Opinion
Case No. 3:01 CV 7658
October 23, 2003
ORDER
This is a breach of contract action arising from an Asset Purchase Agreement between Plastech Engineered Products, Inc. and Cooper-Standard Automotive, Inc. This court has jurisdiction pursuant to 28 U.S.C. § 1332. Pending are defendant's motion for summary judgment and plaintiff's cross-motion for partial summary judgment. For the following reasons, defendant's motion shall be granted in part and denied in part. Plaintiff's motion for partial summary judgment shall be granted in part and denied in part.
BACKGROUND
Both plaintiff Plastech Engineered Products, Inc. ("Plastech") and defendant Cooper-Standard Automotive, Inc. ("Cooper-Standard") are parts suppliers to automobile manufacturers. In April, 2000, Plastech and Cooper-Standard entered into an Asset Purchase Agreement ("APA") whereby Plastech purchased most of Cooper-Standard's injection molding operations located at its Winnsboro, South Carolina plant. Cooper-Standard retained, however, its extrusion molding operations. Under the terms of the APA, certain assets/liabilities were purchased/sold, and others were excluded. (APA § 2.1). For instance, "Cooper-Standard retained its [accounts] payable, [accounts] receivable, and most liabilities." (Doc. 87, at 4).
The Non-Competition Provision
The APA contains a non-competition provision which provides in relevant part:
(a) In partial consideration for the Purchase Price, Seller shall not, for a period of eighteen (18) months from and after the Closing Date, without the prior written consent of Buyer, directly or indirectly, or as the agent of another Person or through other Persons as an agent:
(ii) seek to divert or dissuade from continuing to do business with or entering into business with Buyer, any supplier, customer or other Person that had a business relationship with or with which Buyer was actively planning or pursuing a business relationship during such eighteen (18) month period.
(APA, § 6.7(a), emphasis added).
Shortly after consummation of the APA, DaimlerChrysler, which was "do[ing] business with" Plastech by purchasing Plastech's injection molded bodyside parts for their JR41 line of vehicles ("the JR41 business"), ran into financial difficulties. DaimlerChrsyler began investigating whether it could save money by using an extrusion molded part in place of the injection molded part supplied by Plastech. During its review, DaimlerChrysler contacted Cooper-Standard for information regarding extrusion versus injection molding.
In response, in January, 2001, about eight months after asset sale, Cooper-Standard provided price information for extrusion molded bodyside parts for DaimlerChrysler's comparison. In May, 2001, Cooper-Standard also issued an official price quotation for extrusion molded parts to DaimlerChrysler. This was approximately thirteen months after the APA was signed
Thereafter, DaimlerChrysler diverted a large portion of the JR41 business from Plastech to Cooper-Standard. Plastech alleges that it suffered monetary damages as a result of this diversion.
The Brite-Strip Pricing/Cost Information
Prior to the closing, Plastech sought information from Cooper-Standard regarding its cost/pricing for a specific trim part manufactured for the Mercury Sable known as the "brite strip" insert. Plastech provided a form for Cooper-Standard's use in providing the information. Cooper-Standard provided the information on the form from Plastech.
The brite strip insert is a part that Cooper-Standard manufacturers. However, on the form provided by Plastech, Cooper-Standard used the "Purchased Components" line to report the cost of the part. Purchased components are commonly understood to be parts which a company purchases from another company, rather than parts that a company produces itself.
There was no reference in the APA to the brite strip insert. There is no information in the record that there was any discussion or agreement between Plastech and Cooper-Standard about the source of the brite strip insert prior to consummation of the APA.
Plastech alleges that it relied on the allegedly misleading information Cooper-Standard provided under the heading "Purchased Components" as its basis for estimating its expenses for future business involving the brite strip part. After the asset sale, Plastech contacted Cooper-Standard for the purpose of procuring the brite strip inserts at the cost listed on the previously-filled in form. Cooper-Standard's quotation to Plastech, however, was nearly double the cost stated on the form.
