Fontbank, Inc. v. Compuserve, Incorporated

742 N.E.2d 674, 138 Ohio App. 3d 801, 2000 Ohio App. LEXIS 3453
CourtOhio Court of Appeals
DecidedAugust 3, 2000
DocketNo. 99AP-817.
StatusPublished
Cited by89 cases

This text of 742 N.E.2d 674 (Fontbank, Inc. v. Compuserve, Incorporated) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fontbank, Inc. v. Compuserve, Incorporated, 742 N.E.2d 674, 138 Ohio App. 3d 801, 2000 Ohio App. LEXIS 3453 (Ohio Ct. App. 2000).

Opinion

Glasser, Judge.

Plaintiff-appellant, Fontbank, Inc., appeals from a judgment of the Franklin County Court of Common Pleas dismissing its breach-of-contract action against defendant-appellee, CompuServe, Incorporated, on a motion for judgment on the pleadings.

CompuServe operates a worldwide on-line computer information service. Fontbank develops and markets computer software. This action has its genesis in Fontbank’s April 1994 proposal to develop several products for CompuServe. Specifically, Fontbank offered to develop and operate an on-line multimedia superstore, to be known as “Jerry’s World,” to market items such as fonts, clip art, and graphics over CompuServe’s on-line service. As proposed, Jerry’s World would market and sell materials both for immediate download and for more traditional “off-line” parcel delivery.

Fontbank also proposed that it develop and manage two on-line forums on CompuServe’s on-line service: (1) the “Jerry’s World Forum,” which was to be dedicated to the discussion and support of products marketed through Jerry’s World, and (2) the “Reader’s Forum,” which was to be dedicated to the discussion of popular literature.

The parties agree that Fontbank made the above proposal, and that as a result of the proposal, they entered into the following two written agreements: (1) a “Service and License Agreement for Electronic Services” (“Service and License Agreement”) related to Jerry’s World on January 4, 1995, and (2) a “Service Agreement for Forum Managers” in April 1994, which authorized Fontbank to set up and manage the Jerry’s World Forum (“Forum Manager’s Agreement # 2”). Beyond these several points, the parties’ agreement as to the fact ceases.

According to the allegations contained in Fontbank’s complaint, CompuServe accepted Fontbank’s proposal for Jerry’s World shortly after it was presented, and authorized Fontbank to proceed with development of Jerry’s World, thereby forming an oral contract between the parties relating to the development of *805 Jerry’s World (“oral development contract”). According to Fontbank, the terms of the oral development contract required Fontbank to develop Jerry’s World, CompuServe to provide the resources, infrastructure, and marketing to support Jerry’s World, and set a date of August 1994 for having Jerry’s World up and operational. Fontbank alleges that this oral development contract was separate and distinct from the Service and License Agreement for Jerry’s World subsequently entered into by the parties.

Fontbank’s complaint further alleges that Fontbank proceeded with the development of Jerry’s World in reliance upon the oral development contract, expending considerable time and money in the process. However, CompuServe breached the oral development contract by failing to complete the database structures necessary to support Jerry’s World in a timely manner, repeatedly changing the supporting databases in ways that were inconsistent with the terms of the oral development contract, and restricting the amount of hard drive space available for Jerry’s World. As a result of CompuServe’s breaches of the oral development contract, Jerry’s World did not become operational until March 1995, more than seven months after the operational date established in the oral development contract. In addition, shortly after Jerry’s World went on-line, CompuServe informed Fontbank that it would not permit Jerry’s World to market and sell products for off-line delivery over its service, in direct contravention of the oral development contract. Together, CompuServe’s various breaches of the oral development contract destroyed the overall “superstore” concept envisioned for Jerry’s World by that contract.

Fontbank’s complaint also alleges that on December 22, 1994, almost four months prior to the parties’ entry into Forum Manager’s Agreement # 2 in April 1994, the parties entered into a written “Service Agreement for Forum Managers,” which authorized Fontbank to set up and manage both the Jerry’s World Forum and the Reader’s Forum (“Forum Manager’s Agreement # 1”). According to Fontbank, while CompuServe went on-line with the Jerry’s World Forum, it breached Forum Manager’s Agreement # 1 by failing to ever implement the Reader’s Forum.

On April 29,1997, Fontbank filed its complaint in the Franklin County Court of Common Pleas naming CompuServe as defendant and asserting the following eight claims: (I) a claim for breach of the oral development contract, (II) a claim for breach of'Forum Manager’s Agreement # 1, (III) an implied or quasi contract claim on the oral development contract and Forum Manager’s Agreement # 1, (IV) a detrimental reliance claim on the oral development contract and Forum Manager’s Agreement # 1, (V) a promissory estoppel claim on the oral development contract and Forum Manager’s Agreement # 1, (VI) a fraud-in-the-inducement claim, (VII) a claim for an accounting under the Service and License *806 Agreement, and (VIII) a claim for fees owed under the Service and License Agreement as established by the accounting requested in claim VII.

On July 14, 1997, CompuServe responded to Fontbank’s complaint with an answer and two counterclaims. On February 3, 1998, CompuServe filed a motion for judgment on the pleadings or summary judgment on all counts of Fontbank’s complaint. On December 18, 1998, the trial court issued a decision granting judgment on the pleading for CompuServe as to all eight counts of Fontbank’s complaint. On June 14, 1999, CompuServe voluntarily dismissed its counterclaims. Accordingly, on June 18, 1999, the trial court filed a judgment entry dismissing Fontbank’s complaint for the reasons set forth in its decision of December 18, 1998. Fontbank appeals therefrom, assigning the following errors:

“Assignment of Error No. 1:
“The trial court committed prejudicial error in considering, as a motion for judgment on the pleadings pursuant to Civil Rule 12(C), the ‘motion of CompuServe, Incorporated for judgment on the pleadings and/or summary judgment on all counts of plaintiffs complaint,’ which referenced in its memorandum in support facts and documents outside the pleadings and which contained an affidavit as an exhibit.
“Assignment of Error No. 2:
“The trial court committed prejudicial error in granting judgment on the pleadings against plaintiff/appellant as to claims for breach of contract, implied or quasi contract, detrimental reliance, promissory estoppel, and fraud in the inducement (claims one, three, four, five and six respectively of the complaint) which were based upon an oral product development agreement, on the basis of an integration clause in a subsequent written non-exclusive product licensing agreement.
“Assignment of Error No. 3:
“The trial court committed prejudicial error in granting judgment on the pleadings against plaintiff/appellant as to claim six’s claim of fraud in the inducement as to the written non-exclusive product licensing agreement.
“Assignment of Error No. 4:
“The trial court committed prejudicial error in granting judgment on the pleadings against plaintiff/appellant as to claim six’s claim of fraud in the inducement as to the forum managers agreement.

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Bluebook (online)
742 N.E.2d 674, 138 Ohio App. 3d 801, 2000 Ohio App. LEXIS 3453, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fontbank-inc-v-compuserve-incorporated-ohioctapp-2000.