United Young People Assn. v. Ohio Expositions Comm. ( 2016 )

[Cite as United Young People Assn. v. Ohio Expositions Comm., 2016-Ohio-7062.]
THE UNITED YOUNG PEOPLE Case No. 2015-00262
ASSOCIATION
Judge Patrick M. McGrath
Plaintiff Magistrate Holly True Shaver
v. DECISION
OHIO EXPOSITIONS COMMISSION,
et al.
Defendants
{¶1} On June 7, 2016, defendants filed a motion for summary judgment pursuant
to Civ.R. 56(B). On June 21, 2016, plaintiff filed a response. On June 28, 2016,
defendants filed a reply in support of their motion, and a motion for leave to file the
same, which is GRANTED, instanter. The motion for summary judgment is now before
the court on a non-oral hearing pursuant to L.C.C.R. 4(D).
{¶2} Civ.R. 56(C) states, in part, as follows:
{¶3} “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. A summary judgment shall not be rendered unless it appears from
the evidence or stipulation, and only from the evidence or stipulation, that reasonable
minds can come to but one conclusion and that conclusion is adverse to the party
against whom the motion for summary judgment is made, that party being entitled to
have the evidence or stipulation construed most strongly in the party’s favor.” See also
Gilbert v. Summit County, 104 Ohio St. 3d 660, 2004-Ohio-7108, citing Temple v. Wean
United, Inc. (1977), 50 Ohio St. 2d 317.
Case No. 2015-00262 -2- DECISION
{¶4} Plaintiff, United Young People Association (UYPA), is a nonprofit
corporation that provides janitorial services and is certified in Ohio as a Community
Rehabilitation Program (CRP) as defined in R.C. 125.60. As such, plaintiff employs
people with work-limiting disabilities. Pursuant to R.C. 125.603(B), defendant,
Department of Administrative Services (DAS), through its Office of Procurement from
Community Rehabilitation Programs (OPCRP), entered into a contract with plaintiff to
perform janitorial services at the Ohio Exposition Center (OEC), a participating state
agency, from May 1, 2014 through June 30, 2017. (Defendants’ Exhibit A.) Timothy
Ferguson, owner of UYPA, was the “contractor’s contact” per the contract documents.
(Id. p. 2). The contract documents included the “Mandatory Contract for Janitorial
Services: Ohio Expo Center” (2 pages); the “State of Ohio DAS General Services
Division OPCRP Standard Contract Terms and Conditions” (10 pages); and the
“Specifications and Requirements.” (11 pages) (Id.)
{¶5} UYPA began performing services pursuant to the contract on May 1, 2014.
According to UYPA, it “substantially complied” with the terms of the contract, but on
February 25, 2015, DAS issued a letter stating that the contract would be terminated,
effective March 31, 2015, for “persistent default” as set forth in Section I(C)1(c) of the
contract. (Defendants’ Exhibit B.) In the letter, Ronald Rowland, Procurement Manager
for DAS, states:
{¶6} “Specifically, since its inception, the contract has had multiple Complaint to
Vendor (CTV) forms filed. On July 15, 2014, the first of these documented that the
United Young Peoples Association (UYP) failed to properly staff restrooms during the
Goodguys Car Show resulting in poor cleanliness within the Expo’s restrooms. On the
first day of the Ohio State Fair, July 23, another CTV was filed documenting failure
again to maintain restroom cleanliness. On July 29 and 31 CTVs were filed
documenting failure to properly clean and maintain the restrooms in the Expo Center’s
Administration Building. The problems indicated within these CTVs were subsequently
Case No. 2015-00262 -3- DECISION
cured. However, these as well as multiple additional complaints documented by CTVs
constitute persistent defaults to the contract.” (Id.)
