Bridgestone Ams. Tire Operations, L.L.C. v. Harris

[Cite as Bridgestone Ams. Tire Operations, L.L.C. v. Harris, 2020-Ohio-76.]
COURT OF APPEALS
STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT
BRIDGESTONE AMERICAS TIRE JUDGES:
OPERATIONS, LLC Hon. W. Scott Gwin, P. J.
Hon. John W. Wise, J.
Plaintiff-Appellee Hon. Patricia A. Delaney, J.
-vs- Case No. 2019CA00098
RONNIE HARRIS, et al.
OPINION
Defendants-Appellants
CHARACTER OF PROCEEDING: Civil Appeal from the Court of Common
Pleas, Case No. 2016CV00688
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: January 13, 2020
APPEARANCES:
For Plaintiff-Appellee For Defendants-Appellants
DAVID T. MOSS TERRENCE L. SEEBERGER
JOHN R. CHLYSTA STARK & KNOLL CO., LPA
HANNA, CAMPBELL, & POWELL, LLP 3475 Ridgewood Road
3737 Embassy Parkway, Suite 110 Akron, Ohio 44333
Akron, Ohio 44333
Stark County, Case No. 2019CA00098 2
Wise, J.
{¶1} Defendants-Appellants Ronnie Harris and B&S Transport, Inc. appeal the
decision of the Stark County Court of Common Pleas (“trial court”), which granted
summary judgment against them and in favor of Plaintiff-Appellee Bridgestone Americas
Tire Operations, LLC in a lawsuit seeking payment for automotive tires following
termination of a dealership agreement between the parties. The relevant facts leading to
this appeal are as follows.
{¶2} Appellant B&S Transport, Inc. is a subchapter “S” corporation, primarily
owned by Appellant Harris, engaged in the business of tire sales and distribution,
including the supplying of tires to the federal government. In 1991, B&S Transport Inc.
and Bridgestone/Firestone, Inc. entered into a standard dealership agreement, as further
discussed infra. The agreement, by its terms, was to be construed under the laws of the
State of California. Id. at para. 13.
{¶3} The aforesaid dealership agreement was accompanied by a mutually
signed letter dated April 1, 1991 that expressly amended the agreement. The letter
included language wherein appellee recognized that because of the nature of appellants'
business, “it is not realistic for you to perform certain of the functions performed by a
typical tire dealer, such as handling warranty adjustments, or providing services to
purchasers of Bridgestone products * * *.” Appellee also therein stated that it proposed to
proceed with orders being accepted or rejected on a “deal-specific basis,” extending to
appellants that same “net store prices” and “other prices, discounts and payment terms
available to any other Bridgestone dealer * * *.” The amending letter also stated: “At any
time, and for any reason, either party may terminate this relationship upon 30 days' written
Stark County, Case No. 2019CA00098 3
notice, provided that each party shall honor all commitments incurred prior to the effective
date of any such termination. * * * .”
{¶4} Subsequent to 1991, the parties engaged in business under the aforesaid
dealership agreement and amending letter, resulting in appellants obtaining numerous
federal government contracts benefiting appellee for the provision of Bridgestone and
Firestone brand tires.
{¶5} In late 2011, appellants won six contract awards, for two years each, from
the Defense Logistics Agency (“DLA”), with DLA having the unilateral right to extend each
contract by a year. See Ronnie Harris Affidavit, para. 18–24. Appellee was notified that
B&S was bidding for the DLA contracts and was timely provided copies of all six contracts.
Appellee thereupon began to furnish tires in support of these DLA contracts.
{¶6} However, on or about February 28, 2013, appellee caused to be personally
delivered to Appellant Harris a written notification that appellee had “decided to terminate
B&S Transport as an authorized dealer of all Bridgestone and Firestone brand product
lines * * *.” The stated reasons for termination included “Bridgestone's change in
distribution and go-to-market solutions strategies.” See Exhibit B of Affidavit # 1 of
Landers Gaines. The effective termination date was set forth as January 1, 2014.
