^^^^^AIAL
COVI;R PAGE
Case Name and Nurnber: Baltes Connnercial Realty v. Daryl Harrison, Trial Court Case No.:2006CV9262; CoLu-t of'Appeals Case No.: CA 023177
Nature of Proceedings: Appeal from a Court of Appeals
Narne of Court Appealed From: Court of Appeals For Montgomery County, Ohio, SecondAppellate District
Title of Document: Memorandum In Support Of Jurisdiction Of Appellant, Darryl IIarrison
Party on Whose Behalf Document is Being Filed: Darryl Harrison, aka, Daryl I3arrison,Appellant
Attorney Inforination:
Worrell A. Reid (0059620)6718 Loop Rd., No. 2Centerville, OI 145459(937) 434-2880Fax (937) 434-2033
sbcglobal.netWorrell_ reid0Attorney for Appellant
Laurence A. Laslcy (0002959)130 West Second Street, Ste. 830Dayton, OII 45402(937) 222-6699Fax (937) 226-0060Attorney for Appellee
CLMK OF "0UUi'r^UF'Ri"lU1C ("OtlnT L)F i;Jlqlo
IN THE SUPREME COURT OF 01110
BALTLS COMMERCIAL REALTY, : On Appeal From The Montgomeryet al., County Cout-t Of Appeals,
Second Appellate DistrictPlaintiff Appellee
vs.
DARYL HARRISON, et al.,
Defend ant-Appellant.
Court Of AppealsCase No. 23177
Supreme Ct. Case No.
Memoranduin In Support Of Jurisdiction Of Appellant, Darryl Harrison
Worrell A. Reid (0059620)6718 Loop Rd., No. 2Centerville, OH 45459(937) 434-2880Fax (937) [email protected] for Appellant
Laurence A.Lasky (0002959)130 West Second Street, Ste. 830Dayton, OH 45402(937) 222-6699Fax (937) 226-0060Attoniey for Appellee
TABLE OF CONTENTSPAkTe
F,XPLANATION OF WHY'I'HIS CASE IS A CASE OF PUBLICOR GREAT GI;NTERAL INTEREST AND INVOLVES A SUBSTANTIALCONSTITUTIONAL QUF,STION ........................................................................1
STATEMENT OF THl* CASE AND FACTS .............................................................................2
ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW ........................................7
Proposition of Law No. 1: A guaranty signed by an officer of an Ohio limitedliability company, in his capacity as "President" does not impose personal lia-bility pursuant to R.C. 1705.48 and the Ohio Statute Frauds ...................................7
Proposition of Law No. II: The Complaint for eviction whicli omitted any al-legations relating to a guarantee was legally insufficient to put an ofhcer ofa Iimited liability company on notice that his personal liability was in issue,and as suclr, a ruling that he is personally liable was a violation of his consti-tutional guaraiitee of due process..................................................................10
C'ONCLUSTON ............................................................................................................................14
CERTIFICATE OF SERVICE .....................................................................................................15
APPENDIX Appx. Pa.ee
Opinion of the Montgomery County Court of Appeals(November 6, 2009) ... .... . .. . . . . . .. . . . . . . ... .. . . .. . .. . . . . .. . . . . . . .. . .. ... .. . .. . .. . . .. . . ... .. . . ....
.Tudgment Entry of thc Montgomery County Court of Appeals(November 6, 2009) ... ............ ..................... ............ ......... .....................17
EXPLANATION OF WHY TIIIS C,ASE IS A CASE OF PUBLIC OR GREAT GENERALINTERES"I' AND INVOLVES A SUBS"1'ANTIAL CONSTITUTIONAL QiJES'I'ION
Setting up a business as a limited liability company is the preferred means of corporate
governance for many Ohioans. The aim of this form of business is to offer the flexibility of a
sole proprietorship with the assurance of liniited liability. Having limited liability is, of course,
very important to all business owners. The State of Ohio has recognized the value of this type of
business entity, and has enacted ORC 1705. By ruling that an officer of a limited liability
company who signs a document as "President" is personally liable for the debts of the limited
liability company, the Montgomery County Court of Appeals, Second Appellate District, has
essentially repealed ORC 1705. In light of the proliferation of limited liability eompanies, this
Most Honorable Court has a duty to clarify the circumstances under which a member or officer
may be subject to personal liability.
Furthermore, the coinplaint for eviction did not put Appellant on notice that his personal
liability was in issue. The first cause action for restitution of the premises, alleged the breach of
a lease, which was clearly signed by the Appellant as President of 4A Capital Group, LLC, an
Ohio Limited Liability Company; the second cause of action incorporated the first and requcsted
damages. At no time did Appellee move to amend the pleadings, nor to have the evidence
conform to the pleadings, as is required by Ohio Rules of Civil Procedure. This lack of notice,
and disregard for the Ohio Rules of Civil Procednre, was a denial of Appellant's rights to due
process pursuant to the Ohio and United States Constitutions.
For the foregoing reasons, this is a case of great public or general importance, and does have
substantial constitutional implications.
STATEMENT OF THE CASF. AND FAC'1'S
Appeliee's Complaint for eviction and breach of lease, named Appellant in his iudividual
capacity. It was abundantly clear that the lease was signed by Appellant as President of 4A
Capital G-oup, LLC. It was also abrmdantly clear that Appellant should not have been uamed
as a party. This was a calculated oversight on the part of Appellee, howcver, with an eye toward
obtaining a default judgment against Appellant in his individual capacity. The Magistrate did in
fact nile that Defendant Harrison should be dismissed as a party because the lease agreement was
signed by Defendant/Appetlant Harrison only in his corporate capacity. `I'his Magistrate's
Decision, which was entered on September 27, 2007, was docketed after the Plaintiff was
ordered to file additional evidence. "1'he Plaintiff failed to file any additional documentation.
Despite Appellee's failure to act, however, their niotion to reconsider, to add the docunients that
were previously ordered to be made a part of the record, was sustained. During the first trial for
daniages which was held on Septeinber 27, 2007, and after Appellant was dismissed by the
Magistrate, the Appellee proceeded to introduce evidence in regard to the guaranty. Appellant
objected to the introduction of the guaranty, and at no time did the Magistrate allow Appellee to
amend the pleadings to confomr the evidence.
In any event, upon finally learning that the guaranty was executed, and acknowledge by
Defendant Harrison, only in his corporate capacity, and being fiilly aware that parol evidence was
inadmissible to vary or supplement the terms of a contract that is clear on its face, the Magistrate
and Trial Court created a "special promise," substance over form, exception to Ohio law
pertaining to limited liability companies, and to the Ohio statute of frauds, so that if a member or
otf cer of an Ohio fimited liability company makes a "special promise" in the capacity as a
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corporate officer, the form of the signature becomes wholly iixelevant. 'fhe rendering of a
decision by the Trial Court, without a formal amendment of the pleaclings, was a denial of
Appeltant's right to due process. The Montgomeiy County Court of Appcals, Second Appellate
District, agreed with the Trial Court. Nonetheless, this Decision was clearly erroneous, and must
remain a part of Ohio jririsprudence.
