[Cite as Kwon v. J.D. Stone Restaurants, Inc., 2011-Ohio-4649.]

COURT OF APPEALS 

DELAWARE COUNTY, OHIO 

FIFTH APPELLATE DISTRICT 

RAMZI O. KWON, ET AL. 

 Plaintiffs-Appellees 

-vsJ. D. STONE RESTAURANT, INC., 

ET AL. 

 Defendants-Appellants 

JUDGES: 

Hon. William B. Hoffman, P.J. 

Hon. Sheila G. Farmer, J. 

Hon. Patricia A. Delaney, J. 

Case No. 10CAE070054 

O P I N I O N 

CHARACTER OF PROCEEDING: Appeal from the Delaware County Court of 

Common Pleas, Case No. 09CVH0336 

JUDGMENT: Affirmed in part; Reversed in part; and 

 Remanded 

DATE OF JUDGMENT ENTRY: September 13, 2011 

APPEARANCES: 

For Plaintiffs-Appellees For Defendants-Appellants 

ROBERT G. KENNEDY HILLARD M. ABROMS 

4924-B Reed Rd. 753 South Front Street 

Columbus, Ohio 43220 Columbus, Ohio 43206 
Delaware County, Case No. 10CAE070054 2

Hoffman, P.J. 

{¶1} Defendants-appellants J.D. Stone Restaurants, Inc. and Anthony Torchia 

appeal the June 18, 2010 Judgment Entry of the Delaware County Court of Common 

Pleas granting judgment in favor of Plaintiffs-appellees Ramzi O. Kwon and Il Sim 

Group, LLC. 

STATEMENT OF THE FACTS AND CASE 

{¶2} This matter arises from litigation in which Appellees Ramzi Kwon and II 

Sims Group, LLC. (“Kwon”) sought return of the purchase price they paid for the 

purchase of the Hickory House Restaurant North in Powell, Ohio. Appellants J.D. Stone 

Restaurants and Anthony Torchia deny they owe Appellees any amount of the purchase 

monies paid. 

{¶3} The parties entered into an agreement for the purchase of the Hickory 

House Restaurant on or around October 13, 2006. At the time, Kwon was represented 

by realtor Ben Kahng and Appellants were represented by realtor Kim Lewis. 

{¶4} During all times pertinent hereto, Appellants were leasing the restaurant 

premises from Your Financial Community, Inc., the landlord herein (“Landlord”). The 

lease addendum between Appellants and Landlord contained certain conditions 

Appellants agreed they would meet should they decide “to sell the business and to sell, 

assign or transfer this leasehold interest...” The conditions included a requirement 

certain financial documents be provided to Landlord. Landlord in turn had thirty days to 

either consent to the transfer and release Appellants from their obligation under the 

lease; refuse to consent specifying the same in writing; or tender their consent subject 
Delaware County, Case No. 10CAE070054 3

to certain conditions specified in writing. Kwon was not provided with a copy of the 

lease agreement between Appellant and Landlord. 

{¶5} Instead, Realtor Kim Lewis requested the required documentation from 

Kwon in order to provide the same to Landlord. Kwon testified he provided the 

documentation to Ms. Lewis telling her he was, at the time, going through a dissolution 

of marriage and the financial statement represented the total of his and his wife’s 

assets. Kim Lewis did not ask for any further documentation or any updating of Kwon’s 

financial documentation. 

{¶6} Landlord informed Kim Lewis via Letter of November 6, 2006, of the need 

for verified financial documentation and a signed copy of the purchase contract. 

{¶7} The petition for dissolution of Kwon’s marriage was filed on September 26, 

2006 (before the date of the preparation of his financial statement), and finalized on 

November 21, 2006. After the dissolution, Kwon’s assets were reduced by 

approximately one-half, but he did not provide any supplemental financial information to 

Appellants or Landlord reflecting change of his financial statement. 

{¶8} Kim Lewis provided financial documentation from Kwon’s accountant to 

Landlord on November 20, 2006, and Landlord failed to respond. On January 27, 2007, 

an attorney for Appellant wrote a letter to Landlord indicating that due to Landlord’s 

failure to respond, the parties were going to move forward with the sale and transfer of 

the restaurant and transfer of the liquor license. 

{¶9} Appellants represented to Kwon they had every right to transfer and 

assign the lease since Landlord did not respond pursuant to the terms of the lease 
Delaware County, Case No. 10CAE070054 4

agreement. Kwon independently attempted to negotiate a new lease with Landlord, but 

his attempts were unsuccessful. 

