[Cite as Cachat v. IQS, Inc., 2011-Ohio-3057.]

 Court of Appeals of Ohio

EIGHTH APPELLATE DISTRICT 

COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION 

No. 95501 

JOHN CACHAT, ET AL. 

PLAINTIFFS-APPELLANTS 

vs. 

IQS, INC., ET AL.

DEFENDANTS-APPELLEES 

JUDGMENT: 

AFFIRMED

Civil Appeal from the 

Cuyahoga County Common Pleas Court 

Case Nos. CV-689839 and CV-727087 

 BEFORE: Blackmon, P.J., Celebrezze, J., and E. Gallagher, J. 

 RELEASED AND JOURNALIZED: June 23, 2011 
ATTORNEY FOR APPELLANTS

Robert P. DeMarco 

DeMarco & Triscaro, Ltd. 

30505 Bainbridge Road 

Suite 225 

Solon, Ohio 44139 

ATTORNEYS FOR APPELLEES

John S. Kluznik 

Weston Hurd LLP 

The Tower at Erieview 

1301 East Ninth Street, Suite 1900 

Cleveland, Ohio 44114-1862 

Andrew G. May 

Robert Radasevich 

Neal, Gerber & Eisenberg, LLP 

Two North LaSalle Street 

Suite 1700 

Chicago, Illinois 60602 

 

PATRICIA ANN BLACKMON, P.J.: 

{¶ 1} Appellants John Cachat and the Cachat Family Limited 

Partnership (jointly referred to as “CFLP”) appeal the trial court’s granting of 

summary judgment in favor of appellees IQS, Inc., Michael Rapaport, Wayne 

Bourlais, George Middleman, and Apex Investment Fund V, L.P. ( jointly 

referred to as “IQS”) and assign the following three errors for our review: 
“I. The trial court erred in finding that plaintiff was not 

entitled to non-competition payments pursuant to his 

amended and restated non-competition agreement.” 

“II. The trial court erred in finding that plaintiff was not 

entitled to severance payments under Section 6.2 of his 

amended and restated employment agreement.” 

“III. The trial court erred in finding that plaintiff was 

bound by the general release.”

{¶ 2} Having reviewed the record and relevant law, we affirm the trial 

court’s decision. The apposite facts follow. 

Facts

{¶ 3} In 2003, Cachat entered into negotiations with Apex Investment 

Fund, V, L.P. (“Apex”) for the purpose of Apex infusing money into an Ohio 

Company founded by Cachat known as IQS, Inc. As a result of the 

negotiations, on October 1, 2003, a “Series A Convertible Preferred Stock 

Agreement” was entered into between Apex and IQS. Pursuant to this 

agreement, Apex invested $2 million dollars in equity into IQS in exchange 

for convertible participating preferred stock in IQS.1

Employment Agreements

 1

On March 19, 2004, Apex and IQS amended the agreement, pursuant to 

which Apex invested an additional $1 million dollars of equity in IQS in exchange 

for additional convertible participating preferred stock in IQS.
{¶ 4} As a condition to Apex’s investment, Cachat was required to enter 

into various employment-related agreements with IQS. The primary 

agreement was an Executive Employment Agreement in which Cachat agreed 

to be employed as the Chief Vision Officer of IQS and act as the chairman of 

IQS’s board of directors. Cachat also entered into a non-competition 

agreement agreeing not to compete with IQS for a year following the 

termination of his employment in exchange for $375,000. 

{¶ 5} Despite Apex’s initial infusion of $3 million, IQS was not 

profitable in subsequent years. By the fall of 2007, Apex had invested an 

additional $5 million dollars in the company in the form of loans, all of which 

were documented with promissory notes. Nine hundred thousand dollars in 

interest had accrued on the loans. Cachat and the company’s president, 

Michael Rapaport, attempted to raise outside capital to no avail. Thus, the 

company was in need of additional cash from Apex in order to pay its bills and 

continue to operate. 

