Court Opinion

ID: 6495395
Source: CourtListenerOpinion
Date Created: 2022-06-27 16:09:27.007075+00
Date Added: 2024-06-11T08:46:22.992725
License: Public Domain

[Cite as Lima Refining Co. v. Linde Gas N. Am., L.L.C., 2022-Ohio-2185.]

                      IN THE COURT OF APPEALS OF OHIO
                          THIRD APPELLATE DISTRICT
                               ALLEN COUNTY

LIMA REFINING COMPANY,
                                                                   CASE NO. 1-22-08
       PLAINTIFF-APPELLANT,

       v.

LINDE GAS NORTH AMERICA, LLC,                                      OPINION

       DEFENDANT-APPELLEE.

                  Appeal from Allen County Common Pleas Court
                           Trial Court No. CV2021 0309

                                     Judgment Affirmed

                             Date of Decision: June 27, 2022

APPEARANCES:

        J. Alan Smith for Appellant

        Kenneth E. Smith for Appellee
Case No. 1-22-08

WILLAMOWSKI, J.

       {¶1} Plaintiff-appellant Lima Refining Company (“LRC”) appeals the

judgment of the Allen County Court of Common Pleas, arguing that the trial court

erred in granting defendant-appellee Linde Gas North America, LLC’s (“LGNA”)

Civ.R. 12(B)(6) motion to dismiss. For the reasons set forth below, the judgment

of the trial court is affirmed.

                             Facts and Procedural History

       {¶2} LRC “is engaged in the production of transportation fuel and

petrochemical feedstocks.” Doc. 1. LGNA “is a supplier of industrial gasses.” Doc.

4. On December 17, 2013, LRC and LGNA entered a contract that begins as

follows:

       1. Purchase and Sale of Product

           1.1 Subject to Section 1.2, Linde shall provide and * * * sell
               and deliver Product to Customer [LRC], and Customer
               shall purchase from Linde, Customer’s present and
               future requirements for Product for use in connection
               with Customer’s operations * * *.

Doc. 1, Ex. A. The contract defines “Product” as “liquid and/or gas product

Nitrogen and/or Oxygen * * *.” Doc. 1, Ex. A. In turn, Section 1.2 states:

           1.2 Notwithstanding anything to the contrary, Linde’s
               obligations to supply Product shall be limited to the
               Delivery Requirements.

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Case No. 1-22-08

                 1.2.1 If Customer requires Product in excess of the
                      Delivery Requirements (‘Excess Product’), then
                      Linde will provide such Excess Product on an ‘as
                      available’ basis so long as the Excess Product is
                      available or not otherwise committed to other
                      customers. Linde shall offer such Excess Product to
                      Customer at the prices set forth in Exhibit A, plus any
                      additional costs associated with providing the Excess
                      Product.

                 1.2.2 If Linde is unable to provide Excess Product to
                      Customer as required, then Customer has the option
                      of obtaining substitute liquid source product from a
                      third party in excess of the Delivery Requirements.

(Emphasis added.) Doc. 1, Ex. A. The contract then defined the “Delivery

Requirements” in the following provision:

      IV. Production and Delivery Capabilities (‘Delivery Requirements’)

      A. Nitrogen:

          165,000 scf [standard cubic feet] per hour flow rate (± 5%)
          with the Linde Plant operating at barometric pressure of 14.7
          psia and 70°F and 80% relative humidity (‘Flow Rate’).

      B. Nitrogen Pipeline:

          As available gaseous Nitrogen from the Linde Plant.

Doc. 1, Ex A. The contract then states that “Nitrogen,” as used in this agreement,

refers to “nitrogen gas provided by Linde to Customer [LRC].” (Emphasis added.)

Doc. 1, Ex. A.

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Case No. 1-22-08

       {¶3} LRC alleged that, in 2021, it demanded an amount of gaseous nitrogen

that was in excess of 165,000 scfh. Doc. 1. LRC also demanded “250,000 scfh of

liquid nitrogen * * *.” Doc. 1, Ex. B. LRC stated, in a letter to LGNA, that the

failure to confirm this order would constitute an anticipatory breach of the contract.