Plaintiff's Complaint which was filed on or about November 11, 2006, reads as follows:
COUNT ONE
1. Plaintiff is the landlord of the commereial premises located at 8150 Rrashiugtoti Village Driveand described below Delendant's name in the above caption, and Defendant presently operates abusiness therein. The Lease for saidpremises is attached hereto as Plaintifl's Exhibit 1.
2. Plaintiff has failed to pay the required rental for said premises and is now in arrears in theamormt of FOURTEEN THOUSAND ONE ILUNDRED FIFTY DOLLARS AND 86/100
($14,150.86).
3. Defendant refuses to leave said premises and sLu-render possession thereof.
COUNT TWO
4. Plaintiff restates all the allegations above herein.
5. Plaintiff asks for a money judgment in the ainormt claimed above of $ 14,150.86 plus backreasonable rental value and damages and all other rent and da nages and repair costs up to andinchuling the time the Defendant vacates the premises.
WHEREFORE, Plaintiff prays for restitation of said premises; for reasonable rental value
and repair costs at the conclusion of the case...
Plaintiff's Complaint did not allege Lhe circumstances under which Darryl I Iarrison
guaranteed the perforrnance of the limited liability company, and as such, did not put him, nor
the Court, on notice that his "personal guarantee" was an issue in the case. On December 15,
2006, Defendants filed their answer, setting up the affirmative defenses of inisjoinder of Daryl
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Harrison, aka, Darryl Harrison, in his individual capacity, and further stated that Count Two of
the Complaint violated the statute of frauds. The restitution hearing was held before Magistrate
Nadine Ballard on or about December 15, 2006. 'fhe Magistrate's Decision which was filed on
December 28, 2008, granted restitution of the premises to the Plaintiff. In the "Findings Of
Fact" Magistrate Ballard found that " The Plaintiff established that the Defendant, Darryl
Harrison, as a corporate representative of 4A Capital Group, LLC, signed a lease..." 1'he
Magistrate further foimd that DePendant, 4A Capital Group, LLC, was in breach of the lease, and
issued: "A writ of restitution in favor of the Plaintiff, Baltes Coimnercial Realty Yankee Business
Centre, LT, and against the Defendant, 4A Capital Group, LLC and all other occupants..."
On January 23, 2007, Defendant Daryl Harrison (aka, Darryl Harrison) filed his motion to be
dismissed as a party, pursuant to Civ. R. 21, on thc grounds that he did not sign the lease nor any
guarantee in his individual capacity, and that to hold him personally liable would violate the
provisions of RC 1335.05, which requires that a guarantor signs in the capacity in which he is to
be held liable. On Januaiy 23, 2007, Daryl Harrison submitted his Affidavit stating that the
Plaintiff prepared the lease and the guaranty, and that he never agreed to be personally liable for
the debt of 4A Capital Group, LLC. On February 8, 2007, Plaintiff filed their Memorandum in
Opposition to Defendants' Motion'io Dismiss Darryl Harrion, onthe grounds that the corpoiate
veil of 4A Capital may be pierced. On February 16, 2007, DePendant Harrison filed his Reply To
Memorandum In Opposition Of Motion To Dismiss, in which he cited RC 1705.48 for the
proposition that the debts of a limited liability cornpany are solely the debts of the limited
liability company. On March 28, 2007, new Magistrate, Kristi A. Wuebben, issued a
Magistrate's Decision, ordering that the Motion to Disiniss, with supporting Affidavit, be
4
treated as a motion for summaiy judgment, and the parties were given 28 daYs in which to
subniit supporting evidence and additional responses. The Plaintiff did not submit any
further documents, nor argLunents to defeat the Motion to Dismiss which Magistrate Wuebben
had converted to a motion for sununary judgment.
On September 27, 2007, before the trial in regards to danrages, Magistrate Wuebben issued
the Magistrate's Decision. The Magistrate's Decision was absolutely, brilliantly reasoned,
and written. The Magistrate found that Defendant IIarrison signed the lease in his capacity as
President of 4A Capital Group, LLC, and that the acknowledgeinent was also in his corporate
capacity. The Magistrate cited the proper legal authority that no corporate ofticer may be held
personally liable when he clearly signs in his ccnporate capacity. The Magistrate also cited the
pi-oper authority in regards to piercing the corporate veil, requiring that it be shown that the
corporation has "... no separate mind, will or existence of its own..." 1Jltimately, the Magistrate
granted Defendant Harrison's Motion to Dismiss/Motion for Summary Judgment, and the
matter was ordered to proceed to trial "with Defendant 4A Capital Group, LLC only..."
Id.
On October 10, 2007, Plaintiff filed their Objection To Magistrate's Decision Of Septcrnber
27, 2007, Motion'I'o Add Newly Discovered Evidence, In 1'he Alternative, Motion For New
Trial. Plaintiff s objection was based on the fact that Daryl IIarrison signed a pcrsonal guaranty
which was not before Magistrate Wuebben on September 27, 2007, when the Magistrate's
Decision dismissing Dei'endant Harrison was issued. This objection was baseless, and should
have been overruled in light of the fact that Appellee had been given the opportunity to
supplement the record with supporting evidence. Appellee ignored the Magistrate's Decision,
5
and failed to supply the guarantee. Even so, Appellee's motion to set aside the Magisirate's
Decision was sustained. On Noveinber 14, 2007, Magistrate Wuebben issued an F,ntry and Order
vacating the Magistrate's Decision of September 27, 2007. The reason for the reconsideration
was due to the fact that the Magistrate did not know that the guarantee had been admitted into
evidence. To date (12/3/09), Appelle has produced no evidence that the said guaranty was
admitted into evidence when Defendant Harrison had been dismissed.
Another trial pertaining to damages was held on Apri12, 2008. Appellant was riot present as
the Entry And Order (vacating summary judgment in Defendant Harrison's favor) stated that:
"'1'he Motion for Summary Judgment will be reconsidered..." Defendant Harrison had
previously submitted his Affidavit (filed 1/23/07) wherein he stated that lie dicl tiot agree to be
personally liable for any debt which arose out oi'the lease agreement. P'urthermore, Defeudant
Harrison had clearly signed the guaranty solely in his corporate capacity. 1'he Plaintiff did have a
witness present. The Magistrate's Decision was filed on Apri125, 2008, The Magistrate found
that the terms aild execution of the guarantee demonstrated that Daryl I-Iairison, inade a "special
pronlise" to answer for the debt of the 4A Capital Group, LLC, whereby he became personally
liable pursuant to RC 1335.05. The Magistrate further found that he signed the guaranty with the
intention of binding himself personally to the terms thereof. On May 7, 2008, Defendant
Harrison filed his timely objection the Magistrate's Decision. On December 12, 2008, Judge
Gorman issued her Decision adopting the Magistrate's Decision. On January 2, 2009, Defendant
Ilarrison filed his Notice of Appeal. Appellant's Brief was filed on May 1, 2009. Appellee's
Brief was filed on May 19, 2009. Appellant's Reply Brief was filed on May 27, 2009. "I'he
Court of Appeals liled its Opinion and Judgment Entry sustaining the "l'rial Cotn-t on November
6, 2009. This appeal ensued.
