Court Opinion

ID: 9910059
Source: CourtListenerOpinion
Date Created: 2023-12-14 19:07:21.215891+00
Date Added: 2024-06-11T12:50:41.352743
License: Public Domain

[Cite as Hal Fab, L.L.C. v. Jordan, 2023-Ohio-4535.]

                              COURT OF APPEALS OF OHIO

                             EIGHTH APPELLATE DISTRICT
                                COUNTY OF CUYAHOGA

HAL FAB, LLC, ET AL.,                                  :

                Plaintiffs-Appellees,                  :
                                                                     No. 112508
                v.                                     :

RICHARD JORDAN, ET AL.,                                :

                Defendants-Appellants.                 :

                               JOURNAL ENTRY AND OPINION

                JUDGMENT: REVERSED AND REMANDED
                RELEASED AND JOURNALIZED: December 14, 2023

            Civil Appeal from the Cuyahoga County Court of Common Pleas
                                Case No. CV-19-912921

                                            Appearances:

                Meyers, Roman, Friedberg & Lewis, R. Scott Heasley,
                Carly Glantz, and Amily A. Imbrogno, for appellees Hal
                Fab LLC and Brook Park Land Development I, LLC.

                Mansour Gavin, LPA, Edward O. Patton, and Katie E.
                Epperson, for appellants.

EILEEN T. GALLAGHER, J.:

                Defendant-appellant,           Richard     Jordan   (“Jordan”),   appeals   two

judgments rendered against him and in favor of plaintiffs-appellees, Hal Fab, L.L.C.

(“Hal Fab”) and Brook Park Land Development I, L.L.C. (“Brook Park”) (collectively
“appellees”) following a bench trial and a hearing on attorney fees. He claims the

following errors:

      1. Whether the trial court erred in finding that the February 9, 2018
      letter alone, amounted to a contract without regard to the limitations
      expressly stated in the February 7, 2018 letter.

      2. Whether the trial court erred in piercing the corporate veil of
      MacroTrend to impute personal liability onto appellant Jordan, who
      did not own the company and was merely an employee of MacroTrend.

      3. Whether the trial court erred in extending the guarantee language
      of the February 9, 2018 letter to all expenses, past to future, of appellees
      onto appellant Jordan.

      4. Whether the trial court erred in failing to grant appellant Jordan’s
      motion for directed verdict, notwithstanding judgment.

      5. Whether the trial court erred by granting attorney fees and damages
      based upon exhibits withdrawn from trial and awarding breach of
      contract [sic] damage claims for the tort-based fraud claims.

      6. Whether the trial court erred as a matter of law by denying appellant
      Jordan’s motion for summary judgment and motion for directed
      verdict related to fraud, piercing the corporate veil, breach of contract
      and promissory estoppel.

            We find merit to the appeal and reverse the trial court’s judgments.

                       I. Facts and Procedural History

            This dispute involves a series of agreements related to the purchase of

commercial property located in Hawesville, Kentucky (“the Kentucky property”).

On April 18, 2017, Brook Park entered into a purchase agreement (the “original

purchase agreement”) with third-party Arconic Automotive Castings (“Arconic”) to

purchase the Kentucky property for $2.7 million. Brook Park subsequently assigned

it rights under the original purchase agreement to Hal Fab, a wholly-owned
subsidiary of Brook Park. Brook Park is solely owned and operated by Howard

Lichtig (“Lichtig”).

             Brook Park entered into the original purchase agreement with intent to

either lease the property to third-party WhiteRock Pigments, Inc. (“WhiteRock”),

sell the property to WhiteRock, or sell its interest in Hal Fab to WhiteRock. (Tr.

103.) WhiteRock had acquired intellectual property from Sherwin Williams to

produce a paint pigment called titanium dioxide, and it sought financial investments

of approximately $250 million to build a plant to produce the pigment.

             Defendant MacroTrend Capital Group, L.L.C., now MacroTrend

Capital Group, Inc. (collectively “MacroTrend”), is a banking and asset-

management company that procures funds from foreign investors interested in

investing in American companies. Jordan was an employee of MacroTrend with

the title of president throughout the events giving rise to this case. MacroTrend

assured appellees that it would obtain the necessary financing for WhiteRock to

develop factories on the Kentucky property. (Tr. 50.)        Because Brook Park’s

purchase of the Kentucky property was to be financed through commercial funding

with a lease to WhiteRock, the financing Brook Park needed to purchase the

Kentucky property was contingent on WhiteRock becoming a tenant of the property.

