[Cite as Daly v. Rowe , 2022
- Ohio
- 3750.] 

### IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO

CLIFFORD LAWTON DALY, JR. , Plaintiff

- Appell ee/Cross

Appellant ,

vs. BRUCE ROWE , COATING APPLICATIONS, INC.,
COATING APPLICATIONS LLC, and
COATING APPLICATION S INTERNATI O NAL LLC,
Defendant s - Appell ants/Cross

Appellees / Third

- Party Plaintiffs ,

a nd KATHY R. DALY, Third

- P arty Defendant ,

a nd QUALITY COMPOSITES, INC.,
Interested

- P arty Defend ant

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: APPEAL NO S

. C

- 220026 C

- 220031 TRIAL NO. A

- 1805658
O P I N I O N

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Civil Appeal s From: Hamilton County Court of Common PleasOHIO FIRST DISTRICT COURT OF APPEALS

2 Judgmen t Appealed From Is : Affirmed in Part, Reversed in Part, and Cause Re manded Date of Judgment Entry o n Appeal: October 21, 2022

De B lasis Law Firm, LLC , and Rick D. DeBlasis , for Plaintiff

- Appell ee/Cross

Appellant , Santen & Hughes and Brian P. O ’ Connor , for Defendant s - Appell ants/Cross

Appellees

.OHIO FIRST DISTRICT COURT OF APPEALS

3 M YERS , Presiding Judge. 

### {¶1} Bruce Rowe and Cliffor d Daly were business pa r tners for years until their relationship dissolved in 2018. Daly brought suit against Rowe when he was
locked out of the business , an d th e s e ap pea l s follow the trial court ’ s de termination of

c laims between the part ies. Both plain tiff

- appellee/cross

- appe llant Clifford Daly and
defendants

- appell ants/cross

- appellees B ruce Rowe, Coating Applicati ons, Inc., Coating Applicati ons LLC, and Coating Applications I n ternational LLC ( collectively
referred to as “ defen dants ” ) , 1 appeal from the trial court ’ s entry foll owing a bench trial finding in favor o f Daly on his claim for breach of fiduc iary duty and awarding him damages. 

### {¶2} In th ese appeals, we are asked to determine whether Daly had standing to p ursue a direct claim for bre ach of fiduciary duty again st Rowe or whe ther that
claim had to be br o ught derivat ively on behalf of the shareholders of the close

corp oration that Daly and Rowe had formed . If we find that Daly had a viable individual claim, we must then review the trial court ’ s award of damages. We con clude

t hat the trial court did not err in granting judgment to Daly individually on his claim
fo r breach of fiduciary dut y. But we further find that the trial court ’ s award of damages was against the manifest weight of th e evidence

. We a ccordingly reverse the t rial

court ’ s award of damages and remand this case for further proceedings.

Factual and Procedural Background


### {¶3} Approxi mately 3 0 years ago, D aly and Rowe form e d Q uality Composites, I n c. , ( “ QCI ” ) a cl ose corporation that owns the rig hts to a product known

1 Th e Coating Application defendants , as a cknowledged in Ro we ’ s appellate br ief, are Rowe ’ s “ wholly owned and controlled busi ness entities. ”OHIO FIRST DISTRICT COURT OF APPEALS

4 a s Braze Tape , a m a terial used to bind metal products t ogether. Daly and Row e each
own 50 percent of QCI. Daly is the president and treasurer of QCI, while Rowe is the
vice

- pres ident and secretary. Daly and Rowe a re also directors of the corporation , and

ea ch appoint ed one additional director. 

### {¶4} In 1992, QCI purchased the right s, title, and interest in Braze Tape , including the manufacturing process to make the tape, fr o m Coating Applications,
I nc. , ( “ CAI ” ) a corpo ration that is ow ned in p art by Rowe

. Th e parties intended QCI

to operate as a holding company, and i n 1994 , QCI entered into an agreement with CAI authorizing CAI to se ll and manufacture Braze Ta pe . W h ile t he agreement provided that CAI would receive be tween a five

- perc ent and ten

- per c ent c om m ission
on all Braze Tape sales, in practice , QCI never actually paid the commission re ferenced
in t he agreement. Rather, p er the parties ’ standard practices, payments received for Braze Tape sales by CAI were depos ited into a QCI

- C AI joint

- age ncy bank acc ount

. CAI sold other products in addition to Braze Tape, and payments received f rom the
sale of C AI ’ s other products were also deposited into the joint

- agency bank ac count. After payments were de posited into the j o int

- agency ba nk account, mo ney received
for Braze Tape sales w as transferred into a separate corporate account for QC I. 

