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Case: 5:17-cv-02189-JRA Doc #: 43 Filed: 07/19/18 1 of 16.

PageID #: 942

IN THE UNITED STATES DISTRICT COURT


FOR THE NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

HEALTH AND WELLNESS LIFESTYLE ) CASE NO. 5:17-CV-02189


CLUBS, LLC, )
) JUDGE JOHN R. ADAMS
Plaintiff )
)
vs. )
)
RAINTREE GOLF, LLC, et al. )
)
Defendants. )
_______________________________________________________________________________

BRIEF IN OPPOSITION TO
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
_______________________________________________________________________________

Plaintiff Health and Wellness Lifestyle Clubs, LLC (“HW”), by and through its

undersigned counsel, hereby files its Brief in Opposition to Defendants’ Partial Motion for

Summary Judgment.

I. INTRODUCTION AND FACTS1

HW is a foreign company from Delaware that was looking for income producing

commercial properties to purchase. In 2015, HW entered into Purchase Agreements for the

planned purchase of two golf courses in Ohio: Raintree and Prestwick Golf Courses in

Uniontown, Ohio. The parties signed 2 Purchase Agreements for the sale of the golf courses and

properties although both properties are owned by Defendant Raintree Golf, LLC. Prior to

signing the Purchase Agreements, in the Purchase Agreements and thereafter, the Defendants

made a series of representations, promises and warranties to HW. They promised, represented

and warranted that:

1
All Facts are support by the Declarations of Garrison, Vyas and Nugar attached hereto as Exhibits “11-“13.”
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-Seller must provide true and accurate finance statements from a CPA (Sec 4.1(b)7)

-Seller must provide reasonable assurances to Purchaser’s lender (Sec. 4.1(b)7(d))

-Seller must provide and disclose material adverse conditions (Sec. 4.1(b)(7)(e))

-Seller must provide all documents to review (Sec. 4.1(b)(7)(k))

-It is a condition precedent to closing that Seller fully complies and that all representations
and warranties are accurate (Sec 4.1)

-Seller must provide financial statements prepared in accordance with GAAP (i.e. generally
accepted accounting principles) (Sec. 5.1 reps and warranties of seller)

-Seller must make no misstatements or omissions of material fact (Sec. 5.1)

-Seller agrees that Purchaser may and shall rely on all documents provided (Sec. 9)

-There are no material adverse conditions (Sec. 9)

See Purchase Agreements, Exhibits “1” and “2.” These promises were all false and misleading

and Defendants breached and violated the Agreements. See Declaration of Garrison, Exhibit

“11.” The income for the property had greatly reduced during the due diligence period, no

events were booked for 10 months and insider, interrelated debt existed between the golf courses.

Initially, the parties worked cooperatively to complete the sale of the properties. While

HW planned to obtain an SBA loan for the purchase of the properties, it also had the financial

ability to self-finance the purchase, which was communicated to Defendants. See Exhibit “12.”

Thereafter, Defendants signed a First Amendment for each Agreement on July 1, 2016.

On January 9, 2017, Defendants signed Second Amendments for each Agreement

(which Defendants failed to include or refence in the Motion). See Exhibits “3” and “4.” In

the January 9, 2017 Second Amendment for the Raintree Golf Course, Defendant Rainieri

clearly agrees and states that the “closing date agreed upon for the purchase of Raintree shall be

adjusted …[sic] commencing the twelve month period of closing from the date of closing

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Prestwick.” Thus, the Agreement for Raintree did not terminate or lapse in 2016 or 2017.

Raintree did not have to close until 12 months after Prestwick, which self-evidently pushes it into

the calendar year 2018 and beyond. Thus, the sales were moving forward throughout 2017.

In March 2017, the parties were emailing regarding the permitting and zoning process,

which required Defendant Rainieri to be in attendance and consent. The parties were proceeding

forward with their plans to sell. See Exhibit “5.” Defendants also extended the closing until

May 31, 2017. See Extension, Exhibit “6.” Thus, it is clear that the Agreements did not lapse or

terminate in 2016. Defendants’ own transactional attorney, Thomas Sicuro, Esq. (“Defendants’

Attorney”) attested to this fact in his affidavit filed in Court.

