[Cite as Re/Max Crossroads Properties v. Roberts, 2013-Ohio-5575.]


                 Court of Appeals of Ohio
                               EIGHTH APPELLATE DISTRICT
                                  COUNTY OF CUYAHOGA


                              JOURNAL ENTRY AND OPINION
                                       No. 99537




                 RE/MAX CROSSROADS PROPERTIES
                                                  PLAINTIFF-APPELLEE

                                                    vs.


                                  THOMAS ROBERTS
                                                  DEFENDANT-APPELLANT




                                           JUDGMENT:
                                            AFFIRMED


                                        Civil Appeal from the
                                       Berea Municipal Court
                                       Case No. 10 CVF 03395

        BEFORE: Kilbane, J., Boyle, P.J., and Keough, J.

        RELEASED AND JOURNALIZED:                         December 19, 2013
ATTORNEY FOR APPELLANT

David M. Lynch
333 Babbitt Road
Suite 333
Euclid, Ohio 44123

ATTORNEYS FOR APPELLEE

Katheryn J. McFadden
Donald P. McFadden
Monica E. Russell
McFadden & Freeburg Co., L.P.A.
1370 Ontario Street
Suite 600
Cleveland, Ohio 44113
MARY EILEEN KILBANE, J.:

      {¶1} Defendant-appellant, Thomas Roberts d.b.a. Citadel Communications/Data

Encompass       Technologies,   Inc.   (“Roberts,”       “Encompass,”     or   “Citadel

Communications”), appeals from the judgment of the Berea Municipal Court that

awarded plaintiff-appellee, Re/Max Crossroads Properties (“Re/Max”), $11,665 in

connection with a telephone upgrade project. For the reasons set forth below, we affirm.



      {¶2} Re/Max sought to upgrade its existing telephones in order to accommodate

Voice over Internet Protocol (“VoIP”) service.       On August 31, 2010, Re/Max paid

Roberts $10,665. Roberts began work on the telephone system, but by November 18,

2010, VoIP service was not operational, and Re/Max demanded the return of the $10,665

payment.

      {¶3} On December 20, 2010, Re/Max filed suit against Roberts, alleging that

Roberts had agreed to reprogram the existing telephones and to install VoIP technology.

Roberts maintained that he did not promise to complete such an upgrade, but had agreed

to simply review the existing telephone system to evaluate whether it could be used for

VoIP service.

      {¶4} On April 12, 2011, Re/Max propounded discovery to Roberts. By August

12, 2011, Roberts had not responded, and on August 12, 2011, Re/Max filed a motion to

compel. The trial court granted this motion on August 18, 2011. At his deposition on

August 31, 2011, Roberts agreed to provide various records to Re/Max, including records
pertaining to how the $10,665 payment was disbursed, time spent on the project, and the

name and addresses of defense witnesses.        Roberts ultimately did not provide this

information, and on October 13, 2011, Re/Max filed a second motion to compel. On

December 15, 2011, the magistrate granted the motion and ordered that the documents

Roberts failed to provide could not be offered at trial, Roberts could not present testimony

from unidentified witnesses, and monetary sanctions would be imposed.

       {¶5} The matter proceeded to trial before a magistrate on November 14, 2012.

At this time, Re/Max requested $1,000 as an additional sanction for the discovery

violations.   Thereafter, Mary Lou Steed (“Steed”) of Re/Max testified that Roberts

indicated that the existing Cisco phones could be used for the VoIP technology, and he

agreed to “reflash” them and “get them working in the new voice system.” Although

Roberts informed Steed that the name of his company was Encompass, he requested that

the $10,665 check for payment list Citadel as the payee. Steed also testified that an

Encompass employee took the existing phones but Roberts failed to deliver any of the

agreed-upon products or services and repeatedly refused to return Re/Max’s payment.

Steed admitted on cross-examination that the parties’ written contract was never signed.

