AIRBORN ELECTRONICS, INC. Appellee/Cross-Appellant
MAGNUM ENERGY SOLUTIONS, LLC Appellant/Cross-Appellee
FROM JUDGMENT ENTERED IN THE COURT OF COMMON PLEAS COUNTY OF
SUMMIT, OHIO CASE No. CV 2013 06 2736
S. HOOVER, Attorney at Law, for Appellant/Cross-Appellee.
F. DOWNEY and STEVEN A. CHANG, Attorneys at Law, for
DECISION AND JOURNAL ENTRY
JENNIFER HENSAL JUDGE
Magnum Energy Solutions, LLC appeals a judgment of the Summit
County Court of Common Pleas that awarded damages to AirBorn
Electronics, Inc. on its breach of contract claim. AirBorn
has cross-appealed the court's judgment awarding Magnum
damages on its conversion claim. For the following reasons,
this Court affirms in part and reverses in part.
AirBorn promotes itself as a one-stop shop for electronics
design and manufacturing. In 2010, Magnum hired AirBorn to
manufacture a power strip for it. It later hired AirBorn to
design and manufacture an "access point" that would
help wireless devices communicate with a network and a
"dimmer relay" that would control overhead
lighting. Magnum also hired AirBorn to design an infrared
motion sensor and to design a new version of the power strip
after the original did not perform as well as anticipated.
According to Magnum, none of the products that AirBorn
designed or manufactured worked correctly. It, therefore,
began outsourcing its projects to a different company. After
Magnum stopped using AirBorn, AirBorn sued Magnum for breach
of contract and unjust enrichment, alleging that Magnum had
failed to pay for all the work it performed. Magnum
counterclaimed, alleging breach of contract, conversion,
negligence, and breach of warranty, alleging that AirBorn had
sold it defective products and had improperly retained some
of its materials after the contracts were cancelled.
The case eventually proceeded to trial on AirBorn's
breach of contract and unjust enrichment claims and
Magnum's breach of contract and conversion claims.
Following the presentation of the evidence, the trial court
directed a verdict in favor of AirBorn with respect to its
allegation that Magnum failed to pay for all of the work it
performed on the two versions of the power strip and the
dimmer relay. The jury found that Magnum breached its
contract with AirBorn with respect to the access points and
motion sensors. The jury found in favor of Magnum on its
conversion claim and also awarded Magnum punitive damages.
Following the trial, however, the court granted AirBorn
judgment notwithstanding the verdict with respect to the
jury's punitive damages award. Magnum has appealed the
trial court's judgment, assigning three errors, and
Airborn has cross-appealed, assigning two errors.
MAGNUM'S ASSIGNMENT OF ERROR I
THE TRIAL COURT ERRED AS A MATTER OF LAW IN GRANTING
AIRBORN'S MOTION FOR DIRECTED VERDICT IN FAVOR OF
AIRBORN'S CONTRACT CLAIMS, AND AGAINST MAGNUM'S
COUNTERCLAIMS, WITH RESPECT TO THREE OF AIRBORN'S
PROJECTS THAT DID NOT RESULT IN WORKING PRODUCTS.
Magnum argues that the trial court incorrectly granted
AirBorn's motion for directed verdict as to the two
versions of the power strip and the dimmer relays. Under
Civil Rule 50(A)(4), the trial court shall grant a motion for
directed verdict after the evidence has been presented if,
"after construing the evidence most strongly in favor of
the party against whom the motion is directed, * * *
reasonable minds could come to but one conclusion upon the
evidence submitted * * *." Civ.R. 50(A)(4); Parrish
v. Jones, 138 Ohio St.3d 23, 2013-Ohio-5224, ¶ 16.
"By the same token, if there is substantial competent
evidence to support the party against whom the motion is
made, upon which evidence reasonable minds might reach
different conclusions, the motion must be denied."
Hawkins v. Ivy, 50 Ohio St.2d 114, 115 (1977).
Because a motion for directed verdict presents a question of
law, this Court's review is de novo. Jackovic v.
Webb, 9th Dist. Summit No. 26555, 2013-Ohio-2520, ¶
Magnum argues that AirBorn was not entitled to a directed
verdict on the parties' breach of contract claims because
none of the products it produced worked. It notes that there
was evidence that the original version of the power strip
tended to explode and that there were even char marks on the
example presented at trial. Magnum notes that one of
AirBorn's employees admitted that the dimmer relays also
blew up when they were installed at their intended
destination. It contends that, even though the second version
of the power strip never made it to production, the prototype
it received also did not work. According to Magnum, because
AirBorn did not produce working products, it had no
obligation to pay AirBorn.
Regarding the first version of the power strip, the evidence
at trial was that Magnum hired AirBorn to manufacture a
design that Magnum provided, using a list of components that
Magnum also provided. Although it was not disputed that some
of the power strips did not work correctly, Magnum did not
present any evidence that the reason the power strips failed
was because of AirBorn's manufacturing process instead of
the design Magnum provided or the components Magnum selected.
According to one of AirBorn's engineers, he attempted to
replicate what caused some of the power strips to stop
working, but was unable to duplicate the issue. He,
therefore, concluded that it must have been some sort of
catastrophic event at the facility where they were being used
that caused them to fail. AirBorn also presented evidence
that it delivered over 2, 600 power strips to Magnum and that
only a few had been returned to it.
Regarding the second version of the power strip, Magnum hired
AirBorn to redesign the power strip, hoping to correct the
alleged problems with the first version. The record indicates
that AirBorn developed a prototype of a redesigned power
strip, but Magnum chose not to use it. Magnum did not submit
any evidence that AirBorn failed to perform its obligations
with respect to the redesign of the power strip.
Regarding the dimmer relays, one of AirBorn's engineers
testified that the relays were designed to operate on a
110-volt system. After completing the design, they produced a
prototype, which Magnum approved. AirBorn, therefore, began
manufacturing the relays. When the relays were installed at a
federal courthouse, however, they malfunctioned because it
had a 277-volt system. According to AirBorn's engineer,
AirBorn replaced a part on the relays at its own cost so that
the relays would work at the courthouse. He testified that
there were no further issues with the dimmer relays and that
Magnum even ordered another 102 dimmer relays after the
problem was corrected.
Upon review of the record, AirBorn demonstrated that it
performed its obligations under the parties' contracts
regarding the two versions of the power strip and the dimmer
relays. Magnum did not offer any expert testimony that the
alleged problems with the first version of the power strip
were attributable to AirBorn's manufacturing process, and
it approved the version of the dimmer relay that did not
initially work at the federal courthouse. In addition, there
was no evidence that AirBorn failed to design a second
version of the power strip. We, therefore, conclude that the