COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 69992 LOUIS A. FRANGOS : : Plaintiff-appellant : : JOURNAL ENTRY -vs- : AND : OPINION MANUEL CHAVEZ, SR., ET AL. : : Defendants-appellees : : DATE OF ANNOUNCEMENT OF DECISION: JANUARY 30, 1997 CHARACTER OF PROCEEDING: Civil appeal from Court of Common Pleas Case No. CV-279813 JUDGMENT: Affirmed. DATE OF JOURNALIZATION: APPEARANCES: For Plaintiff-Appellant: For Defendants-Appellees: GUS FRANGOS, ESQ. BRIAN J. ESSI, ESQ. 2200 Illuminating Building 140 Public Square, Suite 512 55 Public Square Cleveland, Ohio 44114 Cleveland, Ohio 44113 - 2 - DYKE, J.: Plaintiff Louis A. Frangos appeals from the judgment entered in favor of defendants in his action for breach of a partnership agreement and related causes of action. For the reasons set forth below, we affirm. On November 3, 1994, plaintiff filed this action against Manuel Chavez, Sr. (hereafter referred to as "Chavez"), Manuel Chavez, Jr., Robert Chavez, J. Robert Brown, Martin A. Chavez, Cleveland Prospect Street, Chavez Properties, Parking Company of America and two unnamed parking lot operators, and set forth four claims for relief. In the first claim, plaintiff alleged that he obtained a partnership interest "equivalent to a one-sixth shareholder and/or a legal, proprietary and/or equitable interest in the land and/or business ventures" of the individual defendants. Plaintiff further alleged that these defendants failed to recognize that interest, and he prayed for a declaration of rights from the court. In his second claim for relief, plaintiff maintained that defendants' failure to account to him pursuant to his asserted interest constituted a breach of fiduciary duty which required the imposition of a constructive trust. In his third claim for relief, plaintiff prayed for a dissolution of the partnership, and in his fourth claim, plaintiff alleged that defendants' conduct consti- tuted a breach of the alleged partnership contract. Defendants denied liability and asserted that plaintiff was simply an employee of Parking Company of America and not a partner - 3 - of that entity. In addition, Chavez filed a counterclaim against plaintiff seeking recovery of $73,000 which he claimed had been advanced to him against future profits which did not materialize, plus recovery of an additional $950. Cleveland Prospect Street and the unnamed defendants were subsequently dismissed from the action and the matter proceeded to a bench trial on October 25, 1995. Plaintiff's evidence established that while working as a real estate consultant in 1987 or 1988, he met Chavez who was contem- plating expanding his company, Parking Company of America, to include the Cleveland area. After a series of meetings, Chavez invited him to view his operations in Cincinnati, and subsequently announced to his sons that plaintiff "would be their Cleveland partner in all land deals." According to plaintiff, Chavez agreed to give him a one-sixth interest in such deals and his contribution to the partnership was his extensive knowledge of the Cleveland real estate market and experience in structuring land transactions. Plaintiff acknowledged that Chavez's other partners did not affirm Chavez's announcement but he explained that Chavez had the "last word" on the matter. Following the meeting in Cincinnati, the parties met in order to reduce the agreement to writing. Plaintiff testified that a draft of such agreement was prepared but never executed. Nonethe- less, plaintiff located properties for defendants to lease, supervised renovation projects and managed completed parking lots for defendants. - 4 - Plaintiff was initially paid $500 per month in salary plus $2,500 per month in a "draw." In November 1989, plaintiff's monthly salary was increased to $1,000 and his monthly "draw" was decreased to $2,000, then again reduced to $500. Plaintiff further established that he arranged for the lease of a Travel Lodge located on Euclid Avenue at East 33rd Street. Chavez told plaintiff that the two men "will do this together," or exclusive of the other defendants, in a fifty/fifty arrangement. Thereafter, the lessor paid Chavez $100,000 to terminate the lease. Chavez refused to distribute half of the proceeds to plaintiff and instead gave him one-sixth of the proceeds with the following memo: 1. I would find it very difficult to cut Chavez Properties out. 2. Our agreement with you is you own or you are 1/6 partner of all parking and land deals. You are one of six partners in Cleveland. We have an agreement with you. Can we change (reduce your interest)? No, I don't think so. 3. $6,000 investment that I made for contribu- tions and option was for Chavez Properties even though they had absolutely no liability. I thought we would do something for the firm we work with. That's where "let's you and I do it" came from but I don't know how we could justify excluding them. I suppose if it had been $20,000 we could have even though its tough to justify. * * * 4. Because you are a first class