C. Norris Manufacturing, LLC v. BRT Heavy Equipment, LLC et al
Memorandum Opinion and Order For the reasons herein, the Court grants in part and denies in part Defendants' motion for summary judgment. ECF Dkt. # 84 . The Court grants Defendants' motion for summary judgment as to Plaintiff' ;s claim for promissory estoppel and dismisses with prejudice Plaintiff's promissory estoppel claim. Id. However, the Court denies all other aspects of Defendants' motion for summary judgment. Id. Magistrate Judge George J. Limbert on 3/17/2017. (S,L)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
C. NORRIS MANUFACTURING, LLC., )
BRT HEAVY EQUIPMENT, LLC. et al., )
CASE NO. 5:14CV2797
UNITED STATES MAGISTRATE
JUDGE GEORGE J. LIMBERT
MEMORANDUM OPINION & ORDER
This matter is before the Court upon a motion for summary judgment filed pursuant to Rule
56 of the Federal Rules of Civil Procedure by Defendants BRT Heavy Equipment, LLC., doing
business as Beelman Heavy Equipment, LLC., and Beelman River Terminals, Inc.’s (“Defendants).
ECF Dkt. #84. Defendants assert that they are entitled to judgment as a matter of law on Plaintiff
C. Norris Manufacturing LLC’s (“Plaintiff”) complaint against them. Id.
For the following reasons, the Court GRANTS Defendants’ motion for summary judgment
as to Plaintiff’s promissory estoppel claim and dismisses that claim WITH PREJUDICE. ECF Dkt.
#84. The Court DENIES Defendants’ motion for summary judgment on all other grounds. ECF
FACTUAL AND PROCEDURAL HISTORY
On December 19, 2014, Defendants filed a notice of removal with this Court from the Stark
County Court of Common Pleas. ECF Dkt. #1. Defendants indicated that Plaintiff filed a two-count
complaint against them in the Stark County Court of Common Pleas for breach of contract and
promissory estoppel and they attached a copy of said complaint. ECF Dkt. #1-1.
In that complaint, Plaintiff alleged that it was an Ohio limited liability company that is a
leading supplier of hydraulic excavator long reach fronts for the material handling industries. Id.
at 2. It explained that it upgrades, reconstructs, and builds cranes for any industry, including
building and modifying cranes for barge loading and unloading. Id. Plaintiff further alleged that
Defendant Beelman River Terminals, Inc. is a Missouri corporation with a principal place of
business in Illinois and Sam Beelman is a principal with BRT Heavy Equipment, LLC., doing
business at Beelman Heavy Equipment LLC., and Beelman River Terminals, Inc., with the authority
to enter into contracts on behalf of Beelman. Id. at 2.
Plaintiff averred in its complaint that it had performed prior projects for Beelman-affiliated
entities but never manufactured barges for Beelman before. ECF Dkt. #1-1 at 3. Plaintiff further
alleged that on or around April 21, 2014, Sam Beelman informed it that Beelman was in the market
to buy barges and Sam Beelman provided Plaintiff with a concept drawing for a possible barge
layout on or around June 12, 2014 and asked if Plaintiff would survey the market to see if any such
barges were available. Id. After Sam Beelman was not satisfied with the barges available for sale
on the market and other barge fabricators could not meet the availability that Sam Beelman sought
due to other pending projects, Plaintiff submitted a quote to Defendants on August 1, 2014 for barge
fabrication after it consulted with a maritime engineer/naval architect. Id. Plaintiff averred that Sam
Beelman responded that he wanted three barges and Chris Norris, an agent of Plaintiff, along with
Robert Rogers, met with Sam Beelman to discuss the barges and they discussed that the company
that would build the barges would be a new start-up company that would have Defendants’ purchase
order as its first order. Id.
Plaintiff further averred in the complaint that the parties agreed that because Defendants
were familiar with Plaintiff, the contract for purchasing the barges would be between Plaintiff and
Defendants and Plaintiff would subcontract fabrication to the start-up company which would be
known as International Barge & Steel, LLC. (“IBS”), which was formed by Christopher Norris and
Robert Rogers and its business would be to build barges for customers on custom specifications.
ECF Dkt. #1-1 at 4. Plaintiff alleged that at the meeting, the parties drafted a draw schedule that
would facilitate the start-up equipment, materials, and labor required to build the barges and they
agreed that the barges would be engineered by a maritime engineer/naval architect. Id.
Plaintiff further alleged that Plaintiff and Defendants agreed to a Purchase Order Contract
(“Purchase Order”) on or about August 26, 2014 with a total purchase price of $1,845,000.00 and
specifications provided by Defendants for the barges. ECF Dkt. #1-1 at 4. Plaintiff alleged that on
or about August 27, 2014, Defendants made the initial payment of $307,000.00 to Plaintiff’s Ohio
bank. Id. Plaintiff averred that it and IBS thereafter sourced equipment and negotiated purchases
for cranes, forklifts, and other necessary expenses for the project. Id.
