[Cite as Navidea Biopharmaceuticals, Inc. v. Capital Royalty Partners II, L.P., 2021-Ohio-808.]

IN THE COURT OF APPEALS OF OHIO 

TENTH APPELLATE DISTRICT 

Navidea Biopharmaceuticals, Inc., : 

 Plaintiff-Appellee/ : 

 Cross-Appellant, No. 19AP-825 

 : (C.P.C. No. 18CV-3097) 

v. 

 : (REGULAR CALENDAR) 

Capital Royalty Partners II, L.P. et al., 

 : 

 Defendants-Appellants/ 

 Cross-Appellees. : 

 

D E C I S I O N 

Rendered on March 16, 2021 

 

On brief: Barnes & Thornburg LLP, Robert C. Folland, and 

David J. Dirisamer, for appellee/cross-appellant. Argued: 

Robert C. Folland.

On brief: Ulmer & Berne LLP, Andrew W. Owen and 

Rachael L. Rodman; Stinson L.L.P., Paul B. Lackey, and 

Michael P. Aigen, pro hac vice, for appellants/cross-appellees. 

Argued: Michael P. Aigen.

 

APPEAL from the Franklin County Court of Common Pleas 

DORRIAN, P.J. 

{¶ 1} Defendants-appellants/cross-appellees Capital Royalty Partners II, L.P., 

Capital Royalty Partners II (Cayman), L.P., Capital Royalty Partners II – Parallel Fund "A," 

L.P., Parallel Investment Opportunities Partners II, L.P., Capital Royalty Partners II – 

Parallel Fund "B" (Cayman), L.P. and Capital Royalty Servicing, LLC ("Capital Royalty") 

appeal from a judgment of the Franklin County Court of Common Pleas which granted in 

part and denied in part the summary judgment motion of plaintiff-appellee/crossappellant, Navidea Biopharmaceuticals, Inc. ("Navidea"), and granted in part and denied 
No. 19AP-825 2 

in part Capital Royalty's motion for summary judgment. Navidea filed a cross-appeal from 

both the trial court's August 16, 2018 (motion to dismiss) and its November 27, 2019 

(summary judgment motions) decisions. For the following reasons, affirm in part and 

reverse in part. 

I. Facts and Procedural History 

{¶ 2} Navidea is a biopharmaceutical company located in Dublin, Ohio, and Capital 

Royalty are lenders. In May 2015, Capital Royalty loaned Navidea an original principal 

amount of $50 million. As security for the loan, Navidea granted Capital Royalty firstpriority liens and security interests in Navidea's property, including bank accounts and 

accounts receivable. Pursuant to the loan and security agreements, in the event of a default, 

Capital Royalty was granted certain rights, including the right to declare all outstanding 

obligations immediately due and payable, to take possession of all collateral without 

judicial process, and to direct Navidea's account receivables to be paid directly to Capital 

Royalty. 

{¶ 3} In 2016, disputes arose among the parties regarding the amount Navidea 

owed Capital Royalty, and alleged tortious actions by Capital Royalty against Navidea and 

the rightful ownership of funds held by Cardinal Health 414 LLC ("Cardinal"), who was 

Navidea's primary customer. These disputes led to litigation in both Ohio and Texas. 

{¶ 4} On April 7, 2016, Capital Royalty filed a lawsuit against Navidea in the Texas 

Harris County district court alleging Navidea was in default of its obligations under the loan 

agreement and sought a declaratory judgment that certain default events had occurred.1 

Capital Royalty Partners II, L.P. v. Navidea Biopharmaceuticals, Inc., 151st District Court, 

Harris Cty. Texas No. 2016-22242 (Dec. 27, 2017) ("Capital Royalty, Texas No. 2016-

22242"). Capital Royalty requested that Cardinal forward all payments it owed to Navidea 

to Capital Royalty. 

{¶ 5} On June 16, 2016, Capital Royalty exercised its contractual right under the 

loan documents to require U.S. Bank to transfer funds amounting to $4,112,434.17 from a 

Navidea account to Capital Royalty. These funds are referred to as the "Swept funds." 

 

1 Macrophage Therapeutics ("Macrophage"), a Delaware corporation, is listed as a defendant in the Texas 

action, along with Navidea. Macrophage is a guarantor but not listed in Cardinal's interpleader complaint or 

Navidea's complaint filed in Ohio. 
No. 19AP-825 3 

{¶ 6} Navidea filed counterclaims in the Texas action alleging: (1) aiding and 

abetting breach of fiduciary duty, (2) breach of contract, (3) breach of the duty of good faith 

and fair dealing, and (4) a declaratory judgment action seeking a declaration that Capital 

Royalty improperly applied approximately $4 million collected from Navidea to amounts 

not designated under the loan agreement. 

{¶ 7} On February 8, 2017, the Texas court granted partial summary judgment in 

favor of Capital Royalty holding that Navidea had committed one or more events of default 

under the loan documents and was liable for damages. Navidea filed a motion for 

reconsideration. The Texas trial court denied the motion. 

{¶ 8} On June 17, 2016, Cardinal filed an interpleader action in Ohio against 

Navidea and Capital Royalty to determine the true recipient of moneys to be paid by 

Cardinal under an agreement that Cardinal executed with Navidea and seeking an order 

directing Cardinal to pay the proper party. Cardinal Health 414, LLC v. Navidea 

Biopharmaceuticals, Inc., Franklin C.P. No. 16CV-5801 ("the first Ohio action"). On 

August 26, 2016, Navidea filed an answer and cross-claims against Capital Royalty in the 

interpleader action, alleging: (1) defamation, arguing that Capital Royalty falsely told 

Cardinal and others that Navidea had defaulted under the loan documents, (2) intentional 

interference with contract arguing that Capital Royalty interfered with the contract between 

Navidea and Cardinal, and (3) Navidea sought a permanent injunction to allow Navidea to 

use the funds Cardinal owed Navidea, including the funds at issue in the interpleader 

complaint and preventing Capital Royalty from taking possession of the funds. 

{¶ 9} On September 23, 2016 in the first Ohio action, Capital Royalty filed a motion 

to stay or, in the alternative, a motion to dismiss Navidea's cross-claims for injunctive relief 

and damages because of the pending Texas action. On November 21, 2016, the Ohio trial 

court granted leave for Navidea to file an amended cross-claim for injunctive relief and 

damages, which it filed on December 1, 2016, alleging defamation, interference with 

contract, abuse of process, and sought a permanent injunction preventing Capital Royalty 

from taking possession of the funds Cardinal owed Navidea. On January 24, 2017, the Ohio 

trial court denied Capital Royalty's motion to stay or, in the alternative, motion to dismiss. 

{¶ 10} Navidea, Capital Royalty, and Cardinal participated in negotiations with the 

Ohio trial court judge and reached an agreement, and the parties reduced their settlement 
No. 19AP-825 4 

to writing in a document titled Global Settlement Agreement (the "Agreement"),2 signed 

March 3, 2017. As part of the Agreement: (1) Navidea, Capital Royalty, and Cardinal agreed 

to dismiss the claims in the first Ohio action with prejudice (section 1.5(a)), (2) dismiss the 

counterclaims in the Texas action with prejudice (section 2.1); however, Navidea retained 

the right to assert any claims and defenses to prove it only owed $47 million, not the $66 

million as alleged by Capital Royalty (section 2.1), (3) Capital Royalty would release the 

liens on Navidea's property and each party would obtain a letter of credit to cover the final 

judgment (sections 1.4 and 2.1), and (4) Navidea agreed to pay Capital Royalty an amount 

to be determined by the Texas court but not less than $47 million and not more than $66 

million with $59 million to be paid immediately after an asset sale to Cardinal by Navidea 

before March 10, 2017 (section 1.2). The Texas court was to determine the amount due 

pursuant to the underlying loan, any fees and other associated costs, and the Texas court 

would have exclusive jurisdiction over all matters regarding those issues and any issues 

regarding the letters of credit each party had to obtain. 

{¶ 11} The Agreement provided in section 2.1 regarding the parties' litigation in 

Texas ("Lender" is Capital Royalty and "Company" is Navidea) as follows: 

The Company and Lenders shall continue to litigate, in the 

Texas Court as part of the Texas Action, the Lenders' claims 

against the Company arising under the Loan Documents and 

the Company's defenses and affirmative defenses thereto, (the 

"Texas Claims"), provided, however, that (a) the Company 

shall withdraw its counterclaims against the Agent [CRG 

Servicing LLC] and the Lenders in the Texas Action by filing, 

on the Closing Date, a Notice of Nonsuit With Prejudice, 

substantially in the form of Exhibit 2.1(a) hereto, with the 

Texas Court in the Texas Action and (b) the Company hereby 

agrees not to assert in the future such (or similar) 

counterclaims against the Agent and/or the Lenders and/or 

their affiliates in the Texas Action. For avoidance of doubt, 

the Texas Claims shall include all defenses and affirmative 

defenses, whether contractual or extra-contractual, 

(including, without limitation, rights of setoff and offset) to 

the causes of action pled by the Lenders in the Texas Action 

(collectively, "Defenses"), provided that the Defenses are 

permitted by New York law, in a manner consistent with the 

 

2 The parties use both the terms mediation and settlement negotiations (herein referred to as "negotiations"). 

Regardless of the term, the parties spent nine hours negotiating in front of the Ohio trial court judge which 

resulted in the Agreement. 
No. 19AP-825 5 

mediation transcript, dated February 22, 2017, Case No. 

16CV-5801, a copy of which is attached hereto as Exhibit 

2.1(b). The Texas Court shall adjudicate the Texas Claims to 

determine the final amount of the Obligations owed by the 

Company to the Lenders under the Loan Documents (the 

"Final Obligation Amount"), provided, that the Final 

Obligation Amount shall in no event be less than $47,000,000 

(the "Obligation Minimum") or more than $66,000,000 

(the "Obligation Maximum"), with each such amount net 

of any amounts received by the Lenders on or prior to receipt 

of the Deposit Amount, and (1) provided however, that the 

Company retains, among other rights, the right to assert that 

all offsets, payments and credits have not been allowed, 

including without limitation, the credit due for the U.S. Bank 

funds previously taken by Lenders and (2) provided further, 

that the Texas Court's decision shall be final and nonappealable and not subject to reconsideration, and shall be 

binding on all of the Parties to this Agreement. In furtherance 

thereof, the Lenders and the Company shall notify the Texas 

Court of this Agreement. 

(Emphasis sic.) 

{¶ 12} The parties agreed the Texas court would apply New York law. Further, the 

Agreement provided that the Texas court action was not appealable. "[T]he Texas Court's 

decision shall be final and non-appealable and not subject to reconsideration, and shall be 

binding on all of the Parties to this Agreement." (Agreement at section 2.1.) 

