Court Opinion

ID: 9914133
Source: CourtListenerOpinion
Date Created: 2023-12-29 17:07:43.435373+00
Date Added: 2024-06-11T13:10:19.922897
License: Public Domain

[Cite as HB Martin Logistics, Inc. v. Hissong Group, Inc., 2023-Ohio-4836.]

STATE OF OHIO                     )                        IN THE COURT OF APPEALS
                                  )ss:                     NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT                  )

HB MARTIN LOGISTICS, INC.                                  C.A. No.           30566

        Appellee/Cross-Appellant

        v.                                                 APPEAL FROM JUDGMENT
                                                           ENTERED IN THE
PACCAR, INC. DBA KENWORTH                                  COURT OF COMMON PLEAS
TRUCKING COMPANY                                           COUNTY OF SUMMIT, OHIO
                                                           CASE No.   CV 2020-06-1808
        Defendant

        and

HISSONG GROUP, INC.

        Appellant/Cross-Appellee

                                 DECISION AND JOURNAL ENTRY

Dated: December 29, 2023

        FLAGG LANZINGER, Judge.

        {¶1}     Hissong Group, Inc. (“Hissong”) appeals from the judgment of the Summit County

Court of Common Pleas dated December 13, 2022, that denied its motion for judgment

notwithstanding the verdict. HB Martin Logistics, Inc. (“HBM”) cross-appeals from the judgment

of the Summit County Court of Common Pleas dated October 11, 2022, that entered final judgment

in its favor, but implicitly denied its motion for prejudgment interest. For the following reasons,

this Court affirms the judgment dated December 13, 2022, reverses the judgment dated October

11, 2022, to the extent it implicitly denied HBM’s motion for prejudgment interest, and remands

the matter for further proceedings.
                                                 2

                                                 I.

       {¶2}    The underlying case has a lengthy procedural history, much of which is not relevant

to the disposition of this appeal. This Court, therefore, will limit its recitation of the facts and

procedural history accordingly.

       {¶3}    Heather Martin is the president of HBM. On September 9, 2016, Ms. Martin signed

a one-page, double-sided purchase agreement (the “Purchase Agreement”) to purchase a 2017

Kenworth T680 semi-truck from Hissong. The front page of the Purchase Agreement provided

that the semi-truck was sold “with manufacturers standard new truck warranty[.]” The front page

also provided that “[t]he seller hereby expressly disclaims all warranties, either expressed or

implied, including any implied warranty of merchantability or fitness for a particular purpose * *

*.” The back page of the Purchase Agreement provided that:

       [i]t is expressly agreed that there are no warranties, express or implied, made by
       either Dealer of Manufacturer except * * * [t]he only warranty extended to the
       original buyer of a vehicle by Dealer shall be limited to the prevailing published
       warranties of the Manufacturer of vehicle or Manufacturer of components.

No written warranties were attached to the Purchase Agreement.

       {¶4}    Per Ms. Martin’s affidavit, on September 27, 2016, Hissong sent her two limited

warranty agreements via email: (1) the “Kenworth Truck Company Limited Warranty

Agreement[;]” and (2) the “Paccar Engine Limited Warranty Agreement” (the “LWAs”). Both

LWAs contained the following language: “It is agreed that you have 12 months from the accrual

of the cause of action to commence any legal action arising from the purchase or use of” the semi-

truck or the engine “or be barred forever.” (Emphasis sic.) Ms. Martin averred that she read,

signed, and returned the LWAs to Hissong on the same day she received them.1

       1
          The record reflects that Ms. Martin testified at her deposition that she read the LWAs
prior to purchasing the semi-truck. Ms. Martin later submitted an affidavit wherein she averred:
                                                 3

       {¶5}       On June 22, 2020, HBM sued Hissong, asserting the following claims related to

HBM’s purchase of the semi-truck: (1) breach of contract/express warranty; (2) breach of

contract/implied warranty; and (3) negligence. HBM alleged that after it purchased the semi-truck,

its drivers experienced numerous issues with the semi-truck’s coolant system. HBM alleged that,

despite Hissong’s numerous attempts, Hissong was ultimately unable to repair the semi-truck,

which lead to a third party having to install a new engine block. HBM alleged that this caused it

to sustain damages, including lost revenue and the cost of having a third party replace the semi-

truck’s engine.

