[Cite as Grigoryan v. MaxOut Sports, L.L.C., 2017-Ohio-6982.]

Court of Appeals of Ohio

EIGHTH APPELLATE DISTRICT 

COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION 

No. 105251

GHAZAROS GRIGORYAN

PLAINTIFF-APPELLEE 

vs. 

MAXOUT SPORTS, L.L.C.

DEFENDANT-APPELLANT 

JUDGMENT: 

AFFIRMED

Civil Appeal from the 

Cuyahoga County Court of Common Pleas 

Case No. CV-16-859746 

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

RELEASED AND JOURNALIZED: July 27, 2017 
ATTORNEY FOR APPELLANT

Kenneth L. Gibson 

Gibson & Moran, L.L.C. 

234 Portage Trail 

P.O. Box 535 

Cuyahoga Falls, Ohio 44221 

ATTORNEYS FOR APPELLEE

Samuel J. Lauricia, III 

Matthew Miller 

Timothy R. Obringer 

Scott J. Orille 

Weston Hurd, L.L.P. 

Tower at Erieview 

1301 East 9th Street, Suite 1900 

Cleveland, Ohio 44114 
FRANK D. CELEBREZZE, JR., J.: 

{¶1} Defendant-appellant, MaxOut Sports, L.L.C. (“MaxOut”), brings this appeal 

challenging the trial court’s order granting summary judgment in favor of 

plaintiff-appellee, Ghazaros Grigoryan (“appellee”), on appellee’s claim for declaratory 

judgment. Specifically, MaxOut argues that the trial court erred by determining that a 

valid and enforceable contract existed permitting appellee to compete against MaxOut 

and by denying its motion for a preliminary injunction. After a thorough review of the 

record and law, this court affirms. 

I. Factual and Procedural History

{¶2} The instant matter arose from a dispute between appellee and MaxOut 

regarding the noncompete provision in MaxOut’s operating agreement. MaxOut is a 

martial arts training and fitness center in Bedford Heights, Ohio. Appellee was a former 

manager and director of training with MaxOut. 

{¶3} MaxOut’s managers executed an operating agreement in December 2012. 

The operating agreement identified the company’s members, managers, and officers, set 

forth the members’ ownership of the company, and set forth various policies pertaining to 

the company’s operation. The operating agreement also contained a noncompete 

provision that, among other things, prohibited any manager from conducting the same or 

similar business activities within a 50-mile radius of MaxOut. 
{¶4} The operating agreement identified the following four managers and provided 

that these managers were responsible for managing the company: (1) Shane Hudson 

(“Hudson”), (2) Corneliu Mihalca (“Mihalca”), (3) Alexander Bagne (“Bagne”), and (4) 

appellee. In or around January 2016, appellee expressed an interest in withdrawing from 

MaxOut and opening his own martial arts training facility. 

{¶5} On January 19, 2016, appellee and Hudson executed a withdrawal 

agreement. 1 Pursuant to the withdrawal agreement, appellee would surrender his 

ownership share in the company to Hudson in exchange for being relieved from the 

noncompete provision’s prohibition against conducting the same or similar business 

activities within a 50-mile radius of MaxOut. 

{¶6} After entering into the withdrawal agreement, appellee opened a martial arts 

training facility in Mayfield Village, Ohio, on January 30, 2016. On February 5, 2016, 

an attorney acting on behalf of MaxOut sent a cease and desist letter to appellee, asserting 

that he was still subject to the operating agreement’s noncompete provision. 

{¶7} On March 2, 2016, appellee filed a complaint for declaratory judgment 

pursuant to R.C. 2721.03. In his complaint, appellee requested a declaratory judgment 

that he was, in fact, entitled to operate his own martial arts training facility pursuant to the 

withdrawal agreement. Appellee attached the operating agreement, the withdrawal 

agreement, and the letter from MaxOut’s counsel to his complaint. On March 29, 2016, 

 1

It is unclear whether the withdrawal agreement was drafted by appellee, Hudson, or another 

representative of MaxOut. 
MaxOut filed an answer and asserted a counterclaim against appellee for breach of the 

noncompete provision. 

