Court Opinion

ID: 4693807
Source: CourtListenerOpinion
Date Created: 2021-06-08 18:14:07.024061+00
Date Added: 2024-06-11T08:05:25.660474
License: Public Domain

[Cite as Sutherland v. Gaylor, 2021-Ohio-1941.]

                         IN THE TRIAL COURT OF APPEALS OF OHIO

                                  TENTH APPELLATE DISTRICT

Craig Sutherland et al.,                          :

                Plaintiffs-Appellees/             :
                Cross-Appellants,
                                                  :              No. 20AP-257
v.                                                           (C.P.C. No. 18CV-4088)
                                                  :
Jason Gaylor,                                             (REGULAR CALENDAR)
                                                  :
                Defendant-Appellant/
                Cross-Appellee.                   :

                                         D E C I S I O N

                                      Rendered on June 8, 2021

                On brief: Murray Murphy Moul + Basil LLP, Joseph F.
                Murray, and Jonathan P. Misny, for appellee/cross-appellant
                Craig Sutherland. Argued: Jonathan P. Misny.

                On brief: Gordon Bibart LLC, John P. Gordon, and Susan L.
                Strayer, for appellant/cross-appellee Jason Gaylor.
                Argued: John P. Gordon.

                  APPEAL from the Franklin County Court of Common Pleas
SADLER, J.
        {¶ 1} Defendant-appellant/cross-appellee, Jason Gaylor ("Gaylor"), appeals from
a judgment of the Franklin County Court of Common Pleas awarding damages to plaintiff-
appellee/cross-appellant, Craig Sutherland ("Sutherland"), on his breach of contract claim.
Sutherland's cross-appeal challenges the adequacy of the damages awarded. For the
reasons that follow, we reverse.
No. 20AP-257                                                                                             2

I. FACTS AND PROCEDURAL HISTORY
           {¶ 2} Sutherland is a registered investment advisor. In 1994, Sutherland entered
into a franchise agreement with Money Concepts International ("Money Concepts"), a
company that provides financial planning and wealth management services. Pursuant to
the franchise agreement, Sutherland operates a Money Concepts Financial Planning
Center, and he runs the business under the fictitious name of Sutherland Wealth Partners.
The franchise agreement permits Sutherland to market and sell financial products and
services in Columbus, Ohio through Money Concepts International. (Pl.'s Ex. 1 at 2.) Under
the terms of the franchise agreement, Sutherland receives commission income from Money
Concepts pursuant to a specified schedule for the financial services he sells. Article IV of
the franchise agreement provides that "[c]ompensation rights shall vest in [Sutherland]
and coded representatives." (Pl.'s Ex. 1 at 5.) Article III, paragraph 5 of the franchise
agreement provides that Sutherland "shall not either voluntarily or by operation of law,
assign * * * this Agreement or any right or interest thereunder without first obtaining the
written consent." (Emphasis added.) (Pl.'s Ex. 1 at 4.)
           {¶ 3} In 1999, Sutherland founded Conceptual Solutions, Ltd., an Ohio limited
liability company. Sutherland is the sole member of Conceptual Solutions. According to
Sutherland, he founded Conceptual Solutions on the advice of his accountant for the
purpose of distributing the commission income he received from Money Concepts and
reporting income to the Internal Revenue Service ("IRS"). Sutherland testified he deposits
the commission income he receives from Money Concepts with Conceptual Solutions, and
Conceptual Solutions pays all business expenses and provides him with a salary.1
           {¶ 4} On February 12, 2009, Sutherland entered into an "Agreement of
Association" with Gaylor, who was also a registered investment advisor. (Pl.'s Ex. 2.) The
Agreement of Association authorizes Gaylor to sell Money Concepts' products to investors
as an independent contractor of Sutherland under Sutherland's franchise agreement with
Money Concepts. The parties to the Agreement of Association are set out in the first
paragraph as follows: "This agreement is made and entered into as of this 12[th] day of
February, 2009 (the "Effective Date"), by and between Craig Sutherland, a Money Concepts

1   The record does not contain Conceptual Solutions' Articles of Organization or Operating Agreement.
No. 20AP-257                                                                                 3

