NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

File Name: 16a0625n.06

No. 16-3419

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

FARMERS’ ETHANOL LLC,

Plaintiff-Appellant,

v.

BOUNTY MINERALS, LLC,

Defendant-Appellee.

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ON APPEAL FROM THE UNITED 

STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF OHIO

BEFORE: DAUGHTREY, CLAY, and COOK, Circuit Judges.

MARTHA CRAIG DAUGHTREY, Circuit Judge. In this diversity action for breach of 

contract, plaintiff Farmers’ Ethanol LLC, appeals the district court’s grant of judgment on the 

pleadings to defendant Bounty Minerals, LLC. Farmers’ Ethanol argues that letters of intent 

executed by the parties comprise an enforceable agreement for Bounty Minerals’s purchase of 

certain oil and gas rights from Farmers’ Ethanol. In the alternative, Farmers’ Ethanol argues that 

it is entitled to recover damages under a theory of promissory estoppel predicated on Bounty 

Minerals’s silence in the face of an alleged duty to speak. For the reasons discussed below, we

affirm the judgment of the district court. 

FACTUAL AND PROCEDURAL BACKGROUND

The complaint in this case alleged the following: After a period of negotiation, Farmers’ 

Ethanol and Bounty Minerals agreed to and signed letters of intent that discussed “proposed 
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transactions” in which Bounty Minerals would purchase oil and gas interests from Farmers’ 

Ethanol. Among other provisions, one of the letters of intent stated:

After the execution of this letter of intent, Bounty shall have seven days to 

conduct a preliminary review of title and evaluate the Properties. During the 

initial review period, Farmers’ shall provide Bounty copies of deeds and other 

title information and documentation regarding title to the Properties to Bounty. If 

after the initial review period, Bounty wants to proceed with the acquisition of the 

oil and gas interest, Bounty shall prepare an oil and gas deed and order for 

payment in the forms attached . . . and present them to Farmers’ for review and 

approval.

The letters of intent also stated that “Bounty acknowledges that Farmers’ may choose to satisfy 

one or more liens or claims from proceeds of this transaction.” 

After the initial review period elapsed, Bounty Minerals did not prepare the deeds and 

orders for payment. Approximately one month after the signing of the letters of intent, Bounty 

Minerals told Farmers’ Ethanol that a price reduction from what was reflected in the letters of 

intent would induce it to purchase the oil and gas interests. Farmers’ Ethanol declined to reduce 

the price; subsequently, Bounty Minerals informed Farmers’ Ethanol that an outstanding 

$600,000 civil judgment and judgment lien against the real property prevented it from going 

forward with the proposed transaction. In the following months, Bounty Minerals continued to 

maintain that the civil judgment and lien were an impediment to closing. 

Ultimately, Farmers’ Ethanol informed Bounty Minerals that it would satisfy the 

judgment (along with a $400,000 premium that the judgment creditor required in order to enter 

an escrow agreement requested by Bounty Minerals). Without hearing back from Bounty 

Minerals, Farmers’ Ethanol then did so and subsequently sent electronic copies of documents 

satisfying the judgment and releasing the lien, which Bounty Minerals agreed to forward to its 

legal counsel for review.
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A month or so later, Farmers’ Ethanol contacted Bounty Minerals about the closing it 

anticipated would occur several weeks thereafter. Counsel for Bounty Minerals subsequently 

told Farmers’ Ethanol that it did not believe that it was obligated to purchase the mineral 

interests and that no closing was planned. 

Farmers’ Ethanol initiated suit against Bounty Minerals in Ohio state court, alleging 

breach of contract and promissory estoppel (among other claims). With regard to the cause of 

action for breach of contract, Farmers’ Ethanol alleged that the letters of intent constituted a 

binding contract for the sale of the oil and gas interests to Bounty Minerals. Farmers’ Ethanol 

also alleged that Bounty Minerals’s failure to give notice that it would not close the deal even if 

the judgment lien was satisfied estopped Bounty Minerals from “claiming that it ha[d] no 

obligation to perform its contracts.” Bounty Minerals removed the case to federal district court 

and moved for judgment on the pleadings on all claims. 

