Court of Appeals of Ohio, Eighth District, Cuyahoga
Appeal from the Cuyahoga County Court of Common Pleas Case
Nos. CV-18-892326, CV-18-905385
REVERSED AND REMANDED
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
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
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
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, ...