(Tr. 103, 236-237.) WhiteRock’s ability to lease and operate on the Kentucky

property was contingent on WhiteRock obtaining financing for its project. Thus,

Brook Park could not purchase the Kentucky property unless WhiteRock obtained

the necessary financing for its project.
            Under the terms of the original purchase agreement, Brook Park was

required to make a good-faith deposit of $100,000 upon execution. Brook Park then

had a 120-day evaluation period to complete its due diligence with closing to occur

30 days after the expiration of the evaluation period.      The original purchase

agreement provided Book Park with two options to extend the evaluation period for

two additional 60-day periods with the payment of an additional $50,000 fee per

extension. Brook Park also had the option to terminate the agreement for a full

refund of its earnest money and extension fees during the first and second

extensions of the evaluation period if the tenant was unable to satisfy the “Tenant

Financing Contingency.” (Tr. 56-57.)

            The initial evaluation period was set to expire on August 18, 2017.

Because WhiteRock had not yet secured its financing, Brook Park extended the

evaluation period for an additional 60 days until October 15, 2017, with the payment

of an additional $50,000. (Tr. 59-60.) Because WhiteRock had not obtained

funding prior to the expiration of the first extension, it extended the evaluation

period for another 60 days through December 15, 2017, with the payment of an

additional $50,000. Thus, by December 2017, Brook Park had paid $100,000 in

earnest money upon execution of the original purchase agreement and two

additional payments of $50,000 totaling $100,000 for two extensions of the

evaluation period through December 15, 2017. Brook Park was entitled to a full

refund of its deposits and extension fees totaling $200,000 on or before

December 15, 2017, by giving notice to Arconic, that its prospective tenant,
WhiteRock, had failed to secure its financing. At some point in time, Brook Park

assigned its rights under the original purchase agreement to Hal Fab.

              On December 14, 2017, Lichtig met with Jordan and the principals of

WhiteRock, Leon Polott (“Polott”) and Bob Meyer (“Meyer”), to discuss the closing

date. Lichtig expressed concerns about the risk posed by the delay in WhiteRock’s

funding because his ability to terminate the original purchase agreement with a full

refund of his deposit and extension fees was expiring the next day. Jordan assured

Lichtig that the funds were coming from overseas and that they were awaiting

transfer to the United States. In fact, WhiteRock signed a note guaranteeing

payment of the funds held in escrow as well as Lichtig’s expenses.1 (Tr. 120-122,

124.) Lichtig nevertheless memorialized his concerns and his understandings in an

email addressed to Meyer that same day wherein he stated, in relevant part:

      My ability to terminate my contract with Arconic (Alcoa) for cause ends
      tomorrow; up until this point, I could terminate based on your inability
      to get a financing commitment for your funding; if I terminate after
      tomorrow, I note [sic] only lose my money that is held in escrow
      ($200,000), but could also be subject to further damages or specific
      performance * * * not a road we want to go down * * *

      * * *

      We also discussed my ongoing risk, which is that although you have
      signed a note guaranteeing payment of funds held in escrow plus my
      expenses (which I certainly appreciate), from a practical standpoint, if
      the worst should happen and the deal doesn’t move forward, I’m in
      trouble * * * I also appreciate [Jordan]’s sensitivity to my exposure
      (and yours as well) * * *.

      1  Appellees never sued WhiteRock, Polott, or Meyer to collect on the note.
(Tr. 124.)
(Defendant’s exhibit No. RJ 12, p.3.)

             On December 27, 2017, Hal Fab entered into a formal real estate

purchase agreement with WRP Realty, L.L.C. (“WRP Realty”), a separate entity

affiliated with WhiteRock, to allow WhiteRock to purchase the Kentucky property

from Hal Fab for $10 million. WRP Realty never ended up buying the Kentucky

property from Hal Fab because it ultimately never received the necessary funding.

(Tr. 244-245.) Had the deal gone through, Lichtig would have realized a profit of

about $7 million. (Tr. 106.)

              On or about January 12, 2018, Arconic and Hal Fab executed an

amendment to the original purchase agreement (the “first amendment”), which

extended the closing date to February 12, 2018. (Tr. 61; Defendant exhibit No. RJ

29.) There were no fees associated with this extension. (Tr. 62.) On February 18,

2018, Hal Fab executed a second amendment to the original purchase agreement

(“second amendment”), which extended the closing date to March 12, 2018. The

second amendment provided that if the sale failed to close by March 12, 2018, Hal

Fab agreed to release $75,000 of the earnest money and to pay a one-time, non-

refundable payment of $7,500 to the seller. (Plaintiff’s exhibit No. 11.)