In his affidavit, Defendants’ Attorney swore, under oath, that there was still a valid

contract in May 2017 stating, “as this time the transaction is scheduled to be closed as of May

30, 2017.” See Exhibit “7.” Additionally, Defendants’ Attorney swore under oath that on “May

4, 2016, approval for financing was obtained by a lender.” On May 3, 2017, Defendant

Rainieri also signed an updated Borrower Information Application for the federal SBA loan for

the Agreements. See SBA app. Exhibit “8.” Clearly, the deal was not terminated in December

2016, February 2017 or otherwise.

In June 2017, an issue arose regarding material adverse conditions for the golf courses

that had never been disclosed as required by the parties’ Agreements. The income had

dramatically reduced for the golf courses. It was not disclosed that Prestwick had not paid rent

to Raintree for years. (in essence, Defendant Raintree was failing to pay itself). Prestwick was

apparently in financial hardship and had not paid rent for years. In its 2016 tax return, signed

April 8, 2017, Raintree apparently forgave the debt of Prestwick for the unpaid rent. This first

came to light in June 2017. See June 15, 2017 email, first page of Tax Return, Exhibits “9” and

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“10.” This was not disclosed to HW and was never discussed in 2016 or early 2017. In fact, the

2016 tax return was not even signed until April 8, 2017. Id.

This debt forgiveness between the related businesses created a myriad of financial

problems. It created phantom income for Prestwick, it shows as income, but no revenue or cash

is actually received. Similarly, Raintree’s income reduces since the rent, which had been a

receivable (inflating the assets) was never paid. Thus, an asset became a loss. As a result, the

actual income was far lower than represented. Similarly, no weddings or events had been

booked for 10 months, which dramatically decreased revenue. These material adverse conditions

were never disclosed as required by the parties Agreements and was never uncovered until mid-

June 2017. See Exhibit “9.” Additionally, in late 2017 it came to light that Defendant

Raintree’s existing lender had defaulted Defendant and entered into a forbearance

agreement. See Dec. Garrison. This was never disclosed. These breaches, fraud and

misrepresentations caused the current lawsuit to be filed in October 2017. At no point did

Defendants ever serve a formal written termination notice for either property as required by the

Agreements. See Sec. 10 of the Agreements. As will be shown herein below, Defendants’

Motion for Summary Judgment is not well taken, this matter is replete with genuine issues of

material fact. Defendants breached the contract, defrauded HW and made a series of

misrepresentations damaging HW.

II. LAW AND ARGUMENTS

A. RULE 56(D) MOTION

As the Court knows, HW filed a FRCP 56(d) Motion requesting additional time in this

matter to allow it to conduct discovery prior to summary judgment briefing. HW hereby

incorporates all the arguments raised in its FRCP 56(d) Motion. FRCP 56(a) provides that “[a]

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party may move for summary judgment at any time after the expiration of the time permitted

under these rules for a responsive motion or pleading…” In this case, the pleadings remain

open. Defendants’ Motion is premature and requiring HW to respond to it without closing the

pleadings and conducting discovery (let alone an adequate opportunity to conduct discovery) is

improper prejudicing HW’s right to proceed on the merits of the case. The Sixth Circuit Court of

Appeals holds that a party “must receive ‘a full opportunity to conduct discovery’ to be able to

successfully defeat a motion for summary judgment.” Ball v. Union Carbide Corp., 385 F.3d

713, 719 (6th Cir. 2004). It is improper to grant summary judgment if the nonmovant is given an

insufficient opportunity for discovery. Whit’s Landing Fisheries, Inc. v. Buchholzer, 29 F.3d

229, 231-232 (6th Cir. 1994).

HW needs to conduct discovery to properly investigate its fraud and breach of contract

claims. Specifically, HW needs to determine if the information provided prior to and at the time

of execution of the contracts by Defendants was accurate or false. See Affidavit attached to

FRCP 56(d) Motion as Exhibit “1.” The only way to obtain this necessary information is to

allow the parties to conduct sworn discovery2 and obtain background records for the financials.

