APPEAL from the Franklin County Court of Common Pleas, C.P.C. No. 12CVH05-6603
Law Offices of Daniel R. Mordarski LLC, and Daniel R. Mordarski, for appellees Entire Energy & Renewables, LLC.
Lane, Alton & Horst LLC, and Edward G. Hubbard, for appellees FWD: Power, LLC.
Ice Miller LLP, Josef Keglewitsch and Stephen Kleinman, for appellees The Chestershire Group, LLC and The Gary L. Curry Revocable Living Trust.
Hahn Loeser & Parks LLP, John F. Marsh and F. Allen Boseman, Jr., for appellants EnviroWave Energy, LLC, John Novak and Judith Novak.
(¶ 1} This is an appeal from a decision and entry denying defendants-appellants', EnviroWave Energy, LLC, John Novak and Judy Novak (collectively, "EnviroWave"), motion to compel arbitration and to dismiss or stay litigation. For the reasons that follow, we affirm.
(¶ 2} The following facts are from the allegations in the amended complaint.
(¶ 3} Appellant John Novak and his company, EnviroWave, invented, developed and patented a technology to use microwave energy to process shredded tires into renewable energy, fuel, and industrial process commodities. The only existing EnviroWave Tire System was located in Ashtabula, Ohio. Sometime during 2010, the project ran out of money and was idled. The tire system continued to be stored at the Ashtabula location until May 9, 2012.
(¶ 4} In March 2011, Richard Sloan, the CEO of appellee FWD:Power, LLC ("FWD:Power") executed an agreement with EnviroWave to purchase and license tire systems from EnviroWave. That agreement contained an arbitration clause and was for territories other than Franklin County, Ohio.
(¶ 5} In addition to his out-of-state dealings with John Novak and EnviroWave, Sloan and FWD:Power wanted to relocate the existing tire system from Ashtabula, Ohio to Grove City, Ohio, where a large scrap tire facility was located. Sloan was also communicating with the purchasers of the existing EnviroWave Tire System, appellants known as the "Duncan Defendants" and/or appellant Enterprise 620, LLC ("E620"). In 2011, Sloan was introduced to Gary Curry. Curry is the owner of the Chestershire Group ("TCG"), the trustee for appellee, the Gary L. Curry Revocable Living Trust ("Curry Trust"), and the manager of non-party, Franklic LLC ("Franklic").
(¶ 6} After months of due diligence, and based upon EnviroWave's representations and silence, FWD:Power, TCG, E620, and the Duncan Defendants formed and funded the joint venture Entire Energy & Renewables, LLC ("EER"). EER was formed on September 9, 2011 to secure funding for the move and to obtain a sublicense for the technology. E620 contributed equipment known as the "Ashtabula Assets, " and those assets were supposedly free and clear of all security interests or other encumbrances. The Curry Trust provided additional debt financing to the company to position EER to construct, own, and operate a tire system plant in Franklin County, Ohio by relocating and utilizing the Ashtabula Assets.
(¶ 7} In December 2011, Curry negotiated and executed on behalf of Franklic, a written agreement with EnviroWave ("the Franklic Agreement") that granted a limited license for EnviroWave's technology for the tire systems. Franklic was required to purchase and build, or relocate at least one tire system in Franklin County, Ohio. Under Article 2.4 of the Franklic Agreement, Franklic could, at its discretion, sublicense its rights for the processing of scrap tire shards to EER, and to EER alone in Franklin County. The Franklic Agreement included an arbitration clause.
(¶ 8} From January through early March 2012, EER continued forward with the project believing that it had a clear title to the Ashtabula Assets.
(¶ 9} On March 22, 2012, EnviroWave claimed that the Duncan Defendants owed in excess of $2 million for the tire system and that EnviroWave had a security interest in the tire system, albeit one that had not been perfected by a filing. EnviroWave intentionally did not disclose the claimed debt owed by the Duncan Defendants because it was confidential to EnviroWave and the Duncan Defendants.
(¶ 10} At one point, Duncan admitted to falsifying wire transfers and to owing EnviroWave some undetermined amount of money for the tire system. He also claimed he was entitled to various credits because EnviroWave owed him money.
(¶ 11} EnviroWave forbade moving the Ashtabula Assets to Franklin County. Ultimately, the project was so delayed that the plant was ...