Court Opinion

ID: 2705150
Source: CourtListenerOpinion
Date Created: 2014-08-04 22:32:33.932656+00
Date Added: 2024-06-11T12:22:05.549425
License: Public Domain

[Cite as Rayco Mfg., Inc. v. Beard Equip. Co., 2014-Ohio-970.]

STATE OF OHIO                     )                        IN THE COURT OF APPEALS
                                  )ss:                     NINTH JUDICIAL DISTRICT
COUNTY OF WAYNE                   )

RAYCO MANUFACTURING, INC.                                  C.A. No.   11CA0057

        Appellee/Cross-Appellant

        v.                                                 APPEAL FROM JUDGMENT
                                                           ENTERED IN THE
BEARD EQUIPMENT COMPANY                                    COURT OF COMMON PLEAS
                                                           COUNTY OF WAYNE, OHIO
        Appellant/Cross-Appellee                           CASE No.   10 CV 0244

                                 DECISION AND JOURNAL ENTRY

Dated: March 17, 2014

        CARR, Judge.

        {¶1}     Appellant/cross-appellee Beard Equipment Co. (“Beard”) appeals the judgment of

the Wayne County Court of Common Pleas that granted summary judgment in favor of

appellee/cross-appellant Rayco Manufacturing, Inc. (“Rayco”). Rayco filed a cross-appeal to the

judgment denying its motion to compel. This Court reverses and remands.

                                                      I.

        {¶2}     Rayco is an Ohio corporation in the business of manufacturing and selling

equipment that is used in the forestry and landscaping industries. Beard is a Florida corporation

that sells and services equipment, such as that manufactured by Rayco. Rayco and Beard entered

into a dealership agreement wherein Rayco appointed Beard as its exclusive dealer for Rayco’s

products in certain counties in Alabama, Florida, and Louisiana. The agreement contained a

forum selection clause that required legal proceedings arising out of the agreement to be heard in

either the federal court located in the Northern District of Ohio or, if that court had no
                                                   2

jurisdiction, then in the state courts of Wayne County, Ohio. The agreement moreover contained

certain covenants, including those wherein each party agreed “to save, indemnify and hold

harmless” the other under certain circumstances.          In addition, the agreement provided that

“[w]here both parties have been contributory causes to any claim, suit damages, cost, and losses

and expenses each party shall bear and sustain its’ own damages, cost, losses, and expenses.”

(sic) The dealership agreement incorporated Exhibit C, Rayco’s standard terms and conditions

of sale document. Exhibit C included a provision warranting that Rayco’s products will be free

from defects in material and workmanship.

          {¶3}   Beard thereafter sold a Rayco forestry mower to Josh Akridge in Alabama. Mr.

Akridge subsequently filed a complaint in the Circuit Court of Clarke County, Alabama, against

Rayco; Beard; and Joe Ecker and Jody Bach1, individually and as representatives of Beard. The

July 22, 2008 complaint alleged eight causes of action, including claims for breach of implied

and express warranty, and respondeat superior. The breach of warranty claim (Count Four)

alleged in part that “the defendants expressly in writing and impliedly under the law, warranted

that the Mower was free of defects when in fact the Mower had defects and had been

damaged[.]” In addition, Count Four alleged that “[t]he aforesaid breach of warranty of each of

the above described defendants * * * combined and concurred, and as a proximate consequence

thereof, the plaintiff was injured and damaged * * *.”

          {¶4}   A little more than a year and a half later, Rayco filed a complaint against Beard in

the Wayne County Court of Common Pleas, in which it alleged a claim for breach of contract

(relating to the dealership agreement), and a claim for declaratory judgment seeking a declaration

that Beard was contractually obligated to indemnify Rayco in the Alabama litigation.

1
    Evidence in the record indicates that the correct spelling of his last name is Bacque.
                                                3

Subsequently, Mr. Akridge filed a second amended complaint in Alabama, alleging in Count

Nine an additional claim under Alabama’s extended manufacturer’s liability doctrine.

