Specialty Executives, Inc. v. KDH Def. Sys., Inc.

93 N.E.3d 114, 2017 Ohio 4399
CourtCourt of Appeals of Ohio, Fifth District, Morrow County
DecidedJune 12, 2017
DocketNo. 16CA0012
StatusPublished
Cited by2 cases

This text of 93 N.E.3d 114 (Specialty Executives, Inc. v. KDH Def. Sys., Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Ohio, Fifth District, Morrow County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Specialty Executives, Inc. v. KDH Def. Sys., Inc., 93 N.E.3d 114, 2017 Ohio 4399 (Ohio Super. Ct. 2017).

Opinion

Baldwin, J.

{¶ 1} Defendant-appellant KDH Defense Systems, Inc. appeals from the October 17, 2016 Journal Entry of the Morrow County Court of Common Pleas. Plaintiff-appellee Specialty Executives, Inc. has filed a cross-appeal.

STATEMENT OF THE FACTS AND CASE

{¶ 2} Appellant KDH Defense Systems, Inc. ("KDH"), which is located in North Carolina, is a designer and manufacturer of body armor that is used by the military and law enforcement. Appellee Specialty Executives, Inc., which is located in Morrow County, Ohio, is an employment recruiter *117that specializes in the defense industry.

{¶ 3} On or about December 15, 2011, appellant entered into a Placement Search Agreement with appellee. The Agreement provided that appellee would be compensated 25% of a hired candidate's first year contracted salary. The Agreement stated that it would "act as the legal and binding contract for all placement services between SE [appellee] and CLIENT [appellant]." The Agreement further stated that "CLIENT will be able to terminate this AGREEMENT with 10 days written notice remitted to SE [appellee] by CLIENT via certified mail," and that "SE will be able to terminate this Agreement with ten days written notice remitted to SE (sic) by CLIENT (sic) via certified mail." The Agreement also provided that it could be modified or amended by a writing signed by both parties. Moreover, the Agreement stated, in relevant part, as follows:

The AGREEMENT shall be construed under and in accordance with the laws of the State of Ohio. The venue of any litigation related hereto shall be in the applicable State or Federal courts in Morrow County, Ohio. In the event SE must pursue collection or legal efforts to obtain payment hereunder, SE shall be entitled to receive from CLIENT all of its cost and expenses related to the collection, both prior to and during litigation, including reasonable attorney fees and applicable finance charges. There is no provision provided in this contract for arbitration.
Appellee placed seven employees with appellant in accordance with such Agreement.

{¶ 4} On or about March 25, 2014, Travis Thomas, appellee's President, contacted David Herbener, appellant's President and CEO, via email to determine if he was interested in hiring Scott Wylie. In the e-mail, Thomas stated that if appellant was interested in hiring Wylie, who Thomas stated did not have a non-competition agreement with his current employer, appellee's fee would be 30% of his contracted first year salary. Thomas attached a copy of the Fee Agreement to the email.

{¶ 5} After appellant expressed an interest in hiring Wylie after interviewing him, Thomas sent an email to Herbener on April 18, 2014 stating, in relevant part, as follows:

{¶ 6} I would recommend the below listed schedule for the placement of Scott Wylie.

{¶ 7} 1) 6 month guarantee (if KDH meets scheduled payments and pays in full).

{¶ 8} 2) 30% of guaranteed salary 178K (SE's base fee for senior level placements).

{¶ 9} 3) 5 payments of $10,680.00. First payment due April 28th(Scott's Start Date). Each additional payment due on the 28th of each month.

{¶ 10} Thomas ended the email by stating that he could have the agreement drawn up and emailed to Herbener for his signature. Later on the same day, Herbener sent an email to Thomas providing that "I need you to get to 25% and we have a deal with all else the same as you listed below." In an email to Thomas from Herbener dated Monday, April 21, 2014, Herbener indicated that appellant would "go along with your 30% with the conditions that you noted below in your Friday email." The "Friday email" referred to was the email from Thomas dated April 18, 2014.

{¶ 11} On April 21, 2014 and May 22, 2014, appellee sent David Herbener copies of the Fee Agreement that contained Thomas' electronic signature. These versions were was more detailed than the *118earlier version and indicated that appellant would be invoiced $53,400.00, which is 30% of Wylie's alleged salary of $178,000.00.

{¶ 12} It was discovered shortly thereafter that Wylie's previous employer alleged that he was bound by a non-competition agreement. Appellant, through Herbener, still expressed interest in hiring Wylie. Wylie subsequently filed a lawsuit in August of 2014 against his former employer to resolve the non-competition agreement. The lawsuit was resolved on October 6, 2014 and dismissed on October 30, 2014. Appellant hired Wylie as memorialized in an Employment Agreement dated October 6, 2014. His base salary was $160,000.00 a year plus guaranteed commissions of no less than $2,000.00 a month for the first six months. On or about October 15, 2016, appellee sent appellant an invoice in the amount of $44,500.00 for Wylie's placement. Appellee on or about the same date, allegedly sent appellant an invoice in the amount of $53,400.00. Appellant refused to pay either of the invoices.

{¶ 13} Appellant never returned to appellee a signed version of the 2014 Fee Agreement.

{¶ 14} On November 4, 2014, appellee filed a complaint for breach of contract and unjust enrichment against appellant based upon the 2011 Agreement, demanding compensation in the amount of $44,500.00, which represents 25% of $178,000.00, attorney's fees, and interest. Appellee, in its complaint, noted that the 2011 Agreement stated, in relevant part, as follows: "This AGREEMENT shall be construed under and in accordance with the laws of the State of Ohio. The venue of any litigation related hereto shall be in the applicable State or Federal courts in Morrow County, Ohio." On January 5, 2015, appellant filed an answer to the complaint. Appellant, in its answer, claimed, in part, that the 2011 Agreement did not apply to Wylie's placement and that the Morrow County Court of Common Pleas was not a proper venue.

{¶ 15} On February 18, 2015, appellee filed a Motion for Summary Judgment against appellant. Appellant, on March 3, 2015, filed a combined Memorandum in Opposition to such motion and Motion for Summary Judgment, arguing that the 2011 Agreement did not apply to the Wylie placement and that, therefore, the trial court lacked personal jurisdiction over appellant.

{¶ 16} Appellee, on April 27, 2015, filed a Motion to Amend Its Complaint. Appellee sought to amend its complaint based on appellant's position that the 2011 Agreement did not apply because there were new negotiations between appellant and appellee. Appellee, in its motion, stated that "to the extent that it does not apply, then the contract sent to KDH on no less than two occasions after negotiations would govern the transaction. That latter contract actually contains terms more favorable to Specialty than the 2011 contract." Appellee, in its motion, stated, in relevant part, as follows:

The 2014 contract would have been referenced in and attached to the original Complaint filed in this action, but for some confusion on the part of the undersigned attorney regarding the sequence of events. Specifically, there had been another proposed contract sent to KDH at the beginning of the 2014 negotiations. But the terms of that contract had clearly been rejected by KDH. Thus, it was never attached. Recently the undersigned counsel became aware of the most-recent proposed contract (attached), whose terms were never rejected by KDH.

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Cite This Page — Counsel Stack

Bluebook (online)
93 N.E.3d 114, 2017 Ohio 4399, Counsel Stack Legal Research, https://law.counselstack.com/opinion/specialty-executives-inc-v-kdh-def-sys-inc-ohctapp5morrow-2017.