McConnell v. Hunt Sports Enterprises

On June 17, 1997, John H. McConnell and Wolfe Enterprises, Inc. filed a complaint for declaratory judgment in the Franklin County Court of Common Pleas against Hunt Sports Enterprises, Hunt Sports Enterprises, L.L.C., Hunt Sports Group, L.L.C. (“Hunt Sports Group”), and Columbus Hockey Limited (“CHL”). CHL was a limited liability company formed under R.C. Chapter 1705. A brief background of the events leading up to the formation of CHL and the subsequent discord among certain of its members follows.

In 1996, the National Hockey League (“NHL”) determined it would be accepting applications for new hockey franchises. In April 1996, Gregory S. Lashutka, the mayor of Columbus, received a phone call from an NHL representative inquiring as to Columbus’s interest in a hockey team. As a result, Mayor Lashutka asked certain community leaders who had been involved in exploring professional sports in Columbus to pursue the possibility of applying for an NHL hockey franchise. Two of these persons were Ronald A. Pizzuti and McConnell.

Pizzuti began efforts to recruit investors in a possible franchise. Pizzuti approached Lamar Hunt, principal of Hunt Sports Group, as to Hunt’s interest in investing in such a franchise for Columbus. Hunt was already the operating member of the Columbus Crew, a professional soccer team whose investors included Hunt Sports Group, Pizzuti, McConnell, and Wolfe Enterprises, Inc. Hunt expressed an interest in participating in a possible franchise. The deadline for applying for an NHL expansion franchise was November 1,1996.

On October 31, 1996, CHL was formed when its articles of organization were filed with the secretary of state pursuant to R.C. 1705.04. The members of CHL were McConnell, Wolfe Enterprises, Inc., Hunt Sports Group, Pizzuti Sports Limited, and Buckeye Hockey, L.L.C. 1 Each member made an initial capital contribution of $25,000. CHL was subject to an operating agreement that set *668 forth the terms between the members. Pursuant to section 2.1 of CHL’s operating agreement, the general character of the business of CHL was to invest in and operate a franchise in the NHL.

On or about November 1, 1996, an application was filed with the NHL on behalf of the city of Columbus. In the application, the ownership group was identified as CHL, and the individuals in such group were listed as Pizzuti Sports Limited, McConnell, Wolfe Enterprises, Inc., and Hunt Sports Group. A $100,-000 check from CHL was included as the application fee. Also included within the application package was Columbus’s plan for an arena to house the hockey games. There was no facility at the time, and the proposal was to build a facility that would be financed, in large part, by a three-year countywide one-half percent sales tax. The sales tax issue would be on the May 1997 ballot.

On May 6,1997, the sales tax issue failed. The day after, Mayor Lashutka met with Hunt, and other opportunities were discussed. The mayor also spoke with Gary Bettman, commissioner of the NHL, and they discussed whether an alternate plan for an arena was possible. Also on May 7, 1997, Dimon McPherson, chairman and chief executive officer of Nationwide Insurance Enterprise (“Nationwide”), met with Hunt, and they discussed the possibility of building the arena despite the failure of the sales tax issue. McPherson testified that he chose Hunt because: “Well, he was the visible, obvious, only person that was involved in trying to bring NHL hockey to Columbus. There was really no one else to turn to.” Hunt was interested, and Nationwide began working on an arena plan. On or about May 9, 1997, the mayor spoke with Bettman and let him know that alternate plans would be pursued, and Mr. Bettman gave Columbus until June 4,1997 to come up with a plan.

By May 28, 1997, Nationwide had come up with a plan to finance an arena privately and on such date, Nationwide representatives met with representatives of Hunt Sports Group. Hunt Sports Group did not accept Nationwide’s lease proposal. McPherson told Hunt that City Council would be meeting on Monday, June 2, 1997, to vote on an ordinance that, in general terms, included an authorization for the city to enter into an agreement with Nationwide to build a downtown arena. Nationwide informed Hunt Sports Group that it needed an answer by Friday, May 30, 1997 as to whether, in general terms, the lease proposal was acceptable. On May 29, 1997, Nationwide representatives again met with representatives of Hunt Sports Group. Again, Hunt Sports Group indicated that the lease proposal was unacceptable and that the NHL team would lose millions with this proposal. The June 4, 1997 NHL deadline was discussed. Hunt Sports Group stated that it would continue to evaluate the proposal, and it wanted the weekend to do so. Nationwide informed appellant that it needed an answer by close of business Friday, May 30.

