United States District Court, N.D. Ohio, Eastern Division
HONORABLE SARA LIOI UNITED STATES DISTRICT JUDGE
matter is before the Court on two motions for summary
judgment. The first is the motion of defendants
Mitsui Chemicals America, Inc. (“MCA”) and
Gregory Bushman (in his capacity as an employee of MCA)
(“Bushman”) (collectively, the “MCA
defendants”) for judgment on the claims asserted
against them by plaintiffs Source Associates, Inc.
(“Source”) and Conrad A. Mamajek, Inc.
(“CAM”) (collectively “plaintiffs” or
“Source/CAM”) (Doc. No. 92 [“MCA SJ
Mot.”]). Plaintiffs opposed the motion (Doc. No. 99
[“Opp'n MCA SJ Mot.”]), and the MCA
defendants filed a reply (Doc. No. 103 [“MCA SJ
Reply”]). The second is the amended motion of
defendants Bushman (in his individual capacity) and Lewis
Breon (“Breon”) (collectively the
“Bushman/Breon defendants”) (Doc. No. 94
[“B&B SJ Mot.”]). Plaintiffs opposed the
motion (Doc. No. 100 [“Opp'n B&B SJ
Mot.”]), in response to which the Bushman/Breon
defendants filed an amended reply. (Doc. No. 106
[“B&B SJ Reply”]).
reasons that follow, defendants' motions for summary
judgment are granted.
this case was removed from the Summit County Court of Common
Pleas on the basis of diversity jurisdiction pursuant to 28
U.S.C. § 1332, plaintiffs were granted leave to file an
amended complaint. The first amended complaint (Doc. No. 23
[“FAC”]), brought against defendants MCA,
Bushman,  Breon, and NXT Phase, LLC
(“NXT”), sets forth six claims for relief: against
MCA for breach of contract (claim one) and for breach of the
covenant of good faith and fair dealing (claim two); against
Bushman, Breon and NXT for tortious interference with the
contractual and business relationship between MCA and
Source/CAM (claim three); against all defendants for tortious
interference with contractual and business relationships
between Source/CAM and non-parties Complex Chemicals Co.,
Inc. (“Complex”) and John Brindle Oil and Chem
LTD (“Brindle”) (claim four); and against all
defendants for unjust enrichment (claim five) and civil
conspiracy (claim six).
undisputed facts generally underlying all six claims can be
briefly summarized as follows. In the spring of 1999, Source and
CAM entered into a joint venture for the purpose of selling
off-spec viscosity modifier polymer (“VME”)
produced by Mitsui Chemicals, Inc. (“MCI”) and
Mitsui Elastomers Singapore Pte Ltd (“MELS”). The
off-spec VME produced by MCI and MELS was sold to plaintiffs
through MCA. Plaintiffs had two customers for this
product-Brindle and Complex.
1999 through December 2013, Source purchased off-spec VME
from MCA at prices CAM negotiated with MCA for re-sale to
Brindle and Complex. MCA drop-shipped the product to Brindle
and Complex. Net profits of the joint venture were divided
equally between Source and CAM.
was an employee of MCA until his retirement on December 31,
2013. He held the position of Director of Business
Development, and the sale of prime and off-spec VME was his
responsibility. Bushman discussed his retirement plans with
his supervisor in the first half of 2013, and recommended
that in 2014, MCA utilize his company, NXT, to sell off-spec
VME. MCA terminated off-spec VME sales to plaintiffs,
effective December 31, 2013, and directed the sale of
off-spec VME to NXT, instead.These events triggered this
(in his individual capacity) and Breon moved to dismiss the
claims asserted against them in the first amended complaint
for failure to state a claim. The motion was granted in part
and denied in part. Source Assocs., Inc. v. Mitsui
Chemicals Am., Inc., No. 5:15-CV-215, 2016 WL 828785
(N.D. Ohio Mar. 3, 2016).
respect to claim three, the motion was granted as to Breon
but denied as to Bushman. As to claim four brought against
all defendants, the Court ruled that claim failed to state a
claim against Bushman and Breon, and claim four was dismissed
as to those defendants. Id. Bushman and Breon's
motion to dismiss claims five and six were denied.