Financial Planning Center (hereinafter "Financial Center President") * * * and Jason Gaylor
(hereinafter "Representative")." (Pl.'s Ex. 2 at 1.) Conceptual Solutions is not a party to the
Agreement of Association.
        {¶ 5} The Agreement of Association contains the following "non-solicitation"
provision:
                XVII. Termination
                ***
                (f) Representative agrees that for the two (2) year period
                immediately following the termination of this Agreement,
                Representative shall not for any reason directly or indirectly,
                by any means or device whatsoever, for himself/herself or on
                behalf of or in conjunction with any person, partnership,
                corporation or association, market to, sell to, or solicit for the
                purpose of selling to or marketing any financial services
                products to any persons or entities who were clients of
                Financial Center President, MCC or MCI at any time during
                the term of this Agreement.
(Pl.'s Ex. 2 at 4.)
        {¶ 6} Gaylor voluntarily terminated his business relationship with Sutherland on
September 30, 2016 and began working for a competitor, Cardinal Wealth Partners. In
October 2016, Sutherland, by and through legal counsel, sent Gaylor correspondence
reminding him of his obligations under the non-solicitation provision in the Agreement of
Association and demanding that he cease and desist soliciting Money Concepts' clients. On
May 15, 2018, plaintiffs, Sutherland and Conceptual Solutions, filed this lawsuit against
defendant Gaylor and defendant Ashley Coury, an employee of Conceptual Solutions. On
August 9, 2018, the trial court issued a decision dismissing all claims against Coury.
Sutherland and Conceptual Solutions appealed the decision to this court. On October 12,
2018, we dismissed the appeal, sua sponte, for lack of a final, appealable order. The
August 9, 2018 judgment is not the subject of this appeal.
        {¶ 7} In the remaining count of Sutherland's complaint, Sutherland alleges that
Gaylor breached the non-solicitation provision in the Agreement of Association.
Conceptual Solutions is not identified as a party plaintiff to the claim against Gaylor. On
February 19, 2019, Sutherland moved the trial court for partial summary judgment as to
the enforceability of the non-solicitation provision.        Gaylor filed a cross-motion for
No. 20AP-257                                                                                                 4

summary judgment on the breach of contract claim. Therein, Gaylor argued, among other
things, Sutherland could not recover damages for Gaylor's breach of the non-solicitation
provisions in the Agreement of Association because any lost profits arising from the breach
belonged to Conceptual Solutions, not Sutherland. Gaylor did not, however, move the trial
court to join or substitute Conceptual Solutions as a party plaintiff to the breach of contract
claim.
         {¶ 8} On April 30, 2019, the trial court ruled that Gaylor breached the Agreement
of Association by soliciting clients of the franchise within the two-year period immediately
following termination of the Agreement of Association on September 30, 2016. The trial
court nevertheless determined that an issue of fact existed whether the non-solicitation
provision of the Agreement of Association was enforceable as a reasonable restriction on
Gaylor's trade or business.2
         {¶ 9} The issues of damages and the reasonableness of the non-solicitation
provision in the Agreement of Association were tried to the court on August 26 and 27,
2019. On April 9, 2020, the trial court issued a written decision on the breach of contract
claim. The trial court concluded the non-solicitation provision in the Agreement of
Association was legally enforceable; a ruling that is not challenged in this appeal. In so
ruling, the court also found as follows:
                 The competent and credible evidence establishes that Gaylor
                 serviced 120 accounts. Upon terminating his association with
                 Su[th]erland, 100 of those clients went with Gaylor, 6 stayed
                 with Su[th]erland, and the remainder went elsewhere. This
                 means Gaylor wrongfully took 83.33% of the accounts. The
                 Court finds that it is reasonable that Su[th]erland would have
                 retained this client base. Su[th]erland credibly testified that
                 he has a high retention rate. Additionally, if Gaylor had not
                 wrongfully solicited these clients, their accounts would have
                 automatically reverted to and been serviced by Su[th]erland
                 with no disruption to them. Thus, the Court finds the

2 The trial court decision also contains the following ruling: "The final issue to be resolved is Defendant's
request for summary judgment on the grounds that Plaintiff cannot establish damages. The Court has
reviewed the parties' competing arguments. Neither party has convinced the Court as to his position as a
matter of law. As argued by Defendant, the measure of damages is generally 'lost profits,' which would be
reported by Conceptual Solutions, Ltd. However, Plaintiff argues that he was paid by MCC, and thus, he can
trace his lost revenue and prove that he incurred damages. In construing the evidence in Plaintiff's favor, the
Court will DENY Defendant's request for summary judgment on this issue." (Emphasis sic.)
No. 20AP-257                                                                                          5

                competent and credible evidence establishes lost profits per
                year of $111,111.50 ($133,339.13 x 83.33%).
                ***
                Accordingly, the Court finds that the business would have
                made an additional $111, 111.50 per year—or $222,223.00 for
                the 2-year period—in profits but for Gaylor's violation of the
                non-compete provision.
(Decision at 11-12.)
         {¶ 10} The trial court did not award Sutherland damages equal to the profits lost as
a result of Gaylor's breach. Rather, the trial court awarded damages to Sutherland in the
total amount of $97,778.12, representing the estimated additional salary Sutherland would
have received from Conceptual Solutions had Gaylor not violated the non-solicitation
provision in the Agreement of Association.3 Thus, a significant portion of the damages
recoverable as a result of Gaylor's breach were not awarded by the trial court.
         {¶ 11} Gaylor timely appealed to this court from the April 9, 2020 judgment.
Sutherland filed a cross-appeal.
II. ASSIGNMENTS OF ERROR
         {¶ 12} Appellant Gaylor assigns the following as trial court error:
                1. The trial court erred as a matter of law by awarding
                Sutherland damages based upon loss of income from
                Conceptual Solutions without sufficient evidence to support
                its verdict.
                2. The trial court erred as a matter of law in calculating the
                income Conceptual Solutions presumably lost as a result of
                Gaylor's competition over a 24[-]month period when there
                was insufficient evidence to determine when Appellant lost
                his customers and thus the period during which he incurred
                damages.
                3. The trial court abused its discretion by entering a verdict in
                favor of Sutherland having found that Sutherland had not
                carried his burden to prove damages with reasonable
                certainty.
         {¶ 13} Appellee/cross-appellant Sutherland assigns the following as trial court
error:

3The trial court determined, based on the tax returns of Conceptual Solutions and Sutherland, Conceptual
Solutions payed Sutherland a salary roughly equal to 44 percent of total business income.
No. 20AP-257                                                                              6

              The trial court erred in weighing the evidence that Money
              Concepts paid Sutherland his commission income directly.
III. LEGAL ANALYSIS
       A. Gaylor's Third Assignment of Error and Sutherland's Cross-
          Assignment of Error
       {¶ 14} Gaylor's third assignment of error and Sutherland's cross-assignment of
error raise the same threshold legal issue. Because those assignments of error are largely
dispositive of this appeal, we will consider them together.
       {¶ 15} " 'It has been consistently held in Ohio that in a breach of a covenant not to
compete, the usual measure of damages is lost profits.' " Ginn v. Stonecreek Dental Care,
12th Dist. No. CA2015-01-001, 2015-Ohio-4452, ¶ 18, quoting Briggs v. GLA Water Mgt.,
6th Dist. No. WD-12-062, 2014-Ohio-1551, ¶ 30. Gaylor contends the proper measure of
damages in this case is an award of lost profit that would place the non-breaching party in
the same position that party would have enjoyed had Gaylor not breached the Agreement
of Association. Sutherland argues the true measure of damages is the gross commissions
he receives from Money Concepts. The trial court determined the total damages flowing
naturally from Gaylor's breach of the Agreement of Association was $222,223, regardless
of whether it is considered lost profit or lost commission income. The parties disagree in
this case whether Sutherland is the proper party to prosecute the claim against Gaylor and
recover $222,223 in damages.
       {¶ 16} The trial court, in awarding damages to Sutherland, essentially split the
breach of contract claim into two parts: Sutherland's lost salary and Conceptual Solutions'
lost business income. The trial court decision provides, in relevant part, as follows:
              Next, the Court will address the major point of dispute in this
              litigation. Who is the real party in interest as to any damages
              stemming from Gaylor's breach of contract? As advanced by
              Gaylor, the measure of damages for violation of a non-
              compete provision is generally "lost profits." Because the
              business income is reported by Conceptual Solutions, Gaylor
              contends that Su[th]erland is not the real party in interest as
              to any damages.
              ***
              It is Su[th]erland's position that he is in fact directly
              compensated by Money Concepts, and how he chooses to
No. 20AP-257                                                                                                 7

                 disburse the money thereafter for tax purposes is of no
                 consequence.
                 After careful consideration of the evidence, the Court finds
                 that Su[th]erland did not substantiate that he is paid directly
                 by Money Concepts and then disburses the money to
                 Conceptual Solutions. He did not produce any documentary
                 proof, such as the 1099's, to support his testimony. The
                 competent evidence, as evidenced by Conceptual Solutions'
                 tax records, is that the business income belongs to Conceptual
                 Solutions. * * *
                 Based on this finding, Gaylor's position is that any loss was
                 sustained by Conceptual Solutions and not Su[th]erland. * * *
                 While the Court agrees that Su[th]erland seeks to recover
                 damages sustained by Conceptual Solutions, it would be a
                 fallacy to say that he did not himself sustain a loss. The
                 credible evidence establishes that Su[th]erland was
                 compensated in the form of a salary paid by Conceptual
                 Solutions.
(Decision at 7-8.)
        {¶ 17} Relying on the real party in interest rule under Civ.R. 17(A), the trial court
limited Sutherland's damage award to the additional salary Sutherland would have earned
from Conceptual Solutions had Gaylor not breached the Agreement of Association.4 In
Sutherland's cross-assignment of error, he argues the trial court erred when it limited his
recovery because he is the contracting party, not Conceptual Solutions, and all damages
flowing from the breach belong to him, not Conceptual Solutions. In Gaylor's third
assignment of error, he argues that the right to lost profits arising from his breach of the
Agreement of Association belonged solely to Conceptual Solutions, the limited liability
company that operates Sutherland's Money Concepts franchise.                          Gaylor claims that
Sutherland has not proven he personally suffered an injury as a result of Gaylor's breach of
the Agreement of Association.
        {¶ 18} In our view, the competing arguments of the parties raise the question
whether Sutherland or Conceptual Solutions has standing to assert a claim for the breach