Thus, Defendants’ Motion is premature and HW requested additional time for discovery.

B. SUMMARY JUDGMENT STANDARD

In considering a motion for summary judgment, a court should only grant the motion if

there remains no genuine issue of material fact and, when construing the evidence most strongly

in favor of the non-moving party, reasonable minds can come to, but one conclusion and that

conclusion is that the moving party is entitled to judgment as a matter of law. See FRCP 56. On

summary judgment, the inferences to be drawn from the underlying facts must be viewed in the

2
As opposed to uncertified, random documents sent by Defendants or their counsel.
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light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S.

654, 655, 82 S.Ct. 993, 994, (1962). The movant must meet the initial burden of showing “the

absence of a genuine issue of material fact” as to an essential element of the non-movant's case.

This burden may be met by pointing out to the court that the respondent, having had sufficient

opportunity for discovery, has no evidence to support an essential element of his or her case.

Street v. J.C. Bradford & Co., 886 F.2d 1472 (1989) (emphasis added). The inquiry on

a summary judgment motion is, “whether the evidence presents a sufficient disagreement to

require submission to a jury or whether it is so one-sided that one party must prevail as a matter

of law.” Id. It is against this backdrop that the instant motion is to be addressed.

C. DISPUTED GENUINE ISSUES OF FACT

At the outset, the Court should note that the Agreements are governed by Delaware law,

not Ohio law. Defendants are citing to the wrong substantive law throughout their brief.

In this matter, there are a litany of disputed issues of material fact. As set forth herein

above, Defendants claim the Agreements terminated or lapsed in 2016. That is false. In

January 2017, Defendant Rainieri signed two separate, Second Amendments to the

Purchase Agreements. See Exhibits “3” and “4.” In the Second Amendment for Raintree Golf

Course, Defendant Rainieri clearly agrees that the:

closing date agreed upon for the purchase of Raintree shall be adjusted …[sic]
commencing the twelve month period … [sic] from the date of closing Prestwick.

Thus, Raintree golf course did not have to close until 12 months after Prestwick, which self-

evidently pushes it to the calendar year 2018. This directly conflicts with Defendants’ current

arguments that the Agreement lapsed in December 2016 creating a genuine issue of material fact.

Similarly, throughout 2017, the parties were working together, emailing regarding the

permitting/zoning process, and Defendant Rainieri attended zoning/planning meetings with the
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City. The parties were proceeding forward with their plans to sell throughout the entire first half

of 2017. See Exhibits “13”, “5”, “6.” If there was no Agreement, why would Defendants do

this? Nevertheless, perhaps the most damning evidence comes from the Defendants’ own

attorney. Defendants’ Attorney filed a sworn affidavit in Court, which is a judicial admission.

See Exhibit “7.” These sworn statements contradict all of the arguments in Defendants’ Motion.

A judicial admission is not merely another layer of evidence, upon which the district

court can superimpose its own assessment of weight and validity. Merritt v. United Parcel

Service, 956 A.2d 1196 (2008). It is, to the contrary, an unassailable statement of fact that

narrows the triable issues in the case. Conomos v. Sun, 831 A.2d at 712-13 “If there is some

support in the record for the truth of an averment, the trial court abuses its discretion if it

disregards the [judicial] admission. Such averments are binding on a party whether admitted by

counsel or the client.”. Id. Judicial admissions in pleadings are binding on both the party and the

Court. Ferguson v. Neighborhood Hous. Servs.,780 F.2d 549, 551 (6th Cir.1986); See

also Barnes v. Owens–Corning Fiberglas Corp., 201 F.3d 815, 829 (6th Cir.2000). The Sixth

Circuit has determined that even oral representations by counsel are judicial admissions. Berlin

v. The Celotex Corp., 912 F.2d 465, 1990 WL 125360 (6th Cir., 1990).

