Jeffrey Allen Industries, L.L.C. v. Manco

2014 Ohio 268

• Court: Ohio Court of Appeals
• Decided: January 24, 2014
• Docket: 13CA53
• Status: Published

Opinion

[Cite as Jeffrey Allen Industries, L.L.C. v. Manco, 2014-Ohio-268.]

COURT OF APPEALS RICHLAND COUNTY, OHIO FIFTH APPELLATE DISTRICT

JEFFREY ALLEN INDUSTRIES, LLC, : JUDGES: ET AL., : : Hon. John W. Wise, P.J. Plaintiffs - Appellees : Hon. Patricia A. Delaney, J. : Hon. Craig R. Baldwin, J. -vs- : : RONALD J. MANCO, ET AL., : Case No. 13CA53 : Defendants - Appellants : : and : : JOHN B. OFFENBURGER, : OPINION Third Party Plaintiff-Appellant : : -vs- : : JEFFREY A. BENTON, : Third Party Defendant-Appellee :

CHARACTER OF PROCEEDING: Appeal from the Richland County Court of Common Pleas, Case No. 08-CV-1342

JUDGMENT: Affirmed in part and reversed and remanded in part

DATE OF JUDGMENT: January 24, 2014

APPEARANCES:

For Defendant--Appellee For Plaintiff-Appellant Jeffrey A. Benton John B. Offenburger

BENJAMIN D. KITZLER ROBERT A. FRANCO Spaulding & Kitzler, L.L.C SHANNON G. BECKER 3 North Main Street, Suite 803 1007 Lexington Avenue Mansfield, OH 44902 Mansfield, OH 44907 Richland County, Case No. 13CA53 2

Baldwin, J.

{¶1} Third-party plaintiff-appellant John Offenburger appeals from the May 17,

2013 Judgment Entry of the Richland County Court of Common Pleas granting the

Motion for New Trial filed by third-party defendant-appellee Jeffrey Benton.

STATEMENT OF THE FACTS AND CASE

{¶2} On or about March 16, 2007, an Asset Purchase Agreement was entered

into between appellant John Offenburger and Ronald Manco, as buyer, and Jeffrey

Allen Industries, LLC (“JAI”) and Stacy Trimble, who owned JAI and was then appellee

Benton’s girlfriend, as seller. Pursuant to the terms of the agreement, appellant and

Manco purchased the assets of a cabinet making business for $200,000.00. Paragraph

16 of the agreement stated, in relevant part, as follows:

{¶3} “Noncompetition. The Seller, Stacy L. Trimble and Jeffrey A. Benton,

personally, agree that, for a period of three (3) years from the date of Closing hereof,

they will not directly own, manage, operate, join, control, or participate in the ownership,

management, operation or control of or be connected with, in any manner, any cabinet

making business within a sixty (60) mile radius of Galion, Ohio, which shall be in

competition with the business of the Buyer…” The agreement was signed by Trimble as

owner of JAI and also individually as to paragraphs 6 (which concerned representation

and warranties of the seller) and 16 and by appellant and Manco. Appellee, who was a

key employee of JAI, signed in his individual capacity as to paragraphs 6 and 16.

{¶4} On March 26, 2007, contemporaneously with the closing in this matter,

appellant formed Stonybrook Cabinet Company, Inc. Richland County, Case No. 13CA53 3

{¶5} On July 8, 2008, JAI filed a complaint against appellant John Offenburger,

Stonybrook Cabinet Co., Inc. and Ronald Manco. In its complaint, JAI asserted claims

for breach of contract, fraud, replevin and unjust enrichment. The claims all related to

the sale of JAI’s assets to appellant and Manco.

{¶6} On September 15, 2008, appellant John Offenburger and Stonybrook

Cabinet Co. filed a third party complaint against appellee Benton and Trimble, alleging

conversion, civil theft, and breach of the non-compete clause in the Asset Purchase

Agreement. In their Third Party Complaint, appellant and Stonybrook demanded

judgment against both appellee Benton and Trimble. On April 23, 2009, a Notice of

Suggestion of Death of Ronald Manco was filed. An amended third party complaint was

filed on August 30, 2011 that added Julius Homes, LLC as a third party defendant and

added a claim of tortious interference with contract.

