Ragen v. Hancor, Inc.

• Decision Date: 29 January 2013
• Docket Number: Case No. 3:08 CV 1022.
• Citation: 920 F.Supp.2d 810
• Parties: William RAGEN, dba Ragen Associates, Plaintiff, v. HANCOR, INC., et al., Defendant.
• Court: U.S. District Court — Northern District of Ohio

920 F.Supp.2d 810

William RAGEN, dba Ragen Associates, Plaintiff,
v.
HANCOR, INC., et al., Defendant.

Case No. 3:08 CV 1022.

United States District Court, N.D. Ohio, Western Division.

Jan. 29, 2013.

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Douglas A. Andrews, Schoonover, Andrews and Rosenthal, LLC, Cleveland, OH, Troy L. Moore, Ballenger & Moore, Toledo, OH, for Plaintiff.

David W. Alexander, Jessica D. Goldman, Squire Sanders (U.S.) LLP, Columbus, OH, Pamela H. Thurston, Ohio Justice & Policy Center, Cincinnati, OH, for Defendant.

MEMORANDUM OPINION
KATZ, District Judge.

Plaintiff William Ragen (who does business as Ragen Associates) spent twenty years as a manufacturer's representative, selling pipe and related drainage products made by defendant Hancor, Inc. During those years, the relationship evolved and changed in several ways. The parties started with a written contract in 1988 and updated it in writing in 1992, 1993, 1994, 1995, 1996, and 2001. The parties also frequently modified the terms of the sales

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relationship, usually by Hancor telling Mr. Ragen that it was adding or removing territory, customers, and access to product lines. In 2005, defendant Advanced Drainage Systems Inc., which was a long time competitor of Hancor, acquired Hancor. Over time, ADS took over some Hancor operations, yet also strived to maintain some legacy Hancor operations in place and, at least to an extent, operate independently. In 2007, the combined corporate management opted to end Hancor's and ADS' sales relationship with Mr. Ragen.

Mr. Ragen filed an amended complaint with this Court containing nineteen claims for relief. (Doc. 52.) Claims 3, 5, 8, 9, 11, 12, 13, 14, 16 and 17 were dismissed, either by the Court in response to a motion to dismiss or voluntarily. (Docs. 68 & 96.) Three summary judgment motions are now before the Court. Mr. Ragen has filed a partial summary judgment motion asking for judgment in his favor on Claims 1 and 2 against only defendant Hancor, which Hancor opposes. Hancor has filed a partial summary judgment motion asking for judgment in its favor on just certain theories contained within claims 1 and 2 and for judgment in its favor on claims 4, 7, 10, 18, and 19. Hancor has acknowledged that some theories contained in Claims 1 and 2 must go to trial. ADS has filed a summary judgment motion asking for judgment in its favor on all claims that remain against it (1, 2, 4, 7, 10, 15, 18, and 19). Mr. Ragen opposes both defendants' motions.

I. Jurisdiction

The amended complaint reflects that Mr. Ragen is a citizen of New Jersey. (Doc. 52 at ¶ 2.) Defendant Hancor Inc. is incorporated in Ohio with its principal place of business in Ohio. ( Id. at ¶ 3.) Defendant Advanced Drainage Systems, Inc. is incorporated in Delaware and its principal place of business is in Ohio. ( Id. at ¶ 5.); see28 U.S.C. § 1332(c). The complaint alleges damages in excess of $75,000. ( Id. at ¶ 1.) The defendants admit to the citizenship of each corporation as alleged in the complaint. (Answer, Doc. 58.) The Court has diversity jurisdiction since, at the time of the filing of the complaint, complete diversity existed between the plaintiff and defendants and the amount in controversy exceeds the threshold. 28 U.S.C. § 1332.

II. Standard

Summary judgment is appropriate where, “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The moving party bears the initial responsibility of, “informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quotations omitted). The movant may meet this burden by demonstrating the absence of evidence supporting one or more essential elements of the non-movant's claim. Id. at 323–25, 106 S.Ct. 2548. Once the movant meets this burden, the opposing party can avoid judgment only by setting forth facts that show that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Once the burden of production has so shifted, the party opposing summary judgment cannot rest on its pleadings or merely reassert its previous allegations. It is not sufficient “simply [to] show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Rather,

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Rule 56(a) “requires the nonmoving party to go beyond the pleadings” and present some type of evidentiary material in support of its position. Celotex, 477 U.S. at 324, 106 S.Ct. 2548;see also Harris v. General Motors Corp., 201 F.3d 800, 802 (6th Cir.2000). Summary judgment must be entered, “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322, 106 S.Ct. 2548.