Plaintiff alleged in the complaint that on or about September 16, 2014, Plaintiff provided
Defendants with the engineered drawings for the barges, and Defendants engaged Manley Brothers,
LLC. to review the Purchase Order and the drawings, and that company concluded that the drawings
were consistent with the Purchase Order specifications. ECF Dkt. #1-1 at 4-5. Plaintiff averred that
on or about October 3, 2014, Manley Brothers, LLC. made suggestions to Plaintiff about upgrades
to Defendants’ specifications and Plaintiff made those changes and resubmitted its drawings to
Defendants on October 23, 2014. Id. at 5. Plaintiff alleged that on October 31, 2014, it requested
a meeting with Defendants in order to move the process along and on November 5, 2014, a meeting
was held with Christopher Norris, Robert Rogers, the maritime engineer/naval architect employed
by IBS, Sam Beelman, and two other representatives of Defendants. Id. At the meeting, according
to Plaintiff, Manley Brothers, LLC. submitted a new comment sheet that they discussed, then they
all traveled to the site where the barges would be unloaded. Id. Plaintiff alleged that on the drive
there, Sam Beelman provided Christopher Norris with a document entitled “Addendum to Purchase
Order” and he requested that Norris sign the document, but Norris refused because it would have
materially altered the Purchase Order and it contained factual inaccuracies. Id. Plaintiff alleges that
on or about November 7, 2014, Defendants mailed to it a notice of termination of the Purchase
Order. Id. at 6.
In Count One of its complaint, Plaintiff alleged that Defendants breached the Purchase Order
by wrongfully terminating the Purchase Order with its termination notice as Plaintiff performed its
contractual obligations and Defendants failed and refused to perform its contractual obligations.
ECF Dkt. #1-1 at 6-7. In Count Two, Plaintiffs alleged a promissory estoppel cause of action,
averring that Defendants promised to pay $1,845,000.00 for the fabrication of three barges, Plaintiff
reasonably, substantially and foreseeably relied upon the promise to its detriment and it would be
unjust if Defendants’ promises were not enforced. Id. at 7.
On February 23, 2015, the parties consented to the jurisdiction of the undersigned. ECF Dkt.
#19. On August 14, 2015, Defendants filed an answer and a counterclaim against Plaintiff. ECF
Dkt. #39. Plaintiff filed a reply to the counterclaim on September 2, 2015. ECF Dkt. #41.
Defendants subsequently amended their counterclaim on December 7, 2015 to add IBS, Christopher
Norris, and Robert Rogers. ECF Dkt. #59. Newly added counterclaim parties IBS, Christopher
Norris, and Robert Rogers filed their consent to the undersigned’s jurisdiction thereafter. ECF Dkt.
#48. Plaintiff, with the newly added counterclaim parties, filed a reply to the amended counterclaim
on January 4, 2016. ECF Dkt. #66.
On December 7, 2016, Defendants filed a motion for summary judgment as to Plaintiff’s
complaint. ECF Dkt. #84. On January 20, 2017, Plaintiff filed a brief in opposition to the motion
for summary judgment. ECF Dkt. #89. On February 3, 2017, Defendants filed a reply brief. ECF
STANDARD OF REVIEW
A court must grant summary judgment “if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). In order to show that a fact cannot be or is genuinely disputed, a party must support the
(A) citing to particular parts of materials in the record, including
depositions, documents, electronically stored information, affidavits
or declarations, stipulations (including those made for purposes of the
motion only), admissions, interrogatory answers, or other materials;
(B) showing that the materials cited do not establish the absence or
presence of a genuine dispute, or that an adverse party cannot
produce admissible evidence to support the fact.
Fed. R. Civ. P. 56(c)(1).
Upon filing a motion for summary judgment, the moving party has the initial burden of
establishing that there are no genuine issues of material fact as to an essential element of the
nonmoving party’s claim. Moldowan v. City of Warren, 578 F.3d 351, 374 (6th Cir. 2009) (internal
citation omitted); Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479–80 & n. 12 (6th Cir. 1989).
The moving party is not required to file affidavits or other similar materials negating a claim on
which its opponent bears the burden of proof, so long as the moving party relies upon the absence
of the essential element in the pleadings, depositions, answers to interrogatories, and admissions on
file. Celotex Corp. v. Catrett, 477 U.S. 317 (1986).
In response, if the moving party establishes the absence of a genuine issue of material fact,
in order to defeat summary judgment, the non-moving party “may not rely merely on allegations or
denials in its own pleading; rather, its response must – by affidavits or as otherwise provided in this
rule—set out specific facts showing a genuine issue for trial.” See Fed. R. Civ. P. 56(c); 56(e).
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87 (1986); Alexander v.
CareSource, 576 F.3d 551, 558 (6th Cir. 2009) (internal citation omitted). In this regard, “Rule 56
does not impose upon the district court a duty to sift through the record in search of evidence to
support a party’s opposition to summary judgment,” but rather, “Rule 56 allocates that duty to the
opponent of the motion, who is required to point out the evidence, albeit evidence that is already in
the record, that creates an issue of fact.” Williamson v. Aetna Life Ins. Co., 481 F.3d 369, 379–80
(6th Cir. 2007) (internal citation omitted); see also Tucker v. Tennessee, 539 F.3d 526, 531 (6th Cir.
2008) (internal citation omitted). Moreover, the non-moving party must show more than a scintilla
of evidence to overcome summary judgment; it is not enough for the non-moving party to show that
there is some metaphysical doubt as to material facts. Matsushita Elec. Indus. Co., 475 U.S. at
586–587; see also Barr v. Lafon, 538 F.3d 554, 574 (6th Cir. 2008).
Accordingly, the ultimate inquiry is whether the record, as a whole, and upon viewing it in
the light most favorable to the non-moving party, could lead a rational trier of fact to find in favor
of the non-moving party. Matsushita Elec. Indus. Co., 475 U.S. at 586–87; see also Anderson, 477
U.S. at 252.
