Gracetech Inc. v. Perez
2012 Ohio 700
Ohio Ct. App.2012Background
- Gracetech provided security services to Dave’s Supermarket in the Cleveland area; Grace died July 16, 2007, transferring Gracetech shares to Grace’s mother Dorr.
- Perez, an independent contractor for Gracetech since 2000, signed a noncompete prohibiting work for Dave’s for one year after leaving Gracetech.
- After Grace’s death, Perez asserted control over Gracetech’s daily operations as a “go-to” person, with disputed authority and no clear limits.
- Perez began organizing Precision Security Agency and began providing security services to Dave’s in August 2007 while Gracetech’s licensing process continued.
- Dave’s began dealing with Precision; Gracetech employees joined Precision; a complaint seeking enforcement of the noncompete was filed, though no hearing occurred on injunctive relief.
- The trial court found the noncompete enforceable; a jury awarded $2,500 on breach of contract, though most claims against Perez/Precision were resolved against appellants; the court denied post-trial motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court erred in denying summary/directed verdict/JNOV on fiduciary duty and business interference | Perez owed a fiduciary duty and interfered with Gracetech’s relationships | No fiduciary relationship; actions were lawful competition or at most at-will interference | Directed verdict for liability on fiduciary duty and business interference was improper; remand for damages |
| Whether the trial court erred in denying directed verdict/JNOV on tortious interference with contract | Perez knew noncompete agreements and improperly induced breaches | Privilege or lack of clear knowledge about noncompetes defeats liability | No reversible error; issues of fact remained regarding awareness of noncompete and ensuing interference; remand for damages |
| Whether the trial court erred by sua sponte awarding liquidated damages on breach of contract | Liquidated damages were misapplied; actual damages should be considered | Damage issue was properly sent to the jury; liquidated damages were not exclusive | Assignment moot; actual damages pursued at trial; no reversible error |
| Whether the denial of post-trial motions was proper | Errors warrant JNOV or new trial | No error in the rulings | Remand dictated for liability and damages; some issues resolved in appellants’ favor |
Key Cases Cited
- Gordon v. Dziak, 2008-Ohio-570 (8th Dist. 2008) (affidavits cannot create fact disputes contradicting prior testimony)
- Fred Siegel Co., L.P.A. v. Arter & Hadden, 85 Ohio St.3d 171 (1999-Ohio-260) (privilege in interfering with a competitor's contract)
- Lakeshore Corp. v. Xam, Inc., 8th Dist. No. 79091 (2002-Ohio-20) (damages and jury consideration in contract breaches)
- Blon v. Bank One, Akron, 35 Ohio St.3d 98 (1988) (fiduciary relationship concepts and de facto duties)
- Chickey v. Watts, 2005-Ohio-4974 (10th Dist. 2005) (death of shareholder does not dissolve a corporation)
- Gordon v. Dziak, 2008-Ohio-570 (8th Dist. 2008) (disallowing improper fact disputes created by inconsistent testimony)