{¶10} On February 28, 2007, Appellants filed a complaint for declaratory 

judgment in the Delaware County Court of Common Pleas, Case No. 07-CVH-02-249, 

seeking a declaration by the court Appellants had the right to assign the existing lease 

to Kwon. 

{¶11} On March 14, 2007, the parties executed a Closing Agreement, an 

Assignment of Lease and a Management Contract. In the Closing Agreement signed by 

the parties, they mutually agreed: 

{¶12} “...This entire transaction is contingent upon the liquor license for said 

business being transferred from Seller to Buyer. If the license cannot be transferred 

due to Seller’s fault, action or inaction, then this entire transaction at the option of the 

Buyer shall be null and void and all monies and documents paid and signed by the 

various parties hereto shall be returned to the respective parties from which they came 

and all parties shall be released from the obligations of the same...” 

{¶13} The Assignment of Lease contained the following language: 

{¶14} “...The Assignors do hereby warrant that they have the right to sell, 

transfer, assign and set over the aforesaid described leases, and the Assignors further 

covenant with the Assignee, his executors, administrators and assigned, that the 

assigned premises now are free and clear of any judgments, executions, taxes, 

assessments and encumbrances whatsoever. Except: it is understood the lessor has 

objected to said assignment, albeit incorrectly. As a result, correspondence has ensued 

from both Buyer’s and Seller’s counsel placing landlord on notice of his default and 
Delaware County, Case No. 10CAE070054 5

waiver of consent to assignment, and the sale is going forward. Additionally, 

Seller’s counsel has filed declaratory judgment action in Delaware Common Pleas 

Court, which has been served and is pending...” 

{¶15} The trial court dismissed Appellants’ declaratory judgment action on 

March 18, 2008, due to Appellants’ failure to proceed with the case. 

{¶16} On April 18, 2008, Kwon notified Appellants they were exercising their 

rights under the Closing Agreement to declare the transaction null and void, and 

demanded return of the purchase monies paid and returned control of the restaurant to 

Appellants. 

{¶17} Appellants demanded a set off of the purchase monies for the losses 

incurred during Kwon’s operation of the restaurant until its eventual sale, and damages 

in the amount of $373,794.72. 

{¶18} The trial court found Appellants’ own inaction caused the failure of the 

assignment of the lease, and ordered Appellants return all monies paid by Kwon upon 

return of the restaurant. The court further found because the terms of the agreement 

did not specifically address any losses or costs to Appellants as a result of the failure of 

the purchase agreement, Appellants’ claim for set-off or damages was denied. The trial 

court further ordered Appellants pay Kwon “the amount of $175,000.00, plus legal 

interest from the date the restaurant was returned (May 1, 2008), plus costs.” 

{¶19} Appellants now appeal, assigning as error: 

{¶20} “ERROR 1: THE COURT ERRONEOUSLY WENT OUTSIDE THE FOUR 

CORNERS OF THE CONTRACT WHERE THE LANGUAGE OF THE CONTRACT 

WAS CLEAR AND UNAMBIGUOUS. 
Delaware County, Case No. 10CAE070054 6

{¶21} “ERROR 2: 

{¶22} A. THE TRIAL COURT ABUSED ITS DISCRETION IN FINDING THE 

PLAINTIFF DID NOT INTENTIONALLY MISLEAD THE DEFENDANT OR THE 

LANDLORD BY CREATING A FALSE IMPRESSION OF HIS FINANCIAL STATUS. 

{¶23} B. THE TRIAL COURT ERRED AS A MATTER OF LAW BY FAILING TO 

FIND DEFENDANT FAILED TO ESTABLISH ANY FRAUD OR 

MISREPRESENTATION IN THE PREPARATION OR SUBMISSION OF HIS 

FINANCIAL INFORMATION. 

{¶24} C. THE TRIAL COURT ERRED AS A MATTER OF LAW BY NOT 

MAKING ANY RULING WHATSOEVER WITH REGARD TO DEFENDANTS’ 

COUNTERCLAIMS, DUE TO PLAINTIFFS FRAUDULENT MISREPRESENTATION OF 

HIS FINANCIAL STATUS.” 

{¶25} “ERROR 3: THE COURT ERRED AS A MATTER OF LAW IN 

IMPROPERLY IMPLYING OF [SIC] EVEN CONSIDERING THE REMEDY OF 

RESCISSION.” 

I. 

