Court Opinion

ID: 4553281
Source: CourtListenerOpinion
Date Created: 2020-08-05 16:09:31.361222+00
Date Added: 2024-06-11T09:25:33.773972
License: Public Domain

[Cite as White v. Pitman, 2020-Ohio-3957.]

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

BRYAN WHITE,                                         APPEAL NO. C-190441
                                                 :
                                                     TRIAL NO. A-1901247
COOL COUNTRY CORPORATION,
                                                        O P I N I O N.
  and                                            :

TUPPER PLAINS INVESTMENTS,
LLC,                                             :

    Plaintiffs-Appellants,
                                                 :
  vs.

AARON PITMAN,                                    :

API DOMAIN CAPITAL, LLC,
                                                 :
RA DOMAIN CAPITAL, LLC,

HP INSURANCE GROUP, INC.,                        :

AUTOINSURANCENOW, LLC,
                                                 :
PERSONALINJURY.ORG, LLC,

COOL COUNTRY GROUP, LLC,                         :

  and
                                                 :
RYAN GOLDSCHMIDT,

    Defendants-Appellees.                        :
                   OHIO FIRST DISTRICT COURT OF APPEALS

Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is:      Affirmed in Part, Reversed in Part, and Cause
                                Remanded

Date of Judgment Entry on Appeal: August 5, 2020

Carlile Patchen & Murphy, LLP, Matthew S. Brown and Joseph M. Patchen, for
Plaintiffs-Appellants,

Graydon Head & Ritchey LLP and Daniel J. Knecht, for Defendants-Appellees Aaron
Pitman, API Domain Capital, LLC, HP Insurance Group, Inc., AutoinsuranceNow,
LLC, Personalinjury.org, LLC, and Cool Country Group, LLC,

Murphy Landen Jones PLLC and Michael S. Jones, for Defendants-Appellees Ryan
Goldschmidt and RA Domain Capital, LLC.

                                          2
                       OHIO FIRST DISTRICT COURT OF APPEALS

MYERS, Presiding Judge.

       {¶1}     Plaintiffs-appellants Bryan White, Cool Country Corporation, and

Tupper Plains Investments, LLC, appeal from the trial court’s entry granting the

Civ.R. 12(B)(6) motion to dismiss filed by defendants-appellees Aaron Pitman, API

Domain Capital, LLC, HP Insurance Group, LLC, AutoinsuranceNow, LLC, Cool

Country Group, LLC, Personalinjury.org, LLC, Ryan Goldschmidt, and RA Domain

Capital, LLC.

       {¶2}     We hold that the trial court properly dismissed the plaintiffs’ asserted

claim of piercing the corporate veil. But because the trial court failed to accept all

allegations in the plaintiffs’ complaint as true when finding that previously executed

releases barred all claims in the complaint, and because it erred in determining that

the plaintiffs failed to plead their fraud claim with particularity, we hold that the trial

court erred in granting the motion to dismiss with respect to the remaining claims,

and we reverse its judgment in part.

                         Factual and Procedural Background

       {¶3}     Pitman, who is engaged in the business of acquiring, developing, and

selling internet domain names, approached White regarding White’s investment in

various internet-domain-related investments. According to the complaint, Pitman

proposed that White invest in various entities, and that Pitman utilize his experience

to acquire, develop, market, and ultimately sell the purchased domain names for a

profit. White relied on Pitman to identify the domains to purchase, with the belief

that the domain names would be purchased from disinterested third parties and that

                                                3
                        OHIO FIRST DISTRICT COURT OF APPEALS

any subsequent sales of the domain names would be arms-length transactions.

White and Pitman engaged in the following transactions:

        1. White invested $125,000 in AutoinsuranceNow, LLC. As set forth

            in the operating agreement of AutoinsuranceNow, LLC, White’s

            company, Cool Country Corporation, owned 40 percent of the

            entity, while API Domain Capital, LLC, which was solely owned by

            Pitman, owned 60 percent of the entity.