Doc. 1, Ex. B. In response, LGNA stated that these demands “exceeded the

Delivery Requirements” as the contract did not require LGNA to supply more than

165,000 scfh of gaseous nitrogen. Doc. 1, Ex. C. LGNA further stated that the

failure to deliver the demanded amounts of nitrogen would not constitute a breach

of the contract. Doc. 1, Ex. C.

       {¶4} On October 5, 2021, LRC filed a complaint against LGNA that raised

a breach of contract claim and requested a declaratory judgment. Doc. 1. On

November 9, 2021, LGNA filed a motion to dismiss pursuant to Civ.R. 12(B)(6).

Doc. 4. On December 30, 2021, the trial court issued a judgment entry that found

the allegations in LRC’s complaint could not establish (1) that LGNA was

contractually obligated to provide an amount of gaseous nitrogen that exceeded

165,000 scfh; (2) that LGNA was contractually obligated to provide 250,000 scfh

of liquid nitrogen; or (3) the existence of a justiciable controversy that could provide

grounds for a declaratory judgment. Doc. 9. Accordingly, the trial court granted

LGNA’s motion to dismiss as to all claims in LRC’s complaint. Doc. 9.

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Case No. 1-22-08

       {¶5} LRC filed its notice of appeal on January 28, 2022. Doc. 11. On

appeal, LRC raises the following two assignments of error:

                            First Assignment of Error

       The trial court erred when it held that Lima Refining Company
       could prove no set of facts entitling it to relief on its breach of
       contract claim.
                         Second Assignment of Error

       The trial court erred when it held that Lima Refining Company
       could prove no set of facts entitling it to relief on its declaratory
       judgment claim.

The contract at issue states that “New York law governs all matters pertaining to the

validity, construction, and effect of this agreement.” Doc. 1, Ex. A.

       {¶6} “In contractual choice-of-law situations, the law of the chosen state is

applied to resolve the substantive issues in the case, while the law of the forum state

will govern procedural matters.” Citibank (South Dakota), N.A. v. Perz, 191 Ohio

App.3d 575, 2010-Ohio-5890, 947 N.E.2d 191, ¶ 28 (6th Dist.).

       ‘Substantive law’ may be defined as ‘[t]he part of the law that
       creates, defines, and regulates the rights, duties, and powers of
       parties[,]’ Black’s Law Dictionary (8. Ed. Rev. 2004) 1470, while
       ‘procedural law’ may be defined as ‘[t]he rules that prescribe the
       steps for having a right or duty judicially enforced, as opposed to
       the law that defines the specific rights or duties themselves.’ Id.
       at 1241.

(Brackets sic.) Columbus Steel Casings Co. v. Transportation & Transit Associates,

LLC, 10th Dist. Franklin No. 06AP-1247, 2007-Ohio-6640, ¶ 64.

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Case No. 1-22-08

                              First Assignment of Error

       {¶7} LRC argues that the trial court erred in dismissing the breach of

contract claims pursuant to Civ.R. 12(B)(6).

                                   Legal Standard

       {¶8} “A [Civ.R. 12(B)(6)] motion to dismiss for failure to state a claim

upon which relief can be granted is procedural and tests whether the complaint is

sufficient.” Pearsall v. Guernsey, 2017-Ohio-681, 86 N.E.3d 69, ¶ 8 (3d Dist.),

quoting Bd. of Health of Defiance Cty. v. McCalla, 3d Dist. Defiance No. 4-12-07,

2012-Ohio-4107, ¶ 33. For a Civ.R. 12(B)(6) dismissal to be proper, “it must appear

beyond doubt that the plaintiff can prove no set of facts in support of the claim that

would entitle the plaintiff to relief.” Arnett v. Precision Strip, Inc., 2012-Ohio-2693,

972 N.E.2d 168, ¶ 5 (3d Dist.), quoting LeRoy v. Allen, Yurasek, & Merklin, 114

Ohio St.3d 323, 2007-Ohio-3608, 872 N.E.2d 254, ¶ 14. “[A]s long as there is a set

of facts, consistent with the plaintiff’s complaint, which would allow the plaintiff to

recover, the court may not grant a defendant’s motion to dismiss.” York v. Ohio

State Hwy. Patrol, 60 Ohio St.3d 143, 144, 573 N.E.2d 1063 (1991).