While Defendants claim the Agreements for Raintree terminated in 2016, this directly

conflicts with the sworn affidavit from Defendants’ Attorney. In May 2017, the transactional

attorney for Defendants swore under oath in Court that the Agreements were still in full

force and effect. See Exhibit “7.” Similarly, while Defendants now claim that lender financing

was never provided, in May 2017, Defendants’ Attorney again swore under oath in Court

that the “approved financing” had been provided a year earlier. A party cannot advance one

version of the facts, conclude that its interests would be better served by a different version, and

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change the facts, safe in the belief that the trier of fact will never learn of the change in stories.

Carey’s Home Construction, LLC v. Estate of Myers, 2014 WL 1724835 (Del. Sup. Ct. 2014) In

discussing judicial admissions in the context of summary judgment, the district courts hold that

“[w]hile this evidence is more precisely relevant to a substantive interpretation, it nonetheless

supports…[the] suggestion that [defendant]… [when] confronted with the unexpected loss…

changed its story in mid–1995. This is exactly what Ferguson and the doctrine of judicial

admissions seeks to prevent.” Curb v. MCA Records, Inc., 898 F.Supp. 586 (1995). Thus, a

party cannot change its story and ignore past judicial admissions, like the Defendants are

attempting to do here. Defendants are bound by the sworn statements of their attorney in a

judicial proceeding. Merritt; Conomos; Ferguson; Curb. This evidence not only creates genuine

issues of material fact but is damning evidence against the Defendants. Thus, Defendant’s

Motion for Summary Judgment should be denied.

Common sense also dictates that Defendants’ current story simply does not make sense.

If the Agreements had lapsed and were of no force and effect, then why was Defendants’

Attorney swearing under oath that they were still in effect? If Defendants never received

confirmation of financing, why did Defendants’ Attorney state under oath they had received

“approved financing” in May 2016? If the Agreement for Raintree terminated December 1,

2016, why did Defendants sign a Second Amendment January 9, 2017? If there were no

Agreements in effect, why did Defendant Rainieri sign SBA applications and appear at zoning

meetings in 2017? Defendants claim the Agreements lapsed in 2016, but there is a Second

Amendment signed in 2017. Defendants claim there was no financing, but the attorney for

Defendants swore under oath that they received the evidence of financing in 2016. Defendants

claim to have terminated the Agreements, but there is no evidence of a termination letter sent or

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served in accordance with the Agreements. Sec 10.5 of Agreements. Defendants’ current

position is entirely inconsistent with their acts and deeds, creating a series of disputed issues of

material fact. This case is replete with disputed issues of material fact requiring denial of the

Motion for Summary Judgment.

D. BREACHES AND VIOLATIONS BY DEFENDANTS

The Defendants’ misinterpret the Complaint - this is an action for damages. While there

is a refence to specific performance in the demand, there is no claim for specific performance. In

fact, this entire lawsuit seeks damages and no claim for specific performance is being sought.

Under the express terms of the Purchase Agreement, if Defendants defaulted, then HW

had the right to seek damages. See Sec. 6.2. Agreements. The issue of whether there was or was

not a termination or a condition precedent becomes ultimately immaterial. All of HW’s claims

for damages survive any alleged termination or any argument made in Defendants’ Motion for

Summary Judgment. The Agreements state that:

[i]n the event the sale of the Property as contemplated hereunder is not consummated
due to Sellers default hereunder… Purchaser shall be entitled, as its sole remedy,
either: (a) or to receive any sums of money damages available under the law or
under the principles of equity…” or (b) to enforce specific performance….

