Court Opinion

ID: 4355361
Source: CourtListenerOpinion
Date Created: 2018-12-31 20:28:29.379038+00
Date Added: 2024-06-11T07:49:43.423737
License: Public Domain

[Cite as Metal Seal v. Good Time Outdoors, Inc., 2018-Ohio-5326.]

                                    IN THE COURT OF APPEALS

                                ELEVENTH APPELLATE DISTRICT

                                          LAKE COUNTY, OHIO

 METAL SEAL PRECISION, LTD.,                             :          OPINION
 AN OHIO LIMITED LIABILITY COMPANY,
                                                         :
                   Plaintiff-Appellant,                             CASE NO. 2017-L-142
                                                         :
         - vs -
                                                         :
 GOOD TIME OUTDOORS, INC., d.b.a.
 CORE15 RIFLE SYSTEMS, et al.,                           :

                   Defendants-Appellees.                 :

 Civil Appeal from the Lake County Court of Common Pleas, Case No. 2015 CV 000123.

 Judgment: Affirmed.

 Grant J. Keating and JoAnna Tatarko, Dworken & Bernstein Co., L.P.A., 60 South Park
 Place, Painesville, OH 44077 (For Plaintiff-Appellant).

 Richard J. Marco, Jr., Marco & Marco, 52 Public Square, Medina, OH 44256 (For
 Defendants-Appellees).

TIMOTHY P. CANNON, J.

        {¶1}      Appellant, Metal Seal Precision, Limited (“Metal Seal”), appeals the October

3, 2017 judgment of the Lake County Court of Common Pleas. Following a bench trial,

the trial court found in favor of appellees, Norman Clifton III and Good Time Outdoors,

Inc., d.b.a. Core15 Rifle Systems (“Good Time Outdoors”). The trial court’s judgment is

affirmed for the following reasons.
Procedural History

        {¶2}    This case stems from Metal Seal’s business relationship with Good Time

Outdoors. Metal Seal is a machine shop located in Mentor, Ohio. A portion of its business

includes manufacturing machine parts for the firearms industry. Good Time Outdoors,

Inc. is located in Ocala, Florida and conducts business under three divisions: Good Time

Outdoors Airboats, Bluegrass Armory, and Core15 Rifle Systems. Core15 Rifle Systems

assembles AR-15 rifles for sale to retailers and individuals.

        {¶3}    In early 2012, Metal Seal began supplying Good Time Outdoors with bolt

carrier groups (“BCGs”), a critical component of AR-15 rifles. The parties engaged in

business together until 2014.

        {¶4}    On January 23, 2015, Metal Seal filed in the Lake County Court of Common

Pleas a complaint against Good Time Outdoors and its president, Norman P. Clifton, III.

The complaint alleged that the parties entered into a General Terms and Conditions of

Sale agreement (“General Terms”), pursuant to which Metal Seal agreed to manufacture

certain goods, and Good Time Outdoors agreed to purchase those goods. The complaint

alleged Good Time Outdoors breached the General Terms, and Metal Seal was entitled

to relief. In addition to breach of the General Terms, the complaint also raised claims for

unjust enrichment, promissory estoppel, and action on account. With leave of court, Metal

Seal filed an amended complaint.1

        {¶5}    Good Time Outdoors and Clifton filed an answer and counterclaim on March

20, 2015. The counterclaim was later withdrawn.

1. In the amended complaint, the date the General Terms were entered into by the parties was changed
from “January of 2013” to “June, 2012,” and the section of the General Terms regarding damages for breach
was changed from “Section 16(c)” to “Section 15(c).”

                                                   2
         {¶6}   Metal Seal filed a motion for summary judgment on December 18, 2015.

Good Time Outdoors filed a brief in opposition, and Metal Seal filed a reply. The trial

court denied the motion for summary judgment.

         {¶7}   The matter proceeded to a bench trial on January 31 through February 3,

2017. The following facts are summarized from the testimony and evidence presented at

trial.

Purchase Orders 11028 & 11139

         {¶8}   Metal Seal and Good Time Outdoors began conducting business together

after meeting at a firearms convention in January 2012.       In February 2012, David

Blackburn, Metal Seal’s salesman, exchanged several e-mails with Thomas Cistola, the

purchasing and sales manager for Good Time Outdoors.           They discussed pricing,

quantity, and lead time for the manufacture of both manganese phosphate (“MagPhos”)

and nickel boron (“NiBr”) BCGs. Per Cistola’s request, Blackburn sent an e-mail on

February 13, 2012, quoting $108.00 per unit for 100 NiBr BCGs per month for 12 months,

with a lead time of 12 to 14 weeks to the first delivery. The next day, Cistola sent

Purchase Order 11028 for the purchase of 100 NiBr BCGs per month, totaling $10,800.00

per month. The purchase order indicated the initial shipment would be sent May 15 to

June 1, 2012, and ordered the same quantity be shipped once per month, through

December 2012, on the 15th of each month.

         {¶9}   On February 20, 2012, Blackburn and John Habe, the president of Metal

Seal, met with Clifton and Cistola to persuade Good Time Outdoors to provide Metal Seal

with a “request for quote” for MagPhos BCGs. During the meeting, they discussed

quantities and pricing. On February 25, 2012, Blackburn sent Cistola an e-mail, quoting

                                            3
$73.00 per unit for MagPhos BCGs for a total of 2,300 units. The quote proposed

components would be shipped June through December 2012 in the following quantities

per month: 200 units in June and July 2012; 300 units in August and September 2012;

400 units in October and November 2012; and 500 units in December 2012. The lead

time to the first delivery would be 12 to 14 weeks. Cistola replied to the quote, indicating

he wanted to “bump up the quantities from Aug on out.” Cistola e-mailed Purchase Order

11139 on March 13, 2012, for a total of 35,000 units of MagPhos BCGs at a unit price of

$69.00 in the following quantities per month: 2,000 units in May and June 2012; 2,500

units in July through September 2012; 3,000 units in October and November 2012; and

3,500 units in December 2012 through February 2013. Cistola’s e-mail stated: “If we can

get the first 500 shipped the second week of May and are on track with the PO by June

1 that would be fantastic.” The next day, Cistola sent Blackburn an e-mail, stating: “Per

our discussion earlier, here are the revisions.”     The revised purchase order added

shipments for 3,500 units in March and April 2013. It also indicated “net 15 terms.” Habe

testified that meant Good Time Outdoors would pay Metal Seal “in 15 days after we

shipped the parts.”