*669 On May 30, 1997, McPherson called McConnell and requested that they meet and discuss “where [they] were on the arena.” McPherson “could see that the situation now was slipping away, and [he] just didn’t want that to happen,” so he went to see McConnell for advice and counsel. McConnell testified that the conversation was “totally out of the blue. [McPherson] said that Nationwide was going to finance and build an arena, and that he had offered the Hunt group the opportunity to pick up the lease and bring a franchise in. That was news to me. It was out of the blue.” McPherson told McConnell about appellant’s rejection of the lease proposal and discussed the NHL’s June 4 deadline. McConnell stated that if Hunt would not step up and lease the arena and, therefore, get the franchise, McConnell would. Hunt Sports Group did not contact Nationwide on May 30, 1997.

On Saturday, May 31, McPherson told Nationwide’s board of directors that there was not yet a lease commitment but that if Hunt Sports Group did not lease the arena, McConnell would. On Monday, June 2, 1997, City Council passed the resolution that set forth the terms for Nationwide to build an arena downtown. Also on June 2,1997, McPherson met with Bettman and told him that Nationwide would be building an arena in downtown Columbus. McPherson also told Bettman that if need be, McConnell would purchase the' franchise on his own. On or about Tuesday, June 3, McConnell was informed that appellant had not yet accepted the lease proposal. On June 3, Hunt spoke with Robert J. Woodward, Jr., executive vice-president and chief investment officer of Nationwide, and asked him to fax a copy of the ordinance passed by City Council. On that same date, Hunt Sports Group told Nationwide that it still found the terms of the lease to be unacceptable. On June 3 or June 4, McConnell, in a conversation with the NHL, orally agreed to apply for a hockey franchise for Columbus. On June 4, McPherson returned a call’from Hunt, and Hunt informed McPherson that he was still interested in pursuing an agreement with Nationwide.

On June 4, 1997, the NHL franchise expansion committee met. Bettman informed the committee that Nationwide would build an arena, and McConnell was prepared to go forward with the franchise even if he had to do it himself. The committee was told that Hunt Sports Group’s involvement was an open issue, but McConnell as an owner was more than adequate. The expansion committee recommended Columbus to the NHL board of governors as one of four cities to be granted a franchise.

On June 5, 1997, the NHL sent Hunt a letter requesting that he let the NHL know by Monday, June 9, 1997 whether he was going forward with his franchise application. In a June 6, 1997 letter to the NHL, Hunt responded that CHL intended to pursue the franchise application. Hunt informed the NHL that he had arranged a meeting with the members of CHL to be held on June 9, 1997. *670 Hunt indicated that the application was contingent upon entering into an appropriate lease for a hockey facility.

On June 9, 1997, a meeting took place at Pizzuti’s office. Those present at the meeting included McConnell, Hunt, Pizzuti, John F. Wolfe, chairman of Wolfe Enterprises, Inc., and representatives of Buckeye Hockey, L.L.C. and Ameritech. The NHL required that the ownership group be identified and that such ownership group sign a lease term sheet by June 9, 1997. Brian Ellis, president and chief operating officer of Nationwide, presented the lease term sheet to those present at the meeting, left the meeting, and went to a different room.

Hunt indicated the lease was unacceptable. Ameritech and Buckeye Hockey, L.L.C. indicated that if Hunt found it unacceptable, then they too found it unacceptable. Pizzuti and Wolfe agreed to participate along with McConnell. John Christie, president of JMAC, Inc., the personal investment company of the McConnell family, left the meeting and joined Ellis. Christie informed Ellis that McConnell had accepted the term sheet and was signing it in his individual capacity. The term sheet contained a signature line for “Columbus Hockey Limited” as the franchise owner. Ellis phoned his secretary and had her omit the name “Columbus Hockey Limited” on her computer from under the signature line and fax the change to Ellis at Pizzuti’s office. McConnell then signed the term sheet as the owner of the franchise. Christie faxed the signed lease term sheet to Bettman that day along with a cover letter and a description of the ownership group. Such ownership group was identified as John H. McConnell, majority owner, Pizzuti Sports, L.L.C., John F. Wolfe, and “[u]p to seven (7) other members.” The cover letter indicated that the attached material signified an amendment to the November 1,1996 application from the city.

