[Cite as Kademian v. Marger,

.]

IN THE COURT OF APPEALS FOR MONTGOMERY COUNTY, OHIO

MICHAEL T. KADEMIAN, M.D. :

Plaintiff-Appellant : C.A. CASE NO. 25917

v. : T.C. NO. 02-CV-2576

DONALD MARGER, M.D., et al. : (Civil appeal from Common Pleas Court) Defendant-Appellees :

:

..........

OPINION

Rendered on the 3rd day of October , 2014.

..........

JAMES M. HILL, Atty. Reg. #0030633, James M. Hill Co., L.P.A., 2365 Lakeview Drive, Suite A, Beavercreek, Ohio 45431-3696 Attorney for Plaintiff-Appellant

FELIX J. GORA, Atty. Reg. #0009970, Rendigs, Fry, Kiely & Dennis, 600 Vine Street, Suite 2650, Cincinnati, Ohio 45202-3688 Attorney for Defendant-Appellees

..........

DONOVAN, J.

{¶ 1} This matter is before the Court on the Notice of Appeal of Michael T.

Kademian, M.D.,filed September 19, 2013. Kademian appeals from the December 20, 2012

Verdict Entry of the trial court, issued following trial at which a unanimous jury found in 2

favor of Appellee Donald Marger, M.D., on Kademian’s claims for breach of fiduciary duty

and conversion. Kademian also appeals from the August 20, 2013 Decision of the trial

court that overruled his motions for judgment notwithstanding the verdict and for a new trial.

We hereby affirm the judgment of the trial court.

{¶ 2} The lengthy factual history herein is set forth in this Court’s March 9, 2012

Opinion reversing the decision of the trial court and remanding the matter on Kademian’s

direct appeal from the trial court’s decision entering summary judgment in favor of Marger

on Kademian’s claims for conversion and tortious interference, and granting Marger’s

motion for a directed verdict, at the close of Kademian’s case, on Kademian’s claim of

breach of fiduciary duty. Kademian, M.D. v. Marger, M.D., 2d Dist. Montgomery No.

24256,

(“Kademian I”). Therein this Court noted that in ruling on

Kademian’s appeal, it “construed the transcripts of testimony and documents admitted at the

conclusion of Dr. Kademian’s case most strongly in Dr. Kademian’s favor.” Id., ¶ 5. This

Court set forth the following facts:

* * * Donald Marger, a radiation oncologist, formed [Marger and

Associates (“M & A”)] in 1983, for the purpose of practicing medicine. At

the time, Marger was the sole shareholder in M & A. In 1983, Marger also

began an association with Good Samaritan Hospital in Dayton, Ohio, and

continued to practice radiation oncology at Good Samaritan until June 30,

2000.

Michael Kademian was also a radiation oncologist and became

employed by M & A in January 1990. At the time, Marger had been working 3

at St. Elizabeth's Hospital (later known as Franciscan Hospital), and at Good

Samaritan. After Kademian became employed, the two doctors each spent

one-half day at each hospital, switching locations at noon.

The following year, in January 1991, Kademian purchased 49% of the

corporate shares, paying $2,500 as a down payment, and signing a promissory

note for the remainder of the cost. The book value of the shares was derived

by subtracting the assets from the liabilities and multiplying that amount by

0.49. The total price listed in the stock purchase agreement was $10,851.

In April 1992, both Marger and Kademian signed Amended and

Restated Employment Agreements with M & A. The agreements are

essentially identical, and in Paragraph 5, prohibit Marger and Kademian from

engaging “in the practice of medicine, specifically therapeutic radiology,

except as an Employee of the Employer unless otherwise authorized by the

Board of Directors.” * * * .

Paragraph 9 of the agreements also contains a non-competition clause,

which provides that:

9. Non-Competition. Without the express written

consent of the Employer, the Employee shall not directly or

indirectly own, manage, operate, join, control or participate in

the ownership, management, operation or control of or be

connected in any manner with the speciality practice of

therapeutic radiology other than pursuant to the terms of this 4

Agreement.

Upon termination of employment, the Employee

covenants and agrees that except for the prior written consent

of the Employer, the Employee will not engage in the practice

of the speciality of therapeutic radiology, in any way, in St.

Elizabeth's Hospital or Good Samaritan Hospital, both of

Dayton, Ohio, nor with any other venture involving any

hospital or institutions with which the Employer is or shall be

associated, nor with any independent or free-standing facility

within a geographic radius of ten (10) miles of St. Elizabeth or

Good Samaritan Hospital, Dayton, Ohio. Such restrictions

shall continue for a period of two (2) years from and after the

termination of employment or existence of the Corporation or

any successor thereto, including the death or retirement of the

remaining shareholders of Employer, whichever time is

shorter. * * *.

Marger and Kademian continued to practice together for a number of

years, performing radiation oncology services at Good Samaritan and at St.

Elizabeth's Hospital. Good Samaritan was an “open hospital,” which allows

any radiation oncologist to obtain privileges and treat at the facility, because

the hospital does not have an exclusive agreement with any one person or

group. M & A had a strong relationship with Good Samaritan, as evidenced 5

by the fact that Marger was the medical director of radiation oncology at

Good Samaritan at the time of the events giving rise to the current litigation.

Kademian had also been the medical director at Good Samaritan.

Around 1985, Dr. Robert Field was appointed as the medical director

of radiation oncology at Miami Valley Hospital, a third hospital located in

Dayton, Ohio. Field continued as medical director, and his group had an

exclusive contract to practice radiation oncology at Miami Valley, between

1985 and the summer of 2000. This meant that only doctors in Field's group

could treat patients in the radiation oncology department. Other doctors could

be on staff at Miami Valley, but would not be allowed to treat patients in the

department.

In 1995, Premier Health Partners was formed, joining Miami Valley

and Good Samaritan in one holding company. Miami Valley was a 60%

shareholder and Good Samaritan was a 40% shareholder in Premier Health.

In 1997, Miami Valley and Good Samaritan hired consultants to evaluate

their oncology programs. The consultants recommended, in late 1997, that

Good Samaritan and Miami Valley integrate their radiation oncology

programs. Administrators at both Good Samaritan and Miami Valley

encouraged Field's group and M & A to merge. Consequently, in early 1998,

Marger formed a limited liability company with Field's group. This was done

over the objections of Kademian, who was concerned about Field's abilities

as a physician. At least as early as 1994, Miami Valley also had concerns over 6

Field's leadership and clinical practice. In 1994, Miami Valley's chief

operating officer (COO) required Field to prepare a corrective action plan for

the business and clinical practice. Miami Valley did not think much of Field

as a clinician, felt Field had a slipshod approach to medicine, and was

continually attempting to get Field to improve. Kademian was aware of

Field's reputation prior to the merger discussions, and told Marger he did not

believe Field was a good doctor.

Another issue with Field was that in 1997, the Ohio Department of

Health had established a requirement that medical directors of radiation

oncology must be certified by the American Board of Radiology (ABR). Field

was not certified by ABR. Kademian had been board-certified by ABR for

many years, and was appointed medical director of radiation oncology at

Good Samaritan in May 1997. Kademian notified Good Samaritan (which at

that time was part of Premier Health), about Field's lack of appropriate

certification, but Field remained director at Miami Valley. The issue of

Field's lack of board certification resurfaced during the merger discussions.

During 1998, Kademian received courtesy staff privileges at Miami

Valley and began investigating Field's certification status. After Kademian

called the president of Premier Health about Field's lack of ABR certification,

Field was removed as medical director and was replaced by his associate, Dr.

Duncan.

Also in 1998, ill will began to develop between Marger and Kademian 7

as a result of the proposed merger and Marger's sale of Western Ohio stock

that was owned by M & A. Marger received the entire distribution from the

sale, rather than allocating 49% of the proceeds, approximately $60,000, to

Kademian. At one point, Marger stated that he wanted to “get rid” of

Kademian. In addition, Kademian testified that he had learned during

discovery of a prediction Marger had made in July 1998, to M & A's

corporate attorney. The prediction was that Kademian was going to be

removed as medical director at Good Samaritan. This “prediction” came true.

In early September 1998, Kademian was removed as medical director over an

incident involving a hearing aid that a nurse had misplaced at work.

Kademian contended that the matter was trivial and was not grounds for

removal.

Marger was appointed as medical director of radiation oncology at

Good Samaritan about a week after Kademian was removed. Between

October and December 1998, Kademian and Marger discussed the possibility

of Kademian leaving M & A, due to these issues, but nothing ever came of

the discussions.

M & A had previously added Dr. Greg Rasp, another radiation

oncologist, as an employee. Rasp was given a preliminary contract similar to

the contract that Kademian originally had, and was supposed to be considered

for partnership within a few years after his employment. When Rasp was

considered for partnership, Marger wanted to retain his 51% share in M & A 8

and require Kademian to give or sell one-half of his shares to Rasp.

Kademian refused to divest himself of his interest, and this issue was never

resolved prior to the dissolution of M & A.

In January 1999, Rasp entered into a “restated” employment contract

with M & A. This agreement provides that Rasp's employment would

continue until terminated as provided in Section 10 of the agreement. * * *.

Under the agreement, Rasp was to maintain staff privileges at Franciscan

Medical Center-Dayton Campus (formerly known as St. Elizabeth's) and such

other hospitals at which he practiced. * * * The agreement also contains a

restrictive covenant, which provides as follows:

11. Restrictive Covenant. Employee acknowledges (a)

that the Employer has a large investment of time, effort and

money in obtaining its relationship with the hospitals at which

the Employer's employees practice medicine (“Hospitals”),

with each such relationship hereafter referred to as a

“Relationship,” (b) that the Employer's success depends upon

its developing and maintaining such Relationships, (c) that

each Relationship constitutes an asset and property of the

Employer, (d) that the recruitment and orientation of

employees to staff the Employer's needs represents a

substantial investment by Employer, and (e) that Employee's

performing services for the Employer constitutes a position of 9

trust by the Employee which may result in a relationship

whereby Employee could influence future actions of a

Hospital or others relative to a Relationship.

Therefore, if a Relationship is terminated because the

Employee solicited or agreed to perform (directly or indirectly)

in the future similar services as were provided by the

Employer's employees at a Hospital, then the Employer would

be damaged and such interference, solicitation and/or

agreement by the Employee would constitute a breach of trust

and a breach of [sic] and the Employee's fiduciary duty to the

Employer.

