United Gulf Marine, L.L.C. v. Continental Refining Co., L.L.C.

[Cite as United Gulf Marine, L.L.C. v. Continental Refining Co., L.L.C., 2019-Ohio-666.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
ALLEN COUNTY
UNITED GULF MARINE, LLC,
PLAINTIFF-APPELLEE, CASE NO. 1-18-35
v.
CONTINENTAL REFINING
COMPANY, LLC, OPINION
DEFENDANT-APPELLANT.
Appeal from Allen County Common Pleas Court
Trial Court No. CV 2017 0040
Judgment Affirmed in Part, Reversed in Part and Cause Remanded
Date of Decision: February 25, 2019
APPEARANCES:
Aaron L. Bensinger for Appellant
Anthony J. Hornbach for Appellee
Case No. 1-18-35
ZIMMERMAN, P.J.
{¶1} Defendant-appellant, Continental Refining Company, LLC (“CRC”),
appeals the June 13, 2018 judgment entry of the Allen County Court of Common
Pleas awarding $322,836.80 in attorney fees in favor of plaintiff-appellee, United
Gulf Marine, LLC (“UGM”). For the reasons that follow, we affirm in part and
reverse in part.
{¶2} In a previous appeal, this court recited much of the factual and
procedural background relevant to this case, and we will not duplicate those efforts
here. United Gulf Marine, LLC v. Continental Refining Co., LLC, 3d Dist. Allen
No. 1-17-40, 2017-Ohio-9083. In short, UGM alleged that CRC breached two
commercial contracts—the Transmix Agreement and the Naphtha Agreement.1 See
id. at ¶ 2. On December 18, 2017, we affirmed the judgment of the trial court
awarding summary judgment in favor of UGM as to Counts I and V of its second
amended complaint. Id. at ¶ 1.
{¶3} Relevant to this appeal, on September 13, 2017, UGM filed a motion
for attorney fees as to Count V of its second amended complaint. (Doc. No. 40).
CRC filed a memorandum in opposition to UGM’s motion for attorney fees as to
Count V on September 26, 2017. (Doc. No. 53). On October 4, 2017, UGM filed
1
In UGM’s second amended complaint, Counts I through IV relate to the Transmix Agreement and Counts
V and VI relate to the Naphtha Agreement. United Gulf Marine, LLC v. Continental Refining Co., LLC, 3d
Dist. Allen No. 1-17-40, 2017-Ohio-9083, ¶ 4.
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a reply to CRC’s memorandum in opposition to its motion for attorney fees as to
Count V. (Doc. No. 57). On October 24, 2017, the trial court stayed UGM’s motion
for attorney fees as to Count V pending the resolution of CRC’s appeal of the trial
court’s judgment awarding summary judgment in favor of UGM as to Counts I and
V. (Doc. No. 60).
{¶4} After this court affirmed the judgment of the trial court’s summary-
judgment award in favor of UGM as to Counts I and V, the trial court on December
22, 2017 granted summary judgment in favor of UGM on one of the remaining
counts of its second amended complaint—Count IV—and CRC’s second
counterclaim and denied summary judgment as to Count III of UGM’s second
amended complaint and CRC’s first counterclaim. (See Doc. Nos. 62, 73, 76). CRC
appealed the trial court’s judgment on January 4, 2018, but later dismissed its appeal
on March 26, 2018. (Doc. Nos. 79, 109). The case proceeded to a bench trial on
January 12 and 23, 2018. (See Doc. Nos. 93, 94). On February 27, 2018, the trial
court awarded judgment in favor of UGM as to Count III of its second amended
complaint and dismissed CRC’s first counterclaim. (Doc. No. 105).2
{¶5} After all of the outstanding claims were resolved, on March 23, 2018,
UGM filed a motion for attorney fees on the claims and counterclaims on which it
2
The trial court concluded that Counts II and VI—which alleged claims of unjust enrichment—were rendered
moot by its prior decision awarding summary judgment in favor of UGM as to Counts I and V. (See Doc.
No. 105).
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prevailed under the Transmix Agreement and renewed its motion for attorney fees
as to Count V under the Naphtha Agreement. (Doc. Nos. 106, 107). CRC filed
memoranda in opposition to UGM’s motions for attorney fees on April 5, 2018.
(Doc. Nos. 110, 111). After the parties exchanged a number of motions, the trial
court ultimately permitted UGM to file instanter its replies to CRC’s memoranda in
opposition to its motions for attorney fees. (See Doc. Nos. 112, 113, 114, 115, 116,
117, 118, 119, 121, 122, 123).
