Briggs v. GLA Water Mgmt.

Decision Date11 April 2014
Docket NumberCourt of Appeals No. WD-12-063,Trial Court No. 2011CV0434,Trial Court No. 2011CV0495,Court of Appeals No. WD-12-062
Citation2014 Ohio 1551
PartiesThomas M. Briggs Appellant v. GLA Water Management, et al. Appellees
CourtOhio Court of Appeals

DECISION AND JUDGMENT

Thomas Dillon and Rebecca E. Shope, for appellant.

Robert J. Bahret, Christine M. Gaynor and Andrew J. Ayers, for appellees.

OSOWIK, J.

{¶ 1} This is an appeal from a judgment of the Wood County Court of Common Pleas that denied appellant Thomas Briggs' motion for judgment notwithstanding the verdict or, in the alternative, a new trial. Judgment was entered following a jury trial on appellant's complaint alleging breach of a commercial lease agreement and non-competeagreement, and on appellees' counterclaim. For the reasons that follow, the judgment of the trial court is reversed.

{¶ 2} The claims in this matter arose out of business transactions surrounding appellee Charles Hamrick's purchase of an industrial water treatment business owned by appellant Thomas Briggs. The undisputed facts relevant to the issues raised on appeal are as follows.

{¶ 3} In 1978, Briggs founded Viking Chemicals of Northwest Ohio, later renamed GLA Water Management, Inc. ("GLA"), to provide industrial water treatment products and services to businesses in the northwest Ohio area. In 1982, Briggs hired Hamrick and in 1998, Hamrick became operating agent for GLA. Shortly thereafter, Briggs and Hamrick began discussing the sale of GLA to Hamrick upon Briggs' retirement. On November 17, 1999, Briggs and Hamrick executed several documents to accomplish the sale of the business, including a commercial lease agreement, a non-compete agreement and a personal guaranty. The 15-year lease agreement was drafted to enable Briggs to remain as owner of the building while GLA continued to operate out of that location. Pursuant to the lease, set to expire in December 2014, GLA would pay rent of $2,750 per month for the first five years and $4,750 each month for the remaining ten years. Pursuant to the non-compete agreement, GLA was to pay Briggs the sum of $3,500 per month for 15 years (from January 2000 through December 2014) in exchange for Briggs' agreement not to engage in any business or activity in competition with GLA within the states of Ohio, Indiana and Michigan for those 15 years. Under the guaranty,signed by Hamrick in his individual capacity, Hamrick agreed to assume payments under the lease and the non-compete in the event they were not made by GLA.

{¶ 4} On June 8, 2011, Briggs filed a complaint for damages against Hamrick and GLA in which he alleged that GLA breached the commercial lease agreement by failing to timely pay the full amount of rent due, which had accrued to $47,500 as of May 2011. Briggs also alleged that, while he had fulfilled his obligation under the non-compete, GLA had failed to pay him the monthly amount of $3,500 in exchange for his compliance. Further, Briggs alleged that Hamrick breached the terms of the personal guaranty by failing to pay the amounts owed under the lease and the non-compete. Lastly, Briggs alleged that GLA had been unjustly enriched to Briggs' detriment in the amount of $116,000 in past due rent and non-compete payments, plus interest, attorneys' fees and expenses.

{¶ 5} On June 16, 2011, appellees GLA and Hamrick (hereafter, "GLA") responded by denying the allegations and asserting a counterclaim alleging that Briggs breached the terms of the non-compete agreement by secretly competing against the interests of GLA and Hamrick and by assisting others in efforts to compete against them. GLA specifically alleged that Briggs had benefitted financially and was liable to GLA for all amounts wrongfully paid him, and that Briggs had been unjustly enriched in an amount in excess of $300,000.

{¶ 6} On April 30, 2012, Briggs filed a motion for summary judgment on all issues. On May 24, 2012, GLA filed a brief in opposition in which it failed to submitevidence of lost profits or any other money damages caused by Briggs' alleged breach. In his reply brief, Briggs asserted that lack of evidence of lost profits or any other damages caused by the alleged competition precluded GLA from prevailing as a matter of law.

{¶ 7} On June 6, 2012, the trial court granted partial summary judgment in favor of Briggs, finding that the lease agreement and the guaranty were breached. The trial court found that GLA had admitted that the monthly rent from August 2010 through June 2011 was never paid and that GLA disputed the amount owed, not the existence of a breach. Additionally, the trial court found that triable issues of fact existed on Briggs' remaining claims for breach of the non-compete agreement, breach of the personal guaranty as it related to the non-compete agreement, and unjust enrichment. Trial was further ordered on GLA's counterclaim for Briggs' breach of the non-compete agreement and unjust enrichment. The case proceeded to trial before a jury on the issue of the amount due Briggs under the lease agreement and the personal guaranty as it related to the lease.

