[Cite as Vaughn Industries, L.L.C. v. LG Electronics, Inc. , 2021-Ohio-1253.]

COURT OF APPEALS RICHLAND COUNTY, OHIO FIFTH APPELLATE DISTRICT

VAUGHN INDUSTRIES, LLC, ET AL. : JUDGES: : Hon. John W. Wise, P.J. Defendants/Third-Party Plaintiffs : Hon. Craig R. Baldwin, J. Appellant : Hon. Earle E. Wise, Jr., J. -vs- : : LG ELECTRONICS, INC. : Case No. 2019 CA 0113 : Third-Party Defendant-Appellee : O P I N I O N

CHARACTER OF PROCEEDING: Appeal from the Court of Common Pleas, Case No. 18-CV-686

JUDGMENT: Dismissed

DATE OF JUDGMENT: April 12, 2021

APPEARANCES: For Plaintiff-Appellant For Defendant-Appellee DAVID W. ORLANDINI PAUL SCHUMACHER 655 Metro Place South, Suite 200 600 Superior Avenue East Dublin, OH 43017 Fifth Third Center, Suite 2330 Cleveland, OH 44114 DAVID G. UTLEY 520 South Main Street Suite 2551 RICHARD J. SILK, JR. Akron, OH 44311-1077 250 Civic Center Drive, Suite 280 Columbus, OH 43215 DAVID T. ANDREWS 3161 Neille LaneRichland County, Case No. 2019 CA 0113 2 Twinsburg, OH 44087 Wise, Earle, J. {¶ 1} Appellants, Defendants/Third-Party Plaintiffs Vaughn Indu stries, LLC, et al (Vaughn) appeal the judgment of the Richland County Court of Co mmon Pleas granting Appellee Third-Party Defendant LG Electronics U.S.A., Inc. (LG Electronics) motion to dismiss Vaughn's third-party complaint against LG. For the reas ons that follow, we agree and dismiss Vaughn’s appeal. FACTS AND PROCEDURAL HISTORY {¶ 2} The parties agree upon the facts leading up to the trial court's dismissal of Vaughn's third-party complaint against LG Electronics as outlin ed below. {¶ 3} This matter involves a construction dispute between sever al parties. Plaintiffs are the Ohio Facilities Construction Commission and the Pioneer Career and Technology Center Board of Education ("OFCC" and "Pioneer" or c ollectively, "Plaintiffs"). OFCC is an agency of the State of Ohio formed by the general assembly to facilitate construction and reco nstruction of educational build ings. Pioneer is an Ohio political subdivision which partnered with the OFCC to fund the local share of school building projects within the district. {¶ 4} In May 2010, the State of Ohio through Pioneer entered in to a contract with Vaughn to serve as the heating, ventilation, and air conditioni ng system ("HVAC") contractor for the building of the Pioneer Career and Technolog y Center in Shelby, Ohio ("The Project"). Ohio Farmers Insurance Company acted as surety for the Vaughn HVAC contract. As part of The Project, Vaughn contracted with Stoerm er-Anderson to supply the HVAC system. Stoermer-Anderson then contracted with LG Elec tronics toRichland County, Case No. 2019 CA 0113 3
manufacture and supply the specified HVAC system. Stroemer-Ande rson then purchased the HVAC system from LG Electronics. {¶ 5} On October 2, 2018, Plaintiffs filed a complaint against Vaughn and Ohio Farmers Insurance. The complaint alleged Vaughn failed to perfo rm and otherwise breached certain terms under its contract, breached express war ranties, failed to correct defective materials and installations, failed to perform in a w orkmanlike manner, and/or otherwise failed to comply with the requirements of the contrac t documents. Included as part of the complaint was a claim for replacement of defective parts of the HVAC system manufactured by LG Electronics. OFCC and Pioneer sought damages for the replacement of the HVAC system and other consequential damages. {¶ 6} On December 4, 2018, Vaugn answered the complaint and add itionally filed a third-party complaint against LG Electronics. {¶ 7} On January 4, 2019, LG Electronics moved to dismiss Vaugh n's third-party complaint pursuant to Civ.R. 12(B)(6), arguing the HVAC system was not a product under the Ohio Products Liability Act (OPLA). LG Electronics addition ally moved to dismiss Vaughn's claims for indemnification arguing the economic loss d octrine barred such a claim. {¶ 8} On February 13, 2019, Vaughn filed an Amended Third-Party Complaint against Third-Party Defendants LG Electronics and Stoermer-Ande rson. {¶ 9} On March 1, 2019, LG Electronics renewed its motion to di smiss all thirdparty claims against it including Vaughn's OPLA claim. Vaughn f iled a memorandum in opposition on March 11, 2019, and LG Electronics filed a reply on August 7, 2019.Richland County, Case No. 2019 CA 0113 4 {¶ 10} On October 31, 2019, the trial court granted LG Electron ics' motion to dismiss Vaughn's amended complaint finding the HVAC system was a fixture and not a product as defined by OPLA, and that therefore Vaughn could pro ve no set of facts warranting relief under OPLA. The trial court further found no direct privity of contract between Vaughn and LG Electronics and therefore dismissed Vaugh n's indemnification and contribution claims as barred by the Economic Loss Doctrine