{¶7} A jury trial was held in December of 2012 on the issue of whether or not

appellee had violated the non-compete clause contained in paragraph 16 of the Asset

Purchase Agreement. Appellee represented himself at trial and Trimble and Julius

Homes, LLC did not appear. The jury, on December 21, 2012 returned with a

$300,000.00 verdict in favor of appellant. As memorialized in a Journal Entry filed on

January 2, 2013, the trial court entered judgment in favor of appellant and against

appellee in the amount of $300,000.00 plus interest. The trial court, in a separate

Judgment Entry filed on the same day, entered judgment in favor of appellant and

against Trimble and Julius Homes, LLC.

{¶8} On January 4, 2013, appellee filed a Motion for Judgment Notwithstanding

the Verdict and Motion for a New Trial. Appellee, in his motion, alleged that he was Richland County, Case No. 13CA53 4

entitled to a new trial pursuant to Ohio Civ.R. 59(A)(4) and (A)(6) because appellant

was awarded excessive damages that appeared to have been given under the influence

of passion or prejudice and because the judgment was not sustained by the weight of

the evidence. Appellant filed a memorandum in opposition to such motion on February

15, 2013.

{¶9} As memorialized in a Judgment Entry filed on May 17, 2013, the trial court

overruled appellee’s Motion for Judgment Notwithstanding the Verdict, but granted his

Motion for New Trial. The trial court, in its Judgment Entry, stated, in relevant part, as

follows: “Mr. Benton [appellee] filed his motions pro se and defended himself at trial. For

an untrained person he did a respectable job but his efforts fell well short of a lawyerly

performance. Mr. Offenburger [appellant], on the other hand, hired two young but well-

qualified attorneys,… Mr. Benton [appellee] in his humble request for the jury to treat

him fairly was simply no match for [appellant’s attorneys].” The trial court further stated

that while there was a “smattering of evidence” that appellee’s cabinet-making may

have cost appellant some customers, “there was no evidence that [appellant] was either

capable or willing to serve customers.” The trial court also found that there was “little

evidence” to justify the $300,000.00 in damages that the jury awarded to appellant.

{¶10} Appellant now appeals from the trial court’s May 17, 2013 Judgment

Entry, raising the following assignments of error on appeal:

{¶11} THE TRIAL COURT ABUSED ITS DISCRETION WHEN IT IMPROPERLY

GRANTED A NEW TRIAL ON THE BASIS OF GROUNDS NOT SPECIFIED IN ITS

ORDER, OR ON GROUNDS NOT LEGALLY RECOGNIZED BY LAW OR

SUPPORTED BY FACT. Richland County, Case No. 13CA53 5

{¶12} INSOFAR AS IT MAY BE IMPLIED THAT THE TRIAL COURT GRANTED

A NEW TRIAL BASED ON THE GROUNDS THAT THE EVIDENCE WAS NOT

SUFFICIENT TO SUPPORT THE UNANIMOUS JURY VERDICT, IT WAS AN ABUSE

OF DISCRETION BECAUSE THE JURY VERDICT WAS SUPPORTED BY

COMPETENT CREDIBLE EVIDENCE ON EACH ELEMENT OF APPELLANT’S CLAIM

FOR BREACH OF CONTRACT.

{¶13} INSOFAR AS IT MAY BE IMPLIED THAT THE TRIAL COURT

GRANTED A NEW TRIAL BASED ON THE GROUNDS THAT THE DAMAGES WERE

EXCESSIVE OR TOO LARGE, IT WAS AN ABUSE OF DISCRETION BECAUSE THE

JURY VERDICT WAS SUPPORTED BY COMPETENT CREDIBLE EVIDENCE, AND

THERE WAS NO FINDING THAT THE AWARD WAS INFLUENCED BY PASSION OR

PREJUDICE.

{¶14} For purposes of judicial economy, and because all three assignments

relate to whether or not the trial court erred in granting the Motion for New Trial, we shall

address the assignments of error together.

I, II, III

{¶15} Appellant, in his three assignments of error, argues that the trial court

erred in granting appellee’s Motion for New Trial.

