Hanneman Family Funeral Homes & Crematorium v. Orians , 2022 Ohio 984 ( 2022 )

[Cite as Hanneman Family Funeral Homes & Crematorium v. Orians, 2022-Ohio-984.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
ALLEN COUNTY
HANNEMAN FAMILY FUNERAL
HOME AND CREMATORIUM,
PLAINTIFF-APPELLANT/ CASE NO. 1-21-05
CROSS-APPELLEE,
v.
PATRICK ORIANS, ET AL.,
OPINION
DEFENDANTS-APPELLEES/
CROSS-APPELLANTS.
Appeal from Allen County Common Pleas Court
Trial Court No. CV 2020 0021
Judgment Affirmed
Date of Decision: March 28, 2022
APPEARANCES:
Aaron L. Bensinger and Christopher A. Jackson for Appellant
J. Alan Smith and Dalton J. Smith for Appellees
Case No. 1-21-05
ZIMMERMAN, P.J.
{¶1} Plaintiff-appellant/cross-appellee, Hanneman Family Funeral Home
and Crematorium (“Hanneman”), appeals the judgment of the Allen County Court
of Common Pleas dismissing its claims for tortious interference with contracts and
business relationships and trade-secret violations against the defendants-
appellees/cross-appellants, Patrick Orians (“Orians”) and Chiles-Laman Funeral &
Cremation Services (“Chiles-Laman”) (jointly as “cross-appellants”), its claims
against Orians for conversion and defamation, and its claim against Chiles-Laman
for ratification.1
{¶2} Cross-appellants appeal the trial court’s decision on Hanneman’s trade-
secret violations as well as the trial court’s dismissal of its claim for conversion
against Hanneman. For the reasons that follow, we affirm the judgment of the trial
court.
{¶3} This genesis of this case is Hanneman’s “asset only” purchase of several
funeral homes from Service Corporation International, Inc. (“SCI”) that included
Siferd-Orians Funeral Home (“Siferd-Orians”) in Lima, Allen County, Ohio (“the
Lima facility”). Orians (a 33-year employee of Siferd-Orians) ended his
employment with Siferd-Orians on the day Hanneman purchased the Lima facility.
Thereafter, Orians was hired by a competitor-funeral home in Lima, Chiles-Laman.
1
Chiles-Laman is correctly identified as T.R. Chiles & Sons-Laman, Inc. dba Chiles-Laman Funeral &
Cremation Services. (Doc. Nos. 1, 4, 6, 7); (Laman Depo. at 21-22, Doc. No. 129).
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After acquiring his new position at Chiles-Laman, and while Hanneman was
applying for a change in ownership for the Lima facility, Orians wrote and mailed
letters to preneed-funeral-contract customers of the former Siferd-Orians Funeral
Home on Chiles-Laman letterhead. Ultimately, many preneed customers
transferred their preneed-funeral contracts to Chiles-Laman.
{¶4} On January 14, 2020, Hanneman filed a complaint in the trial court
against cross-appellants. (Doc No. 1). Hanneman’s complaint alleged claims for
tortious interference with a business relationship and for conversion. (Id.).
Hanneman also requested injunctive relief. (Id.).
{¶5} On February 11, 2020, cross-appellants filed an answer and three
counterclaims against Hanneman for injunctive relief, declaratory judgment, and
conversion. (Doc. No. 5). Thereafter, cross-appellants filed an amended answer,
which included additional counterclaims (for trespass to chattels and tortious
interference with business relationships and contracts against Hanneman) as well as
a motion for a temporary restraining order (“TRO”). (Doc. Nos. 8, 9). The trial
court denied cross-appellants’ motion for a TRO on March 10, 2020. (Doc. No. 13).
{¶6} On March 20, 2020, Hanneman filed an answer to cross-appellants’
counterclaims and requested leave to file an amended complaint. (Doc. Nos. 14,
20). The trial court granted leave and the amended complaint was filed on June 2,
2020, which included all the preceding claims plus claims for tortious interference
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with contracts and trade-secret misappropriation against cross-appellants; a claim
for defamation against Orians; and a claim for ratification against Chiles-Laman.
(Doc. Nos. 57, 58).
{¶7} Thereafter, and on August 7, 2020, Hanneman filed a motion to compel
discovery responses to its request for interrogatories and production of documents,
which was opposed by cross-appellants. (Doc. Nos. 77, 80, 82, 83). The trial court
denied Hanneman’s motion on September 15, 2020. (Doc. No. 87).
{¶8} On August 21, 2020, cross-appellant’s filed a motion for summary
judgment as to all seven of Hanneman’s claims against cross-appellants. (Doc. No.
79). Hanneman filed a memorandum in opposition to cross-appellants motion for
summary judgment on November 20, 2020. (Doc. No. 119). On December 10,
2020, Hanneman requested leave of court to file a partial motion for summary
judgment that cross-appellants opposed. (Doc. Nos. 135, 139, 140). Hanneman
sought partial summary judgment as to its tortious interference with contracts and
business relationships (Am. Compl. Cts. 1 & 2) and its trade-secret misappropriation
claims (Am. Compl. Ct. 4) against cross-appellants, and its defamation claim (Am.
Compl. Ct. 6) against Orians. The trial court granted Hanneman leave of court to
file its motion on December 15, 2020. (Doc. No. 138).
{¶9} On February 8, 2021, the trial court granted summary judgment in favor
of cross-appellants and denied Hanneman’s motion for partial summary judgment
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as to all of Hanneman’s claims except injunctive relief. (Doc. No. 142). The trial
court also granted summary judgment in favor of Hanneman as to cross-appellants’
conversion claim against Hanneman.2 (Id.). The trial court then determined that
there is “no just reason for delay” and certified the judgment entry as final and
appealable under Civ.R. 54(B).
