Rutherlan Enterprises, Inc. v. Zettler Hardware

60 F. Supp. 3d 828, 2014 U.S. Dist. LEXIS 160332, 2014 WL 6432707
CourtDistrict Court, S.D. Ohio
DecidedNovember 14, 2014
DocketCase No. 2:14-cv-0019
StatusPublished

This text of 60 F. Supp. 3d 828 (Rutherlan Enterprises, Inc. v. Zettler Hardware) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rutherlan Enterprises, Inc. v. Zettler Hardware, 60 F. Supp. 3d 828, 2014 U.S. Dist. LEXIS 160332, 2014 WL 6432707 (S.D. Ohio 2014).

Opinion

OPINION AND ORDER

GREGORY L. FROST, District Judge.

This matter is before the Court for consideration of Defendants Zettler Hardware, Nicholas Zettler, Peter Michailidis, Luke Stratton, and Alex Rouse’s (collectively “Defendants”)1 motion for summary judgment (ECF No. 35), Plaintiffs memorandum contra (ECF No. 38)2, and Defendants’ reply memorandum (ECF No. 40). For the reasons that follow, the Court GRANTS in part and DENIES in part Defendant’s motion.

[831]*831I. BACKGROUND

Plaintiff, Rutherlan Enterprises, Inc. d/b/a Island Ace Hardware (“Rutherlan”), is a Hawaiian corporation with its primary place of business in Princeville, Hawaii. Rutherlan sells tools and other hardware in Hawaii and is a franchise of Ace Hardware Corporation. Terry Caplan (“Ca-plan”) is the President of Rutherlan.

Defendant Substruct Systems, LLC (“Substruct”) is an Ohio limited liability company with its principal place of business located in Worthington, Ohio. Sub-struct is funded by Zettler Hardware (“Zettler”). Substruct sold and designed computer systems and computer-related software, including point-of-sale systems (“POS systems”). Defendants Luke Strat-ton (“Stratton”), Alex Rouse (“Rouse”), and Nicholas Zettler (“Mr. Zettler”) were each members of Substruct. Peter Mi-chailidis (“Michailidis”) was an employee of Substruct.

Though the initiating party is disputed, Substruct and Rutherlan entered into an agreement in 2008 through which Ruther-lan would use a POS system designed by Substruct. Caplan spoke primarily with Michailidis and Stratton regarding the details of the POS system that Substruct was designing for Rutherlan. Michailidis and Stratton provided Caplan with the contact information for a few Ace Hardware stores that were using the Substruct POS system. Caplan contacted the Ace Hardware store in Boyne City, Missouri, and spoke to proprietor Jim White about the Sub-struct system. White told Caplan that he was happy with the system overall, but had experienced some minor glitches with it.

On or about June 13, 2008, Stratton and Michailidis visited Rutherlan Enterprises, Inc., where they met with Brian Wong (“Wong”) from the Ace Hardware Corporate offices and Caplan to further discuss the POS system. Wong expressed concern to Caplan that the Substruct POS system would not be a good fit for Ruther-lan. Despite Wong’s concerns, Caplan opted to move forward with the installation of the Substruct POS system. On December 16, 2008, Rutherlan and Substruct entered into a contract for the POS system, which includes a clause stating that Ohio law shall govern the agreement. The POS system was installed in early January 2009 and went live on January 12, 2009. Though the parties agree that there were some initial issues with the POS system, a late January 2009 email communication between Stratton and Caplan indicated that Caplan thought Substruct was working to fix the problems with the POS system.

After the installation, Rutherlan continued to experience sporadic issues with the Substruct system. By June 2009, Caplan had decided Rutherlan needed to switch back to its former system, Activant, and Caplan began plotting the details of the switch. Prior to the termination of Ruth-erlan’s contract with Substruct, no one at Substruct had been made aware of Ca-plan’s plan for reverting back to Activant. On September 30, 2009, Caplan terminated the Substruct contract, and Rutherlan reinitiated the Activant POS system.

Defendants allege that, following Ruth-erlan’s switch back to Activant, Rutherlan destroyed, removed, and/or discarded the hard drive that held the Substruct POS, as well the computer terminals, thereby leaving Rutherlan in possession of only a few pieces of the Substruct POS system. Rutherlan denies any improper actions regarding the Substruct POS system, maintaining that the materials in question had been packaged up and stored with the intention of being shipped back to Sub-struct.

[832]*832On October 12, 2010, Rutherlan filed a complaint in the Circuit Court of the Fifth Circuit of Hawaii, alleging eight claims for relief against Substruct: two claims for breach contract; misrepresentation; fraud in the inducement; promissory estoppel; breach of implied warranties; breach of express warranties; and unjust enrichment. (ECF No. 35-2.) That case was dismissed due to the Hawaiian state court’s lack of jurisdiction. On September 26, 2011, Rutherlan filed a complaint in this Court, citing five claims for relief: breach of contract; unjust enrichment; fraudulent misrepresentation; breach of implied warranty; and breach of express warranty. (Case No. 2:ll-cv-859, ECF No. 1.) The parties filed a joint stipulation of voluntary dismissal on March 6, 2013. (Id.) On May 17, 2013, Substruct filed its certificate of dissolution.

On January 7, 2014, Rutherlan filed a complaint in this Court against Substruct, Zettler, Mr. Zettler, Stratton, Rouse, Mi-chailidis, Does 1-10, and ABC Corporations 1-10. (ECF No. 1.) Again, Plaintiffs complaint asserts five claims for relief: breach of contract; unjust enrichment; fraudulent misrepresentation; breach of implied warranty; and breach of express warranty. (Id.)

Defendants Zettler, Michailidis, Rouse, Stratton, and Mr. Zettler now move for summary judgment on count three (fraudulent misrepresentation) of the complaint and “a declaration that the breach of contract, unjust enrichment!,] and breach of warranty claims cannot be prosecuted against the [Defendants].” (ECF No. 35 at 6). That motion is fully briefed and ripe for the Court’s review.

II. DISCUSSION

A. Standard of Review

Federal Rule of Civil Procedure 56 provides that summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The Court may therefore grant a motion for summary judgment if the nonmoving party who has the burden of proof at trial fails to make a showing sufficient to establish the existence of an element that is essential to that party’s case. See Muncie Power Prods., Inc. v. United Tech. Auto., Inc., 328 F.3d 870, 873 (6th Cir.2003) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).

In viewing the evidence, the Court must draw all reasonable inferences in favor of the nonmoving party, which must set forth specific facts showing that there is a genuine issue of material fact for trial. Id. (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)); Hamad v. Woodcrest Condo. Ass’n, 328 F.3d 224, 234 (6th Cir.2003).

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Bluebook (online)
60 F. Supp. 3d 828, 2014 U.S. Dist. LEXIS 160332, 2014 WL 6432707, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rutherlan-enterprises-inc-v-zettler-hardware-ohsd-2014.