ARGUMEN'I' IN SUPPOR'1' OP PROPOSL"l'IONS OF LAW
Proposition of Law No. I: A guaranty signed by an ofticer of an Ohio Limited Liability
Company, in his capacity as "President" does not impose personal liability pursuant to
Pursuant to R.C. 1705.48 and the Ohio Statute of Frauds
It is well understood, that the purpose of the Ohio Limited Liability Statute was to
essentially allow a company to be governed as a sole proprietorship, without the formalities of a
duly authorized corporation. Ohio Revised Code 1705.48 (Personal liability oS'menibers and
managers) reads in pai-t as follows:
Except as otherwise provided by this chapter or any other provisionof the Revised Code, including, but not limited to sections 3734.908,5739.33, 5743.57, 5747.07, and 5753.09 of the Revised Code, all ofthe following apply:(A) The debts, obligations, aud liabilities of a limited liabilityCompany, whether arising in contract, tort, or otherwise, aresolely the debts, obligations, and liabilities of the limited lia-bility company.(B) Neither the members of the limited liability company norany inanagers of the limitcd liability company are personallyliable to satisfy any judgment , decree, or order of a court for,or are personally liable to satisfy in any other manner, a debt,obligation, or liability of the company solely by reason ofbeing ainember or nianager of the limited liability company.
In thc case at bar, Appellant Harrison, signed the Lease as "President" of 4A Capital Group,
LLC, an Ohio Limited Liability Compairy. Magistrate Wuebben has previously ruled that the
execution of lease by Appellant in Iiis corporate capacity, did not impose personal liability. The
Magistrate then proceeded to dismiss Defendant Harrison as a party to the action. In the case at
bar, Appellant signed the guaranty as "President". See, Trailscript, Plainti Pt's Exhibit 2
7
attached. Above the signature, the following is typed: "Guarantor: Daryl Harrison,
President". On direct exa.niination, Plaintiff s employce, and witness, Katie Stanton, stated: "I
prepared the Lease and met with them on several occasions to discuss payiiient, security deposit,
the like, and then we met a final time to get all the documents signed. 1'ranscript. p. 4. She was
later asked if she had "-prepared a document called a Guaranty..." Her response: "Yes". She
furtlier stated: "I prepared both documents, the Giaranty and the Lease; it is in the normal course
of my duties to do that." "I'ranscript, p. 12. It follows, therefore, that because the Lease and the
Guaranty were signed by Defendant Hairison only in his capacity as "President", personal
liability may not be imposed on him. Any debt due the Plaintiff/Appellee is "solely the debts,
obligations, and liabilities of the limited liability company", pursuant to ORC 1705.48.
In Ohio, no action may be brought to to charge a defendant to answer for a debt or
miscairiage of another, unless the agreement upon which the action is brought is in writing, and
signed by the party to be charged. RC 1335.05. Furthermore, a guarantor is bound only by the
words of his contract, and parol evidence is not admissible to enlarge or limit the terms of the
instnunent. Third National Banlc of Cincirmati v. Laidlaw, (1912) 86 Ohio St. 9 1.
Additionally, "...the meaning of wo:-ds actually used, is to be acertained in the same manner as
the meaning of similar words used in other contracts. Id. The lease was signed as "President" of
4A Capital Group, LLC, an Ohio Limited Liability Conipany. This being the case, the guaranty
pertaining to the lease, which was sigired by Appellant as "President" had to be interpreted as
being signed by Appellant solely in his capacity as Presiclent of 4A Capital Group, LLC., an Ohio
Limited Liability Company.
The 1'rial Court's Decision, Order And Entry, filed on 12/12/08, finding that Defendant
8
Harrison had made a "special prornise" to answer for the debt of the other Defendants, is also
clearly contrary to the Ohio statute of frauds. Whctlier a corporate officer is personally liable
upon a contract depends on the form of the ptromise, and the forrn of the signature. Spiccr v_
James, (1985) 21 Ohio App.3d 222. The Trial C.oui-C's Decision conlpletely disregarded the
undisputed fact that Daryl Harrison signed the Guaranty, which was prepared by the Plaintiff,
only in his capacity as "President" of 4A Capital Group, LLC. Furthermore, contemporaneous
negotiations, understandings, promises, representations, or the like, are irrelevantwhen
interpreting an unambiguous contract. The Gray Printing Com^,uiy v. Blushina Brides. I.I.C,
Slip Copy, 2006 WI, 832587 (Ohio App. 10 Dist.), citing, Busler v. D & 11 Mf =̂ , Inc^ (1992), 81
Ohio App. 3d 385.
The Court of Appeals noted that the Magistrate found that the text of the guaranty was clear
and unambiguous. Appendix, Opinion, at p. 6. Yet the Magistrate stated that Appellee's witness
gave iulrefuted testimony that a special appointment was made with Appellant to execute the
guaranty, and that Appellant knew that his personal guarantee was required to induce Appellee to
enter into the lease with the limited liability company. Id. at p. 7. If the guaranty was "clear
and unanlbiguous", why was parol evidence considered? Of course, since the guarantee is clear
and unambiguous, the trial court's interpretation thereof is a matter of law which this Most
Honorable Court may review de novo. SNee, Saunders v. Mortensen. (2004) 101 Ohio St.3d 86.
Whether a corporate officer is personally liable upon a contract depends on the form of the
promise, and the form of the signature. Spioor y. Jaines (1985) 21 Ohio App.3d 222. RC
1335.05 requires that a contract of guaranty be signed by the party to be charged. In the case
at bar, the Guaranty was signed by the party, who was "Dairyl Harrison, President". The ruling
9
in Spicer, as is the clear meaning of RC 1335.05, is that the forni of the signature must be
analyzed also. In Spicer, thc Court noted that words and phrases such as 'V.P.' and `Pres.' were
sufficient indication of corporate capacity. 't'he Guaranty indicates that Defendant IIarrison's
signature is in the form of a coi-porate officer, with no indication of personal liability. A guaranty
signed by the guarantor in his capacity as "President", is not signed by the party to be charged as
required by RC 1335.05, and personal liability is thus avoided. This is especially evident when
viewed in paYa rnateria with the Lease which was signed by "Darryl IIarrision, President of 4 A
Capital, LLC. The doctrine of contra pr^oferentem is also applicable since Appelle prepared the
guaranty. "I'he'hrial Court's "special promise", substance over form eYception to thc Ohio
statute of fi•auds completely ignores the fact that the forin of the signature is important.