. {¶ 11} Vaughn filed an appeal. On December 12, 2019, LG Electro nics filed a motion to dismiss Vaughn's appeal for lack of a final appealabl e order. Vaughn filed a reply on December 23, 2019. Both parties filed briefs and the m atter is now before this court for consideration. Before we address Vaughn's assignments of error, however, we must first determine whether the matter is before us via a fina l appealable order. FINAL APPEALABLE ORDER ANALYSIS {¶ 12} When determining whether a judgment or order is final an d appealable, an appellate court must first determine whether the order is final within the requirements of R.C. 2505.02. Then, if the order satisfies R.C. 2505.02, the co urt must determine whether Civ.R. 54(B) applies and, if so, whether the order contains a c ertification that there is no just reason for delay. Gen. Acc. Ins. Co. v. Ins. Co. of N. Am ., 44 Ohio St.3d 17, 21, 540 N.E.2d 266 (1989). " 'Civ.R. 54(B) does not alter the requireme nt that an order must be final before it is appealable.' " Id ., quoting Douthitt v. Garrison , 3 Ohio App.3d 254, 255, 44 N.E.2d 1068 (9th Dist.1981). {¶ 13} R.C. 2505.02(B) lists orders that are final and may be r eviewed upon appeal. Here the germane section is (B)(1):Richland County, Case No. 2019 CA 0113 5
(B) An order is a final order that may be reviewed, affirmed, m odified, or reversed, with or without retrial, when it is one of the fol lowing: (1) An order that affects a substantial right in an action that in effect determines the action and prevents a judgment; * * * {¶ 14} Civ.R. 54(B) provides that "[w]hen more than one claim f or relief is presented in an action whether as a claim, counterclaim, cross- claim, or third-party claim," or when the action involves multiple parties, "the court may en ter final judgment as to one or more but fewer than all of the claims or parties only upon a n express determination that there is no just reason for delay." "Thus, in multiple-cla im or multiple-party actions, if the court enters judgment as to some, but not all, of the claim s and/or parties, the judgment is a final appealable order only upon the express dete rmination that there is no just reason for delay." In re Estate of L.P.B ., 10th Dist. No. 11AP-81, 2011-Ohio-4656, ¶ 9. While inserting the language of "no just reason for delay" i n an entry is not a "mystical incantation which transforms a nonfinal order into a final appe alable order," the language can "transform a final order into a final appealable order." Wisintainer v. Elcen Power Strut Co. , 67 Ohio St.3d 352, 354, 617 N.E.2d 1136 (1993), citing Chef Italiano Corp. v. Kent State Univ ., 44 Ohio St.3d 86, 541 N.E.2d 64 (1989). {¶ 15} Vaughn argues the decision on appeal is final because it "affects a substantial right in an action that in effect determines the ac tion and prevents a judgment[.]" R.C. 2505.02(A)(1) defines a "substantial right" a s one "that the United States Constitution, the Ohio Constitution, a statute, the comm on law, or a rule of procedure entitles a person to enforce or protect." "An order w hich affects a substantialRichland County, Case No. 2019 CA 0113 6
right * * * [is] one which, if not immediately appealable, woul d foreclose appropriate relief in the future." (Citations omitted.) Bell v. Mt. Sinai Med. Ctr ., 67 Ohio St.3d 60, 63, 616 N.E.2d 181 (1993). {¶ 16} Vaughn argues the trial court’s order effectively preclu des it from obtaining a judgment against LG and therefore, the trial court’s order de termined the action and prevents a judgment between it and LG. In support of its argume nt, Vaughn cites Dywidag Sys. Internatl., USA, Inc. v. Ohio Dept. of Transp. , 10th Dist. Franklin No. 10AP-270, 2010-Ohio-3211. But Dywidag is factually distinguishable. {¶ 17} In Dywidag , DSI filed a third-party complaint against Insteel asserting c laims for declaratory judgment, indemnity/contribution (which include d a duty to defend), breach of contract, breach of good faith, unjust enrichment, and breac hes of express and implied warranties. Id . at ¶ 4. The trial court subsequently granted summary judgment in favor of Insteel on certain claims and dismissed others under Civ.R. 12( B)(6) thereby dismissing DSI’s third-party complaint in its entirety. Id . at ¶ 5. The court of claims thereafter incorporated Civ.R. 54(B) language into its decision and DSI ap pealed only the claims at issue in its third-party complaint against Insteel. Id . at ¶ 6. Insteel moved to dismiss the appeal arguing the court of appeals lacked subject matter juris diction because indemnity claims are not appropriate for Civ.R. 54(B) certification. Id . at ¶ 7. {¶ 18} In denying Insteel’s motion to dismiss the appeal, the Dywidag court referenced the Ohio Supreme Court’s decision in Gen. Acc. Ins. Co. v. Ins. Co. of N. Am., where the Court concluded the duty to defend involved a “substa ntial right.” Gen. Acc. Ins. Co. , 44 Ohio St.3d at paragraph one of the syllabus, 540 N.E.2d 26 6. The Dywidag court also referenced our decision in Kallaus v. Allen , 5th Dist. Licking No. 09-CA-0002,Richland County, Case No. 2019 CA 0113 7