{¶26} In the first assignment of error, Appellants cite to Paragraph 3 of the 

parties’ agreement which requires the “Buyer” to “cause the filing of an application for 

the transfer of the subject liquor license from Seller to Buyer.” The paragraph provides, 

“If the license cannot be transferred due to Buyer’s fault, action or inaction, then the 

Buyer shall be responsible for finding another Buyer to whom said business and liquor 

license can be transferred.” Appellants maintain the trial court went outside the four 

corners of the contract in not finding Kwon’s false financial statements were clearly 
Delaware County, Case No. 10CAE070054 7

detrimental to the transfer. Appellants assert it was Kwon’s misrepresentation which 

caused the Landlord to not permit the assignment. 

{¶27} The trial court herein found the liquor license could not be transferred due 

to Appellants’ failure to proceed with the declaratory judgment action in the Delaware 

County Court of Common Pleas. The trial court did not rule upon whether Kwon 

provided a false financial statement to Landlord. 

{¶28} Appellants did not present testimony from their realtor Kim Lewis. Rather, 

Appellee Kwon testified he told Ms. Lewis he had obtained the financial documents from 

his accountants, and he told Lewis he was in the process of dissolution, and the records 

he transmitted were the most recent, but were all before his dissolution of marriage. 

Ms. Lewis did not ask for updated financial documents. Appellants further did not offer 

testimony relative to Ms. Lewis’ or anyone else asking Appellee for updated, postdissolution financial documents. 

{¶29} We find the trial court did not err in finding the liquor license could not be 

transferred due to Appellants’ failure to proceed in the declaratory judgment action, 

declaing the lease assignable to Appellees. Further, the original purchase contract and 

addendum clearly state the contract was contingent upon the successful transfer of the 

liquor license and business permits. 

{¶30} The first assignment of error is overruled. 

II. 

{¶31} In the second assignment of error, Appellants assert the trial court erred in 

failing to find Kwon engaged in fraud or misrepresentation in the submission of the 

financial documents in this matter. 
Delaware County, Case No. 10CAE070054 8

{¶32} In Burr v. Stark County Board of Commissioners (1986), 23 Ohio St.3d 69, 

491 N.E.2d 1101, paragraph two of the syllabus, the Supreme Court of Ohio found the 

elements of fraud to be as follows: 

{¶33} “(a) a representation or, where there is a duty to disclose, concealment of 

a fact, 

{¶34} “(b) which is material to the transaction at hand, 

{¶35} “(c) made falsely, with knowledge of its falsity, or with such utter disregard 

and recklessness as to whether it is true or false that knowledge may be inferred, 

{¶36} “(d) with the intent of misleading another into relying upon it, 

{¶37} “(e) justifiable reliance upon the representation or concealment, and 

{¶38} “(f) a resulting injury proximately caused by the reliance. (Cohen v. Lamko, 

Inc. (1984), 10 Ohio St.3d 167, [10 OBR 500], 462 N.E.2d 407, followed.)” 

{¶39} The elements of fraud must be established by clear and convincing 

evidence. Clear and convincing evidence is that measure or degree of proof that will 

produce in the mind of the trier of facts a firm belief or conviction as to the allegations 

sought to be established. Cross v. Ledford (1954), 161 Ohio St. 469, 120 N.E.2d 118. 

The burden to prove fraud rests upon the party alleging the fraud. First Discount Corp. 

v. Daken (1944), 75 Ohio App. 33, 60 N.E.2d 711, paragraph seven of the syllabus. 

{¶40} At the trial herein, Kwon testified: 

{¶41} “Q. You were - - when you were asked - - when you were signing this, 

were you asked to provide any information by Ms. Lewis or Mr. Kahng regarding your 

financial ability? 

{¶42} “A. No. 
Delaware County, Case No. 10CAE070054 9

{¶43} “Q. Did you provide any documents to them to provide to Mr. Costanza? 

{¶44} “A. I gave Kim Lewis, she said she’s gonna give all the information - - all 

the paperwork and give it to Mr. Costanza. 

{¶45} “Q. Okay. Did she tell you what you had to give? To your knowledge, did 

she tell you or Mr. Kahng what information they needed to give to Mr. Costanza? 

{¶46} “A. Just financial statement. 

{¶47} “Q. Okay. 

{¶48} “A. And - - 

{¶49} “Q. To your knowledge, did you give her everything that she asked for? 

{¶50} “A. Yes, I gave her - - I gave to her everything. 

{¶51} “Q. And to your knowledge, did she then provide that to Mr. Costanza? 