       {¶5}    On June 21, 2010, Beard filed both a motion to dismiss Rayco’s complaint filed in

the Wayne County Court of Common Pleas, and an answer to Rayco’s complaint. In its motion

to dismiss, Beard argued that Rayco’s complaint failed to state a claim upon which relief can be

granted because the trial court lacked subject matter jurisdiction to hear the claims which were

not yet ripe. Specifically, Beard asserted that the dealer agreement included no express duty to

“defend.” In the alternative, Beard moved to stay the proceedings pending resolution of the

Alabama litigation. In its answer, Beard raised multiple defenses, including the failure to state a

claim upon which relief can be granted and the inapplicability of the indemnity provision in the

dealer agreement because Mr. Akridge alleged a manufacturing and/or design defect in the

mower and, per the parties’ agreement, Rayco was responsible for manufacturing and/or design

defects.

       {¶6}    Rayco opposed Beard’s motion to dismiss, arguing that Beard’s duty to indemnify

Rayco constituted a duty to defend that was triggered by the filing of Mr. Akridge’s complaint.

Rayco argued that its Ohio claims were ripe because it had already been harmed by the need to

pay for its own defense in Alabama. Beard replied that, because Mr. Akridge alleged that the

mower was defective and Rayco had a contractual duty to indemnify Beard against defects, the

indemnification provision in favor of Rayco was not yet triggered.             Beard argued that

indemnification implicates the right of one party to compel another to pay damages; therefore,

the issue of liability must first be determined. Beard argued that Rayco’s claims were not ripe

because Rayco must be completely absolved from liability before it might be entitled to
                                                4

indemnification by Beard. The trial court denied both Beard’s motion to dismiss and motion to

stay.

        {¶7}     Beard filed a motion for reconsideration of its motions to dismiss and,

alternatively, stay the proceedings. Beard asserted that the Alabama court had denied Rayco’s

motion to dismiss or decline to exercise jurisdiction. In conclusion, Beard argued: (1) Rayco’s

liability for design or manufacturing defects would preclude indemnification by Beard; (2)

Rayco’s contributory liability would preclude indemnification by Beard; and (3) Rayco would be

required to indemnify Beard for any design or manufacturing defects. Because the Alabama

court had not yet determined those issues, Beard argued that Rayco’s Ohio claims were not ripe.

        {¶8}     Rayco opposed the motion to reconsider, arguing that the trial court could not

consider materials outside the pleadings with regard to a motion to dismiss filed pursuant to

Civ.R. 12(B)(6). The trial court could, therefore, not consider the Alabama court order denying

Rayco’s motion to dismiss.       In addition, Rayco emphasized the parties’ dealer agreement

wherein the indemnification provisions referenced “all claims.” Although Rayco acknowledged

that the duty to indemnify might not arise until later, it argued that a duty to defend may be

triggered by an obligation to indemnify against “all” claims of a certain nature.         In the

alternative, Rayco argued that although the duty to indemnify may not arise until later, the

indemnitor may nevertheless be required to pay all expenses arising out of the defense as well as

the liability.   Based on Mr. Akridge’s allegations in his complaint, coupled with Beard’s

knowledge and control over the communications between Beard and Mr. Akridge, Rayco argued

that the dealer agreement indemnification provision imposed a duty to defend on Beard under

these circumstances.
                                                 5

       {¶9}    In reply, Beard argued that the trial court may consider any materials with regard

to a motion to dismiss pursuant to Civ.R. 12(B)(1), for lack of subject matter jurisdiction. This

was Beard’s first reference to (B)(1); it had earlier cited (B)(6). Beard emphasized that it had not

contracted to indemnify Rayco against “all” claims based on the plain language of the parties’

agreement which enumerated exceptions to Rayco’s right to indemnification. Beard argued that,

if these exceptions applied, Rayco would not be entitled to indemnification.

       {¶10} Rayco filed a sur-reply, noting that Beard for the first time in its reply invoked

Civ.R. 12(B)(1), rather than (B)(6). It argued that Beard could not change the basis for its

motion in a reply brief. Nevertheless, Rayco too appended materials outside the scope of a

motion pursuant to Civ.R. 12(B)(6). Specifically, Rayco argued that Beard ignored the forum

selection clause in the parties’ dealer agreement and moved the Alabama court to resolve the

Rayco/Beard dispute regarding indemnification by filing a cross-claim in the Alabama case.

Rayco argued that this was not a matter for the Alabama court, as it served to divide the

necessary alliance between Rayco and Beard in Alabama, and forced them to pursue competing

theories to absolve themselves of liability at the other’s expense. The trial court denied Beard’s

motion for reconsideration.