LAW AND ANALYSIS
BREACH OF CONTRACT
Defendants first contend that Plaintiff cannot establish the requisite prima facie elements in
order to prevail on a breach of contract claim under Ohio law. ECF Dkt. #85 at 5-11. The elements
of a breach of contract law under Ohio law are: “(1) the existence of a contract; (2) performance by
the plaintiff; (3) breach by the defendant; and (4) damage or loss to the plaintiff as a result of the
breach.” NanoLogix, Inc. v. Novak, No. 4:13-cv-1000, 2016 WL 1170776, at *7 (Mar. 25, 2016),
quoting Issuer Advisory Grp. LLC v. Tech. Consumer Prods., Inc., No. 5:14CV1705, 2015 WL
458113, at *3 (N.D. Ohio Feb. 3, 2015) (quoting V & M Star Steel v. Centimark Corp., 678 F.3d
459, 465 (6th Cir. 2012) (citing, among authorities, Savedoff v. Access Grp., Inc., 524 F.3d 754, 762
(6th Cir. 2008))).
“Under Ohio law, a non-breaching party to a contract is excused from complying with
conditions of the contract, when the party for whose benefit the condition operates has already
materially breached the contract.” Capital City Energy Grp., Inc. v. Kelley Drye & Warren, LLP,
975 F. Supp. 2d 842, 860 (S.D. Ohio 2013) (quoting Jackson v. State Farm Fire & Cas. Co., 461
Fed.Appx. 422, 426 (6th Cir. 2012)). A material breach occurs when a party fails to perform an
element of the contract “that is so fundamental to the contract that the single failure to perform
defeats the essential purpose of the contract or makes it impossible for the other party to perform.”
Creative Concrete v. D & G Pools, No. 07 MA 163, 2008 WL 2609504, at *3 (Ohio Ct.App. June
26, 2008). Ohio law provides that five factors are considered in determining whether a breach is
material: “the extent to which the injured party will be deprived of the expected benefit, the extent
to which the injured party can be adequately compensated for the lost benefit, the extent to which
the breaching party will suffer a forfeiture, the likelihood that the breaching party will cure its
breach under the circumstances, and the extent to which the breaching party has acted with good
faith and dealt fairly with the injured party.” Software Clearing House, Inc. v. Intrak, Inc., 66 Ohio
App.3d 163, 170–71, 583 N.E.2d 1056 (Ohio Ct.App.1990). The mere breach of a contract term by
a party who has substantially performed does not relieve the other party from performing the
contract. Kehoe, 933 F.Supp.2d at 1004, quoting Hostetler v. Cent. Farm & Garden, Inc., No. 2010
AP 120046, 2012 WL 439696, at *6 (Ohio Ct.App. Feb. 9, 2012). The breach must be material.
The determination of whether a material breach of a contract has occurred is generally a
question of fact. Kehoe Component Sales, Inc. v. Best Lighting Products, Inc., 933 F.Supp.2d 974,
1005 (S.D. Ohio 2013), citing Kersh v. Montgomery Developmental Center, 35 Ohio App.3d 61, 63,
519 N.E.2d 665 (Ohio App. Ct. 1987). However, materiality can be a question of law if the contract
itself clearly makes a certain event a material breach. O'Brien v. Ohio State Univ., No. 06AP–946,
2007 WL 2729077, at *3 (Ohio Ct.App. Sept. 20, 2007) (internal citations omitted).
Performance by Plaintiff and Material Breach
Defendants first contend that Plaintiff cannot establish the second element for its breach of
contract claim, that Plaintiff performed or substantially performed its obligations under the Purchase
Order. ECF Dkt. #85 at 6. Defendants assert that Plaintiff cannot establish this element because
Plaintiff failed to provide the required initial drawings in the time specified in the Purchase Order
and Plaintiff failed to submit acceptable drawings that Defendants could approve as the Purchase
Order also required. Id.
Defendants point out that the Purchase Order required Plaintiff to submit drawings to them
within two weeks of the execution of the contract and first payment. ECF Dkt. #85 at 6; ECF Dkt.
#82-2 at 1. Defendants assert that the Purchase Order was executed on August 26, 2014 and the first
payment was made on August 27, 2014. ECF Dkt. #85 at 6, citing ECF Dkt. #82-3 at 70.
Defendants submit that Plaintiff should have provided the drawings to them by or on September 10,
2014, but Plaintiff delivered the drawings on September 16, 2014. ECF Dkt. #85 at 6. Defendants
further assert that even when Plaintiff submitted the late drawings, they were met with disapproval
and despite Plaintiff’s submission of revised drawings attempting to comply with the expectations
of Defendants and industry standards, the drawings were never approved and never met the industry
standards. Id. at 7. Defendants submit that the failure to submit timely drawings and to submit
drawings that were not approved and noncompliant establishes that Plaintiff neither performed nor
substantially performed in order to proceed with its prima facie case of breach of contract. Id. at 3-7.
The Court finds that the Purchase Order required that Plaintiff submit drawings within 2
weeks of execution of the contract and first payment, which occurred on August 26, 2014 and
August 27, 2014, respectively, and the drawings were not submitted until September 16, 2014, some
6 days after they were due. ECF Dkt. #82-3 at 40-43, 70, 92-93; ECF Dkt. #82-4 at 158, 187.
Plaintiff admits this in its brief in opposition to the motion for summary judgment. ECF Dkt. #89
at 9, citing ECF Dkt. #89-2 at 3.
In opposing the motion for summary judgment as to whether it performed or substantially
performed, however, Plaintiff argues that a 6-day delay was nominal and did not legally or factually
constitute a material breach of the Purchase Order. ECF Dkt. #89 at 4-5. Plaintiff further asserts
that Defendants did not object to the drawings when they were delivered on September 16, 2014 and
thus they are estopped from asserting that the delay in delivery of the drawings constituted a material
breach. Id. at 7-8. Plaintiff also asserts that Defendants’ submission of the drawings to their
engineer eight days after receiving them from Plaintiff further negates a finding that the delay was
a material breach. Id. at 5.
