[Cite as Jeffrey Allen Industries, L.L.C. v. Manco, 2011-Ohio-2655.]


                                        COURT OF APPEALS
                                     RICHLAND COUNTY, OHIO
                                    FIFTH APPELLATE DISTRICT

                                                              JUDGES:
JEFFREY ALLEN INDUSTRIES, LLC,                        :       Hon. W. Scott Gwin, P.J.
ET AL                                                 :       Hon. William B. Hoffman, J.
                                                      :       Hon. Patricia A. Delaney, J.
                      Plaintiffs-Appellants           :
                                                      :
-vs-                                                  :       Case No. 2010-CA-0145
                                                      :
RONALD J. MANCO, ET AL                                :
                                                      :       OPINION
                   Defendants-Appellees




CHARACTER OF PROCEEDING:                                  Civil appeal from the Richland County Court
                                                          of Common Pleas, Case No. 08-CV-1342H


JUDGMENT:                                                 Affirmed in part; Reversed in part




DATE OF JUDGMENT ENTRY:                                   June 1, 2011


APPEARANCES:

For Plaintiffs-Appellants                                 For Defendants-Appellees

JOSEPH T. OLECKI                                          ROBERT A. FRANCO
WELDON, HUSTON & KEYSER                                   1007 Lexington Avenue
76 North Mulberry                                         Mansfield, OH 44907
Mansfield, OH 44902
[Cite as Jeffrey Allen Industries, L.L.C. v. Manco, 2011-Ohio-2655.]


Gwin, P.J.

        {¶1}      Plaintiffs-appellants Jeffrey Allen Industries, LLC and Stacey L. Trimble,

and third-party defendant-appellant Jeffrey Benton appeal a summary judgment of the

Court of Common Pleas of Richland County, Ohio, entered in favor of defendants-

appellees John Offenburger and Stonybrook Cabinet Company, Inc. on all claims

against appellees and on their third-party claim against appellant Benton. Appellants

assign six errors to the trial court:

        {¶2}      “I. THE TRIAL COURT ERRED IN CONCLUDING THE PURCHASE

AGREEMENT WAS A FULLY INTEGRATED AGREEMENT.

        {¶3}      “II. THE TRIAL COURT ERRED IN FAILING TO CONSIDER MANCO’S

CLEAR DECLARATION AGAINST INTEREST IN DETERMINING WHETHER THE

PURCHASE AGREEMENT WAS A FULLY INTEGRATED AGREEMENT.

        {¶4}      “III. THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT

TO OFFENBURGER BASED ON HIS CLAIMED LACK OF KNOWLEDGE OF THE

AGREEMENT BECAUSE, AT A MINIMUM, A GENUINE ISSUE OF MATERIAL FACT

EXISTS       AS     TO     OFFENBURGER’S              AWARENESS        AND   ASSENT   TO   THE

AGREEMENT.

        {¶5}      “IV. THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANTS ARE

NOT LIABLE FOR UTILITY BILLS WHILE THEY OCCUPIED THE FORMER

PREMISES OF JEFFREY ALLEN INDUSTRIES, LLC.

        {¶6}      “V. THE TRIAL COURT ERRED IN FINDING PLAINTIFFS WAIVED

THEIR CLAIMS BY EXECUTING THE PURCHASE AGREEMENT.
Richland County, Case No. 2010-CA-0145                                                3


       {¶7}    “VI. THE TRIAL COURT ERRED IN ENTERING SUMMARY JUDGMENT

FOR DEFENDANTS ON THEIR CONVERSION CLAIM AGAINST                              JEFFREY

BENTON.”

       {¶8}    The central issue in this case is whether an agreement to purchase

business assets for a stated price may be modified by a prior agreement increasing the

purchase price, if the purchase agreement contains an integration clause. We find

evidence of the prior agreement is barred by the parol evidence rule.

       {¶9}    The trial court journalized an extensive judgment entry in this case. The

court found the undisputed material facts are that Jeffrey Allen Industries, LLC was a

cabinet making business wholly owned by Stacey Trimble, but operated and managed

by her fiancé Jeffrey Allen Benton. Benton and Trimble decided to close the cabinet

making business and sell off its assets, because Benton wanted to become a

homebuilder.     Their employee, Ronald Manco, met an investment advisor, John

Offenburger, at a birthday party. Manco told Offenburger about the proposed sale of

the cabinet making business. Benton had announced the assets of the business would

soon be put up for auction.