       {¶9} “An appellate court reviews a trial court’s decision to grant a Civ.R.

12(B)(6) motion de novo.” Strahm v. Kagy, 3d Dist. Allen No. 1-17-08, 2017-Ohio-

4220, ¶ 7. In this process, “[t]he allegations of the complaint must be taken as true,

and those allegations and any reasonable inferences drawn from them must be

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Case No. 1-22-08

construed in the nonmoving party’s favor.” Faber v. Seneca County Sheriff’s Dept.,

2018-Ohio-786, 108 N.E.3d 213, ¶ 7 (3d Dist.), quoting Ohio Bur. of Workers’

Comp. v. McKinley, 130 Ohio St.3d 156, 2011-Ohio-4432, 956 N.E.2d 814, ¶ 12.

Generally, a court “may consider only the statements and facts contained in the

pleadings and may not consider or rely on evidence outside the complaint.” Main

v. Lima, 3d Dist. Allen No. 1-14-42, 2015-Ohio-2572, ¶ 37.

       {¶10} However, “in an action alleging a breach of contract a reviewing court

must look not only to the allegations in the complaint but also to the language of the

contract.” Keenan v. Adecco Emp. Servs., Inc., 3d Dist. Allen No. 1-06-10, 2006-

Ohio-3633, ¶ 9. Thus, “[m]aterial incorporated in a complaint may be considered

part of the complaint for purposes of determining a Civ.R. 12(B)(6) motion to

dismiss.” State ex rel. Peoples v. Schneider, 159 Ohio St.3d 360, 2020-Ohio-1071,

150 N.E.3d 946, ¶ 9, quoting State ex rel. Crabtree v. Franklin Cty. Bd. of Health,

77 Ohio St.3d 247, 1997-Ohio-274, 673 N.E.2d 1281, fn. 1 (1997).

       {¶11} “If a written instrument is attached to the complaint, it should be

construed together with the averments of the complaint in determining whether there

is any possible set of facts which would entitle the plaintiff to relief.” Allstate Ins.

Co. v. Blaum, 4th Dist. Ross No. 1490, 1988 WL 130692, *2 (Dec. 2, 1988).

       If a plaintiff attaches documents to his complaint, which he claims
       establish his case, such documents can be used to his detriment to
       dismiss the case if they along with the complaint itself establish a
       failure to state a claim. Adlaka v. Giannini, 7th Dist. [Mahoning]

                                          -7-
Case No. 1-22-08

       No. 05 MA 105, 2006-Ohio-4611, ¶ 34. To the extent the language
       in attached documents clearly forecloses a plaintiff’s claims, the
       trial court may properly dismiss those claims under Civ.R.
       12(B)(6). Denlinger v. [City of] Columbus, 10th Dist. [Franklin]
       No. 00AP-315[, 2000 WL 1803923, *5] (Dec. 7, 2000).

Beard v. New York Life Ins. & Annuity Corp., 10th Dist. Franklin No. 12AP-977,

2013-Ohio-3700, ¶ 11. In “consider[ing] documents attached or incorporated into

the complaint,” “a court need not accept as true allegations in a complaint that are

contradicted by documents attached to the complaint.” Valentine v. Cedar Fair,

L.P., 2021-Ohio-2144, 174 N.E.3d 900, ¶ 23 (6th Dist.).

       {¶12} “The essential elements of a breach of contract cause of action are ‘the

existence of a contract, the plaintiff’s performance pursuant to the contract, the

defendant’s breach of his or her contractual obligations, and damages resulting from

the breach[.]’” Canzona v. Atanasio, 118 A.D.3d 837, 838, 989 N.Y.S.2d 44 (N.Y.

