[Cite as Parmater v. Internet Brands, Inc., 2015-Ohio-253.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Eric Parmater, :
Plaintiff-Appellant, :
No. 14AP-391
v. : (C.P.C. No. 13CV-1637)
Internet Brands, Inc. et al., : (REGULAR CALENDAR)
Defendants-Appellees. :
D E C I S I O N
Rendered on January 27, 2015
Cooper & Elliott, LLC, Rex H. Elliott, and Charles H.
Cooper, Jr., for appellant.
Taft Stettinius & Hollister, LLP, and Justin D. Flamm, for
appellee, Internet Brands, Inc.
APPEAL from the Franklin County Court of Common Pleas
LUPER SCHUSTER, J.
{¶ 1} Plaintiff-appellant, Eric Parmater, appeals from a judgment of the Franklin
County Court of Common Pleas granting defendant-appellee, Internet Brands, Inc.'s
("Internet Brands"), motions for summary judgment and denying Parmater's motion to
compel discovery.
I. Facts and Procedural History
{¶ 2} In 2002, Parmater and David Hunegnaw co-founded GrooveJob.com, Inc.
("GJ Inc."), which owned and operated GrooveJob.com, a job-posting website for
seasonal and part-time jobs. Hunegnaw owned 100 shares and Parmater owned 99
shares. After a business dispute, Hunegnaw, as the majority shareholder, removed
Parmater from GJ Inc.'s board of directors, as well as from his position as vice president,
in August 2002. In December 2002, the Ohio Secretary of State canceled GJ Inc. for its
No. 14AP-391 2
failure to maintain a statutory agent as required under R.C. 1701.07. In February 2007,
the secretary of state canceled GJ Inc.'s articles of incorporation for its failure to file
required tax reports under R.C. 5733.20.
{¶ 3} Hunegnaw formed a new company in 2004, GrooveJob, LLC ("GJ LLC")1
GJ LLC continued to operate the GrooveJob.com website.
{¶ 4} In October 2008, Hunegnaw and GJ LLC agreed to sell Internet Brands the
website GroveJob.com and its related assets, including "trademarks, service marks, trade
names, copyrights and * * * all other intellectual property and technology comprising the
Website and its business." (R. 69, exhibit C, 1.) As described in the asset purchase and
sale agreement ("purchase agreement") Internet Brands paid GJ LLC and Hunegnaw
$850,000.
{¶ 5} Parmater initially sued both Hunegnaw and Internet Brands in May 2009,
but voluntarily dismissed the complaint without prejudice. Parmater then refiled his
claims in February 2013 against Internet Brands, Hunegnaw, and Hunegnaw Enterprises,
LLC. Parmater brought claims individually, and on behalf of "nominal plaintiff" GJ Inc.,
for conversion, breach of fiduciary duty, misappropriation of corporate opportunity, civil
conspiracy, trademark infringement, deceptive trade practices, unfair competition, and
unjust enrichment. Parmater notes in the complaint that "GrooveJob.com is a Plaintiff in
this case only to the extent necessary to provide the relief sought herein. * * * Parmater
has brought this action individually and, in the alternative, on behalf of GrooveJob.com to
assist in the winding up of its affairs." (R. 9, Complaint, 3, fn. 1.)
{¶ 6} Parmater moved for default judgment on June 13, 2014 with respect to all
claims against Hunegnaw for his failure to appear in the case. The trial court granted
default judgment against Hunegnaw and awarded Parmater approximately $1.3 million in
damages. Internet Brands filed two motions for partial summary judgment; one with
respect to Parmater's claims brought on behalf of "nominal plaintiff" GJ Inc., and another
with respect to Parmater's individual claims. On January 28, 2014, the trial court granted
both motions for summary judgment. Parmater timely appealed.
1After Internet Brands purchased the website and its related assets, GJ LLC was renamed Hunegnaw
Enterprises, LLC.
No. 14AP-391 3
II. Assignments of Error
{¶ 7} Parmater assigns the following three errors for our review:
[1.] The Trial Court Erred In Granting Internet Brands'
Motion for Partial Summary Judgment (June 25, 2013)
Against Mr. Parmater's Claims On Behalf of GJ INC.
