Grigoryan v. MaxOut Sports, L.L.C., 94 N.E.3d 1214

Background

MaxOut Sports LLC had an operating agreement (Dec. 2012) with a noncompete barring managers from operating a similar business within 50 miles; four managers were listed (Hudson, Mihalca, Bagne, Grigoryan).
Grigoryan (appellee) signed a January 19, 2016 withdrawal agreement with Hudson surrendering his ownership interest to Hudson in exchange for relief from the 50-mile noncompete (other noncompete restrictions remained).
Grigoryan opened a competing martial arts studio; MaxOut sent a cease-and-desist and sued/counterclaimed; Grigoryan sought declaratory judgment that the withdrawal agreement permitted him to compete.
The trial court granted summary judgment to Grigoryan on declaratory relief, finding the withdrawal agreement valid and effective to amend the operating agreement’s noncompete; MaxOut appealed.
On appeal the court reviewed whether (1) the withdrawal agreement properly amended the operating agreement (who had authority to approve), (2) any condition precedent (Mihalca’s approval) existed, (3) the agreement was executed/delivered, and (4) whether R.C. 1705.31 or injunctive relief altered the outcome.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Authority to amend operating agreement / validity of withdrawal agreement	Grigoryan: withdrawal agreement is an amendment; he and Hudson together held a majority of manager votes under the operating agreement and validly approved it	MaxOut: amendment required approval of a majority of managers (3 of 4), not a majority vote; Mihalca and Bagne were needed	Held: Operating agreement requires a majority vote, not 3-of-4 managers; Grigoryan and Hudson represented a majority vote and validly approved the withdrawal agreement.
Condition precedent (whether Hudson’s approval was conditioned on Mihalca’s consent)	Grigoryan: withdrawal agreement’s terms are clear and unambiguous; no condition precedent exists	MaxOut: parol evidence (affidavits) shows Hudson conditioned his approval on Mihalca’s consent	Held: No condition precedent; the written withdrawal agreement is unambiguous and parol evidence contradicting it is inadmissible; self-serving affidavits insufficient to avoid summary judgment.
Execution/delivery (whether agreement was sufficiently signed/delivered)	Grigoryan: signed agreement (by Hudson and Grigoryan) and parties intended to be bound; physical delivery not required	MaxOut: Hudson only conditionally signed and did not deliver executed agreement to Grigoryan; partial execution invalidates it	Held: Hudson signed; physical delivery not essential where intent to be bound exists; agreement valid despite lack of delivery to Grigoryan.
Applicability of R.C. 1705.31 (conflict-of-interest rules) and injunctive relief	Grigoryan: statute inapplicable because only Hudson and Grigoryan had voting power (others had 0% profit share) and they represented the voting majority	MaxOut: statute requires approval by disinterested managers or other statutory safeguards; agreement was not fair and lacked required approvals	Held: R.C. 1705.31 did not apply because Mihalca and Bagne had no voting power (0% profit share); injunctive-relief claim was moot after declaratory ruling.

Key Cases Cited

Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (de novo review standard for summary judgment and appellate review) (explains standard of review for summary judgment)
Dresher v. Burt, 75 Ohio St.3d 280 (defines burdens on movant and nonmovant on summary judgment)
Saunders v. Mortensen, 101 Ohio St.3d 86 (contract-construction principles: intent from contract language)
Kelly v. Medical Life Ins. Co., 31 Ohio St.3d 130 (party intent is presumed to reside in contract language)
Ed Schory & Sons, Inc. v. Francis, 75 Ohio St.3d 433 (parol evidence rule bars contradicting unambiguous written agreements)
Campbell v. George J. Igel & Co., 3 N.E.3d 219 (conditions precedent disfavored; parol evidence and standards for showing condition precedent)