Appellants' Federal Lawsuit
{¶7} On December 19, 2013, Appellants Ronnie Harris, who is African–
American, and B&S Transport sued Appellee Bridgestone Americas Tire Operations in
the United States District Court for the Northern District of Ohio, case number 5:13–cv–
02793–SL. Appellants therein alleged that Bridgestone had racially discriminated against
Harris by terminating the dealer agreement without cause and by allegedly favoring a
Stark County, Case No. 2019CA00098 4
nonminority dealer. See B&S Transport v. Bridgestone Americas Tire Opers., 171
F. Supp. 3d 669, 676 (N.D. Ohio 2016). They also asserted state-law claims, including
breach of contract, breach of implied covenant of good faith, promissory estoppel, and
others. Appellants sought damages and injunctive relief. Id.
{¶8} After an oral hearing, the federal court denied appellants preliminary
injunctive relief, finding that the discrimination claim did not present a high likelihood of
success on the merits. B&S Transport v. Bridgestone Americas Tire Opers., N.D.Ohio
No. 5:13-CV-2793, 2014 WL 804771 (Feb. 27, 2014).
{¶9} After discovery, the federal court granted appellee summary judgment on
appellants' discrimination claims. See 171 F. Supp. 3d at 680–83, 689. The federal court
further declined jurisdiction over appellants' state-law claims.
{¶10} On reconsideration, the federal court adhered to its original decision. See
B&S Transport, Inc. v. Bridgestone Americas Tire Operations, LLC, N.D.Ohio No. 5:13-
CV-2793, 2017 WL 5554769 (Nov. 17, 2017).
Federal Appeal
{¶11} Appellants thereafter appealed to the United States Court of Appeals, Sixth
Circuit. On February 13, 2019, the Sixth Circuit Court affirmed the grant of summary
judgment in favor of Bridgestone by the United States District Court for the Northern
District of Ohio. See B&S Trans., Inc. v. Bridgestone Americas Tire Operations, LLC, 758
Fed.Appx. 503 (6th Cir.2019).
Appellee's Common Pleas Lawsuit and Appellants' Counterclaims
{¶12} After the federal court declined jurisdiction over the state-law claims,
appellee filed an action on March 23, 2016 in the Stark County Court of Common Pleas,
Stark County, Case No. 2019CA00098 5
seeking to recover more than $1,000,000.00 that Appellants B&S and Harris allegedly
owed for tires they had purchased on credit. Appellants, on April 22, 2016, counterclaimed
for breach of contract, breach of the implied covenant of good faith, promissory estoppel,
tortious interference with contract, antitrust, and a violation of R.C. 1353.06.
{¶13} On February 7, 2017, after the completion of discovery, appellee moved for
summary judgment in regard to all claims, including the counterclaims. Via a judgment
entry issued on March 28, 2017, the trial court denied summary judgment on appellee's
claims, finding a factual dispute over amounts allegedly owed by appellants. However,
the court granted summary judgment in favor of appellee on appellants' counterclaims.
The trial court issued a nunc pro tunc judgment entry on April 14, 2017, adding Civ.R.
54(B) language.
First State Appeal
{¶14} Appellants then filed an appeal to this Court, arguing that the trial court had
erred in granting Bridgestone summary judgment on appellants' breach of contract,
breach of good faith and fair dealing, and promissory estoppel counterclaims.
{¶15} Upon review, this Court affirmed the April 14, 2017 decision of the Stark
County Court of Common Pleas. See Bridgestone Americas Tire Operations, LLC v.
Harris, 5th Dist. Stark No. 2017 CA 00068, 2018-Ohio-63, 104 N.E.3d 81 (decided
January 9, 2018). We will herein refer to this decision of affirmance as “Harris I.”
{¶16} The Ohio Supreme Court subsequently declined to accept the case for
further appeal. See Bridgestone Ams. Tire Operations, L.L.C. v. Harris, 152 Ohio St. 3d
1481, 2018-Ohio-1990, 98 N.E.3d 295 (announced May 23, 2108).
