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Tesar Industrial Contractors, Inc. v. Steel

Court of Appeals of Ohio, Ninth District, Lorain

May 29, 2018

TESAR INDUSTRIAL CONTRACTORS, INC. Appellee/Cross-Appellant
v.
REPUBLIC STEEL Appellant/Cross-Appellee

          APPEAL FROM JUDGMENT ENTERED IN THE COURT OF COMMON PLEAS COUNTY OF LORAIN, OHIO CASE No. 13CIV181984

          PIERRE H. BERGERON, LAUREN S. KULEY, and LARISA M. VAYSMAN, Attorneys at Law, for Appellant/Cross-Appellee.

          ROYCE R. REMINGTON, JEFFREY A. BRAUER, MATTHEW D. WARTKO, and CHRISTOPHER W. ST. MARIE, Attorneys at Law, for Appellee/Cross-Appellant.

          DECISION AND JOURNAL ENTRY

          JULIE A. SCHAFER JUDGE.

         {¶1} Appellant/Cross-Appellee, Republic Steel, appeals the judgment of the Lorain County Court of Common Pleas. Additionally, Appellee/Cross-Appellant, Tesar Industrial Contractors, Inc., appeals from the trial court's judgment. For the reasons set forth below, this Court affirms.

         I.

         {¶2} In 2012, Republic initiated a project to construct an electronic arc furnace at Republic's facility in Lorain, Ohio. The project involved several components, including the erection of supporting and surrounding structures. Republic solicited bids for the project, which required multiple contractors to perform different and overlapping portions.

         {¶3} Tesar submitted an initial bid of $5, 482, 495.00 to perform work on the project as a structural contractor for the exhaust system. After some negotiation, Tesar submitted a reduced proposal to Republic on March 22, 2013, with a quote of $4, 830, 000.00 to perform its portion of work on the project. Republic accepted Tesar's bid, and issued a purchase order dated March 27, 2013, resulting in the parties' original contract.

         {¶4} The project fell significantly behind schedule and costs began to mount. Republic faulted Tesar's mismanagement for these issues, but Republic also acknowledged that it had some degree of responsibility for initial delays on the project and recognized that unforeseen difficulties had led to some cost overruns. Both Republic and Tesar desired to push forward and complete the project quickly, so the parties began to negotiate a revised contract.

         {¶5} Tesar, then in a position to appreciate the scope of the remaining work, submitted a proposal to complete the project. The parties entered into their revised contract when Republic accepted Tesar's proposal and issued a purchase order on August 20, 2013, authorizing payment to Tesar in an amount not to exceed $3, 712, 701.20 for the scope of work described therein. This purchase order also specified that, if any additional work should be required, Republic must issue a revision to the purchase order prior to the work being performed.

         {¶6} Once again, the work on the project strayed off course both in terms of time and costs. Republic accused Tesar of persistent performance failures and failure to abide by Republic's policies. Tesar blamed Republic for the delay and increased costs, citing Republic's overall failure to adequately manage the project and attempts to cut corners.

         {¶7} Tesar contends that Republic's project manager, Mark Qualls, began to directly manage the project on a time and materials basis. Further, Tesar claims that Mr. Qualls began verbally instructing Tesar to perform additional work and "out of scope" work prior to obtaining additional purchase orders with assurances of payment. Ultimately, Republic determined that Tesar could not credibly guarantee completion of the project, so it terminated Tesar and obtained another contractor to complete the work.

         {¶8} Tesar filed suit against Republic in November of 2013, alleging that Republic breached the parties' original agreement from March of 2013, the parties' revised agreement from August of 2013, and agreements for "out of scope" work that Republic directed Tesar to perform in addition to the scope of work described in the original and revised agreements. Tesar also asserted claims for fraudulent inducement and unjust enrichment. Republic answered Tesar's complaint, and filed a counterclaim alleging three causes of action, including a claim that Tesar breached the original and revised contracts. Republic also asserted a claim for declaratory judgment and a claim of unjust enrichment.

