2022 Ohio 2185
Ohio Ct. App.2022Background
- Lima Refining Company (LRC) and Linde Gas North America, LLC (LGNA) executed a supply agreement (Dec. 17, 2013) defining “Product” to include liquid and/or gaseous nitrogen; the contract contains a New York choice‑of‑law clause.
- The contract’s Delivery Requirements specify gaseous nitrogen at 165,000 scf/hr (±5%) and the pipeline supply as "as available," and Section 1.2 limits Linde’s obligations to those Delivery Requirements.
- Section 1.2.1 provides that any "Excess Product" (above Delivery Requirements) will be supplied only on an "as available" basis and only if not otherwise committed to other customers; the customer may procure substitutes when Linde cannot provide excess.
- In 2021 LRC demanded gaseous nitrogen in excess of 165,000 scfh and 250,000 scfh of liquid nitrogen; LGNA declined, asserting no contractual obligation to deliver those amounts.
- LRC sued for breach of contract and declaratory relief; the trial court granted LGNA’s Civ.R. 12(B)(6) motion to dismiss all claims. LRC appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether LGNA breached by not supplying gaseous nitrogen above 165,000 scfh | LRC: contract and communications show a right to the excess gas it demanded | LGNA: contract limits obligations to Delivery Requirements; excess is only "as available" and only if not committed to others | Court: Dismissal affirmed — complaint lacks allegations that the demanded excess was available or not committed elsewhere, so no plausible breach pleaded |
| Whether LGNA breached by not supplying 250,000 scfh of liquid nitrogen | LRC: Product includes liquid N2 and past practice supports its demand | LGNA: Delivery Requirements define Nitrogen as gaseous and no set liquid quantity is guaranteed; excess liquid only "as available" | Court: Dismissal affirmed — contract contains no obligation to deliver that specific liquid amount and complaint fails to allege availability/not‑committed facts |
| Whether the declaratory judgment claim presented a justiciable controversy | LRC: dispute over each party’s contractual obligations justifies declaratory relief | LGNA: no justiciable controversy because LRC cannot show a contractual right to the demanded amounts | Court: Dismissal affirmed — because breach claims fail, there is no substantial legal interest that a declaratory judgment would practically resolve |
Key Cases Cited
- Arnett v. Precision Strip, Inc., 972 N.E.2d 168 (standards for Civ.R. 12(B)(6) dismissal)
- LeRoy v. Allen, Yurasek & Merklin, 872 N.E.2d 254 (pleading standard: cannot state claim if no set of facts entitles relief)
- York v. Ohio State Highway Patrol, 573 N.E.2d 1063 (plaintiff may recover if any set of facts consistent with complaint allows recovery)
- Sears v. Sears, 138 A.D.3d 1401 (contract interpretation: give fair meaning to all language to effect parties’ expectations)
- Patsis v. Nicolia, 120 A.D.3d 1326 (clear, complete, unambiguous written agreements are enforced as written)
- Arnott v. Arnott, 972 N.E.2d 586 (standard of review for dismissal of declaratory judgment claims)
- Chanos v. MADAC, LLC, 74 A.D.3d 1007 (declaratory judgment requires a real dispute affecting substantial legal interests)