In the instant case, the Purchase Order does indicate that the drawings were to be completed
and submitted to Defendants within two weeks of the contract approval and first payment. ECF Dkt.
#89-1 at 1. However, the Purchase Order does not specifically make the failure to submit the
drawings within the two weeks a material breach. Id. Since the Purchase Order fails to specify that
a delay in submitting the drawings constitutes a material breach and Defendants do not otherwise
establish that such a delay as a matter of law constitutes a material breach, the Court DENIES
Defendants’ motion for summary judgment on this issue because genuine issues of material fact
surround whether the untimely submission of the drawings constitutes a material breach.
The Court also finds that the trier of fact should determine whether Plaintiff failed to provide
Defendants with adequate barge design drawings and/or failed to secure Defendants’ approval of
the drawings, and whether each or both of these failures, if they exist, constituted a material breach
of the Purchase Order. Defendants contend that their engineer, Mr. McGrady, reviewed the
untimely drawings, and ultimately rejected them, finding that they did “not meet the expectations
of the undersigned or Beelman personnel.” ECF Dkt. #85 at 6, citing ECF Dkt. #85-3 at 146.
Defendants assert that Plaintiff was provided with modifications that were necessary for the barge
to be adequately designed and Plaintiff’s revised drawings still did not comply “with the industry
standard for the design of the barges.” ECF Dkt. #85 at 6, citing ECF Dkt. #85-3 at 164.
Defendants contend that Mr. McGrady never approved the drawings and experts for both parties
opined that Plaintiff’s drawings did not comply with industry standards. ECF Dkt. #85 at 6-7, citing
ECF Dkt. #89-4 at 125-126 and ECF Dkt. #85-5 at 6. Defendants further assert that the parties met
on or about November 5, 2014 to discuss the drawings’ alleged deficiencies and omissions, but they
could not reach a compromise on Plaintiff’s drawings that still contained top deck design issues.
Id. Defendants posit that on November 7, 2014, Defendants terminated the Purchase Order due to
the untimely submission of the drawings, Plaintiff’s inability to provide acceptable drawings, and
IBS’s demonstration of inexperience and lack of understanding of inland river barge design and
In response to Defendants’ motion for summary judgment on this issue, Plaintiff cites to the
deposition testimony of Mr. McGrady, Defendants’ own expert, and asserts that he testified that he
received a redacted version of the Purchase Order from Defendants and Plaintiff’s design submission
matched up with the specifications of the Purchase Order. ECF Dkt. #89 at 10 and 18, citing ECF
Dkt. #88-5 at 72, 101. Plaintiff also asserts that the changes requested by Defendants and Mr.
McGrady were modifications, Plaintiff made those modifications, and Mr. McGrady testified that
the modified drawings were very close to completion. Id. Plaintiff further cites to Mr. McGrady’s
deposition testimony where he indicated that he did not review the drawings for compliance with
the industry “ABS” standards and he did not agree with the ABS standards as “[t]hey don’t make
any sense.” ECF Dkt. #89 at 19, citing ECF Dkt. #88-5 at 45. Plaintiff also cites to Mr. McGrady’s
testimony that he did not consider the ABS standards as to the modified drawings as he indicated
that “most inland barges are built without rules.” ECF Dkt. #89 at 19, citing ECF Dkt. #88-5 at 54.
Plaintiff further cites to Defendant Beelman’s testimonial admission that going into the November
5, 2014 meeting with Plaintiff, the project was going well enough that Defendants had no plans to
terminate the Purchase Order with Plaintiff. ECF Dkt. #89 at 10, citing ECF Dkt. #88-2 at 190-191.
Based upon the parties’ arguments and the testimony of Mr. Beelman, Mr. McGrady, and
the other experts, the Court finds that it cannot determine as a matter of law that Plaintiff’s drawings
were not approved by Defendants and if they were not, whether this constituted a material breach
of the Purchase Order. Thus, the Court finds that Plaintiff has established that genuine issues of
material fact exist as to whether Plaintiff substantially performed its obligations under the Purchase
Order by providing adequate drawings, whether those drawings were ever approved, and whether
the changes requested by Defendants and Mr. McGrady were preferences or required changes in
order to conform with industry standards and/or the Purchase Order. Moreover, because these
materials facts are in dispute, the issue of whether a material breach of the Purchase Order existed
as to providing adequate drawings and getting required approval must be decided by a jury as well.
Accordingly, Defendants’ motion for summary judgment on this issue is DENIED.
“Time is of the Essence” contract and Anticipatory Breach
Defendants also move for summary judgment against Plaintiff, asserting that the Purchase
Order was a “time is of the essence” contract and Plaintiff anticipatorily breached the contract
because it would have been impossible for Plaintiff to deliver the first barge by the December 2,
2014 deadline established in the Purchase Order. ECF Dkt. #85 at 7-8. They cite to the testimony
of their expert and Plaintiff’s own expert who testified that as of the way things stood on November
5, 2014, the barge would not have been able to be delivered by the deadline. Id. at 8, citing ECF
Dkt. #85-5 at 8; ECF Dkt. #89-4 at 103.
In response, Plaintiff argues that at the time that Defendants terminated the Purchase Order
on November 5, 2014, no barges were yet due to be delivered, and therefore Plaintiff did not breach
any obligation to timely deliver barges. ECF Dkt. #89 at 13. Plaintiff further asserts that
Defendants cannot prove that an anticipatory breached because an anticipatory breach requires proof
that a party refused to perform its obligations, which Defendants cannot establish, and Defendants
never demanded assurances that the barges would be completed if Defendants had reasonable
grounds to believe that Plaintiff would not perform under the contract. Id. at 13-14, citing cases.
