Shaw Steel, Inc. v. Ronfeldt Mfg., L.L.C.

2016 Ohio 1117
CourtOhio Court of Appeals
DecidedMarch 17, 2016
Docket102665
StatusPublished
Cited by10 cases

This text of 2016 Ohio 1117 (Shaw Steel, Inc. v. Ronfeldt Mfg., L.L.C.) 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
Shaw Steel, Inc. v. Ronfeldt Mfg., L.L.C., 2016 Ohio 1117 (Ohio Ct. App. 2016).

Opinion

[Cite as Shaw Steel, Inc. v. Ronfeldt Mfg., L.L.C., 2016-Ohio-1117.]

Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINION No. 102665

SHAW STEEL, INC.

PLAINTIFF-APPELLANT

vs.

RONFELDT MANUFACTURING, L.L.C.

DEFENDANT-APPELLEE

JUDGMENT: AFFIRMED

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-13-802306

BEFORE: Laster Mays, J., Jones, A.J., and Celebrezze, P.J.

RELEASED AND JOURNALIZED: March 17, 2016 ATTORNEYS FOR APPELLANT

Donald N. Jaffe Shawn W. Maestle Weston Hurd, L.L.P. Tower at Erieview 1301 East 9th Street, Suite 1900 Cleveland, Ohio 44114

ATTORNEYS FOR APPELLEE

Peter A. Dewhirst Larry E. Yunker Lyden, Chappell & Dewhirst, Ltd. 5565 Airport Highway, Suite 101 Toledo, Ohio 43615

Jonathan M. Hanna Lyden, Chappell & Dewhirst, Ltd. 5470 Main Street, Suite 300 Sylvania, Ohio 43560 ANITA LASTER MAYS, J.:

{¶1} Plaintiff-appellant Shaw Steel, Inc. (“Shaw”) challenges the trial court’s judgment

awarding damages to Shaw in the sum of $68,500.37, in its complaint on account for unpaid

invoices against defendant-appellee Ronfeldt Manufacturing, L.L.C. (“Ronfeldt”), and awarding

$83,695.24 to Ronfeldt on its counterclaims for breach of contract and breach of warranties.

The net effect of the damages award is a final judgment of $15,194.87 against Shaw. After a

thorough review of the record, we affirm the trial court’s decision.

I. BACKGROUND AND FACTS

{¶2} Shaw is a metal supplier who has provided speciality steel products to Ronfeldt,

a steel parts fabricator, for 15 years. Ronfeldt issued purchase orders 15523 dated April 17,

2012, 15677 dated June 13, 2012, and 15769 dated July 16, 2012 (“Orders”) to Shaw. The

Orders contained quality specifications, grade specifications, chemical properties, and

mechanical properties required for the steel.

{¶3} The steel was purchased to manufacture high pressure filter assemblies for Ronfeldt

customers Pall, Inc. (“Pall”) and Donaldson, Inc. (“Donaldson”). Shaw provided certifications

with the shipments that the steel complied with specifications.

{¶4} On October 11, 2012, Donaldson expressed concerns to Ronfeldt about whether

the steel met the required specifications. On October 12, 2012, Ronfeldt asked that Shaw

provide verification of compliance with the yield and strength test results. While awaiting a

response from Shaw, Ronfeldt had a sample tested by Veltec Laboratories (“Veltec”). Ronfeldt

received the results on October 17, 2012 that confirmed the steel did not meet specifications.

Ronfeldt immediately notified Shaw and forwarded a sample of the steel. {¶5} Shaw had the sample tested by Steel Testing Laboratory and the test results were

dated October 24, 2012. On November 1, 2012, Shaw informed Ronfeldt that its laboratory test

confirmed the noncompliance findings as evidenced by Shaw’s November 1, 2012 corrective

action report. (Def. exhibit No. 14.)

{¶6} Donaldson elected to accept all products manufactured with the steel. Pall

accepted the parts that it had already incorporated into products and sold. Pall rejected and

charged back the nonconforming goods, 6,727 units, on November 20, 2012. (Def. exhibit Nos.

12n, 12r, 20.)