{¶7} Plaintiff asserts that defendants failed to comply with the proper procedure
set forth in Section S-14 of the contract prior to termination. Specifically, plaintiff asserts
that Andrew Westhoff, OEC’s Facility Manager, sent CTV forms to DAS without giving
plaintiff proper notice or the opportunity to cure the problems he complained of. Plaintiff
also argues that Westhoff falsified the complaints upon which the CTV forms were
based. In essence, plaintiff asserts that DAS could not terminate the contract if plaintiff
cured any performance problems in a timely manner. Plaintiff also asserts that
defendant, OEC, has been unjustly enriched by labor and materials that plaintiff
provided without payment.
{¶8} In their motion, defendants assert that they are entitled to summary
judgment for a number of reasons. First, defendants assert that OEC was not a party to
the contract, and, therefore, any breach based upon conduct by OEC is not actionable.
Second, defendants assert that DAS complied with the applicable termination provisions
in the contract. Finally, defendants assert that plaintiff has failed to state a claim for
unjust enrichment.
{¶9} To recover upon a breach of contract claim, plaintiff must prove “the
existence of a contract, performance by the plaintiff, breach by the defendant, and
damage or loss to the plaintiff.” Nilavar v. Osborn, 137 Ohio App. 3d 469, 483 (2nd
Dist.2000). In order to prove a breach by defendants, plaintiff must show that
defendants “did not perform one or more of the terms of a contract.” Little Eagle Props.
v. Ryan, 10th Dist. Franklin No. 03AP-923, 2004-Ohio-3830, ¶ 15. The construction of
written contracts is a matter of law. Alexander v. Buckeye Pipe Line Co., 53 Ohio St. 2d
241, paragraph one of the syllabus (1978). The cardinal purpose for judicial
examination of any written instrument is to ascertain and give effect to the intent of the
parties. Aultman Hosp. Assn. v. Community Mut. lns. Co., 46 Ohio St. 3d 51, 53 (1989).
Case No. 2015-00262 -4- DECISION
“The intent of the parties to a contract is presumed to reside in the language they chose
to employ in the agreement.” Kelly v. Medical Life Ins. Co., 31 Ohio St. 3d 130,
paragraph one of the syllabus (1987). “Common words appearing in a written
instrument will be given their ordinary meaning unless manifest absurdity results, or
unless some other meaning is clearly evidenced from the face or overall contents of the
instrument.” Alexander, supra, paragraph two of the syllabus.
{¶10} The language in the contract shows that DAS employed plaintiff as a CRP.
(Mandatory Contract, page 1.) Although the contract was for janitorial services to be
performed at the Ohio Expo Center, OEC was not a party to the contract. Rather, OEC
was a “participating state agency” as set forth in R.C. 125.02, et seq., and as stated in
sections S-2 and S-14 of the contract. In addition, section S-6 states that the contract
can be renewed “solely at the discretion of DAS for a period of one month” or “by mutual
agreement between the contractor and DAS.”
{¶11} Although OEC was not a party to the contract, reasonable minds can
conclude that OEC was an intended third-party beneficiary. “’[A] beneficiary of a
promise is an intended beneficiary if recognition of a right to performance in the
beneficiary is appropriate to effectuate the intention of the parties and * * * the
circumstances indicate that the promisee intends to give the beneficiary the benefit of
the promised performance.’” Huff v. First Energy Corp., 130 Ohio St. 3d 196, 2011-
Ohio-5083, ¶ 10, quoting Restatement of the Law 2d, Contracts (1981), Section
302(1)(b). Although the agreement does not need to expressly identify the intended
third-party beneficiary, the parties must enter into the agreement with the intent to
benefit that individual. Bungard v. Dept. of Job & Family Servs., 10th Dist. Franklin No.
07AP-447, 2007-Ohio-6280, ¶ 23. An intended third-party beneficiary “acquires rights
under the contract as well as the ability to enforce the contract once those rights have
vested.” Reif v. Wagenbrenner, 10th Dist. Franklin No. 10AP-948, 2011-Ohio-3597, ¶
32.