        2. White invested $50,000 in Personalinjury.org, LLC. As set forth in

            the operating agreement of Personalinjury.org, LLC, White’s

            company Tupper Plains Investments, LLC, owned 40 percent of the

            entity, and API Domain Capital, LLC, owned 60 percent.

        3. White invested $200,000 in Digital Asset Brokerage Group, LLC.

            As set forth in the parties’ joint venture agreement, White was to

            personally own 10 percent of this entity, and HP Insurance Group,

            LLC, was to own 90 percent.

        4. White invested $750,000 in Dependent.com, LLC. The parties

            formed Cool Country Group, LLC, to hold this domain name.

            White’s company Cool Country Corporation owned 50 percent of

            Cool Country Group, LLC, and RA Domain Capital, LLC, owned the

            other 50 percent.

        {¶4}    The parties subsequently entered into a partial buyback1 of White’s

company Cool Country Corporation’s shares in Cool Country Group, LLC.                        For

1 The parties refer to this transaction as a buyback agreement. The transaction in fact involves a
sale of shares, rather than a buyback, because R.A. Domain Capital, LLC, and API Domain
Capital, LLC, did not own the shares prior to Cool Country Corporation’s initial purchase of them.

                                                    4
                     OHIO FIRST DISTRICT COURT OF APPEALS

$30,000, R.A. Domain Capital, LLC, and API Domain Capital, LLC, purchased a

portion of Cool Country Corporation’s shares in the entity. As part of the agreement,

the parties executed a mutual release of claims. This release provided in relevant

part that:

       In exchange for and in consideration of the promises contained in this

       Agreement, Seller [Cool Country Corporation] and Bryan White, being

       the sole shareholder and director of Seller, on behalf of themselves and

       on behalf of their respective, heirs, successors, representatives, agents,

       assigns, next of kind, members and affiliates (the “Seller Releasing

       Parties”) hereby fully, finally, and forever release, acquit, and

       discharge the Company, RA Domain, Ryan Goldschmidt, being the

       sole member of RA Domain, API Domain, Aaron Pitman, being the

       sole member of API Domain, and their respective affiliates, officers,

       directors, managers, members[,] employees, attorneys, agents,

       representatives[,] heirs, next of kin, successors and assigns (“Buyer

       Released Parties”) from any and all claims, causes of action, sums of

       money, accounts, demands, losses, damages, liabilities, judgments and

       executions of whatever kind or nature, whether known or unknown,

       direct or indirect, absolute or contingent, or suspected or unsuspected,

       whether the same be in administrative proceedings, in arbitration or

       other, at law, in equity or mixed, which the Seller Releasing Parties

       ever had, now have, or hereafter may have against any of the Buyer

       Released Parties prior to the execution of this Agreement.

                                               5
                        OHIO FIRST DISTRICT COURT OF APPEALS

        {¶5}    Pitman, through his company API Domain Capital, LLC, additionally

purchased all of White’s company Cool Country Corporation’s shares in

AutoinsuranceNow, LLC, for $62,500.               This sale agreement also contained a

similarly worded mutual release of claims.2

        {¶6}    Approximately two years after these buyback agreements were

executed, the plaintiffs filed a complaint in Athens County, Ohio against Pitman and

the other defendants. The complaint alleged that Pitman induced White to invest in

the transactions set forth above by holding himself out as an expert in the field of

domain-name investment. Pitman solicited White to invest by representing that the

sellers of the domain names they would purchase together were bona fide,

disinterested third-parties and that subsequent sales of the domain names would be

arms-length transactions, and by promising that White would receive a high rate of

return on his investments.