[2.] The Trial Court Erred In Granting Internet Brands'
Motion [For] Summary Judgment (November 19, 2013)
Against Mr. Parmater's Individual Claims.
[3.] The Trial Court Erred In Denying [Mr. Parmater's]
Motion to Compel (December 3, 2013).
III. Discussion
{¶ 8} In Parmater's first and second assignments of error, he argues the trial court
erred in granting Internet Brands' motions for summary judgment with respect to both
Parmater's individual claims and those claims brought on behalf of "nominal plaintiff" GJ
Inc.
{¶ 9} An appellate court reviews a summary judgment under a de novo standard.
Coventry Twp. v. Ecker, 101 Ohio App.3d 38, 41 (9th Dist.1995). Summary judgment is
proper only when the party moving for summary judgment demonstrates: (1) no genuine
issue of material fact exists, (2) the moving party is entitled to judgment as a matter of
law, and (3) reasonable minds could come to but one conclusion and that conclusion is
adverse to the party against whom the motion for summary judgment is made, that party
being entitled to have the evidence most strongly construed in its favor. Civ.R. 56(C).
{¶ 10} Under Civ.R. 56(C), the moving party bears the initial burden of informing
the trial court of the basis for the motion and identifying those portions of the record
demonstrating the absence of a material fact. Dresher v. Burt, 75 Ohio St.3d 280, 293
(1996). The moving party, however, cannot discharge its initial burden under this rule
with a conclusory assertion that the nonmoving party has no evidence to support the
nonmoving party's claims. Id.; Vahila v. Hall, 77 Ohio St.3d 421, 429 (1997). Once the
moving party discharges its initial burden, summary judgment is appropriate if the
nonmoving party does not respond, by affidavit or otherwise provided in Civ.R. 56, with
specific facts showing that a genuine issue exists for trial. Dresher at 293; Civ.R. 56(E).
No. 14AP-391 4
A. First Assignment of Error – Claims by "nominal plaintiff" GJ Inc.
{¶ 11} In his first assignment of error, Parmater argues the trial court erroneously
concluded "nominal plaintiff" GJ Inc. did not have standing to bring claims against
Internet Brands. Specifically, Parmater argues three separate grounds for his claim that
even though the secretary of state canceled GJ Inc.'s articles of incorporation, Parmater
may still bring claims on behalf of GJ Inc. We disagree.
{¶ 12} First, Parmater argues for the first time on appeal that the cancelation of GJ
Inc.'s articles of incorporation does not equate to a cancelation of the corporation itself
and cites Eversman v. Ray Shipman Co., 115 Ohio St. 269 (1926) in support of this
argument. Because Parmater failed to raise this argument before the trial court, he has
waived it for purposes of appeal. Rhoades v. Chase Bank, 10th Dist. No. 10AP-469, 2010-
Ohio-6537, ¶ 24, citing State ex rel. O'Brien v. Messina, 10th Dist. No. 10AP-37, 2010-
Ohio-4741, ¶ 17, citing Porter Drywall, Inc. v. Nations Constr., LLC, 10th Dist. No. 07AP-
726, 2008-Ohio-1512, ¶ 11, citing State v. Childs, 14 Ohio St.2d 56 (1968), paragraph three
of the syllabus.
{¶ 13} Second, Parmater argues that under R.C. 1701.88, he was authorized to
bring claims on behalf of GJ Inc. as part of the "winding up" of GJ Inc.'s corporate affairs.
At the time of the purchase agreement, R.C. 1701.88(A) provided, in part, that:
When a corporation is dissolved voluntarily, when the articles
of a corporation have been canceled, or when the period of
existence of the corporation specified in its articles has
expired, the corporation shall cease to carry on business and
shall do only such acts as are required to wind up its affairs, or
to obtain reinstatement of the articles * * * and for such
purposes it shall continue as a corporation.2
See also Columbia Real Estate Title Ins. v. Columbia Title Agency, Inc., 11 Ohio App.3d
284 (10th Dist.1983); Buckeye Power Sales Co. v. Hightower, 10th Dist. No. 92AP-196
(July 2, 1992) ("Under R.C. 1701.88(A), when the articles of incorporation are canceled by
2 Before the trial court, both the parties and the court itself relied on the current version of R.C.
1701.88(A), which provides a five-year period for a canceled corporation to "wind up its affairs"; a
provision not in the version of the statute at the time of the purchase agreement. Parmater now argues
the court improperly relied on the previous version. However, regardless of the version relied on, the
outcome would not change because Parmater's claims brought on behalf of "nominal plaintiff" GJ Inc.
were not for the purpose of winding up corporate affairs, a limitation present in both versions of R.C.
