Pierre Invests., Inc. v. CLE Capital Group, Inc.
202 N.E.3d 870
Ohio Ct. App.2022Background
- Pierre Investments (Texas) paid a $75,000 commitment fee to CLS for a November 5, 2018 Loan Commitment for a $10 million development loan; CLS later assigned the deal to Comprehensive. Closing never occurred and Pierre sued for fraud, breach, unjust enrichment, promissory estoppel, deceptive trade practices, and related claims.
- Mockensturm, Ltd. and two attorneys (Mockensturm Defendants) were alleged to have misrepresented CLS’s lending history/role and to have induced Pierre to pay the commitment fee; they were never retained by Pierre for this transaction.
- CLS (a Delaware corporation) and its president Uballe were alleged to have misrepresented CLS as a direct lender and guarantor; Momentum Financial Group (MFG) was the identified financial guarantor/underwriter.
- The trial court granted summary judgment in part: dismissed fraud and deceptive-trade claims against various defendants; Uballe was dismissed individually; only reciprocal breach-of-contract claims between Pierre and CLS/Comprehensive remained and proceeded to bench trial.
- At trial the court took judicial notice that CLS had been dissolved as a Delaware corporation effective March 1, 2012; the court found CLS lacked capacity such that Pierre’s breach claim against CLS was dismissed; the court entered mixed verdicts involving Comprehensive.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraudulent inducement by Mockensturm | Mockensturm knowingly misrepresented its relationship with CLS and underwriting capability to induce payment | No duty to disclose in arm’s‑length deal; plaintiff never retained Mockensturm; deposition/affidavit contradictions | Summary judgment for Mockensturm: plaintiff failed to show genuine issue of material fact for fraud |
| Fraudulent inducement by CLS | CLS misrepresented it was a direct lender/guarantor and could fund $10M | Transaction was arm’s‑length; MFG was financial guarantor; plaintiff cannot pierce corporate veil or show fraud beyond contract | Summary judgment for CLS on fraud: fraud claim duplicates contract and plaintiff failed to prove separate tort damages or veil-piercing |
| Deceptive Trade Practices (R.C. 4165.02) | False/misleading loan advertising induced Pierre; statements entered interstate commerce | No evidence a substantial portion of consumers was deceived; same deficiencies as fraud claim | Summary judgment for defendants: plaintiff did not show likely deception of the relevant public or causal link to public harm |
| Breach of contract against CLS / capacity to sue | Loan Commitment created enforceable obligations and CLS breached by not funding | CLS was dissolved (Delaware) in 2012 and lacked legal capacity to be sued; assignment was defective | Trial court verdict affirmed: CLS lacked capacity (dissolved), so breach claims against CLS dismissed; mixed outcome against Comprehensive sustained |
Key Cases Cited
- Ratonel v. Roetzel & Andress, L.P.A., 67 N.E.3d 775 (Ohio 2016) (standard of review and Civ.R. 56 summary judgment framework)
- Mike McGarry & Sons, Inc. v. Construction Resources One, LLC, 107 N.E.3d 91 (6th Dist. 2018) (elements of common‑law fraud)
- Blon v. Bank One, Akron, N.A., 519 N.E.2d 363 (Ohio 1988) (no duty to disclose in ordinary arm’s‑length business transactions)
- Byrd v. Smith, 850 N.E.2d 47 (Ohio 2006) (an affidavit that contradicts prior deposition cannot defeat summary judgment without explanation)
- Belvedere Condominium Unit Owners’ Assn. v. R.E. Roark Cos., Inc., 617 N.E.2d 1075 (Ohio 1993) (three‑part test to pierce corporate veil)
- Dombroski v. WellPoint, Inc., 895 N.E.2d 538 (Ohio 2008) (limit veil‑piercing expansion; require extreme shareholder misconduct)
- Wooster Floral & Gifts, L.L.C. v. Green Thumb Floral & Garden Ctr., Inc., 172 N.E.3d 60 (Ohio 2020) (elements for Ohio Deceptive Trade Practices Act claims require deception of a substantial portion of the relevant audience)