IN THE SUPREME COURT OF OHIO

Sam Montello

Appellant,

On Appeal from the LakeCounty Court of Appeals,Eleventh Appellate District

v.

Thomas Ackerman

Appellee

Court of Common PleasCase No.: 08 CV 001678

Court of AppealsCase No.: 2010-L-007

MEMORANDUM IN SUPPORT OF JURISDICTIONOF APPELLANT SAM MONTELLO

David M. Lynch (0006380) (COUNSEL OF RECORD)29311 Euclid AvenueSuite 200Wickliffe, Ohio 44092(440) 278-4246Fax No. (440)278-4249dmlesqLa2davidmlynch.net

COUNSEL FOR APPELLANT, SAM MONTELLO

Charles V. LongoCharles V. Longo, CO., L.P.A.25550 Chagrin Boulevard #320Beachwood, Ohio 44122(216) 514-1919Fax No. (216) 593-0914

COUNSEL FOR APPELLEE, THOMAS ACKERMAN

CLERK OF COURTB su^^^^^ Cou^^ o^ ®H[® ^

TABLE OF CONTENTS

Page

EXPLANATION OF WHY THIS CASE IS A CASE OF PUBLICOR GREAT GENERAL INTERST AND INVOLVES A SUBSTANTIAL,CONSTITUTIONAL QUESTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ^

STATEMENT OF THE CASE AND FACTS . . . . . . . . . . . . . . . . . . . . . . . . 2 _ 3

ARGUMENT IN SUPPORT OF PROPOSITION OF LAW . . . . . . . . . . . . 4-5 - 6

CONCLUSTION .............................................. 7

CERTIFICATE OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

APPENDIX

Item Letter Desi ng ation

Appendix Item One

Appendix Item One is the Judgment Entry of the Trial Court alongWith the Findings of Fact and Conclusions of Law . . . . . . . . . . . . . . . . . . . A

Appendix Item Two

Appendix Item Two is the Journal Entry and Opinion of the Courtof Appeals ................................................... B

EXPLANATION OF WHY TIIIS CASE IS A CASE OF PUBLIC OR GREATGENERAL INTEREST AND INVOLVES A SUBSTANTIAL

CONSTITUIONAL QUESTION

This case presents a very important question for all persons who enter into real

estate development agreements. Can the continuation of the project long after a partner

identifies fraud mean that the fraud cannot be claimed toward the end of the project?

We urge the Supreme Court to Say "No!" to this question by accepting jurisdiction

and allowing the trial Court to hear this case.

STATEMENT OF CASE AND FACTS

STATEMENT OF CASE

This matter is a refilling of a verbal agreement case wherein Sam Montello sues

Thomas Ackerman because Ackerman promised to pay a portion of the proceeds from

"Cali Woods" housing development.

The development of "Cali Woods" has been ongoing for many years. Ackerman is

the project manager who failed to provide either an accounting or deliver the promised

proceeds to Mr. Montello (Montello having contributed to the support of the project).R. 2.

Ackerman filed for Summary Judgment claiming Statute of Limitations, Statue of

Frauds, and Res Judicata. R. 40.

The Trial Court granted Summary Judgment for the Plaintiff-Appellee based on

these claims by Ackerman. R. 65 Montello, Appellant, appealed because he believes

Summary Judgment should not have been granted. The Court of Appeals denied this

appeal.

STATEMENT OF FACTS

Sam Montello and Joseph Cali began a residential project for single family homes

called "Cali Woods" in Concord, Ohio back in 1995 by virtue of a "handshake agreement".

The project manager was Defendant/Appellee Thomas Ackerman, who entered into a

written agreement with Cali to do so. Montello is not a party to or mentioned in this

written agreement.R. 2.

Montello, however, met with Ackerman and established that Ackerman would

share the revenue from the project with Montello based on Montello's contributions in

cash and real estate.

Montello then litigated against Joseph Cali in Florida because of Cali's failure to

honor his promises to him in various matters, including Cali Woods. This Florida case was

settled in June of 2006, releasing Cali and "any business entity" that Cali "has an interest

in" of all liability.R. 40.

Montello brought this action in 2007 against project manager Thomas Ackerman

because of Ackerman's verbal agreement to distribute revenue to Montello, Cali Woods

still being operated by Ackerman in 2007 as a still uncompleted project. R. 2.

The Trial Court granted Summary Judgment to Ackerman, stating that the action

was barred by Statute of Limitations, and by the Statute of Frauds as the agreement was

verbal. The Trial Court also said the Florida settlement with Cali protected Ackerman

from suit. R. 65.

Montello has appealed this ruling to this Court of Appeals and now turns to the

Ohio Supreme Court.

ARGUMENT IN SUPPORT OF PROPOSITION OF LAW

STATUTE OF LINIITATIONS

The Appeals Court relies on deposition testimony from Montello that he had

suspicions regarding Ackerman's failure to distribute revenue that date back to as far back

as 1998.

However, the deposition of Montello and the Affidavit of Montello describe the

project as ongoing and continuing as of 2007. R. 45. The underlying project was a housing

development of around 110 acres that like many such projects, took a very long time to

mature and come to fruition.

The Court concludes that Montello is time barred from suing on this project in 2007

because his concerns began in 1998. With Cali Woods continuing the development in

2007, did Montello waive his litigation rights because he wanted to see if Ackerman would

make Montello's distribution as the project proceeded? Is a real estate investor now

required to bring suit before a project is completed if he is concerned at early stages of the

project?

The Supreme Court of Ohio has answered this question. In Weber v. Billman, the

Ohio Supreme Court tells us "that where a contract ..... is a continuing one with no fixed

date of termination, the Statute of Limitations does not begin to run until the services

rendered under such contract actually end. 165 Ohio St. 431 at 433 (1956).

STATUTE OF FRAUDS

Defendant claims that Mr. Montello's Agreement, being verbal, violates Ohio's

Statute of Frauds.

Again, the case law specifically looks at this sort of Agreement as outside the

Statute of Frauds and therefore not requiring a written agreement.

This very specific type of case came before the Court of Appeals in Furth v.

