[Cite as Payette Fin., Servs., L.L.C. v. Mtge. Electronic Registration Sys., Inc., 2020-Ohio-5055.]

IN THE COURT OF APPEALS 

ELEVENTH APPELLATE DISTRICT 

PORTAGE COUNTY, OHIO 

PAYETTE FINANCIAL SERVICES, LLC, : O P I N I O N 

 

 Plaintiff, : CASE NO. 2020-P-0010

 - vs - : 

MORTGAGE ELECTRONIC 

REGISTRATION SYSTEMS, INC., 

ACTING SOLELY AS NOMINEE FOR 

MB FINANCIAL BANK, N.A., et al., 

: 

: 

: 

 Defendants-Third Party 

 Plaintiffs-Appellants/ 

 Cross-Appellees, 

: 

: 

DAVID GRAY, et al., 

: 

 Third Party Defendants- 

 Appellees/Cross-Appellants. : 

Civil Appeal from the Portage County Court of Common Pleas, Case No. 2016 CV 

00969. 

Judgment: Affirmed. 

Kerin Lyn Kaminski and Kathleen A. Nitschke, Giffen & Kaminski, LLC, 1300 East Ninth 

Street, Suite 1600, Cleveland, Ohio 44114 (For Defendants-Third Party PlaintiffsAppellants/Cross-Appellees). 

Jeffrey Mark Levinson, Levinson LLP, 55 Public Square, Suite 1750, Cleveland, Ohio 

44113 (For Third Party Defendants-Appellees/Cross-Appellants). 

MARY JANE TRAPP, J. 
 2

{¶1} Cross-appellants, David and Shelly Gray (collectively, “the Grays”), appeal 

from the judgments of the Portage County Court of Common Pleas, which adopted the 

magistrate’s decision and overruled their objections, finding that while the Grays asserted 

a “vague” affirmative defense of release in their answer to the Third Party Complaint, they 

did not assert a “counterclaim of any kind” that “meets the requirements of the Ohio Rules 

of Civil Procedure as a properly pleaded claim for damages” for breach of contract. 

{¶2} In the Grays’ sole assignment of error, they argue that the trial court erred 

in failing to find that they asserted a valid breach of contract claim via an affirmative 

defense because the cross-appellees, Douglas and Kristine Ritzel (collectively, “the 

Ritzels”), commenced and prosecuted third party claims against them in direct 

contravention of the parties’ earlier mutual release, thus entitling the Grays to damages. 

They further assert the trial court erred in failing to find the issue was tried by implied 

consent pursuant to Civ.R. 15(B) after the Ritzels made a motion to amend their pleadings 

to conform to the evidence. 

{¶3} A review of the record and pertinent law reveals the Grays only asserted a 

breach of the mutual release as an affirmative defense and did not file a counterclaim or 

a motion for leave to amend. There is sparse testimony by Mr. Gray regarding the costs 

they incurred from the underlying litigation as a result of the alleged breach. Further, 

objections were made to this line of questioning, which were sustained. Moreover, to find 

a breach of contract claim was impliedly tried by consent would cause a substantial 

prejudice to the Ritzels. 

{¶4} Thus, the judgment of the Portage County Court of Common Pleas is 

affirmed. 
 3

Substantive and Procedural Facts 

{¶5} This case arises from a foreclosure action in which the Ritzels were the 

defendants/third-party plaintiffs along with their lender and co-defendant/third-party 

plaintiff, MB Financial Bank, N.A. (“MBFinancial”), and the Grays were third-party 

defendants. 

{¶6} In 2011, the Ritzels entered into a lease with an option to purchase with the 

Grays for the subject residential property. In 2015, the Ritzels signed a purchase 

agreement for the property. At the time the purchase agreement was executed, three 

mortgages encumbered the property – two held by Wells Fargo and a third originally held 

by Lake National Bank. It was alleged that Payette Financial Services, LLC (“Payette”) 

subsequently acquired a participation interest in that third note and mortgage (the 

“Payette mortgage”). 