{¶10} Hanneman filed its notice of appeal on February 9, 2021 raising the
following five assignments of error for our review.
Assignment of Error No. I
The Trial Court Incorrectly Dismissed Appellant’s Claim For
Trade Secret Violations And Incorrectly Denied Appellant’s
Summary Judgment Motion On Appellant’s Claim For Trade
Secret Violations.
Assignment of Error No. II
The Trial Court Erred By Denying Appellant’s Motion To
Compel Discovery.
Assignment of Error No. III
The Trial Court Erred By Dismissing Appellant’s Claim For
Tortious Interference With Business Contracts, Business
Relations And Conversion By Appellees.
Assignment of Error No. IV
The Trial Court Erred By Dismissing Appellant’s Claim For
Ratification.
2
All of cross-appellant’s other claims (i.e., injunctive relief, declaratory judgment, trespass to chattels, and
tortious interference with contracts and business relationships) survived summary judgment. (Doc. No. 142).
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Assignment of Error No. V
The Trial Court Erred By Dismissing Appellant’s Claim For
Defamation.
{¶11} On February 23, 2021, cross-appellants filed a notice of cross-appeal,
and cross-appellants raise the following two assignments of error for our review.
Cross-Assignment of Error No. I
The Trial Court Erred When It Failed to Hold That
Appellant/Cross-Appellee’s Common Law Tort Claims Were Not
Preempted By Its Ohio Uniform Trade Secret Act Claim.
Cross-Assignment of Error No. II
The Trial Court Erred When It Entered Summary Judgment on
Appellee/Cross-Appellant’s Claim of Conversion as Neither Party
Moved for Summary Judgment on the Claim.
{¶12} We will begin by addressing Hanneman’s second assignment of error
followed by his first, third, and fifth assignments of error together with cross-
appellants first and second cross-assignments of error. We will address
Hanneman’s fourth assignment of error last.
Hanneman’s Appeal
Assignment of Error No. II
The Trial Court Erred By Denying Appellant’s Motion To
Compel Discovery.
{¶13} In his second assignment of error, Hanneman asserts that the trial court
erred by denying his motion to compel discovery. Specifically, he argues that were
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he permitted to gain more information (through discovery) his common-law-tort-
claims would not have been dismissed.
Standard of Review
{¶14} “‘A decision to grant or deny a discovery motion rests within the sound
discretion of the trial court.’” Zellner v. Prestige Gardens Rehabilitation and
Nursing Center, 3d Dist. Union No. 14-18-14, 2019-Ohio-595, ¶ 46, quoting Alford
v. Arbors at Gallipolis, 4th Dist. Gallia No. 17CA11, 2018-Ohio-4653, ¶ 70. “‘The
trial court has discretion to manage the discovery process.’” Id., quoting Alford at
¶ 70, citing State ex rel. Daggett v. Gessaman, 34 Ohio St.2d 55 (1973). The abuse-
of-discretion standard suggests the trial court’s decision is unreasonable, arbitrary,
or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983).
Analysis
{¶15} Before we review the merits of this argument, we must address
whether the issue is reviewable by this court as a final, appealable order.
{¶16} We have appellate jurisdiction over “final appealable orders.” Ohio
Constitution, Article IV, Section 3(B)(2). See Grieshop v. Hoyng, 3d Dist. Mercer
No. 10-06-27, 2007-Ohio-2861, ¶ 15. “If an order is not final and appealable, the
appellate court lacks jurisdiction, and the appeal must be dismissed.” Dunham v.
Ervin, 10th Dist. Franklin No. 17AP-79, 2017-Ohio-7616, ¶ 10. “‘An order of a
court is a final appealable order only if the requirements of both R.C. 2505.02 and,
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if applicable, Civ.R. 54(B), are met.’” CitiMortgage, Inc. v. Roznowski, 139 Ohio
St.3d 299, 2014-Ohio-1984, ¶ 10, quoting State ex rel. Scruggs v. Sadler, 97 Ohio
St.3d 78, 2002-Ohio-5315, ¶ 5.
{¶17} Hanneman’s second assignment of error derives from the trial court’s
certification of its judgment pursuant to Civ.R. 54(B) and now is seeking to have us
review the trial court’s denial of his motion to compel under this assignment of error.
Generally speaking, a motion to compel discovery is interlocutory in nature, and
typically, is not a final, appealable order. See, e.g., Block Communications, Inc. v.
Pounds, 6th Dist. Lucas No. L-13-1224, 2015-Ohio-2679, ¶ 32. There are
exceptions to this general rule when alleged trade secrets are at issue. See id.Important to the discussion, cross-appellants never asserted that the information
Hanneman sought from Chiles-Laman involved trade secrets; only Hanneman did.
(Doc. Nos. 77, 80, 82, 83). Nonetheless, cross-appellants’ argued that the
information sought is proprietary-business information.
{¶18} Hence, if the trial court’s judgment overruling the motion to compel
was the sole decision Hanneman sought to appeal, this court would have no choice,
but to conclude that the merits of that ruling are not properly before us. However,
under the facts presented and because the trial court entered its final judgment as to
Hanneman’s common-law tort claims, we conclude that the trial court’s order
denying Hanneman’s motion to compel merged into the trial court’s final judgment
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on summary judgment as to his common-law-tort claims. Consequently, Hanneman
is entitled to contest the merits of the trial court’s ruling on his motion to compel
within the context of this appeal. Accordingly, we conclude we have jurisdiction to
review Hanneman’s second assignment of error.
Analysis
{¶19} According to our review of the record, Hanneman’s counsel filed a
motion requesting an order compelling the cross-appellants to comply with the
following requests:
(1) Identification of electronic and cloud storage devices;
***
(2) Identification and production of all documents related to any and
all preneed contracts from 2009 to present;
***
(3) The employment contract and compensation of Defendant
Patrick Orians.