       {¶10} Habe testified this was the “[l]argest firearms order Metal Seal had ever

received.” To manufacture the higher volume of parts, Metal Seal had to increase its

capacity and purchased $2,168,735.00 in additional equipment and machinery. Metal

Seal also spent additional sums on tooling, training, and set-up. Habe testified the cost

to increase capacity was incorporated in Metal Seal’s price quotes.

General Terms and Conditions of Sale

       {¶11} On May 31, 2012, Blackburn sent an e-mail to Cistola offering to extend the

payment terms to “net 30” if Clifton would sign a “personal guarantee of payment.” On

                                             4
June 7, 2012, a little more than three months after the first purchase order between the

parties, Blackburn sent Cistola an e-mail with the General Terms document attached.

The last section of the document was titled “Personal Guaranty.” On June 8, 2012, Cistola

e-mailed the document back to Blackburn with Clifton’s signature assenting to the terms

and conditions and the personal guaranty.

      {¶12} Good Time Outdoors could not get parts fast enough to meet customer

demand, and throughout the summer of 2012, Metal Seal’s BCG shipments fell well below

the ordered quantities. Metal Seal shipped the following quantities of parts from May

through September 2012 under Purchase Order 11028: 0 of 100 units in May; 200 of 100

units in June; 0 of 100 units in July; 0 of 100 units in August; and 100 of 100 units in

September. The following shipments were made May through September 2012 under

Purchase Order 11139: 428 of 2,000 units in May; 975 of 2,000 units in June; 650 of

2,500 units in July; 2,000 of 2,500 units in August; 1,250 of 2,500 units in September.

Purchase Order 11139 Revised

      {¶13} At the request of Metal Seal, in September 2012, Good Time Outdoors

revised Purchase Order 11139 to reflect an increased price per unit for MagPhos BCGs.

The increased unit price accounted for the additional capacity required to meet Good

Time Outdoors’ need for greater quantities of parts.

      {¶14} On September 27, 2012, Cistola sent Blackburn revised Purchase Order

11139, reflecting 3,200 units of MagPhos BCGs at $70.36 per unit “[e]ffective 10/1/12

through 12/1/13.” The purchase order further stated: “Core 15 retains the right to reduce

quantities w/ 30 days notice. Any additional will be added to the end of the PO. Min qty

per month of 2,000 pcs.”

                                            5
       {¶15} In October 2012, Metal Seal shipped 800 of 3,200 units that were ordered

under Purchase Order 11139. No shipments were made under Purchase Order 11028

that month.

       {¶16} On November 8, 2012, Blackburn sent an e-mail to the bookkeeper for

Good Time Outdoors, stating no payment had been made on a past due amount of

$62,550.00. The e-mail indicated Good Time Outdoors was placed on a credit hold, and

Metal Seal would suspend shipments of product until the account was current. Habe

testified the parties communicated about payment on a “regular basis,” and Good Time

Outdoors requested continued shipments and made promises that the payments would

be made.

       {¶17} On November 19, 2012, Clifton sent an e-mail to Blackburn, requesting an

immediate shipment of 400 BCGs. Clifton sent another e-mail on November 27, 2012,

requesting “ETAs on shipments over the next 30 days.” Clifton further explained: “We will

be out of BCG by the end of today. We are overnight a check for $33,421.00 on Invoice

# 12091. If you can send us an Invoice for the 800 that we received on 11/16, I will get a

check to you this week also. I will commit to paying Metal Seal on a 15 day bases going

forward, But I need Product. [sic.]” The same day, Blackburn responded, stating 400

BCGs were being shipped that day and that Metal Seal planned on shipping 800 units

per week going forward. Blackburn explained a two-day power outage at the plant caused

a disruption in production. He further stated: “We want to keep Core 15 as a long term

customer and are committed to do our best to get product to you when you need it. Our

guys have been advised that you were running low on BCG inventory and to make Core

15 shipments a priority.”

                                            6
       {¶18} Metal Seal’s shipments continued to fall below the ordered quantities. In

November 2012, Metal Seal shipped 100 of 100 units under Purchase Order 11028 and

1,200 of 3,200 units under Purchase Order 11139. Metal Seal shipped 0 of 100 units

under Purchase Order 11028 in December 2012.

New Arrangement with Slabe Machine Parts, Co.

       {¶19} Habe testified that in December 2012, Cistola visited the Metal Seal facility

to discuss delivery and quality control problems.       One of the issues Metal Seal

experienced was producing the “bolt carrier” for the MagPhos BCGs. Cistola learned that

Slabe Machine Parts, Co. (“Slabe”) manufactured bolt carriers. A new arrangement was

made, pursuant to which Good Time Outdoors would purchase the bolt carrier component

for the MagPhos BCGs directly from Slabe. It would continue to purchase the rest of the

MagPhos BCG components and the complete NiBr BCGs from Metal Seal. Good Time

Outdoors would assemble the MagPhos BCGs at its facility and absorb any extra costs

for doing so.

       {¶20} Good Time Outdoors issued new purchase orders to reflect the new

arrangement. These purchase orders superseded Purchase Order 11139.

