2024 Ohio 73
Ohio Ct. App.2024Background
- Kevin Ciptak entered into an employment and noncompetition agreement with Yagour Group (dba Perfection Landscapes) in July 2019, which prevented him from engaging in competitive business or soliciting clients/employees during and after his employment.
- Ciptak operated his own side landscaping business while employed by Perfection, performing similar types of work using Perfection's resources and employees without disclosing these jobs or seeking employer consent.
- After discovering Ciptak’s activities via employee reports and GPS tracking, Perfection terminated his employment and later filed suit for breach of contract, seeking damages and attorney’s fees based on violation of the noncompetition provisions.
- The trial court conducted a bench trial, ultimately awarding Perfection $62,437 in damages, reflecting the profits Ciptak earned from his side jobs, and $20,000 in attorney’s fees plus litigation expenses.
- Ciptak appealed, arguing (among other things) that Perfection failed to prove lost profits with reasonable certainty and could not use his “illicit profits” as a measure of damages under Ohio law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Measure of damages for breach of noncompetition agreement | Ciptak’s illicit profits are equivalent to Perfection’s lost profits | Only plaintiff’s own lost profits, not defendant’s gains, are recoverable | Ciptak’s profits from side jobs reasonably estimated Perfection’s lost profits |
| Capacity to perform side jobs (causation of lost profits) | Company could and would have performed all jobs undertaken by Ciptak | Perfection was too busy and lacked capacity; no jobs were diverted from the company | Trial court credited Perfection’s testimony that it could have performed the jobs |
| Sufficiency/certainty of lost profits evidence | Lost profits were proven by detailed job records and Ciptak’s admissions | Lost profits were speculative and not established with reasonable certainty | Profits calculation was supported by competent, credible evidence |
| Attorney’s fees award | Contract allowed recovery of fees connected with enforcement | Fees improper if damages recoverable were not proven | Fees upheld, as breach and damages were proven; defendant waived specific challenge on appeal |
Key Cases Cited
- Charles R. Combs Trucking, Inc. v. Internatl. Harvester Co., 12 Ohio St.3d 241 (standard for recovery of lost profits in breach of contract)
- Gahanna v. Eastgate Props. Inc., 36 Ohio St.3d 65 (requirement to prove lost profits with reasonable certainty)
- Eastley v. Volkman, 132 Ohio St.3d 328 (manifest weight of the evidence standard)