       {¶6}       After a period of discovery, Hissong moved for summary judgment. In its motion,

Hissong argued, in part, that HBM’s claims were time-barred by the “abridged 12-month statute

of limitations period” set forth in the LWAs.

       {¶7}       In its brief in opposition to Hissong’s motion for summary judgment, HBM

indicated that it would “forgo further prosecution” of its breach of contract/express warranty claim

because it could not be made whole without the recovery of consequential damages, which were

not recoverable under the LWAs. HBM, therefore, indicated that the trial court could enter partial

summary judgment in favor of Hissong on that claim.

       {¶8}       HBM then argued that Hissong was not entitled to summary judgment, in part,

because a genuine issue of fact remained regarding whether the LWAs failed their essential

       In my deposition, I testified “yes” in response to two questions as to whether I read
       the truck warranty and the engine warranty “before purchasing the vehicle.” I
       answered yes because I assumed that when the attorney referred to “purchasing the
       vehicle,” she meant the whole process of paying the purchase price and completing
       all the paperwork the dealer said it needed. If I had understood that the purchase
       was complete on September 9, 2016, I would have answered “no” to her questions
       because I did not receive and read the LWAs until September 27, 2016.
                                                  4

purpose. If they did, HBM argued, then: (1) the LWAs did not govern the parties’ rights and

obligations, including HBM’s contractual obligation to pursue any claims against Hissong within

12 months of their accrual; and (2) in the absence of enforceable express warranties, HBM was

entitled to seek compensation for Hissong’s breach of implied warranties of merchantability and

fitness for a particular purpose, and for negligence.

       {¶9}    In its judgment entry, the trial court acknowledged HBM’s desire to “forgo further

prosecution” of its breach of contract/express warranty claim and granted judgment in favor of

Hissong on that claim. The trial court then addressed Hissong’s argument regarding the 12-month

limitation period as follows:

       [HBM] has waived any and all claims under the express limited warranties. HBM
       is now only proceeding under the theories of breach of implied warranty of
       merchantability or fitness for an intended purpose, and negligence. Both of those
       claims have two year statute of limitations. “[W]hether a suit is brought in contract
       or tort, when the ‘essence’ of an action is wrongful harm to person or personal
       property, the R.C. 2305.10 statute of limitations is the appropriate one to apply.”
       Ressallat v. Burglar & Fire Alarms, Inc. (1992), 79 Ohio App.3d 43, 49, 606
       N.E.2d 1001. Based upon the foregoing, this Court finds that [HBM’s] remaining
       claims are not barred by the contractual 12 month statute of limitations and denies
       [Hissong’s] motion for summary judgment on this defense.

(Emphasis sic.) The trial court ultimately denied Hissong’s motion for summary judgment on

HBM’s claims against it for breach of contract/implied warranty and negligence.

       {¶10} Two days after the trial court issued its ruling on Hissong’s motion for summary

judgment, Hissong filed a motion for judgment on the pleadings on HBM’s implied-warranty

claim. In it, Hissong acknowledged the trial court’s determination in its summary-judgment ruling

that the contractual 12-month limitations period did not apply, and its purported ruling that the

two-year statute of limitations period under R.C. 2305.10 applied. Hissong argued that, even under

the two-year statute of limitations period, HBM’s implied-warranty claim was still time-barred.
                                                  5

       {¶11} HBM filed a brief in opposition to Hissong’s motion for judgment on the pleadings.

In its opposition, HBM argued that the four-year statute of limitations set forth in R.C. 1302.98

applied to its implied-warranty claim, and that the trial court’s statement in its summary-judgment

ruling that the two-year statute of limitations period under R.C. 2305.10 applied was merely

dictum.

       {¶12} Hissong filed a reply in support of its motion, and HBM filed a surreply. In its

surreply, HBM argued, in part, that Hissong failed to assert a statute of limitations or contractual

limitations period as an affirmative defense in its answer and, therefore, had waived those defenses.

Several days later, Hissong moved for leave to amend its answer to “formally include in its Answer

affirmative defenses concerning the untimeliness of [HBM’s] claim.”