       {¶21} On December 7, 2012, Cistola sent Purchase Order 12212, and on

December 14, 2012, he sent Purchase Order 12253. The purchase orders reflected the

different MagPhos BCG components Good Time Outdoors was ordering from Metal Seal

and indicated different quantities and prices depending on the component. Metal Seal

shipped the parts for those orders on the dates they were issued.

       {¶22} On December 20, 2012, Purchase Orders 12270 through 12281 were

issued for January through December 2013.

                                            7
Purchase and Supply Agreement

        {¶23} On January 28, 2013, Blackburn sent Cistola a “Purchase and Supply

Agreement” (“Purchase Agreement”) for review and signature. The Purchase Agreement

included an “Exhibit A.” Good Time Outdoors refused to sign the Purchase Agreement.

        {¶24} In June 2013, Good Time Outdoors issued Purchase Orders 13135 through

13146 for MagPhos BCG components to be shipped January through December 2014.

It also issued Purchase Order 13167 for complete NiBr BCGs at a price of $108.00 per

unit to be shipped June 2013 through May 2014 in the following quantities: 200 units per

month in June and July 2013, and 500 units per month for August 2013 through May

2014.    Under Purchase Order 13167, Good Time Outdoors also ordered uncoated

MagPhos BCG components to be sent monthly from May 2013 through May 2014.

        {¶25} Habe testified that in spite of the new purchase orders, Cistola indicated he

would take as many parts Metal Seal could produce, and Purchase Order 11139 was left

open for Metal Seal to send Good Time Outdoors the rest of its completed MagPhos

inventory. Metal Seal shipped complete MagPhos BCGs under purchase order 11139 in

the following quantities: 900 units in December 2012; 450 units in January 2013; 541 units

in February 2013; and 900 units in March 2013. The complete MagPhos BCGs were

shipped in addition to the components under the new arrangement.

Purchase Orders Suspended

        {¶26} Metal Seal made shipments pursuant to Purchase Orders 12270 through

12278 from January through September 2013. Of these purchase orders, the only month

in which Metal Seal’s shipments met the quantity of parts ordered was Purchase Order

                                             8
12276 in July 2013. During the same time frame, under Purchase Order 13167, Metal

Seal sent 200 of 200 units in June 2013 and 200 of 200 units in July 2013.

       {¶27} By mid-2013, Good Time Outdoors no longer needed a large quantity of

parts. Douglas Gifford, Good Time Outdoors’ Director of Operations, testified Good Time

Outdoors was having cash flow issues. Good Time Outdoors became overdue to Metal

Seal on several invoices. On August 27, 2013, Habe, Blackburn, Clifton, and Gifford met

in Clifton’s office in Florida to discuss past due balances and quantities. On August 30,

2013, Habe sent an e-mail to Gifford proposing a reduced shipping schedule and price

adjustments for MagPhos BCG components and complete NiBr BCGs. After follow-up e-

mails from Habe requesting a phone call, Gifford sent an e-mail response on September

5, 2013, indicating someone would be in touch with him.        On September 6, 2013,

Blackburn sent an e-mail to Good Time Outdoors’ bookkeeper to follow up on Good Time

Outdoors’ past-due balance. The bookkeeper indicated Good Time Outdoors hoped to

get a payment to Metal Seal in the next week. On September 9, 2013, Habe e-mailed

Gifford and explained that Metal Seal was still producing MagPhos BCG components and

complete NiBr BCGs and would be sending out shipments that day. Habe stated that

Good Time Outdoors had an overdue balance of $317,686.00 and that Metal Seal’s bank

was involved.

       {¶28} On September 12, 2013, Habe sent Clifton an e-mail with the General

Terms attached. The parties talked by telephone the next day. Metal Seal indicated

Good Time Outdoors had failed to pay on numerous invoices. Clifton sought to suspend

the remaining purchase orders because Good Time Outdoors could not keep accepting

product it could not use.

                                           9
       {¶29} On September 23, 2013, Gifford sent Habe an e-mail, stating:

              Per the teleconference of Tuesday, September 17th between
              Yourself, Mr. Blackburn, Mr. Clifton and myself, I am reconfirming
              that Core Rifle Systems has suspended all P.O.’s with Metal Seal
              Precision until further notice.

              Please feel free to contact me with any questions or concerns.

              We look forward to meeting with you on the 27th.

       {¶30} Habe responded the same day. Habe stated that Metal Seal “purchased

raw material, tooling, machines, etc. to build parts for your orders and have millions of

dollars of inventory built or in the process of being built to fill your orders.” The e-mail

further stated that Metal Seal could not accept Good Time Outdoors’ position in

suspending the purchase orders, and Metal Seal was looking to “negotiate a solution.”

       {¶31} On September 27, 2013, Habe sent Gifford an e-mail outlining a proposed

solution that had been discussed by the parties. The e-mail proposed a new shipping

and price schedule. The unit price for MagPhos components and complete NiBr BCGs

was to increase with decreased monthly shipment quantities. It also indicated that Good

Time Outdoors could request shorter lead times. The e-mail proposal further stated that

Good Time Outdoors “will not purchase these parts from any other supplier unless [Metal

Seal] cannot meet [Good Time Outdoors’] delivery dates and quantities. In this scenario

Good Time Outdoors can purchase the quantity needed to subsidize the shortfall.”

       {¶32} Gifford responded by e-mail on October 1, 2013, with Purchase Orders

13905 through 13909 for October 2013 through February 2014, reflecting the proposed

arrangement. Gifford indicated the new purchase orders would supersede the previous

purchase orders for that time period. These purchase orders did not reflect that Good

                                            10
Time Outdoors would not purchase the parts from other suppliers unless Metal Seal failed

to meet delivery dates and quantities.

