Court Opinion

ID: 2704302
Source: CourtListenerOpinion
Date Created: 2014-08-04 20:23:10.255585+00
Date Added: 2024-06-11T10:00:38.797290
License: Public Domain

[Cite as Imagine Nation Books, Ltd. v. STG Ents., Inc., 195 Ohio App.3d 286, 2011-Ohio-4639.]

                Court of Appeals of Ohio
                               EIGHTH APPELLATE DISTRICT
                                  COUNTY OF CUYAHOGA

                              JOURNAL ENTRY AND OPINION
                                       No. 96215

                     IMAGINE NATION BOOKS, LTD.,
                                                          APPELLANT,

                                                     v.

                     STG ENTERPRISES, INC., ET AL.,
                                                          APPELLEES.

                                           JUDGMENT:
                                            AFFIRMED

                                     Civil Appeal from the
                            Cuyahoga County Court of Common Pleas
                                     Case No. CV-689361

        BEFORE:          Celebrezze, J., Blackmon, P.J., and Jones, J.

        RELEASED AND JOURNALIZED: September 15, 2011
       Goldman & Rosen, Ltd., and James R. Russell Jr.; and
       Faruki Ireland & Cox, P.L.L., and D. Jeffrey Ireland, for appellant.

       David M. Leneghan and K. Scott Carter, for appellees.

       FRANK D. CELEBREZZE JR., Judge.

       {¶ 1} Plaintiff-appellant, Imagine Nation Books, Ltd. (“INB”), brings this appeal

challenging the trial court’s determination that defendants-appellees, STG Enterprises, Inc.

(“STG”) and Steven Traina, its only officer, did not breach the terms of an agreement

between the parties because there was no valid, enforceable contract. INB now argues that

there was a valid agreement or, in the alternative, that it is entitled to the return of an $8,000

signing bonus it had advanced to Traina. After a thorough review of the record and law, we

affirm the decision of the trial court.

       {¶ 2} Traina had been a representative of Books Are Fun (“BAF”) for several years.

BAF was a competitor of INB in the retail sale of books and other items to children at in-

school events. In July 2008, Traina flew to INB’s headquarters in Boulder, Colorado, to

discuss becoming a representative for INB. While there, Traina signed one of two

nondisclosure agreements on July 7, 2008.1 INB’s Vice President of Displays Division, Tony

Gilio, discussed Traina’s defection from BAF, and the two reached an understanding that

Traina would become an INB sales representative starting August 20, 2008, in time for the

new school year. Traina was supplied with a representative agreement with a three-page

       1
           The other nondisclosure agreement was signed on June 18, 2008.
cover letter laying out some key terms of the representative agreement, including its own

liquidated-damages provision if Traina did not begin work by August 20, 2008. Traina

signed and returned both of these documents on July 16, 2008. Traina received a check from

INB for $8,000 dated July 17, 2008, described as a signing bonus. The letter accompanying

the check was dated June 17, 2008.

       {¶ 3} However, Traina and INB were never able to agree on the counties to which

Traina would have exclusive sales rights, and an INB representative never signed the

agreement.2 Evidence was adduced at trial that Traina had signed on as a representative for

INB so that INB would not have a sales representative in his area, and he would be free of

any competition for the beginning of the 2008-2009 school year as he continued to sell for

BAF.

       {¶ 4} In November 2008, INB arranged to buy all BAF’s inventory and intellectual

property, an arrangement that was consummated in an asset-purchase agreement. This

essentially terminated Traina’s relationship with either company. After the asset-purchase

agreement was signed, Traina inquired about a position with INB, but INB demanded the

return of the signing bonus.3                  After Traina refused, INB contracted with another

representative for Cuyahoga and surrounding counties.

       {¶ 5} INB filed suit against Traina and STG on April 6, 2009, asserting various

claims, including a breach-of-contract claim in its second amended complaint, arguing for

       2
           A provision of the agreement specifically made signature by both parties necessary for contract formation.
       3
           INB indicated to Traina that it would settle for a return of $6,000.
liquidated damages under the representative agreement.4 A three-day trial began on August

10, 2010, in which INB argued that the representative agreement was a valid, binding

contract that entitled it to damages under the liquidated-damages provision of the

representative agreement and the separate liquidated-damages provision in the three-page

document prefacing the representative agreement, which INB now terms the “letter

agreement.” Traina argued that this letter agreement was simply a cover sheet to the

representative agreement and that in any event, an injury excused him from performance in

accordance with that document. INB also argued for the return of the signing bonus because

there was no meeting of the minds with regard to the representative agreement. Traina

countered that the signing bonus was consideration for his agreement not to disclose any of

INB’s plans or discussions with his then employer, BAF. Importantly, no written agreement

referenced this bonus.