Farkasch, 26 Ohio App 258 (1927). The Eighth District Court of Appeals stated in its

syllabus, "Oral contract creating partnership relation between parties to share in money

realized from commissions for sale of real estate, which had been earned by one party, held

not within Statute of Frauds". Id at 258. This is Mr. Montello's case almost exactly!

Ohio jurisprudence, Third Edition restates the status of Ohio law:

A parole partnership agreement or joint enterprise, enteredinto by two or more individuals for the purpose of dealingand trading in lands or interests in lands for profit, is notwithin the provision of the Statute of Frauds relating tointerests concerning lands, and the existence of thepartnership and the extent of each partner's interest may beshown by parole.

Clearly, the Agreement was not to transfer land as would require

writing. This was an Agreement requiring the project manager to pay

monies to Mr. Montello, clearly outside the Statute of Frauds

RES JUDICA TA

Plaintiff argues that a previous Settlement Agreement with Joe Cali,

attached hereto as Exhibit 3, releases Thomas Ackerman and therefore is Res

Judicata, barring the instant lawsuit.

-5-

We ask this Court to see exactly who was released in the Settlement

Agreement by reviewing the Agreement.

Thomas Ackerman was not named in that previous suit in Florida

and the only persons listed as released are indicated with the following

language:

The parties hereby release each other as well as any businessentity that they may have an interest in and each other'sblood relatives from any and all causes of action or claimsfrom the beginning of the world to the date of this agreementwith the exception of the obligations in the settlementagreement.

R. 40, Settlement attached to Plaintiff's sum. Judgementmotion.

It is impossible to read this Agreement as applying to Thomas

Ackerman unless you call him a "business entity".

Given the high hurdles inherent in Summary Judgment law, the Res

Judicata argument of Defendant must fail as well.

CONCLUSION

The Summary Judgment rule requires the Trial Court to consider the motion "most

strongly" in favor of Mr. Montello, when reviewing the Motion and the underlying

evidence.

Given this, how can Defendant be entitled to Summary Judgment on an ongoing

project when the case law favors Montello's chance to have his day in Court? We urge this

Court to reverse the Appeal Court's ruling on Summary Judgment and remand this matter

for a full Trial on the merits.

David M. Lxiich (0006380)29311 Euclid AvenueSuite 200Wickliffe, Ohio 44092440-278-4246440-278-4249 (Fax.)dmlesqkdavidmlynch.net

CERTIFICATE OF SERVICE

I certify that a copy of this Memorandum in Support of Jurisdiction of Appellant

Sam Montello was sent via regular mail this 9th day of September 2010 to Charles V.

Longo, Charles V. Longo, Co., L.P.A., 25550 Chagrin Boulevard #320, Beachwood, Ohio

44122.

COUNSEL FOR APPELLANT,SAM MONTELLO

-7-

IN THE COURT OF COMMON PLEAS

RR. 'ii°f=: "^"^SAM MOI^I^f.LO,

25 LAKE COUNTY, OHIO

vs.

THOMAS ACKERMAN,

Defendant

CASE NO. 08CV001678

JUDGE VINCENT A. CULOTTA

JUDGMENT ENTRY

This matter comes before the Court for consideration of Defendant Thomas Ackerman's

Motion for Summary Judgment, Plaintiffs Response to Defendant's Motion for Summary

Judgment, and Defendant Thomas Ackerman's Reply in Support of His Motion for Sunnnary

Judgment.

STATEMENT OF THE CASE

Plaintiff, Sam Montello, initiated this action against Thomas Ackerman alleging that

Plaintiff and Joseph Cali entered into an agreement in 1984 for the acquisition of land and

building of homes in "Ca1i Woods." Plaintiff indicates that he and Joseph Cali created a verbal

partnership in which Plaintiff would receive one-half of the proceeds from "Cali Woods."

Plaintiff further alleges that Defendant Thomas Ackerman became the project manager for the

"Cali Woods" project and in 1995, verbally acknowledged that Plaintiff would receive one-half

of the proceeds from "Cali Woods" and verbally agreed to ensure that distributions of the

proceeds to Plaintiff would take place. Plaintiff indicates that he justifiably relied on said

representations. Plaintiff alleges that Defendant has defrauded Plaintiff of any proceeds from

"Cali Woods" and instead, has retained the proceeds for himself. Plaintiff asks for the

appointment of a receiver to manage the affairs of "Cali Woods," judgment in excess of

$50,000.00, interest, costs and attorney's fees.

Defendant, Thomas Ackerman, has filed a Counterclaim alleging that Plaintiff's claims

amount to a frivolous lawsuit meant to harass, annoy and create unnecessary expense for

Defendant. Defendant further alleges intentional and/or negligent infliction of emotional

distress.APPENDIX ITEM 1(Exhibit A)

1

At this time, Defendant Thomas Ackerman is seeking an Order granting summary

judgment in his favor and against Plaintiff on Plainfiff's claims against him. Defendant contends

that he is entitled to judgment as a matter of law on Plaintiff s breach of oral contract and

fraudulent misrepresentation because those claims are barred by the applicable statute of

limitations, the Statute of Frauds and by the application of resjudicata.

Plaintiff opposes Defendant's motion and Defendant has filed a reply.

The Court will consider the motion on an issue by issue basis.

SUMMARYJUDGMENTSTANDARD

Pursuant to Civ.R. 56, summary judgment is proper, when, after construing the evidence

in a light most favorable to the nonmoving party, there remains no genuine issue of material fact

and the moving party is entitled to judgment as a matter of law.

The moving party bears the initial responsibility of informing the trial court of the basis

for, the motion, and identifying those portions of the record which demonstrate the absence of a

genuine issue of fact on a material element of the nonmoving party's claim. Dresher v. Burt

(1996), 75 Ohio St.3d 280. If the moving party satisfies this burden, then the nonmoving party

has the burden pursuant to Civ.R. 56(E) to provide evidence demonstrating a genuine issue of

material fact. Id. If the nonmoving party does not satisfy this burden then summary judgment is

appropriate. Id.

