William E. Weaner & Assocs. v. 369 W. First, LLC

Decision Date10 January 2020
Docket NumberAppellate Case No. 28399
Citation2020 Ohio 48
PartiesWILLIAM E. WEANER & ASSOCIATES, LLC, et al. Plaintiffs-Appellants/Cross-Appellees v. 369 WEST FIRST, LLC, et al. Defendants-Appellees/Cross-Appellants
CourtOhio Court of Appeals

(Civil Appeal from Common Pleas Court)


CRAIG T. MATTHEWS, Atty. Reg. No. 0029215, 320 Regency Ridge Drive, Centerville, Ohio 45459 Attorney for Plaintiffs-Appellants/Cross-Appellees

T. ANDREW VOLLMAR, Atty. Reg. No. 0064033 and ADAM ARMSTRONG, Atty. Reg. No. 0079178, 40 North Main Street, Suite 2010, Dayton, Ohio 45423 Attorneys for Defendants-Appellees/Cross-Appellants


{¶ 1} This case is before the court on the appeal of Plaintiffs-Appellants/Cross-Appellees, Shooter Construction Company dba Possert Construction ("Possert") and William Weaner and Associates, LLC ("Servpro"), and the cross-appeal of Defendants-Appellees/Cross-Appellants, Whichard Whichard, NW Fashion, LLC ("NW"), and Olympia Shoppes, LLC ("Olympia").1

{¶ 2} Plaintiffs appeal from a judgment denying in part their motion for summary judgment against Defendants; the motion was also granted in part. Specifically, the trial court found Defendants jointly and severally liable for a total of $14,000 toward the payment of $60,143 in attorney fees and/or unpaid interest on an attorney fee judgment that was awarded to Plaintiffs in July 2015. The basis for the judgment was that transfers of this amount by a limited liability company (LLC), 369 West First Street, LLC ("369") to NW and Olympia violated the Ohio Uniform Fraudulent Transfer Act ("UFTA"). Plaintiffs do not appeal from this part of the judgment, but Defendants have cross-appealed, contending that the trial court erred in awarding this amount to Plaintiffs.

{¶ 3} The trial court rejected Plaintiffs' fraudulent transfer claims concerning January 2013 transfers of $100,000 to Whichard and $123,690 to Ashton Limited, LLC ("Ashton"). Ashton was a defendant in the trial court, and like NW and Olympia, was an LLC owned solely by Whichard. The trial court also refused to pierce the corporate veil of 369 and hold Whichard responsible for the attorney fee judgment against 369. Plaintiffs appeal from this part of the trial court judgment as well.

{¶ 4} After considering the evidence, we conclude that the trial court did not err inawarding $14,000 to Plaintiffs. However, there were genuine issues of material fact regarding the piercing of the corporate veil and the transfers to Whichard and Ashton. As a result, the judgment of the trial court will be affirmed in part and reversed in part, and this cause will be remanded to the trial court for further proceedings.

I. Facts and Course of Proceedings

{¶ 5} Plaintiffs' claims are based on what is now nearly an eleven-year attempt to collect on amounts that 369 owed for work that Plaintiffs performed in 2008. As noted, Whichard was the sole owner of 369, which was formed to purchase property at 369 West First Street, in Dayton, Ohio. In late August 2008, a large rainstorm damaged 369's building. At the time, the building was the only property that 369 owned.

{¶ 6} Servpro is a company that provides water remediation services. Whichard's assistant, Jeanette Hagood, signed a contract with Servpro, agreeing to pay for any amounts that were not covered by insurance immediately upon receipt of an invoice. The contract imposed interest and finance charges at the maximum allowable by law or at 1.5% per month, whichever was less, on accounts that were over 30 days past due. Further, the contract provided that if legal action were brought, Servpro would be entitled to reasonable legal fees and costs of collection, in addition to any other amounts the customer owed. Finally, the contract provided for the filing of mechanics liens. The total charge for Servpro's services was $13,939.04.

{¶ 7} Hagood also signed a contract with Possert for needed property repairs. Although Possert estimated $75,000 in construction costs, only limited repairs were done. Possert's contract, like Servpro's, imposed 1.5% interest due per month on all past-due invoices. In addition, Possert's contract provided for recovery of reasonable attorney fees and costs. The total cost of Possert's repairs was $9,402.25, which was billed by Possert on November 7, 2008. That same day, Traveler's Insurance had informed both Servpro and Possert that it had denied 369's claim for insurance, and that they would need to individually invoice 369. They did so, but 369 never paid the invoices.

{¶ 8} Both Servpro and Possert filed mechanics' liens against 369's property on West First Street. Subsequently, on December 29, 2008, Whichard signed a general warranty deed, conveying the 369 property to Eufala corporation. Whichard's son, Chad Whichard ("Chad"), who was the managing member of another LLC (Northwest Outparcels, LLC), also signed the warranty deed. According to Whichard, 369 owned a 90% interest in the property, and Northwest owned 10%.