Plaintiff further contends that substantial evidence exists from which a reasonable jury could find
that Defendants were the ones who caused the delays because they wanted modifications and
Defendants wanted to terminate the Purchase Order with Plaintiff for reasons other than any alleged
non-performance. ECF Dkt. #89 at 11. Plaintiff asserts that termination occurred after Plaintiff
refused to sign Defendants’ addendum to the purchase order that would have materially changed the
original terms of the Purchase Order. ECF Dkt. #89 at 6. Plaintiff also cites to Mr. Beelman’s
deposition testimony and posits that Defendants no longer needed the barges as Defendants operated
for 25 years from the St. Louis Port Authority Municipal River Terminal (“the Port”) prior to
entering into the Purchase Order, but in 2014, the Port Authority did not renew its lease with
Defendants, so Defendants had to look for a backup plan, which resulted in the decision to purchase
barges. Id., citing ECF 82-2 at 29-42. Plaintiff submits that after entering into the Purchase Order
in August of 2014, the Port Authority subsequently made the Port available for bids again by
November of 2014, which is when Defendants terminated the Purchase Order. ECF Dkt. #89 at 11,
citing ECF Dkt. #82-4 at 206-208. Plaintiff cites to Mr. Beelman’s deposition testimony where he
agreed that it was worth holding off building barges with Plaintiff or any other manufacturer until
Defendants found out whether the Port Authority accepted their bid, which it ultimately did not. Id.
at 207-208. Plaintiff also cites to Mr. Beelman’s testimony indicating that he did not obtain barges
elsewhere after terminating the Purchase Order because uncertainties in the barge business existed
at the time. Id. at 63.
In addition, Plaintiff describes in its response to the motion for summary judgment how all
three barges would operate as one combined unit, and it cites to the testimony of Mr. Shearer, one
of Defendants’ experts, who testified that he was not aware that there were plans to use the first
barge prior to receiving the second and third barges. ECF Dkt. #89 at 10, citing ECF Dkt. #88-4 at
38-39, 55. Plaintiff asserts that the second and third barges were not due for completion until March
25, 2015 and Plaintiff’s expert, Mr. Boksa, testified that Plaintiff certainly would have been able to
deliver the three barges within that time frame. ECF Dkt. #89 at 10, citing ECF Dkt. #89-2, 89-4
The Court finds as a matter of law that the Purchase Order was not a “time is of the essence”
contract. The law in Ohio is to find that generally, time of performance is not of the essence to a
contract, unless it expressed or implied from the nature of the contract or circumstances under which
it was negotiated. Franklin Mgt. Industries, Inc. v. Far More Properties, Inc., 25 N.E.3d 416, 421
(Ohio App. 8th Dist. 2014), citing Brown v. Brown, 90 Ohio App.3d 781, 784, 630 N.E.2d 763 (Ohio
App. 11th Dist.1993), Mays v. Hartman, 81 Ohio App. 408, 412, 77 N.E.2d 93 (Ohio App. 1st
Dist.1947) and Green, Inc. v. Smith, 40 Ohio App.2d 30, 37–38, 317 N.E.2d 227 (Ohio App. 4th
Dist.1974). In the instant case, there is no express clause in the Purchase Order indicating that it is
a “time is of the essence” contract. ECF Dkt. #82-2. When such an express provision is not
specified in the contract, the Court can infer such a provision only “by clear implication from the
surrounding circumstances.” SRW Envt’l Servs., Inc. v. Dudley, No. CA2008-11-282, 2009 WL
2231867, at *3 (Ohio App. 12th Dist. July 27, 2009), quoting Hall v. U.S. Bank Natl. Assn., No.
C-040642, 2006 WL 199860, at *2 (Ohio App. 1st Dist. Jan. 27, 2006), unpublished.
Defendants assert that the contract was a “time is of the essence” contract because it
contained specific deadlines for providing the initial drawings to Defendants and for delivering each
of the barges to Defendants. ECF Dkt. #85 at 7. However, as Plaintiff points out, the fact that a
contract contains specified dates does not render the contract a “time is of the essence” contract.
ECF Dkt. #89 at 11, citing Shelton v. Twin Twp., 30 N.E.3d 1047, 2015-Ohio-1602 (Ohio App. 12th
Dist. Apr. 27, 2015).
“Ohio courts are split as to whether and when ‘time is of the essence’ may be implied in a
contract.” Shelton, 30 N.E.3d at 1054. Some Ohio courts imply such a term depending upon the
nature of the contract or the circumstances under which it was negotiated, while other Ohio courts
have implied that the contract is a “time is of the essence” contract whenever a definite date is fixed
for compliance. Id. at 1054-1055, citing Green, Inc. v. Smith, 40 Ohio App.2d 30, 37–38, 317
N.E.2d 227 (Ohio App. 4th Dist.1974); Franklin Mgt. Indus., Inc. v. Far More Properties, Inc., 8th
Dist., 25 N.E.3d 416, 2014-Ohio-5437 (Ohio App. 8th Dist. 2014); and Lake Ridge Academy v.
Carney, No. 91CA005063, 1991 WL 215024, *4 (Ohio App. 9th Dist. Oct. 16, 1991), unpublished;
Calabrese v. Vukelic, No. 94–J–37, 1995 WL 750140, *1 (Ohio App. 7th Dist. Dec. 14, 1995),
unpublished, citing Domigan v. Domigan, 46 Ohio App. 542, 546, 189 N.E. 860 (Ohio App. 5th
Dist.1933). Still other Ohio courts combine the approaches and consider both the nature and
circumstances of the negotiation, as well as the fixed date of the contract in determining whether to
imply that time is of the essence in the contract. Shelton, 30 N.E.3d at 1054-1055, citing Marion
v. Hoffman, No. 9–10–23, 2010 WL 3839439 (Ohio App. 3rd Dist. Oct. 4, 2010); Nippon Life Ins.
