The Devine Group v. Omni Hotels Corporation
Filing
30
MEMORANDUM OPINION AND ORDER signed by Judge William O. Bertelsman on 7/3/2019. Defendant's 24 Motion for Judgment on the Pleadings is GRANTED. Defendant's renewed 26 Motion to Dismiss Count 1 is GRANTED. Plaintiff's 25 Motion for Summary Judgment is DENIED. All claims in the 1 Complaint are DISMISSED WITH PREJUDICE. (eh)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT CINCINNATI
CIVIL ACTION No. 1:18-cv-186 (WOB)
THE DEVINE GROUP, INC.
VS.
PLAINTIFF
MEMORANDUM OPINION AND ORDER
OMNI HOTELS CORPORATION
DEFENDANT
This is a run-of-the-mill contract dispute. Defendant Omni Hotels and
Plaintiff, The Devine Group, entered into a written agreement. Defendant terminated
the contract without cause because it believed it had that right under the terms of
the contract. Plaintiff claimed the parties agreed to a longer engagement and filed
this lawsuit, asserting three counts: (1) declaratory judgment; (2) anticipatory
repudiation; and (3) breach of contract.
On September 20, 2018, this Court heard oral argument on Defendant’s first
motion to dismiss (Doc. 5) and the parties’ cross-motions for judgment on the
pleadings (Docs. 10, 19). (Doc. 20). These motions were denied without prejudice, and
the Court granted Plaintiff 90 days “to produce to [D]efendant any evidence to
support [P]laintiff’s interpretation of the contract,” and 60 days thereafter to conduct
any depositions. Id. Plaintiff produced thirty pages of e-mail communications that
preceded the formation of the Contract. With a few exceptions, these e-mails are
primarily between Plaintiff’s own personnel. (Doc. 25-3). The parties, however, did
not conduct any depositions.
This matter is now before the Court on the following motions: (1) Defendant’s
motion for judgment on the pleadings or, in the alternative, motion for summary
judgment (Doc. 24);1 (2) Defendant’s renewed motion to dismiss Count I (Doc. 26);2
and (3) Plaintiff’s motion for summary judgment (Doc. 25). The Court dispenses with
oral argument at this stage because the materials before it adequately present the
facts and legal contentions. Accordingly, the matter is ripe for disposition.
As set forth below, the parties’ contract unambiguously permitted Defendant
to terminate the contract when it did, and therefore the Court will grant Defendant’s
motion for judgment on the pleadings.
FACTUAL AND PROCEDURAL BACKGROUND
The material facts giving rise to this controversy are undisputed. Plaintiff, The
Devine Group, Inc. (“Devine”), provides businesses with employee and talent
assessment services. (Doc. 1, ¶ 12). Defendant, Omni Hotels Corporation (“Omni”),
operates hotels throughout the United States, Canada, and Mexico. Id. at ¶ 13. On
May 4, 2016, the parties executed the Enterprise People Analytics Solutions contract
(the “Contract”). Id. at 22; see id. at ¶ 14. The Contract was drafted by Devine. See id.
1
Defendant supports its motion, in part, by incorporating its arguments in prior
filings (Docs. 14, 19). (Doc. 24 at 11).
2
Defendant also relies on previous filings (Docs. 5-1, 11) to support its renewed
motion to dismiss Count I. (Doc. 26 at 1). In opposition to Defendant’s renewed
motion to dismiss, Plaintiff has renewed and incorporated its previously stated
position as set forth in (Doc. 9). (Doc. 27 at 11).
The Devine Grp., Inc. v. Omni Hotels Corp.
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at 17.
Pursuant to the Contract, Devine agreed to provide its professional services to
Omni. (Doc. 1 at 18). Omni, in turn, agreed to pay a monthly fee in accordance with
Section III of the Contract as follows:
Id. at 19.3 The agreed duration of the Contract is set forth in Section V, which is the
center of this dispute. That provision, under the heading “TERM,” states:
The Term of this Enterprise License is equal to the Terms in Section III
above. At the end of the first term, ending December 31st, 2016, Omni
will have the option to terminate the agreement. Notice must be
provided in writing no later than December 31st, 2016. There will be
additional annual renewals thereafter unless canceled by either party
with 60 days prior written notice.