### {¶5} QCI was a sub tenant of CAI, and it pai d a certain percenta ge of the
utilities and rent for the office premises

. QCI also paid CAI fo r any bi lls that were submitt ed for ti me and material , and labor invo lved in the manufacture of Braze Tape

. All profits earned by QCI were e qually split between Daly and Rowe , and they wer e paid from t he QCI account

. 

### {¶6} Unfortunately, the relationship be tw een the parties soured , as R owe began to su s pect that Daly was divulging CAI ’ s trade s ecrets . Rowe believed DalyOHIO FIRST DISTRICT COURT OF APPEALS

5 produced Braze Tape on his own and had misr epresented the q uality of the product when doing so

. On May 28, 2018 , Rowe evicted Daly a nd QCI from the office p remises.
Dal y taped the agr e e ment ex ecuted between QC I and CAI in 1994 to the wall , along
with a n ote stating that the old contract was , as of that day, back in effect

. Daly has had no access to the premises since that date . N or has he received any paym ent fr om QCI since the ev ict i on. On August 2 4, 2018, Daly , in his capacity as president of QCI,
sent notice to Rowe that he was terminating QC I ’ s agreement with CAI. 

### {¶7} Daly, both individually and derivatively on behalf o f QCI, an d Q CI file d suit against de fenda nts. Da ly did not make a demand on QCI ’ s Boar d of Directors before filing the action derivatively on behalf of the corporation . He alleged in the complaint that “ [i]t wou ld be futile for Daly to make further demand on the Boa rd of
D irectors of QCI f

or se veral re asons. Daly an d Rowe are 50/50 sh areholders of QCI.
Fu rther demand would require Rowe to investigate and bring claims against himself for his abusive conduct as described herein. Rowe has clearly evidenced his intent no t
to take any action to correct hi s misconduct. ” 

### {¶8} T he c omplaint sought a declaratory judgment and injunctive relief
auth orizing Daly to terminate the a greement between QCI and CAI , enjoining defendants from selling Braze Tape, and authorizing Daly to rel ice nse the sale of Braze Tape to ot he r vendors. The c omplaint additionally asserted claims for breach of
fid uciary duty, accounting, conver s ion, theft, replevin, and breach of contract. In support of the as serte d claims, the complaint alleged that Row e s old Bra ze Tape without a uthorization, converted and/ o r stole checks due to QCI, and wrongfully
evi cted Daly and QC I from the premises.OHIO FIRST DISTRICT COURT OF APPEALS

6 

### {¶9} Defend ants filed counterclai ms against D aly and QCI for a violation of
18 U .S.C. 1030 (the Computer Fraud and A bus e Act), brea ch of fid uciary d uty, theft, a violat i on of Ohio ’ s Deceptive Trade Prac tices Act , and bad faith

. They addi tionally sought a declaratory judgment that Rowe was entitled to indemnification from QC I for
the costs incurred in defend ing the laws uit brought aga inst him. Defend ants also filed
thir d

- party claims for a violation of the Computer Fraud and Abuse Act , thef t, and a
violation of Ohio ’ s Deceptive Trade Practices Act again st Kathy Daly, Daly ’ s wife who
had worke d as a n office manager for Q CI. 

### {¶10} Defendant s filed a motion to di sq uali fy counse l for Daly and QCI, arguing that QCI ’ s Board of Directors had never been asked to vote to authorize the
l awsuit and that counsel would have “ divided loyal ties ” if engaged in representation of both plainti ffs

. Subsequen t to the filing o f thi s motion, Q CI r e tained separate counsel

. The court denied the motion to disqualify, stating in relevant part : In this case, th e C ourt finds that a demand for a vote by the board of directors would have been pointless as Mr. Rowe owns the other 50% of
the company. Addit i onally , even if there was an issue of adequate representation by [ Daly ’ s counsel], QCI is no w represented b y in dep endent counsel. QCI is a nominal but nece ssary party to this case.
T he parties later filed an agreed en try real igning QC I as an interested

- p a rty defendant. 