{¶7} At closing, the Wells Fargo liens were satisfied from the sale proceeds 

funded by MBFinancial. Neither the Ritzels nor MBFinancial discovered, nor did the 

Grays disclose, the third mortgage prior to the closing of the sale of the property 

{¶8} To further complicate matters, after the purchase agreement was executed, 

but before closing, the relationship between the Ritzels and the Grays grew tumultuous – 

culminating in the Grays filing an eviction action. The Grays alleged non-payment of 

amounts due under the lease agreement, and the Ritzels filed a counterclaim for specific 

performance and money damages. The parties eventually signed a confidential 

settlement agreement and mutual release – the subject of this appeal – and dismissed 

the eviction action. 
 4

{¶9} The Ritzels then completed the purchase, and the Grays delivered a 

general warranty deed. Later, having been unable to collect against the Grays, Payette 

brought its foreclosure action, asserting its lien against the Ritzels’ residence as first in 

priority when it discovered the property had been sold to the Ritzels. 

{¶10} In the foreclosure action, MBFinancial and the Ritzels filed amended thirdparty claims against the Grays for breach of warranty deed, fraudulent misrepresentation, 

and unjust enrichment. In turn, the Grays filed an amended answer denying the 

allegations and raising various affirmative defenses, including a defense that “the claims 

against the Grays contained in the Third-Party Complaint were released.” In their prayer 

for relief, the Grays requested the court to “enter judgment in favor of the Grays on the 

Third-Party Complaint as to each and every Count therein, assessing any costs of this 

litigation against the Defendants and grant the Grays such further and additional relief as 

is just.” There were no further amendments to the pleadings. 

{¶11} After a lengthy discovery phase, which included, by the parties’ stipulation, 

the filing of the mutual release from the eviction action into the record of the foreclosure 

action, a three-day trial was held before a magistrate. 

Trial Testimony and the Grays’ Claims 

{¶12} Counsel for the Grays concluded his opening statement by stating: “At the 

end of this case, the Grays, who are the parties least able to afford this expense, will ask 

the Court for an award that the Defendants pay the costs the Grays incurred in this 

meritless litigation due to their breach of the contract of the mutual release.” 

{¶13} Mr. Gray testified briefly as to the mutual release: 
 5

{¶14} “Q. So once you saw this mutual release in the closing documents, did you 

expect to be done with the Ritzels forever? 

{¶15} “A. Absolutely. 

{¶16} “Q. Did you think we would be here today? 

{¶17} “A. No. 

{¶18} “Q. Would you please read aloud the mutual release paragraph of this 

document found on Page 2 at 1.0, starting with mutual releases?

{¶19} “A. Mutual releases. Each party, including their respective families, 

assignees, agents, heirs, beneficiaries, fiduciaries, representatives, insurers, successors, 

and assigns, exchange for the other party’s promises and covenants and for all other 

good and valuable consideration, the sufficiency of which are acknowledged, irrevocably 

and non-conditionally release, acquits, and forever discharges the other party from any 

and all claims, demands, costs, expenses, and cause of action of any kind or description 

whatsoever whether known or unknown, vested or contingent, legal or equitable, that 

each has or might have against the other relating to or arising out of subject matter of 

litigation to lease the purchase agreement, from the beginning of time until the date the 

agreement is fully executed. 

{¶20} “Q. It’s pretty comprehensive; isn’t it? 

{¶21} “A. Yes. 

{¶22} “Q. There are no exceptions to the mutual promise of finality there that I 

can see; do you? 

{¶23} “A. I think it all says it right there. 

{¶24} “Q. It covers all claims? 
 6

{¶25} “A. Yes. 

{¶26} “Q. Known or unknown? 

{¶27} “A. Correct. 

{¶28} “Q. It doesn’t say anywhere except for any type of claims; does it? 

{¶29} “A. No, it does not. 

{¶30} “Q. All is all; right? 

{¶31} “A. Correct. 

{¶32} “Q. Unknown is unknown; right? 

{¶33} “A. Yes. 

{¶34} “Q. And yet in plain breach of that mutual promise of finality, we’re here 

now; right? 