Id.
It is uncontested that Omni did not exercise its option to terminate the
Contract on December 31, 2016. (Doc. 1, ¶ 21); (Doc. 3, ¶ 21). Hence, Devine continued
3
See also (Doc. 25-2 at 4).
The Devine Grp., Inc. v. Omni Hotels Corp.
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to provide its services and, for the next year, Omni paid the increased monthly fee of
$6,875. See (Doc. 1, ¶¶ 19–24). Then, on October 26, 2017, Devine received a
“Termination Letter” from Omni, for the stated purpose of “initiating the termination
of [the] contract” and “providing the required 60 day written notice to terminate the
agreement and discontinue service effective December 31, 2017.” (Doc. 1 at 25).4
At that time, Devine claims it responded to Omni that the Contract Term ran
through December 31, 2019, and that the Termination Letter did not terminate the
Contract. Id. at ¶ 23. Omni, however, allegedly responded that it was “firm in [its]
resolve” and “well within the terms of the [C]ontract to end the agreement” when it
did. Id. at ¶ 26. When Omni then refused to pay Devine’s January 2018 invoice,
Devine filed suit in state court on February 26, 2018. Id. at ¶ 25; see id. at 5.5 Omni
timely removed the case to this Court. Id. at 1.
LEGAL STANDARD
“After the pleadings are closed—but early enough not to delay trial—a party
may move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). “The standard of
review for a Rule 12(c) motion is the same as for a motion under Rule 12(b)(6) for
failure to state a claim upon which relief can be granted.” Fritz v. Charter Twp. of
4
The Termination Letter contains a purported error because it states that it is
“effective December 31, 3017.” (Doc. 1 at 25). But Devine has not challenged the
validity of Omni’s termination based upon this apparent scrivener’s error.
5
Devine alleges it also sent Omni an invoice for February 2018. (Doc. 1, ¶ 25).
The Devine Grp., Inc. v. Omni Hotels Corp.
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Comstock, 592 F.3d 718, 722 (6th Cir. 2010).
To survive a motion to dismiss, a plaintiff must plead “enough facts to state a
claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007). “For purposes of a motion for judgment on the pleadings, all wellpleaded material allegations of the pleadings of the opposing party must be taken as
true,
and
the
motion
may
be
granted
only
if
the
moving
party
is nevertheless clearly entitled to judgment” as a matter of law. McGlone v. Bell, 681
F.3d 718, 728 (6th Cir. 2012) (citation and internal quotation marks omitted).
When evaluating a Rule 12(c) motion, a court may consider: (1) “documents
attached to the pleadings”; (2) documents “referred to in the pleadings” that “[are]
integral to the claims”; and (3) “matters of public record”—and may do so “without
converting the motion to one for summary judgment.” Commercial Money Ctr., Inc. v.
Illinois Union Ins. Co., 508 F.3d 327, 335–36 (6th Cir. 2007); see also Brent v. Wayne
Cty. Dep’t of Human Servs., 901 F.3d 656, 695 (6th Cir. 2018) (explaining that if a
party has “attached exhibits to their motion for judgment on the pleadings, [a court]
may consider those exhibits so long as they are referred to in the Complaint and are
central to the claims contained therein.” (citation and internal quotation marks
omitted)); Henry v. Chesapeake Appalachia, LLC, 739 F.3d 909, 912 (6th Cir. 2014);
Fed. R. Civ. P. 10(c).
If materials other than those listed above “are presented to and not excluded
by the court, the motion must be treated as one for summary judgment under Rule
The Devine Grp., Inc. v. Omni Hotels Corp.
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56.” See, e.g., Fed. R. Civ. P. 12(d); Max Arnold & Sons, LLC v. W.L. Hailey & Co.,
452 F.3d 494, 503 (6th Cir. 2006). Summary judgment under Rule 56 is appropriate
only when the Court, viewing the record as a whole and in the light most favorable to
the nonmoving party, determines that there exists no genuine issue of material fact
and that the moving party is entitled to judgment as a matter of law. See Fed. R. Civ.