### {¶11} Daly and third

- party defendant Kathy Daly moved for summary judgment on defendants ’ counter cla ims a n d third

- party claims for violati ons of the Computer Fraud and Abuse Act and Ohio ’ s Deceptive Trade Pr actices Act, b rea ch of
fid uciary duty , and theft. The trial cour t granted the motion with respect to the claims
for a violation of the C omputer Frau d a nd Abuse Act and theft. But it found thatOHIO FIRST DISTRICT COURT OF APPEALS

7 genuine issues of material fact existed with respect to the c l aims for breach of fi d uciary duty an d a violation of Ohio ’ s Deceptive Trade Pra ctices Act. 

### {¶12} Defendants moved for summa ry judgment on Daly ’ s clai ms for accounting, conversion, and breach of contract. The trial court granted the motion on all three clai ms , additionally st ating in its entry t h at it was of the opinion th at the claims for theft and replevin should also be dismissed but it could not dismi ss them
because those claims had not been subject to the motion for summary judgment. Daly subs equently el ected not to pu rs ue th e replevin clai m at trial. Daly also abandoned
the breach

- of

- fid uciary

- duty claim that he had brought derivatively on behalf of QCI

an d pursued that claim only in his individual c apacity. 

### {¶13} The case proceeded to a bench trial on all r emaining claims. Daly and
Rowe bo th test i fied about the busin ess practices of, and the nature of the rel ationship
between , QCI and CAI from the relation shi p ’ s inception until Rowe e s sentially e victed Daly an d QCI from the premises in May of 2018

. Severa l historical prof it

- and

- loss

statements we re entered into evidence. With respect to QCI ’ s earnings an d Daly ’ s claimed lost profits following the eviction, Daly identified an exhibit detailing QC I ’ s earnings in the five

- year per iod prece ding the eviction

. He testif ied as follows about
the exhibit and the corporation ’ s historical ea rnings : Counsel: And wh at were the tota l s ales of QCI for that five

- year period? Daly: That would be $1,689 , 230. Counsel: A n d so if we divide tha t number by five, we get about $330,000 annual sales? Daly: That would be a good average.OHIO FIRST DISTRICT COURT OF APPEALS

8 Counsel: Okay. A n d of course it ’ s been

— th is would have been three

plus years since you were e jected from QCI; is that right? Daly: That ’ s correct. Counsel: So in the normal course, you would expect something in excess
of a million do llars having been sold by CAI for QCI in that time period ; i s that right?
Da ly: That would be a good estimate. Counsel: All right. A n d is there a l ine in here that d enotes what Mr.
Rowe took out of the company i n those five year s? Daly: Yes, ther e woul d be. On the second page, Page 2, of that, up near the top where it says “ P rofessional Fees, ” under “ Consulting. ” That
would be Mr. Rowe ’ s, his take. Counsel: Okay. So he was paid wages, or was he paid distribu tions? Daly: I b elieve he was paid a cons ulting fee.
C o unsel: That ’ s how he took his part of the pro fits? Daly : Tha t ’ s correct. Counsel: So over that five

- year p er iod, he took out almost

— well, $276,000 per year ? Daly: I th ink that ’ s a five

- year period

. Counsel: Five

- year period, pardon. Daly : Yes. Counsel: I ’ m just going to do a tiny bit of math he re. So about $5 5,000 a year was his share of the p rofits. Daly: Yes.OHIO FIRST DISTRICT COURT OF APPEALS

9 Counsel: QCI ’ s business? Daly: Cor rect. Counsel: A n d where in this report is

— and th at represents 16.3 percent of the gross income? Daly: Yes; of the sales.
Counsel: Of the sales. A n d that ’ s just his share. That ’ s not both of you ; that ’ s just his share. Daly : That ’ s correct.
Co unsel: And so where are yours? W h ere does your money come out? Daly: Well, if you look on Pag e 1, you ’ ll see “ Net Wages. ” And that
199,000 repr esents my take

- home pay; after ta xes. Co unsel: Okay. A n d so there would be withholdings; FICA, S o cial Security, Medicare, I thi nk? Daly: Correct.