individual, I wanted you in our company. I also told you that you would have a net value of $1 million in 10 years. I still believe that. It is unfortunate that we have had this misunderstanding. I don't think either of us put that much importance on - 5 - money. I know that for me, good relationships have been a top priority in my life and that has served me well. TOTAL $100,000.00 NET 92,500.00 One-sixth: $ 15,416.67 In a subsequent memo, Chavez wrote, "... I am happy to have a partner like you." Chavez also introduced plaintiff to others as his Cleveland partner. With regard to damages, plaintiff testified that one of the properties which was the subject of a Cleveland land deal was originally purchased for $465,000 and was presently worth $700,000 or $800,000. A second property likewise had equity of $300,000 or $400,000. Plaintiff conceded, however, that defendants had recently abandoned two or three of their lots. Finally, plaintiff's evidence established that he arranged for the Chavezes, acting through Northeast Ohio Parking Company, to invest in properties and manage demolition undertaken by the Greater Cleveland Domed Stadium Corporation. According to plaintiff, the transaction yielded a return of the original investment plus approximately $3,000 per month for three years. The arrangement ended, however, when it became apparent that the city would not proceed with plans for a domed stadium. A loss of revenue ensued, and according to plaintiff, Chavez stated that as a partner, plaintiff would not be paid. He was subsequently locked out of his office and the parties terminated their affiliation. - 6 - Manuel Chavez, Sr. testified that in preparing the July 3, 1990 memo to plaintiff which indicated that plaintiff is "1/6 partner of all parking and land deals" he wished to convey to plaintiff that Chavez can give him a 1/6 interest in Cleveland operations "if we can get a business going." (Tr. 118). None- theless, there was payment for a transaction which had already been completed. He further asserted that he would not have selected Frangos, a "stranger," as a partner for his corporation. He also denied that there was an oral partnership agreement, stating that throughout his career, he had explicitly indicated money distri- butions and responsibilities in writing. There was no writing in this instance, but according to the witness, he and plaintiff had "an agreement to split a certain ownership." (Tr. 132). He could not recall whether he had ever introduced plaintiff to anyone as his "partner." He further indicated that he has, in the past, referred to his co-venturers as "partners" for certain specific deals and through such "partnerships" disbursed additional com- pensation for the venture. (Tr. 195). Chavez testified, however, that the draw amounts were to be paid back against future profits. (Tr. 216). Thereafter, on November 22, 1995, the trial court issued a written opinion in which it found as follows: *** there was not sufficient evidence presented by the plaintiff to establish a Partnership under the law; no agreement among all of the alleged partners, no competent evidence to establish a Constructive Trust; no specific damages established to a reasonable certainty *** there was no Partnership but there was a contract for services - 7 - established between Manuel Chavez, Sr. and Louis A. Frangos. In addition, the court found for plaintiff on Chavez's counter- claim. Plaintiff now appeals and assigns two errors for our review. Plaintiff's first assignment of error states: THE TRIAL COURT ABUSED ITS DISCRETION BY REFUSING TO PERMIT THE PLAINTIFF TO AMEND HIS COMPLAINT TO CONFORM TO THE EVIDENCE ADDUCED AT TRIAL RESPECTING DEFENDANT'S FRAUD. Within this assignment of error, plaintiff maintains that the trial court erred in failing to permit him to amend his complaint to conform to the evidence adduced at trial in order to include a complaint for fraud stemming from the Travel Lodge deal. According to plaintiff, this transaction "involved only Mr. Frangos and Mr. Chavez personally in which Mr. Fangos and Mr. Chavez were to be equal fifty percent equity participants." Later, Chavez insisted that the transaction also included Chavez Properties and the other five individual partners, then provided plaintiff with one-sixth of the profits. At trial, Chavez acknowledged that he did not distribute the remaining five-sixths of the profits to the partners, but rather, deposited this portion in one of his individual bank accounts. Plaintiff therefore maintained, in a post trial brief, that the pleadings should be amended to conform to the evidence adduced at trial as the alleged fraud was first uncovered at trial then was expressly tried without objection by - 8 - either party. The trial court did not grant the motion, and instead entered judgment for defendants on the causes of action set forth in the complaint. We therefore presume that it was overruled. See Brannan v. Fowler (1995), 100 Ohio App.3d 577, 581. The amendment of pleadings to