{¶35} “[Counsel for MBFinancial/the Ritzels]: Objection. Just leading all the way 

through, but I got tired of objecting, but that’s just – 

{¶36} “The Magistrate: Sustained. 

{¶37} “[Counsel for the Grays]: Okay. 

{¶38} “Q. So it would be a legitimate question to ask why we’re here now in light 

of this release? 

{¶39} “A. Yes. 

{¶40} “Q. Can you tell me how? 

{¶41} “A. It’s been ongoing for two years now. Emotionally, it’s like a big, black 

cloud hanging over us. Financially, up to this trial it’s cost us $35,000.00 to deal with this. 

It’s caused a lot of friction and undue distress on us as a family. 
 7

{¶42} “Q. Can you describe generally what the financial costs – or I’m sorry, give 

me general categories of what the financial cost to you consists of? 

{¶43} “A. Missed work. I’ve had to miss obviously these last three days. I missed 

a day for the deposition, hotel costs, flight costs, attorney fees. 

{¶44} “Q. Did you also have to buy transcripts? 

{¶45} “A. Yes. We had to buy transcripts. I think that’s – covers it. 

{¶46} “Q. All expenses incurred because of the Ritzels’ breach of the mutual 

release; correct? 

{¶47} “[Counsel for MBFinancial/the Ritzels]: Objection. 

{¶48} “The Magistrate: Sustained.” 

{¶49} Toward the end of trial after the court ruled on admission of evidence, 

MBFinancial and the Ritzels moved to amend the pleadings to conform to the admitted 

evidence. The Grays did not object. Payette moved for a directed verdict, which was 

overruled. At that point, Payette indicated to the court that it had no rebuttal and that it 

would “like to make a similar motion to conform.” The magistrate responded that “the 

motion to have it conform to the evidence has already been put on by the Defendants 

[MBFinancial and Ritzels], so its conforming how it conforms. Okay.” Payette’s counsel 

replied, “Okay,” and the Grays’ counsel said, “Prospectively as well.” The magistrate 

responded, “All right. So that will be granted for all parties * * *.” 

{¶50} During closing arguments, both sides spoke briefly about the mutual 

release. The Grays contended that the Ritzels had released all claims relating to the 

purchase agreement in the mutual release and asked the court for “judgment in their favor 

on each of the Defendant’s claims and also an award of the costs they incurred in this 
 8

litigation on account of the Defendant’s clear breach of contract by proceeding in the face 

of the mutual release, which again, they hid.” 

{¶51} In rebuttal, counsel for MBFinancial and the Ritzels stated that “Mr. Gray’s 

counsel brought up that they should be able to get fees based on breach of contract, and 

I think he means breach of the purchase agreement although I’m not quite sure. And so 

to the extent that that’s what he is indeed seeking, I would then say that such fees can’t 

be recovered, because there’s no contract to be breached. The purchase agreement 

merged into the warranty deed, and so, therefore, there’s no way to enforce the purchase 

agreement at this point.” 

{¶52} The magistrate issued her decision, finding, in relevant part that: the Ritzels 

and the Grays entered into and executed a purchase agreement offer, receipt and 

acceptance for the property, which was subsequently amended six times; the Grays 

signed a seller pre-closing information form that did not disclose the Payette mortgage on 

the property; the Grays and the Ritzels were having various disputes that culminated in 

February of 2016 when the Grays filed an eviction action against the Ritzels; however, 

the parties decided to proceed with a sale of the property and executed a purchase 

agreement for the property in April of 2016; and the Grays signed an owner’s affidavit and 

closing disclosure statements in connection with the sale of the property, none of which 

disclosed the Payette mortgage. 

{¶53} The magistrate further found that the Grays then signed the ALTA 

Settlement Statement showing payments to Wells Fargo and a Closing Disclosure that 

failed to disclose the third mortgage. The magistrate found that on the same date, the 
 9

Grays and the Ritzels “executed a Confidential Settlement Agreement and Mutual 

Release, which resolved the eviction litigation between them.” 