{¶16} Civ.R. 59(A) governs grounds for a new trial and states as follows: “A new

trial may be granted to all or any of the parties and on all or part of the issues upon any

of the following grounds: Richland County, Case No. 13CA53 6

{¶17} “(1) Irregularity in the proceedings of the court, jury, magistrate, or

prevailing party, or any order of the court or magistrate, or abuse of discretion, by which

an aggrieved party was prevented from having a fair trial;

{¶18} “(2) Misconduct of the jury or prevailing party;

{¶19} “(3) Accident or surprise which ordinary prudence could not have guarded

against;

{¶20} “(4) Excessive or inadequate damages, appearing to have been given

under the influence of passion or prejudice;

{¶21} “(5) Error in the amount of recovery, whether too large or too small, when

the action is upon a contract or for the injury or detention of property;

{¶22} “(6) The judgment is not sustained by the weight of the evidence;

however, only one new trial may be granted on the weight of the evidence in the same

case;

{¶23} “(7) The judgment is contrary to law;

{¶24} “(8) Newly discovered evidence, material for the party applying, which with

reasonable diligence he could not have discovered and produced at trial;

{¶25} “(9) Error of law occurring at the trial and brought to the attention of the

trial court by the party making the application.

{¶26} “In addition to the above grounds, a new trial may also be granted in the

sound discretion of the court for good cause shown.”

{¶27} Depending on the basis of the motion for a new trial, we review the trial

court's decision under either a de novo or an abuse of discretion standard of review.

Rohde v. Farmer, 23 Ohio St.2d 82, 262 N.E.2d 685 (1970), paragraphs one and two of Richland County, Case No. 13CA53 7

syllabus. “Where a trial court is authorized to grant a new trial for a reason which

requires the exercise of sound discretion, the order granting a new trial may be reversed

only upon a showing of abuse of discretion by the trial court.” Id. at paragraph one of

syllabus. However, “[w]here a new trial is granted by a trial court, for reasons which

involve no exercise of discretion but only a decision on a question of law, the order

granting a new trial may be reversed upon the basis of a showing that the decision was

erroneous as a matter of law.” Id. at paragraph two of syllabus. An abuse of discretion

implies that the court's attitude was “unreasonable, arbitrary, or unconscionable.”

Blakemore v. Blakemore, 5 Ohio St.3d 217, 450 N.E.2d 1140 (1983).

{¶28} While the trial court, in its May 17, 2013 Judgment Entry, did not specify

which subsection of Civ.R. 59 it was basing its judgment on, we note that appellee, in

his motion, only alleged that he was entitled to a new trial pursuant to Civ.R. 59(A)(4)

and (6). Appellee, in his brief, now maintains that a new trial was warranted under

Civ.R. 59(A)(6) and (7) because “there was no evidence [a]ppellee breached the non-

compete agreement. “ Appellee further contends that a new trial was warranted under

Civ.R. 59(A)(4) or (5) because the damages were excessive and/or without basis in

evidence.

{¶29} As is stated above, Civ.R. 59(A)(6) permits a trial court to grant a new trial

on the basis that the judgment is not sustained by the weight of the evidence. If the

verdict is supported by substantial competent, credible evidence, a trial court abuses its

discretion in granting a new trial based upon the weight of the evidence. Dillon v. Bundy,

72 Ohio App.3d 767, 773-774, 596 N.E.2d 500 (10th Dist. 1991). Richland County, Case No. 13CA53 8

{¶30} A trial court's decision to grant a motion for a new trial based upon the

weight of the evidence will be overturned on appeal only where the trial court abused its

discretion in granting the motion. Rohde, supra, 23 Ohio St.2d at 90. A trial court may

not set aside a jury verdict upon the weight of the evidence based upon a mere

difference of opinion with the jury; doing so constitutes an abuse of discretion by the trial

court. Id. at 92. The jury's function is to weigh the evidence in the first instance, and a

trial court may not usurp that function. Id.