4 In the trial court, Gaylor argued that Sutherland should be estopped from disregarding Conceptual Solutions'

separate corporate identity in order to prosecute a claim for lost profit in his individual capacity. (Gaylor's
Feb. 19, 2019 Mot. for Summ. Jgmt. at 8-12; Gaylor's Mar. 12, 2019 Memo. in Opp. to Sutherland's Mot. for
Summ. Jgmt. at 6.) Thus, the issue of Sutherland's standing to sue was raised in the trial court.
No. 20AP-257                                                                                 8

of the Agreement of Association. In order for a plaintiff to establish standing, the plaintiff
must show he suffered: (1) an injury that is (2) fairly traceable to the defendant's allegedly
unlawful conduct, and (3) likely to be redressed by the requested relief. "[F]or purposes of
appellate review, a question involving standing is typically a question of law and, as such, it
is to be reviewed de novo." Wilkins v. Harrisburg, 10th Dist. No. 14AP-1028, 2015-Ohio-
5472, ¶ 7, citing LULAC v. Kasich, 10th Dist. No. 10AP-639, 2012-Ohio-947, ¶ 23, citing
Ohio Concrete Constr. Assn. v. Ohio Dept. of Transp., 10th Dist. No. 08AP-905, 2009-
Ohio-2400, ¶ 9. Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-
Ohio-5017, ¶ 21-22. Accordingly, Ohio courts have held that "[b]ecause standing is
jurisdictional, it cannot be waived." Orum Stair, LLC v. GJJG Ents., LLC, 10th Dist. No.
15AP-507, 2016-Ohio-7064, ¶ 50 (Luper Schuster, J., concurs in part, dissents in part),
citing Gildner v. Accenture, L.L.P., 10th Dist. No. 09AP-167, 2009-Ohio-5335, ¶ 9. A lack
of standing cannot be cured by use of Civ.R. 17 or the joinder rules. BAC Home Loans
Servicing LP v. Busby, 2d Dist. No.25510, 2013-Ohio-1919.
       {¶ 19} "Common-law standing is similar to Civ.R. 17(A)'s real-party-in-interest
requirement." Abroms v. Synergy Bldg. Sys., 2d Dist. No. 23944, 2011-Ohio-2180, ¶ 46.
While the real-party-in-interest rule under Civ.R. 17(A) concerns proper party joinder, it
does not address standing. Schwartzwald at ¶ 33, citing Lincoln Property Co. v. Roche,
546 U.S. 81, 90 (2005). "Indeed, one who has standing by possessing a 'personal stake' in
a lawsuit undoubtedly also has a 'real interest in the subject matter of the litigation.' "
Abroms at ¶ 46. "Thus, courts often conflate common-law standing and Civ.R. 17, treating
them as one and the same." Id., citing State ex rel. Jones v. Suster, 84 Ohio St.3d 70, 77
(1998) ("Although a court may have subject matter jurisdiction over an action, if a claim is
asserted by one who is not the real party in interest, then the party lacks standing to
prosecute the action.").
       {¶ 20} With regard to common-law claims for breach of contract, "[i]t is generally
recognized that a contract is binding only upon the parties to that contract." TRINOVA
Corp. v. Pilkington Bros., P.L.C., 70 Ohio St.3d 271, 275 (1994); Cleveland Window Glass
& Door Co. v. Natl. Surety Co., 118 Ohio St. 414 (1928). Accordingly, only a party to the
contract or an intended third-party beneficiary has enforceable rights thereunder; an
incidental third-party beneficiary does not. TRINOVA Corp. at 277; Torrance v. Rom, 8th
No. 20AP-257                                                                                    9

Dist. No. 108818, 2020-Ohio-3971, ¶ 23; Thornton v. Windsor House, Inc., 57 Ohio St.3d
158, 161. See also Beard v. New York Life Ins. & Annuity Corp., 10th Dist. No. 12AP-977,
2013-Ohio-3700, ¶ 29 ("Because appellant is neither a party to nor an intended third-party
beneficiary of the 2010 annuity, he lacks standing to pursue his breach of contract claim.");
Camp St. Mary's Assn. of W. Ohio Conference of the United Methodist Church, Inc. v.
Otterbein Homes, 176 Ohio App.3d 54, 2008-Ohio-1490, ¶ 25 (3d Dist.) (only the
contracting party has standing to seek rescission based on breach of contract). Conversely,
"a party who fortuitously receives some benefit from the performance of a contractual
promise is an incidental, and not an intended, third-party beneficiary." Prince v. Kent State
Univ., 10th Dist. No. 11AP-493, (Mar. 13, 2012), citing TRINOVA Corp. at 278; Hill v.
Sonitrol of Southwestern Ohio, Inc., 36 Ohio St.3d 36, 40 (1988).
       {¶ 21} On the other hand, a real party in interest has been defined as " '* * * one who
has real interest in the subject matter of the litigation, and not merely an interest in the
action itself, i.e., one who is directly benefited or injured by the outcome of the case.' " Cent.
Mtge. Co. v. Webster, 5th Dist. No. 2011CA00242, 2012-Ohio-4478, ¶ 26, quoting Shealy
v. Campbell, 20 Ohio St.3d 23, 24 (1985). "The purpose behind the real party in interest
rule is '* * * to enable the defendant to avail himself of evidence and defenses that the
defendant has against the real party in interest, and to assure him finality of the judgment,
and that he will be protected against another suit brought by the real party at interest on
the same matter.' " Schwartzwald, 2012-Ohio-5017, at ¶ 32, quoting Celanese Corp. of Am.
v. John Clark Industries, 214 F.2d 551, 556 (5th Cir.1954).
       {¶ 22} Here, the trial court found Sutherland sustained a compensable injury as a
result of Gaylor's breach of the Agreement of Association but only compensated him for his
lost salary. The trial court also found Conceptual Solutions was the real party in interest
for purposes of lost profit. Our review of the evidence in the record reveals Sutherland is
the only party with standing to sue Gaylor for breach of the Agreement of Association, and
Sutherland, not Conceptual Solutions, is the real party in interest.
       {¶ 23} Conceptual Solutions is not a party to the 2009 Agreement of Association
between Sutherland and Gaylor, and there is no mention of Conceptual Solutions in that
agreement. The language in the Agreement of Association prohibits unilateral assignment,
and there was no evidence produced at trial to support a finding that Sutherland assigned
No. 20AP-257                                                                                                10