             On February 7, 2018, Lichtig and Jordan met a second time to discuss

the status of the financing. Jordan told Lichtig that based on representations made

by Kevin Gluckstal (“Gluckstal”), MacroTrend’s shareholder and CEO, he was

confident the financing would be provided and that there had been delays

transferring the funds from Asia to Europe and from Europe to the United States.
At Lichtig’s request, Jordan prepared a letter on behalf of MacroTrend dated

February 7, 2018 (the “February 7th letter”), wherein Jordan recommended a one-

month extension of appellees’ agreement to purchase the Kentucky property. The

February 7th letter states, in relevant part:

      As previously discussed on several occasions, MacroTrend Capital is
      the funding source providing the capital for the purchase of the
      Hawesville property by WhiteRock Pigments (via assignment from Hal
      Fab). We are committed to this purchase and the development of
      WhiteRock’s facilities in Hawesville. The engineers and surveyors have
      completed their work and done a great job. The project is ready to move
      forward and our principals are excited about working with WhiteRock
      to develop this business opportunity.

      MacroTrend Capital had expected our funding to be completed by
      February 2, and the money available for closings by February 12. The
      money has not yet been transferred to MacroTrend for completing
      transactions. As such, we will need an extension of the agreement to
      acquire the property and make arrangements to close as soon as the
      funds are available. At this point there is no question as to the funding
      and MacroTrend is committed to this project.

      While MacroTrend expects to close soon, we are not yet able to confirm
      a date until the funds are transferred to our account. Therefore, it
      seems prudent for the parties to extend the contract for one month so
      this closing process takes place in an orderly manner. If agreeable with
      Arconic, I would be happy to come to Pittsburgh Thursday or Friday to
      meet them and answer any questions.

(Plaintiff’s exhibit No. 16.) Jordan sent the February 7th letter to codefendant

Gregory Lustig (“Lustig”), MacroTrend’s general counsel and chairman of the board,

for approval before sending it to Lichtig. (Plaintiff’s exhibit No. 16; tr. 339.)

              On February 9, 2018, again at Lichtig’s request, Jordan signed a letter

(the “February 9th letter”) on behalf of MacroTrend, promising to reimburse

appellees for expenses in the event that MacroTrend failed to provide the necessary
financing to WhiteRock that would allow Hal Fab to purchase the Kentucky

property. The February 9th letter states:

      This letter confirms the prior statements and the commitment of
      MacroTrend Capital Group LLC to reimburse Brook Park Land
      Development, Ltd. and Hal Fab LLC (“Purchaser”) for all deposits,
      extension fees, and out of pocket expenses (including legal, surveyor,
      title, environmental, and travel costs) incurred by Purchaser in
      connection with the potential purchase of the Hawesville Property,
      should MacroTrend and WhiteRock fail to provide the financing
      necessary for the purchase of the Hawesville Property and/or the
      purchase of the membership interests in Hal Fab.

              By mid-March 2018, it was clear that MacroTrend was not going to be

able to secure the financing necessary for the WhiteRock project. (Tr. 255-256, 387.)

Lichtig had no further communications with Jordan after MacroTrend failed to

secure funding by the March 12, 2018 deadline set forth in appellees’ second

amendment to the original purchase agreement. Nevertheless, Hal Fab, through

Lichtig, requested several, additional extensions of the closing date after

MacroTrend was no longer involved in the project. (Tr. 76-78, 91, 137.) The

extensions cost an additional $15,000 each, and Hal Fab requested these additional

extensions based on assurances from WhiteRock, not MacroTrend, that it was going

to be able to obtain the funding and close the deal. (Tr. 94, 137.) WhiteRock

continued to search for funding after it stopped dealing with MacroTrend in March

2018, and Lichtig never stopped seeking extensions of the original purchase

agreement until Arconic “chose to go in a different direction.” (Tr. 257-258.)

              In March 2019, appellees filed suit against Jordan, MacroTrend,

Lustig, and Gluckstal (collectively “defendants”) to recover all the deposits, fees, and
expenses appellees had paid in connection with the original purchase agreement and

subsequent extensions. Appellees alleged that the February 9th letter constituted a

guaranty of all of its expenses. The complaint was amended twice, and the second

amended complaint asserted claims for breach of contract, fraud, and promissory

estoppel.