       {¶11} The parties filed competing motions for summary judgment. Each side further

filed a brief in opposition to the other’s motion. On August 19, 2011, the trial court issued a

judgment entry in which it granted Rayco’s motion for summary judgment and denied Beard’s

motion for summary judgment. The court concluded that Beard breached its agreement with

Rayco. It scheduled a subsequent damages hearing at which time it would determine Rayco’s

damages, specifically the reasonable costs and fees it expended in defending the Alabama

litigation during the relevant time period, as well as the reasonable costs and fees it expended in
                                                 6

defending the Ohio action.       The court declared that Beard was contractually obligated to

indemnify Rayco in the Alabama litigation from July 22, 2008, to June 1, 2011. It further

declared that Beard would once again be obligated to indemnify Rayco in the Alabama litigation

if Count Nine of Mr. Akridge’s Second Amended Complaint were dismissed or summary

judgment was granted against Mr. Akridge on that count.

          {¶12} The parties attempted to engage in discovery regarding the damages issue. Due to

numerous disputes regarding discovery, the damages hearing was continued until November 1,

2011. Immediately prior to hearing, the parties argued their respective pretrial motions. The

trial court orally denied Beard’s motion to strike or preclude the testimony of Rayco’s expert and

orally denied Rayco’s motion to compel Beard to provide its own legal bills relevant to the Ohio

matter.

          {¶13} On November 21, 2011, the trial court issued its judgment awarding damages to

Rayco in the total amount of $116,633.55. This amount was comprised of $27,897.50 for Ohio

counsel and $21,291.84 for local Alabama counsel in connection with the defense of the

Alabama litigation; $60,855.50 for attorney fees and $703.91 in costs in connection with the

prosecution of the Ohio indemnification case; and $5884.80 for expert witness fees in connection

with its litigation of damages in the Ohio indemnification case.

          {¶14} Beard filed a timely appeal the next day, raising two assignments of error. Rayco

subsequently filed a timely cross-appeal, raising one assignment of error.

                                                II.

                         BEARD’S FIRST ASSIGNMENT OF ERROR

          THE COURT ERRED BY DENYING BEARD’S MOTION FOR SUMMARY
          JUDGMENT AND GRANTING RAYCO’S MOTION FOR SUMMARY
          JUDGMENT.
                                                7

       {¶15} Beard argues that the trial court erred by granting Rayco’s motion for summary

judgment and denying its own motion for summary judgment. This Court agrees.

       {¶16} This Court reviews an award of summary judgment de novo. Grafton v. Ohio

Edison Co., 77 Ohio St.3d 102, 105 (1996). This Court applies the same standard as the trial

court, viewing the facts in the case in the light most favorable to the non-moving party and

resolving any doubt in favor of the non-moving party. Viock v. Stowe-Woodward Co., 13 Ohio

App.3d 7, 12 (6th Dist.1983).

       {¶17} Pursuant to Civ.R. 56(C), summary judgment is proper if:

       (1) No genuine issue as to any material fact remains to be litigated; (2) the
       moving party is entitled to judgment as a matter of law; and (3) it appears from
       the evidence that reasonable minds can come to but one conclusion, and viewing
       such evidence most strongly in favor of the party against whom the motion for
       summary judgment is made, that conclusion is adverse to that party.

Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327 (1977).

       {¶18} To prevail on a motion for summary judgment, the party moving for summary

judgment must be able to point to evidentiary materials that 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.

Dresher v. Burt, 75 Ohio St.3d 280, 293 (1996). Once a moving party satisfies its burden of

supporting its motion for summary judgment with sufficient and acceptable evidence pursuant to

Civ.R. 56(C), Civ.R. 56(E) provides that the non-moving party may not rest upon the mere

allegations or denials of the moving party’s pleadings. Rather, the non-moving party has a

reciprocal burden of responding by setting forth specific facts, demonstrating that a “genuine

triable issue” exists to be litigated for trial. State ex rel. Zimmerman v. Tompkins, 75 Ohio St.3d

447, 449 (1996).
                                                 8

       {¶19} The non-moving party’s reciprocal burden does not arise until after the moving

party has met its initial evidentiary burden. To do so, the moving party must set forth evidence

of the limited types enumerated in Civ.R. 56(C), specifically, “the pleadings, depositions,

answers to interrogatories, written admissions, affidavits, transcripts of evidence, and written

stipulations of fact[.]” Civ.R. 56(C) further provides that “[n]o evidence or stipulation may be

considered except as stated in this rule.”

