685 N.E.2d 246 | Ohio Ct. App. | 1996
This is an accelerated appeal from summary judgment rendered in the Portage County Court of Common Pleas in favor of plaintiff-appellee, Akro-Plastics, and against defendant-appellant, Drake Industries ("Drake").
Akro-Plastics manufactures backboards that are fitted into medical stretchers at its facility in Kent, Ohio. Sometime in early 1993, Akro-Plastics and Drake entered into an oral agreement whereby Drake would pick up large shipments of stretcher backboards at the Kent facility and take them to its own facility in Constantine, Michigan. There, Drake promised to inject foam into the boards as one stage in the manufacturing process and subsequently to return the boards to Kent. After that, Akro-Plastics would in turn sell the boards at retail to its customers.
On or about March 8, 1993, a fire broke out in Drake's facility that destroyed an entire shipment of three hundred sixty-four of Akro-Plastic's stretcher boards. Thereafter, Drake informed Akro-Plastics that it had improperly processed a second and third shipment of one hundred twenty-seven and one hundred ninety-two boards, respectively, and that the boards were useless. Although it is not entirely clear from the record, it appears that none of these boards were returned to Kent as promised.
On January 23, 1995, Akro-Plastics filed a complaint seeking recovery for the damage inflicted upon its property while in Drake's custody. The complaint contained three claims, one for each shipment. On October 16, 1995, Akro-Plastics filed a motion for summary judgment. Drake filed a motion in opposition on November 20, 1995, arguing that the court should apply Michigan law. The trial court applied Ohio law, granted Akro-Plastics' motion, and entered judgment against Drake in the amount of $79,646.
Drake timely initiated this appeal, and asserts the following as error:
"1. The trial court erred in applying Ohio law rather than Michigan law to a contract which is to be performed in Michigan and where the only relevant contact with Ohio is that one of the contracting parties [the plaintiff] is an Ohio corporation.
"2. The trial court erred in granting summary judgment where the evidence in the record is insufficient to determine the terms of the agreement between the parties; and where the evidence and facts that do appear in the record regarding the agreement are conflicting and disputed.
"3. The trial court erred when it awarded damages where there is no evidence or facts in the record to support the damages alleged by Plaintiff and awarded by the trial court; and where the evidence and facts that do appear in the record are *224 conflicting and disputed; and where the trial court improperly placed the burden of proof on Defendant."
With regard to the first assignment of error, Drake argued to the court below that Michigan law should apply on the principle that, in an action on a contract, the law of the state where a contract is to be performed governs the issues raised in a case where there is a conflict between the laws of two or more jurisdictions. See, generally, Gries Sports Ent., Inc. v. Modell
(1984),
Resort to the principles of conflict of laws is necessary only if there is an actual conflict between local law and the law of another jurisdiction. Canadian Overseas Ores Ltd. v.Compania, Etc. (S.D.N.Y. 1982),
Admittedly, Drake has attempted to meet its burden of demonstrating a conflict. In its appellate brief, Drake cites certain provisions of Michigan's no-fault automobile insurance law, under which a claimant suffering property damage arising out of the maintenance of a motor vehicle must bring an action against the vehicle owner's insurance carrier. Mich.Stat.Ann. 24.13121 (Callaghan 1994). See, also, Michigan Basic Prop. Ins.Assn. v. Michigan Mut. Ins. Co. (1983),
Notwithstanding the foregoing, we must confine our analysis only to the facts existing in the trial record as provided by an appellant. App.R. 12(A)(1)(b). The composition of the record is particularly important, because the appellant bears the burden of demonstrating errors by reference to the matters existing therein. Knapp v. Edwards Laboratories (1980),
A careful review of the trial record in this case reveals that the assertion that Drake's employee was grinding a trailer hitch, hence subjecting this case to the no-fault automobile insurance laws, while appearing in Drake's brief on appeal, does not appear in the pleadings, the motions, the memoranda in support and opposition, or the affidavits filed in the court below. Therefore, this assertion of fact does not form any part of the trial record. Essentially, Drake has introduced it on appeal in a belated attempt to demonstrate how Michigan law conflicts with Ohio law. However, factual assertions appearing in a party's brief, but not in any papers submitted for consideration to the trial court below, do not constitute part of the official record on appeal, and an appellate court may not consider these assertions when deciding the merits of the case. See State v. Stevens (Dec. 22, 1994), Cuyahoga App. No. 67400, unreported, 1994 WL 716350, at fn. 1 (court would not consider factual matters contained in both parties' briefs but not in the record); Estate of Dindot (June 4, 1993), Paulding App. No. 11-93-1, unreported, 1993 WL 195083, at 2 (court would not consider factual allegation in appellant's brief that appellee had notice of a judgment being revived where that fact did not appear in the record); State v. Reichenbach (Aug. 20, 1991), Franklin App. No. 90AP-1223, unreported, 1991 WL 224532, at 3 (court would not consider a number of mitigating factors presented in appellant's brief but not to the trial court when deciding whether trial court abused its discretion in sentencing appellant).
The assertion that the employee in question was grinding a trailer hitch being unsupported, Drake has failed to meet its burden of demonstrating that Michigan law and Ohio law are in conflict. The trial court did not err when it failed to address Drake's argument below. The first assignment of error is without merit.