{¶52} “A. Yes. 

{¶53} “Q. Okay. Did she ask you for any additional information? 

{¶54} “A. No. 

{¶55} “* * * 

{¶56} “Q. And you were relying on her to provide whatever documentation to the 

landlord that was necessary, were you not? 

{¶57} “A. Yes. 

{¶58} “* * * 

{¶59} “Q. Okay. Now, shortly after that you and your wife’s dissolution went 

through, did it not? 

{¶60} “A. Yes. 
Delaware County, Case No. 10CAE070054 10

{¶61} “Q. Do you remember telling Ms. Lewis that you were going through a 

dissolution at the time? 

{¶62} “A. Yes. 

{¶63} “* * * 

{¶64} “Q. Okay. And I think you testified that you told Ms. Lewis that you were - 

- you and your wife were getting a dissolution, too, right? 

{¶65} “A. Yes. 

{¶66} “Q. Okay. Did she ever ask you for any updated assets? 

{¶67} “A. No. 

{¶68} “Q. Any updated financials? 

{¶69} “A. No.” 

{¶70} Tr. at 35-40; 53. 

{¶71} Again, Appellants did not present testimony from their realtor Kim Lewis to 

rebut any of Kwon’s testimony. Appellants’ attorney, John Hobday, did testify the 

landlord was not informed by Ms. Lewis the financial records reflected Kwon’s 

predissolution assets. 

{¶72} It is for the trial court to hear the evidence and weight the credibility of the 

witnesses. We find the trial court’s finding Kwon did not intentionally mislead Appellants 

and its failure to find fraud or misrepresentation by Kwon was not erroneous. 

{¶73} With regard to Appellants’ argument the trial court erred in failing to rule 

on the counterclaims for offset and damages, we find the argument well taken. We do 

not find Appellants’ counterclaim(s) for damages due to Appellee’s operation of the 

business during the time period at issue precluded by the contract between the parties. 
Delaware County, Case No. 10CAE070054 11

Therefore, the trial court erred in summarily dismissing the claims based on the 

rescission of the contract. Appellant’s argument is sustained with regard to the 

counterclaims for damages to offset the award to Appellees and the matter is remanded 

to the trial court for further proceedings with respect thereto. 

III. 

{¶74} In the third assignment of error, Appellants asserts the trial court erred in 

granting rescission of the contract herein. 

{¶75} Based upon our analysis and disposition of Appellants’ first and second 

assignments of error, we find the trial court did not err in finding the transaction null and 

void pursuant to the parties’ agreement providing the right to rescind the purchase 

contract. The Closing Agreement cited in the Statement of the Facts and Case, supra, 

clearly gives Buyer an option to declare the agreement “null and void and all monies 

and documents paid and signed by the various parties hereto shall be returned to the 

respective parties from which they came and all parties shall be released from the 

obligations of the same....” 

{¶76} Appellants’ third assignment of error is overruled. 
Delaware County, Case No. 10CAE070054 12

{¶77} The June 18, 2010 Judgment Entry of the Delaware County Court of 

Common Pleas is affirmed, in part, reversed, in part, and remanded for further 

proceedings in accordance with the law and this opinion. 

By: Hoffman, P.J. 

Farmer, J. and 

Delaney, J. concur 

 ___________________________________ 

 HON. WILLIAM B. HOFFMAN 

 ___________________________________ 

 HON. SHEILA G. FARMER 

 ___________________________________ 

 HON. PATRICIA A. DELANEY 

 
Delaware County, Case No. 10CAE070054 13

IN THE COURT OF APPEALS FOR DELAWARE COUNTY, OHIO 

FIFTH APPELLATE DISTRICT 

RAMZI O. KWON, ET AL. : 

 : 

 Plaintiffs-Appellees : 

 : 

-vs- : JUDGMENT ENTRY 

 : 

J D STONE RESTAURANT, INC., 

ET AL. : 

 : 

 Defendants-Appellants : Case No. 10CAE070054 

 For the reasons stated in our accompanying Opinion, the June 18, 2010 

Judgment Entry of the Delaware County Court of Common Pleas is affirmed in part; 

reversed in part; and the matter is remanded for further proceedings in accordance with 

the law and our Opinion. Costs divided equally. 

 

 ___________________________________ 

 HON. WILLIAM B. HOFFMAN 

 ___________________________________ 

 HON. SHEILA G. FARMER 

 ___________________________________ 

 HON. PATRICIA A. DELANEY