       {¶20} The following facts are not in dispute. Rayco drafted a dealership agreement that

it required all dealers who would be selling Rayco’s products to execute. Rayco was designated

as “company,” in those agreements and the seller was designated as “distributor.” Rayco and

Beard entered into such an agreement that contained the following indemnification provision:

       In consideration of the separate responsibilities of the parties in the manufacture
       and service of product, company agrees to save, indemnify and hold harmless
       distributor from and against all law suits, damages, cost, losses and expenses that
       may be made or suffered by anyone in any manner arising out of the design and
       manufacture of product sold to distributor except as heretofore provided;
       distributor agrees to save, indemnify, and hold harmless company from and
       against any and all claims, suits, damages, cost, losses, and expenses that may be
       made or suffered by anyone in any manner resulting from or arising out of the
       sale, rental, lease, modification, alteration, installation or servicing of the product
       by its employees or agents. Where both parties have been contributory causes to
       any claim, suit damages, cost, and losses and expenses each party shall bear and
       sustain its’ own damages, cost, losses, and expenses. The parties shall cooperate
       in the resolution or defense of such claims or litigation. (sic).

       {¶21} Rayco argued in its motion for summary judgment that the parties’

indemnification provision required Beard to defend Rayco in the Alabama litigation from its

inception. In its complaint, it sought a declaration to that effect, as well as a finding that Beard

breached the terms of the dealership agreement by refusing to provide such a defense. The crux

of its argument was that, although the indemnification provision did not expressly recite a duty to

defend, defense was warranted because the provision was triggered pursuant to the pleading rule.
                                                9

In other words, Rayco argued that Mr. Akridge’s Alabama complaint pleaded allegations which

fell within the coverage of the indemnification provision, thereby implicating a duty by Beard to

defend Rayco against such claims.

       {¶22} As indemnity provisions are construed in the same manner as other contractual

agreements, “[t]he nature of an indemnity relationship is determined by the intent of the parties

as expressed by the language used.” Worth v. Aetna Cas. & Sur. Co., 32 Ohio St.3d 238, 240

(1987). The parties’ provision did not expressly include any obligation to defend.

       {¶23} Rayco here relies heavily on two Ohio Supreme Court cases in support of his

argument that Beard had a duty to provide Rayco’s defense in the Alabama case. Specifically,

Rayco relies on Worth, supra, in support of its argument that Beard must pay its ongoing

attorney fees and costs. Worth, however, involved a contractual provision entitling certain

company executives to reimbursement of attorney fees incurred, up to a certain limit, in their

efforts to enforce their employment agreements after a change in company ownership. The

provision did not require the company to provide the underlying defense, but rather to reimburse

the executives for their legal expenses.      The company understood that the future new

management might not want to pay the executives the benefits for which they had contracted,

and the purpose of the reimbursement provision was to prevent the executives from ultimately

retaining their benefits but realizing a net loss due to legal expenses incurred in pursuing

payment of those benefits. The Worth court held that “an indemnitor’s express agreement to

indemnify an indemnitee for qualified legal expenses incurred is enforceable * * *. In the event

that the indemnitor wrongfully refuses to honor its obligations, the indemnitee may recover its

legal expenses.” Id., 32 Ohio St.3d at 242.
                                                 10

       {¶24} This Court does not read Worth to compel a party to assume the initial burden for

an ongoing defense for an indemnitee, especially in the absence of any such express provision.

If Beard is ultimately found liable and Rayco is absolved from liability in the Alabama case,

there is authority to allow the court in its discretion to order Beard to reimburse Rayco for its

legal expenses incurred in defending itself as part of its indemnification obligation. But the plain

language of the parties’ agreement does not impose an express duty to defend.

       {¶25} This situation is not analogous to situations involving insurance companies where

the insurance company has an inherent duty to defend the insured. Preferred Mut. Ins. Co. v.