{¶ 6} Apex agreed to provide additional funding, conditioned on the 

execution of new employment-related agreements by Cachat and Rapaport 

and the conversion of the outstanding principal balance of Apex’s loans to 

preferred stock in the company. Accordingly, on October 2, 2007, Cachat 

entered into an amended executive employment agreement; non-solicitation; 
non-disclosure, and developments agreement; and non-competition 

agreement. 

{¶ 7} While the amended agreements were identical in some respects to 

the original agreements, they differed in significant ways. Among the 

changes were the automatic renewal date of Cachat’s employment agreement 

was shortened from two years to one year, and the notice of non-renewal was 

reduced from 90 days to 30 days. Under the amended non-competition 

agreement, IQS had the option to bind Cachat to a one-year non-competition 

period following his termination from IQS, provided that IQS paid him 

$500,000. This was different from the automatic payment of $375,000 and 

an automatic one-year non-competition agreement. The amended 

non-competition agreement emphasized that whether to pay Cachat the 

$500,000 to not compete was within the company’s “sole discretion.” 

{¶ 8} Each of the amended employment-related agreements also 

contained full integration clauses pursuant to which the parties agreed that 

the various agreements contained the full and complete expression of the 

parties’ agreements and that the agreements could not be modified or 

amended absent a written document signed by all the parties. 

General Release

{¶ 9} Along with obtaining funding from Apex, IQS’s primary lender 

was KeyBank. By the spring of 2008, the principal balance of the loans was 
$630,000. Cachat and CFLP had personally guaranteed the KeyBank loans 

and used their two commercial properties as collateral. At a meeting 

conducted in March 2008, IQS’s board, including Cachat, discussed and 

unanimously passed a resolution authorizing Rapaport to negotiate with 

KeyBank to obtain a discount of the outstanding balance on the KeyBank 

loans in exchange for an immediate lump sum payment. On April 4, 2008, 

KeyBank agreed to accept IQS’s offer to pay the lump sum payment of 

$350,000 in complete satisfaction of the KeyBank loans. On April 11, 2008, 

KeyBank sent a proposed settlement and release agreement memorializing 

the transaction, which was to be executed by KeyBank, IQS, Cachat, and 

CFLP. 

{¶ 10} IQS did not have the $350,000 to pay the lump sum and 

requested a loan from Apex to cover the amount. Apex agreed to loan IQS 

$350,000 to retire the KeyBank loans provided that Cachat and CFLP agreed 

to fully and completely release all of the defendants and their affiliates from 

any conceivable claims they may have had against them. On April 22, 2008, 

Cachat, both personally and on behalf of CFLP, agreed to the release. 

Termination of Employment

{¶ 11} On August 26, 2008, at an IQS board meeting, Cachat was 

hand-delivered a letter informing him that the company was not extending 

the term of his employment agreement beyond the expiration of the term, 
which ran “through October 2008.” The letter informed Cachat that his 

employment pursuant to the employment agreement would cease as of 

October 31, 2008 and that his employment as the company’s Chief Vision 

Officer would end on November 1, 2008. Cachat continued as chairman of 

the board and remained a shareholder of the company. On November 25, 

2008, Cachat sent an email tendering his resignation as director and from all 

officer positions with IQS. 

{¶ 12} On April 10, 2009, Cachat filed a suit alleging nine counts against 

IQS, its president and board member, Michael Rapaport, and its two other 

board members, Wayne Boulais and George Middlemas. The counts asserted 

claims for breach of Cachat’s original and amended employment agreements; 

declaratory judgment that the general release executed by Cachat was 

without consideration and unenforceable; declaratory judgment that Cachat’s 

amended non-competition agreement was unenforceable; declaratory 

judgment that Cachat’s original non-competition agreement was enforceable; 

fraudulent inducement to enter into the amended employment and amended 

non-competition agreements; fraudulent inducement to enter into Cachat’s 

commission agreement; breach of the commission agreement; declaratory 

judgment that Cachat was entitled to be paid certain commissions; and, 

breach of implied covenants of good faith and fair dealing in Cachat’s 

amended employment and commission agreements. On December 22, 2009, 
Cachat filed an amended complaint adding CFLP as a plaintiff and Apex as a 

defendant. Cachat also added two more counts alleging IQS breached a lease 

agreement and that Apex fraudulently induced Cachat and CFLP to enter 

into a general release. 