Id. at *5-6. Finally, the Court declined to resolve
the issue of whether plaintiffs' claims are preempted by
Ohio's Uniform Trade Secret Act (“OUTSA”),
leaving that issue for summary judgment. Id.
moves for summary judgment on all claims asserted against the
MCA defendants: breach of contract (claim one); breach of the
covenant of good faith and fair dealing (claim two); tortious
interference with contractual and business relationships
between plaintiffs and their customers, Brindle and Complex
(claim four); unjust enrichment (claim five); and civil
conspiracy (claim six).
and Breon seek summary judgment on all claims that survived
their motion to dismiss. Bushman seeks summary judgment on
claim three (tortious interference with the relationship
between plaintiffs and MCA), and Bushman and Breon seek
summary judgment on claims five and six.
judgment is appropriate where “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). A fact is material if its resolution
affects the outcome of the lawsuit under the governing law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,
106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute is genuine,
and summary judgment is not appropriate, “if the
evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Id.
moving party must provide evidence to the court that
demonstrates the absence of a genuine dispute as to any
material fact. Whether a disputed fact is material is
entirely dependent upon the essential elements of each
particular claim for which a party seeks summary judgment.
See In re Meridia Prod. Liab. Litig., 328 F.Supp.2d
791, 796 (N.D. Ohio 2004) (“In seeking summary
judgment, the moving party bears the initial burden of
showing an absence of a genuine issue of material fact as to
an essential element of the nonmoving party's
case.”) (citing Waters v. City of Morristown,
242 F.3d 353, 358 (6th Cir. 2001)). Once the moving party
meets this initial burden, the opposing party must come
forward with specific evidence showing that there is a
genuine issue for trial. Celotex Corp. v. Catrett,
477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986);
Anderson, 477 U.S. at 250. The nonmoving party may
oppose a summary judgment motion “by any of the kinds
of evidentiary material listed in Rule 56(c), except the mere
pleadings themselves[.]” Celotex, 477 U.S. at
324. The Court must view all facts and evidence, and
inferences that may be reasonably drawn therefrom, in favor
of the nonmoving party. United States v. Diebold,
Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176
averments or conclusory allegations of an affidavit do not
create specific fact disputes for summary judgment purposes.
See Lujan v. Nat'l Wildlife Fed'n, 497 U.S.
871, 888-89, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990).
“‘The mere existence of a scintilla of evidence
in support of the [nonmoving party's] position will be
insufficient; there must be evidence on which the jury could
reasonably find for the [nonmoving party].'”
Street v. J.C. Bradford & Co., 886 F.2d 1472,
1477 (6th Cir. 1989) (quoting Anderson, 477 U.S. at
district court's review on summary judgment is a
threshold inquiry to determine whether there is the need for
a trial due to a genuine factual dispute that must be
resolved by a finder of fact because those issues may
reasonably be resolved in favor of either party.
Anderson, 477 U.S. at 250. Put another way, this
Court must determine “whether the evidence presents a
sufficient disagreement to require submission to a jury or
whether it is so one-sided that one party must prevail as a
matter of law.” Id. at 251-52; Wexler v.
White's Fine Furniture, Inc., 317 F.3d 564, 578 (6th
judgment is required:
against a party who fails to make a showing sufficient to
establish the existence of an element essential to that
party's case, and on which that party bears the burden of
proof at trial. In such a situation, there can be no genuine
issue as to any material fact, since a complete failure of
proof concerning an essential element of the nonmoving
party's case necessarily renders all other facts
immaterial. The moving party is entitled to judgment as a
matter of law because the nonmoving party has failed to make
a sufficient showing of an essential element of [his] case
with respect to which [he] has the burden of proof.
Celotex, 477 U.S. at 322-23 (internal quotation
marks and citation omitted).
Choice of Law
party has advanced any evidence or argument regarding the
issue of choice of law applicable to plaintiffs' claims.
“Absent an effective choice of law provision, Ohio
courts apply the law of the state with the most significant
relationship to the contract.” Bruster v. Uber
Tech., Inc., 188 F.Supp.3d 658, 663 (N.D. Ohio 2016)
(quoting Andrews v. Columbia Gas Transmission Corp.,
544 F.3d 618, 623 (6th Cir. 2008) (further citation
omitted)). “To assist in making this determination,
Section 188(2)(a) through (d) [of the Restatement of
Conflicts] more specifically provides that courts should
consider the place of contracting, the place of negotiation,
the place of performance, the location of the subject matter,
and the domicile, residence, nationality, place of
incorporation, and place of business of the parties.”
Ohayon v. Safeco Ins. Co. of Illinois, 747 N.E.2d
206, 209 (Ohio 2001).
plaintiff corporations are citizens of Ohio, and their
principal places of business are in Ohio. (FAC ¶¶
1, 2.) The oral agreement that plaintiffs allege controls
this case was negotiated in Japan, as discussed below. MCA,
which performed administrative functions related to the
alleged agreement, is incorporated in the State of Delaware,
with its principal place of business in New York. (Doc. No. 1
¶ 8). Bushman is a citizen of New York, and Breon now
resides in California. (Id. ¶¶ 9, 10.)
During all time periods relevant to this case, however, Breon
was an employee of Lubrizol, an Ohio corporation.