P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322–24 (1986); Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248–50 (1986).
“The summary judgment standard does not change simply because the parties
presented cross-motions.” Profit Pet v. Arthur Dogswell, LLC, 603 F.3d 308, 311 (6th
Cir. 2010). “[R]ather, a court must evaluate each party’s motion on its own merits,
taking care in each instance to draw all reasonable inferences against the party
whose motion is under consideration.” Id. (citations and internal quotation marks
omitted).
ANALYSIS
I.
Breach of Contract (Count III)
The Court will first address Devine’s breach of contract claim because it is at the
heart of Devine’s Complaint and necessarily encompasses the other two claims for
declaratory judgment and anticipatory repudiation.
A.
Applicable Law
The Contract contains a choice-of-law clause that explicitly provides that the
The Devine Grp., Inc. v. Omni Hotels Corp.
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terms shall be construed according to Ohio law. (Doc. 1 at 21).6 The law of Ohio
therefore governs this dispute.
The required elements for a breach of contract claim 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.” V&M Star
Steel v. Centimark Corp., 678 F.3d 459, 465 (6th Cir. 2012); Jarupan v. Hanna, 878
N.E.2d 66, 73 (Ohio Ct. App. 2007). Only the “breach” element is implicated by the
parties’ dispositive cross-motions. But the issue here is not whether Omni sent the
Termination Letter and refused to make any further payments. Instead, the question
is whether Omni had the right to terminate the Contract when it did.
B.
Principles of Contract Interpretation
The “interpretation of written contract terms, including the determination of
whether those terms are ambiguous, is a matter of law for initial determination by
the court.” Savedoff v. Access Grp., Inc., 524 F.3d 754, 763 (6th Cir. 2008) (applying
Ohio law).7 “When confronted with an issue of contract interpretation, [the court’s]
6
“When interpreting contracts in a diversity action,” courts “generally enforce the
parties’ contractual choice of governing law.” See, e.g., Savedoff v. Access Group,
Inc., 524 F.3d 754, 762 (6th Cir. 2008) (citing Carnival Cruise Lines, Inc. v. Shute,
499 U.S. 585, 596 (1991)); see also Tele-Save Merchandising Co. v. Consumers
Distrib. Co., Ltd., 814 F.2d 1120, 1122 (6th Cir. 1987) (“Ohio choice-of-law principles
strongly favor upholding the chosen law of the contracting parties.”).
7
The Sixth Circuit caselaw cited herein is based on Ohio law unless otherwise noted.
The Devine Grp., Inc. v. Omni Hotels Corp.
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role is to give effect to the intent of the parties.” Sunoco, Inc. (R&M) v. Toledo Edison
Co., 953 N.E.2d 285, 292 (Ohio 2011). “[T]hat intent is presumed to reside in the
language [the parties] chose to employ in the agreement.” State ex rel. Petro v. R.J.
Reynolds Tobacco Co., 820 N.E.2d 910, 915 (Ohio 2004); Sunoco, Inc. 953 N.E.2d at
292. “Where a contract is found to be integrated, courts consider the language of the
contract alone to define the obligations by which the parties intended to be bound.”
Dottore v. Huntington Nat’l Bank, 480 F. App’x 351, 352 (6th Cir. 2012)
(citing Bellman v. Am. Int’l Grp., 865 N.E.2d 853, 856–57 (Ohio 2007)).
“[T]he meaning of a contract is to be gathered from a consideration of all its
parts, and no provision is to be wholly disregarded as inconsistent with other
provisions unless no other reasonable construction is possible.” Savedoff, 524 F.3d at
763 (quoting Burris v. Grange Mut. Co., 545 N.E.2d 83, 88 (Ohio 1989)). This includes
“writings executed as part of the same transaction.” Textileather Corp. v. GenCorp
Inc., 697 F.3d 378, 382 (6th Cir. 2012) (citation and internal quotations omitted).
