Court Opinion

ID: 2698301
Source: CourtListenerOpinion
Date Created: 2014-08-04 17:48:18.735451+00
Date Added: 2024-06-11T12:50:50.531088
License: Public Domain

[Cite as Heineken U.S.A., Inc. v. Esber Beverage Co., 2014-Ohio-946.]

                       [Please see vacated opinion at 2014-Ohio-291.]

                                       COURT OF APPEALS
                                      STARK COUNTY, OHIO
                                   FIFTH APPELLATE DISTRICT

                                                             JUDGES:
HEINEKEN USA, INCORPORATED                           :       Hon. William B. Hoffman, P.J.
                                                     :       Hon. W. Scott Gwin, J.
                        Plaintiff-Appellant          :       Hon. John W. Wise, J.
                                                     :
-vs-                                                 :
                                                     :       Case No. 2013 CA 00158
ESBER BEVERAGE COMPANY                               :
                                                     :
                     Defendant-Appellee              :       OPINION

CHARACTER OF PROCEEDING:                                 Civil appeal from the Stark County Court of
                                                         Common Pleas, Case No.2013CV00891

JUDGMENT:                                                Reversed and Remanded

DATE OF JUDGMENT ENTRY:                                  March 10, 2014

APPEARANCES:

For Plaintiff-Appellant                                  For Defendant-Appellee

JAMES L. MESSENGER                                       GARY CORROTO
RICHARD J. THOMAS                                        MARIA KLUTINOTY EDWARDS
JERRY KRZYS                                              Tzangas, Plakas, Mannos, Ltd
6 Federal Plaza Central, Ste. 1300                       220 Market Avenue South, 8th Floor
Youngstown, OH 44503                                     Canton, OH 44702

                                                         STANLEY R. RUBIN
                                                         437 Market Avenue North
                                                         Canton, OH 44702
[Cite as Heineken U.S.A., Inc. v. Esber Beverage Co., 2014-Ohio-946.]

Gwin, J.,

        {¶1}    On February 6, 2014, defendant-appellee Esber Beverage Company filed

motions for reconsideration, to certify a conflict and for en banc consideration of our

January 27, 2014 decision reversing the trial court’s grant of summary judgment in

Esber’s favor. See, Heineken USA, Inc. v. Esber Beverage Company, 5th Dist. Stark

No. 2013CA00158, 2014-Ohio-291.

Facts and Procedural History

        {¶2}     Appellee, Esber Beverage Company (“Esber”) is one of the oldest, family-

owned, continuously operated beverage wholesalers in Ohio and the United States. It

was founded in 1937 by Dave and Helen Esber and is currently operated by second and

third generation Esber family members. Esber is an Ohio distributor of alcoholic

beverages to retail permit holders in the state.

        {¶3}    Heineken N.V. is a beverage manufacturer based in the Netherlands.

Heineken USA, Inc. [“HUSA”] is a wholly owned subsidiary of Heineken Brouwerijen

B.V. [“Heineken B.V.”], which, in turn, is a wholly owned subsidiary of Heineken N.V.

        {¶4}     Pursuant to a multi-billion dollar acquisition, in April 2008, Heineken N.V.

acquired certain Scottish & Newcastle UK Ltd. [“S&N UK”] businesses in Belgium,

Finland, Ireland, Portugal, the United Kingdom, and the United States (“the S&N

Acquisition”). See, Esber Beverage Co. v. Heineken USA, Inc., 5th Dist. Stark No. 2011

CA00033, 2011-Ohio-5939, 2011 WL 5626592. [“Esber I”]. As a result of the S&N

Acquisition, Heineken N.V. assumed exclusive control over and liability for S&N UK, its

subsidiaries and its assets, including a brand of hard cider named Strongbow Hard

Cider [“Strongbow”], effective April 28, 2008. Since that time, Heineken N.V. has,
Stark County, Case No. 2013 CA 00158                                                  3

through its subsidiaries, manufactured, marketed and sold Strongbow in international

markets.

      {¶5}   Prior to January 1, 2013, Heineken N.V. supplied Strongbow into the

United States through its import agent Vermont Hard Cider Company, LLC (“VHCC”).

      {¶6}    Heineken B.V. entered into an agreement with VHCC effective December

31, 2012, pursuant to which Heineken B.V. compensated VHCC in exchange for the

early termination of VHCC’s right to supply Strongbow in the United States. Affidavit of

Hemmo Parson, Senior Legal Counsel for Heineken B.V., ¶19 [“Parson”]. Thereafter,

Heineken B.V. entered into an agreement with HUSA, “nam[ing]” the latter as the

exclusive U.S. import agent for the Brand effective January 1, 2013. Parson, ¶20.