      {¶33} On October 8, 2013, Blackburn sent Gifford an e-mail with Metal Seal’s own

proposed purchase orders reflecting the proposed agreement.           Blackburn indicated

Gifford could use those purchase orders “as reference.” Metal Seal’s purchase orders

included greater detail regarding the terms outlined in the September 27, 2013 e-mail and

contained language that Good Time Outdoors would not purchase the parts from other

suppliers unless Metal Seal failed to meet the delivery dates and quantities. Ultimately,

no agreement was reached by the parties with regard to these new proposals.

      {¶34} Habe testified that Metal Seal ceased shipments as of the September 23,

2013 e-mail from Good Time Outdoors.             Metal Seal’s last shipment went out on

September 18, 2013. Habe affirmed that at the time the purchase orders were suspended

Metal Seal was “sitting on finished product that had not yet been delivered.” Habe

explained: “We had a lot of product. We had nickel boron carrier groups and we had a

bunch of components for the mag phos components that they asked us to deliver. We

had those built. And we also had the ones that were not plated. We had some of those

bolts as well.” Habe further testified that Metal Seal had 4,295 NiBr BCGs that were

completed but never shipped to Good Time Outdoors.               This amounted to over

$400,000.00 in completed NiBr BCGs. Metal Seal was able to sell approximately 4,000

of those parts to a different customer at $105.00 per unit, $3.00 less per unit than what

Good Time Outdoors had agreed to pay. Metal Seal also had to put “about five bucks

into each part” because the new customer wanted the parts customized. Habe testified

that Metal Seal lost a total of $8.00 per part and sustained a total loss of $32,000.00 for

                                            11
the parts sold. Habe further testified that Metal Seal had 295 NiBr BCGs remaining. Each

part cost $102.00 to produce, totaling $30,090.00 to produce the 295 units.         Habe

explained the total cost for goods that were finished but never shipped to Good Time

Outdoors was $62,090.00.

       {¶35} Habe further testified that at the time the orders were suspended, Metal

Seal had numerous purchase orders that were unfulfilled. Habe testified to 15 months of

outstanding purchase orders for MagPhos BCG components: 12279 through 12281 and

13135 through 13146, each totaling $184,835.00. In addition to those purchase orders,

Habe testified to a total unfulfilled order of 5,000 units for NiBr BCGs. Metal Seal had

built 4,295 units, discussed above, leaving a balance of 705 units at $108.00 per unit for

a total of $76,140.00.      Habe further testified Good Time Outdoors also ordered

$68,000.00 in uncoated parts. The total of unfulfilled orders was $2,916,665.00. Habe,

however, testified that Metal Seal was not requesting that full amount in damages.

Pursuant to the liquidation clause in the General Terms, Metal Seal was requesting 45%

of the total unfulfilled orders, or $1,312,499.25.

Firing Pins & Components Returned to Metal Seal

       {¶36} By early 2014, Good Time Outdoors had made payments that reduced the

amount it owed to Metal Seal for parts delivered to $84,606.00. However, in June 2014,

Good Time Outdoors returned 1,545 chrome plated firing pins to Metal Seal claiming for

the first time that they had defective coatings. The problem had not been noticed until

Good Time Outdoors used up its inventory. Metal Seal took receipt of the returned firing

pins and had them recoated. Blackburn retained the firing pins at the direction of Habe

due to Good Time Outdoors’ outstanding balance with Metal Seal. Good Time Outdoors

                                             12
repeatedly requested the return of the firing pins so it could complete orders for rifles and

pay off the remaining arrears. Metal Seal did not return the firing pins, and Good Time

Outdoors returned the remainder of the BCG components in its inventory back to Metal

Seal.

        {¶37} Habe and Clifton met at the Las Vegas Shot Show in January 2015 and

attempted to resolve the issues between the parties. They were unable to come to an

agreement to settle their dispute.

        {¶38} After a bench trial, the trial court entered judgment on October 3, 2017. The

trial court concluded that the General Terms document signed in June 2012 was not an

enforceable contract because it did not contain adequate terms. The trial court further

concluded that the parties’ conduct was not evidence of a contract because, “[w]hile the

parties clearly wanted to maintain their business relationship and were flexible, there was

no meeting of the minds on the essential terms of a contract.” The court found in favor of

Good Time Outdoors on Metal Seal’s breach of contract claim. The trial court further

ruled in favor of Good Time Outdoors on Metal Seal’s claims for unjust enrichment,

promissory estoppel, and action on account.

        {¶39} Metal Seal noticed a timely appeal and raises five assignments of error,

which we review out of order.

Extrinsic Evidence

        {¶40} Metal Seal’s second assignment of error states:

        {¶41} “The Trial Court erred as a matter of law when it considered inadmissible

evidence.”

                                             13
       {¶42} Metal Seal argues the General Terms agreement is unambiguous, and it

was therefore improper for the trial court to consider extrinsic evidence to interpret the

General Terms agreement.

       {¶43} “The standard of review in a breach of contract action is whether the trial

court erred as a matter of law.” Falcone Bros., Inc. v. Pawmew, Inc., 5th Dist. Stark No.

2016CA00209, 2017-Ohio-6958, ¶15, citing Unifund, CCR, L.L.C. v. Johnson, 8th Dist.

Cuyahoga No. 100600, 2014-Ohio-4376, ¶7. “We must therefore ‘determine whether the

trial court’s order is based on an erroneous standard or a misconstruction of the law.’”

Id., quoting Unifund, supra, at ¶7. However, due deference must be given to the trial

court’s findings of fact if the findings are supported by competent, credible evidence.

Id.(citation omitted).

       {¶44} There is no dispute that the transaction at issue involves the sale of goods.

Accordingly, Ohio’s version of the Uniform Commercial Code (“UCC”), found in Revised

Code Chapters 1301 and 1302, is applicable to this case. See Tubelite Co., Inc. v.

Original Sign Studio, Inc., 176 Ohio App.3d 241, 2008-Ohio-1905, ¶12 (10th Dist.).