Accordingly, the Employee shall not breach the

Employee's fiduciary duty to and position of trust with the

Employer, and the Employee shall not, individually or in

concert with any other person or entity, do anything to

adversely influence or interfere with a Relationship. In

addition, the Employee agrees that for a period of 12 months

after the Employee's termination of employment with the

Employer without cause, or the Employer's termination of the

Employee's employment for cause, the Employee shall not,

directly or indirectly, at a Hospital, whether alone, or as a

shareholder, partner or member, or as an officer, director, 10

manager, employee, contractor or otherwise, perform services

similar to those provided by the Employee during the Term.

Provided, however, if the Employer loses, breaches,

surrenders or terminates its contract at Franciscan Medical

Center-Dayton Campus or in any way curtails, limits or

decreases the services it provides at Franciscan Medical

Center-Dayton Campus, then the provisions of this Section

shall be null and void and the Employee shall not be subject to

the restrictive covenant provisions set forth in this Section.

***

During 1999, merger discussions with Field's group continued, despite

the fact that Kademian wanted to end the discussions. In December 1999,

Marger ended the discussions due to Field's failure to disclose financial

information. At the time, no one knew that Field's group had been sold to U.S.

Oncology, a for-profit cancer treatment national corporation.

During the early part of 2000, M & A was beginning to have more of a

physical presence at Miami Valley, and its doctors had been given limited

privileges to treat patients, despite the fact that Field's group had an exclusive

contract. M & A's ability to practice was due to the issues with Field and the

fact that Field had sold another party a free-standing radiation center that

Miami Valley wanted to buy.

In January 2000, a patient described at trial as Patient X was referred to 11

Kademian for a decision on whether he should have radiation treatment for a

possible reoccurrence of cancer in his prostate gland. Patient X had been

previously treated at Miami Valley by Field.

While taking Patient X's history, Kademian learned that Patient X had

suffered severe radiation burns on his legs in 1999, after being treated by Field

for skin cancer on his legs. Patient X was apprehensive about having more

radiation treatments because he thought he might be overly sensitive to

radiation. After obtaining the records for Patient X, Kademian discovered that

the patient had been exposed to excessive amounts of radiation, and had been

exposed in areas where radiation should not have been given. In addition to

the severe burns that were caused, the treatment created a risk of future

problems, like radiation necrosis or tissue death, which did, in fact, later occur

with Patient X.

In early February 2000, Kademian wrote a letter to Miami Valley's

radiation safety officer, reporting the over-exposure and alleged substandard

treatment, which Kademian contended should have been reported to the Ohio

Department of Health. Kademian asked the hospital to address the issue, so he

would know what to tell Patient X when they discussed radiation treatment for

his prostate cancer. Kademian copied the letter to the chairman of the

radiation safety committee, and to Gary Marshall, who was Premier Health's

vice-president of Oncology Services for both Good Samaritan and Miami

Valley. [Cite as Kademian v. Marger,

.] Kademian did not receive a response to this letter, so he sent another

letter in early March to Marshall, indicating that he would have no choice but

to report the over-radiation if the hospital did not report it. Kademian also

requested a meeting with Marshall and Premier Health's general counsel, Dale

Creech. In addition, Kademian copied Miami Valley's COO with the letter.

Marshall replied, stating that nothing had occurred that needed to be reported,

and that he would arrange a date for a meeting. Marshall also stated that it

would be “unfortunate” if Kademian implicated the hospital in discussions he

had with anyone, particularly since Miami Valley had not completed its

investigation.

***

Kademian and his attorney subsequently met with Premier Health's

general counsel, Creech, to discuss concerns about the radiation oncology

department and the necessity of reporting the mis-administration overdose.

During the meeting, Creech revealed Miami Valley's concerns about Field and

his clinical qualifications. Creech also expressed the opinion that the overdose

was not reportable, but told Kademian to go ahead and report it if he felt he

should. After the meeting, Kademian then met with Rasp, Marger, M & A's

attorney, and his own attorney. Rasp and Marger did not say not to report the

incident. Marger asked Kademian not to report it to the Department of Health

without telling him first, and Kademian agreed. Kademian later decided to go

ahead and report the matter, however, because he was concerned and his

concerns were increased by Creech's comments. * * * 13

During the week of April 10, 2000, Kademian and his attorney met

with representatives of the Ohio Department of Health, Bureau of Radiation

Protection, which administers the radiation safety programs for the

Department of Health. Kademian reported the alleged radiation overexposure

of a Miami Valley patient. As a result of the meeting, an inspector arrived at

Miami Valley on April 18, 2000, for an inspection. This was the first day

Miami Valley would have become aware of the inspection. The inspector

stayed for two days. Prior to the arrival of the inspectors, Miami Valley had

not referred the Patient X matter to an independent consultant for review. In

addition, Kademian had never received any substantive response from

Marshall.

An “absolute coincidence” occurred the first day of the inspection,

according to Marger. On April 18, 2000, Marger told Rasp and Kademian that

he (Marger) was leaving M & A. At trial, Marger testified that when he talked

about leaving M & A, he had no idea that the state had come to investigate

Miami Valley. Conversely, Kademian testified that Marger is the one who told

him that the Department of Health inspection had started on April 18, 2000.

Marger and Kademian discussed whether or not Kademian should have gone

to the Department of Health, and Marger said, “I can't control you. You are

affecting my health, Mike, you are affecting my blood pressure, you're

affecting me emotionally * * * and you're going to be affecting me

financially.” * * * During this discussion, Marger also told Rasp that he would 14

“take care” of him.

Miami Valley hired an independent consultant to peer-review the

incident, but did not do so until after the Department of Health began its

investigation. On May 16, 2000, two more inspectors from the Bureau of

Radiation Protection came to Miami Valley to continue the inspection. Shortly

thereafter, on May 23, 2000, Marshall, the vice-president of Oncology for both

Miami Valley and Good Samaritan, and Bobbie Martin, the director of

Oncology at Good Samaritan, discussed information that could only have

come from Marger or Rasp.[]

Martin's notes about the conversation state “confidential Marger, MK

will get notice this Thursday that corporation will be dissolved by next Friday.

* * *” * * * Martin's notes further indicate that KDD (referring to Doug

Deck, the chief executive officer of Good Samaritan) would sign with the

“new corporation,” and that “MK” would have a period of time so continuity

would not be disrupted. * * * Other notes written by Martin indicate that

“Marger needs to let Greg out of exclusive. Dissolve contract. * * * Give Greg

exclusive contract,” and “Appoint Greg as acting medical director. Have

Marger let him out of the exclusive clause. Dissolve corporation. Award Greg

exclusive contract.” * * *.

On the same day these notes were made, notices were sent out

indicating that a shareholder meeting to dissolve M & A would be held on

June 2, 2000. On June 2, 2000, Marger voted to liquidate M & A, over 15

Kademian's objection. The liquidation was effective June 30, 2000, with M &

A ceasing active operations on that date. Before the dissolution, the corporate

earnings of M & A were approximately $2,000,000 per year.

Prior to the meeting on June 2, 2000, M & A's corporate attorney

prepared Articles of Incorporation for Cancer Consultants of Southwest, Ohio,

Inc., at Marger's request. Marger signed the articles of incorporation and the

appointment of himself as statutory agent for Cancer Consultants on the same

day that he voted to dissolve M & A. The articles of incorporation for Cancer

Consultants were filed with the Ohio Secretary of State, and bear a date-stamp

of June 5, 2000.

Marger admitted having had discussions with Rasp about continuing a

professional association together. When Marger had these discussions, he

knew that Rasp was under a contractual agreement with M & A and would

have to be released from that agreement. Marger acknowledged that he had

also an employment agreement with M & A that contained a covenant not to

compete, and that he knew, based on his discussions with M & A's corporate

attorney, that when a corporation is dissolved, all contracts referable to the

corporation are null and void. Marger further admitted that dissolving M & A

allowed him to form Cancer Consultants, and that he and Rasp had a plan to

continue practicing full-time, as 50/50 owners of Cancer Consultants, at the

same institutions where M & A and its doctors had practiced. At the time,

Kademian was primarily practicing at Good Samaritan; the group as a whole 16

practiced at Franciscan and Good Samaritan, with some limited practice at

Miami Valley. Rasp knew that Marger was forming an entity so that the two

of them could practice radiation oncology.

On June 7, 2000, M & A's corporate attorney sent Marger copies of

employment agreements for both Marger and Rasp with Cancer Consultants,

and two copies of a shareholder's agreement for Cancer Consultants. On the

same date, coincidentally or not, Medical Billing Services for the New

Century (MBI), the billing service for M & A, sent Kademian a letter, refusing

to provide billing services to him. The letter indicated that MBI had made the

decision because of “the potential conflict of providing billing services for

competitors within the same location.” * * * MBI then went on to provide

billing services for Cancer Consultants.

***

In late June 2000, Kademian went on vacation. When he returned, he

received a letter from Rasp dated July 4, 2000, written on Cancer Consultants

letterhead. The letter lists the areas of practice as Good Samaritan, Miami

Valley, and Franciscan. In the letter, Rasp states that: “Don told me on Friday

(6/30/00) that he filed the documents to dissolve Donald Marger, M.D. and

Associates, Inc. Given that, I have formed the above named corporation.” * *

*.

Kademian spoke to Rasp that afternoon, and was told that he should

form his own corporation. Rasp did not, during this conversation, or any other, 17

ask Kademian to join Cancer Consultants, nor did he suggest that Kademian

might be able to join Cancer Consultants. Rasp also never disclosed to

Kademian what had occurred regarding Marger and the formation of Cancer

Consultants. Kademian also discovered that day that all the patients Marger

had been treating, as well as those who were coming up for checkups months

or years after their prior treatment, had been transferred to Rasp. Additionally,

he discovered that Rasp had already had prescription pads printed for Cancer

Consultants.

Furthermore, Kademian called Upper Valley Radiation Center, located

north of Dayton, and learned that Marger was working there full-time, despite

having announced his retirement. At the time of trial, Marger was still

working for the same employer, but worked part-time.