{¶6} On May 21, 2018, CRC filed a motion to strike UGM’s renewed motion
for attorney fees as to Count V alleging that its motion was denied by the trial court’s
judgment entry issued on February 27, 2018. (Doc. No. 125). On May 31, 2018,
UGM filed a memorandum in opposition to CRC’s motion to strike. (Doc. No.
128).
{¶7} After a hearing on May 21, 2018, the trial court on June 13, 2018
awarded UGM $322,836.80 in attorney fees. (Doc. No. 131).
{¶8} CRC filed its notice of appeal on June 29, 2018. (Doc. No. 134). It
raises one assignment of error for our review.
Assignment of Error
Plaintiff is Not Entitled to Any Attorney’s [sic] Fees.
{¶9} In its assignment of error, CRC argues that the trial court erred by
awarding UGM $322,836.80 in attorney fees. Specifically, CRC argues that (1)
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UGM failed to specifically plead for attorney fees; (2) the trial court improperly
reconsidered UGM’s motion for attorney fees under Count V as it relates to the
Naphtha Agreement; (3) the indemnity provision of the Transmix Agreement does
not apply to attorney fees; (4) the attorney-fee provisions of both contracts are
unenforceable; and (5) UGM failed to prove reasonable attorney fees.
Standard of Review
{¶10} “The decision to award attorney fees and the amount thereof are within
the discretion of the trial court.” Technical Constr. Specialties, Inc. v. New Era
Builders, Inc., 9th Dist. Summit No. 25776, 2012-Ohio-1328, ¶ 26, citing Cassaro
v. Cassaro, 50 Ohio App.2d 368, 373-374 (8th Dist.1976). Therefore, we review a
trial court’s determination regarding attorney fees for an abuse of discretion.
Brittner v. Tri-County Toyota, Inc., 58 Ohio St.3d 143, 146 (1991). An abuse of
discretion suggests the trial court’s decision is unreasonable, arbitrary, or
unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983).
Analysis
{¶11} “Attorney fees are generally not recoverable in contract actions.”
Technical Constr. Specialties, Inc. at ¶ 26, citing First Bank of Marietta v. L.C. Ltd.,
10th Dist. Franklin No. 99AP-304, 1999 WL 1262058, *8 (Dec. 28, 1999). “Such
a principle comports with the ‘American Rule’ that requires each party involved in
litigation to pay its own attorney fees in most circumstances.” Id., citing Sorin v.
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Bd. of Edn., 46 Ohio St.2d 177, 179 (1976). “As exceptions to that rule, recovery
of attorney fees may be permitted if (1) a statute creates a duty to pay fees, (2) the
losing party has acted in bad faith, or (3) the parties contract to shift fees.” Id., citing
McConnell v. Hunt Sports Ents., 132 Ohio App.3d 657, 699 (10th Dist.1999), citing
Pegan v. Crawmer, 79 Ohio St.3d 155, 156 (1997).
{¶12} In this case, CRC raises five arguments as to why the trial court abused
its discretion by awarding UGM attorney fees. In its first argument, CRC contends
that UGM failed to adequately plead for attorney fees. Specifically, CRC contends
that Ohio law requires parties to set “forth attorney’s [sic] fees as a distinct claim in
their pleadings * * *.” (Appellant’s Brief at 6). In support of its argument, CRC
directs us to three cases from our sister appellate districts: Jones v. McAlarney
Pools, Spas & Billiards, Inc., 4th Dist. Washington No. 07CA34, 2008-Ohio-1365,
Knight v. Colazzo, 9th Dist. Summit No. 24110, 2008-Ohio-6613, and Scott v.
Lyons, 11th Dist. Ashtabula No. 2008-A-0032, 2009-Ohio-1141. CRC’s argument
is misguided. Those cases address whether the court had jurisdiction to hear the
case, not whether the parties properly plead for attorney fees. Accordingly, we
reject CRC’s argument that UGM did not sufficiently plead for attorney fees.
{¶13} The caption of CRC’s second argument contends that attorney fees are
barred by the doctrine of res judicata. Stated another way, CRC contends that the
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trial court improperly reconsidered its denial of attorney fees relative to Count V
under the Naphtha Agreement. We agree.