COURT'S ANALYSIS

Statute of Limitations

It is Defendant's position that regardless of whether Plaintiff s cause of action is based in

contract or in tort, Plaintiff claims are untimely and fail as a matter of law. Specifically,

Defendant asserts that PlainfifPs breach of an oral contract claim is governed by R.C. §2305.07,

which provides:

Contract not in writing

Except as provided in sections 126.3011 and 1302.982 of the Revised Code, an actionupon a contract not in writing, express or implied, or upon a liability created by statute

'This section is the Limitation of action for failure to make distribution or payment and is not relevant here.' This section sets forth the Statute of limitations in contracts for sale and is not relevant here.

2

other than a forfeiture or penalty, shall be brought within six years after the cause thereofaccrued.

Defendant maintains that according to Plaintiff s own deposition testimony, Plaintiff's

breach of contract claim arises out of a verbal contract between Plaintiff and Defendant which

was entered into sometime in 1995. Defendant also maintains that according to Plaintiff

deposition testimony, Plaintiff was aware of Defendant's breach of the alleged oral contract in

1998, but that he did not assert a claim against Defendant until March 30, 2007.

In opposing Defendant's motion relative to the statute of limitations argument for oral

contract, Plaintiff asserts that Cali Woods was an on-going project and Defendant was still

developing homes as late as April, 2007. It is Plaintiffs position that the statute oflimitations

begins to run at the end of the contract, and not when the payee becomes unhappy. Plaintiff

relies on Weber v. Billman (1956), 165 Ohio St. 431 and Snider v. Rollins (1921), 102 Ohio St.

372, to support his position. Plaintiff also relies on his own affidavit which states that the oral

contract was continuous in nature and that Defendant was operating Cali Woods in 2007.

In reply, Defendant asserts that Plaintiff s position is absurd and flies against established

case law regarding the accraal of a breach of an oral contract claim. Specifically, Defendant

relies on Aluminum Line Products Co. v. Brad Smith Roofing Co., Inc. (1996) 109 Ohio App.3d

246 (cause of action for breach of an oral contract accrues when the plaintiff discovers the

omission to perform as agreed in the oral contract) and Children's Hospital v. Ohio Dept. of

Public Welfare (1982) 69 Ohio St.2d 523 (cause of action for breach of contract accrues when

money is actually withheld).

Defendant fiuther distinguishes the cases relied on by Plaintiff to support his continuous

contract argument from the instant case arguing that the cases relied on by Plaintiff involve

service agreements which were to continue indefinitely with services performed throughout the

relationship.

Defendant further asserts that Plaintiffs affidavit does not create a genuine issue of

material fact as to the running of the statute of limitations.

Likewise, Defendant maintains that Plaintiff's fraudulent misrepresentation claim is

governed by the R.C. §2305.09, which provides, in relevant part:

Except as provided for in division (C) of this section, an action for any of thefollowing causes shall be brought within four years after the cause thereof accrued:

3

(C) For relief on the ground of fraud, except when the cause of action is a violation ofsection 2913.493 of the Revised Code, in which case the action shall be brought withinfive years after the cause thereof accrued;

If the action is for trespassing. under ground or injury to niines, or for the wrongfultaking of personal property, the causes thereof shall not accrue until the wrongdoer isdiscovered; nor, if it is for fraud, until the fraud is discovered.

Defendant maintains that a cause of action for fraud accrnes when the injured party

discovers the fraud or when, in exercise of reasonable diligence, the fraud should have been

discovered. See Marshall v. Silsby (Oct. 21, 2005), Lake App. No. 2004-L-094, unreported.

Defendant relies on Plaintiffs deposition testimony wherein he stated that he believed

that he was the victim of fraud in 1998, and that he believed that Defendant was participating in

defrauding Plaintiff in 1998. Defendant further notes that Plaintiff adniitted in deposition that it

was his understanding back in 2000, when he filed a case against Joe Cali and Cali Woods4 that

Defendant was involved in defrauding Plaintiff. It is Defendant's position that Plaintiff's

fraudulent misrepresentation claim is time-barred because Plaintiff knew or should have known

of the alleged fraud on October 17, 2000, when he filed a case against Joe Cali and Cali Woods,

but did not file an action against Defendant until March 30, 2007.5

In response to Defendant's argument relative to the Statute of Limitations for fraud

actions, Plaintiff makes the same argument that the oral contract at issue here is a continuous

contract wherein the cause of action does not accrue until the termination of the contract.

Plaintiff again relies on his own affidavit which states that the oral contract was continuous in

nature and that Defendant was operating Cali Woods in 2007.

Upon consideration, it is the opinion of this Court that Plaintiff's breach of oral contract

and fraudulent misrepresentation claims are timed-barred. Defendant has provided evidence that

Plaintiff was aware of a breach of the oral contract in 1998 and aware of the fraud in 1998 or

2000, but brought this action initially in 2007. Plaintiff has not met his burden pursuant to

' This section deals with Identity fraud and is not relevant here.° Lake County Court of Common Pleas Case No. OOCV001661.5 Lake County Case No. 07CV000923, which was voluntarily dismissed and re-filed as the instant action.

4

Civ.R. 56(E), to provide evidence demonstrating a genuine issue of material fact. Plaintiff's

affidavit states that he believes that Defendant conunitted a breach andlor fraud up to 2007,

however, Plaintiff's affidavit does not state when the breach and/or fraud first occurred and/or

was discovered. The Court further finds that the cases relied on by Plaintiff relative to an on-

going contract, are distinguishable. Specifically, both Snider and Weber involved continuing

employment contracts that were to be performed during the lifetime of the employer. In both

cases, the Supreme Court of Ohio held that the statute of limitations did not begin to run until the

employer's death. The instant case does not involve a continuous employment contract whereby

one party performed services for the other with the expectation of payment.

An action for breach of an oral contract must be brought within six years after the cause

of action accrues, i:e. when the breach occurs, pursuant to R.C. §2305.07. The cause of action

accrues when the complaining party suffers actual damage as a result of the alleged breach. See

Miclwest Specialists. Inc. v. Firestone Tire & Rubber Co. (1988), 42 Ohio App.3d 6, 8. Further,

an action for fraud must be brought within four years of discovery of the fraud pursuant to R.C.

§2305.09.

