Court Opinion

ID: 4674532
Source: CourtListenerOpinion
Date Created: 2021-04-05 13:12:24.252921+00
Date Added: 2024-06-11T08:03:20.978666
License: Public Domain

[Cite as Lykins Oil Co. v. Corbin, 2021-Ohio-1126.]

                                     IN THE COURT OF APPEALS

                            TWELFTH APPELLATE DISTRICT OF OHIO

                                          CLERMONT COUNTY

 LYKINS OIL COMPANY, d.b.a. LYKINS                    :
 ENERGY SOLUTIONS,
                                                      :   CASE NO. CA2020-07-036
        Appellant,
                                                      :        OPINION
                                                                4/5/2021
     - vs -                                           :

                                                      :
 HOMER C. CORBIN, JR. a.k.a. JOHN
 CORBIN, JR., et al.,                                 :

        Appellees.

        CIVIL APPEAL FROM CLERMONT COUNTY COURT OF COMMON PLEAS
                           Case No. 2020 CVH 00003

Stagnaro, Saba & Patterson Co., L.P.A., Peter A. Saba, Jeffrey M. Nye, Joshua M. Smith,
2623 Erie Avenue, Cincinnati, Ohio 45208, for appellant

Freking Myers & Reul LLC, George M. Reul, Jr., 600 Vine Street, 9th Floor, Cincinnati, Ohio
45202, for appellee Homer C. Corbin, Jr., a.k.a. John Corbin, Jr.

Black, McCuskey, Souers & Arbaugh, Brain R. Mertes, 220 Market Avenue South, Suite
1000, Canton, Ohio 44702, for appellee RJ Wright and Sons, Ltd.

        PIPER, P.J.

        {¶1}     Appellant, Lykins Oil Company, d.b.a. Lykins Energy Solutions, appeals a

decision of the Clermont County Court of Common Pleas grating a joint motion to modify a

preliminary injunction in favor of appellees John Corbin, and his employer, RJ Wright and
                                                                                 Clermont CA2020-07-036

Sons, LTD.1

        {¶2}     Lykins is a wholesaler and distributor of gasoline, diesel fuel, and other

petroleum products.2 Lykins employed Corbin as a sales representative from 2010 until

2019.     During his time with Lykins, Corbin worked in various geographic locations

throughout the United States. Within these areas, Corbin serviced approximately 100

Lykins customers and grossed over $72 million in sales during his last year of employment.

        {¶3}     According to Lykins, Corbin was trained on several of Lykins' trade secrets

and related confidential business information, including knowledge of customers, financial

records, pricing, and various marketing strategies. Corbin also participated in weekly sales

meetings with Lykins' sales staff during which the representatives discussed Lykins' sales

methods and customers. Corbin also maintained Lykins' "Quote Matrix," which contained

detailed and specific customer information as well as data on supplier and shipping

networks.

        {¶4}     It is undisputed that at the start of Corbin's employment with Lykins, he signed

a   non-compete,         non-solicitation,      and     confidentiality      agreement        ("Non-Compete

Agreement").        Corbin's Non-Compete Agreement prohibited him from engaging in

competition or attempted competition throughout Ohio, Indiana, Kentucky, and "any other

geographic area or territory in which [Corbin] represented [Lykins] for three consecutive

months or longer during [his] last three years of employment."

        {¶5}     It is also undisputed that Corbin was terminated by Lykins in September 2019,

1. According to Loc.R. 6(A), we sua sponte remove this case from the accelerated calendar for the purposes
of issuing this written opinion.

2. As discussed later, the parties stipulated to an agreed preliminary injunction and the trial court neither held
an evidentiary hearing nor provided findings of fact or conclusions of law related to whether Lykins was entitled
to a preliminary injunction. As such, several facts are in dispute regarding the history precipitating the
preliminary injunction, and the events that occurred after the stipulation was accepted by the trial court. With
full acknowledgment of the factual disputes, we offer a factual background for context, as well as to help
frame our review. However, nothing in this written decision is meant to determine facts in dispute or decide
the merits of pending issues other than the matters related to the direct issues on appeal.