{¶ 13} The Agreement addressed the Cardinal letter of credit in section 2.3 and 

provided that Cardinal shall provide a letter of credit in an amount equal to $7,153,000.3 If 

 

3 In W. Sur. Co. v. N. Valley Bank, 5th Dist. No. CT2004-0049, 2005-Ohio-3453, ¶ 15, the court discussed a 

letter of credit as follows: "A letter of credit is a specialized commercial document arising from an agreement 

between a bank and its customer. Carnegie Fin. Corp. v. Akron Nat. Bank & Trust Co. (1976), 49 Ohio App.2d 

321, 327, 361 N.E.2d 504. Letters of credit are unique commercial instruments and are governed by their own 

unique rules. Nassar v. Florida Fleet Sales, Inc., (S.D.N.Y.1999), 79 F.Supp.2d 284, 291-292, citing Mutual 

Export Corp. v. Westpac Banking Corp., (C.A.2, 1993), 983 F.2d 420, 423. 'Originally conceived as a means 

of facilitating international sales of goods, the letter of credit has recently come to serve a variety of purposes, 

such as ensuring the payment of construction loans, guaranteeing the performance of obligations, and 

supporting the issuance of commercial paper. * * * The letter of credit facilitates the underlying transaction 

both by substituting the known and secure credit of the issuer, such as a bank, for the unknown and perhaps 

risky credit of the other party to the underlying transaction, and by ensuring payment "up front," thereby 

shifting the burden of litigation to the dissatisfied purchaser of the goods or services.' In re Guy C. Long, Inc.

74 B.R. 939, 943, Insurance Company of North America v. Heritage Bank, N.A., (C.A.3, 1979), 595 F.2d 171, 

173 (Footnote omitted.)" 
No. 19AP-825 6 

the Texas court determined the final obligation was more than $59 million and if Navidea 

failed to pay the full amount of the required payment to Capital Royalty within five days of 

the Texas court's determination, then Capital Royalty was entitled to draw on the Cardinal 

letter of credit in an amount equal to the difference between $59 million and the final 

obligation amount, plus the actual out-of-pocket costs incurred by Capital Royalty in 

procuring the letter of credit, but less any partial payment made by Navidea toward the 

required payment. As will be explained in more detail below, Capital Royalty sent Navidea 

a letter on January 16, 2018 stating it was going to draw on the entire amount of the 

Cardinal letter of credit of $7,153,000. 

{¶ 14} On March 6, 2017, the parties filed a stipulated notice of voluntary dismissal 

with prejudice of the first Ohio action. 

{¶ 15} In December 2017, the Texas court held a trial and rendered a final judgment 

for Capital Royalty on December 27, 2017, finding that since Navidea defaulted under the 

loan agreement as previously determined, Capital Royalty was entitled to $66 million. The 

Texas trial court order stated: " 'To be clear, though, this judgment requires Defendants 

"Navidea" to pay an additional Seven Million Dollars ($7,000,000.00) in new money on 

top of the Fifty Nine Million Dollars that "Navidea" has already paid pursuant to the 2017 

settlement agreement entered into prior to the commencement of the trial of this case.' " 

In re Navidea Biopharmaceuticals, Inc., 14th Dist. Court of Appeals of Texas No. 14-18-

00036-CV (Mar. 8, 2018) ("In re Navidea, Texas No. 14-18-00036-CV"), quoting Capital 

Royalty, Texas No. 2016-22242. 

{¶ 16} Navidea filed a letter and emergency motion to stay execution, arguing the 

Texas trial court should correct its mathematical errors and reduce the judgment in order 

to account for Capital Royalty's receipt of the Swept funds. Navidea also filed a motion to 

correct the judgment in which it argued the trial court should correct the mathematical 

errors in its judgment to reduce the amount of money owed to Capital Royalty from $7 

million to approximately $2 million (reducing the Swept funds from the amount Navidea 

owed). Navidea Biopharmaceuticals, Inc. v. Capital Royalty Partners II, L.P., 14th Dist. 

 

R.C. 1305.01(A)(10) defines a letter of credit as "a definite undertaking that satisfies the requirements of 

section 1305.03 of the Revised Code by an issuer to a beneficiary at the request or for the account of an 

applicant or, in the case of a financial institution, to itself or for its own account, to honor a documentary 

presentation by payment or delivery of an item of value." 
No. 19AP-825 7 

Court of Appeals of Texas No. 14-18-00225-CV (July 16, 2019) ("Navidea 

Biopharmaceuticals, Texas No. 14-18-00225-CV"). 

{¶ 17} On January 3, 2018, the Texas trial court granted a stay and signed the 

following order: 

After reviewing the pleadings on file and any arguments of 

counsel, the Court hereby stays the execution of its Judgment 

which would otherwise be immediately collectible and 

executable through 5 p.m. Houston time on Wednesday, 

January 10, 2018. The Court will either enter an amended 

Judgment and Findings and Conclusions by that time, or not. 

No additional filings will be considered, and no additional 

hearings will be held. 

In re Navidea, Texas No. 14-18-00036-CV, quoting Capital Royalty, Texas No. 2016-

22242. 

{¶ 18} On January 10, 2018, the Texas trial court filed first amended final judgment, 

which stated in part: 

IT IS ORDERED, ADJUDGED, AND DECREED that 

Plaintiffs recover from Defendants the amount of $7,000,000 

in damages, which is new money, in addition to the 

$59,000,000 previously paid to Plaintiffs pursuant to the 

high-low settlement agreement in this case. 

IT IS FURTHER ORDERED that the Plaintiffs recover from 

Defendants post-judgment interest at the rate of 5% per 

annum from the date of this Amended Final Judgment. 

The Court Orders, Adjudges, and Decrees that this Amended 

Final Judgment replaces the Final Judgment signed on 

December 27, 2017, and this Amended Final Judgment 

disposes of all claims, all defenses, and all parties. 

It is further ORDERED that no additional filing or motions or 

corrections will be accepted by the Court pursuant to the plain 

language of the Parties' agreements. Further, the Court will 

not hold any additional hearings in this case. 

(Emphasis sic.) In re Navidea, Texas No. 14-18-00036-CV, quoting Capital Royalty, 

Texas No. 2016-22242. 

{¶ 19} Thus, the Texas court determined that Navidea had already paid $59 million 

when the Agreement was reached and ordered Navidea to pay Capital Royalty "an 
No. 19AP-825 8 

additional $7,000,000.00 in new money on top of the $59,000,000.00 [Navidea has] 

already paid in under the settlement agreement in this case." Capital Royalty, Texas No. 

2016-22242, First Amended Findings of Fact and Conclusions of Law at ¶ 100. 

{¶ 20} On January 16, 2018, Navidea then filed an emergency motion to set 

supersedeas bond and to modify the judgment, arguing the Texas trial court failed to 

expressly account for the Swept funds. The Texas trial court held a hearing on the bond 

amount.4 

{¶ 21} At the hearing, Navidea argued the following: 

Judge, this is a 4.112 million-dollar issue involving the swept 

funds that were at issue during the trial. 

As you know, there was a high-low in the settlement between 

59 and 66 million. 59 had already been paid, as well as 4.112 

in swept funds. 

The damages model that [Capital Royalty] put forward in 

Exhibit 126 gave credit for the 4.112 in swept funds. Your 

judgment states that it will be 59 million plus 7 million in 

damages. Which we believe takes into account the 4.112 in 

swept funds and that the remaining obligation is 2 million 

plus. 

But there is a 7 million-dollar letter of credit outstanding. 

[Capital Royalty] have stated their intent to execute on the 

entire $7 million on the letter of credit despite the prior 

payment of $4.112 million. That is the reason that we filed the 

emergency motions. That is what we are trying to stop from 

happening. And that is what we need clarification on because 

there is a disagreement between the two sides as to that issue. 

(Capital Royalty, Texas No. 2016-22242 Mar. 26, 2018 Tr. at 5-6.) 

{¶ 22} Capital Royalty argued the following: 

Now they're here trying to argue that you made a mistake, 

which they're barred from doing. So instead they're taking a 

 

4 In the decision based on an appeal from the Texas trial court setting a bond, the appellate court stated the 

trial court held a hearing on the bond pursuant to Texas procedure and quoted the trial court from the hearing. 

Navidea Biopharmaceuticals, Texas No. 14-18-00225-CV. Apparently, the Texas trial court initially refused 

to hold a hearing because the 14th Dist. Court of Appeals of Texas granted in part Navidea's petition for a writ 

of mandamus claiming that the district court failed to set a supersedeas bond. The appellate court found the 

trial court had abused its discretion in failing to set a supersedeas bond and that Navidea did not have an 

adequate remedy on appeal and conditionally granted the writ to direct the trial court to set the supersedeas 

bond amount. See In re Navidea, Texas No. 14-18-00036-CV. 
No. 19AP-825 9 

position that there is now a cap on total recovery, the total 

amount of money that we can get in this relationship, as 

opposed to what the cap really is was a cap on trial. What they 

fail to tell you is that at the time of the settlement agreement, 

including the 59 million-dollar payment, we had received $71 

million. 

So if there truly was a 66 million-dollar cap on our total 

recovery as opposed to what you were doing at trial, there 

never would have been a trial because the minute we received 

the 59 million, we would have had to give them 5 million back. 

* * * 

Everyone knows that this case was a cap on the trial, which 

was in addition to all the other money we received. 

(Capital Royalty, Texas No. 2016-22242 Mar. 26, 2018 Tr. at 7-8.) 

{¶ 23} The Texas trial court rejected Navidea's argument, stating: 

The answer is that it is not in excess of what the Court 

intended to issue. The Court meant what it said, $7 million 

new money, period. That's what the judgment says. That's 

what it means. That's what the evidence was at trial. 

 

(Capital Royalty, Texas No. 2016-22242 Mar. 26, 2018 Tr. at 11.) 

{¶ 24} After the court's ruling, Navidea asked a question for clarification, as follows: 

Where in the findings of fact and conclusions of law was the 

swept - - were the swept funds dealt with? 

THE COURT: They were dealt with in that you had - - I'm 

persuaded by their argument, among other things, that this 

was a settlement agreement to pay $59 million in with a highlow of 49 million and 66 million and the evidence sufficiently 

demonstrated that they're entitled to an additional $7 million 

and that the swept funds were just as easily contemplated in 

the 59 million. 

(Capital Royalty, Texas No. 2016-22242 Mar. 26, 2018 Tr. at 12.) 

{¶ 25} The Texas trial court ordered Navidea to file a cash bond of $7,717,500 if 

Navidea was going to appeal. Id. 

{¶ 26} Navidea filed an appeal arguing the trial court erred by awarding the Swept 

funds as damages to Capital Royalty which resulted in a double recovery. Capital Royalty 
No. 19AP-825 10 

argued that Navidea's appeal was barred because the parties waived their appeal rights in 

the Agreement and, thus, Navidea's appeal should be dismissed. Navidea responded that 

it only waived its right to appeal the trial court's determination of the final obligation 

amount and not the calculation of damages that included a gross mistake or absurd result. 

{¶ 27} While the appeal in Texas was pending, on April 12, 2018, Navidea filed this 

action in Ohio in Franklin C.P. No. 18CV-3097 ("second Ohio action") and then amended 

the complaint on May 22, 2018 alleging fraudulent inducement and fraudulent 

misrepresentation, breach of contract, conversion, unjust enrichment, civil conspiracy, 

tortious disclosure of confidential information, professional negligence, and breach of 

confidence. Navidea's contentions were that Capital Royalty had collected more than the 

$66 million cap on damages as the result of Capital Royalty collecting $4,112,434.17 from 

U.S. Bank on June 28, 2016, the Swept funds, and Capital Royalty's draw on the Cardinal 

letter of credit valued at $7,153,000.00 in addition to the $59 million payment Navidea 

made pursuant to the Agreement. Section 4.3 of the Agreement provided: "Nothing in the 

foregoing releases shall preclude a Party or Parties from seeking to enforce the terms of this 

Agreement." 

