Tesar Indus. Contractors v. Republic Steel
113 N.E.3d 1126
Ohio Ct. App.2018Background
- Republic Steel contracted with Tesar Industrial Contractors for structural work on an electronic arc furnace project; parties executed an initial (Mar 2013) and a revised (Aug 20, 2013) purchase order with a “not-to-exceed” amount and a requirement that additional work be authorized by revised purchase orders.
- Project experienced significant delays and cost overruns; Republic alleged Tesar’s poor performance and ultimately terminated Tesar and hired a replacement contractor.
- Tesar sued (Nov 2013) alleging breach of the original and revised contracts and breach based on out-of-scope work, plus fraud in the inducement and unjust enrichment; Republic counterclaimed for breach and unjust enrichment.
- After a 14-day jury trial, the jury found for Tesar on breach of contract ($3,078,000) and unjust enrichment ($462,128), totaling $3,540,128; jury rejected Republic’s counterclaims. Trial court denied post-trial motions by Republic.
- Appeals: Republic appealed denial of post-trial relief (JNOV/new trial/remittitur); Tesar cross-appealed the trial court’s grant of directed verdict on its fraud-in-the-inducement claim. Ninth District affirmed.
Issues
| Issue | Plaintiff's Argument (Tesar or party asserting claim) | Defendant's Argument (Republic) | Held |
|---|---|---|---|
| Whether jury instructions listing enumerated alleged breaches warranted a new trial | Tesar: instructions correctly listed alleged breaches and followed Ohio pattern jury instructions | Republic: enumerated items included duties not in contract and misled jury; objected to certain items | Court: no reversible error; instructions consistent with Ohio Jury Instr.; Republic failed to show prejudice or timely preserve objections; waiver/invited error for one agreed item |
| Whether jury damages must be limited by the Aug. 2013 purchase order "not-to-exceed" cap (remittitur/JNOV) | Tesar: evidence supported breach and damages; waiver of the cap was for jury to consider | Republic: cap and change-order/write requirement limit recoverable contract damages; damages excessive and should be reduced or JNOV entered | Court: denied relief; Republic raised contractual-limitation argument post-verdict and failed to show cap as a matter of law; remittitur denied absent manifest excess/passion or prejudice |
| Whether unjust enrichment award duplicated contract damages (improper recovery under contract) | Tesar: unjust enrichment award applied only to work outside written contracts as instructed | Republic: identical amount to alleged consequential contract damages shows jury awarded contract damages via unjust enrichment | Held: presumption jury followed instructions; special interrogatories and charge precluded double recovery; Republic’s speculation insufficient to overturn verdict |
| Whether trial court erred by directing verdict for Republic on Tesar’s fraud-in-the-inducement claim | Tesar: Republic’s project manager misrepresented existence of a $4.83M lower bid and that work could be done for that price, inducing Tesar to reduce bid | Republic: Tesar had means and experience to assess cost; any statements were opinion or non-actionable; reliance was unjustified | Court: directed verdict proper—Tesar’s evidence of justifiable reliance was insufficient as a matter of law; reasonable minds could reach only adverse conclusion to Tesar |
Key Cases Cited
- Kokitka v. Ford Motor Co., 73 Ohio St.3d 89 (instruction viewed as whole and reversible error only if it probably misled jury)
- Goldfuss v. Davidson, 79 Ohio St.3d 116 (plain-error doctrine in civil cases is very narrow; applies only in exceptional circumstances)
- Cromer v. Children's Hosp. Med. Ctr. of Akron, 142 Ohio St.3d 257 (prejudice from a jury instruction cannot be presumed; must be affirmatively shown)
- Moskovitz v. Mt. Sinai Med. Ctr., 69 Ohio St.3d 638 (jury’s assessment of damages will not be disturbed absent passion, prejudice, or manifest excess)
- Poske v. Mergl, 169 Ohio St. 70 (abuse of discretion standard explained in context of new-trial determinations)