Ohio Valley Business Advisors, L.L.C. v. AER Invest. Corp.
2017 Ohio 1283
| Ohio Ct. App. | 2017Background
- AER owned a Camp Bow Wow franchise and sold its assets to franchisor DOG on April 4, 2014, for $175,000 with a contingent right to additional proceeds if DOG resold the business for more than $175,000 before August 31, 2014.
- On April 7, 2014, AER (through Amy Ryan) signed a nonexclusive brokerage/listing agreement with Ohio Valley to find a buyer before August 31, 2014; Ohio Valley received a $5,000 nonrefundable listing fee and a 12% brokerage commission (up to $40,000 less the listing fee) on any sale, but purchasers "originating" through DOG were excluded.
- DOG forwarded a May 7, 2014 letter of intent from an anonymous LLC (later linked to Michael Paquette) offering $250,000; Ryan rejected it.
- On August 25, 2014, Ohio Valley presented a binding offer from "K9 Playtime, L.L.C." to buy Camp Bow Wow for $300,010; K9’s listed members included Michael Paquette, Jennifer D’Aurelio, and Missy Bedwell.
- AER refused to pay Ohio Valley the $28,976.16 brokerage fee, claiming the buyer originated via DOG (Paquette) and thus was excluded; sale from DOG to K9 closed December 17, 2014, netting AER $283,134.68.
- Ohio Valley sued for breach of contract; the trial court awarded Ohio Valley the brokerage fee. AER appealed, raising (1) lack of corporate capacity (K9 not formed until Sept. 3, 2014) and (2) manifest-weight challenge.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a valid purchase contract existed by Aug 31, 2014 | Ohio Valley: K9/offer constituted a valid buyer within the brokerage deadline | AER: K9 lacked corporate capacity (not formed until Sept 3), so no valid contract by Aug 31 | Court: AER waived this argument by failing to raise it at trial; not considered on appeal |
| Whether the purchaser was excluded as a buyer "originating" through DOG | Ohio Valley: K9/Paquette did not qualify as an excluded DOG-originated purchaser | AER: Paquette (a DOG-originated contact) means the sale was excluded from brokerage fees | Court: Trial court found K9 was not excluded; appellate court affirmed (manifest-weight argument overruled as untimely or unsupported) |
| Whether Ohio Valley is entitled to brokerage fee ($28,976.16) | Ohio Valley: Brokerage agreement and incorporated DOG terms entitle fee if buyer not excluded | AER: No fee owed because buyer originated via DOG or contract invalid | Court: Awarded fee to Ohio Valley; AER’s challenges fail |
| Claim for attorney fees or sanctions on appeal | Ohio Valley: Seeks attorney fees and App.R.23 sanctions | AER: Opposes | Court: Brokerage agreement required each party to bear own fees; Ohio Valley failed to cross-appeal fee ruling and did not move for sanctions, so no change or sanctions granted |
Key Cases Cited
- State v. Williams, 51 Ohio St.2d 112 (1977) (issues not raised in trial court are waived on appeal)
- Goldfuss v. Davidson, 79 Ohio St.3d 116 (1997) (plain-error doctrine in civil cases is disfavored and applies only in exceptional circumstances)
- Quarterman, 140 Ohio St.3d 464 (2014) (an appellate court need not consider plain error when not timely raised)
- Link v. Wabash R.R. Co., 370 U.S. 626 (1962) (courts possess inherent power to manage and sanction litigation conduct)