Thompson Thrift Constr. v. Lynn
89 N.E.3d 249
| Ohio Ct. App. | 2017Background
- Project: 300,000 sq. ft. hotel at 801 Polaris Parkway. Thompson Thrift was GC; National Framing (Lynn) was framing subcontractor; Mark Hill d/b/a Mega Framing (Hill) was hired by Lynn to supply labor.
- Hill worked Aug–Dec 2013; last unconditional lien waiver he signed had effective date Dec 13, 2013. Lynn walked off Dec 16, 2013; Hill continued through Dec 23, 2013.
- Hill filed a mechanic’s lien Jan 6, 2014 for $148,058. Thompson Thrift obtained court approval to substitute a discharge bond (Fidelity surety) for the lien.
- Arbitration panel and trial court found: (1) an oral contract existed between Thompson Thrift and Hill for Dec 16–23, 2013 and awarded Hill $48,800 for breach; (2) Thompson Thrift tortiously interfered with Hill’s business relationships by recruiting Hill’s core crew, awarding lost-profits ($36,843.25) and attorney fees ($16,852); (3) award against Fidelity on the discharge bond for certain amounts (retainage and change orders) but not all amounts; (4) Lynn was liable to Hill and Thompson Thrift obtained offsetting judgments against Lynn.
- On appeal the appellate court affirmed most rulings but (a) held Hill could not recover from the bond amounts that were already waived by lien waivers for work due before Dec 13, 2013, and (b) ruled Hill cannot recover the $48,800 from the bond because he already recovered that amount directly from Thompson Thrift (to avoid double recovery).
Issues
| Issue | Hill (Plaintiff) Argument | Thompson Thrift / Fidelity (Defendant) Argument | Held |
|---|---|---|---|
| 1) Can Hill recover against the discharge bond for amounts owed by Lynn and/or Thompson Thrift? | The bond substituted for the lien secures Hill’s full lien claim; bond principal (Thompson Thrift) sought to clear title for lien that ran against the property, so Hill may recover against the bond for valid lien amounts (including amounts owing from Lynn and amounts later found due from Thompson Thrift). | Bond principal is Thompson Thrift (not Lynn); Hill cannot use the bond to collect debts owed by Lynn; some claimed amounts are barred by lien waivers. | Partly: Hill may recover from the bond for retainage and change orders (not waived), but cannot recover from the bond for amounts already due and waived pre-Dec 13, 2013. Also Hill cannot recover the $48,800 twice — he may not collect it from the bond because he recovered it directly from Thompson Thrift. |
| 2) Do Hill’s lien waivers signed through Dec 13, 2013 bar his bond recovery for retainage/change orders and pre-Dec-13 labor? | Waivers limited to amounts earned and released through their effective dates; retainage and change orders were not due/claimed as of Dec 13, 2013 and thus not waived. | The waivers were unconditional and released "any and all" lien rights through the effective dates, so they bar recovery for any amounts accruing on or before those dates. | Waivers bar recovery for labor/materials that were due and owing prior to Dec 13 (those items were covered by waivers), but do not bar recovery for retainage or change orders that had not yet accrued as of Dec 13. Fidelity did not waive the lien-waiver defense by pleading merely "waiver"; Hill had notice and argued the issue. |
| 3) Was there an enforceable oral contract between Thompson Thrift and Hill (Dec 16–23, 2013) and were damages proven? | Hill: Thompson Thrift told Hill at an on-site meeting to continue work and assured payment; Hill performed through Dec 23 and presented invoices ($37,800 and $11,000) substantiating $48,800 due. | Thompson Thrift: No written contract; Hill’s testimony inconsistent; inadequate backup for invoices; damages not proven with reasonable certainty. | Affirmed: Trial court’s de novo review found competent, credible evidence of an oral contract and that Hill’s invoices and testimony provided reasonable certainty of damages for the Dec 16–23 period. |
| 4) Did Thompson Thrift tortiously interfere with Hill’s business relations and were attorney fees proper? | Hill: Thompson Thrift solicited Hill’s core crew, had them sign with a temp agency/Hahn, controlled their work on-site — intentional interference causing loss of business and lost profits; intentional nature justifies attorney fees. | Thompson Thrift: Workers were independent contractors/at-will; recruitment was privileged competition; damages speculative; no basis for attorney fees. | Affirmed: Competent evidence showed a business relationship with specialized crew, Thompson Thrift knew and intentionally induced the crew to work without Hill — interference not privileged as fair competition; damages (half of claimed lost profits) supported; attorney fees allowed per arbitration stipulation and the arbitrators’ finding of intentional interference. |
Key Cases Cited
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (Ohio 1983) (standard for abuse of discretion)
- Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241 (Ohio 1978) (ordinary meaning of contract language)
- Kostelnik v. Helper, 96 Ohio St.3d 1 (Ohio 2002) (elements of contract formation)
- C.E. Morris Co. v. Foley Construction, 54 Ohio St.2d 279 (Ohio 1978) (standard for appellate review of damage calculations)
- Fred Siegel Co., L.P.A. v. Arter & Hadden, 85 Ohio St.3d 171 (Ohio 1999) (privilege of fair competition and Restatement §768 factors)