Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Chuang Development LLC v. Raina

Court of Appeals of Ohio, Tenth District

May 25, 2017

Chuang Development LLC, Plaintiff-Appellee,
v.
Rajineesh Raina, Defendant-Appellant, Tenna Sharma, Defendant-Appellee.

         APPEALS from the Franklin County Court of Common Pleas (C.P.C. N0. 12CV-7365)

         On brief:

          Smith Law, Ltd., and Karen K Fuller Smith, for Chuang Development LLC.

         Argued:

          Karen K Fuller Smith.

         On brief:

          Maguire & Schneider, LLP, Keith W. Schneider, and Trina N. Goethals, for Rajineesh Raina.

         Argued:

          Trina N. Goethals.

          DECISION

          BROWN, J.

         {¶ 1} Defendant-appellant, Rajineesh Raina, appeals from two judgments of the Franklin County Court of Common Pleas, one overruling his objections to both the magistrate's decision awarding damages to plaintiff-appellee, Chuang Development, LLC ("Chuang"), and to the magistrate's decision denying his motion to vacate, and the other denying his Civ.R. 60(B) motion for relief from judgment. Because (1) Chuang properly served Raina, but (2) the trial court's award of damages was speculative, we affirm in part and reverse in part.

         {¶ 2} On June 7, 2012, Chuang filed a complaint against Raina and Gopal Gautam in the court of common pleas. Chuang asserted that it was the owner of commercial property located at 5000 Upper Metro Place, Dublin, Ohio ("business address"), and that it had leased the premises to Salvi's Bistro LLC ("Salvi's") on August 10, 2010 pursuant to a written lease agreement. Raina and Gautam signed the lease as the managing members of Salvi's, and executed and delivered to Chuang personal guarantees to cover Salvi's obligations under the lease. Chuang alleged that Salvi's had breached the lease by failing to pay rent, and that Raina and Gautam were in breach of their respective guarantees.

         {¶ 3} Salvi's operated a restaurant and bar at the leased premises. The term of the lease was ten years. In 2012, Salvi's stopped paying rent. Chuang filed a forcible entry and detainer action against Salvi's in March 2012 in municipal court, and separately filed the instant action in common pleas court to recover its damages. The forcible entry and detainer action was resolved by agreed entry on November 27, 2012.

         {¶ 4} In the present action, Chuang instructed the clerk to serve the complaint by certified mail to Raina and Gautam at the business address. On June 14, 2012, the clerk noted on the docket that it had received the signed certified mail return receipts.

         {¶ 5} On June 13, 2012, Gautam notified the court that he had filed a petition in bankruptcy, and asked the court to stay the case. The court issued an order staying the action on June 14, 2012.

         {¶ 6} Chuang dismissed Gautam from the case on June 20, 2012, and filed a motion asking the court to reactivate the case. The court reactivated the case on July 13, 2012.

         {¶ 7} Chuang filed an amended complaint on July 19, 2012, adding Teena Sharma as a defendant. Chuang asserted that Raina and Sharma had both executed personal guarantees to cover Salvi's obligations under the lease, and that Raina and Sharma were in breach of their respective guarantees. Chuang requested that the amended complaint be served on Raina at the business address via certified mail. On July 26, 2012, the clerk noted on the docket that it had received the signed certified mail return receipt.

         {¶ 8} Chuang filed a motion for summary judgment on March 14, 2013. Chuang noted that Salvi's had breached the lease agreement by failing to pay rent and other charges, and that Raina and Sharma were in breach of their personal guarantees. Chuang asked the court to grant it damages in the amount of $1, 421, 645.69; which included past due rent, accelerated future rent payments, attorney fees, and other miscellaneous expenses. Chuang stated that defendants were entitled to a deduction of $10, 500.00 for the tenant's security deposit.

         {¶ 9} On April 18, 2013, the trial court issued a decision and entry granting Chuang's motion for summary judgment as to liability only. The court scheduled the matter for a damages hearing before a magistrate. The entry granting Chuang's motion for summary judgment was mailed to Raina at the business address, but was returned to the court with the notation "not deliverable as addressed unable to forward."

         {¶ 10} The damages hearing was held May 29, 2013. Raina did not appear for the hearing, and Chuang's managing member, Julie Chuang, testified as to Chuang's damages. Chuang noted at the hearing that she had sold some of the restaurant equipment remaining in the building for $2, 000.00.

         {¶ 11} On July 2, 2013, the magistrate issued a decision awarding Chuang $1, 426, 902.48 in damages. The magistrate determined that the past due rent was $114, 825.69, and that "[b]ased on the acceleration clause included in the Lease, and the fact the term is set forth as ten (10) years, the * * * calculation of future rent totals $1, 295, 040.00." (July 2, 2013 Mag. Decision at 2.) The magistrate found that Chuang was entitled to $25, 036.79 in miscellaneous expenses ($6, 500.00 roof repairs $600.00 missing char broiler $180.00 trash removal $1, 175.98 water bill $1, 000.00 sign removal $15, 580.81 reconciliation charges) and $4, 500.00 in attorney fees. The magistrate gave defendants a credit of $12, 500.00 ($10, 500.00 security deposit $2, 000.00 sold restaurant equipment). The decision was mailed to Raina at the business address, but was returned to the court with the notation "unable to forward return to sender."

