NZR Retail of Toledo, Inc. v. Beck Suppliers, Inc.
2016 Ohio 3205
Ohio Ct. App.2016Background
- Beck Suppliers supplied gasoline to NZR and other stations; NZR and related entities (MAR Distributors; Hasan; Y. and M. Qaimari) were parties to earlier litigation with the William F. Beck Living Trust over unpaid loans.
- Appellants allege that starting Sept. 1, 2010, NZR agreed to pay an extra $0.02/gallon: $0.01 as a security deposit held by Beck Suppliers and $0.01 to be forwarded to the Beck Trust to pay borrower debts; about $136,000 was collected through Jan. 2012.
- Appellants claim Beck Suppliers never forwarded the $68,000 destined for the Beck Trust and did not return the $68,000 deposit; they assert breach of contract and related claims (Count 2).
- Separately, appellants allege Beck Suppliers wrongfully billed and collected approximately $637,000 from NZR as charges attributable to Ohio’s Commercial Activity Tax (CAT) in violation of R.C. 5751.02(B) (Count 1).
- Beck Suppliers moved to dismiss under Civ.R. 12(B)(6) arguing Count 2 is barred by the statute of frauds and cannot be recast as tort; Count 1 fails because R.C. 5751.02(B) permits including CAT in price or only the tax commissioner may enforce the statute.
- The trial court dismissed both counts; on appeal the Sixth District affirmed dismissal as to Dean Beck but reversed dismissal as to Beck Suppliers and remanded Counts 1 and 2 for further proceedings against Beck Suppliers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Count 2 (two-cent arrangement) is barred by the statute of frauds | Arrangement not a suretyship; agreement was alleged (and could be written) so statute of frauds shouldn’t bar claim | Agreement is oral promise to answer for another’s debt (surety/answer for debt) so statute of frauds applies | Reversed dismissal as to Beck Suppliers: complaint can be read to allege a written agreement and signed contracts in the record show the arrangement; unjust enrichment also pleaded alternatively |
| Whether Dean Beck is individually liable for alleged fraud/reliance | Dean Beck’s alleged misrepresentations induced reliance causing damages | Any damages claimed arise from contractual breach, not separate tort damages | Affirmed dismissal as to Dean Beck: plaintiffs did not allege tort damages distinct from contract damages |
| Whether Beck Suppliers’ inclusion/billing of CAT violated R.C. 5751.02(B) and breached contract (Count 1) | Beck Suppliers improperly billed/invoiced CAT separately and collected $637,000 in violation of statute and contract | R.C. 5751.02(B) permits recovery of CAT as part of contract price; Beck Suppliers entitled to include CAT in price | Reversed dismissal as to Beck Suppliers: complaint plausibly alleges CAT was separately billed/invoiced (not included in price) and contract language is fact-specific—claim survives 12(B)(6) |
| Whether plaintiffs’ pleadings fail for lack of attached written agreement per Civ.R.10(D)(1) | Not raised by defendant; plaintiffs can state prima facie case without attachment | Attachment required by rule | Court notes omission but declines dismissal on that basis; failure to attach can be addressed by a motion for more definite statement |
Key Cases Cited
- Witham v. South Side Bldg. & Loan Assn. of Lima, 133 Ohio St. 560, 15 N.E.2d 149 (Ohio 1938) (definition of setoff/mutuality requirement)
- O'Brien v. Univ. Community Tenants Union, Inc., 42 Ohio St.2d 242, 327 N.E.2d 753 (Ohio 1975) (standard for Civ.R. 12(B)(6) dismissal)
- Perrysburg Twp. v. Rossford, 103 Ohio St.3d 79, 814 N.E.2d 44 (Ohio 2004) (de novo review of 12(B)(6))
- Johnson v. Microsoft Corp., 106 Ohio St.3d 278, 834 N.E.2d 791 (Ohio 2005) (elements of unjust enrichment)
- Mohmed v. Certified Oil Corp., 37 N.E.3d 814 (Ohio Ct. App. 2015) (CAT may be included in price; contractual terms control whether inclusion breaches supply agreement)
- Ohio Grocers Assn. v. Levin, 123 Ohio St.3d 303, 916 N.E.2d 446 (Ohio 2009) (characterization of CAT as a franchise/privilege tax)
- Textron Fin. Corp. v. Nationwide Mut. Ins. Co., 115 Ohio App.3d 137, 684 N.E.2d 1261 (Ohio Ct. App. 1996) (tort claims tied to contract require additional, distinct damages)