On June 17, 1997, the NHL expansion committee recommended to the NHL board of governors that Columbus be awarded a franchise with McConnell’s group as owner of the franchise. On the same date, the complaint in the case at bar was filed. On or about June 25, 1997, the NHL board of governors awarded Columbus a franchise with McConnell’s group as owner. 2 Hunt Sports Group, Buckeye Hockey, L.L.C. and Ameritech have no ownership interest in the hockey franchise.

On July 3, 1997, after the complaint had been filed, Hunt Sports Group, on behalf of CHL, filed a verified complaint in the Supreme Court of New York, County of New York, against the NHL, Nationwide, McConnell and his son, John *671 P. McConnell, Wolfe Enterprises, Inc., and Pizzuti Sports Limited. Hunt Sports Group set forth various claims for relief arising out of the events set forth above and requested, in part, that the NHL be enjoined from granting a franchise for Columbus to McConnell/COLHOC or from allowing any person other than CHL to obtain or maintain such a franchise. In such complaint, Hunt Sports Group admitted that the franchise had already been awarded to McConnell/COLHOC.

In their complaint, McConnell and Wolfe Enterprises, Inc. requested a declaration that section 3.3 of the CHL operating agreement allowed members of CHL to compete with CHL. Specifically, McConnell and Wolfe Enterprises, Inc. sought a declaration that under the operating agreement, they were permitted to participate in COLHOC and obtain the franchise. On June 23, 1997, McConnell and Wolfe Enterprises, Inc. filed a first amended complaint adding a second claim for relief. The second claim sought judicial dissolution of CHL pursuant to R.C. 1705.47.

On June 23, 1997, Hunt Sports Group filed an answer and counterclaim on its behalf and on behalf on CHL. The counterclaim was asserted against McConnell and alleged breach of contract, breach of fiduciary duty, and interference with prospective business relationships.

On July 3, 1997, McConnell and Wolfe Enterprises, Inc. filed a motion for summary judgment as to count one of the first amended complaint (declaratory judgment as to section 3.3 of the operating agreement) and as to counts one through five of the counterclaim (breach of contract and breach of fiduciary duty). Hunt Sports Group 3 filed a memorandum contra, and McConnell and Wolfe Enterprises, Inc. filed a reply. On October 31, 1997, the trial court rendered a decision, granting summary judgment in favor of McConnell and Wolfe Enterprises, Inc. on count one of the first amended complaint and on counts one and three of the counterclaim. Specifically, the trial court found that section 3.3 of the operating agreement was clear and unambiguous and allowed McConnell and Wolfe Enterprises, Inc. to compete against CHL and obtain the NHL franchise. In addition, the trial court found McConnell did not breach the operating agreement by competing against CHL. The trial court denied the motion for summary judgment as to counts two, four, and five of the counterclaim. Therefore, the claims that remained were count two of the first amended complaint (judicial dissolution of CHL) and counts two, four, five, six, seven, and eight of the counterclaim (breach of fiduciary duty and interference with' prospective business relationships).

*672 On December 12, 1997, Hunt Sports Group filed a notice of dismissal without prejudice, pursuant to Civ.R. 41(A)(1) and (C), of all the remaining counts in the counterclaim. On December 19, 1997, McConnell and Wolfe Enterprises, Inc. filed a motion for entry of final judgment or, in the alternative, for leave to file a second amended complaint. Hunt Sports Group opposed the motion and filed its own motion for entry of final judgment. On February 17, 1998, the trial court rendered a decision, denying the motions for entry of final judgment and granting McConnell and Wolfe Enterprises, Inc.’s motion for leave to file a second amended complaint.

The second amended complaint added two claims for relief. Count three sought a declaration that McConnell, Wolfe Enterprises, Inc., and other members of COLHOC had not violated any fiduciary duties or committed any other tortious or wrongful acts in connection with the hockey franchise and arena lease. Count four alleged Hunt Sports Group breached the CHL operating agreement, in essence, by unilaterally rejecting the Nationwide lease proposal and by usurping control of CHL.