his rights under the Agreement of Association to Conceptual Solutions. In his third
assignment of error, Gaylor contends that "[b]ecause Gaylor was not prohibited from
competing with Conceptual Solutions, Conceptual Solutions could not be legally damaged
by [Gaylor's] competition." (Gaylor's Brief at 26.) Yet Gaylor also argues in his third
assignment of error that any profits lost as a result of his breach of the Agreement of
Association belong to Conceptual Solutions.
        {¶ 24} We find Gaylor's position untenable. Were we to accept the argument Gaylor
makes in his third assignment of error, Sutherland would not have standing to prosecute
an action against Gaylor for breach of the Agreement of Association because he operates
his business as a limited liability company, and Conceptual Solutions would not have
standing to prosecute an action for breach of contract against Gaylor because Conceptual
Solutions is not a party to the Agreement of Association. Under Ohio law, however, a
contracting party has standing to prosecute an action for breach of contract. Because
Sutherland, not Conceptual Solutions, is the contracting party, Sutherland, not Conceptual
Solutions, is the party with standing to bring the action against Gaylor for breach of the
Agreement of Association.
        {¶ 25} The claim for breach of contract asserted by Sutherland against Gaylor
represents a single, indivisible claim for relief in contract, and Sutherland, as the
contracting party, is the only party with standing to assert that claim. Because the
undisputed evidence in the record shows that Sutherland was the only party with standing
to prosecute a claim for breach of the Agreement of Association, Sutherland is also the real
party in interest. Abroms, 2011-Ohio-2180, at ¶ 46; Schwartzwald, 2012-Ohio-5017, at
¶ 36. Had Sutherland assigned his rights under the Agreement of Association to Conceptual
Solutions, at any time prior to the commencement of this action, Conceptual Solutions
would be the party with standing to sue Gaylor for breach of contract, not Sutherland.5

5 Because a limited liability company is distinct from its members, an individual member of a limited liability

company lacks standing to assert claims individually where the cause of action belongs to the company. TD
Ltd., LLC v. Dudley, 12th Dist. No. CA2014-01-009, 2014-Ohio-3996, ¶ 16, fn. 2. "The general rule is
applicable in cases where the individual is the sole stockholder." (Citation omitted.) Canderm Pharmacal,
Ltd. v. Elder Pharmaceuticals, Inc., 862 F.2d 597, 603 (6th Cir.1988). See also Sobh v. Am. Family Ins. Co.,
755 F.Supp.2d 852, 856 (N.D.Ohio 2010) (applying Ohio law finding sole member of limited liability company
lacked standing to bring breach of contract action in his individual capacity on behalf of the company). "The
lack of standing may require a court to dismiss an action." Torrance, 2020-Ohio-3971, at ¶ 23, citing Thies v.
Wheelock, 2d Dist. No. 2017-CA-8, 2017-Ohio-8605, ¶ 10.
No. 20AP-257                                                                               11

Because Conceptual Solutions has no enforceable rights under the Agreement of
Association, Conceptual Solutions has no standing to assert a claim against Gaylor for
breach of the Agreement of Association or to recover damages as a result of Gaylor's breach.
Absent standing to sue, Conceptual Solutions cannot be the real party in interest. Abroms
at ¶ 46; Schwartzwald at ¶ 36.
       {¶ 26} It is Gaylor's contention in his third assignment of error that Sutherland's
failure to produce IRS Form 1099 precluded him from recovering damages in the form of
lost profit. Sutherland counters in his cross-assignment of error that he produced sufficient
evidence to support a finding by the trial court that he was paid directly by Money Concepts,
even though he did not produce Form 1099. We agree with Sutherland.
       {¶ 27} Conceptual Solutions was not in existence in 1994 when Sutherland and
Money Concepts executed the franchise agreement. The franchise agreement provides that
Sutherland "shall not either voluntarily or by operation of law, assign * * * this Agreement
or any right or interest thereunder without first obtaining written consent." (Emphasis
added.) (Pl.'s Ex. 1 at 4.) There was no evidence produced in the trial court to support a
finding that Sutherland assigned his rights under the 1994 franchise agreement to
Conceptual Solutions, and there was no evidence in the record to support a finding that
Conceptual Solutions was a party, assignee, or intended beneficiary of the 1994 franchise
agreement. In our view, the manner in which Sutherland reports his commission income
from Money Concepts to the IRS is not probative of his standing to sue Gaylor for the breach
of the Agreement of Association and not dispositive of his right to recover damages in the
form of lost profits arising from that breach.
       {¶ 28} Moreover, Sutherland testified he is paid directly by Money Concepts, and he
receives an IRS Form 1099 from Money Concepts.            Gaylor also testified he is paid
commission income directly from Money Concepts, and he receives a Form 1099 from
Money Concepts. (Def.'s Ex. K.) Sutherland submitted numerous commission statements
he received from Money Concepts. None of the statements refer to Conceptual Solutions.
There is no question that Money Concepts paid compensation directly to Sutherland on
execution of the franchise agreement in 1994, as Conceptual Solutions was not yet in
existence. Under the franchise agreement, compensation rights vest in Sutherland. (Pl.'s
Ex. 1 at 5.) The franchise agreement prohibited unilateral assignment by Sutherland, and
No. 20AP-257                                                                                 12