Consequently, thc Opinion of the Court of Appeals sustaining thc'1'rial Court's Decision is
contrary to Ohio law, and must be reversed.
Proposition of Law No.1l: The Complaint for eviction which omitted any allegationsrelating to a guarantee was Icgally insufficient to put an officer of a limitedliability company on notice that his personal liability was in issue, and as such,
a ruling that he is personally liable was a violation of his constitutionalguarantce of due process
Plaintiffs Complaint did not allege any type ol' a guaranty, and as such, did not put Defendant
IlaiTison, nor the Court, on notice that his "personal guarantee" was an issue in the case. '1'his
being the case, the Ti-ial Court's Decision filed on 12l12/08, is contrary to Ohio Rules of Civil
Procedure, Plaintiff'.s Complaint dicl not contain a "short and plain statement showing that they
entitled to relief' based on the guaranty, a true copy of which is attached to the Transcript,
Plaintiff's Exhibit `2", as is required by Civ. R. 8(A). Furtliermore, the guarantee was not
attacherl to the Complaint as is required by Civ. R. 10(D), and no explanation was given for its
10
omission. Accorcling to the records in these proceedings, the guaranty was mentioned for the
veiy first time, at the trial which was held on September 27, 2007. Decision, Order And F,ntry
Overi-uling Defendant's Objections To Magistrate's Decision; Affirming Magistrate's Decision,
p. 3. This additional claiin lior relief, was offered after Appellee's allegations ofpiercing the
corporate veil failed. Appellee should have filed an anlended eomplaint, alleging the existence
of a guaranty, and requesting relief based on this theory of recovery.
It must also be noted that the Magistrate's Decision, p. 4, tiled on 9/27/08, granting sumniary
judgment in Appellatit's favor, stated that "...the matter will proceed to trial with Defendant 4A
Capital Group, LLC only..." Consequently, when the guaranty was received in evidence,
Defendant Harrison was not even a pai-ty to the proceedings. The (Magistrate's) F,ntry and
Order filed on 11/14/07 stating that at the 9/27/08 trial there "... were a nuniber of questions
directed to the witness regarding Mr. Harrison's personal liability and the Guaranty..." is
irrelevant as to Appellant, as he was not a party to these proceedings, following his dismissal. In
looking at the four corners of the well pleaded Cornplaint, we note that Count One for eviction,
was based on the "...Lease for said prcniises attaclled hereto as Plaintift's F.xhibit I......
Furthermore, in Count Two, for damages, Plaintiff restated "...all the allegations above
herein..." Complaint In Forcible Entry And Detainer-Two Counts. It is undeniable, therefore,
that Plaintiff s cntire Complaint is based on a breaclr of the Lease whiclr was attached to
the Complaint. 1'here is no allegation of a guarantee, nor of the default and insolvency of 4A
Capital Group, LLC. Count Two simply reinerated the fact that there was a lease and that
Defendant Harrison had executed the Lease in his corporate capacity.
Appellee's Complaint was undoubtedly based on breach of contract, not a guaranty. A
11
guaranty, as is a promissory note, gives rise to a separate cause of action. Gray PrintinQ Company
v. Blushing Brides, LLC, Slip Copy, 2006 WL 832587 (Ohio App. 10 Dist.). As the Magistrate
noted, a guaranty is a promise to pay after the principal debtor has failed to pay as agreed.
Magistrate's Decision file on 4/25/08, p. 4. Pursuant to Civ. K. 9(C), the default of Co-
Detendant, 4A Capital, LLC, must have been plcaded, as a condition precedent to finding
AppetlantlDefendant Harrison personally liable. To prevail on a guaranty clairn the plaintiff
niust allege and prove that the priniary obligor has been suect, and their assets exhausted, before
the guaranty can be enforecd. Liguidating Midland Bank, Trustec, v. Strecker, (1930) 40 Ohio
App. 510. The Magistrate's Decision wliich was filed on 4/25/08, treated Defendant Harrison as
a surety, and not as a guarantor, and is thus procedurally contrary to Ohio law. Tlie "1'rial Judge,
in the Trial Court's Decision, Order And Entry, filed on 12/12/08, adopting the Magistrate's
Decision which was fited on Apri125, 2008, agreed that the guaranty was not attached to the
Complaint filed on Noveniber 22, 2006, agreed that the said guaranty was introduced for the first
time, at the September 27, 2007 trial, wherein Defendant Harrison was not a party (having been
dismissed), and approximately 11 months after the Complaint was originally filed, and yet
concluded "...on this set of facts, the Court finds that the Coniplaint sufficiently infortned
IIarrison of the claims against him and his claim that he was unfairty surprised at the April 2,
2008 trial by the guaranty is without merit."
Where an action was filed based on an account alone, otie Ohio Court of Appeals ruled that the
trial court had no authority to render judgment on the proniissory note relating to the account.
Gray PrintinQ Conipany v. BhtshinQ Brides, LIC, Slip Copy, 2006 Wi, 832587 (Ohio App. 10
Dist.). So, we see that Appellant's procedural due process rights were violated.
12
1'he just procedure was for the Magistrate (at the Apri12, 2008 trial) to malre the Plahrtiff
amend its Complaint to allege facts sufficient to show the guaranty, that the principal, 4A Capital
Group, LLC, was insolvent, and that Appellant may somehow be personally liable. Otherwise,
the Magistrate could only rule on Counts One and Count Two as pled in AppelleeslPlaintiffls
Complaint, without any reierence to the guaranty. Appellec's Complaint was insufficient to
sustain a cause of action against Appellant under the short form of pleading as required by the
Oliio Rules of Civil Produre. See, Brown v. Columbus Stampinp, & Mfg. Co•, 9 Ohio App. 2d
123 (1967). At the trial held on April 2, 2008, counsel for Defendant IIarrison did in fact object
to the introduction of the guaranty, but the same was overruled. Transcript, p. 9-11. As the
Court of Appeals noted, "Nothing in the body of Yankee's Complaint suggests that Harrison had
been sued in his individual capacy". Opinion p. 9. The Court of Appeals stated that a trial
court's decision on whether to allow the amendment of a pleading is reviewed for an abuse ol'
discretion. Id, at p. 11. The problem is that Appellee never moved to have the pleadings
amended! The Court of Appeal's statement that:
... by perniitting Yankee to introduce evidence on the guarantyissue, the magistrate allowed Yankee to amend its pleading,in accordance with Civ. R. 15(B), and to proceed on itsclaim against IIarrison individually based on the guaranty...Id. at p. 12,
is a clear instance of favoritism to Appellee. After all, Appellant had no opportunity to see and
test the allegations of guaranty and stiretyship. The Court of Appeals noted that Appellant
objected to the testimony regarding the guaranty. Opinion, p. 11. Upon this objection the Trial
Court may have allowed the pleadings to be aniended pursuant to Civ. R. 15 (B); however,
Appellee did not formally, nor in formally (though perhaps tacitly) move to have the pleadings
13
aniended, and the Court did not formally allow the pleadings to be amended. This failure on the
part of the Appellee should have forced the Court to consider the allegations set forth in the
Complaint; and as such, slzould not have ruled against Appellant in his individual capacy. The
Trial Court's ruling was thus contrary to law, and denied Appellant clue process under the Ohio
and United States Constitutions, and the Coui-t of Appeal's Enty sustaining the Ti-ial C.ourt mnst
be reversed.