HW chooses damage. Therefore, if the sales do not go through, which they clearly did not, then

HW has the right to seek any and all damages in law or in equity that it suffered as a result of

Defendants’ defaults. The Defendants breached and violated the following provisions of the

Agreements:

-Sec 4.1(b)7 Seller must provide finance statements from a CPA;

-Sec. 4.1(b)7(d) Seller to provide reasonable assurances to purchaser’s lender;

-Sec. 4.1(b)(7)(e) Seller to provide and disclose any material adverse conditions;

-Sec. 4.1(b)(7)(k) Seller shall provide all documents for Purchaser to review;
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-Sec. 4.7 a condition precedent of Purchaser to buy is that the Seller fully complies under
the Agreement and that all representations and warranties are accurate;

-Sec. 5.1(l), Seller must provide financial statements prepared in accordance with GAAP;

-Sec. 5.1(o) Seller warrants that there are no misstatements or omissions of material fact;
and

-Sec. 9.1 Seller warrants that there are no material adverse conditions that would affect
the financing of the transaction or adversely affect the business operations.

Defendant breached all the aforementioned promises, conditions, obligations, covenants,

representations and warrants. See Exhibits “1” and “2.” The unpaid rent, forgiveness of debt and

loss of income were never disclosed - they were uncovered in June 2017. Moreover,

Defendants’ defaults with its existing lender and the forbearance agreement with its lender

was never disclosed. See Garrison Declaration. Thus, there are clear breaches,

misrepresentations and fraud giving HW the contractual right to file suit and recover any and all

damages.

E. CONDITION PRECEDENT

1. FINANCING

While the Defendants appear to claim the failure of a condition precedent on financing in its

Motion, this is in error. HW provided evidence of its financing in 2016. Defendants’ Attorney

swore under oath that “approval for the financing was obtained.” See Exhibit “7.” Moreover, HW

had the ability to self-finance the purchase. See Vyas Declaration “12.” Thus, money was not at

issue - if the Defendants had not fraudulently misrepresented the financial condition.

Defendants claim the necessity for a “final, unconditional commitment,” but that argument

is in inaccurate. As an initial matter, HW had the ability to self-finance the sale and did not

need a lender. See Vyas Declaration. Moreover, the Agreement itself also does not require a
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“final, unconditional commitment” as Defendants claims. Section 4.1(b)(2) of the Agreement

states that HW may provide an unconditional commitment or, “commitments as the case may

be….” See Purchase Agreement. The commitment may be unconditional or otherwise. The

Agreement was quite broad and all-inclusive in the language that it used. Any commitment

sufficed and satisfied the Agreement, not only a final, unconditional commitment.

Alternatively, if the Court finds a valid condition precedent existed and was not met, then

Defendants caused any such failure. As the Court knows, a party may not escape contractual

liability by reliance upon the failure of a condition precedent where the complaining party

wrongfully prevented performance of the condition precedent. Mobile Communications Corp. of

America v. MCI Communications, 11 Del. J. Corp. L. 680, 1985 WL 11574 (Del. 1985); See Gulf

Oil Corp. v. American Louisiana Pipeline Co., 282 F.2d 401 (6th Cir. 1960); 3A Corbin

on Contracts § 767 (1961). This is known as the prevention doctrine. A party may not act in bad

faith to effectuate the failure of a condition precedent and defeat a contract. T. B. Cartmell Paint

& Glass Co. v. Cartmell, 37 Del. 528, 186 A. 897 (1936); See Also; Kellie Auto Sales, Inc. v.

Rahbars & Ritters Ents., L.L.C., 172 Ohio App.3d 675 (2007).

Even without an express contractual provision, a party to a contract must in good faith

work to see that the terms of conditions precedent occur. Davidson & Jones Dev. Co. v. Elmore

Dev. Co., 921 F.2d 1343, 1350-1 (6th Cir. 1991). The non-occurrence of a condition precedent

is excused if a contracting party's wrongful conduct contributes materially to the non-occurrence

of the condition. Restatement (Second) of Contracts § 245. Moreover, federal courts in this

Sixth District hold that the conduct relating to a condition precedent or its alleged failure is

an issue of material fact precluding summary judgment. Fsgbank, N.A. v. Triumph

Investment Managers, LLC 2014 WL 11510597 (E.D. Tenn. 2014).