              Appellees alleged that the February 9th letter constituted a contract

and that the defendants breached the contract by failing to reimburse appellees for

all of their expenses. They further alleged that the defendants committed fraud

because they knowingly made false representations regarding their ability to obtain

the financing necessary for appellees to purchase the Kentucky property. The

appellees’ promissory-estoppel claim alleged that appellees justifiably relied on

defendants’ representations and that they would not have continued to pursue the

transaction related to the Kentucky property if it had not been for the defendants’

assurances.

              MacroTrend and Gluckstal failed to answer the complaint and upon

motion, the court entered a default judgment against MacroTrend in the amount of

$560,326.93 with respect to the breach-of-contract claim and a default against

MacroTrend and Gluckstal, jointly and severally, in the amount of $560,326.93 on

the fraud and promissory-estoppel claims. Jordan filed a motion to dismiss and for

summary judgment, arguing he was not personally liable for appellees’ damages

because he acted at all times solely in his capacity as an employee of MacroTrend.

He further argued, in the alternative, that even if he were considered an officer of
MacroTrend, he could not be held personally liable because there was no basis for

piercing the corporate veil.

              The court denied Jordan’s motion to dismiss and for summary

judgment, and the case proceeded to a bench trial on appellees’ claims against

Jordan and Lustig in June 2021. At trial, appellees asked the court to pierce the

corporate veil in order to hold Lustig and Jordan personally liable for their damages.

The trial court issued a written decision on June 21, 2022, wherein it found in favor

of appellees and against Lustig and Jordan on all claims. The court found that both

Lustig and Jordan were corporate officers of MacroTrend. It also found that because

MacroTrend committed fraudulent acts through Lustig and Jordan, appellees had

established a valid claim to pierce the corporate veil. Accordingly, the court entered

judgment against Lustig and Jordan, jointly and severally, in the amount of

$501,091.43, inclusive of attorney fees in the amount of $127,688.34. The court’s

order also provided that additional attorney fees and expenses would be determined

following a hearing on a later date.

              The trial court held a hearing on additional attorney fees on July 27,

2022. Seven months later, on February 27, 2023, the court issued a decision

awarding appellees $29,351.32 in attorney fees. Jordan now appeals the trial court’s

judgments.
                              II. Law and Analysis

                          A. The February 9th Letter

              In the first assignment of error, Jordan argues the trial court erred in

determining that the February 9th letter constituted an enforceable contract. In the

third assignment of error, Jordan argues the trial court erred in extending the

alleged guaranty language in the February 9th letter to all expenses, past to future.

We discuss these assigned errors together because they both relate to our

interpretation of the alleged contract document.

              The interpretation of a written contract is a matter of law subject to

de nov0 review. Saunders v. Mortensen, 101 Ohio St.3d 86, 2004-Ohio-24, 801

N.E.2d 452, ¶ 9. In a de novo review, we review the merits of the case independently,

without any deference to the trial court. Sosic v. Stephen Hovancsek & Assocs., Inc.,

8th Dist. Cuyahoga No. 109993, 2021-Ohio-2592, ¶ 21.

             A contract is generally defined as a promise that is actionable upon

breach. Perlmuter Printing Co. v. Strome, Inc., 436 F.Supp. 409, 414 (N.D.Ohio

1976). To be enforceable, a contract must have an offer, acceptance, consideration,

and a manifestation of mutual assent. Kostelnik v. Helper, 96 Ohio St.3d 1, 2002-

Ohio-2985, 770 N.E.2d 58, ¶ 16. To prove the existence of a contract, the proponent

of the contract must show that “both parties consented to the terms of the contract,

that there was a ‘meeting of the minds’ of both parties, and that the terms of the

contract are definite and certain.” Nilavar v. Osborn, 137 Ohio App.3d 469, 484,
738 N.E.2d 1271 (2d Dist.2000), quoting McSweeney v. Jackson, 117 Ohio App.3d

623, 631, 691 N.E.2d 303 (4th Dist.1996).

               In interpreting contracts, the court’s role is “to give effect to the intent

of the parties to the agreement.” Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216,

2003-Ohio-5849, 797 N.E.2d 1256, ¶ 11, citing Hamilton Ins. Servs. v. Nationwide

Ins. Cos., 86 Ohio St.3d 270, 273, 714 N.E.2d 898 (1999). “When the language of a

written contract is clear, a court may look no further than the writing itself to find

the intent of the parties.” Id.

               The February 9th letter states:

      This letter confirms the prior statements and the commitment of
      MacroTrend Capital Group LLC to reimburse Brook Park Land
      Development, Ltd. and Hal Fab LLC (“Purchaser”) for all deposits,
      extension fees, and out of pocket expenses (including legal, surveyor,
      title, environmental, and travel costs) incurred by Purchaser in
      connection with the potential purchase of the Hawesville Property,
      should MacroTrend and WhiteRock fail to provide the financing
      necessary for the purchase of the Hawesville Property and/or the
      purchase of the membership interests in Hal Fab.