Stark County, Case No. 2019CA00098 6
Subsequent Common Pleas Proceedings
{¶17} On November 21, 2018, Appellee Bridgestone moved for summary
judgment in the trial court on three issues, claiming entitlement to judgment in the sum of
$946,635.56 under both breach of contract and account theories, entitlement to enforce
such judgment against Appellant Harris under a personal guaranty, and for interest and
attorney fees. Appellants defended against the summary judgment motion.
{¶18} On January 10, 2019, the trial court filed its grant of summary judgment,
which was slightly modified as to amount only by nunc pro tunc entry of January 28, 2019.
In essence, the trial court found that both appellants were liable to Bridgestone for the
sum of $946,635.56, and that both appellants were liable to Bridgestone for interest and
attorney fees in an amount to be determined.
{¶19} On May 29, 2019, the trial court further awarded Bridgestone attorney fees
in the sum of $262,749.80 plus expenses of $10,404.92, and interest through the date of
judgment in the sum of $483,691.87, computed at the California statutory rate of ten
percent on the underlying judgment.
{¶20} Appellants Ronnie Harris and B&S Transport, Inc. filed a notice of appeal
on June 26, 2019. They herein raise the following five Assignments of Error:
{¶21} “I. THE TRIAL COURT ERRED BY GRANTING BRIDGESTONE
SUMMARY JUDGMENT ON ITS BREACH OF CONTRACT AND ACCOUNT CLAIMS,
IN THE SUM OF $946,635.56.
{¶22} “II. THE TRIAL COURT ERRED BY NOT ADDRESSING THE DEFENSE
OF UNCLEAN HANDS THAT WAS RAISED BY APPELLANTS IN THEIR REPLY TO
Stark County, Case No. 2019CA00098 7
[THE] COUNTERCLAIM AND IN THEIR RESPONSE TO THE SUMMARY JUDGMENT
MOTION.
{¶23} “III. THE TRIAL COURT ERRED BY GRANTING BRIDGESTONE
SUMMARY JUDGMENT ON ITS CLAIM THAT APPELLANT HARRIS WAS
PERSONALLY LIABLE FOR THE $946,635.56 JUDGMENT AGAINST APPELLANT
B&S TRANSPORT.
{¶24} “IV. THE TRIAL COURT ERRED BY GRANTING BRIDGESTONE
SUMMARY JUDGMENT, [AND] IT ALSO ERRED BY GRANTING BRIDGESTONE
ATTORNEY FEES.
{¶25} “V. THE TRIAL COURT ERRED BY APPLYING AN INCORRECT RATE
OF INTEREST TO THE UNDERLYING JUDGMENT.”
Summary Judgment Standard
{¶26} Summary judgment proceedings present the appellate court with the unique
opportunity of reviewing the evidence in the same manner as the trial court. See Smiddy
v. The Wedding Party, Inc. (1987), 30 Ohio St. 3d 35, 36, 506 N.E.2d 212. As such, we
must refer to Civ.R. 56(C) which provides, in pertinent part: “Summary judgment shall be
rendered forthwith if the pleadings, depositions, answers to interrogatories, written
admissions, affidavits, transcripts of evidence in the pending case 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. * * * 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
Stark County, Case No. 2019CA00098 8
for summary judgment is made, that party being entitled to have the evidence or
stipulation construed most strongly in the party's favor. * * *.”
{¶27} Pursuant to the above rule, a trial court may not enter summary judgment if
it appears a material fact is genuinely disputed. The party moving for summary judgment
bears the initial burden of informing the trial court of the basis for its motion and identifying
those portions of the record that demonstrate the absence of a genuine issue of material
fact. The moving party may not make a conclusory assertion that the non-moving party
has no evidence to prove its case. The moving party must specifically point to some
evidence which demonstrates the non-moving party cannot support its claim. If the
moving party satisfies this requirement, the burden shifts to the non-moving party to set
forth specific facts demonstrating there is a genuine issue of material fact for trial. Vahila
v. Hall (1997), 77 Ohio St. 3d 421, 429, 674 N.E.2d 1164, citing Dresher v. Burt (1996),
75 Ohio St. 3d 280, 662 N.E.2d 264.
I.
{¶28} In their First Assignment of Error, appellants contend the trial court erred in
granting summary judgment in favor of Appellee Bridgestone in the amount of
$946,635.56 on its breach of contract and account claims. We disagree.