       {¶13} In a combined judgment entry, the trial court denied Hissong’s motion for judgment

on the pleadings and its motion for leave to amend its answer. Regarding Hissong’s motion for

judgment on the pleadings, the trial court noted that the issue of which statute of limitations period

applied to HBM’s implied-warranty claim was not before it when it ruled on Hissong’s motion for

summary judgment. The trial court acknowledged that it referred to the two-year limitations period

under R.C. 2305.10 in its ruling, but indicated that it did so without considering whether that statute

of limitations actually applied to HBM’s implied-warranty claim. The trial court clarified that,

when ruling on Hissong’s motion for summary judgment on HBM’s implied-warranty claim, its

judgment was limited to the conclusion that the 12-month contractual limitations period was not

applicable. The trial court then concluded that the four-year statute of limitations period under

R.C. 1302.98 applied to HBM’s implied-warranty claim. In doing so, the trial court explained:

       In this case, there is no question that HB Martin has sued upon the contract of sale
       with Hissong. * * * The Ohio Supreme Court previously held that where a contract
       exists, and a party makes a claim for breach of an implied warranty, the commercial
       contract is subject to the UCC Codes. * * * In this case, the parties entered into
                                                  6

       such a commercial contract and are in privity. Thus, the four year statute of
       limitation found in ORC 1302.98, is controlling.

The trial court, therefore, denied Hissong’s motion for judgment on the pleadings.

       {¶14} The trial court then addressed Hissong’s motion for leave to amend its answer. The

trial court denied Hissong’s motion, reasoning:

       At this juncture, protracted litigation has occurred in this matter including multiple
       motions for summary judgment and now, Hissong’s own Motion for Judgment on
       the Pleadings. Due to Hissong’s failure to timely plead the defense of the statute
       of limitations, Hissong’s Motion for Leave to Amend its Answer is denied.

       {¶15} The following day, Hissong filed a second motion for judgment on the pleadings

on HBM’s implied-warranty claim. In it, Hissong argued that it was not submitting its motion

pursuant to any statute of limitations defense. Rather, it argued, HBM failed to state a claim upon

which relief could be granted because, by contract, HBM had 12 months to file any claims against

it and HBM failed to do so.

       {¶16} The trial court denied Hissong’s second motion for judgment on the pleadings on

the basis that Hissong did not obtain leave of court prior to filing the motion. The trial court also

reasoned that Hissong’s motion was untimely due to the impending trial date. As a result, the trial

court struck Hissong’s second motion for judgment on the pleadings.

       {¶17} The matter proceeded to a jury trial. At trial, HBM proceeded under the theory that

the express warranties failed their essential purpose, which enabled HBM to recover under its

implied-warranty claim. Following the close of HBM’s case, Hissong moved for directed verdict,

in part, based upon HBM’s failure to bring its claims within the 12-month contractual limitations

period. The trial court denied Hissong’s motion in that regard, holding that the issue had already

been ruled upon.
                                                  7

       {¶18} The jury ultimately determined that the express warranties failed their essential

purpose, that Hissong breached the implied warranty of merchantability, and that HBM was

entitled to damages. Accordingly, the trial court entered judgment in favor of HBM in the amount

of $443,625.00 plus post-judgment interest.

       {¶19} Hissong then filed a motion for judgment notwithstanding the verdict on HBM’s

claim for breach of implied warranty of merchantability. In it, Hissong argued that HBM failed to

present a cognizable claim for breach of implied warranty because, by contract, HBM had 12

months to file any claims against it and failed to do so.

       {¶20} In response, HBM argued that Hissong could not use a motion for judgment

notwithstanding the verdict to challenge the trial court’s pre-judgment rulings. HBM also argued

that, even if Hissong could challenge the trial court’s rulings regarding the inapplicability of the

12-month contractual limitations period contained within the LWAs, the LWAs (and any

limitations period contained therein) could not reduce the four-year statute of limitations because

Hissong did not provide HBM with the LWAs until after the sale of the semi-truck.