(See MCA SJ Mot. at 2426.)
side has briefed the choice of law issue, but both sides
apply Ohio law to their analysis. Upon balancing the above
factors, the Court finds that Ohio has the most significant
relationship to this dispute and, therefore, will apply Ohio
Claim one-Breach of contract against MCA
Ohio law, the elements of a breach of contract claim 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) (citing, among authorities, Savedoff v.
Access Grp., Inc., 524 F.3d 754, 762 (6th Cir. 2008)).
claim that there is an enforceable contract between MCA and
plaintiffs, requiring MCA to sell off-spec VME to them
exclusively and until such time as plaintiffs no longer
desire to purchase that product. According to plaintiffs, the
alleged contract was formed when Mamajek traveled to Japan as
a Lubrizol employee, just before he retired in 1998, in order
to meet with MCI executive, Katsuhiko Tasaka
(“Tasaka”). During that meeting, plaintiffs claim
that Tasaka told Mamajek that MCI had a warehouse full of
off-spec VME that it could not sell because of MCI's
existing agreement to sell prime VME to Lubrizol, and Tasaka
sought Mamajek's help.
to Mamajek, he and Tasaka reached an agreement concerning the
purchase and resale of off-spec VME. (Doc. No. 68-1
(Deposition of Conrad Mamajek [“Mamajek Dep.”])
at 950-51.) Mamajek agreed to buy MCI's off-spec VME and
sell it, with 30-60 day payment terms, at an agreed price
(subject to changes in the market). Under their agreement,
Mamajek was not obligated to buy a specific amount of
off-spec VME, or any at all. (Id. at 952-53.)
According to Mamajek, his oral agreement with Tasaka was good
for a year and then it was “evergreen” and
“kept rolling over every year after that.”
(Id. at 952-54.)
testified that, under the alleged agreement, MCI was free to
stop selling off-spec VME to Mamajek and Mamajek was free to
stop buying the product and, if either took that action, they
could not be sued by the other party. (Id. at
954-55.) That said, Mamajek testified that his alleged
agreement with MCI was exclusive and, although he was not
actually required to purchase any off-spec VME from MCI, MCI
could not sell off-spec VME to anyone but Mamajek as long as
he lived or wanted to buy the product. (Id. at
956-59.) Source did not have an agreement with MCI regarding
off-spec VME, but had an agreement with Mamajek to re-sell
the product. (Id. at 1036-38.) Source contends,
however, that MCI's agreement survives Mamajek and
applies to Source “[f]orever.” (Doc. No. 64-1
(Deposition of Chester Danforth [“Danforth
Dep.”]) at 638 (216-17).)
contend that Mamajek's alleged exclusive agreement with
MCI to buy and sell off-spec VME extends to, and obligates,
all of MCI's affiliated companies, including
(Opp'n MCA SJ Mot. at 2690.) Plaintiffs argue that MCA
has the same obligations as MCI under the alleged contract
with Mamajek because: (1) MCA is a wholly-owned subsidiary
controlled by MCI (including its performance of the alleged
contract between MCI and Mamajek); (2) MCA is a third-party
beneficiary to the MCI agreement; and (3) MCA is in privity
with MCI. Plaintiffs further argue that MCA is estopped from
denying that it owed plaintiffs any obligations under the
alleged contract because MCA cannot accept the benefits of
the alleged contract, but deny its burdens. (Id. at
2709-2712.) Finally, plaintiffs contend that MCA's
alleged obligations extend to Source by virtue of the joint
venture between Mamajek and Danforth, and because Source is a
third-party beneficiary of Mamajek's agreement with MCI.
(Id. at 2710-11.)
argues that it is entitled to summary judgment on
plaintiffs' claim for breach of contract because: (1)
plaintiffs cannot show the existence of a contract and, even
if they can, the contract is with MCI (who is not a party to
this case), and not MCA; (2) any agreement is too indefinite
to be enforceable; and (3) any agreement is unenforceable
under the statute of frauds. (See MCA SJ Mot. at
plaintiffs' arguments regarding MCA's contractual
obligations to plaintiffs hinge on the enforceability of the
Mamajek's agreement with Tasaka. In the absence of an
enforceable agreement between Mamajek and MCI, there is no
enforceable agreement against MCA. For the reasons that
follow, the Court finds that Mamajek's alleged oral
agreement with MCI is not enforceable under Ohio's
statute of frauds.