        {¶7}    The complaint set forth the domain purchases described above and

alleged that Goldschmidt and Roderick Hammons, who were the owners of the

domain names prior to White and his companies’ purchase of them, assisted Pitman

in his efforts to defraud White.          The complaint alleged that Goldschmidt and

Hammons were Pitman’s business associates, that the domain-name purchases were

not the promised arms-length transactions, and that White had been induced to

advance the funds for purchase of the domains based on grossly inflated prices that

exceeded their fair market value. White alleged that he was induced by Pitman’s

misrepresentations and concealment of material facts to purchase the domains, and

that he had been fraudulently induced to sign the buyback agreements containing the

2The parties also refer to this transaction as a buyback agreement, although it involves a sale of
shares, rather than a buyback.

                                                    6
                      OHIO FIRST DISTRICT COURT OF APPEALS

release clauses without receiving consideration in return. The complaint further

alleged that Pitman had a direct pecuniary interest in the form of an undisclosed

ownership interest in Digital Asset Brokerage Group, LLC, (one of the jointly

purchased domains) or in another side deal with his business associates Goldschmidt

and Hammons that involved Pitman’s receipt of all or a portion of the domain sales

proceeds.

       {¶8}    The complaint contained claims for fraud, breach of the fiduciary duty

of loyalty, a violation of Ohio’s Limited Liability Act, a violation of Ohio’s Securities

Act, breach of contract, and piercing the corporate veil. White sought damages in the

amount of his total investments, less the money he received in the buyback

agreements.      He also sought compensatory and punitive damages, and a

determination that his investments in HP Insurance Group, Inc., AutoinsuranceNow,

LLC, Personalinjury.org, LLC, and Cool Country Group, LLC, were void. Upon the

defendants’ motion to transfer venue, which was premised on a forum-selection

clause in the buyback agreements, the Athens County trial court transferred venue to

the Hamilton County Court of Common Pleas.

       {¶9}    After transfer, the defendants filed a Civ.R. 12(B)(6) motion to dismiss,

arguing that the plaintiffs’ claims were barred by the release clauses in the buyback

agreements. The trial court granted the motion to dismiss, determining that all

claims were barred by the two releases. It held that the plaintiffs failed to provide

any factual support for their assertion that they were fraudulently induced to sign the

buyback agreements, and that the plaintiffs could not challenge the validity of the

releases because they had not tendered back the consideration they had received.

The trial court further held that the plaintiffs failed to state the allegations of fraud in

                                                 7
                      OHIO FIRST DISTRICT COURT OF APPEALS

count one with sufficient particularity; that, with respect to the claim for breach of

the fiduciary duty of loyalty, the plaintiffs failed to cite any statute, case law, or

operative facts that established such a duty; that the plaintiffs failed to allege acts on

the part of the defendants that would constitute a breach of contract; and that the

plaintiffs had failed to state a separate cause of action for piercing the corporate veil.

       {¶10} Plaintiffs appeal, arguing in a single assignment of error that the trial

court erred in granting the defendants’ motion to dismiss.

                                Final, Appealable, Order

       {¶11} Before considering the merits of the plaintiffs’ argument, we must

determine if we have jurisdiction to proceed with this appeal.

       {¶12} This court only has jurisdiction to review final and appealable orders.

Ohio Constitution, Article IV, Section 3(B)(2); R.C. 2505.03. Whether the order in

this case was final and appealable depends on whether the dismissal was “on the

merits” or “otherwise than on the merits.” A dismissal “otherwise than on the

merits” is without prejudice and is generally not a final, appealable order because

such a dismissal does not typically prevent a party from refiling.           State ex rel.

DeDonno v. Mason, 128 Ohio St.3d 412, 2011-Ohio-1445, 945 N.E.2d 511, ¶ 2; Bank

of Am., N.A. v. Edwards, 2017-Ohio-4343, 93 N.E.3d 212, ¶ 36 (9th Dist.). Whereas

a dismissal that is “on the merits” is a dismissal with prejudice, and is final and

appealable. Bank of Am., N.A. at ¶ 36.