{¶ 28} While the Texas appeal and the second Ohio action were pending, on 

April 27, 2018, the Texas trial court held a temporary injunction hearing on an anti-suit 

injunction request filed by Capital Royalty requesting the trial court enforce its judgment 

and prevent Navidea from proceeding with the Ohio lawsuits. The Texas trial court denied 

the anti-suit injunction, stating as follows: 

In the Court's opinion, as I understand the claims in Ohio, 

they seem to me to be quite a reach. To suggest that the fraud 

- - the alleged fraud having to do with representations about 

affirmative defenses and whether they can be pursued here, 

and which ones, is not extrinsic. 

It is completely intrinsic in that the written agreement that 

this Court was trying a case about expressly talked about your 

ability to assert affirmative defenses. 

And as I indicated earlier, I won't go through that in any detail, 

but as I indicated, the agreement was construed at Navidea's 

request, both sides' request, really, about whether the 

affirmative defenses could be asserted. And then ultimately 
No. 19AP-825 11 

there was cross motions for summary judgment about which 

affirmative defenses had any merit. 

So we fully litigated the issue of affirmative defenses. And they 

were tried, the ones that survived summary judgment. 

So to say that that is somehow fraud in the inducement when 

it's expressly in the wording of the operative agreement, or 

breach of contract, to me seems rather meritless. And it begs 

the question, given that you-all had waived your appeal, that 

what did we spend all of 2017 doing here and why did we 

bother? 

Of course, this extrinsic fraud and breach of contract claim are 

just another bite at the apple. You're accusing them of doubledipping something that we fully litigated, and then had a 

hearing about and cross motions. And then another hearing 

about the amount of the supersedeas bond. 

But I think that in light of the hearing that recently took place 

in Ohio and Judge -- is it Serrott, am I saying that right -- 

Judge Serrott's preliminary finding of jurisdiction and express 

request on the record that this Court defer to him, essentially, 

out of a sense of comity and collegiality, I will allow him to 

proceed further with this case. 

And I'm confident that he'll be able to see exactly what I see. 

Perhaps the procedural vehicle will be different. But I -- and 

I'm very close to granting an anti-suit injunction here, but at 

this point I don't think it's appropriate. 

(Capital Royalty, Texas No. 2016-22242 Apr. 27, 2018 Tr. at 26-27.) 

{¶ 29} In the second Ohio action, Capital Royalty filed a motion to dismiss which the 

trial court granted in part on August 16, 2018. The Ohio trial court determined it had 

jurisdiction over the parties and Franklin County was the proper venue to determine all 

issues related to the Agreement because the trial court retained jurisdiction to enforce the 

Agreement during the negotiations. 

{¶ 30} The Ohio trial court determined it had retained jurisdiction to enforce the 

Agreement based on the judge's statements during the negotiations that occurred in 2017, 

resulting in the Agreement, as follows: 

THE COURT: In Ohio, anything on the record is enforceable 

as a contract. I can enforce it. We've reached an agreement. I 
No. 19AP-825 12 

can enforce this. Again, everything else is going to Texas. If 

you have problems with documents, which I hope that you 

won't, because I have been involved enough. We all agree? 

Okay. 

(First Ohio action Feb. 22, 2017 Tr. at 18-19.) 

{¶ 31} The parties incorporated the transcript of the negotiations into the 

Agreement in section 7.6, which provides: 

Entire Agreement. This Agreement and the exhibits attached 

hereto constitutes the entire agreement among the Parties 

with respect to the matters covered hereby and supersedes all 

previous written, oral or implied understandings among the 

Parties with respect to such matters. The Recitals set forth in 

the beginning of this Agreement are incorporated herein. 

(The transcript of the negotiations was attached as Exhibit 2.1(b).) 

{¶ 32} The Ohio trial judge further stated on the record during the negotiation 

proceedings as follows: 

The dispute in this case will be resolved in Texas regarding the 

underlying loan and what's owed, what fees are due, what 

attorney fees and other associated costs will be litigated in 

Texas. Texas will have exclusive jurisdiction over all matters 

regarding these issues. 

The position of Navidea is that they owe 47 million dollars. 

The position of [Capital Royalty] is that they're owed * * *. 

* * * 66 million dollars. There's a difference of 47 versus 66 

million. The 59 million dollars will be paid directly to [Capital 

Royalty]. It will be litigated in Texas before the judge that it's 

currently set in front of with no appeal. That's a final decision. 

Whatever the decision is, the judge will take testimony, 

however they decide to hear that, in Texas. The Texas court 

will decide that issue. 

The parameters are, do we owe 47 million, or do we owe 66 

million? There's a difference, obviously, of 12 million dollars 

on the one side that potentially Navidea could recoup. It's my 

understanding that [Capital Royalty] will obtain a letter of 

credit for that 12 million dollars. The cost of that letter of 

credit, we'll go through in a moment. 

On the other side, there's a risk of a difference of seven million 

dollars. Navidea will obtain a letter of credit at its cost, or 
No. 19AP-825 13 

Cardinal will. One way or another, there will be a letter of 

credit. 

The costs of those letters of credit will be allocated in Texas, 

depending on the following: The prevailing party, or winning 

party, whatever you want to call the party, will be defined as 

anybody -- if [Capital Royalty] obtains a judgment of 59 

million dollars and one penny, they are deemed to be the 

prevailing party with regard to the costs of the letter of credit. 

If it's $58,999,999.99, then Navidea is deemed the prevailing 

party, and [Capital Royalty] will pay the costs of that letter of 

credit. 

So the litigation in Texas -- the cross-claims here are 

dismissed. So the amount in controversy is from 47 to 66 with 

payment guaranteed as I've outlined. 

 

* * * 

Any dispute involving the letters of credit will be determined 

by the Texas court. 

(Feb. 22, 2017 Tr. at 5-7.) 

{¶ 33} The parties and the trial judge continued: 

[Navidea's counsel]: * * * [T]he 59 million dollars will be paid 

with 47 million dollars from the Cardinal sale, five million 

dollars from the Merrill Lynch account, which is currently in 

a Merrill Lynch account. 

* * * 

THE COURT: Let me correct that. All right. So 59 million 

dollars is being paid at closing to [Capital Royalty], and then 

[Capital Royalty] is going to release all their liens. You're free 

to have your five million dollar account. They're going to 

retain the money that was swept. Let's make that clear. Go 

ahead. 

[Navidea's counsel]: Well, they're going to retain the money 

that's swept, but we reserve the right to argue that that should 

be credited back to us along with all the other arguments that 

we have down there. 

THE COURT: You can make an affirmative defense out of 

what would be your cross-claims down in Texas. 
No. 19AP-825 14 

[Navidea's counsel]: Yes. In addition, Your Honor, just to 

make it clear, we don't release any claims or defenses in Texas, 

but whatever claims and defenses we have will be subject to 

the parameters, which is 47 million to 66 million. 

THE COURT: Well, it's my understanding, again, that there's 

going to be a release in the sense of, this is it, those are the 

parameters. You aren't going to be pursuing damages other 

than an offset, for lack of a better term, within these 

parameters to figure out who the winner is below 59 million 

or above 59. 

[Navidea's counsel]: So we have all our claims and defenses 

intact. We can't go below 47 or above 66. 

[Capital Royalty's counsel]: Our position is that the nature of 

this dispute deals with dismissal of prejudice of everything 

here in Ohio and otherwise releases your counterclaims in 

Texas subject to your rights to otherwise assert affirmative 

defenses in connection with the dispute, which is how much is 

really owed. 

THE COURT: Correct. That's my understanding, and that's 

what we have been dealing with. In other words, you can go 

down there and say, "Listen, here's why we only owe them 47 

million dollars, you know. We only owe them 47 million 

dollars because they preemptively filed an action and seized 

accounts. We really weren't in material default." But you can't 

obtain a judgment against them as somehow collectable. [sic.] 

We're within these parameters. 

(Feb. 22, 2017 Tr. at 9-12.) 

{¶ 34} Thus, the Ohio trial court denied the motion to dismiss regarding the three 

claims related to the Agreement, breach of contract, conversion, and unjust enrichment 

claims. The trial court found: 

This Court retained jurisdiction to enforce the settlement 

agreement but agreed all other issues regarding the amount 

owed and litigation of all defenses and other factual matters 

concerning the loan were to be decided by the Texas Court 

before Judge Englehart. Plaintiff complains that Defendants 

allegedly misrepresented the settlement agreement to the 

Texas Court preventing it from presenting all its defenses. 

Whether or not this claim has merit is irrelevant. Those issues 

were before the Texas Court and that Court was the exclusive 
No. 19AP-825 15 

forum to determine what evidence and defenses were 

relevant. 

(Second Ohio action Aug. 16, 2018 Order and Entry at 1-2.) The trial court dismissed 

Navidea's claims regarding fraudulent inducement and fraudulent misrepresentation, civil 

conspiracy, tortious disclosure of confidential information, professional negligence, and 

breach of confidence on grounds that: (1) the court lacked jurisdiction over these claims, 

(2) improper venue, (3) litigation immunity, and (4) failure to plead the fraud claims with 

particularity and specificity. 

{¶ 35} On August 27, 2018, Capital Royalty filed a petition seeking a writ of 

prohibition against the Ohio trial court judge in the Supreme Court of Ohio. State ex rel. 

Capital Royalty Partners II, L.P. v. Serrott, 01/23/2019 Case Announcements, 2019-Ohio169. Navidea filed a motion to intervene which was granted. Judge Serrott filed a motion 

to dismiss arguing the trial court had subject-matter jurisdiction and that Capital Royalty 

had an adequate remedy in the ordinary course of law through an appeal. The Supreme 

Court granted the motion to dismiss and dismissed Capital Royalty's petition for a writ of 

prohibition. 

{¶ 36} While the Texas appeal and the petition seeking a writ of prohibition were 

pending, on January 31, 2019, Navidea filed a motion for enforcement of the Agreement to 

require Capital Royalty to provide for the extension or replacement of the letter of credit 

arguing that the Ohio trial court had the power to interpret and enforce the parties' 

Agreement and should require that the letter of credit be extended or replaced pending the 

final adjudication of the amount Navidea owes to Capital Royalty. 

{¶ 37} On February 15, 2019, the Ohio trial court held a hearing in the second Ohio 

action on Navidea and Capital Royalty's motions to compel discovery, and Navidea's 

motion for enforcement of the Agreement for the extension or replacement of the letter of 

credit. The trial court stated the following during the hearing: 

JUDGE SERROTT: All right. So [Navidea's counsel], what am 

I supposed to do if I rule in your favor, which I doubt if I do 

before this Texas litigation's done, if the Texas Court of 

Appeals decides this exact issue because the exact issue that 

you're arguing to me is in front of the Texas Court of Appeals? 

[Navidea's counsel]: I don't think that's accurate, Your Honor. 
No. 19AP-825 16 

JUDGE SERROTT: Well, I read your briefs, and you outlined 

why you think they were overpaid, and it's the same argument 

you're making up here. 