In late July 2000, the Department of Health sent Gary Marshall,

Premier Health Vice President of Oncology Services, a notice of violations

letter and a report of its investigation of the Patient X situation, based on the

findings of three investigators who had worked on the report. The notice

detailed six violations, including lack of documentation to establish that

Miami Valley was following proper procedures for addressing complaints;

deficiencies in Miami Valley's timely submission of data to the Department of

Health, problems with Miami Valley's quality assessment and improvement

program; and a lack of documentation that the radiation oncologist set limits

of doses to critical structures surrounding the treatment area. The report also 18

concluded that the inadequate quality assessment and improvement program

and inadequate complaint handling process all contributed to a radiotherapy

course that resulted in a “disproportionated output of the prescribed radiation

dose across the treatment field.” * * * The Department of Health ordered

Miami Valley to submit various evidence and to develop a corrective action

plan to address the violations within thirty days of receipt of the letter.

Miami Valley's response was sent to the Department of Health on

August 24, 2000. One of the attachments was a final report from Miami

Valley's independent consultant, dated June 16, 2000. Consistent with

Kademian's findings, the report concluded that the quality of care provided to

Patient X fell below accepted standards of care.

In June or July 2000, Kademian learned that Miami Valley was

considering hiring Dr. Ditzel for the position of radiation oncology director.

After meeting Ditzel, Kademian then met with Mary Boosalis, the

vice-president and COO for Miami Valley, during the week of August 7,

2000. At the meeting, Kademian and Boosalis discussed the selection process

for the director's postiion [sic], Ditzel's qualifications, the quality of care in the

radiation oncology department, and the Patient X matter. Kademian expressed

concern over the selection process, because the job had not been advertised,

and it was his understanding that the decision had already been made, with

only one candidate, Ditzel, having been considered. On August 13, 2000,

Kademian wrote a follow-up letter to Boosalis, opposing Ditzel's selection for 19

two reasons. The first reason was that the selection process was flawed, and

the second was that Kademian did not believe Ditzel was the most qualified

candidate that could be found.

Boosalis replied on August 17, 2000, stating that the decision of who

to hire as medical director belonged to Miami Valley. Boosalis also told

Kademian that he could only treat patients at Miami Valley until a new

exclusive contract was signed with Dr. Ditzel's group. According to Miami

Valley representatives, Miami Valley had discussed with Rasp the fact that

Ditzel and a colleague, Dr. Paessun, were going to come to Dayton and

practice with Rasp. The question was whether Kademian should continue to

practice, and the consensus was that they would have a new group with Ditzel,

Rasp, Paessun, and Kademian. However, after Kademian made his displeasure

about Ditzel known, it was the collective decision of Boosalis, Bill Thornton,

Miami Valley CEO, and Marshall, the vice-president of Oncology for both

Good Samaritan and Miami Valley, that Kademian would not be able to

practice.

Kademian contended, however, that no one ever told him that they

wanted him to stay at Miami Valley. In fact, Kademian tried to meet with

administrators and they would not meet with him. He also tried to talk with

Doug Deck, the president at Good Samaritan about staying at Good

Samaritan; Deck refused to meet with him. In addition, Kademian testified

that Rasp never came to him and said anything about working to try to include 20

him in Cancer Consultants, nor did Rasp ever say anything to him after June

30, 2000, about working together. Rasp also never told Kademian that he was

being scrutinized by the hospitals in any way in terms of coming into Cancer

Consultants.

In the fall of 2000, Good Samaritan and Miami Valley signed

exclusive contracts with Cancer Consultants, which meant that Kademian

would not be able to treat patients at either hospital, because he was not

employed by Cancer Consultants. In addition, Franciscan was not an option,

because it had closed by that time.

At trial, Kademian presented evidence indicating that he had lost the

following amounts due to the alleged breach of fiduciary duty and civil

conspiracy: (1) equity and goodwill in the amount of $203,651, based on the

dissolution of M & A; (2) lost earnings, plus interest, of approximately

$6,386,861 through March 31, 2010, and lost retirement contributions, plus

interest[] from 2001 through 2011, of about $350,529. The lost wages were

calculated based on Kademian's 1999 earnings of approximately $456,000.

In late September 2000, Kademian filed suit against Marger, M & A,

Rasp, Cancer Consultants, Good Samaritan, Miami Valley, and Premier

Health. The complaint was dismissed without prejudice and was refiled in

April 2002, against the same parties. The complaint included claims of breach

of fiduciary duty, breach of contract, and conversion against Marger; claims of

breach of duty of loyalty and good faith, and breach of contract against Rasp; 21

and claims of tortious interference with contract, tortious interference with

business expectancy, violation of R.C. 4113.52, and civil conspiracy against

all defendants. After motions to dismiss certain claims were sustained,

Kademian filed an amended complaint in August 2003, adding claims of

breach of a buy-sell agreement and breach of duty of good faith and fair

dealing against Marger; claims of conversion against Rasp; claims of replevin

against Marger, Rasp, and Cancer Consultants; and claims of constructive

trust against Rasp and Cancer Consultants.

In 2006, the hospital defendants were dismissed, with prejudice.

Ultimately, the remaining claims were dismissed, other than the breach of

fiduciary duty and conspiracy claims1, which proceeded to trial, with Marger

and Rasp as the remaining defendants. Kademian settled his claims against

Rasp during trial, leaving Marger as the sole defendant.

At the end of Kademian's case, Marger moved for a directed verdict,

which was granted by the trial court on the theory that Marger did not take

advantage of the alleged breach of fiduciary duty and conspiracy, because he

did not practice further with Good Samaritan and Miami Valley. * * *. Id., ¶

5-51.

{¶ 3} This Court noted as follows:

Marger argues that he had the right to dissolve the corporation. This

1 The claims before the trial court were breach of fiduciary duty, conversion, and tortious interference. 22

is true. However, we have stressed that even if a particular close corporation

or partnership decision cannot be contested, “the manner in which the

decision is made cannot violate the majority’s fiduciary duty.” Schhafer v.

RMS Realty,

,

(2d Dist. 2000). In

Schafer, a majority of partners issued a capital call, which was within their

right to do under the partnership agreement. However, their action was

taken in an attempt to squeeze out a minority partner. On appeal, we affirmed

a jury verdict rendered in favor of the minority partner, noting that while the

minority partner “could not contest the capital call itself, he could bring an

action for breach of fiduciary duty if the defendants acted in bad faith or in a

duplicitous manner by voting for and proceeding with the capital call.”

Kademian I, ¶ 69.

{¶ 4} Upon remand, Kademian testified that M & A began to have problems in

late 1997 or early 1998 which “were principally related to the fact that Good Samaritan

Hospital had been taken over by Miami Valley and I would characterize a corporate takeover

with the formation of Premier Health Partners.” Trial Transcript (“T.T.”), pg. 16.

Kademian testified that he was “livid” to learn that Marger formed an LLC with Dr. Field’s

group in 1998, because “Dr. Marger and I had had numerous conversations from the day that

I moved to Dayton about Dr. Field[], numerous. We had those conversations and they

always centered about Dr. Fields (sic) substandardness as a physician.” T.T. pg. 17.

{¶ 5} Regarding Patient X and the formation of Cancer Consultants, the following

exchange occurred: [Cite as Kademian v. Marger,

.] Q. Tell the jury briefly what happened at the meeting with the

Department of Health.

A. Briefly we met, Steve2 and I met with Roger Suppes, who is chief

of the radiation protection division, Maggie Wanchick, who is an

investigator, I think. And there were two or three other people. And I just

presented my concerns about this particular case and my particular concerns

in general about safety matters at Miami Valley Hospital.

Q. And that was on either the 12th or 13th of April, 2000?

A. Yeah, thereabouts. * * *

Q. What happened after that?

A. The next thing was the following week because there was a

weekend between there. So in the following week I didn’t hear anything

until I had a meeting with Drs. Marger and Rasp at St. Elizabeth’s Hospital. *

**

Q. What happened at that meeting?

A. Well, the meeting, we’re sitting there and Dr. Marger said,

“Mike, the Department of Health is investigating Miami Valley Hospital.”

And he was very upset about it.

Q. What happened?

***

A. * * * [The Department of Health] had been at the hospital that day

2 Steve Dankof, counsel for Kademian at the time. 24

that we were having our meeting and he was upset about it because I had

gone to the state to report it. And then he made an announcement, he and

Dr. Rasp.

Q. What was the announcement?

A. Well, he said, “You know, I’ve had it with you. I can’t control

you. You’re affecting me emotionally. You’re affecting me physically.

My blood pressure is going up. And you’re going to be affecting me

financially. You’re getting the hospital in trouble. And because of what

you’ve done, I am leaving [M & A].” And he kind of laughed. He said, “I’m

leaving you [M & A]. You’re going to be [M & A]. Ha ha.” Because the

irony that he was going to be gone and I would have this corporation called

[M & A].

And then he also said to Dr. Rasp, “Don’t worry, Greg. I will take

care of you.” Then he opened it for discussion. Greg and I were sitting next

to each other. He was across from us. And, you know, I explained why I

went to the state. I just said, “I went to the state because I went to the state

because I thought it needed to be done.” And he several times asked if

anybody had anything to say. I gave my explanations as to why I did what I

did and he again two or three times asked, “Does anybody have anything to

say?”

So finally I just said, “I don’t have anything to say,” and I left. I left

Greg and Don and I left. I went home. 25

Q. What happened next?

A. In terms of?

Q. Well, you said that Dr. Marger indicated to you that he was going

to leave you from Marger and Associates. (Sic).

A. He said he was going to leave me the corporation.

Q. Did he do that?

***

A. No. Oh, what happened next is that was the middle of April, so

it’s kind of limbo land because I didn’t know what he was talking about. I

didn’t know what leaving me the corporation really meant. And Steve

Dankof was my attorney at the time and he would sometimes hear things

from the corporate attorney, Rick Carli[]le. I don’t think Don Marger and I

had a conversation about anything other than direct patient care after that

meeting. ***

And then probably sometime in May, and I don’t know the date, I

received a call from my attorney, Steve, who told me that Marger was going

to dissolve Marger and Associates. He had heard this from Rick Carli[]le

that the corporation was going to be dissolved. I didn’t really know what

that meant. And so then subsequently I received I think through Steve a

letter saying we’re going to have a shareholders meeting for the purpose of

dissolving Marger & Associates.

Q. Did you have a meeting? 26

A. Yep.

Q. What happened at the meeting?

A. Well, the meeting was in early June. * * * . Steve and I went.

Carli[]le was there with Dr. Marger. And Dr. Marger made a motion that we

dissolve Marger & Associates. It was open for discussion. Steve spoke on

my behalf. Said, “You know, we don’t want the corporation dissolved. We

see no reason to dissolve the corporation.” After the discussion we took a

vote and I voted 49 percent to not dissolve the corporation. End of meeting.

