of
Appeals for the Eighth Appellate District in Furth v. Farkasch (1927), 26 Ohio App. 258,
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wherein the court held, at paragraph one of the syllabus: "Oral contract creating
partnership relation between parties to share in money realized from commissions for
sale of real estate, which had been earned by one party, held not within statute of
frauds ***." (Emphasis sic.) As noted by the Court of Appeals for the Tenth Appellate
District in Gunsorek v. Heartland Bank (1997), 124 Ohio App.3d 735, 740-742, Furth is
an early example of a line of appellate decisions in this state holding that the Statute of
Frauds does not apply to oral partnerships to share in the profits from the sale of realty,
or to acquire and develop realty not already owned by one of the partners. When such
agreements pertain to property already owned by one of the partners, the Statute of
Frauds applies. Gunsorek at 742-745.
{¶25} We respectfully decline to rely on Furth, and related cases. As Mr.
Ackerman indicates, the viability of these cases is questionable, following the decision
of the Supreme Court of Ohio in Olympic Holding Co., L.L.C. v. ACE Ltd., 122 Ohio
St.3d 89, 2009-Ohio-2057. In that case, the Court held, in an action between title
insurers and reinsurers:
{¶26} "In Garg v. Venkataraman (1988), 54 Ohio App.3d 171, 172-173, *"*, the
court stated, 'While joint venture agreements may be oral, they are, nonetheless, still
contracts, and thus subject to all of the applicable requirements of contract law,
including the Statute of Frauds.' Thus, Garg held that if a joint agreement does not
comply with the statute of frauds, it is unenforceable and cannot impose any fiduciary
duties upon the parties. Id. at 172. We agree with Garg and therefore hold that a joint-
venture agreement that does not comply with the statute of frauds is unenforceable, and
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an unenforceable joint-venture agreement cannot impose any fiduciary duties on the
parties." Olympic Holding Co. at ¶46.
{¶27} In view of this mandate applying the Statute of Frauds to joint ventures, it
appears likely to us that the Supreme Court would also hold that the statute applies to
partnerships. We further note the court in Olympic Holding Co. held: "When parties to
an alleged agreement did not intend the agreement to be performed in less than a year,
the statute of frauds renders that agreement unenforceable." Id. at ¶48. (Emphasis
sic.) As the trial court correctly noted, Mr. Montello's own evidence indicates the
agreement between him and Mr. Ackerman was not intended to be performed in less
than a year. Consequently, the Statute of Frauds bars the enforcement of the
agreement.
{¶28} The second issue lacks merit. This action is barred by the Statute of
Frauds.
{¶29} Under his third issue, Mr. Montello argues that the settlement of his
Florida action against Mr. Cali does not place the bar of res judicata on his action
against Mr. Ackerman. As we noted above, paragraph 5 of the settlement of that action,
entered into in June 2006, provided that Mr. Montello and Mr. Cali released each other,
"as well as any business entity that they may have an interest in *** from any and all
causes of action or claims from the beginning of the world to the date of this agreement
***[.]" Mr. Montello asserts that this settlement and release does not apply to Mr.
Ackerman, since he is not a business entity.
{¶30} In State ex ret. Nickoli v. Erie Metroparks, 124 Ohio St.3d 449, 2010-Ohio-
606, at ¶21-22, the Supreme Court of Ohio stated:
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{¶31} "In Ohio, '(t)he doctrine of res judicata encompasses the two related
concepts of claim preclusion, also known as res judicata or estoppel by judgment, and
issue preclusion, also known as collateral estoppel.' O'Nesti v. DeBartolo Realty Corp.,
113 Ohio St.3d 59, 2007-Ohio-1102, ¶6, '**. 'Claim preclusion prevents subsequent
actions, by the same parties or their privies, based upon any claim arising out of a
transaction that was the subject matter of a previous action,' whereas issue preclusion,
or collateral estoppel, ' precludes the relitigation, in a second action, of an issue that had
been actually and necessarily litigated and determined in a prior action that was based
on a different cause of action.' Ft. Frye Teachers Assn., OEAINEA v. State Emp.
Relations Bd. (1998), 81 Ohio St.3d 392, 395, ** ; see Holzemer v. Urbanski (1999), 86
Ohio St.3d 129, 133, '*.
{¶32} "For res judicata to apply, 'one of the requirements is that the parties to
the subsequent action must be identical to or in privity with those in the former action.'
Kirkhart v. Keiper, 101 Ohio St.3d 377, 2004-Ohio-1496, **, ¶8." (Parallel citations
omitted.)
{¶33} "`What constitutes privity in the context of res judicata is somewhat
amorphous. A contractual or beneficiary relationship is not required: "In certain
situations (***) a broader definition of privity is warranted. As a general matter, privity is
merely a word used to say that the relationship between the one who is a party on the
record and another is close enough to include that other within the res judicata."' Brown
[v. Dayton (2000)], 89 Ohio St.3d [245,] *** 248 (quoting Thompson v. Wing [(1994)], 70
Ohio St.3d 176, ***). 'Privity has also been defined as "such an identification of interest
of one person with another as to represent the same legal right."' Green v. City of
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Akron, 9th Dist. Nos. 18284, 18294, 1997 Ohio App. LEXIS 4425, "'* (Oct. 1, 1997)
(quoting Buchanan v. Palcra Inc., 6th Dist. No. E-87-22, 1987 Ohio App. LEXIS 10285,
*** (Dec. 31, 1987))." Elec. Enlightenment, Inc. v. Kirsch, 9th Dist. No. 23916, 2008-
Ohio-3633, at ¶8. (Parallel citations omitted.)
{¶34} "The doctrine of resjudicata requires a plaintiff to present every ground for
relief in the first action, or be forever barred from asserting it." (Emphasis sic.) National
Amusements, Inc. v. Springdale (1990), 53 Ohio St.3d 60, 62.
{1135} In this case, the June 1995 agreement between the Calis and Mr.
Ackerman, attached to Mr. Montello's own complaint, indicates that Mr. Cali and Mr.
Ackerman were business partners in the development of Cali Woods. We believe this is
sufficient to establish privity between them. Consequently, in settling the Florida action
between himself and Mr. Cali, Mr. Montello was required to except Mr. Ackerman from
the operation of the settlement and release, in order to avoid the bar of res judicata. He
did not.
{1136} The third issue lacks merit. This action is barred by res judicata.
{¶37} The judgment of the Lake County Court of Common Pleas is affirmed.
{¶38} It is the further order of this court that appellant is assessed costs' herein
taxed.
{¶39} The court finds there were reasonable grounds for this appeal.
MARY JANE TRAPP, P.J., concurs,
DIANE V. GRENDELL, J., concurs in judgment only.
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