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Defendants acted in bad faith in failing to disclose overall poor financial condition of the

golf courses. Defendants never disclosed their own defaults with their lender of the forbearance

agreement they signed. Defendants acted in bad faith in failing to disclose unpaid, interrelated

debts and phantom income. Defendants failed to properly disclose this financial information and

material adverse conditions injuring HW. In fact, there was no issue with financing until June

2017, when HW learned that a large portion of Defendant Prestwick’s income was debt

forgiveness income from its failure to pay rent to Raintree. See Exhibit”9.” Again, this creates

phantom income, it shows up on a tax return as income, but no actual money is received. It is a

paper accounting entry. This materially and inaccurately inflates the income for Prestwick and

deflates it for Raintree. Prestwick gets phantom income and Raintree does not get paid on its

receivable for rent. Despite these financial misrepresentations, failure to disclose material

adverse conditions and breaches of the Agreements, HW still had the ability to purchase the

properties itself and had the financial ability to self-fund the purchase. See Exhibit “12.”

Defendants’ Motion should be denied.

2. AGREEMENT TERMINATED/LAPSED

Defendants argue ad nauseum that the Agreement for Raintree lapsed on December 30,

2016, but that is inaccurate. In order to terminate the Agreements, a formal notice must be sent in

accordance with the terms of the Agreements. See Sec. 10.5. The express terms required a written

letter sent by certified mail or federal express with signed, proof of delivery. No such notice was

ever sent3. The Agreements were never terminated in accordance with the Agreements.

The parties’ course of conduct shows they were all working to close the deals into mid-

2017. Under Delaware law, the parties can show modifications to contracts through explicit

3
Emails were sent, but then retracted. However, emails do not comply with the Agreements’ terms.
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agreements to modify or actions and course of conduct of the parties. MRPC Christiana LLC v.

Crown Bank, 2017 WL 6606587, (Sup. Ct. Del. 2017). Under Delaware law, the parol evidence

rule does not preclude evidence of a subsequent oral agreement that modifies an earlier contract.

Council of Unit Owners of Breakwater House Condominium v. Simpler, Del.Super., Civ. A. No.,

89C 09 007, Graves, J. (Feb. 18, 1993); Creative Builders, Inc. v. Jackson, 2000 WL 33654094

(2000). Furthermore, the parties to a contract may orally modify their agreement even though

the contract requires such modifications to be in writing. Creative at 7; see also W.E. Cleaver &

Sons, Inc. v. Darley Club, Del.Super., Civ. A. No. 84L-SE-26, Chandler, J. (Sept. 16, 1987). The

parties course of dealing in this matter, in addition to the signed Second Amendments, shows

that the purchase of the golf courses was ongoing well into mid-2017.

As discussed above, in May 2017, Defendants’ Attorney stated under oath that the

Agreements were in full force and effect and the anticipated closing for late May. Additionally,

Defendant Rainieri was physically present at township zoning meetings seeking approvals relating

to the properties in the spring of 2017. Defendant Rainieri signed applications for permits relating

to the properties in cooperation with HW in the spring of 2017. On May 3, 2017, Defendant

Rainieri signed another SBA application for HW under penalty of perjury. See Exhibit “8.”

Defendant Rainieri extended the sale of Prestwick until May 31, 2017 and stated that the Agreement

was “currently in effect.” See Exhibit “6.”

On June 15, 2017, the parties and their counsel were emailing regarding the deal. An

undisclosed problem had arisen caused by the intertwined nature of the golf courses. They were

both owned by Defendant Raintree, LLC. Defendant Raintree was charging Prestwick rent and then

later, when the rent was never paid, the debt was apparently forgiven. This occurred after the initial

Agreements were signed. This created reduced income for Raintree (an asset was lost) and phantom

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income for Prestwick, which materially changed the income and business of each golf course. See

Email chain4 Exhibit “9.” With all these dealings in June 2017, Defendants Attorney never claimed

there was no agreement. Defendants’ attorney never said stop emailing because the Agreements

lapsed. All the parties were proceeding with the deal in June 2017. Clearly, the Agreements had

not lapsed or been terminated because the parties were still working together to close the

transactions. Any “prohibition against amendment except by written change may be waived or

modified in the same way in which any other provision of a written agreement may be waived or

modified, including a change in the provisions of the written agreement by the course of conduct

of the parties.” Pepsi-Cola Bottling Co. of Asbury Park v. Pepsico, Inc., 297 A.2d 28 (1972). The

parties course of dealing and conduct (which is an issue of fact) shows a clear intent to proceed

with the sales. Petrick v. B-K Dynamics, Inc., 283 A.2d 696 (1971). Defendants’ motion should

be denied as a matter of law.