{¶14} To determine whether the trial court improperly reconsidered its denial
of attorney fees as to Count V, we must first determine whether the trial court’s
February 27, 2018 judgment entry constitutes a final, appealable order. Contrary to
UGM’s argument on appeal (and the trial court’s conclusion in its June 13, 2018
judgement entry), the trial court’s February 27, 2018 judgment entry constitutes a
final, appealable order. See Knight at ¶ 9 (noting that because “a general request for
attorney fees included in a prayer for relief should not be elevated to the status of a
separate claim for relief,” entries that do not specifically defer attorney-fee
adjudication or do not defer the amount of fees after awarding attorney fees are final,
appealable orders), citing Jones at ¶ 12, citing R.C. 2505.02 and Civ.R. 54(B). In
its February 27, 2018 entry, in addition to disposing of the remaining claims of the
parties, the trial court specifically denied “all of plaintiff’s pending motions for
sanctions and attorney’s [sic] fees * * *.” (Doc. No. 105). At that time, the only
pending motion for attorney fees before the trial court was a motion for attorney
fees as to Count V under the Naphtha Agreement. (See Doc. Nos. 40, 105). In other
words, because UGM included its request for attorney fees as a general request in
its second amended complaint and because the trial court’s February 27, 2018
judgment entry did not defer attorney-fee adjudication or defer determining the
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amount of fees after awarding attorney fees, the February 27, 2018 judgment entry
is a final, appealable order.3 Accord Knight at ¶ 8-9 (concluding that the trial court’s
judgment entry constituted a final, appealable order because “Knight asserted two
non-statutory claims” for attorney fees in his complaint and the trial court’s entry
“makes no reference to the issue of attorney fees”).
{¶15} Subsequent to the trial court’s February 27, 2018 judgment entry,
UGM filed a motion seeking attorney fees as to the claims on which it prevailed
3
UGM also contends that the February 27, 2018 judgment entry is not a final, appealable order because it
did not decide all of the issues—namely, UGM’s January 17, 2017 motion for pre- and post-judgment interest
and the amount of sanctions the trial court previously awarded UGM in its December 4 and 27, 2017 entries—
or include a Civ.R. 54(B) certification. (See Doc. Nos. 71, 78, 97). We disagree. Based on the specific facts
and circumstances of this case, the pre- and post-judgment interest requested by UGM “is mechanical and
unlikely to produce a second appeal * * *.” State ex rel. White v. Cuyahoga Metro. Hous. Auth., 79 Ohio
St.3d 543, 546 (1997). Indeed, UGM requested pre- and post-judgment interest under R.C. 1343.03(A),
which, as UGM acknowledged, “‘automatically bestows a right to statutory interest as a matter of law on a
judgment, and does not leave any discretion to the trial court to deny such interest.’” (Doc. No. 97, quoting
Buchenroth v. Adkins, 3d Dist. Logan No. 8-3-17, 2014-Ohio-257, ¶ 10). Moreover, UGM asserted that it
was entitled to pre- and post-judgment interest pursuant to the rate agreed to by the parties in the contracts.
See Buchenroth at ¶ 10 (noting that R.C. 1343.03(A) “provides that a creditor is entitled to pre-judgment and
post-judgment interest at the statutory rate, ‘unless a written contract provides a different rate of interest in
relation to the money that becomes due and payable, in which case the creditor is entitled to interest at the
rate provided in that contract’”), quoting R.C. 1343.03(A). Thus, unlike the pre-judgment interest under R.C.
1343.03(C) at issue in Miller v. First Internatl. Fid. & Tr. Bldg., Ltd., the pre- and post-judgment interest
requested in this case does not require judicial fact-finding or the exercise of judicial discretion. 113 Ohio
St.3d 474, 2007-Ohio-2457, ¶ 7. Moreover, the outstanding imposition of the amount of sanctions the trial
court ordered in its December 4 and 27, 2017 entries does not prevent the trial court’s February 27, 2018
judgment entry from being a final, appealable order. See State ex rel. Corn v. Russo, 90 Ohio St.3d 551, 556
(2001) (noting that the imposition of costs, attorney fees, contempt actions, and Civ.R. 11 sanctions are not
judgments on the merits of an action; rather, those impositions require “the determination of a collateral issue:
whether the attorney has abused the judicial process, and, if so, what sanction would be appropriate” and that
“[s]uch a determination may be made after the principal suit has been terminated”); Dillon v. Big Trees, Inc.,
9th Dist. Summit No. 23831, 2008-Ohio-3264, ¶ 10 (“A motion for sanctions under Rule 11 of the Ohio
Rules of Civil Procedure creates a proceeding ancillary to and independent of the underlying case.”), citing
Vogel v. Shaw, 9th Dist. Summit No. 20007, 2001 WL 111576, *2 (Feb. 7, 2001), citing Risk Insurers v.
