Lambda Research, Inc. v. Jacobs

[Cite as Lambda Research, Inc. v. Jacobs, 2013-Ohio-348.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
LAMBDA RESEARCH INC., : APPEAL NO. C-100796
TRIAL NO. A-0307855
and :
SURFACE ENHANCEMENT : O P I N I O N.
TECHNOLOGIES, LLC,
:
Plaintiffs-Appellees,
:
vs.
:
TERRY JACOBS,
:
Defendant-Appellant.
Civil Appeal From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Affirmed
Date of Judgment Entry on Appeal: February 6, 2013
Zachary Gottesman and James Keller, for Plaintiffs-Appellees,
Wood, Herron & Evans, L.L.P., Gregory F. Ahrens, and Brett Schatz, for Defendant-
Appellant.
OHIO FIRST DISTRICT COURT OF APPEALS
Per Curiam.
{¶1} Defendant-appellant Terry Jacobs appeals from a judgment in favor of
his former employer, plaintiffs-appellees Lambda Research, Inc., and Surface
Enhancement Technologies LLC (collectively Lambda), following a three-week jury trial.
Finding none of his six assignments of error meritorious, we affirm the trial court’s
judgment.
{¶2} In his first and second assignments of error, Jacobs argues the trial court
erred in denying his motion for judgment notwithstanding the verdict, or in the
alternative, his motion for a new trial, because Lambda failed to prove the element of
causation on its tortious-interference-with-business-relationship claim, and it failed to
prove the elements of causation and damages on its breach-of-contract claim,
misappropriation-of-trade-secrets claim, and civil-conspiracy claim, and therefore, the
jury’s verdict on those claims was not supported by the evidence.
{¶3} In reviewing the trial court’s denial of Jacobs’s motion for judgment
notwithstanding the verdict, we construe the evidence most strongly in favor of Lambda.
See Civ.R. 50(A)(4) and (B). A motion for judgment notwithstanding the verdict must
be denied when substantial, competent evidence has been presented from which
reasonable minds could draw different conclusions. See Goodyear Tire & Rubber Co. v.
Aetna Cas. & Sur. Co., 95 Ohio St.3d 512, 2002-Ohio-2842, 769 N.E.2d 835, ¶ 3-4.
{¶4} After reviewing all the evidence presented in this case, we conclude that
reasonable minds could have differed on whether Jacobs had (1) tortiously interfered
with Lambda’s business relationships with General Electric and Pratt & Whitney; (2)
breached his employment contract causing Lambda damages; (3) misappropriated
Lambda’s trade secrets causing it to lose profits; and (4) acted in malicious combination
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OHIO FIRST DISTRICT COURT OF APPEALS
with his new employer to cause Lambda injury. Consequently, the trial court did not err
in denying Jacobs’s motion for judgment notwithstanding the verdict on those claims.
{¶5} Jacobs alternatively argues that the trial court erred in denying his
motion for a new trial because the jury’s verdict was against the manifest weight of the
evidence. See Civ.R. 59(A)(6). We review a trial court’s decision to deny a motion for
new trial for an abuse of its discretion. See Sharp v. Norfolk & W. Ry. Co., 72 Ohio St.3d
307, 312, 649 N.E.2d 1219 (1995). The trial court did not abuse its discretion in denying
Jacobs’s motion for a new trial because the jury’s verdict was amply supported by the
record. We, therefore, overrule his first and second assignments of error.
{¶6} In his third assignment of error, Jacobs argues that the trial court erred
to his prejudice in admitting into evidence speculative and uncorroborated testimony
and exhibits of budgetary forecasting and by failing to grant remittitur based on these
errors.
{¶7} Jacobs argues that the trial court abused its discretion in admitting
testimony from Lambda’s expert, Jeffery Long. The record reflects that prior to trial,
Jacobs asked the trial court to exclude Long’s testimony as a matter law. The trial court
refused, but stated that it was making no ruling on whether Long’s testimony would be
admissible at trial.
