N. Chem. Blending Corp., Inc. v. Strib Industries, Inc., D.B.A. Prod. Chem. ( 2018 )

[Cite as N. Chem. Blending Corp., Inc. v. Strib Industries, Inc., D.B.A. Prod. Chem., 2018-Ohio-3364.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 105911
NORTHERN CHEMICAL
BLENDING CORP., INC.
PLAINTIFF-APPELLANT
vs.
STRIB INDUSTRIES, INC., D.B.A.,
PRODUCTS CHEMICAL, ET AL.
DEFENDANTS-APPELLEES
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-16-857980
BEFORE: E.T. Gallagher, P.J., S. Gallagher, J., and Jones, J.
RELEASED AND JOURNALIZED: August 23, 2018
ATTORNEYS FOR APPELLANT
Jim Petropouleas
James E. Boulas
James E. Boulas Co., L.P.A.
7912 Broadview Road
Broadview Heights, Ohio 44147
ATTORNEYS FOR APPELLEES
John S. Kluznik
Weston Hurd, L.L.P.
The Tower at Erieview
1301 East 9th Street, Suite 1900
Cleveland, Ohio 44114
For ChemMasters, Inc.
Deborah J. Michelson
Miller Goler Faeges Lapine, L.L.P.
1301 East 9th Street, Suite 2700
Cleveland Ohio 44114
For John Stibrick
Victor T. Dimarco
Shawn W. Maestle
Weston Hurd, L.L.P.
1301 East 9th Street, Suite 1900
Cleveland, Ohio 44114
EILEEN T. GALLAGHER, P.J.:
{¶1} Plaintiff-appellant, Northern Chemical Blending Corp., Inc. (“Northern Chemical”),
appeals from the trial court’s judgment granting summary judgment in favor of
defendants-appellees, Strib Industries, Inc., d.b.a. Products Chemical, and John Stibrick
(collectively “Strib Industries”). Northern Chemical raises the following assignments of error
for review:
1. The trial court erred as a matter of law in not considering all of the evidence
before it in rendering judgment in appellees’ favor.
2. The trial court erred as a matter of law in granting appellees’ motion for
summary judgment.
{¶2} After careful review of the record and relevant case law, we affirm the trial court’s
judgment.
I. Procedural and Factual History
{¶3} Northern Chemical has operated a chemical blending company since 1983 and
performs filling and blending services for customers. Northern Chemical is owned and operated
by John Zemaitis. Strib Industries also performs chemical filling and blending services and is
owned and operated by John Stibrick.
{¶4} For approximately 25 years, Northern Chemical subcontracted certain filling and
blending orders to Strib Industries for customers who required smaller packaging. Pursuant to
the parties’ business arrangement, Strib Industries was paid a percentage of the revenue Northern
Chemical received for the product Strib Industries filled or blended on Northern Chemical’s
behalf. On January 1, 2006, Northern Chemical and Strib Industries entered into a
confidentiality, nondisclosure, and nonuse agreement (the “Strib NDA Agreement”). The NDA
Agreement covered all work Strib Industries performed for Northern Chemical and required Strib
Industries to maintain Northern Chemical’s confidential information.
{¶5} In January 2009, Northern Chemical entered into a business relationship with
ChemMasters, Inc. (“ChemMasters”). Pursuant to their business arrangement, Northern
Chemical agreed to blend and package certain concrete sealers and coatings for ChemMasters.
ChemMasters and Northern Chemical also entered into a confidentiality, nondisclosure, and
nonuse agreement (the “ChemMasters NDA Agreement”), wherein Northern Chemical agreed to
maintain ChemMasters’ confidential information.
{¶6} Upon securing ChemMasters’ business, Northern Chemical subcontracted with Strib
Industries to fill the orders it received from ChemMasters. Strib Industries was paid a
percentage of the revenue Northern Chemical received from ChemMasters for the products Strib
Industries filled and blended. Upon relinquishing the blended product to ChemMasters, Strib
Industries would invoice Northern Chemical for the amount due, with the notation that payment
was due within 30 days. It was understood and agreed that Northern Chemical was to pay Strib
Industries the amount invoiced no later than 10 days after Northern Chemical received payment
from ChemMasters.
{¶7} In April 2014, ChemMasters ceased doing business with Northern Chemical, and
began doing business directly with Strib Industries. Believing that “[Strib Industries and
ChemMasters] conspired to improperly cut-out Northern Chemical from the business
relationship,” Northern Chemical filed a complaint against Strib Industries and ChemMasters in
January 2016. The complaint sought a declaratory judgment and asserted causes of action for
breach of contract, tortious interference with business relations, tortious interference with
contract, accounting and restitution, misappropriation of trade secrets, and civil conspiracy.
{¶8} In March 2016, Strib Industries filed an answer brief and asserted counterclaims for
breach of contract and unjust enrichment. The counterclaim sought payment of overdue
invoices in the amount of $8,992.50.
{¶9} In April 2016, Northern Chemical filed a notice of voluntary dismissal of its claims
against ChemMasters. Northern Chemical also voluntarily dismissed its civil conspiracy claim
against Strib Industries.
{¶10} In June 2016, Strib Industries filed a “motion to deem admissions as admitted.”
The motion alleged that Northern Chemical failed to respond to Strib Industries’ requests for
admissions, which asked Northern Chemical to admit that it failed to pay Strib Industries for
certain invoices. Thus, Strib Industries requested the trial court to deem the relevant discovery
requests as written admissions pursuant to Civ.R. 36(A)(1). The motion was unopposed and
granted by the trial court.