{¶29} California recognizes that “the vital elements of a cause of action based on
contract are mutual assent (usually accomplished through the medium of an offer and
acceptance) and consideration.” Div. of Labor Law Enforcement v. Transpacific Trans.
Co., 69 Cal. App. 3d 268, 275, 137 Cal. Rptr. 855, 859 (1977). As in Ohio, California courts
avoid interpretations of contracts that create absurd or unreasonable results. See
Sequeira v. Lincoln Natl. Life Ins. Co., 239 Cal. App. 4th 1438, 1445, 192 Cal. Rptr. 3d 127,
Stark County, Case No. 2019CA00098 9
132 (2015). Furthermore, under California law, the essential elements of an “account
stated” are: (1) previous transactions between the parties establishing the relationship of
debtor and creditor; (2) an agreement between the parties, express or implied, on the
amount due from the debtor to the creditor; (3) a promise by the debtor, express or
implied, to pay the amount due. Leighton v. Forster, 8 Cal.App.5th 467, 491, 213
Cal. Rptr. 3d 899, 918 (Cal.App.2017) (additional citations omitted).
{¶30} However, in the case sub judice, it appears appellants’ challenge herein is
focused on the amount of the monetary judgment, rather than the question of breach per
se. Indeed, at this juncture there is little dispute that appellants obtained certain tires on
credit from Appellee Bridgestone and sold them to customers, but did not forward the
monies to appellee. See Ronnie Harris deposition, April 29, 2015, at 179-181.
{¶31} Appellee largely based its summary judgment claim as to the amount owed
on the November 20, 2018 third affidavit of Karen Smith, the executive director of credit
and billing services for Bridgestone. In her affidavit, Smith provided inter alia the following
explanation of the Bridgestone dealer discount program:
Once Bridgestone tires are delivered to a dealer’s customer, the
dealer can submit to Bridgestone a receipt to confirm the delivery.
Submitting delivery receipts can entitle the dealer to certain discounts or
commissions that reduce the amount the dealer owes Bridgestone on the
transactions at issue. The discounts or commissions available to dealers
change from time to time and are published in Bridgestone’s marketing and
government policy documents made available to Bridgestone-authorized
dealers, including B&S Transport. The amount of discount or commission
Stark County, Case No. 2019CA00098 10
depends on various factors specific to the transaction, such as the type of
tires delivered, the quantity of the tires, and the type of customer receiving
the tires.
{¶32} Smith Affidavit at para. 11.
{¶33} We note the standard dealership agreement the parties entered into in 1991
inter alia provided that “[appellants] shall be entitled to purchase the Products at prices in
the applicable Bridgestone price lists, less any applicable discounts and allowances and
subject to such further terms and conditions as may be in effect from time to time.” See
Agreement, para. 6(a), emphasis added. Appellants in essence presently insist that
appellee only provided evidence of what it invoiced to B&S, not what it was legally owed
under the parties’ agreements. See Appellants’ Brief at 10. In other words, appellants
presently contend that appellee failed to articulate to the trial court its basis for ignoring
applicable discounts normally available to Bridgestone dealers, which discounts would
have significantly diminished the monetary amount awarded in the underlying dispute.
{¶34} Attached to Smith's third affidavit as exhibit “A” is a detailed statement of
account that reflects tires purchased by Appellant B&S when it was an authorized dealer.
Said statement lists 81 line-item entries, consisting of 71 debits and 10 credits, resulting
in an asserted net unpaid balance by B&S of $955,144.16. Smith further averred: “With
respect to the transactions shown on Exhibit A, B&S has not submitted to Bridgestone
any delivery receipts needed for Bridgestone to calculate the amount of any discounts or
commissions to which B&S might have been entitled had it submitted the receipts. ***.”
Smith Affidavit at para. 12.