On March 4, 1998, Hunt Sports Group filed a motion to dismiss the second amended complaint pursuant to Civ.R. 12(B)(6). On April 27,1998, the trial court denied this motion.

On April 20, 1998, Hunt Sports Group, in its name and on behalf of CHL, filed a complaint for a writ of mandamus and for a writ of prohibition in the Supreme Court of Ohio. Hunt Sports Group named as respondents the Franklin County Court of Common Pleas and the trial judge, Judge John P. Bessey. Hunt Sports Group requested that respondents be enjoined and prohibited from proceeding further in the action below and that a writ of mandamus issue directing respondents to enter final judgment in the action. On April 27, 1998, the Supreme Court of Ohio dismissed the matter. State ex rel. Hunt Sports Ent. v. Franklin Cty. Court of Common Pleas (1998), 81 Ohio St.3d 1528, 693 N.E.2d 284.

A jury trial was held in May 1998 on counts three and four of the second amended complaint. McConnell and Wolfe Enterprises, Inc. presented their evidence and then rested. Hunt Sports Group moved for a directed verdict on count four. This motion was denied. Hunt Sports Group presented no evidence. McConnell and Wolfe Enterprises, Inc. then moved for a directed verdict on counts three and four, and Hunt Sports Group moved for a directed verdict on count four. On May 15, 1998, the trial court rendered a decision, denying Hunt Sports Group’s motion and granting McConnell and Wolfe Enterprises, Inc.’s motion for directed verdicts on counts three and four of the second amended complaint.

*673 On June 29, 1998, McConnell and Wolfe Enterprises, Inc. filed a motion for attorney fees, pursuant to R.C. 2721.09, on counts one and three of the second amended complaint and as damages for breach of contract. On August 5, 1998, the trial court journalized an order appointing Michael L. Close liquidating trustee of CHL to conclude the affairs of CHL. On September 2, 1998, the trial court rendered a decision, granting McConnell and Wolfe Enterprises, Inc. $920,244 plus interest for attorney fees pursuant to R.C. 2721.09.

On September 18, 1998, the trial court filed a decree of judicial dissolution of CHL. On September 24, 1998, the trial court submitted findings of facts and conclusions of law as to count two of the second amended complaint. The trial court found that wrongful conduct on the part of Hunt Sports Group required that CHL be dissolved. The trial court rendered judgment in favor of McConnell and Wolfe Enterprises, Inc. on count two of the second amended complaint.

On October 15, 1998, the trial court filed a final judgment entry as to all claims. Hunt Sports Group filed a notice of appeal on October 29,1998. Michael L. Close (“liquidating trustee”) filed a notice of appeal on behalf of CHL on November 16, 1998. The appeals have been consolidated. Hunt Sports Group (“appellant”) sets forth the following assignments of error:

“1. The trial court erred in granting summary judgment in favor of Plaintiff-Appellees on Count One of their First Amended Complaint and on the First and Third Counts of Defendants’ Counterclaim.

“2. The court erred in excluding evidence of breach of fiduciary duties, in misdefining fiduciary duties, and in directing a verdict for Plaintiff-Appellees on Count Three of the Second Amended Complaint. Based upon the evidence presented at trial, and considering that evidence in a light most favorable to Defendants, it cannot be said that reasonable minds could come to but one conclusion, that Plaintiffs had committed no tortious or other wrongful acts. The declaratory judgment granted to Plaintiff-Appellees is not supported by the evidence or in law.

“8. The trial court erred in denying Defendants’ Motion for Directed Verdict on Count Four of the Second Amended Complaint and in granting a directed verdict in favor of Plaintiffs on that count.

“4. The trial court abused its discretion in allowing the filing of the Second Amended Complaint after all claims and counterclaims had been resolved.

“5. The trial court erred in denying Defendants’ Motion to Dismiss Count Three of the Second Amended Complaint.

“6. The trial court’s order dissolving CHL is premised upon findings of fact and conclusions of law which are erroneous and are unsupported by any evidence in the record.

*674 “7. The trial court erred in awarding Plaintiff-Appellees $920,244 in attorney’s fees and expenses in this action pursuant to Ohio R.C. § 2721.09.”

