Court Opinion

ID: 6116287
Source: CourtListenerOpinion
Date Created: 2022-02-03 17:11:10.610814+00
Date Added: 2024-06-11T08:22:02.007656
License: Public Domain

[Cite as Gerace v. Biotheranostics, Inc., 2022-Ohio-302.]

                               COURT OF APPEALS OF OHIO

                              EIGHTH APPELLATE DISTRICT
                                 COUNTY OF CUYAHOGA

JAMES GERACE,                                           :

                 Plaintiff-Appellant,                   :
                                                            No. 110440
                 v.                                     :

BIOTHERANOSTICS, INC., ET AL.,                          :

                 Defendants-Appellees.                  :

                                JOURNAL ENTRY AND OPINION

                 JUDGMENT: AFFIRMED
                 RELEASED AND JOURNALIZED: February 3, 2022

             Civil Appeal from the Cuyahoga County Court of Common Pleas
                                 Case No. CV-20-939288

                                             Appearances:

                 Polk Kabat, LLP, Shannon J. Polk, Mark F. Humenik, and
                 Daniel M. Connell, for appellant.

                 Jackson Lewis P.C., Vincent J. Tersigni, and Donald G.
                 Slezak, for appellees.

LISA B. FORBES, J.:

                   Plaintiff James Gerace (“Gerace”) appeals from the trial court’s

judgment dismissing his complaint against his former employer Biotheranostics,

Inc., and three of the company’s executives: Lisa Whitmyer, Vice President of
Marketing; Don Hardison, Chief Executive Officer; and Matt Sargent, Chief

Commercial Officer (collectively “Defendants”). After reviewing the facts of the case

and pertinent law, we affirm the lower court’s judgment.

I.    Facts and Procedural History

              This case concerns, in part, whether California law can properly

govern Gerace’s claims in an Ohio state court. Gerace filed his complaint against the

Defendants in the Cuyahoga County Common Pleas Court setting forth three claims:

California unfair business/trade practices; wrongful discharge in violation of public

policy under California law; and wrongful discharge in violation of Ohio public

policy.1 The gist of all three claims is that Defendants improperly terminated

Gerace’s employment.

              A brief summary of the parties and places is a logical place to start.

Viewing the allegations in a light most favorable to the plaintiff, as we must when

reviewing a lower court’s ruling on a motion to dismiss, the following information is

taken from Gerace’s complaint. Gerace is a resident of Ohio, who lived and worked

in Ohio at all times pertinent to this case. Biotheranostics is a Delaware corporation

with a principal place of business in California and regularly conducts business in

Ohio. Whitmyer is a resident of Ohio, Hardison is a resident of California, and

Sargent is a resident of Arizona.

      1Claims one and two are against Biotheranostics and Doe/XYZ Corporation
Defendants. Claim three is against all Defendants.
               In January 2016, Biotheranostics hired Gerace to market its “most

significant product, Breast Cancer Index [“BCI”], to hospitals and oncologists

specializing in the treatment of breast cancer.” The National Comprehensive Cancer

Network (“NCCN”) is a nonprofit organization “of 28 leading cancer centers devoted

to patient care, research, and education.” During the 5th Annual Cleveland Breast

Cancer Summit, which was held in late August 2019, Dr. Jame Abraham (“Dr.

Abraham”), who was the director of the Breast Cancer Oncology Program at the

Cleveland Clinic, as well as an NCCN panelist, “spoke favorably about

Biotheranostics’s [BCI], giving the impression that the NCCN had approved, or

would likely approve [BCI] for inclusion in its guidelines.”

               During a break at the summit, Gerace thanked Dr. Abraham “for his

positive comments about” BCI, and Dr. Abraham “became extremely upset, most

likely as a result of a concern that he had violated NCCN’s” policies by appearing to

unofficially endorse BCI.     Dr. Abraham communicated to the Defendants his

disapproval of Gerace, ultimately stating that he was “done with Biotheranostics.”

On August 27, 2019, Biotheranostics terminated Gerace’s employment. The next

day, Dr. Abraham communicated to Defendants that he “could work with

Biotheranostics after all.”