Agreement with MCI unenforceable under Ohio's statute of
argues that plaintiffs' alleged oral contract with MCI is
unenforceable under Ohio Rev. Code § 1302.04(A) because
the agreement is for more than $500 in sales of off-spec
VME. That section provides:
(A) Except as otherwise provided in this section a contract
for the sale of goods for the price of five hundred dollars
or more is not enforceable by way of action or defense unless
there is some writing sufficient to indicate that a contract
for sale has been made between the parties and signed by the
party against whom enforcement is sought or by his authorized
agent or broker. A writing is not insufficient because it
omits or incorrectly states a term agreed upon but the
contract is not enforceable under this division beyond the
quantity of goods shown in such writing.
purpose of the statute of frauds is to prevent unfounded oral
contract claims[.]” Copeland Corp. v. Choice
Fabricators Inc., 345 F.App'x 74, 77 (6th Cir. 2009)
(citation omitted). “While the writing need only
‘afford a basis for believing that the offered oral
evidence rests on a real transaction, ' it must satisfy
‘three definite and invariable requirements': (1)
it must ‘evidence a contract for the sale of goods,
' meaning it must indicate a contract has been made
although the contract itself may be oral; (2) it must include
‘authentication which identifies the party to be
charged' and (3) ‘it must specify a
quantity.'” Copeland Corp., 345
F.App'x at 76 (citing U.C.C. § 2-201 cmt. 1; see
also Columbus Trade Exch., Inc. v. AMCA Int'l Corp.,
763 F.Supp. 946, 950 (S.D. Ohio 1991)). The writing must
indicate a completed transaction for goods, not a future
transaction. Puritan Sys., Inc. v. M. G. Indus.,
Inc., No. 18093, 1997 WL 775681, at *3 (Ohio Ct. App.
Oct. 29, 1997) (citation omitted).
do not dispute that § 1302.04 applies to the alleged
agreement. There is no dispute that the agreement is
oral-there are no faxes, emails, or other written
communications with MCI, Tasaka, or his assistant, that state
the terms of Mamajek's alleged agreement regarding
off-spec VME. (Mamajek Dep. at 1106-1107; see also
Doc. No. 92-3 at 2462 (Answer to Request for Admission No.
1).) Thus, the alleged agreement between Mamajek and MCI is
not enforceable under § 1302.04(A).
Merchant exception-§ 1302.04(B)
though an oral agreement for more than $500.00 may not be
enforceable under § 1302.04(A), an agreement may still
be enforceable if it satisfies the requirements of the
merchant exception under § 1303.04(B).
posits that Source, Mamajek, MCA, and MCI are
“merchants” within the meaning of the statute.
(See MCA SJ Mot. at 2437 n.11.) A
“‘[m]erchant' means a person who deals in
goods of the kind or otherwise by the person's occupation
holds the person out as having knowledge or skill peculiar to
the practices or goods involved in the transaction or to whom
such knowledge or skill may be attributed by the person's
employment of an agent or broker or other intermediary who by
the agent's, broker's, or other intermediary's
occupation holds the person out as having such knowledge or
skill.” Ohio Rev. Code § 1302.01(A)(5). In
opposing MCA's motion, plaintiffs do not dispute that
Source, Mamajek, MCI, and MCA are “merchants”
under the statute.
Between merchants if within a reasonable time a writing in
confirmation of the contract and sufficient against the
sender is received and the party receiving it has reason to
know its contents, it satisfies the requirements of division
(A) of this section against such party unless written notice
of objection to its contents is given within ten days after
it is received.
order “[f]or a writing to be ‘sufficient against
the sender, ' it must meet the requirements set forth in
R.C. 1302.04(A).” Aubin Indus., Inc. v. Smith,
No. C-1-04-681, 2007 WL 2626433, at *10 (S.D. Ohio Sept. 6,
First, the writing must be signed by the party to be charged.
Puritan Systems, Inc. v. M.G. Industries, Inc., 1997
WL 775681, *2-4 (Ohio App. 9 Dist., 1997). Second, the
writing must indicate that there has been a completed
transaction for goods, not a future transaction. Id.
Third, the writing must state the quantity of goods involved.
In the case of a requirements contract, a writing indicating
that a buyer would get its supply of a product from the
seller and giving a definite time frame to the agreement may
be sufficient to fulfill the quantity term requirement.
a confirmatory writing is sufficient against the sender is a
question of law. Puritan Sys., 1997 WL 775681, at *3
(citation omitted); see also Carcorp, Inc. v. Chesrown
Oldsmobile--GMC Truck, Inc., 823 N.E.2d 34, 39 (Ohio Ct.
App. 2004) (“The issue whether appellant's breach
of contract claim is barred by R.C. 1301.12 [(statute of
frauds for personal property)] . . . was properly before the
trial court for determination as a matter of law.”).
contend that both MCI and MCA confirmed the oral agreement
between Mamajek and Tasaka by an email on July 25, 2012 from
Bushman (an MCA employee) to Mamajek, which states:
Tokyo has confirmed that you are the only outlet for off spec
VME. They are very concerned about potential confusion in
market and are ...