Co. of Am. v. One Source Mgt., Ltd., No. L–10–1247, 2011 WL 1782089 (Ohio App. 6th Dist. May
Reviewing both the deadlines in the Purchase Order and the circumstances surrounding
negotiation of the Purchase Order, the Court finds as a matter of law that the Purchase Order was
not a “time is of the essence” contract. While the Purchase Order states when the first barge and
then second and third barges would be delivered, the deadlines are expressed not in specific dates
but in periods of weeks following the date of the execution of the agreement and first payment. ECF
Dkt. #89-1. The Purchase Order provides that the first barge will be delivered 14 weeks from the
date of the executed agreement and receipt of the initial payment and the second and third barges
will be delivered 30 weeks from the date of receipt of the first payment. Id. Moreover, the Financial
Terms section of the Purchase Order also seems to support a more flexible deadline as it sets forth
payments for each barge in terms of days from the execution of the Purchase Order and specifically
states that “Payment Schedule will be adjusted to fit actual production schedule,” which implies that
the production schedule could be adjusted.
In addition, the circumstances surrounding the negotiation of the contract does not support
the finding of a “time is of the essence” contract as Defendants point to no evidence supporting such
a finding. And while Mr. Norris testified that he was aware that Defendants wanted the barges built
“as soon as possible,” ECF Dkt. #88-1 at 11, and Norris was unable to secure other manufacturers
to build the barges within “any kind of reasonable delivery time,” no indication exists in the record
as to the exact time that Defendants requested for completion of the project from the surrounding
circumstances of negotiation or the Purchase Order itself.
For these reasons, the Court finds as a matter of law that the Purchase Order was not a “time
is of the essence” contract and DENIES Defendants’ motion for summary judgment on the issues
of breach and anticipatory breach of contract by Plaintiff, as genuine issues of material fact require
that these issues be presented to the jury.
Defendants also move for summary judgment on the damages element of Plaintiff’s breach
of contract claim, asserting that Plaintiff’s lost profits theory is remote and speculative. ECF Dkt.
#85 at 10. Defendants correctly assert that in order to recover lost profits for a breach of contract
under Ohio law, a plaintiff must show that “(1) the profits were within the parties’ contemplation
at the time the contract was made; (2) the loss of the profits is the probable result of the breach of
contract; and (3) the profits are not remote and speculative and may be shown with reasonable
certainty.” Ask Chemicals, LP. v. Computer Packages, Inc. 593 Fed. App’x 506, 511 (6th Cir. 2014),
quoting City of Gahanna v. Eastgate Props., Inc., 36 Ohio St.3d 65, 521 N.E.2d 814, 817( 1988).
In order to recover lost profits in Ohio, “the amount of the lost profits, as well as their
existence, must be demonstrated with reasonable certainty.” Ask Chemicals, 593 Fed. App’x at 511,
quoting Gahanna, 521 N.E.2d at 818. Lost profits calculations must be based on facts. Ask
Chemicals, 593 Fed. App’x at 511, quoting UZ Engineered Prods. Co. v. Midwest Motor Supply Co.,
Inc., 147 Ohio App.3d 382, 770 N.E.2d 1068, 1083 (2001).
Defendants attack the third element of the lost profits analysis, asserting that Plaintiff cannot
reasonably show that its lost profits were not remote and speculative. ECF Dkt. #85 at 10-11.
Defendants contend that Plaintiff cannot produce a breakdown of its expenses and neither Plaintiff
nor Mr. Rogers had ever designed or built a barge before entering into the instant contract and
therefore had no independent knowledge or information to support its lost profits claim. ECF Dkt.
#85 at 10-11. Defendants cite to Mr. Norris’ testimony that he simply received numbers and
information from Mr. Rogers for the Purchase Order, and neither Mr. Norris nor Mr. Rogers had
prior experience building barges and Mr. Rogers testified that he came up with prices in the
Purchase Order by calling people in the industry to obtain welding and steel costs, but he could not
identify those people at his deposition. Id. at 11-12, citing ECF Dkt. #82-3 at 35-36, 224; ECF Dkt.
#82-6 at 32-33; ECF Dkt. #85-2 at 4-5. Defendants cite to a number of Sixth Circuit and Ohio state
court cases in support of its proposition that detailed evidence is required in order to support a lost
profits assertion and the failure to provide a breakdown of production expenses, such as parts, labor,
and overhead is improper and will result in a lost profits calculation being deemed founded on facts
not in evidence. ECF Dkt. #85 at 10, citing Ask Chemicals, 593 Fed. App’x at 511; Auto Indus.
Supplier ESOP v. Ford Motor Co., 435 Fed. App’x 430 (6th Cir. 2011); Loadman Grp., LLC. v.
Banco Popular N. Am., No. 4:10CV1759LIO, 2013 WL 1154528, (N.D. Ohio Mar. 19, 2013),
unpublished; Gahanna, 36 Ohio St.3d at 68; AGF, Inc. v. Great Lakes Heat Treating Co., 51 Ohio
St.3d 177, 555 N.E.2d 634, 640 (1990); Endersby v. Schneppe, 73 Ohio App.3d 212, 596 N.E.2d
1081, 1084 (Ohio App. 3rd Dist. 1991); Kinetico, Inc. v. Indep. Ohio Nail Co., 19 Ohio App.3d 26,
28, 482 N.E.2d 1345 (Ohio App. 8th Dist. 1984).