“Common, undefined words appearing in a contract will be given their ordinary
meaning . . .” Sunoco, Inc., 953 N.E.2d at 292. But courts do not give words their
ordinary meaning if “manifest absurdity results,” id., or “some other meaning is
clearly evidenced from the face or overall contents of the agreement.” Lockheed
Martin Corp. v. Goodyear Tire & Rubber Co., 529 F. App’x 700, 703 (6th Cir. 2013)
(quoting Sunoco, Inc., 953 N.E.2d at 293).
“Only if the contract is ambiguous will courts look to facts outside the four
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corners of the contract to determine intent.” Yellowbook, Inc. v. Brandeberry, 708 F.3d
837, 844 (6th Cir. 2013). Otherwise, courts “must apply the plain language of the
contract.” Textileather Corp., 697 F.3d at 382 (quoting Foster Wheeler Enviresponse,
Inc. v. Franklin Cty. Convention Facilities Auth., 678 N.E.2d 519, 526 (Ohio 1997));
City of St. Marys v. Auglaize Cty. Bd. of Comm’rs, 875 N.E.2d 561, 566 (Ohio 2007)
(“Where the terms in a contract are not ambiguous, courts are constrained to apply
the plain language of the contract.”). “If a contract, or, term in a contract . . . is
ambiguous” then “extrinsic evidence of reasonableness or intent can be employed.”
Cal. Fitness I, Inc. v. Lifestyle Family Fitness, Inc., 433 F. App’x 329, 337 (6th Cir.
2011) (citation and internal quotation marks omitted). This so-called “parol evidence,”
however, “is admissible to interpret, but not to contradict, the express language of
the contract.” United States v. Ohio, 787 F.3d 350, 354 (6th Cir. 2015) (citation and
internal quotation marks omitted).
“Contractual language is ambiguous only where its meaning cannot be
determined from the four corners of the agreement or where the language is
susceptible of two or more reasonable interpretations.” Savedoff, 524 F.3d at 763
(citation and internal quotation marks omitted); Eastham v. Chesapeake Appalachia,
LLC, 754 F.3d 356, 361 (6th Cir. 2014). “[C]ourts may not use extrinsic evidence
to create an ambiguity; rather, the ambiguity must be patent, i.e., apparent on the
face of the contract.” Savedoff, 524 F.3d at 763 (emphasis added) (quoting Covington
v. Lucia, 784 N.E.2d 186, 190 (Ohio Ct. App. 2003)).
The Devine Grp., Inc. v. Omni Hotels Corp.
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On the other hand, “a contract is unambiguous if it can be given a definite
legal meaning.’” LM Ins. Corp. v. Criss, 716 F. App’x 530, 534 (6th Cir. 2017)
(emphasis added) (quoting Westfield Ins. Co. v. Galatis, 797 N.E.2d 1256, 1261 (Ohio
2003)). “A contractual term is not ambiguous merely because”—as in this case—“two
parties offer substantially different interpretations.” Coma Ins. Agency v. Safeco Ins.
Co., 526 F. App’x 465, 468 (6th Cir. 2013) (citation and internal quotation marks
omitted). In the same vein, “[t]he fact that a contract . . . is silent on a particular point
does not make it ambiguous.” Savedoff, 524 F.3d at 764 (quoting Statler Arms v.
Apoca, Inc., 700 N.E.2d 415, 421 (Ohio Ct. App. 1997)).
“If a contract is clear and unambiguous . . . there is no issue of fact to be
determined,” Lincoln Elec. Co. v. St. Paul Fire & Marine Ins. Co., 210 F.3d 672, 684
(6th Cir. 2000) (quoting Inland Refuse Transfer Co. v. Browning-Ferris Indus. of Ohio,
474 N.E.2d 271, 272–73 (Ohio 1984)),8 and “a court may look no further than the
writing itself to find the intent of the parties.” Sunoco, Inc., 953 N.E.2d at 292.
C.
