2015 Ohio 3714
Ohio Ct. App.2015Background
- Hardin County Court of Appeals reversed a jury verdict in a dispute over chicken manure rights between LandTech and OFE/Trillium; judgment entries followed jury verdicts awarding LandTech roughly $2.585 million against each defendant and post-trial motions were denied.
- LandTech sued on a July 1, 2006 written contract (Ohio Fresh Eggs, LLC Contractor Outsourcing Agreement) alleging breach, breach of implied contracts, and related tort/estoppel claims; later LandTech dismissed most counts, leaving only breach of the Agreement (Count One).
- The core dispute is whether the contract is for sale of goods (manure) under the UCC or for services; the quantity term in the agreement is contested and central to enforceability.
- The trial court denied a preliminary injunction and later denied summary judgment; the case went to trial in late October 2014; the jury found for LandTech against OFE and Trillium, awarding damages; post-trial motions for JNOV and certification were denied.
- The appellate court sustained the first assignments of error of OFE and Trillium, holding the Agreement is unenforceable for lack of an essential quantity term, thus not enforceable under the UCC, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the 2006 Agreement enforceable given its quantity term? | LandTech argues the quantity term exists or is implied. | OFE/Trillium argue the contract lacks a definite quantity and is illusory. | Unenforceable; lacks an enforceable quantity term under UCC. |
| Does the Agreement constitute a sale of goods under the UCC or a sale of services? | LandTech contends it is a sale of manure (goods) with brokers’ services incidental. | OFE/Trillium contend it is for services or mixed, not solely goods. | Governing under UCC as a sale of goods. |
| If illusory, was JNOV or summary judgment appropriate? | LandTech contends issues of contract formation remained. | OFE/Trillium assert no genuine issues; contract illusory. | JNOV/summary judgment granted for defendants; contract unenforceable. |
Key Cases Cited
- Tubelite Co., Inc. v. Original Sign Studio, Inc., 176 Ohio App.3d 241 (Ohio App. 2010) (UCC quantity term requirements; analysis of contract formation under 2-204; predominant-factor test guidance)
- Mueller v. All-Temp Refrig., Inc., 2014-Ohio-2718 (Ohio Supreme Court 2014) (Predominant-factor test for goods vs. services contracts; when no factual dispute, court may decide applicability of UCC)
- Urban Industries of Ohio, Inc. v. Tectum, Inc., 81 Ohio App.3d 768 (Ohio App. 1992) (Predominant purpose and UCC applicability in mixed contracts)
- Allied Erecting & Dismantling Co. v. Ohio Edison Co., 2015-Ohio-2328 (7th Dist. Mahoning No. 13 MA 40) (Predominant purpose; absence of exclusive terms affecting contract classification)
- Orchard Group, Inc. v. Conrad, 135 F.3d 429 ((6th Cir. 1998)) (Exclusivity in a requirements contract; absence of exclusivity defeats classification)
- Jackson Tube Serv., Inc. v. Camaco LLC, 2013-Ohio-2344 (Ohio 2013) (Exclusivity and terms in a requirements/output contract; interpretation under Ohio law)
- H & M Landscaping Co., Inc. v. Abraxus Salt, L.L.C., 2010-Ohio-4138 (Ohio 8th Dist.) (Quantity term requirements under UCC; illusory terms and enforceability)
- Oglebay Norton Co. v. Armco, Inc., 52 Ohio St.3d 232 (Ohio 1990) (Filling gaps in contracts when parties intend to be bound; limits of filling quantity gaps)