Midwest Specialties, Inc. v. Firestone Tire & Rubber Co.

• Citation: 42 Ohio App.3d 6,536 N.E.2d 411
• Decision Date: 20 July 1988
• Docket Number: No. 13349,13349
• Parties: MIDWEST SPECIALTIES, INC., Appellee, v. FIRESTONE TIRE & RUBBER COMPANY, Appellant. *
• Court: United States Court of Appeals (Ohio)

Page 6

42 Ohio App.3d 6

536 N.E.2d 411

MIDWEST SPECIALTIES, INC., Appellee, v. FIRESTONE TIRE & RUBBER COMPANY, Appellant. ^*

No. 13349.

Court of Appeals of Ohio, Ninth District, Summit County.

July 20, 1988.

Syllabus by the Court

1. A cause of action for breach of contract does not accrue until the complaining party suffers actual damages as a result of the alleged breach.

2. Where a jury's answers to interrogatories are alleged to be inconsistent with the verdict, a presumption arises that the jury placed that construction upon the questions which makes the answers thereto harmonious with the verdict.

3. A party complaining of a breach of contract is not required to demand performance from the breaching party prior to instituting suit where the obligation to perform is complete and unconditional.

Michael F. O'Loughlin and Theodore G. Gudorf, Dayton, for appellee.

James C. Sennett, Robert S. Walker, Joseph D. Pollock, Cleveland, and Laurel Nelson, Akron, for appellant.

BAIRD, Presiding Judge.

This cause came on before the court upon the trial court's order denying defendant's motions for judgment notwithstanding the verdict, directed verdict, and summary judgment. The case went to trial and the jury awarded the plaintiff-appellee, Midwest Specialties, Inc. ("Midwest"), $402,000. We affirm.

In 1979, the defendant-appellant, Firestone Tire & Rubber Company ("Firestone"), was involved in the production of tank tread assemblies for the United States government. Part of Firestone's business included working with the plaintiff-appellee, Midwest. In early 1979, Richard Kennedy, Midwest's president, director, and sole shareholder, came up with an idea for a VECP ¹ for a tank pad that involved changing the material used to make the tank pad backing plate. Kennedy thought that this would result in a significant cost savings to the government. Kennedy testified that he entered into a contract with Firestone in April 1979 regarding the VECP. Midwest would provide all technical data and samples, and Firestone would test, process and submit the VECP to the government. All profits were to be shared equally.

Kennedy testified that as of May 1979, all the necessary back-up material had been provided to Firestone, thereby completing Midwest's performance. Kennedy believed that Firestone's performance should reasonably have been completed within a few weeks. Over the next six months, the VECP documentation was forwarded to several different Firestone employees. On November 20, 1979, John Schneider, a Firestone employee based in Detroit, received the VECP information for review. He contacted Kennedy and arranged for a meeting to discuss submission of the VECP. Kennedy testified that shortly after that meeting he was informed that the VECP had been submitted. On March 4, 1980, Kennedy received a telephone call from a government engineer who asked him several questions about the T130 pad, and then informed him that he was evaluating a suggestion by a government employee and that Firestone's VECP had not been submitted. Kennedy called Firestone at that point and complained that the VECP had not been sent in. By March 11, 1980, Firestone submitted the VECP. On May 1, 1980, the government accepted the VECP of Elmer Busse, the government employee. On February 23, 1981, the government rejected the Firestone VECP, stating:

"In the case of your VECP, I find that the impetus for any change from the T130 aluminum track pad plate to a thinner plate made from high strength steel has come not from the Firestone VECP, but from Mr. Busse's suggestion. Further, I conclude that the impetus for your VECP submitted 11 March 1980 was the news of Mr. Busse's suggestion. * * *

"Based upon the facts set forth in this letter, the cases upon value engineering, and the provisions in the aforementioned contract clause itself, I am hereby rejecting your VECP # 0387-1. * * * "

On March 7, 1986, Kennedy filed suit against Firestone claiming breach of contract. At trial, Midwest requested $754,989.05 in damages. The jury awarded $402,000 to Midwest. Firestone appeals.

Assignment of Error I

"The trial court erred in not granting Firestone's motions for judgment notwithstanding the verdict, directed verdict and summary judgment because Midwest's claim of breach of oral contract is barred by the statute of limitations."

R.C. 2305.07 provides as follows:

"Except as provided in section 1302.98 of the Revised Code, an action upon a contract not in writing, express or implied, or upon a liability created by statute other than a forfeiture or penalty, shall be brought within six years after the cause thereof accrued."