The plain language of the February 9th agreement provides a clear promise by

MacroTrend to reimburse appellees for “all” the expenses listed therein.

               Jordan nevertheless argues the February 9th letter must be read in

conjunction with the February 7th letter to determine the parties’ intent because the

February 9th letter expressly states that it “confirms the prior statements and

commitment of MacroTrend.”            The February 7th letter states that because

MacroTrend had not yet received funding for the WhiteRock project, “it seems

prudent for the parties to extend the contract for one month * * * .” Jordan contends
that when the February 7th and the February 9th letters (the “February letters”) are

read together, the promise to reimburse appellees’ expenses in the February 9th

letter only applies to one month of expenses. He also asserts that without the context

provided by the February 7th letter, the plain language of the February 9th letter

leads to an absurd result wherein MacroTrend is obligated to reimburse Hal Fab for

all fees and expenses indefinitely into the future, even after MacroTrend was no

longer involved in the WhiteRock project. (Appellant’s reply brief p. 3.)

              When construing a contract, evidence of prior written agreements are

generally barred from consideration by the parol evidence rule. “The parol evidence

rule states that ‘absent fraud, mistake or other invalidating cause, the parties’ final

written integration of their agreement may not be varied, contradicted or

supplemented by evidence of prior or contemporaneous oral agreements, or prior

written agreements.’” Galmish v. Cicchini, 90 Ohio St.3d 22, 27, 734 N.E.2d 782

(2000), quoting 11 Williston, Contracts, Section 33:4, at 569-570 (4th Ed.1999). See

also Carey v. Down River Specialties, Inc., 8th Dist. Cuyahoga No. 103595, 2016-

Ohio-4864, ¶ 17-19.

              The parol evidence rule is not a rule of evidence, but a rule of

substantive contract law employed as an aid to judicial interpretation. Ed Schory &

Sons, Inc. v. Francis, 75 Ohio St.3d 433, 439, 662 N.E.2d 1074 (1996). As a policy

matter, the rule is designed to protect the integrity of written agreements and

thereby encourage parties to put all contractual terms in writing. Galmish at 27.
              However, when the circumstances surrounding the alleged agreement

invest the language of the contract with a special meaning, extrinsic evidence may

be considered in an effort to give effect to the parties’ intentions. Bellman v. Am.

Internatl. Group, 113 Ohio St.3d 323, 2007-Ohio-2071, 865 N.E.2d 853, ¶ 7. See

also Shifrin v. Forest City Ents., Inc., 64 Ohio St.3d 635, 638, 597 N.E.2d 499 (1992)

(Extrinsic evidence is admissible to ascertain the intent of the parties when the

contract is unclear or ambiguous, or when circumstances surrounding the

agreement give the plain language special meaning.).

              At the time the February letters were written, there was a common

expectation among the parties that MacroTrend would receive the funds promised

for WhiteRock’s project in the very near future. (Tr. 406.) It was for this reason that

Jordan indicated the need for a one-month extension in the February 7th letter.

Indeed, the February 7th letter states that “MacroTrend expects to close soon[.]”

Jordan testified he thought the February letters had to be considered together in

order to understand the parties’ intentions. He testified at trial:

      I didn’t see either one as a guaranty. I saw the letter of the 9th to be
      read in conjunction with the one from February 7th. I thought that if
      there was a meeting of the minds, that a contract would then be drawn
      memorializing whatever was agreed to. And I thought that the
      February 9th letter was specific to a 30-day period to be somewhat
      lined up with the timeliness of the escrow agreement that was in place,
      running into March.

(Tr. 328.) Jordan also stated:

      At the lunch at the first part of February, it was discussed getting a 30-
      day extension, and this letter was to cover that. It was a 30-day
      concept. It was the value of 15, about $15,000 would probably be
        involved to extend it with Arconic. But the idea was that I would
        accompany any meeting that was going on at Arconic so I could
        understand what the terms of the extension might be and I would be
        able to tell our team, this makes sense to me, or it’s too expensive, or
        are we sure there’s not an alternative buyer for this project and it needs
        to be extended at all, or should we just sort of walk away from it and
        take our chances upon funding, because the property would still be
        there.

