Radio Parts Co. v. Invacare Corp.
| Decision Date | 22 September 2008 |
| Docket Number | No. 07CA009192.,07CA009192. |
| Citation | 897 N.E.2d 228,178 Ohio App.3d 198,2008 Ohio 4777 |
| Parties | RADIO PARTS COMPANY et al., Appellants, v. INVACARE CORPORATION, Appellee. |
| Court | Ohio Court of Appeals |
Michael R. Stavnicky, Cleveland, for appellants.
Jeffrey Embleton, Cleveland, for appellee.
{¶ 1} Radio Parts Company and Apsco International worked together to sell circuit board assemblies to Invacare Corporation for use in Invacare's home medical equipment. After Invacare announced that it would be sending its business overseas, the companies agreed that Apsco would continue to supply Invacare's needs until the transition was complete. According to Radio Parts and Apsco, Invacare also agreed to buy whatever component parts Radio Parts and Apsco had in inventory when the project finally ended. When Invacare refused to do so, Radio Parts and Apsco sued. After voluntarily dismissing the case, they refiled nearly a year later. In this refiled suit, the trial court granted summary judgment to Invacare on all claims based on the statute-of-limitations defense that Invacare had pleaded in an amended answer after it had already moved for summary judgment on that basis. This court affirms because the trial court did not abuse its discretion in allowing Invacare to amend its pleading after moving for summary judgment, there are no genuine issues of material fact, and Invacare is entitled to judgment as a matter of law.
{¶ 2} This litigation began shortly after Invacare ended its relationship with Radio Parts and Apsco. Invacare manufactures, distributes, and sells home medical products. Radio Parts and Apsco are companies that had an ongoing business relationship with Invacare. Radio Parts supplied raw materials that Apsco used to assemble and test circuit boards to be used in Invacare products. In 1995, Apsco, Radio Parts, and Invacare entered into a written volume purchase agreement for circuit board assemblies. The agreement listed Invacare as the buyer, Apsco as the seller, and Radio Parts as Apsco's agent. The agreement covered a one-year period and was not extended in writing. The companies did continue the arrangement beyond that time, however, via blanket purchase orders and releases from Invacare to Apsco.
{¶ 3} At some point near the end of 1999 or the beginning of 2000, Invacare notified Apsco that it would be moving its circuit board assembly business to another company. The transition process was expected to take at least a year, and Apsco agreed to continue to supply Invacare's product needs during the transition. According to Radio Parts and Apsco, Invacare agreed that at the end of the transition period, it would buy all remaining component parts that Radio Parts had purchased for the Invacare assemblies. Invacare denies having made such an agreement.
{¶ 4} In June 2003, Radio Parts and Apsco filed a breach-of-contract claim against Invacare based on Invacare's refusal to purchase the materials remaining when the relationship ended. The parties completed some discovery in that case, and Invacare filed a motion for summary judgment. Radio Parts and Apsco voluntarily dismissed that case on May 25, 2005, without responding to the motion for summary judgment. Radio Parts and Apsco's lawyer died some time after having dismissed the case.
{¶ 5} On May 19, 2006, Radio Parts and Apsco refiled the case against Invacare. The refiled complaint included claims for breach of contract, promissory estoppel, unjust enrichment, and action on account. A few days later, the complaint was amended to include, as a plaintiff, Nimbus, a joint venture between Apsco and Radio Parts. Invacare timely answered the amended complaint, but did not assert the affirmative defense of statute of limitations. After refusing to respond to written discovery requests, Invacare moved the court for a protective order. The trial court ordered limited discovery on the issue of the statute-of-limitations defense. Invacare then moved for summary judgment on that basis. After Radio Parts, Apsco, and Nimbus responded to the summary judgment motion, arguing that Invacare had forfeited the statute-of-limitations defense by not timely asserting it in its answer, Invacare moved the trial court for leave to amend its pleading under Civ.R. 15. The trial court granted Invacare leave to amend its answer.
{¶ 6} The trial court granted summary judgment to Invacare because it determined that there were no genuine issues of material fact and Invacare, Apsco, and Nimbus's claims were barred by the statute of limitations. The trial court applied the four-year statute of limitations found in Ohio's codification of the Uniform Commercial Code and held that Radio Parts and Apsco had voluntarily dismissed their original suit after that statute of limitations had expired. The trial court also applied the Uniform Commercial Code's six-month saving clause, as opposed to the general one-year saving clause found in Section 2305.19 of the Ohio Revised Code, holding that Radio Parts and Apsco had failed to refile their case in time to take advantage of that provision. The trial court further noted that even if Radio Parts and Apsco had refiled their claims six months earlier, the Uniform Commercial Code's saving provision does not apply to voluntarily dismissed cases.