{¶54} The magistrate continued her findings by noting that pursuant to the Mutual 

Release, the Grays and the Ritzels “released, acquitted and forever discharged any and 

all claims, whether known or unknown, vested or contingent, legal or equitable, that each 

party had or might have against the other relating to or arising out of the subject matters 

of the eviction action, the Lease Agreement, or the Purchase Agreement, from the 

beginning of time until the date the Mutual Release was fully executed on May 24, 2016. 

On May 24, 2016, the Grays executed a General Warranty Deed in favor of the Ritzels.” 

{¶55} The magistrate also found that “MB Financial did not rely upon the Grays’ 

Owners Affidavit regarding the condition of the title to the Property, but relied upon the 

defective title exam and title commitments. No evidence was presented that the Ritzels 

justifiably relied upon any misrepresented statements by the Grays to induce reliance in 

the purchase of the Property. No evidence was presented that the Grays intended to 

mislead any party.” 

{¶56} The magistrate then ordered, as is pertinent to this appeal, that (1) “the 

Grays were granted judgment against MB Financial on each of their claims”; (2) the 

Ritzels were “granted judgment on their claim against Third-Party Defendants, Shelly 

Gray and David Gray, for breach of warranty deed”; (3) the Grays were “granted judgment 

against Third-Party Plaintiffs, Douglas Ritzel and Kristine Ritzel, on the remainder of 

Third-Party Plaintiffs’ claims.” 

{¶57} Upon review, the trial court adopted the magistrate’s decision without 

modifications. MBFinancial, the Ritzels, and the Grays subsequently filed objections. In 
 10 

their objections, the Grays argued they were entitled to a judgment in their favor and 

against the Ritzels and MBFinancial for breach of contract and to a hearing to determine 

damages incurred by the Grays as a result of the breach. 

{¶58} Based upon the court’s review of the pleadings, the trial transcript, the 

various stipulations between the parties, the exhibits admitted into evidence, the 

objections asserted by the parties, and the arguments submitted in opposition to the 

objections, the court found the objections not well-taken. 

{¶59} More specifically, the court found that the Grays asserted in their objections 

that MBFinancial and the Ritzels violated a Confidential Settlement Agreement and 

Mutual Release in conjunction with an unrelated eviction action. They further argued that 

the magistrate’s decision found “all of the requisite elements of the Grays’ breach of 

contract claim.” 

{¶60} Upon review of the pleadings, the court found that the Grays did not file any 

claim at any time against MBFinancial or the Ritzels for breach of contract or any other 

claim for relief. In their amended answer, the Grays did assert an affirmative defense that 

“[t]he claims against the Grays contained in the Third-Party Complaint were released” and 

requested that the court “grant the Grays such further and additional relief as is just.” 

{¶61} The court concluded that “while the Grays may have asserted a valid (but 

vague) affirmative defense, they clearly did not assert a viable claim that meets the 

requirements of the Ohio Rules of Civil Procedure as a properly pleaded claim for 

damages.” 

{¶62} The instant appeal followed, with MBFinancial, the Ritzels, and the Grays 

all filing appeals of the trial court’s judgments adopting the magistrate’s decision and 
 11 

overruling their respective objections. MBFinancial’s and the Ritzels’ appeal against 

Payette was subsequently dismissed. 

{¶63} The Grays now raise one assignment of error on appeal: 

{¶64} “The trial court erred as a matter of both fact and law in failing to find that 

the Grays properly asserted a valid breach of claim on account of the Ritzels’ 

commencement and prosecution of the third-party claims against the Grays in violation 

of the Mutual Release, entitling the Grays to damages therefor.” 

Standard of Review 

{¶65} On appeal, a trial court's overruling of objections and adoption of a 

magistrate’s decision will not be overruled unless the trial court abused its discretion. 

(Citations omitted.) Davis v. J & J Concrete, 11th Dist. Trumbull No. 2018-T-0074, 2019-

Ohio-1407, ¶18. The term “abuse of discretion” is one of art, “connoting judgment 

exercised by a court which neither comports with reason, nor the record.” State v. 

Underwood, 11th Dist. Lake No. 2008-L-113, 2009-Ohio-2089, ¶30, citing State v. 