In this case, Plaintiff testified at deposition that he filed suit against Joseph and Sarah

Cali in the late 1990's seeking damages for breach of contract for their alleged failure to pay him

profits for the Cali Woods project. Plaintiff fiirther testified at his deposition that he made an

oral contract with Defendant Ackerman in 1995 regarding payment of the proceeds of Cali

Woods. Plaintiff testified that he became aware of the alleged breach of the oral contract in

1998, and began contemplating a lawsuit at that time. Plaintiff testified at deposition that he

knew that Defendant Ackerman was not looking out for Plaintiff's best interest and that he was

participating in the alleged fraud against Plaintiff with regard to the Cali Woods project in 1998.

Plaintiff admitted at deposition that Defendant Ackerman was not giving Plaintiff "nothing, not

even information" in violation of the alleged oral agreement in 2000 when Plaintiff sued Joe Cali

for fraud, breach of contract and corrupt activity in October, 2000. It is the opinion of this Court,

based upon Plaintiff's own testimony, that Plaintiff's causes of action for breach of an oral

contract and for fraud against Defendant Ackerman accrued in 1998 or 1999 and certainly no

later than 2000 because that is when Plaintiff alleges he knew that he was not being paid profits

by Defendant Ackerman for the Cali Woods project. Inasmuch as Plaintiff first filed this action

5

on March 30, 2007, the claims are time-barred regardless of whether Plaintiff's cause of action is

based in contract or in tort.

Statute of Frauds

Defendant maintains that any agreement relative to the development of real estate would

fall within R.C. §1331.05.

R.C. §1335.05 provides, in relevant part:

Certain agreements to be in writing

No action shall be brought whereby to charge the defendant, upon a special promise, toanswer for the debt, default, or miscarriage of another person; nor to charge an executoror administrator upon a special promise to answer damages out of his own estate; nor tocharge a person upon an agreement made upon consideration of marriage, or upon acontract or sale of lands, tenements, or hereditaments, or interest in or concerning them,or upon an agreement that is not to be performed within one year from the makingthereof; unless the agreement upon which such action is brought, or some memorandumor note thereof, is in writing and signed by the party to be charged therewith or someother person thereunto by him or her lawfully authorized.

Defendant maintains that it is uncontroverted that there is no signed writing referencing

Plaintiff's right or interest in the Cali Woods development. Defendant notes that the only signed

writing proffered by Plaintiff in this case is a contract between Defendant and Joseph Cali and

Sarah Cali, to which Plaintiff is not a party. Thus, Defendant contends that Plaintiffs claim for

breach of oral contract fails as a matter of law because there is no signed writing.

Plaintiff maintains that the agreement at issue in this case is outside of the Statute of

Frauds. Plaintiff relies on Furth v. Farluzsch (1927), 26 Ohio App. 258, wherein the Eighth

District Court of Appeals held that an oral contract creating a partnership relationship between

two parties to share in commissions for sale of real estate did not have to be in writing. Thus,

Plaintiff maintains that the agreement for Defendant to pay Plaintiff monies is outside of the

Statute of Frauds.

In reply, Defendant notes that R.C. §1335.05 provides:

No action shall be brought whereby to charge the defendant, upon a special promise toanswer for a debt, default or miscarriage of another person... upon an agreement that isnot to be performed within one year from the making thereof; unless the agreement uponsuch action is brought ... is in writing and signed by the party to be charged.

6

Defendant asserts that Plaintiff's. own affidavit states that the oral contract continued into

2007, and, therefore, was not completed within one year. Thus, Defendant maintains that the

contract does fall within the Statute of Frauds. Defendant relies on Olympic Holding Co., LLC v.

ACE Ltd. (May 7, 2009), _ N.E.2d _, 2009-Ohio-2057, wherein the Supreme Court of Ohio

held that while a joint venture agreement can be oral, it must comply with all of the applicable

requirements of contract law, including the Statute of Frauds. The Supreme Court fittther noted

that when the parties to the oral joint venture agreement do not intend for the agreement to be

performed in less than one year, the Statute of Frauds renders it unenforceable. Id. Thus,

inasmuch as the Plaintiff"'s own affidavit states that the oral contract was to be continued into

2007, Defendant maintains that Plaintiff's claims fail as a matter of law.

Agreements that do not comply with the statute of frauds are unenforceable. Htemmel v.

Hummel (1938), 133 Ohio St. 520, paragraph one of the syllabus. See also Shepherd v. Westlake

(1991), 76 Ohio App.3d 3, 10; DeCavitch v. Thomas Steel Strip Corp. (1990). 66 Ohio App.3d

568. 572.

The Court notes that Defendant's original motion argues that any agreement relative to

the development of real estate must be in writing to satisfy the Statute of Frauds while PlaintifPs

opposition asserts that the case is outside the Statute of Frauds because it involves an oral

contract creating a partnership agreement for the parties to share in real estate commissions.

Defendant does not address Plaintiff's argument relative to the creation of a partnership

agreement to share in real estate conunissions, but instead asserts another argument that if the

contract cannot be performed within one year it must be in writing to satisfy the Statute of

Frauds. Defendant notes that Plaintiff's arguments and affidavit asserting that the contract was

ongoing, which were presented relative to Defendant's Statute of Limitations arguments,

confirmed that the purported agreement was in violation of the Statute of Frauds. Specifically,

Defendant notes that if the alleged contract is ongoing and cannot be completed in one year, then

it must be in writing to satisfy the Statute of Frauds. Inasmuch as the alleged contract is not in

writing, Defendant argues that he is entitled to judgment as a matter of law.

Upon consideration, and without making a finding regarding whether or not the alleged

agreement involves a transaction for the transfer of real estate, the Court finds that by the

Plaintiff's own admissions as well as his own affidavit, the alleged contract between Plaintiff and

Defendant could not be performed within one year. Therefore, the agreement must be in writing

7

to be enforceable. The alleged contract in this case does not comply with the Statute of Frauds

because it cannot be performed within one year and it is not in writing. Defendant is entitled to

judgment as a matter of law.

Res Judicata

Under the doctrine of resjudicata, a valid, final judgment rendered upon the merits bars

all subsequent actions based upon any claims arising out of the transaction or occurrence that

was the subject matter of the previous action. See Grava v. Parkman Township (1995), 73 Ohio

St.3d 379.

