Shelly Co. v. N.E.S. Corp.

[Cite as Shelly Co. v. N.E.S. Corp., 2026-Ohio-3019.] COURT OF APPEALS OF OHIO EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA THE SHELLY COMPANY, ET AL., : Plaintiffs-Appellees, : Nos. 115409 and 115668 v. : N.E.S. CORP., ET AL., : Defendants-Appellants. : JOURNAL ENTRY AND OPINION JUDGMENT: AFFIRMED IN PART, REVERSED IN PART, VACATED IN PART, AND REMANDED RELEASED AND JOURNALIZED: August 6, 2026 Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-22-968212 Appearances: Hahn Loeser & Parks LLP, Aaron S. Evenchik, Gregory A. Thompson, and Benjamin J. Horvath, for appellees. Flowers & Grube, Michael J. Factor, and Paul W. Flowers; Audra J. Zarlenga, for appellants. DEENA R. CALABRESE, P.J.: In these consolidated appeals following a bench trial and post-trial proceedings, defendants-appellants Perk Company, Inc. (“Perk”), Anthony Cifani (“Tony Cifani”), and Hudson Insurance Company, Inc. d.b.a. Hudson Insurance Group (“Hudson”) (collectively the “Perk Defendants”) challenge the trial court’s judgment awarding damages and attorney fees to plaintiffs-appellees The Shelly Company, Shelly Materials, Inc., Allied Corporation d.b.a. StoneCo, Inc., and Jefferson Materials Company d.b.a. StoneCo, Inc. (collectively “Shelly”). We find some merit to the appeal. Accordingly, we affirm in part, reverse in part, vacate in part, and remand for further proceedings consistent with this opinion. I. Facts and Procedural History This appeal concerns Shelly’s efforts to collect payment for materials supplied in connection with various roadway projects. Shelly consists of related corporate entities that supply materials, including asphalt, for roadway construction and maintenance projects. In its original complaint filed September 1, 2022, Shelly named its customer N.E.S. Corp. (“N.E.S.”), along with N.E.S.’s president, John Bojec (“Bojec”), as defendants. N.E.S. is an asphalt paving contractor. Shelly sought to recover in excess of $1,244,769.05 for materials supplied pursuant to contract. Shelly also sought recovery against Bojec individually pursuant to a personal guaranty he had executed, agreeing to be held jointly and severally liable for any of N.E.S.’s debt to Shelly. Shelly’s original complaint consisted of four counts, specifically: Count I: Breach of contract against N.E.S. and Bojec; Count II: Unjust enrichment against N.E.S. and Bojec; Count III: Action on account against N.E.S. and Bojec; and Count IV: Breach of personal guaranty against Bojec.  The complaint included multiple attachments, including an agreement with incorporated personal guaranty and a six-page aged analysis report — i.e., an account statement — reflecting a total balance due of $1,244,769.05. Shelly sought that sum plus contractual interest, attorney fees pursuant to the terms of the contract, and costs. On December 8, 2022, before any answers had been filed, the trial court held a case-management conference. By agreement of appearing counsel, Shelly was granted leave to file an amended complaint no later than December 23, 2022. On December 22, 2022, Shelly filed its first amended complaint, which joined Perk, Hudson, Great Midwest Insurance Company (“Midwest”), and Mahorsky Group Inc. (“Mahorsky”) as defendants. Like N.E.S., Perk is Shelly’s customer. Hudson, Midwest, and Mahorsky were named as sureties and were sued for recovery on payment bonds issued in relation to specified projects. In addition to its original allegations, Shelly contended, inter alia, that Tony Cifani, Perk’s majority shareholder, had obtained an ownership interest in N.E.S. pursuant to a stock-purchase agreement, that N.E.S. and Perk “have common and overlapping management and ownership[,]” and that after the stock-purchase agreement “Shelly was directed to treat Perk and [N.E.S.] as the same entity.” The amended complaint alleged, for example, that both N.E.S. and Perk issued checks to Shelly to pay amounts charged to N.E.S. and that Perk issued checks to Shelly for both Perk’s and N.E.S.’s invoices. Shelly therefore contended that Perk and N.E.S. “managed . . . projects in a horizontally integrated manner” and should be held jointly and severally liable to Shelly for payment. Counts I through III, for breach of contract, unjust enrichment, and action on account, were amended to join Perk in addition to N.E.S. and Bojec. Count IV, which sought recovery under a personal guaranty, named only Bojec. The amended complaint contained additional counts (Counts V-VII) against N.E.S., Perk, and the sureties seeking recovery on the payment bonds. Count VIII of the amended complaint sought a declaratory judgment as to