               On March 22, 2021, the court granted Defendants’ motion to dismiss,

stating in part as follows:

      Count one of plaintiff’s complaint, California unfair business/trade
      practices, pursuant to Cal. Bus. & Prof. Code § 17000 et seq. and count
      [two] wrongful discharge in violation of public policy under Cal. Penal
          Code § 641.3 and Cal. Bus. & Prof. Code §17200 against Defendants
          * * * are dismissed as the operative facts alleged in the complaint
          occurred in Ohio, and therefore, Ohio law governs, and California’s
          presumption against the extraterritorial application of state law
          preclude the claims.

          Count three of plaintiff’s complaint, wrongful discharge in violation of
          Ohio public policy * * * is dismissed as plaintiff failed to establish the
          clarity and jeopardy elements required to succeed on a wrongful
          discharge in violation of public policy claim.

                  It is from this order that Gerace appeals.

II.       Law and Analysis

          A.    Civ.R. 12(B)(6) Motion to Dismiss

                  We review rulings on Civ.R. 12(B)(6) motions to dismiss under a de

novo standard. “A motion to dismiss for failure to state a claim upon which relief

can be granted is procedural and tests the sufficiency of the complaint. * * * Under

a de novo analysis, we must accept all factual allegations of the complaint as true

and all reasonable inferences must be drawn in favor of the nonmoving party.”

NorthPoint Props. v. Petticord, 179 Ohio App.3d 342, 2008-Ohio-5996, 901 N.E.2d

869, ¶ 11 (8th Dist.). “For a trial court to grant a motion to dismiss for failure to state

a claim upon which relief can be granted, it must appear ‘beyond doubt from the

complaint that the plaintiff can prove no set of facts entitling her to relief.’” Graham

v. Lakewood, 2018-Ohio-1850, 113 N.E.3d 44, ¶ 47 (8th Dist.), quoting Grey v.

Walgreen Co., 197 Ohio App.3d 418, 2011-Ohio-6167, 967 N.E.2d 1249, ¶ 3 (8th

Dist.).

                  For ease of discussion, we address Gerace’s assignments of error out

of order.
      B.   California’s Presumption Against the                     Extraterritorial
      Application of California Law Does Not Apply

               In Gerace’s second assignment of error, he argues that the “trial court

erred * * * by determining * * * that California’s presumption against the

extraterritorial application of state law preclude[s] the claims.” Upon review, we

conclude that we need not look to California law because Ohio law governs the

claims in the instant case.

               First, we note that appellate courts review a trial court’s choice-of-law

determination under a de novo standard. Holliday v. Ford Motor Co., 8th Dist.

Cuyahoga No. 86069, 2006-Ohio-284, ¶ 14. The Ohio Supreme Court has held that

“[w]hen confronted with a choice-of-law issue in a tort action * * * a presumption is

created that the law of the place of the injury controls unless another jurisdiction

has a more significant relationship to the lawsuit.” Morgan v. Biro Mfg. Co., 15 Ohio

St.3d 339, 342, 474 N.E.2d 286 (1984).

               More specifically, Ohio courts have held that in a wrongful

termination case, the place where the plaintiff lost his or her employment is the place

of the injury. See Hoyt v. Nationwide Mut. Ins. Co., 10th Dist. Franklin No. 04AP-

941, 2005-Ohio-6367, ¶ 27 (applying Morgan to a wrongful termination case and

holding that New Jersey law applied when the plaintiff resided, worked, and was

terminated in New Jersey); see also Walker v. Nationwide Mut. Ins. Co., 10th Dist.

Franklin No. 16AP-894, 2018-Ohio-1810, ¶ 20 (“Because a plaintiff’s injury in a

wrongful termination claim is the loss of employment, the place where the plaintiff

lives and works is the place of injury.”).
              Turning to the facts of the case at hand, Gerace lived and worked in

the same state at the time his employment was terminated. This state is Ohio, and

a presumption arises that Ohio law applies to his wrongful termination claims. For

Gerace to overcome the presumption that Ohio law applies to his case, he must show

that “another jurisdiction has a more significant relationship to the lawsuit.”