there was no evidence that Sutherland assigned his rights under the franchise agreement
to Conceptual Solutions. Under the circumstances, and to the extent it is relevant, the
undisputed evidence submitted by Sutherland supports a finding that Sutherland was paid
commission income directly from Money Concepts. (Pl.'s Ex. 9.) Sutherland need not
produce IRS Form 1099 as corroboration for his testimony. Moreover, the fact that
Conceptual Solutions reported Sutherland's commission income from Money Concepts as
business income of Conceptual Solutions does not vest Conceptual Solutions with any
enforceable rights to that compensation under the franchise agreement.
       {¶ 29} Accordingly, we hold the trial court erred by limiting Sutherland's recovery
to the additional salary he would have been paid by Conceptual Solutions in the two years
following the termination of the Agreement of Association. Because Sutherland was the
contracting party, not Conceptual Solutions, any damages arising from Gaylor's breach
accrued to Sutherland, whether they be considered gross lost profits or lost commission
income. Accordingly, Sutherland's cross-assignment of error is sustained and Gaylor's
third assignment of error is overruled. This case shall be remanded for the trial court to
award Sutherland damages equal to the gross profits lost as a result of Gaylor's breach. As
previously determined by the trial court, the gross amount of Sutherland's lost
profit/commission income is $222,223.
       B. Gaylor's Second Assignment of Error
       {¶ 30} In Gaylor's second assignment of error, Gaylor contends that insufficient
evidence supported an award of damages based on estimated lost profit for the two-year
period immediately following Gaylor's termination of the business relationship in
September 2016. We disagree.
       {¶ 31} "When reviewing a sufficiency of the evidence argument, the standard of
review in a civil case is similar to the standard for determining whether to sustain a motion
for judgment notwithstanding the verdict." Natl. [Collegiate] Student Loan Trust-1 v.
Payne, 10th Dist. No. 18AP-973, 2020-Ohio-3553, ¶ 21, citing Hartford Cas. Ins. Co. v.
Easley, 90 Ohio App.3d 525, 531 (10th Dist.1993). Appellate courts review such a ruling
under the de novo standard. Environmental Network Corp. v. Goodman Weiss Miller,
L.L.P., 119 Ohio St.3d 209, 2008-Ohio-3833, ¶ 23. On review, "we must test whether the
evidence, construed most strongly in favor of [the] appellee[], is legally sufficient to sustain
No. 20AP-257                                                                                  13

the verdict." Id. The question is "whether the defendant is entitled to judgment as a matter
of law when the evidence is construed most strongly in favor of the prevailing party." Easley
at 531, citing Civ.R. 50(B). " 'In other words, is the verdict one which could reasonably be
reached from the evidence?' " Natl. [Collegiate] Student Loan Trust-1 at ¶ 21, quoting
Easley at 530, citing Civ.R. 50(B) and Cataland v. Cahill, 13 Ohio App.3d 113 (10th
Dist.1984).
       {¶ 32} "It [is] axiomatic in contract law that in determining damages for a breach of
contract, the injured party is entitled to compensation to be placed, insofar as can be done
by a monetary award, in the same position as that party would have occupied if the contract
had been performed." Briggs, 2014-Ohio-1551, at ¶ 28. " 'Although a party damaged by
the acts of another is entitled to be made whole, the injured party should not receive a
windfall; in other words, the damages awarded should not place the injured party in a better
position than that party would have enjoyed had the wrongful conduct not occurred.' " Id.,
quoting Triangle Properties, Inc. v. Homewood Corp., 10th Dist. No. 12AP-933, 2013-
Ohio-3926, ¶ 52.
       {¶ 33} " 'In order for a plaintiff to recover lost profits in a breach of contract action,
the amount of the lost profits, as well as their existence, must be demonstrated with
reasonable certainty.' " Banks v. Bob Miller Builders, Inc., 10th Dist. No. 01AP-582 (2001),
quoting Gahanna v. Eastgate Properties, Inc., 36 Ohio St.3d 65 (1988). There must be
more than a conclusory statement as to the amount of lost profits. Kinetico, Inc. v. Indep.
Ohio Nail Co., 19 Ohio App.3d 26, 30-31 (8th Dist.1984). "An explanation of how that sum
was determined is required. Lost profits must be substantiated by calculations based on
facts available or in evidence, otherwise they are speculative and uncertain." Banks,
quoting Rhodes v. Rhodes, 71 Ohio App.3d 797, 809 (1991).
       {¶ 34} " 'The difficulty of proving lost profits varies greatly with the nature of the
transaction.' " (Citation omitted.) Advanced Travel Nurses, LLC v. Watson, 2d Dist. No.
24628, 2012-Ohio-3107, ¶ 16, quoting AGF, Inc. v. Great Lakes Heat Treating Co., 51 Ohio
St.3d 177, 181 (1990). " 'If the breach prevents the injured party from carrying on a well-
established business, the resulting loss of profits can often be proved with sufficient
certainty. Evidence of past performance will form the basis for a reasonable prediction as
No. 20AP-257                                                                                            14

