Lamson & Sessions Company v. William H. Peters
576 F. App'x 538
| 6th Cir. | 2014Background
- Lamson & Sessions Co. owned Youngstown Steel Door (YSD) which carried long-term retiree, health care, and environmental liabilities.
- In 1988 YSD was sold to Youngstown Steel Door Industries, Inc. (YSDI) formed by former executives Mundinger and Peters; Dennison from Packer Thomas advised on audits.
- The Purchase Agreement excluded liabilities from pending retiree-class actions; Lamson was not a party to it.
- Two Settlement Agreements (Aug. 31, 1988) required YSD to pay retiree benefits; Lamson guaranteed YSD’s obligations; Lamson guaranteed Youngstown Steel Door’s obligations.
- From 1989–2003 YSD paid benefits under the settlements; in 2001 YSD distributed about $4 million to shareholders including Mundinger and Peters; 2002 YSD spun off Triax-YSD Inc. to the same shareholders.
- In 2003 YSD defaulted on retiree payments; Lamson loaned funds to YSD secured by mortgage to continue payments; YSD later foreclosed in 2004, assets sold, Lamson’s liens released, and Lamson assumed retiree payments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether YSD breached the Purchase or Settlement Agreements | Lamson claims breach of contract via default on retiree payments under agreements. | Purchase excludes retiree-liabilities; Settlement imposes payments but no indemnity/reimbursement obligation to Lamson or Youngstown Steel Door. | No breach; no enforceable obligation to reimburse for defaulted payments. |
| Whether Lamson stated a tortious interference claim | Lamson alleges Mundinger and Peters tortiously induced breach by causing default on benefits. | No breach of contract shown, so no interference. | Failed; no breach proven, so no tortious interference. |
| Whether Lamson can recover on a quasi-contract theory | Lamson argues implied-by-law reimbursement from YSD for payments under guaranty. | Waived quasi-contract argument; even if considered, cannot interfere with a quasi-contract. | Waived; alternatively, cannot support tortious interference with a quasi-contract. |
| Whether Lamson can recover on unjust enrichment | Lamson conferred loans to YSD; defendants benefited; unjust enrichment should be recognized. | Existence of express promissory notes and repayment bars unjust enrichment. | Express contract and full repayment foreclose unjust enrichment. |
Key Cases Cited
- Doner v. Snapp, 98 Ohio App.3d 597 (Ohio Ct. App. 1994) (breach of contract elements; pleadings sufficient under implied conduct)
- Hummel v. Hummel, 133 Ohio St.520 (Ohio 1938) (contracts implied in law (quasi-contract) defined)
- Gross v. Fizet, No. 98-364 (Ohio App. 1999) (constructive contracts and quasi-contract notions)
- Mutual Fin. Co. v. Politzer, 21 Ohio St.2d 177 (1970) (implied reimbursement obligation for guarantor)
- Frank Lerner & Assoc., Inc. v. Vassy, 74 Ohio App.3d 537 (1991) (implied indemnity concepts in guaranty contexts)
- Nat’l Sur. Corp. v. Seward, 31 Ohio App.3d 206 (1928) (guarantor as contract creditor for reimbursement)
- Ullmann v. May, 147 Ohio St. 468 (1947) (unjust enrichment limitations; return of benefits not unjust where return is contractually due)
- Hambleton v. R.G. Barry Corp., 12 Ohio St.3d 179 (1984) (unjust enrichment requires no unjust retention where there is agreed return)