Plaintiff cites to caselaw indicating that lost profits damages “often require conjecture” and
“need not be proven with mathematical precision.” ECF Dkt. #89 at 16, quoting Miami Packaging,
Inc. v. Processing Sys., Inc., 792 F.Supp.2d 560, 566 (S.D. Ohio 1991)(citation omitted) and Eggert
v. Meritain Health, Inc., 428 Fed. App’x 558, 566 (6th Cir. 2011). Plaintiff notes that this
uncertainly in damages is “why Ohio courts consistently hold that the issue of whether damages are
too remote or whether they are reasonably certain is a question of fact for the jury.” ECF Dkt. #89
at 17, citing Miami Packaging, 792 F.Supp.2d at 566; Kosier v. DeRosa, 169 Ohio App.3d 150, 862
N.E.2d 159, 2006-Ohio-5114 (Ohio App. 6th Dist. 2006); WRG Servs., Inc. v. Eliers, No. 2008L0057, 2008 WL 4876868, 2008-Ohio-5854 (Ohio App. 11th Dist. Nov. 7, 2008).
Many of the cases cited by Defendants involve the courts finding that future lost profits were
too speculative and remote. ECF Dkt. #88-1 at 195, citing Ask Chemicals, 593 Fed. App’x 506;
Auto Industries Supplier Emp. Stock Ownership Plan, 435 Fed. App’x 430; AGF, 555 N.E.2d 634;
Kinetico, 482 N.E.2d 1345; Loadman, 2013 WL 1150125. The instant case is not one where a loss
of future profits is alleged as Plaintiff requests damages only resulting from an alleged breach of the
Purchase Order by Defendants.
Further, the Court finds that Plaintiff presents sufficient evidence concerning its damages
and adequately meets its reciprocal burden of countering Defendants’ lost profits assertions.
Defendants assert that Plaintiff has “utterly failed to present any reliable evidence to support a
calculation of lost profits” and the lost profits theory is too remote and speculative. ECF Dkt. #85
at 11-12. Defendants submits that neither Mr. Norris nor Mr. Rogers ever designed or built a barge
before and Mr. Norris did not know the bases for Plaintiff’s pricing calculations in the Purchase
Order as he testified that he relied upon Mr. Rogers for the pricing but Mr. Rogers could not recall
any of the individuals that he spoke to in order to set the prices in the Purchase Order. ECF Dkt. #85
Defendants are correct that Mr. Norris had never built a barge before. ECF Dkt. #82-3 at 35,
45; ECF Dkt. #82-6 at 32. However, Mr. Norris indicated in his deposition and Declaration that he
is the Chief Executive Officer of Plaintiff, a long-time manufacturer and supplier for the handling
and barge unloading industries, and he has been extensively involved in the design of large projects
relating to heavy equipment and machinery, including fabrication, welding, design, pricing steels
and material, and estimating job projects since 1984. ECF Dkt. #82-3at 11; ECF Dkt. #88-1 at 4;
ECF Dkt. #89-2. And while Mr. Norris testified that the basis for the $1.44 million price for
manufacturing the barges was calculated from information provided by Mr. Rogers, Mr. Norris did
in fact testify as to the basis for some of the calculations, including raw materials and labor and
associated costs. ECF Dkt. #82-3 at 224-225; ECF Dkt. #88-1 at 195. For instance, he testified that
the material cost was $.49 per pound at the time of they would have been manufacturing the barges.
Id. at 225. He also explained that the overhead costs of $219,000.00 included money spent getting
ready to manufacture the barges and they could provide itemization of that. Id. at 228. It was noted
that the $219,000.00 included outlay for auction materials. Id. at 229. Mr. Norris also explained that
his role was to broker the deal to build barges between Mr. Rogers and Defendants. ECF Dkt. #82-3
at 41-42. He also testified that he made sure that Mr. Beelman knew that IBS was a startup company
and after Mr. Beelman gave the verbal order to Mr. Norris concerning building the barges, Mr.
Norris wanted to become a part of IBS so he bought into IBS as a partial owner in lieu of his
commission for the barges. Id. at 42.
As to Mr. Rogers, Defendants assert that he also had no prior experience building barges and
while he testified that he called various people to get information about welding, steel costs and
other costs that he put into the Purchase Order, he could not specifically identify who those people
were and did not provide any further explanation for his calculations. ECF Dkt. #85 at 11-12. Mr.
Rogers did testify that the instant case was his first experience designing and building a barge from
scratch. ECF Dkt. #85-2 at 5. However, he testified that he took college classes in industrial
engineering and in 2005, he acquired an interest in a company that did marine construction, where
he performed bidding, managed the staff and projects, and brought on other contractors for dredge
projects, bridge work, and reef development. ECF Dkt. #88-3 at 3, 17-18. He also did consulting
work for some marine construction companies and did some building for them and sold them
equipment. Id. at 19-20. Moreover, Mr. Norris testified that when Mr. Rogers requested the
opportunity to bid in the barge job for Defendants, Mr. Rogers informed him that Mr. Rogers’ plan
was not to build the barges himself but to set up a yard, hire an engineering firm and subcontract the
labor to get the barges built. ECF Dkt. #82-3 at 34-35. Mr. Norris also testified that Mr. Rogers
owned barges and was well-versed on barge design because he owned barges and made
modifications to them. Id. at 35. He also explained that Mr. Rogers had been in contact with Fritz
Schmid, a naval architect, concerning the design and building of the barges. Id. at 36-37. Contrary
to Defendants’ assertion, Mr. Rogers did specifically identify at least one person that he spoke to
in determining the prices to put in the original Purchase Order. ECF Dkt. #85-2 at 4-5. He
identified Willard Johnson as one of the people with whom he communicated about some of the
pricing that he put in the Purchase Order, and he explained that he also communicated with different
people and steel companies about how may feet can a welder weld in an hour, general and steel
platform prices on a per-pound basis, and steel costs. Id. at 3-5. Mr. Norris also testified that Mr.
