2020 Ohio 7009
Ohio Ct. App.2020Background
- M&P purchased two 10-ton cranes with remote-control upgrades from Konecranes in 2013; on October 4, 2013 an employee was injured during operation and M&P alleges the crane/remote malfunctioned.
- Konecranes inspected, replicated the malfunction, removed the remote control from M&P's site, and allegedly refused to return it unless M&P signed a general release; M&P refused; the remote was returned years later and remained defective according to M&P.
- M&P sued (refiled in 2019) for breach of express and implied warranties and breach of contract seeking compensatory and consequential damages (lost employee hours, lost productivity, WC payments, increased premiums, etc.).
- The written purchase agreement (attached to the complaint) included a conspicuous Standard Warranty that disclaimed all implied warranties and a conspicuous limitation-of-damages clause excluding consequential damages and capping liability at the purchase price.
- The trial court granted Konecranes' Civ.R. 12(B)(6) motion, holding the contract barred M&P's claimed consequential damages; the court dismissed without prejudice.
- The court of appeals reversed, holding M&P pleaded facts that, if proved, could support recovery of direct damages (e.g., loss of the remote) and remanded for further proceedings while finding the limitation clause enforceable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether M&P's complaint states a claim for compensable damages despite the contract's disclaimers | M&P pleaded both direct (loss of remote/use) and consequential damages; allegations and exhibits show direct loss (cost of removed remote) | Contract expressly disclaims implied warranties, excludes consequential damages and caps liability at the purchase price | Reversed dismissal — M&P plausibly alleged direct damages that survive 12(B)(6); case remanded for damages inquiry (consequential damages excluded) |
| Whether a valid contract existed (meeting of the minds) | No valid contract because the product did not function as promised so no meeting of minds | Parties signed a written commercial agreement; signing establishes meeting of minds between competent commercial parties | Contract exists; allegations in complaint treat the attached agreement as the parties' contract |
| Whether the limitation-of-liability clause is unconscionable or unenforceable | Clause unenforceable due to unconscionability, public policy, willful/wanton conduct or fraud | Clause is conspicuous, negotiated between commercial parties, and caps liability at the purchase price — therefore enforceable | Limitation provision is conscionable and enforceable; court confines recovery to direct damages (capped by contract) |
| Whether dismissal under Civ.R. 12(B)(6) was proper given the complaint and attached contract | Facts alleged entitle M&P to recovery; dismissal was premature | Contract language negates recovery beyond contractual remedies and caps damages | Dismissal improper as to direct-damage claims; reversal and remand for trial on compensatory damages; consequential damages barred per contract (concurring judge emphasized cap to purchase cost) |
Key Cases Cited
- Chemtrol Adhesives, Inc. v. Am. Mfrs. Mut. Ins. Co., 42 Ohio St.3d 40 (Ohio 1989) (conspicuous contract disclaimers and limitations are enforceable in commercial settings)
- Sunoco, Inc. (R&M) v. Toledo Edison Co., 129 Ohio St.3d 397 (Ohio 2011) (when contract language is clear, court's analysis is limited to the writing)
- O'Brien v. Univ. Community Tenants Union, Inc., 42 Ohio St.2d 242 (Ohio 1975) (standard for Civ.R. 12(B)(6): dismissal only if plaintiff can prove no set of facts entitling recovery)
- Mitchell v. Lawson Milk Co., 40 Ohio St.3d 190 (Ohio 1988) (on a motion to dismiss courts must presume factual allegations are true and draw inferences in favor of the nonmoving party)