{¶8} When Long began testifying, Jacobs’s counsel stated that he wanted to
voir dire Long before he proffered his opinion. The trial court stated that Lambda’s
counsel should have an opportunity to qualify Long, and that Jacobs’s counsel could voir
dire him, if plaintiff had n0t done so. A discussion was then held off the record followed
by a brief recess.
{¶9} Following questioning by Lambda’s counsel, Lambda’s counsel asked the
court to permit Long to provide opinion testimony. The court asked Jacobs’s counsel if
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OHIO FIRST DISTRICT COURT OF APPEALS
he wanted to voir dire Long. Jacobs’s counsel replied, “No, although I object to his
qualification to provide testimony on patent licensing and reasonable royalty * * * as
there has been nothing to qualify that witness in that very niche field of damages. But I
will save the remainder of my issues for cross-examination.” The court then asked
Lambda’s counsel if he wanted to ask Long about his qualifications on those issues.
Following more testimony, Lambda’s counsel tendered Long as an expert witness. The
court then stated it would accept his testimony, without any objection from Jacobs’s
counsel. Long then testified without any further objection by Jacobs’s counsel.
{¶10} Jacobs’s failure to object to the admission of Long’s testimony at trial
denied the trial court the opportunity to effectively correct any error. We decline to
label as plainly erroneous Long’s testimony when it was not met with the appropriate
objections. See Suida v. Howard, 1st Dist. Nos. C-000656 and C-000687, 2002-Ohio-
2292, ¶ 18-19 quoting Goldfuss v. Davidson, 79 Ohio St.3d 116, 121, 679 N.E.2d 1099(1997).
{¶11} Moreover, we cannot say that the trial court abused its discretion in
denying JacobS’s motion for remittitur of damages on the misappropriation-of-trade-
secrets claim. “The assessment of damages is usually entirely within the discretion of
the jury, and the trial court is disallowed to alter a jury's decision.” See Innovative
Technologies Corp. v. Advanced Mgt. Technology, 2d Dist. No. 23819, 2011-Ohio-
5544, ¶ 68. The trial court did not err in denying Jacobs’s motion for remittitur
where the jury’s award of damages was not so excessive as to appear to be the result
of passion or prejudice, and the amount awarded was not against the manifest weight
of the evidence. See id. at ¶ 68 and 108. We, therefore, overrule Jacobs’s third
assignment of error.
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OHIO FIRST DISTRICT COURT OF APPEALS
{¶12} In his fourth assignment of error, Jacobs argues that “the trial court
erred in not vacating the judgment against him for conspiracy with a codefendant when
the codefendant was admittedly not properly served under the Hague Services
Convention and not under the court’s jurisdiction.”
{¶13} The record reveals that prior to trial, Ecoroll AG, a German company,
had filed a motion to dismiss Lambda’s claims against it, pursuant to Civ.R. 3(A), based
upon its allegations that Lambda had failed to properly serve it under the terms of the
Hague Convention. Lambda filed a memorandum opposing the motion to dismiss,
arguing that it had perfected service of process upon Ecoroll AG by serving Ecoroll Corp.
Tool Technology, its wholly owned subsidiary and involuntary domestic agent, at its
offices in Milford, Ohio. Thus, Lambda argued that the Hague Services Convention did
not apply. The trial court denied Ecoroll AG’s motion to dismiss. Ecoroll AG
subsequently renewed the motion, which the trial court again denied.
{¶14} Following the jury’s verdict in favor of Lambda, the trial court
journalized a December 16, 2009 entry, which provided that Jacobs, Ecoroll AG, and
Ecoroll Corp. Tool Technology were jointly and severally liable. Ecoroll AG and its
wholly owned subsidiary, Ecoroll Corp. Tool Technology, (“the Eocoroll defendants”)
subsequently entered into a settlement agreement with Lambda. On June 1, 2011, the
trial court entered an order that (1) enforced the settlement agreement, (2) partially
vacated the December 16, 2009 judgment entry and the related March 24, 2010 decision
awarding attorney fees against the Ecoroll defendants, and (3) dismissed all of Lambda’s
claims against Ecoroll AG and Ecoroll Corp. Tool Technology with prejudice.