Defendant asserts that PlaintifPs claims against him are barred by the doctrine of res

judicata because Plaintiff admitted in deposition that on June 1, 2006, Plaintiff reached a

settlement agreement in the February 23, 1999, case filed in Collier County, Florida against Cali

Woods, Inc., Cali & Associates, Joseph Cali and Sarah Cali. Defendant further notes that

Plaintiff admitted in deposition that pursuant to that agreement, Plaintiff settled and released all

claims that he had or has against Cali Woods including any claim he may haye or had against

any business entity that they may have an interest in and from any and all causes of acrion or

claims from the beginning of the world to the date of the agreement. It is Defendant's position

that Plaintiff is now trying to re-litigate claims that he released and for which he already received

$550,000.00. Thus, it is Defendant's position that PlaintifPs claims are barred by the doctrine of

resjudicata.

In opposition, Plaintiff asserts that the previous Settlement Agreement between Plaintiff

and Joe Cali did not release Defendant from PlaintifPs claims. Plaintiff asserts that the

Agreement released Joe Cali and any business entity that they have an interest in and each

other's blood relatives, and since Defendant is not a business entity, the Agreement does not

apply to him.

In reply, Defendant maintains that Plaintiff ignores that fact that Defendant was an

employee of Joseph Cali and Cali Woods, Inc., and, therefore, the Settlement Agreement did

apply to him. Moreover, Defendant maintains that the claims asserted by Plaintiff against Joseph

Cali and Cali Woods, Inc. involve the same transaction as his subsequent action against

Defendant. Defendant asserts that the doctrine of resjudicata is a complete bar to any

subsequent action on the same claim or cause of action between parties or those in privity with

8

them. See Brown v. Dayton (2000), 89 Ohio St.3d 245. Defendant maintains that inasmuch as

he was the project manager for Cali Woods, Inc., he was in privity with Cali Woods, Inc.

Defendant further maintains that even if this Court were to determine that he was not in

privity with Cali Woods, Inc., the action would be barred under the doctrine of resjudicata

because Plaintiff's claims arise out of the transaction that was the subject matter of the previous

Florida action. Defendant relies on Grava v. Parkman Twp., supra, wherein the Supreme Court

of Ohio held that a valid, final judgment rendered upon the merits bars all subsequent actions

based upon any claim arising out of the transaction that was the subject matter of the previous

action. Defendant further relies on U.S. BankNat'ZAss'n v. Gullotta 120 Ohio St.3d 401 and

National Amusements, Inc. v. City of Springdale (1990),. 53 Ohio St.3d 60, wherein the Supreme

Court of Ohio has held that an existing final judgment or decree between the parties to the

litigafion is conclusive to all claims which were or might have been litigated in the first lawsuit.

Defendant asserts that according to PlaintifPs deposition testimony, the Florida action involved

claims for monies he believed to be wrongfully withheld surrounding his transaction with Joseph

Cali and/or Cali Woods, Inc. Thus, Defendant argues that Plaintiff should have litigated his

claims against Defendant in the Florida case, and because he did not, his claims are barred under

the doctrine of resjudicata.

It is the opinion of this Court that Defendant is also entitled to an Order granting

judgment as a matter of law in his favor based on the doctrine or resjudicata. It is

uncontroverted that Plaintiff entered into a settlement agreement with Joseph Cali et. al.

regarding the Cali Woods project, received monies and signed a release which released Joseph

Cali, Cali Woods, Inc., Cali & Associates and Sarah Cali from any future claims, including any

claim he may have or had against any business entity that they may have an interest in and from

any and all causes of action or claims from the beginning of the world to the date of the

agreement. It is the opinion of this Court that the claims of Plaintiff arise out of the same

transaction that was the subject matter in the Florida case, and, therefore, should have been

brought in the Florida case. Accordingly, Plaintiff is barred from bringing the same claims now.

9

COURT'S CONCLUSION

Based upon the foregoing, the Court finds that Defendant Thomas Ackerman's Motion

for Summary Judgment is well taken and granted.

IT IS SO ORDERED.

^VINCENT C T A JUDGE

Copies:

David M. Lynch, Esq.Charles V. Longo, Esq.

10

STATE OF OHIO ))SS.

IN THE COURT OF APPEALS

COUNTY OF LAKE ) ELEVENTH DISTRICT

SAM MONTELLO, JUDGMENT ENTRY

Plaintiff-Appellant, CASE NO. 2010-L-007

- vs -

THOMAS ACKERMAN,

Defendant-Appellee.

FILEDCOURT OF APPEALS

JUL 2 6 2010MAUREEN G. KELLYCLERK OF COURT

LAKE COUNTY, OHIO

For the reasons stated in the opinion of this court, the sole assignment of

error lack merit. It is the judgment and order of this court that the judgment of the

Lake County Court of Common Pleas is affirmed.

It is the further order of this court that appellant is assessed costs herein

taxed. The court finds there were reasonable grounds for this appeal.

MARY JANE TRAPP, P.J., concurs,

DIANE V. GRENDELL, J., concurs in judgment only.

APPENDIX ITEM 2

(Exhibit B)

THE COURT OF APPEALS

ELEVENTH APPELLATE DISTRICT

LAKE COUNTY, OHIO

SAM MONTELLO,

Plaintiff-Appellant,

-vs-

THOMAS ACKERMAN,

Defendant-Appellee.

OPINION

CASE NO. 2010-L-007

^ MIDCOURT OF APPEALS

IUL 26 2010MAUREEN G. KELLYCLERK OF COURT

LAKE CUUNTY, ®t1!®

Civil Appeal from the Court of Common Pleas, Case No. 08 CV 001678.

Judgment: Affirmed.

David M. Lynch, 29311 Euclid Avenue, #200, Wickliffe, OH 44092 (For Plaintiff-Appellant).

Charles V. Longo and Matthew D. Greenwell, Charles V. Longo, Co., L.P.A., 25550Chagrin Boulevard, #320, Beachwood, OH 44122 (For Defendant-Appellee).

COLLEEN MARY O'TOOLE, J.