Lorenz Equip., 69 Ohio St.3d 576 (1994), Stevens v. Kiraly, 24 Ohio App.3d 211 (9th Dist.1985), and Baker
v. USS/Kobe Steel Co., 9th Dist. Lorain No. 98CA007151, 2000 WL 14044 (Jan. 5, 2000). Indeed, in its
motions to quash and strike, UGM requested that the trial court award it its fees and costs in preparing the
motions, respectively. (Doc. Nos. 65, 72). Moreover, UGM’s motion to strike specifically requested
judgment under Civ.R. 11. (Doc. No. 65).
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relative to the Transmix Agreement and renewed its motion seeking attorney fees
as to Count V. In other words, UGM did not directly appeal or file a Civ.R. 60(B)
motion as to the trial court’s denial of attorney fees as to Count V. Therefore, while
we conclude that UGM’s post-judgment motion requesting attorney fees relative to
the Transmix Agreement was properly before the trial court, we conclude that the
trial court was without jurisdiction to reconsider its denial of UGM’s request for
attorney fees as to Count V.4
{¶16} “The Rules of Civil Procedure do not provide for motions for
reconsideration; and therefore, ‘motions for reconsideration of a final judgment in
the trial court are a nullity.’” Miller v. Cass, 3d Dist. Crawford No. 3-09-15, 2010-
Ohio-1930, ¶ 44, citing Pitts v. Dept. of Transp., 67 Ohio St.2d 378, 379-380 (1981)
and Ham v. Ham, 3d Dist. Wyandot No. 16-07-04, 2008-Ohio-828, ¶ 15.
“Furthermore, any order that a trial court enters granting or denying any such motion
is also a legal nullity.” Id., citing Robinson v. Robinson, 168 Ohio App.3d 476,
2006-Ohio-4282, ¶ 17 (2d Dist.), citing Pitts at 381. See also id. (explaining that
“Civ.R.60(B), not a motion for reconsideration, is the proper way to bring to the
trial court’s attention its errors following a final judgment entry”), citing Reagan v.
4
In its brief, CRC raises an argument in a footnote that UGM waived its ability to collect attorney fees. (See
Appellant’s Brief at 9, fn. 5). However, based on our conclusion that UGM properly requested attorney fees
in its second amended complaint, CRC’s argument that that UGM waived its ability to collect attorney fees
because it failed to request such fees prior to the trial court’s final judgment entry is without merit. See
Internatl. Bd. of Electrical Workers, Local Union No. 8 v. Vaughn Industries, L.L.C., 116 Ohio St.3d 335,
2007-Ohio-6439, ¶ 17 (holding “that when attorney fees are requested in the original pleadings, a party may
wait until after entry of a judgment on the other claims in the case to file its motion for attorney fees”).
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Ranger Transp., Inc., 11th Dist. Portage Nos. 95-P-0123 and 95-P-0124, 1996 WL
494886, *3 (Aug. 9, 1996). For these reasons, UGM’s “renewed” motion for
attorney fees as to Count V is a nullity and the trial court’s judgment entry awarding
attorney fees as to Count V is likewise a nullity. See Bank of Am., N.A. v. Sullivan,
3d Dist. Allen No. 1-15-09, 2015-Ohio-2736, ¶ 16.
{¶17} The remainder of CRC’s assignment of error focuses on whether it is
contractually obligated to pay UGM’s attorney fees and the reasonableness of its
fees. However, based on our conclusion that the trial court’s judgment entry
awarding attorney fees as to Count V is a nullity, we need not address any arguments
relative to the parties’ contractual obligations regarding attorney fees or the
reasonableness of attorney fees under the Naphtha Agreement.