       {¶13} Civ.R. 41(B)(3) provides that “[a] dismissal under division (B) of this

rule and any dismissal not provided for in this rule, except as provided in division

(B)(4) of this rule, operates as an adjudication upon the merits unless the court, in its

order for dismissal, otherwise specifies.” Civ.R. 41(B)(4) does not apply in this case.

                                                8
                        OHIO FIRST DISTRICT COURT OF APPEALS

Here, the trial court dismissed all claims in the plaintiffs’ complaint on the basis of

the releases contained in the buyback agreements. This was an adjudication on the

merits. Civ.R. 41(B)(3); see Pasipanki v. Morton, 9th Dist. Medina No. 1158, 1982

WL 2809, *4 (Oct. 27, 1982).

         {¶14} The trial court did not specify in this case whether the dismissal was

with or without prejudice. Where a trial court’s entry is silent as to whether a

dismissal is with or without prejudice, the dismissal is treated as being with

prejudice. See Freedom Mortgage Corp. v. Hufford, 5th Dist. Licking No. 16-CA-72,

2017-Ohio-1111, ¶ 13.

         {¶15} Because the trial court’s dismissal was on the merits and was a

dismissal with prejudice, its entry is a final, appealable order subject to review by this

court.

                                  Standard of Review

         {¶16} We review a trial court’s ruling on a Civ.R. 12(B)(6) motion to dismiss

de novo. Parker v. Ford Motor Co., 2019-Ohio-882, 124 N.E.3d 893, ¶ 10 (1st Dist.).

When ruling on a motion to dismiss, the trial court is confined to the allegations in

the complaint, and it must accept the complaint’s factual allegations as true and

draw all reasonable inferences in favor of the nonmoving party.            Id.   A Civ.R.

12(B)(6) motion to dismiss tests the sufficiency of the complaint, and it should not be

granted “unless it appears beyond doubt from the complaint that the plaintiff can

prove no set of facts entitling him to recovery.” Id., quoting Thomas v. Othman,

2017-Ohio-8449, 99 N.E.3d 1189, ¶ 19 (1st Dist.).

                                                9
                     OHIO FIRST DISTRICT COURT OF APPEALS

                      Fraud Claim was Pled with Particularity

       {¶17} The trial court dismissed the plaintiffs’ claim for fraud based on its

determination that the plaintiffs had failed to plead the claim with the required

particularity.

       {¶18} To succeed on a claim for fraud, a plaintiff must establish:

       (a) a representation or, where there is a duty to disclose, concealment

       of a fact, (b) which is material to the transaction at hand, (c) made

       falsely, with knowledge of its falsity, or with such utter disregard and

       recklessness as to whether it is true or false that knowledge may be

       inferred, (d) with the intent of misleading another into relying upon it,

       (e) justifiable reliance upon the representation or concealment, and (f)

       a resulting injury proximately caused by the reliance.

State ex rel. Seibert v. Richard Cyr, Inc., 157 Ohio St.3d 266, 2019-Ohio-3341, 134

N.E.3d 1185, ¶ 36.

       {¶19} Civ.R. 9(B) provides that “[i]n all averments of fraud or mistake, the

circumstances constituting fraud or mistake shall be stated with particularity.” To

satisfy this requirement, “a plaintiff should plead the time, place, and content of the

false representation, the fact misrepresented, and the nature of what was obtained or

given as a consequence of the fraud” along with the identity of the alleged fraudster.

Meehan v. Mardis, 2019-Ohio-4075, 146 N.E.3d 1266, ¶ 20 (1st Dist.).

       {¶20} Here, the plaintiffs allege that fraud resulted both from the defendants’

affirmative misrepresentations and concealment of facts where there was a duty to

disclose. The duty to disclose allegedly stemmed from the fiduciary relationship that

                                             10
                     OHIO FIRST DISTRICT COURT OF APPEALS

existed between the members of the limited liability companies (including White and

the entities owned by either White or Pitman) that the parties had formed.

