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Admin Net Tech LLC v. Medical Imaging Diagnostics, LLC

Court of Appeals of Ohio, Seventh District, Mahoning

August 23, 2019

ADMIN NET TECH LLC, Plaintiff-Appellant,
v.
MEDICAL IMAGING DIAGNOSTICS, LLC et al., Defendants-Appellees.

          Civil Appeal from the Court of Common Pleas of Mahoning County, Ohio Case No. 2015 CV 2551

         JUDGMENT: Affirmed.

          Atty. Edward T. Saadi, Edward T. Saadi, LLC., for Plaintiff-Appellant and

          Atty. Andrew R. Zellers, Richard G. Zellers & Associates, Inc., for Defendants-Appellees.

          BEFORE: Carol Ann Robb, Cheryl L. Waite, Judges and Arlene Singer, Judge of the Sixth District Court of Appeals, Sitting by Assignment.

          OPINION AND JUDGMENT ENTRY

          ROBB, J.

         {¶1} Plaintiff-Appellant Admin Net Tech, LLC appeals the decision of the Mahoning County Common Pleas Court finding Defendant-Appellee Albert M. Bleggi was not personally liable for the debts of Defendant Medical Imaging Diagnostics, LLC. Appellant contends this decision was not supported by sufficient evidence, was contrary to the manifest weight of the evidence, and improperly relied on documents generated after contract formation to speculate as to what a non-witness knew about the company prior to contract formation. For the following reasons, the trial court's judgment is affirmed.

         STATEMENT OF THE CASE

         {¶2} In 2015, Appellant filed a breach of contract action against Medical Imaging Diagnostics, LLC and Albert M. Bleggi dba Medical Imaging Diagnostics, alleging the defendants failed to pay outstanding invoices for computer equipment and services. Summary judgment was granted against Medical Imaging Diagnostics, LLC in the amount of $17, 449.96. (5/9/17 J.E.) On the issue of whether Dr. Bleggi was personally liable for the debt, the case proceeded to a bench trial before a magistrate. At trial, Appellant's counsel framed the issue as whether Dr. Bleggi disclosed he was acting as an agent and whether he disclosed the identity of the principal. (Tr. 10-11).

         {¶3} Appellant presented the testimony of its current president, Ellissa Scott. She said Bill Adair served as the president from 2001 -2012, at which time he moved and relinquished his ownership interest in the company.[1] Ms. Scott was the vice-president and secretary of the company during that time; she also did the billing and was the custodian of records. (Tr. 49-50). Ms. Scott testified to unpaid invoices totaling $17, 449.96 which were billed to "Medical Imaging Diagnostics" (without LLC after the name). The first invoice, dated November 30, 2011, showed services rendered and equipment provided that month which totaled $3, 657.04. (Pl. Ex. E).

         {¶4} Earlier, on August 17, 2011, Appellant generated an estimate for 15 new computers and some accompanying services for this client. The computers were not ordered at the time, and the estimate was revised on February 20, 2012, showing the price for 12 computers and instructing the customer to sign, date, and return the estimate to schedule the installation. On February 29, 2012, Dr. Bleggi signed and dated the estimate, which was the only signed document produced. (Pl. Ex. B). The required deposit of $5, 549.10 for the equipment order was paid to Appellant at this time, leaving $6, 554.43 due as shown by a March 5, 2012 invoice. (Pl. Ex. G). The services part of the estimate was invoiced on June 4, 2012 for $4, 393.87. (Pl. Ex. P).

         {¶5} Other outstanding invoices included: $274.88 for a service call on January 4, 2012 (Pl. Ex. V); $103.12 for a March 7, 2012 service call (Pl. Ex. I); $145.98 for a March 13, 2012 service call (Pl. Ex. L); $375.50 for a service call on April 9, 2012 (Pl. Ex. K); $181.47 for equipment in a June 4, 2012 invoice (Pl. Ex. O); $301.30 for a service call on June 6, 2012 (Pl. Ex. R); $779.28 for service calls on June 13, 14, 19, and 22, 2012 (Pl. Ex. S); $559.68 for one year of data backup beginning in July 2012 (Pl. Ex. T); and $123.30 for diagnostics on July 6, 2012 (Pl. Ex. U).