Morgan at 342.       Courts take several factors, including the following, into

consideration when determining whether a party made this showing:

      (1) the place of the injury; (2) the place where the conduct causing the
      injury occurred; (3) the domicile, residence, nationality, place of
      incorporation, and place of business of the parties; (4) the place where
      the relationship between the parties, if any, is located; * * *. All of these
      factors are to be evaluated according to their relative importance to the
      case.

Id.

              In the case at hand, the place of injury — i.e., Gerace’s termination —

is Ohio.   The conduct that Gerace alleges caused his termination — i.e., Dr.

Abraham’s threats — took place in Ohio.           Gerace also alleges that “[c]ritical

decisions,” such as “[t]he decision to terminate [him were] made in California by

Biotheranostics executives * * *.” Gerace lived and worked in Ohio. Biotheranostics

is a Delaware corporation with a principal place of business in California and

regularly conducts business in Ohio. Whitmyer is a resident of Ohio, Hardison is a

resident of California, and Sargent is a resident of Arizona. According to Gerace’s

complaint, the Defendants “effectuat[ed] the termination of Plaintiff’s Ohio-based

employment,” which tips the scales in favor of Ohio under the fourth factor.
               Upon review of Gerace’s complaint, we conclude that Ohio has the

most significant relationship to this lawsuit.       Keeping in mind that Gerace’s

termination is the injury, the conduct leading up to the termination and the

termination itself dominate this fact pattern. It is undisputed that these actions took

place in Ohio. “[T]he state in which both the conduct and the injury occur has the

dominant interest in regulating that conduct, determining whether is it tortious in

character, and determining whether the interest is entitled to legal protection.”

Kurent v. Farmers Ins. of Columbus, 62 Ohio St.3d 242, 246, 581 N.E.2d 533 (1991).

Gerace’s second assignment of error is overruled.

      C.     The Operative Facts Occurred in Ohio

               In his first assignment of error, Gerace argues that the trial court

erred by dismissing his first two claims, specifically “by making impermissible

factual findings that the operative facts alleged in the Complaint occurred in Ohio

and not in California as specifically alleged by Plaintiff.”

               In the first claim of Gerace’s complaint, he alleges that Defendants

violated two California code sections. First, Cal. Bus. & Prof. Code 17200, which

states in pertinent part that “unfair competition shall mean and include any lawful,

unfair or fraudulent business act or practice and unfair, deceptive, untrue or

misleading advertising.” Second, California Penal Code 641.3, which states that

      [a]ny employee who solicits, accepts, or agrees to accept money or any
      thing of value from a person other than his or her employer, other than
      in trust for the employer, corruptly and without the knowledge or
      consent of the employer, in return for using or agreeing to use his or
      her position for the benefit of that other person, and any person who
      offers or gives an employee money or any thing of value under those
      circumstances, is guilty of commercial bribery.

                 In the second claim of Gerace’s complaint, he alleges that Defendants’

termination of his employment “was unlawful, unfair, fraudulent, immoral,

unethical, oppressive, and anti-competitive and frustrated the public policy of

California, including, but not limited to, California’s commercial bribery statute, Cal.

Penal Code 641.3 and Cal. Bus. & Prof. Code 17200.” In other words, Gerace’s first

and second claims allege the same facts and cite the same law.

                 It is undisputed that the trial court found that “the operative facts

alleged in the complaint occurred in Ohio * * *.” Upon review of Gerace’s complaint,

we agree with the trial court. All of the facts in the complaint occurred in Ohio, with

the exception of the following allegations:          “Critical decisions resulting in

Biotheranostics’ ‘plan’ to bow to Dr. Abraham’s demands and terminate Gerace were

made in California.” It is unclear from Gerace’s complaint what those “critical

decisions” were, although the only references to actions that took place in California

concern communicating, via email or telephone, with people located in California.

