Volunteer Energy Services, Inc. v. Option Energy, LLC

579 F. App'x 319
CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 5, 2014
Docket13-1035, 13-1087
StatusUnpublished
Cited by35 cases

This text of 579 F. App'x 319 (Volunteer Energy Services, Inc. v. Option Energy, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Volunteer Energy Services, Inc. v. Option Energy, LLC, 579 F. App'x 319 (6th Cir. 2014).

Opinion

BOGGS, Circuit Judge.

This case involves a contract dispute between Volunteer Energy Services, Inc. (“Volunteer”), a natural-gas supplier that is incorporated and has its principal offices *321 in Ohio, and Option Energy, LLC (“Option”), an alternative-energy broker that is organized in Michigan. The two companies entered into an Agent Agreement (“Agreement”) on February 2, 2009, in which Option agreed to procure customers for Volunteer in exchange for commissions. During the life of the contract, Volunteer learned that Option was soliciting Volunteer customers and transferring them over to another supplier. Volunteer, in turn, withheld commissions due Option. Option eventually terminated the Agreement, effective April 21, 2011.

On May 27, 2011, Volunteer sued Option in federal district court in Michigan, claiming that Option breached its contract with Volunteer by transferring Volunteer’s customers over to a competitor, and that Option and two of its executives, including its owner, president, and CEO Jonathan Rockwood, tortiously interfered with Volunteer’s business relationships, in violation of Michigan law. Option countersued, claiming, as relevant to this appeal, that Volunteer breached the contract by failing to pay Option the commissions that it had earned, and that, in so doing, Volunteer violated the Michigan Sales Representative Commission Act (“SRCA”), Mich. Comp. Laws § 600.2961.

The parties filed cross-motions for summary judgment, and the district court ruled that a key disputed provision in the Agreement — the non-solicitation/non-eom-pete clause (“non-solicitation clause”) — was ambiguous. In particular, it was unclear whether the clause prohibited Option from soliciting Volunteer’s customers a) both during the term of the Agreement and for a period of time following its termination or, alternatively, b) only following the termination of the Agreement. The court held a bench trial to resolve the ambiguity, which it resolved in favor of Volunteer, finding that, given the parties’ conduct and the communications between them during the course of their business relationship, the parties intended that the non-solicitation provision also apply during the term of the Agreement. Option thus breached the contract by transferring some of Volunteer’s customers over to a competitor while the Agreement was still in effect. The district court awarded $509,000 in damages to Volunteer for lost profits. The court rejected Volunteer’s tortious-inter-ference claims, however, as unsupported by the evidence: Volunteer “ha[d] shown nothing more than a breach of contract by the corporation, not a separate tort of tortious interference.” Volunteer Energy Servs., Inc. v. Option Energy, LLC, No. 1:11-CV-554, 2012 WL 6084158 at *10 (W.D.Mich. Dec. 6, 2012), judgment amended, 2013 WL 1500433 (WJD.Mich. Apr. 10, 2013).

In addition, the district court found that Volunteer, too, had breached the contract by failing to pay the commissions that it owed Option. In addition, the court found that Ohio’s sales-commission statute, Ohio Rev.Code § 1335.11, rather than Michigan’s SRCA, properly applied to Option’s claim for unpaid commissions, and, in accordance with the Ohio statute, the court awarded Option $159,000 — treble damages for the commissions not paid. Because the contract required Volunteer to continue to make certain payments following the termination of the Agreement, the court also ordered, in an amended judgment, that Volunteer continue to make those commission payments as they come due.

Both sides appealed. Option asserts two claims. First, Option claims that it was entitled to summary judgment on the breach-of-eontract claim because the non-solicitation clause was unambiguous: it applied only after the termination of the Agreement and only to Volunteer customers that had not previously been recruited *322 by Option. Second, Option claims that the district court erred in awarding Volunteer anything other than nominal damages because Volunteer failed to prove lost profits with reasonable certainty. In its cross-appeal, Volunteer argues that it adequately proved its tortious-interference claims below, that Option was not entitled to treble damages for the unpaid commissions, and that Option had forfeited or waived any claim to ongoing commission payments.

We affirm the district court in all respects.

I

A

Option’s first claim is that the contract’s non-solicitation clause was unambiguous and prevented Option from soliciting Volunteer’s customers only once the Agreement was terminated.

Under Ohio law, “[t]he role of courts in examining contracts is to ascertain the intent of the parties.” Savedoff v. Access Grp., Inc., 524 F.3d 754, 763 (6th Cir.2008) (internal quotation marks omitted). “[C]ourts presume that the intent of the parties to a contract resides in the language they chose to employ in the agreement.” Shifrin v. Forest City Enterprises, Inc., 64 Ohio St.3d 635, 597 N.E.2d 499, 501 (1992). The interpretation of that language, including the determination of whether it is ambiguous, is a matter of law for initial determination by the court. Savedoff, 524 F.3d at 763. “Contractual language is ambiguous only where its meaning cannot be determined from the four corners of the agreement or where the language is susceptible of two or more reasonable interpretations.” Ibid, (citations and internal quotation marks omitted). “[W]here the written contract is standardized and between parties of unequal bargaining power, an ambiguity in the writing will be interpreted strictly against the drafter and in favor of the nondrafting party.” Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 797 N.E.2d 1256, 1262 (2003). Otherwise, “[i]t is generally the role of the finder of fact to resolve ambiguity.” Ibid.

Since the question whether the contract was ambiguous is a question of law, we review the district court’s ruling on the issue de novo.

The non-solicitation clause in the Agreement reads, in relevant part, as follows:

For the term of this Agreement and for the longer of (a) one year after the Termination Date (defined below) or (b) to Agent following termination, as set forth in Section 10, Agent agrees that it will not (1) employ any VESI [Volunteer Energy Services, Inc.] employee without VESI’s prior written consent or solicit or attempt to induce any VESI employee to become its employee or the employee of any VESI competitor or customer; and/or (2) solicit existing customers at the time of the termination date of VESI (including those of VESI’s affiliates) in the Territory regarding the purchase of natural gas by any such customer.

(emphasis added).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
579 F. App'x 319, Counsel Stack Legal Research, https://law.counselstack.com/opinion/volunteer-energy-services-inc-v-option-energy-llc-ca6-2014.