(¶1} Sam Montello appeals from the grant of summary judgment to Thomas

Ackerman by the Lake County Court of Common Pleas in his action for breach of

contract and/or fraud regarding the proceeds from a real estate development, "Cali

Woods," located in Concord Township, Lake County, Ohio. The trial court found any

action by Mr. Montello was barred by the applicable statutes of limitations, the Statute of

Frauds, and res judicata. We affirm.

{112} According to Mr. Montello, in June 1984, he and a friend, Joseph Cali,

entered a verbal agreement to acquire land in Lake County, Ohio, to be developed into

residential real estate. In return for providing capital, Mr. Montello was to receive one

half of any proceeds from the development, which was named Cali Woods. While

described as a "verbal partnership" in Mr. Montello's complaint, the parties do not

appear to dispute that Cali Woods was organized at some point into a corporation, "Cali

Woods, Inc."

{113} Mr. Montello alleges that he was introduced to Mr. Ackerman in 1995, and

that Mr. Ackerman was project manager for the development of Cali Woods. He alleges

that Mr. Ackerman entered into a verbal contract with him, to assure that Mr. Montello

received his one half of any proceeds from the project. Attached to Mr. Montello's

complaint is a written agreement between Joseph Cali, his wife, Sarah, and Mr.

Ackerman, dated June 1995, by which the Calis and Mr. Ackerman agreed to form a

development corporation for the lands constituting Cali Woods, with the Calis to own

one half of the corporation, Mr. Ackerman, the other half. Essentially, the Calis were to

provide the land for the development, and Mr. Ackerman, the expertise in running it. Mr.

Montello was not a party to this agreement, nor mentioned in it.

{¶4} In his deposition, Mr. Montello stated that he knew as early as 1998, that

Mr. Cali and Mr. Ackerman were failing to live up to their duty to provide him his money

from Cali Woods, or any accounting of its affairs. In 1999, Mr. Montello filed suit in the

Circuit Court for the Twentieth Judicial Circuit, Collier County, Florida, against Mr. Cali,

Cali and Associates, Inc., and others. Mr. Ackerman was not a party to that action. In

2

June 2006, this Florida action was settled pursuant to arbitration, with Mr. Montello

receiving $550,000. In relevant part, the settlement agreement states as follows:

{¶5} "5. The parties hereby release each other as well as any business entity

that they may have an interest in and each others (sic) blood relatives from any and all

causes of action or claims from the beginning of the world to the date of this agreement

with the exception of the obligations in this settlement agreement."

{¶6} March 30, 2007, Mr. Montello filed his initial complaint against Mr.

Ackerman in the trial court, that being Case No. 07-CV-000923. Mr. Ackerman

answered and counterclaimed. April 9, 2008, Mr. Montello moved to dismiss the case

without prejudice, which motion the trial court granted in part, leaving Mr. Ackerman's

counterclaim pending.

{¶7} May 20, 2008, Mr. Montello refiled the instant case. Mr. Ackerman

answered and counterclaimed, which answer and counterclaim were, eventually

amended. Mr. Ackerman moved for summary judgment April 17, 2009, which motion

Mr. Montello opposed. Mr. Ackerman further filed a response to Mr. Montello's

opposition. August 6, 2009, the trial court granted the motion for summary judgment.

Mr. Montello timely noticed this appeal, assigning a single error:

{¶8} "The Trial Court errored (sic) in granting Summary Judgment for the

Defendant."

{¶9} "'Pursuant to Civ.R. 56(C), summary judgment is appropriate when there

is no genuine issue of material fact and the moving party is entitled to judgment as a

matter of law.' Holik v. Richards, 11th Dist. No. 2005-A-0006, 2006-Ohio-2644, ¶12,

citing Dresher v. Burt (1996), 75 Ohio St.3d 280, 293, ***. 'In addition, it must appear

3

from the evidence and stipulations that reasonable minds can come to only one

conclusion, which is adverse to the nonmoving party.' Id. citing Civ.R. 56(C). Further,

the standard in which we review the granting of a motion for summary judgment is de

novo. Id. citing Grafton v. Ohio Edison Co. (1996), 77 Ohio St.3d 102, 105, "*.

{¶10} "Accordingly, '(s)ummary judgment may not be granted until the moving

party sufficiently demonstrates the absence of a genuine issue of material fact. The

moving party bears the initial burden of informing the trial court of the basis for the

motion and identifying those portions of the record which demonstrate the absence of a

genuine issue of fact on a material element of the nonmoving party's claim.' Brunstetter

v. Keating, 11th Dist. No. 2002-T-0057, 2003-Ohio-3270, ¶12, citing Dresher at 292.

'Once the moving party meets the initial burden, the nonmoving party must then set

forth specific facts demonstrating that a genuine issue of material fact does exist that

must be preserved for trial, and if the nonmoving party does not so respond, summary

judgment, if appropriate, shall be entered against the nonmoving party.' Id., citing

Dresher at 293.

{¶11} "**•

{¶12} "***

{¶13} "Since summary judgment denies the party his or her'day in court' it is not

to be viewed lightly as docket control or as a 'little trial.' The jurisprudence of summary

judgment standards has placed burdens on both the moving and nonmoving party. In

Dresher v. Burt, the Supreme Court of Ohio held that the moving party seeking

summary judgment bears the initial burden of informing the trial court of the basis for the

motion and identifying those portions of the record before the trial court that

4

demonstrate the absence of a genuine issue of fact on a material element of the

nonmoving party's claim. The evidence must be in the record or the motion cannot

succeed. The moving party cannot discharge its initial burden under Civ.R. 56 simply

by making a conclusory assertion that the nonmoving party has no evidence to prove its

case but must be able to specifically point to some evidence of the type listed in Civ.R.