to the future.' '' AGF at 181, quoting Restatement of the Law 2d, Contracts, Section 352,
Comment b (1981).
        {¶ 35} "The general rule regarding damages in civil cases is that they must be proven
with certainty, but the amount may be reasonably estimated." Tackle Constr. Group, LLC
v. Pedtke Ents., 2d Dist. No. 27813, 2018-Ohio-1859, ¶ 22, quoting TJX Companies, Inc. v.
Hall, 183 Ohio App.3d 236, 2009-Ohio-3372, ¶ 32 (8th Dist.). " ' "Damages are not
rendered uncertain because they cannot be calculated with absolute exactness. It is
sufficient if a reasonable basis of computation is afforded, although the result be only
approximate." ' " Tackle Constr. Group at ¶ 22, quoting TJX Companies at ¶ 32, quoting
Palmer v. Connecticut Ry. & Lighting Co., 311 U.S. 544, 559-60 (1941).
        {¶ 36} Here, the existence of lost profit is not disputed.6 The question in this case is
the amount of profit lost. As previously noted, the trial court found as follows:
                The competent and credible evidence establishes that Gaylor
                serviced 120 accounts. Upon terminating his association with
                Su[th]erland, 100 of those clients went with Gaylor, 6 stayed
                with Su[th]erland, and the remainder went elsewhere. This
                means Gaylor wrongfully took 83.33% of the accounts. The
                Court finds that it is reasonable that Su[th]erland would have
                retained this client base. Su[th]erland credibly testified that
                he has a high retention rate. Additionally, if Gaylor had not
                wrongfully solicited these clients, their accounts would have
                automatically reverted to and been serviced by Su[th]erland
                with no disruption to them. Thus, the Court finds the
                competent and credible evidence establishes lost profits per
                year of $111,111.50 ($133,339.13 x 83.33%).
                ***
                Accordingly, the Court finds that the business would have
                made an additional $111, 111.50 per year—or $222,223.00 for
                the 2-year period—in profits but for Gaylor's violation of the
                non-compete provision.
(Decision at 11-12.)
        {¶ 37} The above-cited calculation represents an estimate of gross lost profit for 100
clients over a full 2-year period commencing immediately on Gaylor's severance of the

6 As noted in our ruling on Sutherland's cross-assignment of error and Gaylor's third assignment of error,

Gaylor erroneously contends the lost profits belong to Conceptual Solutions, not Gaylor. At trial, Gaylor's
counsel also challenged Sutherland's damages estimate because it was based on commission statements from
2014 and may have included commissions earned by other representatives.
No. 20AP-257                                                                              15

parties' business relationship. Gaylor's second assignment of error does not challenge the
calculation itself or the accuracy of the underlying data.       Rather, Gaylor claims the
methodology is flawed because it erroneously assumes Gaylor solicited all 100 clients on
the first day the restriction was in place. Gaylor claims a reliable estimate of lost profits
required evidence as to the precise date when Gaylor solicited each of the 100 clients at
issue and the precise amount of commission income Gaylor derived from each of those
clients from the date of solicitation to the end of the 2-year period of restriction in
September 2018. We do not believe Ohio law required Sutherland to establish the amount
of lost profit with such precision.
       {¶ 38} Sutherland's Money Concepts franchise was established in 1994, and it has
been operated as a going concern since that time. Gaylor first began operating as an
independent contractor under Sutherland's Money Concepts franchise in 2009 when the
Agreement of Association was executed, and he continued to perform in that capacity
through September 2016 when he severed his relationship with Sutherland. Sutherland
produced business records documenting what he believed to be an accurate accounting of
Gaylor's commission income from Money Concepts during Gaylor's most recent full year of
production. See Pl.'s Ex. 8 and 9.
       {¶ 39} Sutherland asked the trial court to award damages based on lost profits
projected over a two-year period beginning September 2016 and ending September 2018.
Because Sutherland's Money Concepts franchise was a well-established business, and
because Gaylor had a well-established commission history with the franchise, the amount
of lost profit resulting from Gaylor's breach during that period of time could be proved with
sufficient certainty, without the need for an expert opinion. In this case, evidence of
Gaylor's past performance formed the basis for the trial court to make a reasonable
prediction of the profit lost in the two years following the breach.
       {¶ 40} The trial court examined Gaylor's most recent commission history preceding
the date Gaylor severed his business relationship with Sutherland and used that data to
project the commission income Sutherland lost over the two-year period as a result of
Gaylor's breach. The trial court found that "the business would have made an additional
$111,111.50 per year—or $222,223.00 for the 2-year period—in profits but for Gaylor's
No. 20AP-257                                                                                  16

