Court Opinion

ID: 4577982
Source: CourtListenerOpinion
Date Created: 2020-10-16 20:10:35.912671+00
Date Added: 2024-06-11T13:38:34.770907
License: Public Domain

[Cite as Lakeview Elec., Inc. v. Van Auken, 2020-Ohio-4941.]

                            IN THE COURT OF APPEALS OF OHIO
                                SIXTH APPELLATE DISTRICT
                                     LUCAS COUNTY

Lakeview Electric, Inc.                                    Court of Appeals No. OT-17-006

        Appellee                                           Trial Court No. 11-CV-250H

v.

David L. Van Auken, et al.                                 DECISION AND JUDGMENT

        Appellant                                          Decided: October 16, 2020

                                                 *****

        D. Jeffery Rengel and Thomas R. Lucas, for appellee.

        John A. Coppeler, for appellant.

                                                 *****

        OSOWIK, J.

        {¶ 1} Appellant, David Van Auken, appeals the September 30, 2015 judgment of

the Ottawa County Court of Common Pleas denying his motion for summary judgment

and granting the motion for summary judgment of appellee, Lakeview Electric, Inc.
(“Lakeview”). For the following reasons, we reverse and remand the trial court’s

judgment.

                                       I. Background

       {¶ 2} On April 26, 2011, Lakeview filed a four-count complaint against Van

Auken, dba Lifestyle Development (“Lifestyle”), Dennis Hartzell, and First Choice

Builders, Inc. (“First Choice”) seeking recovery on two accounts, alleging unjust

enrichment, and seeking to enforce a promissory note. Lakeview dismissed its claims

against Hartzell, the owner of First Choice, on October 29, 2014. First Choice failed to

answer the complaint, and the trial court granted Lakeview a default judgment against

First Choice on January 25, 2017. Thus, the claims against Van Auken are the only ones

before us.

       {¶ 3} Van Auken and Lakeview each filed a motion for summary judgment on

January 11, 2013. On August 24, 2015, the trial court filed a judgment entry granting

Lakeview’s motion and denying Van Auken’s motion. The court found that Van Auken

was personally liable on the promissory note and granted Lakeview a judgment of

$25,929.36—the full amount of the promissory note and more than the $23,768.58

Lakeview requested in its complaint.

       {¶ 4} On September 30, 2015, the court filed a nunc pro tunc entry granting

Lakeview interest on its judgment at the rate of 18 percent per year from April 26, 2011.

The September 30 entry was identical to the August 24 entry in all other respects.

2.
       {¶ 5} Van Auken filed this timely appeal on February 14, 2017. He asserts two

assignments of error:

              1. There are genuine issues of fact which preclude granting

       appellee’s summary judgment.

              2. Appellant’s affirmative defense of lack of consideration bars

       appellee’s claim on a promissory note.

                                        II. Facts

       {¶ 6} Lakeview is an electrical contractor that provided goods and services to First

Choice and Lifestyle. In its complaint, Lakeview alleged that Van Auken and Hartzell

were business partners who were doing business as First Choice and Lifestyle. Hartzell

confirmed in his answer, filed June 2, 2014, that Van Auken was a shareholder of First

Choice. In Hartzell’s affidavit in support of his own motion for summary judgment,

however, Hartzell averred that he was the sole owner of First Choice. Van Auken denied

having any ownership interest in First Choice in his answer, his discovery responses, and

his affidavit in support of his motion for summary judgment.

       {¶ 7} Lakeview sought to recover $18,378.14 from the defendants based on two

accounts; it also alleged unjust enrichment in the same amount. In support of the first

account, Lakeview attached an invoice dated January 14, 2008 (“invoice A”). The

invoice lists only “Lifestyle Development” in the “Bill To” section and “4712 Marshview

Dr.” in the “Project” section. The “Terms” are “Net 30.” After the statement “The

Following [sic] work was completed for Lifestyle Development,” invoice A lists a

3.
number of items and prices for the work Lakeview completed. The second page of

invoice A shows a total owed of $14,628.33 and includes handwritten notations of two

payments for $3,375 and $4,000, leaving a balance of $7,253.33. Invoice A includes a

line item that states “Dave Paid 3375.00 on 1-31-08 [sic].” The invoice does not include

any other dates.