Ferranto, 112 Ohio St. 667, 676-78 (1925). Stated differently, an abuse of discretion is 

the trial court’s “failure to exercise sound, reasonable, and legal decision-making.” State 

v. Beechler, 2d Dist. Clark No. 09-CA-54, 2010-Ohio-1900, ¶62, quoting Black Law's 

Dictionary 11 (8th Ed.Rev.2004).

Did the Grays Present a Claim for Relief? 

{¶66} The Grays assert that the trial court erred in finding that they did not assert 

a breach of contract claim at trial because they established, without objection, all of the 

elements necessary to establish such a claim. They further contend that to find they did 

not assert a claim for breach of contract by way of a pleading ignores and is contrary to 
 12 

the plain provisions of Civ.R. 15(B), which allows amendments of pleadings to conform 

to the evidence and trial of a claim not raised in the pleadings by implied consent. Thus, 

they assert that we should reverse for the trial court to hold a hearing on the issue of 

damages resulting from the Ritzels’ breach. 

{¶67} At the outset, we note that the Grays raise the second contention in their 

assignment of error (trial by implied consent) for the first time on appeal. This argument 

was not raised in the Grays’ objections to the Magistrate’s Decision. A party may 

not raise a claimed error on appeal unless that party has properly objected to that factual 

finding or legal conclusion in his or her objections to the magistrate's decision. Civ.R. 

53(D)(3)(b)(iv); Stauffer v. Stauffer, 11th Dist. Geauga No. 2008-G-2860, 2009-Ohio-998, 

¶21, citing Loss v. Claxton, 11th Dist. Portage No. 2003-P-0128, 2005-Ohio-347, ¶71.

{¶68} It is a well-established rule of appellate review that a court will not consider 

issues that an appellant fails to raise initially at the trial court. Warmuth v. Sailors, 11th 

Dist. Lake No. 2007-L-198, 2008-Ohio-3065, ¶36, citing Lippy v. Society Natl. Bank, 88 

Ohio App.3d 33, 40 (11th Dist.1993) (appellant cannot raise an argument on appeal for 

the first time when there was no indication that the argument was brought to the trial 

court’s attention and considered below); MKB Leasing Corp. v. Sagowitz, 4th Dist. 

Washington No. 02CA3, 2002-Ohio-5749, ¶24; McKenzie v. Spangler, 6th Dist. Lucas 

No. L-96-236, 1997 WL 243578, *2 (May 9, 1997) (an issue is not ripe for appellate review 

unless it was presented to the trial court and the court made a definitive ruling on the 

issue). 

{¶69} “The well-settled rule which requires the parties to adhere on appeal to the 

theory upon which they presented the case in the trial court, operates to limit the scope 
 13 

of the review * * * the case, on appeal, must be reviewed and decided on the theory on 

which it was tried in the court below * * *.” Webb v. Grimm, 116 Ohio App. 63, 74 (2d 

Dist.1961), quoting 3 American Jurisprudence, Section 830, at 372. 

{¶70} Moreover, the Grays failed to support their claimed error with arguments 

and failed to cite any legal authority as required by App.R. 16(A)(7) and Loc.R. 16(C)(4). 

An appellant's brief must include argument and law, “containing the contentions of 

appellant with respect to each assignment of error presented for review * * *, with citations 

to the authorities, statutes, and parts of the record on which appellant relies.” S. Russell 

v. Upchurch, 11th Dist. Geauga Nos. 2001-G-2395 & 2001-G-2396, 2003-Ohio-2099, ¶9, 

citing App.R. 16(A)(7)6. Therefore, this court may disregard appellant's assignments of 

error pursuant to App.R. 12(A)(2). Id. at ¶11; see also Karnofel v. Superior Waterproofing, 

Inc., 11th Dist. Trumbull No. 2018-T-0055, 2019-Ohio-1409, ¶39. 

{¶71} Had it been raised below, however, we would still find the claimed error to 

be without merit.

{¶72} The trial court found that “while the Grays may have asserted a valid (but 

vague) affirmative defense, they clearly did not assert a viable claim that meets the 

requirements of the Ohio Rules of Civil Procedure as a properly pleaded claim for 

damages.” We agree.

