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Jori, L.L.C. v. B2B International, LLC

Court of Appeals of Ohio, Eleventh District, Lake

March 30, 2018

JORI, LLC, Plaintiff-Appellant,
v.
B2B INTERNATIONAL, LLC, et al., Defendants-Appellees,

          Civil Appeal from the Lake County Court of Common Pleas, Case No. 2015 CV 000814.

          Stanley Dub, 20600 Chagrin Boulevard, (For Plaintiff-Appellant).

          Edgar Boles, Dinn, Hockman & Potter, LLC, (For Defendants-Appellees).

          OPINION

          COLLEEN MARY OTOOLE, J.

         {¶1} Plaintiff-appellant, Jori, LLC, [1] appeals from the judgments of the Lake County Court of Common Pleas, ruling in favor of defendants-appellees, B2B International, LLC and Elie Chamoun on Jori's claims that appellees failed to comply with R.C. 1334.01 et seq. in entering a "business opportunity plan." For the following reasons, we reverse and remand.

         {¶2} On May 13, 2015, Jori filed a complaint against appellees. Jori argued that it executed a license agreement with B2B, in order to operate a "Burgers 2 Beer, " or B2B, restaurant. Count one alleged that this constituted the sale of a "business opportunity plan" pursuant to R.C. 1334.01 and B2B failed to comply with statutory requirements to provide a written disclosure document and a right to cancel. Count two alleged that Chamoun, the managing partner of B2B, was personally liable.

         {¶3} On June 19, 2015, Chamoun filed a motion to dismiss arguing that Jori failed to establish the elements necessary to pierce the corporate veil. Jori opposed the motion and it was denied by the trial court.

         {¶4} Also on June 19, 2015, B2B filed an answer, counterclaim, and third-party complaint raising five causes of action against Jori and Faddoul. Jori and Faddoul filed an answer on July 2, 2015.

         {¶5} On July 31, 2015, Jori filed a motion for partial summary judgment arguing that there was no issue of fact that B2B violated R.C. 1334.01 when a license agreement was executed, the agreement constituted a business opportunity plan, and B2B failed to comply with the disclosure and notice requirements of R.C. 1334.02 - .06 for such plans. Attached to the motion was the affidavit of Faddoul, Jori's owner. He attested that he began having discussions with Chamoun about operating a restaurant using the trade name of B2B in October 2013. Chamoun described his restaurants operating under the same name as being "very successful" and on November 1, 2013, sent an e-mail with projections, including yearly sales of $1, 700, 000. Faddoul was very interested in opening a B2B restaurant based on Chamoun's representations. As a result, Faddoul leased a building in Willowick and formed Jori, LLC to own the restaurant. According to Faddoul, Chamoun ordered the signs and printing of the menus for the restaurant, and dictated the menu's design and prices at which food and beverage would be sold. Chamoun also told Faddoul which vendors to use to supply the food and beverage items. A license agreement was signed on May 17, 2014 which allowed Jori/Faddoul to operate a restaurant using the name, logo, décor, and recipes of B2B in exchange for agreed upon payment.

         {¶6} On September 17, 2015, appellees filed a brief in opposition to Jori's motion for partial summary judgment arguing that the court could only look to the terms of the integrated license agreement to determine whether a "business opportunity plan" existed. Attached was the affidavit of Chamoun, who averred that Faddoul, the owner of one or more Subway franchises, asked for a license to use B2B's name, trade dress, and propriety information, but did not want a franchise agreement, an allegation denied by Faddoul in a subsequent affidavit. Chamoun stated that there was no representation or promise of profit and estimated sales figures provided were an opinion and based on if the restaurant was run correctly. Chamoun stated that Faddoul, after completing refurbishments with his own contractor, opened the B2B restaurant in May 2014 but by August 2014 had changed the restaurant to Cleveland Burger Company.

         {¶7} On September 21, 2015, Chamoun filed an answer, counterclaim, and third party complaint. Jori and Faddoul filed an answer two days later.

         {¶8} On April 4, 2016, the trial court denied Jori's motion for partial summary judgment. The court applied the parol evidence rule and found that it could only consider the four corners of the license to determine whether the parties had a "business opportunity plan" pursuant to R.C. 1334.01(D). The court found that no business opportunity plan existed and that appellees could not be held liable for failure to comply with the obligations in R.C. 1334.02 - .06. On May 6, 2016, the court issued a judgment entry restating that holding and noting that "there is no just cause for delay."

         {¶9} Jori and Faddoul appealed to this court. The appeal was dismissed in a September 30, 2016 memorandum opinion, in which this court held that there was a lack of a final order since the denial of a motion for summary judgment is not final. Jori, LLC v. B2B Internatl., LLC, 11th Dist. Lake No. 2016-L-046, 2016-Ohio-7162.

         {¶10} On November 1, 2016, Jori filed a motion for rehearing of motion for partial summary judgment or requesting the court to enter judgment for appellees on Jori's claims. On November 8, 2016, the trial court issued a judgment entry stating that the prior denial of the motion for summary judgment "resulted in judgment against Plaintiff as to all claims in Plaintiffs Complaint" and that the "judgment was in favor of the Defendant as to all Plaintiffs claims against the Defendant." The court granted the portion of Jori's motion requesting it to enter judgment for appellees on Jori's claims. The court included language that "there is no just cause for delay."

         {¶11} On appeal, Jori raises the following two assignments of error:

         {¶12} "[1.] The trial court erred in finding that the License Agreement did not meet the statutory definition of a 'business opportunity ...


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