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                                                                      Clermont CA2020-07-036

and hired thereafter by RJ Wright. While the exact nature of the relationship between RJ

Wright and Lykins is undetermined, the record indicates that RJ Wright is both a vendor to

Lykins and a competitor who engages in the same wholesale and distribution business.

Corbin allegedly began using information he obtained during his time with Lykins in his work

for RJ Wright, including the Quote Matrix. Corbin also purportedly communicated with

Lykins' customers, asking some to cease their purchases from Lykins or offering

competitive deals with RJ Wright. Corbin also supposedly suggested that RJ Wright expand

into areas of operation he had worked in during his time with Lykins.

      {¶6}   Lykins sued Corbin and RJ Wright in January 2020 and moved for a temporary

restraining order and preliminary injunction. Before a hearing was held on Lykins' request,

the parties stipulated to an Agreed Preliminary Injunction, which in part prohibited Corbin

from providing services to RJ Wright. Regarding the restrictions on Corbin's employment

with RJ Wright, the parties agreed:

             Corbin shall be prohibited from the following: (i) directly or
             indirectly engaging in or rendering any services with respect to
             the general business of RJ Wright, including but not limited to
             the conduct of selling, soliciting, promoting or performing the
             distribution and sale of petroleum products including gasoline,
             diesel fuel, lubricants, kerosene and Diesel Exhaust Fluid on
             behalf of RJ Wright; (ii) directly or indirectly contacting, diverting,
             soliciting, or attempting to contact, divert or solicit, any business
             from any potential or prospective customers on RJ Wright's
             behalf; (iii) directly or indirectly communicating with RJ Wright
             employees, officers, agents, and customers regarding any
             business activity or related business matter; and, (iv) directly or
             indirectly using or participating in the use of any associated RJ
             Wright technology, including, but not limited to, RJ Wright's
             computers, cell phones, licensed software.

      {¶7}   With the stipulated agreement in place, the parties proceeded to discovery.

Approximately two months later, and during the beginning of the Covid-19 pandemic, RJ

Wright and Corbin moved the court to modify the preliminary injunction. RJ Wright and

Corbin requested modifications that would allow Corbin to work for RJ Wright in

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Pennsylvania, West Virginia, Texas, and Oklahoma. In so doing, RJ Wright claimed that

Corbin's services were needed to pursue various undisclosed business opportunities.

        {¶8}    Lykins opposed the requested changes. In so doing, Lykins argued that

neither Corbin nor RJ Wright presented evidence of a change in circumstances since the

time of the stipulated agreement and that the proposed modification would directly violate

Corbin's Non-Compete Agreement.

        {¶9}    In support of its opposition, Lykins submitted affidavits that Corbin had

represented Lykins for more than three consecutive months in Pennsylvania, West Virginia,

and Texas. In response, Corbin submitted an affidavit in which he generally asserted that

the information regarding his sales and services as provided by Lykins was inaccurate.

        {¶10} After delays related to the pandemic, the trial court held a hearing in May 2020

on the defendants' joint request to modify. During that hearing, the trial court denied Lykins'

request to call Corbin as a witness for cross-examination purposes after defense counsel

stated that Corbin was not prepared to testify. In June 2020, the trial court granted Corbin

and RJ Wright's motion, modifying the preliminary injunction "to allow Mr. Corbin to work for

RJ Wright, as an active participant in petroleum sales, in West Virginia, Pennsylvania,

Oklahoma, and Texas."

        {¶11} Lykins now appeals the trial court's decision, raising one assignment of error

for our review. However, before we address Lykins' argument on appeal, we will first

address two preliminary issues that may have otherwise prevented appellate review.

                                     I. Final Appealable Order3

        {¶12} First, we will address whether the trial court's modification of the preliminary

3. RJ Wright and Corbin filed a motion to dismiss for lack of a final appealable order. This court denied the
motion. However, we address the issue herein for contextual purposes and to share our reasoning for denying
the motion.

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                                                                  Clermont CA2020-07-036

injunction is a final appealable order.

       {¶13} According to R.C. 2505.02(B)(4), an order is final when it is:

              (4) An order that grants or denies a provisional remedy and to
              which both of the following apply:

              (a) The order in effect determines the action with respect to the
              provisional remedy and prevents a judgment in the action in
              favor of the appealing party with respect to the provisional
              remedy.

