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Vassil v. Gross & Gross, L.L.C.

Court of Appeals of Ohio, Eighth District

September 26, 2013

LAWRENCE W. VASSIL PLAINTIFF-APPELLANT CROSS-APPELLEE
v.
GROSS & GROSS, L.L.C., ET AL. DEFENDANTS-APPELLEES CROSS-APPELLANTS

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-688844

ATTORNEYS FOR APPELLANT Mark I. Wallach Marquettes D. Robinson Thacker Martinsek, L.P.A

ATTORNEYS FOR APPELLEES Timothy T. Brick, Julie L. Juergens, Jamie A. Price Gallagher Sharp

BEFORE: S. Gallagher, P.J., Kilbane, J., and E.T. Gallagher, J.

JOURNAL ENTRY AND OPINION

SEAN C. GALLAGHER, PRESIDING JUDGE

(¶ 1} Appellant Lawrence Vassil appeals from a judgment in favor of appellees Robert Gross and Gross & Gross, L.L.C., entered after a jury trial. Appellees cross-appealed. For the following reasons, we affirm the decision of the trial court.

(¶2} In Vassil v. Gross & Gross, L.L.C., 8th Dist. Cuyahoga No. 94919, 2011-Ohio-1920, this court set out the factual background.

On March 31, 2009, Vassil filed this complaint against [appellees] for legal malpractice in connection with the review of documents related to the sale of his industrial cleaning companies to State Industrial Products ("SIP"). Vassil alleged that in 2005, he owned the assets of Quality Cleansing Agents, Inc. ("Quality") and ILMC, Inc. In late 2005, Hal Uhrman, owner and chairman of SIP, contacted Vassil about purchasing the assets of Quality and ILMC, as well as Burns Chemical Systems, Inc. ("Burns"), a company whose assets Vassil had the option to acquire. In 2006, Vassil provided SIP with financial documents for the companies. Vassil further alleged that he purchased Burns while it was in foreclosure, and he created Clean All Systems, LLC ("Clean All") from that company. Vassil subsequently agreed to sell the companies to SIP for $8 million dollars and become an employee of SIP.
In March 2007, SIP and its counsel[, William Barnett, ] prepared a draft of an Asset Purchase Agreement ("APA") that set forth details of the purchases and indicated that the sellers had made certain financial statements that were "correct and complete" and were "in compliance with all federal, state, local and foreign statutes, regulations, ordinances and other provisions * * * concerning * * * pollution or protection of the environment[.]" SIP and its counsel also prepared a draft of an Employment Agreement that set forth the terms of Vassil's employment with SIP and indicated, in a cross-default provision, that SIP could terminate Vassil "for cause" if he "violated any provision of this Agreement or the Asset Purchase Agreement."
Vassil hired Gross to represent him. Gross reviewed the drafts of the agreements. On March 22, 2007, Gross notified Vassil that he had some significant concerns and that he wanted to go over the draft with Vassil to determine what Vassil had specifically agreed to. Vassil and Gross subsequently discussed the matter over the telephone. Portions of the agreements were changed. Gross raised additional concerns with Vassil, but in mid-April 2007, Vassil stopped communicating with Gross, and by April 17, 2007, SIP's general counsel dealt only with Vassil. Vassil executed the agreements on April 23, 2007, without Gross. Part of the transaction closed on that date, and a second closing was scheduled to occur on September 18, 2007.
The final version of the APA contained Vassil's warranties that certain financial statements were "correct and complete, " and that the companies were in compliance with pollution and environmental protection laws. The final version of the Employment Agreement contained the cross-default provision that stated that SIP could terminate Vassil "for cause" if he "violated any provision of this Agreement or the Asset Purchase Agreement."
In August 2007, SIP informed Vassil that it had learned of inaccuracies in the warranties related to one of the companies and maintained that he had breached the APA. SIP indicated that under the cross-default provision, Vassil was subject to termination and it was entitled to a reduction in the purchase price.
On September 1, 2007, Vassil obtained new counsel, and on October 4, 2007, his new counsel entered into a "Standstill Agreement" with SIP and also agreed that Vassil would be placed on paid leave. On November 30, 2007, SIP filed a claim for arbitration under the terms of the APA, asserting that Vassil had breached representations and warranties set forth in the APA. SIP also sought a declaratory judgment that "Vassil's breach of the [APA] constitutes cause for his termination."
On December 10, 2007, Vassil filed a response to the arbitration claim and a counterclaim seeking a declaratory judgment that he did not breach the APA and that any termination by SIP would be without cause. He asserted that he had purchased one of the companies from a foreclosing bank and told SIP that the company and its records were in disarray. The second closing occurred as scheduled, ...

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