H & M Landscaping Co., Inc. v. Abraxus Salt, L.L.C.H & M Landscaping Co., Inc. v. Abraxus Salt, L.L.C.
H & M LANDSCAPING CO., INC.
PLAINTIFF-APPELLANT
vs.
ABRAXUS SALT, L.L.C.
DEFENDANT-APPELLEE
JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: September 2, 2010
ATTORNEYS FOR APPELLANT
David M. Leneghan
K. Scott Carter
200 Treeworth Boulevard
Suite 200
Broadview Heights, Ohio 44147
ATTORNEYS FOR APPELLEES
Roger L. Kleinman
Ann M. Hunt
McDonald Hopkins L.L.C.
2100 Bank One Center
600 Superior Avenue, East
Cleveland, Ohio 44114-2653
FRANK D. CELEBREZZE, JR., J.:
{¶ 1} Appellant, H & M Landscaping Co., Inc. (“H&M“), appeals from the trial court‘s grant of summary judgment in favor of appellee, Abraxus Salt, L.L.C. (“Abraxus“). H&M argues that Abraxus breached a contract for the supply of road salt for the 2007-2008 winter season. After a thorough review of the record and the apposite law, we affirm the decision of the trial court.
{¶ 2} On September 25, 2007, Abraxus contacted H&M to discuss its salt needs for the upcoming winter season. The parties arrived at an oral agreement, and H&M sent Abraxus a check for $100,000 to prepurchase road
{¶ 3} During that winter season, H&M was provided with salt it had prepurchased at the agreed-upon price. By February 13, 2008, H&M had used all of its prepaid salt and was invoiced for two new salt orders at $44 per ton. On February 18, 2008, H&M purchased additional salt, but at a price of $55 per ton. On this date, Abraxus advised H&M that its regular salt supplier, Cargill, was experiencing a shortage at its salt mine in Cleveland. As a result, Abraxus had to purchase salt from other locations at an increased price and increased transportation costs. Abraxus informed H&M that it must pay all outstanding invoices immediately, and any future salt purchases would cost $110 per ton.
{¶ 4} H&M declined to purchase any further salt and sued Abraxus for breach of contract and fraud on March 26, 2009. Abraxus submitted a motion to dismiss, which the trial court converted to a motion for summary judgment.
Law and Analysis
{¶ 5} Appellant argues in its sole assignment of error that the trial court erred in granting Abraxus‘s motion for summary judgment.
{¶ 6} ”
{¶ 7} It is well established that the party seeking summary judgment bears the burden of demonstrating that no issues of material fact exist for trial. Celotex Corp. v. Catrett (1986), 477 U.S. 317, 330, 106 S.Ct. 2548, 91 L.Ed.2d 265; Mitseff v. Wheeler (1988), 38 Ohio St.3d 112, 115, 526 N.E.2d 798. In Dresher v. Burt, 75 Ohio St.3d 280, 1996-Ohio-107, 662 N.E.2d 264, the Ohio Supreme Court modified and/or clarified the summary judgment standard as applied in Wing v. Anchor Media, Ltd. of Texas (1991), 59 Ohio St.3d 108, 570 N.E.2d 1095. Under Dresher, “the moving party bears the initial responsibility of informing the trial court of the basis for the motion, and identifying those portions of the record which demonstrate the absence of a genuine issue of fact on a material element of the nonmoving party‘s claim.” (Emphasis sic.) Id. at 296. The nonmoving party has a reciprocal burden of specificity and cannot rest on mere allegations or denials in the pleadings. Id. at 293. The nonmoving party must set forth “specific facts” by the means listed in
{¶ 8} This court reviews the lower court‘s granting of summary judgment de novo. Brown v. Scioto Cty. Commrs. (1993), 87 Ohio App.3d 704, 622 N.E.2d 1153.
The Existence of a Contract
{¶ 9} H&M alleges that the price quotation sent by Abraxus constituted an offer, which H&M accepted, creating a binding contract between the parties. A contract for the sale of salt is a contract for the sale of goods. As such, the parties’ claims are governed by Ohio‘s version of the Uniform Commercial Code (“UCC“), codified in
{¶ 10} Whether a price quotation can constitute an offer must be judged on the writing as well as the objective evidence surrounding its creation. In Bergquist Co. v. Sunroc Corp. (E.D.Pa. 1991), 777 F.Supp. 1236, 1249, the district court found that the following created an issue of fact that should be resolved by the jury: “(i) the price quotation was developed by the defendant after the parties had engaged in substantial negotiations; (ii) the quotation included a description of the product, a list of various quantities at various prices, terms of payment, and delivery terms; (iii) the quotation contained the statement ‘[t]his quotation is offered for your acceptance within 30 days‘; and (iv) the price which the purchaser paid was the price listed in the price quotation rather than the price listed in the purchaser‘s subsequent purchase order.” Dyno Constr. at 573.