       {¶21} The complaint alleged that, in order to secure White’s investment,

Pitman represented that the sellers of the domain names they would purchase

together would be bona fide, disinterested third-parties and that any subsequent

sales of the domain names would be arms-length transactions.            The complaint

further alleged that Pitman failed to disclose that Goldschmidt and Hammons, from

whom the domains were purchased, were Pitman’s business associates, and that they

assisted Pitman in his efforts to defraud White by grossly inflating the prices for the

purchased domains so that the prices exceeded the fair market value. It also alleged

that Pitman misrepresented and concealed his pecuniary interest in the purchase of

the domains. The complaint set forth the date of each domain purchase as well as

the amount that White had invested, and alleged that White was justified in relying

on Pitman’s representations because Pitman held himself out as an expert in the field

of domain-name investment. The plaintiffs asserted that, as a result of Pitman’s

misrepresentations and concealment of material facts, they incurred significant

monetary damages totaling the sum of White’s investments less the money received

from the buybacks.

       {¶22} The plaintiffs’ allegations of fraud satisfied the Civ.R. 9(B)

requirement that all averments of fraud be pled with particularity. We consequently

find that the trial court erred in dismissing the fraud claim on that ground.

                                  Release of Claims

       {¶23} The trial court dismissed all claims in the plaintiffs’ complaint on the

grounds that the claims were barred by the releases in the buyback agreements. The

                                              11
                     OHIO FIRST DISTRICT COURT OF APPEALS

defendants asserted the releases as an affirmative defense. The releases provided

that White and his companies released the defendants from all claims and causes of

action that White and his companies may have against them, whether known or

unknown at the time.

       {¶24} While a release is generally “an absolute bar to a later action on any

claim encompassed within the release,” a release may be challenged as having been

obtained by fraud in the factum or fraud in the inducement. Haller v. Borror Corp.,

50 Ohio St.3d 10, 13, 552 N.E.2d 207 (1990). Fraud in the factum exists where the

executor of the release lacked an understanding and was unaware that a release had

been signed because of an act or misrepresentation of another party.            Id. at

paragraph one of the syllabus. A claim of fraud in the inducement, on the other

hand, involves a claim that the releasor “was induced to grant the release upon the

wrongful conduct or misrepresentation of the person so benefited. The

misrepresentation may concern the economic value of the claim released.” Id. at 14.

A release allegedly obtained by fraud in the inducement can only be challenged after

a return or tender of consideration. Id. The purpose of this tender requirement is to

prevent a releasor from “retain[ing] the benefit of his act of compromise and at the

same time attack its validity when he understood the nature and consequence of his

act.” Id.

       {¶25} The releases in this case were contained in the buyback agreements.

The plaintiffs did not specifically challenge the buyback agreements in their fraud

claim, but, to prevent the releases from barring their claims, the plaintiffs contended

that the releases had been obtained by fraud in the inducement. The complaint

contained the following allegations with respect to the releases:

                                              12
                      OHIO FIRST DISTRICT COURT OF APPEALS

       On September 16, 2016, Pitman did a partial buyback of White’s shares

       in Cool Country Group, LLC for $30,000, but Pitman fraudulently

       induced White to sign on behalf of Cool Investments, LLC and Cool

       Country Corporation as part of that a further fraudulent document,

       with no consideration, which included certain release provisions

       within, unrelated to [the] purported purpose of the transaction.

       On October 17, 2016, Pitman repurchased White’s investment in

       Autoinsurancenow, LLC but fraudulently induced him to sign on

       behalf of Cool Investments, LLC as part of that a further fraudulent

       document, with no consideration, which included certain release

       provisions within, unrelated to the purported purpose of the

       transaction.

       {¶26} The trial court held that the plaintiffs could not challenge the validity

of the releases because they had not tendered back the consideration that they

received, and because they failed to provide any factual support for the allegation

that they were fraudulently induced to sign the buyback agreements.