       {¶45} “In construing the terms of any contract, the principal objective is to

determine the intention of the parties.” Hamilton Ins. Serv., Inc. v. Nationwide Ins. Cos.,

86 Ohio St.3d 270, 273 (1999) (citation omitted). “We presume the intent of the parties

to a contract resides in the language used in the written instrument.” Oryann, Ltd. v. SL

& MB, LLC, 11th Dist. Lake No. 2014-L-119, 2015-Ohio-5461, ¶25, citing Kelly v. Med.

Life Ins. Co., 31 Ohio St.3d 130 (1987), paragraph one of the syllabus.

       {¶46} Generally, at common law, only where the language of a writing “is unclear

or ambiguous, or when the circumstances surrounding the agreement invest the language

                                            14
with a special meaning, will extrinsic evidence be considered in an effort to give effect to

the parties’ intentions.” Shifrin v. Forest City Ent., Inc., 64 Ohio St.3d 635, (1992), at

syllabus. Ohio’s UCC, however, rejects the common law rule that extrinsic evidence is

admissible only where the terms of a writing are ambiguous. See R.C. 1302.05 Official

Comment 1(c). R.C. 1302.05 provides:

              Terms with respect to which the confirmatory memoranda of the
              parties agree or which are otherwise set forth in a writing intended
              by the parties as a final expression of their agreement with respect
              to such terms as are included therein may not be contradicted by
              evidence of any prior agreement or of a contemporaneous oral
              agreement but may be explained or supplemented:

              (A) by course of performance, course of dealing, or usage of trade
              as provided in section 1301.303 of the Revised Code; and

              (B) by evidence of consistent additional terms unless the court finds
              the writing to have been intended also as a complete and exclusive
              statement of the terms of the agreement.

       {¶47} Where the parties have reached a written agreement that is final with

respect to the terms contained in the writing, evidence of prior agreements or

contemporaneous oral agreements cannot be used to contradict those terms, but extrinsic

evidence of trade usage, course of dealing, or course of performance may be used to

explain or supplement the writing. Camargo Cadillac Co. v. Garfield Ents., Inc., 3 Ohio

App.3d 435, 438 (1st Dist.1982) (citations omitted). Further, if the writing is not “a

complete and exclusive statement of the agreement,” the writing may also be explained

or supplemented by consistent additional terms. Id. To determine whether the parties

intended the writing to be the complete and exclusive statement of their agreement, the

court must look outside the four corners of the document and consider the surrounding

facts and circumstances. Id. at 437-438; Abele v. Bayliner Marine Corp., 11 F.Supp.2d

                                            15
955, 963 (N.D.Ohio 1997); In re Manchester Steel, Inc., 156 B.R. 988, 993 (N.D.Ohio

1993); see also Allapattah Servs., Inc. v. Exxon Corp., 61 F.Supp.2d 1308, 1315 (S.D.Fla.

1999), citing Nanakuli Paving & Rock Co. v. Shell Oil Co., Inc., 664 F.2d 772, 794, 796-

797 (9th Cir.1981) and Transamerica Oil Corp. v. Lynes, Inc., 723 F.2d 758, 765 (10th

Cir.1983).

             The General Terms agreement provides, in relevant part:

             These General Terms and Conditions of Sale (this “Agreement”)
             govern the manufacturing and sale of Products by Metal Seal
             Precision, Ltd., an Ohio limited liability company (the “Seller”) to
             Core15Rifle Systems, Inc. (the “Purchaser”). Seller and Purchaser
             may herein be individually referred to as a “Party” or collectively as
             “Parties.”

             1. CONTRACT SCOPE AND DOCUMENTS

             Absent a * * * contrary written agreement signed by both Parties, the
             contract between Seller and Purchaser shall be governed by Seller’s
             written Quotation to Purchaser (“Quote”), Purchaser’s written
             acceptance of the Quote (“Purchase Order”), and the terms stated in
             this Agreement (collectively the “Contract”). Absent Seller’s prior
             written agreement, any term or provision stated in Purchaser’s
             Purchase Order that is inconsistent with either the Quote and/or the
             within Agreement shall be ineffective and no part of the Contract.
             The Contract may not be modified except by a written agreement
             signed by both Parties. For purposes of the Contract, any notices or
             modifications that must be in writing may be satisfied by an exchange
             of e mail communications.

             2. DESCRIPTION OF PRODUCTS/AGREEMENT TO SELL AND
             PURCHASE

             The materials/parts/services covered under this Agreement (“the
             Products”) are defined in Seller’s Quote, which is incorporated by
             reference. * * * Seller agrees to manufacture and sell to Purchaser,
             and Purchaser agrees to purchase from Seller, the quantity of
             Products, at the prices and at the delivery dates stated in Seller’s
             Quote. * * *

             ***

                                           16
              9. ENTIRE AGREEMENT

              The terms of the Contract represent the entire understanding of the
              Parties regarding the subject matter hereof, and supersedes all prior
              understandings whether written or oral. Further amendments or
              modifications may only be made in writing, and must be signed by
              an authorized representative of each Party. No waiver of the breach
              of any term or condition of this Agreement shall be deemed to
              constitute the waiver of any other breach of the same or any other
              term or condition.