App. 2014). “When interpreting a contract * * * the court should arrive at a

construction that will give fair meaning to all of the language employed by the

parties to reach a practical interpretation of the expressions of the parties so that

their reasonable expectations will be realized.” Sears v. Sears, 138 A.D.3d 1401,

1401, 30 N.Y.S.3d 770 (N.Y. App. 2016), quoting Trbovich v. Trbovich, 122

A.D.3d 1381, 1383, 997 N.Y.S.2d 855 (N.Y. App. 2014). “[A] written agreement

that is complete, clear and unambiguous on its face must be enforced according to

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Case No. 1-22-08

the plain meaning of its terms.” Patsis v. Nicolia, 120 A.D.3d 1326, 1327, 992

N.Y.S.2d 349 (N.Y. App. 2014).

                                    Legal Analysis

       {¶13} On appeal, LRC argues that the complaint and the materials attached

thereto allege a set of facts that state two breach of contract claims. We will consider

each of these two alleged breaches in turn.

       {¶14} First, LRC asserts that LGNA breached the contract by failing to

supply the amount of gaseous nitrogen that LRC demanded in excess of 165,000

scfh. Doc. 1. Section 1.2 of the contract addresses the sale and purchase of

“Product” between LGNA and LRC:

       1.2 Notwithstanding anything to the contrary, Linde’s
           obligations to supply Product shall be limited to the Delivery
           Requirements.

            1.2.1 If Customer requires Product in excess of the Delivery
                 Requirements (‘Excess Product’), then Linde will
                 provide such Excess Product on an ‘as available’ basis
                 so long as the Excess Product is available or not otherwise
                 committed to other customers. * * *

(Emphasis added.) Doc. 1, Ex. A. The contract then sets forth the following as the

“Delivery Requirements”:

       IV. Production and Delivery Capabilities (‘Delivery Requirements’)

       A. Nitrogen:

                                          -9-
Case No. 1-22-08

             165,000 scf [standard cubic feet] per hour flow rate (± 5%)
             with the Linde Plant operating at barometric pressure of 14.7
             psia and 70°F and 80% relative humidity (‘Flow Rate’).

         B. Nitrogen Pipeline:

             As available gaseous Nitrogen from the Linde Plant.

Doc. 1, Ex. A. Thus, an amount of gaseous nitrogen above 165,000 scfh qualifies

as “Excess Product” under Section 1.2.1.1 Doc. 1, Ex. A. LRC does not allege in

its complaint that LGNA failed to provide 165,000 scfh of gaseous nitrogen and

does not, therefore, allege that LGNA breached Section A of the delivery

requirements provision of the contract. Doc. 1.

         {¶15} Rather, LRC asserts that LGNA breached the contract by failing to

supply the amount of excess gaseous nitrogen that LRC demanded. Section 1.2.1

of the contract and Section B of the delivery requirements provision indicate that

LGNA’s obligations are not necessarily limited to providing LRC with 165,000 scfh

of gaseous nitrogen. Section 1.2.1 of the contract states that, if LRC requires more

than 165,000 scfh of gaseous nitrogen, LGNA “will provide * * * Excess Product

on an ‘as available’ basis” provided that “Excess Product is available or not

otherwise committed to other customers.” Doc. 1, Ex. A. Thus, beyond the 165,000

scfh amount of gaseous nitrogen stated in the delivery requirements, LGNA is

1
 We will refer to an amount of gaseous nitrogen that is in excess of 165,000 scfh as “excess gaseous nitrogen”
in the remainder of this opinion.

                                                    -10-
Case No. 1-22-08

contractually required to provide LRC with any excess gaseous nitrogen that is

available and is not already committed to other customers.

         {¶16} To establish that LGNA had excess product available, LRC points to

an email exchange that it attached to the complaint. Doc. 1, Ex. G, H. These

communications were between a representative of LGNA and a representative of

LRC. Doc. 1, Ex. H. In an email, LGNA’s representative offered the following:

         During the upcoming turnaround, Linde [LGNA] will deliver
         Excess Product on a firm basis in the quantities reflected under
         the ‘Truck Requirements’ in the attached spreadsheet, subject to
         the other terms and conditions of the supply agreement.

Doc. 1, Ex. H.2 However, the emails indicate that LRC expressly rejected this offer.