Thompson, 23 Ohio St.3d 78, 80 (1986) (“An insurance company has a duty to defend an action

against its insured when the allegations of the complaint against the insured bring the action

within the coverage of the insured’s policy.”). That inherent duty clearly arises “where the

pleadings unequivocally bring the action within the coverage afforded by the policy,” and it may

otherwise arise where the allegations “state a claim which is potentially or arguably within the

policy coverage, or [where] there is some doubt as to whether a theory of recovery within the

policy coverage had been pleaded[.]” Willoughby Hills v. Cincinnati Ins. Co., 9 Ohio St.3d 177,

180 (1984). In cases such as the instant one, however, the purpose of an indemnification

provision is to protect one party or both from liability for the negligent acts of the other, and the

parties are free to negotiate the terms and limitations of the indemnification as they may agree.

E.g., Krasny-Kaplan Corp. v. Flo-Tork, Inc., 66 Ohio St.3d 75, 77 (1993) (“[A] contractual

provision between the parties may shift costs of presenting a defense from one party to another –

the parties have the ability to contractually require one codefendant either to supply the other’s

defense or to reimburse the other for attorney fees expended.”).          Such provisions will be

enforced as long as they are not void as against public policy. See, e.g., Best v. Energized
                                                 11

Substation Serv., 9th Dist. Lorain No. 93CA005737, 1994 WL 440471 (Aug. 17, 1994). Here,

Rayco and Beard did not expressly contract to provide a defense for one another.

       {¶26} Nevertheless, Rayco further relies on the Ohio Supreme Court’s decision in Allen

v. Standard Oil Co., 2 Ohio St.3d 122 (1982), for the proposition that the agreement’s language

regarding indemnity for “all claims” or “suits” gave rise to Beard’s duty to defend Rayco in the

Alabama action. As an initial matter, this Court notes that the contract in Allen stated that

“Carrier agrees to indemnify, save harmless, and defend Sohio from and against all and any

liabilities, * * * claims, * * * of whatsoever nature * * *.” Accordingly, the parties in that case

expressly agreed that the carrier would provide a defense. That is not the case in the matter

before us, although the absence of language regarding defense is not dispositive.

       {¶27} Rayco accurately asserts that the high court in Allen reiterated that it generally

follows the pleading rule in determining whether a duty to defend exists. Allen, 2 Ohio St.3d at

124. “For purposes of the pleading rule the question is whether the allegations contained in the

complaint fall within the coverage of the policy.” Id. The Allen court refused to apply the

pleading rule in that particular case, however, because the parties’ agreement negated the

carrier’s duty to defend and indemnify “where the separate intervening negligence of Sohio or

third persons is the proximate cause of the accident.” Id. at 123. Because that agreement

premised the existence of the carrier’s duties on the ultimate finding regarding the parties’

respective liability, the high court found the pleading rule inapposite. Id. at 125.

       {¶28} Where the pleading rule is not applicable, the court may necessarily look to

matters beyond the pleadings.      The Allen court enunciated the applicable rule as follows:

“[W]hen an indemnitor expressly agrees to indemnify an indemnitee except in certain specified

instances and it is determined that the exceptions do not pertain, then the indemnitor is obligated
                                                12

to indemnify the indemnitee under the terms of the agreement.”            (Emphasis added)      Id.

Accordingly, the court looked beyond the mere allegations in the complaint to the ultimate

assessment of liability, given the parties’ agreement to relieve the carrier of its duty to defend

where Sohio’s or a third party’s negligence was the proximate cause of injury. In Allen, the high

court was able to ultimately conclude that the carrier was not relieved of its duty to indemnify

Sohio because the merits of the underlying negligence action had already been determined, and

neither Sohio nor a third party was found to be liable. That is a significant distinction from the

case before this Court, where the parties’ indemnification provision delineates “certain specified

instances” under which each is to indemnify the other and also where each must bear its own

costs.

         {¶29} Beard argued in its motion for summary judgment that Rayco’s claims against it

were not ripe for consideration. This Court agrees. To obtain a declaratory judgment, the

plaintiff must prove that there exists “(1) a real controversy between the parties, (2) a

controversy which is justiciable in character, and (3) a situation where speedy relief is necessary

to preserve the rights of the parties.” Williams v. Akron, 54 Ohio St.2d 136, 144 (1978). “In

order to be justiciable, a controversy must be ripe for review.” State ex rel. Mun. Constr. Equip.