{¶8} MaxOut filed a motion for summary judgment and a preliminary injunction 

on August 31, 2016. Appellee filed a motion for summary judgment on September 1, 

2016. 

{¶9} On November 7, 2016, the trial court granted appellee’s motion for summary 

judgment in part and denied the motion in part. The trial court granted summary 

judgment in appellee’s favor on his claim for declaratory relief, concluding that the 

withdrawal agreement was a valid contract that permitted appellee to compete against 

MaxOut. The court denied appellee’s motion for summary judgment on MaxOut’s 

counterclaim for breach of the noncompete provision. Furthermore, the trial court 

denied MaxOut’s motion for summary judgment and preliminary injunction. 

{¶10} On December 8, 2016, the parties filed an agreed order in which MaxOut 

agreed to dismiss its counterclaim for breach of the noncompete provision without 

prejudice, rendering the trial court’s November 7, 2016 judgment a final appealable 

order. The trial court approved the parties’ agreed order. 

{¶11} On December 13, 2016, MaxOut filed the instant appeal challenging the 

trial court’s judgment. MaxOut assigns two errors for review: 

I. The trial court erred in granting [s]ummary [j]udgment to [appellee] and 

denying summary judgment to Max[O]ut on the issue of the validity of the 

withdrawal agreement. 

II. The trial court erred in failing to grant injunctive relief. 
II. Law and Analysis 

A. Summary Judgment

{¶12} This court reviews an appeal from summary judgment under a de novo 

standard of review. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 

241 (1996). We accord no deference to the trial court’s decision and independently 

review the record to determine whether summary judgment is appropriate. 

{¶13} Pursuant to 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 nonmoving party, reasonable minds can reach only one conclusion that is 

adverse to the nonmoving party. 

{¶14} On a motion for summary judgment, the moving party carries an initial 

burden of identifying specific facts in the record that demonstrate his or her entitlement to 

summary judgment. Dresher v. Burt, 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 

(1996). If the moving party fails to meet this burden, summary judgment is not 

appropriate. However, if the moving party meets this burden, the nonmoving party has 

the reciprocal burden to point to evidence of specific facts in the record demonstrating the 

existence of a genuine issue of material fact for trial. Id. at 293. Summary judgment is 

appropriate if the nonmoving party fails to meet this burden. Id. 

B. Interpretation of the Operating Agreement

{¶15} The withdrawal agreement provides: 
[appellee] expressed interest in purchasing a competing business to 

[MaxOut], and as such, agreed to withdrawal as a member, manager, and 

officer of [MaxOut]. As part of this withdrawal, [appellee] agreed to 

relinquish his share in [MaxOut] to Shane Hudson. 

In exchange for [appellee’s] withdrawal, [MaxOut] agrees not to enforce 

the specific term prohibiting managers from engaging in “any enterprise 

conducting business activities that are the same as or similar to MaxOut 

Sports within a 50-mile radius of [MaxOut]” per the non-compete 

provisions in the [operating agreement]. All other provisions in the 

non-compete provision, including a prohibition from “directly or indirectly 

solicit[ing] business from customers, clients, and prospective clients of 

[MaxOut]” as well as the prohibition from “directly or indirectly solicit[ing] 

any employee or independent contractor of [MaxOut] for employment 

elsewhere” shall remain in full effect. 

 

The withdrawal agreement proposed to relieve appellee from the prohibition in the 

operating agreement’s noncompete provision against conducting the same or similar 

business activities within a 50-mile radius of MaxOut. Accordingly, the withdrawal 

agreement was, in effect, an amendment of the operating agreement. 

{¶16} In order to determine whether the withdrawal agreement is valid and 

enforceable, we must determine whether appellee and Hudson had authority to amend the 

operating agreement’s noncompete provision. In order to make this determination, it is 

necessary to review the terms and provisions set forth in the operating agreement. 