Case No. 2015-00262 -5- DECISION
{¶12} Section S-3 of the contract states that in consideration for the contractor’s
performance, each participating state agency agreed to pay the contractor directly at the
rate specified in the contract. In addition, OEC was charged with administration and
monitoring of UYPA’s performance of cleaning and maintaining the restrooms on OEC’s
premises. Construing the evidence most strongly in favor of plaintiff, reasonable minds
can conclude only that OEC was an intended third-party beneficiary of the contract.
Therefore, defendants’ argument that plaintiff may not recover against OEC under a
breach of contract action is not-well taken.
{¶13} Plaintiff argues that defendants breached the contract by failing to comply
with Section S-14 of the Supplemental Contract Terms and Conditions.
{¶14} Section S-14 of the Supplemental Contract Terms and Conditions states:
{¶15} “Contract Compliance. The participating state agency [OEC] or
cooperative purchasing partner is responsible to administer and monitor the
Contractor’s performance and compliance with the terms, conditions and specifications
of the Contract. Therefore the Contractor must respond to complaints about
performance of the obligations in this Contract to such entity in a timely manner.”
(Emphasis added.)
{¶16} “Any time a participating state agency or cooperative purchasing partner
observes any performance or compliance issues, they shall do the following:
“1. Timely document the compliance or performance issue.
“2. Convey the issue to the Contractor and demand immediate correction.
“3. Document the Contractor corrective actions or lack thereof.
{¶17} “If the Contractor fails to correct satisfactorily the performance or
compliance issue, the participating state agency or cooperative purchasing partner shall
notify DAS in the form of a ‘Complaint to Vendor’ (CTV). At the point, DAS may employ
all available options and remedies, including termination of the Contract if necessary to
resolve the Contractor’s continued nonperformance or noncompliance. Failure of the
Case No. 2015-00262 -6- DECISION
Contractor to respond to a CTV may result in default of the Contractor, and may be
cause for termination and debarment.”
{¶18} Plaintiff argues that Andrew Westhoff, OEC’s Facility Manager, sent CTV
forms to DAS without giving plaintiff proper notice or the opportunity to cure the
problems he complained of. Plaintiff also argues that Westhoff falsified the complaints
upon which the CTV forms were based. In essence, plaintiff asserts that OEC should
send a CTV to DAS only if the performance issue was not corrected, and that DAS
could not terminate the contract if plaintiff cured any performance problems in a timely
manner.
{¶19} However, the plain language of the contract contemplates termination even
if plaintiff cured multiple performance issues. Section I.C.1.c. of the Standard Contract
Terms and Conditions states:
{¶20} “1. Contract Termination. If Contractor fails to perform any one of its
obligations under this Contract, it will be in default and the State may terminate this
Contract in accordance with this section. The termination will be effective on the date
delineated by the State. (Emphasis added.)
{¶21} “c. Termination for Persistent Default. The State may terminate this
Contract by written notice to Contractor for defaults that are cured, but are persistent.
‘Persistent’ means three or more defaults. After the State has notified Contractor of its
third default, the State may terminate this Contract without providing Contractor with an
opportunity to cure, if Contractor defaults for a fourth time. The four defaults are not
required to be related to each other in any way.” (Defendants’ Exhibit A, p. 3.)
{¶22} Plaintiff’s duties under the Specifications and Requirements, Section IV,
page 2 included the following:
{¶23} “E. The awarded Contractor, and not the facility, is responsible for
resolving all housekeeping and restroom attendant related problems to the satisfaction
Case No. 2015-00262 -7- DECISION
of the facility. Failure to comply with the provisions set forth herein will result in the
initiation of the State of Ohio’s formal ‘Complaint to Vendor’ process.
{¶24} “F. The facility reserves the right to add, delete, or modify as needed any
of the housekeeping cleaning and sanitation expectations and frequencies set forth
herein as determined appropriate by the State. Maintaining the overall cleanliness of
the facility is paramount to this Contract.” (Emphasis added.)
{¶25} The contract also set forth additional cleaning requirements during the Ohio
State Fair and other special events. Id., pages 3-4.