       {¶10} Manco told Offenburger that the business had been consistently profitable

for several years. Manco said he would have tried to buy the business himself, but he

did not have the means. Manco proposed that if Offenburger could buy the business

assets, Manco would manage a new cabinet making business, and Offenburger and

Manco would share any profits. Offenburger was interested even though Manco had no

assets, meaning the purchase would depend wholly on Offenburger’s assets and

credits.
Richland County, Case No. 2010-CA-0145                                                  4


       {¶11} Offenburger and Manco met with Benton to see the tools and assets of the

business. Benton volunteered that his auctioneer told him the assets of the business

would sell for between $175,000 and $225,000 at auction. At Offenburger’s request,

Manco prepared a list of the assets and inventory to be sold. Offenburger then took the

list to consult with the industrial equipment salesman who had sold and serviced the

tools and equipment. The industrial equipment salesman’s opinion of the value of the

items was within the range Benton’s auctioneer had estimated.

       {¶12} Offenburger then met with a bank officer at FirstMerit Bank to pursue

financing in the event the parties were able to come to terms. Offenburger had the loan

package structured so both he and Manco would be obligated on the loan.

       {¶13} The court found Benton rejected Offenburger’s initial offer to buy the

assets for $150,000. Benton was asking $300,000, despite having disclosed that his

own auctioneer had put a much lower value on the assets. After several weeks of

negotiations, Offenburger presented Benton with a written Asset Purchase Agreement,

offering a purchase price of $200,000 for the assets and inventory, to be paid in full, in

cash or certified funds, at a closing to be held on March 23, 2007.

       {¶14} On March 16, 2007, Trimble, Benton, Manco, and Offenburger met at

Offenburger’s Merrill Lynch office where all four signed the Asset Purchase Agreement

before a notary public. Trimble signed both as an individual and in a representative

capacity for Jeffery Allen Industries, LLC, and the other three signed solely as

individuals.

       {¶15} On March 23, 2007, Trimble and Benton met Manco, Offenburger, and

their banker for the closing. On behalf of Jeffrey Allen Industries, LLC, Trimble and
Richland County, Case No. 2010-CA-0145                                               5


Benton accepted the $200,000 in certified funds tendered for the assets being sold, and

transferred the assets to Manco and Offenburger, for their new company, Stonybrook

Cabinet Company, Inc. The new company was not a party to the Asset Purchase

Agreement.

      {¶16} After the closing, Manco and Offenburger transferred the assets to

Stonybrook Cabinet Company.        The new company operated out of Jeffrey Allen

Industries’ former premises.    Offenburger did not work in the new business, but

continued his employment as an investment adviser.

      {¶17} The court found it was undisputed that within a few weeks of the closing,

without Manco’s or Offenburger’s knowledge or permission, Benton approached certain

Stonybrook Cabinet customers and convinced them to give Benton their payments for

amounts the customers owed to Stonybrook Cabinet Company. The court found there

was no dispute that Benton never advised Manco or Offenburger he intended to

intercept these payments from their customers, nor did Benton tell them he had done so

after the fact. The court found Benton admitted he never turned any of the funds he

received from Stonybrook’s customers over to Stonybrook. In late April when Manco

and Offenburger discovered Benton had possession of their customers’ payments,

Offenburger directed Manco to contact the Crawford County Sheriff’s Department.

      {¶18} Benson maintained Manco and Offenburger owed Jeffrey Allen Industries

an additional $97,000 for the purchase of the business’s assets. This included a

payment of $50,000, and Benson’s retention of approximately $47,000 worth of certain

assets he claimed were not included in the sale.
Richland County, Case No. 2010-CA-0145                                                  6


       {¶19} Stonybrook     Cabinet Company experienced mounting losses              until

FirstMerit Bank contacted Offenburger to advise him that Manco had completely

exhausted the company’s $100,000 operating line of credit, and checks were being

presented for payment without sufficient funds available to cover them. Offenburger

examined the finances and closed Stonybrook Cabinet Company, paying off the bank

loans from his personal funds.

       {¶20} The court found there was no dispute over what assets were being sold

and no dispute that the assets were being transferred at the time of the closing. The

court also found there was no dispute that the list of the assets and inventory to be sold

was prepared sometime prior to the closing. The court found Benton conceded in his

deposition testimony the parties had agreed what would be sold and that everything that

they intended to sell was actually sold to Manco and Offenburger.

       {¶21} However, the court found the parties did not agree on whether a final

listing of the assets was attached as an exhibit to the Asset Purchase Agreement at or

before the closing. The court found the dispute was not material, because such exhibits

to a contract are often not attached to the actual contract being signed.

