Court Opinion

ID: 2700534
Source: CourtListenerOpinion
Date Created: 2014-08-04 19:22:17.658814+00
Date Added: 2024-06-11T13:10:52.164524
License: Public Domain

[Cite as Aqua Ohio, Inc. v. Allied Indus. Dev. Corp., Inc., 2014-Ohio-1473.]

                            STATE OF OHIO, MAHONING COUNTY

                                   IN THE COURT OF APPEALS

                                        SEVENTH DISTRICT

AQUA OHIO, INC.,              )
                              )                              CASE NO.          13 MA 85
     PLAINTIFF-APPELLEE,      )
                              )
VS.                           )                              OPINION
                              )
ALLIED INDUSTRIAL DEVELOPMENT )
CORPORATION, INC., et al.,    )
                              )
     DEFENDANTS-APPELLANTS. )

CHARACTER OF PROCEEDINGS:                                    Civil Appeal from Common Pleas Court,
                                                             Case No. 12CV722.

JUDGMENT:                                                    Affirmed.

APPEARANCES:
For Plaintiff-Appellee:                                      Attorney James Blomstrom
                                                             Attorney Matthew Vansuch
                                                             26 Market Street, Suite 1200
                                                             Youngstown, Ohio 44503

For Defendant-Appellant:                                     Attorney Kathryn Vadas
                                                             Attorney Kevin Bradford
                                                             6550 Seville Drive, Suite B
                                                             Canfield, Ohio 44406

JUDGES:
Hon. Joseph J. Vukovich
Hon. Gene Donofrio
Hon. Cheryl L. Waite

                                                             Dated: March 31, 2014
[Cite as Aqua Ohio, Inc. v. Allied Indus. Dev. Corp., Inc., 2014-Ohio-1473.]
VUKOVICH, J.

        {¶1}     Defendants-appellants Allied Industrial Development Corporation, Inc.
and Allied Erecting and Dismantling Co., Inc. (Allied) appeal the decision of the
Mahoning County Common Pleas Court granting plaintiffs-appellees Aqua Ohio,
Inc.’s motion for Judgment Notwithstanding the Verdict (JNOV).                          In granting the
JNOV, the trial court determined that the language of the 1913 contract, which is at
the core of this lawsuit, does not require Aqua to remove the pipeline and does not
provide for damages for failing to remove the pipeline. For the reasons expressed
below, that legal interpretation of the 1913 contract is proper and sound. Therefore,
the judgment of the trial court is hereby affirmed.
                                        Statement of the Case
        {¶2}     In 1913, The Lake Erie and Eastern Railroad Company and Mahoning
Valley Water Company entered into a contract which allowed the water company to
lay an 18 inch waterline across the railroad company’s land.                          The pipeline was
thereafter laid.
        {¶3}     Mahoning Valley Water Company later dissolved and Ohio Water
Company assumed the rights, responsibilities, and obligations under the contract.
The water company is Aqua Ohio’s predecessor in interest and the railroad is Allied’s
predecessor in interest.
        {¶4}     Allied has been acquiring land between the Mahoning River and Poland
Avenue since the early 1970s and now owns over 200 acres in this area. This land,
or portions of it, are considered a brownfield and Allied is in the process of reclaiming
this area by removing so many feet of earth and refilling it with “clean” earth; its plan
is to remediate this area and create a “Foreign Trade Zone.”
        {¶5}     In 1994, Allied approached Ohio Water about this 18 inch crossover
waterline. Allied was of the position that the waterline interfered with its plans for the
property and that Ohio Water needed to and was required to relocate the line.
Negotiations occurred but eventually broke down and the issue was not resolved.
        {¶6}     It appears from the record that around that time the waterline began
leaking and was flooding portions of Allied’s property.                        In 1994 and 1996, Allied
                                                                                         -2-

