Diamond Wine & Spirits v. Dayton Heidelberg
| Decision Date | 02 August 2002 |
| Docket Number | No. 1-01-153.,1-01-153. |
| Citation | 148 Ohio App.3d 596,2002 Ohio 3932,774 N.E.2d 775 |
| Court | Ohio Court of Appeals |
| Parties | DIAMOND WINE & SPIRITS, INC., Appellee, v. DAYTON HEIDELBERG DISTRIBUTING CO., INC., Appellant; C&G Distributing Company, Inc., Appellee. |
David W. Alexander and Marc J. Kessler, Columbus, for appellee.
Alfred J. Weisbrod, Dayton; and Dennis M. Fitzgerald, Findlay, for appellant.
John M. Leahy, Lima; Roger Schantz and James F. Deleone, Columbus, for third-party defendant-appellee.
{¶ 1} Defendant-appellant, Dayton Heidelberg Distributing Co., Inc. ("Heidelberg"), brings this appeal from an Allen County Common Pleas Court decision granting summary judgment against it and dismissing its claims for misrepresentation, breach of contract-warranty, and indemnification against third-party defendant-appellee, C & G Distributing Company, Inc. ("C & G"). Upon review of the record, we find that Heidelberg's knowledge of circumstances surrounding the agreement and terms within the agreement preclude the company from claiming that it had been misled into signing the contract. We further find that a contract which purports to obligate a party to indemnify an actor against a civil action for intentional acts designed and calculated to accomplish the disruption, interference or destruction of a business relationship or contract violates public policy and is, therefore, unenforceable to that extent. Accordingly, we affirm the trial court's judgment.
{¶ 2} Facts and procedural history relevant to the issues raised on appeal are as follows. C & G distributed alcoholic beverages in Lima, Ohio, including various brands of beer and wine. In 1999, C & G decided to sell the wine division of its distribution business. By letters dated June 17, 1999, C & G authorized its counsel to solicit offers from two other alcoholic beverage distributors in the Lima area, Heidelberg and Diamond Wine & Spirits, Inc. ("Diamond"). Over the next several months Diamond and Heidelberg submitted competing bids for the distribution business. C & G eventually selected Diamond, whose $850,000 bid exceeded Heidelberg's $750,000 bid. Thereafter, C & G and Diamond negotiated the terms of an asset purchase agreement ("Diamond Agreement") by which the wine division would be sold. In November 1999, C & G forwarded an executed copy of the agreement to Diamond's counsel. Diamond's board of directors authorized its president to execute the agreement in December 1999.
{¶ 3} Under the terms of the Diamond Agreement, and in accordance with R.C. 1333.84(F), C & G was obligated to secure the prior consent of alcoholic beverage manufacturers to the transfer of its franchise right to distribute the manufacturers' products. However, the agreement specifically contemplated that some manufacturers would not consent to the transfer. A rebate provision in the agreement provided that in the event a manufacturer did not consent to the transfer, Diamond would be entitled to all gross profits earned from the sale of the licensed beverages or any amounts C & G received from any other party in exchange for the franchise within one year of the agreement.
{¶ 4} During the fall of 1999, C & G contacted its manufacturers to obtain their approval for the sale. Several manufacturers sent written confirmation that they were either consenting to or refusing to consent to the transfer. Represetatives from one of the more lucrative manufacturers, Canandaigua Wine Company ("Canandaigua"), gave preliminary oral indications that consent would be forthcoming.
{¶ 5} Between August 1999 and January 2000, Heidelberg's principal, Vail Miller, aware of the fact that they were competing with Diamond for the franchise rights and having heard from a representative of Canandaigua that they were going to recommend that the company consent to a sale of the franchise to Diamond, contacted a principal in Canandaigua's New York office. Miller attempted to convince Canandaigua that Heidelberg would better serve the company's needs and offered incentives in hopes of obtaining their approval.
{¶ 6} On January 14, 2000, C & G and Diamond closed on the sale of C & G's wine division. Diamond forwarded a letter dated January 14, 2000, to C & G indicating that several manufacturers had not consented to the transfer, thereby invoking the rebate provision. Believing that Heidelberg was the likely recipient of the nonconsenting brands, Diamond advised C & G that "it was important that C & G and Diamond work together to see that Heidelberg pays a fair price to C & G for the lines that it is apparently going to obtain." Diamond subsequently received written notice from Canandaigua that it would not be consenting to the transfer.