{¶17} As noted above, the operating agreement provides that MaxOut will be 

managed by four managers — Hudson, Mihalca, Bagne, and appellee. The operating 

agreement sets forth each manager’s ownership of the company: Hudson, 30%; Mihalca, 

30%; Bagne, 5%, and appellee, 30%.2

 

 2

 The remaining 5% is owned by Dan Pazara who is not listed as a manager. 
{¶18} The operating agreement’s voting provision provides, in relevant part: 

Managers shall be entitled to vote based upon the following: 

One (1) vote for each 10% ownership of stock; one half (0.5) vote for each 

5% ownership of stock. 

Regular matters that require a vote of the managers shall be approved by a 

majority vote. 

A majority vote of the managers is required in order to authorize the 

following acts: 

* * * 

-amendment of the Operating Agreement 

* * * 

Action may be taken without a meeting if a majority vote of the managers 

consent to the action in writing. 

 

Accordingly, there were a total of nine and one-half manager votes — Hudson, Mihalca, 

and appellee each had three votes, and Bagne had one-half vote. 

{¶19} The operating agreement’s noncompete provision provides, in relevant part: 

[u]nless a majority approval is provided by all managers, no manager, for 

any reason, shall directly or indirectly solicit business from customers, 

clients and prospective clients of MaxOut Sports. Nor shall any manager 

engage in (as employee, instructor, principal, shareholder, partner, 

consultant, or any other capacity) any enterprise conducting business 

activities that are the same as or similar to MaxOut Sports within a 50-mile 

radius of MaxOut Sports. Manager shall not directly or indirectly solicit 

any employee or independent contractor of MaxOut Sports for employment 

elsewhere. 

The parties dispute the meaning of the language “[u]nless a majority approval is provided 

by all managers” and the approval that is required in order to amend the noncompete 
provision by approving the withdrawal agreement. Appellee contends that this language 

refers to a majority vote as provided in the operating agreement’s voting provision. On 

the other hand, MaxOut asserts that this language refers to the approval of a majority of 

the managers — three out of the four managers — rather than a majority vote. 

{¶20} In his motion for summary judgment, appellee argued that his and Hudson’s 

approval of the withdrawal agreement was sufficient because together, he and Hudson 

represented a majority of the managers’ vote. Furthermore, appellee argued that he and 

Hudson were the only managers who were authorized to vote on and approve the 

withdrawal agreement. In support of his argument, appellee directed the trial court to 

MaxOut’s Internal Revenue Service tax document for the 2015 calendar year. 

{¶21} The tax document listed four MaxOut “partners” and indicated the partner’s 

share of profit, loss, and capital: (1) Hudson, 60%; (2) Mihalca, 0%; (3) Bagne, 0%; and 

(4) appellee, 40%. Appellee’s argument is based on an application of the operating 

agreement’s voting and “profit allocation” provisions. The profit allocation provision 

provides, “[n]et income or net loss of the LLC will be allocated to the members in 

proportion to their ownership of the LLC.” Accordingly, appellee argues that because 

Mihalca’s and Bagne’s share of the profit, loss, and capital was 0%, their ownership of 

the company was 0% and, thus, they were not entitled to vote on or approve the 

withdrawal agreement. 

{¶22} On the other hand, MaxOut argued that the withdrawal agreement needed to 

be approved by a majority of the managers — three out of the four managers — rather 
than a majority vote of the managers. After review, however, we find that the operating 

agreement is devoid of any language supporting MaxOut’s position. 

{¶23} The purpose of contract construction is to discover and effectuate the intent 

of the parties. Saunders v. Mortensen, 101 Ohio St.3d 86, 2004-Ohio-24, 801 N.E.2d 

452, ¶ 9. The intent of the parties is presumed to reside in the language they chose to 

use in their agreement. Kelly v. Med. Life Ins. Co., 31 Ohio St.3d 130, 132, 509 N.E.2d 

411 (1987). Principles of contract interpretation preclude us from rewriting the contract 

by reading into its language or terms that the parties omitted. DDR Rio Hondo, L.L.C. v. 

Sunglass Hut Trading, L.L.C., 8th Dist. Cuyahoga No. 98986, 2013-Ohio-1800, ¶ 23. 