conform to the evidence presented at trial is governed by Civ. R. 15(B) which provides in relevant part as follows: (B) Amendments to conform to the evidence. When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment. *** If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and objecting party fails to satisfy the court that the admission of such evidence would prejudice him in his action or defense on the merits. The court may grant a continuance to enable the objecting party to meet such evidence. The decision to grant or deny a motion to amend pleadings to conform to the evidence will not be disturbed in the absence of a gross abuse of discretion. Spisak v. McDole (1984), 15 Ohio St.3d 62, 63. In this instance, the document submitted with regard to the Travel Lodge transaction was offered to support plaintiff's claim that he was a one-sixth partner on all land ventures. Indeed, plaintiff's testimony did not address the elements of fraud as such claim would relate to this transaction. There was therefore little - 9 - advanced notice that this issue of fraud associated with the transaction had entered the case and it was not thoroughly developed below. We are therefore unable to conclude that the trial court abused its discretion in its implicit denial of the motion to amend the pleadings to add this additional claim of fraud. The first assignment of error is overruled. Plaintiff's second assignment of error states: THE TRIAL COURT'S FINDING THAT A PARTNERSHIP BETWEEN PLAINTIFF AND DEFENDANT DID NOT EXIST AND ALSO NOT FINDING THAT DEFENDANT COMMITTED FRAUD WAS AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE. Plaintiff next challenges the trial court's conclusion that he had failed to prove that he and the six individual defendants had formed a partnership. With regard to our standard of review, we note that judgments supported by some competent, credible evidence will not be reversed by a reviewing court as being against the manifest weight of the evidence. Berger v. Dare (1994), 99 Ohio App.3d 103, 106. With regard to the substantive law regarding partnerships, we further note that R.C. 1775.05 defines a partnership as an association of as co-owners of a business for profit. R.C. 1775.06 sets forth rules by which to determine the existence of a partnership and provides in relevant part as follows: - 10 - (C) The sharing of gross returns does not of itself establish a partnership, whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived. (D) The receipt by a person of a share of the profits of a business is prima-facie evidence that he is a partner in the business, but no such interference shall be drawn if such profits were received in payment: (1) As a debt by installments or otherwise. (2) As wages of an employee or rent to a landlord. (3) As an annuity to a widow or representative of a deceased partner; (4) As interest on a loan, though the amount of payment very with the profits of the business. (5) As the consideration for the sale of good will of a business or other property by installments or otherwise. Thus, participation in profits is not necessarily dispositive of whether a partnership has been formed. Berger v. Dare, supra, at 106. The evidence must show that the participants shared the profits as principals with mutual authority to bind the business. Id. It is axiomatic, however, that no person can become a member of a partnership without the consent of all of the partners. Seigel v. Kaplan (1975), 43 Ohio App.2d 171, 174; Graines v. Miller (February 18, 1993), Cuyahoga App. No. 63608, unreported. In this instance, plaintiff presented evidence that Manuel Chavez, Sr. agreed that plaintiff was to be a "1/6 partner of all parking and land deals." In addition, plaintiff demonstrated that he was paid in the form of draws against future earnings, consistent with a partnership, cf. deVillers v. Sliwinski (May 20, - 11 - 1993), Pickaway App. No. 92 CA 27, unreported. Nonetheless, plaintiff did not demonstrate that had mutual agency and control over the business, that he had the right to control the direction or operation of the business, or that he had decision making power within the business. Most significantly, plaintiff presented no evidence that the remaining "partners" mutually assented to the formation of the partnership. Indeed, the evidence indicated that the other "partners" would not have assented to such arrangement. Accordingly, we are unable to determine that the trial court erred in determining that plaintiff's proof was insufficient. The second assignment of error is overruled. Affirmed. - 12 - It is ordered that appellees recover of appellant their 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. SWEENEY, C.J., AND O'DONNELL, J., CONCUR ANN DYKE JUDGE N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc.App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E) unless a motion for reconsideration with supporting brief, per App.R. 26(A), is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the .