whether N.E.S. and Perk were “alter egos of each other for the purposes of” Shelly’s action against them.1 On January 17, 2023, Shelly filed a notice of voluntary dismissal with prejudice as to Mahorsky only. On February 22, 2023, the trial court held a pretrial conference and established discovery and other deadlines. Shelly filed a notice of dismissal with prejudice of its claims against Midwest on February 24, 2023. The trial court held another pretrial conference on March 2, 2023, and scheduled a settlement conference for August 10, 2023. On May 1, 2023, pursuant to a settlement agreement, Shelly dismissed all of its claims against Bojec, with the court to retain jurisdiction to enforce the terms of the settlement agreement. The trial court granted the parties’ joint motion to continue the August 10, 2023 settlement conference but held the parties’ contemporaneous 1 The amended complaint incorrectly captioned Count VIII as Count VII. The amended complaint clearly consisted of eight counts. request to amend the case-management schedule in abeyance. Following a pretrial held December 13, 2023, the trial court amended the case-management order.2 Discovery continued, including motion practice pertaining to certain bank records. On January 29, 2024, Shelly filed its motion to file a second amended complaint instanter “to add Anthony J. Cifani as an additional Defendant based on his execution of a personal guaranty in favor of Shelly.” The proposed amended complaint also deleted allegations pertaining solely to defendants who had been dismissed from the case. The Perk Defendants did not oppose Shelly’s motion, and the trial court granted Shelly leave to file its second amended complaint. Shelly filed its second amended complaint, along with the associated filing fee, on February 14, 2024. The second amended complaint consisted of six counts: Count I: Breach of contract against N.E.S., Perk, and Tony Cifani; Count II: Unjust enrichment against N.E.S., Perk, and Tony Cifani; Count III: Action on account against N.E.S., Perk, and Tony Cifani; Count IV: Breach of personal guaranty against Tony Cifani; Count V: Payment bond claim against Perk and Hudson; and Count VI: Declaratory judgment against N.E.S. and Perk pursuant to an alter ego theory of liability. 2 The trial court set the case for trial by jury, even though no party had made a jury demand. (It had likewise set the case for a jury trial in its orders dated February 23, 2023, and May 4, 2023.) On May 6, 2024, the Perk Defendants filed a motion to strike the jury trial order. The trial court granted the unopposed motion on September 4, 2024.  While Perk and Hudson timely answered, Tony Cifani did not, and Shelly filed a motion for default judgment on March 22, 2024. Tony Cifani later sought leave to file an answer instanter, which the trial court granted. Shelly filed a motion for partial summary judgment on May 2, 2024, seeking judgment as a matter of law on Count I (breach of contract), Count IV (breach of personal guaranty against Tony Cifani), and Count V (claim on payment bond). On July 15, 2024, the Perk Defendants filed a combined cross-motion for summary judgment and brief in opposition to Shelly’s motion for partial summary judgment. While we will not summarize the parties’ cross-motions in detail, we note that the Perk Defendants’ motion requested summary judgment on all of Shelly’s claims, including the count for declaratory judgment, and their supporting brief contains substantial discussion of corporate veil piercing. For example, the Perk Defendants argued that Shelly “cannot meet any of the prongs necessary to pierce the Defendant NES corporate structure as it relates to Perk or [Tony] Cifani[]” and that under applicable law there was “not enough to pierce the corporate veil and to hold either Perk or [Tony] Cifani personally liable for NES’ s unpaid corporate debts to” Shelly. On August 13, 2024, Shelly filed its combined reply brief in support of its motion for partial summary judgment and its opposition to the Perk Defendants’ motion for summary judgment. Shelly argued, inter alia, that the Perk Defendants were not entitled to summary judgment “on the issue of veil-piercing . . . because the record evidence discovered to date offers significant support for the conclusion that Cifani and Perk abused NES’s corporate form and exercised such control over NES such that it was a mere alter ego of Cifani and Perk.” Elsewhere in the brief, Shelly argued: The deposition testimony and the documents produced so far offer significant support for Shelly’s allegations that Mr. Cifani and Perk operated NES as if it had no separate