CHL, through its liquidating trustee, sets forth the following assignments of error:

“A. The Franklin County Court of Common Pleas erred in interpreting paragraph 3.3 of the Columbus Hockey Limited Operating Agreement in such a manner as to allow the members of Columbus Hockey Limited to compete with such limited liability company.

“B. The Franklin County Court of Common Pleas erred in determining that the Plaintiffs did not violate any fiduciary duty owed to any of the Defendants by virtue of their mutual membership interest in Columbus Hockey Limited, in regard to their obtaining the National Hockey League franchise and/or signing an arena lease with Nationwide.”

We note that CHL’s assignments of error are raised only conditionally, and CHL indicates that if appellant’s related assignments of error are sustained, then any judgment as to CHL should also be reversed, and CHL’s claims should be reinstated below.

In its first assignment of error, appellant contends the trial court erred in granting summary judgment in favor of McConnell and Wolfe Enterprises, Inc. (“appellees”) on count one of the first amended complaint and on counts one and three of appellant’s counterclaim. These counts each involve provisions of the operating agreement-and will be addressed separately.

Summary judgment is appropriate when, construing the evidence most strongly in favor of the nonmoving party, (1) there is no genuine issue of material fact, (2) the moving party is entitled to judgment as a matter of law, and (3) reasonable minds can come to but one conclusion, that conclusion being adverse to the nonmoving party. Zivich v. Mentor Soccer Club, Inc. (1998), 82 Ohio St.3d 367, 369-370, 696 N.E.2d 201, 203-204, citing Horton v. Harwick Chem. Corp. (1995), 73 Ohio St.3d 679, 653 N.E.2d 1196, paragraph three of the syllabus. Our review of the appropriateness of summary judgment is de novo. Smiddy v. The Wedding Party, Inc. (1987), 30 Ohio St.3d 35, 30 OBR 78, 506 N.E.2d 212.

As indicated above, count one of the first amended complaint sought a declaration that section 3.3 of CHL’s operating agreement allowed members to compete against CHL to obtain an NHL franchise. Appellees contend section 3.3 is plain and unambiguous and allows what occurred here — COLHOC competing for and obtaining the NHL franchise. Appellant asserts, in part, that the trial court’s interpretation of section 3.3 was incorrect and that section 3.3 is ambiguous and subject to different interpretations. Therefore, appellant contends extrinsic evidence should have been considered, and such evidence would have *675 shown the parties did not intend section 3.3 to mean members could compete against CHL and take away CHL’s only purpose.

The construction of written contracts is a matter of law. Alexander v. Buckeye Pipe Line Co. (1978), 53 Ohio St.2d 241, 7 O.O.3d 403, 374 N.E.2d 146, paragraph one of the syllabus. The purpose of contract construction is to discover and effectuate the intent of the parties, and the intent of the parties is presumed to reside in the language they chose to use in the agreement. Graham v. Drydock Coal Co. (1996), 76 Ohio St.3d 311, 313, 667 N.E.2d 949, 951-952. If a contract is clear and unambiguous, there is no issue of fact to be determined, and the court cannot create a new contract by finding an intent not expressed in the clear language employed by the parties. Inland Refuse Transfer Co. v. Browning-Ferris Industries of Ohio, Inc. (1984) 15 Ohio St.3d 321, 322, 15 OBR 448, 448-449, 474 N.E.2d 271, 272-273; Alexander at 246, 7 O.O.3d at 406, 374 N.E.2d at 150. Only where the language of a contract is unclear or ambiguous or when the circumstances surrounding the agreement invest the language of the contract with a special meaning, will extrinsic evidence be considered in an effort to give effect to the parties’ intentions. Shifrin v. Forest City Ent., Inc. (1992), 64 Ohio St.3d 635, 597 N.E.2d 499, syllabus.

The test for determining whether a term is ambiguous is that common words in a written contract will be given their ordinary meaning unless manifest absurdity results or unless some other meaning is clearly evidenced from the face or overall content of the contract. Aultman Hosp. Assn. v. Community Mut. Ins. Co. (1989) 46 Ohio St.3d 51, 54, 544 N.E.2d 920, 923, citing Alexander at paragraph two of the syllabus. A writing will be read as a whole, and the intent of each part will be gathered from a consideration of the whole. Foster Wheeler Enviresponse, Inc. v. Franklin Cty. Convention Facilities Auth. (1997), 78 Ohio St.3d 353, 361, 678 N.E.2d 519, 525-526. For the reasons that follow, we conclude that section 3.3 is plain and unambiguous and allowed members of CHL to compete against CHL for an NHL franchise.