{¶11} In December 2016, Strib Industries filed a motion for summary judgment on its
counterclaims, arguing that it is entitled to judgment in the amount of $8,992.50. Strib
Industries argued that judgment was appropriate because “Northern Chemical concedes the
invoices are outstanding and due to Strib Industries as evidenced by the request for admissions
propounded upon Northern Chemical and which [the trial court] deemed admitted.”
{¶12} In February 2017, Strib Industries filed a separate motion for summary judgment as
to Northern Chemical’s claims, arguing that it was entitled to judgment as a matter of law
because (1) there is no evidence of a valid contract between Northern Chemical and Strib
Industries, (2) there is no evidence of an exclusivity contract between Northern Chemical and
ChemMasters, (3) the blending and filling services provided to ChemMasters were products that
ChemMaster developed and/or formulated, and (4) it was not unlawful or improper for Strib
Industries to conduct business directly with ChemMasters based on Northern Chemical’s failure
to pay Strib Industries for its services.
{¶13} In support of its motions for summary judgment, Strib Industries attached copies of
the pleadings, a copy of the Strib NDA Agreement, a copy of the ChemMasters NDA Agreement,
pertinent portions of John Zemaitis’s deposition testimony, the affidavit of John Stibrick, and
copies of Northern Chemical’s unpaid invoices that were deemed by the court to be written
admissions.
{¶14} After receiving a 30-day extension of time, Northern Chemical filed a brief in
opposition to Strib Industries’ motions for summary judgment on March 3, 2017. Northern
Chemical argued that genuine issues of material fact remain on their claims against Strib
Industries. In addition, Northern Chemical maintained that Strib Industries is not entitled to
summary judgment on its counterclaim for the unpaid invoices because Strib Industries
“materially breached [its] agreement to wait until Northern Chemical was paid by ChemMasters
to receive payment [from Northern Chemical].”
{¶15} Northern Chemical’s opposition brief attached a copy of the Strib NDA
Agreement, emails from Northern Chemical to ChemMasters regarding past due invoices, and
the deposition testimony of John Stibrick.1
{¶16} On March 13, 2017, Strib Industries filed a reply brief in support of its motions for
summary judgment and contemporaneously filed a motion to strike the certain exhibits attached
to Northern Chemical’s brief in opposition. In the motion to strike, Strib Industries argued that
1
Northern Chemical’s brief in opposition references “Plaintiff’s Affidavit attached as ‘Exhibit 1.’”
However, no affidavit was attached to the brief.
the email correspondences attached to Northern Chemical’s brief in opposition did not constitute
proper evidence under Civ.R. 56(C) and were not authenticated by a properly framed affidavit.
{¶17} On March 20, 2017, Northern Chemical filed a brief in opposition to the motion to
strike and requested leave of court to supplement its opposition brief with the affidavit of John
Zemaitis, which was notarized on March 20, 2017. Northern Chemical argued that the affidavit
properly attests to the exhibits attached to the brief in opposition pursuant to Civ.R. 56(E), and
“provides no additional information that is not already provided in the brief in opposition.”
{¶18} Before the trial court ruled on Northern Chemical’s attempt to supplement its brief
with Zemaitis’s affidavit, Strib Industries filed a motion to strike the affidavit. Strib Industries
argued that it would be unjust to consider the untimely affidavit because it was not attached to
the brief in opposition, and therefore, Strib Industries did not have the opportunity to address the
contents of the affidavit at the time Strib Industries was required to file its reply brief. Strib
Industries noted that the affidavit was notarized on March 20, 2017, thereby demonstrating that
the affidavit did not exist at the time the brief in opposition was filed.
{¶19} On May 18, 2017, the trial court denied Northern Chemical’s request to
supplement its brief in opposition with Zemaitis’s affidavit. In addition, the trial court granted
Strib Industries’ motion to strike the affidavit and copies of certain email correspondences
attached to Northern Chemical’s brief in opposition. On the same day, the trial court granted
Strib Industries’ separate motions for summary judgment, stating in relevant part:
Pending before the court are (A) [Strib Industries’] motion for summary judgment
with respect to Northern Chemical’s claims; and (B) [Strib Industries’] motion for
summary judgment on its counterclaim pursuant to Civ.R. 56. * * *.
Upon review of the evidentiary materials, and viewing the evidence most strongly
in favor of the non-moving party, the court finds and concludes that no genuine
issues of material fact remain to be litigated in this case and that defendants are
entitled to judgment as a matter of law. Defendants supported their motions with
admissible evidence and concise, compelling legal arguments. Northern
Chemical, by contrast, has not come forward with admissible evidence suggesting
that there is a genuine issue for trial. Defendants’ motions for summary
judgment are therefore granted.
Accordingly, Northern Chemical’s claims are dismissed in their entirety, with
prejudice. With respect to defendant Strib Industries’ counterclaim, the court
awards judgment to Strib Industries in the amount of $8,992.50, plus interest at
the statutory rate from the date of judgment, as well as the costs of this action.
{¶20} Northern Chemical now appeals the trial court’s judgment.
II. Law and Analysis
A. Evidentiary Rulings
{¶21} In its first assignment of error, Northern Chemical argues “the trial court erred as a
matter of law in not considering all of the evidence before it in rendering judgment in [Strib
Industries’] favor.” Northern Chemical contends that the trial court erred by striking the
affidavit of John Zemaitis and the email correspondences referred to in his supporting affidavit.
1. Notice of Appeal
{¶22} Before addressing the merits of this assigned error, we must resolve Strib
Industries’ contention that Northern Chemical’s first assignment of error fails as a matter of law
because Northern Chemical’s notice of appeal does not comply with App.R. 3(D) and
Loc.App.R. 3(B).
