Deems v. Ecowater Sys., Inc.

2016 Ohio 5022
Ohio Court of Appeals·Decided July 20, 2016·No. 27645·Published·Cited by 3 cases

Opinion

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

RICK DEEMS, et al. C.A. No. 27645 Appellants

v. APPEAL FROM JUDGMENT ENTERED IN THE

ECOWATER SYSTEMS, INC., et al. COURT OF COMMON PLEAS COUNTY OF SUMMIT, OHIO

Appellees CASE No. CV 2013-02-1202

DECISION AND JOURNAL ENTRY Dated: July 20, 2016

MOORE, Judge.

{¶1} Plaintiffs Rick and Ron Deems appeal from the judgment of the Summit County Court of Common Pleas. This Court affirms.

I.

{¶2} Ronald Learn owned a water treatment business known as Lindsay Soft Water (“Lindsay”), which was an authorized dealer for EcoWater Systems, LLC (“EcoWater”), a manufacturer of water treatment products. Mr. Learn became interested in selling Lindsay, and he commenced discussions with potential buyers. Although an EcoWater dealer may sell its business entity without restriction by EcoWater, the EcoWater authorized dealership status does not transfer with the business absent EcoWater approval.

{¶3} One potential buyer interested in acquiring Lindsay, Rick Deems, had long been employed in the water treatment business. Rick Deems’ father, Ron Deems, was planning to invest in his son’s business. Ron Deems previously had been an authorized dealer for EcoWater,

but he had become engaged in a lawsuit with EcoWater, which settled in 2002. As part of the settlement agreement, Ron Deems was precluded from thereafter operating as a dealer for EcoWater. Rick Deems was not a party to that lawsuit.

{¶4} Mr. Learn also engaged in discussions for the sale of Lindsay with Hempy Water Conditioning, Inc. (“Hempy”), a water treatment supplier, which was an existing authorized dealer for EcoWater. After several discussions between the parties, Mr. Learn ultimately sold Lindsay to Hempy.

{¶5} In 2013, the Deemses filed a complaint against EcoWater and Hempy (collectively “Appellees”) asserting several claims arising from the alleged conduct of Appellees’ representatives prior to and during the course of negotiations in the sale of Lindsay. These claims included tortious interference with a contract, tortious interference with a business relationship, fraud, and civil conspiracy. During the trial court proceedings, Appellees moved for summary judgment in their favor. The trial court granted their motions and dismissed the Deemses’ complaint. The Deemses timely appealed, and they now raise four assignments of error for our review. We have consolidated the assignments of error, and we will address certain assignments of error out of order to facilitate our discussion.

II.

ASSIGNMENT OF ERROR I

THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT TO THE APPELLEES BECAUSE THERE WERE GENUINE ISSUES OF FACT IN DISPUTE AND BECAUSE THEY WERE NOT ENTITLED TO JUDGMENT AS A MATTER OF LAW.

ASSIGNMENT OF ERROR III

THE TRIAL COURT IMPROPERLY GRANTED SUMMARY JUDGMENT ON THE FRAUD COUNT.

ASSIGNMENT OF ERROR II

SUMMARY JUDGMENT WAS IMPROPER ON [RICK] DEEMS’ TORTIOUS INTERFERENCE CLAIMS.

ASSIGNMENT OF ERROR IV

SUMMARY JUDGMENT WAS LIKEWISE IMPROPER ON THE CIVIL CONSPIRACY CLAIM AS TO RICK DEEMS.

{¶6} In their assignments of error, the Deemses argue that the trial court erred in granting summary judgment in favor of EcoWater and Hempy on Rick Deems’ claims for fraud, tortious interference, and civil conspiracy. We disagree.

{¶7} We review an award of summary judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105 (1996). We apply the same standard as the trial court, viewing the facts of the case in the light most favorable to the non-moving party and resolving any doubt in favor of the non-moving party. Viock v. Stowe-Woodward Co., 13 Ohio App.3d 7, 12 (6th Dist.1983).

{¶8} Pursuant to Civ.R. 56(C), summary judgment is proper only if:

(1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party.

Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327 (1977).

{¶9} The party moving for summary judgment bears the initial burden of informing the trial court of the basis for the motion and pointing to parts of the record that show the absence of a genuine issue of material fact. Dresher v. Burt, 75 Ohio St.3d 280, 292-93, 1996-Ohio-107. “If the moving party fails to satisfy its initial burden, the motion for summary judgment must be denied.” Id. at 293. If the movant satisfies this burden, the nonmoving party “must set forth specific facts showing that there is a genuine issue for trial.” Id., quoting Civ.R. 56(E).

{¶10} Here, the relevant portions of the depositions on which the parties relied in support of, and in opposition to, summary judgment follow.

{¶11} In Mr. Learn’s deposition, he maintained that when he decided to sell Lindsay, he called EcoWater to obtain information to assist him in valuing the business. An EcoWater employee named Dean Roberts returned his call and informed Mr. Learn that Hempy may be interested in purchasing Lindsay. Thereafter, meetings were arranged for Mr. Learn with potential buyers, including Hempy and Rick Deems, who was also interested in purchasing Lindsay. Mr. Learn maintained that he told Rick Deems that Mr. Learn would require any purchaser of Lindsay to obtain EcoWater dealership approval.

{¶12} The then current president of Hempy, Jeff Knedler, recalled in his deposition that Mr. Roberts called him and advised him that he had referred Mr. Learn to Hempy as a potential buyer for Lindsay. Around this same time, Mr. Learn had called him regarding the sale of Lindsay as well. Sometime in early June 2012, Mr. Knedler, Paul Staley (the former president of Hempy who was at that time a member of Hempy’s board), and another employee of Hempy had several meetings with Mr. Learn. Mr. Learn was adamant that the purchaser of Lindsay be approved as an EcoWater dealership. Mr. Learn had mentioned to Mr. Knedler that he was considering selling Lindsay to “the Deemses[.]” At some point during their discussions concerning the sale of Lindsay, Mr. Knedler mentioned to Mr. Learn the 2002 lawsuit between “the Deemses” and EcoWater. Mr. Knedler stated in his deposition that he did so because he was surprised that the Deemses and EcoWater “would want to reenter into a business arrangement after they have sued one another.” Mr. Learn and Mr. Knedler both maintained that Mr. Knedler did not provide Mr. Learn with any further details about that lawsuit. Mr. Knedler stated that he was not aware that Rick Deems was not involved in the 2002 lawsuit.

{¶13} In his deposition, Rick Deems maintained that he had been interested in purchasing Lindsay because it was close to his home, and he expressed to the manager of Lindsay his interest in purchasing the company if Mr. Learn decided to sell. Rick Deems was familiar with Mr. Staley from their shared experience in the water treatment industry. At some point prior to Mr. Staley’s retirement party in 2011, Mr. Deems approached Mr. Staley, in confidence, and told him that he was interested in purchasing Lindsay when Mr. Learn decided to sell it, and Mr. Deems sought Mr. Staley’s advice on such a transaction.

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Deems v. Ecowater Sys., Inc., 2016 Ohio 5022 (Ohio Ct. App. 2016).

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