F. CITY OF GREEN CONTRACT IS VOID

Defendants claim to have a final contract with the City of Green for the sale of Raintree.

The Court should carefully examine that contract since it is void as a matter of law. R.C. 5705.41

The City Council has not approved that contract and the financial officer has not certified the

contract as required by Ohio law. See Dec. Nagar; See Contract. Under Ohio law, no city shall:

…make any contract or give any order involving the expenditure of money
unless there is attached thereto a certificate of the fiscal officer of the
subdivision that the amount required to meet the… has been lawfully
appropriated for such purpose and is in the treasury or in process of
collection to the credit of an appropriate fund free from any previous
encumbrances. This certificate need be signed only by the subdivision's fiscal
officer. Every such contract made without such a certificate shall be void, and
no warrant shall be issued in payment of any amount due thereon…

4
The Court should note that the Defendants Attorney is included as a recipient on each of these emails.
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R.C. 5705.41. The contract with the City of Green recently filed by the Defendants with this

Court is void. The contract with the City of Green does not contain a certification from the fiscal

officer, let alone a certificate that the funds have been appropriated for the purchase. The alleged

contract with the City of Green is void as a matter of law. R.C. 5705.41. Moreover, that

contract is contingent upon counsel’s approval. See Sec. 6.2. Thus, that contract is a red herring,

which misleads the Court into believing some other deal is final or imminent.

F. DEFENDANTS’ COUNTERCLAIMS

In addition to the aforementioned arguments, Defendants’ Counterclaims are either

barred or limited by the Agreements. In the event the sale of the:

Property is not consummated due to Purchaser’s default, Seller shall be entitled,


as its sole remedy, to terminate this Agreement and received the Deposit as
liquidated damages… A default by Purchaser shall be define as a breach of the
covenants of good faith and fair dealing and Purchaser’s refusal to close
transaction on grounds if all conditions precedent to close escrow have been
satisfied. Purchaser’s refusal to close escrow due to failure of a condition
precedent … shall not be construed as a default by Purchaser.

Sec. 6.1, Agreement. Thus, turning Defendants’ own arguments against themselves, there is no

breach or default if the sale does not go through due to the failure of a condition precedent.

Moreover, even if there had a been a breach, Defendants’ the sole and exclusive remedy is to

retain the deposits, nothing more.

III. CONCLUSION

As set forth herein above, this matter is brimming with disputed issues of material fact that

prohibit summary judgment. The Agreements were not terminated, let alone done so in accordance

with the terms of the Agreements. The financing issue is a red herring as HW had the funds

available to finance the sale itself without a bank. Most significantly, HW’s claims for money

damages survive regardless of any purported termination of the Agreements.

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Respectfully submitted,

/s/ Michael R. Stavnicky


Michael R. Stavnicky
(Reg. No. 0063726)
Christopher O’Connell
(Reg. No. 0075395)
Singerman, Mills, Desberg & Kauntz Co., L.P.A.
3333 Richmond Road, Suite 370
Beachwood, Ohio 44122
(216) 292-5807
F: (216)292-5867
mstavnicky@smdklaw.com
coconnell@smdklaw.com
Attorneys for Plaintiff

CERTIFICATE OF SERVICE

Pursuant to Fed. R. Civ. P. 5(d) and 5(e), I hereby certify that on this 19th day of July 2018, a

copy of the foregoing was delivered by electronic mail via this Court’s Electronic Filing System to

all parties or counsel of record.

/s/ Michael R. Stavnicky


Attorneys for Plaintiff

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