{¶ 8} Trial commenced on August 22, 2013. The jury heard two days of testimony from Briggs; Hamrick; Charles Hamrick, Jr.; Tom Kurfis, owner of Clean Water Services ("CWS"), and his son Eric Kurfis; Matt Ross, CWS treasurer; Larry Latra, whose company previously sold chemicals to GLA; and Vicki Bollett, office manager for GLA. At the conclusion of GLA's case, Briggs moved for a directed verdict with respect to the counterclaim, arguing that GLA had not submitted any evidence as tolost profits or other damages attributed to Briggs' alleged competitive activities and that, without damages, a breach of contract claim fails as a matter of law. The trial court denied the motion for directed verdict and stated that it would allow the matter to go to the jury based on an unjust enrichment theory. Briggs objected to the trial court's reasoning, arguing that the non-compete was an express written agreement which precluded any implied contract/unjust enrichment theory. After hearing arguments as to Briggs' motion for a directed verdict at the close of GLA's case, the trial court emphasized that the question of whether Briggs competed with GLA in violation of the non-compete agreement was a factual issue, and ruled that GLA had presented enough evidence of competing activity by Briggs for the matter to go to the jury.

{¶ 9} The jury returned a verdict of $118,750 in favor of Briggs on the breach of commercial lease and guaranty claims and a verdict of $353,500 in favor of GLA on the breach of the non-compete counterclaim. The jury also returned a verdict for GLA on Briggs' claim for breach of the non-compete agreement. The trial court awarded judgment to GLA in the off-set amount of $234,250.

{¶ 10} On September 5, 2012, Briggs filed a motion for judgment notwithstanding the verdict or, in the alternative, a new trial. In his motion, Briggs again argued that there was no evidence before the jury that his conduct resulted in any monetary damages to GLA. He further argued once again that GLA was prohibited from proceeding on an alternative claim for unjust enrichment since there was an express contract executed between the parties. GLA did not dispute Briggs' recitation of the evidence, insteadarguing that it was entitled to restitution damages. In its judgment entry filed October 31, 2012, the trial court denied Briggs' motion for judgment notwithstanding the verdict. As to its denial of Briggs' motion for a new trial, the court found that the jury's award was supported by the evidence and that the damages were not excessive because they were based specifically on the monthly payments that were made to Briggs.

{¶ 11} Appellant Briggs sets forth the following assignments of error:

The trial court committed reversible error in denying Mr. Briggs' motion for directed verdict where GLA failed to present any evidence of lost profits or other damages caused by Mr. Briggs' alleged breach of the noncompetition agreement.
The trial court committed reversible error in ruling that the case was proceeding to the jury on a theory of unjust enrichment with breach of contract jury instructions, but then ruling post-trial that it was actually the contract claim that survived.
The jury award amounts to the remedy of recession [sic] or an illegal forfeiture where there was no factual support or legal basis for the jury to require Mr. Briggs to disgorge all payments received under the noncompetition agreement from January 2002 until May 2010.
The trial court erred in relying on Yurchak v. Jack Boiman Constr. Co. in denying Mr. Briggs' Motion for Judgment Notwithstanding theVerdict or, Alternatively, a New Trial, where Yurchak was irrelevant and, even if applicable, was applied incorrectly by the trial court.

{¶ 12} Briggs argues, first, that the trial court erred by denying his motion for directed verdict and, second, that the court erred by denying his subsequent motion for judgment notwithstanding the verdict (JNOV). As to the motion for directed verdict, Briggs asserts in his first assignment of error that GLA failed to present any evidence of lost profits based on the alleged violation of the non-compete agreement. As to his motion for judgment notwithstanding the verdict, Briggs asserts in his fourth assignment of error that the trial court improperly relied on Yurchak v. Jack Boiman Constr. Co., 3 Ohio App.3d 15, 443 N.E.2d 526 (1st Dist.1981), in denying the motion.

{¶ 13} The decision to grant or deny a Civ.R. 50(B) motion for JNOV is reviewed de novo. Osler v. Lorain, 28 Ohio St.3d 345, 347, 504 N.E.2d 19 (1986), equating the test regarding review of a JNOV to the test applied to review a directed verdict. A directed verdict is also reviewed de novo. Goodyear Tire & Rubber Co. v. Aetna Cas. & Sur. Co., 95 Ohio St.3d 512, 2002-Ohio-2842, 769 N.E.2d 835, ¶ 4 (setting forth the...

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