United States District Court, S.D. Ohio, Eastern Division
Kimberly A. Jolson, Magistrate Judge
OPINION AND ORDER
A. SARGUS, JR., UNITED-STATES DISTRICT JUDGE
pending before the Court is Defendant International Auction
Partners, Inc., d/b/a Bidsquare's ("Bidsquare"
or "Defendant") Motion for Partial Judgment on the
Pleadings (ECF No. 6). Plaintiffs SAM Auction Software LLC
and Bidpath, Incorporated, d/b/a SAM Auction Software
(collectively "Plaintiffs" or "SAM") have
responded (ECF No. 14), and Defendant replied (ECF No. 15).
Accordingly, this matter is ripe for review. For the reasons
stated herein, Defendant's Motion for Partial Judgment on
the Pleadings (ECF No. 6) is GRANTED.
December 13, 2013, SAM and International Auction Partners,
Inc. ("IAP"), a predecessor of Bidsquare, entered
into the Software Platform Service Agreement (the
"Service Agreement). (Compl. ¶ 9 [ECF No. 1]). The
Service Agreement initially was for a one-year term, through
December 31, 2014, and automatically renewed for additional
one-year terms, through December 31, 2018. (Compl. ¶
12). Pursuant to the Service Agreement, Defendant was to pay
Plaintiffs $5, 000 per month for hosting the Online Venue
Platform, as well as an additional fee for every auction that
Bidsquare, or its predecessor, listed on the Online Venue
Platform. (Fee Schedule [ECF No. 1-1, Ex. B, PAGEID # 14]).
During this time, Bidsquare used the SAM online venue
platform to conduct online auctions. (Compl. ¶ 9). By
May 1, 2018, however, Bidsquare stopped using SAM's
online venue platform and began to conduct its auction
business on another platform service provider. (Id.
¶ 12). And on October 30, 2018, Defendant terminated the
agreement, per the terms of the Service Agreement.
(Id. ¶ 15).
allege that Defendant materially breached the Service
Agreement in two ways: 1) Defendant failed to pay the $5, 000
per month service fee from June 2018 through December 2018;
and 2) Defendant neglected to pay the "per auction"
fees owed to Plaintiffs under the Service Agreement for
auctions that Bidsquare conducted on other platforms from May
1, 2018 through December 31, 2018, totaling approximately
$181, 000. (Compl. ¶¶ 12-14, 17-20).
commenced this action on March 6, 2019, with the filing of a
two-count Complaint against LAP for: 1) breach of written
contract; and 2) "Money Owed on Account Against
LAP". (See generally Compl.). Defendant has
moved for partial judgment on the pleadings, pursuant to Rule
12(c) of the Federal Rules of Civil Procedures, asserting
that Plaintiffs cannot, as a matter of law, collect the
"per auction" fees for auctions conducted on other
platforms. (See generally Mot. for on Pld. [ECF No.
6]). Plaintiff opposes Defendant's Motion, asserting that
the parties' agreement implies exclusivity. (See
Pl. Opp'n at 2-3 [ECF No. 14]). Defendant replied.
(See generally Reply [ECF No. 15]). Accordingly,
this matter is fully briefed and ripe for disposition.
Court reviews a Rule 12(c) motion for judgment on the
pleadings in the same manner it would review a motion made
under Federal Rule of Civil Procedure 12(b)(6). Vickers
v. Fairfield Med. Ctr., 453 F.3d 757, 761 (6th Cir.
2006). Rule 12(b)(6) provides for dismissal of actions that
fail to state a claim upon which relief can be granted.
Generally, an action will be dismissed under this standard
where "there is no law to support the claims they
made." Stew Farm, Ltd. v. Nat. Res. Conservation
Serv., 967 F.Supp.2d 1164, 1169 (S.D. Ohio 2013) (citing
Ranch v. Day & Night Mfg. Corp., 576 F.2d 697,
702 (6th Cir. 1978)). The same holds where "the facts
alleged are insufficient to state a claim." Id.
Federal Rule of Civil Procedure 8(a)(2) requires "a
short and plain statement of the claim showing that the
pleader is entitled to relief." See also Bell Atl
Corp. v. Twombly, 550 U.S. 544, 555 (2007). To meet this
standard, a complaint must contain sufficient factual matter,
accepted as true, to "state a claim to relief that is
plausible on its face." Id. at 570;
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(clarifying the plausibility standard articulated in
considerations inform whether a complaint meets the
facial-plausibility standard. "A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged."
Iqbal, 556 U.S. at 678. Further, the factual
allegations of a pleading "must be enough to raise a
right to relief above the speculative level."
Twombly, 550 U.S. at 555. A complaint will not,
however, "suffice if it tenders 'naked assertion[s]
devoid of 'further factual enhancement.'"
Iqbal, 556 U.S. at 678 (quoting Twombly,
555 U.S. at 557). Courts must construe the claim at issue in
the light most favorable to the non-moving party, accept all
factual allegations as true, and make reasonable inferences
in favor of the non-moving party. Total Benefits Planning
Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552
F.3d 430, 434 (6th Cir. 2008).
moves for partial judgment on the pleadings and asserts that,
as a matter of law, Plaintiffs are not entitled to the amount
of damages they seek for the alleged breach of contract.