{¶ 7} Radio Parts, Apsco, and Nimbus have appealed, arguing that the trial court erred by allowing Invacare to amend its answer to assert the statute-of-limitations defense and by granting it summary judgment. They have argued that summary judgment should not have been granted because (1) the Uniform Commercial Code statute of limitations is not applicable, (2) the ruling was based on a misunderstanding of the Uniform Commercial Code's saving clause, (3) there was not an identity of parties or claims between this case and the original action, (4) there was no sale in this case, (5) the Uniform Commercial Code statute and the Ohio Rules of Civil Procedure are in conflict, and (6) there is a genuine issue of material fact regarding the running of the statute of limitations.
{¶ 8} Radio Parts, Apsco, and Nimbus have argued that the trial court erred by allowing Invacare to amend its answer to assert the statute-of-limitations defense after discovery was complete and Invacare had moved for summary judgment. Invacare has responded that the trial court properly granted leave to amend the answer under Civ.R. 15.
{¶ 9} An appellate court applies an abuse-of-discretion standard of review to a trial court's decision to grant a party leave to amend a pleading. Wilmington Steel Prods. Inc. v. Cleveland Elec. Illum. Co. (1991), 60 Ohio St.3d 120, 122, 573 N.E.2d 622. Civ.R. 8(C) requires that in a responsive pleading, a party must "set forth affirmatively * * * statute of limitations * * * and any other matter constituting an avoidance or affirmative defense." Although failure to adhere to this requirement exposes the party to forfeiture of the defense, "[i]n the real world * * * failure to plead an affirmative defense will rarely result in [forfeiture]" because of the protection of Civ.R. 15(A). Hoover v. Sumlin (1984), 12 Ohio St.3d 1, 5, 12 OBR 1, 465 N.E.2d 377, quoting Bobbitt v. Victorian House Inc. (N.D.Ill. 1982), 532 F.Supp. 734, 736.
{¶ 10} Civ.R. 15(A) allows for amendment of pleadings by leave of court or by written consent of the other party after a responsive pleading has been made. A party may seek leave to amend at any time, including, under certain circumstances, after trial. See Civ.R. 15(B). Rule 15(A) provides, "Leave of court shall be freely given when justice so requires." The Ohio Rules of Civil Procedure were intended to promote the resolution of cases on their merits rather than on pleading deficiencies. Hoover, 12 Ohio St.3d at 5, 12 OBR 1, 465 N.E.2d 377. Accordingly, a party's initial failure to plead a defense "should prevent its later assertion only if that will seriously prejudice the opposing party." Id.
{¶ 11} The Ohio Supreme Court has held that "a motion for leave to amend should be granted absent a finding of bad faith, undue delay or undue prejudice * * *." Hoover, 12 Ohio St.3d at 6, 12 OBR 1, 465 N.E.2d 377. Courts have found undue prejudice, for example, when a defendant has waited to add affirmative defenses until a time when the plaintiff could not adequately prepare to respond. St. Marys v. Dayton Power & Light Co. (1992), 79 Ohio App.3d 526, 536, 607 N.E.2d 881 (). This court has found undue delay and prejudice when plaintiffs waited 25 months to amend, allowing the opposing party to waste significant time and resources pursuing the case. L.E. Sommer Kidron Inc. v. Kohler, 9th Dist. No. 06CA0044, 2007-Ohio-885, 2007 WL 634428, at ¶ 39-41.
{¶ 12} Radio Parts, Apsco, and Nimbus have argued that Invacare forfeited the statute of limitations defense by moving for summary judgment before properly pleading it. They have cited Mossa v. W. Credit Union Inc. (1992), 84 Ohio App.3d 177, 181, 616 N.E.2d 571, and Motorist Ins. Cos. v. Shields (Jan. 29, 2001), 4th Dist. No. 00CA26, 2001 WL 243285 at *3, for the proposition that an affirmative defense cannot properly be raised during summary judgment proceedings. In each of those cases, however, the defense was forfeited because the defendant had failed to move for leave to amend its answer to include the defense, even after having moved for summary judgment.
{¶ 13} Invacare first raised the statute-of-limitations defense in its motion for summary judgment. Invacare filed that motion on November 6, 2006, nearly six months after the case had been refiled. Radio Parts moved for an extension of time to respond to the summary judgment motion, and the court ordered a period of limited discovery regarding the statute-of-limitations defense. It appears that the prospect of forfeiture of...
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