The issue presented to the trial court in the summary judgment motion was whether Midwest had filed its claim within six years of the accrual of the action. Firestone argued that the cause of action accrued at the time of the breach, which it contends was November 20, 1979, when a government employee submitted a VECP before Firestone did. Midwest argues that the cause of action did not accrue until some actual damages were suffered, and therefore the earliest date would be March 11, 1980, the date Firestone submitted its proposal, almost five months after Elmer Busse, a government employee, submitted his VECP proposal.

In reviewing a summary judgment, the trial and appellate courts use the same standard, that the inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion, and if, when so viewed, reasonable minds can come to differing conclusions, the motion should be overruled. Hounshell v. American States Ins. Co. (1981), 67 Ohio St.2d 427, 433, 21 O.O.3d 267, 271, 424 N.E.2d 311, 314-315. The reviewing court must follow the standard set forth in Civ.R. 56(C), which specifically provides that before summary judgment may be granted, it must be determined that: (1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party. Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327, 4 O.O.3d 466, 472, 364 N.E.2d 267, 274.

Review of a motion for directed verdict does not present a question of fact or raise factual issues, but instead presents a question of law, even though in deciding such a motion it is necessary to review and consider the evidence. Ruta v. Breckenridge-Remy Co. (1982), 69 Ohio St.2d 66, 23 O.O.3d 115, 430 N.E.2d 935, syllabus. The trial and appellate courts, without weighing the evidence, must construe the evidence most strongly in favor of the non-moving party and determine whether reasonable minds could come to but one conclusion on the evidence submitted, that conclusion being adverse to such party. If so, a directed verdict should be granted or affirmed. Strother v. Hutchinson (1981), 67 Ohio St.2d 282, 21 O.O.3d 177, 423 N.E.2d 467. The standard of review for a motion for judgment notwithstanding the verdict is the same as that applicable to a motion for a directed verdict. Posin v. A.B.C. Motor Court Hotel (1976), 45 Ohio St.2d 271, 275, 74 O.O.2d 427, 430, 344 N.E.2d 334, 338.

In ruling on Firestone's motion for summary judgment, the trial court concluded that the correct interpretation of the rule regarding accrual of the action is that Midwest's cause of action did not accrue until actual damages occurred. In its ruling, the trial court stated that the plaintiff did not suffer any actual damage until its proposal, submitted on March 11, 1980, was rejected, and the government employee's proposal was formally accepted on May 1, 1980. Therefore, the court held, the plaintiff's complaint was timely filed within the six-year statute of limitations. We agree with the trial court's determination. The Ohio Supreme Court has stated that:

" * * * Ordinarily, a cause of action does not accrue until actual damage occurs; when one's conduct becomes presently injurious, the statute of limitations begins to run. State, ex rel. Teamsters Local Union 377, v. Youngstown (1977), 50 Ohio St.2d 200 [4 O.O.3d 387, 364 N.E.2d 18] * * *." Children's Hospital v. Dept. of Republic Welfare (1982), 69 Ohio St.2d 523, 526, 23 O.O.3d 452, 454, 433 N.E.2d 187, 190.

In Children's Hospital, the Supreme Court held that the appellee's cause of action for amounts wrongfully withheld did not accrue until the money was actually withheld, and not at the time the entry was made in appellant's books of account which produced no immediate injury or damage to appellee. See, also, Rose v. General Motors Corp., Frigidaire Div. (S.D.Ohio 1983), 573 F.Supp. 747.

In reviewing the trial court's ruling, we do not think that it was error to find that the plaintiff's claim was not barred by the statute of limitations.

As Samuel Williston states:

"A breach of contract may be so slight as not to allow a recovery by the injured party of entire damages for the contract; in case of a bilateral contract, the breach may not even justify him in refusing to continue performance on his own part.

"A cause of action for breach of the entire contract has not yet arisen, and though by delay for the statutory period he may lose his right to recover damage for the slight breach which has already occurred, as a separate injury, yet if later the breach becomes material, or another and a material breach is committed, the statutory period in an action for the entire breach of the contract should be calculated from the time when the plaintiff was first able to sue for an entire breach of the contract." (Emphasis added.) 18 Williston, Law of Contracts (3 Ed.1978) 786, Section 2026B.

The record reflects that even though the government employee's proposal was submitted on November 20,...