2018 Ohio 1811
Ohio Ct. App.2018Background
- Justin Doran, a commercial loan officer, signed an employment agreement with one-year non-compete and non-solicit covenants and later signed a Bank-Owned Life Insurance (BOLI) plan that also contained one-year post-separation restrictions intended to replace the employment agreement restrictions.
- Doran resigned May 9, 2016 to work for Columbus First; Heartland protested, sent threatening letters, and claimed Columbus First tortiously interfered.
- Doran and Columbus First sued for declaratory judgment (June 7, 2016) seeking a ruling on enforceability of the BOLI restrictions; Heartland counterclaimed for breach and tortious interference.
- Trial court (July 18, 2016) struck the non-compete clause as unreasonable and modified the non-solicit clause; Heartland’s counterclaims based on the stricken non-compete were dismissed.
- Heartland appealed but failed to post the $100,000 supersedeas bond required to stay the trial-court judgment; the judgment remained effective and the one-year restrictive period expired May 9, 2017.
- The court of appeals dismissed the appeal as moot because the contractual restrictions had expired, leaving no live controversy and no practical relief the appellate court could grant.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the appeal presents a live controversy after the one-year restrictive period expired | Doran/Columbus First: Restrictions expired May 9, 2017, so the issue is moot | Heartland: Reversal would revive its counterclaims (breach, tortious interference) and relief should be prospective | Held: Moot — restrictions expired and trial judgment stood during appeal (no bond posted), so no live controversy or practical relief exists |
| Whether an appellate court may prospectively extend expired restrictive covenants pending appeal | Doran/Columbus First: No; parties complied with effective judgment and no injunctions were sought | Heartland: Courts sometimes prospectively enforce or extend covenants when inequity or immediate competition justifies it | Held: Prospectively extending is inapplicable here — no injunction sought, no immediate competition, and litigants complied with judgment |
| Whether Heartland’s counterclaims survive despite expiration of covenant | Doran/Columbus First: Counterclaims dismissed when covenant struck; after expiration, breach/tort claims are moot | Heartland: Counterclaims could be revived if appellate reversal occurs | Held: Not preserved for appeal; Heartland did not assign error on counterclaims and did not secure stay, so claims cannot revive post-expiration |
| Whether failure to post supersedeas bond affects appeal | Doran/Columbus First: Failure to post meant trial judgment remained effective during appeal | Heartland: Reasons for not posting not a basis to maintain live controversy | Held: Failure to post bond meant judgment stayed was never in effect; the court relied on this to find mootness |
Key Cases Cited
- James A. Keller, Inc. v. Flaherty, 74 Ohio App.3d 788 (10th Dist. 1991) (courts should not decide abstract or moot questions; mootness deprives jurisdiction)
- Blood v. Nofzinger, 162 Ohio App.3d 545 (6th Dist. 2005) (a judgment remains effective during appeal unless properly stayed or superseded)
- United States v. W.T. Grant Co., 345 U.S. 629 (U.S. 1953) (when a case is moot, the defending party is entitled to dismissal)
- National Sanitary Supply Co. v. Wright, 644 N.E.2d 903 (Ohio 1994) (a covenant not to compete that expires by its own terms moots requests to enforce it)