Q. Why did you vote to not dissolve the corporation?

***

A. Because it was our business entity. It was the place that I - - the

entity through which I earned my livelihood, so there would be no reason for

me to want to dissolve it, to make it go away. T.T. pg. 69-72.

{¶ 6} Kademian identified Exhibit 200, the July 4, 2000 letter from Rasp to

Kademian, as described in the facts above, and the following exchange occurred:

Q. At any time did anyone ever inform you that it was not Dr. Rasp

that had formed Cancer Consultants - -

***

Q. - - and that it was Dr. Marger?

***

A. Never.

Q. Did anyone ever inform you that Dr. Marger had a plan to 27

practice with Dr. Rasp and exclude you from that practice?

A. No, I only learned of that from discovery.

Q. Did anyone ever suggest to you that you would be able to join

Cancer Consultants?

A. Never. T.T. pg. 77-78.

Kademian testified that when he returned from vacation, “all of the patients that Dr. Marger

had been treating - - we were all treating patients at Good Sam. All of his patients had been

transferred to Dr. Rasp.” Pg. 79.

{¶ 7} The following exchange occurred on cross-examination:

Q. Are you aware of any fact whereby Dr. Marger received any

compensation, or anything of value from either the hospital, Premier, Miami

Valley, or Good Sam by reason of his decision to dissolve [M & A]?

A. No.

Q. Did Dr. Marger after June 30th, 2000, ever see (sic) or work at

Miami Valley Hospital?

A. To my knowledge, no.

Q. Good Samaritan Hospital?

A. To my knowledge, no.

Q. Franciscan Hospital?

A. To my knowledge, no.

Q. Was Dr. Marger after June 30th, 2000, every (sic) employed by or

provide any services to any premiere hospital that you know of? 28

A. No. T.T. pg. 94.

***

Q. * * * During the period of June 2000, did you have discussions

with Dr. Rasp about working together?

A. We probably had some discussions during June. Yeah.

Q. * * * did Dr. Rasp say anything to you about working together?

A. We talked about the future, and we talked about the possibility

that that might happen. * * *

Q. Did you ever tell Dr. Rasp after the meeting in June, “You’re free

white and 21.”?

A. Yes, I used that term.

Q. What’d you mean by that?

A. I meant he was free. I meant he was white, not in a disparaging

way, and that he was 21. That he was an adult and that free will (sic). He

had free will.

***

A. * * * I was completely in the dark about Cancer Consultants, so I

was operating in a vacuum. So anything that I was saying at that time was

based on not knowing what was happening. T.T. pg. 100-01.

{¶ 8} Kademian admitted that he had “ill will” toward Marger “because he, you

know, announced at the meeting on April 18th, because I went to the State of Ohio he was

going to do something.” T.T. pg. 103. Kademian testified that in 1999, he and Marger 29

“had a very collegial relationship.” T.T. pg. 103. Kademian denied having ill will toward

Marger since 1998. Kademian further acknowledged that, since M & A did not have any

contracts with the hospitals where it provided services, that it was important for M & A to

maintain a good rapport with the hospitals, the technicians, the therapists and the nurses

there. Kademian stated that M & A was “not dissolved for any legitimate business reason.”

T.T. pg. 124. Regarding the Western Ohio stock, Kademian stated that the issue arose in

1998, and that it was about the “fact that our corporation owned Western Ohio stock and it

was sold and Dr. Marger received all the proceeds.” T.T. pg. 126. Kademian denied that

the issue persisted into 2000, and he stated that he and Marger “agreed to disagree” in 1998

about the stock. T.T. pg. 127.

{¶ 9} Kademian identified, as Exhibit 114, correspondence dated June 12, 2000

from him to Marger which was copied to the CEOs of Good Samaritan and Premier. When

asked if the letter suggested that Marger committed malpractice, Kademian responded, “I say

that his treatment was sub-optimal and incorrect. * * * I consider it a representation of fact.

It’s not intended to disparage. It’s intended to describe fact; sub-optimal and incorrect.”

T.T. pg. 151. Kademian also identified, as Exhibit 116, correspondence dated June 13,

2000 from him to Marger, which was also copied to the CEOs of Good Samaritan and

Premier. The following exchange occurred:

Q. Did you send this letter to disparage Mr. Marger’s treatment of

this patient?

A. No. The intent of the letter was to inform the CEOs that peer

review was being abandoned at our hospital, per the order of Dr. Marger. 30

Q. And so your effort to talk about peer review was to send CEOs

letters about your opinions on Dr. Marger’s care of patients?

A. No. No. No. No. * * * My concern was that Dr. Marger

abandoned peer review. T.T. pg. 153.

Kademian acknowledged that he sent both letters “while I was an employee and co-owner of

[M & A].” T.T. pg. 154.

{¶ 10} Bobbie Martin, the director for Oncology at Good Samaritan, testified

regarding her notes as set forth in the facts in Kademian I, above, and she acknowledged that

they indicate that Marger would have to let Rasp out of his exclusive contract. On

cross-examination, she indicated that she received “multiple” complaints regarding

Kademian from her staff from 1998 to 2000. When asked what the complaints were about,

she responded, “Behavior. Yelling at staff. The nurses would complain that they were not

allowed to ask him a question directly. They needed to write it on a piece of paper and put

it in his office, as long as he was not in his office. So they had to kind of jockey to see

when they could leave a note to get a question answered. That’s an example.” T.T. pg.

271.

{¶ 11} Marger testified that the issue regarding his sale of the Western Ohio stock,

after Kademian became a partner, was a contentious issue throughout the parties’ entire

working relationship. He further testified that Kademian was “very, very against”

associating with the Field group, and that “that issue plus the Western Ohio issue, those were

just basically very big contentious issues pretty much until the end of the corporation.” T.T.

pg. 573. Regarding Kademian’s interactions with hospital staff, Marger stated that he “saw 31

several instances where Dr. Kademian was indeed being quite aggressive with the staff and

yeah, that couldn’t help but somehow affect our relationship with the hospital

administrations.” T.T. pg. 574. Marger stated that peer review “is a process by which a

physician’s work is evaluated by his peers.” T.T. pg. 589. He stated that M & A began

practicing at Miami Valley in early 2000, and that he “kind of like[d] the way they do their

peer review. It was different than the way we were doing it.” T.T. pg. 589. Marger stated

that he instituted Miami Valley’s peer review process at Good Samaritan, and that Kademian

“became so mad at me. He wouldn’t talk to me at all and he refused to even be in the same

room with me.” T.T. pg. 590. Marger stated that through April, 2000 his relationship with

Kademian “was continuing to deteriorate. * * * this Western Ohio business kept getting

raised. And Dr. Kademian and I were coming (sic) more and more distanced over a variety

of issues, like the peer review.” T.T. pg. 590. When asked about his health in 2000,

Marger stated, “Early 2000, it was okay. But after a few more months, you know, when we

were getting like into the spring, I was having a lot of medical problems. I really was. I

mean, this was affecting my health. Our relationship.” T.T. pg. 591.

{¶ 12} When asked about Patient X, Marger stated that he and Drs. Rasp and

Kademian had a meeting “where when we were talking about his reporting this, Dr. Rasp

and I had requested of him that he at least let us know what he’s going to do, because this

obviously was affecting the administration or would have an effect on the hospital

administration.” T.T. pg. 592. Marger stated that he did not “want to be blindsided

someday in the hall by an administrator saying, ‘Oh, did you know Dr. Kademian did this,

that and the other.’” T.T. pg. 592-93. Marger testified, “I think basically, when I heard 32

that Dr. Kademian had reported it or was going to report it to the State, just a few days after

we had asked Dr. Kademian to at least tell us what he was going to do, and he went ahead

and did it anyway without letting us know, that was the straw that broke the camel’s back.”

T.T. pg. 594. At that time, Marger stated, “My health is at risk and I just - - I need to

divorce Dr. Kademian. I think we had a very, very bad marriage.” T.T. pg. 594.

{¶ 13} Marger stated that he and Rasp and Kademian had a meeting in April, 2000,

and Marger stated, “I don’t remember my exact words. I think I said I’m leaving Marger

and Associates. * * * I said I’m leaving.” T.T. pg. 594. Marger stated that he called the

subsequent shareholders meeting because he thought that was “the cleanest way to

disassociate myself from Dr. Kademian.” T.T. pg. 595. The following exchange occurred

regarding the June 30, 2000 dissolution of M & A:

Q. Now, in June, what was your idea about what you were going to

do on July 1? And this is early June?

A. Emotionally and physically, I was in a good bit of turmoil right

about that period of time. But after I had announced that I was * * * leaving

[M & A], or whatever it was that I actually said - - I mean, that was the effect

of it though. I started to think about what I wanted to do. And I wasn’t

absolutely sure what I wanted to do, but I knew I still wanted to possibly be

able to practice, if that’s what I chose to do.

Q. Okay. So did you have any discussions then with Dr. Rasp about

maybe practicing with you on July 1 or August or September?

A. Eventually I did. Not when I made that decision. 33

***

Q. What did you do next in terms of what your future was going to

hold?

A. Well, if I wanted the potential to continue to practice, I was going

to have to set up some sort of practice vehicle, you know. And that’s

actually the - - that was actually the genesis of Cancer Consultants of

Southwest Ohio.

Q. So what was the purpose of Cancer Consultants of Southwest

Ohio?

A. Well initially, it was, as I said, a - - how was I going to continue

to practice, if that’s what I decided to do?

Q. Did you ever fund to Cancer Consultants? Put any money it?

(Sic)

A. Only money was whatever fees were required by the State to file

the paperwork.

Q. Did you ever receive any income from Cancer Consultants?

A. No.

Q. Did you ever work for Cancer Consultants?

A. No.

Q. Did you talk to Dr. Rasp about potentially becoming a partner of

yours after Marger and Associates ceased doing business?

A. Yes, I did. I - - I had Cancer Consultants. And at some point, I 34

asked Dr. Rasp if he would have any interest in working with me.

Q. * * * were there preliminary contracts drawn up, if you remember?

A. Yeah. He - - you know, he said, you know basically, yes, he

would consider it. So asked Mr. Carli[]le to go ahead and draw up some

basic contracts for our review.