Plastech alleges that it was forced to procure the brite strip insert from other companies at a higher price than it originally anticipated, thus causing Plastech to incur monetary damages. This situation gives rise to two alternative causes of action in Plastech's complaint: 1) breach of § 5.2(t) (the representations and warranties clause), and 2) negligent/innocent misrepresentation.
That section provides:
Neither this Agreement on or any schedule attached hereto or other documents and written information furnished by or on behalf of Seller, its attorneys, auditors or agents to Buyer in connection with this Agreement contains any untrue statement of material fact or omits any material fact necessary to make the statements contained herein or therein not misleading.
GM Liability/Announcement to GM
Included in the liabilities assigned to Plastech via the APA was a liability to General Motors ("GM") for approximately $1.1 million, which arose as a result of excess costs, e.g., expedited shipping costs, associated with products GM had purchased from Cooper-Standard. (APA § 3.1; Exh. 3.1(b)). Apparently, at the time of the assignment of this liability, Plastech did not intend to pay the full amount to GM, but rather expected negotiating with GM to pay a lesser amount. Although the APA capped the liability of the obligation at $1,118,467.72 (APA, Exh. 3.1(b)), the assignment of the liability to Plastech did not indicate that the amount could be reduced through negotiation between Plastech and GM.
When GM contacted Cooper-Standard about the liability, Cooper-Standard told GM that the liability had been assigned to Plastech under the APA. Though Cooper-Standard made this response solely to GM, and to no one else. Plastech claims that Cooper-Standard's notice to GM about the assignment of the liability to Plastech violated § 6.3 of the APA, which barred any "public announcements" about the sale.
Section 6.3 of the APA provides:
Neither party to this Agreement shall make any public announcements with respect to this Agreement or the transactions contemplated hereby without the prior written consent of the other party hereto; provided, however, that a party may, without the consent of the other party, make such public announcement as may upon the advice of counsel be required by law if it has used all reasonable efforts to r party to this Agreement shall make any public announcements with respect to this consult with the other party regarding the requirement for and substance of such announcement.
Plastech eventually was able to negotiate a slightly lesser amount, which it paid to GM.
Tooling Receivables
Included in Cooper-Standard's accounts receivable (excluded, per § 2.1 of the APA, from the purchased property) were certain unbilled "tooling receivables." These tooling receivables were monies which were, or would become due to Cooper-Standard from original equipment manufacturers ("OEMs") for certain expenditures related to procuring the tooling necessary to produce the automotive parts the OEMs had contracted to purchase from Cooper-Standard.
OEMs generally do not pay for tooling expenditures until the tooling is approved in a process known as the production part approval process ("PPAP"). However, to enable completion of the tooling order, Cooper-Standard would sometimes make interim payments to the tooling vendors, before receiving payment from the OEMs. Cooper-Standard's regular business practice was to carry these tooling expenditures on the accounts receivable books until they were PPAP'ed and paid by the OEM. It is undisputed that approximately $2.8 million in tooling receivables were included in Cooper-Standard's accounts receivable calculations appended to the APA.
The only dispute between the parties is whether Cooper-Standard should have included the tooling receivables in the accounts receivable calculation; Plastech does not dispute that Cooper-Standard did include them. Plastech asserts these tooling receivables should not have been accounts receivable until PPAP'ed, because that is how Plastech handles its tooling receivables. I find this to be irrelevant. The APA as written does not contemplate Plastech's purchase of the tooling receivables, because Cooper-Standard actually included those amounts in its final calculation for its ($7.3 million) accounts receivable, which are excluded from the APA.
After the closing, OEMs paid the amounts due for tooling directly to Plastech, rather than to Cooper-Standard. Plastech has kept those monies. One payment from Ford Motor Company for $243,000 did go to Cooper-Standard. Cooper-Standard retained that payment.
The Indemnification Clause
Section 9.2 of the APA, entitled "Indemnification," reads, in relevant part:
Subject to the limitations set forth in this Article DC, Seller shall indemnify and hold harmless Buyer . . . from and against any and all losses, liabilities, damages, demands, claims, suits, actions, judgments or causes of action, assessments, costs and expenses including, without limitation, interest, penalties, reasonable attorneys' fees, any and all reasonable expenses incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation, excluding, however, recoveries in respect of lost profits or consequential damages (collectively, "Damages"), asserted against, resulting to, imposed upon, or incurred or suffered by Buyer, directly or indirectly, as a result of or arising from
The parties dispute the meaning of this provision. Cooper-Standard asserts that Plastech cannot receive damages in the form of lost profits. Plastech disagrees.