* * * Counsel: So you were paid, actual ly , W

- 2 wag es, and Mr . Rowe was paid consulting fees. Is that ’ s wha t you ’ re telling me? Daly: Tha t ’ s correct, that’ s correct.
Co unsel: A nd were you each paid the same amount over this five

- year period? Daly: Yes. We w ould take exactly the same amount of money out. Counsel: So if I were to ask you what the average a nnual partner ’ s percentage of sales is a good number to determine profits, what number would you say it is?OHIO FIRST DISTRICT COURT OF APPEALS

10 Daly: I would say whate ver that

— if you look u nder Consulting, the 16.3,
since I would t ake the same am ount, I would say 32.6 would be

— Counsel: To tal, split in ha lf? Daly: Yes. Counsel: 16.3 percent for each of you? Daly: Yes. 

### {¶14} In other words, Daly ’ s testimony e stablished that Q CI ’ s historical p rofit

marg in was approximately 32.6 percen t of gross s ales. Thus, even though they
received payment i n different form s, Rowe and Daly each rece ived 16.3 p ercent of the

gross sales revenue historically. 

### {¶15} Daly and Rowe als o both testified about joint exhib it 15, which cons isted
of multiple invoice s that they agreed were for CAI ’ s sale s of Braze Tape from A pril of
2018 thr ough sometime in 2021. According to Daly, these invoices totaled $338,711.37 , an d he never received any of his share of the profits for t hese sales

. 

### {¶16} In addition to the agreed

- up on in voices in join t exhibit 15, Daly testified
about additi onal in voices th at CAI had submitted to various customers in the years after the eviction . Daly and Rowe disputed w h e ther these additional invoices were for
the sales of Bra ze Tape or fo r other p roducts manufactured by C AI. With respect to
th is group of invoice s, Daly t estified with certai nty that particular invoices were for the sale of Braze Tape. As to other invoices in this group, Daly could o nly sta te th at they

were “ likely ” or “ probably ” f or sales of B raze Tape. Rowe also testified about th ese dis puted i nvoices, and he conceded that m any of the invoices were for the sale of Braze Tape.OHIO FIRST DISTRICT COURT OF APPEALS

11 

### {¶17} Daly ul timately estimated th at CAI had invoiced over one mill ion dollars
in sa les since he was evicted from the premise s . And he opin ed that based on hi s historic al shar e of prof its prior to the eviction, he was entitled to receive in pr ofits approximately 16 .3 percent of sales during that time period

. 

### {¶18} Rowe also te stified about QCI ’ s historical profit m arg in, agreeing with Daly that QCI ’ s a verage profit margin was ap proxi mately on e third of all sales , with he and Daly each receiving 16.3 percent of that amount

. He also te stified that D aly had not been paid by Q CI s ince the eviction , and that no money for t he sale of Braze Tape
had been transferred in to QCI ’ s own ac count. Rather, QCI ’ s mon ey was held in a bank

account in the name of C A Patents . Rowe explaine d that C A Pa tents w as the holding company for his patent s, and that money received by CAI was plac ed into the C A
Patents account. 

### {¶19} Rowe identified multiple checks written f rom the C A Patent s account that were clearly f

or his own personal expenses. Inc lud ed in these personal expenses
were pa yments to his dau ghter, to a count ry club, for automobile r epairs and exp enses , and for medical bills

. These t otal ed a pproximately $45 ,000. 

### {¶20} The trial court found in fa vor of Daly on his claim for a declaratory jud gment and injunctive r elief , and it issued a declaratory ju dgment auth oriz in g him,

as p r esident of QC I, to terminate the agreement between QCI and CAI an d to rel icense
the sale of Braze Tape to other vendors. Defe ndants have n ot appeal ed this portion of
the trial court ’ s judgment

. 

### {¶21} T he court a lso found in favor of Daly on his cl aim for breach of fid ucia ry duty. With respect to da m ages for the breach of fid uciar y duty, the cour t found that Daly “ presented a theory of lost profits at trial, but failed to carry his burden of proofOHIO FIRST DISTRICT COURT OF APPEALS

12 rega rding th e a lleged lost profits . Plaintiff ’ s pr oof of gross revenue and profit was speculative. ” T he court fu rther found that Row e had admitted to spending QCI ’ s profits and that the evidence demon strated that “ Rowe at least in part siphoned the
income from Braze Ta pe sales in cash an d checks made pay ab l e to himself and other s, as well as payments for Ro we ’ s personal, recreation al and medical expense s. ” Th e
court stated that these actions constituted a breach of fiduc iar y duty to Daly and QC I , and that Daly was en tit led to damages in the amount of $45 ,090.47 for this breach. 