{¶23} According to App.R. 3(D), the decision being appealed must be designated in the
notice of appeal, and Loc.App.R. 3(B) requires attachment of that entry to the notice. In this
case, Strib Industries correctly states that Northern Chemical’s notice of appeal only attached the
trial court’s May 18, 2017 journal entry granting summary judgment in favor of Strib Industries.
It did not identify or attach the trial court’s separate May 18, 2017 judgment entries that granted
Strib Industries’ motions to strike Zemaitis’s affidavit and certain exhibits attached to Northern
Chemical’s brief in opposition to summary judgment.
{¶24} However, the failure to attach a copy of the order being appealed from is not a
jurisdictional defect. Thus, “this court has discretion to entertain an appeal that does not
comply with these rules.” Hubbard v. Charter One Bank, 8th Dist. Cuyahoga No. 104146,
2017-Ohio-1033, ¶ 11, citing Midland Funding L.L.C. v. Hottenroth, 2014-Ohio-5680, 26
N.E.3d 269, ¶ 3 (8th Dist.) (en banc). The purpose of these rules is to appropriately notify other
parties to the appeal of its scope.
{¶25} As stated, the trial court found that summary judgment in favor of Strib Industries
was appropriate because Northern Chemical failed to “come forward with admissible evidence
suggesting that there is a genuine issue for trial.” The admissibility of the evidence attached to
Northern Chemical’s brief in opposition was highly contested and was the subject of multiple
motions. Furthermore, the validity of the court’s May 18, 2017 judgments have been fully
briefed by both parties on appeal. Under these circumstances, we find Strib Industries was
reasonably placed on notice that Northern Chemical would be challenging the trial court’s
decision to strike certain evidence attached to its brief in opposition. Accordingly, we exercise
our discretion to consider Northern Chemical’s first assignment of error.
2. Motion to Strike Documentary Evidence
{¶26} A trial court’s determination of a motion to strike is reviewed for an abuse of
discretion. Squire v. Geer, 117 Ohio St. 3d 506, 2008-Ohio-1432, 885 N.E.2d 213, ¶ 10. An
abuse of discretion implies that the court’s attitude is unreasonable, arbitrary, or unconscionable.
Blakemore v. Blakemore, 5 Ohio St. 3d 217, 219, 450 N.E.2d 1140 (1983).
{¶27} On appeal, Northern Chemical argues the trial court abused its discretion by
striking Zemaitis’s affidavit and the email correspondences attached to its brief in opposition to
summary judgment. Northern Chemical asserts that the excluded “email [exhibits] were not a
surprise to [Strib Industries] as they were attached to the brief in opposition and the affidavit was
not a surprise to [Strib Industries] as it did not deviate or provide anything outside of the brief.”
{¶28} Civ.R. 56(C) provides, in relevant part:
Unless otherwise provided by local rule or by order of the court, the adverse party
may serve responsive arguments and opposing affidavits within twenty-eight days
after service of the motion, and the movant may serve reply arguments within
fourteen days after service of the adverse party’s response. Summary judgment
shall be rendered forthwith if the pleadings, depositions, answers to
interrogatories, written admissions, affidavits, transcripts of evidence, and written
stipulations of fact, if any, timely filed in the action, show that there is no genuine
issue as to any material fact and that the moving party is entitled to judgment as a
matter of law. No evidence or stipulation may be considered except as stated in
this rule.
{¶29} Civ.R. 56(E) provides, in relevant part:
Supporting and opposing affidavits shall be made on personal knowledge, shall
set forth such facts as would be admissible in evidence, and shall show
affirmatively that the affiant is competent to testify to the matters stated in the
affidavit. Sworn or certified copies of all papers or parts of papers referred to in
an affidavit shall be attached to or served with the affidavit. The court may
permit affidavits to be supplemented or opposed by depositions or by further
affidavits.
{¶30} This court has previously recognized that “[u]nder Civ.R. 56(E), the proper
procedure for introducing evidentiary matters not specifically authorized by Civ.R. 56(C) is to
incorporate them by reference in a properly framed affidavit.” Biskupich v. Westbay Manor
Nursing Home, 33 Ohio App. 3d 220, 221, 515 N.E.2d 632 (8th Dist.1986).
{¶31} “Documents submitted in defense against a motion for summary judgment must be
properly ‘sworn, certified or authenticated by affidavit’ or they may not be considered in
determining whether there is a triable issue of fact.” Burkhart v. H.J. Heinz Co.,
2013-Ohio-723, 989 N.E.2d 128, ¶ 12 (6th Dist.), quoting Green v. B.F. Goodrich Co., 85 Ohio
App.3d 223, 228, 619 N.E.2d 497 (9th Dist.1993); see also Douglass v. Salem Comm. Hosp.,
153 Ohio App. 3d 350, 2003-Ohio-4006, 794 N.E.2d 107, ¶ 25 (7th Dist.). Ohio courts
consistently apply this rule and recognize that “documents that have not been sworn, certified, or
authenticated by way of affidavit ‘have no evidentiary value.’” Mitchell v. Internatl. Flavors &
Fragrances, Inc., 179 Ohio App. 3d 365, 2008-Ohio-3697, 902 N.E.2d 37, ¶ 17 (1st Dist.),
quoting Lance Acceptance Corp. v. Claudio, 9th Dist. Lorain No. 02CA008201,
2003-Ohio-3503, ¶ 15.