              (b) The appealing party would not be afforded a meaningful or
              effective remedy by an appeal following final judgment as to all
              proceedings, issues, claims, and parties in the action.

       {¶14} Here, the first prong has been established. The trial court issued orders

modifying the preliminary injunction, which determined the action with respect to the

provisional remedy and prevented judgment in favor of Lykins regarding its requested

maintenance of the status quo.

       {¶15} The second prong is also met. The purpose of the preliminary injunction and

subsequent modification is to establish guidelines for Corbin's permitted and prohibited

conduct during the time that his Non-Compete Agreement is in place. All parties need to

proceed according to the terms of the preliminary injunction, some of which impact trade

secrets and restricted competition. However, Lykins would be denied meaningful review

after a final judgment because the guidelines in place after the modification specifically

impact Corbin's ability to work for RJ Wright in areas where he may be prohibited from

working and with customers with whom he may be prohibited from soliciting according to

the terms of his Non-Compete Agreement.

       {¶16} Thus, by the time a final judgment is entered on the matter, Lykins may have

already been compromised by the modifications to the preliminary injunction that allow

Corbin to work in certain geographic locations. As such, the modification of the preliminary

injunction is a final, appealable order.

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                                                                              Clermont CA2020-07-036

                                        II. Mootness Doctrine4

        {¶17} Next, we address why this issue is not moot even though the yearlong

prohibition timeframe agreed to within Corbin's Non-Compete Agreement has since expired

during the pendency of the appeal.

        {¶18} A case is moot "when the issues presented are no longer 'live' or the parties

lack a legally cognizable interest in the outcome." Villas at the Pointe of Settlers Walk

Condominium Ass'n v. Coffman Dev. Co., 12th Dist. Warren No. CA2009-12-165, 2010-

Ohio-2822, ¶ 9.

        {¶19} At first blush, the arguments raised by Lykins appear moot given that Corbin's

Non-Compete Agreement was to last one year from the date of his termination in 2019.

However, caselaw is clear that if a plaintiff is entitled to an injunction, he or she must not be

precluded from enforcing the judgment simply because the agreement's expiration occurs

during the related litigation. Rogers v. Runfola & Assocs., 57 Ohio St.3d 5, 9 (1991).

        {¶20} In Rogers, the Ohio Supreme Court was asked to determine the validity of a

non-compete clause, and in so doing, was also asked to decide the valid timeframe of the

prohibition if such clause was validated. The court determined that the clause was valid

and then held that the proper approach to enforcing a non-compete clause is to use the

date of the trial court's order going forward. Otherwise, the court reasoned, using the

termination date of the non-compete agreement would "emasculate the clear intent of" the

civil rules.

        {¶21} While it is true that the one-year anniversary of Corbin's termination has since

passed, the one-year timeframe since the trial court amended the injunctive orders has not.

4. The issue of mootness arose after the filing of the parties' briefs. As such, this court requested that the
parties file supplemental briefs on the issue. Both parties obliged our request, raising arguments in support
of and in opposition to finding the appeal moot. Thus, we provide our analysis herein for determining that the
appeal is not moot.

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                                                                     Clermont CA2020-07-036

As such, the trial court's injunctive orders are still pending as of the rendering of this

decision, and the arguments raised by Lykins regarding those orders are ripe for review.

       {¶22} Moreover, Ohio law provides that "an injunction must account for periods of

noncompliance in order to make judicial enforcement effective." Charles Penzone, Inc. v.

Koster, 10th Dist. Franklin No. 07AP-569, 2008-Ohio-327, ¶ 25.

       {¶23} The record indicates that Corbin has continued to communicate with RJ

Wright, and has also communicated with Lykins' customers.               In fact, the trial court

scheduled a show cause hearing to determine whether Corbin should be held in contempt

for noncompliance with the injunctive orders. However, given the pendency of this appeal,

the trial court did not have jurisdiction to rule on the matter and will need to do so once it

regains post-appeal jurisdiction.

