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Bunta v. Superior VacuPress, L.L.C.
218 N.E.3d 838
Ohio
2022
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Background

  • In 2014 Firman Mast and Vasile Bunta formed Superior VacuPress, LLC (VacuPress); Firman financed the venture and was manager; Bunta later became a 30% member under a January 2016 amended operating agreement.
  • VacuPress struggled financially; members agreed manager could wind up and dissolve and to satisfy creditors before distributing any remaining assets to members per the operating agreement and applicable Ohio LLC statute.
  • In late 2016 Firman dissolved VacuPress, formed Superior Lumber, LLC with other Masts, and transferred VacuPress’s assets and liabilities to Superior Lumber; the bank required an assumption agreement making Superior Lumber responsible for the debts.
  • Bunta sued, asserting breach of fiduciary duty, conversion, unjust enrichment, and other claims; the jury found for Bunta on conversion and unjust enrichment but found for Firman on breach of fiduciary duty.
  • On appeal, the Fifth District affirmed; the Ohio Supreme Court granted discretionary review focused on whether a membership interest or a right to compensation at dissolution can be the subject of conversion and whether an operating agreement precludes conversion/unjust-enrichment claims against a manager acting under the agreement.
  • The Ohio Supreme Court reversed the court of appeals, holding as a matter of law that the evidence was insufficient to support Bunta’s conversion and unjust-enrichment claims and entering judgment for Firman on those claims.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether a member's interest or a right to compensation at dissolution is property subject to conversion Bunta: membership interest (including right to compensation at dissolution) is identifiable intangible property and was converted when assets/liabilities were rolled into Superior Lumber Firman: any right to compensation on dissolution had no value because liabilities exceeded assets; membership-interest compensation is not a convertable intangible here; operating agreement governs remedies Court: conversion requires an identifiable property interest; Bunta produced no evidence he had a right to compensation at dissolution because VacuPress had negative net equity; directed verdict for defendant on conversion reversed the jury verdict for plaintiff
Whether unjust enrichment claim is available when an express operating agreement governs member rights Bunta: performed unpaid services before membership and conferred benefits; equitable relief available Firman: operating agreement fixed parties’ rights and covered the subject matter, so unjust enrichment is barred Court: operating agreement governed compensation and distributions; unjust enrichment barred as a matter of law; directed verdict for defendant on unjust enrichment required

Key Cases Cited

  • Zacchini v. Scripps-Howard Broadcasting Co., 47 Ohio St.2d 224 (1976) (intangible rights identified with a document may sometimes be converted, but not all publicity/performer rights are identifiable res for conversion)
  • Ruta v. Breckenridge-Remy Co., 69 Ohio St.2d 66 (1982) (standard for reviewing directed-verdict motion requires considering evidence most strongly in favor of nonmovant)
  • Hambleton v. R.G. Barry Corp., 12 Ohio St.3d 179 (1984) (elements of unjust enrichment in Ohio)
  • Hummel v. Hummel, 133 Ohio St. 520 (1938) (unjust enrichment and quasi-contract principles explained)
  • Ullmann v. May, 147 Ohio St. 468 (1947) (a party cannot claim restitution when the parties agreed to a contract covering the same subject)
  • Schafer v. RMS Realty, 138 Ohio App.3d 244 (2000) (partnership interest in specific partnership property can be identifiable res for conversion; distinguishable on facts)
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Case Details

Case Name: Bunta v. Superior VacuPress, L.L.C.
Court Name: Ohio Supreme Court
Date Published: Dec 9, 2022
Citation: 218 N.E.3d 838
Docket Number: 2021-0066
Court Abbreviation: Ohio