2022 Ohio 1181
Ohio Ct. App.2022Background
- Prime Investments, LLC (broker) and Altimate Care, LLC executed a written Broker Agreement on June 9, 2016, granting Prime exclusive brokerage rights and providing for a 7% commission or $50,000 minimum.
- The contract's "Selling Period" was extended to November 28, 2017; the Agreement also provided that if a buyer who signed an NDA during the Selling Period purchased the business within 24 months after the Selling Period, Prime would be paid the commission.
- Prime obtained a signed NDA from Michael Pollak (and his potential investors/agents) during the Selling Period; in January 2019 (within the 24-month post-period) a Pollak-associated investor purchased Altimate for $13 million.
- Altimate (defendants) refused to pay Prime's commission; Prime sued for breach of contract, unjust enrichment, and promissory estoppel. The trial court dismissed all claims under Civ.R. 12(B)(6).
- On appeal, the Tenth District reversed dismissal of the breach-of-contract and unjust-enrichment claims (holding Prime pleaded sufficient facts under Paragraph 2 of the Broker Agreement and notice pleading), but affirmed dismissal of promissory estoppel (promise was embodied in the written contract).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Prime stated a breach-of-contract claim under the Paragraph 2 NDA/24‑month provision | Prime: NDA signed during Selling Period by Pollak/associates and sale within 24 months triggers commission | Altimate: Complaint fails to identify ultimate buyer; Pollak acted as broker, so Prime didn’t procure buyer | Held: Reversed dismissal — allegations suffice to allege breach under Paragraph 2; identity likely discoverable and notice pleading controls |
| Whether Prime needed to identify the buyer by name in the complaint | Prime: Not required; pleading need only give fair notice | Altimate: Lack of buyer identity shows Prime didn't procure actual buyer and warrants dismissal | Held: Prime not required to plead buyer identity; dismissal improper because discovery can identify buyer |
| Whether obtaining an NDA equates to procuring a "ready, willing, and able" buyer under Paragraph 1 | Prime: Alternative claim; but primary claim relies on Paragraph 2, not the "ready, willing, and able" language | Altimate: NDA alone doesn't show buyer was ready/willing/able; dismissal proper | Held: Court rejects conflation — Paragraph 2 does not require proof of "ready, willing, and able" at NDA signing; Paragraph 1 standard is distinct |
| Whether promissory estoppel/unjust enrichment claims can proceed | Prime: Alternatively pleads unjust enrichment and promissory estoppel if contract doesn't cover sale | Altimate: Express contract controls; equitable claims barred | Held: Unjust enrichment claim may proceed at this early stage (bad faith alleged); promissory estoppel dismissed because promise is contained in the written contract |
Key Cases Cited
- Lucarell v. Nationwide Mut. Ins. Co., 152 Ohio St.3d 453 (2018) (elements of breach and implied duty of good faith and fair dealing)
- York v. Ohio State Hwy. Patrol, 60 Ohio St.3d 143 (1991) (Ohio notice-pleading standard—plaintiff need not prove case at pleading stage)
- Shifrin v. Forest City Ent., Inc., 64 Ohio St.3d 635 (1992) (court cannot rewrite unambiguous contract terms)
- Ed Schory & Sons, Inc. v. Soc. Natl. Bank, 75 Ohio St.3d 433 (1996) (implied duty of good faith in contract performance)
- Graham v. Drydock Coal Co., 76 Ohio St.3d 311 (1996) (contract construction aims to effectuate parties' intent)
- O'Brien v. Univ. Community Tenants Union, Inc., 42 Ohio St.2d 242 (1975) (Civ.R. 12(B)(6) tests complaint sufficiency)