{¶24} In the instant matter, MaxOut essentially asks this court to rewrite the 

operating agreement by reading into it that the approval of three out of the four managers 

is required in order to modify the operating agreement and/or approve the withdrawal 

agreement. MaxOut’s contention is expressly contradicted by the voting provision’s 

language that “[a] majority vote of the managers is required in order to authorize * * * 

amendment of the operating agreement.” The operating agreement does not draw a 

distinction between “voting” and “approving.” In fact, the voting provision’s language 

that “[r]egular matters that require a vote of the managers shall be approved by a majority 

vote” suggests that voting and approving are one and the same. 

{¶25} After reviewing the record, we find that appellee and Hudson had the 

authority to approve the withdrawal agreement. The withdrawal agreement amended the 

operating agreement’s noncompete provision. As noted above, the voting provision 
specifically provides that a majority vote is required in order to authorize an amendment 

of the operating agreement. It is undisputed that appellee and Hudson represented a 

majority of the managers’ vote. Accordingly, the trial court properly declined to adopt 

MaxOut’s interpretation that the approval of three out of the four managers was required, 

rather than a majority vote, in order to approve the withdrawal agreement. 

{¶26} Regarding the 2015 tax document, MaxOut argued that a manager’s 

ownership was governed by the operating agreement, not the tax document, and that the 

operating agreement cannot be amended by any tax documentation. MaxOut is 

essentially asking this court to apply the operating agreement’s “members” provision, 

which sets forth the managers’ ownership of the company, but not apply the operating 

agreement’s profit allocation provision. MaxOut cannot have it both ways. Although 

the operating agreement may not have been formally amended to show a change in the 

managers’ ownership interest in the company, an examination of the operating 

agreement’s members and profit allocation provisions and the 2015 tax document clearly 

reflect that there had, in fact, been a change in the managers’ ownership of the company 

between the execution of the operating agreement in December 2012, and the execution 

of the withdrawal agreement in January 2016. 

{¶27} For all of the foregoing reasons, we find no merit to MaxOut’s assertion that 

the withdrawal agreement needed to be approved by a majority of the managers rather 

than a majority vote of the managers. 

C. Condition Precedent
{¶28} In its motion for summary judgment, MaxOut further argued that Hudson’s 

approval of the withdrawal agreement was conditioned upon Mihalca’s approval of the 

agreement, and this condition was not satisfied. 

Under basic contract law, “[a] condition is an event, not certain to occur, 

which must occur, unless its non-occurrence is excused, before performance 

under a contract becomes due.” Restatement of the Law 2d, Contracts, 

Section 224 (1981). A condition precedent is an event that must take place 

before a duty to perform arises. Atelier Dist. v. Parking Co. of Am., Inc., 

10th Dist. Franklin No. 07AP-87, 2007-Ohio-7138, ¶ 35. “Whether a 

provision in a contract is a condition precedent is a question of the parties’ 

intent. Intent is ascertained by considering not only the language of a 

particular provision, but also the language of the entire agreement and its 

subject matter.” Troha v. Troha, 105 Ohio App.3d 327, 334, 663 N.E.2d 

1319 (2d Dist.1995). Conditions precedent are not favored under contract 

law and will not be found unless the agreement plainly shows an intent to 

the contrary. Campbell v. George J. Igel & Co., [2013-Ohio-3584, 3 

N.E.3d 219, ¶ 13 (4th Dist.)]. 

(Emphasis added.) Westlake v. VWS, Inc., 8th Dist. Cuyahoga No. 100180, 

2014-Ohio-1833, ¶ 24. 

{¶29} In the instant matter, we cannot say that the withdrawal agreement plainly 

shows that the parties intended to create a condition precedent. The terms of the 

withdrawal agreement are clear and unambiguous. The express terms of the agreement 

require that appellee withdraw as a member, officer, and manager of MaxOut, relinquish 

his ownership shares to Hudson, and comply with the noncompete provision’s 

prohibitions against soliciting business from MaxOut and MaxOut’s employees. 