***
(Doc. No. 77).
{¶20} In its motion to compel, Hanneman argued that the information in the
Chiles-Laman’s electronic and cloud-storage devices was needed because cross-
appellants had not produced correspondence, emails, letters or documents as it
related to the preneed contracts. (Id.). Hanneman argued that it needed access to
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10 years of Chiles-Laman’s preneed-customer lists to determine whether there were
additional friends, family members, or spouses who may have transferred their
preneed files to Chiles-Laman. (Id.). Finally, Hanneman asserted that he needed
access to Orian’s compensation with Chiles-Laman to determine if Orians was
incentivized to provide Chiles-Laman with the preneed contracts, and whether
Chiles-Laman was aware of its value. (Id.)
{¶21} Cross-appellants argued that Hanneman already possessed the
relevant preneed contracts and files, an authorization for each transfer requested,
and a complete copy of the letters Orians sent to former customers. (Doc. No. 80).
Additionally, cross-appellants assert that the requested colleagues, family members,
and friends list is too speculative because those individuals may have never been
customers of Siferd-Orians (and thus its successor Hanneman) in the first instance.
Lastly, cross-appellants asserted that Orians’s compensation structure is irrelevant
since nothing prohibits Chiles-Laman from hiring Orians specifically for his ability
to obtain preneed transfers of former customers. (Doc. No. 80).
{¶22} In its ruling denying the motion to compel, the trial court considered
that certain documents were already in Hanneman’s possession; what was relevant
to Hanneman’s claims in the amended complaint; the proportional needs of the case;
the parties’ access to relevant information; the parties’ resources; and whether the
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expense of the proposed discovery request outweighed its likely benefit. (Doc. No.
87).
{¶23} On appeal, Hanneman argues that the trial court erred by overruling
its motion to compel the production of the documents, information, and lists
requested because those items were needed for damages calculations since
common-law-tort claims were dismissed by the trial court. We disagree.
{¶24} In reviewing the trial court’s decision and the record before us, we
conclude that Hanneman failed to demonstrate that the trial court abused its
direction by denying its motion to compel discovery. The trial court determined
that Hanneman already had access to all relevant information (Hanneman’s preneed
customers’ contracts and files, the transfer authorizations from the customers, and a
complete copy of the letters sent out by Orians on Chiles-Laman letterhead) as it
pertained to its claims. See Byrd v. Lindsay Corporation, 9th Dist. Summit No.
29491, 2020-Ohio-3870, ¶ 13, quoting Martin v. The Budd Co., 128 Ohio App.3d
115, 119 (9th Dist.1998), citing Manofsky v. Goodyear Tire & Rubber Co., 69 Ohio
App.3d. 663, 668 (9th Dist.1990) (observing that “discovery proceedings may not
be used to conduct a mere fishing expedition for incriminating evidence”, and
concluding that “those documents were not relevant to the litigation”). Hence, we
do not conclude that the trial court abused its discretion by denying Hanneman’s
motion to compel discovery.
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{¶25} Accordingly, Hanneman’s second assignment of error is overruled.
Assignment of Error No. I
The Trial Court Incorrectly Dismissed Appellant’s Claim For
Trade Secret Violations And Incorrectly Denied Appellant’s
Summary Judgment Motion On Appellant’s Claim For Trade
Secret Violations.
Assignment of Error No. III
The Trial Court Erred By Dismissing Appellant’s Claim For
Tortious Interference With Business Contracts, Business
Relations And Conversion By Appellees.
Assignment of Error No. IV
The Trial Court Erred By Dismissing Appellant’s Claim For
Ratification.
Assignment of Error No. V
The Trial Court Erred By Dismissing Appellant’s Claim For
Defamation.
Cross-Assignment of Error No. I
The Trial Court Erred When It Failed to Hold That
Appellant/Cross-Appellee’s Common Law Tort Claims Were Not
Preempted By Its Ohio Uniform Trade Secret Act Claim.
Cross-Assignment of Error No. II
The Trial Court Erred When It Entered Summary Judgment on
Appellee/Cross-Appellant’s Claim of Conversion as Neither Party
Moved for Summary Judgment on the Claim.
{¶26} In its remaining assignments of error, Hanneman argues that the trial
court erred by granting summary judgment in favor of cross-appellants as to all of
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its claims except injunctive relief. Cross-appellants argue that the trial court erred
by failing to preempt Hanneman’s common-law-tort claims under Ohio’s Uniform
Trade Secrets Act (“OUTSA”) and by entering summary judgment on cross-
appellants’ conversion claim even though neither party moved for summary
judgment on that claim.
Standard of Review
{¶27} We review a decision to grant summary judgment de novo. Doe v.
Shaffer, 90 Ohio St.3d 388, 390 (2000). “De novo review is independent and
without deference to the trial court’s determination.” ISHA, Inc. v. Risser, 3d Dist.
Allen No. 1-12-47, 2013-Ohio-2149, ¶ 25, citing Costner Consulting Co. v. U.S.
Bancorp, 195 Ohio App.3d 477, 2011-Ohio-3822, ¶ 10 (10th Dist.). Summary
judgment is proper where there is no genuine issue of material fact, the moving party
is entitled to judgment as a matter of law, and reasonable minds can reach but one
conclusion when viewing the evidence in favor of the non-moving party, and the
conclusion is adverse to the non-moving party. Civ.R. 56(C); State ex rel. Cassels
v. Dayton City School Dist. Bd. of Edn., 69 Ohio St.3d 217, 219 (1994).