[Navidea's counsel]: Well, it's different in this sense, Your 

Honor. The issue in Texas is whether or not the judge erred 

and permitting an overpayment or, in fact, did he even order 

an overpayment, which, you know, is an entirely different 

question. What does it mean when he says, you know, seven 

million of new money? But the fact of the matter is even if he 

did make a ruling such as that, it would still be a violation of 

the settlement agreement to collect more than was permitted 

under the settlement agreement. So, in fact, it is possible that 

there could be a ruling in Texas saying this is what the court 

ruled, you waived your appeal rights, we're sorry, it may have 

been a mistake, but, you know, too bad. And in the same 

respect, we could be entitled to a payment here either under 

theory of breach of settlement agreement, under the theory 

of- - 

JUDGE SERROTT: How wouldn't that be inconsistent with 

the ruling down there? That's what concerns me. You know, 

listen, I haven't looked at everything in detail and it'll all be 

flushed out, assuming this case goes forward. 

* * * 

So I think he should have accounted for those funds. Again, I 

haven't decided the matter completely and I know there's all 

kinds of issues about the interest and et cetera, et cetera, but 

all that argument was made down there, and, you know, that 

issue's on appeal. It's the exact same issue on appeal. And if 

you can't convince the judge in Texas and you can't convince 

the Court of Appeals but you convince me, you're going to 

have inconsistent judgments. 

[Navidea's counsel]: Well, I would submit to Your Honor that 

that, in fact, is not the case, and I would also say that, you 

know, at the status we are now with respect to taking of 

discovery, we don't necessarily even have to get to that issue. 

Likewise, there's been a motion to dismiss that's been filed 

which you've already ruled on. 

Speaking to the fact that to the extent they didn't account for 

the four million dollars, it would be a breach of the settlement 

agreement, and given that, we're entitled to take discovery 

'cause, ultimately, we can't prove our case until we've taken 
No. 19AP-825 17 

the discovery and found out information, so that's really what 

we're here today on. 

JUDGE SERROTT: I understand. 

[Navidea's counsel]: We're not here today on jurisdictional 

issues. 

JUDGE SERROTT: Well, I'm thinking about it, okay? 

[Navidea's counsel]: Yeah. 

JUDGE SERROTT: I understand. I've read through 

everything and I'm going to rule on the motions today, but I 

am concerned about, you know, inconsistent judgments, I'm 

concerned about the full faith in credit, and, you know, that's 

what I'm concerned about because the exact issue is on 

appeal. I do understand the argument that they could say, 

listen, you waived your right to appeal. 

* * * 

JUDGE SERROTT: All right. Well, we can deal with the 

motions today, but I want you to know I am concerned about 

that issue. And, you know, I ruled on the motion to dismiss 

'cause I didn't think it was proper to dismiss it at that point 

and the supreme court, all they said in their ruling was, listen, 

they didn't patently lack jurisdiction. There's no other 

commentary about all the legal issues that they still have that 

they can appeal depending on how I rule regarding full faith 

in credit, is this the right venue and all those other issues. So 

all the supreme court did is say, listen, you didn't patently lack 

jurisdiction because jurisdiction was reserved. 

(Feb. 15, 2019 Tr. at 7-11.) 

{¶ 38} On the same day as the hearing, February 15, 2019, the Ohio trial court 

granted in part and denied in part each party's motion to compel regarding discovery but 

denied attorney fees. The trial court denied Navidea's motion for enforcement of the 

Agreement, finding the Texas court retained jurisdiction over the letters of credit and, thus, 

the Ohio court had no ability to issue an order extending the letters of credit. "Any dispute 

involving the letters of credit will be determined by the Texas court." (Feb. 22, 2017 Tr. at 

7.) 
No. 19AP-825 18 

{¶ 39} On July 16, 2019, the Texas Fourteenth Court of Appeals rendered a decision 

in Navidea's appeal. Navidea argued on appeal that the Texas trial court improperly 

calculated damages owed to Capital Royalty because it did not account for the Swept funds 

in the final judgment which resulted in a double recovery for Capital Royalty. The Texas 

appellate court held that the waiver of appeal was not limited to the trial court's 

determination of the final obligation amount but applied to the entirety of the adjudication 

of the Texas claims. As to the Texas claims, the appellate court found that Navidea agreed 

to: 

[N]onsuit its counterclaims but retained the right to assert "all 

defenses and affirmative defenses" to those claims, including 

"the credit due for the U.S. Bank funds previously taken by 

Lenders[,]" [Capital Royalty] i.e., the swept funds that are the 

subject of this appeal. The Texas Court is then directed to 

"adjudicate the Texas claims" to "determine" the Final 

Obligation Amount "net of any amounts received by the 

Lenders on or prior to receipt of the [$59 million Navidea paid 

under the settlement agreement]" to reach its "decision." 

(Emphasis sic.) Navidea Biopharmaceuticals, Texas No. 14-18-00225-CV, quoting the 

Agreement. 

{¶ 40} The Texas appellate court concluded that "the only fair reading of the 

reference to the 'Texas Court's decision' is that it refers to the trial court's adjudication of 

the Texas Claims, which encompasses the determination of the Final Obligation Amount 

'net of' (i.e., minus) any amounts [Capital Royalty] received before Navidea's payment of 

the $59 million, subject to Navidea's right to assert a credit due for the Swept funds and 

other defenses." Navidea Biopharmaceuticals, Texas No. 14-18-00225-CV. The appellate 

court found the trial court's amended final judgment was the decision that is final and nonappealable. Thus, the appellate court concluded Navidea waived its right to appeal the trial 

court's judgment in the parties' Agreement. The court also found that Navidea failed to 

demonstrate the trial court committed a gross mistake because the record reflected that the 

court's judgment fully effectuated the parties' Agreement. The court dismissed the appeal. 

Navidea Biopharmaceuticals, Texas No. 14-18-00225-CV. 

{¶ 41} In the second Ohio action, both parties sought summary judgment on the 

breach of contract, conversion, and unjust enrichment claims. In a decision dated 

November 27, 2019, the trial court in the second Ohio action granted in part and denied in 
No. 19AP-825 19 

part Navidea's summary judgment motion and granted in part and denied in part, Capital 

Royalty's motion for summary judgment. In the decision, the trial court stated, "Further, 

regarding jurisdiction, Judge Serrott stated '[i]n Ohio, anything on the record is enforceable 

as a contract. I can enforce it. We've reached an agreement. I can enforce this [Agreement] 

* * * everything else is going to Texas.' " (Nov. 27, 2019 Decision at 2-3, quoting Feb. 22, 

2017 Tr. at 18.) The trial court found Capital Royalty had the right to take the Cardinal 

draw but that its retention of those funds put Capital Royalty's recovery in excess of the $66 

million cap because it already had recovered the Swept funds and found that Navidea was 

entitled to summary judgment on its breach of contract claim. However, Navidea's 

conversion and unjust enrichment claims were alternate theories of recovery to its breach 

of contract claim and, therefore, the Ohio trial court denied these claims.5 Thus, the trial 

court granted Navidea's motion for summary judgment regarding its breach of contract 

claim regarding the Swept funds and the Cardinal letter of credit draw and interest but 

denied Navidea's motion for summary judgment regarding its conversion, unjust 

enrichment sanctions, punitive damages, and attorney fees. The trial court denied Capital 

Royalty's motion for summary judgment pertaining to the court's jurisdiction to enforce the 

Agreement, its breach of contract claim regarding the Swept funds and Cardinal letter of 

credit draw but granted Capital Royalty's motion for summary judgment regarding 

Navidea's conversion, unjust enrichment claims, sanctions, punitive damages, and attorney 

fees. 

{¶ 42} Capital Royalty filed a notice of appeal and Navidea filed a cross-appeal. 

These appeals are presently before us. 

II. Assignments of Error 

A. Capital Royalty's Appeal 

{¶ 43} Capital Royalty assigned the following four assignments of error for our 

review: 

[I.] The Ohio trial court committed reversible error under the 

Full Faith and Credit Clause of the United States Constitution 

and well-settled Ohio common law by rendering a judgment 

that constitutes an impermissible collateral attack on the valid 

judgment of another state court. 

 

5 The trial court stated that these claims were "dismissed" on pages 18-19 of its decision but denied the motion 

for summary judgment regarding these claims. (See Nov. 27, 2019 Decision.) 
No. 19AP-825 20 

[II.] The Ohio trial court committed reversible error by 

rendering a judgment that violates the enforceable forum 

selection clause that the business entities involved in this 

dispute incorporated into their fully integrated contractual 

agreement to resolve the disputes among them. 

[III.] Even if the Ohio trial court properly considered the 

merits of Navidea's breach of contract claim (which it did not), 

the undisputed material facts do not support the Ohio trial 

court's holding on that claim. 

[IV.] Even if the Ohio trial court properly held that Navidea 

was entitled to judgment on its breach of contract claim 

(which it was not), the Ohio trial court improperly applied the 

wrong state's statutory interest rate to the amount of the 

judgment. 

B. Navidea's Cross-Appeal 

{¶ 44} Navidea asserted in its cross-appeal the following five assignments of error: 

[I.] The Trial Court erred in granting the Motion to Dismiss as 

to * * * Navidea Biopharmaceuticals, Inc.'s ("Navidea") tort 

claims on the basis that it lacked jurisdiction over those claims 

and/or that it was an improper venue for those claims. 

[II.] The Trial Court erred in granting the Motion to Dismiss 

as to Navidea's tort claims on the basis of litigation immunity. 

[III.] The Trial Court erred in granting the Motion to Dismiss 

as to Navidea's tort claims on the basis of a failure to plead the 

fraud claims with particularity and specificity. 

[IV.] The Trial Court erred in granting DefendantsAppellants' Motion for Summary Judgment as to Navidea's 

conversion claim and in not awarding Navidea punitive 

damages. 

[V.] The Trial Court erred in finding that Navidea was not 

entitled to recover its attorney fees on its breach of contract 

claim. 

III. Analysis 

{¶ 45} The trial court granted partial summary judgment for each of the parties. We 

review de novo a trial court decision granting summary judgment. Capella III, LLC v. 
No. 19AP-825 21 

Wilcox, 190 Ohio App.3d 133, 2010-Ohio-4746, ¶ 16 (10th Dist.), citing Andersen v. 

Highland House Co., 93 Ohio St.3d 547, 548 (2001). "[D]e novo appellate review means 

that the court of appeals independently reviews the record and affords no deference to the 

trial court's decision." (Internal quotations and citations omitted.) Holt v. State, 10th Dist. 

No. 10AP-214, 2010-Ohio-6529, ¶ 9. Summary judgment is appropriate where "the moving 

party demonstrates that: (1) there is no genuine issue of material fact, (2) the moving party 

is entitled to judgment as a matter of law, and (3) reasonable minds can come to but one 

conclusion and that conclusion is adverse to the party against whom the motion for 

summary judgment is made." Capella III at ¶ 16, citing Gilbert v. Summit Cty., 104 Ohio 

St.3d 660, 2004-Ohio-7108, ¶ 6. The court must resolve all doubts and construe the 

evidence in favor of the non-moving party when ruling on a motion for summary judgment. 

Pilz v. Ohio Dept. of Rehab. & Corr., 10th Dist. No. 04AP-240, 2004-Ohio-4040, ¶ 8. 