Q. To your knowledge, was anything ever signed?

A. No. Nothing was signed, to my knowledge.

***

Q. * * * Now, after you talked to Dr. Rasp - - by the way, did you

have any discussions with Dr. Kademian in this - - in the period of time of

June about what you were going to do after June 30th or what he was going to

do after June 30th?

A. No.

Q. Why not?

A. Well, among other reasons, Dr. Kademian was not talking to me

at the time. But you know, I - - with the dissolution of the corporation, you

know - - and everybody can do whatever they wanted. So I figured we’re all

big boys and we can go off and practice however we think is appropriate.

Q. But was it your understanding or belief that Dr. Kademian would

continue to practice at the same hospitals after - -

***

Q. June 30th? 35

A. - - I absolutely was convinced that Dr. Kademian was going to

continue to practice. I just had no doubts about that.

Q. But not with you.

A. Correct. I had, you know, no problem with him continuing to

practice. Just we couldn’t be partners anymore.

Q. To your knowledge, after June 30th, were all the accounts

receivable and other assets of [M & A] distributed pursuant to the contracts,

to your knowledge?

A. Absolutely.

Q. Was Dr. Rasp involved in the incorporation of Cancer

Consultants?

A. No.

Q. What happened in the first week - - or let’s say the second week

or the third week in June? Did you change your mind in terms of continuing

to practice in Dayton?

A. Yeah, so right along about the middle of June - - well, you

referred to this epiphany and that’s actually the word I used. I realized that if I

continued to practice in Dayton, you know, by myself, with whoever,

anybody else, I would still have to be dealing with Dr. Kademian or

interacting with him frequently. We would be going to the same tumor

board meetings. We would be going to cancer committee meetings. We

would be going to radiation safety meetings. 36

I would probably be seeing him still several times a week. And I said

my health just isn’t worth this. And I said, you know, the heck with it. I do

not need to practice anymore full time in Dayton, Ohio. And that was the

end of it.

Q. Did you ever use the term, “I’m going to retire?”

A. I might have. I might have.

Q. Did you mean from the practice of medicine?

A. No, I never really planned on retiring from the practice of

medicine. I certainly planned on retiring from [M & A].

Q. Did you ever have any discussions in May or June of 2000 with

the hospitals about entering in exclusive contracts just with you?

A. Absolutely not. I never had any contact with anyone in any

hospital regarding exclusive contracts.

Q. Now, we’re back to this epiphany. Do you

remember when in June that

was?

A. I think it was right almost exactly around the middle of June.

Q. So what happened next in terms of Cancer Consultants?

A. I think it was Dr. Rasp’s attorney who contacted Mr. Carli[]le and

basically asked him, “What am I going to do with Cancer Consultants?” You

know, and I had nothing to do with it. I wasn’t going to use it. I wasn’t

going to practice. 37

And I think it was his attorney who suggested to Mr. Carli[]le, if Dr.

Rasp would pay the fees associated with its incorporation, could he just go

ahead and use it? Because I, you know, I had basically laid the business

groundwork, like an - - you know, like a tax ID number, things like that.

Q. And did you have any further affiliation starting on July 1 with

Cancer Consultants in any way?

A. You know, since June 30th of 2000, I have never even set foot in

Good Samaritan or Miami Valley again, literally. No. The answer is no.

T.T. pg. 598-603.

{¶ 14} Marger also testified that in the middle of June, 2000, Kademian expressed

an interest in buying the shares of M & A, and that he told Carlile to “pursue it.” According

to Marger, “we just never heard back from Dr. Kademian. Nothing was ever signed. But I

- - you know, again, with certain considerations, I was willing to sell him the shares of

stock.” T.T. pg. 605. The following exchange occurred on cross-examination:

Q. Your decision to dissolve [M & A] came at a time when you had

a plan to continue in the practice with its employee, Dr. Rasp and without Dr.

Kademian.

A. That’s absolutely not true. My decision to dissolve it came

before I knew what I was going to do, before I had any thought of continuing

or not continuing. The decision was based solely on my need to divorce

myself from Dr. Kademian.

Q. When was Cancer Consultants formed? 38

***

A. I think the official paperwork was June 2nd of 2000.

Q. Same day that you voted to dissolve [M & A], correct?

A. Yes.

Q. You used [M&A] attorneys to create this competing corporation,

correct?

A. They were never - - there was no competition. They were never

in competition. They never existed in terms of providing services. There

was no way for them to compete.

Q. Do you recall watching your video when you said that Cancer

Consultants was going to do exactly the same thing that [M & A] had done in

exactly the same places?

A. Provided radiation oncology services. (Sic)

Q. At the same hospitals.

A. That’s what I intended, yes.

Q. The only thing that would be missing would be Dr. Kademian,

correct?

A. No. I absolutely expected Dr. Kademian to be there also.

Q. The only thing that would be different as between Cancer

Consultants and [M & A] * * * was that Cancer Consultants would not

involve Dr. Kademian, correct?

A. Correct. Cancer Consultants would not involve Dr. 39

Kademian.

Q. Dr. Rasp knew that you were going to form Cancer Consultants,

correct?

A. Yes.

Q. And he learned that from you: is that correct?

A. That’s correct.

Q. And you didn’t involve Dr. Kademian in those discussions, did

you?

***

A. - - no, no, no.

***

Q. You said at some point in time, there was discussions after you

voted to dissolve [M & A] about you selling the entity to Dr. Kademian,

correct?

A. That’s correct.

Q. Do you recall one of the terms of that sale being that Dr. Rasp

could be released from any sort of covenant?

A. That’s correct.

Q. * * * And you weren’t going to be with the company, correct?

A. Correct.

Q. And he had to change the name of the company; is that correct?

A. Yes, after a certain length of time, because in all honesty, I did 40

not know what Dr. Kademian was up to and I honestly did not want my name

associated with him - - with his activities anymore. T.T. pg. 616-19.

{¶ 15} On redirect examination, the following exchange occurred:

Q. Dr. Marger, some mention was made of Rick Carli[]le. Is Rick

Carli[]le also your personal counsel?

A. Yes.

Q. Was the formation for Cancer Consultants, did it have anything to

do with [M & A] in terms of Mr. [Carli[]le being the counsel for [M & A]?

Well, let me rephrase the question. * * * Was Mr. Carli[]le’s work for you

relative to Cancer Consultants personally for you?

A. Personally for me?

Q. Right. As your counsel.

A. Yes. T.T. pg. 650.

{¶ 16} Rasp testified as follows regarding the dissolution of M & A:

Q. Now did there come to be a time in early 2000 when Dr. Marger

informed you of his future or what he was going to do?

A. In April we had one of our regular meetings, the three of us that

we would have - - I think they were on Tuesdays. * * * But and at this

meeting he suddenly announced that he was leaving. That things were

ending. And he wasn’t very clear on what was going on. I think Mike and I

were - - well I don’t want to speak for Mike, but I was stunned.

*** 41

Q. Now in that earlier meeting, the one you mentioned in April, do

you recall Dr. Marger ever telling you or did you ever hear that he would take

care of you?

A. Oh, no.

Q. Did you ever hear Dr. Marger say I’m leaving the company to Dr.

Kademian?

A. No.

***

Q. But it did come to your attention that [M & A] was ending

business as of June 30th?

A. Yes.

Q. How did you receive that information?

A. I believe Mike, Dr. Kademian called me at home and gave me

that information.

Q. What do you recall - - first of all, do you remember when that

phone conversation took place?

A. It was in June of 2000. So it would have been very early in June

2000. Maybe June 2nd, 3rd, 4th, somewhere right in that time period.

Q. What do you recall of that conversation and what Dr. Kademian

told you?

A. He told me that they had voted to I think he used the word

dissolve the company. That it was going to end June 30th. You know, I 42

asked him what that meant and he said, you know, that he was going to form

his own company. And I asked him what it meant for me and he said that, you

know, you’re free, white and 21. You can do what you want. T.T. pg.

507-509.

{¶ 17} At the conclusion of the evidence, counsel for Kademian moved for a

directed verdict "on three aspects of its claim for fiduciary duty." He asserted that "Dr.

Marger's conversations with Dr. Rasp, while a majority shareholder in Marger and

Associates, was a breach of fiduciary duty," that the "use of Marger and Associates attorneys

to form Cancer Consultants was a breach of Dr. Marger's fiduciary duties," and that "the plan

that Dr. Marger admitted to was a breach of Dr. Marger's fiduciary duties. These are all

undisputed facts. And reasonable minds can only conclude that this would be a breach of

fiduciary duty."

{¶ 18} In its August 20, 2013 decision overruling Kademian’s motion for

judgment notwithstanding the verdict and a new trial, the trial court determined in part as

follows:

The court has thoroughly reviewed the entire video transcript of the

trial herein, and has considered the arguments of counsel contained within

their Memoranda. Contrary to Plaintiff’s assertions, the evidence at trial was

not undisputed. While there was evidence before the jury that Marger’s

conduct could have constituted a breach of his fiduciary duties to Kademian,

the evidence did not require a conclusion that Marger had breached those

duties, nor does the inquiry stop there. The jury was permitted to consider 43

Marger’s motives in dissolving the corporation, as well as whether he had

acted in good faith and for a legitimate business purpose. Additionally, the

jury was permitted to consider whether a schism existed between the

shareholders such that it was no longer practicable to carry on the business of

the corporation. There was ample evidence produced at trial that Dr. Marger

and Dr. Kademian did not enjoy a productive or positive relationship and that

Dr. Kademian’s behavior toward Dr. Marger, hospital staff and patients was

such that, if believed by or given weight by the jury, provided ample evidence

in support of Dr. Marger’s conduct and could lead to the conclusion that Dr.

Marger’s conduct in dissolving the business was the result of his good faith

and was exercised for a legitimate business purpose. Still further, the

evidence at trial was such that Dr. Kademian’s behavior to those around him

could be characterized as demeaning, dismissive, and unprofessional such

that the jury could have concluded that such a serious schism had developed

between the two physicians that it was no longer possible for them to carry on

business together and that the schism resulted from Dr. Kademian’s behavior,

and not that of Dr. Marger.