Procedural Posture
Plaintiff Plastech has voluntarily dismissed Counts III and VIII, which sounded in fraud. Defendant Cooper-Standard seeks summary judgment on all other counts in the amended complaint, as well as on its own counterclaim for unjust enrichment. Plaintiff Plastech seeks partial summary judgment, against Cooper-Standard on the unjust enrichment counterclaim, and in Plastech's favor on Cooper-Standard's Count I (breach of § 6.7 of the APA) and Count VI (conversion of the $243,000 payment from Ford Motor Company). In cross-motions for summary judgment, each party seeks a favorable interpretation of the indemnification clause in § 9.2 of the APA.Cooper-Standard's motion will be granted in part and denied in part. Plastech's motion will be granted in party and denied in part. As a result, two issues remain for trial, namely Plastech's claim in Count IV, alleging negligent/innocent misrepresentation as to the brite strip pricing/cost, and Plastech's damages as to Count I, breach of the non-compete provision.
STANDARD OF REVIEW
Summary judgment must be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477U.S. 317, 322 (1986). The moving party always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact. Id. at 323. The burden then shifts to the nonmoving party who "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (quoting FED. R. ClV. P. 56(e)).
Once the burden of production shifts, the party opposing summary judgment cannot rest on its pleadings or merely reassert its previous allegations. It is insufficient "simply [to] show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, Rule 56(e) "requires the nonmoving party to go beyond the [unverified] pleadings" and present some type of evidentiary material in support of its position. Celotex, 477 U.S. at 324.
In deciding the motion for summary judgment, the evidence of the non-moving party will be believed as true, all doubts will be resolved against the moving party, all evidence will be construed in the light most favorable to the non-moving party, and all reasonable inferences will be drawn in the non-moving party's favor. Eastman Kodak Co. v. Technical Servs., Inc., 504 U.S. 451, 456 (1992). Summary judgment shall be rendered only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c).
However, the filing of cross motions as to any particular issue does not require me to resolve that issue at the summary judgment stage. As explained in B.F. Goodrich Co. v. U.S. Filter Corp., 245 F.3d 587 (6th Cir. 2001):
A trial court may conclude, when reviewing the undisputed material facts agreed upon by the parties and drawing all inferences, in turn, for the non-moving party, that a genuine issue exists as to those material facts, in which case the court is not permitted to resolve the matter, but rather, must allow the case to proceed to trial. . . . Therefore, summary judgment was not necessarily appropriate solely because the parties filed cross-motions for summary judgment.Id. at 593 (footnotes omitted).
DISCUSSION
Because this is primarily a breach of contract case, I set forth some general principles of contract law.First, I note that the APA contains § 11.11, which provides that the agreement "shall in all respects be construed in accordance with and governed by the laws of the State of Ohio." (APA § 11.11, at 26). In Ohio, contract interpretation is generally a question of law. See New Market Acquisitions, Ltd. v. Powerhouse Gym, 154 F. Supp.2d 1213, 1220 (S.D. Ohio 2001) (citation omitted). Terms within a contract are to be given their plain and natural meaning. See Books A Million, Inc. v. H N Enters., Inc., 140 F. Supp.2d 846, 853 (S.D. Ohio 2001) (citation omitted). Initially the court determines whether any contract terms are ambiguous. See Shifrin v. Forest City Enters., Inc., 64 Ohio St.3d 635, 638 (1992). A contract term is ambiguous if it is reasonably susceptible to more than one interpretation. See Books A Million, Inc., 140F. Supp.2d at 853 (citing USFG Co. v. St. Elizabeth Med. Ctr., 129 Ohio App.3d 45, 55 (1998)). If the terms are not ambiguous, the court determines the meaning of the contract without reference to any parol/extrinsic evidence. Shifrin, 64 Ohio St.3d at 638 (citing Stony's Trucking Co. v. Public Util. Comm., 32 Ohio St.2d 139, 142 (1972)).
