Moats v. Howard, 2013 Ohio 5656

In 2003 Marianne and Herman Moats bought Davis Glass & Mirror, Inc. from John and Maureen Howard; as part of the buyout the parties signed a Health Insurance Coverage Contract requiring the buyers to provide/maintain John’s and Maureen’s insurance under the employer plan through Sept. 1, 2012.
After a disputed March 2006 meeting, beginning April 2006 John reimbursed Davis Glass for premiums; parties later disputed whether that conduct reflected an agreed modification, duress, or lack of consideration.
Maureen died in November 2010; litigation followed with multiple claims and a counterclaim by the Howards asserting the Moats breached the health insurance contract by ceasing payments after March 2006.
Most claims were settled; the trial court tried the remaining claims and found (1) the parties agreed the insurance was provided to the Howards as employees, (2) John did not promise consulting services in exchange for insurance, and (3) an implied-in-fact modification occurred in 2006 under which John reimbursed the corporation for premiums.
The trial court entered judgment denying the Howards’ counterclaim and awarding costs; the Howards appealed, asserting legal duress, exclusion of rebuttal witness testimony, and lack of consideration for the modification.

Issue	Plaintiff's Argument (Moats)	Defendant's Argument (Howard)	Held
Whether payments beginning April 2006 were evidence of a consensual modification or were made under economic duress	Reimbursement payments show assent to a modification; no duress	Payments resulted from economic duress due to Maureen’s terminal illness, so modification not voluntary	Court: No legal duress; duress attributable to illness, not coercion by Moats; overrules duress claim
Whether trial court abused discretion by excluding rebuttal testimony of Michael Mulholland	Exclusion prevented proof that Maureen did not consent and was under duress	Witness was undisclosed, testimony cumulative, and not admissible under hearsay exceptions	Court: No abuse of discretion; exclusion proper and any testimony would be cumulative or legally irrelevant
Whether the 2006 modification lacked consideration and is unenforceable	No new consideration was given for the oral modification	Parties acted on the modification for years; refusal to enforce would cause injustice	Court: Enforceable under narrow exception—parties’ long performance made verbal modification binding despite lack of new consideration

Blodgett v. Blodgett, 49 Ohio St.3d 243 (Ohio 1990) (duress requires coercion by the other contracting party; hardship alone is insufficient)
Phung v. Waste Mgmt., Inc., 71 Ohio St.3d 408 (Ohio 1994) (parties have right to present rebuttal testimony on matters first raised in opponent’s case-in-chief)
Pang v. Minch, 53 Ohio St.3d 186 (Ohio 1990) (trial court has discretion to control admission of unexpected testimony at trial)
Thurston v. Ludwig, 6 Ohio St. 1 (Ohio 1856) (oral modifications that are acted upon by parties may become binding where refusing enforcement would work fraud or injustice)
Eberly v. A-P Controls, Inc., 61 Ohio St.3d 27 (Ohio 1991) (limitations on hearsay exceptions where declarant is not an adverse party)
Beard v. Meridia Huron Hosp., 106 Ohio St.3d 237 (Ohio 2005) (appellate relief for abuse of discretion requires prejudice or inconsistency with substantial justice)