mind, will, or existence of its own, exercised in such a manner as to commit fraud against Shelly. The Perk Defendants filed a further reply brief on September 4, 2024. While claiming that there was no “supporting proof” that Tony Cifani and his brother became minority shareholders in N.E.S., the Perk Defendants also argued that “there was never any allegation that Perk was ever a shareholder in” N.E.S.: Shelly’s veil piercing claim against Defendant Perk must be dismissed as a matter of law, because Shelly has proffered no evidence to dispute the fact that Perk was never a shareholder of NES. None of Perk’s alleged actions listed on Page 13-15 of Shelly’s Opposition are relevant. Since Perk was never a shareholder of NES, the Belvedere test is inapplicable. (Emphasis in original.) In other words, while the reply brief addressed veil piercing as to Perk, it did not address veil piercing as to Tony Cifani personally. On October 1, 2024, the trial court ordered the Perk Defendants to produce discovery pursuant to its February 12, 2024 order within 14 days. It held Shelly’s associated motion to show cause in abeyance. The same day, the trial court denied the parties’ cross-motions for summary judgment without opinion, other than to remark that “questions of material fact remain for trial.” The Perk Defendants filed their initial trial brief on October 14, 2024. They argued, inter alia, that Tony Cifani was either never a shareholder of N.E.S. or “would have only been a 20% shareholder of N.E.S. for a brief moment in time.” Accordingly, the Perk Defendants argued that Shelly’s veil-piercing arguments should fail. Shelly likewise filed its initial trial brief on October 14, 2024. In addition to other arguments, Shelly wrote that the evidence would “support the conclusion that Defendants Perk and Cifani abused NES’s corporate form with the intent of avoiding payment obligations to Shelly[]” and that Shelly therefore “seeks to pierce the corporate veil to Defendants Perk and Cifani” in the amount of “$997,838.19 plus interest and legal fees[.]” In a table summarizing their theories of liability, Shelly included the same argument, writing that one theory they intended to present at trial was “[v]iel-piercing [sic] against Perk and Cifani for their abuse of NES’s corporate form[.]” The Perk Defendants filed a revised trial brief on January 24, 2025. They again argued, inter alia, that “Shelly is improperly trying to pierce N.E.S.’s corporate veil of limited liability to attempt to get to one alleged minority shareholder of N.E.S., Anthony Cifani, and/or to Perk.” The Perk Defendants further stated that while veil piercing was raised in Shelly’s original trial brief filed October 14, 2024, it “was never actually alleged in the Second Amended Complaint at issue in this case.” Shelly filed a fresh version of its own trial brief the same day, reiterating that it sought to pierce the corporate veil against both Perk and Tony Cifani. II. The Trial The case was tried to the bench on January 31, February 3, and February 4, 2025. A. Shelly’s Case-in-Chief Shelly called five witnesses in its case-in-chief. We summarize their testimony in order. 1. John Trafficante Shelly called credit manager John Trafficante as its first witness. Trafficante identified himself as a credit manager for Shelly’s northeast division, a position he had held for approximately six years. Trafficante stated that he reviewed credit applications for new customers and would ultimately monitor billing and payment activity to ensure collection on all receivables. He then walked through the process of providing a credit application to customers and following up by checking credit references. Trafficante testified that a successful applicant would also be given a customer agreement and that an individual would be required to sign a personal guaranty page “in case the company itself is unable to pay the bills[.]” (Tr. 51.) Trafficante then testified concerning the process customers followed to obtain materials, indicating that Shelly would provide a quote for a particular job based upon information provided and, if the customer was satisfied, the customer would complete a purchase order. The “purchase order is sent to billing[,]” and then once a job is set up, the customer “is then able to get materials for that job[]” via phone, email, or by going to a Shelly plant. (Tr. 52.) Trafficante testified that if a customer needed product delivered, Shelly could handle delivery or the client could arrange for hauling on its own. He stated that it was not Shelly’s routine practice to issue a different purchase order even if Shelly would be