Operators’ Labor Council v. Cleveland, 113 Ohio St.3d 480, 2007-Ohio-2452, ¶ 17, quoting

Keller v. Columbus, 100 Ohio St.3d 192, 2003-Ohio-5599, ¶ 26. In determining whether a claim

is justiciable, courts consider “(1) whether delayed review would cause hardship to the plaintiffs;

(2) whether judicial intervention would inappropriately interfere with further [] action; and (3)

whether the courts would benefit from further factual development of the issues presented.”

Ohio Forestry Assn., Inc. v. Sierra Club, 523 U.S. 726, 733 (1998).
                                                13

       {¶30} In this case, Rayco has already expended the money for its defense in the

Alabama case. Therefore, further delay will not cause any additional hardship to it. Second,

judicial intervention by the Ohio court at this time may inappropriately interfere with further

action by the Alabama court. The Ohio court’s determination that Beard is obligated to defend

Rayco notwithstanding the exceptions in the parties’ indemnification agreement may

inappropriately indicate that the Ohio court has considered the limited evidence before it relevant

to the underlying Alabama claims and concluded that Rayco should be absolved of all liability.

Any potential preclusive effect of such a legal conclusion would necessarily interfere with the

Alabama court’s resolution of Mr. Akridge’s complaint. Finally, because it is not within the

Ohio court’s authority to determine the substantive issue of liability in the underlying Alabama

case, further factual development of the issue of indemnification is necessary, but it can only

exist upon resolution of the Alabama litigation. Accordingly, the issue of whether or not Beard

owes a duty to indemnify Rayco in the Alabama case is not ripe at this time.

       {¶31} Moreover, applying Allen as requested by Rayco, it appears that this is not the

case in which the pleading rule would apply. The parties’ agreement provided that Beard will

indemnify Rayco against certain types of claims, that Rayco will indemnify Beard against certain

other types of claims, and that each party would bear its own costs where both have been

“contributory causes to any claim * * *.” Given that the indemnification provision provides for

“certain specified instances” in which one party or both would be excused from indemnifying the

other, it is necessary and proper to look beyond the mere allegations in the Alabama complaint.

Both parties agreed that the Alabama litigation had not been resolved at the time relevant to the

trial court’s determination of the parties’ competing motions for summary judgment.
                                               14

       {¶32} Rayco argues that Mr. Akridge’s initial complaint did not allege any claims

against it that invoked Rayco’s duty to indemnify Beard. Even applying the pleading rule as

Rayco proposes, however, this Court disagrees. Mr. Akridge alleged in several of his counts that

all the defendants’ actions “combined and concurred” to cause him harm. Such allegations

implicated the provision in Rayco’s and Beard’s agreement that “each party shall bear and

sustain its[] own damages, cost, losses, and expenses” where both “have been contributory

causes to any claim * * *.” Moreover, Mr. Akridge alleged that the defendants warranted the

mower to be free from defects when it was not, and warranted the mower to be merchantable and

fit for the ordinary purpose for which it was intended when it was not. Such allegations

implicated the provision in the parties’ agreement that Rayco would indemnify Beard against all

suits arising out of the design and manufacture of the product. Therefore, even on the face of the

Alabama complaint, Rayco is alleged to be liable for some of the damages sustained by Mr.

Akridge. To the extent that the trial court did not recognize these claims as alleging Rayco and

Beard to be contributory causes and as alleging design and/or manufacturing defects, it erred.

       {¶33} Because Beard’s liability has not yet been determined, it is not possible to

determine whether it maintains any duty to indemnify or defend Rayco. By the same reasoning,

because Rayco’s liability has not yet been determined, it is not possible to determine whether

Rayco maintains any duty to indemnify or defend Beard.

       {¶34} The trial court concluded that the issue of Beard’s obligation to indemnify Rayco

after Mr. Akridge filed his second amended complaint in which he added a count alleging a

claim under Alabama’s extended manufacturer’s liability doctrine (a product liability cause of

action) could not yet be determined. It reasoned that that claim clearly implicated the provision

in the parties’ agreement that Rayco indemnify Beard for any design or manufacturing claims.
                                                 15

The trial court declared that Beard would again be obligated to indemnify Rayco after the date of

the filing of the second amended complaint if the Alabama court ruled in Rayco’s favor on that

claim. Implicitly then, the trial court concluded that the issue of indemnification was not ripe for

review until after that claim had been disposed in the Alabama litigation. Rayco does not

challenge the trial court’s conclusion in that regard.

