Dywidag Sys. Internatl., USA, Inc. v. Ohio Dept. of Transp.Dywidag Sys. Internatl., USA, Inc. v. Ohio Dept. of Transp.
Rendered on July 8, 2010
Marshall & Melhorn, LLC, Thomas W. Palmer and John A. Borell, Jr., for appellant.
Porter Wright Morris & Arthur LLP, David P. Shouvlin, Kathleen M. Trafford, and Ryan P. Sherman, for appellee.
ON MOTION
CONNOR, J.
{¶1} Plaintiff-appellant, Dywidag Systems International, USA, Inc. (“appellant” or “DSI“), has appealed the decision of the Court of Claims of Ohio, which granted third party defendant-appellee, Insteel Wire Products Company‘s (“appellee” or “Insteel“), motion for summary judgment, thereby eliminating appellee as a party to the case.
{¶2} As part of a construction project involving I-480 and the creation of a new bridge known as the Veterans’ Glass City Skyway, in Toledo, Ohio, defendant-appellee Ohio Department of Transportation (“ODOT“), contracted with DSI to supply various material to construct the bridge, including epoxy-coated steel wire strands (“the strand“). Because DSI does not fabricate epoxy-coated steel wire strands, DSI contracted with Insteel to supply the two million feet of strand needed for the project. Insteel shipped the strand between May 2002 and January 2003, but for various reasons, the bridge project was substantially delayed. As a result, the strand sat in a warehouse for several years until ODOT began to install the strand in July 2006, at which time ODOT allegedly discovered flaws with the strand. ODOT then rejected the strand and required DSI to furnish a new strand.
{¶3} DSI contacted Insteel, requesting that it replace the defective strand and also indemnify and defend DSI for any liability it owed to ODOT. Insteel refused, so DSI purchased the new strand from another source at a cost of over $2.7 million. Additional project costs were incurred as a result of the removal of the defective strand, the installation of the replacement strand, and the corresponding delays.
{¶4} DSI filed a complaint against ODOT seeking declaratory relief and monetary relief regarding the replacement of the strand. ODOT filed a counterclaim against DSI alleging breach of contract and seeking damages in excess of $8 million.
{¶5} On November 30, 2009, the Court of Claims granted summary judgment in favor of Insteel on DSI‘s claims for breach of express warranty, breach of implied warranty, and contractual indemnity on the grounds they were barred by the statute of limitations. As to DSI‘s claims for common law indemnity, contribution, unjust enrichment, and breach of good faith, the Court of Claims dismissed those allegations for failure to state a claim upon which relief could be granted. Thus, the court entered judgment in favor of Insteel as to the third-party complaint in its entirety. The court‘s judgment entry did not include
{¶6} On February 1, 2010, DSI filed a motion asking the Court of Claims to amend its entry by including
{¶7} On May 12, 2010, Insteel filed the instant motion to dismiss, arguing this court lacks subject-matter jurisdiction in this appeal because indemnity claims are not
{¶8} An appellate court has jurisdiction to review and affirm, modify, or reverse judgments or final orders of the trial courts within its district. See
(1) An order that affects a substantial right in an action that in effect determines the action and prevents a judgment;
(2) An order that affects a substantial right made in a special proceeding or upon a summary application in an action after judgment;
(3) An order that vacates or sets aside a judgment or grants a new trial[.]
{¶9}
{¶10} The Supreme Court of Ohio has determined that a final order “is one disposing of the whole case or some separate and distinct branch thereof.” Lantsberry v. Tilley Lamp Co. (1971), 27 Ohio St.2d 303, 306.
When more than one claim for relief is presented in an action whether as a claim, counterclaim, cross-claim, or third-party claim, and whether arising out of the same or separate transactions, or when multiple parties are involved, the court may enter final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay. In the absence of a determination that there is no just reason for delay, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties, shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.
{¶11} Therefore to qualify as final and appealable, the trial court‘s order must satisfy the requirements of
{¶12} The Supreme Court of Ohio has established a two-step process for determining whether an order is both final and appealable. Gen. Acc. Ins. Co. v. Ins. Co. of N. Am. (1989), 44 Ohio St.3d 17. In the first step, the appellate court must determine whether the order fits within one of the categories set forth in
{¶13} An order allowing or dismissing a third-party complaint is not a final appealable order unless there is an express determination that there is no just reason for delay. “In that event, the judgment is reviewable upon the determination of no reason for delay, as well as for the error in allowing or dismissing the third-party complaint[.]” State ex rel. Jacobs v. Municipal Court of Franklin Cty. (1972), 30 Ohio St.2d 239, syllabus.
{¶14} Pursuant to
{¶15} Neither party seems to truly address or analyze whether the appeal meets the first prong of the two-part test set forth above. Instead, both sides seem to simply assert the trial court‘s order is final pursuant to
{¶16} In Elkins v. Access-Able, Inc., 10th Dist. No. 04AP-101, 2004-Ohio-4101, we examined the denial of a summary judgment motion regarding the requested dismissal of a third-party complaint claiming contribution and indemnification. In that case, we determined that an order involving a third-party complaint alleging contribution and indemnification did not qualify as a “special proceeding” pursuant to
{¶17} DSI‘s third-party complaint against Insteel asserts a claim for contribution and indemnification. The indemnity provision in DSI‘s “Terms and Conditions,” upon which DSI relies, reads as follows:
12. Indemnity – The Seller shall indemnify, hold harmless, and defend the Buyer from and against any and all claims, suits, actions, proceedings, liabilities, damages, demands, costs and expenses of whatsoever kind and
character (including but not limited to attorney‘s fees and expenses) arising out of or by reason of any injuries (including death) or damage to any persons, or damage to property of any persons or economic loss to any person, or violation of any Statute or regulation, cause[d] in whole or in part, or claimed to be caused in whole or in part or contributed to by any act, omission, fault or negligence of the Seller or anyone acting in its behalf or by reason of any fault or defect in any of the goods covered by this purchase order. This indemnity shall apply notwithstanding that any fault or negligence of Buyer is or is alleged to be a contributing factor in such matter.