{¶ 46} Navidea filed this action (second Ohio action) claiming, among other things, 

breach of contract on grounds that Capital Royalty breached the Agreement by collecting 

$70,265,434.17, which is in excess of the $66 million limit permitted by the Agreement. 

Navidea asserts the overpayment is the result of Capital Royalty collecting $4,112,434.17 

from U.S. Bank on June 28, 2016, the Swept funds, and Capital Royalty's draw on the 

Cardinal letter of credit valued at $7,153,000.00 in addition to the $59 million payment 

Navidea made pursuant to the Agreement. Navidea argues this overpayment is a breach of 

contract and if not deemed a breach of contract, then Navidea alternatively sought relief 

based on conversion and unjust enrichment. Thus, Navidea sought an award of 

$4,265,434.17 in actual damages, $8,530,868.34 in punitive damages, interest, and 

attorney fees. 

{¶ 47} Capital Royalty argued in response that the trial court did not have 

jurisdiction to address the issues because the final decision in Texas was non-appealable 

and this court must also give the Texas judgment Full Faith and Credit. Alternatively, 

Capital Royalty argued they did not breach the Agreement by collecting more than the $66 

million cap because Navidea's calculation of the funds was incorrect. Finally, Capital 

Royalty argued Navidea did not satisfy the elements for conversion or unjust enrichment. 

{¶ 48} On appeal, Capital Royalty argues we must reverse the trial court's judgment 

for three reasons: (1) the trial court judgment violates the Full Faith and Credit Clause of 
No. 19AP-825 22 

the United States Constitution and constitutes an impermissible attack on the Texas 

judgment, (2) the Agreement provided that the Texas court had exclusive jurisdiction to 

determine the issues raised in Navidea's Ohio claims, and (3) the trial court erred in 

determining that Capital Royalty breached the Agreement. Capital Royalty's first and 

second assignments of error address the first two reasons set forth above. Capital Royalty's 

third and fourth assignments of error address the third reason set forth above. 

A. Capital Royalty's First and Second Assignments of Error 

{¶ 49} In its first and second assignments of error, Capital Royalty contends the trial 

court erred by finding it breached the Agreement and rendering a judgment that violates 

the Full Faith and Credit Clause of the United States Constitution and well-settled Ohio 

common law because the trial court judgment constitutes an impermissible collateral 

attack on the valid judgment of the Texas court and violated the forum selection clause that 

the parties chose in the Agreement. 

{¶ 50} Navidea's claim for breach of contract was as follows: 

The [Capital Royalty] Parties have failed to abide by their 

obligations under [the Agreement] by not permitting Navidea 

to raise all affirmative defenses in the Texas Litigation to 

which it was entitled under [the Agreement], and by claiming 

to have been owed more than $66,000,000.00 as of the 

Parties' settlement agreement in order to increase the [Capital 

Royalty] Parties' ultimate recovery from Navidea. 

(Amended Compl. at ¶ 203.) 

{¶ 51} It is important to keep the specific claim in mind as we consider Capital 

Royalty's first and second assignments of error. We address the second assignment of error 

regarding the forum selection clause first. 

{¶ 52} Capital Royalty asserts the Agreement provided that the Texas court had 

exclusive jurisdiction to: (1) determine the amounts owed between the parties—including 

consideration of set-off rights, (2) the parties rights under the Agreement, and (3) any other 

disputes in connection with the Agreement. In support, Capital Royalty points to sections 

2.1, 7.3, 7.6, and 1.5 of the Agreement. It also submits that New York law applies to 

interpretation of the Agreement and the forum selection clauses. 

{¶ 53} Navidea argues the Agreement provided exclusive jurisdiction to the Texas 

court only on the issue of the maximum obligation or the amount owed, but not on the issue 
No. 19AP-825 23 

of entitlement to an offset for the Swept funds, not on the issue of enforcement of the 

Agreement, and not on claims that happened after the Texas court issued its judgment. 

Navidea also points to sections 2.1 and 7.3, as well as sections 2.3, 4.1, 4.2, and 4.3 of the 

Agreement. Navidea submits that New York law applies when interpreting the scope of the 

Agreement and in determining whether the Agreement provides for exclusive jurisdiction 

in the Texas court; however, Ohio law applies when interpreting enforceability of the 

Agreement. Finally, Navidea argues, in the alternative, that even if it is determined the 

Agreement provides for exclusive jurisdiction in the Texas court on the issues alleged in the 

breach of contract claim, that such jurisdiction should not be enforced due to fraud on the 

part of Capital Royalty. 

{¶ 54} The Ohio trial court determined that it retained jurisdiction to enforce the 

Agreement. Specifically, it determined that the Texas court retained "all rights to determine 

how much Navidea owed to [Capital Royalty] under the Loan Agreement and Ohio retained 

all rights to enforce the Global Settlement Agreement, but to do so Ohio must apply New 

York law to such enforcement." (Nov. 27, 2019 Decision at 8.) The court made its 

determination based on statements the common pleas judge made during the negotiations 

and on section 7.3 of the Agreement. 

{¶ 55} Section 4.3 of the Agreement states "[n]othing in the foregoing releases shall 

preclude a Party or Parties from seeking to enforce the terms of this Agreement." Navidea 

argues that because section 4.3 does not explicitly allocate jurisdiction to enforce the terms 

of the Agreement, it is necessary to look at the Ohio trial judge's statement during 

negotiations, and that the judge's statement establishes the Ohio court had jurisdiction to 

enforce the Agreement and therefore to consider and rule in its favor on the breach of 

contract claim. The Ohio trial judge stated the following during negotiations: 

In Ohio, anything on the record is enforceable as a contract. I 

can enforce it. We've reached an agreement. I can enforce this. 

Again, everything else is going to Texas. If you have problems 

with documents, which I hope that you won't, because I have 

been involved enough. We all agree? Okay. 

(Feb. 22, 2017 Tr. at 18-19.) 

{¶ 56} Capital Royalty argues that section 7.6, the integration clause of the 

Agreement, superseded the trial court's oral comments during negotiations. However, as 
No. 19AP-825 24 

Navidea points out, section 7.6 provides that the Agreement, and the exhibits attached 

thereto, constitute the entire agreement of the parties. The negotiation proceedings, 

containing the Ohio trial judge's oral statements quoted above, was attached to the 

Agreement as Exhibit 2.1(b). Notwithstanding, Capital Royalty argues that the context of 

the trial judge's statement was in response to a comment by Navidea's attorney who stated 

the parties previously had trouble documenting things between them and questioned 

whether the parties would be able to document the Agreement. 

{¶ 57} It is not necessary for us to determine whether the Ohio trial judge's 

statement during negotiations granted the Ohio court exclusive jurisdiction to enforce the 

Agreement. This is so because, even assuming, arguendo, that the Ohio court had such 

jurisdiction, the Agreement specifically provided that the obligations Capital Royalty 

allegedly failed to abide by be addressed exclusively by the Texas court. Furthermore, in 

addition to the Agreement specifically providing for the Texas court's exclusive jurisdiction 

relating to: (1) the raising of affirmative defenses, and (2) the claim for the amount owed, 

the Texas court did, in fact, exercise its jurisdiction over these matters and rendered final 

judgment regarding the same. For the reasons we further discuss below, we find the Ohio 

trial court erred in exercising jurisdiction over the matters raised in the breach of contact 

claim as it was specifically alleged by Navidea. 

{¶ 58} Section 7.3 of the Agreement provides, as follows: 

Governing Law; Waiver of Jury Trial. [Governing law clause:] 

Except for any disputes solely between Cardinal Health and 

the [Navidea] (which are governed by a certain Side Letter 

Agreement between Cardinal Health and the Company), this 

Agreement and all matters arising hereunder or with respect 

hereto shall be governed by and construed and enforced in 

accordance with the internal laws of the State of New York, 

without regard to the principles of conflicts of laws thereof. 

[Forum selection law clause:] From and after the Effective 

Date, each Party agrees that all legal proceedings concerning 

the interpretation, enforcement and defense of the 

transactions contemplated by this Agreement (and any and 

all Exhibits6 hereto) shall be commenced exclusively in the 

Texas Court (and appealed only to a court with jurisdiction 

over the Texas Court's decisions) and each Party submits to 

the exclusive jurisdiction of the Texas Court (or any appeals 

 

6 We note that Exhibit 2.3 is the Cardinal Letter of Credit Form. 
No. 19AP-825 25 

court with jurisdiction over the Texas Court's decisions) for 

the adjudication of any dispute thereunder or in connection 

therewith and hereby waives any claim that it is not personally 

subject to the jurisdiction of any such court. [Jury trial waiver 

clause:] Each Party hereby waives, to the fullest extent 

permitted by applicable law, any and all right to trial by jury 

in any proceeding arising out of or relating to this Agreement 

or the transactions contemplated hereby. 

(Emphasis added.) 

{¶ 59} Section 7.3 of the Agreement uses the word "exclusive" twice to indicate that 

the Texas court7 is the exclusive forum and other forums are excluded. The forum selection 

clause also expressly addresses the scope of the clause and includes "all legal proceedings 

concerning the interpretation, enforcement and defense of the transactions contemplated 

by this Agreement [and] the adjudication of any dispute thereunder or in connection 

therewith." (Emphasis added.) 

{¶ 60} Section 7.3 contains language indicating the parties' intent to make the Texas 

court's jurisdiction exclusive. The phrase "exclusive jurisdiction" is, without a doubt, a 

phrase of exclusivity. The language the parties used does not merely authorize jurisdiction 

in the 151st Judicial District Court of Harris County, Texas, rather, it mandates jurisdiction 

in the Texas court and clearly provides that jurisdiction is appropriate in Texas to the 

exclusion of all other jurisdictions. Furthermore, the scope of the clause covers the matters 

raised in the breach of contract claim as it was specifically alleged by Navidea. 

{¶ 61} Section 2.1, when read in its entirety, also supports the finding that the 

Agreement provided for exclusive jurisdiction in the Texas court over matters raised in the 

breach of contract claim as it was specifically alleged by Navidea. Section 2.1 states: 

The Texas Claims. The Company and the Lenders shall 

continue to litigate, in the Texas Court as part of the Texas 

Action, the Lenders' claims against the Company arising 

under the Loan Documents and the Company's defenses and 

affirmative defenses thereto, (the "Texas Claims"), provided, 

however, that (a) the Company shall withdraw its 

counterclaims against the Agent and the Lenders in the 

Texas Action by filing, on the Closing Date, a Notice of 

Nonsuite With Prejudice, substantially in the form of Exhibit 

 

7 The clause uses "the Texas Court," which is designated in the Recitals section of the Agreement as "the 151st 

Judicial District Court of Harris County, Texas" and refers to a specific venue for the claims. (See Agreement 

at 1.) 
No. 19AP-825 26 

2.1(a) hereto, with the Texas Court in the Texas Action and (b) 

the Company hereby agrees not to assert in the future such (or 

similar) counterclaims against the Agent and/or the Lenders 

and/or their affiliates in the Texas Action. For avoidance of 

doubt, the Texas Claims shall include all defenses and 

affirmative defenses, whether contractual or extracontractual, (including, without limitation, rights of setoff and 

offset) to the causes of action pled by the Lenders in the Texas 

Action (collectively, "Defenses"), provided that the Defenses 

are permitted by New York law, in a manner consistent with 

the mediation transcript, dated February 22, 2017, Case No. 