{¶26} In support of their motion, defendants filed the deposition of Timothy
Ferguson, president of UYPA. Ferguson admitted that UYPA received the four CTV
forms that Rowland mentions in his letter. (Deposition of Ferguson, pgs. 22-23, lines 23-
25, 1.) However, Ferguson testified that Westhoff “falsified” the CTV forms. (Id., p. 23,
lines 2-4.) Ferguson testified that in July 2014, during the Goodguys car show,
Westhoff approached him and told him that as UYPA’s director, Westhoff expected
Ferguson to be “at every event from the beginning to the end, through the duration of all
of the events that take place at the Expo.” Id., p. 23. Ferguson then explained to
Westhoff that he could not be there the whole time, but his operation manager,
Denisesha Draper, who was second in charge would be there in his place. Id. p. 24.
Ferguson testified that he had to leave the Goodguys show to attend to other business.
When Ferguson returned, Westhoff confronted him and said, “You [were] gone. I told
you to be here.” Ferguson replied, “I told you I cannot be there at your beck and call,
but I have an operation manager.” Id., p. 24. According to Ferguson, after this
altercation, Westhoff told him that he would do everything in his power to make sure
that Ferguson lost the contract. Ferguson admitted that from July 2014 through
February 28, 2015, he received ongoing complaints about UYPA’s performance.
Although Ferguson disputes the veracity of Westhoff’s claims that there was poor
cleanliness of the restrooms, Ferguson admits that the CTVs that were sent to DAS
Case No. 2015-00262 -8- DECISION
complained of poor restroom cleanliness. Id., pgs. 65-66; Defendants’ Exhibit B.
Although plaintiff argues that it was not notified of its performance issues, Ferguson
admits in his deposition that he was notified of all four CTVs that were mentioned in the
letter.
{¶27} In opposition to defendants’ arguments, plaintiff filed the affidavit of
Ferguson, who avers in part:
{¶28} “11. OEC, via Andrew Westhoff filed numerous CTVs with DAS without
properly notifying Plaintiff of the alleged ‘performance or compliance issues.’
{¶29} “12. OEC, via Andrew Westhoff filed numerous CTVs with DAS within
hours of ‘observing’ said ‘performance or compliance issues’ and/or upon being advised
by unrelated parties with respect to alleged ‘performance or compliance issues.’
{¶30} “13. Anytime a compliance or performance issue was conveyed to Plaintiff
it was promptly and satisfactorily corrected.
{¶31} “14. Defendant OEC, however, would still submit CTV forms to DAS, even
though the performance and/or compliance issues had been satisfactorily corrected.
{¶32} “* * *
{¶33} “17. Andrew Westhoff falsified and/or made up complaints in an effort to
cause Plaintiff to lose its contract with Defendants.
{¶34} “* * *
{¶35} “20. As a result of Defendants’ conduct, Plaintiff has suffered damage
and/or loss. Plaintiff has lost the opportunity to complete the Contract and receive those
monies under the Contract.” (Plaintiff’s Exhibit A.)
{¶36} Even construing the evidence most strongly in plaintiff’s favor, the plain
language of the contract shows that plaintiff was obligated to maintain the restrooms to
the facility’s satisfaction. See Section IV, E and F, supra. Ferguson admits in his
deposition that Westhoff was upset with him for leaving the premises during the
Goodguys car show, because that was an important event where the restrooms needed
Case No. 2015-00262 -9- DECISION
to be maintained and cleaned throughout the day. Although Ferguson disputes that the
restrooms were dirty, he does admit that he received the CTV forms as indicated in the
letter, and ongoing complaints from July 2014 through February 2015. The plain
language of the contract allows DAS to terminate the contract if the contractor is in
persistent default, even when those defaults are cured. Section IV of the contract states
that the contractor is responsible for resolving all housekeeping and restroom attendant
related problems to the satisfaction of the facility.
{¶37} The language of the contract states that the contractor is in default if the
contractor fails to perform its duties under the contract. It is undisputed that special
events, such as the Ohio State Fair and the Goodguys car show required more attention
to the restrooms during those events. The restrooms did not meet the standard of
cleanliness desired by Westhoff during the Goodguys car show and the Ohio State Fair.