handling delivery and that there would not typically be a separate line item in the purchase order for delivery. Instead, after delivery, Shelly would generate an invoice “for hauling itself[.]” (Tr. 53.) Asked whether invoices would always be directed to the customer identified on the purchase order, Trafficante responded in the negative, further explaining: “That’s the typical process, but if we are requested to send it to a different location, we try to accommodate the customer as much as we can.” (Tr. 54.) Trafficante testified to his familiarity with Perk, indicating that it generally performed concrete work, bridge work, and highway construction. He identified exhibit No. 1 as the Perk credit application with incorporated customer agreement and personal guaranty executed by Tony Cifani. Trafficante testified that Tony Cifani likewise signed the customer agreement, which included provisions specifying a finance charge on past due invoices and Shelly’s entitlement to attorney fees and expenses incurred in collecting past due amounts on unpaid invoices. Trafficante identified Tony Cifani as “the principal of Perk” and a shareholder and officer of N.E.S. (Tr. 58.) He described the essential dispute in this case as pertaining to “unpaid invoices on the N.E.S. account, which consists of N.E.S. invoices and Perk invoices.” (Tr. 58.) He identified the four construction projects at issue as “Lake Avenue, Union Avenue, Auburn, and U.S. 322.” (Tr. 58-59.) Trafficante testified that “the four jobs . . . were for Perk, but there are other invoices on the N.E.S. account that were for N.E.S.” (Tr. 58.) According to Trafficante, Shelly contracted directly with Perk on the four construction projects at issue, with Perk as general contractor and Shelly as a material supplier. He then identified exhibit No. 2 as the purchase order for the Union Avenue project, an order for asphalt materials with the customer identified as Perk. Trafficante testified that there were still open invoices on the Union Avenue job. He further explained that when customers send payment, they indicate which invoices should be “cleared with that payment.” (Tr. 63.) Next, Trafficante identified exhibit No. 3 as the purchase order for the U.S. 322 project, which likewise identified the customer as Perk and similarly ordered asphalt. Trafficante testified that exhibit No. 4 was the purchase order for the Auburn project and was likewise for asphalt. His identification of the customer on the purchase order as Perk, however, drew an immediate objection. The electronically printed customer name on the purchase order specified N.E.S., and the trial court itself observed: “I am looking at N.E.S.” and then asked Trafficante, “Who is it billed to?” (Tr. 65.) Trafficante responded: It says N.E.S. initially, but then it was called in to change to Perk. It’s hard to see it there, but on top of N.E.S., it’s Xed out, and you can faintly see Perk on this copy. There are clearer copies that will show that. (Tr. 66.) He testified that the same handwritten annotation reflecting a change to “Perk” was dated “6/3/21” based on additional handwritten annotations appearing at the bottom left and right of the same purchase order. Trafficante further explained: So this was originally produced on 4/23, but at some point between 4/23 and it looks like on 6/3, we were notified to change it from N.E.S. to Perk. (Tr. 66.) Later, on cross-examination, Trafficante indicated that it was “switched to Perk” and pointed to a handwritten notation that he indicated stated, “‘Perk, per Craig R.’” (Tr. 132.) Over defense counsel’s hearsay objection, which the trial court overruled, Trafficante testified: [O]ur billing clerk made a note on June 3rd. . . . There’s documentation up top that says “per Craig R.,” that looks like June 3rd, ‘21. That it was changed by Craig R. and then at the bottom left our materials manager, Kerry Broth, signed off on it also on June 3rd. (Tr. 132.) The trial court later asked Trafficante whether he was “part of this transaction[,]” to which Trafficante responded, “No.” (Tr. 138.) He further conceded, when confronted on cross-examination with defense exhibit DD, that the Auburn purchase order was reissued to Perk in October 2022, but that he was unaware of any copy signed by a Perk representative. (Tr. 134-135.) Trafficante explained that if a project goes over a year, Shelly might “need to update pricing or in this case maybe we updated from N.E.S. to Perk or for whatever reason.” (Tr. 136.) The trial court then pointed out that both were issued to N.E.S. Trafficante responded, “Right.” (Tr. 136-137.) This exchange continued:  THE