complained to Ohio Water and Aqua Ohio of this problem. Allegedly nothing was
done to repair the waterline at that point. In 2000, Norfolk and Southern Railroad
complained to Aqua Ohio about the leaking water because it was flooding portions of
its land. In December 2000, the valve was shut off and no water was transported
through the line.
       {¶7}   Sometime in 2009, Allied contacted Aqua Ohio and asked for the
location of this waterline. Aqua Ohio provided Allied with a schematic of where the
waterline was located. However, the schematic did not indicate at what depth the
waterline was located. It appears that Allied wanted Aqua Ohio to come out to the
site and indicate exactly where the line was located and at what depth. Allied wanted
this information because it was in the process of remediating the land and it did not
want to dig up the waterline and damage it; it was afraid of potential liability.
       {¶8}   Thereafter, Allied contacted Aqua Ohio about the waterline, requesting
permission to remove it. At the end of 2010 or in the beginning of 2011, Aqua Ohio
informed Allied that Allied could remove the line, but that Aqua Ohio was not
abandoning the easement that was created by the 1913 contract.                      This was
unacceptable to Allied.     Allied did not believe that the 1913 contract created an
easement and it was of the position that even if it did, it wanted Aqua Ohio to
relinquish that easement. Due to the language used in a letter granting permission to
Allied to remove the waterline, Allied refused to remove the line. Instead, it appears
that the parties attempted to negotiate about relocating this waterline. However,
negotiations reached an impasse.
       {¶9}   Aqua Ohio wanted to retain this “easement” because it still wanted the
ability to transfer water across Allied’s property. In fact, it is claimed that at one point
Aqua Ohio attempted to come out and repair the waterline. However, Allied would
not let Aqua Ohio remain on the property to take such action. This waterline provides
access to another waterline that can transport water from Lake McKelvey to Aqua
Ohio’s potential fracking customers.       That lake’s water is low in sulfates and is
allegedly the type of water needed for fracking.
       {¶10} As a result of the above, Aqua Ohio filed a verified complaint against
Allied seeking a declaratory judgment that the 1913 agreement created a license
                                                                                     -3-

coupled with an interest in favor of Aqua Ohio. 03/09/12 Complaint. Aqua Ohio also
sought a temporary restraining order asking for immediate access to Allied’s property
to repair and reestablish water flow through the waterline. 03/09/12 TRO. The TRO
was denied.
      {¶11} Allied filed an answer and counterclaim asserting that Aqua Ohio
breached the agreement by refusing to relocate the waterline and by failing to
maintain it.   03/14/12 Answer and Counterclaim.           Aqua Ohio answered the
counterclaim. 03/19/12 Answer. Allied then moved to have the trial bifurcated, which
was granted.
      {¶12} The first jury trial, which dealt with whether the 1913 agreement was a
contract and whether it was breached, began on April 11, 2012. Testimony included
discussions of the flooding that occurred in the 1990s because of the leaking
waterline, that Aqua Ohio would not come out and locate the waterline, and Allied’s
plans for the property and how the waterline was allegedly interfering with that plan.
      {¶13} Three interrogatories were presented to the jury. The first was, “Do you
find by a preponderance of the evidence that Plaintiff’s Exhibit 1 [1913 Agreement]
constitutes an enforceable contract between Mahoning Valley Water Co. and Lake
Erie and Eastern Railroad Co.?” All eight jurors agreed that it did. The second
interrogatory asked, “Have the Defendants proven by a preponderance of the
evidence that Plaintiff, Aqua Ohio, Inc., abandoned its rights under the January, 1913
instrument?” All eight jurors agreed that it did not. The last interrogatory asked,
“Have the Defendants, Allied Industrial Development Corporation, Inc. and Allied
Erecting and Dismantling Co., Inc., proved by a preponderance of the evidence that
Plaintiff, Aqua Ohio, Inc., materially breached the terms of the January 1913
instrument?” Six of the eight jurors answered this question in the affirmative.
      {¶14} The second jury trial (a different jury) began on January 7, 2013, to
ascertain damages. The testimony offered by Allied focused on September 2010
through the present time and only covered the costs caused by Aqua Ohio’s alleged
interference with Allied’s property by not removing the waterline. The testimony did
not indicate what the damages were for the flooding that occurred in the 1990s.
                                                                                    -4-