       {¶24} Thus, it is apparent that using the date of the trial court's orders or the possible

noncompliance period, Lykins has not had the benefit of the full year of Corbin's Non-

Compete Agreement in which it could make efforts to retain its clients. Thus, the issue is

not moot, and we will determine the merits of Lykins' appeal as argued in its sole assignment

of error:

       {¶25} THE COMMON PLEAS COURT ERRED WHEN IT MODIFIED THE

PRELIMINARY INJUNCTION.

                                    III. Merits of Modification

       {¶26} Lykins argues in its assignment of error that the trial court erred in modifying

the preliminary injunction.

                                A. Change in Circumstances

       {¶27} "A court issuing [an] injunction has inherent authority to modify or vacate its

own injunctive decree." Cleveland v. Ohio Dept. of Mental Health, 84 Ohio App.3d 769,

773 (10th Dist.1992).     "A court must never ignore significant changes in the law or

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                                                                  Clermont CA2020-07-036

circumstances underlying an injunction lest it becomes inequitable that the injunction should

have prospective application." Id.

       {¶28} Ohio law is not abundant on the issue of modification of preliminary

injunctions, but appellate courts have upheld modification of injunctive relief based upon a

change in circumstances. Ormet Aluminum Mill Prods. Corp. v. USW, AFL-CIO, Local

5760, 7th Dist. Monroe Nos. 05-MO-1, 05-MO-2, 05-MO-10, 05-MO-11, 2006-Ohio-3782, ¶

7. See also Bd. of Trustees v. Baumgardner, 11th Dist. Geauga No. 2006-G-2721, 2007-

Ohio-1783, ¶ 38 (noting that a change in circumstances may warrant a modification of

injunctive relief).

       {¶29} In Ormet, the party seeking modification of a preliminary injunction in a labor

strike situation provided evidence that circumstances had changed since the issuance of

the preliminary injunction specific to how protestors were conducting themselves. These

changed circumstances included increased violence and picketers engaging in activities

such as throwing objects at employees' vehicles, using sling shots to shoot objects at

employees and guards, shining laser lights in the eyes of guards, and otherwise damaging

vehicles. Based upon the cited changes, the party seeking modification asked that the

preliminary injunction be amended to help eliminate the activities described above.

       {¶30} In affirming, the Ormet Court determined that the trial court's modifications

constituted a final appeal order and were warranted based upon the increased violence that

had occurred since the issuance of the original preliminary injunction. The appellate court

affirmed the trial court's modifications to the original preliminary injunction because the

evidence proved a change in circumstances had occurred. Id. at ¶ 57.

       {¶31} Thus, in order for the trial court in the case sub judice to modify the original

preliminary injunction, there must have been evidence presented of a change in

circumstances upon which to base a finding that a change had occurred. However, upon

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                                                                      Clermont CA2020-07-036

review of the record, the trial court determined that it was unable to analyze the change in

circumstances issue because it had not fashioned the terms of the original injunctive relief.

       {¶32} In its modification entry, the trial court stated, "in this case, since the

preliminary injunction was agreed to by the parties, the Court cannot weigh the facts to

determine whether a change in circumstances exists."                 Despite the trial court's

determination that it was unable to perform the necessary analysis, it later stated in its entry,

              to the extent that a change of circumstances is required, there
              is a new RJ Wright customer in West Virginia that was not
              previously contemplated in the agreed preliminary injunction,
              who is not a current or prospective customer of Lykins.
              Therefore, there has been at least once [sic] change that would
              warrant modification given that the complaint only prays for
              injunctive relief relative to Ohio.

       {¶33} However, given the trial court's first statement that it could not weigh the facts

to determine whether a change in circumstances existed, we cannot determine that the trial

court's analysis of the issue was valid according to Ohio law. There is no indication in the

trial court's entry that it based its decision to modify after analyzing the issue specific to the

necessary weighing of facts and the proper legal analysis of the issue. This is especially

true where the court referenced only one possible customer and never addressed whether

that one possibility was significant enough to render the circumstances changed since the

time of the preliminary injunction.