16CV-5801, a copy of which is attached hereto as Exhibit 

2.1(b). The Texas Court shall adjudicate the Texas Claims to 

determine the final amount of the Obligations owed by the 

Company to the Lenders under the Loan Documents (the 

"Final Obligation Amount"), provided, that the Final 

Obligation Amount shall in no event be less than $47,000,000 

(the "Obligation Minimum") or more than $66,000,000 

(the "Obligation Maximum"), with each such amount net 

of any amounts received by the Lenders on or prior to receipt 

of the Deposit Amount, and (1) provided however, that the 

Company retains, among other rights, the right to assert that 

all offsets, payments and credits have not been allowed, 

including without limitation, the credit due for the U.S. Bank 

funds previously taken by Lenders and (2) provided further, 

that the Texas Court's decision shall be final and nonappealable and not subject to reconsideration and shall be 

binding on all of the Parties to this Agreement. In furtherance 

thereof, the Lenders and the Company shall notify the Texas 

Court of this Agreement. 

(Emphasis sic.) 

{¶ 62} Section 2.1 states the parties "shall continue to litigate, in the Texas Court 

[Capital Royalty's] claims against [Navidea] arising under the Loan Documents and 

[Navidea's] defenses and affirmative defenses thereto." (Emphasis added.) It also states 

"[f]or avoidance of doubt, the Texas Claims shall include all defenses and affirmative 

defenses, whether contractual or extra-contractual, (including, without limitation, rights 

of setoff and offset) to the causes of action pled by [Capital Royalty] in the Texas Action." 

(Emphasis added.) Nevertheless, Navidea argues that section 2.1 does not provide for 

exclusive jurisdiction in the Texas court and points to the clause at the end of section 2.1 

which provides that "[Navidea] retains, among other rights, the right to assert that all 

offsets, payments and credits have not been allowed, including without limitation, the 
No. 19AP-825 27 

credit due for the U.S. Bank funds previously taken by [Capital Royalty]." Navidea argues 

that "[t]here is no language as to jurisdiction over that right, and that right is apart from 

the right to assert offsets as part of the 'Texas Claims,' demonstrating a separate right. * * * 

There is no explicit language reserving such a decision to the exclusive jurisdiction of the 

Texas Court." (Mar. 13, 2020 Navidea Brief at 30-31.) 

{¶ 63} We are not persuaded by Navidea's argument. The clause at the end of 

section 2.1 is prefaced by the language stating the parties "shall" continue to litigate in the 

Texas court and that the Texas claims "shall" include Navidea's defenses and affirmative 

defenses. We must read the statements in context with one another. We also consider 

section 2.1 in context with section 7.3 which we discussed above, as well as section 1.5 which 

requires all parties to file a notice of voluntary dismissal of the Ohio action with prejudice. 

{¶ 64} Navidea also looks to section 2.38 and argues that section does not state the 

Texas court is solely empowered to determine the issues about which it now complains. 

However, section 2.3 does reference the Texas court and, again, section 2.3 must be read in 

context with the other relevant sections. 

 

8 Section 2.3 of the Agreement states: "The Cardinal Health Letter of Credit. On the Closing Date, Cardinal 

Health shall deliver to the Agent, on behalf of the Lenders, a Letter of Credit (the "Cardinal Health Letter 

of Credit") issued by a financial institution substantially in the form attached hereto as Exhibit 2.3, in an 

amount equal to $7,153,000. If the Texas Court determines that the Final Obligation Amount is more than 

the Deposit Amount, then, if the Company fails to pay the full amount of the required payment to Lenders 

within five (5) days of the Texas Court's determination, the Agent shall be entitled to draw on the Cardinal 

Health Letter of Credit in an amount equal to the difference between the Deposit Amount and the Final 

Obligation Amount plus the actual out-of-pocket costs incurred by each Lender in procuring the Lender 

Letters of Credit, but less any partial payment made by the Company toward the required payment. Upon 

delivery of such payment to the Agent, the Cardinal Health Letter of Credit shall terminate. If the Texas Court 

has not finally adjudicated the Final Obligation Amount by the one-year anniversary of the Closing Date, 

Cardinal Health shall extend the Cardinal Health Letter of Credit or procure a new letter of credit in 

substantially the same form, until the Texas Court rules on the Final Adjudication. Any costs incurred in 

extending the Cardinal Health Letter of Credit, or in procuring a letter of credit in substantially the same form, 

shall be borne by Cardinal Health." 
No. 19AP-825 28 

{¶ 65} In a last-ditch effort, Navidea points to sections 4.19 and 4.2,10 the mutual 

release sections, and the exception therein for the "Texas Claims." Navidea again then 

attempts to define the "Texas Claims" narrowly to exclude the matters raised by the breach 

of contract claim as it was specifically alleged. Again, we are not persuaded by Navidea's 

attempt to narrow the scope of sections 7.3 and 2.1. 

{¶ 66} Sections 7.3 and 2.1 of the Agreement were agreed to by the parties. Thus, 

Navidea's opportunity to argue regarding the issue of the Swept funds was before the Texas 

court during the trial to determine the amount Navidea owed between $59 and $66 million. 

Further, when Navidea agreed to the Agreement terms that the Texas trial court would 

determine the amount Navidea owed Capital Royalty between $59 and $66 million, 

Navidea was aware that Capital Royalty had already acquired the Swept funds and planned 

to keep them. Navidea specifically negotiated it would retain the right to argue to the Texas 

court that it was entitled to a setoff from the Swept funds. The Texas trial court stated that 

issue had been litigated and determined Navidea still owed another $7 million. Thus, the 

Agreement and the Texas court addressed the same matters raised in the breach of contract 

claim as it was specifically alleged by Navidea. 

{¶ 67} Finally, Navidea argues we should not enforce the forum selection clause 

because there is evidence of fraud or overreaching in securing agreement to that clause. In 

 

9 Section 4.1 of the Agreement states: "Effective as of the Closing Date, Navidea, Macrophange and Cardinal 

Health, on behalf of themselves and any entity or person that could claim derivatively, each hereby irrevocably 

and forever release and discharge, and covenant not to sue, the Agent, each of the Lenders, all of their 

respective directors, officers, members, agents or representatives, and any of them, from or for any and all 

claims, liability, damages, counterclaims, claims for equitable relief, actions, causes of action, and/or demands 

(including, without limitation, attorneys' fees or costs) of every nature and description whatsoever, whether 

matured, unmatured or contingent, liquidated or unliquidated, whether known, unknown or hereafter 

discovered, arising in whole or in part prior to the Closing Date in connection with, arising out of or released 

to the Loan Documents or any action taken or failed to be taken in connection therewith, except for the Texas 

Claims solely as set forth in this Agreement." 

10 Section 4.2 of the Agreement states: "Effective as of the Closing Date, the Agent and each Lender, on behalf 

of themselves and any entity or person that could claim derivatively, hereby irrevocably and forever release 

and discharge, and covenant not to sue, the Company and Cardinal Health, all of their respective directors, 

officers, members, agents or representatives, and any of them, from or for any and all claims, liability, 

damages, counterclaims, claims for equitable relief, actions, causes of action, and/or demands (including, 

without limitation, attorneys' fees or costs) of every nature and description whatsoever, whether matured, 

unmatured, contingent, liquidated or unliquidated, whether known, unknown or hereafter discovered, arising 

in whole or in part prior to the Closing Date in connection with, arising out of or related to the Loan Documents 

or any action taken or failed to be taken in connection therewith, except that the Agent and each Lender shall 

be entitled to pursue against the Company only the Texas Claims solely as set forth in this Agreement." 
No. 19AP-825 29 

support, it points to its fraudulent inducement claims. Navidea argues that "[Capital 

Royalty] engaged in fraud which induced Navidea to agree to the forum selection clause." 

(Mar. 31, 2020 Navidea Brief at 42.) However, Navidea's fraudulent inducement claims do 

not allege fraudulent inducement to agree to the forum selection clause. There is no 

mention in the fraud claims of sections 7.3 and 2.1. Rather, those claims allege that Capital 

Royalty failed to disclose that it intended to argue before the Texas court that Navidea owed 

more than $66 million and that it intended to seek to block Navidea from asserting 

affirmative defenses before the Texas court. Furthermore, as will be discussed later, the 

Ohio trial court dismissed the fraud claims on grounds of: (1) lack of jurisdiction, 

(2) improper venue, (3) litigation immunity, and (4) failure to plead the fraud claims with 

particularity and specificity. Upon dismissing the claims, the Ohio trial court further stated 

that it did "not believe any of the 'fraud' variety claims are viable nor are they appropriate 

in this forum." (Aug. 16, 2018 Decision at 4.) Navidea argues in its assignments of error 

that the trial court erred in doing so. We are not persuaded by Navidea's arguments that 

we should refuse to enforce the forum selection clause, and we will address the merits of 

Navidea's fraudulent inducement claims when we address its assignments of error. 

{¶ 68} Accordingly, we sustain Capital Royalty's second assignment of error. 

{¶ 69} Turning now to the first assignment of error, Capital Royalty asserts the Ohio 

trial court violated the Full Faith and Credit Clause of the United States Constitution. 

{¶ 70} The Full Faith and Credit Clause, Article IV, Section 1, United States 

Constitution, provides that " 'Full Faith and Credit shall be given in each State to the public 

Acts, Records, and Judicial Proceedings of every other State.' " See Wyatt v. Wyatt, 65 

Ohio St.3d 268, 269 (1992) (pursuant to Full Faith and Credit Clause, Ohio courts must 

recognize the validity of judgments rendered in sister states). The doctrine of Full Faith 

and Credit requires that the state of Ohio give to "acts, records, and judicial proceedings" 

of another state the same faith and credit "as they have by law or usage in the courts of such 

State * * * from which they are taken." See 28 U.S.C. 1738. Thus, Ohio courts must give the 

same "credit" to the Texas proceeding at issue in this case as that proceeding would carry 

in the Texas courts. See Durfee v. Duke, 375 U.S. 106, 109 (1963). 

{¶ 71} Navidea claims that Full Faith and Credit does not extend to Capital Royalty's 

draw on the full amount of the Cardinal Letter of Credit because that draw took place on 
No. 19AP-825 30 

April 9, 2018 after the Texas Court rendered its judgment on January 10, 2018. Therefore, 

according to Navidea, the claim did not exist and could not have existed when the Texas 

court rendered its judgment and claim preclusion does not apply. Navidea also argues issue 

preclusion does not apply because, according to Navidea, the Texas court never determined 

whether Navidea should be credited for the Swept funds. 

{¶ 72} Initially, the Ohio trial court denied Navidea's motion for enforcement of the 

Agreement finding that "[a]ny dispute involving the letters of credit will be determined by 

the Texas court." (Feb. 22, 2017 Tr. at 7.) However, subsequently, the Ohio trial court 

found that it had jurisdiction to "determine whether the $66,000,000.00 final judgment 

from the Texas court includes the disputed funds such as the Swept Funds and Cardinal 

Draw, and if so, whether Navidea overpaid in excess of the $66,000,000.00, which would 

be a material breach of the Global Settlement Agreement." (Nov. 27, 2019 Decision at 9.) 