       {¶27} Plaintiffs contend that the trial court’s determination that they failed

to tender back consideration was contradictory to the assertion in the complaint that

no consideration had been received.      The defendants argue that the plaintiffs’

assertion that they had not received consideration was belied by their

acknowledgment in the complaint, as well as the buyback agreements attached to the

complaint, that they received approximately $92,500 in consideration for the

buyback agreements.

                                             13
                      OHIO FIRST DISTRICT COURT OF APPEALS

       {¶28} For purposes of reviewing a Civ.R. 12(B)(6) motion to dismiss, the trial

court was required to accept the plaintiffs’ factual allegations as true and draw all

inferences in favor of the nonmoving party. Parker, 2019-Ohio-882, 124 N.E.3d

893, at ¶ 10. The trial court was required to accept as true the plaintiffs’ allegation

that White and his companies had not received any consideration in return for

executing the releases. And because the plaintiffs alleged that no consideration was

received, there was no consideration to be tendered back before contesting the

releases. Considering the plaintiffs’ complaint in its entirety, including the releases

in the buyback agreements, we cannot say that there are no set of facts under which

the plaintiffs can recover. Id.

       {¶29} We further hold that the trial court erred in determining that the

plaintiffs failed to provide any factual support for the allegation that they were

fraudulently induced to sign the buyback agreements. When considering whether a

plaintiff has complied with the Civ.R. 9(B) particularity requirement, “[t]he

underlying determination in each case is whether the allegation is specific enough to

inform the defendant of the act of which the plaintiff complains, and to enable the

defendant to prepare an effective response and defense.” Meehan, 2019-Ohio-4075,

146 N.E.3d 1266, at ¶ 22, quoting Baker v. Conlan, 66 Ohio App.3d 454, 458, 585

N.E.2d 543 (1st Dist.1990).       The plaintiffs’ allegation of fraudulent inducement,

combined with the other allegations of fraud in the complaint, provided the

defendant with sufficient notice of the plaintiffs’ complaints and an ability to

effectively prepare a defense.

       {¶30} We hold that the trial court erred in granting the motion to dismiss on

the grounds that the releases barred the plaintiffs’ claims.

                                               14
                     OHIO FIRST DISTRICT COURT OF APPEALS

                         Breach of Fiduciary Duty of Loyalty

       {¶31} We next consider the trial court’s dismissal of the plaintiffs’ claim for

breach of the fiduciary duty of loyalty. The elements for a breach-of-fiduciary-duty

claim are “(1) the existence of a duty arising from a fiduciary relationship, (2) the

failure to observe the duty, and (3) an injury proximately resulting.” Vontz v. Miller,

2016-Ohio-8477, 111 N.E.3d 452, ¶ 28 (1st Dist.).

       {¶32} In addition to finding that it was barred by the releases, the trial court

held that the plaintiffs’ asserted claim for breach of the fiduciary duty of loyalty was

subject to dismissal because the plaintiffs failed to cite any statute, case law, or

operative facts that established such a duty on the part of the defendants. In so

concluding, the trial court relied on the operating agreement of AutoinsuranceNow,

LLC, which referenced the duty of loyalty in the context of conflicts of interest and

stated that “[a] Member, Manager, officer or agent does not violate a duty or

obligation to the Company merely because his conduct furthers the Member’s,

Manager’s, officer’s or agent’s own interest.”

       {¶33} Members of a limited liability company owe each other the fiduciary

duties of loyalty and care. See R.C. 1705.281. These obligations are far broader than

the limited language in the parties’ operating agreement that the trial court relied on

to find that the fiduciary obligation was extinguished.