{¶7} On November 15, 2012, Ronfeldt notified Shaw that it required conforming steel

to remanufacture the Pall parts, but Shaw indicated that it could not locate replacement steel

(Def. exhibit No. 25, Testimony of Troy Williams). On November 20, 2012, Ronfeldt issued its

final material rejection report. (Def. exhibit No. 16.) The cost to remanufacture the parts was

$85,500.17 ($12.71 per unit for 6,727 units), $1,343.31 for return shipping of the rejected

products, with a scrap credit of $3,148.24, resulting in a net amount of $83,695.24. There were

no lost sales as a result.

{¶8} Shaw and Ronfeldt engaged in several unrelated transactions until February 2013 for

the sum of $68,500.37 (the “2013 Invoices” and “2013 Purchase Orders”). The invoices for the

noncompliant steel were still outstanding. On February 11, 2013, Shaw refused to fill pending

purchase orders until Ronfeldt paid back invoices. (Def. exhibit No. 18.)

{¶9} On February 25, 2013, Ronfeldt filed suit for breach of contract and warranties in

the Lucas County Court of Common Pleas. On February 28, 2013, Shaw filed suit against

Ronfeldt for the unpaid 2013 Invoices in the Cuyahoga County Court of Common Pleas.

Ultimately, the parties agreed to proceed in Cuyahoga County where Ronfeldt filed a counterclaim for damages related to the 6,727 rejected parts. A bench trial ensued. The trial

court granted Shaw’s uncontested motion for a directed verdict on the 2013 Invoices, resulting in

a judgment of $68,500.37.

{¶10} The trial court proceeded to entertain Ronfeldt’s counterclaim for the

remanufacturing costs, plus return shipping, less scrap, totaling $83,695.24. Shaw denied

liability for 40 percent of the claimed damages arguing that, when Donaldson contacted Ronfeldt

regarding possible noncompliance of the steel on October 11, 2012, Ronfeldt was on notice that

the steel may not be conforming. On October 17, 2012, Shaw argued that Ronfeldt had actual

knowledge that the steel was nonconforming because it had received the Veltec lab results.

{¶11} As a result, Shaw posited that, as of the October 10 to October 17, 2012 time

period, only 4,104 units of the 6,727 noncompliant units had been manufactured and delivered.

(Tr. 198, 298.) Therefore, Ronfeldt knowingly manufactured and delivered 2,623 defective

parts to Pall on October 26 and October 29, 2012. Ronfeldt’s acts constituted an intervening

cause to Shaw’s negligence so that Ronfeldt was not entitled to consequential damages for the

2,623 parts (at $12.71 per part, $33,338.33).

{¶12} Ronfeldt explained at trial that the steel was placed through a 12- step process

prior to final fabrication for shipment to Ronfeldt’s customers. The process consisted of: (1)

outblank; (2) wash and wax; (3) first draw; (4) second draw; (5) anneal; (6) wax; (7) third draw;

(8) final draw; (9) edge off and trim; (10) flare; (11) lathe; and (12) wash, oil, and pack. (Def.

exhibit No. 17.)

{¶13} A portion of the processing was conducted by third party vendors. Under

expedited conditions, the process took at least three weeks to complete. (Def. exhibit No. 12L; tr.

156-157.) Product batches were released by Ronfeldt upon completion to Donaldson and Pall. Shipments to Pall took place on June 5, 28, 29; September 14, October 26, and October 29, 2012.

(Joint exhibit No. 1.)

{¶14} Ronfeldt rejected Shaw’s assertion that it began the three week, 12-step process

after it received notice of a possible issue in October 2012. Ronfeldt did state that it sought

confirmation from Shaw before notifying Donaldson and Pall of the noncompliance. On

November 1, 2012, Ronfeldt contacted Shaw to inquire about the status of its testing. Shaw

confirmed that the steel did not meet specifications. Ronfeldt then notified Donaldson and Pall

of the noncompliance. As a result, Ronfeldt states it acted reasonably. Ronfeldt also offered

that there was no evidence that Ronfeldt’s damages would not have been even greater if

processing was frozen in October 2012.

A. Trial Court’s Initial Findings of Fact and Conclusions of Law

1. 2013 Invoices

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