       {¶ 8} In support of the second account, Lakeview attached an invoice dated

December 16, 2008 (“invoice B”). This is the only date on the invoice. The “Bill To”

section lists only “First Choice Builders.” Invoice B does not have a “Project” section;

instead, it has a section titled “P.O. No.” that states “Bailywick lot 13.” The “Terms” of

the invoice are “2/3 Rough 1/3 Finish.” Under the statement “I am pleased to quote the

following for First Choice Builders,” invoice B lists a number of items, but does not

include any prices. The first charge on the invoice is for “Total for labor and material for

original bid,” which is listed as $7,299. The remaining charges are listed under the

heading “Extra Work [sic] completed.” The second page of invoice B shows a total due

of $11,124.81 and does not note any payments.

       {¶ 9} The fourth count in Lakeview’s complaint concerns a promissory note dated

December 31, 2008. The amount of the note is $25,929.36, to be paid in six monthly

installments of $2,160.76 with a balloon payment for the remaining principal due on July

1, 2009. Lakeview sought damages in the amount of $23,768.58 for the remaining

principal balance. The note lists First Choice and Van Auken “individually and

collectively” as the borrowers. The signature block of the note is spread over two pages.

4.
At the bottom of the first page are the words “First Choice Builders.” At the top of the

second page is the line “per: _______________ (SEAL).” This would be underneath

“First Choice Builders” if the signature block were on one page. Below that is a blank

signature line with “Dave Van Auken” typed under it. Van Auken signed the note on the

line above his name. Van Auken also signed “First Choice Builders Inc.” in cursive

above his signature and below the “per” line. Van Auken did not indicate that he was

signing “for,” “per,” or “on behalf of” First Choice and did not include a title (such as

“project manager” or “manager”) with his signature.

       {¶ 10} Van Auken filed his answer on May 25, 2011. In it, he denied having any

business interest in First Choice, denied owing Lakeview any money, and denied

personal liability for the promissory note. Van Auken also asserted five defenses,

including claims that he was acting as First Choice’s employee and did not receive any

goods or services in his individual capacity, the documents attached to the complaint do

not constitute accounts, and there was a lack of consideration for the transactions in the

complaint.

       {¶ 11} On January 11, 2013, Lakeview moved for summary judgment on the basis

that it sufficiently proved two unpaid accounts and that Van Auken was personally liable

on the December 31 note. In support, Lakeview submitted the affidavit of Scott White,

Lakeview’s owner. The affidavit authenticates invoice A, invoice B, and the promissory

note. White also states that the note “represented the sum total remaining due to

Lakeview Electric, Inc. on the earlier electrical jobs performed by Lakeview Electric, Inc.

5.
* * *,” which is contrary to Lakeview’s assertion in its complaint that the sums due on

the accounts are distinct from the amount due under the note. White also asserts that the

note “was prepared and signed with the intent to bind both First Choice Builders and

David Van Auken, personally, for the outstanding balance then owed to Lakeside

Electric, Inc.” Van Auken responded by arguing that there were genuine issues of

material fact in dispute regarding whether he received the goods and services from

Lakeview as a project manager for First Choice or for his own personal use and whether

he intended to sign the note as a representative of First Choice or personally.

       {¶ 12} Also on January 11, 2013, Van Auken moved for summary judgment on

the basis that he acted as First Choice’s representative—not in an individual capacity—in

all transactions with Lakeview and was not personally liable on either of the accounts or

on the promissory note. He specifically argued that he ordered supplies and made

payments as First Choice’s project manager and that his signature on the note was only as

First Choice’s agent. Although he made some payments to Lakeview from Lifestyle’s

bank account, he stated in his affidavit that he was reimbursed by First Choice or Hartzell

for those expenses. He also averred that he told White at the time that he signed the

promissory note that he was not signing it individually. Lakeview responded by arguing

that the note unambiguously named both First Choice and Van Auken, personally, as the

borrowers, and Van Auken’s signature did not include any indication that he was signing

on behalf of First Choice.