{¶ 11} In the present case, the parties had engaged in significant negotiations, as evidenced by H&M‘s $100,000 check submitted to Abraxus before H&M received the quotation. Abraxus also referred to the quotation as a “salt pricing contract” in a cover letter accompanying the document. H&M was charged the early season rate that was specified. The document
{¶ 12} In the present case the document in question contains price, delivery terms, terms of payment, and product descriptions. Quantity is missing from the document. Quantity is generally the only term that is required for contract formation. Official Comment One to
{¶ 14} The only arguable reference evidencing an intent to form a requirements contract in Abraxus‘s quotation is the beginning line which states, “ABRAXUS SALT, LLC is pleased to submit the following quote for your Deicing Salt needs for the 2007/2008 season[.]” This is not a sufficiently definite expression of an intent on the part of Abraxus to engage in a full requirements contract, as H&M claims.
{¶ 15} Under Ohio law prior to the adoption of the UCC, a requirements contract “must [have] some fixed conditions or circumstances from which the quantities involved in the contract can at least be approximated.” U.S. Printing & Lithographing Co. v. Crites (1921), 15 Ohio App. 63, 1 Ohio Law Abs. 395, at p. 2. In those pre-UCC cases that have upheld requirements contracts as valid, “the quantities needed may be ascertained with some degree of certainty, and the intention of the parties, it is presumed, was to contract with reference to such quantity.” Fuchs v. United Motor Stage Co. (1939), 135 Ohio St. 509, 514, 21 N.E.2d 669. The UCC did not substantially change the common law in Ohio. Orchard Group at 428, fn. 2.
{¶ 17} In Orchard Group, the Sixth Circuit found that “‘[Konica] is pleased to offer these terms in return for a film commitment of 36 mos.‘” was not a seasonable expression of an intention to enter into a requirements contract, finding “[t]here is nothing in the language itself on its [face] which even remotely suggests exclusivity.” Orchard Group at 429. Similarly, the document sent by Abraxus contains no language as to exclusivity. H&M remained free to purchase salt from other suppliers. This is an important element to a requirements contract because such contracts rely on the good faith of the parties for enforcement.
{¶ 18} Additional language in the document sent by Abraxus stated, “[e]ither party in regard to usage allocated above assumes no obligation.” This language would preclude a finding that the parties intended to enter into a requirements contract or that the document contemplated an exclusive relationship. H&M attempts to submit parole evidence in an affidavit to the trial court, but “parole evidence is only admissible when the contract language is itself ambiguous as to its terms. See, e.g., Thomas J. Kline, Inc. v. Lorillard, Inc., 878 F.2d 791, 794 (4th Cir.1989).” Orchard Group at 429.
{¶ 19} While Orchard Group deals with a new business where no prior estimation of requirements could be used to determine whether the parties were operating in good faith, the same logic applies here. H&M does not allege that the two parties had a prior relationship that would allow evidence of past dealings to fill in a quantity term.2
{¶ 20} H&M argues that Abraxus accepted the agreement through its actions in supplying H&M with salt at the agreed-upon price. Abraxus did supply H&M with salt that was prepaid at the agreed-upon rate. However, Abraxus also charged H&M $11 per ton more than the quoted rate on at least one occasion after H&M exhausted its prepurchased amount. This course of performance information does not help H&M overcome the lack of a quantity term in the agreement. H&M sent payment for $150,000 in salt, which Abraxus accepted and delivered. The statute of frauds precludes H&M from arguing that additional amounts were also included in the agreement because they are not evident in the document that H&M asserts is a contract, and
Fraud
{¶ 21} H&M argues Abraxus committed fraud by representing to H&M that it would supply all its needed salt for the 2007-2008 season at the price set forth in the quotation.
{¶ 22} “The elements of fraud in the inducement are ‘(1) a representation of fact, (2) which is material to the transaction at hand, (3) made falsely, with knowledge of its falsity, or with utter disregard and recklessness, as to whether it is true or false, (4) with the intent of misleading another into relying upon it, (5) justifiable reliance upon the representation, (6) and a resulting injury proximately caused by the reliance.‘” Mtge. Electronic Registration Sys., Inc. v. Mosley, Cuyahoga App. No. 93170, 2010-Ohio-2886, ¶34, quoting Natl. City Bank v. Slink & Taylor, LLC, Portage App. No. 2002-P-0045, 2003-Ohio-6693, ¶23.
{¶ 23} H&M alleges the parties reached an understanding that Abraxus would supply H&M with 7,900 tons of salt for the 2007-2008 season at an agreed-upon price. According to H&M president, Mark Mazzurco, H&M was
{¶ 24} Since H&M‘s fraud claim fails, so too does its claim for punitive damages. Generally, punitive damages are not available in a breach of contract action. Ketcham v. Miller (1922), 104 Ohio St. 372, 136 N.E. 145, paragraph two of the syllabus. “[P]unitive damages are recoverable for a tort committed in connection with, but independently of, a breach of contract, the allowance of the punitive damages being for the tort, and not for the breach of
Conclusion
{¶ 25} The document in question is not a contract, but rather a price quotation inviting an offer from H&M. H&M submitted payment for $150,000 worth of salt and received that amount. H&M has failed to demonstrate fraud on the part of Abraxus. The quotation is not sufficiently definite to constitute a contract between the parties. The trial court did not err in granting summary judgment in favor of Abraxus.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure.
FRANK D. CELEBREZZE, JR., JUDGE
MARY J. BOYLE, P.J., and COLLEEN CONWAY COONEY, J., CONCUR