Omni’s Right to Terminate the Contract
Devine’s breach of contract claim turns on the extent of Omni’s termination
rights under the Contract. Devine contends the Contract Term is three years and
8
“[I]f a term cannot be determined from the four corners of a contract, factual
determination of intent or reasonableness may be necessary to supply the missing
term.” Bank One, N.A. v. Echo Acceptance Corp., 380 F. App’x 513, 521 (6th Cir.
2010) (quoting Inland Refuse Transfer Co., 474 N.E.2d at 272–73).
The Devine Grp., Inc. v. Omni Hotels Corp.
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eight months, beginning when the Contract was executed and running “through
December 31, 2019, with annual renewals following the end of that Term.” Devine
argues that during that three-year and eight-month Term, Omni only had “a single
opt-out option” or “early termination right,” which required Omni to provide written
notice of termination no later than December 31, 2016 (approximately eight months
from when the Contract was executed). (Doc. 27 at 1, 7; Doc. 25 at 2, 8–10); (Doc. 1, ¶
20). Omni also reads the Contract as establishing a three-year and eight-month Term.
But Omni maintains that “there are three annual renewal periods within the [T]erm.”
(Doc. 24 at 15–16).
As a preliminary matter, the Contract before the Court is a fully integrated
agreement between the parties. (Doc. 1 at 19, § VIII) (stating that the Contract “is
the entire agreement between The Divine Group and [Omni]”). Thus, in accordance
with the above principles of contract interpretation, the starting point is the language
in Sections III and V governing the Term of the Contract. See Dottore, 480 F. App’x
at 352. If, and only if, those provisions are ambiguous by virtue of being “susceptible
of two or more reasonable interpretations” may extrinsic evidence be considered to
determine the intent of the parties. Savedoff, 524 F.3d at 763.
The Court therefore will exclude the e-mails produced by Devine (Doc. 25-3);
the letter from Devine’s counsel (Doc. 24-2); the declaration of Devine’s Chief
Operating Officer, Erik Lutz (Doc. 25-1); and the affidavit of Omni’s Vice President
of Talent Acquisition & Development, Jon Hunter (Doc. 28-1). As a result, the Court
The Devine Grp., Inc. v. Omni Hotels Corp.
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will view Omni’s motion (Doc. 24), as one under Rule 12(c). Northville Downs v.
Granholm, 622 F.3d 579, 585 (6th Cir. 2010).
Turning then to the language of the Contract, in Section III the following table
is set forth:
(Doc. 1 at 19). Section V, under the heading “TERM,” states:
[1] The Term of this Enterprise License is equal to the Terms in Section
III above. [2] At the end of the first term, ending December 31st, 2016,
Omni will have the option to terminate the agreement. [3] Notice must
be provided in writing no later than December 31st, 2016. [4] There will
be additional annual renewals thereafter unless canceled by either party
with 60 days prior written notice.
Id.9 Beginning with the first sentence, the Term of the Contract must be “equal” to
the time period established by the “Terms” in Section III. Thus, the Term of the
Contract is three (3) years and eight (8) months.
The second sentence unambiguously permits Omni to terminate the Contract
on December 31, 2016. And as to the third sentence, that provision simply prescribes
9
The four sentences are labeled to avoid confusion.
The Devine Grp., Inc. v. Omni Hotels Corp.
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the means by which Omni was required to exercise its termination right; namely, by
providing notice “in writing no later than December 31, 2016.” The parties agree
Omni had this termination right and did not exercise it. (Doc. 1, ¶ 21); (Doc. 3, ¶ 21).
That leaves the fourth sentence: “There will be additional annual renewals
thereafter unless canceled by either party with 60 days prior written notice.”
(emphasis added). This sentence is the source of the tension between the parties. But
that sentence yields only one reasonable interpretation: The adverb “thereafter”
plainly refers to December 31, 2016.10 The meaning is unambiguous, Savedoff, 524
F.3d at 763, and thus the Court will not, and indeed cannot, consider Devine’s
extrinsic evidence. Yellowbook, Inc., 708 F.3d at 844.