COURT: And the prior one, the later one is N.E.S. still. Can you explain that? THE WITNESS: No. (Tr. 137.) Trafficante testified that Shelly honored the request to change the purchase order from N.E.S. to Perk. Trafficante identified exhibit No. 5 as a purchase order for the Lake Avenue project, with Perk specified as the customer. He further testified that Shelly had not been paid in full with respect to materials supplied or services rendered under the four identified purchase orders. Testimony next turned to invoices. Trafficante identified exhibit Nos. 14-26 as invoices for the Union Avenue project. He identified exhibit Nos. 27-30 as invoices for the U.S. 322 project, exhibit Nos. 31-34 as invoices for the Auburn project, and exhibit Nos. 35-41 as invoices for the Lake Avenue project. Each invoice was directed to N.E.S. Trafficante explained that this was done because “[t]hat’s what the customer requested.” (Tr. 73.) The trial court asked Trafficante if he “[took] that direction from Perk” and whether it was “personally requested of” him. (Tr. 74.) Trafficante responded, “Not to me, personally.” (Tr. 74.) Counsel for the Perk Defendants lodged a hearsay objection. After extensive inquiry by the trial court regarding the scope of Trafficante’s personal knowledge, the trial court stated: “He has no particular knowledge as to why these were billed to N.E.S., right?” (Tr. 77.) Trafficante responded: “Well, I have spoken to other people that do some of these tasks.” (Tr. 77.)  Testimony then focused on exhibit No. 54, a demonstrative summary listing open invoices for each of the four construction projects. The demonstrative exhibit (essentially a spreadsheet) also included columns for the number of months each invoice was past due, accrued interest, and a column representing the invoiced amount plus interest. Trafficante testified to the amounts due before interest, consistent with the exhibit: Union Avenue $31,638.50 U.S. 322 $41,755.48 Auburn $145,434.88 Lake Avenue $20,602.00 Total $239,430.86 (Tr. 78-79.)3 Trafficante then identified letters sent with respect to outstanding invoices on the various projects. Three of these exhibits — exhibit Nos. 7, 9, and 13 — corresponded to the Union Avenue, U.S. 322, and Lake Avenue projects, respectfully, and listed Hudson as surety. Exhibit No. 11 pertained to the Auburn project and listed Mahorsky as surety. Having covered what he referred to as what Perk allegedly owed Shelly, testimony turned to what N.E.S. owed Shelly. (Tr. 81.) Trafficante identified exhibit No. 52 as the credit application, customer account agreement, and personal 3 As discussed below, Shelly later conceded that it was owed nothing on the Lake Avenue project, and the total claimed principal due under the projects specified above (i.e., excluding interest and any award of attorney fees and costs) was therefore reduced to $218,828.86. guaranty pertaining to N.E.S. The N.E.S. customer account agreement contains the same provision as Perk’s for interest on unpaid invoices and entitlement to legal fees and expenses associated with collection. Exhibit No. 53 was identified as an aging report for N.E.S. generated by Trafficante. He testified that it reflected “the balance owed at $1,244,769.05.” (Tr. 83.) Trafficante further testified, however, that Bojec had made some payments toward the balance and that the current amount would be less because of those credits. He did not specify a sum, but did indicate that the credits would likewise lower the amount that Shelly sought from Perk. (Tr. 83.) On cross-examination, Trafficante identified the customer account numbers that Shelly assigned to Perk and N.E.S. as originally handwritten at the top of their respective credit applications. N.E.S.’s customer number was identified as 42149 and Perk’s as 13607. Trafficante acknowledged that Shelly had separately provided different materials and services to both N.E.S. and Perk and that Bojec had executed the personal guaranty for N.E.S.’s account. He further indicated that nothing in the N.E.S. account paperwork indicated that Perk or Tony Cifani would be guarantors for any N.E.S.’s debts. Trafficante also admitted that Shelly sold products to N.E.S. for projects not involving Perk: Q. So would you agree with me that Shelly sold products to N.E.S. on projects that did not involve Perk? A. That’s correct. (Tr. 92.)  