2013 Ohio 2400
Ohio Ct. App.2013Background
- PCV recruited cardiologist Dr. Nabil Alloush who bought 20 units in PCV under an operating agreement governing membership and payouts.
- Membership criteria required good standing with St. Elizabeth Health Center medical staff and appropriate clinical privileges under §6.2.
- Withdrawal rights existed under §7.3(b) upon triggering events like retirement or death, with a formula-based payout; expulsion under §6.5 paid $10 per unit.
- Dr. Alloush resigned from Health Center staff in December 2008, liquidating his practice assets and leaving the country for a period.
- PCV expelled Alloush in January 2009 after deemed failure to meet membership criteria, issuing $200 (20 units at $10) as divestment settlement.
- Trial court granted Alloush summary judgment for a formula-based payout; PCV appealed, arguing no retirement or breach justified payout under the agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Alloush's December 2008 actions constitute retirement triggering §7.3(b)? | Alloush retired, triggering formula payment. | No retirement; actions did not meet retirement definition. | Fact question; material issues require trial. |
| Did PCV breach by expelling Alloush in January 2009 without proper notice? | Expulsion violated §6.5 and due process. | Expulsion permissible if criteria not met; proper notice not shown. | Material breach issues exist; summary judgment improper. |
| Was the notice and handling of retirement expulsion material breach under §6.5? | Notice and process breached; prejudiced member. | Technical deviations are immaterial if actual notice occurred. | Issue of material breach for jury determination. |
| Was the correct measure of damages the formula amount or $10 per unit? | Formula amount governs if retirement is valid. | If not properly retired, $10 per unit applies. | Damage measure depends on breach and retirement determination; not resolved at this stage. |
Key Cases Cited
- Temple v. Wean United, Inc., 50 Ohio St.2d 317 (Ohio 1977) (summary judgment standards; material facts required)
- Dresher v. Burt, 75 Ohio St.3d 280 (Ohio 1996) (probative burden on movant in Civ.R.56)
- Viock v. Stowe-Woodward Co., 13 Ohio App.3d 7 (Ohio App. 6th Dist. 1983) (facts viewed in light most favorable to nonmovant; triable issues)
- Bowen v. Kil-Kare, Inc., 63 Ohio St.3d 84 (Ohio 1992) (summary judgment considerations; material facts)
- O’Brien v. Ohio State Univ., 2007-Ohio-4833 (Ohio 10th Dist.) (breach materiality; contract interpretation factors)
- Stonehenge Land Co. v. Beazer Homes Investments, LLC, 177 Ohio App.3d 7 (Ohio App. 10th Dist. 2008) (notice provisions; actual notice defeats strict compliance)
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (Ohio 1996) (summary judgment standard; de novo review)
- Marion Family YMCA v. Hensel, 178 Ohio App.3d 140 (Ohio App. 3rd Dist. 2008) (material breach definition; substantial versus nominal breach)
- Warren Concrete & Supply, Inc. v. Strohmeyer Contracting, Inc., 11th Dist. No. 2010-T-0004 (Ohio App. 11th Dist. 2010) (materiality of contractual breaches; jury questions)