When considering the Motion for Judgment notwithstanding the

Verdict, and after construing the evidence adduced at trial and the facts

established by any admissions in the pleadings most strongly in favor of the

non-moving party, Defendant herein, and without engaging in any weighing

of the evidence, the court finds that there is substantial, competent evidence 44

upon which reasonable minds may reach different conclusions. As stated

above, while the evidence revealed that Dr. Marger no longer wanted to do

business with Dr. Kademian and dissolved the corporation seemingly to do

business with Dr. Rasp and without Dr. Kademian, there was ample evidence

to support the conclusion that it was Dr. Kademian’s behavior that caused the

schism between the shareholders and, still further, that given Dr. Kademian’s

behavior, Dr. Marger’s decision to dissolve the corporation was for a

legitimate business purpose and was not lacking in good faith and,

additionally, that no conversion of Plaintiff’s property resulted. Therefore,

Plaintiff’s Motion for Judgment notwithstanding the Verdict must be

overruled.

In considering Plaintiff’s Motion for New Trial, and particularly any

claim based upon manifest weight of the evidence, and, after weighing the

evidence, the court finds that there was competent, substantial and credible

evidence to support the verdicts of the jury and that the judgment is not

contrary to law. For the reasons stated above relating the Plaintiff’s Motion

for Judgment Notwithstanding the Verdict, the court finds that Plaintiff’s

Motion for New Trial must also be overruled.

{¶ 19} Kademian asserts six assignments of error herein. We will consider his first

three assigned errors together for ease of analysis. They are as follows:

“THE TRIAL COURT ERRED IN FAILING TO DIRECT A VERDICT IN FAVOR

OF DR. KADEMIAN ON HIS BREACH OF FIDUCIARY DUTY CLAIMS.” 45

And,

“THE TRIAL COURT ERRED IN FAILING TO INSTRUCT THE JURY THAT

DR. MARGER BREACHED HIS FIDUCIARY DUTIES TO DR. KADEMIAN.”

And,

“THE TRIAL COURT ERRED IN FAILING TO GRANT DR. KADEMIAN’S

MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT AND MOTION

FOR A NEW TRIAL.”

{¶ 20} Kademian asserts that the “evidence is undisputed that Dr. Marger and Dr.

Rasp secretly entered into an agreement prior to the dissolution of [M & A] such that they

would continue the practice in another entity without Dr. Kademian. * * * This was clearly

a breach of the fiduciary duties owed by Dr. Marger to Dr. Kademian.” Kademian asserts

that the Court “made it abundantly clear in its Opinion that it is not the reason or the nature

of the actions that are controlling, it is ‘the manner in which the decision is made [that]

cannot violate the majority’s fiduciary duty.’”

{¶ 21} In addition to the trial testimony above, Kademian directs our attention to

the following exchange in Marger’s November 17, 2006 deposition that was played for the

jury at trial:

Q. When you suggested to Dr. Rasp that you might want to continue

with him in a professional association, what was his response?

A. It was in the affirmative because I know that that was our plan.

Q. That was whose plan?

A. Our plan was to continue a professional association * * * as 46

Cancer Consultants.

Q. So for some period of time you and Dr. Greg Rasp planned to

continue your professional association as Cancer Consultants?

A. Correct.

Q. But you don’t know what that time frame was?

A. No.

{¶ 22} As this Court has noted:

* * * In Ruta v. Breckenridge-Remy Co. (1982),

,

,

, the Supreme Court of Ohio discussed the

following analysis a trial court is to adhere to when ruling on a motion for

directed verdict:

“When a motion for directed verdict is entered, what is

being tested is a question of law; that is, the legal sufficiency

of the evidence to take the case to jury. This does not involve

weighing the evidence or trying the credibility of the

witnesses; it is in the nature of a demurrer to the evidence and

assumes the truth of the evidence supporting the facts essential

to the claim of the party against whom the motion is directed,

and gives to that party the benefit of all reasonable inferences

from that evidence. The evidence is granted its most favorable

interpretation and is considered as establishing every material

fact it tends to prove. The ‘reasonable minds' test * * * calls 47

upon the court only to determine whether there exists any

evidence of substantial probative value in support of that

party's claims. See Hamden Lodge v. Ohio Fuel Gas Co.

(1934),

,

. Weighing evidence

connotes finding facts from the evidence submitted; no such

role is undertaken by the court in considering a motion for a

directed verdict. A motion for directed verdict raises a

question of law because it examines the materiality of the

evidence, as opposed to the conclusions to be drawn from the

evidence. To hold that in considering a motion for directed

verdict a court may weigh the evidence, would be to hold that

a judge may usurp the function of the jury. Section 5, Article I

of the Ohio Constitution.” Id. at 68-69,

,

.567

An appellate court reviews a trial court's ruling on a

motion for directed verdict de novo, as it presents the court

with a question of law. Schafer v. R.M.S. Realty (2000),

,

. De novo review

means that this court uses the same standard that the trial court

should have used, and we examine the evidence to determine

whether as a matter of law no genuine issues exist for trial.

Dupler v. Mansfield Journal Co., Inc. (1980),

,

,

. Thus, the trial

court's decision is not granted any deference by the reviewing

court. Brown v. Scioto Cty. Bd. of Commissioners (1993),

,

.

Lasley v. Nguyen,

,

,

(2d

Dist.).

{¶ 23} “The standard for granting a directed verdict set out in Civ.R. 50 also applies

to a motion for JNOV. * * *.” Randall v. Mihm,

,

(2d Dist. 1992). Finally, Civ.R. 59 governs motions for a new trial, and as the trial

court indicated, while Kademian’s “motion does not specifically delineate the grounds upon

which he seeks a new trial, it appears he [relied] upon Civ.R. 59(A)(6) and (7), which

provide for a new trial” because “(6) the judgment is not sustained by the weight of the

evidence” and “(7) the judgment is contrary to law.” “A trial court's denial of a motion for

a new trial is reviewed for an abuse of discretion. Yungwirth v. McAvoy (1972),

,

,

.” Zerkle v. Kendall,

,

,

(2d Dist.) “Abuse of discretion” has been defined

as an attitude that is unreasonable, arbitrary, or unconscionable. Huffman v. Hair Surgeons,

Inc.,

,

(1985). A decision is unreasonable if there is no

sound reasoning process that would support that decision. AAAA Enterprises, Inc. v. River

Place Community Urban Redevelopment Corp.,

,

(1990);

Feldmiller v. Feldmiller, 2d Dist. Montgomery No. 24989,

.

{¶ 24} As this Court noted in Kademian I, “Claims for breach of fiduciary duty 49

require proof of the following elements: ‘(1) the existence of a duty arising from a fiduciary

relationship; (2) a failure to observe the duty; and (3) an injury resulting proximately

therefrom.’ * * * .” Id., ¶ 57.

{¶ 25} As this Court has previously noted:

A fiduciary duty is generally defined as “ ‘[a] duty of utmost good

faith, trust, confidence, and candor owed by a fiduciary * * * to the

beneficiary * * *; a duty to act with the highest degree of honesty and loyalty

toward another person and in the best interests of the other person.’” In re

Trust of Bernard, Summit App. No. 24025,

,

, at ¶ 20, quoting from Black's Law Dictionary (8th Ed.Rev. 2004)

545. * * * .

For example, “[p]artners in Ohio owe a fiduciary duty to one another.”

Dunn v. Zimmerman (1994),

,

.

Controlling shareholders in close corporations also owe fiduciary duties to

minority shareholders. In Busch v. Premier Integrated Med. Assoc., Ltd.,

Montgomery App. No. 19364,

,

, we

noted:

“[L]ike partners, controlling shareholders of a close

corporation owe a fiduciary duty to minority shareholders, a

duty which is violated when the majority takes action it is

authorized to take which nevertheless operates to the

disadvantage of the minority and was not undertaken in good 50

faith and for a legitimate business purpose. Id. at ¶ 79, citing

Schafer v. RMS Realty (2000),

,

.

***

Good faith is “defined generally as ‘honesty in fact in the conduct or

transaction concerned.’” Casserlie v. Shell Oil Co.,

,

,

, quoting R.C. 1301.01(S). The Supreme

Court of Ohio has also defined the term as follows:

“‘A lack of good faith is the equivalent of bad faith,

and bad faith, although not susceptible of concrete definition,

embraces more than bad judgment or negligence. It imports a

dishonest purpose, moral obliquity, conscious wrongdoing,

breach of a known duty through some ulterior motive or ill

will partaking of the nature of fraud. It also embraces actual

intent to mislead or deceive another.’” Hoskins v. Aetna Life

Ins. Co. (1983),

, 6 OBR 337,

, quoting Slater v. Motorists Mut. Ins. Co. (1962),

,

,

, paragraph

two of the syllabus.

DiPasquale v. Costas,

,

,

(2d Dist.).

{¶ 26} Finally, we note that “[c]ourts in sister states and Ohio appellate courts have 51

found a heightened fiduciary duty between majority and minority shareholders in a close

corporation.” Crosby v. Beam,

,

(1989). As this

Court previously noted:

A drawback to the nature of a close corporation is that majority

shareholders can easily abuse their corporate control to the disadvantage of

the minority shareholders. Minority shareholders are particularly vulnerable

because they are small in number and cannot easily protect their financial

interests because there is usually no readily available market for their stock.

Because of the close relationship between majority shareholders and the

actual operation of a close corporation:

“* * * the form is peculiarly susceptible to a particular

form of misuse or abuse by the majority or controlling

shareholders. Commonly known as a ‘squeeze-out’ or

‘freeze-out,’ it refers to manipulative use of corporate control

to eliminate minority shareholders * * * or otherwise unfairly

deprive them of advantages or opportunities to which they are

entitled.” Estate of Schroer, supra, [19 Ohio App.3d] at

37-38, 19 OBR at 103-104,

, citing

O'Neal, “Squeeze-outs” of Minority Shareholders: Expulsion

or Oppression of Business Associates (1975).

In response to this problem, numerous courts have “borrowed” a rule

from partnership law, and have held that majority shareholders have a 52

heightened fiduciary duty, one of the utmost good faith and loyalty, to the

minority shareholders. Estate of Schroer, supra at 37-38, 19 OBR at 103-104,

. Thus, a majority shareholder's fiduciary duty

prohibits him from using his power to promote his personal interests at the

expense of corporate interests.

quoting United States v. Byrum

(1972),

,

,

. In

Crosby, the Ohio Supreme Court held that:

“Where majority or controlling shareholders in a close

corporation breach their heightened fiduciary duty to minority

shareholders by utilizing their majority control of the

corporation to their own advantage, without providing

minority shareholders with an equal opportunity to benefit,

such breach, absent a legitimate business purpose, is

actionable. (Emphasis added.) Crosby,

,

.