{¶18} As to the Transmix Agreement, CRC contends that it is not
contractually obligated to pay UGM attorney fees because the indemnity provision
“does not apply as an attorney’s [sic] fees provision * * * [because] the indemnity
clause at issue does not apply to direct disputes, but only to third party disputes”
and because the parties did not specifically negotiate the indemnity provision
contained in the Transmix Agreement. (Appellant’s Brief at 11).5 As an initial
matter, we must resolve CRC’s contention that, as a matter of Ohio law, indemnity
5
“The Supreme Court of Ohio has held that a trial court is not required to hold an evidentiary hearing on an
application for attorney fees.” Conway v. Conway, 11th Dist. Lake No. 2009-L-013, 2009-Ohio-6231, ¶ 30,
citing State ex rel. Chapnick v. E. Cleveland City School Dist. Bd. of Educ., 93 Ohio St.3d 449, 452 (2001)
and McPhillips v. United States Tennis Assn. Midwest, 11th Dist. Lake No. 2006-L-235, 2007-Ohio-3595, ¶
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provisions are limited to third-party disputes. CRC’s argument is misguided. See,
e.g., Heffner Investments, Ltd. v. Piper, 3d Dist. Mercer No. 10-07-09, 2008-Ohio-
2495, ¶ 51 (“‘Ohio law permits the enforcement of indemnity agreements.’”),
quoting Centennial Ins. Co. v. Cincinnati Ins. Co., 10th Dist. Franklin No. 90AP-
352, 1990 WL 189977, *3 (Nov. 29, 1990), and citing American Premier
Underwriters, Inc. v. Marathon, 3d Dist. Mercer No. 10-03-12, 2004-Ohio-2222, ¶
28; Black’s Law Dictionary, 1834 (10th Ed.2014) (defining indemnity contract as
“[a] contract by which the promisor agrees to reimburse a promisee for some loss
irrespective of a third person’s liability”). See DeMarco, Inc. v. Johns-Manville
Corp., 10th Dist. Franklin No. 05AP-445, 2006-Ohio-3587, ¶ 18 (“The right of
indemnity may result from an express agreement or contractual provision, or it may
be implied from a contractual agreement or relationship.”), citing Indiana Ins. Co.
v. Barnes, 165 Ohio App.3d 262, 2005-Ohio-6474, ¶ 14 (10th Dist.), quoting Worth
v. Aetna Cas. & Sur. Co., 32 Ohio St.3d 238, 240 (1987); Four Seasons
Environmental, Inc. v. Westfield Cos., 93 Ohio App.3d 157, 159 (1st Dist.1994)
(“Indemnity arises from contract, either express or implied, and is the right of a
person who has been compelled to pay what another should have paid to require
32, citing Cregar v. Ohio Edison Co., 11th Dist. Trumbull No. 89-T-4316, 1991 WL 1579, *4 (Jan. 11, 1991).
However, when contractual terms regarding attorney fees are in dispute, the trial court must hold a hearing.
See, e.g., Rulli v. Fan Co., 79 Ohio St.3d 374 (1997), syllabus. Because the terms of the indemnity provision
of the Transmix Agreement were in dispute, the trial court properly conducted a hearing on the issue.
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complete reimbursement.”), citing Travelers Indemn. Co. v. Trowbridge, 41 Ohio
St.2d 11 (1975), paragraph two of the syllabus.
{¶19} In this case, the parties included an express-indemnity agreement in
the Transmix Agreement, which provides:
17. Indemnity: Subject to Section 16, Seller and Buyer mutually
covenant to and shall protect, defend, indemnify and hold each other
harmless from and against any and all claims, demands, suits, losses
(including without limitation, costs of defense, attorneys’ [sic] fees,
penalties and interest). Damages, causes of action and liability of
every type and character without regard to amount caused by, arising
out of or resulting from the acts or omissions or negligence of such
indemnifying party, its officers, employees or agents with respect to
the purchase and sale of Product hereunder.
(Emphasis sic.) (Doc. No. 12, Ex. B). Therefore, because the parties expressly
contracted for indemnification, we must interpret that contract provision to
determine the rights and obligations of the parties. See Four Seasons Environmental
at 159 (“An indemnity agreement, such as the one between Westfield and
DeBra/indemnitors, is interpreted like any contract to conform to the intent of the
parties.”), citing Worth at 240-241. See also Lake Pointe Townhomes Homeowners’
Assn. v. Bruce, 178 Ohio App.3d 756, 2008-Ohio-5264, ¶ 10 (8th Dist.).
{¶20} “A court’s primary objective in the construction of any written
agreement is to ascertain and give effect to the intent of the parties by examining
the language that they chose to employ.” O.E. Meyer Co. v. BOC Group, Inc., 6th
Dist. Erie No. E-99-002, 2000 WL 234549, *5 (Mar. 3, 2000), citing Foster Wheeler
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Enviresponse, Inc. v. Franklin Cty. Convention Facilities Auth., 78 Ohio St.3d 353,
361 (1997). See Brown v. Gallagher, 4th Dist. No. 12CA3332, 2013-Ohio-2323, ¶
10 (“Indemnity agreements must be interpreted in the same manner as other
contracts.”), citing Portsmouth Insurance Agency v. Medical Mutual of Ohio, 188
Ohio App.3d 111, 2009-Ohio-941, ¶ 18 (4th Dist.). First, a court must determine
whether the disputed language is plain and unambiguous. Beverly v. Parilla, 165
Ohio App.3d 802, 2006-Ohio-1286, ¶ 24 (7th Dist.). See also Aultman Hosp. Assn
v. Community Mut. Ins. Co., 46 Ohio St.3d 51, 55 (1989). “The language is
unambiguous if, from reading only the four corners of the instrument, the language
is clear, definite, and subject to only one interpretation.” Beverly at ¶ 24. “Contract
language is ambiguous ‘if it is unclear, indefinite, and reasonably subject to dual
interpretations.’” Mulchin v. ZZZ Anesthesia, Inc., 6th Dist. Erie No. E-05-045,
2006-Ohio-5773, ¶ 36, quoting Beverly at ¶ 24. See also Bay Coast Properties, Inc.