Doc. 1, Ex. G, H. Even if these communications were admissible evidence,3 these

emails do not support the assertion that LGNA breached Section 1.2.1 or Section B

of the delivery requirements because this email exchange does not indicate that

LGNA refused to provide LRC with the available excess product. This limited set

of communications suggests that LGNA was acting consistently with the

requirements of the contract and that LRC rejected the excess product that LGNA

had available. Doc. 1, Ex. G, H.

2
   The spreadsheet referenced in this email communication was not attached to the complaint. Doc. 1.
Similarly, the exact amount of gaseous nitrogen in excess of 165,000 scfh that was requested by LRC is not
clear from the materials attached to the complaint.
3
  In its brief, appellee argues that these emails were exchanged in the process of settlement communications
and are, therefore, inadmissible under Evid.R. 408. Appellee’s Brief, 9.

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Case No. 1-22-08

       {¶17} Under the contract, LGNA was not required to supply excess gaseous

nitrogen in any amount that LRC demanded. Again, beyond the 165,000 scfh of

gaseous nitrogen in the delivery requirements, the contract only required LGNA to

provide excess gaseous nitrogen that was available and not otherwise committed to

other customers. But the complaint nowhere alleges that the amount of excess

gaseous nitrogen that LRC had demanded was available and nowhere alleges that

the demanded amount of excess gaseous nitrogen was not already committed to

LGNA’s other customers. Doc. 1. In the absence of such allegations, LRC has not,

under the circumstances of this case, set forth facts that could establish that LGNA

breached Section 1.2.1 of the contract or Section B of the delivery requirements

provision. Doc. 1, Ex. A.

       {¶18} Further, having examined the remainder of the contract, we have

found no other provision that would obligate LGNA to provide LRC with gaseous

nitrogen in excess of 165,000 scfh. Doc. 1, Ex. A. Accordingly, we conclude that

the complaint and that materials attached thereto are not sufficient to state a breach

of contract claim arising from LGNA’s failure to provide excess gaseous nitrogen

in the amount that was demanded by LRC in this case.

       {¶19} Second, LRC asserts that LGNA breached the contract by failing to

provide 250,000 scfh of liquid nitrogen.        To determine LGNA’s contractual

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Case No. 1-22-08

obligations to supply liquid nitrogen, we return to Section 1.2 of the contract. The

first portion of Section 1.2 reads as follows:

      1.2 Notwithstanding anything to the contrary, Linde’s
          obligations to supply Product shall be limited to the Delivery
          Requirements.

(Emphasis added.) Doc. 1, Ex. A. In turn, the delivery requirements under the

contract are as follows:

       IV. Production and Delivery Capabilities (‘Delivery Requirements’)

       A. Nitrogen:

          165,000 scf [standard cubic feet] per hour flow rate (± 5%)
          with the Linde Plant operating at barometric pressure of 14.7
          psia and 70°F and 80% relative humidity (‘Flow Rate’).

       B. Nitrogen Pipeline:

          As available gaseous Nitrogen from the Linde Plant.

Doc. 1, Ex. A. The contract subsequently defines “Nitrogen” as “nitrogen gas

provided by Linde to Customer [LRC].” (Emphasis added.) Doc. 1, Ex. A. Thus,

the delivery requirements provision does not mention liquid nitrogen and does not

contain any language that would require LGNA to supply LRC with 250,000 scfh

of liquid nitrogen or any other set amount of liquid nitrogen. Doc. 1, Ex. A.

       {¶20} However, where the delivery requirements provision uses the word

“Nitrogen,” Section 1.2.1 of the contract uses the word “Product”:

       1.2.1 If Customer requires Product in excess of the Delivery
             Requirements (‘Excess Product’), then Linde will provide

                                         -13-
Case No. 1-22-08

             such Excess Product on an ‘as available’ basis so long as the
             Excess Product is available or not otherwise committed to
             other customers. * * *

Doc. 1, Ex. A. The contract defines “Product” as “liquid and/or gas product

Nitrogen and/or Oxygen * * *.” Doc. 1, Ex. A.