{¶73} Civ.R. 8(A), “claims for relief,” states, in pertinent part, that “[a] pleading that 

sets forth a claim for relief, whether an original claim, counterclaim, cross-claim, or thirdparty claim, shall contain (1) a short and plain statement of the claim showing that the 

party is entitled to relief, and (2) a demand for judgment for the relief to which the party 

claims to be entitled. If the party seeks more than twenty-five thousand dollars, the party 
 14 

shall so state in the pleading but shall not specify in the demand for judgment the amount 

of recovery sought, unless the claim is based upon an instrument required to be attached 

pursuant to Civ. R. 10.”

{¶74} In addition, Civ.R. 13(A) provides that “[a] pleading shall state as a 

counterclaim any claim which at the time of serving the pleading the pleader has against 

the opposing party, if it arises out of the transaction or occurrence that is the subject 

matter of the opposing party’s claim * * *.” (Emphasis added.) 

{¶75} There is no dispute that the Grays did not set forth a counterclaim for money 

damages for the alleged breach of the settlement agreement and release. This failure 

would appear to resolve the issue inasmuch as it has been waived and the Grays cannot 

now assert it on appeal. See Poppe Law Office v. Orick, 3d Dist. Mercer No. 10-13-07, 

2013-Ohio-5662, ¶30. 

{¶76} The Grays appear to be arguing that an affirmative defense of release was 

transformed into a counterclaim via Civ.R. 15(B), which allows for the amendment of 

pleadings to conform to evidence presented at trial, and rescues them from waiver when 

their claim for breach of the settlement agreement and release was tried by implied 

consent of the parties. 

{¶77} Civ. R. 15(B) provides: 

{¶78} “When issues not raised by the pleadings are tried by express or implied 

consent of the parties, they shall be treated in all respects as if they had been raised in 

the pleadings. Such amendment of the pleadings as may be necessary to cause them to 

conform to the evidence and to raise these issues may be made upon motion of any party 

at any time, even after judgment. Failure to amend as provided herein does not affect 
 15 

the result of the trial of these issues. If evidence is objected at the trial on the ground that 

it is not within the issues made by the pleadings, the court may allow the pleadings to be 

amended and shall do so freely when the presentation of the merits of the action will be 

subserved thereby and the objecting party fails to satisfy the court that the admission of 

such evidence would prejudice him in maintaining his action or defense upon the merits. 

The court may grant a continuance to enable the objecting party to meet such evidence.” 

{¶79} An affirmative defense, however, cannot simply be transformed into a 

counterclaim. The difference between a defense and a counterclaim is that “the latter is 

affirmative in nature, and asserts a separate cause of action, while the former serves to 

preclude recovery by asserting facts that defeat the plaintiff's right to recovery.” (Citation 

omitted.) BAC Home Loans Servicing, L.P. v. Hall, 12th Dist. Warren No. CA2009-10-

135, 2010-Ohio-3472, ¶18. An affirmative defense generally refers to that which is offered 

to defeat an action by “denying, justifying, or confessing and avoiding the plaintiff's cause 

of action. It goes to the plaintiff's right and generally would not be considered an 

independent claim existing against the plaintiff.” (Citation omitted.) Id. 

{¶80} Civ.R. 8(C) provides that “[w]hen a party has mistakenly designated a 

defense as a counterclaim or a counterclaim as a defense, the court, if justice so requires, 

shall treat the pleading as if there had been a proper designation.” This provision, 

however, was intended to permit trial courts to remedy clerical errors made in designating 

affirmative defenses and counterclaims and was not intended as a means by which a 

party could correct a substantive error in a pleading after the time for amendment to the 

pleading had passed. BAC Home Loans Servicing at ¶19, citing Am. Outdoor Advertising 
 16 

Co., LLC v. P & S Hotel Group, Ltd., 10th Dist. Franklin No. 09-AP-221, 2009-Ohio-4662, 

¶26. 