2009-Ohio-6339. In Kallaus , this Court dismissed an appeal for lack of jurisdiction concluding, "[w]here the duty to defend is not involved, we fin d whether the declaration is one finding coverage or not finding coverage does not change th e analysis where the damages are still unresolved." (Emphasis added.) Id . at ¶ 11. Because DSI’s third-party complaint also alleged a duty to defend against Insteel, which is a "substantial right," the court denied Insteel’s Motion to Dismiss. Id. at ¶¶ 18, 34. {¶ 19} Dywidag and Kallaus also referenced the Ohio Supreme Court’s decision in Walburn v. Dunlap , 121 Ohio St.3d 373, 2009-Ohio-1221, 904 N.E.2d 863, wherein t he Court found that a party entitled to insurance coverage without addressing the issue of damages did not affect a substantial right, despite the trial c ourt’s inclusion of Civ.R. 54(B) language. Id. at ¶ 26.The Walburn court distinguished its decision from Gen. Acc. Ins. Co

. on the basis that Walburn involved a declaration of coverage, but did not involve a duty to defend, and a declaration an insured is entitled to coverage that does not address damages does not affect a substantial right as defined in R.C. 2505.02(A)(1). See Kallaus at ¶ 10. {¶ 20} Here, Vaughn did not assert a claim in its third-party c omplaint that LG has a duty to defend it. It also makes no such allegation in its in demnity/contribution claim. Because Vaughn is not requesting that LG defend it in the prese nt litigation, we conclude the trial court’s dismissal of Vaughn’s claim for indemnificati on/contribution did not result in a final order. See Nationwide Mut. Fire Ins. Co. v. M.B. Roofing Sys., Inc ., 10th Dist. Franklin No. 12AP-44, 2012-Ohio-6195, where the trial court gra nted summary judgment in favor of a defendant on a cross-claim for indemnity or contr ibution while the issue of liability on the main claim remained unresolved. Id . at ¶11. The court of appeals ultimatelyRichland County, Case No. 2019 CA 0113 8
concluded it lacked jurisdiction over the appeal because appell ant would not be denied effective relief if the summary judgment decision was not subje ct to immediate review since appellant could seek review of the summary judgment order as part of any appeal from a final judgment on the main claim. Id

. {¶ 21} Therefore, having concluded the indemnification/contribu tion claim is not a final order because it does not affect a substantial right and damages have not been determined, there is no need to analyze the second prong regard ing whether the trial court’s inclusion of Civ.R. 54(B) language makes this an appeal able order. {¶ 22} We next address Vaughn’s OPLA claim. "Generally, the que stion of whether an order is final and appealable turns on the effect which the order has on the pending action rather than