Blain's Folding Serv., Inc. v. Cincinnati Ins. Co.
109 N.E.3d 177
Ohio Ct. App.2018Background
- Blain’s Folding Service sued DANE Contractors after DANE’s alleged failure to install a dedicated power source for a cutting machine, causing damage and delays; Blain’s claimed lost profits from an asserted three‑year job with AGS Custom Graphics (AGS).
- Blain’s sought damages for lost profits (~$350,000/year), delay, increased costs, and lost future accounts; DANE moved for summary judgment arguing statute of frauds and speculative damages.
- The trial court granted summary judgment for DANE without opinion; Blain’s appealed.
- On appeal, the court addressed whether DANE waived the statute of frauds defense by not pleading it and whether Blain’s proved lost profits with reasonable certainty.
- Court found DANE, as a nonparty to the alleged oral contract between Blain’s and AGS, could not be required to invoke or defend on statute‑of‑frauds grounds and that statute‑of‑frauds was not a proper basis for summary judgment.
- The court affirmed summary judgment on alternate grounds: Blain’s failed to show a binding multi‑year contract with AGS and failed to prove lost profits with the requisite reasonable certainty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DANE waived statute of frauds by not pleading it | DANE did not plead statute of frauds; thus it waived the defense | Statute of frauds bars enforcement of oral multi‑year agreements; DANE asserted it | Court: DANE had no obligation to plead it because a nonparty cannot invoke statute as a sword; statute‑of‑frauds issue was not a proper basis for summary judgment against DANE |
| Whether the alleged three‑year contract between Blain’s and AGS existed | Blain’s: AGS agreed to a three‑year project and lost profits are recoverable | DANE: No enforceable three‑year contract; AGS denied any such contract; thus lost profits are speculative | Court: Evidence showed AGS did not have a three‑year contract; Blain’s had only hope to bid work; no contract established |
| Whether lost profits were proven with reasonable certainty | Blain’s: Expert calculated lost profits from historical margins to quantify loss | DANE: Expert opinion was too general, not tied to AGS work; damages speculative | Court: Expert based on general company margins, not AGS‑specific work; lost profits too speculative and not shown with reasonable certainty |
| Whether negligence claim survived summary judgment due to damages | Blain’s: Negligence caused lost business and profits | DANE: No admissible evidence of damages from negligence | Court: Negligence claim fails without proof of actual damages; summary judgment proper |
Key Cases Cited
- FirstMerit Bank, N.A. v. Inks, 138 Ohio St.3d 384, 7 N.E.3d 1150 (2014) (statute of frauds bars enforcement of oral agreements not to be performed within one year)
- Texeramics v. United States, 239 F.2d 762 (5th Cir.) (statute‑of‑frauds defense is personal to contracting parties)
- Bell v. Horton, 113 Ohio App.3d 363, 680 N.E.2d 1272 (1996) (discussing enforceability of oral real‑property agreements in tortious‑interference context)
- Charles R. Combs Trucking, Inc. v. Internatl. Harvester Co., 12 Ohio St.3d 241, 466 N.E.2d 883 (1984) (elements for recoverable lost profits in contract cases)
- Gahanna v. Eastgate Properties, Inc., 36 Ohio St.3d 65, 521 N.E.2d 814 (1988) (lost profits are remote or speculative if not shown with reasonable certainty)
- Legros v. Tarr, 44 Ohio St.3d 1, 540 N.E.2d 257 (1989) (limitations on third‑party invocation of defenses tied to contracting parties)