CONCLUSION
For the reasons discassed above, this case involves matters of public and great general
interests and a substantial constitutional question. The Appellant requests that this Most
Honorable Court acceptjurisdiction in this case so that these important issues may bc reviewed
on the merits.
Most Respectfully Subniitted,
Worrell N. Reid (0059620)Attorney for Appellant
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CERTIFICATE OF SERVICE
The undersigned eertifies that a copy of this Notice Of Appeal was sent by ordinary U.S. Mail
to counsel for Appellee, Laurence A. Lasky, 130 West Second Street, Ste. 830, Dayton, OH
45402, on December 4, 2009.
Worrell A. Reid, Esq.,
15
APPEnII7IX
IN THE COURT OF APPEALS FOR MONTGOMERY COUNTY, OHIO
BALTES COMMERCIAL REALTY, et al.
Plaintiffs-Appellees C.A. CASE NO. 23177
V.
DARRYL HARRISON, et al.
Defe n d a nts-Ap pe l l a nts
T.C. NO. 2006 CV 9262
(Civil appeal fromCommon Pleas Court)
OPINION
Rendered on the 6th day of November , 2009.
LAURENCE A. LASKY, Atty. Reg. No. 0002959, 130 West Second Street, Suite 830,Dayton, Ohio 45402
Attorney for Plaintiffs-Appellees
WORRELL A. REID, Atty. Reg. No. 0059620, 6718 Loop Rd., No. 2, Centerville, Ohio45459
Attorney for Defendants-Appellants
FROELICH, J.
Darryl Harrison appeals from a judgment of the Montgomery County Court of
Common Pleas, which affirmed the magistrate's decision finding, after a trial, that Harrison
THE COURT OF APPBALS OF OHIOSECOND APPELLATE DISTRICT
2
and 4A Capital Group ("4A") were jointly and severally liable to Yankee Business Centre
Ltd. in the amount of $61,836.10. Harrison alleges that the court erred in finding him liable
based on a guaranty signed by him. For the following reasons, the trial court's judgment
will be affirmed.
On August 30, 2006, Yankee and 4A entered into a commercial lease whereby 4A
would rent approximately 6,000 square feet of space located at 8150 Washington Village
Drive within the building known as Yankee Business Centre. Baltes Commercial Realty
is the managing agent for Yankee Business Centre and has an ownership interest in the
property. According to the lease, 4A's rent during the first year was $5,500 per month. 4A
also agreed to pay outstanding sums due from a Greenline Capital Funding lease in the
amount of $1,287.93 per month. The lease was signed by Katherine Stanton for Yankee
and by Harrison as President of 4A. Specifically, the signature lines showed:
"LESSOR: Yankee Business Centre, LTD.,
"an Ohio limited liability company
"Katherine Stanton [signaturel
"By: Katherine Stanton [printed handwriting]
"Its: Property Manager [printed handwritingl
"LESSEE: 4A Capital Group, LLC, an Ohio
"limited liability company
"Daryl Harrison signature] 4A Capital Group LLC [printed handwritingl
"By: Daryl Harrison [printed handwritinal
"Its: President 4A Capital Group LLC [printed handwritingT"
'rHL' CoCRT oF APPBALS OF oAloSECOND APPBLLATE DISTRICT
3
On November 22, 2006, Yankee brought suit against Harrison and 4A, seeking
restitution of the premises and $14,150,86 plus "back reasonable rental value and
damages and all other rent and damages and repair costs up to and including the time the
Defendant vacates the premises." In the caption of the Complaint, Harrison and 4A are
identified as "Guarantor/Defendant(s)." Yankee attached to its Complaint a notice under
the Fair Debt Collection Practices Act and a copy of the August 30 lease between 4A and
Yankee.
In theirAnswer, Harrison and 4A asserted as affirmative defenses that Harrison had
been misjoined and that the complaint constituted "[s]lander of Defendant, Darryl
Harrison's good name by calling him a'Guarantor' which is fictitious, denoted his personal
liability, and which was intended to ruin his credit in the financial industry."
In December 2006, a trial was held before a magistrate on Yankee's claim for a writ
of restitution, after which the magistrate granted restitution of the property to Yankee. The
case remained active due to Yankee's pending claim for damages.
In January 2007, Harrison moved to dismiss the claim against him, arguing that he
signed the lease as President of 4A, a limited liability company, that Yankee made no
allegations against him regarding a guaranty, and that such a claim is not supported by the
statute of frauds because there is no written guaranty agreement. He supported his motion
with an affidavit, in which he stated that he signed the lease in his capacity as President
of 4A and that it was not agreed that he would be personally responsible for the payment
of any debt which might arise pursuant to the lease. Yankee opposed Harrison's motion,
arguing that the "corporate veil" may be pierced and dismissal at that juncture would be
premature.
'I'HE COURT OF APPEAI,S OF 01110SECOND APPELLATE DISTRICT
4
Because Harrison had supported his motion with an affidavit, the magistrate
converted the motion to one for summary judgment, and she granted the parties 14 days
to submit any additional response. No additional materials were filed.
On September 27, 2007, the magistrate granted summary judgment to Harrison,
stating that no facts had been submitted to refute Harrison's affidavit. That day, which was
the scheduled trial date, the magistrate held a hearing during which the guaranty was
apparently presented and entered into evidence. The record does not include a transcript
for this hearing, and the nature of the hearing is not clear from the record. ,
Yankee filed objections to the magistrate's ruling and moved for a new trial. It stated
that a guaranty document was presented at the restitution trial, and the document should
have been in the original trial documents that the court reviewed. In response, Harrison
argued that the complaint did not put him on notice that his "personal guarantee" was an
issue in the case, that Yankee did not request to pierce the corporate veil in its complaint,
and that Yankee failed to state a claim against him. Treating Yankee's motion as a motion
for reconsideration, the magistrate noted that the guaranty "has been misplaced and was
not included in the Court's file." Thus, in the interests of justice, the magistrate vacated its
decision granting summary judgment to Harrison and stated that the motion would be
reconsidered. Harrison objected to the magistrate's decision granting the motion for
reconsideration. The trial court overruled Harrison's objection. There is no indication in
the record that the magistrate ever "re-ruled" on the motion for sumrrlary judgment prior to
the trial on the merits.
