Court of Appeals of Ohio, Eighth District, Cuyahoga
ERNEST BOAEUF, ET AL. PLAINTIFFS-APPELLEES
MEMPHIS STATION, L.L.C. DEFENDANT-APPELLANT
Appeal from the Cuyahoga County Court of Common Pleas Case
ATTORNEY FOR APPELLANT Charles W. Zepp Seeley, Savidge, Ebert
& Gourash Co., L.P.A.
ATTORNEYS FOR APPELLEES Gerry Davidson William S. Creighton
Jeffrey J. Fanger Fanger & Associates, L.L.C. Nicholas
Weiss John F. McIntyre
BEFORE: Stewart, J., E.A. Gallagher, A.J., and Laster Mays,
JOURNAL ENTRY AND OPINION
J. STEWART, JUDGE.
Plaintiff-appellee Ernest Boaeuf, through his corporation
Memphis March 2014, L.L.C., and defendant-appellant Memphis
Station, L.L.C., entered into an asset purchase agreement for
the sale of a bar and grill, and liquor permit. Boaeuf began
operating the tavern, but made only one full payment and one
partial payment on a cognovit note that he issued to Memphis
Station. Memphis Station obtained a cognovit judgment and
then sold all of the assets included in the asset purchase
agreement, including the liquor permit, to another buyer.
Boaeuf brought this action against Memphis Station, raising
several claims, only one of which survived trial - a
conversion claim relating to the sale of the bar assets to a
third party. The magistrate who conducted the trial found
that Memphis Station's sale of the bar assets to another
buyer was an unauthorized act of dominion over assets
belonging to Boaeuf. The magistrate ordered damages of $25,
000 for the liquor permit, $30, 000 for the bar assets, $20,
000 in punitive damages, and attorney fees in the stipulated
amount of $24, 000. The court approved and adopted the
magistrate's decision over objections by Memphis Station.
On appeal, Memphis Station argues that the court erred by
rejecting its claim that Boaeuf's abandonment of the
premises was a defense to the conversion claim, that the
court's valuation of the business assets was against the
manifest weight of the evidence, and that the court erred by
awarding punitive damages and attorney fees.
Memphis Station argues that the evidence showed that Boaeuf
abandoned the premises before it sold the bar assets to
another party, thus defeating the conversion claim.
"[Conversion is the wrongful exercise of dominion over
property to the exclusion of the rights of the owner, or
withholding it from his possession under a claim inconsistent
with his rights." Joyce v. Gen. Motors Corp.,
49 Ohio St.3d 93, 96, 551 N.E.2d 172 (1990).
This case is an example of the common law maxim nemo dat quod
non habet (also known as the nemo dat rule): "No one in
general can sell personal property and convey a valid title
to it unless he is the owner or lawfully represents the
owner." Mitchell v. Hawley, 83 U.S. 544, 550,
21 L.Ed. 322 (1872). When Memphis Station sold the bar assets
to Boaeuf, it gave up any right or title to those assets;
they belonged to Boaeuf. By selling bar assets that it no
longer held title to, Memphis Station converted Boaeuf s
Memphis Station does not dispute these legal principles, but
argues that Boaeuf had closed the bar and permanently
abandoned the bar assets. Indeed, abandonment of property -
where the owner has relinquished all right, title, claim, and
possession with the intention of not reclaiming it or
resuming its ownership, possession, or enjoyment - is an
affirmative defense to conversion. McCain v. Brewer,
2d Dist. Darke No. 2014-CA-8, 2015-Ohio-198, ¶ 17.
Memphis Station supports its abandonment argument by citing
Boaeuf s testimony that the bar business was "not the
kind of business that I wanted to be in" and that
"in my mind the deal was over" and "so we
Memphis Station does not give full context to Boaeuf s
testimony. The evidence showed that Boaeuf had been managing
the bar because it "didn't have a liquor license,
and we didn't have a lease." The evidence showed
that the Ohio Department of Liquor Control cancelled the
application to have the liquor permit transferred to Boaeuf.
And as he managed the business while waiting for the transfer
of the liquor permit, Boaeuf discovered that some of the bar
customers were drug dealing from the bar. When he barred
those people from the premises, "the business just
evaporated." These two factors - the liquor permit and
the clientele - are what caused Boaeuf to "walk
away" from operating the bar.
The law makes it clear that "[m]ere non-use is not
sufficient to establish the fact of abandonment, absent other
evidence tending to prove the intent to abandon."
Perez Bar & Grill v. Schneider, 9th Dist. Lorain
No. 11CA010076, 2012-Ohio-5820, ¶ 32. Boaeuf's trial
testimony that he decided to "walk away" from the
bar business did not necessarily mean that he had abandoned
the bar assets. Indeed, he testified that despite closing the
bar, he intended to sell the bar assets to pay off the
outstanding balance on the cognovit note. And we note that
Boaeuf s statement about walking away from the bar business
was made at trial; Memphis Station offered no evidence to
show that it confirmed Boaeuf s intentions prior to selling
the bar assets to the third party. This was an important
omission because Memphis Station had already received a
cognovit judgment for the contract price of the bar assets.
We conclude that the court relied ...