         {¶6} Ms. Scott said Appellant first performed work for Dr. Bleggi in 2002. A certificate from the Ohio Secretary of State showed Articles of Organization were filed in 2007 for Medical Imaging Diagnostics, LLC by its agent, Dr. Bleggi. (Pl. Ex. Y). Ms. Scott claimed she did not know Dr. Bleggi was acting as an agent for an LLC when he employed their services before or after this date. She believed he was personally doing business as Medical Imaging Diagnostics. (Tr. 37-38, 43-44). She was the person who entered the client's name in their system as "Medical Imaging Diagnostics" but did not know when she did so. (Tr. 61).

         {¶7} On November 2, 2011, Ms. Scott received a fax from an employee at "Medical Imagining Diagnostics LLC" (note the use of LLC). The fax asked Ms. Scott to complete an attached questionnaire on the readiness of their prior computer system for upgrade to a new billing system (required to bill government programs). (Tr. 46-47).[2] On March 13, 2012, another questionnaire was faxed to Ms. Scott from the same employee at "Medical Imagining Diagnostics LLC" who said "Bill said you could help me with this." Ms. Scott said this questionnaire was completed to show the specifications for the new computer systems. (Tr. 48-49). She said the handwriting on the form appeared to be that of Mr. Adair (Appellant's former president). (Tr. 62). He handwrote the "Client Name" on the questionnaire as "Medical Imaging Diagnostics LLC" (and elsewhere wrote "Medical Imaging"). On March 19, 2012, he faxed his response to "Medical Imaging Diagnostics LLC."

         {¶8} On June 18, 2012, Appellant sent a letter (signed by both Mr. Adair and Ms. Scott) to "Medical Imaging, LLC" (at the same address listed on Appellant's invoices for "Medical Imaging Diagnostics"); the letter mentioned the project was put on hold by Dr. Bleggi. Although it was her company who placed this client name in the letter she signed, Ms. Scott said she did not know the name "Medical Imagining, LLC." Ms. Scott disclosed that Mr. Adair "was close with Dr. Bleggi" and his wife worked for Dr. Bleggi. After reviewing the documents, she acknowledged "[i]t looked like [Mr. Adair] might have known" Medical Imaging Diagnostics was an LLC. (Tr. 50-51).

         {¶9} Dr. Bleggi did not attend the trial due to a health condition. Appellant caused to be read portions of Dr. Bleggi's deposition testimony into the record. Dr. Bleggi said he was the sole member of Medical Imaging Diagnostics, LLC. (Tr. 82). He assumed the invoices from Appellant represented work performed at the medical office, suggesting the employees at the office coordinated the work. He did not know whether any of the invoices had been paid. When asked if there was a reason he did not sign the estimate as president or as a member of Medical Imaging Diagnostics, LLC, he responded, "Not that I'm aware of, no." (Tr. 83-84). After he was asked to acknowledge that the estimate (generated by Appellant) did not say "LLC" after "Medical Imaging Diagnostics," he was asked, "Did you ever disclose to Admin Net Tech that you were acting on behalf of an LLC when you signed that document?" He replied, "I don't recall." (Tr. 84).

         {¶10} On April 9, 2018, the magistrate's decision found Dr. Bleggi was not personally liable. The magistrate reviewed the testimony and quoted case law on agency. The magistrate pointed out the issue of whether an agency relationship and the identity of the principal were disclosed or known to a third person was a question of fact. The magistrate noted the LLC was created years prior to the invoices at issue and the manner in which the parties conducted their prior business dealings was not presented at trial. The magistrate found that although Ms. Scott testified she was unaware the client was an LLC, the evidence clearly showed the agency relationship was known to Appellant's president and should have been known to Ms. Scott. The magistrate pointed to documents sent throughout the project establishing Appellant knew the agency relationship and the identity of the principal.

         {¶11} Appellant filed timely objections, claiming Dr. Bleggi did not make Appellant aware he was an agent for an identified limited liability company and the court should not speculate as to what a non-witness (Appellant's former president) knew based on documents sent after contract formation. On September 19, 2018, the trial court overruled the objections and adopted the magistrate's decision. Appellant filed a timely appeal and contests the decision finding Dr. Bleggi was not personally liable.

         ASSIGNMENTS OF ERROR

         {¶12} Appellant sets forth the following four assignments of error, which Appellant addresses[3] together:

"INSUFFICIENT EVIDENCE EXISTS TO SUPPORT THE TRIAL COURT'S DECISION THAT APPELLEE ALBERT BLEGGI IS NOT PERSONALLY LIABLE FOR THE ...

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