{¶31} The trial court, in its May 17, 2013 Judgment Entry, appears to find, in

part, that the jury’s decision that appellee violated the non-compete provision in the

Asset Purchase Agreement was against the manifest weight of the evidence. The trial

court, in its Entry, stated that “[t]he evidence at trial could be interpreted to indicate that

[appellant] closed his business before [appellee] picked up the slack which indeed was

the testimony of [appellee]. [Appellant’s] ability to do quality cabinetry was alluded to by

[appellant] but was not fully substantiated by the evidence.” The trial court further held

that “[i]t is this Court’s Opinion that a reasonable jury could just as well have found that

[appellee] got back into cabinet-making at the request of former customers who were

not being served by [appellant]., i.e. he was either out of business or unable to do the

work.”

{¶32} However, we find that the jury’s decision that appellee violated the non-

compete provision was supported by competent, credible evidence and that the trial

court erred in granting a new trial, under either Civ.R. 59(A)(6) or (7), on such basis. At

the trial in this matter, appellee testified that after the closing, he began doing business

as Julius Homes, LLC. In representing himself, he conceded that he competed with Richland County, Case No. 13CA53 9

appellant and indicated that he did so because his former customers where not being

taken care of by appellant. Appellee stated that he went back to building cabinets

around April of 2008. Appellee, in his brief, contends that at the time he started doing

so, Stonybrook had ceased operations and that, therefore, he did not violate the non-

compete provision.

{¶33} However, at the trial, appellant testified that he was engaged in cabinet

making until he closed his business in March of 2009. Appellant testified that, in

November of 2007, the Articles of Incorporation for Unique Granite were filed.

According to appellant, during the beginning of 2008, Stonybrook and Unique were

combined into one company. While appellant ceased doing business in February of

2008 as Stonybrook Cabinet Company, he testified that they continued doing business

under Unique Granite and Custom Cabinets and continued building cabinets. An

insurance policy for Unique Granite, that was admitted as an exhibit and covered the

period from October 27, 2008 through October 27, 2009, described the business as

including cabinet making. In addition, employee payroll records from the period from

December 28, 2008 through March 6, 2009 for Unique Granite were admitted as

exhibits. Appellant testified that, during such time, they were building cabinets.

Furthermore, Unique Granite’s bank statements for the periods from January 1, 2008

through April of 2009 were admitted as exhibits as were tax returns for Stonybrook for

2008 and Unique Granite for 2008 and 2009. Appellant testified that, during such time

period, he was in business and was making cabinets.

{¶34} At the trial, Eric Swainhart, the owner of Liberty Cabinet Components who

was called as a witness by appellee, testified that he did work for appellee’s company Richland County, Case No. 13CA53 10

and also for appellant’s company in May or June of 2008. He further testified that he did

work for appellee in June and July of 2008. Swainhart testified that, in June of 2008, he

did work involving cabinets for Unique Granite and that he hired appellant to do some

cabinetry work for him in the fall of 2008 on a Victoria’s Secret job. He further testified

that he told appellee that he was doing work for Unique Granite at that point and that

“[e]veryone involved knew exactly what was going on…” Trial Transcript at 146.

Swainhart testified that, throughout 2008, appellee knew that he was working for

appellant’s company.

{¶35} Ty Pritchett, a former employee of appellant’s who was employed at

appellant’s cabinet making business until around February of 2008, testified that he kept

in touch with appellant after he left and that appellant was still conducting business until

September or October of 2008. He testified that, in February of 2008, the shop was

“[r]unning as usual” and that ”[e]verything was working.” Trial Transcript at 149. He

further testified that cabinets were being made and that, when he visited the shop after

he left his employment there, he did not notice anything unusual.

{¶36} Based on the foregoing, we find that there was substantial credible

evidence supporting the jury’s verdict that appellee violated the non-compete

agreement with appellant, who was the buyer of appellee’s business. The trial court, in

its Judgment Entry, clearly indicated that it had a difference of opinion with the jury.

However, a trial court may not set aside a jury verdict upon the weight of the evidence

based upon a mere difference of opinion with the jury; doing so constitutes an abuse of

discretion by the trial court Richland County, Case No. 13CA53 11

{¶37} Appellant also argues that the trial court erred in granting a new trial on

the basis that the award of $300,000.00 in damages was excessive or too large.

