COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 69399 : HARVESTING SYSTEMS, LTD. : : JOURNAL ENTRY Plaintiff-Appellee : : and -vs- : : OPINION : THOMAS J. KILBANE : : Defendant-Appellant : : DATE OF ANNOUNCEMENT AUGUST 1, 1996 OF DECISION: CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court Case No. 214106 JUDGMENT: Affirmed. DATE OF JOURNALIZATION: __________________________ APPEARANCES: For Plaintiff-Appellee: For Defendant-Appellant: PAUL P. EYRE, ESQ. JAMES J. MCDONNELL, ESQ. BETH A. BRANDON, ESQ. 936 Terminal Tower Baker & Hostetler Cleveland, Ohio 44113 3200 National City Center Cleveland, Ohio 44114 -2- PATRICIA ANN BLACKMON, P.J.: Defendant-appellant Thomas Kilbane appeals a decision of the trial court for plaintiff-appellee, Harvesting Systems, Inc., on its declaratory judgment action. Kilbane assigns the following two errors for our review: I. THE TRIAL COURT ERRED BY ALLOWING THE PLAINTIFF TO WITHDRAW ITS JURY DEMAND AS TO COUNT 1 OF THE PLAINTIFF'S COMPLAINT AND AMENDED COMPLAINT. II. THE TRIAL COURT ERRED WHEN IT RULED UPON PLAINTIFF'S REMAINING COUNTS AND DEFENDANT'S COUNTERCLAIMS AND CROSS-CLAIMS. Having reviewed the record and the arguments of the parties, we affirm the decision of the trial court. The apposite facts follow. Harvesting Systems Limited (HSL) was a Florida limited partnership involved in the manufacture and sale of harvesting equipment used to pick oranges and other citrus fruit. Harvesting Management Corporation (HMC) was a general partner of HSL. Thomas Kilbane was a limited partner in HSL and loaned over $380,000 to HSL to assist the partnership with its financial difficulties. In February 1988, McKenna and Carney sought to raise additional money to pay the partnership's debts by diluting ownership of the company and selling additional shares. In order to go forward with the dilution, McKenna and Carney had to have the consent of all the partners to an amendment of HSL's partnership agreement. McKenna sent a Letter of Approval to all limited partners for signature and asked them to return it by March 10, -3- 1988. As of late June 1988, all of the partners except Kilbane had approved the dilution. In October 1988, Frank McKenna and John Carney, officers and controlling shareholders of HMC, began negotiating with Kilbane to extend the due date of a $380,000 loan Kilbane made to HSL. The loan, originally made in 1982 and due in April 1987, had already been extended twice once to July 1987 and then to November 1988. In exchange for the proposed extension, HSL offered Kilbane additional interest at the rate of one percent (1%) for each $225,000 of the amount loaned plus an extra one tenth of one percent (.1%) equity interest in the partnership. Because Kilbane's loan was for $380,000, he stood to receive an additional 1.7% of interest plus the extra one tenth of one percent (.1%) partnership equity. Kilbane refused to sign the loan extension unless he was guaranteed to receive ten percent (10%) additional equity in the partnership. On October 22, 1988, Carney asked Kilbane to dictate his "wish list" of what it would take to resolve the impasse. As a result of their conversation, a handwritten document dated 10/23/88 was drafted. The document was signed by Carney, McKenna, and Kilbane and contained the following provisions: 1. Pay 380,000 by 5/31/89 2. By 3/1/89; advise TJK of amt. capable to pay by 5/31/89 -- 3rd party guaranty til 5/31/89 Pay 50% by 5/31/89, 50% by 12/31/89 3. Balance due after 5/31/89 is due 12/31/89. TJK becomes gap lender at 1%/225,000 loan on balance due after 5/31/89 3a. (.10%) add equity if 2 & 3 not paid on time note to 12/31/90 -4- 3b. Int. paid mo. 4. TJK sign Harvesting Systems Consent letter today. 5. Revised loan documents by 10/30/88 On the following day, Kilbane insisted to Carney that he was to receive 10% equity in the partnership. Carney told Kilbane that he was to receive one-tenth of one percent. Thereafter, negotiations broke down. In January 1989 and again in July 1989, Kilbane sent McKenna a draft of a loan extension agreement reflecting a 10% equity interest to Kilbane. McKenna refused to sign the agreement. In December 1990, HSL tendered a check to Kilbane for the amount of the loan along with a release form. Kilbane refused the check and refused to sign the release, claiming he was entitled to a 10% equity. Thereafter, HSL deposited the money into an escrow account. On July 7, 1991, HSL filed a complaint against Kilbane for declaratory relief, fraud, breach of lender fiduciary duty, breach of partners duty, intentional interference with contract relations, and alternate dispute resolution. Kilbane filed counterclaims for 1 declaratory relief and fraud. He also filed a counterclaim for judgment on the promissory note representing the loan he made to HSL. Both parties requested a jury trial. Over Kilbane's objection, HSL was allowed to withdraw its jury demand shortly before trial. The issue of declaratory relief was heard by the trial court. At trial, the parties disagreed about 1 This counterclaim was erroneously labeled a cross-claim. -5- the meaning and intent of the October 23, 1988 document. Kilbane testified that, after extensive negotiations, McKenna and Carney agreed to give him the ten percent (10%) equity he requested and the handwritten document reflected that agreement at the time he signed it. He contended that McKenna altered the document after it was signed by Kilbane by adding a decimal point in front of the 10%, making it .10%. McKenna admitted adding the decimal point but contends that Kilbane was aware of the change at the time it was made. He also testified that he continually refused Kilbane's request for a 10% equity, telling him that such an amount was not authorized by the partnership. McKenna and Carney both testified that the October 23, 1988 handwritten document was never intended to be a contract but was only a written