{¶15} In a June 1, 2010 order, the Ecoroll defendants, and Lambda expressly
consented to the trial court maintaining jurisdiction to enforce the settlement agreement
between them “without waiving the affirmative defenses of insufficiency of process and
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OHIO FIRST DISTRICT COURT OF APPEALS
lack of personal jurisdiction.” The June 1, 2010 order further provided that Jacobs was
not a party to the Ecoroll defendants’ agreement with Lambda, and that the entry “d[id]
not vacate any judgment, terminate any execution proceeding, or apply to any claims
brought against or by Defendant Terry Jacobs.” The trial court subsequently entered
final judgment on the jury’s verdict on June 11, 2010, against Jacobs.
{¶16} Jacobs’s argument that an alleged failure of personal service on Ecoroll
AG justifies vacation of the final judgment against him is feckless. Whether service of
process was properly perfected on Ecoroll AG is a personal defense to Ecoroll AG.
Ecoroll AG, the only party who asserted that affirmative defense, has settled with
Lambda and has been dismissed from the case.
{¶17} Jacobs’s reliance on O.B. Corp. v. Cordell, 47 Ohio App.3d 170, 547
N.E.2d 1201 (10th Dist.1988) is also misplaced. Jacobs cites Cordell for the proposition
that even if Ecoroll AG was still part of the litigation and if there were a judgment against
it, that such a judgment would be void ab initio and that it “necessarily follows” that
there can be no judgment against him. But the court in Cordell never considered
vacating a judgment against a properly served party based upon an argument that
another party was not properly served. Id. at 172. Rather, the court considered only
whether judgment could be entered against two defendants, neither of which had been
served. Id.
{¶18} Jacobs’s reliance on Rondy v. Rondy, 13 Ohio App.3d 19, 468 N.E.2d 81(9th Dist.1983) is similarly misplaced. Rondy fails to address, much less support,
Jacobs’s argument that a judgment against one party is void based on the possibility that
a judgment could not be properly entered against a codefendant. Rondy involved a
modification of a child support order where the other party to the divorce proceedings,
the wife, had not been served with notice of the motion for modification and had no
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OHIO FIRST DISTRICT COURT OF APPEALS
opportunity to protect her interest in the proceeding. Id. at 19-20. The wife challenged
the trial court’s orders, and the appellate court concluded that they were void ab initio.
Id. at 20-21.
{¶19} Jacobs has not set forth any case law to support his argument that he has
standing to attack a valid judgment against him based upon a purported lack of service
of process on or a lack of personal jurisdiction over a codefendant, who has subsequently
settled with the plaintiff and has been dismissed from the lawsuit with prejudice. As a
result, the trial court did not err in denying his motion to vacate the judgment against
him on this basis. We, therefore, overrule his fourth assignment of error.
{¶20} In his fifth assignment of error, Jacobs argues that the trial court erred
by failing to dismiss Lambda’s claims against him in favor of arbitration. But Jacobs
waived any right he may have had for this court to review the parties’ arbitration
agreement by failing to timely appeal from the trial court’s September 2004 order
denying his request for arbitration.
{¶21} In August 2004, Jacobs filed a motion to dismiss the proceedings in the
trial court and to compel arbitration under his contract with Lambda. Lambda filed a
memorandum opposing the motion. Jacobs filed a reply memorandum in which he
asserted that the trial court should, at a minimum, stay the proceedings pending
arbitration. On September 14, 2004, the trial court denied Jacobs’s motion.
{¶22} R.C. 2711.02(C) provides that
[e]xcept as provided in division (D) of this section, an order under
division B of this section that grants or denies a stay of a trial of any
action pending arbitration including but not limited to, an order that is
based upon a determination that a party has waived arbitration under the
arbitration agreement is a final order and may be reviewed, affirmed,
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OHIO FIRST DISTRICT COURT OF APPEALS
modified, or reversed on appeal pursuant to the Rules of Appellate
Procedure and to the extent not in conflict with those rules, Chapter 2505
of the Revised Code. (Emphasis added.)
The Ohio Supreme Court has held that “R.C. 2711.02(C) permits a party to appeal a trial
court order that grants or denies a stay of trial pending arbitration, even when the order
makes no determination pursuant to Civ.R. 54(B).” See Mynes v. Brooks, 124 Ohio
St.3d 13, 2009-Ohio-5946, 918 N.E.2d 511, syllabus.