      {¶15} The jury was instructed that the previous jury had determined that the
1913 agreement was a contract and the Aqua Ohio materially breached it. It was
then instructed, “You should consider what damages, if any, were suffered by Allied
as a result of the breach for failure to properly maintain the waterline by Aqua Ohio.”
Two interrogatories were asked. The first was, “Did Aqua Ohio’s breach of contract
cause Allied damages?” All eight jurors answered this question in the affirmative.
The second interrogatory asked, “How did Aqua Ohio breach the contract?” The
jurors wrote in the following answer, “Aqua Ohio’s failure to maintain and locate the
waterline thereby interfering with the development of Allied’s property.”     All eight
agreed to this answer. The jurors then filled out the general verdict form for Allied
and award Allied $723,111 in damages. This verdict was signed by all eight jurors.
      {¶16} Following that decision, Aqua Ohio filed a Civ.R. 50 motion for
judgment notwithstanding the verdict and, in the alternative, a motion for new trial.
Allied opposed these motions. The trial court granted the motion for JNOV and
denied the motion for new trial. 05/01/13 J.E.
      {¶17} Allied timely appeals the order granting the JNOV. Aqua Ohio has filed
cross assignments of error claiming, in the alternative, that the trial court erred in
denying the motion for a new trial.
                           Allied’s First Assignment of Error
      {¶18} “The trial court erred in granting Aqua Ohio’s motion for Judgment
Notwithstanding the Verdict.”
      {¶19} During the damages portion of the trial Allied offered evidence of the
costs to work around the waterline in reclaiming the land. Allied claimed that the
location of the waterline interfered with its development of the land and that Aqua
Ohio was required to the move the line upon Allied’s request.
      {¶20} The damages awarded by the jury were for “Aqua Ohio’s failure to
maintain and locate the waterline thereby interfering with the development of Allied’s
property.” Answer to Damages Jury Interrogatory Number Two. Thus, the damages
awarded by the jury were interference damages.
      {¶21} Based upon that statement, the evidence offered at trial, and the
language in the 1913 agreement, Aqua Ohio moved for a JNOV. It claimed that the
                                                                                    -5-

agreement language did not contemplate damages for failing to remove the waterline
and/or interfering with the Allied’s development of the property.
       {¶22} The trial court agreed and granted the JNOV explaining:
                The first jury found that Aqua Ohio had breached the contract by
       failing to maintain the waterline. The damages found in the later trial do
       not relate to maintenance of the waterline. These damages sought by
       Defendant and subsequently awarded by the jury relate to location and
       interference of the waterline in the development of Defendant’s land.
       These damages are not properly awardable under Defendant’s
       counterclaim.
                The Court finds that in construing the evidence most strongly in
       favor of the non-movant, reasonable minds could come to but one
       conclusion upon the evidence submitted and that conclusion is adverse
       to Defendant.
                Therefore, the Plaintiff’s Motion for Judgment Notwithstanding
       the Verdict is granted as the evidence is totally insufficient to support
       the verdict as a matter of law.
05/01/13 J.E.
       {¶23} This is a legal determination by the trial court based on the evidence
submitted at trial and based on the language of the 1913 agreement.
       {¶24} Appellate courts review decisions to grant or deny a motion for JNOV
under a de novo standard of review. Environmental Network Corp. v. Goodman
Weiss Miller, LLP, 119 Ohio St. 3d 209, 2008-Ohio-3833, 893 N.E.2d 173, ¶ 22.
Thus, we use the same test that the trial court applies when it is determining whether
to grant or deny the motion.
       {¶25} A motion for JNOV under Civ.R. 50(B) tests the legal sufficiency of the
evidence. Eastley v. Volkman, 132 Ohio St. 3d 328, 2012–Ohio–2179, 972 N.E.2d
517 at ¶ 25 (a motion for JNOV presents a question of law); Posin v. A.B.C. Motor
Court Hotel, Inc., 45 Ohio St. 2d 271, 275, 344 N.E.2d 334 (1976) (motions for JNOV
employ the same standard as motions for directed verdict). Thus, when a verdict has
been returned for the plaintiff, the trial court, in determining whether to sustain a
                                                                                    -6-