{¶28} “The party moving for summary judgment has the initial burden of
producing some evidence which demonstrates the lack of a genuine issue of material
fact.” Carnes v. Siferd, 3d Dist. Allen No. 1-10-88, 2011-Ohio-4467, ¶ 13, citing
Dresher v. Burt, 75 Ohio St.3d 280, 292 (1996). “In doing so, the moving party is
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not required to produce any affirmative evidence, but must identify those portions
of the record which affirmatively support his argument.” Id., citing Dresher at 292.
“The nonmoving party must then rebut with specific facts showing the existence of
a genuine triable issue; he may not rest on the mere allegations or denials of his
pleadings.” Id., citing Dresher at 292 and Civ.R. 56(E).
{¶29} Material facts are those facts “that might affect the outcome of the suit
under the governing law.” Turner v. Turner, 67 Ohio St.3d 337, 340 (1993) citing
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505 (1986).
“Whether a genuine issue exists is answered by the following inquiry: [d]oes the
evidence present ‘a sufficient disagreement to require submission to a jury’ or is it
‘so one-sided that one party must prevail as a matter of law[?]’” Id., citing Anderson
at 251-252.
Trade-secret-Misappropriation Claims
{¶30} In his first assignment of error, Hanneman argues that the trial court
erred by granting summary judgment as to his trade-secret-misappropriation claims
against cross-appellants on the basis that a genuine issue of material fact exists as
to whether Hanneman’s files constituted a trade secret under OUTSA; whether
Orians misappropriated trade-secrets by copying and using the files to solicit
business for Chiles-Laman; and whether Chiles-Laman also misappropriated a
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trade-secret by knowingly using the trade-secret, which was acquired through
improper means.
{¶31} In order to prevail on trade-secret-misappropriation claim, Hanneman
must establish: (1) the existence of a trade secret; (2) the acquisition of a trade secret
as a result of a confidential relationship; and (3) the unauthorized use of a trade
secret. Heartland Home Fin., Inc. v. Allied Home Mortg. Capital Corp., 258
Fed.Appx. 860, 861 (6th Cir.2008) (interpreting R.C. 1333.61-1333.69). Under
OUTSA, Hanneman may recover damages from cross-appellants if it can establish
that Orians and Chiles-Laman misappropriated its trade secrets. See Kendall
Holdings, Ltd. v. Eden Cryogenics, LLC, 521 Fed.Appx. 453, 457 (6th Cir.2013).
OUTSA defines misappropriation in the following ways:
(1) Acquisition of a trade secret of another by a person who knows
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;
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(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.
R.C. 1333.61(B)(1)-(2)(a)-(c). See Kendall Holdings, Ltd. at 456, citing R.C.
1333.61(B). “‘Improper means’ includes theft, bribery, misrepresentation, breach
or inducement of a breach of a duty to maintain secrecy, or espionage through
electronic or other means.” R.C. 1333.61(A). See Kendall Holdings, Ltd. at 457,
citing R.C. 1333.61(A).
{¶32} Ultimately, Hanneman’s assignment of error hinges on two questions:
1) what information did Orians obtain prior to the end of his employment
relationship with SCI, and 2) whether that information was (in fact) a trade secret.
Because it is dispositive of the issue before us, we will begin by addressing those
questions ultimately to determine whether Hanneman’s trade-secret-
misappropriation claims involve a trade secret.
{¶33} Under OUTSA, a trade secret is defined to mean:
information, 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.
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(2) It is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
(Emphasis added.) R.C. 1333.61(D). See State ex rel. The Plain Dealer v. Ohio
Dept. of Ins., 80 Ohio St.3d 513, 524, 1997-Ohio-75, superseded by statute on other
grounds as stated in, State ex rel. Bressler v. Ohio State Univ., 89 Ohio St.3d 517-
518 (1997). The Supreme Court of Ohio recognized certain factors to consider
when analyzing a trade-secret claim:
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.
State ex rel. The Plain Dealer at 524-525. A business or possessor must take some
active steps to maintain its secrecy of a potential trade secret in order to enjoy
presumptive trade-secret status. Id. at 525, citing Water Mgt., Inc. v. Stayanchi, 15
Ohio St.3d 83, 85-86 (1984). Moreover, the burden to identify and demonstrate that
the material is included in categories of protected information under the statute falls
upon Hanneman in asserting trade-secret status. Id., citing Amoco Prod. Co. v.
Laird, 622 N.E.2d 912 (Ind. 1993). Here, Hanneman based its trade-secret-
misappropriation claims on Orians’s purported theft of the preneed customer
contracts and client information from the Siferd-Orians files.
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Orians attainment of preneed customer information
{¶34} Importantly, Hanneman’s “asset only” purchase of Siferd-Orians from
SCI on August 1, 2019 included:
(v) All preneed funeral merchandise and/or service agreements
generated in the operation of the Business that have not yet been
cancelled, transferred or fully serviced as the Effective Time (the
“Preneed Agreements”), including contract and accounts receivable
associated therewith;
(Doc. No. 134, Cross-appellants Ex. L). In addition to the preneed-service
agreements, Siferd-Orians maintained files associated with each preneed customer.
(See Orians Depo. at 101-102, 169-168). Amongst other things, each Siferd-Orians’
preneed-customer file included a client-information sheet (“CIS”) containing the
name and address of that specific preneed customer. (Orians Depo. at 169).
{¶35} After meeting with the Hanneman’s and prior to the asset-only sale,
Orians discovered he was being replaced as funeral director of the Lima facility.
(Kr. Hanneman Depo. at 143-144); (Orians Depo. at 166). Moreover, Orians was
notified by his direct supervisor (Beth Wagner) that he would not be retained by
Hanneman. (Orians Depo. at 156, 166-167); (Sizemore Depo. at 73). (See Doc.