       {¶22} The court found the undisputed evidence is that the list of inventory and

equipment was prepared, and exchanged between the buyers and sellers, and each

side understood precisely what was to be sold. The court found the sellers signed the

contract and then proceeded to the closing; the buyers tendered full payment for the

assets; the sellers accepted payment; and all assets the parties intended to be included

in the sale were actually sold.
Richland County, Case No. 2010-CA-0145                                                   7


       {¶23} The trial court found Section 2 of the Asset Purchase Agreement states

Manco and Offenburger would not assume or be responsible for any liabilities,

obligations, indebtedness, or claims against Jeffrey Allen Industries LLC or any other

person employed by or affiliated with it. In Section 15, the Agreement provides Jeffrey

Allen Industries LLC indemnifies and promises to defend and hold the buyer harmless

against all claims, losses, liabilities, damages, costs, and expenses for any assertion of

any liability, obligation, indebtedness, or claim arising from a related operation prior to

the closing, or for liabilities not expressly assumed by the buyers pursuant to their

contract.

       {¶24} Finally, the court found Section 22 of the Agreement stated it contains the

entire understanding and supersedes all prior and contemporaneous negotiations,

statements, and agreements with respect to the subject matter.           The court found

nowhere in the agreement do the parties agree that the buyers would assume any

liability for unpaid utility charges, nor does the agreement provide the sellers would

receive or share in any accounts receivable after the closing.

       {¶25} On May 5, 2009, Manco’s counsel filed a notice that Manco had died, and

no one filed a motion to intervene or substitute for him in the lawsuit.        The court

dismissed all claims by or against Manco pursuant to Civ. R. 25 (A).

       {¶26} The trial court found the claims remaining were the claims of Jeffrey Allen

Industries against Offenburger and Stonybrook Cabinet Company, and the third party

claims by Stonybrook Cabinet Company against Benton.             Jeffrey Allen Industries

asserted four claims against Offenburger and Stonybrook: breach of contract, fraud,

replevin, and unjust enrichment. The court found the breach of contract and fraud
Richland County, Case No. 2010-CA-0145                                                  8


claims are predicated on the alleged parol agreement to pay an additional $97,000 over

and above the $200,000 purchase price of the Asset Purchase Agreement. Jeffrey Allen

Industries alleged Manco had made a verbal promise to make the further payment

within a year after the closing, and alleged the appellants relied on the promise in

signing the Asset Purchase Agreement. In their answer to the complaint, Offenburger

and Stonybrook denied any additional agreement or fraud, and asserted affirmative

defenses of the parol evidence rule, waiver, and lack of authority, among other

defenses.

      {¶27} The court found the third claim of Jeffrey Allen Industries was for replevin

of a single double head wide-belt sander. The court found Benton admitted in his

deposition this item had been sold to and rightfully belonged Manco and Offenburger,

and abandoned the claim.

      {¶28} The fourth claim was for unjust enrichment, concerning utility bills from the

City of Galion and from Columbia Gas Company, charged against an account belonging

to Jeffrey Allen Industries but ostensibly for service after Stonybrook took possession of

the business premises.

      {¶29} In its counterclaim Stonybrook Cabinet Company alleged conversion and

civil theft, for three checks it claimed Benton intercepted from Stonybrook Cabinet

Company’s customers, totaling $17,258. Offenburger’s affidavit also stated Benton

converted three checks totaling $17,258. Benton’s affidavit admitted taking two of the

checks totaling $12,345 from Stonybrook customers, but asserted he took the funds as

self-help to satisfy in part the $97,000 he claimed was due on the parties’ oral

agreement, but not contained in the Assert Purchase Agreement. The court found it was
Richland County, Case No. 2010-CA-0145                                                   9


undisputed that Benton had taken the third check because he did not expressly deny

the allegation in his deposition or affidavit.

       {¶30} The trial court found the Asset Purchase Agreement contained an

integration clause, and the parol evidence rule barred introduction of any alleged verbal

agreement.

       {¶31} The court found the utility bills concerned both current and delinquent

charges, and do not differentiate how much of the bills are due for utility service before

the closing.    The court found no party offered any evidence from which it could

determine what portion of the utility service bill was incurred by Stonybrook Cabinet,

and found the agreement provided the buyer would not be responsible or liable in any

way for bills of the seller unless it expressly accepted responsibility for them. The court

found Offenburger and Stonybrook Cabinet Company did not agree to undertake

transfer of utility service accounts out of Jeffrey Allen Industries’ name, and the court

found it was probable that no one but the account’s owner could have transferred the

account to Stonybrook. The court stated it could not break down the bills, and for this

reason, it could not find Offenburger and Stonybrook Cabinet Company would not be

unjustly enriched if appellants paid the entire bills.

