Source Assocs., Inc. v. American, CASE NO. 5:15-cv-215
| Decision Date | 16 June 2017 |
| Docket Number | CASE NO. 5:15-cv-215 |
| Parties | SOURCE ASSOCIATES, INC., et al., PLAINTIFFS, v. MITSUI CHEMICALS AMERICA, et al., DEFENDANTS. |
| Court | U.S. District Court — Northern District of Ohio |
MEMORANDUM OPINION
This matter is before the Court on two motions for summary judgment.1 The first is the motion of defendants Mitsui Chemicals America, Inc. ("MCA") and Gregory Bushman (in his capacity as an employee of MCA) ("Bushman") (collectively, the "MCA defendants") for judgment on the claims asserted against them by plaintiffs Source Associates, Inc. ("Source") and Conrad A. Mamajek, Inc. ("CAM") (collectively "plaintiffs" or "Source/CAM") (Doc. No. 92 ["MCA SJ Mot."]). Plaintiffs opposed the motion (Doc. No. 99 ["Opp'n MCA SJ Mot."]), and the MCA defendants filed a reply (Doc. No. 103 ["MCA SJ Reply"]). The second is the amended motion of defendants Bushman (in his individual capacity) and Lewis Breon ("Breon") (collectively the "Bushman/Breon defendants") (Doc. No. 94 ["B&B SJ Mot."]). Plaintiffs opposed themotion (Doc. No. 100 ["Opp'n B&B SJ Mot."]), in response to which the Bushman/Breon defendants filed an amended reply. (Doc. No. 106 ["B&B SJ Reply"]).
For the reasons that follow, defendants' motions for summary judgment are granted.
After this case was removed from the Summit County Court of Common Pleas on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332, plaintiffs were granted leave to file an amended complaint. The first amended complaint (Doc. No. 23 ["FAC"]), brought against defendants MCA, Bushman,2 Breon, and NXT Phase, LLC ("NXT"),3 sets forth six claims for relief: against MCA for breach of contract (claim one) and for breach of the covenant of good faith and fair dealing (claim two); against Bushman, Breon and NXT for tortious interference with the contractual and business relationship between MCA and Source/CAM (claim three); against all defendants for tortious interference with contractual and business relationships between Source/CAM and non-parties Complex Chemicals Co., Inc. ("Complex") and John Brindle Oil and Chem LTD ("Brindle") (claim four); and against all defendants for unjust enrichment (claim five) and civil conspiracy (claim six).
The undisputed facts generally underlying all six claims can be briefly summarized as follows.4 In the spring of 1999, Source and CAM entered into a joint venture for the purpose of selling off-spec viscosity modifier polymer ("VME") produced by Mitsui Chemicals, Inc. ("MCI") and Mitsui Elastomers Singapore Pte Ltd ("MELS"). The off-spec VME produced by MCI and MELS was sold to plaintiffs through MCA. Plaintiffs had two customers for this product—Brindle and Complex.
From 1999 through December 2013, Source purchased off-spec VME from MCA at prices CAM negotiated with MCA for re-sale to Brindle and Complex. MCA drop-shipped the product to Brindle and Complex. Net profits of the joint venture were divided equally between Source and CAM.
Bushman was an employee of MCA until his retirement on December 31, 2013. He held the position of Director of Business Development, and the sale of prime and off-spec VME was his responsibility. Bushman discussed his retirement plans with his supervisor in the first half of 2013, and recommended that in 2014, MCA utilize his company, NXT, to sell off-spec VME. MCA terminated off-spec VME sales to plaintiffs, effective December 31, 2013, and directed the sale of off-spec VME to NXT, instead.5 These events triggered this lawsuit.
Bushman (in his individual capacity) and Breon moved to dismiss the claims asserted against them in the first amended complaint for failure to state a claim. The motion was granted in part and denied in part. Source Assocs., Inc. v. Mitsui Chemicals Am., Inc., No. 5:15-CV-215, 2016 WL 828785 (N.D. Ohio Mar. 3, 2016).