       {¶21} While Section 1.2.1 does not require LGNA to provide a set amount

of liquid nitrogen, the plain language of this provision indicates that LGNA is to

provide “Product,” which includes gaseous and liquid nitrogen, on an “as available”

basis. Doc. 1, Ex. A. However, in its complaint, LRC nowhere alleges that LGNA

had 250,000 scfh of liquid nitrogen that was available and nowhere alleges that

LGNA had 250,000 scfh of liquid nitrogen that was not already committed to other

customers. Doc. 1. Thus, LRC did not set forth facts in its complaint that could

establish that LGNA breached Section 1.2.1 of the contract by failing to provide

250,000 scfh of liquid nitrogen.

       {¶22} While LRC identifies several places in the contract that mention liquid

nitrogen, none of these provisions specify a set amount of liquid nitrogen that

LGNA is obligated to supply LRC. These provisions do not contain any language

that would expand LGNA’s obligations beyond providing liquid nitrogen on an “as

available” basis as described in Section 1.2.1 of the contract. Doc. 1, Ex. A. Further,

in the arguments on appeal, LRC has not explained how any of these identified

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Case No. 1-22-08

provisions would obligate LGNA to provide LRC with the specific amount of

250,000 scfh of liquid nitrogen.

       {¶23} On appeal, LRC also points to a statement in an email attached to the

complaint in which a representative of LRC mentions that LGNA’s failure to supply

liquid nitrogen in this case was not in keeping with the previous practices of the

parties. Doc. 1, Ex. D. We note that the complaint does not contain any factual

allegations relating to the past practices of the parties that are briefly alluded to in

this email. In the absence of other clarifying allegations in the complaint, the nature

of these past practices is left completely unexplained.

       {¶24} Further, LRC has not set forth allegations that could establish that

LGNA’s departure from the past practices of the parties constituted a breach of the

plain and unambiguous language of the written contract. If the past practice of the

parties was for LGNA to provide LRC with liquid nitrogen on an “as available”

basis, then LGNA would not be acting inconsistently with this past practice or

breaching the contract by failing to provide liquid nitrogen to LRC if no excess

liquid nitrogen was available or was not already committed to other customers.

Even when considering the complaint alongside this vague statement in the

identified email, LRC cannot establish that LGNA breached the contract.

       {¶25} In its pleadings and in its arguments on appeal, LRC has not identified

a specific provision in the contract that LGNA breached by failing to supply LRC

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Case No. 1-22-08

with the demanded 250,000 scfh of liquid nitrogen. See State ex rel. Maher v. City

of Akron, 9th Dist. Summit No. 28761, 2018-Ohio-4310, ¶ 22. Accordingly, having

examined the contract and the materials attached thereto, we conclude that LRC has

not alleged a set of facts that could establish that, under the circumstances of this

case, LGNA breached the contract by failing to provide LRC with 250,000 scfh of

liquid nitrogen.

       {¶26} In conclusion, LRC has not pled facts that could establish that LGNA

breached the contract attached to the complaint by failing to provide excess gaseous

nitrogen in the amount LRC demanded or by failing to provide 250,000 scfh of

liquid nitrogen. Thus, having examined the allegations in the complaint and the

materials attached thereto, we conclude that LRC did not set forth facts that could

establish a breach of contract claim upon which relief could be granted. See Keenan,

supra, at ¶ 11-12; Enduring Wellness, L.L.C. v. Roizen, 8th Dist. Cuyahoga No.

108681, 2020-Ohio-3180, ¶ 77, 83. The trial court did not err in granting LGNA’s

motion to dismiss pursuant to Civ.R. 12(B)(6). LRC’s first assignment of error is

overruled.

                            Second Assignment of Error

       {¶27} LRC argues that the trial court erred in dismissing the declaratory

judgment action pursuant to Civ.R. 12(B)(6).