Furthermore, the express terms of the agreement require that MaxOut relieve appellee 

from the noncompete provision’s prohibition against conducting the same or similar 

business activities within a 50-mile radius of MaxOut. 
{¶30} The withdrawal agreement’s language does not modify the parties’ 

obligations and there is no language that evidences an intent to make these obligations 

conditional. The withdrawal agreement lacks language or words that are typically found 

in a conditional contract, including, but not limited to, “condition,” “conditional,” 

“contingent,” “subject to,” or “unless.” See Campbell at ¶ 21. The agreement’s 

language does not indicate that Hudson’s approval is conditional in any way, and makes 

no reference to Mihalca’s approval of the agreement. Had the parties intended to make 

Hudson’s approval conditioned upon Mihalca’s approval, they easily could have inserted 

language to that effect. 

{¶31} In support of its argument that Mihalca’s approval of the withdrawal 

agreement was a condition precedent, MaxOut attached affidavits of Hudson and Mihalca 

to its motion for summary judgment. First, Hudson averred, in relevant part, 

I had grave doubts about whether [the withdrawal] agreement would be fair 

to the other members and I told [appellee] that I would only approve this 

agreement if it were approved also by [Mihalca] who was another primary 

member/manager and who had loaned large sums of money to the company 

in order to provide the initial financing. I signed the withdrawal 

agreement, but did not deliver the signed copy to [appellee], but rather gave 

it to [Mihalca] for his consideration. I told [Mihalca] that if he approved of 

the withdrawal agreement, then he could send it with my approval to 

[appellee]. Ultimately neither [Mihalca] nor any of the other members or 

managers approved the withdrawal agreement and to my knowledge the 

partially executed withdrawal agreement was never delivered to [appellee]. 

{¶32} Second, Mihalca averred, in relevant part, 

I received a copy of the proposed withdrawal agreement from [Hudson] 

which he had signed but not delivered to [appellee] and was told that if I 

approved the agreement I could send it with his and my signature to 

[appellee]. 
After due consideration, I determined that there was nothing of benefit to 

[MaxOut] in the withdrawal agreement. I therefore did not approve the 

withdrawal agreement and did not forward the copy of the agreement with 

[Hudson’s] signature to [appellee]. 

{¶33} It is undisputed that these affidavits are parol evidence. The parol evidence 

rule prohibits a party to a contract from introducing evidence of alleged or actual 

agreements that contradict the unambiguous terms of a written contract. Grimmer v. 

Shirilla, 8th Dist. Cuyahoga No. 103921, 2016-Ohio-5423, ¶ 20, citing Ed Schory & 

Sons, Inc. v. Francis, 75 Ohio St.3d 433, 440, 662 N.E.2d 1074 (1996). However, Ohio 

courts have held that parol evidence is admissible to establish a condition precedent to the 

existence of a contract. 

{¶34} MaxOut directs this court to Carter v. New Buckeye Redevelopment Corp., 

8th Dist. Cuyahoga No. 72501, 1998 Ohio App. LEXIS 1414 (Apr. 2, 1998). There, this 

court held that even if a condition precedent is not included in the language of a contract, 

parol evidence is admissible to establish that the condition precedent was orally agreed 

upon. Id. at 7, citing Riggs v. Std. Slag Co., 9th Dist. Summit No. 16199, 1993 Ohio 

App. LEXIS 5431 (Nov. 10, 1993), and Frankel Chevrolet Co. v. Snyder, 37 Ohio App. 

378, 174 N.E. 751 (8th Dist.1930). This court explained, “[t]he parol evidence 

establishing a condition precedent does not contradict the terms of the document, but 

establishes a separate agreement that the document would only go into effect if certain 

contingencies occurred.” Carter at 7-8. 

[E]ven a condition precedent may not be shown by parol evidence when the 

condition is inconsistent with the express terms of the writing. When the 
subject matter of a condition precedent is dealt with in the written 

instrument, in any form, the condition may not be shown by parol evidence 

to be different from the manner in which it is expressed in the writing. 