“In considering a motion for summary judgment, the Court must view the facts and draw all reasonable inferences therefrom in a light most favorable to the nonmoving party.” Williams v. Belknap, 154 F.Supp.2d 1069, 1071 (E.D.Mich.2001) (citing 60 Ivy Street Corp. v. Alexander, 822 F.2d 1432, 1435 (6th Cir.1987)). However, “at the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter,” Wiley v. United States, 20 F.3d 222, 227 (6th Cir.1994) (quoting Anderson, 477 U.S. at 249, 106 S.Ct. 2505); therefore, “[t]he Court is not required or permitted ... to judge the evidence or make findings of fact.” Williams, 154 F.Supp.2d at 1071. The purpose of summary judgment “is not to resolve factual issues, but to determine if there are genuine issues of fact to be tried.” Abercrombie & Fitch Stores, Inc. v. Am. Eagle Outfitters, Inc., 130 F.Supp.2d 928, 930 (S.D.Ohio 1999). Ultimately, this Court must determine, “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson, 477 U.S. at 251–52, 106 S.Ct. 2505;see also Atchley v. RK Co., 224 F.3d 537, 539 (6th Cir.2000).

III. Choice of Law

Each written contract submitted into evidence contains a provision specifying that Ohio law shall be used to construe the terms of it. (Doc. 52–1 at ¶ 12; Doc. 52–2 at ¶ 13(e); Doc. 52–3 at ¶ 12(e); Doc. 52–4 at ¶ 12(e); Doc. 52–6 at ¶ 12(e); Doc. 52–7 at ¶ 12(e); Doc. 52–10 at ¶ 12(e).) Even though Mr. Ragen worked in several eastern states, Ohio has adopted the Restatement (Second) of Conflict of Laws Section 187, which prioritizes the parties' choice within a contract over other states unless the chosen state, “has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice,” or application of the chosen state's law conflicts with the fundamental policy of the state that would otherwise be chosen. Schulke Radio Prods., Ltd. v. Midwestern Broad. Co. 6 Ohio St.3d 436, 453 N.E.2d 683, 686 (1983). Neither party has argued for any other choice of law and neither exception to the Restatement principal is apparent in this case. The Court will use Ohio law.

IV. Mr. Ragen's Partial Summary Judgment Motion

Mr. Ragen's summary judgment motion asks the Court to find that Hancor breached the written agreement between Mr. Ragen and Hancor by, on a few occasions, unilaterally reducing his territory without committing those changes to writing as was required in each written agreement. Mr. Ragen can show that a series of written agreements with Hancor outlined and governed their sales relationship over the course of a number of years. (Doc. 52–1 (1988 agreement); Doc. 52–2 (1992 agreement); Doc. 52–3 (1993 agreement); Doc. 52–4 (1994 agreement); Doc. 52–6 (1995 agreement); Doc. 52–7 (1996 agreement); Doc. 52–10 (2001 agreement)). These agreements define Mr. Ragen's sales territory according to geography, product line, and type of account. They also contain clauses requiring all changes to each agreement to be in writing and accepted

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by both parties. ( E.g., doc. 52–10 at ¶ 12(a) (“Amendment of Agreement. Neither this Agreement nor any term hereof may be amended, changed, or modified in any manner except by an instrument in writing which refers to this Agreement and is executed by each of the parties hereto.”).) Mr. Ragen can show that, through the many years of their relationship, Hancor repeatedly modified his sales territory and removed customers without properly modifying the agreements in writing. Hancor does not dispute that it modified the sales territory without a written amendment to the contract, but contends the original contract may not have required territory modifications to be in writing, that the modifications may have been an oral agreement to both modify the territory and to modify the no-oral clause, and Mr. Ragen has waived his right to bring a cause of action for breach because, in continuing the sales relationship for many years, he induced Hancor to believe he waived his right to complain of their breach. Because evidence of any one of these arguments would defeat Mr. Ragen's partial summary judgment motion, the Court need not explore each and instead focuses just on waiver by estoppel.

A breach of a contract is any failure to perform as the contract specifies when the duty to perform exists. Radio Parts Co. v. Invacare Corp., 178 Ohio App.3d 198, 897 N.E.2d 228, 235 (2008); see alsoRestatement (Second) of Contracts § 235(2) (“When performance of a duty under a contract is due any non-performance is a...