       {¶21} The trial court held a hearing on Hissong’s motion for judgment notwithstanding

the verdict. During the hearing, HBM argued, in part, that the LWAs were not part of the Purchase

Agreement, nor were they properly incorporated by reference into the Purchase Agreement. As a

result, HBM argued, the 12-month limitations period contained within the LWAs was not

enforceable and could not be used to reduce the four-year statute of limitations period.

       {¶22} Following the hearing, the trial court denied Hissong’s motion for judgment

notwithstanding the verdict. Hissong now appeals, raising three assignments of error for this

Court’s review. HBM cross-appeals, assigning as error that the trial court erred by implicitly
                                                 8

denying its motion for prejudgment interest when it issued its final judgment. This Court will

address Hissong’s assignments of error first.

                                                 II.

                           HISSONG’S ASSIGNMENT OF ERROR I

       THE TRIAL COURT ERRED BY PERMITTING HBM’S BREACH OF
       IMPLIED WARRANTY CLAIM TO PROCEED, EVEN THOUGH IT WAS NOT
       A LEGALLY COGNIZABLE CLAIM UNDER THE TERMS OF THE PARTIES’
       COMMERCIAL AGREEMENT.

       {¶23} In its first assignment of error, Hissong argues that the trial court erred by allowing

HBM’s implied-warranty claim to proceed. Consistent with its position below, Hissong argues

that HBM’s claim was not legally cognizable because HBM failed to bring the claim within the

12-month contractual limitations period. As a result, Hissong argues, the trial court erred in ruling

on Hissong’s motion for summary judgment, its second motion for judgment on the pleadings, its

motion for directed verdict, and its motion for judgment notwithstanding the verdict, all of which

were premised–in relevant part–upon HBM’s failure to timely file its claims within the 12-month

contractual limitations period. For the following reasons, this Court disagrees.

       {¶24} The issue before this Court is whether the trial court erred by failing to apply the

12-month contractual limitations period contained within the LWAs to HBM’s implied-warranty

claim. R.C. 1302.98(A) provides that “[a]n action for breach of any contract for sale must be

commenced within four years after the cause of action has accrued.” See Miller v. All Am. Homes

of Ohio, L.L.C., 6th Dist. Ottawa No. OT-12-010, 2013-Ohio-1085, ¶ 11 (acknowledging that R.C.

1302.98(A) applies to implied-warranty claims). It also provides that “[b]y the original agreement

the parties may reduce the period of limitation to not less than one year * * *.” (Emphasis added.)

R.C. 1302.98(A).
                                                 9

       {¶25} Here, the record reflects that Ms. Martin signed the Purchase Agreement for the

semi-truck on September 9, 2016. The Purchase Agreement did not include a provision setting

forth a 12-month limitations period for HBM to assert claims against Hissong. Instead, the 12-

month limitations period was set forth in the LWAs, which–according to Ms. Martin’s affidavit–

Hissong sent to her via email on September 27, 2016 (i.e., 18 days later). A review of the LWAs

confirms that Ms. Martin signed them on September 27, 2016. The issue, then, turns to whether

the LWAs were incorporated by reference into the original agreement (i.e., the Purchase

Agreement) such that the 12-month limitations period was part of the “original agreement” for

purposes of R.C. 1302.93(A). For the following reasons, this Court concludes that they were not.

       {¶26} “Ohio contract law includes the doctrine of incorporation by reference.” Volovetz

v. Tremco Barrier Sols., Inc., 10th Dist. Franklin No. 15AP-1056, 2016-Ohio-7707, ¶ 26. “Under

that doctrine, when a document is incorporated into a contract by reference, that document

becomes part of the contract.” Id. “Whether a contract has incorporated another document by

reference presents a question of law for a court to determine.” Id. at ¶ 27.

       {¶27} “Generally, ‘the parties to a contract may incorporate contractual terms by

reference to a separate, noncontemporaneous document, including * * * a separate document

which is unsigned[,]’ if ‘the contract makes clear reference to the document and describes it in

such terms that its identity may be ascertained beyond doubt.’” (Alterations sic.) Id., quoting 11

Lord, Williston on Contracts, Section 30:25, 294-301 (4th Ed.2012). “[T]he contract language

must also clearly demonstrate that the parties intended to incorporate all or part of the referenced

document.” Volovetz at ¶ 27. “[M]ere reference to another document is not sufficient to

incorporate that document into a contract * * *.” Id. In other words:

       the language used in a contract to incorporate extrinsic material by reference must
       explicitly, or at least precisely, identify the written material be[ing] incorporated
                                               10

       and must clearly communicate that the purpose of the reference is to incorporate
       the referenced material into the contract * * *.