If the terms are ambiguous, the court is to give effect to the parties' intent. Pharmacia Hepar, Inc. v. City of Franklin, 111 Ohio App.3d 468, 475 (1996). Only when the terms are ambiguous may a court resort to extrinsic/parol evidence to determine such intent. See Shifrin, 64 Ohio St.3d at 638 (citing Kelly v. Med. Life Ins. Co., 31 Ohio St.3d 130, 132(1987)). If ambiguity exists in a contractual term, then the intended meaning of the term is a question of fact for the jury to determine. See GenCorp., Inc v. American Int'l Underwriters, 178 F.3d 804, 818 (6th Cir. 1999) (applying Ohio law) ("If the court determines that a contract term is ambiguous, a question of fact for the jury arises."); Bahamas Agri. Indus. Ltd v. Riley Stoker Corp., 526 F.2d 1174, 1179 (6th Cir. 1975) ("According to Ohio law it is within the province of the jury, and not for the court, to ascertain and determine the intent and meaning of the contracting parties in their use of uncertain and ambiguous language.") (citing Amstutz, Adm'r v. Prudential Ins. Co., 136 Ohio St. 404, 408 (1940) ("While it is the function of a court to construe a contract, it is the province of the jury to ascertain and determine the intent and meaning of the contracting parties in the use of uncertain or ambiguous language.")); see also Pharmacia Hepar, supra, 111 Ohio App.3d at 475 (parties' intent is a question of fact if contract language capable of two reasonable but conflicting interpretations).
Such extrinsic/parol evidence may include: "I) the circumstances surrounding the parties at the time the contract was made, 2) the objectives the parties intended to accomplish by entering into the contract, and 3) any acts by the parties that demonstrate the construction they gave to their agreement." USFG, 129 Ohio App.3d at 56 (citation omitted).
In this case, it is undisputed that the parties and their attorneys negotiated the APA line by line. Therefore, I cannot employ the canon of construction that holds that ambiguities are interpreted against the drafter. See, e.g., Wall v. Firelands Radiology, Inc., 106 Ohio App.3d 313, 327 (1995) (rule of contra proferentum does not apply when contracting parties, represented by experienced drafters, engaged in extensive negotiations as to contractual terms).
I. JR 41 DaimlerChrysler Business the Non-Compete
As noted above, the parties negotiated a non-compete provision, found in § 6.7 of the APA. It provides, in relevant part, that Cooper-Standard may not, "directly or indirectly, . . . seek to divert or dissuade" any company with which Plastech was either already doing business or was seeking to do business, from continuing/entering into business with Plastech for a period of eighteen months. It is undisputed that Cooper-Standard sent price quotations to DaimlerChrysler regarding the JR 41 business before the end of the eighteen-month period. Thereafter, DaimlerChrysler took a large part of the JR 41 business away from Plastech and awarded it to Cooper-Standard. Both parties seek summary judgment on this claim, which is asserted as Count I of Plastech's complaint.
Cooper-Standard contends that it did not actively solicit DaimlerChrysler's interest in, or business with, Cooper-Standard. In making this argument, Cooper-Standard ignores and seeks to delete the phrase "directly or indirectly" from the contract.
Contrary to Cooper-Standard's assertion, that phrase is not limited to active solicitation on its part: the contract contains no such modification or qualification. Though DaimlerChrysler initially conceived the idea of switching to extrusion molding and initiated contact with Cooper-Standard, Cooper-Standard's response constituted indirect, if not direct, solicitation of business that it was contractually obligated to forego for eighteen months.
Cooper-Standard also argues that the non-compete is unreasonable/unenforceable, citing the standard set forth in Raimonde v. Van Vlerah, 42 Ohio St.2d 21 (1975). That standard provides:
a covenant not to compete which imposes unreasonable restrictions upon an employee will be enforced to the extent necessary to protect the employer's legitimate interests. A covenant restraining . . . [competition] is reasonable if it is no greater than is required for the protection of the employer, does not impose undue hardship on the employee, and is not injurious to the public. Courts are empowered to modify or amend employment agreements to achieve such results.Id. at 25-26.
