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The Devine Group, Inc. v. Omni Hotels Corp.

United States District Court, S.D. Ohio, Western Division, Cincinnati

July 3, 2019

THE DEVINE GROUP, INC. PLAINTIFF
v.
OMNI HOTELS CORPORATION DEFENDANT

          MEMORANDUM OPINION AND ORDER

          William O. Bertelsman United States District Judge.

         This is a run-of-the-mill contract dispute. Defendant Omni Hotels and Plaintiff, The Devine Group, entered into a written agreement. Defendant terminated the contract without cause because it believed it had that right under the terms of the contract. Plaintiff claimed the parties agreed to a longer engagement and filed this lawsuit, asserting three counts: (1) declaratory judgment; (2) anticipatory repudiation; and (3) breach of contract.

         On September 20, 2018, this Court heard oral argument on Defendant's first motion to dismiss (Doc. 5) and the parties' cross-motions for judgment on the pleadings (Docs. 10, 19). (Doc. 20). These motions were denied without prejudice, and the Court granted Plaintiff 90 days “to produce to [D]efendant any evidence to support [P]laintiff's interpretation of the contract, ” and 60 days thereafter to conduct any depositions. Id. Plaintiff produced thirty pages of e-mail communications that preceded the formation of the Contract. With a few exceptions, these e-mails are primarily between Plaintiff's own personnel. (Doc. 25-3). The parties, however, did not conduct any depositions.

         This matter is now before the Court on the following motions: (1) Defendant's motion for judgment on the pleadings or, in the alternative, motion for summary judgment (Doc. 24);[1] (2) Defendant's renewed motion to dismiss Count I (Doc. 26);[2]and (3) Plaintiff's motion for summary judgment (Doc. 25). The Court dispenses with oral argument at this stage because the materials before it adequately present the facts and legal contentions. Accordingly, the matter is ripe for disposition.

         As set forth below, the parties' contract unambiguously permitted Defendant to terminate the contract when it did, and therefore the Court will grant Defendant's motion for judgment on the pleadings.

         FACTUAL AND PROCEDURAL BACKGROUND

         The material facts giving rise to this controversy are undisputed. Plaintiff, The Devine Group, Inc. (“Devine”), provides businesses with employee and talent assessment services. (Doc. 1, ¶ 12). Defendant, Omni Hotels Corporation (“Omni”), operates hotels throughout the United States, Canada, and Mexico. Id. at ¶ 13. On May 4, 2016, the parties executed the Enterprise People Analytics Solutions contract (the “Contract”). Id. at 22; see Id. at ¶ 14. The Contract was drafted by Devine. See id. at 17.

         Pursuant to the Contract, Devine agreed to provide its professional services to Omni. (Doc. 1 at 18). Omni, in turn, agreed to pay a monthly fee in accordance with Section III of the Contract as follows:

         III. ENTERPRISE MONTHLY FEE

         (Image Omitted.)

         Id. at 19.[3] The agreed duration of the Contract is set forth in Section V, which is the center of this dispute. That provision, under the heading "TERM," states:

The Term of this Enterprise License is equal to the Terms in Section III above. At the end of the first term, ending December 31st, 2016, Omni will have the option to terminate the agreement. Notice must be provided in writing no later than December 31st, 2016. There will be additional annual renewals thereafter unless canceled by either party with 60 days prior written notice.

Id.

         It is uncontested that Omni did not exercise its option to terminate the Contract on December 31, 2016. (Doc. 1, ¶21); (Doc. 3, ¶ 21). Hence, Devine continued to provide its services and, for the next year, Omni paid the increased monthly fee of $6, 875. See (Doc. 1, ¶¶ 19-24). Then, on October 26, 2017, Devine received a “Termination Letter” from Omni, for the stated purpose of “initiating the termination of [the] contract” and “providing the required 60 day written notice to terminate the agreement and discontinue service effective December 31, 2017.” (Doc. 1 at 25).[4]

         At that time, Devine claims it responded to Omni that the Contract Term ran through December 31, 2019, and that the Termination Letter did not terminate the Contract. Id. at ¶ 23. Omni, however, allegedly responded that it was “firm in [its] resolve” and “well within the terms of the [C]ontract to end the agreement” when it did. Id. at ¶ 26. When Omni then refused to pay Devine's January 2018 invoice, Devine filed suit in state court on February 26, 2018. Id. at ¶ 25; see Id. at 5.[5] Omni timely removed the case to this Court. Id. at 1.

         LEGAL STANDARD

         “After the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). “The standard of review for a Rule 12(c) motion is the same as for a motion under Rule 12(b)(6) for failure to state a claim upon which relief can be granted.” Fritz v. Charter Twp. of Comstock, 592 F.3d 718, 722 (6th Cir. 2010).