{¶32} In this case, Northern Chemical’s brief in opposition relied extensively on
unauthenticated email communications that were not incorporated into a properly framed
affidavit. Strib Industries moved to strike these exhibits on grounds that they did not constitute
proper evidence under Civ.R. 56(C). Although Northern Chemical subsequently attempted to
incorporate the unauthenticated documents through its submission of Zemaitis’s affidavit, the
trial court ultimately accepted Strib Industries’ position that the affidavit was untimely pursuant
to Civ.R. 56(C).
{¶33} Despite the language of Civ.R. 56(C), Northern Chemical maintains that its
submission of Zemaitis’s affidavit was not untimely because it was filed well before the trial
court’s judgment was rendered. In support of its position, Northern Chemical relies on this
court’s decision in Paul v. Metrohealth, 8th Dist. Cuyahoga No. 71195, 1998 Ohio App. LEXIS
4964 (Oct. 22, 1998). In Paul, this court reversed the trial court’s exclusion of an opposing
affidavit as untimely, stating:
The trial court’s determination * * * was inappropriate since the rule specifically
permits the opposing party to file affidavits “prior to the day of hearing.”
Id. at 18.
{¶34} After careful consideration, we are not persuaded by Northern Chemical’s reliance
on Paul. Significantly, Paul interpreted a version of Civ.R. 56(C) that has since been
amended. 2 The statute no longer contains language permitting the opposing party to file
affidavits “prior to the day of hearing.” Rather, that language has been deleted and the statute
now directs adverse parties to serve responsive arguments and opposing affidavits “within
twenty-eight days after service” of the movant’s motion for summary judgment.3
{¶35} In this case, Northern Chemical received a 30-day extension in time to respond to
Strib Industries’ motion for summary judgment and was ordered to “file its brief(s) in opposition
to the two motions [for summary judgment] on or before Friday, March 3, 2017.” Northern
Chemical complied with the trial court’s order and filed its opposition brief on March 3, 2017.
However, Northern Chemical did not attach an affidavit to its opposition brief and, without
2
Civ.R. 56(C) was amended on July 1, 2015. The former version of Civ.R. 56(C) provided, in pertinent
part:
The motion shall be served at least fourteen days before the time fixed for hearing. The adverse
party, prior to the day of hearing, may serve and file opposing affidavits. Summary judgment
shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, written
admissions, affidavits, transcripts of evidence, and written stipulations of fact, if any, timely filed
in the action, show that there is no genuine issue as to any material fact and that the moving party
is entitled to judgment as a matter of law. No evidence or stipulation may be considered except as
stated in this rule. (Emphasis added.)
3
Loc.R. 11(I)(1) of the Court of Common Pleas of Cuyahoga County, General Division, provides an
opposing party 30 days to file a brief in opposition with accompanying evidentiary materials.
explanation or justification, waited two additional weeks before attempting to supplement its
brief with Zemaitis’s affidavit. Significantly, the affidavit was filed well beyond the time
period set forth under Civ.R. 56(C), beyond the dispositive motion deadline set forth by the trial
court, and after Strib Industries filed its reply brief in support of its motion for summary
judgment.
{¶36} Under the totality of these circumstances, we find the trial court did not abuse its
discretion in striking the untimely affidavit of John Zemaitis. As such, the email
correspondences attached to Northern Chemical’s brief in opposition were not incorporated by
reference in a properly framed affidavit as required by Civ.R. 56(E). Accordingly, the email
exhibits were not properly before the court for consideration on summary judgment and we
cannot say the trial court abused its discretion by striking them from the record.
{¶37} Northern Chemical’s first assignment of error is overruled.
B. Summary Judgment
{¶38} In its second assignment of error, Northern Chemical argues the trial court erred as
a matter of law in granting summary judgment in favor of Strib Industries.
{¶39} This court reviews a trial court’s grant of summary judgment under the de novo
standard. Grafton v. Ohio Edison Co., 77 Ohio St. 3d 102, 105, 671 N.E.2d 241 (1996).
Pursuant to Civ.R. 56(C), summary judgment is appropriate when (1) there is no genuine issue of
material fact, (2) the moving party is entitled to judgment as a matter of law, and (3) reasonable
minds can come to but one conclusion and that conclusion is adverse to the nonmoving party,
said party being entitled to have the evidence construed most strongly in his favor. Horton v.
Harwick Chem. Corp., 73 Ohio St. 3d 679, 653 N.E.2d 1196 (1995), paragraph three of the
syllabus; Zivich v. Mentor Soccer Club, 82 Ohio St. 3d 367, 369-370, 696 N.E.2d 201 (1998).
{¶40} Summary judgment consists of a burden-shifting framework. The movant bears
the initial burden of informing the trial court of the basis for the motion, and identifying those
portions of the record that demonstrate the absence of a genuine issue of material fact on the
essential element(s) of the nonmoving party’s claims. Dresher v. Burt, 75 Ohio St. 3d 280,
292-293, 662 N.E.2d 264 (1996). Once the moving party satisfies its burden, the nonmoving
party “may not rest upon the mere allegations or denials of the party’s pleadings, but the party’s
response, by affidavit or as otherwise provided in this rule, must set forth specific facts showing
that there is a genuine issue for trial.” Id.; Mootispaw v. Eckstein, 76 Ohio St. 3d 383, 385, 667
N.E.2d 1197 (1996); Civ.R. 56(E). Doubts must be resolved in favor of the nonmoving party.
Murphy v. Reynoldsburg, 65 Ohio St. 3d 356, 358-359, 604 N.E.2d 138 (1992).
