550 F.Supp.3d 500
S.D. Ohio2021Background
- In late 2012 David Hunter (deceased) contracted with Tri-State Coating, Inc. to apply Rhino Shield ceramic coating to his home; Tri-State used subcontractors (including Alex Dgebuadze and John Robertson) and salesperson Rudolph Pallone. A down payment was made and a completion certificate was signed in May 2013 with 10% withheld.
- Hunters submitted a punch list and complained of overspray, lack of primer, and other defects; Tri-State disputes the scope and timing of complained defects and contends it remedied issues and issued a 25-year manufacturer product warranty on June 25–27, 2013.
- Hunters previously sued related claims in Franklin County (filed 2014), obtaining some favorable rulings on CSPA/HSSA issues but later voluntarily dismissed some defendants; litigation and sanctions occurred in state court.
- After the state court granted partial summary judgment for Hunters on HSSA/CSPA issues, Hunters’ counsel emailed defendants’ counsel on June 9, 2017 stating “The Hunters hereby cancel the contract,” and later filed this federal action asserting CSPA, HSSA, breach of contract, misrepresentation, breach of warranties (including Magnuson-Moss), civil conspiracy, declaratory and alter-ego claims against Tri-State, its officers, AmCoat (manufacturer), and trade-name defendants.
- On summary judgment the district court: dismissed most claims and most defendants; held Tri-State violated HSSA/CSPA (three-day cancellation notice, subcontractor disclosure, and Indiana arbitration clause) but found Hunters had validly cancelled the contract under HSSA and thus are limited to a refund (no CSPA damages); granted res judicata in favor of Jim Williams; denied default judgment vs. Dgebuadze; granted summary judgment to AmCoat, AmCoat Technologies, Rhino Shield trade-name defendants, and on remaining common-law/tort and warranty claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Jim Williams is barred by res judicata | Williams already was sued twice in state court arising from same transaction; Hunters continued claims here are improper | Williams argued Ohio’s one-year service rule and two-dismissal rule produced an adjudication on the merits | Court: Williams’s claims barred by res judicata; summary judgment for Williams granted |
| Whether Tri-State (and others) violated HSSA/CSPA | Hunters alleged multiple statutory violations (including improper cancellation notice, failure to disclose subcontractors, unconscionable arbitration clause) | Defendants disputed some violations and disputed which entities were involved | Court: Tri-State violated HSSA/CSPA as to (1) deficient three-day cancellation notice, (2) failure to disclose subcontractors, and (3) unconscionable arbitration clause requiring Indiana arbitration; Hunters entitled to partial summary judgment on liability against Tri-State |
| Whether Hunters’ June 9, 2017 email cancelled the contract under HSSA and the available remedy | Hunters argued the email did not amount to election of remedies or effective cancellation | Defendants argued the email was an effective written cancellation under §1345.23(C) and thus Hunters elected HSSA remedy (refund) and cannot seek CSPA damages | Court: Email admissible and objectively effective; Hunters validly cancelled under HSSA; remedy limited to refund of all payments (no CSPA damages) |
| Whether AmCoat Industries / Dominique are liable under CSPA/HSSA | Hunters sought to hold AmCoat (manufacturer) liable as part of a Rhino Shield enterprise | AmCoat argued it had no direct consumer transaction with Hunters | Court: No evidence AmCoat engaged in consumer transaction; AmCoat and Dominique entitled to summary judgment on CSPA/HSSA claims |
| Whether breach of contract / contract remedies survive after cancellation | Hunters sought breach-of-contract relief and damages | Defendants argued cancellation under HSSA voided contractual remedies; contract warranties unenforceable after cancellation | Court: Once Hunters cancelled under HSSA, contract provisions unenforceable; breach-of-contract claims dismissed (summary judgment for Defendants) |
| Whether misrepresentation, warranty (including Magnuson–Moss), and related tort claims survive | Hunters alleged oral/written express and implied warranties, and tort misrepresentation based on product claims and application | Defendants invoked parol evidence, valid disclaimers, failure to provide written warranty notice/opportunity to cure, and that workmanship warranty is not Magnuson–Moss subject | Court: Misrepresentation claims barred where they duplicate contract claims; two-year workmanship warranty not covered by Magnuson–Moss and unenforceable after cancellation; 25-year product warranty claims fail for lack of written notice/opportunity to cure; summary judgment for Defendants on warranty/Magnuson–Moss claims |
| Whether alter-ego / joint-venture / civil-conspiracy theories attach liability to other defendants or trade-name entities | Hunters argued Rhino Shield was an enterprise and other individuals/entities were alter-egos or joint venturers | Defendants showed Tri-State lawfully used trade name; lack of evidence of unity of control, fraud, or joint venture; AmCoat Technologies dissolved | Court: No factual support for joint venture/alter-ego/conspiracy; summary judgment for Defendants (trade-name defendants treated as Tri-State where appropriate); AmCoat Technologies dismissed as long-defunct |
| Whether default judgment against Dgebuadze is proper | Hunters sought default judgment after Dgebuadze defaulted | Defendants noted liability theories against him were derivative of enterprise theory and other defendants remained contesting merits | Court: Amended complaint lacked sufficient specific allegations against Dgebuadze; because Hunters lost on merits for the enterprise theory, default judgment denied |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard and burdens)
- Anderson v. Liberty Lobby, 477 U.S. 242 (genuine issue for trial standard)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (requiring more than metaphysical doubt to defeat summary judgment)
- Garber v. STS Concrete Co., 991 N.E.2d 1225 (Ohio Ct. App. 2013) (HSSA three-day cancellation rules and CSPA interaction)
- Sisk & Associates, Inc. v. Committee to Elect Grendell, 917 N.E.2d 271 (Ohio 2009) (one-year service rule / instruction to clerk operates as dismissal)
- Grava v. Parkman Township, 653 N.E.2d 226 (Ohio 1995) (res judicata / claim preclusion principles)
- Evilsizor v. Becraft & Sons Gen. Contractors, Ltd., 806 N.E.2d 614 (Ohio Ct. App. 2004) (UCC may apply to paint/product-centered home improvement contracts)
- Minno v. Pro-Fab, Inc., 905 N.E.2d 613 (Ohio 2009) (standards for piercing corporate veil)
- Textron Financial Corp. v. Nationwide Mutual Insurance Co., 684 N.E.2d 1261 (Ohio Ct. App. 1996) (contract action precludes same tort claims when based on contract acts)