(Alteration sic.) Id., quoting Northrop Grumman Information Technology, Inc. v. United States,

535 F.3d 1339, 1345 (Fed.Cir.2008); accord Bd. of Edn. of Martins Ferry City School Dist. v.

Colaianni Constr., Inc., 7th Dist. Belmont No. 22 BE 0032, 2023-Ohio-2285, ¶ 91; Bennett v.

KeyBank, N.A., 6th Dist. Lucas No. L-19-1249, 2020-Ohio-1152, ¶ 25; Capital Real Estate

Partners, LLC v. Nelson, 12th Dist. Warren Nos. CA2018-08-085, CA2018-08-094, 2019-Ohio-

2381, ¶ 15.

       {¶28} Here, as noted in this Court’s recitation of the facts, the front page of the Purchase

Agreement provided that the semi-truck was sold “with manufacturers standard new truck

warranty[.]” The Purchase Agreement did not clearly reference or describe the “Kenworth Truck

Company Limited Warranty Agreement” or the “Paccar Engine Limited Warranty Agreement” in

such terms that their identities could be ascertained beyond doubt. See Volovetz at ¶ 27. Nor did

the Purchase Agreement contain any language clearly demonstrating that the parties intended to

incorporate the LWAs into the Purchase Agreement. Id. Instead, the Purchase Agreement merely

referenced a generic “manufacturers standard new truck warranty” without any mention of an

engine warranty. As a matter of law, this was insufficient to incorporate the LWAs into the

Purchase Agreement. Volovetz at ¶ 27. As a result, the 12-month limitations period contained

within the LWAs could not be considered part of the “original agreement” for purposes of reducing

the four-year statute of limitations under R.C. 1302.93(A).       Accordingly, Hissong has not

established that the trial court erred by declining to apply the 12-month limitations period to

HBM’s claims.

       {¶29} In reaching this conclusion, this Court is mindful of Hissong’s arguments to the

contrary, including HBM’s acknowledgment below that it purchased the semi-truck subject to the
                                                11

LWAs. The dispositive issue before this Court, however, is whether–as a matter of law–the 12-

month limitations period contained within the LWAs was part of the “original agreement” for

purposes of R.C. 1302.93(A). Despite any argument to the contrary, it was not. As a result,

Hissong’s first assignment of error is overruled.

                          HISSONG’S ASSIGNMENT OF ERROR II

       THE TRIAL COURT ERRED BY CONCLUDING THAT HISSONG WAIVED
       ITS DEFENSE CONCERNING HBM’S NON-COMPLIANCE WITH THE 12-
       MONTH CONTRACTUAL TIME LIMIT.

                          HISSONG’S ASSIGNMENT OF ERROR III

       IF HISSONG WAS REQUIRED TO SPECIFICALLY PLEAD ADDITIONAL
       TEMPORAL DEFENSES, THE TRIAL COURT ERRED IN DECLINING TO
       PERMIT HISSONG TO AMEND ITS ANSWER TO ASSERT THOSE
       DEFENSES.

       {¶30} In light of this Court’s resolution of Hissong’s first assignment of error, Hissong’s

second and third assignments of error are moot, and are overruled on that basis. See App.R.

12(A)(1)(c).

                          HBM’S CROSS-ASSIGNMENT OF ERROR

       BECAUSE IT IS MANDATORY TO AWARD PREJUDGMENT INTEREST TO
       THE PREVAILING PLAINTIFF IN A CONTRACT ACTION, THE TRIAL
       COURT ERRED BY FAILING TO RULE ON, AND THUS IMPLIEDLY
       DENYING, PLAINTIFF’S MOTION FOR PREJUDGMENT INTEREST.

       {¶31} In its cross-assignment of error, HBM argues that the trial court erred by failing to

rule on its motion for prejudgment interest, which resulted in the effective denial of that motion.