I disagree. The non-compete' s restrictions are appropriately limited: Cooper-Standard agreed not to seek to divert business, either directly or indirectly, from Plastech to Cooper-Standard for eighteen months. Cooper-Standard was not prevented from continuing its extrusion molding business, it simply agreed not to take customers away from Plastech for a limited period. Given the nature of the parties, size of the asset purchase, and importance of ensuring the vitality of the purchased business, the non-compete was commercially reasonable and enforceable.
When construing the undisputed evidence, in turn, in the light most favorable to each non-moving party, I find that no reasonable juror applying the facts to the law could conclude anything other than that Cooper-Standard's sending of a price quotation within the prohibited time frame constituted a breach of the "indirectly" portion of the non-compete agreement. That being the case, I will grant Plastech's motion for partial summary judgment (as to liability), and deny Cooper-Standard's motion for summary judgment on this claim. The issue of damages for this claim remains for trial.
II. Brite Strip Cost/Pricing A. Count II — Breach of Contract — Section 5.2 of APA
Plastech asserts a cause of action for breach of the representations/warranties clause in the APA. The problem with this cause of action, however, is that the APA does not mention the brite strip. Section 5.2 specifically references any representations/warranties made in the agreement itself, any schedule attached to it, or any documents/information "furnished . . . in connection with this Agreement." (APA, § 5.2(t)). The forms which Plastech gave to Cooper for the brite strip cost information are not in the Agreement itself. Nor are those forms attached as a schedule to the APA.
The only issue is whether they were furnished in connection with the APA. There is no evidence before the Court that would suggest that the information regarding the brite strip was "connected with" the APA. Plastech seeks to expand the contractual warranties/representations to include any information provided to Plastech, even if essentially unrelated to the contract itself. This it cannot do.
Because any alleged misrepresentation regarding the brite strip occurred outside of the reach of the APA or § 5.2, Cooper-Standard is entitled to summary judgment on this claim.
B. Count IV — Negligent/Innocent Misrepresentation
As set forth by the Ohio Supreme Court, the elements of negligent misrepresentation are:
One who, in the course of his business, profession, or employment . . . supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communication the information.Delman v. Cleveland Heights, 41 Ohio St.3d 1, 4 (1989).
Plastech asserts this claim alternatively to the claim in Count n for breach of the representations/warranties clause of the APA; this claim does not require the applicability of the APA for its viability. As noted above, it is undisputed that Cooper-Standard placed its cost/pricing information in the "Purchased Components" section of the form provided by Plastech. It is also undisputed that Cooper-Standard did not, in fact, purchase the brite strip, but manufactured the trim part itself. Cooper-Standard asserts that although technically an error, this misinformation should not be considered as a representation about the cost of the brite strip from an outside supplier, or what it would charge Plastech to supply the brite strip. While that may be the case, that is not the inquiry. The inquiry is whether the information provided was false, and if so, whether Plastech was harmed by its justifiable reliance on the misinformation. Construing the evidence in the light most favorable to the plaintiff, the jury could reasonably conclude that Plastech is entitled to recover on this claim. I will deny Cooper-Standard's motion for summary judgment as to this claim.
III. GM Liability
In Count V, Plastech asserts a cause of action for breach of § 6.3 of the APA — the section prohibiting "public announcements." Plastech alleges that Cooper-Standard's notice to GM that Plastech had assumed the approximately $1.1 million liability via the APA constituted a "public announcement" under the APA.
Pursuant to § 2.1 of the APA, Plastech assumed liability for the $1.1 million Cooper-Standard owed to GM. I find as a matter of law that that section is unambiguous. Plastech assumed the liability, and the only proviso was that the liability was capped at the stated amount.
Plastech seeks to introduce extrinsic/parol evidence that its assumption of the liability was premised on Cooper-Standard's assurance to Plastech that Plastech could negotiate to pay a lesser amount to GM. The problem with Plastech's argument is that there is no mention of this assurance in the APA, which is a complete and integrated agreement. Under Ohio law, I cannot look to extrinsic/parol evidence if the contract is not ambiguous. See Shifrin, 64 Ohio St.3d at 638.
