MRI Software, L.L.C. v. W. Oaks Mall FL, L.L.C.
116 N.E.3d 694
| Ohio Ct. App. | 2018Background
- MRI Software, an Ohio company, contracted in 2013 to provide web-based real-estate management software and a three-week express implementation to West Oaks Mall (Florida). MRI drafted the Agreement, which incorporated “Functional Specifications” by reference to MRI’s website.
- Implementation was delayed; West Oaks experienced ongoing software failures, support problems, incorrect tenant statements, inability to bill or pay invoices, and opened multiple support tickets. West Oaks stopped paying in July 2013 after paying ~$23,000 and later terminated the Agreement.
- MRI sued for breach of contract and unjust enrichment; the trial court found in favor of West Oaks on all claims, awarded limited discovery sanctions to West Oaks for MRI’s discovery failures, and initially ordered each party to bear its own costs.
- The trial court found the Agreement ambiguous as to several functional-specification terms (e.g., “dynamic and flexible reporting”) and admitted parol evidence (testimony from West Oaks’ IT specialist) to interpret those terms.
- The court found MRI failed to perform (did not implement within three weeks, failed to deliver required web-based commercial management/accounts payable/general ledger functionality, and failed to provide adequate support). The appellate court affirmed these findings but reversed the no-fees ruling and remanded for an award of reasonable attorney fees and costs to West Oaks under the contract’s fee-shifting clause.
Issues
| Issue | MRI’s Argument | West Oaks’ Argument | Held |
|---|---|---|---|
| Contract interpretation / ambiguity of Functional Specifications | Terms are unambiguous and should be construed for MRI; trial court erred admitting parol evidence | Contract was ambiguous as to terms like “dynamic and flexible,” so parol evidence was admissible | Court: Contract was ambiguous; trial court permissibly considered parol evidence to interpret terms |
| Failure to perform express implementation (3-week express implementation) | MRI disputed trial-court findings | West Oaks: MRI did not implement within three weeks or thereafter and delayed start | Court: Supported by competent, credible evidence; MRI failed to complete express implementation |
| Software Errors / notice requirement under contract | MRI: West Oaks failed to give required written notice (certified mail/overnight/hand) so no “Errors” were properly reported | West Oaks: Multiple emails, calls, and later mailings gave MRI actual/constructive notice | Court: Actual/constructive notice satisfied; technical deviation was harmless; MRI had notice |
| Unjust enrichment | MRI: Alternatively entitled to recovery under unjust enrichment | West Oaks: A valid, enforceable written contract existed; equitable restitution unavailable where contract governs | Court: MRI cannot recover on unjust enrichment because an enforceable contract governed the relationship |
| Attorney fees under contract (Section 10.16) | MRI: not prevailing; trial court properly had each party bear its own costs | West Oaks: Prevailing party under contract’s fee-shifting clause; entitled to reasonable fees and costs | Court: Trial court erred in denying fees; remanded for a hearing to award reasonable attorney fees and costs to West Oaks |
Key Cases Cited
- Castlebrook Ltd. v. Dayton Properties Ltd., 78 Ohio App.3d 340 (2d Dist. 1992) (appellate review of trial court contract interpretation is abuse-of-discretion when ambiguity exists)
- Seasons Coal Co. v. Cleveland, 10 Ohio St.3d 77 (Ohio 1984) (trial court’s credibility determinations presumed correct; deference to factfinder)
- Hambleton v. R.G. Barry Corp., 12 Ohio St.3d 179 (Ohio 1984) (elements of unjust enrichment)
- Wilborn v. Bank One Corp., 121 Ohio St.3d 546 (Ohio 2009) (fee-shifting clauses enforceable if fees are fair, just, and reasonable)
- Alexander v. Buckeye Pipeline Co., 53 Ohio St.2d 241 (Ohio 1978) (when contract is clear, court looks at the four corners for parties’ intent)