                                  Legal Standard

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Case No. 1-22-08

       {¶28} “The general purpose of a ‘declaratory judgment is to serve some

practical end in quieting or stabilizing an uncertain or disputed jural relation either

as to present or prospective obligations.’” Touro College v. Novus University Corp.,

146 A.D.3d 679, 679, 45 N.Y.S.3d 458 (N.Y. App. 2017), quoting James v. Alderton

Dock Yards, 256 N.Y. 298, 305, 176 N.E. 401 (N.Y. 1931). “[A] declaratory

judgment ha[s] the effect of a final judgment as to the rights and other legal relations

of the parties to a justiciable controversy * * *.” Salvador v. Town of Queensbury,

162 A.D.3d 1359, 1360, 79 N.Y.S.3d 725 (N.Y. App. 2018), quoting NY CPLR §

3001. “To constitute a ‘justiciable controversy,’ there must be a real dispute

between adverse parties, involving substantial legal interests for which a declaration

of rights will have some practical effect.” Chanos v. MADAC, LLC, 74 A.D.3d

1007, 1008, 903 N.Y.S.2d 506 (N.Y. App. 2010).

       {¶29} A court may dismiss a declaratory action pursuant to a Civ.R.

12(B)(6) motion to dismiss “where there is no real controversy or justiciable issue

between the parties * * *.” Dart v. Katz, 2d Dist. Montgomery No. 28913, 2021-

Ohio-1429, ¶ 94, quoting Fioresi v. State Farm Mut. Auto. Ins. Co., 26 Ohio App.3d

203, 203-204, 499 N.E.2d 5 (1st Dist. 1985). “When reviewing a judgment rendered

on a Civ.R. 12(B)(6) motion to dismiss, our standard of review is ordinarily de

novo.” One Energy Enterprises, LLC v. Ohio Department of Transportation, 10th

Dist. Franklin No. 17AP-829, 2019-Ohio-359, ¶ 28.

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Case No. 1-22-08

       {¶30} However, if a declaratory action is dismissed on the grounds that it is

not justiciable, then appellate courts review the dismissal under an abuse of

discretion standard. Arnott v. Arnott, 132 Ohio St.3d 401, 2012-Ohio-3208, 972

N.E.2d 586, ¶ 13. See Heasley, supra, at ¶ 12 (holding that the decision to grant or

deny declaratory relief is a matter committed to judicial discretion). But if “a trial

court determines that a matter is appropriate for declaratory judgment, its holdings

regarding questions of law are reviewed on a de novo basis.” Arnott at ¶ 13. An

abuse of discretion is more than a mere error in judgment. Worden v. Worden, 3d

Dist. Marion No. 9-16-54, 2017-Ohio-8019, ¶ 26. “Rather, a determination that is

arbitrary, capricious, or unreasonable is an abuse of discretion.” Schwieterman v.

Schwieterman, 3d Dist. Logan No. 8-19-49, 2020-Ohio-4881, ¶ 12.

                                   Legal Analysis

       {¶31} On appeal, LRC argues that the trial court erred in dismissing its

declaratory judgment action because there were controversies as to whether LGNA

was contractually obligated to provide the amount of excess gaseous nitrogen that

was demanded by LRC and whether LGNA was contractually obligated to provide

LRC with 250,000 scfh of liquid nitrogen. These assertions formed the basis of

LRC’s two alleged breach of contract claims. Importantly, the breach of contract

claims and the declaratory judgment action rest upon the same factual allegations in

the complaint.

                                        -18-
Case No. 1-22-08

       {¶32} Under the first assignment of error, we concluded that the allegations

in the complaint failed to set forth facts that could establish that LRC had a legal

right under the contract to the amount of excess gaseous nitrogen demanded by LRC

or to 250,000 scfh of liquid nitrogen. Thus, relying on our prior analysis, we

conclude that these exact same allegations cannot, in this case, establish that LRC

had “substantial legal interests for which a declaration of rights will have some

practical effect.” Chanos, supra, at 1008.

       {¶33} In conclusion, the factual allegations in LRC’s complaint do not

establish a disputed legal interest or right under the contract. For this reason, LRC’s

complaint does not present a justiciable controversy. Accordingly, the trial court

did not abuse its discretion in dismissing LRC’s declaratory judgment claim

pursuant to Civ.R. 12(B)(6). LRC’s second assignment of error is overruled.

                                     Conclusion

       {¶34} Having found no error prejudicial to the appellant in the particulars

assigned and argued, the judgment of the Allen County Court of Common Pleas is

affirmed.

                                                                 Judgment Affirmed

ZIMMERMAN, P.J. and MILLER, J., concur.

/hls

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