Numerous lessons can be gleaned from the rather curious case of MADFAN, Inc. v. Makris, 2017-Ohio-979, which was recently decided by Ohio's Eighth Appellate District Court of Appeals. The Eighth District covers Cuyahoga County/Cleveland.
This was a typical case of investors getting screwed over by an unscrupulous businessman. Investors Fred Cieslik, Andrew Peloza, Alexander Stewart and Michael Allen MADFAN, Inc., all of whom were represented by comedian-turned-attorney Michael Cheselka, sued Dino Makris and Michael Westerhaus for fraud and civil conspiracy. They invested in a restaurant with Makris, though Makris's contribution was made through what appears to be essentially a shell corporation (he had creditors chasing him). Westerhaus, a lawyer who represented himself, provided continuing legal services to the restaurant. It is unclear from the opinion what Westerhaus allegedly did wrong, but the investors got a jury verdict of $300,000 against him. It is also not clear what happened with Makris, but Makris did not appeal.
Only Westerhaus appealed. He argued that the investors failed to adequately establish damages at trial. The Court of Appeals began by noting that the Appellees (the investors) failed to file an appellate brief. They were listed as having a lawyer, and they obviously had a decent amount of money and could afford representation, so it is odd to me that they didn't file a brief. In accordance with App.R. 18(C), the Court of Appeals accepted Westerhaus’s statements of facts and issues in his brief as correct and reversed the judgment because his brief reasonably appeared to sustain such action based on the trial record. However, the Court expounded on its reasoning for overturning the verdict.
The Court noted that "[a]s much emphasis as the shareholders placed on Westerhaus’s alleged wrongdoing, none of that matters with respect to measuring damages for the alleged wrongful acts of the defendant. This appeal solely hinges on whether the shareholders presented sufficient evidence to sustain the $300,000 judgment entered in their favor."Read More