 

Villa Realty Co., Inc. v. Allied Invest. Credit Co., 8th Dist. Cuyahoga No. 35585, 1977 

Ohio App. LEXIS 9337 (July 14, 1977). Accord Campbell, 2013-Ohio-3584, 3 N.E.3d 

219, at ¶ 24; Hiatt v. Giles, 2d Dist. Darke No. 1662, 2005-Ohio-6536, ¶ 32. 

{¶35} In the instant matter, as noted above, the withdrawal agreement 

unambiguously imposes a contractual duty on appellee and MaxOut to perform. 

Specifically, the withdrawal agreement provides, “[i]n exchange for [appellee’s] 

withdrawal, [MaxOut] agrees not to enforce the specific term prohibiting managers from 

engaging in ‘any enterprise conducting business activities that are the same as or similar 

to [MaxOut] within a 50-mile radius of [MaxOut.]’” Because the withdrawal agreement 

specifically addresses MaxOut’s duties and obligations, any parol evidence, such as 

Hudson’s and Mihalca’s affidavits, offered to prove a contingent or conditional 

relationship contradict the express terms of the agreement. Accordingly, it would be 

inappropriate to rely on these affidavits. See Campbell at ¶ 24. 

{¶36} We further note that Hudson’s and Mihalca’s affidavits are the only parol 

evidence in the record regarding the alleged condition precedent. Because MaxOut 

sought injunctive relief prohibiting appellee from conducting his competing business, 

these affidavits are undoubtedly self-serving. 

{¶37} The nonmoving party cannot avoid summary judgment “by merely 

submitting a self-serving affidavit that simply contradicts the evidence offered by the 
moving party.” FIA Card Servs., N.A. v. Pfundstein, 8th Dist. Cuyahoga No. 101808, 

2015-Ohio-2514, ¶ 11. “Permitting a nonmoving party to avoid summary judgment by 

asserting nothing more than ‘bald contradictions of the evidence offered by the moving 

party’ would render the summary judgment exercise meaningless.” Id., quoting Greaney 

v. Ohio Turnpike Comm., 11th Dist. Portage No. 2005-P-0012, 2005-Ohio-5284, ¶ 16. 

{¶38} For all of the foregoing reasons, we find no merit to MaxOut’s contention 

that Mihalca’s approval was a condition precedent. Aside from the self-serving 

assertions in Hudson’s and Mihalca’s affidavits, there is no evidence in the record that 

Mihalca’s approval was a condition precedent to appellee’s or MaxOut’s duties to 

perform under the withdrawal agreement. Furthermore, as noted above, Mihalca’s 

approval was not necessary in order to approve the withdrawal agreement because the 

agreement was approved by Hudson and appellee who, together, represented a majority 

vote. 

D. Delivery

{¶39} MaxOut argues that the withdrawal agreement was not valid because the 

agreement was never signed and delivered back to appellee. MaxOut further asserts that 

the signed withdrawal agreement was “never delivered to [appellee] as an executed 

document.” Appellant’s reply brief at 1. 

{¶40} Appellee attached a copy of the withdrawal agreement to his complaint. 

This copy did not contain any signatures. In support of his motion for summary 

judgment, appellee attached another copy of the withdrawal agreement. This copy 
contained the signatures of appellee and Hudson. In its reply brief, however, MaxOut 

contends that the copy of the signed withdrawal agreement was only provided to appellee 

during the exchange of discovery. 

{¶41} In its appellate brief, MaxOut asserts that appellee signed the withdrawal 

agreement and that Hudson “conditionally signed” the withdrawal agreement, but did not 

deliver the “conditionally signed” agreement to appellee. Appellant’s brief at 3. 

Furthermore, MaxOut maintains that the withdrawal agreement was partially and 

conditionally executed. Appellant’s brief at 4. 

{¶42} As noted above, we find no merit to MaxOut’s contention that Hudson 

conditionally approved the withdrawal agreement and that Mihalca’s approval was a 

condition precedent. Furthermore, MaxOut’s contention that the withdrawal agreement 

was partially approved or executed is belied by the record. 

