Lead Opinion
{¶ 3} Once Circuit Solutions familiarized itself with the assembly process related to Mueller's clips, it moved Mueller's machines to Mexico and began to assemble the clips remotely. Mueller eventually outsourced additional stages of its clip assembly production to Circuit Solutions as a result of its increased efficiency. For instance, while Mueller initially provided Circuit Solutions with turned springs to use in the assembly process, Circuit Solutions started having its own workers turn springs so as to relieve Mueller of that additional stage of assembly.
{¶ 4} Mueller eventually indicated that it was no longer interested in outsourcing work to Circuit Solutions and stopped submitting its purchase orders. Without the assembly work from Mueller, Circuit Solutions had to close its facility in Mexico. Believing that Mueller wrongfully cancelled a long-term agreement that the two companies shared, Circuit Solutions filed suit against Mueller for breach of contract on May 30, 2003.1 The trial court held a bench trial and ultimately awarded judgment in Mueller's favor. Circuit Solutions appealed from that judgment on May 11, 2005. *3
{¶ 5} On August 21, 2006, this Court issued a decision in this matter, finding that the trial court had applied the wrong burden of proof to Circuit Solutions' claim. We remanded the matter for the trial court to apply the correct standard. See Circuit Solutions, Inc. v. Mueller Elec.Co., 9th Dist. No. 05CA008775,
{¶ 6} On March 30, 2007, Circuit Solutions filed its second notice of appeal in this matter, raising three assignments of error for our review. For ease of analysis, we rearrange and consolidate several of the assignments of error.
"THE TRIAL COURT COMMITTED PREJUDICIAL ERROR IN DETERMINING, CONTRARY TO THE MANIFEST WEIGHT OF THE EVIDENCE, THAT PURCHASE ORDERS ON WHICH [CIRCUIT SOLUTIONS] SOUGHT LOSS OF PROFITS DAMAGES DID NOT CONSTITUTE A CONTRACT BETWEEN THE PARTIES."
{¶ 7} In its second assignment of error, Circuit Solutions argues that the trial court's finding, that the parties' purchase orders "did not constitute a contract," was against the manifest weight of the evidence. Specifically, Circuit Solutions argues that: (1) the trial court was bound by the law of the case doctrine because this Court already determined in the first appeal that the parties had an "agreement," and (2) Mueller's purchase orders constituted an acceptance of *4 Circuit Solutions' quotation, which contained specific cancellation terms to which Mueller failed to adhere. We disagree.
{¶ 8} This Court applies the standard of review set forth in C.E.Morris Co. v. Foley Constr. Co. (1978),
{¶ 9} Circuit Solutions argues that this Court already determined that the parties had an "agreement" in its first appeal, so the trial court was bound by the law of the case. The law of the case doctrine prohibits a lower court from disregarding the mandate of a superior court *5
absent extraordinary circumstances. Nolan v. Nolan (1984),
{¶ 10} In its initial decision, the trial court applied a clear and convincing burden of proof to Circuit Solutions' breach of contract claim. On appeal, this Court reversed and remanded the matter for the trial court to apply a preponderance of the evidence standard instead. See Circuit Solutions, Inc. v. Mueller Elec. Co., 9th Dist. No. 05CA008775,
{¶ 11} Next, Circuit Solutions argues that the parties had an overarching agreement embodied in the quotation Circuit Solutions sent to Mueller on April 14, 2000 and the purchase orders that Mueller sent to Circuit Solutions in return. Circuit Solutions' quotation included a cancellation provision, which provided as follows:
"Purchase orders, shall remain in force, in whole or in part, unless written cancellation notice is provided by [Mueller], and [Circuit Solutions] accepts said cancellation by written consent to [Mueller]."
Circuit Solutions argues that its quotation was an offer, which Mueller accepted by submitting a purchase order. Hence, Circuit Solutions claims that Mueller accepted its cancellation terms and breached their contract when Mueller terminated their arrangement without providing written notice of cancellation. The trial court determined that the parties did not have a written contract, so their course of conduct controlled the terms of their arrangement. Based on the parties' conduct, the court determined that Mueller was entitled to judgment. We find that the record contains competent, credible evidence to support this judgment.