1701.88(A).
No. 14AP-391 5
the Secretary of State or otherwise, the authority of the corporation to do business
ceases.").
{¶ 14} Winding up affairs is "the process of settling the accounts and liquidating
the assets of a partnership or corporation, for the purpose of making distribution of net
assets to shareholders or partners and dissolving the concern." Consol. Freightways
Corp. v. Allred, 10th Dist. No. 91AP-747 (Dec. 10, 1991), citing Black's Law Dictionary
(5th Ed.1979). When winding up corporate affairs, R.C. 1701.88(D) provided that the
"directors of the corporation and their successors shall act as a board of directors * * *
until the affairs of the corporation are completely wound up. * * * [T]he directors shall
proceed as speedily as is practicable to a complete winding up of the affairs of the
corporation [and] * * * may exercise all the authority of the corporation."
{¶ 15} Even if Parmater was attempting to wind up the affairs of GJ Inc. through
this lawsuit, he has no authority to do so. Parmater was removed from the board of
directors, as well as his position as vice president, in August 2002. Indeed, Parmater
concedes that because he was removed from his positions, he "was without authority to
take action to reinstate GJ Inc." (Parmater's brief, 19.) Because Parmater is not a
director or successor, he has no authority to wind up corporate affairs on GJ Inc.'s behalf.
{¶ 16} Third, Parmater argues that under R.C. 1701.13(H), Internet Brands was not
a party entitled to challenge Parmater's authority to maintain a claim. R.C. 1701.13(H)
provides:
No lack of, or limitation upon, the authority of a corporation
shall be asserted in any action except (1) by the state in an
action by it against the corporation, (2) by or on behalf of the
corporation against a director, an officer, or any shareholder
as such, (3) by a shareholder as such or by or on behalf of the
holders of shares of any class against the corporation, a
director, an officer, or any shareholder as such, or (4) in an
action involving an alleged overissue of shares. This division
shall apply to any action brought in this state upon any
contract made in this state by a foreign corporation.
However, once a corporation has been canceled, as GJ Inc. had been, R.C. 1701.13(H) is
inapplicable. See Mack Constr. Dev. Corp. v. Austin Smith Constr. Co., 65 Ohio App.3d
402 (12th Dist.1989); Superior Piping Contrs., Inc. v. Reilly Industries, Inc., 8th Dist. No.
82567, 2003-Ohio-6347, ¶ 17-21.
No. 14AP-391 6
{¶ 17} Because GJ Inc.'s cancellation precludes any action by the corporation
except winding up its affairs and because Parmater is not authorized to wind up GJ Inc.'s
affairs, we find the trial court did not err in granting Internet Brands' motion for summary
judgment with respect to those claims Parmater brought on behalf of "nominal plaintiff"
GJ Inc. Accordingly, we overrule Parmater's first assignment of error.
B. Second Assignment of Error – Parmater's Individual Claims
{¶ 18} In his second assignment of error, Parmater asserts that the trial court erred
in finding Internet Brands was entitled to summary judgment with respect to Parmater's
individual claims.3 We disagree.
1. Conversion
{¶ 19} On appeal, Parmater argues that by entering the purchase agreement,
Internet Brands converted GJ Inc.'s assets, and, as a shareholder, Parmater can bring a
claim for conversion against Internet Brands.
{¶ 20} "[C]onversion is the wrongful exercise of dominion over property to the
exclusion of the rights of the owner, or withholding it from his possession under a claim
inconsistent with his rights." Joyce v. Gen. Motors Corp., 49 Ohio St.3d 93, 96 (1990).
To succeed on a claim for conversion, a plaintiff must show (1) actual or constructive
possession, or an immediate right to possession of the property, (2) a defendant's
wrongful interference with plaintiff's right to possession, and (3) damages. Dunlop v.
Ohio Dept. of Job & Family Servs., 10th Dist. No. 11AP-929, 2012-Ohio-1378, ¶ 8, citing
Dice v. White Family Cos., Inc., 173 Ohio App.3d 472, 2007-Ohio-5755, ¶ 17 (2nd Dist.).