Therefore, the only reasonable conclusion is that plaintiff breached the contract when it
failed to properly clean and maintain the restrooms, to the satisfaction of OEC, which
resulted in CTVs being sent to DAS, and DAS was within its rights under the contract to
terminate its relationship with plaintiff for persistent default. Construing the evidence
most strongly in plaintiff’s favor, the only reasonable conclusion is that defendants did
not breach any provision of the contract. Therefore, defendants are entitled to summary
judgment as a matter of law on plaintiff’s claim of breach of contract.
{¶38} With regard to the unjust enrichment claim, defendant submitted an
affidavit of Wayne McCulty, Deputy Chief Procurement Officer for DAS, who avers that
he has personal knowledge concerning payments made to plaintiff for the services it
provided to OEC, and that plaintiff has been paid in full for the services that it
performed. (Defendant’s Exhibit B.) In response, plaintiff asserts that the affidavit is
unreliable; however, plaintiff does not specify what services it provided to OEC without
payment. Instead, Ferguson states in his affidavit that he has not been allowed to
Case No. 2015-00262 -10- DECISION
continue with the contract because of defendants’ termination thereof, and that is the
basis for his unjust enrichment claim.
{¶39} To prove a claim for unjust enrichment, a party must establish that it
conferred a benefit upon another, the other party knew of the benefit, and the other
party’s retention of the benefit would be unjust without payment. Hambleton v. R.G.
Barry Corp., 12 Ohio St. 3d 179, 183 (1984). However, “the doctrine of unjust
enrichment does not apply when a contract actually exists; it is an equitable remedy
applicable only when the court finds there is no contract.” Corbin v. Dailey, 10th Dist.
Franklin No. 08AP-802, 2009-Ohio-881, ¶ 10, citing Hummel v. Hummel, 133 Ohio St.
520, 525-528 (1938). The only reasonable conclusion is that the parties’ relationship
was set forth in the contract documents; therefore, plaintiff’s claim for unjust enrichment
fails as a matter of law. In addition, plaintiff has not responded with any detail as to
what services OEC allegedly received and did not pay for in response to McCulty’s
affidavit.
{¶40} Civ.R. 56(E) states, in part: “When a motion for summary judgment is made
and supported as provided in this rule, an adverse 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. If the party does not so respond, summary judgment, if
appropriate, shall be entered against the party.”
{¶41} Construing the evidence most strongly in favor of plaintiff, reasonable
minds can only conclude that plaintiff has failed to state a claim for unjust enrichment.
Accordingly, judgment shall be rendered in favor of defendants.
PATRICK M. MCGRATH
Judge
[Cite as United Young People Assn. v. Ohio Expositions Comm., 2016-Ohio-7062.]
THE UNITED YOUNG PEOPLE Case No. 2015-00262
ASSOCIATION
Judge Patrick M. McGrath
Plaintiff Magistrate Holly True Shaver
v. JUDGMENT ENTRY
OHIO EXPOSITIONS COMMISSION,
et al.
Defendants
{¶42} A non-oral hearing was conducted in this case upon defendants’ motion for
summary judgment. For the reasons set forth in the decision filed concurrently
herewith, defendants’ motion for summary judgment is GRANTED and judgment is
rendered in favor of defendants. All previously scheduled events are VACATED.
Defendants’ June 9, 2016 motion to compel, or, in the alternative, motion in limine is
DENIED as moot. Court costs are assessed against plaintiff. The clerk shall serve
upon all parties notice of this judgment and its date of entry upon the journal.
PATRICK M. MCGRATH
Judge
cc:
Anthony R. McGeorge Lee Ann Rabe
6902 Falling Meadows Drive Randall W. Knutti
Galena, Ohio 43021 Assistant Attorneys General
150 East Gay Street, 18th Floor
Columbus, Ohio 43215-3130
Brian K. Duncan
119 East Granville Street
Sunbury, Ohio 43074
Filed August 16, 2016
Sent To S.C. Reporter 9/29/16