56(C) that affirmatively demonstrates that the nonmoving party has no evidence to

support the nonmoving party's claims. If the moving party fails to satisfy its initial

burden, the motion for summary judgment must be denied. If the moving party has

satisfied its initial burden, the nonmoving party has a reciprocal burden outlined in the

last sentence of Civ.R. 56(E) to set forth specific facts showing there is a genuine issue

for trial. If the nonmoving party fails to do so, summary judgment, if appropriate shall be

entered against the nonmoving party based on the principles that have been firmly

established in Ohio for quite some time in Mitseff v. Wheeler (1988), 38 Ohio St.3d 112,

{¶14} "The court in Dresher went on to say that paragraph three of the syllabus

in Wing v. Anchor Media, Ltd. of Texas (1991), 59 Ohio St.3d 108, **", is too broad and

fails to account for the burden Civ.R. 56 places upon a moving party. The court,

therefore, limited paragraph three of the syllabus in Wing to bring it into conformity with

Mitseff. (Emphasis added.)

{¶15} "The Supreme Court in Dresher went on to hold that when neither the

moving nor nonmoving party provides evidentiary materials demonstrating that there are

no material facts in dispute, the moving party is not entitled to a judgment as a matter of

law as the moving party bears the initial responsibility of informing the trial court of the

5

basis for the motion, `and identifying those portions of the record which demonstrate the

absence of a genuine issue of fact on a material element of the nonmoving party's

claim.' Id. at 276. (Emphasis added.)" Welch v. Ziccarelli, 11th Dist. No. 2006-L-229,

2007-Ohio-4374, at ¶36-37, 40-42. (Parallel citations omitted.)

{¶16} In support of his assignment of error, Mr. Montello raises three issues.

First, he asserts the trial court erred in finding that this action was barred by the statute

of limitations. Second, he asserts that, since his alleged oral agreement with Mr.

Ackerman was for the division of profits from the sale realty arising from a partnership, it

does not fall within the Statute of Frauds. Third, Mr. Montello asserts that the

settlement of his claims against Mr. Cali in the Florida case does not place the bar of

res judicata upon an action against Mr. Ackerman.

{¶17} The statute of limitations concerning (most) oral contracts is six years.

R.C. 2305.07. In this case, Mr. Montello admitted in deposition that he believed neither

Mr. Cali, nor Mr. Ackerman, were performing under the alleged oral agreements in

1998. He did not commence any action against Mr. Ackerman until 2007. A cause of

action for breach of an oral contract accrues "when the plaintiff discovers the omission

to perform as agreed in the oral contract." Aluminum Line Products, Co. v. Brad Smith

Roofing Co., Inc. (1996), 109 Ohio App.3d 246, 258. In the instant case, this would

mean the limitations period expired no later than the end of 2004. Further, as Mr.

Ackerman points out, this court has held that the six year limitations period on oral

contracts to pay money, wherein no specific time for payment is stipulated, begins "to

run from the date the initial promise was made." Mines v. Phillips (1987), 37 Ohio

6

App.3d 121, 122. Application of this rule to the instant case would mean the limitations

period expired at the end of 2001.

{¶18} While it appears to us that this case sounds in contract, analysis under a

fraud theory gives Mr. Montello no comfort. The general statute of limitations for fraud

is four years. R.C. 2305.09(C). This court has held that a cause of action for fraud

accrues either: "(1) when the fraud is discovered; or (2) when, in the exercise of

reasonable diligence, the fraud should have been discovered." Marshall v. Silsby, 11th

Dist. No. 2004-L-094, 2005-Ohio-5609, at ¶26. As Mr. Montello discovered the alleged

fraud in 1998, this means the limitations period expired no later than the end of 2002.

{¶19} Mr. Montello cites to the decision of the Supreme Court of Ohio in Weber

v. Billman (1956), 165 Ohio St. 431, in an attempt to avoid the bar of the statute of

limitations. Like the trial court, we find that case distinguishable. The Weber court held:

"Where a contract of employment is a continuing one with no fixed date of termination,

the statute of limitations does not begin to run until the services rendered under such

contract actually end." Weber at paragraph three of the syllabus. Weber involved a

situation where appellee's great uncle promised to see she was taken care of, if she

would devote herself to nursing him during the declining years of his life. As the Weber

court stated, "there was persuasive evidence before the jury to warrant the finding that

there was a continuing contract which terminated only with the death of the decedent."

Id. at 439. In this case, on the contrary, Mr. Montello alleges the existence of a

continuous contract with Mr. Ackerman to turn over proceeds from the Cali Woods

development, which Mr. Ackerman breached as early as 1998. Indeed, if we were to

7

apply the reasoning in Weberto this case, we would be required to dismiss it, and order

the trial court to do the same, as no cause of action could yet have accrued.

{¶20} The first issue lacks merit. This action is barred by the applicable statutes

of limitations.

{q21} Under his second issue, Mr. Montello asserts the trial court erred in finding

this action was barred by the Statute of Frauds, as codified at R.C. 1335.05. This

section provides, in pertinent part:

{1122} "No action shall be brought whereby to charge the defendant, upon a

special promise, to answer for the debt, default, or miscarriage of another person; nor to

charge an executor or administrator upon a special promise to answer damages out of

his own estate; nor to charge a person upon an agreement made upon consideration of

marriage, or upon a contract or sale of lands, tenements, or hereditaments, or interest in

or concerning them, or upon an agreement that is not to be performed within one year

from the making thereof; unless the agreement upon which such action is brought, or

some memorandum or note thereof, is in writing and signed by the party to be charged

therewith or some other person thereunto by him or her lawfully authorized."

{¶23} Refusing to reach the question of whether the alleged agreement between

Mr. Montello and Mr. Ackerman involved an interest in realty, the trial court nevertheless

found that R.C. 1335.05 applied, since, according to Mr. Montello's own testimony, the

contract between himself and Mr. Ackerman was not intended to be performed within a

year.

{¶24} As support for this issue, Mr. Montello cites to the decision of the Court of

Appeals for the Eighth Appellate District in Furth v. Farkasch (1927), 26 Ohio App. 258,

wherein the court held, at paragraph one of the syllabus: "Oral contract creating

partnership relation between parties to share in money realized from commissions for

sale of real estate, which had been earned by one party, held not within statute of

frauds ***." (Emphasis sic.) As noted by the Court of Appeals for the Tenth Appellate

District in Gunsorek v. Heartland Bank (1997), 124 Ohio App.3d 735, 740-742, Furth is

an early example of a line of appellate decisions in this state holding that the Statute of

Frauds does not apply to oral partnerships to share in the profits from the sale of realty,

or to acquire and develop realty not already owned by one of the partners. When such

agreements pertain to property already owned by one of the partners, the Statute of

Frauds applies. Gunsorek at 742-745.