       {¶34} Instead, the trial court modified the preliminary injunction based upon its

explicit finding that the original preliminary injunction was "exceedingly broad and over

burdensome relative to Mr. Corbin's employment with RJ Wright." The trial court analyzed

the relevant modification using equity principles, noting that "equity" was the "primary focus"

of its inquiry. The trial court made this finding despite the prevailing rule of law that a change

of circumstances is required, and despite the fact that the parties themselves, including

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Corbin and RJ Wright, fashioned the terms of the preliminary injunction.5

        {¶35} As noted above, the parties stipulated the terms of the original preliminary

injunction, and such was accepted and recorded by the trial court as the court's official

orders. Thus, the parties' agreement rendered a hearing on the matter unnecessary and

no evidence was submitted for the court's consideration.                     Even so, the terms of the

preliminary injunction, to which both parties agreed, clearly prescribe prohibited conduct for

both Corbin and RJ Wright based upon stated geographic areas because of Corbin's Non-

Compete Agreement.            However, the fact that the parties stipulated the terms of the

injunctive relief do not diminish the trial court's ability to "weigh the facts" to determine

whether a modification was proper based upon a change in circumstances.

        {¶36} The parties proceeded believing that the trial court was in a proper position to

determine whether a modification of the original preliminary injunction was warranted based

upon changed circumstances. During the hearing on Corbin and RJ Wright's joint motion

to modify, the parties understood that a change in circumstances was necessary in order

to proceed on modification.6

        {¶37} Defense counsel referenced "changed circumstances that would allow the

Court to reconsider the preliminary injunction." Counsel further indicated that the trial court

"could easily do that by reading the contract and understanding that what RJ Wright and

John Corbin are seeking is not prohibitive." When the trial court asked defense counsel

whether "there needs to be a change of circumstances to modify a preliminary injunction,"

5. When referencing a change of circumstances, the trial court's point of comparison was to the complaint --
not the comprehensive agreement subsequently reached by the parties.

6. The trial court stated during the hearing, "I didn't even know there needed to be a change of circumstances,
to be honest with you, and that's why, you know, and I have to look at the law." Later in the hearing, the trial
court reiterated, "I didn't even know there needed to be a change of circumstances, honestly * * *. I don't want
to miss the initial requirement that there's a change of circumstances required, because then it all goes to
heck in a hand basket, if I don't make those findings. And so I want to know how I'm supposed to make those
findings, and what the basis for those were."

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                                                                    Clermont CA2020-07-036

defense counsel answered, "I would agree that there has to be a change in circumstances."

In support of its requested modification, defense counsel argued that the trial court could

take judicial notice of the Covid-19 pandemic, and that such constituted a change in

circumstances because of various constraints imposed upon the litigation as well as the

nation's pandemic-related economic struggles.

       {¶38} Plaintiff's counsel agreed that RJ Wright and Corbin held the burden to prove

"significant changes in fact, law, or circumstances since the prevailing ruling." However,

Plaintiff's counsel argued that the pandemic did not change the contents of Corbin's Non-

Compete Agreement, and that circumstances had not changed since the time of the original

injunction regarding the prohibitions on Corbin's employment with RJ Wright.

       {¶39} Without addressing the merits of the parties' arguments, we agree with the

parties that the trial court was required to first find a change in circumstances based upon

a balancing of the facts before modifying the preliminary injunction. Moreover, we find that

the trial court was able to determine whether circumstances had changed despite the

parties stipulating the terms of the original injunctive relief. The trial court was in a proper

position to accept and weigh evidence of any changes that had occurred subsequent to the

parties' stipulation and to determine whether such evidence warranted modification.

                                 B. Ability to Elicit Evidence

       {¶40} Despite the trial court's need to determine whether a change in circumstances

occurred based on a balancing of the facts, the record demonstrates that the trial court

improperly limited Lykins' ability to present evidence specific to the change in circumstances

issue. During the hearing, plaintiff's counsel stated,

              We do have some evidence to present today, Your Honor. And
              I think the most effective way to do that, we would like to call Mr.
              Corbin to the stand and as if on cross-examination, and ask
              some questions that are relevant to the affidavit that he's
              presented to this Court, and to submit some documents to the

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                                                                    Clermont CA2020-07-036

              court. I believe you indicated that we're going to be free to
              present whatever evidence we want to present. If you want to
              treat it as an evidentiary hearing, we can treat it as an
              evidentiary hearing.