{¶ 7} Thereafter, in February 2000, C & G and Heidelberg entered into an asset purchase agreement ("Heidelberg Agreement") for the sale of the distribution rights to the 11 manufacturers that had not consented to the Diamond transfer. In March 2000, Diamond executed a release in favor of C & G relating to the Diamond Agreement.
{¶ 8} On June 29, 2000, Diamond filed its complaint against Heidelberg and Canandaigua, claiming that Heidelberg had interfered with prospective economic advantage and contract, and that Canandaigua had unreasonably refused to consent to the transfer of the distribution franchise. Heidelberg responded thereto and filed a third-party complaint against C & G, asserting that C & G had misrepresented the nature of its relationship with and transfer of assets to Diamond, and that provisions in the Heidelberg Agreement entitled it to indemnification from C & G for costs and expenses incurred in defending itself against Diamond's claims.
{¶ 9} After deposing representatives of the companies involved, the parties submitted several competing summary judgment motions. On November 13, 2001, the trial court granted summary judgment in favor of C & G finding that (1) as a matter of law, the terms of the Heidelberg Agreement represented and warranted that there was another agreement involving Diamond, and (2) that the indemnification provision of the Heidelberg agreement was so self-contradictory as to preclude determination as to what was intended thereby. The instant appeal followed, with Heidelberg presenting four assignments of error for our review. For purposes of brevity and clarity, we have elected to address the assigned errors out of the order in which they were presented.
{¶ 10} "The trial court erred to prejudice of [Heidelberg] in finding as a matter of law C & G represented and warranted to Heidelberg that there was another agreement involving Diamond."
{¶ 11} "The trial court erred to prejudice of [Heidelberg] in granting summary judgment based upon an issue never raised by movant nor argued by any party."
{¶ 12} It is well established under Ohio law that a court may not grant summary judgment unless the record demonstrates (1) that no genuine issue of material fact remains to be litigated, (2) that the moving party is entitled to judgment as a matter of law, and (3) that, after construing the evidence most strongly in the nonmovant's favor, reasonable minds can come to but one conclusion, and that conclusion is adverse to the party against whom the motion for summary judgment is made.1 In ruling on a summary judgment motion, the trial court is not permitted to weigh evidence or choose among reasonable inferences; rather, the court must evaluate evidence, taking all permissible inferences and resolving questions of credibility in favor of the nonmovant.2 Even the inferences to be drawn from the underlying facts contained in the evidentiary materials, such as affidavits and depositions, must be construed in a light most favorable to the adverse party.3 Appellate review of summary judgment determinations is conducted on a de novo basis;4 therefore, this court considers the motion independently and without deference to the trial court's findings.5
{¶ 13} As mentioned previously, Heidelberg set forth two claims for relief against C & G. First, Heidelberg claimed that C & G had misrepresented the nature of its dealings with Diamond and that it had not entered into any other agreements for the sale of the assets subject to the Heidelberg Agreement, thereby breaching the contract and violating its warranty that the agreement does not conflict with any other agreement regarding the assets to be transferred thereunder. Heidelberg maintains that it was aware only that it had been competing with Diamond for the sale of the assets and that the Heidelberg Agreement involved the sale and transfer of less than all of C & G's assets. Claiming to be wary of the extremely competitive nature of the wine distribution business, Heidelberg asserts that it would not have completed the transaction or be involved in a lawsuit with Diamond had it known that C & G previously entered into an agreement with Diamond for the sale of the assets. Heidelberg's second claim for relief reincorporates its previous allegations and claims that if Diamond has a valid cause of action, it is entitled to indemnification from C & G for costs and expenses incurred in defending itself pursuant to the terms of the Heidelberg Agreement.
{¶ 14} C & G responded to Heidelberg's third-party complaint, asserting that company representatives had informed Heidelberg of the Diamond Agreement prior to entering into the Heidelberg Agreement and through other provisions within the agreement. In any event, C & G argues that Heidelberg is not entitled to indemnification for Diamond's claims because such claims are predicated upon the commission of an intentional tort, and public policy precludes enforcement of indemnification provisions to the extent that they purport to indemnify a party for their own intentionally tortious conduct. We proceed to address Heidelberg's claims in turn.
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