{¶43} The withdrawal agreement cannot be partially executed if it was signed by 

Hudson, alone, or by Hudson and appellee. As noted above, the 2015 tax document 

reflects that Hudson’s share of the company’s profit, loss, and capital was 60%, and 

appellee’s share of the company’s profit, loss, and capital was 40%. Accordingly, there 

were a total of ten manager votes — Hudson had six and appellee had four. Hudson 

alone represented a majority vote. Hudson and appellee were the only managers with 

voting authority when the withdrawal agreement was executed in January 2016. 

{¶44} The affidavits of both Hudson and Mihalca acknowledge that Hudson did, in 

fact, sign the withdrawal agreement. Hudson’s affidavit provides, in relevant part, “I 
signed the Withdrawal Agreement, but did not deliver the signed copy to [appellee], but 

rather gave it to [Mihalca] for his consideration.” Mihalca’s affidavit provides, in 

relevant part, “I received a copy of the proposed Withdrawal Agreement from [Hudson] 

which he had signed but not delivered to appellee[.]” 

{¶45} In Estate of Brewer v. Dowell & Jones, Inc., 8th Dist. Cuyahoga No. 80563, 

2002-Ohio-3440, this court explained, “physical delivery of a contract is not essential to 

create a legally enforceable agreement. Indus[.] Heat Treating Co. v. [Toledo Stamping 

and Mfg. Co.], 104 Ohio App.3d 499, 662 N.E.2d 837 [(6th Dist.1995)]. Where the 

parties intend to be bound by the contract, it is valid[.]” Id. at ¶ 11. Accord Melia v. 

OfficeMax N. Am., Inc., 8th Dist. Cuyahoga No. 87249, 2006-Ohio-4765, ¶ 21. 

{¶46} MaxOut does not dispute that Hudson signed the withdrawal agreement. 

Rather, MaxOut argues that (1) Hudson’s approval was conditioned upon Mihalca’s 

approval and (2) the withdrawal agreement was only partially executed because it was not 

signed or approved by Mihalca. 

{¶47} The fact that Mihalca and Bagne did not approve or sign the withdrawal 

agreement has no effect on the agreement’s validity. In fact, the 2015 tax document 

reflects that they had no share of the company’s profit, loss, and capital, and thus, no 

voting authority. 

{¶48} For all of these reasons, we find no merit to MaxOut’s contention that the 

withdrawal agreement was not valid and enforceable because a signed copy was not 

physically delivered to appellee. 
E. R.C. 1705.31

{¶49} MaxOut argues that the trial court erred by failing to apply R.C. 1705.31 in 

determining whether the withdrawal agreement was valid and enforceable. 

{¶50} R.C. 1705.31(A), governing contracts in which a manager of a limited 

liability company has a financial or personal interest, provides, 

Unless otherwise provided in the operating agreement, the following apply: 

(1) No contract, action, or transaction is void or voidable with respect to a 

limited liability company because it is between or affects the company and 

one or more of its members, managers, or officers, or because it is between 

or affects the company and any other person in which one or more of its 

members, managers, or officers are members, managers, directors, trustees, 

or officers or have a financial or personal interest, or because one or more 

interested members, managers, or officers participate in or vote at the 

meeting that authorizes the contract, action, or transaction, if any of the 

following applies: 

(a) The material facts as to his or their relationship or interest and as to the 

contract, action, or transaction are disclosed or are known to the members 

or managers, and the members or managers, in good faith reasonably 

justified by those facts, authorize the contract, action, or transaction by the 

affirmative vote of a majority of the disinterested members or managers, 

even though the disinterested members or managers constitute less than a 

quorum of the members or managers. 

(b) The material facts as to his or their relationship or interest and as to the 

contract, action, or transaction are disclosed or are known to the members 

entitled to vote on the contract, action, or transaction, and the contract, 

action, or transaction is specifically approved at a meeting of the members 

held for that purpose by the affirmative vote of the members entitled to 

exercise a majority of the voting power of the company held by persons not 

interested in the contract, action, or transaction. 

