Justia Contracts Opinion SummariesArticles Posted in Ohio Supreme Court
Transtar Elec., Inc. v. A.E.M. Elec. Servs. Corp.
A.E.M. Electric Services Corporation, a general contractor, contracted with Transtar Electric, Inc., a subcontractor, to provide electrical services for the installation of a pool at Holiday Inn. A.E.M. did not pay Transtar for its last three invoices because the owner of the project had failed to pay A.E.M. for the work performed by Transtar. A.E.M. alleged that the contract between the parties, which used the phrase “receipt of payment by contractor from the owner for work performed by subcontractor is a condition precedent to payment by contractor to subcontractor for that work”, was sufficient to establish a pay-if-paid payment provision. The court of appeals concluded that the payment provision in the contract was not specific enough to show that both parties understood and agreed that the risk of the owner’s nonpayment would be borne by Transtar instead of A.E.M. The Supreme Court reversed, holding that the use of the term “condition precedent” was an explicit statement of the parties’ intent to transfer the risk of the project owner’s nonpayment from A.E.M. to Transtar. View "Transtar Elec., Inc. v. A.E.M. Elec. Servs. Corp." on Justia Law
FirstMerit Bank, N.A. v. Inks
Defendants executed a promissory note in favor of FirstMerit Bank secured by a mortgage on several parcels of real estate. After Defendants defaulted on the promissory note, FirstBank initiated foreclosure proceedings. The common pleas court entered a decree in foreclosure, and the properties were sold at auction. Because the sale of the properties resulted in a deficiency, FirstMerit obtained a cognovit judgment against Defendants. Defendants moved for relief from judgment pursuant to Ohio R. Civ. P. 60(B), asserting as a defense that they had reached an oral settlement agreement with FirstMerit under which FirstMerit had agreed to cease legal proceedings and release Defendants from their obligations. The trial court denied the motion, concluding that the statute of frauds barred their defense. The appellate court reversed, determining that Ohio Rev. Code 1335.05 did not prohibit Defendants from raising as a defense that the parties orally agreed to modify the terms of their agreement. The Supreme Court reversed, holding that the oral agreement in this case fell within the statute of frauds, and therefore, Defendants were precluded from raising the agreement as a defense in a motion for relief from judgment. View "FirstMerit Bank, N.A. v. Inks" on Justia Law
State ex rel. Shumaker v. Nichols
This appeal involved two separate actions that were consolidated. In the first action, a married couple raised allegations of fraud and other claims against Residential Finance Corporation (RFC), which had brokered two refinancings of the couple's residential mortgage. The first action was consolidated with a foreclosure case filed later against the couple. Appellant and RFC were named as third-party defendants in the foreclosure case. After consolidation, the case was bifurcated on the basis of subject matter for trial purposes and was scheduled to go to trial only on the refinancing issues. Judge Robert Nichols denominated Appellant as a codefendant in that trial. Appellant field an action for a writ of prohibition to prevent Nichols from requiring him to be a defendant in the trial. The court of appeals denied the writ. The Supreme Court affirmed, holding that Appellant could not establish the elements for a writ of prohibition, as Appellant had an adequate remedy at law and Nichols did not patently and unambiguously lack jurisdiction over Appellant. View "State ex rel. Shumaker v. Nichols" on Justia Law
Esber Beverage Co. v. Labatt USA Operating Co., LLC
A manufacturer or alcoholic beverages (InBev) sold all of its rights relating to a particular brand of alcoholic beverage to a successor manufacturer (Labatt Operating). Under the Ohio Alcoholic Beverages Franchise Act, when there is a transfer of ownership, the successor manufacturer may terminate any distributor's franchise without just cause by giving the distributor notice of termination within ninety days of the acquisition and compensating the terminated franchisee. Appellant in this case was the exclusive distributor of Labatt brand products in a ten-county area of Ohio under a franchise agreement with InBev. After the sale, Labatt Operating notified Appellant that it intended to terminate Appellant's franchise to distribute Labatt brand products and that it intended to compensate Appellant. Appellant sued. The trial court granted summary judgment for Appellant and ordered Labatt Operating to continue to distribute its Labatt products through Appellant. The court of appeals reversed. The Supreme Court affirmed, holding that Labatt's termination of Appellant's franchise met the statutory requirements of the Act, and therefore, the court of appeals erred in granting summary judgment to Appellant. View "Esber Beverage Co. v. Labatt USA Operating Co., LLC" on Justia Law
Supportive Solutions, LLC v. Elec. Classroom of Tomorrow
Appellant was a political subdivision for purposes of the governmental-immunity provisions of Ohio Rev. Code 2744. Appellee sued Appellant, asserting several claims. Appellant filed a motion for partial summary judgment, claiming political-subdivision immunity. Appellant then unsuccessfully sought to file an amended answer raising political-subdivision immunity as an affirmative offense. Thereafter, the trial court granted summary judgment to Appellant on two of Appellee's claims. After Appellant appealed the trial court's denial of leave to file an amended answer, the case proceeded to trial. The jury returned a verdict in favor of Appellee on two of its remaining claims. Appellant filed a second appeal from the judgment. While Appellant's appeals were pending, the Supreme Court held that Appellant's first appeal divested the trial court of jurisdiction to proceed with a trial of any claim subject to the political-subdivision immunity defense. The court of appeals subsequently dismissed Appellant's appeals for lack of jurisdiction. The Supreme Court reversed, holding (1) the trial court's denial of Appellant's motion for leave to file an amended answer to raise the affirmative defense of political-subdivision immunity precluded Appellant from enjoying the benefits of the alleged immunity; and (2) the court of appeals therefore possessed jurisdiction to determine Appellant's appeal of that order. View "Supportive Solutions, LLC v. Elec. Classroom of Tomorrow" on Justia Law
Marusa v. Erie Ins. Co.