6.
       {¶ 13} In its September 30, 2015 decision, the trial court first found that Van

Auken was a partner in First Choice. It also found that both Lifestyle and First Choice

had accounts with Lakeview, as presented in invoice A and invoice B, respectively. The

court further found that Lakeview consolidated these accounts into the December 31

promissory note, which was executed by both First Choice and Van Auken. The court

concluded that Van Auken was individually liable on the note because he did not include

the words “by” or “for” with his signature or indicate his position or title with First

Choice when he signed. Accordingly, the trial court granted Lakeview’s motion for

summary judgment and denied Van Auken’s motion for summary judgment. The court

awarded Lakeview a judgment of $25,929.36 with 18 percent interest per year from April

26, 2011.

       {¶ 14} On November 29, 2017, finding that Van Auken had commenced

bankruptcy proceedings, we entered a bankruptcy stay. The bankruptcy case was closed

on September 21, 2020, and this case was reinstated to the court’s docket on September

24, 2020. Lakeview filed a memorandum with the court on October 5, 2020, advising

that the bankruptcy proceedings had not mooted the matter. The appeal is now decisional

before the court.

                                 III. Standard of Review

       {¶ 15} An appellate court reviews summary judgment de novo, employing the

same standard as the trial court. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105,

671 N.E.2d 241 (1996); Lorain Natl. Bank v. Saratoga Apts., 61 Ohio App.3d 127, 129,

7.
572 N.E.2d 198 (9th Dist.1989). The court can grant a motion for summary judgment

only when the moving party demonstrates:

       (1) that there is no genuine issue as to any material fact; (2) that the moving

       party is entitled to judgment as a matter of law; and (3) that reasonable

       minds can come to but one conclusion, and that conclusion is adverse to the

       party against whom the motion for summary judgment is made, who is

       entitled to have the evidence construed most strongly in his favor.

Harless v. Willis Day Warehousing Co., Inc., 54 Ohio St.2d 64, 66, 375 N.E.2d 46

(1978); Civ.R. 56(C).

       {¶ 16} The party seeking summary judgment must specifically delineate the basis

upon which the motion is brought and identify those portions of the record that

demonstrate the absence of a genuine issue of material fact. Dresher v. Burt, 75 Ohio

St.3d 280, 293, 662 N.E.2d 264 (1996); Mitseff v. Wheeler, 38 Ohio St.3d 112, 526

N.E.2d 798 (1988), syllabus. When a properly supported motion for summary judgment

is made, an adverse party may not rest on mere allegations or denials in the pleadings, but

must respond with specific facts showing that there is a genuine issue of material fact.

Civ.R. 56(E); Riley v. Montgomery, 11 Ohio St.3d 75, 79, 463 N.E.2d 1246 (1984). The

opposing party must do so using “pleadings, depositions, answers to interrogatories,

written admissions, affidavits, transcripts of evidence, and written stipulations of fact * *

*.” Civ.R. 56(C). A “material” fact is one that would affect the outcome of the suit

under the applicable substantive law. Russell v. Interim Personnel, Inc., 135 Ohio

8.
App.3d 301, 304, 733 N.E.2d 1186 (6th Dist.1999); Needham v. Provident Bank, 110

Ohio App.3d 817, 827, 675 N.E.2d 514 (8th Dist.1996), citing Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

                                 IV. Law and Analysis

                             A. First Assignment of Error

       {¶ 17} In his first assignment of error, Van Auken argues that genuine issues of

material fact preclude summary judgment in Lakeview’s favor. Specifically, he argues

that the parties never intended to bind Van Auken personally and the form of his

signature shows that he signed only as an agent of First Choice. Lakeview counters that

no material issues of fact remain because Van Auken signed a note that named him as a

joint borrower and did not indicate that he signed on behalf of First Choice, which shows

that Van Auken is liable to Lakeview, regardless of any other facts in the case. We agree

with Van Auken that summary judgment was inappropriate.

                       1. Count Four of Lakeview’s Complaint

       {¶ 18} We first address count four of Lakeview’s complaint, which seeks to

recover on the December 31 promissory note. It is also the only count that the trial court

ruled on directly. In this count, Lakeview alleges that Van Auken is personally liable to

it in the amount of $23,768.58 based on the December 31, 2008 promissory note. In

support, Lakeview submitted the promissory note and White’s affidavit attesting that the

parties intended the note to bind First Choice and Van Auken, personally. In response,

Van Auken submitted his affidavit in which he claims that he signed the note only as

9.
First Choice’s representative and that he told White at the time that he was signing only

on behalf of First Choice, not individually. Van Auken contends that his affidavit

presents a genuine issue of material fact regarding whether the parties intended to bind

him individually, despite the note listing him as a coborrower. We agree.