{¶ 12} "[T]o prove a breach of contract claim a plaintiff must demonstrate by a preponderance of the evidence that: (1) a contract existed, (2) the plaintiff fulfilled his obligations, (3) the defendant failed to fulfill his obligations, and (4) damages resulted from this failure." Second Calvary Church of God in Christ v. Chomet, 9th Dist. No. 07CA009186,
{¶ 13} Circuit Solutions argues that the price quotation that it submitted to Mueller on April 14, 2000 constituted an offer. Even if we were to agree that this quotation constituted an offer instead of an invitation to make an offer, however, the record supports the trial court's conclusion that Mueller never agreed to Circuit Solutions' written terms. Richard Stone, the president of Circuit Solutions, testified that the April 14, 2000 quotation was just one of several quotations that Circuit Solutions submitted to Mueller in an attempt to secure Mueller's business. He testified that Circuit Solutions amended and resubmitted their quotation several times. For instance, Circuit Solutions submitted another quotation with different terms on May 22, 2000. Consequently, even if the April 14, 2000 quotation constituted an offer, its subsequent revisions support the trial court's conclusion that Mueller never accepted Circuit Solutions' written proposal containing the cancellation provision upon which Circuit Solutions' argument depends.
{¶ 14} After failing to find a written contract, the trial court looked to the parties' course of conduct and determined that Circuit Solutions was not entitled to judgment based on Mueller's purchase orders because over time the parties "chang[ed] the terms of the prices of the *8 product, the terms of payment, and the amount of the product ordered[.]" The record contains competent, credible evidence to support this conclusion.
{¶ 15} Much like an express contract, an implied contract "will be enforced if an offer, an acceptance, and consideration are established."Collins v. Flowers, 9th Dist. No. 04CA008594,
{¶ 16} Circuit Solutions' assembly work progressed over the course of its relationship with Mueller as its prices changed and it added additional steps to the work it performed for Mueller. This evidence supports the trial court's conclusion that the parties' relationship evolved *9 over time such that their conduct controlled their implied agreements. See Collins at ¶ 53. Rather than one cohesive, implied contract, the parties engaged in a series of separate, implied contracts, each of which replaced the previous one. The trial court noted this when it cited to the parties many different "terms of the prices of the product, * * * of payment, and [of] the amount of the product ordered[.]" There was no evidence that Circuit Solutions ever intended to completely fill all of Mueller's prior orders, many of which Mueller submitted when Circuit Solutions' costs of labor were less expensive. Mueller simply requested Circuit Solutions to perform work as needed, and Circuit Solutions performed. The parties never entered into a contract that required Mueller to cancel in a certain manner in order to avoid a breach. The trial court's decision that Mueller was entitled to judgment was not against the manifest weight of the evidence. Circuit Solutions' second assignment of error is overruled.
"THE TRIAL COURT COMMITTED PREJUDICIAL ERROR IN DETERMINING, CONTRARY TO THE MANIFEST WEIGHT OF THE EVIDENCE, THAT [CIRCUIT SOLUTIONS] WAS NOT ENTITLED TO RECOVERY FOR ITEMS THAT IT PROVIDED TO MUELLER FOR WHICH IT WAS NOT PAID."
"THE TRIAL COURT COMMITTED PREJUDICIAL ERROR IN DETERMINING, CONTRARY TO THE MANIFEST WEIGHT OF THE EVIDENCE, THAT [CIRCUIT SOLUTIONS] HAD NOT PROVEN BY A PREPONDERANCE OF THE EVIDENCE WHAT IT WOULD HAVE RECOVERED UNDER THE PURCHASE ORDERS IT WAS PREVENTED FROM PERFORMING AND WHAT SUCH PERFORMANCE WOULD HAVE COST."
{¶ 17} In its first assignment of error, Circuit Solutions argues that the trial court's decision that Mueller did not have to reimburse it for certain unpaid billing and tooling expenses was against the manifest weight of the evidence. In its third assignment of error, Circuit *10 Solutions argues that the trial court's decision not to award it lost profits was against the weight of the evidence. We disagree.
{¶ 18} The trial court concluded that Circuit Solutions was not entitled to seek damages because it failed to prove its breach of contract claim. Since we have already concluded that the trial court's decision regarding the existence of a contract was not against the manifest weight of the evidence, we similarly conclude that its decision not to award damages on this basis was supported by competent, credible evidence. See Wilson at ¶ 24. Without a proven breach of contract, Circuit Solutions was not entitled to seek damages on that basis.2 See Second Calvary Church of God in Christ at ¶ 9 (listing the elements a party must prove to recover damages in a breach of contract action). Circuit Solutions' first and third assignments of error lack merit.
*11Judgment affirmed.
The Court finds that there were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Lorain, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App. R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period for review shall begin to run. App. R. 22(E). The Clerk of the Court of Appeals is instructed to mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the docket, pursuant to App. R. 30.
Costs taxed to Appellant.
CARR, J.