Here, there is no evidence Parmater has established any of the three elements.
{¶ 21} Parmater asserts that by entering the purchase agreement, Internet Brands
wrongfully interfered with his right to possession of the GrooveJob.com website.
Parmater claims the purchase agreement itself "constitutes a wrongful act by Internet
Brands, in * * * combination with Hunegnaw Enterprises and Hunegnaw." (R. 9, ¶ 49.)
3 Parmater initially argues that as a minority shareholder of a close corporation he may bring an action
directly against the majority shareholder for a breach of a heightened fiduciary duty and that we should
extend that right to bring claims against Internet Brands. While both parties briefed this issue, Parmater
conceded before the trial court that the Supreme Court of Ohio's decision in DeVries Dairy L.L.C. v.
White Eagle Coop. Assn., Inc., 132 Ohio St.3d 516, 2012-Ohio-3828, precludes him from asserting his
claims for breach of fiduciary duty and misappropriation of corporate opportunity against Internet
Brands. Accordingly, the trial court found Parmater had dismissed these claims, rendering them moot.
(R. 91, Jan. 28, 2014 Decision and Entry, 6.)
No. 14AP-391 7
However, the purchase agreement itself contains no evidence of any wrongful interference
by Internet Brands. Furthermore, Parmater has provided no evidence of any wrongful
acts by Internet Brands. When asked what acts Internet Brands, Hunegnaw, and GJ LLC
committed to deprive him of any assets, Parmater responded, "I don't have any specific
acts." (Parmater Deposition, 93.) Parmater testified at deposition that he had no
knowledge of any wrongful act of Internet Brands, nor did he know of any way Internet
Brands was acting to injure him. Because Parmater cannot point to specific facts
demonstrating Internet Brands interfered with Parmater's right to possession of the
website, his conversion claim fails and we need not address the other elements of his
conversion claim.
2. Unfair Trade Practices: Trademark Infringement, Deceptive Trade
Practices, and Unfair Competition
{¶ 22} Parmater argues that by entering the purchase agreement and operating the
website, Internet Brands is liable for trademark infringement, deceptive trade practices,
and unfair competition. Parmater also asserts he, individually, has an ownership interest
in the website and its related intellectual property assets. More specifically, Parmater
contends he granted GJ Inc. a "non-exclusive license" and because there is no evidence of
a written transfer of his ownership interest in unspecified "copyrighted material" from
Parmater to GJ Inc., under federal law, he continues to own all such rights in the
"copyrighted material." As explained below, these claims fail.
{¶ 23} Parmater has presented no evidence or any specific facts that he has any
ownership interest in the trademarks or copyrights associated with GJ Inc. or the website.
To the contrary, the evidence in the record demonstrates that any trademarks and
copyrights were the property of GJ Inc. In his complaint, Parmater alleged that GJ Inc.
"[owned], and continues to own" the website and its "Related Assets." (R. 9, ¶ 11.)
Parmater defines "Related Assets" to include proprietary information and intellectual
property such as "copyright, tradenames, trademarks, service marks, trade dress and
trade secrets." (R. 9, ¶ 10.) Further, Parmater stated at his August 2013 deposition that it
was his understanding he did not own any copyrighted material related to the website.
Parmater testified that in late 2001 or January 2002, he attempted to register a copyright
related to the website. Internet Brands' counsel then asked, "Were you filing that on your
No. 14AP-391 8
own personal behalf or on behalf of the GrooveJob.com Inc. entity"? Parmater
responded, "GrooveJob.com, Inc." (Parmater Deposition, 51.) Parmater reaffirmed this
understanding when asked whether he believed he personally owned the copyright
interests, stating that "GrooveJob.com [Inc.] owned them and I'm a major shareholder in
the company." (Parmater Deposition, 56.) Therefore, we find Parmater has presented no
specific evidence that would create an issue of material fact as to GJ Inc.'s ownership of
the website's trademarks and copyrights. Accordingly, Internet Brands is entitled to
judgment as a matter of law on Parmater's trademark infringement claim.