Stark County, Case No. 2019CA00098 11
{¶35} In addition, attached as Exhibit B to Smith's affidavit are the invoices, credit
memoranda, and notices that support the entries on the statement of account. Exhibit B
invoices show the purchase order and amount due for each corresponding debit on the
statement. Each invoice also describes the tire model, size, type, and quantities for each
order and shipment. A per unit (i.e., per-tire) amount is also shown on each invoice based
on published price lists and special pricing offered to dealers. Finally, the credits listed on
Exhibit A are supported by the credit memoranda in Exhibit B. The credits reflect
commissions or discounts that B&S earned for certain tire sales.
{¶36} Following appellee’s filing on October 23, 2018 of a motion to compel
discovery, appellants produced 238 pages of documents, which were reviewed by Smith
and ultimately attached as Exhibit C to Smith's affidavit. Most of the documents were
either Bridgestone's own invoices to B&S or B&S's invoices to its customers. B&S didn't
previously submit these documents to Bridgestone to obtain a discount. Further, the
documents didn't include the delivery receipts that might entitle B&S to credits or
discounts granted to authorized dealers.
{¶37} Nonetheless, some of the documents, although not actual delivery receipt
copies, contained enough information for appellee to accept that B&S was entitled to an
$8,508.60 credit against the aforesaid $955,144.16 balance. This credit thus reduced the
principal amount that B&S owed to $946,635.56.
{¶38} In summary, Smith's affidavit explained that B&S wasn't entitled to
discounts, with the exception of $8,508.60, because the documents provided in discovery
(1) were not actually B&S invoices to customers, or (2) were invoices from 2012 or early
2013 for which discounts or credits had already been applied, or (3) were invoices that
Stark County, Case No. 2019CA00098 12
no longer qualified for credits or discounts because they had not been submitted to
Bridgestone within 30 days of delivery, or (4) were invoices set up for customer deliveries
that post-dated the termination date of B&S as a Bridgestone dealer (i.e. January 1,
2014).
{¶39} Based in part on this evidence, the trial court granted summary judgment in
favor of appellee.
{¶40} Generally, the measure of damages under California law for a breach of
contract “is the amount which will compensate the party aggrieved for all the detriment
proximately caused [by the breach], or which, in the ordinary course of things, would be
likely to result” from the breach. Cal. Civ. Code § 3300. “No damages can be recovered
for a breach of contract which are not clearly ascertainable in both their nature and origin.”
Cal. Civ. Code § 3301. See, also, Aphection, Inc. v. Blvd Supply, LLC, 2018 WL 1281725
(Mar. 13, 2018).
{¶41} Upon review, we find reasonable minds could only conclude that appellants
were not entitled to additional discounts or credits against the $946,635.56 figure
presented by Appellee Bridgestone pursuant to Civ.R. 56(E).1 The trial court correctly
1 In their reply brief, appellants advance several challenges to Smith’s Affidavit #3. In
particular, appellants maintain that the criteria for dealer discounts and commissions was
not explained by Karen Smith, preventing B&S Transport from being able to fully provide
the trial court with a damages number. Appellants also maintain that Smith’s basis for
alleged picking only three of the invoices for possible discounts is not explained in Affidavit
#3. Appellants appear to question why Smith made specific reference to invoices
"000002," "000003," and "000005" as being entitled to discounts, even though, according
to appellants, “[t]here appears to be little material difference between those three and the
other fifty-seven invoices that the witness ignored for discount purposes.” Appellants’
Reply Brief at 6. However, we do not agree with appellants that Smith was basing her
crediting calculations solely on those three invoices. She instead was using those three
as exemplars of documents that indeed “reflect[ed] tires that Bridgestone shipped to
B&S’s customers in 2013 while B&S was still an authorized dealer.” Affidavit at para. 16.
Stark County, Case No. 2019CA00098 13
held that appellee was entitled to recover said sum. Accordingly, we hold the court did
not err in granting summary judgment in favor of appellee.
{¶42} Appellants’ First Assignment of Error is therefore overruled.
II.
{¶43} In their Second Assignment of Error, appellants contend the trial court erred
by not addressing their defense of “unclean hands.” We disagree.
{¶44} As an initial matter, we consider the question of choice of law for this
assigned error.
{¶45} We note the full text of the “Applicable State Law” portion of the 1991
dealership agreement in this case reads as follows: “All questions of construction,
interpretation, performance or breach in relation to this Agreement or any part thereof
shall be determined in accordance with the laws of the State of California.” Dealership
Agreement at para. 13.