Trial on Yankee's damages claim was held before the magistrate on April 2, 2008.
Before the presentation of testimony, Harrison's counsel asked the magistrate to reinstate
THE COORT OF APPEALS OF 01110SP,CtONIJ APPELLATE DISTRICT
5
her original summary judgment decision if no guaranty were found to exist. Yankee
responded that, "from the very outset of this case, the Plaintiff has sought to pursue the
Defendant, Darryl Harrison, personally. It is reflected in the Complaint when it was
originally filed in 2006." Yankee further stated that there was a personal guaranty, which
it would present again during the trial. Yankee also asked for a default judgment against
Harrison and 4A, who were absent but whose counsel was present. The magistrate denied
the motion for a default judgment.
During the trial, the magistrate heard evidence from Stanton (the signatory for
Yankee) about 4A's obligations under the lease and the company's default from October
2006 until July 2007, when the property was leased to new tenant. When Stanton was
asked about the preparation of a guaranty, Harrison's counsel objected to testimony
regarding the guaranty on the grounds that it was not pled in the complaint and he would
have negotiated the case differently had he known it was an issue in the case. The
magistrate overruled Harrison's counsel's objection and allowed Yankee's counsel to ask
Stanton aboutthe guaranty. Stanton identified a guaranty signed by Harrison and testified
regarding the preparation and signing of that agreement. The guaranty was admitted into
evidence over Harrison's counsel's objection.
On April 25, 2008, the magistrate granted judgment forYankee and against Harrison
and 4A, and awarded damages, jointly and severally, in the amount of $62,836.10. As to
Harrison, the magistrate stated: "[I]t is undisputed that Darryl Harrison read the guaranty,
understood it and subsequently signed it with the intention of binding himself personally to
the terms of the guarany. No testimony was offered to establish he was deceived, misled,
that he failed to understand the guaranty or that he did not intend to bind himself
THE COURT OF AI'PEALS OF OHIOSECOND APPELLATE DISTRIC'I'
6
personally. The text of the guaranty is clear and unambiguous."
Harrison objected to the magistrate's decision, claiming that the Complaint did not
allege any type of guaranty and did not put him on notice that his "personal guarantee" was
an issue in the case. Harrison also asserted that the magistrate's decision treated him as
a surety, not a guarantor, and that the guaranty was signed by Harrison in his corporate
capacity.
The trial court overruled Harrison's objections and adopted the magistrate's
decision. With respect to the guaranty, the trial court found:
"In the case at bar, Harrison argues that Plaintiffs' Commercial Complaint in Forcible
Entry and Detainer does not refer to the Guaranty and did not put Harrison on notice that
Plaintiffs sought to hold him personally liable. Ohio Civ.R. 8(A) requires that a complaint
set forth 'a short and plain statement of the claim showing that the party is entitled to relief.'
The Court notes that Harrison was named as an individual defendant in the Complaint.
Further, although the guaranty in question was not attached to the Complaint at the time
of its filing, the guaranty was produced to the Court and entered into evidence during the
initial trial in this matter on September 27, 2007. On this set of facts, the Court finds that
the Complaint sufficiently informed Harrison of the claims against him and his claim that
he was unfairly surprised at the April 2, 2008 trial by the guaranty is without merit.
"Harrison argues that he signed the guaranty in his capacity as president of 4A, and
he therefore has not [sic] personal liability. However, the evidence demonstrates that
Harrison read and understood that the guaranty held him personally liable for 4A's
'I'HE COURT OF APPF.ALS OF OHIOSHCOATD APPELLATI: DIS'I'RICT
7
obligations under the lease. Harrison's argument requires this Court to believe that
Plaintiffs required 4A to guarantee its own obligations under the lease. To the contrary,
Stanton gave unrefuted testimony that a special appointment with Harrison was made to
execute the guaranty and that Harrison knew that his personal guarantee was required to
induce Yankee to enter into the lease with 4A."
Harrison appeals from the trial court's judgment, raising two assignments of error.
II.
Harrison's first assignment of error states:
"THE DECISION, ORDER AND ENTRY OVERRULING DEFENDANT'S
OBJECTIONS TO MAGISTRATE'S DEICISON; AFFIRMING MAGISTRATE'S DECISION
IS CONTRARY TO LAW BECAUSE THE COMPLAINT DID NOT GIVE DEFENDANT
HARRISON SUFFICIENT NOTICE THAT HE WAS BEING SUED AS A GUARANTOR,
AND THAT HE WOULD BE HELD PERSONALLY LIABLE FOR THE DEBTS OF THE
LIMITED LIABILITY CORPORATION."
In his first assignment of error, Harrison claims that the trial court erred in granting
judgment against him in his individual capacity, because the Complaint did not allege the
existence of a guaranty, did not raise the guaranty as an issue in the case, and the
guaranty was not attached to the Complaint. Harrison asserts that the Complaint alleged
only breach of a lease agreement and not a claim based on a guaranty.
As in the trial court, Yankee responds that the complaint sufficiently put Harrison on
notice that it was pursuing him in his individual capacity based on the guaranty. Yankee
notes that Harrison's Answer claims that Yankee slandered him by referring to him as a
guarantor. Yankee further contends that Harrison was given notice of the claim based on
THE COURT OF Al'1'EALS OF OHIOSECOND AI'PELLATE DISTRICT
8
the guaranty at various hearings before the magistrate.
Civ.R. 8(A) requires that a pleading that sets forth a claim for relief contain "a short
and plain statement of the claim showing that the party is entitled to relief" and "a demand
forjudgment for the relief to which the party claims to be entitled." When a claim is based
on a written document, a copy of that document must be attached to the pleading. Civ.R.
10(D). If the document is not attached, the pleading must state the reason for its omission.
Id.
Yankee's Complaint alleges, in its entirety:
"COUNT ONE
"1. Plaintiff is the landlord of the commercial premises located at 8150 Washington
Village Drive and described below Defendant's name in the above caption, and Defendant
presently operates a business therein. The Lease for said premises is attached hereto as
Plaintiff's Exhibit 1.
"2. Plaintiff [sic] has failed to pay the required rental for said premises and is now
in arrears in the amount of FOURTEEN THOUSAND ONE HUNDRED FIFTY DOLLARS
AND 86/100 ($14,150.86).
"3. Defendant refuses to leave said premises and surrender possession thereof.
"COUNT TWO
"4. Plaintiff restates all the allegations above herein.