Gigax v. Repka,

,

(2d Dist. 1992).

“Where a partner is expelled in order to resolve a partnership schism, there is no violation of

the fiduciary duty.” Leigh v. Crescent Square, Ltd.,

,

(2d Dist. 1992).

{¶ 27} As did the trial court, we disagree with Kademian that the evidence at trial

was undisputed, such that he was entitled to a directed verdict or to judgment

notwithstanding the verdict. Kademian testified that in April, 2000, Marger “made an 53

announcement, he and Dr. Rasp.” Kademian stated that Marger told him that he was leaving

M & A to Kademian, and that Marger assured Rasp at that time that he would “take care of

him.” Kademian testified that there was no reason to dissolve M & A, and that he later

learned in the discovery process that Marger had a plan to practice with Rasp to Kademian’s

exclusion. Kademian stated that M & A was “not dissolved for any legitimate business

purpose.” Finally, regarding the Western Ohio stock, Kademian denied that the issue

persisted from 1998 to 2000, and he testified that he and Marger “agreed to disagree.”

{¶ 28} Conversely, Marger testified that the Western Ohio stock conflict, as well as

the issue regarding a possible merger with the Field group, were “very big contentious issues

pretty much until the end of the corporation.” Marger stated that Kademian’s “aggressive”

behavior toward hospital staff “couldn’t help but somehow affect our relationship with the

hospital administrations.” Marger stated that he and Kademian were becoming “more and

more distanced over a variety of issues, like the peer review.” Marger testified that his

relationship with Kademian was affecting his health. Marger stated that Kademian’s

reporting of the treatment of Patient X, after agreeing not to do so without first advising

Marger and Rasp, was “the straw that broke the camel’s back.” Marger testified that he told

Rasp and Kademian in April, 2000 that he was leaving M & A, and that at the time he did

not know what he wanted to do going forward. Marger stated that he called the

shareholders meeting because he thought that was “the cleanest way to disassociate myself

from Dr. Kademian.” Marger stated that he never intended to retire from the practice of

medicine, that he incorporated Cancer Consultants as a “practice vehicle” for himself, and

that Rasp was not involved in the process. He stated that he and Rasp subsequently 54

discussed the possibility of practicing together.

{¶ 29} According to Marger, in mid June, 2000, he realized that if he continued to

practice in Dayton, he would also continue to have frequent interactions with Kademian, and

that he turned Cancer Consultants over to Rasp at Rasp’s request. From July 1, 2000,

Marger stated that he “never even set foot in Good Samaritan or Miami Valley again,

literally.” Finally, Marger stated while Kademian expressed an interest in buying the shares

of M & A, and that Marger told his lawyer to look into it, “we just never heard back from

Dr. Kademian” about the purchase. He testified that one of the conditions of any sale of M

& A to Kademian would be that Kademian would be required to change the name of the

entity, since “ * * * I honestly did not want my name associated with him - - with his

activities anymore.”

{¶ 30} Rasp testified that Marger informed him and Kademian that he was leaving

M & A, and that Rasp was “stunned” at the news. Rasp denied that Marger stated that he

would “take care” of Rasp. Rasp denied that Marger indicated that he was leaving M & A to

Kademian. Rasp stated that Kademian told him that he was going to start his own

company, and that Rasp was free to do whatever he chose to do after the dissolution.

{¶ 31} We find, based upon the above testimony of Kademian, that there was

evidence before the jury that Marger breached his fiduciary duties to Kademian. We further

find, based upon the testimony of Marger and Rasp, that there was evidence before the jury

that Marger dissolved the business in good faith and for a legitimate business purpose due to

the schism that existed between the parties. Accordingly, based upon our thorough de

novo review of the record, and without weighing the evidence, we cannot conclude that as a 55

matter of law, no genuine issues existed for trial. For the foregoing reasons (as well as the

reasons set forth in our analysis of Kademian’s fourth assignment of error below), we further

cannot conclude that the trial court abused its discretion in determining that the judgment is

not sustained by the weight of the evidence, or is contrary to law, such that Kademian was

entitled to a new trial.

{¶ 32} Regarding Kademian’s assertion that the trial court erred in failing to

instruct the jury that Marger breached his fiduciary duties, our determination that the trial

court did not err in overruling Kademian’s motion for a directed verdict renders Kademian’s

second assigned error moot. Kademian’s first three assigned errors are overruled.

{¶ 33} Marger’s fourth assigned error is as follows:

“THE JURY’S DETERMINATION THAT DR. MARGER DID NOT BREACH

HIS FIDUCIARY DUTIES TO DR. KADEMIAN IS AGAINST THE MANIFEST

WEIGHT OF THE EVIDENCE.”

{¶ 34} Kademian again asserts that the evidence before the jury was undisputed

regarding Marger’s breach of his fiduciary duties to him, namely that Marger spoke to Rasp

about joining Cancer Consultants without Kademian’s knowledge or consent; that Marger

had M & A’s attorney prepare documents to create Cancer Consultants without Kademian’s

knowledge or consent; and that, pursuant to a “plan” with Rasp, Marger created the new

corporation, without Kademian, to relieve Rasp and himself of the non-competition

agreements with M & A, without Kademian’s knowledge or consent. According to

Kademian, a “review of the record will not disclose any evidence to the contrary.”

{¶ 35} As this Court recently noted: [Cite as Kademian v. Marger,

.] The standard set forth for manifest-weight-of-the-evidence appellate

review in State v. Thompkins,

,

(1997),

applies also in civil cases. Eastley v. Volkman,

,

,

, ¶ 17. In applying this standard, the

appellate court, reviewing the entire record, weighs the evidence and all

reasonable inferences, considers the credibility of witnesses and determines

whether in resolving conflicts in the evidence, the factfinder clearly lost its

way and created such a manifest miscarriage of justice that the judgment must

be reversed and a new trial ordered. The discretionary power to grant a new

trial should be exercised only in the exceptional case in which the evidence

weighs heavily against the judgment. State v. Martin,

,

(1st Dist. 1983), cited approvingly in

.

Folck v. Redman, 2d Dist. Clark No. 2013-CA-35,

.

{¶ 36} As this Court has further noted:

* * * The credibility of the witnesses and the weight to be given to

their testimony are primarily matters for the trier of facts to resolve. State v.

DeHass,

,

(1967). “Because the

factfinder * * * has the opportunity to see and hear the witnesses, the cautious

exercise of the discretionary power of a court of appeals to find that a

judgment is against the manifest weight of the evidence requires that

substantial deference be extended to the factfinder's determinations of

credibility. The decision whether, and to what extent, to credit the testimony

of particular witnesses is within the peculiar competence of the factfinder, 57

who has seen and heard the witness.” State v. Lawson, 2d Dist. Montgomery

No. 16288,

, *4 (Aug. 22, 1997).

Individual Business Servs. v. Carmack, 2d Dist. Montgomery No. 25286,

.

{¶ 37} Having reviewed the entire record, weighed the evidence and considered all

reasonable inferences, and deferring to the credibility assessment of the jury, we cannot

conclude that the unanimous verdict of the jury is against the manifest weight of the

evidence. Marger testified, as noted above, that in response to the ongoing dispute

regarding the Western Ohio stock, Kademian’s conduct regarding Dr. Field, his aggressive

behavior toward hospital staff, his conduct regarding peer review, and finally, his reporting

of the treatment of Patient X without first discussing it with Marger, he announced his

departure from M & A and created Cancer Consultants privately, without Rasp’s

involvement, so that if he chose to continue to practice in Dayton, he could do so. Rasp’s

testimony supports Marger’s, as does Martin’s regarding Kademian’s treatment of hospital

staff. The jury was free to credit Marger’s testimony regarding his motives in dissolving M

& A, namely that it was no longer feasible or functional for him and Kademian to continue

as partners, and that, based upon Kademian’s conduct, a schism existed between Marger and

Kademian. If believed, the jury had ample basis to conclude that Marger dissolved the

business in good faith and for a legitimate business purpose, and that he did not breach his

fiduciary duty to Kademian in doing so. Since Kademian’s fourth assignment of error lacks

merit, it is overruled.

{¶ 38} We will consider Kademian’s fifth and sixth assigned errors together. They 58

are as follows:

“THE TRIAL COURT ERRED IN ALLOWING EVIDENCE OF DR.

KADEMIAN’S ALLEGED ALIENATING ACTIONS CONCERNING THE

APPOINTMENT OF DR. DOUG DITZEL AS THE MEDICAL DIRECTOR OF MIAMI

VALLEY HOSPITAL.”

And,

“THE TRIAL COURT ERRED IN NOT INSTRUCTING THE JURY THAT

SUBSEQUENT ACTIONS BY A PLAINTIFF ARE NOT A DEFENSE TO A CLAIM FOR

BREACH OF FIDUCIARY DUTY.”

{¶ 39} Kademian asserts as follows in his brief:

Dr. Kademian filed a motion in limine to exclude any subsequent

actions on December 6, 2012. Counsel for Kademian objected to such

evidence again at trial and was twice granted a continuing objection to such

evidence by the trial court. * * * Nevertheless, the trial court allowed

evidence by Dale Creech, Gregory Rasp, Rebecca Paessun, Doug Ditzel and

Mary Boosalis that Dr. Kademian caused his own demise subsequent to Dr.

Marger’s wrongful dissolution of [M & A]. * * * The trial court allowed this

evidence because “it goes to damages.”

{¶ 40} Kademian further asserts that in “addition to erring by allowing evidence of

actions by Dr. Kademian subsequent to the breaches of fiduciary duty by Dr. Marger, the

trial court also erred by not providing a requested instruction that such subsequent actions by

a plaintiff are not a defense to breach of fiduciary duty.” 59

{¶ 41} We initially note that the “decision whether to admit or exclude evidence is

within the sound discretion of the trial court, and ‘unless the trial court clearly abused its

discretion and a party was materially prejudiced as a result, reviewing courts should be slow

to interfere.’ King v. Niswonger, 2d Dist. Darke No.2013-CA-1,

,

quoting Waste Mgt. of Ohio, Inc. v. Mid-America Tire, Inc.,

,

(2d Dist. 1996).” Walsh v. Smith, 2d Dist. Montgomery No. 25879,

.