record of the positions taken by the parties during negotiations. The trial court ruled there was "no contract between the parties for either a .10% or a 10% equity interest in Harvesting Systems Limited." Judgment was entered in favor of HSL on its declaratory claim. Judgment was entered in favor of Kilbane on the other claims raised by the complaint. The trial court also ordered the release of the funds being held in escrow. Kilbane appealed the trial court's decision (Case No. 66910). However, his appeal was dismissed for lack of a final appealable order because the trial court failed to issue a ruling on Kilbane's counterclaims. In a July 6, 1995 nunc pro tunc journal entry, the -6- trial court ruled Kilbane's counterclaims moot. This appeal followed. In his first assignment of error, Kilbane argues the trial court erred by allowing HSL to withdraw its jury demand as to count one of the complaint. Under Civ.R. 39(A), when the court decides that no right to jury trial exists as to an issue upon which a trial by jury has been demanded, the action may properly be tried to the court. In this case, the trial court found that Kilbane had no right to a jury trial on the declaratory judgment action. Kilbane challenges this ruling, alleging that HSL's declaratory judgment claim raised a factual issue concerning the terms of the contract between Kilbane and HSL. We disagree. "To determine whether a particular action will resolve legal rights, and therefore give rise to a jury trial right, we examine both the nature of the issues involved and the remedy sought." Wooddell v. Int'l Broth. of Elec. Workers Local 71 (1991), 502 U.S. 93, 97. "Depending upon the character of the declaratory judgment sought, the action may be tried either to a jury or to a court." Erie Ins. Group v. Fisher (1984), 15 Ohio St.3d 380, 381. In its declaratory judgment action, HSL sought a determination by the trial court that there was no contract between HSL and Kilbane. Kilbane also filed a declaratory judgment action, seeking a determination of his rights under the contract. R.C. 2311.04 provides that issues of law must be tried by the court. The statute provides for a jury trial of issues of fact arising in action for the recovery of money only unless a jury -7- trial is waived, or unless all parties consent to a reference under the Rules of Civil Procedure. All other issues of fact shall be tried by the court subject to its power to order any issue to be tried by a jury or referred. Neither HSL nor Kilbane sought to recover any money on their claims for declaratory relief. Accordingly, no right to a jury trial under R.C. 2311.04 existed with respect to the declaratory judgment claims. "[I]n equity actions, there is no right to a trial by jury." Ohio Bd. of Dietetics v. Brown (1993), 83 Ohio App.3d 242,247. The trial court properly decided the declaratory judgment issue without a jury. Kilbane also argues the trial court erred by ruling on HSL's other counts and Kilbane's counterclaims. Kilbane argues the trial court heard evidence only as to HSL's declaratory judgment claim, then later ruled on the remaining counts without taking additional evidence. The trial court issued the following rulings on the other claims raised in the action: This court further finds that Plaintiff has failed to prove by a preponderance of the evidence that Defendant acted with intent to defraud as alleged in Count Two; that Kilbane acted maliciously; or in bad faith in breach of a fiduciary duty as alleged in Count 3; or in breach of a partner's duty as alleged in Count 4; or with intent to interfere with contract relations as alleged in Count 5; or in violation of a duty to engage in alternative dispute resolution as alleged in Count 6. Judgment entry of Jan. 21, 1994 -8- Defendant's counterclaim for declaratory relief is moot. This court found for Plaintiff on its complaint for declaratory relief on the identical issue that is contained within Defendant's counterclaim; further, Defendant's "cross claim" is moot. This court ordered the release of funds due Defendant under the promissory note that was the subject of Defendant's "cross-claim"; finally, Defendant's counterclaim for fraud is moot. This court declared that no contract existed between the parties for either a .10% or 10% equity interest in the subject corp, Harvesting Systems Ltd. Journal entry of July 6, 1995. Civ.R. 42(B) provides that a trial court may order a separate trial of any counterclaim either on its own motion or on the motion of the plaintiff or defendant when a separate trial would be conducive to expedition and economy. Staff Notes to Civ.R. 42(B). In this case, the trial court conducted a trial on the declaratory judgment issue and ruled that no contract existed between HSL and Kilbane. Kilbane's counterclaim for fraud was considered separately. The fraud counterclaim was dependent upon a finding that there was a valid contract between HSL and Kilbane. Once the court found there was no contract, Kilbane's fraud counterclaim was moot. In another counterclaim, Kilbane sought payment of the money he loaned to HSL. The evidence at trial revealed HSL placed the money into an escrow account after Kilbane refused their tender of payment. In its journal entry, the court ordered the release of the money held in escrow. Because the trial court had already -9- ordered the release of the money sought by Kilbane's counterclaim, the counterclaim was moot. Finding no merit to any of Kilbane's assignments of error, we affirm the decision of the trial court. -10- It is ordered that Appellee recover of Appellant its costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Common Pleas Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. Exceptions. NAHRA, J., and O'DONNELL, J., CONCUR. PATRICIA ANN BLACKMON PRESIDING JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof this document will be stamped to indicate journaliza- .