{¶25} We respectfully decline to rely on Furth, and related cases. As Mr.

Ackerman indicates, the viability of these cases is questionable, following the decision

of the Supreme Court of Ohio in Olympic Holding Co., L.L.C. v. ACE Ltd., 122 Ohio

St.3d 89, 2009-Ohio-2057. In that case, the Court held, in an action between title

insurers and reinsurers:

{¶26} "In Garg v. Venkataraman (1988), 54 Ohio App.3d 171, 172-173, *"*, the

court stated, 'While joint venture agreements may be oral, they are, nonetheless, still

contracts, and thus subject to all of the applicable requirements of contract law,

including the Statute of Frauds.' Thus, Garg held that if a joint agreement does not

comply with the statute of frauds, it is unenforceable and cannot impose any fiduciary

duties upon the parties. Id. at 172. We agree with Garg and therefore hold that a joint-

venture agreement that does not comply with the statute of frauds is unenforceable, and

9

an unenforceable joint-venture agreement cannot impose any fiduciary duties on the

parties." Olympic Holding Co. at ¶46.

{¶27} In view of this mandate applying the Statute of Frauds to joint ventures, it

appears likely to us that the Supreme Court would also hold that the statute applies to

partnerships. We further note the court in Olympic Holding Co. held: "When parties to

an alleged agreement did not intend the agreement to be performed in less than a year,

the statute of frauds renders that agreement unenforceable." Id. at ¶48. (Emphasis

sic.) As the trial court correctly noted, Mr. Montello's own evidence indicates the

agreement between him and Mr. Ackerman was not intended to be performed in less

than a year. Consequently, the Statute of Frauds bars the enforcement of the

agreement.

{¶28} The second issue lacks merit. This action is barred by the Statute of

Frauds.

{¶29} Under his third issue, Mr. Montello argues that the settlement of his

Florida action against Mr. Cali does not place the bar of res judicata on his action

against Mr. Ackerman. As we noted above, paragraph 5 of the settlement of that action,

entered into in June 2006, provided that Mr. Montello and Mr. Cali released each other,

"as well as any business entity that they may have an interest in *** from any and all

causes of action or claims from the beginning of the world to the date of this agreement

***[.]" Mr. Montello asserts that this settlement and release does not apply to Mr.

Ackerman, since he is not a business entity.

{¶30} In State ex ret. Nickoli v. Erie Metroparks, 124 Ohio St.3d 449, 2010-Ohio-

606, at ¶21-22, the Supreme Court of Ohio stated:

10

{¶31} "In Ohio, '(t)he doctrine of res judicata encompasses the two related

concepts of claim preclusion, also known as res judicata or estoppel by judgment, and

issue preclusion, also known as collateral estoppel.' O'Nesti v. DeBartolo Realty Corp.,

113 Ohio St.3d 59, 2007-Ohio-1102, ¶6, '**. 'Claim preclusion prevents subsequent

actions, by the same parties or their privies, based upon any claim arising out of a

transaction that was the subject matter of a previous action,' whereas issue preclusion,

or collateral estoppel, ' precludes the relitigation, in a second action, of an issue that had

been actually and necessarily litigated and determined in a prior action that was based

on a different cause of action.' Ft. Frye Teachers Assn., OEAINEA v. State Emp.

Relations Bd. (1998), 81 Ohio St.3d 392, 395, ** ; see Holzemer v. Urbanski (1999), 86

Ohio St.3d 129, 133, '*.

{¶32} "For res judicata to apply, 'one of the requirements is that the parties to

the subsequent action must be identical to or in privity with those in the former action.'

Kirkhart v. Keiper, 101 Ohio St.3d 377, 2004-Ohio-1496, **, ¶8." (Parallel citations

omitted.)

{¶33} "`What constitutes privity in the context of res judicata is somewhat

amorphous. A contractual or beneficiary relationship is not required: "In certain

situations (***) a broader definition of privity is warranted. As a general matter, privity is

merely a word used to say that the relationship between the one who is a party on the

record and another is close enough to include that other within the res judicata."' Brown

[v. Dayton (2000)], 89 Ohio St.3d [245,] *** 248 (quoting Thompson v. Wing [(1994)], 70

Ohio St.3d 176, ***). 'Privity has also been defined as "such an identification of interest

of one person with another as to represent the same legal right."' Green v. City of

11

Akron, 9th Dist. Nos. 18284, 18294, 1997 Ohio App. LEXIS 4425, "'* (Oct. 1, 1997)

(quoting Buchanan v. Palcra Inc., 6th Dist. No. E-87-22, 1987 Ohio App. LEXIS 10285,

*** (Dec. 31, 1987))." Elec. Enlightenment, Inc. v. Kirsch, 9th Dist. No. 23916, 2008-

Ohio-3633, at ¶8. (Parallel citations omitted.)

{¶34} "The doctrine of resjudicata requires a plaintiff to present every ground for

relief in the first action, or be forever barred from asserting it." (Emphasis sic.) National

Amusements, Inc. v. Springdale (1990), 53 Ohio St.3d 60, 62.

{1135} In this case, the June 1995 agreement between the Calis and Mr.

Ackerman, attached to Mr. Montello's own complaint, indicates that Mr. Cali and Mr.

Ackerman were business partners in the development of Cali Woods. We believe this is

sufficient to establish privity between them. Consequently, in settling the Florida action

between himself and Mr. Cali, Mr. Montello was required to except Mr. Ackerman from

the operation of the settlement and release, in order to avoid the bar of res judicata. He

did not.

{1136} The third issue lacks merit. This action is barred by res judicata.

{¶37} The judgment of the Lake County Court of Common Pleas is affirmed.

{¶38} It is the further order of this court that appellant is assessed costs' herein

taxed.

{¶39} The court finds there were reasonable grounds for this appeal.

MARY JANE TRAPP, P.J., concurs,

DIANE V. GRENDELL, J., concurs in judgment only.

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