       {¶32} The trial court concluded it was appropriate to enter summary judgment

against Jeffrey Allen Industries and Benton on all claims against Stonybrook Cabinet

Company and Offenburger. In addition, the court entered summary judgment in favor of

Stonybrook Cabinet Company and against Benton for damages in converting the

customers’ checks in the amount of $17,258, with interest at the statutory rate.
Richland County, Case No. 2010-CA-0145                                                 10


      {¶33} Civ. R. 56 states in pertinent part:

      {¶34} “Summary judgment shall be rendered forthwith if the pleadings,

depositions, answers to interrogatories, written admissions, affidavits, transcripts of

evidence, and written stipulations of fact, if any, timely filed in the action, show that

there is no genuine issue as to any material fact and that the moving party is entitled to

judgment as a matter of law. No evidence or stipulation may be considered except as

stated in this rule. A summary judgment shall not be rendered unless it appears from

the evidence or stipulation, and only from the evidence or stipulation, that reasonable

minds can come to but one conclusion and that conclusion is adverse to the party

against whom the motion for summary judgment is made, that party being entitled to

have the evidence or stipulation construed most strongly in the party's favor. A summary

judgment, interlocutory in character, may be rendered on the issue of liability alone

although there is a genuine issue as to the amount of damages.”

      {¶35} A trial court should not enter a summary judgment if it appears a material

fact is genuinely disputed, nor if, construing the allegations most favorably towards the

non-moving party, reasonable minds could draw different conclusions from the

undisputed facts, Hounshell v. American States Insurance Company (1981), 67 Ohio St.

2d 427, 424 N.E.2d 311.      The court may not resolve ambiguities in the evidence

presented, Inland Refuse Transfer Company v. Browning-Ferris Industries of Ohio, Inc.

(1984), 15 Ohio St. 3d 321, 474 N.E.2d 271. A fact is material if it affects the outcome

of the case under the applicable substantive law, Russell v. Interim Personnel, Inc.

(1999), 135 Ohio App. 3d 301, 733 N.E.2d 1186.
Richland County, Case No. 2010-CA-0145                                               11


        {¶36} When reviewing a trial court’s decision to grant summary judgment, an

appellate court applies the same standard used by the trial court, Smiddy v. The

Wedding Party, Inc. (1987), 30 Ohio St. 3d 35, 506 N.E.2d 212. This means we review

the matter de novo, Doe v. Shaffer, 90 Ohio St.3d 388, 2000-Ohio-186, 738 N.E.2d

1243.

        {¶37} The party moving for summary judgment bears the initial burden of

informing the trial court of the basis of the motion and identifying the portions of the

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

of the non-moving party’s claim, Drescher v. Burt (1996), 75 Ohio St. 3d 280, 662

N.E.2d 264. Once the moving party meets its initial burden, the burden shifts to the

non-moving party to set forth specific facts demonstrating a genuine issue of material

fact does exist, Id. The non-moving party may not rest upon the allegations and denials

in the pleadings, but instead must submit some evidentiary material showing a genuine

dispute over material facts, Henkle v. Henkle (1991), 75 Ohio App. 3d 732, 600 N.E.2d

791.

        {¶38} A failure to respond to a motion for summary judgment does not, by itself,

warrant that the motion be granted. Morris v. Ohio Casualty Insurance Co. (1988), 35

Ohio St.3d 45, 47, 517 N.E.2d 904. Even where the non-movant completely fails to

respond to the summary judgment motion, the trial court's analysis should focus on

whether the movant has satisfied its initial burden of showing that reasonable minds

could only conclude the case should be decided against the nonmoving party. Id. Only

then should the court address whether the non-movant has met its reciprocal burden of

establishing that a genuine issue remains for trial. Id.
Richland County, Case No. 2010-CA-0145                                                   12


                                                I & II

       {¶39} In their first assignment of error, appellants argue the trial court erred in

finding the disputed agreement was fully integrated. Their second assignment of error

is related, and asserts the trial court erred in not considering Manco’s statement that the

parties had agreed to a further payment, in determining whether the purchase

agreement was fully integrated.

       {¶40} Appellants correctly state the parol evidence applies to integrated writings.