(c) The contract, action, or transaction is fair to the company as of the time 

it is authorized or approved by the members or managers. 
{¶51} MaxOut argues that none of the three scenarios set forth in 

R.C. 1705.31(A)(1)(a), (b), and (c) apply. First, MaxOut asserts that there was not full 

disclosure of all the material facts because appellee failed to disclose that he had already 

solicited business from MaxOut customers and clients by informing them that he was 

leaving the company and opening up his own training facility. Second, MaxOut 

contends that Hudson and appellee were not disinterested parties to the contract because 

appellee was relieved from the noncompete provision and Hudson received appellee’s 

interest in the company. Third, MaxOut argues that the withdrawal agreement was not 

fair to the company because only Hudson benefitted from the agreement by receiving 

appellee’s ownership and the company received no benefit from the agreement. 

{¶52} MaxOut emphasizes that “the withdrawal agreement was not approved by a 

majority vote of disinterested members[.]” Appellant’s brief at 9. Initially, we note 

that the operating agreement provides that the company’s managers are entitled to vote 

based on their ownership of stock in the company. The operating agreement does not 

provide for voting by members. Furthermore, this argument — that the withdrawal 

agreement had to be approved by a majority vote of the disinterested members — 

conflicts with MaxOut’s assertion that the withdrawal agreement had to be approved by 

three out of the four managers. 

{¶53} Nevertheless, MaxOut’s reliance on R.C. 1705.31 is misplaced. It is 

undisputed that both Hudson and appellee were financially or personally interested in the 

withdrawal agreement. Pursuant to the withdrawal agreement, appellee would be 
relieved from the noncompete provision’s prohibition against conducting the same or 

similar business activities within a 50-mile radius of MaxOut, and Hudson received 

appellee’s ownership in the company. 

{¶54} The only disinterested managers were Mihalca and Bagne. However, as 

noted above, MaxOut’s 2015 tax document reflects that both Mihalca’s and Bagne’s 

share of the profit, loss, and capital was 0%. Because the operating agreement provides 

that net income or net loss of the company is allocated in proportion to the members’ 

ownership of the company, the only logical conclusion is that Mihalca’s and Bagne’s 

ownership of MaxOut was 0%. Without any ownership of stock in the company, neither 

Mihalca nor Bagne was entitled to vote on the withdrawal agreement. 

{¶55} Accordingly, although Hudson and appellee both had an interest in the 

withdrawal agreement, the record reflects that they were the only managers who shared 

the company’s profit, loss, and capital, and thus, were the only managers who were 

entitled to vote on or approve the withdrawal agreement. Therefore, the trial court did 

not err by failing to apply R.C. 1705.31. 

{¶56} For all of the foregoing reasons, we find that the trial court properly granted 

summary judgment in appellee’s favor and concluded that the withdrawal agreement was 

a valid contract. First, the withdrawal agreement was approved by appellee and Hudson 

who, together, represented a majority of the managers’ vote. Second, Mihalca’s approval 

was not a condition precedent to the parties’ duties to perform under the withdrawal 
agreement. Third, R.C. 1705.31 is inapplicable. Accordingly, MaxOut’s first 

assignment of error is overruled. 

F. Injunctive Relief

{¶57} In its second assignment of error, MaxOut argues that the trial court erred by 

failing to grant injunctive relief. MaxOut concedes, however, that the trial court’s 

determination that the withdrawal agreement modified the noncompete provision 

rendered its motion for preliminary injunction moot. 

{¶58} In light of our determination that the withdrawal agreement is a valid and 

enforceable contract, and that the trial court properly granted summary judgment in 

appellee’s favor, MaxOut’s second assignment of error pertaining to its motion for a 

preliminary injunction is moot. 

III. Conclusion 

{¶59} After thoroughly reviewing the record, we find that the trial court properly 

granted summary judgment in favor of appellee on his declaratory judgment claim. The 

withdrawal agreement was a valid and enforceable contract that relieved appellee from 

the noncompete provision’s prohibition against conducting the same or similar business 

activities within a 50-mile radius of MaxOut. 

{¶60} Judgment affirmed. 

It is ordered that appellee recover from appellant 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. 

FRANK D. CELEBREZZE, JR., JUDGE 

EILEEN T. GALLAGHER, P.J., and 

PATRICIA ANN BLACKMON, J., CONCUR