The APA contains an unambiguous integration clause:
Entire Agreement. This Agreement embodies the entire agreement and understanding of the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and under stands, oral or written, relative to said subject matter. . . .
I further find § 6.3 of the APA unambiguous as a matter of law. The plain and natural meaning of the terms do not support Plastech's interpretation of the "public announcement" provision. First, the plain and natural meaning of the word "public," according to Black's Law Dictionary, is: "1. Relating or belonging to an entire community, state, or nation. 2. Open or available for all to use, share, or enjoy. . . ." Black's Law Dictionary, at 1242 (7th ed. 1999). The plain and natural meaning of the word "announcement," according to Webster's is: "1. the act of announcing or of being announced. 2. a public notification or declaration " Webster's Ninth New Collegiate Dictionary, at 88 (9th ed. 1989).
It is undisputed that Cooper-Standard told GM that Plastech had assumed the $1.1 million liability under the APA. Plastech alleges that this statement constituted a "public announcement" within the meaning of § 6.3, and that the notice impaired Plastech's ability to negotiate with GM to reduce the amount of the liability.
I note that Plastech does not contend that Cooper-Standard should have conducted the negotiations with GM. Plastech, not Cooper-Standard, was the real party in interest, and GM had to become aware at some point that Plastech, not Cooper-Standard, owed it the money at issue.
I find, as a matter of law, that Cooper-Standard is entitled to summary judgment on this claim. The contract does not contemplate absolute secrecy; rather, it prohibits only "public announcements," as defined above. Cooper-Standard's notice to GM does not constitute a public announcement within the meaning of the agreement.
Had Plastech wished to have a more restrictive secrecy clause, it could have sought such a clause in its negotiations with Cooper-Standard. It did not. Plastech cannot bear its burden of proof as to this breach of contract claim. The undisputed evidence, when applied to the unambiguous contract language, shows there has been no such breach. Cooper-Standard's motion for summary judgment shall be granted as to Count V.
IV. Tooling Receivables
Counts VI, Vn, DC, and X all require proof that Cooper-Standard owned the "tooling receivables" pursuant to the APA. Because the tooling receivables are clearly excluded from the purchased property pursuant to the APA, Cooper-Standard is entitled to summary judgment on all four of these counts.
Further, because the tooling receivables were not included in the purchase, Cooper-Standard is entitled to summary judgment in its favor on its counterclaim for unjust enrichment.
A. Count VI — Conversion
In Ohio, a tort claim for common law conversion is one that alleges the defendant exercised dominion or control wrongfully over the property of another, in denial of or under a claim inconsistent with the other's rights. See Ohio Telephone Equipment Sales, Inc. v. Hadler Realty Co., 24 Ohio App.3d 91, 93 (1985).
In this case, as noted above, Cooper-Standard clearly retained the right to collect the tooling receivables post-APA. Plastech's claim for conversion requires, as a factual predicate, that the Ford payment belongs to Plastech. It does not. There is no genuine issue of material fact; Plastech is not entitled to a payment that did not belong to it in the first place. I will therefore grant Cooper-Standard's motion for summary judgment as to this claim.
B. Count VII — Breach of Contract
Plastech asserts that Cooper-Standard's retention of the Ford payment breached the APA. Plastech is incorrect. The tooling receivables, including monies for the D186 tooling, were excluded from the purchased property in the APA. Cooper-Standard's retention of the Ford payment on this tooling receivable cannot constitute a breach of the APA. Cooper-Standard is entitled to summary judgment as to this claim.
C. Count IX — Tortious Interference with Contract
A claim for tortious interference with contract requires the following elements: 1) the existence of contract, 2) the wrongdoer's knowledge of the contract, 3) the wrongdoer's intentional procurement of the breach, 4) lack of justification, 5) resulting damages. Fred Siegel Co. LPA v. Arter Hadden, 85 Ohio St.3d 171, 171-72(1999).
