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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) 434-2033Worrell_reid@sbcglobal.netAttorney 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

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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,

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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

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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

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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.

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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