{¶ 24} Claims for unfair and deceptive trade practices turn on " 'whether the
defendant's use of the disputed mark is likely to cause confusion among consumers
regarding the origin of the goods offered by the parties.' " Reed Elsevier, Inc. v.
TheLaw.net Corp., 269 F.Supp.2d 942, 951 (S.D.Ohio 2003), quoting Daddy's Junky
Music Stores, Inc. v. Big Daddy's Family Music Cntr., 109 F.3d 275, 280 (6th Cir.1997).
Here, Parmater bases his unfair competition and deceptive trade practice claims on his
allegation that Internet Brands' continued and unauthorized use of the "GrooveJob.com"
trademark is likely to cause consumer confusion and misunderstanding as to the origin,
source, affiliation, or ownership of the website. (R. 9 at 18.) First, Parmater has not
established any facts demonstrating consumer confusion. Parmater admitted as much
during his deposition, testifying as follows:
Q: Do you know of anyone in the world who has been
confused about who owns or operates GrooveJob.com,
the website?
A: No. Me.
Q: Anyone besides you?
A: No.
(Parmater Deposition, 85.) Parmater offers nothing more than the broad allegation that
"anyone that uses the Website is necessarily confused since plaintiffs are the true owners,
not Internet Brands." (Emphasis sic.) (Parmater brief, 40.) Second, Parmater has
presented no evidence Internet Brands has made any specific false or misleading
statements with respect to the source, affiliation, or ownership of the website. Third, as
discussed above, Parmater has presented no evidence of ownership of any trademarks or
copyrights used by, or affiliated with, the website. Therefore, we find no set of facts that
No. 14AP-391 9
would allow Parmater to recover under a claim of unfair competition or deceptive trade
practices. Accordingly, the trial court did not err by granting summary judgment on
Parmater's claims.
{¶ 25} Because there are no genuine issues of material fact, and Internet Brands is
entitled to judgment as a matter of law, the trial court did not err in granting summary
judgment with respect to Parmater's claims for trademark infringement, deceptive trade
practices, and unfair competition.
3. Unjust Enrichment
{¶ 26} Parmater next contends the trial court erred in granting summary judgment
in favor of Internet Brands on Parmater's claim for unjust enrichment.
{¶ 27} Unjust enrichment presents a claim under quasi-contract law that arises out
of the obligation to a party that receives benefits but is not justly and equitably entitled to
retain. Hummel v. Hummel, 133 Ohio St. 520, 527 (1938). A claim of unjust enrichment
requires the plaintiff to establish (1) a benefit was conferred by the plaintiff on a
defendant, (2) knowledge by the defendant of the benefit conferred, and (3) the
defendant's retention of the benefit under circumstances would be unjust without
payment to the plaintiff. Alice's Home v. Childcraft Edn. Corp., 10th Dist. No. 09AP-299,
2010-Ohio-4121, ¶ 20, citing Hambleton v. R.G. Barry Corp., 12 Ohio St.3d 179, 183
(1984). Moreover, "[i]n absence of bad faith or fraud, an equitable action for unjust
enrichment will not lie when the subject of the claim is governed by express contract."
Natl./RS, Inc. v. Huff, 10th Dist. No. 10AP-306, 2010-Ohio-6530, ¶ 28, citing Kucan v.
Gen. Am. Life Ins. Co., 10th Dist. No. 01AP-1099, 2002-Ohio-4290 ¶ 39.
{¶ 28} Here, Parmater has provided no evidence establishing that Internet Brands
was aware of any benefit Parmater conferred or that Internet Brands' retention of the
website would be unjust. The purchase agreement never mentions Parmater or GJ Inc.,
likely because the secretary of state canceled GJ Inc. before Internet Brands entered into
the purchase agreement. Further, under the purchase agreement, Internet Brands paid
the owner of GJ LLC, Hunegnaw, $850,000.00 for the website. To the extent Hunegnaw
was unjustly enriched, the trial court awarded Parmater $1,304,851.29 against Hunegnaw
for the same claims he is now asserting against Internet Brands.
No. 14AP-391 10
{¶ 29} Because Parmater has failed to establish he conferred a benefit upon
Internet Brands, that Internet Brands was aware of any alleged benefit, or that Internet
Brands' retention of the website would be unjust, Parmater's unjust enrichment claim
fails. Accordingly, the trial court did not err in granting summary judgment with respect
to this claim.
