Quest Workforce Solutions, L.L.C. v. Job1USA, Inc.
2016 Ohio 8380
| Ohio Ct. App. | 2016Background
- Quest (referral firm) and Job1 (staffing firm) entered a September 25, 2007 Profit Sharing Agreement (PSA): Quest referred clients (notably Yamada) and Job1 provided staffing/payroll; gross profit from referrals was to be split equally after specified "direct expenses."
- PSA required Job1 to maintain records and provide monthly profit statements; it could be terminated for "good cause" with 30 days’ notice. No minimum referrals were required of Quest.
- Quest moved out of office space Job1 initially provided in 2009; thereafter there were no further referrals from Quest after November 12–13, 2009. Job1 internally discussed terminating the PSA and drafted (but did not prove mailing of) a November 13, 2009 termination letter.
- Disputes over Job1’s accounting: Job1’s CFOs prepared profit summaries that included a 3% ‘‘back‑office’’ deduction and allegedly overstated workers’ compensation and other expenses; Quest identified numerous unsupported/incorrect expense allocations and claimed $418,911 in unpaid gross profits (plus prejudgment interest).
- Trial court ruled the PSA had been terminated by November 2009 and entered judgment for Job1, denying Quest an accounting and damages. The Sixth District Court of Appeals reversed, finding the trial court’s termination and accounting conclusions were against the manifest weight of the evidence and remanded for damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the PSA was terminated by conduct in Nov. 2009 | Quest: No; no written notice, no requirement Quest remain onsite, and PSA continued unless terminated | Job1: Parties ceased working together, Quest vacated office, internal termination steps taken | Court: PSA was not terminated by parties’ conduct; unilateral/internal decisions without notice do not end contract (reversed) |
| Whether Job1 breached PSA by failing to share profits and provide accounting | Quest: Job1 failed to provide accurate records; many expenses were unsupported/erroneous, so profits existed | Job1: Supplied available records; losses (except 2008) shown; 3% back‑office deduction appropriate | Court: Job1 failed to provide accurate, supportable financial data; Quest entitled to an accounting; trial court’s finding of no profit 2009–2012 against manifest weight |
| Admissibility/necessity of expert/forensic accounting to prove errors | Quest: Not required; ordinary arithmetic and provided records revealed clear errors and unsupported charges | Job1: Quest needed a forensic accountant to prove accounting errors and quantify damages | Court: Expert unnecessary to show that Job1’s records contained errors/unverified allocations; trial court erred in requiring forensic proof |
| Proper construction of "direct expenses" (3% back‑office add‑on) | Quest: 3% add‑on was not contemplated by Kelly (initial preparer) and should not have been charged | Job1: 3% deduction is a generally accepted accounting treatment of direct costs | Court: Contract language allowed ordinary accounting meaning; 3% add‑on justified as direct expense (question of law) |
Key Cases Cited
- Eastley v. Volkman, 972 N.E.2d 517 (Ohio 2012) (standard for manifest‑weight review)
- State v. Thompkins, 678 N.E.2d 541 (Ohio 1997) (distinguishing sufficiency and weight of the evidence)
- Seasons Coal Co. v. Cleveland, 461 N.E.2d 1273 (Ohio 1984) (deference to trial court findings when supported)
- Alexander v. Buckeye Pipe Line Co., 374 N.E.2d 146 (Ohio 1978) (contract construction is a question of law; ordinary words given ordinary meaning)
- State v. Maupin, 330 N.E.2d 708 (Ohio 1975) (expert testimony not required if lay knowledge suffices)
- State v. Williams, 446 N.E.2d 444 (Ohio 1983) (trial court discretion to admit expert testimony when it will assist factfinder)