v. Natl. City Bank, 6th Dist. Huron No. H-05-015, 2006-Ohio-2348, ¶ 15 (noting
that “[t]he test for determining whether contract terms are ambiguous” is:
“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”), quoting Alexander
v. Buckeye Pipe Line Co., 53 Ohio St.2d 241 (1978), paragraph two of the syllabus.
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{¶21} “If it is clear and unambiguous, the court need not go beyond the plain
language of the agreement to determine the rights and obligations of the parties”
and “[t]he interpretation of a written agreement is * * * a matter of law for the court,”
which an appellate court reviews de novo. O.E. Meyer Co. at *5, citing Aultman
Hosp. Assn. at 53; Bottomline Ink, Corp. v. Huntington Bancshares, Inc., 6th Dist.
Wood No. WD-08-003, 2008-Ohio-2987, ¶ 11, citing Alexander at paragraph one
of the syllabus. “De novo review requires us to conduct an independent review of
the record without deference to the trial court’s decision.” Matrix Technologies,
Inc. v. Kuss Corp., 6th Dist. Lucas No. L-07-1301, 2008-Ohio-1301, ¶ 11, citing
Brown v. Cty. Commrs. of Scioto Cty., 87 Ohio App.3d 704, 711 (4th Dist.1993).
{¶22} “When a court finds an ambiguity in the contract language, the intent
of the parties becomes a question of fact; in order to ascertain such intent, the trier
of fact may rely on extrinsic evidence.” Mulchin at ¶ 36, citing Beverly at ¶ 26. See
also Inland Refuse Transfer Co. v. Browning-Ferris Industries of Ohio, Inc., 15
Ohio St.3d 321, 322 (1984) (“However, if a term cannot be determined from the
four corners of a contract, factual determination[s] of intent or reasonableness may
be necessary to supply the missing term.”). “‘We will not reverse a factual finding
of the trial court so long as some competent, credible evidence supports it.’” Am.
Servicing Corp. v. Wannemacher, 3d Dist. Putnam No. 12-14-01, 2014-Ohio-3984,
¶ 15, quoting Crane Hollow, Inc. v. Marathon Ashland Pipe Line, LLC, 138 Ohio
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App.3d 57, 74 (4th Dist.2000), citing C.E. Morris Co. v. Foley Constr. Co., 54 Ohio
St.2d 279 (1978), syllabus. See also Myers v. Garson, 66 Ohio St.3d 610, 614
(1993).
{¶23} “The parol evidence rule prohibits a party from contradicting or
supplementing a written, fully-integrated contract with extrinsic evidence of prior
or contemporaneous agreements, whether oral or written.” Bottomline Ink, Corp. at
¶ 11, citing Ed Schory & Sons, Inc. v. Society Natl. Bank, 75 Ohio St.3d 433, 440
(1996). “Only when the language of a contract is unclear or ambiguous, or when
the circumstances surrounding the agreement invest the language of the contract
with a special meaning will extrinsic evidence be considered in an effort to give
effect to the parties’ intentions.” Huff v. FirstEnergy Corp., 130 Ohio St.3d 196,
2011-Ohio-5083, ¶ 12.
{¶24} In this case, the trial court concluded that the indemnity provision is
not “available only for ‘claims, demands[,] suits, losses’ brought by a third party *
* *.” (Doc. No. 131). We agree that the plain language of the indemnity provision
is clear and unambiguous and requires the parties to indemnify one another,
including the obligation to recover attorney fees.6 Compare Heffner Invests., 2008-
6
Because we conclude that the indemnity provision of the Transmix Agreement is clear and unambiguous,
parol evidence is inadmissible. See, e.g., H & C Ag Servs., LLC v. Ohio Fresh Eggs, LLC, 3d Dist. No. 6-
15-02, 2015-Ohio-3714, ¶ 44, citing Orchard Group, Inc. v. Konica Med. Corp., 135 F.3d 421, 429-430 (6th
Cir.1998) (“[P]arole [sic] evidence is only admissible when the contract language is itself ambiguous as to
its terms. * * * Here, there is simply no ambiguity. The * * * letter is not unclear * * *”), citing Thomas J.