Galmish v. Cicchini, 90 Ohio St. 3d 22, 2002-Ohio-7, 734 N.E.2d 782. Appellants assert

parol evidence is admissible to assist the court in determining whether an agreement is

integrated, and whether the integration is complete or partial.    Olmsted Manor Skilled

Nursing Center Ltd. v. Olmsted Manor, Ltd., Cuyahoga App. No. 80962, 2002-Ohio-

5457, not reported in the Northeast Reporter.

       {¶41} The Olmsted case involved the sale of a nursing home business. The

parties agreed to a purchase price of $5,000,000, and entered into a subsequent

agreement that although the sale was accomplished in September of 1997, the skilled

nursing center would continue to maintain its Workers’ Compensation account and pay

the premiums through the end of 1997. Neither agreement between the parties

anticipated that a few months later, the Bureau of Workers’ Compensation discovered it

had surplus funds and issued a payment for $88,248.40 as a rebate on the premiums

the skilled nursing center had paid in 1997. Olmsted, Ltd. cashed the checks and

refused to give the funds to Olmstead Skilled Nursing Center. The trial court awarded

the rebate to the skilled nursing center, and the court of appeals affirmed, finding neither

party had anticipated the situation.
Richland County, Case No. 2010-CA-0145                                                 13


      {¶42} The court of appeals found the agreement regarding the transfer of the

Bureau of Workers’ Compensation account from the seller to the buyer could not be

reviewed without also reviewing the purchase agreement, because obviously the

transfer of the account would not have taken place if the nursing home business itself

had not been sold. Thus, the agreement to transfer the account was not a complete

expression of the agreement between the parties.         The court found the purchase

agreement for the nursing home business and the agreement to transfer the Bureau of

Workers’ Compensation account are related documents within a single transaction, and

must be construed together. The court found the agreement to transfer the account

defined only the parties’ relationship with the Bureau and did not contradict the terms of

the agreement to purchase the nursing home. The court found it was clear from the two

documents the Bureau of Workers’ Compensation account agreement was not intended

to supersede any provisions of the purchase agreement.            The court found this

interpretation was consistent with the parties’ intentions and with the expressed terms of

the documents.     The Court of Appeals for the Eighth District noted the purchase

agreement was only partially integrated, so it can be supplemented by evidence of

consistent addition terms. The additional terms must be interpreted as consistent with

the document unless a contradiction is unavoidable. Olmsted at paragraph 23, citing 2

Restatement of Law, Contracts (1981), 92-93, Section 203(a); Ottery v. Bland (1987),

42 Ohio App. 3d 85, 87, 536 N.E. 2d 651.

      {¶43} Appellants argue Manco, who was a party to the purchase agreement,

admitted the purchase agreement was not the full expression of the agreement amongst

the parties. When Manco filed his complaint with the Crawford County Sheriff’s
Richland County, Case No. 2010-CA-0145                                                14


Department, in an unsworn statement he described an agreement whereby he and his

partner (presumably Offenburger) would escrow $50,000 and pay it out to Benton and

Trimble after a year’s time if the business was as profitable as they had represented

and there were no other issues. Manco had a hand-written memo of the terms of the

agreement, calling it a “side agreement”. Manco told the Crawford County Sheriff the

agreement was made prior to closing, and the parties all knew there would be a check

for $200,000 at the closing. Manco indicated the sellers wanted to have more than

$200,000, but Manco and Offenburger could not meet this and only wanted to borrow

$200,000 from the bank. Manco stated that in addition to the $50,000 escrow, Benton

and Trimble would keep a pickup truck, $11,000 from the Shelb account, a $5,000

deposit from Lutz Custom Homes, and $11,500 from the Rush deposit.

      {¶44} Although Manco referred to the agreement as verbal, appellants argue he

had a written memo of the terms. Appellants argue the agreement is admissible

because Manco, a party to the agreement, admitted the parties agreed to additional

terms not written into the Asset Purchase Agreement. Appellants urge because of

Manco’s admission, the parol evidence rule does not apply and the statements are

admissible at least to prove the Asset Purchase Agreement is only partially integrated.

      {¶45} Appellants urge Manco’s statements to the Crawford County Sheriff are

admissible under Evid. R. 804 (B)(3). This Rule provides a statement against interest, if

the declarant is unavailable as a witness, is an exception to the hearsay rule.

Appellants argue Manco’s statements to the Sheriff’s Department are contrary to

Manco’s pecuniary interest, such that a reasonable person in Manco’s position would

not have made the statements unless he believed them to be true.
Richland County, Case No. 2010-CA-0145                                                 15


       {¶46} Appellants also argue because the exhibits listing the assets to be sold

was not attached to the contract the parties signed, it was clearly not a fully integrated

contract.

