Bright Future Partners, Inc. v. Proctor & Gamble Distrib., L.L.C.
2017 Ohio 4145
| Ohio Ct. App. | 2017Background
- Bright Future Partners, Inc. and Anne Chambers filed a prelitigation discovery complaint seeking production of documents from Procter & Gamble Distributing, LLC under R.C. 2317.48 and Civ.R. 34(D). Chambers signed the underlying sale contract as Bright Future’s president but not individually.
- The underlying contract contains a detailed dispute-resolution clause requiring good-faith negotiation, then arbitration, and specifies that (pre-arbitration) there is to be no discovery and that arbitration will allow discovery only if the arbitrator finds a substantial, demonstrable need.
- P&G moved to dismiss under Civ.R. 12(B)(6) (arguing failure to state a claim) and alternatively moved to stay the proceedings pending arbitration. The trial court denied the motions and issued an entry setting a deadline for P&G to respond to the discovery requests.
- P&G appealed; the appellate court first considered whether it had jurisdiction to review the denial of the motion to dismiss and the scheduling/response entry.
- The court held it lacked jurisdiction to review the denial of the motion to dismiss and the scheduling entry because neither was a final order, but it did treat the denial of the stay pending arbitration as a final, appealable order under R.C. 2711.02(C).
- On the merits of the arbitration issue, the court concluded the contract’s arbitration clause (which required negotiation then arbitration of arbitrability and disallowed pre-arbitration discovery) encompassed the discovery dispute, so the trial court erred in denying the stay; the matter was remanded for a stay pending arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the appellate court has jurisdiction to review denial of Civ.R. 12(B)(6) motion | Bright Future/Chambers treated complaint as discovery action under Civ.R. 34(D) (or R.C. 2317.48) and opposed dismissal | P&G argued denial of 12(B)(6) was reviewable | Denial of motion to dismiss is not a final order; appellate court lacks jurisdiction to review that ruling |
| Whether the appellate court has jurisdiction to review the trial court’s scheduling entry requiring P&G to respond to discovery requests | Plaintiffs argued the entry effectively compelled production and was reviewable | P&G argued the entry was final enough to review | Entry was a scheduling/deadline order, not an order compelling discovery; not final and not reviewable |
| Whether the trial court erred by denying P&G’s motion to stay proceedings pending arbitration | Bright Future/Chambers argued discovery-only claims generally fall outside arbitration and that Chambers (as a non-signatory individual) is not bound | P&G argued the dispute (including whether discovery is proper) is covered by the contract’s negotiation/arbitration clause and includes arbitrability issues; arbitration should stay proceedings | The dispute-resolution clause explicitly required negotiation then arbitration of arbitrability and barred pre-arbitration discovery; court erred in denying the stay—remanded to stay for arbitration |
| Whether a nonsignatory plaintiff (Chambers individually) can avoid arbitration by suing in individual capacity | Chambers argued she is a third-party beneficiary and not bound by arbitration provisions | P&G argued allowing avoidance would undermine arbitration policy; nonsignatory claims covered by arbitration stay where related to arbitrable issues | Even if Chambers is a nonsignatory, claims involving signatory agreements will be stayed when an arbitrable issue is identified; stay affirmed as to overall proceedings |
Key Cases Cited
- Chef Italiano Corp. v. Kent State Univ., 44 Ohio St.3d 86 (Ohio 1989) (final-order/finality principles)
- Poulos v. Parker Sweeper Co., 44 Ohio St.3d 124 (Ohio 1989) (limits on actions under R.C. 2317.48)
- Polikoff v. Adam, 67 Ohio St.3d 100 (Ohio 1993) (denial of motion to dismiss generally not final)
- Ignazio v. Clear Channel Broadcasting, Inc., 113 Ohio St.3d 276 (Ohio 2007) (Ohio policy strongly favors arbitration)
- Aultman Hosp. Assn. v. Community Mut. Ins. Co., 46 Ohio St.3d 51 (Ohio 1989) (plain-language contract interpretation)