       {¶ 19} A valid contract requires an actual agreement between the parties to do or

not do something. Lawler v. Burt, 7 Ohio St. 340, 349 (1857). Under the parol evidence

rule, prior or contemporaneous oral statements of the parties are generally inadmissible to

vary, supplement, or contradict the parties’ final written integration of their agreement.

Licata Jewelers, Inc. v. Levis Commons, LLC, 195 Ohio App.3d 411, 2011-Ohio-4684,

960 N.E.2d 514, ¶ 20 (6th Dist.). Such evidence is admissible, however, to show whether

the parties intended the proffered writing to embody a final written integration of their

agreement. Erd v. Sparrow, 2d Dist. Greene No. 98-CA-43, 1999 WL 55684, *4 (Feb. 5,

1999), citing Natl. City Bank v. Donaldson, 95 Ohio App.3d 241, 246, 642 N.E.2d

58 (9th Dist.1994).

       {¶ 20} Here, although the promissory note appears to be a fully integrated writing,

Van Auken claims that the note, as written, does not embody the true intention of the

parties because Lakeview, through White, was aware when Van Auken signed the note

that Van Auken was signing only for First Choice and did not intend to make himself

personally liable. Lakeview presented White’s affidavit to rebut that claim. White avers

that the parties intended Van Auken to be personally bound. Van Auken’s affidavit, on

the other hand, states that he signed only as a representative of First Choice. In addition

10.
to the conflicting statements in the affidavits, Van Auken points to the fact that he has

claimed at every point in the litigation that he acted only as First Choice’s project

manager and did not personally enter into any agreements with Lakeview. Additionally,

Hartzell’s affidavit in support of his own motion for summary judgment confirms that

Van Auken acted as First Choice’s project manager and that all purchases Van Auken

made were made for First Choice in his capacity as project manager. This evidence calls

into question whether Van Auken and Lakeview truly intended to make Van Auken

personally responsible for the amount due under the promissory note.

       {¶ 21} Because a genuine issue of material fact remains regarding whether

Lakeview and Van Auken, personally, executed a binding promissory note, summary

judgment in Lakeview’s favor was not appropriate. We therefore reverse the trial court’s

decision as to count four of Lakeview’s complaint.

                   2. Counts One and Two of Lakeview’s Complaint

       {¶ 22} Next, we address the first two counts in Lakeview’s complaint. These

counts seek recovery of $18,378.14 on two accounts.1 In support of its claims, Lakeview

attached two invoices as proof of the accounts. The trial court found that these accounts

were consolidated into the promissory note. Our review of the record shows that the

invoices do not meet the requirements for proving an action on an account. Thus, the

1
  Count one specifically seeks recovery on the accounts in invoices A and B. Count two
simply restates that the defendants owe Lakeview $18,378.14 for goods and services
provided, but does not allege any additional legal basis for recovery. We construe both
counts as seeking payment on the accounts in invoices A and B.

11.
trial court erred in granting Lakeview’s motion for summary judgment on counts one and

two and in denying Van Auken’s motion for summary judgment on counts one and two.

       {¶ 23} An action on an account is a pleading device used to consolidate claims one

party has against another and is appropriate when the parties have conducted a series of

transactions with balances that remain unpaid. Palmer Bros. Concrete, Inc. v. Kuntry

Haven Constr., LLC, 6th Dist. Wood No. WD-11-033, 2012-Ohio-1875, ¶ 17. To prevail

on an action on an account, the plaintiff must establish the existence of an account in the

name of the party charged, as well as

       (1) a beginning balance (zero, or a sum that can qualify as an account

       stated, or some other provable sum); (2) listed items, dated and identifiable

       by number or otherwise, representing charges, or debits, and credit; and (3)

       a summarization by means of a running or developing balance, or an

       arrangement of beginning balance and items that permits the calculation of

       the amount claimed to be due.

(Internal quotations omitted.) Id. at ¶ 18; Minster Farmers Coop. Exchange Co.,

Inc. v. Meyer, 117 Ohio St.3d 459, 2008-Ohio-1259, 884 N.E.2d 1056, ¶ 16.