{¶41} On appeal, Northern Chemical argues the trial court improperly granted summary
judgment in favor of Strib Industries on its counterclaim for unpaid invoices and on its claims
against Strib Industries for tortious interference with a business relationship, tortious interference
with a contract, breach of contract, and misappropriation of trade secrets. For the purposes of
judicial clarity, we review each claim separately.
1. Tortious Interference with Business Relations
{¶42} The elements of a tortious interference with a business relationship claim require
(1) a business relationship; (2) the wrongdoer’s knowledge of the relationship; (3) the
wrongdoer’s intentional and improper action taken to prevent a contract formation, procure a
contractual breach, or terminate a business relationship; (4) a lack of privilege; and (5) resulting
damages. Brookeside Ambulance, Inc. v. Walker Ambulance Serv., 112 Ohio App. 3d 150,
155-156, 678 N.E.2d 248 (1996); Spafford v. Cuyahoga Community College, 8th Dist. Cuyahoga
No. 84786, 2005-Ohio-1672.
{¶43} Tortious interference with a business relation occurs when “a person, without
privilege, induces or otherwise purposely causes a third party not to enter into, or continue, a
business relationship, or perform a contract with another.” Castle Hill Holdings, L.L.C. v. Al
Hut, Inc., 8th Dist. Cuyahoga No. 86442, 2006-Ohio-1353, ¶ 47, citing Juhasz v. Quik Shops,
Inc., 55 Ohio App. 2d 51, 379 N.E.2d 235 (9th Dist.1978), paragraph two of the syllabus.
{¶44} Whether the business relationship is an at-will relationship does not in and of itself
preclude a finding that the defendant tortiously interfered with the business relationship and,
therefore, is not dispositive of the claim. Fred Siegel Co., L.P.A. v. Arter & Hadden, 85 Ohio
St.3d 171, 178, 707 N.E.2d 853 (1999). On the other hand, interference with the business
relationship alone is insufficient to sustain a cause of action for tortious interference. Id. It is
the improper nature of the conduct that establishes liability. Baseball at Trotwood, L.L.C. v.
Dayton Professional Baseball Club, S.D.Ohio No. C-3-98-260, 2003 U.S. Dist. LEXIS 27460,
*5 (Sept. 2, 2003).
{¶45} Courts must consider the following factors in determining whether the actor’s
means are improper:
(a) the nature of the actor’s conduct, (b) the actor’s motive, (c) the interests of the
other with which the actor’s conduct interferes, (d) the interests sought to be
advanced by the actor, (e) the social interests in protecting the freedom of action
of the actor and the contractual interests of the other, (f) the proximity or
remoteness of the actor’s conduct to the interference, and (g) the relations between
the parties.
Gracetech Inc. v. Perez, 8th Dist. Cuyahoga No. 96913, 2012-Ohio-700, ¶ 19, quoting Fred
Siegel, at paragraph three of the syllabus.
{¶46} It is undisputed that Northern Chemical and ChemMasters shared a business
relationship and that Strib Industries was aware of their business relationship. However, Strib
Industries argued in its motion for summary judgment that it was not improper for John Stibrick
to notify ChemMasters that it would “no longer provide services or products to Northern
Chemical due to non-payment.” Further, Strib Industries argued that there is no evidence to
suggest Strib Industries or ChemMasters were bound to Northern Chemical under an exclusivity
agreement. Thus, Strib Industries maintains that “it was not unlawful or improper for [it to
conduct] business directly with ChemMasters at ChemMasters’ request.” Strib Industries
supported its arguments with Northern Chemical’s written admissions, the affidavit of John
Stibrick, and the deposition testimony of John Zemaitis.
{¶47} In contrast, Northern Chemical argues that Strib Industries intentionally and
without justification caused ChemMasters to end its business relationship with Northern
Chemical. Specifically, Northern Chemical submits that the following factors create genuine
issues of material fact regarding whether Strib Industries’ intentional interference was improper:
Defendants held a shipment of product hostage to cause the interference with the
business relationship between Plaintiff and ChemMasters and left ChemMasters
with the option of either finding a new supplier or doing business directly with
Defendants. * * * Defendants left ChemMasters no option to do business with
Defendants. * * * Defendants’ motive was to force the shut out of Plaintiff and
to take the entire business relationship and profits for themselves. Defendants’
used the nature of their relationship with Plaintiff and the knowledge it acquired
from Plaintiff of Plaintiff’s processes, pricing, contacts and relationship with
ChemMasters to steal the relationship.
{¶48} Our review of the relevant admissible evidence does not support Northern
Chemical’s position. While Northern Chemical suggests the Strib Industries’ actions were
unjustified, Stibrick testified that he ended his business relationship with Northern Chemical
because he “wasn’t being paid for my services, timely, as we had agreed.” He acknowledged
that Northern Chemical and Strib Industries agreed to a payment schedule where Strib Industries
would not be paid by Northern Chemical until Northern Chemical was paid by ChemMasters.
However, Stibrick testified that he learned that ChemMasters “was very timely” with its
payments to Northern Chemical based on conversations he had with Northern Chemical
representatives.
{¶49} Stibrick explained that before Strib Industries held an order that was produced for
ChemMasters, he contacted Zemaitis to determine why Northern Chemical was failing to pay
outstanding invoices. According to Stibrick, Zemaitis claimed that “he was not being paid
timely by ChemMasters.” Thereafter, Stibrick met with ChemMasters to seek clarification.