WHITMORE, P. J. CONCUR
Notes
Concurrence Opinion
CONCURS IN PART AND DISSENTS IN PART, SAYING:
{¶ 22} At first, Circuit Solutions assembled Mueller's electrical clips at its North Ridgeville, Ohio, facility. Mueller delivered unassembled parts to Circuit Solutions and Circuit *13 Solutions assembled the clips. Once Circuit Solutions learned how to assemble the clips efficiently, it transported Mueller's machines to its facility in Mexico and began assembling the clips there. Over time, Mueller outsourced additional stages of its production to Circuit Solutions. To accommodate Mueller's extra machinery, Circuit Solutions expanded its facility in Mexico. Representatives of Mueller visited Circuit Solutions' Mexican facility as it was expanding and approved the expansion.
{¶ 23} Although the parties never signed a written agreement, they developed an understanding regarding Mueller's purchase orders. Mueller would issue a blanket purchase order for a number of clips over a specific period of time. As that order reached fulfillment, Mueller would issue a new purchase order, even if there were clips left to be assembled on the previous order. When Circuit Solutions received the new purchase order, it would set aside the old purchase order and begin using the new one. This ensured that Circuit Solutions never stopped assembling clips.
{¶ 24} In the fall of 2001, Mueller stopped submitting purchase orders and stopped supplying unassembled parts to Circuit Solutions. Although production briefly resumed, Mueller soon began outsourcing its assembly work to a company in China. Circuit Solutions, therefore, had to close its Mexican facility.
{¶ 25} Circuit Solutions sued Mueller for breach of contract, promissory estoppel, and fraudulent misrepresentation, seeking to recover its lost profits on all the purchase orders that Mueller replaced with new purchase orders before all of the clips called for on the replaced orders were assembled. The trial court, however, concluded that it had not proven its claims by clear and convincing evidence. Circuit Solutions appealed its breach of contract claim, and this Court reversed, concluding that the trial court had not applied the correct burden of proof. On *14 remand, the trial court concluded that Circuit Solutions had not proven breach of contract or its damages by a preponderance of the evidence. Circuit Solutions has appealed, assigning three errors.
{¶ 27} "A contract is generally defined as a promise, or a set of promises, actionable upon breach. Essential elements of a contract include an offer, acceptance, contractual capacity, consideration (the bargained for legal benefit and/or detriment), a manifestation of mutual assent and legality of object and of consideration." Kostelnik v.Helper,
{¶ 28} In its judgment entry, the trial court wrote that it had "found, by a preponderance of the evidence that there was no contract between the parties." This was incorrect because it was undisputed that Mueller submitted purchase orders to Circuit Solutions and Circuit Solutions assembled clips based on those orders. Accordingly, there was at least an implied contract *15
between the parties. See Hollis Towing v. Greene,
{¶ 29} Circuit Solutions has argued that, even though the parties did not have a written contract, the cancellation provision from the quotation it sent Mueller was incorporated into their agreement. The quotation that Circuit Solutions sent to Mueller in April 2000 provided that cancellations had to be in writing. It also contained an "exclusivity of terms" provision stating that "[b]uyer's purchase order will constitute an acceptance of the terms stated herein, irrespective of contrary terms in any Buyer's forms." Since Mueller submitted purchase orders to Circuit Solutions after receiving its quotation, Circuit Solutions has argued that the cancellation term became part of their agreement.
{¶ 30} "Typically, a price quotation is considered an invitation for an offer, rather than an offer to form a binding contract . . . [A] buyer's purchase agreement submitted in response to a price quotation is usually deemed the offer." L.B. Trucking Co. Inc. v. C.J. Mahan Constr.Co., 10th Dist. No. 01AP-1240,
"While the inclusion of a description of the product, price, quantity, and terms of payment may indicate that the price quotation is an offer rather than a mere invitation to negotiate, the determination of the issue depends primarily upon the intention of the person communicating the quotation as demonstrated by all of the surrounding facts and circumstances." Dyno Constr. Co.,
{¶ 31} Even if Circuit Solutions' quotation constituted an offer, Mueller did not accept it. The quotation listed prices for assembly of twenty different kinds of clips, specifying quantities that ranged from five thousand to over five hundred thousand. There was no indication that Mueller could accept only part of the quotation; to the extent that Mueller wanted to assent to the quotation, it would have had to have accepted the price and quantity quoted for each clip. Mueller did not simply accept the quotation as it was; instead, it submitted a series of purchase orders in response to the quotation. Accordingly, it was Mueller's purchase orders, not Circuit Solutions' quotation, that formed the basis of the parties' agreement. Circuit Solutions accepted Mueller's purchase orders and began assembling clips under them, without obtaining Mueller's consent to the terms and conditions set forth in its quotation. Circuit Solutions' cancellation term, therefore, was not part of the parties' agreement.