Section' 3.3 of the operating agreement states:

“Members May Compete. Members shall not in any way be prohibited from or restricted in engaging or owning an interest in any other business venture of any nature, including any venture which might be competitive with the business of the Company.”

Appellant emphasizes the word “other” in the above language and states, in essence, that it means any business venture that is different from the business of the company. Appellant points out that under section 2.1 of the operating agreement, the general character of the business is “to invest in and operate a franchise in the National Hockey League.” Hence, appellant contends that *676 members may only engage in or own an interest in a venture that is not in the business of investing in and operating a franchise with the NHL.

Appellant’s interpretation of section 3.3 goes beyond the plain language of the agreement and adds words or meanings not stated in the provision. Section 3.3, for example, does not state “[mjembers shall not be prohibited from or restricted in engaging or owning an interest in any other business venture that is different from the business of the company.” Rather, section 3.3 states: “any other business venture of any nature.” (Emphasis added.) It then adds to this statement: “including any venture which might be competitive with the business of the Company.” The words “any nature” could not be broader, and the inclusion of the words “any venture which might be competitive with the business of the Company” makes it clear that members were not prohibited from engaging in a venture that was competitive with CHL’s investing in and operating an NHL franchise. Contrary to appellant’s contention, the word “other” simply means a business venture other than CHL. The word “other” does- not limit the type of business venture in which members may engage.

Hence, section 3.3 did not prohibit appellees from engaging in activities that may have been competitive with CHL, including appellees’ participation in COLHOC. Accordingly, summary judgment in favor of appellees was appropriate, and appellees were entitled to a declaration that section 3.3 of the operating agreement permitted appellees to request and obtain an NHL hockey franchise to the exclusion of CHL.

Appellant next contends that the trial court erred in granting summary judgment in favor of appellees on counts one and three of appellant’s counterclaim. Count one of the counterclaim alleged McConnell breached the operating agreement by forming COLHOC for the sole purpose of competing directly with CHL’s application for an NHL franchise. Count three avers McConnell breached the operating agreement in refusing to call for additional capital to fund CHL.

We have already determined that section 3.3 permitted appellees to request and obtain an NHL franchise. Appellant points to section 4.1(c)(v) of the operating agreement in further support of its argument that McConnell breached the operating agreement in forming COLHOC and in failing to call for additional capital. Section 4.1 states:

“Approval by Members. * * *[N]o Member shall take any action on behalf of the Company unless such actions are approved by a vote of the specified number of Members:

“(c) The following actions require the approval of Members owning all of the Units allocated to the Members:

*677 “(v) do any other act that would make it impossible to carry on the ordinary business of the Company[.]” (Emphasis added.)

As to any argument that McConnell breached section 4.1(c)(v) in forming COLHOC and competing against CHL, there is no genuine issue of material fact, and appellees are entitled to judgment as a matter of law. The voting requirements in section 4.1 apply only to actions taken “on behalf of the Company.” In forming COLHOC and in obtaining the NHL franchise, McConnell was obviously not taking action on behalf of CHL. Therefore, McConnell did not breach section 4.1(c)(v) in failing to obtain the vote of all CHL members prior to taking such action.

Appellant averred in count three of its counterclaim that McConnell further breached section 4.1(c)(v) by refusing to call for additional capital to fund CHL. In an affidavit filed in support of appellant’s memorandum contra the motion for summary judgment, Hunt stated that at the June 9, 1997 meeting, McConnell informed the other members of CHL that he would attempt to block any effort to raise capital that would allow CHL to obtain an NHL expansion franchise. However, a reading of other sections of the operating agreement shows that McConnell did not breach the operating agreement in allegedly blocking or threatening to block any call for additional capital to fund CHL.

Section 4.1(c)(viii) of the operating agreement requires the approval of all the members of CHL to call for additional capital as provided in section 5.2. Section 5.2 states:

“If at any time or times the Members determine that additional capital is required to preserve and maintain the business of the Company, the Members shall have the opportunity but not the obligation to provide such additional capital in proportion to their Percentage Interests.” (Emphasis added.)

