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Cintas Corp. v. Great Lakes Best One Tire & Service, LLC

Court of Appeals of Ohio, Eleventh District, Trumbull

June 25, 2018

CINTAS CORPORATION, Plaintiff-Appellee,
v.
GREAT LAKES BEST ONE TIRE & SERVICE, LLC, d.b.a. TERRY'S TIRE TOWN, Defendant-Appellant.

          Civil Appeal from the Girard Municipal Court, Case No. 2016 CVF 00153.

          Patrick Milligan and Monique Boyd, 18615 Detroit Avenue, Suite 201, Lakewood, OH 44107 (For Plaintiff-Appellee).

          Darren DeHaven, 3500 Massillon Road, Suite 410, Uniontown, OH 44685 (For Defendant-Appellant).

          OPINION

          COLLEEN MARY OTOOLE, JUDGE

         {¶1} Appellant, Great Lakes Best One Tire & Service, LLC, d.b.a. Terry's Tire Town, appeals from the July 17, 2017 judgment of the Girard Municipal Court, granting judgment in favor of appellee, Cintas Corporation, and against appellant in the amount of $5, 450.44 plus interest following a bench trial. On appeal, Great Lakes asserts the trial court erred in finding it liable under a contract entered into between Terry's Tire Town and Cintas. Great Lakes contends that Cintas did not establish any of the four recognized exceptions to the general rule for successor liability under Flaugher v. Cone Automatic Machine Co., 30 Ohio St.3d 60, 62 (1987). Because the first exception applies in this case since Great Lakes, the buyer corporation, expressly or impliedly agreed to assume Terry's Tire Town's prior liability through the plain language of the Purchase Agreement, we find no reversible error and affirm.

         {¶2} Cintas, an Ohio corporation, is a uniform and facility services provider. Terry's Tire Town was in the business of selling and servicing commercial tires. On September 19, 2012, Terry's Tire Town entered into a five-year "Standard Rental Service Agreement" with Cintas for uniforms and other facility products/services. The Cintas Service Agreement was executed by James Brott, Terry's Tire Town's Commercial Division Manager, and Barry Long, a Cintas Service Sales Representative. The Cintas Service Agreement was terminated prior to completion of the five-year term. Eighty-four weeks remained on the term of the Cintas Service Agreement at the time of Terry's Tire Town's breach with an early cancellation sum due to Cintas in the amount of $5, 450.44.

         {¶3} In March 2014, American Tire Distributors ("ATD") purchased Terry's Tire Town. The following month, ATD approached Mr. Brott indicating it would be selling off the commercial tire division. Mr. Brott asked if he could bid through Great Lakes, a limited liability company he had formed.

         {¶4} On July 31, 2014, a "Purchase Agreement" was entered into by and among Terry's Tire Town Holdings, Inc., Terry's Tire Town, Inc., and Great Lakes. Mr. Brott signed the Purchase Agreement as President of Great Lakes.

         {¶5} Great Lakes continued to use the services of Cintas for a period of time. In early 2016, Great Lakes notified Cintas that it was switching to a more cost-effective option.

         {¶6} On February 22, 2016, Cintas filed a complaint for breach of contract against Great Lakes, d.b.a Terry's Tire Town. On March 16, 2016, Great Lakes filed an answer.

         {¶7} A bench trial was held on June 30, 2017.

         {¶8} On cross-examination, Mr. Brott acknowledged his signature on the 2012 Cintas Service Agreement. (Exhibit A). Mr. Brott also acknowledged his signature on the 2014 Great Lakes Purchase Agreement. (Exhibit H). Mr. Brott testified that the Cintas Service Agreement was not specifically excluded from Section 2.4(a) of the Great Lakes Purchase Agreement. Mr. Brott had knowledge that Terry's Tire Town had a continuous contract with Cintas. He indicated that the Cintas Service Agreement is not on the excluded part of Section 2.3 of the Great Lakes Purchase Agreement. Mr. Brott said he informed Cintas of the sale, i.e., that it was no longer Terry's Tire Town but rather a new entity, Great Lakes. Mr. Brott acknowledged that he never changed the logos on company shirts. (Exhibit F). A photograph taken around June 29, 2016 revealed that the Girard store still had a Terry's Tire Town sign. (Exhibit G). Mr. Brott indicated he could not afford to change the sign at that time.

         {¶9} On direct examination, Mr. Brott testified he "purchased the store assets" for Terry's Tire Town in April 2014. From Mr. Brott's understanding of the Great Lakes Purchase Agreement, he was not assuming any of Terry's Tire Town's contracts or liabilities. Mr. Brott indicated that he cannot point to anything that states that he has assumed any of the liabilities of Terry's Tire Town, specifically the Cintas Service Agreement. He said the invoicing, checks, and business cards all included the name, Great Lakes. However, Mr. Brott stated again that the front signage remained as Terry's Tire Town due to expense.

         {¶10} Cintas Service Sales Representative Mr. Long testified he was told in 2015 that Terry's Tire Town was going to be sold. Don Jones, Operations Manager for Cintas, referenced the Cintas Service Agreement. Mr. Jones also referenced a document regarding liquidated damages in the event of an account being stopped. (Exhibit B). Terry's Tire Town's termination of the contract, which had 84 weeks remaining, was coded as a "price lack of relationship," i.e., ...


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