         {¶9} The matter proceeded to a jury trial. At the close of Tesar's case, the court granted Republic's motion for directed verdict, disposing of Tesar's claim for fraud in the inducement. After fourteen days of trial, the remaining claims were submitted to the jury. The jury returned a verdict in favor of Tesar on its breach of contract claim, awarding $3, 078, 000.00 in damages, and a verdict in favor of Tesar on its claim of unjust enrichment and awarded damages in the amount of $462, 128.00, for a total damage award of $3, 540, 128.00. As to Republic's counterclaims for breach of contract and unjust enrichment, the jury found in favor of Tesar and entered verdicts against Republic on both claims. The jury's resolution of these claims rendered moot, and thereby effectively disposed of, Republic's claim for declaratory judgment. On January 29, 2016, the trial court entered judgment accordingly.

         {¶10} Thereafter, Republic filed post-trial motions for judgment notwithstanding the verdict, a new trial, or remittitur. The trial court denied these motions in its April 28, 2016 journal entry. On May 26, 2016, Republic appealed the trial court's judgment denying the post-trial motions. Tesar filed a cross-appeal on June 6, 2016. Initially, the cross-appeal was docketed separately, but the matters have been consolidated. Republic raises three assignments of error for our review, while Tesar raises one assignment of error in its cross-appeal. For ease of analysis, we consider the assignments out of order.

         II.

         Republic's Assignment of Error II

         The trial court erred by not granting Republic a new trial on the breach of contract claim because the jury was not correctly instructed on the contract duties.

         {¶11} In its second assignment of error, Republic argues that it is entitled to a new trial because it is error to instruct a jury as to the breach of duties not presented in a contract, and to instruct the jury that they may find a breach based on such nonexistent duties. Specifically, Republic claims that the court erred by including in the instructions an "enumerated list of actions[, ]" or purported breaches, which Tesar failed to tie back to a contractual duty. Republic claims to have objected to the format of the instructions enumerating alleged breaches and, further, that it objected specifically to instructing the jury on duties that did not exist in the contract.

         {¶12} Civ.R. 59(A) provides multiple grounds upon which a party may base a motion for a new trial and, depending on the basis stated in the motion, "this Court will review a trial court's decision to grant or deny the motion under either a de novo or an abuse of discretion standard of review." Jackovic v. Webb, 9th Dist. Summit No. 26555, 2013-Ohio-2520, ¶ 17. Republic contends that, because its "new trial motion was based on a question of law, " this Court must apply a de novo standard of review. Obscuring the issues, however, Republic only cited generally to Civ.R. 59(A) in the portions of its motion for a new trial based on the alleged error in the jury instructions.

         {¶13} On appeal, as in its motion for a new trial, Republic has failed to designate any particular Civ.R. 59(A) grounds as a basis for this argument. Additionally, Republic made "no attempt to explain why or how Civ.R. 59(A)'s particular components apply to any of its arguments." Ulrich v. Mercedes Benz USA, LLC, 187 Ohio App.3d 154, 2010-Ohio-348, ¶ 27 (9th Dist). The catch-all provision of Civ.R. 59(A), which permits a new trial to "be granted in the sound discretion of the court for good cause shown, " is the only clearly applicable provision, and so we review for abuse of discretion. Jenkins v. Krieger, 67 Ohio St. 2d 314, 320 (1981). In relation to the disposition of a motion for a new trial, abuse of discretion entails an unreasonable, arbitrary, or unconscionable attitude upon the part of the court." J.A. Berk & Assocs. v. Levin, 9th Dist. Lorain C.A. No. 01CA007943, 2002-Ohio-3182, ¶ 20, quoting Poske v. Mergl, 169 Ohio St. 70, 75 (1959).