Stibrick testified that during this meeting, a representative for ChemMasters indicated that
ChemMasters was paying Northern Chemical for its services in a timely fashion, despite what
Zemaitis may have claimed. In light of this information, Stibrick testified that he informed
ChemMasters as follows:
I can’t do business with [Northern Chemical] because [it] doesn’t pay as we
agreed. You can either find another vendor or supplier or we can continue to
produce them, but you would have to send me, Products Chemical, the purchase
orders, we would process your orders and * * * you would pay us directly.
{¶50} Stibrick testified that shortly after his meeting with ChemMasters, Strib Industries
received its first purchase order from ChemMasters and, at ChemMasters’ request, Strib
Industries agreed to provide blending services to ChemMasters directly.
{¶51} Viewing the foregoing evidence in a light most favorable to Northern Chemical, we
find there is no evidence that Strib Industries used improper means to terminate ChemMasters’
business relationship with Northern Chemical.
{¶52} Collectively, the evidence attached to Strib Industries’ motion for summary
judgment demonstrates that Stibrick had a good faith basis to notify ChemMasters that it would
no longer blend products on Northern Chemical’s behalf due to Northern Chemical’s failure to
pay outstanding invoices. Without competing admissible evidence regarding the status of
ChemMasters’ payment history with Northern Chemical, Strib Industries’ communication to
ChemMasters that it would no longer provide products on Northern Chemical’s behalf was
justified and, therefore, cannot be deemed improper. ChemMasters was free to continue its
business relationship with Northern Chemical, and there is no factual or legal basis to conclude
that Strib Industries improperly induced ChemMasters to end its relationship with Northern
Chemical. In short, Northern Chemical cannot attempt to use the tortious interference doctrine
“to thwart competition where it * * * had no reasonable expectation of exclusive dealings” with
ChemMasters and there is no evidence of improper interference or inducement. See Miller
Bros. Excavating v. Stone Excavating, 2d Dist. Greene No. 97-CA-69, 1998 Ohio App. LEXIS
104 (Jan.16, 1998).
{¶53} Moreover, Northern Chemical has not presented admissible evidence to support its
assertion that Stibrick met with ChemMasters with the intention of “stealing” its business from
Northern Chemical. Stibrick testified that the purpose of the meeting was to determine whether
ChemMasters had been making timely payments to Northern Chemical. In addition, Zemaitis
testified that he had no knowledge concerning the conversation between Stibrick and
ChemMasters’ representatives or how the relationship between ChemMasters and Strib
Industries began.
{¶54} Accordingly, we find the trial court properly granted summary judgment in favor of
Strib Industries on Northern Chemical’s tortious interference with a business relationship claim.
2. Tortious Interference with a Contract
{¶55} The elements of a tortious interference with a contract claim include “(1) the
existence of a contract, (2) the wrongdoer’s knowledge of the contract, (3) the wrongdoer’s
intentional procurement of the contract’s breach, (4) the lack of justification, and (5) resulting
damages.” Fred Siegel, 85 Ohio St. 3d 171, 707 N.E.2d 853 (1999), at paragraph one of the
syllabus.
{¶56} In its motion for summary judgment, Strib Industries’ argued that Northern
Chemical’s complaint merely set forth the elements of a tortious interference with a contract
claim, without “factual allegations that go to each and every one of the recited legal elements.”
In support of this statement, Strib Industries attached the affidavit of John Stibrick and the
deposition testimony of John Zemaitis. In relevant part, Stibrick averred that he was not aware
of any contract between ChemMasters and Northern Chemical. Similarly, Zemaitis conceded
that ChemMasters “was free to do business with anybody” and that he was not aware if Northern
Chemical had a written contract with ChemMasters. Thus, while ChemMasters had sent
purchase orders to Northern Chemical in the past, there is no evidence in the record to suggest
Northern Chemical and ChemMasters shared an ongoing contractual relationship, or that Strib
Industries was aware of such a contractual relationship. See, e.g., Walter v. ADT Sec. Sys., Inc.,
10th Dist. Franklin No. 06AP-115, 2007-Ohio-3324, ¶ 31 (noting that the “main difference
between tortious interference with a contract and tortious interference with a business
relationship is that interference with a business relationship includes intentional interference with
prospective contractual relations, not yet reduced to a contract.”).
{¶57} Collectively, this evidence demonstrates the absence of material facts on the
essential elements of Northern Chemical’s tortious interference with a contract claim.
Furthermore, Northern Chemical’s brief in opposition did not present evidence to create issues of
material fact as to the existence of a valid contract with ChemMasters, or Strib Industries’
knowledge of the contract if one existed. Accordingly, we find the trial court properly granted
summary judgment in favor of Strib Industries on Northern Chemical’s tortious interference with
a contract claim.
3. Breach of Contract
{¶58} To recover on a claim for breach of contract, a plaintiff must demonstrate (1) the
existence of a binding contract, (2) performance by the plaintiff, (3) breach by the defendant, and
(4) damages resulting from the breach. Corsaro v. ARC Westlake Village, Inc., 8th Dist.
Cuyahoga No. 84858, 2005-Ohio-1982, ¶ 20, citing Am. Sales, Inc. v. Boffo, 71 Ohio App. 3d
168, 175, 593 N.E.2d 316 (2d Dist.1991).
{¶59} Throughout this litigation, Northern Chemical has alleged that Strib Industries
breached the Strib NDA Agreement by using Northern Chemical’s confidential information,
including pricing and product formula information, to create a relationship with ChemMasters.
In its motion for summary judgment, Strib Industries argued that assuming the Strib NDA
Agreement was valid and applied to its dealings with ChemMasters, “there is no evidence to
support Northern Chemical’s claim that Strib Industries breached the agreement.”