{¶81} The transcript reveals that toward the end of trial, MBFinancial and the 

Ritzels moved the court to amend the pleadings to conform to the evidence, which the 

magistrate granted without objection. Payette then indicated to the court that it would 

“like to make a similar motion to conform.” The magistrate responded that “the motion to 

have it conform to the evidence has already been put on by the Defendants [MBFinancial 

and Ritzels], so its conforming how it conforms. Okay.” Payette’s counsel replied, “Okay,” 

and the Grays’ counsel said, “Prospectively as well.” The magistrate responded, “All right. 

So that will be granted for all parties * * *.” 

{¶82} We must agree with the Ritzels that the statement, “[p]rospectively as well” 

was “nebulous,” at best and certainly not a motion to amend. But it would appear from 

the magistrate’s response that she was going to accept all pleadings to have been 

amended to conform to the evidence presented at trial. 

{¶83} Such conformation, however, does not change the fact that the Grays did 

not seek affirmative relief under the release (as opposed to using the release as an 

affirmative defense to the Ritzels’ claims against them), and there is nothing in this record 

on the part of the court or MBFinancial and the Ritzels that suggests an affirmative claim 

for damages relating to the release was tried by implied consent. 

{¶84} In State ex rel. Evans v. Bainbridge Twp. Trustees, 5 Ohio St.3d 41 (1983),

the Supreme Court of Ohio explained that “[a]n implied amendment of the pleadings will 

not be permitted, however, where it results in substantial prejudice to a party. * * * Various 

factors to be considered in determining whether the parties impliedly consented to litigate 
 17 

an issue include: whether they recognized that an unpleaded issue entered the case * * 

*; whether the opposing party had a fair opportunity to address the tendered issue or 

would offer additional evidence if the case were to be retried on a different theory * * *; 

and whether the witnesses were subjected to extensive cross-examination on the issue * 

* *.” (Citations omitted.) Id. at 45-46.

{¶85} Under Civ.R. 15(B), implied consent is not established merely because 

evidence bearing directly on an unpleaded issue is introduced without objection. Rather, 

it must appear that the parties understood the evidence was aimed at the unpleaded 

issue. Id. at 46, citing MBI Motor Company, Inc. v. Lotus/East, Inc., 506 F.2d 709, 711 

(6th Cir.1974).

{¶86} A review of the hearing transcript reveals that the only evidence on this 

issue was the mutual release agreement itself, which was submitted by stipulation of all 

the parties, and Mr. Gray’s brief testimony, which touched upon the mutual release and 

that the underlying litigation was costing at least $35,000. 

{¶87} Counsel for MBFinancial and the Ritzels made three objections, all of which 

were sustained. Further, during closing arguments, counsel for MBFinancial and the 

Ritzels expressed confusion over the Grays’ argument, questioning whether they were 

talking about the real estate purchase agreement or the mutual release. The magistrate’s 

decision is also silent as to the issue. In the magistrate’s findings, the mutual release is 

only referenced in conjunction with the confidential settlement agreement and the fact 

that it “resolved the eviction litigation between them [the Ritzels and the Grays].” 

{¶88} Thus, there is nothing in the record from which it can be inferred that the 

Ritzels or the court regarded the issue as one being tried, impliedly or explicitly. It also 
 18 

appears that MBFinancial and the Ritzels would have cross-examined Mr. Gray and/or 

offered rebuttal evidence and witnesses on the issue, particularly, damages. Instead they 

simply objected to the line of questioning, which the court sustained. 

{¶89} “[T]he implication of Civ.R. 15(B) is that a trial court may not base its 

decision upon an issue which was tried inadvertently. Whether an unpleaded issue is 

tried by implied consent is to be determined by the trial court, whose finding will not be 

disturbed, absent showing of an abuse of discretion.” Evans at 46, citing Chesapeake & 

Ohio Railway Co. v. Newman, 243 F.2d 804 (6th Cir.1957). 

{¶90} For the foregoing reasons, we find the Grays’ assignment of error not well 

taken and affirm the judgment of the Portage County Court of Common Pleas.

CYNTHIA WESTCOTT RICE, J., concurs, 

THOMAS R. WRIGHT, J., concurs in judgment only.