(See Mot. for J. on Pld. at 1). Defendant submits
that the plain language of the fully integrated contract
forecloses the Plaintiffs from collecting the approximately
$181, 000 "per-auction" fees they seek to collect,
as neither the Service Agreement or the related License
Agreement contain an exclusivity clause. (See Id. at
diversity cases, a federal court is to apply the law of the
forum state. See Poplar Creek Dev. Co. v. Chesapeake
Appalachia, LLC, 636 F.3d 235, 240 (6th Cir. 2011)
(citations omitted). To succeed on a breach of contract claim
in Ohio, a plaintiff must demonstrate: 1) the existence of a
contract; 2) performance by the plaintiff; 3) breach by the
defendant; and 4) damages. See Bonds v. Univ. of
Cincinnati Med. Ctr., No. 18-3509, ___ Fed.Appx. ___,
2019 WL 2323905, at *3 (6th Cir. Feb. 6, 2019) (citing
Garofalo v. Chicago Title Ins. Co., 104 Ohio App.3d
95, 108, 661 N.E.2d 218 (Ohio App. May 23, 1995)
("Generally, a breach of contract occurs when a party
demonstrates the existence of a binding contract or
agreement; the nonbreaching party performed its contractual
obligations; the other party failed to fulfill its
contractual obligations without legal excuse; and the
nonbreaching party suffered damages as a result of the
only element currently disputed is the damages element.
Plaintiff seeks to collect two forms of damages: 1) the
monthly recurring flat fee; and 2) the variable fee for each
auction held. (Compl. at ¶¶ 20, 23). Defendant,
however, asserts that under the plain and unambiguous terms
of the fully integrated contract, Plaintiffs are not entitled
to the "per auction" fees for auctions conducted on
other hosting platforms as the contract is silent on the
issue of exclusivity. (See generally Mot. for J. on
Pld.). Plaintiffs disagree and assert that certain terms of
the contract are ambiguous and, when read in light most
favorable to the Plaintiffs, support the conclusion that IAP
contracted to exclusively use SAM to host online auctions.
(See Pl. Opp'n at 3).
Ohio law, 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) (citing Parrett v. Am. Ship
Bldg. Co., 990 F.2d 854, 858 (6th Cir. 1993) (applying
Ohio law); Potti v. Duramed Pharm., Inc., 938 F.2d
641, 647 (6th Cir. 1991) (same)). "The role of courts in
examining contracts is to ascertain the intent of the
parties." City of St. Marys v. Agulaize Cty. Bd. of
Comm'rs, 2007-Ohio-5026, at ¶ 18, 875 N.E.2d
561 (Ohio 2007) (citing Hamilton Ins. Servs., Inc. v.
Nationwide Ins. Cos., $6 Ohio St. 3d 270, 714 N.E.2d 898
(Ohio 1999)). "The intent of the parties is presumed to
reside in the language they choose to use in their
agreement." Graham v. Drydock Coal Co., 76 Ohio
St.3d 311, 313, 667 N.E.2d 949 (Ohio 1996). "Where the
terms in a contract are not ambiguous, courts are constrained
to apply the plain language of the contract." City
of St. Marys, 2007-Ohio-5026, at ¶ 18. But
"[e]xtrinsic evidence is admissible to ascertain the
intent of the parties when the contract is unclear or
ambiguous, or when circumstances surrounding the agreement
give the plain language special meaning."
Graham, 76 Ohio St.3d at 313-14 (citing Shifrin
v. Forest City Enters., Inc., 64 Ohio St.3d 635, 638,
597 N.E.2d 499 (Ohio 1992)).
contract's language is ambiguous "only where its
meaning cannot be determined from the four corners of the
agreement or where the language is susceptible of two or more
reasonable interpretations." Covington v.
Lucia,151 Ohio App.3d 409, 414, 784 N.E.2d 186 (Ohio
App. Jan. 23, 2008) (quoting Potti, 938 F.2d at 647)
(internal quotation omitted). "[C]ourts may not use
extrinsic evidence to create an ambiguity; rather, the
ambiguity must be patent, i.e., apparent on the face of the
contract." Id. (citing Schachner v. Blue
Cross & Blue Shield of Ohio,77 F.3d 889, 893 (6th
Cir. 1996)). When determining whether a contract's
language is ambiguous, a court is to consider the entirety of
the contract so to "give reasonable effect to every
provision in the agreement." Stone v. Nat'l City
Bank,106 Ohio App.3d 212, 221, 665 N.E.2d 746 (Ohio
App. Sept. 5, 1995); see also Tri-State Grp., Inc. v.
Ohio Edison Co.,151 Ohio App.3d 1, 9, 782 N.E.2d 1240
(Ohio App. Dec. 26, 2002). Common words in the contract
"are to be given their plain and ordinary meaning unless
manifest absurdity results or unless some other meaning is
clearly intended from the face or overall contents of the
instrument." Alexander v. Buckeye Pipe Line
Co.,53 Ohio St. 2d 241, 245-46, 374 N.E.2d 146 (Ohio
1978). And if a "contract is silent, as opposed to
ambiguous, with respect to a particular matter, ... 'it
is not the function of courts in Ohio to ...