Trafficante confirmed on cross-examination that Shelly’s standard terms and conditions for material sales indicated that “[u]nless otherwise agreed in writing, all materials purchased by buyer shall be FOB. Seller plant sourcing the order.” (Tr. 102-103.) Trafficante then agreed that if Perk signed a purchase order for asphalt to be picked up at a Shelly plant, the price quoted would be for the material to be picked up at Shelly’s plant, and there was nothing in the purchase order identifying an hourly trucking rate that Perk had agreed to pay. (Tr. 103.) He further conceded that, for example, the invoices to N.E.S. for the Lake Avenue project, exhibit Nos. 35-41, directly invoiced N.E.S., and only for hauling. He could not say, however, whether it was N.E.S. or Perk who requested hauling. (Tr. 107.) He clarified that “hauling is not included in the purchase orders” because those consisted just of “quoting of the prices for the material[,]” which was done in advance of any shipping determination. (Tr. 109-111.) Asked if Shelly ever billed Perk for the hauling services that it invoiced to N.E.S., Trafficante stated that Shelly “would have billed to whoever we were asked to bill it to.” (Tr. 112.) He did concede, however, that he would expect the customer that Shelly billed, to pay the invoice. (Tr. 112-113.) Trafficante even admitted the following: Q. So if asphalt materials were included under this purchase order, but they were not invoiced to the customer, the customer is not obligated to pay them until they receive the invoices, correct? A. Correct. (Tr. 128.)  Trafficante testified that Shelly did not invoice Perk for at least some asphalt materials under the U.S. 322 purchase order because they “were asked to bill them to N.E.S.” (Tr. 129.) He admitted that he had no firsthand knowledge of who told Shelly to do so but stated that “it’s standard business practice that if a customer makes a request, if we can accommodate them, we will.” (Tr. 130.) Defense counsel then walked Trafficante through the unpaid invoices for the Auburn project, exhibit Nos. 31-34. (Tr. 138.) Trafficante conceded that all of the invoices were sent to N.E.S., not to Perk, that they were all dated and sent in 2021, and that all of the work related to the unpaid invoices was performed in 2021 rather than 2022. (Tr. 138-139.) Trafficante further identified, on cross-examination, account statements sent directly to N.E.S. employees and bearing only N.E.S.’s customer number. Trafficante admitted that exhibit P, a statement dated November 8, 2021, was sent to N.E.S. employee Gary Helf and indicated an outstanding account balance of $2,342,720.59. (Tr. 145-146.) He admitted that exhibit F was another Shelly account statement sent to Gary Helf at N.E.S. dated August 31, 2022, with an outstanding balance of $1,244,769.05. (Tr. 146-147.) Exhibit C, dated December 21, 2022, and likewise listing N.E.S. as the customer and bearing its account number, indicated an outstanding balance of $1,237,269.05. (Tr. 147-148.) On cross-examination, Trafficante admitted that exhibit D was an account statement dated January 3, 2025, issued to Perk and reflecting a balance due of $68,320.99 from February 26, 2020, up to the statement date. (Tr. 151-152.) This was broken down in an email Trafficante sent to Tony Cifani identified as exhibit CC and dated September 26, 2022. Trafficante testified that he wrote: There’s still a balance of discounts taken that were not earned and finance charges. The unearned discounts total $20,317.91 and the finance charges total $47,381.88. The discounts were taken on average 58.8 days late. I can waive the finance charges, but the unearned discounts need to be paid. Please include the $20,317.91 on the check due this Friday. Let me know if you need to set up a pay plan to take care of the unearned discounts. (Tr. 152-153.)4 Pressed on whether he ever sent Perk a statement of account indicating Perk owed Shelly over a million dollars, Trafficante stated he could not be sure. (Tr. 154.) He characterized the $68,320.99 as being owed “[o]n the Perk account 13607,” evidently referring to Perk’s customer number. (Tr. 154.) He conceded that “[f]or Perk Company,” there were no unpaid invoices apart from the $68,320.99. (Tr. 156.) On redirect, Trafficante recounted conversations with Jackie Cifani. He stated she had used “a Perk e-mail address” and that in an email in February 2021, she informed him that she “was now taking on the role of N.E.S. accounts payable.” (Tr. 159.) Furthermore, with respect to exhibit DD, Trafficante testified that the October 12, 2022 date on this version of the purchase order corresponded 4 We have independently reviewed exhibit CC. Apart from insignificant punctuation changes, the statement read into the transcript is identical to Trafficante’s email. Asked to explain the meaning of “unearned discounts,” Trafficante testified that Shelly allows discounts