Justia Contracts Opinion Summaries

This case arose because the settlement of a personal-injury suit brought by a recipient of workers' compensation benefits against a third-party tortfeasor did not make any provision to repay the statutory subrogee, the Ohio Bureau of Workers' Compensation. The Bureau brought suit against both the recipient of the workers' compensation benefits and third-party tortfeasor under Ohio Rev. Code 4123.931(G) to recover the full amount of its subrogation interest. The trial court held that a two-year limitations period applied and that it had expired. The court of appeals reversed, holding that a six-year limitations period applied and that it had not yet run out. At issue on appeal was whether a claim under section 4123.931(G) brought by a statutory subrogee to recover its subrogation interest is subject to a two-year statute of limitations, the same period applicable to the injured worker's personal-injury suit against the third party, or to a six-year statute of limitations for an action on a liability created by statute. The Supreme Court affirmed the court of appeals, holding that the claim in this case was an action upon a liability created by statute and that the statute of limitations was six years.

Appellants, PNH Inc. and Ronald Creatore, filed an action against Alfa Laval Flow, Inc., which manufactures equipment for sanitary processing of food and beverages, for abuse of process and tortious interference with a contract. Appellants asserted that Alfa Laval Flow misused an involuntary-bankruptcy case it filed against its distributor in an effort to eliminate Creatore as a competitor in the sale of equipment for sanitary processing of food and beverages. The trial court dismissed the claims. The Seventh District affirmed, holding that federal law preempts state-law causes of action alleging the abuse of bankruptcy proceedings. The Supreme Court affirmed, holding that the United States Bankruptcy Code preempts state-law claims that allow the recovery of damages for misconduct committed by a litigant during bankruptcy proceedings.

Virginia King was injured in an automobile accident and was treated for her injuries at Toledo Hospital. Although King informed the hospital staff that she was covered by a health-insuring corporation, the hospital billed King's automobile insurer for the services rendered. King sued the hospital and ProMedica Health System (Appellants). Each of King's causes of action was based on the claim that Appellants violated Ohio Rev. Code. 1751.60(A) by billing the automobile insurer instead of the health-insuring corporation. Section 1751.60(A) stated that every provider that contracts with a health-insuring corporation to provide health-care services to an insured shall seek payment solely from the corporation. The trial court granted Appellants' motion to dismiss, and the court of appeals reversed. At issue on appeal was whether section 1751.60(A) prohibited a provider from seeking payment for medical treatment rendered to an insured injured in an automobile accident from the insured's automobile insurance medical benefits. The Supreme Court reversed the court of appeals, holding (1) section 1751.60(A) applies only when a health-care provider seeks payment from an insured, and (2) section 1751.60(A) does not conflict with Ohio's law on the coordination of insurance benefits.

Five companies entered into special contracts with the Toledo Edison Company for the sale of electricity. The Public Utilities Commission of Ohio (PUCO) established February 2008 as the termination date for the contracts, basing its finding on the language of the special contracts and its orders in earlier electric-deregulation cases. Appellants challenged the decision, contending (1) Toledo Edison agreed in 2001 that the contracts would not terminate until Toledo Edison stopped collecting regulatory-transition charges from its customers, and (2) December 31, 2008 was the date when Toledo Edison stopped collecting regulatory-transition charges. The Supreme Court reversed, holding that the PUCO ignored the plain language of the 2001 amendments to Appellants' special contracts, and accordingly, the PUCO unlawfully and unreasonably allowed Toledo Edison to terminate the special contracts in February 2008.

Insured submitted a claim to Insurer after his house was damaged by a storm. Insured returned the payment tendered to him by Insurer, deeming the amount insufficient to cover the damage to his home. Almost two years after the house was damaged, Insured filed suit against Insurer. Insurer argued the lawsuit was barred by a clause in the insurance contract that stated that any action must be started within one year after the date of loss or damage. The trial court granted Insurer's motion for summary judgment. The court of appeals reversed, concluding the policy language was ambiguous and that Insurer, by its actions, had waived its right to enforce the one-year limitation clause. The Supreme Court reversed the judgment of the court of appeals and reinstated the trial court's grant of summary judgment, holding that Insurer could enforce the limitation-of-action clause contained in its contract because (1) the policy language was not ambiguous, and (2) Insurer did not waive its right to enforce the clause.

After Michele Hobbs and Kelly Mullen decided to have a child together, Mullen became pregnant through in vitro fertilization procedure with donated sperm. Mullen executed a will in which she nominated Hobbs as the guardian of her child and a health-care power of attorney and durable power of attorney in which she gave Hobbs the authority to make decisions regarding the child. Hobbs and Mullen co-parented for two years, after which the women's relationship deteriorated. Hobbs then filed a complaint for shared custody in the juvenile court, alleging that Mullen had created a contract through her conduct with Hobbs to permanently share legal custody of the child. The juvenile court dismissed Hobbs's complaint for shared legal custody, concluding that a preponderance of the evidence did not conclusively demonstrate that Mullen's conduct created a contract that permanently gave partial custodial rights of the child to Hobbs. The court of appeals affirmed. On appeal, the Supreme Court affirmed, holding that competent, credible evidence supported the juvenile court's conclusion that Mullen, by her conduct, did not enter into an agreement with Hobbs through which Mullen permanently relinquished sole custody of her child in favor of shared custody with Hobbs.

Ohio State University entered into an agreement for construction-management services with Turner Construction Company for a construction project. Later, Ohio State selected Turner to serve as construction manager at risk through a qualifications-based selection process rather than going through a traditional competitive bidding process. Ohio State did not require Turner to furnish a surety bond to secure the performance of Turner and its subcontractors. Three trade associations, two that advance the interests of subcontractors (ASA and ASA-Ohio) and one that advances the interests of sureties (SFAA), filed an action for a writ of mandamus to compel Ohio State to require that Turner furnish a bond as construction manager at risk. The Supreme Court dismissed the claims of ASA and ASA-Ohio and denied SFAA's mandamus claim, holding that (1) because ASA and ASA-Ohio did not establish that any of their members had been injured by Ohio State's decision, they lacked standing to raise their mandamus claim; and (2) because the applicable legislation does not require a bonding requirement, SFAA was not entitled to the requested relief in mandamus.

Sunoco, the owner and operator of several petroleum-refining facilities, purchased electric service from Toledo Edison. The contract between the two companies permitted arrangements that differed from the standard rate schedules. BP Oil Company, which owns a competing refined located next to Sunoco's refinery, also had a contract with Toledo Edison. Both contracts contained 'most favored nation' clauses, which allowed Sunoco and BP to utilize any "arrangement, rates or charges" for their facilities that Toledo Edison had given to the other. At issue was whether Sunoco could invoke the clause to extend the duration of its contract with Toledo Edison to match the duration of BP's contract with Toledo Edison, which would result in a $13 million savings for Sunoco. The commission found the clause did not allow Sunoco to extend the duration of its contract. The Supreme Court reversed, holding that under the plain language of the clause, the word "arrangement" encompasses all non-price terms of a competitor's contract. Because duration is a non-price term of contract, it is subject to the clause.