(Tr. 410.) The February 7th letter corroborates his testimony. It states, in relevant

part:

        While MacroTrend expects to close soon, we are not yet able to confirm
        a date until the funds are transferred to our account. Therefore, it
        seems prudent for the parties to extend the contract for one month so
        this closing process takes place in an orderly manner. If agreeable with
        Arconic, I would be happy to come to Pittsburgh Thursday or Friday to
        meet them and answer any questions.

                Lichtig admitted at trial that he continued seeking extensions of the

original purchase agreement and that he kept agreeing to pay the extension fees long

after he ceased to have contact with MacroTrend because WhiteRock asked him to

keep the deal open. (Tr. 94, 137.) Meyer also testified that after WhiteRock ended

its relationship with MacroTrend in March 2018, WhiteRock continued to search for

funding and he knew that Lichtig was continuing to seek extensions in late 2018.

(Tr. 257-258.)

                 It is unreasonable to find that MacroTrend agreed to reimburse

appellees for all expenses, including those generated indefinitely into the future.

The February 7th letter explains the circumstances surrounding MacroTrend’s

promise to reimburse appellees’ expenses. It qualifies the term “all” in the February

9th agreement by limiting the time period for reimbursement to one month. When
the February letters are read together, it is clear that any reimbursement of all

expenses listed in the February 9th letter was limited to a period of one month.

             However, there are other issues with the February letters.            The

February 9th letter does not state any consideration given by appellees in exchange

for MacroTrend’s commitment to reimburse their expenses. Consideration is the

promise of one party to do something he or she is not obligated to do in exchange

for another party’s promise to do something in exchange. Sal’s Heating & Cooling

v. Harbour View Assocs., 8th Dist. Cuyahoga No. 112490, 2023-Ohio-3632, ¶ 12;

Mooney v. Green, 4 Ohio App.3d 175, 446 N.E.2d 1135 (12th Dist.1982)

(consideration may be either a detriment to the promisee or a benefit to the

promisor). To constitute consideration, the benefit or detriment must be “bargained

for.” Sal’s Heating & Cooling at ¶ 12, citing Carlisle v. T & R Excavating, Inc., 123

Ohio App.3d 277, 283, 704 N.E.2d 39 (9th Dist.1997).

              The trial court found that “Defendants received consideration in the

form of the benefit to the promisors because Defendants Jordan and Lustig testified

[MacroTrend] and Defendants Jordan and Lustig would have earned large sums of

money if Plaintiffs closed the transaction to purchase the Property and WhiteRock

began operating the Plant.” (Opinion and order, June 21, 2022, p. 8.) However,

MacroTrend, Lustig, and Jordan would have received these benefits regardless of

whether appellees purchased the Kentucky property and regardless of whether

appellees obtained any additional extensions of the original purchase agreement if

MacroTrend funded the WhiteRock project. WhiteRock and MacroTrend wanted to
purchase the property themselves and would have profited more if the deal had gone

through and Hal Fab were no longer involved. (Tr. 414.) The promise of large profits

if the WhiteRock project went forward was not a benefit given by appellees in

exchange for appellees’ obtaining any extensions of the original purchase

agreement.

              Jordan testified that nothing was offered to MacroTrend in exchange

for the reimbursement, and appellees presented no evidence to the contrary. (Tr.

329.) When the February letters are considered together and with the parties’ trial

testimony, it is clear there was no meeting of minds. Jordan believed there would

be only one extension. The document does not specify if Lichtig believed there were

any limitations with respect to time or number of extensions, but his actions indicate

he thought there were none. The February 7th letter also suggests that the parties

would not reach an agreement unless and until Arconic approved their plan for

another extension. The February 9th letter is, therefore, not an enforceable contract.

              Therefore, the first and third assignments of error are sustained.

                         B. Piercing the Corporate Veil

              In the second assignment of error, Jordan argues the trial court erred

in piercing the corporate veil and in finding him personally liable for appellees’

claims. He maintains there is no evidence that he was an officer of MacroTrend and

that there was no basis to justify piercing the corporate veil.

              Shareholders, officers, and directors of a corporation are generally not

liable for the debts of the corporation. Dombroski v. WellPoint, Inc., 119 Ohio St.3d
506, 2008-Ohio-4827, 895 N.E.2d 538, ¶ 16 citing Article XIII, Section 3, Ohio

Constitution; Belvedere Condominium Unit Owners’ Assn. v. R.E. Roark Cos., 67

Ohio St.3d 274, 287, 617 N.E.2d 1075 (1993). The corporate form was created, in

part, to separate the corporate debts and property of the company from that of the

stockholders in their individual capacities. Id. However, the corporate form may be

disregarded in cases where the corporate shareholders commit fraud or in other

exceptional circumstances. Dombrowski at ¶ 26.