Rogers had been in contact with Mr. Schmid, the naval architect, concerning designing and building
the barges. ECF Dkt. #82-3 at 36.
Based upon the caselaw and the evidence presented by Plaintiff, the Court DENIES
Defendants’ motion for summary judgment on the damages claim. Viewing the facts in a light most
favorable to Plaintiff, Plaintiff has presented sufficient facts to permit a jury to determine the issue
of lost profits suffered by Plaintiff, if any, resulting from any breach of contract.
Defendants also move for summary judgment on Plaintiff’s claim of promissory estoppel,
asserting that Plaintiff has failed to establish a prima facie case for promissory estoppel because it
is not applicable where the parties’ claims are governed by a valid contract. ECF Dkt. #85 at 12,
citing Right-Now Recycling, Inc. v. Ford Motor Credit Co., LLC., No. 15-3621, 264 Fed. App’x 554,
558 (6th Cir. Mar. 23, 2016) and Olympic Holding Co., LLC. v. Ace Ltd., 122 Ohio St. 3d 89, 909
N.E.2d 93, 2009-Ohio-2057 (2009). Defendants point to the fact that the parties acknowledge that
the Purchase Order is a valid and enforceable contract and reason that a promissory estoppel claim
cannot exist as a matter of law. ECF Dkt. #85 at 12.
Plaintiff did not address this assertion in its memorandum in opposition to the motion for
summary judgment. ECF Dkt. #89.
The Court agrees that as a matter of law, Plaintiff’s promissory estoppel claim cannot stand
where a valid contract exists. Ohio law provides that promissory estoppel does not apply when a
valid contract governs the claims of the parties. See Right-Now Recycling, 264 Fed. App’x at 558,
citing Gibson Real Estate Mgmt., Ltd. v. Ohio Dep't of Admin. Servs., 2006 WL 322304, at *3 (Ohio
Ct.Cl. Jan. 4, 2006); Olympic Holding Co. v. ACE Ltd., 122 Ohio St.3d 89, 909 N.E.2d 93, 100
(2009)(“The doctrine of promissory estoppel comes into play where the requisites of contract are
not met, yet the promise should be enforced to avoid injustice.”) (quoting Doe v. Univision
Television Group, Inc., 717 So.2d 63, 65 (Fla.App.1998)); Hughes v. Oberholtzer, 162 Ohio St. 330,
123 N.E.2d 393, 396 (1954) (“It is generally agreed that there can not [sic] be an express agreement
and an implied contract for the same thing existing at the same time.”); see also McGovern v. First
Housing Development Corp., No. 1:13CV2460, 2015 WL 5749837, at *8 (N.D. Ohio Sept. 30,
2015), unpublished, quoting O'Neill v. Kemper Ins. Companies, 497 F.3d 578, 583 (6th Cir.2007)
(citing Terry Barr Sales Agency, Inc. v. All–Lock Co., Inc., 96 F.3d 174, 181 (6th Cir.1996))(“In
Ohio, ‘[w]here the parties have an enforceable contract and merely dispute its terms, scope, or effect,
one party cannot recover for promissory estoppel....’”). An implied-in-law or “quasi-contract,” is
“neither necessary nor appropriate when an express contract governs the dispute between the
parties.” McGovern, 2015 WL 5749837, at *8.
Here, Defendants acknowledge that the Purchase Order is a valid and enforceable contract.
ECF Dkt. #85 at 12. Plaintiff also acknowledges that the Purchase Order is a valid and enforceable
contract. ECF Dkt. #89 at 16. Plaintiff’s entire 26-page response to Defendants’ motion for
summary judgment addresses only issues concerning terms and conditions in the Purchase Order and
mentions nothing about promissory estoppel. Id. at 1-26. Plaintiff’s assertions concern substantial
performance of the Purchase Order, who is the non-breaching and breaching parties to the Purchase
Order, and alleged damages emanating from the breach of the Purchase Order. Id.
Moreover, in its memorandum in support of its motion for summary judgment as to
Defendants’ counterclaims, Plaintiff specifically states that “[t]his matter is a contract dispute
between Norris Mfg. and Beelman.” ECF Dkt. #83-1 at 3. In its reply in support of its motion for
summary judgment on Defendants’ counterclaims, Plaintiff asserts that “[t]his is, and always has
been, a contract dispute between Norris Mfg. and Beelman.” ECF Dkt. #91 at 7.
Upon review of the record and Plaintiff and Defendants’ acknowledgments and agreement
that the Purchase Order governs this dispute between the parties, the Court concludes as a matter
of law that Plaintiff’s promissory estoppel claim cannot stand. Accordingly, the Court GRANTS
Defendants’ motion for summary judgment and DISMISSES WITH PREJUDICE Plaintiff’s claim
for promissory estoppel in the instant case. ECF Dkt. #84.
For the above reasons, the Court GRANTS IN PART AND DENIES IN PART Defendants’
motion for summary judgment. ECF Dkt. #84. The Court GRANTS Defendants’ motion for
summary judgment as to Plaintiff’s claim for promissory estoppel and DISMISSES WITH
PREJUDICE Plaintiff’s promissory estoppel claim. Id. However, the Court DENIES all other
aspects of Defendants’ motion for summary judgment. Id.
DATE: March 17, 2017
/s/George J. Limbert
GEORGE J. LIMBERT
UNITED STATES MAGISTRATE JUDGE
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