Bates v. Rose
2017 Ohio 7977
| Ohio Ct. App. | 2017Background
- Bates sued Rose in municipal court on a promissory note for $8,000 plus related claims for reimbursement of $3,744.57 (appliances) and conversion of an aluminum brake and two yard trimmers; Rose counterclaimed for unpaid wages.
- The signed promissory note required six monthly payments, provided 7.5% interest, and allowed reasonable attorney fees up to 15% of the outstanding balance on default.
- Rose admitted signing the note and making no payments, but asserted an agreement that his work for Bates Recycling, Inc. at a Johnson Rubber site (at $25/hr) would offset installment payments; he claimed 407 hours ($10,175) unpaid.
- Trial court awarded Bates $8,000 on the note but denied interest and attorney fees, found Rose’s counterclaim $10,175 valid, offset the note, and entered judgment for Rose for $2,175; it also rejected Bates’s claims about appliances and equipment.
- On appeal, Bates challenged (1) omission of contractual interest and attorney fees, (2) the trial court’s piercing of the corporate veil to hold him personally liable for wages allegedly owed by Bates Recycling, Inc., and (3) the rejection of his appliance and conversion claims.
Issues
| Issue | Plaintiff's Argument (Bates) | Defendant's Argument (Rose) | Held |
|---|---|---|---|
| Whether trial court erred by not awarding contractual 7.5% interest on the promissory note | The court should have awarded interest per the note from maturity | No direct counter on interest; court nonetheless declined to include it | Court erred: interest at 7.5% must be awarded consistent with R.C. 1343.03 and the note |
| Whether trial court erred by denying attorney fees under the note | Bates requested $1,200 (15% cap) per the note | Rose opposed fees | Court did not abuse discretion in denying fees because Bates offered no evidence showing reasonableness of attorney fees |
| Whether trial court properly pierced the corporate veil to hold Bates personally liable for wages owed by Bates Recycling, Inc. | Piercing was improper because the corporation was not a party and Bates maintained separation between personal and corporate affairs | Rose argued Bates controlled interrelated businesses and should be personally liable | Court erred: no competent evidence of the three veil-piercing elements (complete domination, fraud/illegal act, resulting unjust loss); holding reversed |
| Whether trial court’s rejection of claims for appliance reimbursement and conversion of equipment was against the manifest weight of the evidence | Bates argued Rose agreed to reimburse or return proceeds/value for appliances and equipment | Rose testified parties agreed to postpone reimbursement until appliance sales and that yard trimmers were returned; evidence conflicted | Court did not clearly lose its way; findings for Rose on these claims affirmed |
Key Cases Cited
- Galmish v. Cicchini, 90 Ohio St.3d 22 (Ohio 2000) (prejudgment interest on contract claims governed by statute unless contract provides rate)
- Yarber v. Cooper, 61 Ohio App.3d 609 (Ohio Ct. App.) (trial-court award of attorney fees reviewed for abuse of discretion; reasonableness requires evidence)
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (Ohio 1983) (abuse of discretion standard defined)
- Belvedere Condominium Unit Owners’ Assn. v. R.E. Roark Cos., Inc., 67 Ohio St.3d 274 (Ohio 1993) (shareholder liability is limited; veil piercing is an exception)
- Dombroski v. WellPoint, Inc., 119 Ohio St.3d 506 (Ohio 2008) (piercing corporate veil is rare; requires proof of domination, misuse, and injury)
- Eastley v. Volkman, 132 Ohio St.3d 328 (Ohio 2012) (manifest-weight standard in civil cases)