       {¶48} The trial court determined that although Good Time Outdoors denied a

contract existed, “Clifton’s signature on the [General Terms] agreement is valid.” The trial

court, however, concluded the General Terms agreement was not enforceable because

it lacked “sufficient essential terms.” In coming to this conclusion, the trial court compared

the General Terms agreement to the later Purchase Agreement. The trial court noted the

two documents were similar, but that the Purchase Agreement contained “substantive

changes clearly establishing a requirements contract.” The trial court stated the fact that

no price quotation was included with the General Terms document was “unlike the later

‘Purchase and Supply Agreement’ that was proposed by Metal Seal in December 2012

and rejected by Good Time Outdoors in the first half of 2013. The latter agreement

provided exhibit A that did provide [the essential terms] information.” The trial court

explained:

              Exhibit A of the document specified delivery of components for
              39,000 BCGs in 2013 with deliveries of 750 BCG components per
              week. The cost of the parts would be $51.31 per BCG. These
              components did not include the bolt carrier which was being
              manufactured by Slabe but included all of the other necessary parts
              for complete Mag Phos BCG. This exhibit also specified an annual
              quantity of complete (i.e. including the bolt carrier) Ni Br BCGs of
              1,300 for 2013 for a unit cost of $109.00. 25 complete Ni Br BCGs
              were to be shipped weekly from April 15, 2013 through April 14,
              2014. As mentioned earlier, the earlier General Terms and
              Conditions of Sale agreement did not have a similar exhibit.

                                             17
      {¶49} Although the trial court determined the General Terms agreement was not

an enforceable contract and concluded “the actual terms of their relationship was not

formally documented in writing,” it found the parties’ conduct indicated they had an

“arrangement.” The trial court analyzed the parties’ conduct to determine whether the

“arrangement” established a contract. The trial court concluded that, “[w]hile the parties

clearly wanted to maintain their business relationship and were flexible, there was no

meeting of the minds on the essential terms of a contract.”

      {¶50} Whether the signed General Terms agreement expressed terms that were

enforceable in the business relationship should be determined without regard to a

comparison with the subsequent Purchase Agreement that was never signed. Because

the Purchase Agreement was never signed by Good Time Outdoors, it cannot provide

consistent additional terms and is not evidence of the parties’ intent at the time the

General Terms agreement was signed. The Purchase Agreement cannot be used to

supplement or explain the General Terms agreement because it is not a usage of trade,

course of dealing, or course of performance.

      {¶51} Further, because the General Terms agreement was a writing that

documented at least a portion of the parties’ agreement, the trial court did not need to

determine whether the parties’ conduct created a contract independent of the writing.

Their conduct, however, is relevant to explain or supplement the writing to the extent the

conduct is a trade usage, a course of performance, or a course of dealing.

      {¶52} We determine that the surrounding circumstances indicate the parties did

not intend the General Terms agreement to be the complete and exclusive statement of

their agreement. Although the General Terms agreement contains an integration clause,

                                           18
the agreement is unclear because the surrounding circumstances indicate the “Seller’s

Quote” and “Purchase Order” as defined in the General Terms agreement do not exist.

The General Terms agreement states that the “Contract” is comprised of the General

Terms agreement, “Seller’s Quote”, and “Purchase Order.” The “Seller’s Quote” operates

as an offer, and the “Purchase Order” is the written acceptance of the “Seller’s Quote”

and must contain the same terms as the “Seller’s Quote.” The General Terms agreement

purports that the price, quantity, and delivery terms are included in the “Seller’s Quote.”

However, the only price quotations exchanged between Metal Seal and Good Time

Outdoors were those sent in e-mails from Blackburn to Cistola on February 13, 2012, and

February 25, 2012.      Those quotes, however, were not assented to by Good Time

Outdoors as contemplated by the General Terms. Rather, without prior approval from

Metal Seal, Good Time Outdoors sent purchase orders with different terms than those

contained in the price quotes. The General Terms is therefore final as to some but not

all the terms of the parties’ agreement, and under R.C. 1302.05, the General Terms may

be supplemented or explained by a course of dealing, usage of trade, course of

performance, or by consistent additional terms.

         {¶53} Although it was error for the trial court to compare the General Terms

agreement with the later Purchase Agreement and to analyze the parties’ conduct as a

separate contract, this was harmless error. The trial court’s findings pertaining to the

parties’ conduct are relevant to explain or supplement the writing.

         {¶54} Metal Seal’s second assignment of error is without merit.

Breach of Contract

         {¶55} We address Metal Seal’s first and fifth assignments of error together. They

state:

                                            19
              [1.] The Trial Court Erred as a matter of law when it held no contract
              existed between the parties.

              [5.] The trial court’s conclusion that Metal Seal never formally placed
              Good Time Outdoors in default was against the weight of the
              evidence.

       {¶56} Metal Seal argues it is entitled to judgment as a matter of law on its claim

for breach of contract. Metal Seal contends that Good Time Outdoors had “no right to

unilaterally walk away from its obligations” and that “suspension and refusal to accept

delivery of Metal Seal’s goods in September 2013” constituted a failure by Good Time

Outdoors to perform its obligations under the General Terms agreement and purchase

orders. Metal Seal further maintains that “[n]either the language in the General Terms

nor the Suspended Purchase Orders permit Appellees to unilaterally suspend their orders

unless Metal Seal was in Default.”

       {¶57} Metal Seal maintains the following purchase orders were unfulfilled due to

the suspension: 12279 through 12281 for MagPhos BCG components to be delivered

from October 2013 through December 2013; 13135 through 13146 for MagPhos BCG

components to be delivered from January 2014 through November 2014; and 13167 for

complete NiBr BCGs and uncoated parts to be delivered from August 2013 through May

2014. Metal Seal further maintains that under purchase order 12278, it only made a

partial shipment in September 2013 and would have completely fulfilled that order if the

purchase orders had not been suspended.

       {¶58} A cause of action for a breach of contract requires the claimant to establish:

(1) the existence of a contract, (2) the other party’s failure without legal excuse to perform

when performance is due, and (3) damages or loss resulting from the other party’s breach.

                                             20
Lucarell v. Nationwide Mutual Ins. Co., 152 Ohio St.3d 453, 2018-Ohio-15, ¶41 (citations

omitted).

       {¶59} “‘A contract is generally defined as a promise, or a set of promises,

actionable upon breach.’” Kostelnik v. Helper, 96 Ohio St.3d1, 2002-Ohio-2985, ¶16,

quoting Perlmuter Printing Co. v. Strome, Inc., 436 F.Supp. 409, 414 (N.D.Ohio 1976).