{¶ 32} Mueller's purchase orders did not include any terms regarding cancellation. Mueller's former purchasing manager testified that, when it sent Circuit Solutions a new purchase order, Circuit Solutions would close the previous order and begin working from the new one. An accounting assistant who worked at Circuit Solutions' Mexican facility agreed that, when she received a new purchase order from Mueller, she would begin using the numbers from the new order. Accordingly, there was competent and credible evidence in the record to support the trial court's conclusion that the cancellation term from Circuit Solution's quotation was not *17 incorporated into the parties' agreement and, therefore, that Mueller did not owe Circuit Solutions for the quantities remaining on its cancelled purchase orders.
{¶ 34} "Absent extraordinary circumstances, such as an intervening decision by the Supreme Court, an inferior court has no discretion to disregard the mandate of a superior court in a prior appeal in the same case." Nolan v. Nolan,
{¶ 35} "[T]he law of the case is applicable to subsequent proceedings in the reviewing court as well as the trial court. Thus, the decision of an appellate court in a prior appeal will *18 ordinarily be followed in a later appeal in the same case and court."Id. at 4. The doctrine, however, "is considered to be a rule of practice rather than a binding rule of substantive law and will not be applied so as to achieve unjust results." Id. at 3.
{¶ 36} In its original decision, the trial court found that "there was a meeting between the parties at which a proposed long-term contract was summarily rejected by [Mueller]." It found that "[a]n agreement about price for some work was later reached, and [Circuit Solutions] did work for [Mueller]." It also noted that "there was evidence of a course of conduct wherein the parties substituted new purchase orders for old ones." The trial court denied Circuit Solutions' claims because it "did not meet its burden of proof by clear and convincing evidence."
{¶ 37} On appeal, this Court concluded that the trial court had not applied the correct burden of proof to Circuit Solutions' claims.Circuit Solutions Inc. v. Mueller Elec. Co., 9th Dist. No. 05CA008775,
{¶ 38} On remand, the trial court reweighed the evidence, and found "by a preponderance of the evidence that there was no written contract between the parties." Because there was no written contract incorporating the cancellation terms from Circuit Solutions' quotation, the Court concluded that "the course of conduct of both parties in changing the terms of the prices of the product, the terms of the payment, and the amount of the product ordered is controlling." *19
{¶ 39} The trial court's decision was not inconsistent with this Court's mandate. Although Circuit Solutions has argued that "[t]his Court has already determined that there was an agreement between the parties that related to the terms for cancellation of purchase orders," "courts serving in an appellate capacity . . . are not permitted to make factual findings or to determine the credibility of witnesses."Irvine v. State Unemployment Compensation Bd. of Review,
{¶ 41} In State v. Wilson,
{¶ 42} Circuit Solutions claimed that its price quotations for two products included separate tooling charges because it had to construct special fixtures at its facility before it could produce those products. Circuit Solutions' president testified that Mueller accepted its terms, but never paid the tooling charges. Circuit Solutions' president also testified that, when he reviewed the invoices his company had sent Mueller, he discovered that it had undercharged for one of its products. Circuit Solutions, therefore, sought to recover the tooling charges and the amount it claimed to have under-billed, for a total of $10,197.90.
{¶ 43} Mueller has argued that it contested the alleged tooling charges at trial, but it has not cited, and I have not found, anything in the record that supports its argument. Mueller did not cross-examine Circuit Solutions' president about the unpaid tooling charges and under-billed amounts and did not introduce any evidence rebutting his testimony about those claims. While Mueller has argued that overhead charges are usually included in the per-unit cost of a product, it did not present any evidence supporting that argument at trial or tending to prove that that was done in this case. *21
{¶ 44} The trial court determined that Circuit Solutions "did not meet its burden of proof on its claim as to breach of contract by a preponderance of the evidence" and that it "failed to meet its burden of proof . . . as to the damages also." Presumably, the trial court did not believe Circuit Solutions' president's testimony about the tooling charges and claimed under-billing. It has generally been recognized that a trier of fact is free to reject testimony even if that testimony is unrebutted. See Ace Steel Baling Inc. v. Porterfield,
{¶ 46} The trial court concluded that, because there was no written contract between the parties, their course of conduct "in changing . . . the amount of the product ordered" controlled. The parties' course of conduct established that, when Mueller submitted a new purchase order, Circuit Solutions treated the previous order as cancelled or closed. Inasmuch as that finding was not against the manifest weight of the evidence, the trial court's conclusion that Circuit Solutions failed to prove that it was entitled to recover for prevented performance was also not against the manifest weight of the evidence. The majority has correctly overruled Circuit Solutions' third assignment of error.