With respect to claim three, the motion was granted as to Breon but denied as to Bushman. As to claim four brought against all defendants, the Court ruled that claim failed to state a claim against Bushman and Breon, and claim four was dismissed as to those defendants. Id. Bushman and Breon's motion to dismiss claims five and six were denied. Id. at *5-6. Finally, the Court declined to resolve the issue of whether plaintiffs' claims are preempted by Ohio's Uniform Trade Secret Act ("OUTSA"), leaving that issue for summary judgment. Id. at *6-7.
MCA now moves for summary judgment on all claims asserted against the MCA defendants: breach of contract (claim one); breach of the covenant of good faith and fair dealing (claim two); tortious interference with contractual and business relationships between plaintiffs and their customers, Brindle and Complex (claim four); unjust enrichment (claim five); and civil conspiracy (claim six).
Bushman and Breon seek summary judgment on all claims that survived their motion to dismiss. Bushman seeks summary judgment on claim three (tortious interference with the relationship between plaintiffs and MCA), and Bushman and Breon seek summary judgment on claims five and six.6
Summary judgment is appropriate where "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).7 A fact is material if its resolution affects the outcome of the lawsuit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). A dispute is genuine, and summary judgment is not appropriate, "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.
The moving party must provide evidence to the court that demonstrates the absence of a genuine dispute as to any material fact. Whether a disputed fact is material is entirely dependent upon the essential elements of each particular claim for which a party seeks summary judgment. See In re Meridia Prod. Liab. Litig., 328 F. Supp. 2d 791, 796(N.D. Ohio 2004) () (citing Waters v. City of Morristown, 242 F.3d 353, 358 (6th Cir. 2001)). Once the moving party meets this initial burden, the opposing party must come forward with specific evidence showing that there is a genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986); Anderson, 477 U.S. at 250. The nonmoving party may oppose a summary judgment motion "by any of the kinds of evidentiary material listed in Rule 56(c), except the mere pleadings themselves[.]" Celotex, 477 U.S. at 324. The Court must view all facts and evidence, and inferences that may be reasonably drawn therefrom, in favor of the nonmoving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S. Ct. 993, 8 L. Ed. 2d 176 (1962).
General averments or conclusory allegations of an affidavit do not create specific fact disputes for summary judgment purposes. See Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888-89, 110 S. Ct. 3177, 111 L. Ed. 2d 695 (1990). "'The mere existence of a scintilla of evidence in support of the [nonmoving party's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party].'" Street v. J.C. Bradford & Co., 886 F.2d 1472, 1477 (6th Cir. 1989) (quoting Anderson, 477 U.S. at 252).
The district court's review on summary judgment is a threshold inquiry to determine whether there is the need for a trial due to a genuine factual dispute that must be resolved by a finder of fact because those issues may reasonably be resolved in favor of either party. Anderson, 477 U.S. at 250. Put another way, 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." Id. at 251-52; Wexler v. White's Fine Furniture, Inc., 317 F.3d 564, 578 (6th Cir. 2003).
Summary judgment is required:
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 bears the burden of proof at trial. In such a situation, there can be no genuine issue as to any material fact, since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial. The moving party is entitled to judgment as a matter of law because the nonmoving party has failed to make a sufficient showing of an essential element of [his] case with respect to which [he] has the burden of proof.
Celotex, 477 U.S. at 322-23 (internal quotation marks and citation omitted).
Neither party has advanced any evidence or argument regarding the issue of choice of law applicable to plaintiffs' claims. "Absent an effective choice of law provision, Ohio courts apply the law of the state with the most significant relationship to the contract." Bruster v. Uber Tech., Inc., 188 F. Supp. 3d 658, 663 (N.D. Ohio 2016) (). "To assist in making this determination, Section 188(2)(a) through (d) [of the Restatement of Conflicts] more specifically provides that courts should consider the place of contracting, the place of negotiation, the place of performance, the location of the subject matter, and the domicile, residence, nationality, place of incorporation, and place of business of the parties." Ohayon v. Safeco Ins. Co. of Illinois, 747 N.E.2d 206, 209 (Ohio 2001).
Both plaintiff corporations are citizens of Ohio, and their principal places of business are in Ohio. (FAC ¶¶ 1, 2.) The oral agreement that plaintiffs allege controls this case was negotiated in Japan, as discussed below. MCA, which...
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