Maria Marusa was driving her car when it was struck by a police cruiser driven by a police officer (Officer). Marusa and her daughter (collectively, Appellants) were injured in the accident. Appellants filed suit against Marusa's insurer (Insurer), seeking damages to compensate for medical expenses and pain and suffering. Insurer answered that it was not obligated to pay damages because even though the policy included uninsured-motorist coverage and the officer was an uninsured motorist, Appellants were not "legally entitled to recover" because Officer was immune under the Ohio Political Subdivision Tort Liability Law (OPSTLL). The trial court granted summary judgment for Insurer, and the court of appeals affirmed. The Supreme Court reversed, holding that the language of the policy unambiguously provides uninsured/underinsured motorist coverage when the insured is injured by an owner or operator who is immune under the OPSTLL. View "Marusa v. Erie Ins. Co." on Justia Law
State ex rel. K&D Group, Inc. v. Buehrer
K&D Enterprises, through its manager, Mid-America, contracted to purchase an apartment complex. Prior to the closing, K&D Enterprises created a new company, Euclid-Richmond Gardens, and assigned its rights under the purchase agreement to that new company. Euclid-Richmond Gardens hired K&D Group, Inc., a property-management company, to manage the apartment. K&D Group hired former employees of Mid-America and assumed the operations of the complex. The Bureau of Workers' Compensation later conducted an audit and determined K&D Group was the successor in interest to the business operations of Mid-America, a determination that authorized the Bureau to base K&D Group's experience rating, in part, on Mid-America's past experience, which included a large workers' compensation claim. After K&D Group's administrative appeal was denied, K&D Group unsuccessfully filed a mandamus action in the court of appeals. The Supreme Court reversed the judgment of the court of appeals and issued the writ of mandamus, holding that K&D Group was not a successor in interest for purposes of workers' compensation law, and thus, the Bureau abused its discretion when it transferred part of Mid-America's experience rating to K&D Group. View "State ex rel. K&D Group, Inc. v. Buehrer" on Justia Law
Rayess v. Educ. Comm’n for Foreign Med. Graduates
Appellee, a graduate of a foreign medical school, was required to be certified by the Educational Commission for Foreign Medical Graduates (commission) before applying for medical residency in Ohio. Appellee thus applied to take a United States Medical Licensing Examination (USMLE) examination administered by the commission. Appellee took and failed Part I of the examination. Fifteen years later, Appellee sued the commission for breach of an express written contract, alleging that the commission had failed to administer part I of the USMLE in accordance with the terms and conditions contained in an informational pamphlet provided by the commission, and the breach caused him to fail the examination and suffer damages. The trial court granted the commission's motion for judgment on the pleadings, concluding that the documents attached to the complaint did not constitute an express written contract and that, even if a contract existed, the statute of limitations for oral contracts barred recovery. The court of appeals reversed. The Supreme Court reversed, holding that the informational pamphlet was not a written contract, and thus, Appellee could prove no facts in support of his claim entitling him to relief, and the commission was entitled to judgment as a matter of law. View "Rayess v. Educ. Comm'n for Foreign Med. Graduates" on Justia Law
DiFranco v. FirstEnergy Corp.
Two public utilities (the companies) were wholly owned subsidiaries of appellant FirstEnergy Corporation. Appellees were residential customers of the companies. The customers filed a class-action complaint against FirstEnergy and the companies in the county court of common pleas. The complaint raised four causes of action: declaratory judgment, breach of contract, fraud, and injunctive relief. The trial court granted FirstEnergy's motion to dismiss the complaint for lack of jurisdiction, finding that the Public Utilities Commission of Ohio (PUCO) had exclusive jurisdiction over the allegations in the complaint. The court of appeals affirmed in all respects except with regard to the customers' fraud claim. The appellate court determined on two separate grounds that the trial court had jurisdiction over the fraud claim and remanded that claim to the trial court. The Supreme Court reversed the appellate court, holding (1) the customers' fraud claim was not a pure tort action, but rather, was a claim that the companies were overcharging the customers for electric service; and (2) because the complaint was challenging the rates charged for utility service, it fell within the exclusive jurisdiction of the PUCO. View "DiFranco v. FirstEnergy Corp." on Justia Law
JNT Props., LLC v. KeyBank Nat’l Ass’n
Appellant (Bank) loaned money to Appellee (LLC). LLC later filed a putative class action, alleging that Bank had breached its contract by charging interest in excess of the rate stated in the promissory note. LLC claimed Bank was charging more interest than was agreed to by LLC as expressed in the note by charging a rate calculated by a 365/360 method rather than an annual rate. Bank contended the note fixed the interest rate according to the 365/360 method. The trial court granted summary judgment to Bank. The court of appeals reversed, concluding that there was a genuine issue of material fact as to which interest rate was imposed by the note. The Supreme Court reversed and reinstated the trial court's grant of summary judgment, holding that the clause in the promissory note imposing the interest rate was not ambiguous, and fixed the interest rate according to the 365/360 method. View "JNT Props., LLC v. KeyBank Nat'l Ass'n" on Justia Law