In its second assignment of error, Drake alleges that the trial court erred when it granted Akro-Plastics' motion for summary judgment. We agree. *226
The standard for granting summary judgment is familiar enough: a party moving for summary judgment bears the burden of establishing that (1) no issue of material fact remains to be litigated, (2) the moving party is entitled to summary judgment as a matter of law, and (3) it appears from the evidence, when viewed in a light most favorable to the nonmovant, that reasonable minds can only come to a conclusion adverse to the nonmovant. Welco Industries, Inc. v. Applied Cos. (1993),
According to Civ.R. 7(B)(1) a party moving for summary judgment must state the grounds upon which it moves with specificity. Mitseff v. Wheeler (1988),
In its third assignment of error, Drake argues that the trial court also erred in finding sufficient evidence to award damages in this case. We agree.
It is axiomatic that every plaintiff bears the burden of proving the nature and extent of his damages in order to be entitled to compensation. Columbus Fin. Inc. v. Howard (1975),
However, when goods are not in the hands of consumers, but are still lodged somewhere in the chain of distribution, the concept of fair market value becomes less obvious. As explained in the Restatement of the Law 2d, Torts (1979) 473, Section 911, comment d:
"From the time when a chattel is manufactured to the time of its actual use, there may be many markets in which it is sold. Thus, different prices are paid by the wholesaler, the retail dealer and the consumer. Since the measure of recovery is determined by the harm done, the market that determines the measure of recovery by a person whose goods have been taken, destroyed or detained is that to which he would have to resort in order to replace the subject matter. Thus, the consumer can recover the retail price; the retail dealer, the wholesale price."
It has been consistently held that when goods belonging to a wholesaler are wrongfully damaged or destroyed, the price of the goods is to be determined by the replacement cost, or the wholesale value of the goods. Skaggs Drug Centers, Inc. v. IdahoFalls (1965),
The theory underlying the replacement cost measure of damages for wholesalers and retailers applies equally to the manufacturer, although the manufacturer does not purchase goods in the same sense that the wholesaler and retailer do. If the manufacturer's goods are destroyed, it is in the position to acquire more raw materials and produce substitute goods to sell thereafter in the normal course of business. Additionally, it has not yet sold the goods to a wholesaler, retailer, or directly to the consumer, and so has not yet earned any profit. We find the aforementioned authorities persuasive, and hold the proper measure of damages in tort actions to recover damages for injuries to goods still belonging to the manufacturer to be the replacement cost, or the cost to manufacture substitute goods, immediately before the loss, less the salvage value of the goods, if any, immediately after the loss.3
In this case, Akro-Plastics is the manufacturer and also the retailer of these stretcher boards. It alleged in its complaint that the first shipment of three hundred sixty-four boards had a "market value" of $130 per board, for a total "market value" of $47,320; that the second shipment of one hundred twenty-seven boards had a "market value" of $58 per board, for a total "market value" of $7,366; and that the third shipment of one hundred ninety-two boards had a "market value" of $130 per board, for a total "market value" of $24,960. There is no indication anywhere in the trial record as to what market Akro-Plastics was referring to. It is not entitled to the retail price of these boards — only the replacement cost, which is measured by the cost to manufacture them. We suspect that, because Akro-Plastic used the term "market price," these figures reflect the retail cost of the boards. By relying on these estimates of value without an explanation as to what they refer to, the trial court committed reversible error.
Drake asserted during oral argument that the trial court should also have offset the amount of damages by the amount that Drake's efforts improved the goods. It argued that, if the boards hypothetically cost $5 per board to produce, and if it hypothetically added the foam at $2 per board, this increase in production cost should not be chargeable to Drake, and that it should only have to pay the $5 per board. We disagree. *229
The calculation of replacement cost hinges on when the boards were destroyed or lost. If the boards were destroyed or lost before the foam was injected, then Akro-Plastics would have to expend only that effort, to reproduce unfoamed boards, which cost $5 per board to manufacture to that stage. If the boards were destroyed or lost after Drake injected the foam, then Akro-Plastics would need to expend that effort required to reproduce foamed boards, which cost $7 per board to manufacture to that stage. It appears that all the losses in this case occurred after Drake injected the foam into the boards. In order to completely replace the foamed boards, Akro-Plastics would have to expend that effort required to process the boards through the foaming stage. If Drake remains uncompensated for its work, it should have brought a counterclaim for breach of the processing agreement for the price of its services, or the reasonable value thereof. Drake is not entitled to a setoff in this manner.
On balance, Drake's third assignment of error is well taken.
Because the trial court erred in granting summary judgment on both issues of liability and damages, we reverse its judgment and remand the case for further proceedings consistent with this opinion.
Judgment reversedand cause remanded.
FORD, P.J., and MAHONEY, J., concur.
EDWARD J. MAHONEY, J., retired, of the Ninth District Court of Appeals, sitting by assignment.
"Where in the ordinary case a value is to be found for a single thing, the value is what that single thing would sell for; which amounts to the retail value of it. But when a court is dealing with a stock of goods held for sale, or even with a portion of such stock, the value to be found is its value as a stock or a part of a stock of goods, that is, its wholesale value, without the profit of resale which enters into the retail value; for at the time of valuation that profit has not yet been earned, or, to put the matter in another way, the process of distribution, which brings the goods into the hands of the consumer and thus gives them their final increment of value, has not yet taken place."