         {¶ 6} The trial court found that no contract existed between INB and Traina and that

the signing bonus was in consideration for signing a nondisclosure agreement, as evidenced

by the letter accompanying the check. This letter was dated June 17, 2008, contemporaneous

with the execution of a nondisclosure agreement. However, the check was dated July 16,

2008, which is contemporaneous with Traina’s signature on the representative agreement.

INB argued that the letter had been misdated. The trial court ruled in favor of Traina and

STG on these claims. INB then timely appealed, assigning two errors for our review.

         4
           INB’s second amended complaint asserted ten claims, including a claim for replevin, conversion, tortious
interference with business relationships, breach of guaranty, unjust enrichment, deceptive trade practices, unfair
competition, injunctive relief, and two claims for breach of contract. Breach of the representative agreement is the only
one at issue here.
                                         Law and Analysis

                           I. Judgment Entry Disposing of all Claims

       {¶ 7} Although not raised as an issue by the parties, the trial court’s order of decision

does not specifically address all claims raised in INB’s complaints by name. However, the

unmentioned claims are resolved by the holding that INB did not prove damages and that

Traina and STG did not breach various contracts.

       {¶ 8} “For a court order to be final and appealable, it must satisfy the requirements of

R.C. 2505.02, and if the action involves multiple claims and the order does not enter a

judgment on all the claims, the order must also satisfy Civ.R. 54(B) by including express

language that ‘there is no just reason for delay.’ State ex rel. Scruggs v. Sadler, 97 Ohio

St.3d 78, 2002-Ohio-5315, 776 N.E.2d 101, ¶ 5-7.

       {¶ 9} “In the absence of express Civ.R. 54(B) language, an appellate court may not

review an order disposing of fewer than all claims. Scruggs at ¶ 6. The trial court may revise

the order until all claims are adjudicated. Civ.R. 54(B). A court may not bypass the

requirement to include the express language of Civ.R. 54(B) simply by designating the order

as final. Under Civ.R. 54(B), ‘any order or other form of decision, however designated,

which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the

parties’ does not terminate the action without a determination that there is no just reason for

delay.” Internatl. Bhd. of Elec. Workers, Local Union No. 8 v. Vaughn Industries, L.L.C.,

116 Ohio St.3d 335, 2007-Ohio-6439, 879 N.E.2d 187, ¶ 7-8.
       {¶ 10} The trial court’s order disposes of INB’s trademark claims, but does not

specifically address the tortious-interference claim. At trial, INB elicited testimony that

Traina or a party under contract with STG entered schools giving school personnel the

impression that they were BAF representatives after December 2008. This, INB argued,

interfered with contracts that INB had with those schools. However, the trial court’s order

states that “[t]he evidence presented to the Court is unreliable hearsay. Debbie Boyle did not

testify about the email supposedly proving that Mr. Elias and Mr. Traina were holding

themselves out as BAF representatives.”

       {¶ 11} The trial court found that STG did not breach its contract with BAF, which also

disposes of the breach-of-guaranty claim against Traina. Further, the holding that INB did

not prove its damages renders the unjust-enrichment claims moot. Traina’s counterclaim was

also disposed of by summary judgment, which merged with the trial court’s final order in this

case. Therefore, this is a final, appealable order.

                                       II. Breach of Contract

       {¶ 12} INB first asserts that “[t]he trial court erred by failing to consider whether there

was an enforceable letter agreement that appellee[s] breached entitling [INB] to liquidated

damages in the amount of $11,560.”

       {¶ 13} The interpretation of an unambiguous contract is generally reviewed de novo.

Cleveland-Akron-Canton Advertising Coop. v. Physician’s Weight Loss Ctrs. of Am., 184

Ohio App.3d 805, 2009-Ohio-5699, 922 N.E.2d 1012, ¶ 9. However, that is not the situation

presented here. Reviewing conflicting evidence about whether a party established that it
should be excused from performance based on a contract provision is a question of fact, not

of law. This question of fact requires that due deference be afforded to the trial court’s

determination. Gutbrod v. Schuler, Cuyahoga App. No. 94228, 2010-Ohio-3731, ¶ 17;

Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm (1995), 73 Ohio St.3d 107, 108, 652

N.E.2d 684.

       {¶ 14} Traina claims that he was prevented from performing because of a physical

injury. The existence of such an injury is not a question of contract, but one of evidence

adduced at trial that includes a weighing of credibility best left to the trier of fact. Seasons

Coal Co., Inc. v. Cleveland (1984), 10 Ohio St.3d 77, 80, 461 N.E.2d 1273. Therefore, we

apply an abuse-of-discretion standard to this portion of INB’s argument. To constitute an

abuse of discretion, the ruling must be unreasonable, arbitrary, or unconscionable.

Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 450 N.E.2d 1140.

       {¶ 15} The letter agreement that INB refers to is a three-page document prefacing the

representative agreement that highlights some key terms in it, but also sets forth some

independent provisions. The letter agreement states that Traina will ensure that he is

contractually free to work as an INB representative prior to August 20, 2008, and that he will

begin work on that date. Traina asked that a provision be added excusing performance if

“the early termination [of the agreement] results from [Traina’s] death, injury or

incapacitation, acts of God, or other circumstances outside of the direct control of [Traina].”

       {¶ 16} Traina presented medical records that he had previously submitted to INB

demonstrating that a back injury prevented him from lifting heavy items, a necessary duty
under the INB contract. The trial court found that Traina did not breach the representative

agreement, if it was enforceable, because it contained the same provision regarding injury.

This conclusion applies equally to the letter agreement because it contains the same injury

provision. Therefore, the trial court did not abuse its discretion in finding that Traina did not

breach the agreement.

         {¶ 17} Although the trial court did not include a separate section in its findings of fact

and conclusions of law addressing the letter agreement, that is because INB, at trial, referred

to both simply as the representative agreement. The term “letter agreement” arises only in

INB’s motion for reconsideration after the verdict.

         {¶ 18} The trial court did not fail to consider the letter agreement as INB now argues.

This agreement was lumped together with the representative agreement during INB’s

arguments, and even if it was not, Traina was excused from performance due to injury.5

Therefore, INB was not entitled to $11,560 in liquidated damages.

                                                    III. Signing Bonus

         {¶ 19} Appellant asserts, “Alternatively, if the letter agreement was not binding, the

trial court erred by not finding that there was a failure of return consideration6 for appellant’s

payment of the $8,000 signing bonus and requiring appellee to repay it.”

         5
             INB takes issue with the propriety of the evidence that Traina submitted and the fact that no medical expert
testified about his injuries. However, it is well established that pursuant to Evid.R. 104, the introduction of evidence at
trial falls within the sound discretion of the trial court. State v. Jacks (1989), 63 Ohio App.3d 200, 207, 578 N.E.2d 512.
         6
          “Failure of consideration exists when a promise has been made to support a contract, but that promise has not
been performed.” Rhodes v. Rhodes Indus., Inc. (1991), 71 Ohio App.3d 797, 807, 595 N.E.2d 441, citing Franklin v.
Lick (Apr. 19, 1979), Cuyahoga App. No. 37770.
       {¶ 20} INB again argues that a de novo standard of review should apply to this

assigned error as a matter of contract interpretation. However, no written agreement refers to

the signing bonus. This issue requires a weighing of conflicting evidence in the record and is

one that the trier of fact is in the best position to undertake. Absent an abuse of discretion,

that determination should not be disturbed on appeal. Also, INB’s arguments in this assigned

error attack the weight of the evidence rather than the interpretation of an unambiguous

contract provision. Accordingly, every reasonable presumption of the trial court’s judgments

should be afforded deference. Seasons Coal, 10 Ohio St.3d at 80.

       {¶ 21} The letter included with the check states that it is a signing bonus, but does not

specify that it was for beginning employment with INB. It states:

       {¶ 22} “Enclosed please find your signing bonus.

       {¶ 23} “We all look forward to a long prosperous relationship together.

       {¶ 24} “Please call me anytime with any questions, comments or concerns.”

       {¶ 25} INB now argues that the $8,000 constituted a signing bonus as “an inseverable

part of the cost of business of obtaining a new employee’s service.” Jack P. Friedman,

Dictionary of Business Terms (4th Ed.2007) 615. While this may be the understood term in

common parlance, no contract language in the record evidences that the signing bonus was

for engaging in employment rather than for signing a nondisclosure agreement.

       {¶ 26} The trial court heard the testimony, examined the dates of the documents in

question, and determined that the $8,000 was consideration for signing the nondisclosure
agreement, as Traina testified.7 The letter accompanying the check was dated June 17, 2008,

one day before a nondisclosure agreement was signed by Traina. The check was dated July

17, 2008, the day after Traina signed the representative agreement. The conflicting dates of

the letter and the check and the various agreements created an ambiguity that the trial court

resolved in Traina’s favor. This decision is supported in the record. Therefore, this

assignment of error is overruled.

                                                                                           Judgment affirmed.

BLACKMON, P.J., and JONES, J., concur.

        7
           INB points out that Traina admitted that the letter accompanying the check should have been dated sometime
in July, but Tony Gilio, the author of the letter, testified that it was correctly dated.