The Court therefore holds that Section V clearly and unambiguously dictates
that after December 31, 2016, the Contract would renew once every year, for a period
of one year, but either party was free to “cancel” the renewal by terminating the
Contract with written notice 60 days prior to the renewal date. When applied to facts
of this case, the operative date here is 60 days prior to December 31, 2017. Thus,
Omni’s Termination Letter, dated October 26, 2017, was a timely notice that
terminated the Contract. (Doc. 1 at 25).11 Omni therefore did not breach the Contract.
10
11
The word “thereafter” means “After that in time, order, or sequence; subsequently;
afterwards.” Thereafter, OXFORD ENGLISH DICTIONARY, OED (Oxford Univ. Press
2019),
https://www.oed.com/view/Entry/200475?redirectedFrom=thereafter#eid
(last visited May 16, 2019) [hereinafter “OXFORD ENGLISH DICTIONARY”].
Determining whether a communication has effectively terminated a contractual
The Devine Grp., Inc. v. Omni Hotels Corp.
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This result is unavoidable. Once the terms “additional,”12 “annual,”13
“renewal,”14 and “thereafter,”15 are each given their “ordinary meaning,”16 it cannot
be said that the result the Court reaches today is “manifest absurdity” or that “some
other meaning is clearly evidenced from the face or overall contents of the agreement.”
Sunoco, Inc., 953 N.E.2d at 293–93 (emphasis added) (citation and internal quotation
marks omitted). But in order to find that Devine’s interpretation is reasonable (Doc.
25 at 9–10; Doc. 27 at 5–7), one must essentially ignore the fourth sentence in its
relationship is a question of law. See, e.g., Stonehenge Land Co. v. Beazer Homes
Invs., LLC, 893 N.E.2d 855, 863 (Ohio Ct. App. 2008); Gollihue v. Nat’l City Bank,
969 N.E.2d 1233, 1238 (Ohio Ct. App. 2011); Daniel E. Terreri & Sons v. Bd. of
Mahoning Cty. Comm’rs, 786 N.E.2d 921, 932 (Ohio Ct. App. 2003).
12
The word “additional” means “something else; added; extra, supplementary” or “[a]
thing which is added to something else” as in “addition, an extra.” Additional,
OXFORD ENGLISH DICTIONARY, https://www.oed.com/view/Entry/2188?redirected
From=additional#eid (last visited May 16, 2019).
13
The term “annual” means “[o]ccurring once every year; . . . [or] relating to, or
involving a period of one year.” Annual, BLACK’S LAW DICTIONARY (10th ed. 2014),
available at Westlaw.
14
A “renewal” is defined as “[t]he action of renewing or re-establishing something”;
for example, “the action of extending the period of validity of a lease, licence, etc.”
Renewal, OXFORD ENGLISH DICTIONARY, https://www.oed.com/view/Entry/162428?
redirectedFrom=renewal#eid (last visited May 16, 2019).
15
Thereafter, OXFORD ENGLISH DICTIONARY, supra note 10.
16
“The Ohio Supreme Court has consistently used dictionary definitions to determine
the common meaning of a word.” Eclipse Res. - Ohio, LLC v. Madzia, 717 F. App’x
586, 594 (6th Cir. 2017) (citing Campus Bus. Serv. v. Zaino, 786 N.E.2d 889, 891
(Ohio 2003)).
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entirety. The Court will not do that. Savedoff, 524 F.3d at 763 (“[N]o provision is to
be wholly disregarded as inconsistent with other provisions unless no other
reasonable construction is possible.”).17
“[W]hen a written instrument contradicts allegations in the complaint to which
it is attached, the exhibit trumps the allegations.” Kreipke v. Wayne State Univ., 807
F.3d 768, 782 (6th Cir. 2015) (citation and internal quotation marks omitted). Such
is the case here. Accordingly, the Court will grant Omni judgment on the pleadings.
II.