for invoices “paid timely within a certain timeframe. And if they’re not, they don’t earn a discount. So what [Tony Cifani] did was he paid invoices late. Took the discount and short-paid us. Therefore, that’s an unearned discount he tried to take.” (Tr. 153.) to the October 12, 2022 date on his accompanying email, with counsel suggesting (and Trafficante agreeing) that this did not reflect a change to or reissuance of the purchase order, but only the most recent print date. Trafficante also characterized the $239,430.86 as the total still due under “the four projects that Perk gave us purchase orders for that they then asked us to bill under the N.E.S. account.” (Tr. 164.) He testified that “[t]he $60,000 they’re talking about is the [sic] Perk’s separate account.” (Tr. 164.) On recross, Trafficante conceded that many of the unpaid invoices related to hauling. He further conceded that the final page of exhibit I, Shelly’s standard terms and conditions for material sales contained in purchase orders, indicates: Modification. No amendment or modification of this order shall be valid or enforceable unless in writing and signed by parties sought to be charged, and no prior or current course of dealing between the parties, or any usage of trade or custom of the industry shall modify or supplement the terms and conditions of this order. (Tr. 170; exhibit I.) He further admitted to not being the individual who handled the change to the N.E.S. purchase order (exhibit No. 4) and to lacking any firsthand knowledge regarding how the change was handled. (Tr. 171-172.) On further redirect, Trafficante testified that when he emailed with Jackie Cifani regarding open accounts, she used the email address JJCifani@Perkcompany.com. (Tr. 174.)  2. Tony Cifani Shelly next called Tony Cifani on cross-examination. Tony Cifani testified that he was the CEO, secretary, and treasurer of Perk, and also its majority shareholder. (Tr. 178.) He conceded that N.E.S. was no longer doing business. (Tr. 178-179.) He admitted that he was “going to be a 20 percent shareholder” in N.E.S. “at one time,” but that there had been no transfer of money or stock. (Tr. 179.) He did concede, however, that it was his intention to help N.E.S., including increasing its bonding capacity. He cosigned on a line of credit with CF Bank, and N.E.S. eventually switched its banking to CF Bank, the same bank Perk uses. (Tr. 180-181.) Tony Cifani further admitted that Perk performed contract administration support for N.E.S., as well as payroll and accounting support. (Tr. 181.) N.E.S. ultimately switched its account system to the same one Perk uses. Perk would assist N.E.S. with “entering invoices,” and the two companies would use workers to fill in for each other if they were short. (Tr. 192.) He also admitted to signing checks on behalf of N.E.S. (Tr. 182.) Counsel confronted Tony Cifani with the July 23, 2020 stock- purchase agreement between Bojec as seller and Gary Helf, Tony Cifani, Joseph Cifani, and Kevin Covell as purchasers. (Exhibit No. 45.)5 Tony Cifani conceded he executed the stock-purchase agreement for a 20 percent share in N.E.S., and that he 5 We note that the stock purchase agreement, though dated July 23, 2020, has a closing date of July 22, 2020. Furthermore, the two unanimous actions discussed below are both dated July 22, 2020. signed as secretary of N.E.S. (Tr. 183-184.) He interjected, however, that the transfer of funds in the amount of $7,500 under the stock-purchase agreement “never happened.” (Tr. 184.) Exhibit No. 64, a unanimous written action of the shareholders of N.E.S. dated July 22, 2020, purports to elect the five shareholders named above as the board of directors for N.E.S. Tony Cifani admitted that he signed it, along with others. (Tr. 184-185.) Similarly, he admitted that he signed exhibit No. 65, a unanimous action of N.E.S. shareholders appointing each of the shareholders as officers. (Tr. 185.) Tony Cifani was appointed as secretary of N.E.S. According to exhibit No. 65, Bojec was to serve as president, Helf as vice president, Joseph Cifani as treasurer, and Covell as chief financial officer. Next, Tony Cifani admitted to signing several loan documents with CF Bank, conceding that he intended to be honest with the bank. (Tr. 186.) Exhibit No. 72 identified N.E.S. as the borrower, CF Bank as the lender, and contains Tony Cifani’s signature as secretary of N.E.S. The document bears a loan date of May 11, 2021, and is in the principal amount of $150,000. Tony Cifani signed the same paperwork in several additional locations indicating he served as secretary of N.E.S. and chief financial officer of Perk. The following exchange occurred: Q. Mr. Cifani, I understand that others signed this as well, but you are representing to a lending institution that you are an officer of N.E.S.? A. Sure. (Tr. 192.)  