The parties undertook performance under the terms of the agreement, however. Steed

also admitted that an entity named Cavalier had obligations under a portion of the

contract, and that the contract states “assumed use of existing IP phones, switches and

routers to convert. Otherwise, these [phones] are in addition, See optional/additional IP

phones from Encompass.”
       {¶6}    Re/Max also directed the trial court to a portion of Roberts’s deposition

that had previously been filed with the court, in which he admitted that he is

self-employed and operates under “Citadel Communications.”

       {¶7} Roberts did not present evidence but also directed the court to his

deposition. Roberts maintained in deposition that completion of the VoIP service was

contingent upon use of existing phones, that he undertook to have the existing phones

“reflashed” but was unable to do so despite his best efforts, and that he was entitled to

payment for his efforts.

       {¶8} On November 16, 2012, the magistrate entered judgment for Re/Max and

against Roberts in the amount of $11,665. Roberts filed objections, but on January 15,

2013, the trial court overruled the objections, approved and confirmed the magistrate’s

recommendation, and entered judgment in favor of Re/Max for $11,665.

       {¶9} Roberts now appeals, assigning the following sole assignment of error for our

review:

       The trial court ruled against the weight of the evidence that demonstrated:
       [1.] There was no contract for any repair, only to investigate what repairs
       were needed[; and 2.] There was no personal liability demonstrated.

       {¶10} In State v. Wilson, 113 Ohio St.3d 382, 387, 2007-Ohio-2202, 865 N.E.2d

1264, the Ohio Supreme Court described the civil manifest-weight-of-the-evidence

standard as follows:

       [T]he civil manifest-weight-of-the-evidence standard was explained in C.E.
       Morris Co. v. Foley Const. Co. [1978], 54 Ohio St.2d 279, 8 Ohio Op.3d
       261, 376 N.E.2d 578, syllabus (“Judgments supported by some competent,
       credible evidence going to all the essential elements of the case will not be
       reversed by a reviewing court as being against the manifest weight of the
       evidence”). We have also recognized when reviewing a judgment under a
       manifest-weight-of-the-evidence standard, a court has an obligation to
       presume that the findings of the trier of fact are correct. * * * This
       presumption arises because the trial judge [or finder-of-fact] had an
       opportunity “to view the witnesses and observe their demeanor, gestures
       and voice inflections, and use these observations in weighing the credibility
       of the proffered testimony.” * * * “A reviewing court should not reverse a
       decision simply because it holds a different opinion concerning the
       credibility of the witnesses and evidence submitted before the trial court.
       A finding of an error in law is a legitimate ground for reversal, but a
       difference of opinion on credibility of witnesses and evidence is not.”

 Id. at ¶ 24.

       {¶11} A breach of contract is defined as the failure, without legal excuse, to

perform any promise that forms a whole or part of the contract. J&J Schlaegel, Inc. v.

Bd. of Trustees., 2d Dist. Champaign Nos. 2005-CA-31 and                      2005-CA-34,

2006-Ohio-2913, ¶ 24. To establish the essential elements of a breach of contract claim,

the plaintiff must demonstrate that: (1) a contract existed; (2) the plaintiff fulfilled his

obligations; (3) the defendant breached his obligations; and (4) damages resulted from

this breach. Doner v. Snapp, 98 Ohio App.3d 597, 600, 649 N.E.2d 42 (2d Dist.1994).

       {¶12} In this matter, Re/Max’s evidence demonstrated that Roberts agreed to

reflash the phones and get them working in their new voice system. Although the parties

contemplated use of existing telephones, Re/Max’s evidence demonstrated that Roberts’s

implementation of the VoIP system was not made contingent upon the ability to have the

phones successfully reflashed for the new system. Steed then gave Roberts a check for

$10,665, which he cashed.       In the course of discovery, Roberts failed to produce

evidence of work performed, expenses incurred, or individuals who worked on the
project. Ultimately, the VoIP system was never implemented, and Roberts refused to

return the funds. Therefore, we find competent, credible evidence that Roberts breached

the agreement.