In this count, Plastech seeks to establish that Cooper-Standard interfered with Plastech's contracts with the OEMs for the tooling. However, the tooling contracts are clearly excluded from the purchased assets in the APA, by reason of their inclusion in Cooper-Standard's accounts receivable. Clearly, if there is no contract between Plastech and the OEMs, there is no claim for Cooper-Standard's tortious interference with such a contract. Cooper-Standard is entitled to summary judgment on this claim.
D. Count X — Constructive Trust
The Ohio Supreme Court has defined a "constructive trust" as:
a trust by operation of law which arises contrary to intention . . ., against one who, by fraud, actual or constructive, by duress or abuse of confidence, by commission of wrong, or by any form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good conscience, either has obtained or holds the legal right to property which he ought not, in equity and good conscience, hold and enjoy.Ferguson v. Owens, 9 Ohio St.3d 223, 225 (1984) (quoting 76 Am.Jur.2d 446, Trusts § 221 (1975)).
Because the claim for a constructive trust requires, as a factual predicate, that the defendant is retaining property which it is not entitled to retain, this claim is also ripe for summary judgment. Again, Cooper-Standard retained the right to collect the tooling receivables, which were clearly excluded from the purchased assets in the APA. Because Cooper-Standard was entitled to those monies, Plastech has no legal basis for a constructive trust on those monies. I will grant Cooper-Standard's motion as to this issue.
E. Cooper-Standard's Counterclaim for Unjust Enrichment
A claim for unjust enrichment requires the following elements: 1) a benefit was conferred upon the defendant by the plaintiff; 2) the defendant accepted/appreciated the benefit conferred; 3) acceptance of the benefit without compensation for its value would, under the circumstances, be inequitable. See, e.g., Hambleton v. R.G. Barry Corp., 12 Ohio St.3d 179, 183 (1984).
In the instant case, as set forth above, the undisputed evidence shows that Cooper-Standard retained the right to collect the tooling receivables post-APA. Plastech received multiple payments from OEMs for those tooling receivables, without having expended the money for the tooling — thus a benefit was conferred. Plastech kept those monies — thus, the acceptance/appreciation of the benefit conferred is evident. Because those monies rightfully belonged to Cooper-Standard, Plastech's acceptance of the tooling monies without compensating/reimbursing Cooper-Standard is inequitable. I find there is no genuine issue of material fact as to this claim.
I will therefore grant Cooper-Standard's motion for summary judgment as to its counterclaim.
V. The Indemnification Clause — § 9.2
Section 9.2 of the APA, entitled "Indemnification," reads, in relevant part:
Subject to the limitations set forth in this Article DC, Seller shall indemnify and hold harmless Buyer . . . from and against any and all losses, liabilities, damages, demands, claims, suits, actions, judgments or causes of action, assessments, costs and expenses including, without limitation, interest, penalties, reasonable attorneys' fees, any and all reasonable expenses incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation, excluding, however, recoveries in respect of lost profits or consequential damages (collectively, "Damages"), asserted against, resulting to, imposed upon, or incurred or suffered by Buyer, directly or indirectly, as a result of or arising from
The parties dispute the meaning of this provision. Cooper-Standard asserts that Plastech cannot receive damages in the form of lost profits. Plastech disagrees.
According to Cooper-Standard, this provision obligates it to indemnify Plastech for losses, including losses resulting from the costs and expenses of litigation, and, as well, for any amounts paid in settlement. The amount of any such loss or litigation expense, according to Cooper-Standard, does not include either lost profits or consequential damages. Thus, Cooper-Standard contends that under no circumstance is it liable for lost profits or consequential damages. To diagram Cooper-Standard's reading:
Cooper-Standard is to indemnify and hold Plastech harmless
[1] from and against any and all losses, liabilities, damages, demands, claims, suits, actions, judgments or causes of action, assessments, costs and expenses
[a] including, without limitation, interest, penalties, reasonable attorneys' fees, any and all reasonable expenses incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and
[b] any and all amounts paid in settlement of any claim or litigation,
[2] excluding, however, recoveries in respect of lost profits or consequential damages (collectively, "Damages"). . . .