4. Civil Conspiracy
{¶ 30} Parmater asserts that Internet Brands is liable for civil conspiracy because it
entered the purchase agreement with Hunegnaw. Parmater argues the purchase
agreement is evidence of either an express agreement, or, at least, a common
understanding or design to commit unlawful acts. We disagree.
{¶ 31} Civil conspiracy is an intentional tort that is " ' "a malicious combination of
two or more persons to injure another in person or property, in a way not competent for
one alone, resulting in actual damages." ' " Morrow v. Reminger & Reminger Co., L.P.A.,
183 Ohio App.3d 40, 2009-Ohio-2665, ¶ 40 (10th Dist.), quoting Kenty v. Transamerica
Premium Ins. Co., 72 Ohio St.3d 415, 419 (1995), quoting LeFort v. Century 21-Maitland
Realty Co., 32 Ohio St.3d 121, 126 (1987). Civil conspiracy is derivative and the claim
"cannot be maintained absent an underlying tort that is actionable without the
conspiracy." Id.; see also Walter v. ADT Security Sys., Inc., 10th Dist. No. 06AP-115,
2007-Ohio-3324, ¶ 36. Because Parmater has failed to establish the existence of any of
the underlying torts alleged above, his civil conspiracy claim, likewise, must fail.
{¶ 32} We conclude that the trial court properly granted summary judgment in
favor of Internet Brands on Parmater's individual claims and we overrule his second
assignment of error.
C. Third Assignment of Error – Motion to Compel Discovery
{¶ 33} In his third assignment of error, Parmater contends the trial court erred
when it denied his motion to compel. A party may move for an order compelling
discovery. Civ.R. 37(A). Under Civ.R. 26(B)(1), the scope of pretrial discovery is broad
and parties may obtain discovery regarding any matter that is not privileged and is
relevant to the subject matter. However, trial courts "possess broad discretion over the
discovery process," and, therefore, appellate courts "generally review a trial court's
decision regarding a discovery matter only for an abuse of discretion." MA Equip.
No. 14AP-391 11
Leasing I, L.L.C. v. Tilton, 10th Dist. No. 12AP-564, 2012-Ohio-4668, ¶ 13. An abuse of
discretion implies the trial court's decision was unreasonable, arbitrary, or
unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983).
{¶ 34} Parmater's motion to compel related to the following two document
requests:
All documents and information related to the ownership of
the [GrooveJob.com] Website and Related Assets that were
subject to the Sale Agreement, including but not limited to the
Trademarks associated with the [GrooveJob.com] Website
and Related Assets.
***
All documents and information related to and/or evidencing
Internet Brands' use of the [GrooveJob.com] Website and
Related Assets that were subject to the Sale Agreement,
including but not limited to the Trademarks associated with
the [GrooveJob.com] Website and Related Assets.
(R. 64, Parmater's Motion to Compel, exhibit A, ¶ 19-21.)
{¶ 35} Parmater later limited the requests to "revenue and expense information
related to Internet Brands' ownership and use of the [GrooveJob.com] website since the
Sale Agreement." (R. 64, exhibit B.) At deposition, Internet Brands' corporate
representative, Barbara Lynn Walsh, testified the company operates over 200 websites,
and, because the company does not record expenses by individual website, there is no
readily available documentation to determine how much a particular website costs to run.
Walsh further explained that in order to determine revenue by a particular website, it
would be necessary to review and analyze data across Internet Brands' "general financial
systems." (Walsh Deposition, 93.) Walsh concluded that recovering the revenue and
expense data for just the GrooveJob.com website would require "extraordinary effort."
(R. 66, at 93.) Based on the discovery requests and above testimony, the trial court
concluded that the requests were overly broad and denied Parmater's motion to compel.
We cannot find that the trial court abused its discretion in denying Parmater's motion.
Accordingly, Parmater's third assignment of error is overruled.
No. 14AP-391 12
IV. Disposition
{¶ 36} The trial court did not err in granting Internet Brands' motions for
summary judgment, and the trial court did not abuse its discretion in denying Parmater's
motion to compel discovery. Having overruled Parmater's three assignments of error, we
affirm the judgment of the Franklin County Court of Common Pleas.
Judgment affirmed.
TYACK and BROWN, JJ., concur.