Wall v. Firelands Radiology, Inc.
| Decision Date | 01 September 1995 |
| Docket Number | No. H-94-048,H-94-048 |
| Parties | WALL, Appellant, v. FIRELANDS RADIOLOGY, INC. et al., Appellees. * |
| Court | Ohio Court of Appeals |
Cary Rodman Cooper, for appellant.
Richard D. Panza, for appellees.
This is an appeal from the judgments of the Huron County Court of Common Pleas which granted appellees' motion to strike and motion for summary judgment. Appellant sets forth the following two assignments of error:
The facts relevant to this appeal are as follows. Appellant Mary Jean Wall, M.D., is a radiologist who entered into an employment agreement ("the agreement") with appellee Firelands Radiology, Inc. ("Firelands") on December 21, 1989. Appellee Matthew F. Gutowicz, Jr., D.O. ("Gutowicz") is president and controlling shareholder of Firelands. In August 1989, appellant met Gutowicz when her husband, an obstetrician-gynecologist, was being recruited by a hospital in which Firelands provided radiology services. Later in August, appellant and Gutowicz discussed Firelands' needs and opportunities, Firelands' practice, and a position for appellant in Firelands' practice. According to her affidavit, appellant informed Gutowicz that partnership was important to her and that if he was not willing to make her a full partner that he should not offer her a position. Appellant also asked for a ballpark figure of what a partnership buy-in would be and was told a range of $125,000 to $150,000.
Appellant accepted Firelands' job offer. Negotiation of the agreement between appellant and Firelands was conducted by their respective attorneys. Appellant's attorney had broad experience in the buying and selling of businesses. He reviewed the initial draft of the agreement and recommended changes and modifications. Some changes were accepted but others were rejected by Firelands. The agreement contained an integration clause, described by appellant's attorney as "standard." Appellant's attorney explained the purpose of this clause to her. The agreement also contained a restrictive covenant prohibiting appellant's employment for three years within twenty miles of the two hospitals in which Firelands provided services. This twenty mile geographic restriction was negotiated down from an initial restriction of thirty miles. Appellant also successfully negotiated for the inclusion of a clause prohibiting Firelands from contacting persons or entities located outside the twenty-mile restriction identified by appellant.
The amount of appellant's salary for the two years was included in the agreement. No salary amount after the two years was included in the agreement. In the agreement, Firelands, in its sole discretion, retained the right to change appellant's "duties and responsibilities."
The agreement also provided that appellant would be eligible to purchase one-third of Firelands' shares at the fair market value ("FMV") on the date of purchase as mutually determined by appellant and Firelands. The agreement further provided that if appellant and Firelands could not agree on a FMV by August 30, 1992, that the FMV would be fixed by appraisal as follows: (1) one appraiser appointed by Firelands; (2) one appraiser appointed by appellant; and (3) a third appraiser selected by the above two appraisers.
The agreement did not define FMV, specify the method to be used or the factors to be considered in determining FMV, or provide guidelines as to how the three appraisers were to arrive at the FMV. Although appellant's attorney sought to include the "ball-park" figure, Firelands rejected this request. During negotiations, Firelands' attorney wrote a letter to appellant's attorney in which he stated that "it is our expectation that the stock purchase price to be utilized in the future will be based upon the fair market value of Firelands' tangible assets and a component for Accounts Receivable."
A second draft and a final draft of the agreement were exchanged after negotiations between the attorneys. Negotiations lasted approximately two months. Appellant signed the agreement on December 21, 1989.
Appellant began her employment with Firelands in August 1990. Under the agreement, her option to buy shares matured in July 1992. Appellant and appellees were unable to reach an agreement regarding a FMV for one-third of Firelands' shares. The following three appraisals of FMV for one-third of Firelands' shares were made: (1) Firelands' appraisal: $344,170.44 which included a "goodwill" factor of more than a $500,000; (2) appellant's appraisal: $297,004 based upon the assumption that compensation and benefits would be equal or nearly so among the equal owners; and (3) a third appraisal: $53,460.24.
The third appraiser was chosen by Gutowicz and Firelands' attorney from a list of five appraisers submitted by appellant and her attorney. In March 1993, Firelands' attorney stated in a letter to appellant's attorney that the third appraisal was Appellant sought to buy one-third of the stock based upon the third appraisal. Gutowicz refused to sell at that price. In his affidavit, Gutowicz states that Firelands is prepared to proceed with the appraisal process described in the agreement. In August 1992, Firelands increased appellant's salary to $225,000, $85,000 beyond the amount she was paid in salary for the second and last year covered by the agreement.
On May 26, 1993, appellant filed her complaint, setting forth six claims:
(1) for rescission of the agreement because she was fraudulently induced to enter the same;
(2) for relief from further performance under the agreement because Firelands breached the same;
(3) for relief from further performance under the agreement because of discrimination based upon sex;
(4) for a declaration that Firelands committed unlawful employment practices in violation of R.C. 4112.02(A), excusing appellant's further performance;
(5) for punitive damages, including attorney fees; and
(6) for a declaration that the restrictive covenants in the agreement are not enforceable.
Appellees filed a motion for summary judgment on all claims. Appellant filed an opposition brief and affidavits. Appellees also filed a motion to strike portions of affidavits filed in support of appellant's opposition brief. On October 25, 1994 the trial court granted appellees' motion to strike and motion for summary judgment. Appellant filed a timely notice of appeal.
The issue before this court in the first assignment of error is whether the trial court properly granted appellees' motion for summary judgment. Appellant presents the following four arguments under this assignment of error:
This court will address the arguments in the same order.
In reviewing the grant of a motion for summary judgment, this court must determine whether there were any genuine issues of material fact:
"Summary judgment is appropriate where the movant demonstrates: (1) there is no genuine issue as to material fact; (2) the moving party is entitled to judgment as a matter of law; and (3) reasonable minds can reach but one conclusion, and that conclusion is adverse to the party against whom the motion is made, who is entitled to have the evidence construed most strongly in its favor." Wooster v. Graines (1990), 52 Ohio St.3d 180, 184, 556 N.E.2d 1163, 1167.
Furthermore, "[a] motion for summary judgment forces the nonmoving party to produce evidence on any issue for which that party bears the burden of production at trial." Wing v. Anchor Media, Ltd. of Texas (1991), 59 Ohio St.3d 108, 111, 570 N.E.2d 1095, 1099.
Basic to the grant of a summary judgment motion is that there be no genuine issue as to a material fact. Material facts are determined by substantive law. Only disputes over facts that might affect the outcome of a suit under governing law will properly preclude summary judgment. Irrelevant and unnecessary factual disputes will not preclude summary judgment. Anderson v. Liberty Lobby, Inc. (1986), 477 U.S. 242, 247-248, 106 S.Ct. 2505, 2509-2510, 91 L.Ed.2d 202, 210-212; Perez v. Scripps-Howard Broadcasting Co. (1988), 35 Ohio St.3d 215, 520 N.E.2d 198. In determining whether a "genuine issue" exists, a court must inquire "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-252, 106 S.Ct. at 2512, 91 L.Ed.2d at 214; Turner v. Turner (1993), 67 Ohio St.3d 337, 617 N.E.2d 1123.
Appellant argues that she was fraudulently induced to enter into the employment agreement with Firelands and, therefore, that she is entitled to rescind the agreement. In support of this argument, appellant cites the following as misrepresentations:
1. that the value of one-third of the shares was in the $125,000 to $150,000 range;
2. that appellant could become a "full partner";
3. that the purchase price to be utilized in the future would be based on the FMV of Firelands'...
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