         {¶14} Generally, it is within the trial court's sound discretion to determine how to instruct the jury. Nist v. Mitchell, 9th Dist. Summit No. 27160, 2015-Ohio-4032, ¶ 27. When examining errors in jury instructions, "a reviewing court must consider the jury charge as a whole and 'must determine whether the jury charge probably misled the jury in a matter materially affecting the complaining party's substantial rights.'" Kokitka v. Ford Motor Co., 73 Ohio St.3d 89, 93 (1995), quoting Becker v. Lake Cty. Mem. Hosp. W., 53 Ohio St.3d 202, 208 (1990). "If there is no inherent prejudice in the inclusion of a particular jury instruction, prejudice must be affirmatively shown on the face of the record, and it cannot be presumed." Cromer v. Children's Hosp. Med. Ctr. of Akron, 142 Ohio St.3d 257, 2015-Ohio-229, ¶ 35.

         {¶15} Moreover, Civ.R. 51(A) provides that "[o]n appeal, a party may not assign as error the giving or the failure to give any instruction unless the party objects before the jury retires to consider its verdict, stating specifically the matter objected to and the grounds of the objection." When a party fails to object to a jury instruction as required by Civ.R. 51(A), our review is limited to plain error. Kitson v. Gordon Food Serv., 9th Dist. Medina No. 15CA0078-M, 2016-Ohio-7079, ¶ 10, citing Yungwirth v. McAvoy, 32 Ohio St.2d 285, 288 (1972). The civil plain error doctrine is a "very high standard[.]" Perez v. Falls Fin., 87 Ohio St.3d 371, 375 (2000). "[T]he plain error doctrine is not favored and may be applied only in the extremely rare case involving exceptional circumstances where error, to which no objection was made at the trial court, seriously affects the basic fairness, integrity, or public reputation of the judicial process, thereby challenging the legitimacy of the underlying judicial process itself." Goldfuss v. Davidson, 79 Ohio St.3d 116, (1997) syllabus.

         A. Enumeration of Alleged Breaches

         {¶16} In its brief, and in its motion for a new trial below, Republic avers that it objected to providing the jury with any instruction enumerating alleged breaches of contract. The record, however, belies Republic's claim that it objected to the form of the jury instructions the court gave for breach of contract. During the jury instruction conference, Republic did express some concern by stating counsel's uncertainty as to whether some of the alleged breaches were "obligations under the contract." However, this comment was in the context of the parties' ongoing discussion as to the appropriate way to instruct the jury on this particular matter and Republic stopped short of specifically objecting to an instruction enumerating alleged breaches. Regarding the list of alleged breaches, Republic informed the trial judge that it was "okay removing it all to make it more simple and not confuse the jury, " but that if Tesar was going to include a list of alleged breaches, Republic wanted to "reciprocate" and have its alleged breaches "listed the same way."

         {¶17} After closing arguments the trial judge instructed the jury, in pertinent part:

[F]or the claim of the breach of contract, before you can find for Tesar they have to prove by a preponderance of the evidence [A, ] that Tesar and Republic entered into one or more contracts; [B, ] that Republic breached the contract or contracts by, and I'm going to list a number of things which Tesar claims was a breach.

         The trial court listed the following alleged breaches:

a. failing to timely provide materials to Tesar;
b. providing Tesar with damaged or defective materials;
c. failing to provide materials to Tesar in a manner consistent with industry standards;
d. failing to provide timely and/or accurate design information, including drawings and specifications, for Tesar's labor, work, and/or services;
e. failing to timely provide erection drawings to Tesar and/or, in other cases, failing to provide any erection drawings to Tesar;
f failing to coordinate the labor, work, and/or services of other contractors or persons for whom Republic was responsible;
g. directing the means and methods of Tesar's labor, work, or services;
h. directing cardinal changes to Tesar and Republic's agreed-to scope of work without the issuance of a purchase order; and
i. failing to compensate Tesar for labor, work, services, material, and equipment provided by Tesar to Republic.

         The judge further instructed: "[s]o those are a list of potential ones. However, even if they prove that those were breaches, you have, Tesar has to prove that such a breach was a ...


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