For example, Gerace alleges that “[i]t is believed than [an] email was shared with

Biotheranostics’ in-house General Counsel, Karla Kelly, in California, and other

California-based members of Biotheranostics management team, including

Defendant Hardison.” Gerace also alleged that the “decision to terminate” was made

in California.
               In his appellate brief, Gerace argues that the “trial court ultimately

(but wrongly) accepted as true Defendants’ characterizations of what allegedly

happened, not Plaintiff’s version of events.” To clarify our standard of review, “we

must accept all factual allegations of the complaint as true and all reasonable

inferences must be drawn in favor of the nonmoving party.” Applying this test to

the facts alleged in Gerace’s complaint, we find that Gerace failed to plead “liability-

creating conduct” that occurred in California, because, as explained above, “the

place where the plaintiff lives and works is the place of the injury.” Walker, 10th

Dist. Franklin No. 16AP-894, 2018-Ohio-1810, at ¶ 20. This is the most significant

factor in considering which state’s law governs a wrongful termination claim. Id.

We must not, and we did not, look to anything but Gerace’s complaint to reach this

conclusion.

               Upon review of Gerace’s complaint, we cannot say that the trial court

impermissibly found that the operative facts in the complaint occurred in Ohio.

Accordingly, Gerace’s first assignment of error is overruled.

      D.      Motion to Dismiss or Motion for Summary Judgment?

               In his third assignment of error, Gerace argues that the “trial court

erred as a matter of law by relying on matters outside the pleadings and improperly

converting a motion to dismiss into a motion for summary judgment * * *.”

               Pursuant to Civ.R. 12(B), “[w]hen a motion to dismiss for failure to

state a claim upon which relief can be granted presents matters outside the pleading
and such matters are not excluded by the court, the motion shall be treated as a

motion for summary judgment and disposed of as provided in Rule 56.”

               In the case at hand, Defendants attached the following exhibits to

their motion to dismiss: A) the complaint in Gerace v. Cleveland Clinic Found.,

Cuyahoga C.P. No. CV-19-926516;2 B) documents purporting to relate to Dr.

Abraham’s biographical information; C) documents purporting to relate to NCCN’s

guidelines; D) the complaint in Gerace v. Biotheranostics, Cal. S.C. No. 37-2019-

00065891-CU-WT-CTL (Sept. 18, 2020);3 and E) the court’s journal granting the

defendants’ motion to dismiss in Gerace.

               We need not decide whether these exhibits were properly or

improperly attached to the motion to dismiss. As stated earlier in this opinion, a

ruling on the motion to dismiss could be, and was, properly rendered by viewing the

complaint alone. Furthermore, there is nothing in the record to indicate that the

trial court converted Defendants’ motion to dismiss into a motion for summary

judgment.

               Accordingly, Gerace’s third assignment of error is overruled.

      2  Gerace filed a complaint in the Cuyahoga County Common Pleas Court against
the Cleveland Clinic Foundation and Dr. Abraham based on the same allegations as in the
case at hand. This case is still pending as of the time this opinion was released.

      3  Gerace filed a complaint in a California trial court against the same defendants
and alleging the same facts as in the case at hand. This case was dismissed prior to the
date the complaint in the instant case was filed.
      E.     Motion to Strike

               In his fourth assignment of error, Gerace argues that the “trial court

committed prejudicial error by presumptively denying [his] motion to strike

[attachments] to Defendants’ * * * motion to dismiss * * *.”

               Gerace filed a motion to strike the above-referenced attachments, and

our review of the docket shows that the trial court did not rule on this motion. Ohio

courts consistently hold that when a trial court fails to rule on a pending motion at

the time of final judgment, appellate courts presume the motion was implicitly

denied.    See, e.g., Siemientowski v. State Farm Ins. Co., 8th Dist. Cuyahoga

No. 85323, 2005-Ohio-4295, ¶ 39.

               Upon review, we cannot say that the implicit denial of Gerace’s

motion to strike Defendants’ attachments was erroneous, because there is no

evidence in the record that the trial court relied on these attachments in rendering

its decision in this case. Therefore, Gerace’s fourth assignment of error is overruled.