{¶46} However, the doctrine of “clean hands” is an equitable doctrine. Ellis v.
Patonai, 9th Dist. Wayne No. 06CA0012, 2006-Ohio-5054, ¶ 21. Accordingly, since this
proposed claim by appellants would not center on a legal analysis of the parties’
dealership agreement, we first find reliance on California law to be unnecessary for the
present assigned error. Cf. Harris I at ¶ 39 (declining to apply California contract law to a
question of the equitable claim of promissory estoppel).
Smith then references the allowance of the aforementioned $8,508.60 credit for “those
tires” based on the “difference between the government price and the Bridgestone price
***.” Id. Our review thus leads us to the conclusion that the $8,508.60 credit represented
a particular government adjustment, as opposed to a standard dealer discount. We find
this was adequately explained by Smith in her affidavit for purposes of summary
judgment, and it was not rebutted by appellants.
Stark County, Case No. 2019CA00098 14
{¶47} In Ohio, the doctrine of clean hands is based on the maxim of equity that
provides “he who comes into equity must come with clean hands.” Seminatore v. Climaco,
Climaco, Lefkowitz & Garofoli Co., L.P.A., 8th Dist. Cuyahoga No. 81568, 2003–Ohio–
3945, ¶ 26, citing Marinaro v. Major Indoor Soccer League, 81 Ohio App. 3d 42, 45, 610
N.E.2d 450 (9th Dist.1991). This doctrine requires that whenever a party takes the
initiative to set in motion the judicial machinery to obtain some remedy but has violated
good faith by his prior-related conduct, the court will deny the remedy. Reid v. Wallaby's
Inc., 2nd Dist. Greene No. 2011-CA-36, 2012-Ohio-1437, ¶ 31, citing Marinaro, supra
(internal quotations and additional citations omitted). The application of the doctrine is at
the discretion of the trial court. See Slyh v. Slyh (1955), 72 Ohio Law. Abs. 537, 135 N.E.2d
675.
{¶48} “Equity is based upon what is perceived as fair under the circumstances of
each case and, when both parties are guilty of injustice, a court of equity will leave them
as they are.” Aultcare Corp. v. Roach, Stark App.No. 2008CA00287, 2009–Ohio–6186, ¶
44, quoting Patterson v. Blanton (1996), 109 Ohio App. 3d 349, 354, 672 N.E.2d 208.
Equity follows the law, and cannot be invoked to destroy or supplant a legal right. Civ.
Serv. Personnel Ass'n, Inc. v. City of Akron, 48 Ohio St. 2d 25, 27, 356 N.E.2d 300, 302
(1976), citing In re Dickey (1949), 87 Ohio App. 255, 264, 94 N.E.2d 223, 228.
{¶49} The gist of appellants’ “unclean hands” argument at this juncture is that
appellee “shut out” B&S from Bridgestone’s on-line dealer payment system, blocking B&S
from being able to obtain the dealer discounts that would have lessened the amounts
owed back to appellee. Appellee responds that appellants ignored repeated requests to
produce alternate documentation to support the dealer discounts, such as paper records
Stark County, Case No. 2019CA00098 15
or correspondence, notwithstanding appellee’s allowance of ten months for B&S to
finalize matters after the notification of termination of the dealership agreement, even
though only thirty days was required. Appellee also reminds us in its response that we
previously concluded, in regard to termination of the agreement, “reasonable jurors would
only find appellee acted within the bounds of the agreement and that no demonstrable
lack of good faith had occurred.” Harris I at ¶ 35.