The district court granted Bounty Minerals’s motion, finding that Farmers’ Ethanol failed 

to state a claim for breach of contract because there was no binding agreement and that Farmers’ 

Ethanol failed to state a claim for promissory estoppel by silence because it did not articulate any 

duty under which Bounty Minerals would be required to speak. Farmers’ Ethanol now appeals.

DISCUSSION

Standard of Review

We review an entry of judgment on the pleadings under Federal Rule of Civil Procedure 

12(c) using the same de novo standard of review that applies to a motion to dismiss for failure to 

state a claim. Tucker v. Middleburg-Legacy Place, 539 F.3d 545, 549 (6th Cir. 2008). All wellpleaded material allegations of the party opposing the motion must be taken as true; the motion 

may be granted only if the moving party nevertheless is entitled to judgment as a matter of law. 
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Id.; see also Florida Power Corp. v. FirstEnergy Corp., 810 F.3d 996, 1000 (6th Cir. 2015). In 

order to survive a motion for judgment on the pleadings, a plaintiff’s complaint must meet the 

plausibility standard announced by the Supreme Court in Bell Atlantic Corp. v. Twombly,

550 U.S. 544 (2007). See Tucker, 539 F.3d at 550 (citing Sensations, Inc. v. City of Grand 

Rapids, 526 F.3d 291, 295 (6th Cir. 2008)). Because this case is in federal court under diversity 

jurisdiction, Ohio substantive law applies. 

The “Initial Review Period” Clause

Farmers’ Ethanol argues that the letters of intent constitute a binding contract and that the 

“initial review period” clause was in fact a satisfaction clause requiring Bounty Minerals to fill 

out the deeds and purchase the oil and gas interests unless it was dissatisfied with the title or the 

properties. Farmers’ Ethanol argues that Bounty Minerals breached this purported satisfaction 

clause because it refused to close the transaction in bad faith. We disagree. 

As we have noted in a previous opinion dealing with relevant state law:

Under Ohio law, when confronted with an issue of contract interpretation, a 

court’s role is to give effect to the intent of the parties. To that end, courts should 

examine the contract as a whole and presume that the intent of the parties is 

reflected in the language of the contract. . . . When the language of a written 

contract is clear, a court may look no further than the writing itself to find the 

intent of the parties. Courts may examine extrinsic evidence to ascertain the 

parties’ intent only if the contract is ambiguous.

Eastham v. Chesapeake Appalachia, L.L.C., 754 F.3d 356, 361 (6th Cir. 2014) (internal 

quotation marks, alterations, and citations omitted) (emphasis added). A contract is ambiguous if

it cannot be given a definite legal meaning or if the relevant provision “is susceptible of more 

than one reasonable interpretation.” Id. 

In this case, the plain language of the “initial review period” clause is unambiguous, and 

it unambiguously is not a satisfaction clause. Such clauses generally condition a party’s 
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performance of its duty on its satisfaction with how the other party has performed. By contrast, 

the “initial review period” term in the letters of intent simply stated that Bounty Minerals was 

free to purchase the rights at issue “[i]f . . . [it] wants to,” granting it unfettered discretion about 

whether to proceed with the sale. 

In its brief on appeal, Farmers’ Ethanol’s discussion of why it believes the “initial review 

period” clause is a satisfaction clause rests on faulty reasoning:

[T]he ‘initial review period’ term did [make one party’s performance dependent 

upon the other party’s performance]. Farmers obligation under the [letters of 

intent] to convey the Oil and Gas Rights to Bounty was dependent upon Bounty 

providing the completed deeds and orders for payment after the ‘initial review 

period.’ If Bounty was satisfied with the properties and manifested that 

satisfaction by presenting Farmers with completed deeds and orders for payment, 

then Farmers was obligated to execute the deeds to convey the Oil and Gas Rights 

to Bounty. Thus, Farmers performance was contingent upon Bounty’s 

performance.