“A contract for the sale of goods imposes on the seller the obligation to transfer and deliver

the goods in accordance with the contract and imposes on the buyer the obligation to

accept and pay in accordance with the contract.”          GJP Ents., Inc. v. Performance

Contracting, Inc., N.D.Ohio No. 1:05CV0670, 2006 WL 2381492, *16 (Aug. 16, 2006),

citing R.C. 1302.14.

       {¶60} Under R.C. 1301.201(B)(3), “‘[a]greement, as distinguished from ‘contract’,

means the bargain of the parties in fact, as found in their language or inferred from other

circumstances, including course of performance, course of dealing, or usage of trade[.]”

“‘Contract’, as distinguished from ‘agreement’, means the total legal obligation that results

from the parties’ agreement[.]” R.C. 1301.201(B)(12).

       {¶61} The General Terms agreement was clearly intended to govern the

relationship between Metal Seal and Good Time Outdoors and states that: “Seller agrees

to manufacture and sell to Purchaser, and Purchaser agrees to purchase from Seller, the

quantity of Products, at the prices and at the delivery dates stated in Seller’s Quote.” As

discussed above, there was no “Seller’s Quote” as defined in the General Terms

agreement.     Instead, Good Time Outdoors sent Metal Seal purchase orders that

contained price, quantity, delivery, and payment terms.

                                             21
      {¶62} However, the parties’ course of performance further indicates they did not

intend to manufacture and purchase exactly in accordance with the terms of the purchase

orders. R.C. 1301.303(A) defines “course of performance” as

             a sequence of conduct between the parties to a particular transaction
             that exists if: (1) The agreement of the parties with respect to the
             transaction involves repeated occasions for performance by a party;
             and (2) The other party, with knowledge of the nature of the
             performance and opportunity for objection to it, accepts the
             performance or acquiesces in it without objection.

      {¶63} In considering the parties’ conduct, the trial court found:

             The evidence shows that over time, the parties changed the unit
             prices of the components, the terms of payment, the amount of
             product ordered and the delivery date. The POs had minimal
             language that ordered certain products at a set price. The
             expectation was that if product is delivered, the buyer must pay for
             it. * * * Although [PO11139] considerably exceeded the capacity of
             Metal Seal to deliver, there was no formal or written correspondence
             addressing this problem. The purchase order was not rejected by
             Metal Seal nor did Good Time Outdoors declare a default when Metal
             Seal failed to timely deliver the desired quantities. Blackburn testified
             that everyone knew there would be no compliance with the PO.
             Cistola told him to just get him as much product as you can.
             Subsequent purchase orders followed the same pattern and in many
             cases replaced previous orders. * * * Rather than one cohesive,
             implied contract, the parties engaged in a series of separate POs,
             many of which replaced earlier ones. The terms were loosely defined
             and were based on the needs and circumstances of the parties at
             the time.

The parties modified the terms of the purchase orders on an almost monthly basis. Each

party regularly failed to comply with the terms of the purchase orders due to their

circumstances and market conditions. On multiple occasions, Metal Seal sent no product,

and it regularly sent quantities below those stated in the purchase orders; Good Time

Outdoors was continually behind on payment. This course of performance evidences the

parties’ intent to be bound only from month-to-month, rather than to the multiple months

                                            22
and set quantity of parts covered by the purchase orders.         Good Time Outdoors’

suspension of the purchase orders at issue was consistent with the parties’ conduct

throughout their relationship.   Further, after Good Time Outdoors suspended the

purchase orders, the parties made attempts to resolve their issues but were unable to

come to an agreement. We cannot conclude that suspension of the purchase orders was

a breach of the General Terms agreement. Accordingly, the trial court did not err by

finding in favor of Good Time Outdoors on Metal Seal’s breach of contract claim.

      {¶64} Metal Seal argues the trial court’s findings regarding the parties’ conduct

and “flexible” relationship is evidence of a course of dealing. R.C. 1301.303(B) defines

“course of dealing” as “a sequence of conduct concerning previous transactions between

the parties to a particular transaction that is fairly to be regarded as establishing a

common basis of understanding for interpreting their expressions and other conduct.”

Here, the parties’ transaction involves multiple purchase orders that encompass several

months with performance due each month. Their conduct did not pertain to previous

transactions. Further, the trial court made findings regarding each party’s acquiescence

to the other’s nonconforming performance.        Accordingly, the trial court’s findings

regarding the parties’ “flexible” relationship are evidence of a “course of performance”

and are relevant to explain or supplement the General Terms agreement and to “show a

waiver or modification of any term inconsistent with the course of performance.” R.C.

1301.303(F). Metal Seal’s argument is not well taken.

      {¶65} The trial court did not err in determining Metal Seal was not entitled to

judgment on its claim for breach of contract.

      {¶66} Metal Seal’s first and fifth assignments of error are without merit.

                                           23
Promissory Estoppel

       {¶67} Metal Seal’s fourth assignment of error states:

       {¶68} “The trial court erred as a matter of law by concluding in the absence of an

agreement, Metal Seal could not prove its claim for promissory estoppel.”

       {¶69} Metal Seal claims that in response to Good Times Outdoors’ purchase

orders, it purchased more than $2.1 million worth of equipment and hired and trained

additional personnel.

       {¶70} The elements required to establish a claim of promissory estoppel are “(1)

a clear and unambiguous promise; (2) reliance on the promise; (3) the reliance is

reasonable and foreseeable; and (4) the party relying on the promise was injured by his

or her reliance.” Connolly v Malkamaki, 11th Dist. Lake No. 2001-L-124, 2002-Ohio-6933,

¶16 (citation omitted). As noted by the trial court, this claim was not specifically addressed

by either party during trial or in the closing briefs. However, the trial court included

findings of fact with regard to this claim in its October 3, 2017 judgment entry.