{¶ 9} According to the settlement statement, the purchase price was $300,000, and the cash amount due to the sellers was $226,478.98, based on various settlement charges, including payoff of several mechanics' lien. These liens included $14,103.38 for Possert, $22,612.15 for Servpro, and $28,547.61 to Beerman Realty Company. However, Possert or Servpro were not paid. As a result, Servpro filed suit against 369 in October 2009, seeking $13,939.04, plus interest and reasonable attorney fees. Possert also sued 369 in March 2011, seeking $9,402.25, plus interest and reasonable attorney fees.2 After the cases were consolidated, a magistrate held a joint two-day trial in November 2012. The magistrate found in favor of Servpro and Possert and awardedthe requested amounts, plus interest at the contractual rate of 1.5% from the date of default by 369 (October 21, 2008, and November 7, 2008, respectively).

{¶ 10} The magistrate's April 2013 decision noted that due to the inclusion in the contract of provisions for reasonable attorney fees and costs, the matter of attorney fees would be set for a hearing. April 10, 2013 Amended Magistrate's Decision in Montgomery C.P. No. 2009-CV-9715, pp. 11 and 14-15.3 In addition, the magistrate stressed that "[t]he Court is well aware of the extensive procedural history of this case." Id. at p. 2. Both Plaintiffs and 369 filed objections to the magistrate's decision. In October 2013, the case was transferred to another judge.

{¶ 11} In November 2013, Whichard's attorney, Lemuel Whitsett, offered to settle both claims for $25,000. According to Plaintiff's counsel, the amount of the judgment at that time (prior to the attorney fee award) was $58,601.87. More than five years had elapsed since the work was done on 369. Plaintiff's counsel offered to settle the action for $42,250, but no agreement was reached.

{¶ 12} In April 2014, the trial court issued a decision overruling all the objections to the magistrate's decision. 369 appealed from the decision, but we dismissed the appeal for lack of a final appealable order. See Weaner & Assocs. v. 369 W. First LLC, 2d Dist. Montgomery No. 26404 (December 8, 2014).

{¶ 13} Another judge was assigned to the 2009 collection case early in 2015 and held a hearing on attorney fees. In July 2015, the judge awarded Plaintiffs a total of$60,143.25 in attorney fees. Following 369's appeal, which raised only the attorney fee issue, we affirmed the trial court's judgment. See Weaner & Assocs., L.L.C. v. 369 W. First St., L.L.C., 2d Dist. Montgomery No. 26792, 2016-Ohio-8077. In rejecting 369's claim that Plaintiffs' recovery should be limited to a contingency amount, we stressed that "limiting plaintiffs' recovery to that amount encourages the precise behavior that occurred in this case: defendant's obfuscation, denial, delay and distraction that turned this rather simple collection case into a six year ordeal." Id. at ¶ 34.

{¶ 14} Our opinion was issued in December 2016, and no further appeal was taken. Plaintiffs then filed an action on January 1, 2017, against 369 and Whichard, as well as three other LLCs that Whichard owned: Ashton, NW, and Olympia. The complaint alleged violation of the UFTA and also asked the court to pierce the corporate veil. Another extensive course of litigation ensued. In May 2017, the court set a trial for July 23, 2018. In February 2018, Plaintiffs filed a motion for summary judgment on all claims. Defendants then filed a cross-motion for summary judgment in April 2018. However, in late May 2018, 369 filed for bankruptcy and then filed a motion on August 1, 2018, asking the trial court to stay the case until the bankruptcy proceeding was complete.

{¶ 15} Although Plaintiffs had dismissed 369 as a party in July 2018 and had opposed a stay, the trial court stayed the action on September 9, 2018. After the bankruptcy case ended in November 2018, the trial court lifted the stay and reactivated the action. Subsequently, in April 2019, the court ruled on Plaintiffs' motion for summary judgment and Defendants' cross-motion for summary judgment.

{¶ 16} In its judgment, the court set aside November 2015 transfers from 369 to NW and Olympia, and held Whichard and both entities jointly and severally liable for payment of $14,000. However, the court rejected the attempt to set aside transfers from 369 in January 2013 to Whichard and Ashton. Following the judgment, Plaintiffs filed a notice of appeal, and Defendants cross-appealed.

II. Piercing the Corporate Veil

{¶ 17} Plaintiff's First Assignment of Error states that:

The Trial Court Erred by Granting [Defendants'] Motion for Summary Judgment as to the [Plaintiffs'] Claim Regarding Piercing the Corporate Veil of 369 and Holding [Whichard] Personally Liable for the Debt Owed.

{¶ 18} Under this assignment of error, Plaintiffs contend that the trial court erred in refusing to pierce the corporate veil and hold Whichard responsible...

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