Anticipatory Repudiation (Count II)
To state a claim for anticipatory breach of contract, a plaintiff must establish
that there was (1) “a contract containing some duty of performance not yet due”; (2)
“by word or deed, the defendant refused future performance”; and (3) the defendant
caused “damage to the plaintiff.” Metz v. Am. Elec. Power Co., 877 N.E.2d 316, 324
(Ohio Ct. App. 2007). As a matter of law, Devine cannot establish the first element.
17
In ruling in favor of Omni, the Court emphasizes that it has not construed the
Contract against Devine (the drafter). This would be inappropriate as this so-called
“‘contra proferentem’ canon is meant primarily for cases where the written contract
is standardized and between parties of unequal bargaining power.” Yellowbook,
Inc., 708 F.3d at 847 (citation and internal quotation marks omitted). Moreover,
“[c]onstruing a contract against the drafter is a secondary rule of contract
construction, and is applicable when the primary rules of contract construction, i.e.
plain language of the document and extrinsic evidence, in that order, fail to clarify
the meaning of the contract.” Cadle v. D’Amico, 66 N.E.3d 1184, 1189 (Ohio Ct.
App. 2016); LublinSussman Grp. LLP v. Lee, 107 N.E.3d 724, 729 (Ohio Ct. App.
2018). Here, the Court has merely given the plain language of the Contract its
ordinary meaning in order “to give effect to the intent of the parties.” Sunoco, Inc.,
953 N.E.2d at 292.
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The same reasoning in Count I applies to Count II. As explained above, Omni
properly terminated the Contract. Because this was permissible under the terms of
the Contract, it follows that there was not “a contract containing some duty of
performance not yet due.”
Accordingly, Count II must be dismissed with prejudice.
III.
Omni’s Renewed Motion to Dismiss Count I (Declaratory Judgment)
The parties dispute whether this Court can entertain Count I pursuant to the
Declaratory Judgment Act, 28 U.S.C. § 2201. “District courts possess discretion in
determining whether and when to entertain an action under the Declaratory
Judgment Act, even when the suit otherwise satisfies subject matter jurisdictional
prerequisites.” Wilton v. Seven Falls Co., 515 U.S. 277, 282 (1995). Courts in this
jurisdiction consider the following five factors in exercising their discretion:
(1) whether the judgment would settle the controversy;
(2) whether the declaratory judgment action would serve a useful purpose in
clarifying the legal relations at issue;
(3) whether the declaratory remedy is being used merely for the purpose of
“procedural fencing” or “to provide an arena for a race for res judicata”;
(4) whether the use of a declaratory action would increase the friction between
our federal and state courts and improperly encroach on state jurisdiction; and
(5) whether there is an alternative remedy that is better or more effective.
Bituminous Cas. Corp. v. J & L Lumber Co., 373 F.3d 807, 813 (6th Cir. 2004)
(citations omitted); Western World Ins. Co. v. Hoey, 773 F.3d 755, 759 (6th Cir. 2014).
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The parties agree that the third and fourth factors are not applicable. (Doc. 5-1 at 8
n.3; Doc. 9 at 3).18
Applying the remaining three factors, the Court will decline to hear Devine’s
claim for declaratory judgment. There is no need to belabor the application of these
factors because numerous courts have reached the same result when the declaratory
judgment claim was brought alongside a breach of contract claim.19
18
When the Sixth Circuit has applied the five-factor test, the case typically has
involved a claimant that was seeking an advance opinion on the rights of the
parties (often insurance coverage or indemnity) based on some other underlying
action yet to be decided (often a personal injury claim) that potentially might give
rise to rights and liabilities. See, e.g., Bituminous, 373 F.3d at 812–13 (plaintiff was
seeking “a declaration that [plaintiff] has no duty to defend or indemnify” and the
court held “the district court should have declined to exercise jurisdiction”);
Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 554 (6th Cir. 2008) (concluding
“district court did not abuse its discretion in exercising jurisdiction pursuant to the
Declaratory Judgment Act” in an action to determine whether the insurer had a
“contractual obligation to extend tort liability insurance coverage to [the insured]
for his sexual affair with [a plaintiff]” who had a lawsuit pending in a state court);
Scottsdale Ins. Co. v. Roumph, 211 F.3d 964, 967 (6th Cir. 2000) (plaintiff was
seeking “a ruling on the applicable policy limits for its pending state court tort
action”); Western World Ins. Co., 773 F.3d at 758 (affirming district court’s decision
to assume jurisdiction in an action where all parties sought a declaratory judgment
regarding whether the insurer “had a duty to defend . . . and indemnify” if the
underlying claimant “won her negligence suit.”); Grand T. W. R. Co. v.