       {¶35} The circumstances are no different as they relate to Mr. Akridge’s initial

complaint. Although the pleading rule was inapposite in this case, even were this Court to apply

it as argued by Rayco, Mr. Akridge’s allegations in the initial complaint reasonably implicated

the “certain specified instances” in the parties’ indemnification agreement which potentially

exempted Beard or both parties from indemnifying the other.

       {¶36} Based on this Court’s de novo review, we conclude that the issue of

indemnification was not ripe for the trial court’s review. The trial court could not determine the

rights and obligations of the parties under the indemnification provision because the Alabama

litigation, which implicated the exceptions in the parties’ agreement, had not yet been resolved.

The trial court recognized this in its ruling that Beard did not yet have an obligation to indemnify

Rayco against the claims raised in Mr. Akridge’s second amended complaint. Rayco has not

presented any evidence that it will experience any greater hardship by waiting for the resolution

of the Alabama litigation that it has already experienced by paying for its own defense.

Furthermore, because Rayco’s declaratory judgment claim was not ripe for determination, the

trial court could not have granted judgment in favor of Rayco on its breach of contract claim

either, because any declaration necessarily would have been inextricably intertwined with the

court’s finding regarding liability for breach of contract. Accordingly, the trial court erred in

granting summary judgment in favor of Rayco. Moreover, because Rayco’s claims were not ripe
                                                 16

for its consideration, the trial court erred in denying Beard’s motion for summary judgment and

refusing to dismiss Rayco’s claims. Beard’s first assignment of error is sustained.

                      BEARD’S SECOND ASSIGNMENT OF ERROR

       THE TRIAL COURT ERRED IN GRANTING ATTORNEY FEES AND
       COSTS IN THE AMOUNT OF $116,633.55.

       {¶37} Beard argues that the trial court abused its discretion in awarding attorney fees

and costs in the amount of $116,633.55. Based on our resolution of Beard’s first assignment of

error, its second assignment of error has been rendered moot and we decline to address it. See

App.R. 12(A)(1)(c).

                           RAYCO’S ASSIGNMENT OF ERROR

       THE TRIAL COURT ERRED IN DENYING CROSS-APPELLANT’S
       MOTION TO COMPEL.

       {¶38} Rayco argues that the trial court erred by denying its motion to compel Beard to

produce its billing statements relevant to the indemnification case. Based on our resolution of

Beard’s first assignment of error, Rayco’s assignment of error has been rendered moot and we

decline to address it. See App.R. 12(A)(1)(c).

                                                 III.

       {¶39} Beard’s first assignment of error is sustained. This Court declines to address

Beard’s second assignment of error and Rayco’s sole assignment of error. The judgment of the

Wayne County Court of Common Pleas is reversed and the cause remanded for further

proceedings consistent with this opinion.

                                                                              Judgment reversed,
                                                                             and cause remanded.
                                                 17

       There were reasonable grounds for this appeal.

       We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Wayne, State of Ohio, to carry this judgment into execution. A certified copy

of this journal entry shall constitute the mandate, pursuant to App.R. 27.

       Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the

period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is

instructed to mail a notice of entry of this judgment to the parties and to make a notation of the

mailing in the docket, pursuant to App.R. 30.

       Costs taxed to Appellee/Cross-Appellant.

                                                      DONNA J. CARR
                                                      FOR THE COURT

HENSAL, J.
CONCURS.

BELFANCE, P. J.
CONCURRING IN JUDGMENT ONLY.

       {¶40} I concur in the majority’s judgment. I agree that the trial court’s judgment must

be reversed as Beard cannot be said to have breached the indemnity clause in the dealership

agreement prior to a determination of its liability to the third party. Thus, because the Alabama

litigation is ongoing, the present suit is not ripe and should be dismissed without prejudice.
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APPEARANCES:

HARRY A. TIPPING, CHRISTOPHER A. TIPPING and HAROLD M. SCHWARZ, III,
Attorneys at Law, for Appellant/Cross-Appellee.

DAVID J. WIGHAM, TIMOTHY B. PETTORINI and ANDREW P. LYCANS, Attorneys at
Law, for Appellee/Cross-Appellant.