motion for judgment notwithstanding the verdict, must decide whether the defendant
is entitled to judgment as a matter of law when the evidence is construed most
strongly in favor of the plaintiff. Texler v. D.O. Summers Cleaners & Shirt Laundry
Co., 81 Ohio St. 3d 677, 679, 693 N.E.2d 271 (1998), citing Civ.R. 50(A)(4).           In
determining whether to grant or deny a Civ.R. 50(B) motion, the trial court should not
weigh the evidence or evaluate the credibility of the witnesses. Malone v. Courtyard
by Marriott, 74 Ohio St. 3d 440, 445, 659 N.E.2d 1242 (1996).
       {¶26} In arguing that the JNOV should not have been granted, Allied
contends that the 1913 Agreement requires Aqua Ohio to locate and maintain the
waterline and that the waterline cannot interfere with Allied’s use of the property. It
asserts that damages arising from interference are clearly provided for and/or flow
from the language of the agreement. According to it, that language means that if
Aqua Ohio’s waterline interferes with Allied’s development of the property, the line
must be moved and failure to remove it is a breach of contract.
       {¶27} Aqua Ohio disagrees.         It asserts that the agreement does not
contemplate damages for interference based solely on the location of the waterline.
       {¶28} As can be seen by the arguments, whether or not the JNOV should
have been granted is dependent upon the language of the 1913 Agreement.
       {¶29} It has been explained that contract interpretation is normally a question
of law. Maverick Oil & Gas, Inc. v. Barberton City School Dist. Bd. of Edn., 171 Ohio
App.3d 605, 872 N.E.2d 322, 2007–Ohio–1682, ¶ 19 (9th Dist.). It only becomes a
question of fact when an ambiguous term necessitates the introduction of extrinsic
evidence to interpret the contract. Id.
       {¶30} When confronted with an issue of contract interpretation, our role is to
give effect to the intent of the parties. Westfield Ins. Group v. Affinia Dev., L.L.C.,
2012–Ohio–5348, 982 N.E.2d 132, ¶ 21 (5th Dist.). We will examine the contract as a
whole and presume that the intent of the parties is reflected in the language of the
contract. Chicago Title Ins. Co. v. Huntington Natl. Bank, 87 Ohio St. 3d 270, 273
(1999). In addition, we will look to the plain and ordinary meaning of the language
used in the contract unless another meaning is clearly apparent from the contents of
the agreement. Alexander v. Buckeye Pipe Line Co., 53 Ohio St. 2d 241, 374 N.E.2d
                                                                                     -7-

146 (1978), paragraph two of the syllabus. 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. Sunoco, Inc. (R & M) v. Toledo Edison Co., 129 Ohio St. 3d 397, 2011–Ohio–
2720, ¶ 37. “As a matter of law, a contract is unambiguous if it can be given a definite
legal meaning.” Id. citing Westfield Ins. Co. v. Galatis, 100 Ohio St. 3d 216, 2003–
Ohio–5849, 797 N.E.2d 1256, ¶ 11. The determination of whether a contract is
ambiguous is a question of law. Salter v. Salter, 9th Dist. No. 26440, 2013–Ohio–559
at ¶ 6. If the terms of the contract are clear and unambiguous, the interpretation of
the language is a question of law, which we review de novo. State ex rel. Parsons v.
Fleming, 68 Ohio St. 3d 509, 511, 1994–Ohio–172, 628 N.E.2d 1377.
      {¶31} The language of the 1913 contract provides:
             KNOW ALL MEN BY THESE PRESENTS, that THE LAKE ERIE
      AND EASTERN RAILROAD COMPANY, in consideration of ONE
      DOLLAR, and for valuable considerations to it moving, received to its
      full satisfaction from THE MAHONING VALLEY WATER COMPANY,
      the receipt whereof is hereby acknowledged, does hereby GRANT to
      said Water Company, its successors and assigns, the right to lay down,
      maintain and use for the purpose of transporting water, a pipe line not
      exceeding twenty inches in diameter upon the lands owned by the said
      Railroad Company in the Townships of Coitsville and Youngstown,
      Mahoning County, Ohio, upon the route indicated on the map hereunto
      annexed marked “Exhibit A” and made a part hereof, by the line which
      is colored or shaded in yellow upon the following conditions, to-wit:
             FIRST. That said pipe line shall be placed a sufficient depth
      below the surface of the grade of said ground as such grade is or may
      be established by said Railroad Company, so as not to interfere with
      any of the railroad tracks or improvements which said Railroad
      Company has constructed or may desire to construct upon said lands
      or any part thereof, and shall be laid in accordance with the prevailing
      method now employed by railroad engineers in placing water mains
      under main tracks and protecting the same, and the work of laying,
                                                                                      -8-