No. 79, Ex. D, Orians Aff. at 2, ¶ 15, 16). Thereafter, Orians “copied” the CIS
(containing the preneed customer’s name and address) from each file for customers
with whom he had a “relationship” (i.e., family members, friends, and colleagues).
(Orians Depo. at 167-169, 172, 198, 205). While it is not exactly clear what
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information Orians “copied”, Hanneman testified at his deposition that Orians
“copied” the preneed contract information to get the names of preneed customers.
(Kr. Hanneman Depo. 169-172, 188, 192-195, 285). However, Hanneman
conceded that he did not see Orians “copy” any files. (Kr. Hanneman Depo. 189,
192-195, 285).
{¶36} After learning that he would not be hired by Hanneman, Orians
testified that he contacted Gary Kill at Chiles-Laman to let him know that he was
looking for a job. (Kill Depo. at 62, 75-78); (Orians Depo. at 172). Thereafter,
Orians was interviewed and ultimately offered a position with Chiles-Laman based
on his credentials, longevity in the community, and likeability. (Laman Depo. at
54-68); (Orians Depo. at 174-175). Importantly, Orians never discussed the preneed
contracts during his interview nor was his compensation package tied to the
acquisition of Hanneman’s preneed customers. (Kr. Hanneman Depo. at 285); (Kill
Depo. at 86); (Laman Depo. at 91-94); (Orians Depo. at 178, 186).
{¶37} Just prior to the sale of the funeral home, Orians received a severance
package from Siferd-Orians that included a confidentiality agreement. (Orians
Depo. at 122, 199-201). Pursuant to the terms of the severance package, Orians
destroyed the information he “copied” from Siferd-Orians files. (Orians Depo. at
199). (See Laman Depo. at 103). However, after assuming his new position at
Chiles-Laman, Orians sent out letters (on Chiles-Laman letterhead) to some preneed
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customers of his previous employer. (Laman Depo. 109-114); (Doc. No. 79, Ex. D,
Orians Aff. at 3, ¶ 22); (Orians Depo. at 178-188, 198). Orians testified that the
letters were generated based upon his memory and not the CIS. (Orians Depo. at
198-199).
{¶38} The trial court determined as a matter of law that the information
Orians “copied” was not a trade secret because Hanneman failed to satisfy the first
prong of the statute (i.e., that the information was not “readily ascertainable by
proper means[,] by other persons”). (Doc. No. 142). See R.C. 1333.61(D)(1). See
also State ex rel. The Plain Dealer, 80 Ohio St.3d at 524.
{¶39} Indeed, on August 28, 2019, Hanneman submitted (with its change-in-
ownership application to the Ohio Board of Embalmers and Funeral Directors, a
report generated by the American Memorial Life Insurance Company (“AMLIC”),
that included a list of the active and inactive preneed-contract policies for the former
Siferd Orians Funeral Home.3 (See Doc. No. 119, Def. Ex. 2, Williams Aff. ¶ 3);
(Doc. No. 124, Sealed Ex. F). Cross-appellants obtained a copy of Hanneman’s
application (including the AMLIC report) through a public-record request. The
report contained a total of 238 preneed contracts from Siferd-Orians.4 (Id.). The
3
This report included significantly more information than the CIS. Specifically, it included the policy, name,
plan description, issue date, face amount, current death benefit, total premiums paid, total disbursements,
total loan activity, status, and term dates for all the preneed customers. (Doc. No. 124, Sealed Ex. F).
4
Since this appeal was filed, R.C. 149.43 (was amended by 2021 Am.Sub.H.B. No. 110, 2021 Ohio Laws
File 30, effective September 30, 2021 to April 28, 2022) excluding “[a] preneed funeral contract, as defined
in section 4717.01 * * * and contract terms and personally identifying information of a preneed funeral
contract, that is contained in a report submitted by or for a funeral home to the board of embalmers and
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information obtained in this report also included similar information contained in
the CIS forms, the names of the preneed customers. (See id.).
{¶40} Thus, under the specific facts and circumstances of this case, we agree
with the trial court and conclude that the information “copied” by Orians from the
CIS form did not constitute a trade secret. Accordingly, Hanneman’s trade-secret-
misappropriation claims are without merit.
{¶41} Consequently, and based on our conclusion that the information
“copied” and later destroyed by Orians did not constitute a trade secret under R.C.
1333.61(D), we conclude that there is no genuine issue of material fact that cross-
appellants misappropriated any trade secrets. Therefore, the trial court could not err
by granting summary judgment in favor of cross-appellants as to Hanneman’s trade-
secret-misappropriation claims.
{¶42} Cross-appellants allege in their first cross-assignment of error that the
trial court erred by determining that the Hanneman’s tort claims were not preempted
by OUTSA under R.C. 1333.67(A). As a result of our conclusion (under
Hanneman’s first assignment of error as to its trade-secret-misappropriation claims)
that the information “copied” by Orians is not a trade secret, Hanneman’s common-
funeral directors under division (C) of section 4717.13, division (J) of section 4717.31, or section 4717.41”
from the definition of a “[p]ublic record” under R.C. 149.43(A)(1). R.C. 149.43(A)(1)(nn) (Sept. 30, 2020-
Apr. 28, 2022). Compare with R.C. 149.43(A)(1) (Apr. 8, 2019-Oct. 16, 2019) (containing no previous
exclusion for preneed funeral contracts, terms, and personally identifying information and the required report
from the definition of a public record).
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law-tort claims cannot be displaced. Accordingly, we conclude that the cross-
appellants first cross-assignment of error is also without merit. Therefore, the trial
court did not err by overruling the summary judgment request.
{¶43} Accordingly, Hanneman’s first assignment of error and cross-
appellants’ first cross-assignment of error are overruled.