### {¶22} T he cou rt found in favor of defendants on Daly ’ s remaining claim for
theft . And it found in favor of Daly and Kathy Daly on the counterclaims and third

party claims that defendants had asserted against them. 2 

### {¶23} B o th the defendant s an d Daly have app ealed t he trial court ’ s deci sion

. In a single assign ment of error , de fendants arg ue that the trial court erred in granting judgment in favor of Daly. I n this assignment of error, they argu e that Dal y lack ed standing to p ur sue a direct claim for breach of fid uc iary duty , that it was error to award damages on the claim f

or br each of fid uc iary duty after finding that Daly failed to carry
his burden of proving damages, and that , if damages were properly awarded, the trial

c ourt ’ s calculatio n of damages was erro neou s. 

### {¶24} In his cross

- appeal, Da ly argues in a single as signment of error that t he
trial court e rred in fi nding that he failed to carry his burden of proving lost

- profit damages.

2 Testimony was presented on these claims at trial, but as t he claims were ul timately found to be without merit and tha t findin g is not being challenged on a ppeal, it is not necessary t o discuss the testimony offer ed in support of them.OHIO FIRST DISTRICT COURT OF APPEALS

13 Breach of Fid uciary Duty


### {¶25} We f

irst add ress the portion of defendants ’ assignment of error arguing
that the trial court e rred in g ranting jud gment in favor o f Daly because he lacked standing to pursue a direct claim for breach of fid uciary duty. Defendants do not challenge the trial co urt ’ s fi nding that a br ea ch of fiduciary duty occu rred , but rather
contend that the claim belonged to the corp oration, rather than to D aly individually. 

### {¶26} QCI is a close corporation . A close corporation is “ generally characterized as a corporation with fe w shareh olders who own sh ares that are not
traded on a securities market

. ” Vontz v. Mille r , 2016

- Ohio

- 8477, 1 11 N.E.3d 452, ¶ 30 (1 st Dist.) . In such a corporate structure, which resem bles a partne rship , “ the relationship be tween the shareholders must be one of trust, confidence and l oyalty to
thrive

. ” Id . at ¶ 31, quoting Crosby v. Beam , 47 Ohio St.3d 105, 10 8 , 548 N.E.2d 217 (1989)

. Although a close corporation provides many benefits, the nature of the corporate structure “ also gives majority or controlling s hareholders oppor tunities to oppress minor ity shareh olders

. ” Crosby at 108. For this reason, a heigh tened fiduciary duty exists between majority and minority shareholde rs in a clos e corporation. Id

. ; Maas v. Maas , 2 020
- Ohio

- 5160, 161 N.E.3d 863, ¶ 70 (1 st Dist.)

. 

### {¶27} This heightened fiduciary dut y applies not only to majorit y sh areholders, but to “ control ling sh areholde r s ” as well. Crosby at 109; Vontz at ¶ 35. And it has been held to apply in a close co rporation whe re the corporate owners are equal shar eholders (as are Daly and Rowe ) where one shareholde r who is not
technical ly a majority owner “ exercis e s ‘ control over the corporation to an extent that [the shareholder ’ s] actions dominate[ ]

. ’ ” Vont z at ¶ 35, qu otin g McLaughlin v.OHIO FIRST DISTRICT COURT OF APPEALS

14 Beeghly , 84 Ohio App.3 d 502, 506

- 507, 6 17 N.E.2d 703 (10th Dist. 1992) ; s ee Heaton v. Rohl , 1 93 Ohio App.3d 770, 2011

- Ohio

- 20 90, 954 N.E.2d 1 65, ¶ 54 (11 th Dist. ). 