{¶ 73} Ultimately, the Ohio court determined that: (1) the Texas court was 

"incorrect" when it "believed, or speculated, that the Swept Funds (over $4,000,000.00) 

were accounted for in the $59,000,000.00 payment," and (2) that Capital Royalty retaining 

the Cardinal Draw funds put Capital Royalty's recovery in excess of the $66 million cap. 

(Nov. 27, 2019 Decision at 13, 15.) 

{¶ 74} We reject Navidea's arguments that the Texas court never determined 

whether Navidea should be credited for the Swept funds and that the issues related to the 

Cardinal Draw did not exist when the Texas court rendered judgment. Notwithstanding, 

its ultimate conclusion that Capital Royalty breached the contract, as noted above, the Ohio 

trial court acknowledged the same. The Texas court judgments and post-judgment rulings 

confirm the same. 

{¶ 75} The Texas court determined that Capital Royalty provided all offsets, 

payments, and credits. Navidea filed a motion to correct the judgment immediately after 

the Texas judgment and argued the trial court should correct the mathematical error in its 

judgment to reduce the amount of money owed to Capital Royalty from $7 million to 

approximately $2 million (reducing the Swept funds from the amount Navidea owed). 

Navidea Biopharmaceuticals, Texas No. 14-18-00225-CV. When the Texas court did not 

find in Navidea's favor, Navidea then filed an "Emergency Motion to Set Supersedeas Bond 

and to Modify the Judgment," arguing the Texas trial court failed to expressly account for 
No. 19AP-825 31 

the Swept funds. The trial court held a hearing on the bond amount and Navidea 

specifically argued that the Texas court had not accounted for the Swept funds, as follows: 

Judge, this is a 4.112 million-dollar issue involving the swept 

funds that were at issue during the trial. * * * 

As you know, there was a high-low in the settlement between 

59 and 66 million. 59 had already been paid, as well as 4.112 

in swept funds. 

The damages model that the Plaintiffs put forward in Exhibit 

126 gave credit for the 4.112 in swept funds. Your judgment 

states that it will be 59 million plus 7 million in damages. 

Which we believe takes into account the 4.112 in swept funds 

and that the remaining obligation is 2 million plus. 

But there is a 7 million-dollar letter of credit outstanding. The 

[Capital Royalty] have stated their intent to execute on the 

entire $7 million on the letter of credit despite the prior 

payment of $4.112 million. That is the reason that we filed the 

emergency motions. That is what we are trying to stop from 

happening. And that is what we need clarification on because 

there is a disagreement between the two sides as to that issue. 

(Mar. 26, 2018 Emergency Bond Hearing Tr. at 5-6.) The Texas court addressed this 

argument and stated, "the evidence sufficiently demonstrated that [Capital Royalty is] 

entitled to an additional $7 million and that the swept funds were just as easily 

contemplated in the 59 million." (Mar. 26, 2018 Emergency Bond Hearing Tr. at 12.) 

Navidea Biopharmaceuticals, Texas No. 14-18-00225-CV. 

{¶ 76} Navidea also filed an appeal arguing the Texas trial court erred by awarding 

the Swept funds as damages to Capital Royalty which resulted in a double recovery. 

Navidea further contended it could file an appeal because it only waived its right to appeal 

the trial court's determination of the final obligation amount and not the calculation of 

damages that included a gross mistake or absurd result. The appellate court held the waiver 

of appeal was not limited to the trial court's determination of the final obligation amount 

but applied to the entirety of the adjudication of the Texas claims. As to the Texas claims, 

the appellate court found Navidea agreed to: 

[N]onsuit its counterclaims but retained the right to assert "all 

defenses and affirmative defenses" to those claims, including 

"the credit due for the U.S. Bank Funds previously taken by 
No. 19AP-825 32 

the Lenders[,]" [Capital Royalty] i.e., the swept funds that are 

the subject of this appeal. The Texas Court is then directed to 

"adjudicate the Texas claims" to "determine" the Final 

Obligation Amount "net of any amounts received by the 

Lenders on or prior to receipt of the [$59 million Navidea paid 

under the settlement agreement]" to reach its "decision." 

(Emphasis sic.) Navidea Biopharmaceuticals, Texas No. 14-18-00225-CV, quoting the 

Agreement. The Texas appellate court concluded the trial court's amended final judgment 

was the decision that is final and non-appealable, Navidea waived its right to appeal the 

trial court's judgment in the parties' Agreement, and Navidea failed to demonstrate that the 

trial court committed a gross mistake because the record reflected the court's judgment 

fully effectuated the parties' Agreement. The court dismissed the appeal. Id. 

{¶ 77} The Ohio trial court and this court must recognize and give credit to the Texas 

courts and the judgments. We are required to give the Texas judgment "at least the res 

judicata effect which the judgment would be accorded in [Texas]." Durfee at 109. 

{¶ 78} Accordingly, Capital Royalty's first assignment of error is sustained. 

B. Capital Royalty's Third and Fourth Assignments of Error and Navidea's 

Fourth Assignment of Error, in part, and Fifth Assignment of Error 

{¶ 79} Our ruling sustaining Capital Royalty's first and second assignments of error 

renders moot Capital Royalty's third and fourth assignments of error, as well as Navidea's 

fourth assignment of error, in part, as it relates to awarding punitive damages on Navidea's 

breach of contract claim, and Navidea's fifth assignment of error. 

{¶ 80} Accordingly, we render moot Capital Royalty's third and fourth assignments 

of error, as well as Navidea's fourth assignment of error, in part, and fifth assignment of 

error in its entirety. 

C. Navidea's Fourth Assignment of Error, in part 

{¶ 81} In Navidea's fourth assignment of error, it contends, in part, that the trial 

court erred in granting Capital Royalty's motion for summary judgment as to Navidea's 

conversion claim. The trial court found it retained jurisdiction over Navidea's conversion 

claim but denied the claim because it granted Navidea's breach of contract claim. Given 

that we found the forum selection clause was enforceable as to the matters raised in 

Navidea's breach of contract claim, we will review the court's denial of Navidea's conversion 

claim. 
No. 19AP-825 33 

{¶ 82} Capital Royalty argues that New York law applies to Navidea's tort claims. 

Navidea generally argues that Ohio law applies to tort claims, but also addresses New York 

law regarding conversion. Regardless of which state law is applied, Navidea's conversion 

claim fails. 

{¶ 83} Under Ohio law, Navidea cannot prevail on its conversion claim. In RAE 

Assocs., Inc. v. Nexus Communications, Inc., 10th Dist. No. 14AP-482, 2015-Ohio-2166, 

¶ 30, this court defined the tort of conversion as "the wrongful exercise of dominion over 

property to the exclusion of the rights of the owner or withholding property from the 

owner's possession under a claim inconsistent with the owner's rights." RAE, citing Joyce 

v. Gen. Motors Corp., 49 Ohio St.3d 93 (1990). The elements of conversion include: (1) the 

plaintiff had ownership or right of possession of the property at the time of conversion, 

(2) the defendant's conversion by a wrongful act or disposition of plaintiff's property or 

property rights, and (3) damages resulted therefrom. Id., citing Dice v. White Family Cos.,

Inc., 173 Ohio App.3d 472, 2007-Ohio-5755, ¶ 17 (2d Dist.). 

{¶ 84} In Ohio, courts have historically viewed actions for breach of contract and 

conversion as alternate causes of action. See Boston v. Sealmaster Industries, 6th Dist. No. 

E-03-040, 2004-Ohio-4278, ¶ 36, citing Richardson v. Shaw, 209 U.S. 365, 382-83 (1908). 

An action for damages may be held in either one or the other. Id., citing Erie R.R. Co. v. 

Steinberg, 94 Ohio St. 189 (1916), paragraph one of the syllabus. 

{¶ 85} Under New York law, a conversion consists of someone, intentionally and 

without authority, exercising control over the personal property of another. Colavito v. 

New York Organ Donor Network, Inc., 8 N.Y.3d 43, 49-50 (2006). New York law states 

"the existence of a valid and enforceable written contract governing a particular subject 

matter ordinarily precludes recovery in quasi-contract for events arising out of the same 

subject matter." Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70 N.Y.2d 382, 388 (1987). 

It is also settled under New York law that a tort claim will not arise "where the plaintiff is 

essentially seeking enforcement of the bargain." Somer v. Fed. Signal Corp., 79 N.Y.2d 

540, 552 (1992); In re Chateaugay Corp., 10 F.3d 944, 958 (2d Cir.1993). For a conversion 

claim to succeed in the context of a dispute regarding a contract, "a plaintiff must allege 

acts that constitute unlawful or wrongful behavior separate from a violation of contractual 

rights." Elma RT v. Landesmann Internatl. Marketing Corp., S.D.N.Y. No. 98 Civ. 
No. 19AP-825 34 

3662(LMM) (Mar. 22, 2000), citing Fraser v. Doubleday & Co., 587 F.Supp. 1284, 1288 

(S.D.N.Y.1984). 

{¶ 86} Navidea does not assert damages outside of what it alleged in its breach of 

contract claim and is seeking to enforce the bargain. In paragraph 208 of the Amended 

Complaint regarding the breach of contract claim, Navidea alleged: "[s]pecifically, the 

[Capital Royalty] Parties have recovered at least $7,153,000.00 from Cardinal's line of 

credit, which, when coupled with the money the [Capital Royalty] Parties have already 

recovered from Navidea, totals $70,265,434.17 or more." (Emphasis sic.) In paragraph 

221 of the Amended Complaint regarding the conversion claim, Navidea alleged: 

The actions of the [Capital Royalty] Parties, in taking the full 

$7,153,000.00 of the Cardinal line of credit, for a total 

recovery of $70,265,434.17 or more, despite this being 

clearly prohibited by the agreement between the Parties, and 

despite being repeatedly told that they were not entitled to it, 

evidences hatred, ill will or a spirit of revenge, or a conscious 

disregard for the rights and safety of other persons that has a 

great probability of causing substantial harm. 

(Emphasis sic.) Navidea is specifically seeking the return of damages that exceed the 

contractual $66,000,000 limit. 

{¶ 87} It is true, as Navidea argues, that New York law states that a party may be 

liable in tort when "it has engaged in tortious conduct separate and apart from its failure to 

fulfill its contractual obligations." New York Univ. v. Continental Ins. Co., 87 N.Y.2d 308, 

316 (1995). But, our resolution of Capital Royalty's first and second assignments of error 

and deference to the Texas court's judgment reveal Capital Royalty did not fail to fulfill its 

contractual obligations. Navidea has not persuaded us that any of Capital Royalty's 

obligations, allegedly resulting in conversion, are separate and apart from its contractual 

obligations. Nor has it persuaded us that it had a possessory interest in the portion of the 

letter of credit not needed to satisfy Navidea's $66 million obligation. Navidea bases its 

possessory interest on what it deems to be "the [Texas court's] erroneous assumption that 

the Swept Funds were included within the $59,000,000 settlement payment." (Feb. 21, 

2020 Navidea's Brief at Y23.) The Texas court ruled Capital Royalty was entitled to $66 

million with $7 million of that in new money. When Navidea did not pay within the 

specified five days, Capital Royalty submitted the draw on the Cardinal letter of credit. Such 
No. 19AP-825 35 

action was not a "wrongful exercise of dominion over property." RAE Assocs., Inc. at ¶ 30. 

