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.

Northern Frozen Foods, Inc. v. Farro

Court of Appeals of Ohio, Eighth District, Cuyahoga

December 26, 2019

NORTHERN FROZEN FOODS, INC., Plaintiff-Appellant,
v.
ROSS C. FARRO, ET AL., Defendants-Appellees.

          Civil Appeal from the Cuyahoga County Court of Common Pleas Case Nos. CV-18-892326, CV-18-905385

         JUDGMENT: REVERSED AND REMANDED

          Brouse McDowell L.PA., Clair E. Dickinson, and Kyle A Shelton; Weltman Weinberg & Reis Co., L.PA., Donald A. Mausar, and Roy J. Shechter, for appellant.

          Climaco Wilcox Peca & Garofoli Co., L.P.A, John R. Climaco, and Scott D. Simpkins; Michael L. Climaco, for appellees.

          JOURNAL ENTRY AND OPINION

          RAYMOND C. HEADEN, JUDGE

         {¶ 1} Plaintiff-appellant Northern Frozen Foods, Inc. d.b.a. Northern Haserot ("Northern") appeals from the trial court's granting of summary judgment in favor of defendants-appellees Ross C. Farro ("Farro"), CFC Management Company, Inc. d.b.a. TGI Friday's, CRO Management, L.L.C. d.b.a. TGI Friday's, Buon Pranzo, L.P. d.b.a. TGI Friday's, Lakeview I, Ltd. d.b.a. TGI Friday's, John R. Climaco, Michael L. Climaco, Cleveland Restaurant Operation, Inc., Cleveland Restaurant Operation, L.P. d.b.a. TGI Friday's, Cleveland Restaurant Operation, L.P., II d.b.a. TGI Friday's, Cleveland Restaurant Operation, L.P., III d.b.a. TGI Friday's, BP Green, L.L.C. d.b.a. TGI Fridays, BP Brooklyn, L.L.C. d.b.a. TGI Fridays, BP Stow, L.L.C. d.b.a. TGI Fridays, and BP Elyria, L.L.C. d.b.a. TGI Fridays (collectively, "Defendants"). For the reasons that follow, we reverse.

         Procedural and Substantive History

         {¶ 2} Northern is a distributor of food and other supplies for the restaurant industry. Certain defendants are restaurant entities operating multiple TGI Fridays restaurants located throughout Northeast Ohio. Farro is an owner of defendant entities. From 1995 until the shortly before the inception of this case, Northern was Defendants' supplier, ultimately selling Defendants approximately $4 million of product annually.

         {¶ 3} In 2009, Defendants began to struggle financially and fell behind on their payments to Northern. According to Northern, it did not immediately object to Defendants' overdue balance because of the duration and nature of their relationship. Northern instead agreed to extend Defendants' credit terms from the initial 30-day period to 60 days, then 75 days, and ultimately more than 85 days.

         {¶ 4} According to Northern, its president Douglas Kern ("Kern") contacted Farro in 2011 and attempted to secure Defendants' agreement that they would reduce the days outstanding on their account to 85 days by February 1, 2012. By May 2012, however, Defendants had an outstanding balance of over $1.8 million that was over 120-days delinquent. On May 21, 2012, Kern sent an email to Defendants' CEO regarding the debt and proposed a new payment plan, wherein Defendants would pay $500, 000 within two weeks and pay off the remaining balance over the next two years. Kern also demanded some form of security for the payment plan, due to the amount of outstanding debt.

         {¶ 5} On May 29, 2012, Farro responded to Kern in a letter stating that the company was "not financially able to agree to [the] payment terms." Farro reiterated a proposed payment plan that Defendants reasonably believed the company could afford, wherein Defendants would pay the entire outstanding balance over a period of three years, plus 4 percent interest annually, as follows:

7/1/12 through 12/1/12 principal payments @ $15, 000 a month
1/1/13 through 6/1/13 principal payments @ $30, 000 a month
7/1/13 through 6/1/14 principal payments @ 60, 000 a month
7/1/14 through 6/1/15 principal payments @ $75, 000 a month

         Defendants initially complied with this payment plan, but beginning in 2013 failed to increase their monthly payment as outlined, instead continuing to pay $15, 000 per month through July 2014. In 2015, Defendants reduced their monthly payment amount to $5, 000. In total, Defendants paid Northern $405, 000 during those years. Northern repeatedly contacted Defendants to demand adequate payments or revisions to the payment plan, but Northern did not initiate litigation until 2017, allegedly believing Farro's promise that Defendants would pay their debt in full.

         {¶ 6} In the meantime, Defendants had stopped buying products from Northern; the last invoice for the sale of any goods from Northern to Defendants was dated June 15, 2012.

         {¶ 7} On July 3, 2017, Northern filed a complaint ("First Lawsuit") against CFC Management Company, Inc., CRO Management, L.L.C., Buon Pranzo, L.P., and Lakeview I, Ltd. alleging four counts of breach of contract. On October 30, 2017, these defendants filed their answer to Northern's complaint and filed a motion for summary judgment alleging that Northern's claims were barred by the four-year statute of limitations for the sale of goods under Ohio's version of the Uniform Commercial Code ("UCC") codified in R.C. 1302.98.

         {¶ 8} On November 27, 2017, Northern voluntarily dismissed the first lawsuit. On January 31, 2018, Northern initiated a second action ("Second Lawsuit") against the same defendants, alleging the same four counts of breach of contract, as well as an additional claim for unjust enrichment. Northern also alleged a separate count against Ross C. Farro ("Farro"), requesting that the court pierce the corporate veil of the defendant entities and hold Farro personally liable for any damages awarded in the case.

         {¶ 9} On October 15, 2018, Northern initiated a third action ("Third Lawsuit") alleging the same claims against a different group of defendants: John R. Climaco, Michael L. Climaco, Cleveland Restaurant Operation, Inc., Cleveland Restaurant Operation, L.P., Cleveland Restaurant Operation, L.P., II, Cleveland Restaurant Operation, L.P., III, BP Green, L.L.C., BP Brooklyn, ...


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.