       maintaining and repairing said pipe line by THE MAHONING VALLEY
       WATER COMPANY, shall be under the supervision and subject to the
       approval of the work by the Chief Engineer of THE LAKE ERIE AND
       EASTERN RAILROAD COMPANY.
              SECOND. That said the Mahoning Valley Water Company shall
       conduct the work of laying and repairing said pipe line in such manner
       as not to interfere with the use or operation of any railroad track or other
       structures which said Railroad Company may have on said lands, and
       will indemnify and save harmless said Railroad Company, its
       successors, lessees and assigns, from any and all expense, loss or
       liability growing out of the construction, maintenance or operation of
       said pipe line.
1913 Agreement.
       {¶32} Allied argues these provisions mean that if at any time the railroad, or
Allied, as its successor, determines that the waterline is interfering with the
development of the property the waterline must be removed and relocated. Allied
even goes as far to insinuate that it must be relocated to a different area that is
specified by Allied.
       {¶33} We disagree with this position. Reading of the contract in the manner
Allied suggests ignores the plain language of the contract and is illogical.
       {¶34} The clear and simple purpose of this agreement is for the water
company to run the waterline, but to ensure that the property can be used for railroad
purposes. The plain language of this agreement sets forth each party’s rights. The
water company has the right to lay a waterline at a specific location for the sole
purpose of transporting water. The water company has the right to maintain and use
that waterline.   The railroad company has the right to dictate the engineering
methods for placement of the waterline and at what depth the waterline must be
located. It likewise has the right to supervise and approve repairs to the waterline.
The water company is not permitted to interfere with the use or operation of any
railroad track or structure when it is repairing or laying the line. Furthermore, it must
hold the railroad company, its successors, lessees and assignees from all expenses,
                                                                                         -9-

loss or liability that results from the construction, maintenance or operation of the
waterline.
       {¶35} Admittedly, the first and second conditions in the contract use the word
“interfere.” However, the use of the word “interfere” in these provision does not mean
that the contract provides for interference damages.
       {¶36} The first provision of the agreement discusses at what depth the
waterline must be laid. Specifically it must be, “placed a sufficient depth below the
surface * * * so as not to interfere with any of the railroad track or improvements
which said Railroad Company has constructed or may desire to construct.” The
primary purpose of this provision is to dictate the initial installation of the pipeline and
to ensure that the initial installation does not interfere with the railroad company’s
plans or use. The railroad is specifically indicating that it has to approve the depth of
the line and the laying of the line. The apparent reason for wanting to do so is to
ensure that the waterline can withstand any weight that may be placed upon it. Thus,
this provision does not provide for damages for alleged interference with the
development of the land. Nor does it indicate that if the waterline interferes with some
distant future development of the land it must be removed and relocated to an
entirely different location.
       {¶37} To read this provision otherwise would be illogical. This provision and
the preceding introductory paragraph clearly establish where the waterline was to be
located. In fact, a map was incorporated into the agreement and on that map the
location of the pipeline was specifically identified. This shows the permanency of the
geographical location. If the parties were under any belief that the location could be
moved at the whim of the railroad, the specific location of the line would not have
been set forth in this manner.
       {¶38} Turning to the second condition, it is noted that this is a damages
provision. This condition states that the laying and repairing of the waterline cannot
interfere with the use or operation of the railroad track or other structures the railroad
has on the land. It also provides that the water company will “save harmless” the
railroad company, its successors, lessees, and assigns, from any and all loss
“growing out of the construction, maintenance or operation of said pipe line.”
                                                                                   -10-