{¶60} The Strib NDA Agreement provides, in pertinent part:
1. Confidential Information. “Confidential Information,” for purposes of this
Agreement, shall include, without limitation, (a) the existence of the discussions
with the Company regarding the Possible Transaction, and (b) all information,
materials, documents, including, without limitation, technical information and
data, product development information and data, and financial statements,
projections and other information, furnished by the Company * * * Recipient
hereby acknowledges the sensitive and confidential nature of the Confidential
Information and the damage that may result to the Company in the event any of
such confidential information is disclosed to third parties or otherwise used
improperly.
2. Non-Use of Information. Recipient shall not [use] any Confidential
Information furnished by or through the Company or its employees, affiliates,
agents or representatives in any manner whatsoever, in whole or in part, for any
purpose other than in connection with evaluating the Possible Transaction.
3. Non-Disclosure of Information. Recipient shall use its best efforts to keep
secret and confidential all Confidential Information provided by the Company or
any of its employees, affiliates, agents or representatives, and shall not reveal any
Confidential Information to any third party.
{¶61} At his deposition, Zemaitis alleged that Strib Industries breached the Strib NDA
Agreement by using Northern Chemical’s confidential information to steal ChemMasters as a
customer. However, Zemaitis’s deposition testimony does not support this assertion. Relevant
to Strib Industries’ position that it did not breach the Strib NDA Agreement, Zemaitis provided
the following testimony:
Defense Counsel: The product you were developing or producing for
ChemMasters, were those formulas Northern Chemical’s or ChemMasters’?
John Zemaitis: ChemMasters’.
Defense Counsel: So they would tell you, “here is the formula. I want you to
mix this for us?
John Zemaitis: Correct.
***
Defense Counsel: Was there any information that belonged to Northern Chemical
that you feel my client misued?
John Zemaitis: I can’t answer that. I don’t know.
***
Defense Counsel: As you sit here today, are you aware of any information that
Strib Industries, and when I say Strib Industries, I mean Products Chemical, Strib
Industries, and John Stibrick, any information that they provided to ChemMasters
that belonged to you?
John Zemaitis: No.
{¶62} In light of the foregoing testimony, we find Strib Industries met its initial burden of
pointing to evidence that established its entitlement to judgment as a matter of law on Northern
Chemical’s breach of contract claim. In response, Northern Chemical failed to meet its
reciprocal burden. The clear and unambiguous language of the Strib NDA Agreement
demonstrates that Strib Industries was only restricted from using or disclosing Northern
Chemical’s confidential information to third parties. Here, Zemaitis acknowledged at his
deposition that the formulas used to produce or develop chemical sealants for ChemMasters were
owned by ChemMasters. Thus, the record reflects that any confidential or proprietary
information received or used by Strib Industries belonged to ChemMasters.
{¶63} Furthermore, we find no merit to Northern Chemical’s contention that there are
issues of material fact remaining as to whether Strib Industries inappropriately used or disclosed
confidential information regarding Northern Chemical’s pricing structure. Stibrick testified at
his deposition that he and ChemMasters discussed pricing and agreed the price would be the
same as the price ChemMasters previously paid to Northern Chemical. However, there is no
evidence in this record to suggest that Strib Industries provided ChemMasters with any
confidential information regarding pricing that ChemMasters was not already aware of given its
prior business relationship with Northern Chemical. Similarly, there is no testimony to suggest
Stibrick used his knowledge of Northern Chemical’s pricing information to facilitate or finalize
Strib Industries’ business relationship with ChemMasters. Rather, the evidence demonstrates
that ChemMasters’ business relationship with Strib Industries began at ChemMasters’ request.
{¶64} Under these circumstances, reasonable minds can conclude that in formulating its
business relationship with ChemMasters, Strib Industries did not breach the Strib NDA
Agreement by using or disclosing confidential information that was furnished to Strib Industries
by or through Northern Chemical or its employees. The admissible evidence attached to
Northern Chemical’s brief in opposition does not create a genuine issue of fact for trial.
Accordingly, we find the trial court properly granted summary judgment in favor of Strib
Industries on Northern Chemical’s breach of contract claim.
4. Misappropriation of Trade Secrets
{¶65} Ohio’s Uniform Trade Secrets Act, R.C. 1333.61 through 1333.69, provides for a
civil remedy for the misappropriation of trade secrets.
{¶66} In its complaint, Northern Chemical alleged that Strib Industries misappropriated
Northern Chemical’s trade secrets in an effort to facilitate its direct business relationship with
ChemMasters. The trade secrets identified in Northern Chemical’s complaint include,
“business information and scientific and/or technical information regarding, amongst other
things, the plaintiff’s customers, pricing, designs, processes, methods, and techniques.”
{¶67} The Ohio Uniform Trade Secret Act, R.C. 1333.61(D), defines a “trade secret” as:
[I]nformation, including the whole or any portion or phase of any scientific or
technical information, design, process, procedure, formula, pattern, compilation,
program, device, method, technique, or improvement, or any business information
or plans, financial information, or listing of names, addresses, or telephone
numbers, that satisfies both of the following:
(1) It derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by, other
persons who can obtain economic value from its disclosure or use.
(2) It is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
{¶68} R.C. 1333.63(B) defines “misappropriation” as any of the following:
(1) Acquisition of a trade secret of another by a person who knows or has reason
to know that the trade secret was acquired by improper means;
(2) Disclosure or use of a trade secret of another without the express or implied
consent of the other person by a person who did any of the following:
(a) Used improper means to acquire knowledge of the trade secret;
(b) At the time of disclosure or use, knew or had reason to know that the
knowledge of the trade secret that the person acquired was derived from or
through a person who had utilized improper means to acquire it, was acquired
under circumstances giving rise to a duty to maintain its secrecy or limit its use, or
was derived from or through a person who owed a duty to the person seeking
relief to maintain its secrecy or limit its use;
(c) Before a material change of their position, knew or had reason to know that it
was a trade secret and that knowledge of it had been acquired by accident or
mistake.
