Appeal from the Court of Common Pleas, Case No. 2016 CV 00688
Plaintiff-Appellee DAVID T. MOSS JOHN R. CHLYSTA HANNA,
CAMPBELL & POWELL.
Defendants-Appellants TERRENCE L. SEEBERGER STARK &
John W. Wise, P. J. Hon. Craig R. Baldwin, J. Hon. Earle E.
Wise, Jr., J.
John, P. J.
Defendants-Appellants Ronnie Harris and B&S Transport,
Inc. appeal the decision of the Stark County Court of Common
Pleas, which granted summary judgment against them and in
favor of Plaintiff-Appellee Bridgestone Americas Tire
Operations, LLC on several counterclaims in a dispute
commenced over payment for automotive tires following
termination of a dealership agreement between the parties.
The relevant facts leading to this appeal are as follows.
Appellant B&S Transport, Inc. is a subchapter
"S" corporation primarily owned by Appellant
Harris. Appellants developed a tire distribution business
using minority "set-aside" and related programs,
particularly for supplying tires to the federal government.
In 1991, the parties (B & S and appellant's
predecessor) entered into a standard dealership agreement,
which inter alia provided that "[appellants]
shall be entitled to purchase the Products at prices in the
applicable Bridgestone price lists, less any applicable
discounts and allowances and subject to such further terms
and conditions as may be in effect from time to time."
See Agreement para. 6(a). The agreement, by its
terms, was to be construed under the laws of the State of
California. Id. at para. 13.
The aforesaid dealership agreement was accompanied by a
mutually signed letter dated April 1, 1991 that expressly
amended the agreement. The letter included language wherein
appellee recognized that because of the nature of
appellants' business, "it is not realistic for you
to perform certain of the functions performed by a typical
tire dealer, such as handling warranty adjustments, or
providing services to purchasers of Bridgestone products
***." Appellee also therein stated that it proposed to
proceed with orders being accepted or rejected on a
"deal-specific basis, " extending to appellants
that same "net store prices" and "other
prices, discounts and payment terms available to any other
Bridgestone dealer ***."
The amending letter also stated: "At any time, and for
any reason, either party may terminate this relationship upon
30 days' written notice, provided that each party shall
honor all commitments incurred prior to the
effective date of any such termination. *** The intent of
this approach is that our business should - and can best
-grow over the long term if it is based primarily upon our
developing relationship, upon whatever success we have,
and upon mutual good faith." (Emphases added).
Subsequent to 1991, the parties engaged in business under the
aforesaid dealership agreement and amending letter, resulting
in appellants obtaining numerous federal government contracts
benefiting appellee for the provision of Bridgestone and
Firestone brand tires.
In late 2011, appellants won six contract awards, for two
years each, from the Defense Logistics Agency
("DLA"), with DLA having the unilateral right to
extend each contract by a year. See Ronnie Harris
Affidavit, para. 18-24. Appellee was notified that B&S
was bidding for the DLA contracts and was timely provided
copies of all six contracts. Appellee thereupon began to
furnish tires in support of these DLA contracts. Harris
Affidavit, para. 23. Appellee specifically advised B&S
that it was an authorized dealer to the federal government
pursuant to those contracts (referred to by Bridgestone as
"their GSA contract"). Harris Affidavit, para. 24.
According to Harris, B&S relied upon Bridgestone's
support in bidding for this DLA business. Harris Affidavit,
However, on or about February 28, 2013, appellee caused to be
personally delivered to Appellant Harris a written
notification that appellee had "decided to terminate
B&S Transport as an authorized dealer of all Bridgestone
and Firestone brand product lines ***." The stated
reasons for termination included "Bridgestone's
change in distribution and go-to-market solutions
strategies." See Exhibit B of Affidavit #1of
Landers Gaines. The effective termination date was set forth
as January 1, 2014.
On December 19, 2013, Appellants Ronnie Harris, who is
African-American, and B&S Transport sued Appellee
Bridgestone Americas Tire Operations in the United States
District Court for the Northern District of Ohio, case number
5:13-cv-02793-SL Appellants therein alleged that Bridgestone
had racially discriminated against Harris by terminating the
dealer agreement without cause and by allegedly favoring a
nonminority dealer. See B&S Transport v. Bridgestone
Americas Tire Opers., 171 F.Supp.3d 669, 676 (N.D. Ohio
2016). They also asserted state-law claims, including breach
of contract, breach of implied covenant of good faith,
promissory estoppel, and others. Appellants sought damages
and injunctive relief, arguing that appellee, even after the
termination, was obligated to continue selling tires to
appellants so that appellants could fulfill their tire
contracts with the federal government.
After an oral hearing, the federal court denied appellants
injunctive relief, finding that the discrimination claim did
"not present a high likelihood of success on the
merits." B&S Transport v. Bridgestone Americas
Tire Opers., 2014 U.S. Dist. LEXIS 26119, 14 (Feb. 27,
2014, N.D. Ohio). Appellee also produced evidence of
legitimate business reasons for the termination, reasons the
federal court found "compelling." Id. at
After discovery, the federal court granted appellee summary
judgment on appellants' discrimination claims. 171
F.Supp.3d at 680-83, 689. The federal court further declined
jurisdiction over appellants' state-law claims, although
we note the court addressed some of the underlying arguments
appellants have raised again in the present case.
Common Pleas Lawsuit / Appellants' Counterclaims
After the federal court declined jurisdiction over the
state-law claims, appellee filed an action on March 23, 2016
in the Stark County Court of Common Pleas, seeking to recover
more than $1, 000, 000.00 that Appellants B&S and Harris
allegedly owed for tires they had purchased on credit.
Appellants, on April 22, 2016, counterclaimed for breach of
contract, breach of the implied covenant of good ...