      “The corporate form may be disregarded and individual shareholders
      held liable for wrongs committed by the corporation when (1) control
      over the corporation by those to be held liable was so complete that the
      corporation has no separate mind, will, or existence of its own, (2)
      control over the corporation by those to be held liable was exercised in
      such a manner as to commit fraud or an illegal act against the person
      seeking to disregard the corporate entity, and (3) injury or unjust loss
      resulted to the plaintiff from such control and wrong.”

Dombrowski at ¶ 18, quoting Belvedere, at paragraph three of the syllabus. These

requirements are independent and written in the conjunctive; therefore, all three

must be clearly established in order to be entitled to relief. Id.

              MacroTrend hired Jordan as its president pursuant to an employment

agreement. In its description of Jordan’s duties, the employment agreement states,

in relevant part:

      As President, Employee shall oversee and direct the general business
      operations of the Company and perform such other necessary work in
      connection with the business as may be required of him subject to the
      general direction, approval and control of the CEO and Chairman of
      the Board.

(Emphasis added.) (Defendant’s exhibit No. RJ 1.) Thus, despite his title as

president, Jordan was not an officer of MacroTrend. (Tr. 381.) Jordan’s sole
responsibility at MacroTrend was to source investment opportunities and bring

them to the CEO and chairman of the board. (Tr. 381-382.) If MacroTrend

successfully closed on a deal with any of these opportunities, Jordan would have

been responsible for running the businesses on a day-to-day basis. (Tr. 383.)

Jordan was not involved in securing investment funding for MacroTrend. (Tr. 381-

382, 387.) He also had no authority to bind MacroTrend to any agreements or to

take action without the express approval of Kevin Gluckstal (“Gluckstal”),

MacroTrend’s CEO. (Tr. 340, 353, 357-358, 381.) Moreover, Jordan had no

ownership interest in the corporation and was not a member of the board of

directors. (Tr. 381.) He, therefore, lacked any control over the corporation, and

there is no evidence in the record to satisfy the first prong of the Belvedere test.

              There is also no evidence that Jordan committed fraud. To establish

fraud, the plaintiff must demonstrate (1) a representation or, where there is a duty

to disclose, concealment of a fact; (2) which is material to the transaction at hand;

(3) 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; (4) with

the intent of misleading another into relying upon it; (5) justifiable reliance upon

the representation or concealment; and (6) a resulting injury proximately caused by

the reliance. Gaines v. Preterm-Cleveland, Inc., 33 Ohio St.3d 54, 55, 514 N.E.2d

709 (1987); Mobley v. James, 8th Dist. Cuyahoga No. 108470, 2020-Ohio-380,

¶ 32.
               Jordan repeatedly assured Lichtig that MacroTrend would obtain the

necessary funding for the WhiteRock project, which would have allowed Hal Fab to

close on the purchase of the Kentucky property. The February 7th letter states: “At

this point there is no question as to the funding and MacroTrend is committed to

this project.” Yet MacroTrend never obtained the necessary funding, and Jordan

made representations that ultimately proved untrue. However, there is no evidence

that Jordan knowingly or recklessly misrepresented MacroTrend’s ability to procure

the funding.

               When asked if there was any point in time where Meyer thought that

Jordan was not being truthful about MacroTrend’s ability to secure the funding, he

replied: “I thought he was being truthful with what he knew[.]” (Emphasis added.)

(Tr. 262.) Meyer never thought that Jordan misled him in any way. (Tr. 216.) Meyer

testified that he, himself, was confident that MacroTrend would obtain the necessary

funding. (Tr. 230-231, 241, 253.) Lustig also indicated he believed the funds were

coming. (Tr. 337.) He interpreted the phrase “there is no question as to funding” to

mean there is no question that the project was going to be funded; there was only a

question as to when it would be funded. (Tr. 337.)

               Gluckstal   was   handling   the   procurement     of   funds   from

Indonesian/Vietnamese investors in Asia. (Tr. 267.) Jordan made representations

to appellees based on the information being provided to him by Gluckstal. When

Jordan was asked whether he had any cause to believe that Gluckstal was supplying

him with inaccurate information regarding the status of the funding, he replied, “No.
No, not at all.” (Tr. 387.) MacroTrend had agreements with investors in Indonesia

and Vietnam, and Gluckstal was creating trusts in Switzerland to be used to transfer

the funds from Asia, through Europe, to the United States. (Tr. 384-385.) Jordan

believed that MacroTrend was going to be able to provide the funding. (Tr. 395,

404.) He testified: “I believed wholeheartedly the funding was coming.” (Tr. 406.)