Consolidated Rail Corp., 746 F.2d 323, 326 (6th Cir. 1984) (plaintiff sought “a
judgment that overturns” an “earlier order regarding [plaintiff]’s indemnity claim”
and that would affect a “pending Illinois lawsuit”).
19
See, e.g., Jack v. Grouse, No. 2:16-cv-633, 2017 WL 958621 at *1 (S.D. Ohio Mar.
13, 2017); Miami Valley Mobile Health Servs. v. ExamOne Worldwide, Inc., 852 F.
Supp. 2d 925, 938 (S.D. Ohio 2012); Superior Care Pharmacy v. Medicine Shoppe
Int’l, Inc., No. 2:10-cv-207, 2011 WL 597065 at *15 (S.D. Ohio Feb. 10, 2017); World
Shipping, Inc., No. 1:12-CV-3036, 2013 WL 774503, at *5 (N.D. Ohio Feb. 22, 2013);
Stuckey v. Online Res. Corp., No. 2:08-cv-1188, 2009 WL 5030794, at *19–20 (S.D.
The Devine Grp., Inc. v. Omni Hotels Corp.
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The common thread in these cases is that everything the plaintiffs hoped to
obtain in their declaratory judgment claims could be obtained in their substantive
claims for relief. And this is true whether the plaintiff might prevail or not on their
substantive claims. See Superior Care Pharmacy, 2011 WL 597065 at *15.
Indeed, here Devine seeks a declaratory judgment as to the following issues:
a. The Term of the Contract runs through December 31, 2019;
b. Omni does not have the right to terminate the Contract until the end
of the Term;
c. Omni’s October 26, 2017 letter did not terminate the Contract [as of]
December 31, 2017;
d. Omni has outstanding obligations to Devine Group pursuant to the
Contract, which it must fulfill through the remainder of the Term;
and
e. Devine Group has performed all of its obligations to date under the
Contract.
(Doc. 1, ¶ 29). The first three points are directly covered by the above breach of
contract analysis. The fourth point is a nonstarter because even if Omni was in
breach, specific performance is inappropriate where money damages will make a
claimant whole. See Billy Williams Builders and Developers Inc. v. Hillerich, 446
S.W.2d 280 (Ky. 1969). Finally, the Court sees no reason to issue a declaratory
judgment on the last point where the contractual relationship between the parties
Ohio Dec. 11, 2009).
The Devine Grp., Inc. v. Omni Hotels Corp.
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has ended.
In short, a “declaratory judgment generally is sought before a completed
injury-in-fact has occurred.” Peoples Rights Org., Inc. v. City of Columbus, 152 F.3d
522, 527 (6th Cir. 1998) (citing Nat’l Rifle Ass’n v. Magaw, 132 F.3d 272, 279 (6th Cir.
1997). But here, although premised on a flawed interpretation of the Contract, the
alleged injury-in-fact has already occurred.
Accordingly, the Court will dismiss Count I with prejudice.
IV.
CONCLUSION
Consistent with the accompanying Memorandum Opinion, it is hereby
ORDERED that:
(1) Defendant’s motion for judgment on the pleadings (Doc. 24), is GRANTED;
(2) Defendant’s renewed motion to dismiss Count I (Doc. 26), is GRANTED;
(3) Plaintiff’s motion for summary judgment (Doc. 25), is DENIED;
(4) All claims in the Complaint (Doc. 1), are DISMISSED WITH
PREJUDICE.
A separate judgment shall enter concurrently herewith.
This 3rd day of July 2019.
The Devine Grp., Inc. v. Omni Hotels Corp.
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