       {¶34} The plaintiffs asserted in the complaint that White and Pitman had

formed limited liability companies, and that these limited liability companies involve

a fiduciary relationship and impose upon their members (which were corporate

entities owned individually by White or Pitman) a duty to exercise the utmost good

faith and honesty in all dealings and transactions related to the companies. The

                                                 15
                     OHIO FIRST DISTRICT COURT OF APPEALS

complaint further alleged that Pitman and API Domain Capital, LLC, breached the

duty of loyalty owed to White and his entities by misrepresenting and concealing

material facts pertaining to the domain purchases, by securing a pecuniary interest

for Pitman in the purchase of the domains, and by failing to make reasonable efforts

to develop, market, and sell the domains.

       {¶35} These factual allegations, combined with the legal duty imposed by

R.C. 1705.281, are sufficient to allege a breach of the fiduciary duty of loyalty that

survives a motion to dismiss. The trial court was required to accept the factual

allegations as true, and it erred in concluding as a matter of law that the breach of

fiduciary duty was overcome by the limited language of the operating agreement.

                                 Breach of Contract

       {¶36} With respect to the plaintiffs’ claim for breach of contract, the trial

court found that, in addition to being barred by the releases, the claim was subject to

dismissal because the plaintiffs had failed to allege acts on the part of the defendants

that would constitute a breach of contract.

       {¶37} The elements of a breach-of-contract claim are “the existence of a

contract, performance by the plaintiff, breach by the defendant, and damage or loss

to the plaintiff.” Becker v. Direct Energy, LP, 2018-Ohio-4134, 112 N.E.3d 978, ¶ 38

(2d Dist.), quoting Doner v. Snapp, 98 Ohio App.3d 597, 600, 649 N.E.2d 42 (2d

Dist.1994).

       {¶38} In support of their breach-of-contract claim, the plaintiffs alleged that

each of the operating agreements constituted a valid and enforceable contract

between White and Pitman and their companies; that White complied with his duties

set forth in the operating agreements; and that Pitman breached the operating

                                              16
                        OHIO FIRST DISTRICT COURT OF APPEALS

agreements by taking a pecuniary interest in the purchase of the domains and failing

to make reasonable efforts to develop, optimize, market, and secure buyers for the

domains.

          {¶39} The trial court was required to accept these factual allegations as true

and draw all reasonable inferences in favor of the plaintiffs, the nonmovants. See

Parker, 2019-Ohio-882, 124 N.E.3d 893, at ¶ 10. The allegations in the complaint

sufficiently set forth a claim for breach of contract, and the trial court erred in

concluding otherwise.

                                 Piercing the Corporate Veil

          {¶40} The trial court additionally dismissed the plaintiffs’ claim for piercing

the corporate veil because it determined that the complaint failed to state a separate

cause of action for the claim.

          {¶41} The complaint, in fact, did purport to set forth a claim for piercing the

corporate veil. But, as this court recently held, “piercing the corporate veil is not a

claim, it is a remedy encompassed within a claim, whereby liability for a particular

tort may be imposed upon a particular individual.” Meehan, 2019-Ohio-4075, 146

N.E.3d 1266, at ¶ 8. We accordingly hold that the trial court did not err in dismissing

the plaintiffs’ claim for piercing the corporate veil because it was not a valid cause of

action.

                                        Conclusion

          {¶42} The plaintiffs’ assignment of error is overruled with respect to the

asserted claim for piercing the corporate veil, but is otherwise sustained. Because

the trial court erred in holding that the remaining claims were barred by the releases,

                                                17
                      OHIO FIRST DISTRICT COURT OF APPEALS

erred in finding that the complaint failed to set forth claims for breach of the

fiduciary duty of loyalty and breach of contract, and erred in determining that the

plaintiffs failed to plead their fraud claim with sufficient particularity, we reverse its

dismissal of all claims except the claim for piercing the corporate veil.

       {¶43} The trial court’s judgment is affirmed in part, reversed in part, and this

cause is remanded for further proceedings.

                                                                   Judgment accordingly.

BERGERON and WINKLER, JJ., concur.

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

                                                18