      F.     Wrongful Discharge in Violation of Ohio Public Policy

               In his fifth and final assignment of error, Gerace argues that the “trial

court erred as a matter of law by dismissing [his claim] for wrongful discharge in

violation of Ohio public policy.”

      The common-law doctrine of employment at will generally governs
      employment relationships in Ohio. Under this doctrine, a general or
      indefinite hiring is terminable at the will of either the employee or the
      employer; thus, a discharge without cause does not give rise to an
      action for damages. * * * In response to perceived abuses of the at-will
      principle, a number of states created an exception that permitted a
      discharged employee to assert a tort cause of action for wrongful
      discharge in violation of a fundamental public policy. * * * [T]his court
       followed the national trend in Greeley [v. Miami Valley Maintenance
       Contrs., Inc., 49 Ohio St.3d 228, 551 N.E.2d 981 (1990)] and
       recognized a cause of action in tort for wrongful discharge in violation
       of public policy.

Wiles v. Medina Auto Parts, 96 Ohio St.3d 240, 2002-Ohio-3994, 773 N.E.2d 526,

¶ 5.

               In Wiles at ¶ 7-10, the Ohio Supreme Court listed the four elements of

a claim for wrongful discharge in violation of Ohio public policy:

       1. That clear public policy existed and was manifested in a state or
       federal constitution, statute or administrative regulation, or in the
       common law (the clarity element).

       2. That dismissing employees under circumstances like those involved
       in the plaintiff’s dismissal would jeopardize the public policy (the
       jeopardy element).

       3. The plaintiff’s dismissal was motivated by conduct related to the
       public policy (the causation element).

       4. The employer lacked overriding legitimate business justification for
       the dismissal (the overriding justification element).

               In the case at hand, the trial court found that Gerace “failed to

establish the clarity and jeopardy elements” of the tort. We recognize that Gerace

need not “establish” anything to successfully oppose a motion to dismiss.

Nonetheless, we are able to review this assignment of error under the proper

standard for reviewing the court’s decision to grant a motion to dismiss under

Civ.R. 12(B)(6) for failure to state a claim upon which relief can be granted;

accepting all factual allegations of the complaint as true and drawing all reasonable

inferences in favor of the nonmoving party, it appears from the face of the complaint

that the plaintiff can prove no set of facts entitling him to relief.
               Additionally, the Wiles Court established “that the clarity and

jeopardy elements were questions of law to be decided by the court while factual

issues relating to the causation and overriding justification elements were generally

for the trier of fact to resolve.” Wiles, 96 Ohio St.3d 240, 2002-Ohio-3994, 773

N.E.2d 526, at ¶ 11.

               Upon review, we find that Gerace has met the clarity element of the

Wiles test; however, he failed to establish the jeopardy element, which posits that

the facts at issue in a particular case would “jeopardize” the noted public policies.

               In Gerace’s complaint, he refers to “well-recognized public policies in

the State of Ohio, including * * * Ohio’s common law prohibiting tortious

interference with an employment relationship and Ohio’s statute prohibiting

deceptive trade practices.” He further alleges that “[t]he actions of Defendants in

terminating Gerace’s employment [and] participating in, acquiescing to and/or

failing to prevent [his] termination * * * jeopardized the aforementioned public

policies.” We note that this allegation is a legal conclusion. “[U]nsupported

conclusions of a complaint are not considered admitted and are not sufficient to

withstand a motion to dismiss.” State ex rel. Fain v. Summit Cty. Adult Prob. Dept.,

71 Ohio St.3d 658, 659, 646 N.E.2d 1113 (1995).

             1.   Prohibiting Tortious Interference with an Employment
             Relationship as a Public Policy

               The elements of a tortious interference with an employment

relationship are as follows: “(1) the existence of an employment relationship

between plaintiff and the employer; (2) the defendant was aware of this relationship;
(3) the defendant intentionally interfered with this relationship; and (4) the plaintiff

was injured as a proximate result of the defendant’s acts.” Hester v. Case W. Res.

Univ., 2017-Ohio-103, 80 N.E.3d 1186, ¶ 37 (8th Dist.).