       {¶47} Appellees reply a written contract which appears to be complete and

unambiguous on its face is presumed to be the final and complete expression of the

parties’ agreement. Deutsch Bank National Trust Company v. Pevarski, 187 Ohio App.

3d 455, 471, 2010-Ohio-785, 932 N.E. 2d 887. The parol evidence rule applies where

the language in the agreement is unclear or ambiguous, but the additional terms sought

to be added must be consistent with the terms in the original document. Appellees

assert appellants are arguing the real sales price was $297,000, clearly inconsistent

with the Asset Purchase Agreement’s statement the purchase price was $200,000.

       {¶48} Appellants cite loan documents prepared prior to the closing during the

course of negotiations between Offenburger and the banker. Appellees argue the

documents are excluded by the parol evidence rule, and do not support appellants’

assertion the purchase price was anything other than $200,000. The record contains an

affidavit from Offenburger’s banker, who asserts the documents are all progress notes

made while the parties were “haggling” over the final purchase price. The banker’s

affidavit asserts the notes do not represent a purchase price other than the one signed

by the parties for a final total purchase price of $200,000.

       {¶49} In National City Bank of Akron v. Donaldson (1994), 95 Ohio App.3d 241,

642 N.E.2d 58, the Court of Appeals for the 9th Dist. found where there is an integrated

contract, the parties may argue about the meaning of terms in the document or they

may argue they had another agreement in addition to the document at issue. However,
Richland County, Case No. 2010-CA-0145                                                16


the parol evidence rule bars all evidence contradicting the language in the document.

Donaldson, at 245, citations deleted.

      {¶50} Appellees also assert the statements by Manco to the Crawford County

Sheriff are hearsay, and Manco asserted this agreement was made prior to the final

Asset Purchase Agreement. The record shows Manco clearly stated the payment of the

$50,000 was payable only after a year, and conditioned on the business proving to be

profitable as represented. Appellees argue if the statement was made, it referred to a

separate agreement, which does not demonstrate the Asset Purchase Agreement was

not integrated. Likewise, appellees argue because Manco explained it was conditional,

and thus Manco’s statement was not against his pecuniary interest. We agree.

      {¶51} We find the proposed evidence violates the parol evidence rule, because it

is offered to contradict, not compliment or supplement the original agreement.

      {¶52} The first and second assignments of error are overruled.

                                              III.

      {¶53} In their third assignment of error, appellants argue there is a genuine

issue of material fact in whether Offenburger knew of the side agreement to which

Manco referred in his statement to the deputy sheriff. The trial court found there was no

evidence Offenburger assented to or joined in the agreement. Manco’s statement to the

sheriff’s department stated he was in communication with Offenburger throughout the

whole process culminating in the side agreement.         In his affidavit Benton stated

Offenburger told him the agreement they signed at closing was “for the bank”, and the

parties would have to amend the Asset Purchase Agreement later to include the

$50,000 later payment and to include the exhibit listing the assets to be sold, which was
Richland County, Case No. 2010-CA-0145                                                    17


not attached to the agreement the parties signed. Benton testified he relied on

Offenburger’s assurance the agreement did not include the final purchase price or a list

of all the items included in the sale.

         {¶54} We find it is irrelevant whether Offenburger knew of a side agreement,

because we find the statement made by Manco to the sheriff’s department, and the

other evidence about the alleged side agreement is not admissible to attack the parties’

Asset Purchase Agreement.

         {¶55} The third assignment of error is overruled.

                                                 IV.

         {¶56} In their fourth assignment of error, appellants argue the trial court erred in

finding appellees were not liable for the utility bills charged to appellants’ account. We

agree.

         {¶57}   The court found there was no evidence from which it could apportion the

utility bills, and so the party whose name is on the account, Jeffrey Allen Industries, was

liable for the total amount. The utility bills in question show the dates of service and the

previous and current billing amounts. The current billing on the electric bill is from April

13 to May 14, all after the March 23 closing. The gas bill shows a balance past due from

May 3 and the current usage amount due on June 1. From this, the court could

determine at least a portion of the bills were for utilities used during the time appellees

were in possession of the premises. We find the trial court was incorrect in finding it had

no evidence from which to determine whether appellees were responsible for any of the

bills.
Richland County, Case No. 2010-CA-0145                                                     18


       {¶58} The court found it was “doubtful” whether any person other than Jeffrey

Allen Industries’ owner could have transferred the account over to appellees after the

sale. There is no evidence in the record supporting that finding.