“Heineken USA’s importation of the Strongbow Brand into the United States is now

governed by said agreement” with Heineken B.V. Parson, ¶ 20.

      {¶7}   By letter dated October 30, 2012, Heineken B.V. and HUSA informed

Esber it was terminating Esber’s “franchise and the associated distribution rights” with

respect to Strongbow pursuant to R.C. 1333.85(D). On March 29, 2013, HUSA filed a

Complaint in the Stark County Court of Common Pleas pursuant to R.C. 1333.851(B).

The Complaint sought a determination within 90 days by the Court of the diminished

value to Esber’s business due to the loss of the Strongbow brand. Esber filed an answer

and subsequently a motion for summary judgment.

      {¶8}   The trial court granted Esber’s motion for summary judgment finding that

the franchise termination rules of R.C. 1333.85(D) only apply to a “successor

manufacturer” and HUSA was not a successor manufacturer.
Stark County, Case No. 2013 CA 00158                                                    4

         {¶9}   On January 27, 2014, this Court issued its opinion in Heineken USA, Inc.

v. Esber Beverage Company, 5th Dist. Stark No. 2013 CA 00158, 2014-Ohio-291.

         {¶10} On February 6, 2014, defendant-appellee Esber Beverage Company filed

motions for reconsideration, to certify a conflict and for en banc consideration of our

January 27, 2014 decision reversing the trial court’s grant of summary judgment in

Esber’s favor. Heineken USA filed its memorandum in response.

Application for Reconsideration

         {¶11} App. R. 26 does not provide specific guidelines to be used by an appellate

court when determining whether a decision should be reconsidered or modified. In

Mathews v. Mathews, 5 Ohio App.3d 140, 143, 450 N.E. 2d 278 218(10th Dist. 1981),

the court stated: [t]he test generally applied in [A]pp. R. 26 (A) motions] is whether the

motion for reconsideration calls to the attention of the court an obvious error in its

decision or raises an issue for our consideration that was either not considered at all or

was not fully considered by us when it should have been.” See also, State v. Owens,

112 Ohio App.3d 334, 678 N.E. 2d 956 (11th Dist. 1996); Erie Insurance Exchange v.

Colony Development Corp., 136 Ohio App.3d 419, 736 N.E.2d 950 (10th Dist. 2000).

         {¶12} Esber’s application for reconsideration raises an obvious error in our

decision. No cross motion for summary judgment had been filed in the trial court. We

grant Esber’s application for reconsideration and vacate our decision and instead upon

consideration of the motion and the responses, we herby reverse the trial court’s entry

of summary judgment in favor of defendant-appellee Esber because we find from a

complete and thorough review of the record in this case genuine issues of material fact

exist.
Stark County, Case No. 2013 CA 00158                                                   5

       {¶13} A final determination of the issues in this case will require more factual

development. After further discovery and development of the underlying facts

concerning the various transactions and the relationship of the entities involved, either

party is of course, free to seek summary judgment if it should see fit. Our previous

opinion filed in this matter shall have no precedential value.

Motion to Certify a Conflict

       {¶14} Our disposition of Esber’s application for reconsideration renders moot his

Motion to Certify a Conflict.

Motion for En Banc Consideration

       {¶15} Our disposition of Esber’s application for reconsideration renders moot his

Motion for En Banc Consideration.
Stark County, Case No. 2013 CA 00158                                                    6

Disposition

       {¶16} In     sum,   we    grant   Esber’s   motion   for   reconsideration.   Upon

reconsideration, we vacate our January 27, 2014 decision, grant appellant’s single

assignment of error and reverse the judgment of the Stark County Court of Common

Pleas granting summary judgment in Esber’s favor. We remand this case to the Stark

County Court of Common Pleas for proceedings in accordance with this opinion and the

law.

By Gwin, J., and

Wise, J., concur;

Hoffman, P.J., concurs in part

                                              _________________________________
                                              HON. W. SCOTT GWIN

                                              _________________________________
                                              HON. WILLIAM B. HOFFMAN

                                              _________________________________
                                              HON. JOHN W. WISE

WSG:clw 0305
Stark County, Case No. 2013 CA 00158                                                  7

Hoffman, P.J., concurring in part

      {¶17} I concur in the majority's decision to grant reconsideration and to reverse

the trial court's entry of summary judgment in favor of Appellee based upon the existing

record.   However, I find it premature and advisory for this Court to find there are

genuine issues of material fact which preclude summary judgment at this time. While a

final determination of the issues in this case may well result in more factual

development, such decision should be left to the parties and/or the trial court, and not

be considered a mandate from this Court.

                                                      __________________________
                                                      HON. WILLIAM B. HOFFMAN