       {¶71} The trial court found that the initial General Terms never committed Good

Times Outdoors to a contract that required it to purchase a set quantity of parts for a set

price. However, when asked to sign the Purchase Agreement, which did contain such

terms, Good Time Outdoors refused to sign. In addition, as stated above, the record

supports the fact that contrary to a fixed requirement contract for a period of time, the

parties modified the purchase orders almost on a monthly basis. Metal Seal did not

deliver the quantities ordered on the dates required, and Good Times Outdoors did not

pay invoices when due. Thus, there is support in the record for the trial court’s finding

that there was “no evidence the parties had a meeting of the minds on the requirement

                                             24
that Good Time Outdoors commit itself to purchasing a set quantity of parts regardless of

market demand for assault rifles. Good Time Outdoors presented testimony it would

never have agreed to such terms[.] Absent an agreement from Good Time Outdoors, the

court cannot conclude that Metal Seal’s reliance was reasonable and foreseeable.”

       {¶72} The trial court did not err in determining the elements of promissory estoppel

had not been established.

       {¶73} Metal Seal’s fourth assignment of error is without merit.

Action On Account

       {¶74} Metal Seal’s third assignment of error states:

       {¶75} “The Trial Court’s refusal to award Metal Seal damages on its claim on an

account was against the manifest weight of the evidence.”

       {¶76} In its judgment entry, the trial court noted that Metal Seal’s claim for action

on account was not specifically addressed by either party at trial or in their closing briefs.

The trial court found the “Aged Receivables Report” attached to Metal Seal’s amended

complaint showed Good Time Outdoors owed Metal Seal $84,606.33 and was adequate

to show an “account.” The trial court found that the evidence at trial “showed that Good

Time Outdoors caught up with its arrears with Metal Seal” except for the $84,606.33.

However, the trial court determined that Good Time Outdoors returned the equivalent

amount of parts in June and November 2014. The trial court concluded the “return of the

firing pins and other BCG components extinguished the remaining arrears owed by Good

Time Outdoors.”

       {¶77} On appeal, Metal Seal argues it was improper for the trial court to determine

the return of the parts to Metal Seal released Good Time Outdoors from its obligation to

                                             25
pay the past due account balance. Metal Seal maintains it never agreed to accept the

return of parts in lieu of payment, and Good Time Outdoors had no right to return

previously accepted conforming parts. In response, Good Time Outdoors does not

dispute that it did have an outstanding unpaid balance of $84.606.33 on its account with

Metal Seal or that it had accepted the parts at issue. Instead, Good Time Outdoors

argues the trial court appropriately found that it had satisfied its obligation of payment

when it returned the firing pins and other parts to Metal Seal.

       {¶78} R.C. 1302.66(A) provides, in pertinent part:

              The buyer may revoke his acceptance of a lot or commercial unit
              whose non-conformity substantially impairs its value to him if he has
              accepted it:

              (1) on the reasonable assumption that its non-conformity would be
              cured and it has not been seasonably cured; or

              (2) without discovery of such non-conformity if his acceptance was
              reasonably induced either by the difficulty of discovery before
              acceptance or by the seller’s assurances.

       {¶79} The trial court found that the remaining components could not be used by

Good Time Outdoors after Metal Seal failed to return the allegedly defective firing pins,

because “the firing pins are matched to the other components of BCGs and that even a

slight variation in firing pin dimensions (presumably from firing pins from another vendor)

could result in a malfunctioning BCG.” Thus, Metal Seal’s failure to return the firing pins

substantially impaired the value of the rest of the parts. However, Good Time Outdoors

failed to establish that the firing pins it returned were defective and that its acceptance

was properly revoked. The trial court stated it was “unable to resolve if the firing pins

were defective.”    Accordingly, we determine that Good Time Outdoors’ burden to

                                            26
establish proper revocation of its acceptance of the firing pins and other components was

not met.

       {¶80} However, in order to establish entitlement to recovery on the account, the

seller cannot simply rely on the amount invoiced. R.C. 1302.77, titled “Seller’s remedies

in general,” provides, in pertinent part: “Where the buyer wrongfully rejects or revokes

acceptance of goods * * *, then with respect to any goods directly affected * * *, the

aggrieved seller may: (D) resell and recover damages as provided in section 1302.80 of

the Revised Code[.]” R.C. 1302.80(A) provides:

               Under the conditions stated in section 1302.77 of the Revised Code
               on seller’s remedies, the seller may resell the goods concerned or
               the undelivered balance thereof. Where the resale is made in good
               faith and in a commercially reasonable manner the seller may
               recover the difference between the resale price and the contract
               price together with any incidental damages allowed under section
               1302.84 of the Revised Code, but less expenses in consequences
               of the buyer’s breach.

       {¶81} The trial court determined “[t]he design of the AR 15 assault rifle has been

in the public domain for years and presumably the Mag Phos BCG at issue can be resold

to another party. Metal Seal, in fact, was able to resell 4,000 Ni Br BCGs to a third party

in June 2016[.]” Metal Seal had the burden to establish that it attempted to resell the

MagPhos BCG parts at issue in good faith and in a commercially reasonable manner.

However, there is nothing in the record or in its argument that establishes what damages

Metal Seal should be entitled to after the attempts to sell the parts in mitigation. As the

trial court noted, this claim on account was not specifically addressed by the parties at

trial or in their final argument.

       {¶82} The trial court did not err in refusing to award Metal Seal damages on its

claim on an account.

                                            27
      {¶83} Metal Seal’s third assignment of error is without merit.

      {¶84} The judgment of the Lake County Court of Common Pleas is affirmed.

DIANE V. GRENDELL, J.,

CYNTHIA WESTCOTT RICE, J.,

concur.

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