        {¶39} The type of damages contemplated in this provision clearly contemplate
situations where Aqua Ohio might enter onto the subject property to maintain the line
and during the maintenance if Aqua Ohio damages Allied property, Allied would be
entitled to damages. Likewise, if during the operation of the line it leaked and flooded
the property, Aqua Ohio would be liable for damages. However, the express
language does not include a duty to remove or relocate the pipeline to a different
geographical area and it does not provide for damages resulting solely from all
interference with the usage of the land.
        {¶40} Allied would like us to read this contract to mean that when Allied
notifies Aqua Ohio that its line is interfering with Allied’s current plans, Aqua Ohio
breaches the contract if it fails to remove the line and/or relocate it to a different
geographical location. It appears to be contending that removal is part of its duty to
maintain.    We disagree.   The word “maintain” is not defined by the agreement,
therefore, we must use the ordinary meaning of the word. Maintain means, “To
preserve or keep in a given existing condition, as of efficiency or good repair.”
Webster’s II New Riverside University Dictionary 717 (1984). This does not mean
relocate or move. As such, we will not read such language into the contract. If we
were to read this contract in the manner that Allied advocates it would mean after the
railroad approved and oversaw the laying of this waterline, at any time, including just
days after the work was complete, it could force the water company to tear out the
line because the line “interfered” with plans for the property. This result would be
illogical.
        {¶41} Therefore, given the plain language of the contract, damages could be
awarded for loss resulting only from the improper maintenance, operation and/or use
of the water line. The contract does not authorize damages solely for interference
with the development of the property. Here, Allied did not present any evidence as to
damages resulting from maintenance, operation or use. Instead, Allied asked for
damages in the amount of $723,111, the exact amount the jury awarded, for acts that
occurred from 2010 on for failing to remove the line because it interfered with Allied’s
alleged development of the property.       At the trial for breach, Allied had offered
testimony establishing that when the line was operating in the 1990s it leaked and
                                                                                    -11-

caused flooding to Allied and neighboring owner’s property. Presumably this resulted
in damage to the property. However, during the damages portion of the trial, no
evidence was admitted that the operation of the line caused damages to the property;
Allied presented no testimony as to what those damages would be, or how the
flooding in the 1990s has damaged them now.
       {¶42} Consequently, since the only evidence as to the amount of damages
concerned interference with the development of the property and such damages are
not permitted by the contract, there was no basis in law for the award of damages.
The trial court’s decision to grant the motion for JNOV was proper. This assignment
of error lacks merit.
                              Second Assignment of Error
       {¶43} “The trial court abused its discretion in excluding the future labor portion
of Anness’ expert opinion on damages.”
                 Aqua Ohio’s Conditional Cross Assignments of Error
                                One though Four
       {¶44} “The trial court erred by granting Aqua Ohio’s motion for judgment
notwithstanding the verdict that reduced Allied’s judgment by the amount of the
already-incurred labor costs.”
       {¶45} “The trial court erred by not granting Aqua Ohio’s motion for judgment
notwithstanding the verdict that reduced Allied’s judgment by the amount of the future
equipment costs.”
       {¶46} “The trial court erred by not granting Aqua Ohio’s motion for a new trial
on Allied’s damages claim.”
       {¶47} “The trial court erred by not granting Aqua Ohio’s motion for a new trial
on the entirety of Allied’s contract counterclaim.”
       {¶48} Our resolution of the first assignment of error renders these
assignments of error moot. Thus, they will not be addressed.
                                       Conclusion
       {¶49} In conclusion, the JNOV was properly granted. The trial court’s legal
determination that the agreement does not provide for damages for interference with
the development of the property was correct.          The contract only provides for
                                                                                  -12-

damages which result from the operation, use or maintenance of the waterline. Allied
did not present any evidence of damages that resulted from the operation, use or
maintenance of the waterline. The only evidence submitted concerned the alleged
interference with the development of the property by failing to remove the waterline
when Allied asked for it to be removed. Therefore, the trial court correctly determined
that reasonable minds could come to but one conclusion on the evidence submitted
and that conclusion is adverse to Allied. Thus, the judgment of the trial court is
hereby affirmed.

Donofrio, J., concurs.
Waite, J., concurs.