{¶ 42} The record reflects that on December 6, 2012, Kademian filed a motion

entitled “Plaintiff’s Motion in Limine to Exclude Subsequent Actions of the Plaintiff as an

Intervening, Superceding Cause of Damages.” The motion provides as follows:

* * * while the Defendant has requested an instruction regarding an

intervening, superceding cause pursuant to OJI 405.05, under Ohio law, an

intervening superseding causation only relates to actions by third parties, not

the Plaintiff. Where a Defendant raises the actions of the Plaintiff as a

defense to the Defendant’s wrongdoing, he is raising the issue of comparative

or contributory fault which is not permitted under Ohio law for intentional

torts.

{¶ 43} On December 7, 2012, Marger filed a response which provides in part that

“Defendant agrees to withdraw this requested instruction,” and that Kademian’s motion is

accordingly moot.

{¶ 44} At trial, on December 14, 2012, in the course of the direct examination of

Dale Creech regarding the selection process for the medical director or doctors to replace the 60

Field group, the following exchange occurred:

Q. Do you know in terms of Miami Valley or Premier recruiting for

the medical director for radiation oncology at the Valley how that took place?

A. Not really.

***

A. That was not - - my job would be to do any contracts that resulted

from the recruiting, not to be really involved in the recruiting process itself.

Q. * * * Do you know if Mary Boosalis would be involved however

in the process of the selection of medical director or doctors to fill the

position left by the leaving Field group?

A. Yes, she would have been very involved.

Q. Did you become aware after this period - - you’ve got Rasp,

Kademian, Paessun, Ditzel?

A. Yes.

Q. Did you become aware of a subsequent issue or problem with Dr.

Kademian?

A. Yes. T.T. pg. 357.

{¶ 45} Kademian objected as follows: “* * * This is just a back door way of trying

to introduce an intervening superseding cause. * * * He withdrew his request for instruction

on intervening superseding cause. Then he went before the jury in the opening statement

and said Dr. Kademian cause his own demise. Now that’s where we’re going with this and

it’s not relevant.” T.T. pg. 358. The following exchange occurred: 61

MR. GORA: Your Honor, this goes to damages. And this is the

intent of what the other players with the hospital was going to do (sic), that he

was going to be part of this group that was going to be - - * * *.

THE COURT: Uh-huh.

MR. GORA: It was going to be business as usual and everything was

going to be the same except he’s the one who caused this whole problem. So

he absolutely - -

THE COURT: I agree it goes to damages. Certainly not intervening

superseding, but.

MR HILL: I’m going to request a limiting instruction that it not be

considered an alternative cause.

THE COURT: Well, I will certainly give that instruction, but I do

think it goes to damages. So they’ll be instructed that his behavior is not - -

can’t cause a breach of fiduciary duties. And that’s really clear. * * *

MR. HILL: Okay.

THE COURT: And I’ll instruct them that. They can consider this

testimony only as it relates to damages.

MR. HILL: Thank you.

***

MR. GORA: * * * Your Honor, one of the reasons we received a

directed verdict last time is we didn’t benefit from the dissolution.

Everybody had a level playing field. I think we still have to show that 62

element too in terms of breach of fiduciary duty, that we weren’t involved,

that these contracts had nothing to do with us, how that happened.

THE COURT: But the breach of fiduciary duty was the dissolution of

the corporation, not what happened subsequently in terms of whether he did

or didn’t get this contract. That’s my understanding.

MR. HILL: That’s exactly right. And the Court of Appeals has said

that he didn’t have to benefit from it for it to have to be breach of fiduciary

duty. That was the issue on appeal.

MR. GORA: That’s correct, Your Honor, but except the Court of

Appeals said it’s not just that. It’s other things too. Did he have some ill

will? Was there a reason for this to happen? But I think it’s also important

to reaffirm based on the case law that indeed too why these contracts didn’t or

why Dr. Kademian wasn’t part of these contracts had nothing to do with us

and how that happened.

THE COURT: But that’s only a damage issue. It is not a breach of

fiduciary duty issue. That’s only - - from the Plaintiff’s theory of the case,

the breach of fiduciary duties had already occurred or had occurred in the

dissolution of the corporation. And the - - I’m just going to use your words -

- the plan to set up Cancer Consultants and practice without Plaintiff

involved. So I think this goes to damages only. * * * T.T. pg. 358-61.

Counsel for Kademian then requested and received a continuing objection. T.T. pg. 361.

{¶ 46} Creech then testified as follows regarding Doug Ditzel: [Cite as Kademian v. Marger,

.] * * * As the hospital began to announce that it had recruited Dr.

Ditzel and Dr. Paessun to come practice radiation oncology at the hospital,

and I don’t remember who announced that Dr. Ditzel was going to become

the new medical director of radiation oncology. And Dr. Kademian took

exception to that appointment and entered into kind of a letter writing

campaign to Premier and hospital board members, medical staff, I can’t

remember all who. * * * Where he basically maligned the hospital’s

decision to appoint Dr. Ditzel and attacked Dr. Ditzel’s qualifications to be

medical director.

And that was kind of the last straw. The hospital didn’t take kindly

to that attack and did not want to allow Dr. Kademian to practice. And of

course Dr. Ditzel then didn’t want to have Dr. Kademian in any kind of group

that he was going to be in after having his qualifications assailed. T.T. pg.

362.

{¶ 47} Paessun’s testimony was consistent with that of Creech regarding

Kademian’s conduct toward Ditzel. Ditzel testified that he perceived Kademian’s conduct

“as a threat,” and that he did not want to work with him. T.T. pg. 425, 429. Rasp testified

that in July, 2000, he spoke to Kademian “about putting this four person group together with

him and myself, Dr. Paessun and Dr. Ditzel.” T.T. pg. 528. When asked if he was an

advocate for Kademian being part of the group at that time, Rasp responded, “Absolutely.”

T.T. pg. 528. Rasp stated that after Kademian disparaged Ditzel, “there was no chance” of

Kademian becoming part of the group. T.T. pg. 541. Finally, Boosalis testified that she met

with Kademian after he sent a letter dated August 1, 2000 to Bill Thornton, the CEO of 64

Miami Valley Hospital, that disparaged Ditzel. When asked to describe her meeting with

Kademian, Boosalis replied that it “was very similar to this letter. He was very upset, I

would say, very animated, very accusatory, made, my opinion, quite a few defamatory

remarks - - .” T.T. pg. 452. Boosalis stated, “I asked [Kademian] if he knew Dr. Ditzel or

had worked with him, and he had not which I found rather astounding. He had a very

strong bias that because Dr. Ditzel’s program was not what he considered the caliber of his

program had been, * * * I believe Dr. Ditzel did a D.O. residency and was a D.O. He was

extraordinarily critical of that and thought it disqualified him in essence to be the medical

director.” T.T. p. 452-53.

{¶ 48} We cannot conclude that the trial court abused its discretion in admitting

the evidence at issue, namely Kademian’s conduct following the breach of fiduciary duties

that he alleged Marger committed. As noted above, if a plaintiff establishes that a

defendant breached his fiduciary duty, the plaintiff must then establish that the breach

proximately caused his damages. As this Court noted in Kademian I, "Proximate cause is

ordinarily a question of fact for the jury. Strother v. Hutchinson,

,

(1981)." Id., ¶ 70. In Strother, the Supreme Court of Ohio noted when

discussing proximate cause, that “‘it is generally true that, where an original act is wrongful

or negligent and in a natural and continuous sequence produces a result which would not

have taken place without the act, proximate cause is established * * * .’ * * * .

Foss-Schneider Brewing Co. v. Ulland (1918),

,

.” Strother,

287.

{¶ 49} The theory of Kademian’s case, as reflected in his brief, was that Marger 65

breached his fiduciary duties to him in dissolving M & A, proximately “causing Dr.

Kademian to lose his shareholder interest, his employment and effectively preventing him

from practicing medicine in the Dayton, Ohio area.” (Emphasis added). While Kademian

asserted that the testimony of Creech, Rasp, Paessun, Ditzel and Boosalis was irrelevant, the

trial court correctly determined that it was in fact relevant to a determination of damages,

should the jury conclude that a breach of fiduciary duties occurred. Since an abuse of

discretion is not demonstrated, Kademian’s fifth assigned error is overruled.

{¶ 50} As to the trial court’s jury instructions regarding Kademian’s subsequent

actions, we note that at the charging conference the following exchange occurred:

THE COURT: * * *

Plaintiff also requests an instruction as follows. “All of the claims by

Dr. Kademian against Dr. Marger are claims for intentional torts. Any

action by Dr. Kademian subsequent to any breach of fiduciary duty or” * * *

“or [conversion] by Dr. Marger are no defense to such intentional torts.”

Mr. Gora, any objection?

MR GORA: Yes, Your Honor. That again goes toward - - we’ve

already defined what the claims are, what you have to prove for it. Now he

wants another claim about what - - these are intentional torts and that his

actions don’t matter. And they do, in terms of both proximate cause and

damages. We’ve already been through that at least five to ten times.

***

THE COURT: I am not going to include the instruction about 66

intentional torts and that Dr. Kademian’s subsequent actions are no defense to

such intentional torts,* * * . I - - as I have said before, I think it goes to

proximate cause.

{¶ 51} The record reflects that the trial court instructed the jury in part as follows:

***

A majority shareholder is also prohibited from using his majority

power to promote his personal interest at the expense of the corporation’s

interest. It does not matter whether Dr. Marger personally benefitted from

any breach of fiduciary duties. Any actions by Dr. Kademian subsequent to

breach of fiduciary duty is no defense to any breach of fiduciary duty.

If you find by a preponderance of the evidence that Defendant, Dr.

Marger, violated any fiduciary duty to Plaintiff, Dr. Kademian, you will

consider whether any such violation of fiduciary duty proximately caused

damage to Plaintiff, Dr. Kademian.

***

{¶ 52} Preliminarily, we note that the trial court correctly set forth the elements of

Kademian’s claims, and contrary to Kademian’s assertion, the trial court, after indicating

that it would not provide the instruction that Kademian’s subsequent actions are not a

defense to a claim of breach of fiduciary duty, did in fact provide an instruction regarding the

subsequent actions of Kademian. Thus, Kademian misstates the record on this issue.

Accordingly, his sixth assigned error lacks merit, and it is overruled. The judgment of the

trial court is affirmed. 67

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HALL, J., and WELBAUM, J., concur.

Copies mailed to:

James M. Hill Felix J. Gora Hon. Mary K. Huffman