Common-Law-Tort Claims
{¶44} In its third assignment of error, Hanneman asserts that the trial court
erred by granting summary judgment in favor of cross-appellants as to its common-
law-tort claims because the trial court determined that there were no genuine issues
of material fact as to damages. Specifically, Hanneman argues that cross-appellants
tortuously interfered with its (recently acquired) preneed contracts and business
relationships, and that, Orians wrongfully exercised dominion over the CIS form
contained within each preneed file.
Tortious Interference with Contracts & Business Relationships:
{¶45} A tortious interference with a contract ensues “when a person, without
a privilege to do so, induces or otherwise purposely causes a third person * * * not
to perform a contract with another.” Gentile v. Turkoly, 7th Dist. Mahoning No. 16
MA 0071, 2017-Ohio-1018, ¶ 23, quoting A & B-Abell Elevator Co. v.
Columbus/Cent. Ohio Bldg. & Constr. Trades Council, 73 Ohio St.3d 1, 14 (1995);
Total Quality Logistics, LLC v. Alliance Shippers, Inc., 12th Dist. Clermont No.
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CA2020-06-031, 2021-Ohio-781, ¶ 78. The elements of tortious interference with
a contract are:
1) the existence of a contract, 2) the defendant’s knowledge of a
contract, 3) the defendant’s intentional procurement of the contract’s
breach, 4) the lack of justification, and 5) the resulting damages from
that breach.
(Emphasis added.) Id., citing Fred Siegel Co., L.P.A. v. Arter & Hadden, 85 Ohio
St.3d 171 (1999), paragraph one of the syllabus.
{¶46} Conversely, “[t]he tort of interference with a business relationship
occurs when a person, without privilege to do so, induces or otherwise purposefully
causes a third person not to enter into or continue a business relationship with
another.” Id. at ¶ 24, quoting DK Prods., Inc. v. Miller, 12th Dist. No. CA2008-05-
060, 2009-Ohio-436, ¶ 9, citing Diamond Wine & Spirits, Inc. v. Dayton Heidelberg
Dist. Co., 148 Ohio App.3d 596, 2002-Ohio-3932, ¶ 23 (3rd Dist.). The elements
of this tort are:
(1) the existence of a prospective business relationship; (2) the
wrongdoer’s knowledge thereof; (3) an intentional interference
causing a breach or termination of the relationship; and (4) damages
resulting therefrom.
(Emphasis added.). Id., citing First-Knox Natl. Bank v. MSD Properties, Ltd., 5th
Dist. Knox No. 15CA6, 2015-Ohio-4574, ¶ 19. “Tortious interference with a
business relationship does not require the breach of contract, rather it is sufficient
to prove that a third party does not enter into or continue a business relationship
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with the plaintiff.” Id., citing Magnum Steel & Trading, LLC v. Mink, 9th Dist. Nos.
26127 and 26231, 2013-Ohio-2431, ¶ 10.
Conversion:
{¶47} Conversion is “the wrongful exercise of dominion over property to the
exclusion of the rights of the owner, or withholding it from his possession under a
claim inconsistent with his rights.” Joyce v. Gen. Motors Corp., 49 Ohio St.3d 93,
96 (1990). To prevail on a claim for conversion, a plaintiff must prove the following
elements: (1) the plaintiff’s ownership or right to possess the property at the time of
the conversion; (2) the defendant’s conversion by a wrongful act or disposition of
plaintiff’s property; and (3) damages. (Emphasis added.) Kuvedina, LLC v.
Cognizant Tech. Sol., 946 F. Supp. 2d 749, 761 (S.D. Ohio 2013), citing Haul Trans.
of VA, Inc. v. Morgan, 2d Dist. Montgomery No. CA 14859, 1995 WL 328995, at
*3 (June 2, 1995). “When a defendant to a conversion claim moves for summary
judgment, the court should grant the motion if the plaintiff fails to produce evidence
on any of” these three elements. Minix v. Collier, 4th Dist. Scioto No. 97CA2523,
1998 WL 154540, at *4 (Mar. 31, 1998).
{¶48} Because it is dispositive of all of Hanneman’s common-law-tort
claims, we need only address the element of damages. It is evident that a preneed
contract has value. However, its value is dependent on a variety of factors such as,
the age of the customer at the time the preneed contract is underwritten, whether the
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preneed contract is unfunded or funded by a trust, insurance policy, or annuity5, who
ultimately provides the funeral services at-need, and inflation at the time the services
are rendered. (Kr. Hanneman Depo. at 160-161, 169-170, 255); (Laman Depo. at
26-27, 35, 44-48); (Doc. No. 79, Ex. D, Orians Aff. at 2, ¶ 9, 10); (Orians Depo. at
39, 70). Here, Hanneman presented no evidence of its lost profits as to any of its
common-law-tort claims. Further, deposition testimony reveals that the funeral
home receives nothing from the preneed-contract formation. (Kr. Hanneman Depo.
at 112, 160-161, 170). Rather, the funeral home receives funds at a future date “if
we provide the service” because the funeral home is paid for the services that are
effectuated at-need. (Id.).
{¶49} Even if one could determine the actual value of a preneed contract at
any given point in time based on some of the variables listed above, the valuation is
still speculative because it is subject to other variables such as inflation and
portability (both of which impact the decline of the purchasers purchasing power in
relation to the evolving prices of goods and (in this case) services for a particular
period of time). Thus, any damage calculation is purely theoretical until the preneed
funeral contract is actually realized when a preneed customer dies. (See Doc. No.
79, Appendices 1, 2, 3, 4, 5). See also R.C. 4717.01, 4717.31, 4717.32, 4717.34,
4717.35. Importantly, Hanneman failed to establish the element of damages.
5
Importantly, all the preneed funeral contracts at issue under the facts before were funded by insurance.