{¶ 13} The defendants filed a joint motion for summary judgment on all 

11 counts; Cachat filed a brief in opposition. The only two counts that 

Cachat sought to defend in the motion in opposition was his severance claim 

and declaratory judgment that the general release was void for lack of 

consideration. He, however, also raised two additional claims that had not 

been raised in his complaint: one seeking damages under the amended 

non-competition agreement and one seeking damages for alleged breaches of 

fiduciary duties owed to Cachat. 

{¶ 14} The trial court conducted a hearing on the motion for summary 

judgment. At the hearing, Cachat’s attorney informed the court that Cachat 

and CFLP were abandoning all of the claims except for three: Cachat’s claim 

for severance pay; for payment under the non-competition agreement, and the 

enforceability of the general release. After the hearing, the trial court issued 

a three page opinion in which it granted judgment in IQS’s favor. 

Standard of Review

{¶ 15} We review an appeal from summary judgment under a de novo 

standard of review. Baiko v. Mays (2000), 140 Ohio App.3d 1, 746 N.E.2d 618, 
citing Smiddy v. The Wedding Party, Inc. (1987), 30 Ohio St.3d 35, 506 

N.E.2d 212; N.E. Ohio Apt. Assn. v. Cuyahoga Cty. Bd. of Commrs. (1997), 

121 Ohio App.3d 188, 699 N.E.2d 534. Accordingly, we afford no deference to 

the trial court’s decision and independently review the record to determine 

whether summary judgment is appropriate. Civ.R. 56 summary judgment is 

appropriate when: (1) no genuine issue as to any material fact exists, (2) the 

party moving for summary judgment is entitled to judgment as a matter of 

law, and (3) viewing the evidence most strongly in favor of the non-moving 

party, reasonable minds can reach only one conclusion that is adverse to the 

non-moving party. 

Non-competition Payments

{¶ 16} In his first assigned error, Cachat argues that summary 

judgment was not appropriate as to his claim for payment under the amended 

non-competition agreement, which required IQS to pay him $500,000. He 

argues there are material issues of fact in dispute regarding this issue. 

{¶ 17} Cachat did not contend that he was entitled to the $500,000 

pursuant to the amended non-competition agreement until he raised it in his 

response to IQS’s motion for summary judgment. In fact, in his complaint 

Cachat argued that the prior non-competition agreement that required an 

automatic payment of $350,000 was enforceable, while the amended 

non-competition agreement was unenforceable. This argument is directly 
contrary to his argument that he is entitled to the $500,000 under the 

amended agreement. Because Cachat did not seek payment under the 

amended non-competition agreement in his complaint, the trial court 

properly declined to find merit to his argument because a claim cannot be 

asserted for the first time in an opposition brief. Saikus v. Ford Motor Co.

(Apr. 12, 2001), Cuyahoga App. No. 77802; Akron Hydroelectric Co. v. 

Cuyahoga Falls (1998), 128 Ohio App.3d 754, 716 N.E.2d 780; Williams v. 

Time Warner Cable (June 24, 1998), 9th Dist. No. 18663. Accordingly, 

Cachat’s first assigned error is overruled. 

{¶ 18} Nonetheless, even if we consider his argument, it has no merit. 

Art. I, Section 1.2 of the amended non-competition agreement provides: 

“Payment. Among other considerations received by the 

Founder for the covenant contained in Section 1.1, the 

Company and the Founder agree that Section 1.1 shall be 

effective if, and only if, the Company, in its sole discretion, 

determines, at the time that the Founder ceases to be 

employed or engaged by the Company, to pay to the 

Founder, for such non-competition, an aggregate amount 

of five hundred thousand dollars ($500,000.00), * * *. If 

the Company determines to make such payment, it shall 

notify the Founder of its decision within fifteen (15) 

business days from the date that the Founder ceased to be 

employed or engaged by the Company. * * *.” (Emphasis 

added.)