       {¶41} The trial court then asked defense counsel for a reply and defense counsel

raised an objection, arguing that Corbin was not prepared to testify. The trial court noted

that fears related to the Covid-19 pandemic had led to delays in the case and holding in-

person proceedings. The court then stated,

              the dilemma I'm having is, is everyone's afraid of the virus, but
              then everyone's looking to me to solve this problem. So I said,
              get your asses in here and we'll have a hearing. I mean, that's
              what I said, and I probably did say, whatever you need to do,
              you need to do because you made it clear that you didn't have
              all the discovery you wanted, and I believed you * * *.

However, the trial court ultimately determined that it would not permit Lykins to call Corbin

to elicit evidence on the relevant issues.

       {¶42} During the hearing, defense counsel stated that RJ Wright had an opportunity

to pursue working with a company based in Fort Worth, Texas that had a need for fuel in

West Virginia. It requested modification of the preliminary injunction to allow Corbin to work

with this prospective client. Defense counsel told the trial court that the client was "not a

customer of Lykins," but would not name the prospective client. Defense counsel then

indicated that working with the customer "could potentially lead to others."

       {¶43} Lykins had presented an affidavit to the trial court in anticipation of the hearing

in which it was averred that Corbin had worked with Lykins' customers in West Virginia thus

rendering that state geographically prohibited based on the preliminary injunction.

       {¶44} The relevant issues thus included in what geographic areas Corbin performed

services for Lykins and its customers, including the areas of Texas and West Virginia, as

well as what services Corbin performed. While RJ Wright and Corbin alleged that Corbin

was not prohibited from working with a prospective client in West Virginia and Texas, Lykins

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                                                                     Clermont CA2020-07-036

countered that Corbin had engaged in "business transactions, whether dealing with bringing

product in, shipping product out" in the contested areas. However, Lykins was unable to

develop anything more than what it had already submitted or what it was able to argue

because of the trial court's denial of its request to call Corbin as a witness.

        {¶45} The trial court relied solely upon materials submitted by the parties and denied

Lykins the ability to render evidence from a key source: Corbin's in-person testimony. This

is true even after the court admitted that it had intimated to Lykins its ability to do "whatever

you need to do" and despite recognizing during the hearing its authority to require Corbin

to testify.

        {¶46} There is no doubt that Corbin would have crucial testimony based upon his

employment history with Lykins, including with which Lykins' customers and in what

geographical locations he had worked in the last months of his employment. The trial court

even noted in its decision, "Mr. Corbin does have personal knowledge of which accounts

he actually worked on for Lykins." Permitting Corbin to give testimony explaining the

circumstances would likely have given the trial court pertinent information directly relevant

to the issues at hand.

        {¶47} Moreover, the importance of Corbin's in-person testimony was elevated given

the implications in the record that Corbin may have been less than truthful in his averments.

During the hearing, the trial court stated,

              If Mr. Corbin's lying to the Court, then he may end up in jail for
              lying to the court. And I mean, I have to have accurate
              information and I'm not in a position as one person with no
              commercial experience, to know exactly who's telling the truth.
              But for me, what's at issue here is, is did he ever do business in
              the state - - for Lykins - - in the states that he's asking the Court
              to allow him to do business in an effort to modify the preliminary
              injunction.

Even so, the trial court unnecessarily limited the evidence to submitted materials rather than

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permitting key cross-examination of Corbin's integral testimony and possible credibility

issues.

                                          IV. Conclusion

       {¶48} We find the trial court's decision erroneous for two reasons. First, the trial

court improperly determined that it was unable to weigh the evidence regarding a change

in circumstances. Secondly, the trial court denied Lykins the ability to present evidence in

the form of Corbin's cross-examination despite being told beforehand that it would be able

to do "whatever" it needed to do to develop necessary evidence.

       {¶49} On remand, the trial court shall allow the parties to develop necessary

evidence, and the trial court shall determine whether there has been a change in

circumstances after fully weighing all relevant evidence, including that stipulated by the

parties.7

       {¶50} Judgment reversed and the cause is remanded for further proceedings

consistent with this decision.

       S. POWELL and M. POWELL, JJ., concur.

7. Once again, this court makes no pronouncement on the merits of the change in circumstances decision,
nor on any related issues such as in findings of fact or credibility determinations.

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