### {¶28} A claim for a breach of this heightened fiduciary duty may be brought directly by a shareholde r o n her or his own b ehalf or derivati vely by a shareholder on behalf of the corporation

. Maas a t ¶ 71

. A derivative acti on is appropriat e where an injury directly affect s the corporation and only indirect ly affect s the shareholders,
whereas a direct a ction by a sh areholder is appr opriate wh e n a complaining
shar ehol der suff

er s an injury directly. Id. at ¶ 72. In a direct a ction, “ [t]he in jury to the shareholder must be separate and distinct from the injury to the corporation

. ” Id

. If the defendant ’ s wron gdoing has caused direct harm to th e corporate worth, the

ca use of a c tion accru es to the cor poration, rather than to an individual share holder.
Id. at ¶ 73. This is true : even though in an economic sense real harm may well be sustained by
the shareh olde rs as a result of r educed earnings, diminution in the value

o f owners hip, or accumulation of personal debt and liabilitie s from the

compa ny ’ s financial decline. The personal loss and liability sustained by the shareholder is both duplicative and indir ect t o the corporation ’ s right of action

. Id . at ¶ 77, quoting Ad air v. W ozniak , 23 Ohio St.3d 174, 178, 492 N.E.2d 426 (1986 ). 

### {¶29} Here, an un derstanding o f the cor porate structure of QCI is helpful in determining whether Daly suffere d an injury separate an d distinct from QCI. D aly and
Rowe each own 50 percent of QCI an d , until Daly ’ s eviction , split all corporate profits equall y. Per the part ies ’ standard business practices, pa yments received for sales of Braze Tape by CAI were initially deposite d into the QCI

- CAI joint

- agency account , andOHIO FIRST DISTRICT COURT OF APPEALS

15 then l ater transferred into a corporate account for QCI. After QCI paid all necessary

ex p enses, includin g rent, ut i lities, cost of materials, and bil ls submitted by CAI, all
remainin g profits were split equally between Daly and Rowe. QCI nev er retained any

e arnings. 

### {¶30} It is c lear from the record, and the parties ’ statements during oral

arg ument before thi s court, that profits earned on the sale of Braze T ape were not reinvested in to QCI, but rather were wholly distri buted to Daly an d Rowe. And it is
also c lear that QCI continued t o pay all its expenses. S o while QCI itself has not
receive d any payments f or the sale of Braze T a pe since Rowe evicted Daly in May of 2018, it has suffered no injury from Rowe ’ s breach of fid uciary duty : it has n ot incurred any debt a nd it would have di stributed all profit s to Da ly and Rowe

. Rowe ’ s actions have cause d no direc t harm to QCI ’ s corporate worth. See Maas , 2020
- Ohi o 5160, 161 N.E.3d 863 , at ¶ 7 3. Rather, it was Daly who suffered the injury in this case,
as Rowe r et ained all profits from Bra ze Tape sales, including those to which Daly was
entitl ed

. 

### {¶31} Because Daly su ffered an injury separate and distinct from QCI, he had standing to bring a direct claim for breach of fid u ciary duty, and the trial cour t did not
err in awarding judgment in his f avor on that claim.
Damages


### {¶32} Having determine d that no erro r occurred in th e trial court ’ s finding that Daly was directly injur ed by Rowe ’ s breach of fid uciary duty, we now turn to the
trial court ’ s award of da ma ges for that brea ch. 

### {¶33} In their assi gnment of error, defendants argue that the trial court erred
in awa rding damages af ter finding that Da l y failed t o carry his burden of p rovingOHIO FIRST DISTRICT COURT OF APPEALS

16 damages, and that , if damages were properly awarded, the trial court’s calcul ation of damages wa s erroneous. Daly simil arly a tta cks the trial court ’ s award of damages in
his c ross - appeal, arguing that the trial court erred in finding that he failed to carry his burden of proving damages. 

### {¶34} In a civil bench trial, we review a trial court ’ s award of damages to determine whet her it is against the manifest weight of the evidence. Dano pulos v. Am.
Tra d ing II, LLC

, 2021
- Ohio

- 2196, 174 N.E.3d 493, ¶ 7 (1 st Dist. ). Under such review , t h e trial court ’ s judgment will only be reversed if th e court c learly l ost its way and
created a manifest miscarriage of justice

. Id

. 