         To survive a motion to dismiss, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “For purposes of a motion for judgment on the pleadings, all well-pleaded material allegations of the pleadings of the opposing party must be taken as true, and the motion may be granted only if the moving party is nevertheless clearly entitled to judgment” as a matter of law. McGlone v. Bell, 681 F.3d 718, 728 (6th Cir. 2012) (citation and internal quotation marks omitted).

         When evaluating a Rule 12(c) motion, a court may consider: (1) “documents attached to the pleadings”; (2) documents “referred to in the pleadings” that “[are] integral to the claims”; and (3) “matters of public record”-and may do so “without converting the motion to one for summary judgment.” Commercial Money Ctr., Inc. v. Illinois Union Ins. Co., 508 F.3d 327, 335-36 (6th Cir. 2007); see also Brent v. Wayne Cty. Dep't of Human Servs., 901 F.3d 656, 695 (6th Cir. 2018) (explaining that if a party has “attached exhibits to their motion for judgment on the pleadings, [a court] may consider those exhibits so long as they are referred to in the Complaint and are central to the claims contained therein.” (citation and internal quotation marks omitted)); Henry v. Chesapeake Appalachia, LLC, 739 F.3d 909, 912 (6th Cir. 2014); Fed.R.Civ.P. 10(c).

         If materials other than those listed above “are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56.” See, e.g., Fed.R.Civ.P. 12(d); Max Arnold & Sons, LLC v. W.L. Hailey & Co., 452 F.3d 494, 503 (6th Cir. 2006). Summary judgment under Rule 56 is appropriate only when the Court, viewing the record as a whole and in the light most favorable to the nonmoving party, determines that there exists no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50 (1986).

         “The summary judgment standard does not change simply because the parties presented cross-motions.” Profit Pet v. Arthur Dogswell, LLC, 603 F.3d 308, 311 (6th Cir. 2010). “[R]ather, a court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.” Id. (citations and internal quotation marks omitted).

         ANALYSIS

I. Breach of Contract (Count III)

         The Court will first address Devine's breach of contract claim because it is at the heart of Devine's Complaint and necessarily encompasses the other two claims for declaratory judgment and anticipatory repudiation.

         A. Applicable Law

         The Contract contains a choice-of-law clause that explicitly provides that the terms shall be construed according to Ohio law. (Doc. 1 at 21).[6] The law of Ohio therefore governs this dispute.

         The required elements for a breach of contract claim under Ohio law 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); Jarupan v. Hanna, 878 N.E.2d 66, 73 (Ohio Ct. App. 2007). Only the “breach” element is implicated by the parties' dispositive cross-motions. But the issue here is not whether Omni sent the Termination Letter and refused to make any further payments. Instead, the question is whether Omni had the right to terminate the Contract when it did.

         B. Principles of Contract Interpretation

         The “interpretation of written contract terms, including the determination of whether those terms are ambiguous, is a matter of law for initial determination by the court.” Savedoff v. Access Grp., Inc., 524 F.3d 754, 763 (6th Cir. 2008) (applying Ohio law).[7] “When confronted with an issue of contract interpretation, [the court's] role is to give effect to the intent of the parties.” Sunoco, Inc. (R&M) v. Toledo Edison Co., 953 N.E.2d 285, 292 (Ohio 2011). “[T]hat intent is presumed to reside in the language [the parties] chose to employ in the agreement.” State ex rel. Petro v. R.J. Reynolds Tobacco Co., 820 N.E.2d 910, 915 (Ohio 2004); Sunoco, Inc. 953 N.E.2d at 292. “Where a contract is found to be integrated, courts consider the language of the contract alone to define the obligations by which the parties intended to be bound.” Dottore v. Huntington Nat'l Bank, 480 Fed.Appx. 351, 352 (6th Cir. 2012) (citing Bellman v. Am. Int'l Grp., 865 N.E.2d 853, 856-57 (Ohio 2007)).

         “[T]he meaning of a contract is to be gathered from a consideration of all its parts, and no provision is to be wholly disregarded as inconsistent with other provisions unless no other reasonable construction is possible.” Savedoff, 524 F.3d at 763 (quoting Burris v. Grange Mut. Co., 545 N.E.2d 83, 88 (Ohio 1989)). This includes “writings executed as part of the same transaction.” Textileather Corp. v. GenCorp Inc., 697 F.3d 378, 382 (6th Cir. 2012) (citation and internal quotations omitted). “Common, undefined words appearing in a contract will be given their ordinary meaning . . .” Sunoco, Inc., 953 N.E.2d at 292. But courts do not give words their ordinary meaning if “manifest absurdity results, ” id., or ‚Äúsome other meaning is ...


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