{¶69} When analyzing a trade secret claim, the court must consider:
(1) The extent to which the information is known outside the business; (2) the
extent to which it is known to those inside the business, i.e., by the employees; (3)
the precautions taken by the holder of the trade secret to guard the secrecy of the
information; (4) the savings effected and the value to the holder in having the
information as against competitors; (5) the amount of effort or money expended in
obtaining and developing the information; and (6) the amount of time and expense
it would take for others to acquire and duplicate the information. (Citation
omitted.)
Salemi v. Cleveland Metroparks, 145 Ohio St. 3d 408, 2016-Ohio-1192, 49 N.E.3d 1296, ¶ 25.
{¶70} Northern Chemical’s trade secret claim reiterates many of the same arguments
supporting its breach of contract claim. In challenging the validity of Northern Chemical’s
trade secrets claim, Strib Industries argued in its motion for summary judgment that there cannot
be a claim for misappropriation of trade secrets where (1) “the trade secrets belonged to
ChemMasters not plaintiff,” and (2) “there was no information provided from Strib Industries to
ChemMasters for which ChemMasters did not already have knowledge.” In support of these
statements, Strib Industries relies on Zemaitis’s testimony that (1) the formulas Strib Industries
used to produce the concrete sealer for ChemMasters were owned and/or developed by
ChemMasters, and (2) he was unaware of any information Strib Industries provided to
ChemMasters that belonged to Northern Chemical.
{¶71} Viewing the evidence in a light most favorable to Northern Chemical, we find Strib
Industries satisfied its burden of demonstrating the absence of genuine issues of material fact of
the element of “misappropriation.” Initially, we note that there is no evidence that Strib
Industries used improper means to “acquire” Northern Chemical’s alleged trade secrets. In this
case, the “trade secrets” referenced in Northern Chemical’s complaint contemplates information
that would have been properly provided to Strib Industries during its business relationship with
Northern Chemical. It is not information that was acquired through “theft, bribery,
misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage
through electronic or other means.” See R.C. 1333.61(A). Moreover, Zemaitis’s deposition
testimony supports Strib Industries’ position that the blending formulas Strib Industries used to
fill ChemMasters purchase orders were owned or developed by ChemMasters. Thus, trade
secrets relating to the scientific information involved in Strib Industries’ production of the
concrete sealant, including designs, processes, methods, and techniques, belonged to
ChemMasters and not Northern Chemical.
{¶72} In addition, we find no evidence to support an allegation that Strib Industries
disclosed trade secrets to ChemMasters without Northern Chemical’s consent. Analogous to
our resolution of Northern Chemical’s breach of contract claim, we find no legal precedent to
suggest Strib Industries “misappropriated trade secrets” where the record demonstrates that the
“information,” as defined under R.C. 1333.63(D), was already known by ChemMasters based on
its prior business dealings with Northern Chemical. As stated, the record demonstrates that
ChemMasters was aware of Northern Chemical’s processes and/or pricing information through
no act of Strib Industries. Thus, there is no evidence to suggest Strib Industries improperly
disclosed information to ChemMasters that it had a duty to maintain its secrecy or limit its use.
{¶73} Northern Chemical’s brief in opposition falls short of presenting genuine issues of
material fact regarding the element of misappropriation as defined under the statute. Northern
Chemical provided no evidence to support the mere accusations and assertions raised in its
opposition brief. Accordingly, we find the trial court properly granted summary judgment in
favor of Strib Industries on Northern Chemical’s misappropriation of trade secrets claim.
5. Strib Industries’ Counterclaims
{¶74} Strib Industries’ raised counterclaims for breach of contract and unjust enrichment,
alleging that “Northern Chemical failed to pay Strib Industries for product prepared at the request
of Northern Chemical for ChemMasters and for which Northern Chemical received payment
from ChemMasters.”
{¶75} In its motion for summary judgment, Strib Industries’ argued that Northern
Chemical failed to pay outstanding invoices in the amount of $8,992.50. In support of this
statement, Strib Industries attached copies of nine overdue invoices that were deemed by the trial
court to be written admissions. Construing this evidence in a light most favorable to Northern
Chemical, no genuine issues of material fact remain as to Strib Industries’ counterclaims for
unpaid invoices.
{¶76} In its brief in opposition and on appeal, Northern Chemical does not dispute that it
failed to satisfy the unpaid invoices for services rendered by Strib Industries. Instead, Northern
Chemical argues that it is excused from performing its obligation to pay the outstanding invoices
because Strib Industries’ “materially breached” the parties’ agreement for Strib Industries to
receive payment after Northern Chemical was paid by ChemMasters. However, Northern
Chemical’s opposition brief failed to set forth admissible evidence to support its allegation of
material breach. Accordingly, the trial court properly granted summary judgment in favor of
Strib Industries for its claim for unpaid invoices in the amount of $8,992.50.
{¶77} Based on the foregoing, Northern Chemical’s second assignment of error is
overruled.
{¶78} Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into
execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the
Rules of Appellate Procedure.
EILEEN T. GALLAGHER, PRESIDING JUDGE
SEAN C. GALLAGHER, J., and
LARRY A. JONES, SR., J., CONCUR