2021 Ohio 2156
Ohio Ct. App.2021Background
- McKay sold his Granite Creek Flexcap I, L.P. investment unit to Faith Lawley, LLC in February 2010 under a written Transfer Agreement that gave McKay an option to repurchase the unit through December 31, 2012.
- Option price: $125,000 purchase price + $75,000 capital call + any other capital calls + 25% annual interest; the Transfer Agreement contained an integration clause requiring written modifications.
- McKay never gave written notice of exercise nor tendered the option price before the expiration date, but negotiated with Novicki and Lawley about a proposed alternative "tail" agreement before and after the deadline.
- McKay later claimed the plaintiffs orally agreed to waive or extend the option deadline (and to pay him for forbearance) and asserted promissory estoppel, waiver, and fraud counterclaims after the plaintiffs sued for declaratory relief.
- The trial court granted summary judgment for the plaintiffs, dismissed McKay’s counterclaims, and declared McKay had no rights to distributions or additional compensation from Faith Lawley, LLC; the court found McKay’s affidavit unsupported and contradicted by other evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Promissory estoppel / alleged promise to extend/waive option deadline | No clear, unambiguous promise was made to extend or waive the option; integration clause forbids verbal modification | McKay says plaintiffs promised to allow him to repurchase after the deadline while negotiating, so he reasonably relied | No genuine issue: McKay failed to identify a clear/unambiguous promise; affidavit was self‑serving and contradicted by other record evidence; summary judgment proper |
| Waiver of option deadline | Plaintiffs did not intentionally relinquish the option deadline; merely heard proposals | McKay contends plaintiffs’ conduct/statements amounted to waiver of the deadline | No waiver: negotiating or saying "let him buy in for cash" did not constitute intentional waiver with knowledge of rights |
| Fraud (misrepresentation re: extending option/negotiating in good faith) | No actionable misrepresentation; no evidence plaintiffs promised to extend the deadline | McKay alleges plaintiffs misrepresented they would negotiate in good faith and extend the deadline | No genuine issue: no evidence of misrepresentation concerning extension; fraud claim fails |
| Sufficiency of McKay’s affidavit as summary‑judgment evidence | Plaintiffs argue affidavit is self‑serving, vague, uncorroborated, and contradicted by other evidence | McKay argues his affidavit and some deposition snippets create factual disputes | Held affidavit insufficient to defeat summary judgment: unsupported, vague, and contradicted by emails and depositions |
Key Cases Cited
- Dresher v. Burt, 75 Ohio St.3d 280 (1996) (explains the moving party's initial burden on summary judgment and the nonmovant's requirement to rebut with specific facts)
- Zivich v. Mentor Soccer Club, Inc., 82 Ohio St.3d 367 (1998) (summary judgment standard: evidence construed most strongly in favor of the nonmoving party)
- BAC Home Loans Servicing, L.P. v. Kolenich, 194 Ohio App.3d 777 (2011) (application of summary judgment standards in Ohio appellate practice)
- Miller v. Wikel Mfg. Co., 46 Ohio St.3d 76 (1989) (waiver is a voluntary relinquishment of a known right; affirmative defense)
- List & Son Co. v. Chase, 80 Ohio St. 42 (1909) (waiver may be express or by conduct and must be intentional with knowledge)