"5. Plaintiff asks for a money judgment in the amount claimed above of $14,150.86
plus back reasonable rental value and damages and all other rent and damages and repair
costs up to and including the time the Defendant vacates the premises.
"WHEREFORE, Plaintiff prays for restitution of said premises; for reasonable rental
TkIE COURT OF API'EALS OF OHIOSBCONll AI'1'ELLATF. DISTILIC']'
9
value and repair costs at the conclusion of the case.
"If you are depositing rent with the Clerk of this Court, you shall continue to deposit
such rent until the time of the court hearing. The failure to continue to deposit such rent
may result in your eviction. You may request a trial by jury. You have the right to seek
legal assistance. If you cannot afford a lawyer, you may contact your local Legal Aid or
legal services office. If none is available, you may contact your local Bar Association.
"This is an attempt to collect a debt. Any information given will be used for that
purpose.
"[Attorney signature and address]
"The amount stated in the Complaint is presumed to be correct unless an
Answer is filed within thirty (30) days."
Nothing in the body of Yankee's Complaint suggests that Harrison had been sued
in his individual capacity. The Complaint refers to "Defendant" in the singular, not to
Defendants, and alleges that Defendant operates a business at 8150 Washington Village
Drive pursuant to a lease agreement, which was attached to the Complaint. The lease
indicated that it was entered into by and between Yankee and 4A; Harrison signed the
lease as President of 4A. Thus, the Complaint simply asserted that 4A had failed to pay
the required rent and had refused to vacate the premises. The body of the Complaint is
devoid of any reference to Harrison having signed a guaranty, nor has Yankee included
"a short and plain statement" alleging a claim for relief against Harrison based on an
alleged guaranty.
Nor can Yankee rely on the caption of its Complaint to assert that it has stated a
claim against Harrison. The caption identifies the defendants as "DARRYL HARRISON
THE COURT OF APPEALS OF OHIOSECOND APPELLATE DISTRICT
10
AND DARRYL HARRISON d/b/a 4A CAPITAL GROUP, LLC AND ALL OTHERS, 8150
Washington Village Drive, Dayton, OH 45459, Guarantor/Defendant(s)." Although Harrison
is named separately (along with "all others") and the group is identified as
"guarantor/defendant(s)," the caption of the Complaint does not control the nature of the
claims. Morris v. Children's Hosp. Med, Ctr. (1991), 73 Ohio App.3d 437, 440-41. "It is,
instead, the substance of the pleading that determines its operative effect." Id. In the
absence of any allegations in the body of the Complaint that Harrison was being sued in
an individual capacity as a guarantor of 4A's debt, Harrison was not put on notice by the
Complaint that Yankee was raising that claim against him.
Yankee emphasizes that its claim against Harrison based on the guaranty was
raised numerous times before the trial court and, thus, Harrison had actual knowledge of
Yankee's intent to raise that issue.
Civ.R. 15(B) allows pleadings to be constructively amended to conform to evidence.
That rule provides:
"When issues not raised by the pleadings are tried by express or implied consent
of the parties, they shall be treated in all respects as if they had been raised in the
pleadings. Such amendment of the pleadings as may be necessary to cause them to
conform to the evidence and to raise these issues may be made upon motion of any party
at anytime, even after judgment. Failure to amend as provided herein does not affect the
result of the trial of these issues. If evidence is objected to at the trial on the ground that
it is not within the issues made by the pleadings, the court may allow the pleadings to be
amended and shall do so freely when the presentation of the merits of the action will be
subserved thereby and the objecting party fails to satisfy the court that the admission of
THE COURT OF APPEAI.S OF 01110SECOND AI'PELLATE DISTRICT
11
such evidence would prejudice him in maintaining his action or defense upon the merits.
The court may grant a continuance to enable the objecting party to meet such evidence."
(Emphasis added.)
In order for an objecting party to prevent the amendment of a pleading under Civ.R.
15, the party must establish that he will be subject to "serious disadvantage" if the
amendment were allowed. Hall v. Bunn (1984), 11 Ohio St.3d 118, 122. "Mere surprise"
is generally an insufficient basis for precluding the evidence, and "[ijn determining whether
surprise actually exists, the extent to which the objecting party had knowledge of the
disputed evidence is often considered," Id.
A trial court's decision on whetherto allowthe amendment of a pleading is reviewed
for an abuse of discretion. State ex ret. Askew v. Goldhart (1996), 75 Ohio St.3d 608, 610.
An abuse of discretion connotes more than a mere error of law or judgment; it implies an
attitude on the part of the trial court that is arbitrary, capricious, or unconscionable.
Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219.
At the April 2, 2008, trial, Harrison's counsel objected to testimony regarding the
guaranty, stating:
"Your Honor, this Complaint is about a breach of a Lease. It looks like maybe six
-five paragraphs -Attorney Lasky is trying to introduce a Guaranty. Pursuant to the Rules
of Civil Procedure, one, the Guaranty had to be attached to the Complaint to put my client
on notice.
"Also, suretyship has to be pled specifically. There is absolutely nothing said on the
Complaint about a Guaranty. And if in the beginning I knew that a Guaranty was at issue,
I would have taken a very different view in regards to how we should negotiate this case.
'1'HE COURT OF APPEALS OF OHIOSECOND APPELLATE DISTRIC'.T
12
But because it wasn't attached and we had absolutely no notice, you know, it would be
unfair to introduce a Guaranty at this stage."
Yankee's counsel responded thatthe Complaint identified the defendants as "Darryl
Harrison and Darryl Harrison, dba 4A Capital Group, LLC." He asserted that the issue of
the guaranty had been raised in prior hearings, including the original restitution hearing.
Although Yankee did not expressly ask to amend its complaint to include a claim
against Harrison as guarantor, that motion was implicit in Yankee's argument that Harrison
had been aware of its claim against him individually based on the guaranty and that
proceeding on the guaranty issue would not prejudice him. By permitting Yankee to
introduce evidence on the guaranty issue, the magistrate allowed Yankee to amend its
pleading, in accordance with Civ.R. 15(B), and to proceed on its claim against Harrison
individually based on the guaranty.
We conclude that the magistrate did not abuse her discretion when she permitted
Yankee to try a claim against Harrison individually based on the guaranty. In its October
10, 2007, objection to the magistrate's September 27, 2007, decision granting summary
judgment to Harrison, Yankee asserted that the guaranty document had been signed by
Harrison and that Yankee relied upon Harrison's financial strength in agreeing to lease its
property to 4A. At that time, Yankee asked for the magistrate to vacate its grant of
summary judgment to Harrison and to reinstate him as a party due to the guaranty; the
summary judgment was vacated and Harrison was reinstated, which decision was upheld
by the court over Harrison's objection. At that juncture, even if not by the Complaint or at
the restitution hearing, Harrison was aware that Yankee was attempting to hold him
individually liable based on the guaranty; he was not subject to undue prejudice, serious
THg COUR'I' OF AI'PEALS OF OHIOSLCOND APPr?LLATE DI57'RIC'I'
13
disadvantage, or surprise when Yankee attempted to raise that claim at trial. Considering
that the guaranty had previously been presented as evidence at a prior hearing, the
magistrate could have reasonably concluded that allowing Yankee to proceed on this claim
as part of this litigation was desirable and that Harrison would not be prejudiced thereby.