Kline, Inc. v. Lorillard, Inc., 878 F.2d 791, 794 (4th Cir.1989). Thus, we reject CRC’s argument that we
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Ohio-2495, at ¶ 54 (“Under the clear and unambiguous language of the
indemnification clause provided in the lease agreement, Piper is to indemnify
Heffner Investments from all causes of action, except those resulting from Heffner
Investments[’] negligent acts and omissions, and that obligation to indemnify
includes attorney fees.”); Fabrication Group L.L.C. v. Willowick Partners L.L.C.,
11th Dist. Lake No. 2011-L-141, 2012-Ohio-4460, ¶ 37 (reviewing de novo the trial
court’s interpretation of an attorney-fee provision in a contract and concluding that
the trial court correctly “interpreted this provision to mean that [Fabrication Group]
was entitled to recover its attorney fees for services incurred in the collection of the
amount owed under the balcony railing contract”). That is, the indemnity provision
expressly allows for the recovery of attorney fees from “any and all claims,
demands, suits, [or] losses.” (Doc. No. 12, Ex. B). See, e.g., Allen v. Standard Oil
Co., 2 Ohio St.3d 122 (1982), paragraph one of the syllabus (“When an indemnitor
expressly agrees to indemnify an indemnitee except in certain specified instances *
* *, the indemnitor is obligated to indemnify the indemnitee under the terms of the
agreement.”). See also Lake Pointe at ¶ 10 (applying de-novo review to the
interpretation of an attorney-fees provision of a homeowner’s agreement); Harvest
Land Co-Op, Inc. v. Hora, 2d Dist. Montgomery No. 25068, 2012-Ohio-5915, ¶ 79
(reviewing de novo the interpretation of an attorney-fees provision of a promissory
must construe the provision against UGM and read the Transmix Agreement in conjunction with the Naphtha
Agreement.
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note). Stated another way, based on the express language of the indemnity
provision, the parties did not limit the recovery of attorney fees to claims, demands,
suits, or losses from third parties or from either party’s wrongful refusal to defend
an action against an indemnitee.
{¶25} Having determined that UGM can recover attorney fees under the
indemnity provision of the Transmix Agreement, we now turn to whether the
indemnity provision is otherwise enforceable. Questions regarding the
enforceability of a contract is a question of law subject to de novo review. See
Taylor Bldg. Corp. of Am. v. Benfield, 117 Ohio St.3d 352, 2008-Ohio-938, ¶ 35
(“A determination of whether a written contract is unconscionable is an issue of
law.”). See also Oldendick v. Crocker, 8th Dist. Cuyahoga No. 103384, 2016-Ohio-
5621, ¶ 41; Aftermath, Inc. v. Buffington, 10th Dist. Franklin No. 09AP-410, 2010-
Ohio-19, ¶ 4. As we previously stated, de novo review is conducted without
deference to the trial court’s decision. Matrix Technologies, 2008-Ohio-1301, at ¶
11, citing Brown, 87 Ohio App.3d at 711.
{¶26} On appeal, CRC argues only that the indemnity provision of the
Transmix Agreement is unenforceable because “CRC did not negotiate with UGM
regarding the * * * Indemnity Provision.” (Appellant’s Brief at 17). In support of
its argument, CRC contends that “Ohio law does not permit an award of attorney
fees pursuant to a contractual agreement unless the fee provision is specifically
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negotiated.” (Appellant’s Brief at 19, citing Vistein v. Am. Registry of Radiologic
Technologists, 342 Fed.Appx. 113 (6th Cir.2009), Big Lots Stores, Inc. v. Luv N’
Care, Ltd., 302 Fed.Appx. 423 (6th Cir.2008), Scotts Co. v. Cent. Garden & Pet
Co., 403 F.3d 781 (6th Cir.2005) and Colonel’s Inc. v. Cincinnati Milacron
Marketing Co., 149 F.3d 1182 (6th Cir.1998)). This is not an accurate
representation of Ohio law. See Allied Indus. Scrap, Inc. v. OmniSource Corp., 776
F.3d 452 (6th Cir.2015) (stating that the appropriate standard applicable to
contractual-fee-shifting provisions is the standard provided in Wilborn v. Bank One
Corp., 121 Ohio St.3d 546, 2009-Ohio-306). See also Wolfe v. J.C. Penney Corp.,
10th Dist. Franklin No. 18AP-70, 2018-Ohio-3881, ¶ 28 (noting that the “line of
cases [relied on by CRC] was overruled in Allied Indus. Scrap”); McGowan & Co.
v. Bogan, 93 F.Supp.3d 624, 642 (S.D.Tex.2015) (discussing the Sixth Circuit’s
abrogation of its line of cases “preclude[ing] contractual recovery of attorneys’ [sic]
fees unless the attorneys’ [sic] fees provision was specifically negotiated”).