               The tort of interfering with an employment relationship manifests a

sufficiently clear public policy to satisfy the first element of a wrongful discharge in

violation of public policy claim. See Vitale v. Modern Tool & Die Co., 8th Dist.

Cuyahoga No. 76247, 2000 Ohio App. LEXIS 2743 (June 22, 2000) (“Common law

has established a public policy against tortious interference with contract * * *.”).

We find that this satisfies the clarity element of the Wiles test.

               However, we further find that the facts of the case at hand do not

jeopardize Ohio’s public policy against tortious interference with an employment

relationship. This court has held that “the employer cannot be a defendant in this

type of claim * * *.” Lennon v. Cuyahoga Cty. Juvenile Court, 8th Dist. Cuyahoga

No. 86651, 2006-Ohio-2587, ¶ 20.

       [T]here are three players in a tortious interference claim: the plaintiff,
       the defendant, and a third-party employer. In this instant case,
       however, appellant alleges that other employees interfered with her
       work, making the defendant in her case, her employer. This is not the
       type of situation that tortious interference with employment
       relationship is designed to protect.

Id. at ¶ 19.

               In following Lennon, we conclude that the facts alleged in the

complaint filed in the case at hand do not jeopardize the public policy against

tortious interference with employment relationships. Gerace sued his employer. He
did not sue Dr. Abraham or the Cleveland Clinic in this case. Gerace’s employer and

Defendants are one in the same. It is also notable that Ohio also has a clear public

policy in favor of at-will employment. See Greeley, 49 Ohio St.3d at 234, 551 N.E.2d

981 (holding that the employment-at-will doctrine “permits termination of

employment for no cause or for ‘any cause’ which is not unlawful, at any time and

regardless of motive”).

               Terminating Gerace under the circumstances in the case at hand did

not jeopardize Ohio’s public policy against tortious interference and cannot be the

basis for wrongful termination in violation of Ohio public policy.

             2.   Prohibiting Deceptive Trade Practices as a Public
             Policy

               R.C. 4165.02 defines acts constituting deceptive trade practices and

section (A)(10) states that it is a deceptive trade practice when a “person * * * in the

course of the person’s business, vocation, or occupation, * * * [d]isparages the good,

services, or business of another by false representation of fact * * *.” By enactment

of this statute, the legislature expressed a public policy against deceptive trade

practices.   See Greeley at 234 (“[P]ublic policy warrants an exception to the

employment-at-will doctrine when an employee is discharged or disciplined for a

reason which is prohibited by statute.”).

               Gerace has alleged no acts or omissions in his complaint by any of the

Defendants that could be seen as disparaging anything by false representation of

fact. The factual allegations in the complaint center almost exclusively on Gerace

and Dr. Abraham. Defendants’ only act, as alleged in Gerace’s complaint, was to
terminate Gerace’s employment. There are simply no allegations that Defendants

engaged in deceptive trade practices in violation of R.C. 4165.02(A)(1) or that

Defendants violated the public policy against deceptive trade practices when they

fired Gerace; therefore, Gerace’s complaint fails to allege facts that jeopardize Ohio’s

public policy against deceptive trade practices.

               Accordingly, the court did not err by dismissing this claim against

Defendants and Gerace’s fifth and final assignment of error is overruled.

      G.     Conclusion

               The trial court did not err by dismissing Gerace’s first two claims

because they are based on California law and Ohio law controls the case at hand.

Furthermore, the trial court did not err by dismissing Gerace’s third claim because,

looking at the allegations in a light most favorable to Gerace, he failed to allege

circumstances under which Defendants jeopardized a clear Ohio public policy.

               Judgment affirmed.

      It is ordered that appellees recover from appellant costs herein taxed.

      The court finds there were reasonable grounds for this appeal.

      It is ordered that a special mandate be sent to said court to carry this judgment

into execution.
      A certified copy of this entry shall constitute the mandate pursuant to Rule 27

of the Rules of Appellate Procedure.

LISA B. FORBES, JUDGE

MICHELLE J. SHEEHAN, P.J., and
EMANUELLA D. GROVES, J., CONCUR