{¶38} As is stated above, appellee also asked for a new trial pursuant to Civ.R.

59(A)(4). Such section provides that a new trial may be granted on the following

grounds: “(4) Excessive or inadequate damages, appearing to have been given under

the influence of passion or prejudice.” The trial court, in its Judgment Entry, appeared to

find that the damages awarded were excessive and/or against the manifest weight of

the evidence.

{¶39} An appellate court reviewing whether a trial court abused its discretion in

ruling on a motion for a new trial pursuant to Civ.R. 59(A)(4) must consider (1) the

amount of the verdict, and (2) whether the jury considered improper evidence, improper

argument by counsel, or other inappropriate conduct which had an influence on the jury.

Dillon v. Bundy, 72 Ohio App.3d 767, 774, 596 N.E.2d 500 (10th Dist. 1991). To support

a finding of passion or prejudice, it must be demonstrated that the jury's assessment of

the damages was so overwhelmingly disproportionate as to shock reasonable

sensibilities. Jeanne v. Hawkes Hosp. of Mt. Carmel, 74 Ohio App.3d 246, 257, 598

N.E.2d 1174, 1181 (10th Dist. 1991). The mere size of the verdict is insufficient to

establish proof of passion or prejudice. Jeanne, 74 Ohio App.3d at 257.

{¶40} In Ohio, it has long been held that the assessment of damages is so

thoroughly within the province of the jury that a reviewing court is not at liberty to disturb

the jury's assessment absent an affirmative finding of passion and prejudice or a finding

that the award is manifestly excessive.” Moskovitz v. Mt. Sinai Med. Ctr., 69 Ohio St.3d

638, 655, 635 N.E.2d 331 (1994). Richland County, Case No. 13CA53 12

{¶41} The trial court, in this matter did not make an affirmative finding of passion

or prejudice or that the award was manifestly excessive. Rather the trial court, in its

Judgment Entry, stated that the jury awarded damages in the amount of $300,000.00

“with little evidence to justify the figure”. The trial court, therefore, appears to have

relied on Civ.R. 59(A)(6) which concerns the weight of the evidence. The trial court

further stated, in relevant part, as follows: “The jury apparently observed that [appellee]

had deposited a substantial sum in his banking account and assumed that [appellant]

would have garnered a like sum had he elected to remain in business sans competition

from [appellee]. There was no evidence what the costs of doing business were or would

have been by either party…There was no evidence to indicate the actual profits

[appellee] gained from cabinet-making during the time in question.”

{¶42} The jury, in this matter, appears to have awarded appellant $300,000.00

on the basis that, because his business failed, appellant had to pay $300.000.00 in

bank loans that he had personally guaranteed. Of this amount, $200,000.00 was for the

initial loan to purchase appellee’s business and $100,000.00 was a line of credit taken

out for the company. Appellant contends that he was forced to pay such amount after

he was forced out of business by appellee’s competition.

{¶43} However, during his testimony at trial, appellant indicated that business

dried up because of competition and that Stonybrook ceased operations in February of

2008 because it was unprofitable the way that it was being run. He further testified that

he had disagreements with Ron Manco about how the business was being run.

Appellant testified that Stonybrook was closed because “we had people like you

[appellee] competing directly against us when you weren’t supposed to be.” Trial Richland County, Case No. 13CA53 13

Transcript at 68-69. While there is evidence that appellant suffered damages as a

result of appellee’s competition, there is a dearth of evidence that appellant was forced

to close solely because of appellee’s competition and, as a result, suffered $300,000.00

in damages. We find, on such basis, that the trial court did not err in granting a new

trial with respect to the amount of damages. The trial court’s decision was not arbitrary,

unconscionable or unreasonable. Richland County, Case No. 13CA53 14

{¶44} Based on the foregoing, appellant’s first and second assignments of error

are overruled and appellant’s third assignment of error is sustained.

{¶45} Accordingly, the judgment of the Richland County Court of Common Pleas

is affirmed in part and reversed in part. This matter is remanded to the trial court for a

new trial on the issue of damages sustained by appellant as a result of appellee’s

breach.

By: Baldwin, J.

Wise, P.J. and

Delaney, J. concur.