       {¶13} As to the issue of personal liability, to avoid personal liability in the instant

case the agent must demonstrate that, as the agent, he disclosed: (1) the agency

relationship, and (2) the identity of the principal. Indep. Furniture Sales, Inc. v. Martin,

184 Ohio App.3d 562, 2009-Ohio-5697, 921 N.E.2d 718 (8th Dist.) If this disclosure is

not made, then the agent may be personally liable for contracts entered in his own name.

Id., citing James G. Smith & Assoc., Inc. v. Everett, 1 Ohio App.3d 118, 120-121 439

N.E.2d 932 (10th Dist.1981).

       {¶14} As the Everett court noted, an agent may be held personally liable in

situations:

       (2) Where the principal is only partially disclosed, i.e., where the existence
       of an agency is known to the third person, but the identity of the principal is
       not known. Here, the agent is held to be a party to the transaction and is
       liable to the third party, as is the agent’s principal. Grob v. Myers (1926),
       4 Ohio Law Abs. 349. See also Givner v. United States Hoffman
       Machinery Corp. (1935), 49 Ohio App. 410, 18 Ohio Law Abs. 431, 197
       N.E. 354. The reason for the rule is that since the identity of the principal
       is not known to the third party, he ordinarily will not be willing to rely
       wholly upon the credit and integrity of an unknown party.

       ***

       (4) Where there is a fictitious or nonexistent principal, or the principal is
       without legal capacity or status. If an agent purports to act on behalf of
       such a “principal,” the agent will be liable to the third party as a party to the
       transaction. See Trust Co. v. Floyd (1890), 47 Ohio St. 525, 26 N.E. 110;
       Seasongood & Mayer v. Riddle (1923), 18 Ohio App. 88. See also
       Brawley v. Anderson (1947), 80 Ohio App. 15, 48 Ohio Law Abs. 250, 74
       N.E.2d 428. One cannot be an agent for a nonexistent principal; there is no
       agency. This situation frequently arises where a corporate promoter enters
       into contracts prior to the time the corporation is actually incorporated. See
       Trust Co.

       {¶15} Applying those principles, the court in Huskin v. Hall, 11th Dist. Trumbull

No. 2011-T-0048, 2012-Ohio-653, concluded that an individual could be personally liable

where he uses a fictitious d.b.a. and also fails to disclose that he is actually acting on

behalf of a different principal.

       {¶16} Similarly, in this matter, Roberts entered into the agreement using the d.b.a.

Citadel Communications, and he stated that this is a “self-employed data VAR solution

provider.” The designation d.b.a. or “doing business as” simply indicates that a person

or a corporation is operating under a fictitious business name. It does not mean the

business is a separate and distinct legal entity or that Roberts is not personally liable for

the debts incurred by the business. Schleki v. Beverly, 8th Dist. Cuyahoga No. 59842,

1992 Ohio App. LEXIS 1198 (Mar. 19, 1992), (Krupansky, J., concurring).

       {¶17} Further, Steed testified that Roberts’s proposed contract stated “Encompass

Technology, Inc.,” and she believed she was dealing with an incorporated entity. In any

event, Roberts admitted in his deposition that “the company [Encompass] wasn’t properly

or fully formed when we went forward with the deal to do their phone system, it was done

under the Citadel name, the Citadel entity.” Under these circumstances, Roberts’s use of

the Citadel Communications d.b.a. while purporting to act for Encompass Technology,

Inc., prior to the actual incorporation of that entity, did not insulate Roberts from personal

liability in this matter. The trial court did not err in imposing personal liability.
      {¶18} In accordance with the foregoing, there is competent, credible evidence to

establish that Roberts breached the contract with Re/Max and that he is personally liable.

The assignment of error is without merit.

      {¶19} Judgment affirmed.

      It is ordered that appellee recover from appellant costs herein taxed.

      The court finds there were reasonable grounds for this appeal.

      It is ordered that a special mandate be sent to said court to carry this judgment into

execution.

      A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of

the Rules of Appellate Procedure.




MARY EILEEN KILBANE, JUDGE

MARY J. BOYLE, P.J., and
KATHLEEN A. KEOUGH, J., CONCUR