{¶ 19} Thus, pursuant to the above section, Cachat was prohibited from 

competing with IQS for one year following the termination of his employment 

only if IQS paid him $500,000. Cachat contends that his termination letter, 
delivered on August 26, 2008, activated IQS’s duty to pay him the $500,000 to 

not compete. The letter, written by IQS President Michael Rapaport, stated in 

pertinent part: 

“Pursuant to Section 5.2 of the Employment Agreement, 

IQS hereby gives notice of its intention to not renew the 

Employment Agreement as of October 31, 2008 (the 

‘Termination Date’), which is the last day of the Initial 

Term of the Employment Agreement. * * *. 

“Your employment will continue through November 1, 

2008, at which time you will cease to be employed by IQS. * 

* * Please note that the nonrenewal of the Employment 

Agreement and the subsequent termination of your 

employment with IQS will not have any effect on the 

Amended and Restated Non-competition Agreement and 

the Amended and Restated Non-solicitation, 

Non-disclosure and Developments Agreement, each 

between IQS and you and each dated October 2, 2007, each 

of which shall continue in full force and effect until 

otherwise terminated or until each expires in accordance 

with its terms.”

{¶ 20} The letter does not state that IQS had decided to pay Cachat the 

$500,000 to not compete. Moreover, the company’s decision whether to pay 
the amount was not required to be made until 15 days after the termination. 

The letter was written two months prior to Cachat’s termination date. 

{¶ 21} Additionally, the evidence shows that Cachat did not believe the 

termination letter activated the non-competition agreement. In a letter 

dated November 25, 2008, Cachat’s attorney wrote a letter to IQS stating, 

“this letter serves to confirm that IQS has not exercised its right to enforce 

the non-competition covenant in the Amended and Restated Non-Competition 

Agreement between it and Mr. Cachat and that it has refused to provide Mr. 

Cachat with a written statement confirming its decision for some reason or 

other.” Further, on January 13, 2009, Cachat emailed a letter to a third 

party in which he stated, “IQS failed to exercise its rights to enforce a 

non-compete agreement and, therefore, I am not under a non-compete 

agreement with IQS. I believe that IQS has the same understanding.” 

These letters confirm that the August 2008 letter did not lead Cachat to 

believe that IQS was enforcing the non-competition agreement. 

Severance Payments

{¶ 22} In his second assigned error, Cachat argues that the trial court 

erred by granting summary judgment regarding his claim for severance 

payments. He claims the contract language was ambiguous and created a 

question of law. 
{¶ 23} We note that Cachat failed to argue in the trial court that the 

language regarding what constitutes the end of his term was ambiguous. 

Thus, we are not required to address it. Ingram v. Adena Health Sys., 149 

Ohio App.3d 447, 452, 2002-Ohio-4878, 777 N.E.2d 901; RBS Citizens, N.A. 

v. Zigdon, Cuyahoga App. No. 93945, 2010-Ohio-3511. However, even if the 

argument was raised below, it has no merit. 

{¶ 24} Section 5.1 stated that the term of Cachat’s employment was as 

follows: 

“Initial and Renewal Terms. The term of this Agreement 

commenced on October 1, 2003 and will continue through 

October, 2008 (the ‘Initial Term’) unless terminated earlier 

as provided in this Section 5. This Agreement shall 

thereafter be automatically renewed for successive one 

year periods (the ‘Renewal Terms’) unless terminated 

earlier as provided in Section 5.” 

{¶ 25} Cachat contends whether the contract was to end October 1 or 

October 31, 2008, was ambiguous and, therefore, created an issue of fact. If 

the end date is interpreted to be October 1, then he was not terminated prior 

to the renewal of his term of employment, which his termination letter stated 

was October 31, and he would, therefore, be entitled to severance pay under 

Section 6.2, which provides: 

“If Executive’s employment is terminated by the Company 

pursuant to Sections 5.3(a), (b), or (d), [death, disability, or 

without cause] the Company shall make severance 

payments to the Executive (or his legal representative in 

the case of death) equal to twelve (12) months of his 
adjusted Base Compensation as of the Date of Termination 

(on the same pay dates) and, except for termination 

pursuant to Section 5.3(a), shall continue his employee 

benefit coverage and compensation on the same terms as 

prior to such termination for twelve (12) months from the 

effective date of termination. * * *”

{¶ 26} “Language is ambiguous if the words of a writing are susceptible 

to two or more reasonable interpretations.” Dorsey v. Contemporary 

Obstetrics & Gynecology (1996), 113 Ohio App.3d 75, 84, 680 N.E.2d 240. 