       {¶ 24} The invoices attached to Lakeview’s complaint do not meet the criteria for

an account. Neither invoice includes a beginning balance, nor do they include “dated

items” (other than the notation of a January 31, 2008 payment on invoice A). In short,

they provide no way to determine when Van Auken, Lifestyle, or First Choice received

the goods and services listed on the invoices or when one of the defendants made the

12.
second payment on invoice A. Moreover, invoice B (assuming that it is actually an

invoice and not a quote for proposed work) names “First Choice Builders” as the party to

be billed without including an address or any other identifying information. The

evidence shows that Van Auken does not have any ownership interest in First Choice

and, even if he did, Lakeview did not provide any evidence that it could disregard the

corporate form to hold Van Auken personally liable for the charges listed in invoice B.

       {¶ 25} Because neither invoice meets the requirements for an account, Lakeview

is not entitled to collect from Van Auken the balance due on the invoices. Accordingly,

we reverse the trial court’s decision as to counts one and two and order the trial court on

remand to grant Van Auken’s motion for summary judgment on these counts.

                       3. Count Three of Lakeview’s Complaint

       {¶ 26} Finally, in the third count of its complaint, Lakeview alleges that Van

Auken was unjustly enriched in the amount of $18,378.14 by retaining goods and

services Lakeview provided without paying for them. Unjust enrichment is based on a

theory of quasi-contract or implied contract. A person is unjustly enriched when he has

and retains some benefit that belongs to another. Johnson v. Microsoft Corp., 106 Ohio

St.3d 278, 2005-Ohio-4985, 834 N.E.2d 791, ¶ 20. To recover, the plaintiff must show a

benefit conferred by it on the defendant, the defendant’s knowledge of the benefit, and

that it would be unjust for the defendant to retain the benefit without payment. Cuspide

Properties, Ltd. v. Earl Mechanical Servs., Inc., 2015-Ohio-5019, 53 N.E.3d 818, ¶ 60,

citing Hambleton v. R.G. Barry Corp., 12 Ohio St.3d 179, 183, 465 N.E.2d 1298 (1984).

13.
An express contract precludes any claim for unjust enrichment regarding the same subject

matter. Kott v. Gleneagles Professional Builders & Remodelers, Inc., 197 Ohio App.3d

699, 2012-Ohio-287, 968 N.E.2d 593, ¶ 14 (6th Dist.); Rite Aid of Ohio, Inc. v.

Monroe/Laskey Ltd. Partnership, LLC, 6th Dist. Lucas No. L-09-1179, 2010-Ohio-691, ¶

17.

       {¶ 27} Although the trial court’s judgment entry did not specifically address

Lakeview’s unjust enrichment claim, the court impliedly denied it by finding that Van

Auken was liable on the express contract created by the promissory note. As discussed

above, there are genuine issues of material fact regarding the parties’ intent to hold Van

Auken personally liable on the promissory note. If the decision on the promissory note is

different on remand, the allegation of unjust enrichment could again be applicable. We

therefore reverse the trial court’s grant of summary judgment on count three of

Lakeview’s complaint.

                            B. Second Assignment of Error

       {¶ 28} Based on our disposition of Van Auken’s first assignment of error, we find

that his second assignment of error is moot and is not well-taken.

                                      V. Conclusion

       {¶ 29} Based on the foregoing, we find that the trial court improperly granted

Lakeview’s motion for summary judgment and denied Van Auken’s motion for summary

judgment. The September 30, 2015 judgment of the Ottawa County Court of Common

14.
Pleas is reversed, and the case is remanded for further proceedings consistent with this

decision.2 Lakeview is ordered to pay the costs of this appeal pursuant to App.R. 24.

                                                                      Judgment reversed.

       A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.

Mark L. Pietrykowski, J.                       _______________________________
                                                           JUDGE
Thomas J. Osowik, J.
CONCUR.                                        _______________________________
                                                           JUDGE

           This decision is subject to further editing by the Supreme Court of
      Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
           version are advised to visit the Ohio Supreme Court’s web site at:
                    http://www.supremecourt.ohio.gov/ROD/docs/.

2
 Prior to his retirement and subsequent death, Judge James D. Jensen participated in the
decision making process of this case.

15.