Farmers’ Ethanol’s explanation of why it believes a satisfaction clause exists makes clear 

that the obligation actually runs in the opposite direction in terms of what would be necessary to 

bind Bounty Minerals to perform. Leaving aside the fact that what Farmers’ Ethanol has argued

more closely resembles the fulfillment of a condition precedent (and not an obligation under a 

satisfaction clause), there is a clear non-sequitur in its reasoning. It is true that if Bounty 

Minerals were satisfied with the title work, it could choose to execute the deeds, but it was 

Farmers’ Ethanol (not Bounty Minerals) that the language purports to bind. The fact that the 

“initial review period” clause appears after language requiring Farmers’ Ethanol to provide 

“deeds and other title information and documentation regarding title to the Properties” does not 

limit the scope of Bounty Minerals’s discretion or transform the provision into a satisfaction 

clause dependent upon the quality of Farmers’ Ethanol’s title. 
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A review of the language of the letters of intent makes clear that what they embody is 

merely an offer of sale. Had Bounty Minerals offered some consideration to Farmers’ Ethanol

for its promise to sell its rights at the rates specified in the letters of intent, the letters of intent 

could have formed an enforceable option contract. On their face, the letters of intent clearly 

reflect a promise by Farmers’ Ethanol to sell the oil and gas interests to Bounty Minerals “[i]f 

after the initial review period, Bounty wants” to buy them. The non-circumvention clause in the 

letters of intent (requiring Farmers’ Ethanol not to engage with other prospective buyers) further 

bolsters this interpretation. But there is no promise by Bounty Minerals to complete the 

purchase. Therefore, any agreement reached is, at most, a unilateral contract binding Farmers’ 

Ethanol only.1

What is left, then, are letters of intent that embody an offer to sell, which Bounty 

Minerals could choose to accept or reject as it wished. In the letters, Bounty Minerals promised 

nothing except to prepare the deeds if it wished to consummate the transaction proposed; it 

thereby retained the ability to decide whether to purchase the oil and gas rights, and Farmers’ 

Ethanol may not now force the sale or recover damages. See Langley v. DaimlerChrysler Corp., 

407 F. Supp. 2d 897, 917 (N.D. Ohio 2005), aff’d, 502 F.3d 475 (6th Cir. 2007) (observing that a 

contract is illusory when the promisor retains an unlimited right to determine the nature or extent 

of its performance; such an agreement may not be enforced or damages sought for its breach).

 

1

“A contract is an ‘option’ if the optionholder has the right, but not the obligation, to compel performance by the 

other contract party ‘if he chooses.’” Blanchard Valley Farmers Coop., Inc. v. Carl Niese & Sons Farms, Inc., 

758 N.E.2d 1238, 1243 (Ohio Ct. App. 2001). Hence, an option contract “bind[s] one side without binding the 

other.” Four Howards, Ltd. v. J & F Wenz Rd. Invest., L.L.C., 902 N.E.2d 63, 71 (Ohio Ct. App. 2008). If (as it 

appears from the record) Bounty Minerals did not give consideration for the option to purchase the oil and gas 

rights, Farmers’ Ethanol would have been free to rescind the offer. Thus, the letters of intent may not form any 

enforceable agreement. See Plikerd v. Mongeluzzo, 596 N.E.2d 601, 606 (Ohio Ct. App. 1992).
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Although it is true that courts should avoid an interpretation of a contract that would 

render its promises illusory, Tackett v. M & G Polymers USA, LLC, 811 F.3d 204, 208 (6th Cir. 

2016), the language of the letters of intent in this case is clear and unambiguous: Bounty 

Minerals was required to purchase the rights only if it chose to do so. The letters of intent do not 

delimit the criteria on which a decision to purchase could be premised. And, further, because the 

writings in this case are styled as letters of intent rather than as a contract, it is obviously less 

troubling to conclude that no enforceable contract was created. 

Intent to be Bound 

Farmers’ Ethanol contends that, even if the “initial review period” clause is not a 

satisfaction clause, the district court erred in granting judgment on the pleadings because whether 

the parties intended to be bound by the letters of intent is a question of fact for a jury. Farmers’ 

Ethanol’s primary authority for this proposition is our decision in Arnold Palmer Golf Co. v. 

Fuqua Industries, Inc., 541 F.2d 584 (6th Cir. 1976). 

In Arnold Palmer Golf, which arose in the context of summary judgment, the parties 

executed a “memorandum of intent” that “serve[d] to confirm the general understanding” that the 

parties “ha[d] reached” regarding the acquisition of Arnold Palmer Golf stock by Fuqua

Industries, in exchange for the acquisition of a Fuqua Industries subsidiary’s stock by Arnold 

Palmer Golf and for management services by Fuqua Industries. Id. at 586. The memorandum 

“contained detailed statements concerning . . . the form of the combination, the manner in which

the business would be conducted, the loans that Fuqua agreed to make to Palmer, and the 

warranties and covenants to be contained in the definitive agreement,” among other things. Id. 