       {¶59} Section 2 of the Agreement is entitled “Liabilities Assumed“. The

agreement states on the date of the closing, the buyer agrees to assume and perform

the contracts of the seller listed in Exhibit B. Other than the contracts listed in Exhibit B,

the buyer assumes no liabilities of the seller. Exhibit B is blank. In his deposition

Offenburger stated he believed this section referred to any work in progress and

customer contracts Jeffrey Allen Industries had entered into prior to the sale, but in fact

there were no contracts included in the sale. Offenburger testified he was not involved

with the work at the shop and did not know if Stonybrook completed any work Jeffrey

Allen Industries had begun.

       {¶60}   Section 15 of the agreement relates to indemnification and states the

seller will indemnify the buyer against all claims, losses, liabilities, damages, costs, and

expenses arising prior to the closing. The agreement does not address how the utilities

are to be transferred or how to apportion the billings if there is a carry-over unpaid

balance. We conclude the agreement does not address the situation with the utility bills

and we find it was not anticipated by the parties. Olmsted, supra.

       {¶61} The fourth assignment of error is sustained.

                                                 V.

       {¶62} In their fifth assignment of error, appellants argue the trial court erred in

finding that in executing the Asset Purchase Agreement and accepting the $200,000
Richland County, Case No. 2010-CA-0145                                                   19


payment at closing, appellants waived any claim for additional payment. The trial court

found accepting performance operates as a waiver of any claim of fraud.

       {¶63} In Galmish supra, the Supreme Court discussed the interaction between

the parol evidence rule and allegations of fraud. The court noted the principal purpose

of the parol evidence rule is to protect the integrity of written contracts. Galmish, at 27,

citing Ed Schory & Sons, Inc. v. Society National Bank (1996), 75 Ohio St. 3d 433, 440,

662 N.E. 2d 1074. The court found the parol evidence rule does not prohibit a party

from introducing extrinsic evidence for the purpose of proving fraudulent inducement,

even if the agreement contains an integration clause.     Galmish, supra, at 28, citations

deleted.

       {¶64} The court went on to hold, however, the parol evidence rule applies in

cases where a party alleges the inducement to sign the writing was a promise, the

terms of which are directly contradicted by the signed writing. This means an oral

agreement cannot be enforced in preference to signed writing which pertains to exactly

the same subject matter, but has different terms. Galmish at 29, citations deleted. The

court explained, “[T]he parol evidence rule will not exclude evidence of fraud which

induced [a party to sign] the written contract. But, a fraudulent inducement case is not

made out simply by alleging that a statement or agreement made prior to the contract is

different from that which now appears in the written contract.         Quite the contrary,

attempts to prove such contradictory assertions is exactly what the parol evidence rule

was signed to permit.” Id., citing Shanker Judicial Misuses of Word Fraud to Defeat the

Parol Evidence Rule and the Statute of Frauds (With Some Cheers and Jeers for the

Ohio Supreme Court) (1989), 23 Akron L. Rev. 1.7.
Richland County, Case No. 2010-CA-0145                                               20

       {¶65}   In the Galmish case, Galmish acquired certain property under the terms

of the divorce settlement with Cicchini. Two years after the divorce, Galmish gave a

developer an option to purchase the property, but the developer’s interest was

contingent upon its ability to acquire adjacent parcels.     The developer contacted

Cicchini and asked for his help to ensure Galmish’s property would be available when

the adjacent parcels’ legal complications were resolved.         Cicchini informed the

developer he had either purchased or was going to purchase the property from

Galmish, and he would sell it to the developer when the time came. The developer then

notified Galmish it would not exercise its option to purchase, and informed Galmish she

was free to sell or lease the property.

       {¶66} Cicchini then told Galmish if she sold the property to him he would resell

the property to the developer at a better price than she could negotiate. Galmish and

Cicchini agreed Cicchini would purchase the property from Galmish for $765,000 and

re-sell the property to the developer for $1,700,000. The parties agreed to split the

profits. Cicchini subsequently refused to sign the purchase agreement with the

developer, and Galmish sued, arguing Cicchini was attempting to defeat her rights

under their agreement. The jury found in favor of Galmish and awarded her nearly

$1,500,000 in compensatory and punitive damages and attorney fees. This court found

the parol evidence rule barred Galmish’s claim Cicchini fraudulently induced her to sell

the property to him because he never intended to resell the property to developer.