“Common words appearing in a written instrument will be given their 

ordinary meaning unless manifest absurdity results, or unless some other 

meaning is clearly evidenced from the face or overall contents of the 

instrument.” Alexander v. Buckeye Pipe Line Co. (1978), 53 Ohio St.2d 241, 

374 N.E.2d 146, at paragraph two of the syllabus. 

{¶ 27} We do not agree that the phrase “through October 2008” is 

ambiguous. If the drafter intended October 1, 2008 to be the end of the term, 

the contract would have stated “until October” or “to October.” “Through” is 

commonly understood to mean the end of whatever the word precedes. 

Because the word is not ambiguous, we cannot consider the parol evidence 

Cachat relies upon to show that he was told he would receive severance pay. 

Only when the language of a contract is unclear or ambiguous, or when the 

circumstances surrounding the agreement invest the language of the contract 

with a special meaning will extrinsic evidence be considered in an effort to 
give effect to the parties’ intentions. Kelly v. Med. Life Ins. Co. (1987), 31 

Ohio St.3d 130, 132, 509 N.E.2d 411. When the terms in a contract are 

unambiguous, courts will not in effect create a new contract by finding an 

intent not expressed in the clear language employed by the parties. 

Alexander, at 246, 374 N.E.2d 146. We conclude the agreement is clear and 

unambiguous. Cachat was not entitled to severance pay if the contract is not 

extended and expires on its own terms, which is what occurred here. 

{¶ 28} Cachat also argues that by extending his employment to 

November 1, even if the end of his term was October 31, he would be entitled 

to severance pay. However, the severance clause clearly is triggered based 

on termination prior to the end of a term. IQS clearly advised Cachat that 

his term, which ended October 31, 2008, would not be renewed. The extra 

day of employment did not constitute a renewal of the term given the written 

notice that the term was not being renewed, and it was clear that after the 

additional day, the employment terminated. 

{¶ 29} Additionally, Cachat argued in the trial court that he did not 

understand the terms of the contract. However, the law in Ohio is that 

“parties to contracts are presumed to have read and understood them and 

that a signatory is bound by a contract that he or she willingly signed.” 

Preferred Capital Inc. v. Power Eng. Group Inc., 112 Ohio St.3d 429, 432, 
2007-Ohio-257, 860 N.E.2d 741. Accordingly, Cachat’s second assigned error 

is overruled. 

General Release

{¶ 30} In his third assigned error, Cachat argues that the trial court 

erred by concluding that the language in the 2008 General Release 

extinguished his claims. He argues the release only applied to pending 

claims, not future claims. 

{¶ 31} The trial court’s ruling regarding the general release has no 

impact on the claims at issue in this appeal. In its motion for summary 

judgment, IQS did not argue that Cachat’s claim for severance benefits was 

extinguished by the release. IQS also did not argue that Cachat’s claim 

under the amended non-competition agreement was extinguished by the 

general release, because this was not a claim raised in Cachat’s complaint, 

but raised for the first time in the response brief. Moreover, the court did 

not rule that the general release extinguished any of the claims, but merely 

found that it was enforceable. Accordingly, Cachat’s third assigned error is 

overruled. 

Judgment affirmed. 

It is ordered that appellees recover from appellants their costs herein 

taxed. 

The court finds there were reasonable grounds for this appeal. 
It is ordered that a special mandate be sent to said court to carry this 

judgment into execution. 

A certified copy of this entry shall constitute the mandate pursuant to 

Rule 27 of the Rules of Appellate Procedure. 

 

 

PATRICIA ANN BLACKMON, PRESIDING JUDGE 

FRANK D. CELEBREZZE, JR., J., and 

EILEEN A. GALLAGHER, J., CONCUR