Doran v. Heartland Bank
Decision Date | 08 May 2018 |
Docket Number | No. 16AP–586,16AP–586 |
Citation | 2018 Ohio 1811,112 N.E.3d 355 |
Parties | Justin S. DORAN et al., Plaintiffs–Appellees/Cross–Appellants, v. HEARTLAND BANK, Defendant–Appellant/Cross–Appellee. |
Court | Ohio Court of Appeals |
On brief: Vorys, Sater, Seymour and Pease LLP, Natalie M. McLaughlin, Nelson D. Cary and Daniel J. Clark, Columbus, for appellees/cross-appellants. Argued: Natalie M. McLaughlin.
On brief: Meyer & Kerschner, Ltd., Michael D. Stultz, Tiffin, and Christopher C. Camboni ; Ice Miller LLP, and Paul L. Bittner, Columbus, for appellant/cross-appellee. Argued: Michael D. Stultz.
On brief: Cooper & Elliott, LLC, and Rex H. Elliott, Columbus, as amicus curiae.
DECISION
{¶ 1} Defendant-appellant/cross-appellee, Heartland Bank ("Heartland" or "appellant"), and plaintiffs-appellees/cross-appellants, Justin S. Doran ("Doran") and Columbus First Bank ("Columbus First" or collectively the "appellees"), appeal from a July 18, 2016 decision and entry of the Franklin County Court of Common Pleas. Appellees have filed a motion to dismiss on the grounds of mootness. For the reasons that follow, we dismiss the appeal as moot.
{¶ 2} In light of our resolution of this matter, we will briefly summarize the facts. Doran worked for another bank for eight years and was trained as a commercial loan officer prior to starting work for Heartland on February 4, 2013. Several weeks after starting employment, Heartland requested Doran sign an employment agreement that had non-compete and non-solicitation covenants. As he had already resigned from his previous job and been working at Heartland for several weeks, he decided to sign the agreement.
{¶ 3} As time went on, Doran became one of Heartland's top commercial loan officers. In February 2015, Doran was invited to participate in Heartland's performance driven retirement plan. The performance-based retirement plan consists of (1) a bank-funded investment for the employee, and (2) a life insurance policy for the employee. The banking industry commonly calls these benefits Bank–Owned Life Insurance plans or "BOLIs." Doran's BOLI also had one year non-compete and non-solicitation restrictions on his employment after separating from Heartland. It was Heartland's intention for the BOLI plan restrictions to take the place of the restrictions in Doran's employment agreement. Doran signed the BOLI plan.
{¶ 4} In May 2016, Doran decided to take a job with Columbus First. Doran resigned on May 4, 2016 and requested that Heartland release him from his non-compete restriction. Doran's anticipated start date with Columbus First was May 19, 2016. Shortly before that date, Heartland sent letters to Doran and Columbus First, threatening to pursue all available remedies contending that the employment of Doran by Columbus First was in violation of Doran's BOLI plan and that Columbus First had tortiously interfered with Doran's contract with Heartland. In response, Columbus First delayed Doran's start date, but did not rescind its offer of employment. Columbus First attempted to resolve the dispute to no avail.
{¶ 5} As such, Doran remained out of work. Without a resolution in sight, Doran and Columbus First decided to file for declaratory relief so a court could determine whether the restrictions were enforceable. On June 7, 2016, Doran and Columbus First filed their complaint, seeking a declaratory judgment concerning the enforceability of the non-compete and non-solicitation restrictions contained in the BOLI plan. On June 21, 2016, Heartland filed its answer and counterclaim seeking an order declaring that (1) the BOLI agreement was valid and restricts Doran from working at Columbus First until May 10, 2017, (2) Doran breached the employment agreement and BOLI plan, and (3) Columbus First wrongfully induced Doran to breach said agreements.
{¶ 6} The trial court subsequently set the declaratory judgment hearing for July 11, 2016. The hearing lasted two and one-half days, and included numerous witnesses, concluding on July 13, 2016. On July 18, 2016, the trial court issued its judgment entry and found the following:
{¶ 7} On August 16, 2016, Heartland filed a notice of appeal and, on August 24, 2016, Doran and Columbus First filed a notice of cross-appeal.
{¶ 8} Also, on August 16, 2016, Heartland moved the trial court for a stay of the declaratory judgment entered in this case pending appeal. On August 24, 2016, the trial court granted the stay but stated that "[t]he stay shall go into effect upon the posting of a supersedeas bond in the amount of $100,000.00." On September 13, 2016, Heartland moved the trial court for approval of the bond. Attached to the motion was the proposed appeal bond with Heartland as the principal and Westfield Insurance Company as the surety. On October 26, 2016, the trial court denied Heartland's motion for approval of the bond and specifically stated (Oct. 26, 2016 Entry Denying Defendant's Mot. for Court Approval of Bond.) Our review of the record and the trial court's docket shows that the $100,000 amount was never posted with the clerk of court. As such, the stay never went into effect.
{¶ 9} On April 25, 2017, appellees filed a motion to dismiss for lack of subject-matter jurisdiction claiming that the appeal is moot. On April 28, 2017, we stated that the motion to dismiss shall be submitted to the court as the court determines the merits of this appeal. (Journal Entry at 1.)
{¶ 10} Heartland assigns the following errors:
{¶ 11} Doran and Columbus First assign the following errors:
{¶ 12} Before addressing the assignments of error, we must first address appellees' motion to dismiss. In Swan Super Cleaners, Inc. v. Franklin Cty. Bd. of Commrs. , 2017-Ohio-8978, 101 N.E.3d 591, ¶ 14 (10th Dist.), quoting Grove City v. Clark , 10th Dist. No. 01AP-1369, 2002-Ohio-4549, 2002 WL 2025334, ¶ 11, quoting Culver v. Warren , 84 Ohio App. 373, 393, 83 N.E.2d 82 (11th Dist.1948), we stated:
" "
{¶ 13} Where a question before a court has become moot, the jurisdiction of the court is lost because James A. Keller, Inc. v. Flaherty , 74 Ohio App.3d 788, 791, 600 N.E.2d 736 (10th Dist.1991). "When a case is deemed moot, the defending party is entitled to a dismissal as a matter of right." Lund v. Portsmouth Local Air Agency , 10th Dist. No. 14AP-60, 2014-Ohio-2741, 2014 WL 2895887, ¶ 6, citing United States v. W.T. Grant Co. , 345 U.S. 629, 632, 73 S.Ct. 894, 97 L.Ed. 1303 (1953).
{¶ 14} In appellees' motion to dismiss, they argue that when a contract is no longer enforceable due to the expiration of a time period specified in the contract, any suit seeking a declaratory judgment regarding the scope of the contract is moot. At issue in this case is the enforceability of non-competition and non-solicitation clauses in Doran's employment contract with Heartland. Under the terms of the contract, both of those clauses were subject to a one year "restricted period" defined as "the one-year period immediately after the Executive's Disability or Separation from Service." (Jgmt. Entry at 6.) Doran's employment was separated on May 9, 2016. Appellees argue that the restrictive period ended on May 9,...
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