Indeed, Jordan agreed, as stated in his employment agreement, that his

compensation from MacroTrend would be contingent on him closing a deal with

WhiteRock. If WhiteRock and MacroTrend had closed on their agreement, Jordan

would have received a signing bonus, a salary of $350,000 to be paid retroactively

to his start date with MacroTrend, plus 20 percent of the net transaction fees that

would be owed to MacroTrend. (Tr. 383-384.)

               Jordan also met with an accounting firm to discuss tax planning

because he anticipated receiving a large sum of money when the funding became

available and MacroTrend paid him for his work. (Tr. 401.) Jordan’s actions

corroborate his testimony that he believed the funds were forthcoming. There is

also no apparent motive for him to lie about the funding since he did not stand to

gain anything by doing so. Ultimately the funds were never produced and Jordan

was not compensated for the work he performed on behalf of MacroTrend. There

simply is no evidence in the record to substantiate appellees’ claim that Jordan

knowingly or recklessly made false statements about the funding. Therefore, the

trial court erred in piercing the corporate veil.

               The second assignment of error is sustained.
                             C. Promissory Estoppel

              In the sixth assignment of error, Jordan reiterates his argument that

the trial court erred in denying his motions for summary judgment and for directed

verdict on appellees’ claims for fraud, piercing the corporate veil, breach of contract,

and promissory estoppel. In the fourth assignment of error, Jordan argues the trial

court erred in failing to grant his motion for directed verdict, notwithstanding

judgment. Because the fourth assignment of error is duplicative of the sixth

assignment of error, we address them together.

              We have previously determined there is no evidence to support

appellees’ breach of contract and fraud claims and that there was no basis on which

to pierce the corporate veil. And, having determined that appellees cannot pierce

the corporate veil, appellees’ promissory-estoppel claim against Jordan is moot.

Appellees already obtained a default judgment against MacroTrend for damages

caused as a result of appellees’ reliance on the February 9th letter, and Jordan

cannot be held personally liable for MacroTrend’s debt. Therefore, the fourth and

sixth assignments of error are overruled.

                                 D. Attorney Fees

              In the fifth assignment of error, Jordan argues the trial court erred in

awarding appellees attorney fees based on exhibits withdrawn from trial and

awarding breach-of-contract-claim damages for tort-based fraud claims.
              The trial court’s decisions did not explain its reasons for awarding a

total of $157,039.66 in attorney fees.2 Under the “American rule,” a prevailing party

in a civil action may not recover attorney fees as a part of the costs of litigation. Cruz

v. English Nanny & Governess School, 169 Ohio St.3d 716, 2022-Ohio-3586, 207

N.E.3d 742, ¶ 35. There are three “well-established exceptions” to this rule: (1) when

a statute creates a duty to pay attorney fees, (2) when the losing party acted in bad

faith, and (3) when the parties contracted to shift the fees. Id. at ¶ 36. Appellees’

claim for attorney fees was based on their belief that MacroTrend’s commitment to

reimburse “all” expenses in the February 9, 2018 letter included attorney fees. They

claim that the February 9, 2018 letter shifted the fees to MacroTrend and Jordan.

               However, since we have determined that the February 9, 2018 letter

is not an enforceable contract and Jordan cannot be held personally liable for

MacroTrend’s debts because there is no basis for piercing the corporate veil, we find

that the trial court erred in awarding a judgment for attorney fees against Jordan in

his individual capacity.

               The fifth assignment of error is sustained.

               The trial court’s judgments, journalized on June 21, 2022, and

February 27, 2023, are reversed. Case remanded to the trial court to enter judgment

in favor of Jordan on all claims.

      It is ordered that appellant recover from appellees costs herein taxed.

      2 The trial court awarded $127,688.34 in its judgment following the bench trial and

an additional award of $29,351.32 after a hearing on attorney fees for a total of
$157,039.66.
      The court finds there were reasonable grounds for this appeal.

      It is ordered that a special mandate issue out of this court directing the

common pleas court to carry this judgment into execution.

      A certified copy of this entry shall constitute the mandate pursuant to Rule 27

of the Rules of Appellate Procedure.

EILEEN T. GALLAGHER, JUDGE

KATHLEEN ANN KEOUGH, P.J., CONCURS;
LISA B. FORBES, J., CONCURS IN JUDGMENT ONLY