The memorandum also included two provisions upon which the obligations of the parties would 

be conditioned: first, that the preparation of the definitive agreement would be satisfactory to 
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both parties and their counsel and, second, that the definitive agreement would be approved by 

the Fuqua Industries board of directors. Id. at 586–587. On appeal, we were asked to determine 

whether the parties intended to enter a binding agreement for the transaction itself when they 

executed the memorandum. 

As we stated, “both parties must have a clear understanding of the terms of an agreement 

and an intention to be bound by its terms before an enforceable contract is created.” Id. at 587. 

The question whether an enforceable contract is created “is merely one of expressed intention. 

If their expressions convince the court that they intended to be bound without a formal 

document, their contract is consummated, and the expected formal document will be nothing 

more than a memorial of that contract.” Id. at 587–88 (quoting 1 Corbin on Contracts, 

§30 (1963). We noted, “At bottom, the question whether the parties intended a contract is a 

factual one, not a legal one, and, except in the clearest cases, the question is for the finder of fact 

to resolve.” Id. at 588. 

The holding in Arnold Palmer Golf does not affect the outcome of this case. First, the 

question for the finder of fact is the intent to be bound, not the interpretation of an agreement’s

language. As discussed above, the letters of intent in this case are unambiguous; even if there 

were an intent by the parties to be bound to the terms of the letters of intent, Bounty Minerals 

would be bound only to provide a deed to Farmers’ Ethanol if it wanted to purchase the property. 

Because “[i]t is well established that the construction and interpretation of contracts is a matter 

of law to be determined by the court,” Four Howards, Ltd. v. J&F Wenz Rd. Invest., L.L.C.,

902 N.E.2d 63, 72 (Ohio Ct. App. 2008) this case need not be remanded for consideration by a 

finder of fact. Second, given the illusory nature of the letters of intent, this case is one of those

“clear[] cases” contemplated by Arnold Palmer Golf as being capable of resolution by the court.
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Farmers’ Ethanol also points to the ruling in Arnold Palmer Golf that, in order to 

determine whether the parties manifested an intention to be bound by the terms contained in a 

writing, “the entire document and relevant circumstances surrounding its adoption must be 

considered.” Id. at 589. Farmers’ Ethanol argues that this language requires the court to 

consider Bounty Minerals’s behavior in suggesting an alternative price and then retreating from 

that suggestion as evidence that it believed it was bound by the letters of intent. 

But that argument is equally unavailing. In Arnold Palmer Golf, the dispositive language 

in the memorandum—that “Fuqua will transfer” stock, that the “principal office of Palmer will

be moved,” and that “Fuqua agrees to advance” a payment, as well as the circulation of a press 

release by Fuqua Industries stating that the two companies “have agreed to cooperate in an 

enterprise” in the golfing industry—evinced an intent to be bound by its terms. Id.

The evidence in this case, on the other hand, shows that there was a “proposed” 

transaction, and the only potentially unqualified language in the letters of intent is that Bounty 

Minerals will execute a deed if it desires to do so. Moreover, with regard to Bounty Minerals’s 

attempt to alter the price for the rights, Farmers’ Ethanol’s pleadings make it no less likely that 

Bounty Minerals, after choosing not to proceed with the proposed transaction contemplated in 

the letters of intent, sought to establish negotiations for a different, new sale of rights for a 

different price—well after the seven-day review period had elapsed.

Promissory Estoppel

Under Ohio law, a claim for promissory estoppel exists when a plaintiff has shown a 

clear and unambiguous promise; reliance upon that promise that is reasonable and foreseeable; 

and injury as a result of the reliance. McCarthy v. Ameritech Pub., Inc., 763 F.3d 469, 486–87 

(6th Cir. 2014). “The word ‘promise’ connotes some sort of commitment on the part of the 
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promisor.” Id. at 487. A promise is “a manifestation of intention to act or refrain from acting in 

a specified way, so made as to justify a promisee in understanding that a commitment has been 

made.” Id. (quoting Dailey v. Craigmyle & Son Farms, LLC, 894 N.E.2d 1301, 1307 (Ohio Ct. 