Tony Cifani continued to insist that the stock-purchase agreement was never consummated because he never paid Bojec for the shares and Bojec never issued them, but he conceded that he represented to CF Bank in May 2021, nearly a year after the stock-purchase agreement, that he was an officer of N.E.S. He agreed that the loan documents, in nine locations, reflect that he signed them on behalf of N.E.S. (Tr. 195.) This line of interrogation continued: Q. But I guess I want to understand something about your testimony. As of when you’re signing Exhibit 72, which has a loan origination date of May 11, 2021, almost a year after you signed the shareholder purchase agreement, you are still uncertain, is that your testimony, of whether or not you were going to be a shareholder or officer of N.E.S.? A. I anticipated I was going to. Q. A year later you were still anticipating? A. Yes. (Tr. 195.) Pressed on whether he ever told CF Bank that the stock purchase never went through, Tony Cifani responded that he did not because he had signed for Perk as well, so he “knew [he] was liable for it.” (Tr. 195-196.) Next, Tony Cifani agreed that he signed both a customer account agreement between Perk and Shelly and a corresponding personal guaranty. (Tr. 196-197.) Counsel walked Tony Cifani through the four projects at issue in which Perk was the general contractor and confirmed Perk had been fully paid on each project. Tony Cifani specifically denied that Perk ordered materials on the Auburn project. (Tr. 202 and 204.) He conceded that to his knowledge, all of the materials were delivered in good order, those materials were incorporated into the project, and Perk had been paid as general contractor on the project. (Tr. 202.) On April 20, 2021, a representative of CF Bank sent an email to individuals at Perk and N.E.S., including Tony Cifani, indicating there were insufficient funds in the N.E.S. account to honor outstanding checks. (Exhibit No. 70.) Tony Cifani conceded, based on exhibit No. 86, that he thereafter personally signed some Perk checks to transfer money from Perk’s account to the N.E.S. account in the amounts of $50,000 and $100,000. (Tr. 210-211.) He also signed a check from Perk to N.E.S. in the even amount of $100,000 on May 27, 2021. (Tr. 214.) Another check from Perk to N.E.S. was in the even amount of $5,000. (Tr. 215.) Exhibit No. 79 contained, inter alia, a CF Bank statement with an ending date of March 31, 2023. (Tr. 216-217.) The statement included a check from N.E.S. to Perk, dated March 15, 2023, signed by Tony Cifani, in the amount of $250,243.35. (Tr. 217.) A week later, there is a check from N.E.S. to Perk, likewise signed by Tony Cifani, in the amount of $49,000. Questioned by the court, Cifani claimed that the checks would have “two parts,” including a part not duplicated in the CF Bank account statement “that shows what these are for.” (Tr. 219.) Counsel for Shelly represented to the court that no such items were produced in discovery. (Tr. 220.) The Perk Defendants deferred Tony Cifani’s direct examination to their case-in-chief.  3. John Bojec Bojec testified to his line of work — construction highway paving — and provided a brief history of N.E.S. He was president of N.E.S. “[u]p until June of 2020 when [he] sold 80 percent off to shareholders[,]” namely, “the Cifanis, Kevin Covell and Gary Helf.” (Tr. 223-224.) He first became involved with Tony Cifani in early 2020 through an introduction arranged by Helf. They had several meetings to discuss “joining forces to do paving work for Perk and possibly putting an asphalt plant in Cleveland.” (Tr. 225.) Bojec explained that Perk was letting out extensive subcontractor work “to other paving contractors, and it would have been a boost for N.E.S. to have additional work on a subcontract level versus prime bidding.” (Tr. 225.) Bojec testified that the planned arrangement of Perk as general contractor and N.E.S. as a subcontractor came to fruition, but the businesses became “a little bit more integrated as time went on.” (Tr. 226.) Specifically, Perk stepped in to “participate” when N.E.S. did not have sufficient employees or equipment for certain projects. (Tr. 227.) He rejected Shelly’s counsel’s suggestion that there were “discussions about Perk getting more involved to help N.E.S. out[,]” testifying instead that “it was an organic road that there was a need to fill and it was filled.” (Tr. 227.) Things only became more