{¶27} The appropriate measure of Ohio law concerning the enforceability of
contractual attorney-fee provisions discussed in Wilborn provides that “[w]hen the
right to recover attorney fees arises from a stipulation in a contract, the rationale
permitting recovery is the ‘fundamental right to contract freely with the expectation
that the terms of the contract will be enforced.’” Wilborn at ¶ 8, quoting Nottingdale
Homeowners’ Assn., Inc. v. Darby, 33 Ohio St.3d 32, 36 (1987). “The presence of
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equal bargaining power and the lack of indicia of compulsion or duress are
characteristics of agreements that are entered into freely.” Id., citing Nottingdale at
35. “In these instances, agreements to pay another’s attorney fees are generally
‘enforceable and not void as against public policy so long as the fees awarded are
fair, just and reasonable as determined by the trial court upon full consideration of
all of the circumstances of the case.’” Id., quoting Nottingdale at syllabus, and citing
Worth, 32 Ohio St.3d at 241-243.
{¶28} “In contrast, agreements to pay attorney fees in a ‘contract of adhesion,
where the party with little or no bargaining power has no realistic choice as to
terms,’ are not enforceable.” Id. at ¶ 9, quoting Nottingdale at 37, fn. 7. “To hold
such provisions enforceable would be contrary to the principle that ‘freedom in
bargaining and equality of bargaining * * * are the theoretical parents of the
American law of contracts.’” Id., quoting Neal v. State Farm Ins. Cos., 188
Cal.App.2d 690, 694, 10 Cal.Rptr. 781 (1961).
{¶29} Because CRC makes no argument as to how the indemnity provision
is unenforceable under the standard provided in Wilborn, we reject CRC’s argument
that the indemnity provision is unenforceable. Compare Wolfe at ¶ 30 (rejecting
“Wolfe’s argument that the fee and cost shifting provisions are contrary to law”
because those provisions were not “specifically negotiated” since the “specific-
negotiation” line of cases has been overruled).
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{¶30} Finally, CRC argues that the trial court abused its discretion by
awarding UGM attorney fees because “UGM failed to prove the reasonableness of
their attorney’s [sic] fees.” (Appellant’s Brief at 21). UGM filed two post-judgment
motions for attorney fees—the first was relative to Count V and the second was
relative to the claims on which it prevailed under the Transmix Agreement and for
the calculation of fees that the trial court previously ordered CRC to pay in its
December 4 and 27, 2017 entries. (See Doc. Nos. 106, 107). Specifically, in its
motion for attorney fees relative to the Transmix Agreement and the trial court’s
December 4 and 27, 2017 entries, UGM requested attorney fees as to the Transmix
Agreement and a category of attorney fees noted as “co-mingled” fees between the
Transmix and Naphtha Agreements. In its entry awarding UGM attorney fees, the
trial court awarded a lump sum without specifically delineating what amount of
attorney fees it was awarding as to which contract or category of fees. Accordingly,
based on our conclusion that the trial court’s attorney-fee award as to Count V is a
nullity, we are unable to address CRC’s reasonableness argument. Therefore, on
remand, the trial court should determine the reasonableness of attorney fees relative
to only the Transmix Agreement as consistent with this opinion.
{¶31} For the reasons discussed above, CRC’s assignment of error is
sustained in part and overruled in part.
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{¶32} Having found no error prejudicial, in part, to the appellant herein in
the particulars assigned and argued in its assignment of error, we affirm that portion
of the judgment of the trial court. Having found error prejudicial, in part, to the
appellant herein in the particulars assigned and argued in its assignment of error, we
reverse the judgment of the trial court and remand for the trial court to issue an entry
awarding attorney fees relative to only the Transmix Agreement as are consistent
with this opinion.
Judgment Affirmed in Part,
Reversed in Part and
Cause Remanded
PRESTON and WILLAMOWSKI, J.J., concur.
/jlr
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