Plastech asserts that the exclusion for lost profits and consequential damages applies only to amounts paid in settlement of a claim or litigation. Otherwise, Platech argues, Cooper-Standard is obligated to indemnify Plastech for lost profits and consequential damages.
To diagram Plastech's reading:
Cooper-Standard is to indemnify and hold Plastech harmless
from and against
[a] any and all losses, liabilities, damages, demands, claims, suits, actions, judgments or causes of action, assessments, costs and expenses
[i] including, without limitation, interest, penalties, reasonable attorneys' fees, any and all reasonable expenses incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and
[b] any and all amounts paid in settlement of any claim or litigation,
[i] excluding, however, recoveries in respect of lost profits or consequential damages (collectively, "Damages"),
I conclude that this provision is not ambiguous, and that it admits of only one reading — namely, the reading advanced by Cooper-Standard.
The provision begins with a broad and comprehensive indemnification statement. That initial clause ("any and all losses, liabilities, damages, demands, claims, suits, actions, judgments or causes of action, assessments, costs and expenses") is followed by a dependent clause ("including, without limitation, interest, penalties, reasonable attorneys' fees, any and all reasonable expenses incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever"), the antecedent of which is "costs and expenses." The view that this dependent clause modifies "costs and expenses," rather than the entire precedent list is supported by the nature of the items covered by the dependent clause: all those items are likely to be incurred in, through, or as a result of litigation, and can broadly be viewed as "costs and expenses" of litigation.
Following, and joined to that dependent clause by the conjunction "and" is another dependent clause ("any and all amounts paid in settlement of any claim or litigation"). The antecedent to this clause is, likewise, "costs and expenses" — which can include the amounts paid to settle a suit or claim.
These two dependent clauses underscore the expansive nature of the indemnification obligation, by making clear that liabilities incurred as a result of either threatened or actual litigation are to be paid by Cooper-Standard.
The concluding, limiting clause ("excluding, however, recoveries in respect of lost profits or consequential damages (collectively, `Damages'"), which is the subject of the parties' dispute about this provision, is a dependent clause. Its antecedent — particularly in view of the definitional parenthetical ("collectively, `Damages'") — is the initial, broad and comprehensive statement of the indemnification obligation ("any and all losses, liabilities, damages, demands, claims, suits, actions, judgments or causes of action, assessments, costs and expenses").
If the initial clause were not the antecedent to the concluding limiting clause, the parenthetical term ("collectively, `Damages'") would have a peculiar meaning: the antecedent to that term would be "recoveries in respect of lost profits or consequential damages", rather than the more expansive list in the provision's initial clause. If a limited application of the definition of "Damages" were intended, the drafters would not have included the expansive modifier, "collectively."
"[A]mounts paid in settlement of any claim or litigation", are, moreover, not likely to be broken down into various components in a settlement, as would have to occur to give meaning to the limiting phrase ("excluding, however, recoveries in respect of lost profits or consequential damages"). Indeed, it is more likely that a computation of such amounts will occur during trial and be reflected in a jury's verdict, which likely would include special interrogatories. Absent such breakdown, the limitation could not be applied. Thus, the limitation clause has meaning only if it applies to the entire spectrum of obligations as set forth in the initial clause (which, I note, includes in its list "judgments").
I conclude, accordingly, that Cooper-Standard is entitled to summary judgment on this claim.
CONCLUSION
It is, therefore,
ORDERED THAT
1. Cooper-Standard's motion for summary judgment be and hereby is granted in part and denied in part. Counts II, V, VI, VII, IX, and X are dismissed. Cooper-Standard's motion is also granted as to its unjust enrichment claim and the interpretation of the indemnification clause. Cooper-Standard's motion for summary judgment is denied as to Counts I and IV.
2. Plastech's motion for partial summary judgment be and hereby is granted in part and denied in part. Plastech's motion is granted as to Count I; otherwise, it is denied.
3. Two issues remain for trial: Count IV (negligent/innocent misrepresentation), regarding the brite strip cost information; and damages as to Count I (non-compete).
So ordered.