### {¶35} In determining wheth er th e trial cou rt ’ s award of damages was supported by the weight of the evide nce, we are mindful that “ [a]n award of damag es must be shown with a reason able degree of ce rtainty and in some manner other than mere speculation, conjecture, or surmise. ” Id

. at ¶ 9, qu oting Capital Plus, Inc. v. Parker Ents. Imperial Dist., Inc. , 1st D ist. Hamilton No. C

- 030046, 2004

- Ohio

- 3896, ¶ 53

. But “ once a plain tiff es tablishes a right to damages, plaintiff ’ s r ight will not be denied merely because the damages cannot be calc ulated with mathematical certainty

. ” Id ., quoting Austin v. Chukwuani , 2 017
- Ohio

- 106, 80 N.E.3d 1199, ¶ 21 (8th Dist.)

. 

### {¶36} Here, with respect to dam ages, the trial c ourt found tha t Daly ha d

“ presented a theory of lost profits at trial, but failed to c arry his burden of proof regarding the alleged lost profits. Plaintiff ’ s pro o f of gross revenue and profit was speculative. ” The court further found th at a lthough Daly had failed to prove lost

p rofits, he had prov ed $45,090.47 in d amages for Rowe ’ s breac h of fid uciar y d uty in wrongfully taking corporate a s sets for his own use. So , contrary to defend ants ’OHIO FIRST DISTRICT COURT OF APPEALS

17 argumen t , the trial court did not find that Daly had entirely fail ed to c arry his burde n of proving damages

. 

### {¶37} Turning to the trial co urt ’ s finding that Daly ’ s proof of lost profits was speculative , we hol d that the trial co urt ’ s finding was against the manifest weight of
the evi dence. The da mages estab lished by Daly we re imprecise, but they wer e not
specu la tive. 

### {¶38} Daly testified to QCI ’ s average annual sales and i ts pr ofit margins, as well the percentage of the profits that he and Rowe had received from those sal es, in
the fi ve - year period prece ding his eviction from th e premis es. In addition, Daly identified multiple i nv oic es that the parties agreed we re for CAI’s sal es of Braze Tape from April of 2018 through sometime in 2021. He testified that these invo ices totaled $338,711.37, and that he never re ceived any of his share of the profits for these sales. Daly also i den tif

ied additional invoices submi tted by CAI to v arious customers following the eviction that were in dispute by t he parties as to whether t hey were for the sales of Braze Tap e or for ot her products manu factured by CAI. Rowe als o testified about these disp uted invoices, and he conceded t hat many of the invoices were for the sale of Braze Tape

. It was established t hat p ayments received for th ese inv oices w ere

o wed to QCI , but were never transferred into QCI ’ s account and never sh ared with Daly

. 

### {¶39} Daly opined that based on the histori cal s hare of profits that he had
received prior to the eviction, he was entitled to receive in profits approximately 16.3 percent of the gross sales made duri ng the ti me perio d subse quent to the e victi on . 

### {¶40} The record establishes that while Daly was unable to p rovid e an exact amount of sales or profit that QCI had received in the disputed time period, heOHIO FIRST DISTRICT COURT OF APPEALS

18 provided historical testimony about the corporation’s ann ual earnings and his share of those earning s in the five

- year period prior to the eviction , as well as testi mony about the s ales that QCI had made in th e time period following the eviction

. There was nothing speculative about Daly ’ s testimony or the evi de nce presented reg arding QCI ’ s lost profit s . The trial court ’ s ho lding to the contrary was against the manif e st weight of the evidence

. 

### {¶41} Daly’s assignment of error challenging the trial court’s finding that he failed to carry his burden of proving damages is sustained, an d the trial court’s award of damages is reversed. We need not address the remaind er of the defendants’ assignment of error on the issue of damages, as it challenges the now

- reversed award of damages. The defendants’ assignment of error i s accordingly ove rruled.

Conclusion


### {¶42} Because Daly suffe red an injury s eparate and disti nct from QCI, t he
trial co urt did not err in f inding t hat he had stand ing to bring a direct claim for brea ch
of fid uciary duty. But the trial court err ed in find ing t hat Daly failed t o carry his burden of p roving damage s an d in finding that Daly ’ s p roof of lost pro fi ts was speculative , a nd its award of damag es is reversed. The case is remanded to the trial

court to determine an aw ard of damages consistent with the l aw and this opin ion

.

J u d gment affirmed in part, reversed in part, and ca use remanded

.

B ERGERON and B OCK , JJ. , concur .

Please n ote: The court has recorded its own entry on the date of the release of this opinion

.