Further, section 5.1 of the operating agreement states:

“The Members shall have no obligation to make additional capital contributions to the Company.”

Hence, McConnell was not obligated to call for or provide additional capital to fund CHL. In addition, and as pointed out by the trial court, the evidence does not show that an actual call for additional capital was even made. A statement by a member that he would attempt to block an effort to raise capital if such an effort were made does not amount to an actual call for additional capital.

Given the above, summary judgment in favor of appellees on counts one and three of appellant’s counterclaim was appropriate.

*678 In summary, there are no genuine issues of material fact, appellees are entitled to judgment as a matter of law and reasonable minds could only conclude that section 3.3 of the operating agreement allowed appellees to request and obtain an NHL franchise to the exclusion of CHL, McConnell did not breach the operating agreement by forming COLHOC and competing against CHL, and McConnell did not breach the operating agreement for allegedly refusing to call for or provide additional capital for CHL. Therefore, summary judgment in favor of appellees on count one of the first amended complaint and on counts one and three of appellant’s counterclaim was appropriate.

Accordingly, appellant’s first assignment of error is overruled.

Appellant’s fourth assignment of error will be addressed next. Appellant contends the trial court abused its discretion in allowing the second amended complaint to be filed. Summary judgment disposed of count one of the first amended complaint and counts one and three of the counterclaim. On December 12, 1997, appellant voluntarily dismissed all of its remaining counterclaims. The only claim remaining, therefore, was count two of the first amended complaint — a request for judicial dissolution of CHL. On this same date, appellant apparently faxed the trial court a letter indicating it would not oppose the judicial dissolution of CHL.

Appellees responded with a motion for entry of final judgment or, in the alternative, a motion for leave to file a second amended complaint. Appellees argued that if final judgment was entered, the trial court should include an express declaration that such final judgment was res judicata as to all counterclaims and would preclude appellant from attempting to re-file such claims elsewhere. Appellees further stated that given appellant’s lack of opposition to dissolution of CHL, final judgment should be entered on count two of the first amended complaint.

In the alternative, appellees requested leave to file a second amended complaint that would add a third claim seeking a declaration that neither appellees nor any other member of COLHOC.breached any fiduciary duty or committed any other tortious or wrongful acts in connection with the hockey franchise and arena lease. In addition, the second amended complaint would add a fourth claim for money damages for appellant’s alleged breach of contract. On December 31, 1997, appellant filed its own motion for entry of final judgment. On February 17, 1998, the trial court denied the requests for entry of final judgment and granted appellees’ motion for leave to file a second amended complaint, stating there was a need for a complete and expeditious resolution of all issues.

Appellant asserts that the trial court lacked jurisdiction to grant appellees leave to amend the complaint once appellant voluntarily dismissed the *679 remaining counterclaims. However, after appellant’s remaining counterclaims were voluntarily dismissed, count two of the first amended complaint remained pending. It is immaterial that the parties may have agreed that dissolution of CHL was appropriate. Hence, the trial court did not lack jurisdiction to grant appellees’ motion for leave to amend the complaint.

Appellant further contends appellees’ motion for leave to amend the complaint should not have been granted because it was untimely and prejudicial. A motion for leave to amend a pleading pursuant to Civ.R. 15(A) should be granted freely when justice so requires. Hoover v. Sumlin (1984), 12 Ohio St.3d 1, 12 OBR 1, 465 N.E.2d 377, paragraph one of the syllabus. The decision whether to grant a motion for leave to amend a pleading is within the discretion of the trial court. Turner v. Cent. Local School Dist. (1999), 85 Ohio St.3d 95, 99, 706 N.E.2d 1261, 1264. While Civ.R. 15(A) allows for liberal amendment, such motions should be refused if there is a showing of bad faith, undue delay, or undue prejudice to the opposing party. Id., citing Hoover at paragraph two of the syllabus. A motion for leave to amend must be timely filed. See Peterson v. Teodosio (1973), 34 Ohio St.2d 161, 63 O.O.2d 262, 297 N.E.2d 113, paragraph six of the syllabus; DiPaolo v. DeVictor (1988), 51 Ohio App.3d 166, 170, 555 N.E.2d 969, 973-974, motion to certify overruled in (1988), 39 Ohio St.3d 720, 534 N.E.2d 350. However, time alone is generally an insufficient reason for the trial court to deny a motion for leave to amend, and the primary consideration is whether there is actual prejudice to the opposing party because of the delay. Schweizer v. Riverside Methodist Hosp. (1996), 108 Ohio App.3d 539, 546, 671 N.E.2d 312, 316.