We have already determined the Texas court had exclusive jurisdiction to determine 

matters relating to the Swept funds and the letter of credit. Thus, Navidea cannot prove the 

elements of conversion. 

{¶ 88} Accordingly, Navidea's fourth assignment of error is overruled in part. 

D. Navidea's First Assignment of Error 

{¶ 89} In Navidea's first assignment of error, it argues the trial court erred in 

granting Capital Royalty's motion to dismiss regarding its tort claims on the basis it lacked 

jurisdiction and/or was the improper venue for those claims. 

{¶ 90} To begin, we address the scope of our analysis of the tort claims. Navidea 

filed two separate fraudulent inducement and misrepresentation claims, one as to Capital 

Royalty's maximum recovery and one as to Navidea's affirmative defenses. However, 

Navidea asserts, in footnote 2 of its February 21, 2020 brief, that it is not appealing the trial 

court's ruling as to Navidea's claim for fraudulent inducement and misrepresentation as to 

the affirmative defenses which Navidea could argue before the Texas court. Furthermore, 

Navidea asserted it was not seeking damages other than amounts awarded beyond the $66 

million limit. 

{¶ 91} During oral argument, counsel stated he believed that most of the tort claims 

had not been appealed, and that the footnote in their brief indicated such. He specifically 

mentioned that the release of confidential information and professional negligence claims 

had not been appealed. However, he stated he was not withdrawing any claims other than 

as specified in their "paperwork." He believes the better claims are fraud and conversion 

and all the remaining claims arose out of the context of the Agreement. 

{¶ 92} Further, in their cross-appellant merit brief and reply brief, Navidea only sets 

forth arguments regarding its fraud and conversion claims. Therefore, it is unclear whether 

Navidea is appealing the trial court's dismissal of its civil conspiracy, tortious disclosure of 

confidential information, professional negligence and breach of confidence claims. 

Nevertheless, App.R. 12(A)(2) provides that an appellate court "may disregard an 

assignment of error presented for review if the party raising it fails to identify in the record 

the error on which the assignment of error is based or fails to argue the assignment 

separately in the brief, as required under App.R. 16(A)." Additionally, App.R. 16(A)(7) 
No. 19AP-825 36 

requires that an appellant's brief include "[a]n argument containing the contentions of the 

appellant with respect to each assignment of error presented for review and the reasons in 

support of the contentions, with citations to the authorities, statutes, and parts of the record 

on which appellant relies." "In an appeal to this court, '[t]he burden of affirmatively 

demonstrating error on appeal rests with the party asserting error.' " Morgan v. Ohio State 

Univ. College of Dentistry, 10th Dist. No. 13AP-287, 2014-Ohio-1846, ¶ 64, quoting 

Lundeen v. State Med. Bd. of Ohio, 10th Dist. No. 12AP-629, 2013-Ohio-112, ¶ 16. 

{¶ 93} Thus, we will not address Navidea's claims as to the trial court's dismissal of 

its civil conspiracy, tortious disclosure of confidential information, professional negligence 

and breach of confidence claims. Since we have already addressed Navidea's conversion 

claim, we shall only address its fraudulent inducement and misrepresentation as to Capital 

Royalty's maximum recovery. 

{¶ 94} The trial court granted Capital Royalty's motion to dismiss regarding 

Navidea's civil conspiracy, professional negligence, tortious disclosure of financial 

information, fraudulent inducement and misrepresentation, and breach of confidence 

claims finding, simply, without analysis, that: 

[The aforementioned claims] are all barred by all of the 

following: 

1. This Court lacks jurisdiction over the claims having 

retained jurisdiction only over the settlement agreement; 

2. Improper venue; 

3. Litigation immunity; 

4. Failure to plead the fraud claims with particularity and 

specificity. 

(Aug. 16, 2018 Decision at 3-4.) The Ohio court further stated that it "does not believe any 

of the 'fraud' variety claims are viable nor are they appropriate in this forum." (Aug. 16, 

2018 Decision at 4.) 

{¶ 95} We begin our analysis with Navidea's first assignment of error and the issues 

of jurisdiction and venue. Again, we look to section 7.3 and the forum selection clause of 

the Agreement. In particular, we focus on the phrase "in connection therewith": 
No. 19AP-825 37 

From and after the Effective Date, each Party agrees that all 

legal proceedings concerning the interpretation, enforcement 

and defense of the transactions contemplated by this 

Agreement (and any and all Exhibits hereto) shall be 

commenced exclusively in the Texas Court (and appealed only 

to a court with jurisdiction over the Texas Court's decisions) 

and each Party submits to the exclusive jurisdiction of the 

Texas Court (or any appeals court with jurisdiction over the 

Texas Court's decisions) for the adjudication of any dispute 

thereunder or in connection therewith and hereby waives any 

claim that it is not personally subject to the jurisdiction of any 

such court. 

(Emphasis added.) 

{¶ 96} Navidea's fraud and misrepresentation claims, as well as the civil conspiracy 

claim, are "in connection with" the Agreement and the transactions contemplated by the 

Agreement disputed and adjudicated by the Texas court. The claims make reference to the 

Agreement and allege fraud, misrepresentation and conspiring to do the same during the 

course of negotiating the Agreement. Therefore, the Texas court had exclusive jurisdiction 

over the fraud, misrepresentation and civil conspiracy claims. 

{¶ 97} Navidea argues the forum selection clause is not broad enough to cover its 

tort claims. It further argues that even if the terms of the forum selection clause apply, it 

should not be enforced because, according to Navidea, the clause was secured by fraud and 

it would be unfair or unreasonable to enforce. These are the same arguments we addressed 

and rejected in our analysis of Capital Royalty's second assignment of error. 

{¶ 98} Navidea concedes the interpretation of the forum selection clause is governed 

by New York law. Navidea argues that "[u]nder New York law, the dispositive issue in 

determining the scope of a forum selection clause is the language of the clause. Bernstein 

v. Wysoki, 77 A.D.3d 241, 250, 907 N.Y.S.2d 49 (2010). Forum selection clauses can apply 

to torts if the clause applies to 'any dispute that may arise out of this agreement or otherwise 

between the parties...' or, less broadly, to 'any dispute arising under or in connection with...' 

a contract if the tort is sufficiently related. Id." (Feb. 21, 2020 Navidea's Brief at X95.) We 

agree, and find that Navidea's fraud, misrepresentation and conspiracy claims are in 

connection with and sufficiently related to the Agreement and the transactions 

contemplated by the Agreement disputed and adjudicated by the Texas court. 
No. 19AP-825 38 

{¶ 99} For the precedent set forth by Navidea summarized above, Navidea relied on 

Bernstein v. Wysoki, 77 A.D.3d 241 (2010). Bernstein involved enforcement of a forum 

selection clause by non-signatory parties, which is not the case here. Nevertheless, 

Bernstein points us to Tourtellot v. Harza Architects, Engineers & Constr. Mgrs., 55 

A.D.3d 1096 (2008), which is more relevant. 

{¶ 100} In Tourtellot, the New York appellate court stated "[f]irst, under its broad 

and unequivocal terms, the applicability of the subject forum selection clause does not turn 

on the type or nature of the dispute between them; rather, it applies to 'any dispute arising 

under or in connection with' their agreement." (Emphasis added.) Id., citing see, e.g., Roby 

v. Corp. of Lloyd's, 996 F.2d 1353, 1361 (1993), cert denied, 510 U.S. 945; WMW Mach.,

Inc. v. Werkzeugmaschinenhandel GmbH IM Aufbau, 960 F.Supp. 734, 747 (1997); Triple 

Z Postal Servs., Inc. v United Parcel Serv., Inc., 13 Misc.3d 1241(A) (2006). Tourtellot

involved a purchasing agreement between a supplier (Seller) and a wholesale purchaser 

(Purchaser) which contained a warranty clause, indemnification clause as well as a forum 

selection clause. The forum selection clause stated: "JURISDICTION: Venue over any 

dispute arising under or in connection with this Purchase Order shall reside exclusively in 

the state and federal courts located in the Counties of Boone and Cook, in the state of 

Illinois, and Purchaser and Seller consent to the personal jurisdiction of such courts." 

(Emphasis underline omitted.) (Emphasis italics added.) Tourtellot at 1097. After being 

struck in the head by one Seller's falling light fixtures, a retail customer of the Purchaser 

filed suit against the Purchaser alleging negligence, strict products liability, and breach of 

warranty. The Seller refused to defend and indemnify the Purchaser, and therefore the 

Purchaser commenced a third-party action against the Seller seeking contribution and/or 

common-law as well as contractual indemnification based on allegations of negligence and 

breach of contract. The Seller asserted an affirmative defense based on the forum selection 

clause and won dismissal of the third-party complaint based on this defense. The Purchaser 

argued that the forum selection clause was never intended to apply to third-party claims in 

personal injury and products liability actions such as the plaintiff's action. The New York 

Court of Appeals disagreed. The court held that "[s]ince the essence of [the Purchaser's] 

third-party complaint is to seek enforcement of its contractual right to indemnification 

under the agreement * * *, the complaint does indeed concern a dispute arising under or in 
No. 19AP-825 39 

connection with that agreement such that the forum selection clause is applicable and, once 

invoked by [the Seller], should be enforced." Id. at 1098. 

{¶ 101} Such is the case here, the essence of Navidea's fraud, misrepresentation and 

conspiracy claims are to seek enforcement of its contractual right to the obligation 

maximum outlined in section 2.1 of the Agreement. The tort claims do indeed concern a 

dispute arising under or in connection with the Agreement or the transactions 

contemplated by the Agreement disputed and adjudicated by the Texas court. The forum 

selection clause applies to these claims. Furthermore, for the same reasons we outlined 

previously in our analysis of Capital Royalty's second assignment of error, the clause applies 

and should be enforced. 

{¶ 102} Accordingly, we overrule Navidea's first assignment of error. 

E. Navidea's Second and Third Assignments of Error 

{¶ 103} In its second assignment of error, Navidea argues the trial court erred in 

granting Capital Royalty's motion to dismiss regarding its tort claims on the basis of 

litigation immunity. In its third assignment of error, Navidea argues the trial court erred 

in granting Capital Royalty's motion to dismiss as to Navidea's tort claims on the basis of 

failure to plead the fraud claims with particularity and specificity. 

{¶ 104} Our resolution of Navidea's first assignment of error makes it unnecessary 

for us to consider Navidea's second and third assignments of error. 

{¶ 105} Accordingly, Navidea's second and third assignments of error are rendered 

moot. 

IV. Conclusion 

{¶ 106} For the foregoing reasons, we sustain Capital Royalty's first and second 

assignments of error, which renders moot Capital Royalty's third and fourth assignments 

of error as well as Navidea's fourth, in part, and fifth assignments of error on cross-appeal. 

We overrule Navidea's first and fourth, in part, assignments of error on cross-appeal, which 

renders moot Navidea's second and third assignments of error on cross-appeal. The 

August 16, 2018 judgment of the Franklin County Court of Common Pleas is affirmed in 

part and reversed in part. The November 27, 2019 decision and judgment of the Franklin 

County Court of Common Pleas is affirmed in part and reversed in part. This cause is 
No. 19AP-825 40 

remanded to that court with instructions to proceed in accordance with law and this 

decision. 

Judgments affirmed in part; reversed in part; 

and cause remanded with instructions. 

BROWN and SADLER, JJ., concur.