(Doc. No. 79, Ex. D, Orians Aff. at 2, ¶ 9).
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{¶50} In cross-appellants’ second cross assignment of error, they assert that
the trial court erred by entering summary judgment on behalf of Hanneman as to
their conversion claim when neither party had requested summary judgment as to
their claim.
{¶51} Under certain circumstances, a trial court that denies a motion for
summary judgment can grant summary judgment to the opposing party even if that
party did not file a cross-motion for summary judgment. Crum v. Yoder, 7th Dist.
Monroe No. 20 MO 0005, 2020-Ohio-5046, ¶ 25, citing Salem Community Hosp. v.
Sankovic, 7th Dist. Columbiana No. 96-CO-91 (Dec. 31, 1997). The entry of
summary judgment under Civ.R. 56 against the movant does not prejudice the
movant’s due process rights “where all the evidence material to the issue being
litigated is before the court, and the record shows that no genuine issue as to any
material fact exists and that the nonmoving party is entitled to judgment as a matter
of law.” Houk v. Ross, 34 Ohio St.2d 77 (1973), paragraph one of syllabus
(upholding the appellate court’s grant of summary judgment for the non-movant
where all parties submitted material evidence to the court and the issue was
sufficiently argued to show there existed no genuine issue as to any material fact).
Notably, and like Hanneman, cross-appellants presented no evidence of any lost
profits.
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{¶52} Because of our determinations as to Hanneman’s second assignment
of error, and based on our de novo review of the record, there is no genuine issue of
material fact that Hanneman or cross-appellants presented evidence of anything
other than speculative damages as to their common-law-tort claims. Therefore, the
trial court did not err by granting summary judgment in favor of cross-appellants as
to Hanneman’s tortious interference with contracts and business relationships and
Orians as to Hanneman’s conversion claim. Moreover, the trial court did not err by
granting summary judgment in favor of Hanneman as to cross-appellants conversion
claim.
{¶53} Therefore, Hanneman’s third assignment of error and cross-appellants
second cross-assignment of error are overruled.
Defamation Claim
{¶54} In his fifth assignment of error, Hanneman claims that the trial court
erred by granting summary judgment in favor of Orians as to its defamation claim
because the definition of “force” is false, and it does not have an innocent
interpretation. In this case, Hanneman claimed that Orians defamed it by stating
that Hanneman “forced” him to find new employment.
{¶55} The determination of whether words are defamatory is a question of
law, and thus summary judgment is appropriate in defamation actions. Heidel v.
Amburgy, 12th Dist. Warren No. CA2002-09-092, 2003-Ohio-3073, ¶ 11, citing
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Vail v. The Plain Dealer Publishing Co., 72 Ohio St.3d 279, 280, 1995-Ohio-187,
cert. denied, 516 U.S. 1043, 116 S.Ct. 700 (1996). In order to survive summary
judgment in an action involving defamation, “the plaintiff must make a sufficient
showing of the existence of every element essential to his or her case.” Id.{¶56} “A defamatory statement expressed in a writing, a picture, a sign, or
an electronic broadcast is considered libel.” Wilson v. Harvey, 8th Dist. Cuyahoga
No. 85829, 2005-Ohio-5722, ¶ 17. Because the facts before us involve writings, we
must determine whether the defamatory statements are libelous. Libel is generally
defined “as a false written publication, made with some degree of fault, reflecting
injuriously on a person’s reputation, or exposing a person to public hatred,
contempt, ridicule, shame or disgrace, or affecting a person adversely in his or her
trade, business or profession.” A & B-Abell Elevator Co., Inc., 73 Ohio St.3d at 7.
{¶57} To prevail on a libel claim, a plaintiff must prove five elements: “(1)
a false and defamatory statement; (2) about plaintiff; (3) published without privilege
to a third party; (4) with fault of at least negligence on the part of the defendant; and
(5) that was either defamatory per se or caused special harm to the plaintiff.”
Gosden v. Louis, 116 Ohio App.3d 195, 206 (1996). Jacobs v. Budak, 11th Dist.
Trumbull No. 2002-T-0088, 2004-Ohio-522, ¶ 50.
{¶58} “Libel per se means libel of itself, or upon the face of a publication,
whereas libel per quod is libel by an interpretation, through an innuendo, between
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an innocent or harmless meaning and a libelous one.” Becker v. Toulmin, 165 Ohio
St. 549, 556 (1956). “If a publication can by innuendo be construed to be either
nonlibelous or libelous, the question may be submitted to a jury provided special
damages have been pleaded and proved by the one claiming libel.” Id. “There can
be no maintenance of an action for libel per quod in the absence of proof of special
damages.” Id.{¶59} Whether the statement is one of fact or of opinion is a question of law
for the court to decide. Heidel, 2003-Ohio-3073, at ¶ 15, citing Vail, 72 Ohio St.3d
at 281. In making this determination, the courts use a “totality of the
circumstances” test. Scott v. News-Herald, 25 Ohio St.3d 243 (1986), paragraph
one of the syllabus, overruling, Milkovich v. News-Herald, 15 Ohio St.3d 292(1984); Heidel at ¶ 15, citing Vail, 72 Ohio St.3d at 281. This test comprises four
parts: (1) the specific language used; (2) whether the statement is verifiable; (3) the
general context within which the statement is made; and (4) the broader context
within which the statement appeared. Scott at 250; Heidel at ¶ 15; Vail at the
syllabus. “This analysis is not a bright-line test, but does establish parameters within
which each statement or utterance may stand on its own merits rather than be
subjected to a mechanistic standard.” Vail at 282. This totality-of-the-
circumstances test “‘can only be used as a compass to show general direction and
not a map to set rigid boundaries.’” Id., quoting Scott at 250. “Furthermore, the
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standard must be fluid. Every case will present facts that must be analyzed in the
context of the general test. Each of the four factors should be addressed, but the
weight given to any one will conceivably vary depending on the circumstances
presented.” Id. Additionally, “[a]ll four factors of Ohio’s test for distinguishing a
statement of fact from an opinion depend on the reasonable reader’s perception of
the statement–not on the perception of the publisher.” McKimm v. Ohio Elections
Comm., 89 Ohio St.3d 139, 144 (2000), citing Vail at 282-283. Otherwise, the
author could escape liability by advancing a harmless, subjective interpretation of
the statements made. Id. at 145.