       {¶67} The Supreme Court reversed our decision, and reinstated the verdict. The

court found Galmish’s claim was essentially that the resale of the property at a profit

was a condition of the sale to Cicchini, and at the time the parties entered into the
Richland County, Case No. 2010-CA-0145                                                   21


contract Cicchini never intended to resell the property. The Supreme Court found

Galmish’s alleged agreement to resell the property did not contradict or vary the terms

of the written agreement under which she sold the property to Cicchini, and thus was

not barred by the parol evidence rule.

       {¶68} Here, appellants argue they were defrauded because they were induced

to sign the Asset Purchase Agreement by appellees’ promise, made before the written

contract was signed, to pay a higher price than that set out in the contract. This certainly

varies and contradicts an essential term of the contract. We find the evidence cannot

be produced to show fraud in inducing Trimble, Benton, and Jeffrey Allen Industries to

sign the contract of sale.

       {¶69} The fifth assignment of error is overruled.

                                                VI.

       {¶70} In their sixth assignment of error, appellants urge the trial court erred in

entering judgment for appellees on their conversion claim against appellant Benton. The

checks at issue are: from Logan Construction for $7,600; from Kay Rush for $4,745;

and from Lutz Custom Homes for $4,912.50. In his deposition Benton claimed as part of

the side agreement Jeffrey Allen Industries was to keep all three checks, but he only

acknowledged receiving two. The court found Benton had converted all three because

his admission of taking two does not constitute a denial that he took the third. The

record does not contain any evidence that Benton either denied or admitted taking the

third. The court found as such, the undisputed evidence is that Benton took and

converted all three checks.
Richland County, Case No. 2010-CA-0145                                                  22


      {¶71} For purposes of summary judgment, if appellees presented evidence

Benton received the third check, then Benton was required to come forward with

evidence disputing this. However, we find no evidence in the record showing Benton

ever received or retained the third check. In his affidavit Offenburger states he was

informed by Manco that Benton had converted thousands of dollars from Stonybrook’s

customers. Offenburger stated he confirmed this and then instructed Manco to report

the theft to the Sheriff’s Department. Offenburger stated in his deposition Manco told

him he “got a letter or something” from Benton saying he had photocopied and was

holding checks belonging to Stonybrook. Attached to appellants’ response to appellees’

motion for summary judgment is a copy of a letter from Benton’s counsel to Offenburger

admitting Benton had received two checks totaling $12,345, the sum of the Rush and

Logan checks.

      {¶72} Offenburger’s uncorroborated statements are hearsay and do not support

appellees’ allegation Benton converted the third check. Accordingly, we conclude the

court erred in finding Benton converted the check for $4,912.50 from Lutz Custom

Homes, but correctly found the other two checks, totaling $12,345 were retained by

Benton but rightfully belonged to appellees.

      {¶73} The sixth assignment of error is sustained in part and overruled in part.
Richland County, Case No. 2010-CA-0145                                                23


      {¶74} For the foregoing reasons, the judgment of the Court of Common Pleas of

Richland County, Ohio, is affirmed in part and reversed in part, and the cause is

remanded to the court for further proceedings in accord with law and consistent with this

opinion.

By Gwin, P.J.,

Hoffman, J., and

Delaney, J., concur




                                             _________________________________
                                             HON. W. SCOTT GWIN

                                             _________________________________
                                             HON. WILLIAM B. HOFFMAN

                                             _________________________________
WSG:clw 0503                                 HON. PATRICIA A. DELANEY
[Cite as Jeffrey Allen Industries, L.L.C. v. Manco, 2011-Ohio-2655.]


              IN THE COURT OF APPEALS FOR RICHLAND COUNTY, OHIO

                                    FIFTH APPELLATE DISTRICT


JEFFREY ALLEN INDUSTRIES, LLC                           :
                                                        :
                         Plaintiffs-Appellants          :
                                                        :
                                                        :
-vs-                                                    :       JUDGMENT ENTRY
                                                        :
RONALD J. MANCO, ET AL                                  :
                                                        :
                                                        :
                      Defendants-Appellees              :       CASE NO. 2010-CA-0145




       For the reasons stated in our accompanying Memorandum-Opinion, the judgment of

the Court of Common Pleas of Richland County, Ohio, is affirmed in part and reversed

in part, and the cause is remanded to the court for further proceedings in accord with

law and consistent with this opinion. Costs to be split between the parties.




                                                            _________________________________
                                                            HON. W. SCOTT GWIN

                                                            _________________________________
                                                            HON. WILLIAM B. HOFFMAN

                                                            _________________________________
                                                            HON. PATRICIA A. DELANEY