{¶50} However, where a plaintiff’s action is contractual in nature, the clean hands
doctrine does not apply, even if the defendant pleads unclean hands as an affirmative
defense. See Reid, supra, at ¶ 32. See, also, O'Brien v. Ohio State Univ., 139 Ohio
Misc.2d 36, 2006-Ohio-4346, 859 N.E.2d 607 (Ct.of Cl.)f.n.3 (a holding by the Court of
Claims that where a plaintiff brought suit for monetary damages under a breach of
contract theory, the court’s equitable jurisdiction was not invoked and the defendant's
reliance upon the equitable defense of unclean hands was misplaced.) Even if we were
to conclude otherwise, in order for the doctrine to apply, “the offending conduct must
constitute reprehensible, grossly inequitable, or unconscionable conduct, rather than
mere negligence, ignorance, or inappropriateness.” GMAC Mtge., L.L.C., v. Jackson, 3rd
Dist. Marion No. 9-13-01, 2013-Ohio-2150, ¶ 26 (internal quotations and additional
citations omitted).
{¶51} Under the circumstances of the case sub judice, we hold the trial court did
not abuse its discretion in declining to apply the clean hands doctrine.
{¶52} Appellants’ Second Assignment of Error is overruled.
Stark County, Case No. 2019CA00098 16
III.
{¶53} In their Third Assignment of Error, appellants maintain the trial court erred
by granting appellee summary judgment on its claim that Appellant Harris was personally
liable for the $946,635.56 judgment against Appellant B&S Transport. We disagree.
{¶54} In addition to the 1991 dealer agreement and letter agreement in this matter,
Appellant Harris signed a personal guaranty in 1994. He therein “absolutely and
unconditionally guarantee[d],” among other things, “the payment when due of all presently
existing and future indebtedness and other obligations for the payment of money
(regardless of form) of Customer [B&S Transport] to Creditor ***. Guaranty at page 1. The
guaranty also provides: "This Guaranty shall be binding upon, and shall inure to the
benefit of, the parties' successors and assigns; provided, however, that Guarantor may
not assign or delegate its duties under this Guaranty without Creditor's prior written
consent." Id. at paragraph M.
{¶55} Appellant Harris first points out that he had agreed, under the specific
language of the document, that the guaranty would initially inure to the benefit of
“Bridgestone/ Firestone, Inc., an Ohio Corporation.” See Guaranty at page 1. However,
appellee commenced the underlying lawsuit under the name “Bridgestone Americas Tire
Operations, LLC” (abbreviated hereinafter as “BATO”).
{¶56} The aforementioned guaranty, by its terms, was to be construed and
enforced under the laws of the State of Tennessee. Id. at paragraph L. Generally, under
Tennessee law, contractual rights can be assigned. See Dick Broadcasting Co. of
Tennessee v. Oak Ridge FM, Inc., 395 S.W.3d 653, 671–72 (Tenn.2013); Restatement
(Second) of Contracts § 317(2) (1981).
Stark County, Case No. 2019CA00098 17
{¶57} The record before us reveals that Karen Smith, who has been employed by
appellee for more than 25 years, stated in her first affidavit (filed February 7, 2017) that
Bridgestone/Firestone, Inc. was the predecessor in interest to Bridgestone Americas Tire
Operations, LLC. Landers Gaines, manager of government and military sales, also stated
in his first affidavit (filed February 7, 2017) that B&S was a BATO-authorized dealer until
its termination. The trial court specifically observed that BATO had presented competent
summary judgment evidence that it was the successor to Bridgestone/Firestone, Inc., and
that appellants had not contested such evidence. Judgment Entry, Jan. 28, 2019, at 8.
{¶58} Upon review, we find reasonable minds could only conclude that
Bridgestone/Firestone was the predecessor entity to BATO, and that Appellant Harris
agreed in advance to any successor assignments of the guaranty.
{¶59} Appellants secondly direct us to the following language in the guaranty,
arguing that it creates an ambiguity and should be resolved against the drafter (appellee),
emphasizing that the space following it was left blank:
{¶60} “E. Guarantor has given no guarantees, except as shown below, and will
give notice in writing of each Guaranty issued after the date hereof.
“Creditor Date Amount”
{¶61} See Guaranty at paragraph E.
