Hambleton v. R.G. Barry Corp.

465 N.E.2d 1298, 12 Ohio St. 3d 179, 12 Ohio B. 246, 1984 Ohio LEXIS 1195
CourtOhio Supreme Court
DecidedJuly 25, 1984
DocketNo. 83-1680
StatusPublished
Cited by538 cases

This text of 465 N.E.2d 1298 (Hambleton v. R.G. Barry Corp.) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hambleton v. R.G. Barry Corp., 465 N.E.2d 1298, 12 Ohio St. 3d 179, 12 Ohio B. 246, 1984 Ohio LEXIS 1195 (Ohio 1984).

Opinion

Per Curiam.

I

The first issue presented is whether appellants’ cause of action as set forth in count one of their complaint is time-barred. For the reasons that follow, this court holds that this action was not timely filed pursuant to the time limitations set forth in R.C. 2305.09(B).

It is undisputed that the applicable statute of limitations as to count one of the complaint is contained in R.C. 2305.09. This section provides in part:

“An action for any of the following causes shall be brought within four years after the cause thereof accrued:

{(* * *

“(B) For the recovery of personal property, or for taking or detaining it;

U* * *

“If the action is for * * * the wrongful taking of personal property, the causes thereof shall not accrue until the wrongdoer is discovered * * *.” (Emphasis added.)

In order to determine if this action is timely, then, this court must determine when the cause of action accrued, i.e., the time when the party discovered the wrongdoing. The discovery of the wrongdoing may be constructive as well as actual, for in Schofield v. Cleveland Trust Co. (1948), 149 Ohio St. 133, 142 [36 O.O. 477], this court, in construing the predecessor to R.C. 2305.09, stated as follows:

“ ‘If a person has knowledge of such facts as would lead a fair and prudent man, using ordinary care and thoughtfulness, to make further inquiry, and he fails to do so, he is chargeable with knowledge which by ordinary diligence he would have acquired.’ * * *”

The court of appeals determined that appellants could have, had they used reasonably diligent efforts, discovered their claim as early as 1971 and as late as 1974:

“When the uncontroverted fact of [appellee’s] marketing the shoes in late 1974 is coupled with [appellants’] knowledge in August and September of 1971, and their not having received a response from [appellee] to their attorney’s letter, the conclusion is inescapable that [appellants] were charged with constructive notice of wrongdoing when [appellee] began marketing the shoes. As early as 1971, they possessed knowledge sufficient to lead a reasonably prudent person to make inquiry and, once the shoes were marketed, the circumstances were such that the barest inquiry would have led to actual knowledge of the claimed wrongdoing. See Schofield v. Cleveland Trust Co. (1948), 149 Ohio St. 133, at 142 [36 O.O. 477]. [Appellants] were placed on in[182]*182quiry by the knowledge they possessed in 1971 and the shoes were first marketed in the Fall of 1974, and extensively during 1975; [appellants] cannot avoid constructive notice by failing until the Fall of 1978 to inquire. Instead, they are charged with the knowledge which they would have acquired by the exercise of ordinary diligence.

“Accordingly, as to the intangible personal property interest, whether [appellants] are charged with actual notice that [appellee] was a wrongdoer in 1971, or with constructive notice of that fact in December 1974, their action was not timely filed in late 1979.” (Emphasis added.)

This court concurs with the assessment of the court of appeals that appellants’ cause of action accrued in late 1974. In addition to the factors enunciated by the appellate court, this court would also note that the record reveals that when appellants were fired, Darrell Strub, one of their colleagues who had likewise been hired for “Project Mushroom,” was retained and continued to work for appellee. The record is also devoid of evidence that would indicate appellee was trying to conceal its expenditures of time and money in the development and sale of the polyurethane sole; since 1971, information pertaining to such a sole appeared in appellee’s annual reports. Moreover, the fact that appellee began manufacturing and marketing the shoes in 1974 cannot be minimized.

Based on the combination of these factors, the court of appeals was correct in concluding that appellants possessed knowledge sufficient to lead a reasonably prudent person to make inquiry and had such inquiry been made with reasonable care and diligence, it would have led to the discovery of the alleged wrongdoing in 1974. As such, their action filed in 1979 was untimely in that it was filed beyond the four-year statute of limitations specified in R.C. 2305.09(B).

II

The second issue presented is whether appellants pleaded in count two of their complaint an action in contract or quasi-contract so as to invoke the six-year statute of limitations of R.C. 2305.07.2 For the reasons that follow, this court holds that appellants’ complaint does state a claim for quasi-contract and is thus subject to the statute of limitations set forth in R.C. 2305.07.

In count two of their complaint, appellants incorporated the allegations contained in count one and added the following:

“[Appellee’s] conduct constitutes a violation of its confidential relationship with the [appellants] and of its duties arising therefrom, giving rise to a right of recovery by [appellants] for the unjust enrichment the [appellee] has realized from such conduct.”

Appellants contend that this allegation of breach of a confidential rela[183]*183tionship is sufficient to state a cause of action in quasi-contract, whereas appellee asserts this allegation sounds in terms of a tort only.

This court has previously held that, in determining which limitation period will apply, courts must look to the actual nature or subject matter of the case, rather than to the form in which the action is pleaded. The grounds for bringing the action are the determinative factors, the form is immaterial. See, e.g., Kunz v. Buckeye Union Ins. Co. (1982), 1 Ohio St. 3d 79; Peterson v. Teodosio (1973), 34 Ohio St. 2d 161 [63 O.O.2d 262].

In Hummel v. Hummel (1938), 133 Ohio St. 520, 525, this court observed that liability in quasi-contract “arises out of the obligation cast by law upon a person in receipt of benefits which he is not justly entitled to retain * * *.” The court of appeals in this case listed the elements of quasi-contract as follows: “(1) a benefit conferred by a plaintiff upon a defendant; (2) knowledge by the defendant of the benefit; and (3) retention of the benefit by the defendant under circumstances where it would be unjust to do so without payment (‘unjust enrichment’).”

Using these criteria, this court finds, contrary to the finding of the court of appeals, that appellants’ complaint alleges that: (1) appellants conferred a benefit upon appellee, i.e., the idea to use self-skinning polyurethane in footwear; (2) appellee knew of the benefit since it marketed a line of footwear using appellants’ process; and (3) appellee would be unjustly enriched to retain the benefit without compensating appellants. Count two of appellants’ complaint, which seeks restitution in the amount appellee has been unjustly enriched by retaining appellants’ intangible personal property, thus sufficiently states a claim in quasi-contract.

It is stressed that this court need not address whether appellants should be required to elect the cause of action which they ask the trial court to enforce, i.e.,

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Cite This Page — Counsel Stack

Bluebook (online)
465 N.E.2d 1298, 12 Ohio St. 3d 179, 12 Ohio B. 246, 1984 Ohio LEXIS 1195, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hambleton-v-rg-barry-corp-ohio-1984.