{¶18} DSI‘s third-party complaint against Insteel asserting indemnification was filed in response to ODOT‘s counterclaim filed against DSI, alleging breach of contract and seeking damages in excess of $8 million. Contained within and as part of this indemnification claim, DSI‘s third-party complaint alleges Insteel is required to indemnify and defend DSI from and against any and all claims, including economic loss, caused in whole or in part or contributed to by Insteel. In granting summary judgment in favor of Insteel on the contractual indemnity and breach of warranty claims, and in dismissing the remaining claims in the third-party complaint on the grounds of failure to state a claim, the trial court effectively determined Insteel had no duty to defend DSI.
{¶19} We find a review of current caselaw involving insurance coverage issues, which is similar to indemnification, is instructive here in analyzing whether the trial court‘s order in this case affected a substantial right. In Walburn v. Dunlap, 121 Ohio St.3d 373, 2009-Ohio-1221, the Supreme Court of Ohio determined that a finding that a party was entitled to insurance coverage without addressing the issue of damages did not affect a substantial right. Id. at ¶26. The Supreme Court of Ohio further found it was not a final appealable order, despite the trial court‘s certification under
{¶20} Thus, it would seem to follow that if the issue here was strictly one of indemnification, even though in this case the “coverage” or indemnification rights were denied, since the issue of liability and damages has not yet been adjudicated, DSI‘s substantial rights may not be affected and there may be no final order pursuant to
{¶21} In Gen. Acc. Ins. Co., paragraph one of the syllabus, the Supreme Court of Ohio found the duty to defend involved a substantial right. In Walburn, the Supreme Court of Ohio reiterated that the duty to defend was of great importance to both the insured and the insurer and stated it involved a substantial right. Additionally, in Braelinn Green Condominium Unit Owner‘s Assn., we also determined that the duty to defend involved a substantial right and constituted a final order under
{¶22} Based upon this, we find the trial court‘s order in the instant case affects a substantial right and determines the action between DSI and Insteel by preventing a judgment as to Insteel. The order, which granted summary judgment in favor of Insteel, dismissed the indemnification claim (including the duty to defend) as well as all other causes of action between DSI and Insteel. As a result, DSI cannot recover from Insteel. Given that the duty to defend is a substantial right which will impact DSI‘s defense, if our review of this issue were delayed, DSI would not be afforded appropriate relief in the future by way of another appeal. Therefore, we find the trial court‘s order meets the requirement of a final order pursuant to
{¶23} Our next step involves an analysis under
{¶24} Insteel argues the trial court improperly provided
{¶25} DSI, on the other hand, submits the trial court‘s
{¶26}
{¶27} For purposes of a
{¶28} Trial judges are granted this discretion because they are in the best position to determine whether an appeal of a final order addressing fewer than all of the parties in a multi-party case will be most efficiently heard prior to trial on the merits. Id. at 354-55. This is because the trial court is familiar with the action and can best determine how the court‘s and the parties’ resources may be effectively utilized. Id. at 355. The trial court is
{¶29} A trial court is not required to give reasons for its decision to add
{¶30} Here, although the trial court provided only one reason for adding
{¶31} Furthermore, an immediate appeal could present the most efficient and straightforward trial, if the trial court did in fact err in granting summary judgment with respect to the third-party complaint, as it would allow one trial with all of the parties present. Those parties would then have the ability to present evidence against each other, thereby possibly helping to clarify liability issues.
{¶32} Insteel, however, argues that certification under these circumstances is improper. This argument is based upon several federal cases, including a Sixth Circuit case, Corrosioneering, Inc. v. Thyssen Environ. Sys., Inc. (C.A.6, 1986), 807 F.2d 1279, as well as two federal treatises, which find certification of cases involving indemnification claims where there has been no adjudication as to the underlying liability claims, is an abuse of discretion. However, Ohio courts are not bound by decisions of the United States Court of Appeals for the Sixth Circuit. State v. Morrison (Apr. 22, 1976), 10th Dist. No. 75AP-601; State v. Wolfe (1987), 41 Ohio App.3d 119. Furthermore, while such authority can be persuasive, we do not find it to be so under the circumstances here, as these circumstances are distinguishable.
{¶33} As we previously noted in the first part of analysis, which we conducted despite the parties’ general assertions that the requirements of
{¶34} Based upon the analysis above, we find the judgment at issue is both final and appealable. We find no abuse of discretion in the trial court‘s certification of this matter. Having determined that we have jurisdiction to hear this appeal, we deny Insteel‘s motion to dismiss for lack of a final appealable order.
Motion denied.
FRENCH and McGRATH, JJ., concur.