{¶62} Under Tennessee Law, courts do not favor hypertechnical interpretation of
contracts. Ensureus, LLC v. Oliver, 2015 WL 5157512 (Tenn. App. 2015), citing Big Fork
Min. Co. v. Kentucky Cent. Ins. Co., 888 S.W.2d 434, 437 (Tenn.App.1994). The above
Stark County, Case No. 2019CA00098 18
language requiring Appellant Harris to “give notice” of each guaranty issued subsequently
can only be reasonably interpreted as referring to future obligations, and the obvious
intent of paragraph E is to give appellee notice of any other existing guarantees at the
time of signing. We thus find no ambiguity in the entirety of the guaranty as a matter of
law.
{¶63} We therefore hold the trial court did not err in granting summary judgment
in favor of Appellee Bridgestone on the issue of the personal guaranty of Appellant Harris.
{¶64} Appellants' Third Assignment of Error is overruled.
IV.
{¶65} In their Fourth Assignment of Error, appellants argue the trial court erred in
awarding Appellee Bridgestone attorney fees. We disagree.
{¶66} Appellants at this juncture reiterate their contention that summary judgment
in favor of appellee was erroneous in this matter, and thus succinctly urge that attorney
fees were correspondingly awarded in error.
{¶67} Based on our previous conclusions herein, appellants' Fourth Assignment
of Error is overruled.
V.
{¶68} In their Fifth Assignment of Error, appellants contend the trial court erred in
utilizing the California statutory interest rate in regard to the judgment awarded to
appellee. We disagree.
{¶69} We reiterate that the dealership agreement in this matter, by its terms, was
to be construed under the laws of the State of California. We note Cal.Civ.Code 3289(b)
states as follows: “If a contract entered into after January 1, 1986, does not stipulate a
Stark County, Case No. 2019CA00098 19
legal rate of interest, the obligation shall bear interest at a rate of 10 percent per annum
after a breach.”
{¶70} Appellants concede that as a general rule, the choice of law of the parties
to a contract should govern, subject to recognized exceptions. In other words, “*** the
parties' choice of law to govern their contract will be enforced, except where the chosen
state has no substantial relationship to the parties or the transaction or when the
application of its law would offend a fundamental policy of a state with a materially greater
interest.” Greif Packaging, L.L.C. v. Ryder Integrated Logistics, Inc., 6th Dist. Lucas No.
L-09-1259, 2010-Ohio-4384, ¶ 25, citing Schulke Radio Productions, Ltd. v. Midwestern
Broadcasting Co. (1983), 6 Ohio St. 3d 436, 453 N.E.2d 683.
{¶71} Appellants essentially present a three-fold challenge to the application of
the California interest rate. They first claim the tire-dealership arrangement between B&S
and Bridgestone had nothing to do with California. They further argue that under Ohio law
(R.C. 1343.03), interest on a judgment is tied to the federal short-term interest rate as
outlined in R.C. 5703.47, suggesting a fundamental policy variance between Ohio and
California. Finally, appellants urge that the choice of law provision in the dealership
agreement references construction, interpretation, performance, and breach, but not
“remedies,” thus permitting Ohio law to be considered.
{¶72} However, a review of Harris I reveals that this Court therein steadfastly
analyzed and applied the pertinent laws of California, making an exception only because
of an issue pertaining to the equitable claim of promissory estoppel. The law of the case
doctrine provides that a decision of a reviewing court in a case remains the law of the
case on the legal questions involved for all subsequent proceedings in the case at both
Stark County, Case No. 2019CA00098 20
the trial and reviewing levels. U.S. Bank v. Detweiler, 5th Dist. Stark No. 2011 CA00095,
2012–Ohio–73, ¶ 26. Appellants cannot be permitted to avoid the invocation of California
law when it suits their purposes for a particular issue. Furthermore, as to appellants’ third
sub-argument supra, we are not inclined to otherwise remove the interest rate aspect of
this dispute from the canopy of California law, as we find the issue of interest upon breach
falls under the choice of the law provision to which the parties originally agreed.
{¶73} We therefore hold the trial court did not err in applying the ten percent
California statutory interest rate on the judgment.
{¶74} Appellants' Fifth Assignment of Error is therefore overruled.
{¶75} For the reasons stated in the foregoing opinion, the judgment of the Court
of Common Pleas, Stark County, Ohio, is hereby affirmed.
By: Wise, J.
Gwin, J., and
Delaney, J., concur.
JWW/d 1216