App. 2008)). 

Farmers’ Ethanol bases its claim on a theory that Bounty Minerals was silent in the face 

of a duty to speak. Specifically, Farmers’ Ethanol claims that Bounty Minerals was obligated to 

notify Farmers’ Ethanol that it would not close the proposed sale even if the judgment lien on the 

property was cleared. According to Farmers’ Ethanol, that obligation arose from a duty to 

“negotiate in good faith.” 

Both parties focus their arguments concerning this cause of action on whether Bounty 

Minerals had a duty to speak. But there is fundamental problem with this theory of estoppel: 

Bounty Minerals’s conduct must rise to the level of a promise to purchase the oil and gas rights if 

the judgment lien were satisfied. If its conduct does not amount to a promise, no promissory 

estoppel is available.2

Farmers’ Ethanol’s complaint alleges that “Bounty expressed concern that a $600,000 

civil judgment and a corresponding judgment lien against Farmers’s real property were obstacles 

to closing the transaction”; that “Bounty continued to repeatedly insist over the next two months 

that the Lien precluded it from closing the transaction”; that “Bounty continued to complain that 

the Lien was an obstacle to closing the transaction, and continued to cite the existence of the 

Lien to justify its refusal to complete its title work”; that Bounty Minerals said it “was prepared 

to ‘walk away’ from the deal if Farmers’ Ethanol did not acquiesce to its demand that it be 

 

2

Farmers’ Ethanol’s claim seems closer to equitable estoppel than to promissory estoppel. However, equitable 

estoppel is only a defense, and not a cause of action, under Ohio law. See Ford Motor Credit Co. v. Ryan, 

939 N.E.2d 891, 921 (Ohio Ct. App. 2010) (holding that a claim was for equitable estoppel rather than promissory 

estoppel because it involved a “misrepresentation, not a promise” and noting that “equitable estoppel is a defense to 

a legal or equitable claim, while promissory estoppel is a cause of action”). 
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permitted to contact the judgment creditor”; that “Bounty . . . informed Farmers it would not 

commission the title work until the issue of the Lien was resolved” and “indicated” to Farmers’ 

Ethanol that it should pay the lien; that Farmers’ Ethanol informed Bounty Minerals it would 

satisfy the judgment in full—with no response from Bounty Minerals; and that Farmers’ Ethanol 

notified Bounty Minerals once it had satisfied the judgment and stated that Farmers’ Ethanol

“look[ed] forward to the successful completion of your title work within sixty days.” 

But nowhere does Farmers’ Ethanol allege that Bounty Minerals had promised to close 

the deal if the lien were satisfied. From the complaint it is evident that Bounty Minerals did not 

represent that the judgment and lien were the exclusive obstacles to closing the sale or promise to 

purchase the rights if the lien were satisfied. As a result, Bounty Minerals’s silence when 

confronted with Farmers’ Ethanol’s statement that it would clear the judgment lien in this 

context does not create a promise to do so. Indeed, the complaint makes clear that title work had 

never been undertaken or completed. 

Even taking all well-pleaded facts in Farmers’ Ethanol’s complaint as true, it is not 

plausible to conclude that Bounty had promised to complete the transaction if Farmers’ Ethanol

satisfied the lien, much less that such a promise was clear and unambiguous.3 Regardless of 

whether Bounty Minerals had a duty to speak, the promissory-estoppel claim fails.

CONCLUSION

For the reasons set out above, we find no reversible error and AFFIRM the judgment of 

the district court.

 

3 A recent ruling by the Ohio Court of Appeals suggests that the promise may be one that the promisor “should 

reasonably expect to induce action or forbearance” and need not be “clear and unambiguous.” A N Bros. Corp. v. 

Total Quality Logistics, LLC, 59 N.E.3d 758, 775 (Ohio App. 2016) (holding that the trial court’s failure to require a 

jury to find alleged promises clear and unambiguous was not clear error because, despite court’s consistent 

requirement of a clear and unambiguous promise, the Restatement as adopted by the Ohio Supreme Court did not 

include that language). Even under this standard, Farmers’ Ethanol’s claim fails.