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Holiday Properties Acquisition Corp. v. Lowrie3/12/2003
DECISION AND JOURNAL ENTRY
This cause was heard upon the record in the trial court. Each error assigned has been reviewed and the following disposition is made:
Appellants, Scott Lowrie ("Lowrie") and U.S. Coaters (together "Appellants"), appeal from a judgment rendered in the Summit County Court of Common Pleas, in favor of Appellee, Holiday Properties Acquisition Corp. ("Appellee"). We affirm.
I.
Chempower, Inc. ("Chempower") hired Lowrie as corporate counsel, a director position, in January, 1990. Thomas Kukk ("Kukk"), the president of Chempower, and Mark Rochester were the majority owners of Chempower. In 1991, Kukk appointed Lowrie as general manager of Advance Coil Industries ("ACI"), an unincorporated subsidiary of Chempower. In 1996, Lowrie resigned as corporate counsel and served Chempower solely as the general manager of ACI until Chempower terminated his employment in 1998. While employed by Chempower, Lowrie incorporated his own company, U.S. Coaters, and solicited a partner and customers for his company, as well as located a building to house the operation. U.S. Coaters commenced business in May, 1999.
In 1997, American Eco Holding Corporation ("American Eco") purchased Chempower and operated Chempower as a subsidiary. In September 1999, Chempower filed suit against Appellants, claiming misappropriation of trade secrets, breach of fiduciary duty, and tortious interference with business relations. Appellants counterclaimed for abuse of process.
On August 4, 2000, American Eco filed for Chapter 11 protection in the United States Bankruptcy Court for the District of Delaware, which stayed the action in this case. Ultimately, the bankruptcy trustee approved the sale of some Chempower assets to Appellee, including the case at bar. The sale resulted in the case being reinstated, and Appellee filed for summary judgment on an amended complaint adding a count for breach of contract and deceptive trade practices. Appellants filed a motion to dismiss for lack of jurisdiction. On May, 9, 2001, the trial court granted Appellee summary judgment on the breach of contract claim and on all counts of Appellants' counterclaim, and granted partial summary judgment to Appellants on the misappropriation of trade secrets and deceptive trade practices claims. Appellants' motion to dismiss the remaining claims was denied.
The case went to trial, with the jury finding for Appellee and the court ordering Lowrie to compensate Appellee the sum of $708,000 with interest, and ordering both Appellants to compensate Appellee the sum of $2,500,000. Appellee moved for an award of prejudgment interest, which was denied.
Appellants timely appealed, presenting seven assignments of error. We rearrange the assignments of error and combine the third and fourth for ease of discussion. Appellee cross-appealed, raising one assignment of error.
II.
Appellants' Assignment of Error No. 1
"the trial court erred as a matter of law in determining that the claims made in this lawsuit were assignable to Appellee and that Appellee was the real party in interest and the trial court erred in instructing the jury on the law of assignment."
Appellants argue that the trial court erred in a May 9, 2001 order denying Appellants' motion to dismiss because Delaware law is applicable, and Delaware law disallows the assignment of Chempower's claim to Appellee. Further, Appellants state that even if Ohio law is applicable, the assignment is likewise illegal under Ohio law. Appellants' arguments are not well taken.
It is axiomatic that an action must be prosecuted by the real party in in
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