The first assignment of error is overruled.
Ill.
Harrison's second assignment of error states:
"THE DECISION, ORDER AND ENTRY OVERRULING DEFENDANT'S
OBJECTIONS TO MAGISTRATE'S DECISION; AFFIRMING MAGISTRATE'S DECISION
IS CONTRARY TO LAW BECAUSE THE GUARANTY WAS NOT SIGNED IN
ACCORDANCE WITH THE OHIO STATUTE OF FRAUDS, AND WAS THUS
INEFFECTIVE TO HOLD DEFENDANT HARRISON PERSONALLY LIABLE."
In his second assignment of error, Harrison asserts that the trial court erred in
holding him individually liable under the guaranty, because that document was signed in
his corporate, not personal, capacity. Stated in terms of the statute of frauds, Harrison
claims that he, in his individual capacity, was not the "party to be charged." See R.C.
1335.05. Harrison notes that the guaranty provided for a substitute guarantor should he
leave the company, which, he argues, supports an interpretation that he signed the
document in his corporate capacity.
°Generally, a party signing a contract as a corporaie officer is not individually liable.
However, if a corporate officer executes an agreement in a way that indicates personal
liability, then that officer is personally liable regardless of his intention. Whether a
corporate officer is personally liable upon a contract depends upon the form of the promise
THE COURT OF APPEALS OF OHIOSECOND APPELLATE DISTRICT
14
and the form of the signature." Spicerv. James (1985), 21 Ohio App.3d 222, 223 (internal
citations omitted).
When an officer of a company signs his or her name along with the name of her
corporate title, "the general rule of interpretation governing this kind of signature is that
such words as 'president' are merely descriptive of the character or capacity of the person
signing the document," and the individual signing the guaranty cannot deny personal
liability if the language of the guaranty is clear and unambiguous. Westgate Village
Shopping Ctr. v. Parker, Lucas App. No. L-08-1017, 2008-Ohio-2571, at ¶8, quoting S-S-C
Co. v. Hobby Ctc (Dec. 4, 1992), Lucas App. No. L-92-049; Wells Fargo Bank, N.A. v.
WSW Franchising, Inc., Franklin App. No. 09AP-26, 2009-Ohio-3845.
"The signature itself represents a clear indication that the signator is acting as an
agent if: (1) the name of the principal is disclosed, (2) the signature is preceded by words
of agency such as'by' or'per' or'on behalf of, and (3) the signature is followed by the title
which represents the capacity in which the signator is executing the document, e.g., 'Pres.'
or'V.P.' or'Agent."' George Ballas Leasing, Inc. v, State Sec. Serv., Inc. (Dec. 31, 1991),
Lucas App. No. L-91-069, citing Spicer, supra.
The guaranty signed by Harrison obligated him, as follows:
"NOW, THEREFORE, in consideration of the lease to Lessee [4A] of the Premises
described in the Lease and for other good and valuable consideration, the Guarantor does
hereby guarantee to Lessor [Yankee], its successors and assigns, the due, regular, and
punctual payment by Lessee of the rentals and all other sums payable by Lessee as
specified in the Lease and does further guarantee that Lessee shall faithfully perform and
fulfill all the agreements and obligations provided for in the Lease at the time and in the
THE COURT OF APPEALS OF OHIOSECOND AI'PELLA'f'E ll1STR1CT
15
manner therein agreed."
The guaranty was signed by " Daryl Harrison, President," as the guarantor. Itfurther
provided that, if "Guarantor should leave 4A Capital Group, LLC for any reason, then a
substitute Guarantor must be provided within five (5) days to Lessor to sign a new lease
guaranty."
Although Harrison signed the guaranty agreement with the title, President, his
signature does not indicate that he signed the guaranty on behalf of 4A. Rather, the
agreement identifies Harrison, not 4A, as the guarantor, and the inclusion of "President"
does not mean that he was acting as 4A's agent. The guaranty's language stating a
substitute guarantor must be provided should Harrison leave 4A does not require a finding
that Harrison was not personally liable. Rather, that language merely indicates that
Harrison would be released from his obligation as guarantor upon his departure from 4A,
and that a new guarantor would need to be provided. Moreover, we agree with the trial
court that it does not make common sense, let alone business sense, for Yankee to
request that 4A, the lessee, guarantee its own lease obligations.
Finally, we note that the trial court did not improperly hold Harrison liable as a
surety, rather than as a guarantor. Yankee was not required to pursue 4A before
proceeding against Harrison, the guarantor. Campco Distributors, Inc. v. Fries (1987), 42
Ohio App.3d 200, 201 (stating " creditor need not pursue and exhaust the principal before
proceeding against the guarantor").
The second assignment of error is overruled.
IV.
The judgment of the trial court will be affirmed.
THE COURT OF APPEALS OF OHIOSECOND APPELLATE DISTRICT
16
FAIN, J. and WOLFF, J., concur.
(Hon. William H. Wolff, Jr., retired from the Court of Appeals, sitting by assignment of theChief Justice of the Supreme Court of Ohio).
Copies mailed to:
Laurence A.LaskyWorrell A. ReidHon. Barbara P. Gorman
THE COURT OF APPFALS OF OHIOSECOND APPELLATP, D[STRICT
IN THE COURT OF APPEALS FOR MONTGOMERY COUNTY, OHIO
BALTES COMMERCIAL REALTY, et al.
Plaintiffs-Appellees C.A. CASE NO. 23177
V.
DARRYL HARRISON, et al.
Defenda nts-Appel lants
T.C. NO. 2006 CV 9262
FINAL ENTRY
Pursuant to the opinion of this court rendered on the _6^ day of
Nnvnmhnr, 2009, the judgment of the trial court is affirmed.
Costs to be paid as stated in App.R. 24.
MIKE FAIN, Judge
WILLIAM H. WOLFF, JR., Ju(Sitting by assignment of the ChiJustice of the Supreme Court of Ohio)
SECOND APPELLATE DISTRICT7'I3E COURT OF APPEALS OF OHIO
17
18
Copies mailed to:
Laurence A. Lasky130 West Second StreetSuite 830Dayton, Ohio 45402
Worrell A. Reid6718 Loop Rd., No. 2Centerville, Ohio 45459
Hon. Barbara P. GormanCommon Pleas Court41 N. Perry StreetDayton, Ohio 45422
THE COURT OF APPEALS OF 01110SECOND AI'PELLATE DISTRICT