{¶23} Because R.C. 2711.02(C) defines an order denying a motion to stay
proceedings pending arbitration as a final appealable order, Jacobs had 30 days in
which to appeal the trial court’s order denying his motion to stay proceedings pending
arbitration. See App.R. 4. By failing to timely appeal the trial court’s September 2004
order, and then engaging in years of protracted litigation, including a three-week jury
trial, Jacobs waived his right to argue the merits of the trial court’s arbitration ruling.
See Green Tree Servicing LLC v. Kramer, 193 Ohio App.3d 140, 2011-Ohio-1408, 951
N.E.2d 146, ¶ 19-25 (2d Dist.); Smith v. Williams, 10th Dist. No 09AP-732, 2010-Ohio-
1381, ¶ 13-16; compare Welsh v. Indiana Ins. Co., 5th Dist. No. 2005-CA-00327, 2006-
Ohio-6803 ¶ 17 (applying res judicata instead of waiver). We, therefore, overrule his
fifth assignment of error.
{¶24} In his sixth assignment of error, Jacobs argues that the trial court erred
in awarding Lambda attorney fees for the breach-of-contract, tortious-interference, and
conspiracy claims when there was no statutory basis for the award of attorney fees.
{¶25} We review a trial court’s award of attorney fees under an abuse-of-
discretion standard. Bittner v. TriCounty Toyota, 58 Ohio St.3d 143, 146, 569 N.E.2d
464 (1991); see Hollingsworth v. Time Warner Cable, 168 Ohio App.3d 658, 2006-
Ohio-4903, 861 N.E.2d 580, ¶ 81-86 (1st Dist.). The Ohio Supreme Court has held that
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OHIO FIRST DISTRICT COURT OF APPEALS
when there are claims in a case that can be separated into those for which attorney fees
are recoverable and those for which no fees are recoverable, “the trial court must award
fees only for the amount of time spent pursuing the claim for which fees may be
awarded.” Bittner at 145.
{¶26} Jacobs does not challenge Lambda’s entitlement to attorney fees for the
misappropriation-of-trade-secrets claim. See R.C. 1333.64(C). Rather, he argues that
the trial court was required to reduce the amount of attorney fees to reflect only those
fees incurred by Lambda in pursuing that claim. But the record reflects that Lambda’s
expert witness, Carl Stitch, testified that he could not allocate an amount of attorney fees
for the misappropriation claim when it had been interrelated with the civil-conspiracy,
tortious-interference, and breach-of-contract claims, when the claims had been
successfully tried as a whole, and when they all shared a common core of facts. Stitch
further testified that the billing statements did not break down the amount of time
Lambda’s attorneys had spent on each claim.
{¶27} Jacobs did not present any evidence to contradict Stitch’s testimony, nor
did he call any of Lambda’s attorneys to try to discern a breakdown of the fees for each
claim. On the state of this record, we cannot say that the trial court abused its discretion
in awarding Lambda attorney fees on the breach-of-contract, tortious-interference, and
conspiracy claims. See Miller v. Grimsley, 197 Ohio App.3d 167, 2011-Ohio-6049, 966
N.E.2d 932, ¶ 17-19 (10th Dist.); New Concept Hous. Inc. v. United Dept. Stores Co, 1st
Dist. No. C-080504, 2009-Ohio-2259, ¶ 32-42; Hollingsworth at ¶ 81-86; Parker v. I &
F Insulation Co., 1st Dist. No. C-960602, 1998 Ohio App. LEXIS 1187, *20-22 (Mar. 27,
1998). We, therefore, overrule Jacobs’s sixth assignment of error and affirm the trial
court’s judgment.
Judgment affirmed.
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OHIO FIRST DISTRICT COURT OF APPEALS
HILDEBRANDT, P.J., SUNDERMANN and HENDON, JJ. concur.
J. HOWARD SUNDERMANN, retired, from the First Appellate District, sitting by
assignment.
Please Note:
The court has recorded its own entry this date.
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