Appellees’ motion for leave to file a second amended complaint was filed approximately five weeks before the scheduled trial date. While this could be considered untimely, the trial court did not abuse its discretion in allowing the amendment that added count three because appellant was not prejudiced as a result. Appellees filed their motion for leave to amend only after and in response to appellant voluntarily dismissing its counterclaims. Such motion was filed merely seven days after appellant voluntarily dismissed the remaining counterclaims.

Count three of the second amended complaint sought a declaration that appellees did not breach any fiduciary duty or commit any other wrongful acts in participating in COLHOC. This claim was simply a mirror image of the counterclaims appellant voluntarily dismissed. Therefore, the parties had been litigating the issues involved in such “new” claim ever since the filing of the counterclaims. In addition, while count three purported to include not only the acts of appellees but also the acts of other members of COLHOC (who were not parties to this action), the trial court’s subsequent judgment on count three was as to the acts of appellees only.

*680 Given these circumstances, appellant was not prejudiced, and the trial court did not abuse its discretion in allowing the first amended complaint to be amended to add count three. Count four of the second amended complaint, however, added completely new claims against appellant for breach of contract. Other than the claim for judicial dissolution of CHL, appellees’ other claims all sought declaratory relief in the form of a declaration that, essentially, appellees did nothing wrong. Appellant had had no claims asserted against it personally until count four. For the reasons that follow, we find the trial court abused its discretion in allowing an amendment to add paragraph 31 of count four. However, because such error was not prejudicial, there is no reversible error.

Count four, paragraph 31 of the second amended complaint, states:

“Hunt violated the CHL Operating Agreement, including Section 4.1 of the Agreement, to the damage and substantial detriment of Plaintiffs, by unilaterally rejecting the Nationwide lease proposal, by failing to negotiate with Nationwide in good faith, by allowing Nationwide’s deadline to expire without response, and by failing to advise or obtain the approval of the other members -of CHL before unilaterally rejecting Nationwide’s offer.”

The facts supporting such claims were available to appellees at the time they filed their complaint and first amended complaint. Asserting these new claims against appellant just five weeks prior to trial would have prejudiced appellant. However, the trial court never found against appellant for breach of contract as asserted in paragraph 31.

In addition to paragraph 31, count four included paragraph 32, which averred that appellant violated the operating agreement by wrongfully usurping control of CHL. The trial court directed a verdict against appellant on count four of the second amended complaint for appellant’s actions in unilaterally filing on behalf of CHL the answer and counterclaim herein, the action against the trial judge in the Supreme Court of Ohio, and the New York lawsuit. These actions occurred after the filing of the original complaint and, therefore, there was no abuse of discretion in allowing an amendment that added paragraph 32 of count four.

Given all of the above, there was no reversible error, and the trial court did not abuse its discretion in granting appellees’ motion for leave to file the second amended complaint. Accordingly, appellant’s fourth assignment of error is overruled.

In its fifth assignment of error, appellant contends the trial court erred in denying its motion to dismiss count three of the second amended complaint pursuant to Civ.R. 12(B)(6) for failure to state a claim. As a general matter, a Civ.R. 12(B) motion to dismiss is procedural in nature and tests the sufficiency of *681 the complaint. State ex rel. Hanson v. Guernsey Cty. Bd. of Commrs. (1992), 65 Ohio St.3d 545, 548, 605 N.E.2d 378, 380-381. Appellant asserts that count three should have been dismissed because it is an improper use of declaratory judgment. Appellant contends count three is untriable in the context of declaratory judgment because it seeks to prove a negative — that appellees are not in breach of any fiduciary duties, and appellees have not committed any other tortious or wrongful acts.

R.C. Chapter 2721, the Declaratory Judgments Act, is remedial in nature; its purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights, status and other legal relations and is to be liberally const