Loyalty 360, Inc. v. Empirical Edge, Inc.

2025 Ohio 2134
Ohio Court of Appeals·Decided June 18, 2025·No. C-240315·Published

Opinion

IN THE COURT OF APPEALS

FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO

LOYALTY 360, INC., : APPEAL NO. C-240315 TRIAL NO. A-2201262

Plaintiff-Appellant, :

vs. : EMPIRICAL EDGE, INC., : JUDGMENT ENTRY Defendant-Appellee. :

This cause was heard upon the appeal, the record, the briefs, and arguments.

The judgment of the trial court is affirmed for the reasons set forth in the Opinion filed this date.

Further, the court holds that there were reasonable grounds for this appeal, allows no penalty, and orders that costs are taxed under App.R. 24.

The court further orders that 1) a copy of this Judgment with a copy of the Opinion attached constitutes the mandate, and 2) the mandate be sent to the trial court for execution under App.R. 27.

To the clerk: Enter upon the journal of the court on 6/18/2025 per order of the court.

By:_______________________ Administrative Judge

IN THE COURT OF APPEALS

FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO

LOYALTY 360, INC., : APPEAL NO. C-240315 TRIAL NO. A-2201262

Plaintiff-Appellant, :

vs. : EMPIRICAL EDGE, INC., : OPINION Defendant-Appellee. :

Civil Appeal From: Hamilton County Court of Common Pleas Judgment Appealed From Is: Affirmed Date of Judgment Entry on Appeal: June 18, 2025

Thomas Law Offices, PLLC, and Louis C. Schneider, for Plaintiff-Appellant, Giles & Harper, LLC, Brian T. Giles and William C. Katz, for Defendant-Appellee.

BOCK, Judge.

{¶1} Dissatisfied with disruptions to a website that defendant-appellee Empirical Edge, Inc., (“Empirical”) developed, plaintiff-appellant Loyalty 360, Inc., (“Loyalty”) sued Empirical for breach of contract and unjust enrichment. On appeal, Loyalty challenges the trial court’s directed verdict in Empirical’s favor. Loyalty maintains that the trial court failed to construe the evidence in Loyalty’s favor when it determined that Loyalty failed to establish (1) the terms of the oral contract that Empirical allegedly breached, and (2) that it would be unjust for Empirical to retain the compensation paid by Loyalty.

{¶2} We overrule Loyalty’s assignment of error and hold that the trial court’s decision, properly construed as a judgment of dismissal under Civ.R. 41(B)(2), was appropriately entered for Empirical on Loyalty’s breach-of-contract claim. Loyalty failed to prove that, in the parties’ oral contract, Empirical agreed to (1) assign only Kentico-certified employees to work on Loyalty’s website, and (2) a standard of performance. We also hold that the trial court appropriately entered judgment in favor of Empirical on Loyalty’s unjust-enrichment claim because the existence of an enforceable contract governing Empirical’s work on Loyalty’s website precludes recovery on the unjust-enrichment claim.

{¶3} We affirm the trial court’s judgment.

I. Factual and Procedural History

{¶4} Loyalty is a “trade association for individuals who have customer loyalty programs.” According to Loyalty’s owner, Mark Johnson, the company “facilitates the interaction between brands who are looking to develop customer loyalty through all types of technology.” Carly Stemmer is a longtime employee and current member of Loyalty’s management team, and described Loyalty as “a business-to-business

association for companies that have customer loyalty or rewards programs or companies that run those programs.”

{¶5} In 2022, Loyalty sued Empirical in the Hamilton County Court of Common Pleas for damages stemming from Empirical’s alleged breach of contract and unjust enrichment. Loyalty alleged that it “contracted with [Empirical] to provide . . . management and improvements to [Loyalty]’s website,” and that Empirical failed to provide those services.

{¶6} While the Hamilton County case was pending, Empirical had claims pending against Loyalty in a Superior Court in Burlington County, New Jersey. The parties attempted to settle the matter and agreed to dismiss the respective lawsuits if Loyalty paid Empirical $25,000 and Empirical gave Loyalty its website’s source code and data. But Loyalty refused to dismiss its complaint in this case because Empirical allegedly failed to upload uncompiled files. The trial court denied Empirical’s motion to enforce the settlement agreement, and this court dismissed an appeal of that decision because it was not a final, appealable order. The trial court also denied Empirical’s subsequent motion for summary judgment.

The trial

{¶7} At the bench trial, Loyalty called Johnson and Stemmer, along with Empirical’s owner, to testify to the terms of its oral contract and to establish Empirical’s breach of that contract.

{¶8} Johnson testified that Loyalty’s business model is based on its website, which offers clients differing levels of access to Loyalty’s content. Loyalty’s website and annual conference “allow[] brands to get together and learn on different aspects [of] how to deal with privacy, how to deal with compliance around emotional loyalty.” Johnson explained that some visitors peruse Loyalty’s website for articles, while its

members rely on “research data and analyst reports.” Its website “shar[es] and disseminat[es] information based on best practices that brands have around challenges and opportunities of customer loyalty.”

{¶9} Empirical is a “software development” company founded by Dipal Parikh and headquartered in New Jersey. Empirical has roughly 20 employees who work remotely from India. Parikh has a master’s degree in computer science and trains his employees on “[a]ll the software development and stuff, all the training that they need to do the work done.” Parikh identified two employees that worked on Loyalty’s website and mobile app, Pankil and Nafisha. Both have master’s degrees in computer science from accredited universities.

A. Loyalty’s website and Kentico

{¶10} Loyalty uses Kentico to host its website. Johnson has no formal background or training in software or website development, but testified that Kentico is “a CMS, a Content Management System.” He explained that Kentico offers three versions: “Kentico Portal[,] Kentico NBC[,] and the .NET.” Johnson testified that “most developers are .NET-based developers where Kentico Portal is a very specific type of development.” Stemmer testified that Kentico “is a website content management system and marketing platform.” She explained that, with Loyalty’s “association and being membership-base[d], people will create accounts through the website and have log-ins.”

{¶11} Parikh testified that “Kentico is not a programing language. It’s a CMS.

. . . a program in the .NET technology.” Parikh explained that there are no certified Kentico developers who work for Empirical and that Pankil, the Empirical employee who worked on Loyalty’s website, “is a .NET developer [and] has about 15 years of working experience with the .NET technology . . . and writ[ing] the code.” Pankil has

“complete[d] multiple Kentico projects and is certified in software development and the training on software development.”

{¶12} Parikh described Kentico certifications as “a marketing strategy.” In reality, “[y]ou don’t need Kentico certification to write the code that’s written in a .NET.” According to Parikh, “if you check the Kentico certification website it says that it’s not required to work on Kentico [and instead is] to verify your knowledge of ASP.NET development.”

B. Loyalty hired Empirical

{¶13} In 2018, Loyalty decided to revamp its homepage for an autumn 2018 conference due to “challenges” with its website. Loyalty found Empirical through Upwork.com, a temporary-worker service. Johnson recalled that Empirical told him, “[Y]es, we’re certified with Kentico. Yes, we can complete this project for you.” Loyalty was “convinced based on them being certified developers, as they told [Loyalty], that they would be able to address the issues [Loyalty] w[as] having in Kentico and with specifically Kentico Portal.”

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Loyalty 360, Inc. v. Empirical Edge, Inc., 2025 Ohio 2134 (Ohio Ct. App. 2025).

2025 Ohio 2134 (Loyalty 360, Inc. v. Empirical Edge, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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