For the following reasons, this Court reverses and remands the matter for further proceedings.

       {¶32} The record reflects that the jury rendered its verdict on September 21, 2022. HBM

filed a motion for prejudgment interest pursuant to R.C. 1343.03(A) on September 28, 2022. On

October 11, 2022, the trial court entered judgment in favor of HBM based upon the jury’s verdict.
                                                 12

The trial court did not address HBM’s pending motion for prejudgment interest in that judgment

entry. As a result, that motion is considered denied for purposes of appellate review. Matus v.

Jacts Group, LLC, 9th Dist. Medina No. 17CA0056-M, 2018-Ohio-1439, ¶ 14, quoting Canfield

v. Columbia Gas Transm., LLC, 9th Dist. Lorain No. 15CA010838, 2016-Ohio-5662, ¶ 20

(“Generally, when a trial court fails to rule on a motion, * * * the motion will be considered denied

for purposes of appellate review.”).

       {¶33} Regarding prejudgment interest, R.C. 1343.03(A) provides that:

       [i]n cases other than those provided for in sections 1343.01 and 1343.02 of the
       Revised Code, when money becomes due and payable upon any bond, bill, note, or
       other instrument of writing, upon any book account, upon any settlement between
       parties, upon all verbal contracts entered into, and upon all judgments, decrees, and
       orders of any judicial tribunal for the payment of money arising out of tortious
       conduct or a contract or other transaction, the creditor is entitled to interest at the
       rate per annum determined pursuant to section 5703.47 of the Revised Code, unless
       a written contract provides a different rate of interest in relation to the money that
       becomes due and payable, in which case the creditor is entitled to interest at the rate
       provided in that contract.

       {¶34} When a prevailing party is entitled to prejudgment interest, “[t]he only matter

within the court’s discretion is the determination of the starting date upon which to begin

calculating the prejudgment interest.” Magnum Steel & Trading, L.L.C. v. Mink, 9th Dist. Summit

No. 26127, 2013-Ohio-2431, ¶ 55, quoting Desai v. Franklin, 177 Ohio App.3d 679, 2008-Ohio-

3957, ¶ 31 (9th Dist.).

       {¶35} As noted, HBM’s motion for prejudgment interest is considered denied for

purposes of appellate review. Matus at ¶ 14. The lack of any explanation as to the trial court’s

denial of HBM’s motion for prejudgment interest puts this Court in the position of having to

determine the merits of HBM’s argument in the first instance, which this Court will not do. See

S.C. v. T.H., 9th Dist. Summit No. 29594, 2020-Ohio-2698, ¶ 10. This Court finds it necessary to
                                                 13

remand the matter for the trial court to explain its reasoning for denying HBM’s motion. HBM’s

cross-assignment of error is sustained on that basis.

                                                III.

       {¶36} Hissong’s assignments of error are overruled. HBM’s cross-assignment of error is

sustained. The judgment of the Summit County Court of Common Pleas dated December 13,

2022, that denied Hissong’s motion for judgment notwithstanding the verdict is affirmed. The

judgment of the Summit County Court of Common Pleas dated October 11, 2022, that entered

final judgment in favor of HBM is reversed to the extent it implicitly denied HBM’s motion for

prejudgment interest. The matter is remanded for further proceedings consistent with this Court’s

decision.

                                               Judgment dated December 13, 2022, is affirmed,
                       judgment dated October 11, 2022, is reversed to the extent detailed above,
                                                                            and cause remanded.

       There were reasonable grounds for this appeal.

       We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy

of this journal entry shall constitute the mandate, pursuant to App.R. 27.

       Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period

for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is instructed to

mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the

docket, pursuant to App.R. 30.
                                            14

      Costs taxed to Appellant/Cross-Appellee.

                                                 JILL FLAGG LANZINGER
                                                 FOR THE COURT

SUTTON, P. J.
CARR, J.
CONCUR.

APPEARANCES:

JOHN N. CHILDS, ALEX MCCALLION, and MATHEW E. DONEY, Attorneys at Law, for
Appellant/Cross-Appellee.

CHARLES I. KAMPINSKI and KRISTIN M. ROBERTS, Attorneys at Law, for Appellee/Cross-
Appellant.