the name attached to it, or its general natu re." In re Murray , 52 Ohio St.3d 155, 157, 556 N.E.2d 1169 (1990). Here, the OPLA claim sa tisfies the definition of a "substantial right" because it involves the enforcement of pr oduct liability statutory rights, R.C. 2307.71 et seq., which were also previously recogn ized at common law. McAuliffe v. W. States Import Co., Inc ., 72 Ohio St.3d 534, 538, 651 N.E.2d 957 (1995). Having found the OPLA claim satisfies the definition of a "subs tantial right," we must next determine whether the trial court’s dismissal of the OPLA claim affects a substantial right. "[A]n order affects a substantial right only if an immediate ap peal is necessary to protect the interests of the appealing party." Thomasson v. Thomasson , 153 Ohio St.3d 398, 2018-Ohio-2417, 106 N.E.3d 1239, ¶ 23. {¶ 23} This Court explained in Meier v. Meier , 5th Dist. Fairfield No. 16-CA-42, 2017-Ohio-1109, ¶ 12:Richland County, Case No. 2019 CA 0113 9
An "order which affects a substantial right has also been inter preted to be one which, if not immediately appealable, would foreclose appropriate relief in the future." State v. Shaffer , 8th Dist. Cuyahoga No. 87552, 2006-Ohio-5563, Bell v. Mt. Sinai Med. Ctr ., 67 Ohio St.3d 60, 616 N.E.2d 181 (1993). To establish an order affects a substantial right, the appellant must establish that, in the ab sence of immediate review of the order, he or she will be denied effecti ve relief in the future. Id

. {¶ 24} Here, an immediate appeal is not necessary to protect Va ughn’s right to assert an OPLA claim against LG in the future. Rather, Vaughn’s right to recover against LG on its OPLA claim is contingent on OFCC first recovering aga inst Vaughn. If OFCC proves its claims against Vaughn and recovers damages, Vaughn c ould thereafter appeal the trial court’s decision dismissing its OPLA claim against LG . However, if OFCC fails to prove its claims against Vaughn then Vaughn’s OPLA claim agains t LG is moot. Thus, Vaughn’s OPLA claim against LG remains viable in the future abs ent an immediate appeal because even though Vaughn’s OPLA claim is a substantial right, the trial court’s decision dismissing this claim did not affect this substantial right. Having concluded the trial court’s dismissal of Vaughn’s OPLA claim did not affect a substantial right, as with the indemnity/contribution clai m, we will not address the effec t of the trial court’s inclusion of Civ.R. 54(B) language as applied to the OPLA claim.Richland County, Case No. 2019 CA 0113 10

{¶ 25} For these reasons, the judgment entry appealed from is n ot a final appealable order and we are without jurisdiction to address Vau ghn's appeal. We therefore grant LG’s Motion to Dismiss Appeal.

By Wise, Earle, J. Wise, John, P.J. and Baldwin, J. concur.

EEW/