         {¶ 12} On July 16, 2013, Raina appeared in the action, filing a motion asking the court to grant him additional time to file objections to the magistrate's decision on damages. Raina stated that he did not "have knowledge that a hearing was held, " and that he did not receive the decision on damages "until late last week when he was notified of the same by a third-party." (July 16, 2013 Request for Additional Time.) The trial court granted the motion.

         {¶ 13} On July 31, 2013, Raina filed objections to the magistrate's decision on damages. Raina asserted that "he did not receive proper service and that therefore, jurisdiction is lacking." (July 31, 2013 Objections at 7.) Raina further asserted that the magistrate had relied "on the acceleration clause of the lease, stated in 16.2(i)" to award future accelerated rent payments, but had ignored Article 16.2(b) of the lease, which obligated Chuang to use reasonable efforts to mitigate its damages. (July 31, 2013 Objections at 9.)

         {¶ 14} On April 15, 2014, Raina filed a motion to vacate the decision on damages. Raina asserted that he "did not receive pleadings, notices or motions filed in the instant action, " and that the court lacked personal jurisdiction over him. (Mot. to Vacate at 3.) Raina supported the motion to vacate with his affidavit, averring that he was "a resident of Alameda County, Pleasanton, California, " and had "never been served with a Complaint or Amended Complaint." (Raina Affidavit at ¶ 2-3.) Chuang filed a memorandum contra the motion to vacate and requested a hearing on the matter.

         {¶ 15} On November 10, 2014, the trial court issued a decision referring Raina's motion to vacate to a magistrate for an evidentiary hearing. The court instructed the magistrate "to determine the validity of [Raina's] statements that he was not properly served with the summons and complaint." (Nov. 10, 2014 Decision at 4.)

         {¶ 16} Raina did not appear for the January 8, 2015 evidentiary hearing on his motion to vacate, but his attorney was present for the hearing. Ms. Chuang testified at the hearing, explaining why service to the business address was reasonably calculated to reach Raina. Chuang presented the court with several exhibits, including the lease and guaranty, the November 27, 2012 agreed entry from the eviction action, and several e-mails Raina had sent to Chuang and Chuang's counsel.

         {¶ 17} On May 31, 2015, the magistrate issued a decision denying Raina's motion to vacate. The magistrate noted that "the default address" under the lease was the business address, and that Raina "failed to provide a separate address" on the guaranty, "despite being requested to do so." (May 31, 2015 Mag. Decision at 3.) The magistrate observed that the November 27, 2012 agreed entry demonstrated that Salvi's "continued to occupy the space and do business as a restaurant after the period when this action was initiated, " and that Raina continued to use the business address in the signature block of his e-mails "after certified mail was signed for at the very same address." (May 31, 2015 Mag. Decision at 4-5.) The magistrate concluded that Chuang's evidence from the hearing demonstrated "both a reasonable expectation that service [would] be delivered at the provided contact address for Defendant, along with a sufficient physical presence at the location." (May 31, 2015 Mag. Decision at 12.)

         {¶ 18} Raina filed objections to the magistrate's decision denying his motion to vacate on June 11, 2015. Raina asserted there was nothing in the record indicating that he had "a continual and repeated physical presence at the business address." (June 11, 2015 Objections at 8.) Raina explained that he used the business address in the signature block of his e-mails because that address was "used for delivery arrangements and suppliers who would need to locate the restaurant." (June 11, 2015 Objections at 7.)

         {¶ 19} On November 4, 2015, the trial court issued a decision and entry overruling Raina's objections and adopting the magistrate's decision denying Raina's motion to vacate, and overruling Raina's objections and adopting the magistrate's decision on damages. Regarding the motion to vacate, the court observed that Chuang had "a reasonable expectation that the Complaint would be delivered to Defendant Raina when Defendant Raina was served at his business address, particularly when his business was operating and it was the only address provided by Defendant Raina both on the lease and in subsequent emails." (Nov. 4, 2015 Decision at 6.) Regarding the decision on damages, the court noted that, because Raina failed "to appear at the damages hearing, Defendant Raina lost the opportunity to rebut the evidence offered by Plaintiff, " and "lost the opportunity to present any evidence of Plaintiffs alleged failure to mitigate." (Nov. 4, 2015 Decision at 8, 10.)

         {¶ 20} On November 20, 2015, Raina filed a notice of appeal from the trial court's November 4, 2015 decision and entry. On December 18, 2015, Raina filed a Civ.R. 60(B) motion for relief from the trial court's November 4, 2015 judgment. Raina filed a motion in this court on December 28, 2015, asking this court to temporarily remand the case so the trial court could rule on Raina's Civ.R. 60(B) motion. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.