violation of the non-compete provision." (Decision at 12.) According to the trial court, this
lost profit figure represents the gross profit lost in the relevant time period.
       {¶ 41} The trial court expressly rejected the very argument Gaylor now raises in his
second assignment of error:
              Gaylor argues that any lost profits should not be calculated for
              the full 24 months because there is no clear evidence as to
              when each of the 100 clients left. However, Su[th]erland
              seeks damages for only a 2-year period when, based on the
              nature of the business, he in all likelihood [] would have
              retained the bulk of the clients beyond this time[]frame and
              continued to earn commissions from these accounts.
              Therefore, the Court finds it is fair and reasonable to award
              damages for the full 24 months being sought by Su[th]erland.
(Decision at 11.)
       {¶ 42} With respect to lost profits, "[t]he general rule is that where profits are lost as
the result of a breach of contract, if the profits were in the contemplation of the parties and
there is some rational basis shown for determining such profits, they may be recovered as
damages." Excelsior Motor Mfg. & Supply Co. v. Sound Equip., Inc., 73 F.2d 725, 728-29
(7th Cir.1934), cert. denied, 294 U.S. 706 (1935). Here, the contract prohibits solicitation
of Sutherland's clients for two years. The evidence shows that Gaylor began soliciting
Sutherland's clients, including those exclusively serviced by Sutherland, immediately on
termination of Gaylor's business relationship with Sutherland and that he continued to do
so throughout the two-year period of restriction. The trial court ruled the two-year
restrictive covenant in the Agreement of Association was lawful, and there has been no
challenge to that ruling in this appeal. In making that ruling, the trial court determined
that the non-solitation set forth a reasonable restriction that was necessary to protect
Sutherland's legitimate business interests and that the restriction did not impose undue
hardship on Gaylor.
       {¶ 43} The trial court found that "in all likelihood," 100 clients Gaylor solicited
during the 2-year period covered by the restriction would have been retained by Sutherland.
(Decision at 11.) Those 100 clients would have continued to produce commission income
for Sutherland for the foreseeable future, whether Gaylor solicited those clients on day 1 of
the 2-year period or the last day. The trial court found Sutherland testified credibly as to
No. 20AP-257                                                                               17

his client retention rate. Gaylor's second assignment of error does not raise a challenge to
the weight of the evidence and the credibility of witnesses, as neither the weight of the
evidence nor the credibility of the witnesses is considered in conducting a sufficiency of the
evidence review. Kassay v. Niederst Mgt., 8th Dist. No. 106016, 2018-Ohio-2057, ¶ 20,
citing Texler v. D.O. Summers Cleaners & Shirt Laundry Co., 81 Ohio St.3d 677, 679
(1998).
       {¶ 44} In order for Sutherland to be adequately compensated for his lost profit,
Sutherland is entitled to recover estimated lost profit for those clients over a reasonable
period of time.    The trial court determined the two-year period of restriction was
reasonable.    Competent, credible evidence supports the trial court's determination.
Accordingly, we overrule Gaylor's second assignment of error.
       C. Gaylor's First Assignment of Error
       {¶ 45} In Gaylor's first assignment of error, Gaylor contends the evidence produced
by Sutherland in the trial court was insufficient to support an award of damages to
Sutherland representing the salary he would have received from Conceptual Solutions had
Gaylor not breached the Agreement of Association. Gaylor claims that "[n]ot a scintilla of
evidence was presented at trial as to how * * * Sutherland's compensation was determined
by Conceptual Solutions, * * * what Sutherland's compensation from Conceptual Solutions
actually was, or * * * how Sutherland's compensation from Conceptual Solutions was
impacted by Gaylor's competition." (Gaylor's Brief at 17.)
       {¶ 46} Because we are reversing the trial court's judgment and remanding the
matter for the trial court to award damages based on the gross profit Sutherland lost as a
result of Gaylor's breach of the Agreement of Association, we need not determine whether
the evidence is sufficient to support damages based on Sutherland's salary from Conceptual
Solutions. Nevertheless, for the reasons set forth in our ruling on Sutherland's cross-
assignment of error and Gaylor's third assignment of error, we must sustain Gaylor's first
assignment of error as the evidence does not support a damage award of only $97,778.12.
IV. CONCLUSION
       {¶ 47} Having sustained Sutherland's cross-assignment of error and Gaylor's first
assignment of error, but having overruled Gaylor's second and third assignments of error,
No. 20AP-257                                                                               18

we reverse the judgment of the trial court and remand this matter for the trial court to enter
judgment for Sutherland in the total amount of $222,223, plus interest.
                                             Judgment affirmed in part, reversed in part;
                                                     cause remanded with instructions.
                 LUPER SCHUSTER and BEATTY BLUNT, JJ., concur.
                              _____________