{¶60} However, since it is dispositive of Hanneman’s fifth assignment of
error, we will focus primarily on the first part of the test–the specific language used.
In making a determination under this first part of the test, a court must consider
whether the language used “‘lacks precise meaning and would be understood by the
ordinary reader for just what it is–one person’s attempt to persuade public opinion.’”
Heidel at ¶ 20, quoting Vail at 282-283. If the language is loosely definable or may
be interpreted in various ways, that language will generally not support a cause of
action for defamation. Id., citing Wampler v. Higgins, 93 Ohio St.3d 111, 129
(2001). The main concern is with the common meaning of the statement. Scott at
250.
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{¶61} Here, the record reveals that Orians sent out letters to former Siferd-
Orians preneed customers. (Doc. No. 79, Def. Ex. D, Orians Aff. at ¶). Importantly,
only about half of the letters involved the language cross-appellants argue is
actionable as defamatory. (Doc. No. 79, Def. Ex. B); (Doc. No. 119, Pl. Ex. 35).
Specifically, the language cross-appellants allege are defamatory statements in this
case is that Orians was “forced to find new employment” when Siferd-Orians was
sold to “an out of town owner”. (Emphasis added.) (Id.); (Id.). Important to this
discussion, some letters stated that Orians was “not retained” or “[his] employment
came to an end”. (Id.).
{¶62} Significantly, the trial court determined that as a matter of fact and law
that Orians’s statements were not false, and further, at the very least, his terminology
was susceptible to an innocent interpretation. (Doc. No. 142). We agree.
{¶63} Here, Orians used the term “forced” as a transitive verb to mean that
(he) was effected by the actions of Hanneman as evidenced by the variations he used
in his written letters. Such wording is susceptible to innocent interpretation.
{¶64} Hence, there is no genuine issue of material fact that Orians’ made
false and defamatory statements about Hanneman in his (Orians) letters to
Hanneman’s preneed customers. Therefore, the trial court did not err by granting
summary judgment in favor of Orians as to Hanneman’s defamation claim.
{¶65} Accordingly, Hanneman’s fifth assignment of error is overruled.
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Hanneman’s Ratification Claim
{¶66} Hanneman argues in its fourth assignment of error that the trial court
erred by granting summary judgment on its ratification claim against Chiles-Laman
for Orians’s actions.
{¶67} “A principal ratifies the unauthorized act of his agent if the ‘principal,
with full knowledge of the facts, conducts himself in a way which manifests his
intention to approve an earlier act performed by his agent which did not bind him.’”
Bailey v. Midwestern Ent., Inc., 103 Ohio App.3d 181, 185 (10th Dist.1995),
quoting Karat Gold Imports, Inc. v. United Parcel Serv., Inc., 62 Ohio App.3d 604,
611 (1989). Knowledge need not be actual; rather, the knowledge component of
ratification also includes what the principal should have known. Clear Creek Pshp.
v. LeBeau, 10th Dist. Franklin Nos. 97APE04-568 and 97APE04-569, 1998 WL
212859, *5 (Apr. 28, 1998). In addition, “[r]atification by the principal can be
demonstrated by the retention of the benefits of the transaction.” Chevrolet v.
Calhoun, 10th Dist. Franklin No. 03AP-816, 2004-Ohio-1006, ¶ 19. With retention
of the benefit comes retention of liability. Rambacher v. Staton, 4th Dist. Lawrence
No. 1335, 1979 WL 206868, at *2 (Oct. 12, 1979) (citation omitted). Generally,
whether ratification occurred is a question of fact. See Bailey at 185. However, if
the facts establish each element and they are uncontested, ratification is a question
of law. Karat Gold Imports, Inc. at 612 citing Mountain States Waterbed
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Distributors, Inc. v. O.N.C. Freight Systems Corp., 44 Colo.App. 433, 614 P.2d 906(1980) and Annotation, 15 A.L.R.2d 807, 813 (1951).
{¶68} Significantly, Hanneman is unable to establish the elements of
ratification in light of our decision to overrule Hanneman’s first, second, third, and
fifth assignments of error and cross-appellants’ first and second cross assignment of
error. Moreover, “Ohio does not recognize an independent cause of action for
ratification”. McKee v. McCann, 8th Dist. Cuyahoga No. 104956, 2017-Ohio-4072,
¶ 50. Therefore, we decline to address Hanneman’s fourth assignment of error on
the basis that it is rendered moot by our prior determinations. App.R. 12(A)(1)(c);
McKee. See MacDonald v. Webb Ins. Agency, Inc., 3d Dist. Allen No. 1-15-27,
2015-Ohio-4623, ¶ 41.
{¶69} Based on the foregoing, Hanneman’s first, second, third, and fifth
assignments of error and cross-appellants first and second cross assignments of error
are overruled, and Hanneman’s fourth assignment of error is rendered moot by those
determinations. The judgment of the Allen County Common Pleas Court is
affirmed.
Judgment Affirmed
MILLER, J. and HENDRICKSON, J., concur.
Judge Robert A. Hendrickson from the Twelfth District Court of Appeals
sitting by assignment of the Chief Justice of the Supreme Court of Ohio.
/jlr
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