Ohio Fabricators, Inc. v. Aster Elements, Inc. , 2019 Ohio 3978 ( 2019 )

[Cite as Ohio Fabricators, Inc. v. Aster Elements, Inc., 2019-Ohio-3978.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
OHIO FABRICATORS, INC. C.A. No. 28934
28911
Appellant
v. APPEAL FROM JUDGMENT
ENTERED IN THE
ASTER ELEMENTS, INC., et al. COURT OF COMMON PLEAS
COUNTY OF SUMMIT, OHIO
Appellees CASE No. CV-2016-04-1896
DECISION AND JOURNAL ENTRY
Dated: September 30, 2019
TEODOSIO, Presiding Judge.
{¶1} Ohio Fabricators, Inc. (“Ohio Fabricators”) appeals the order of the Summit
County Court of Common Pleas granting summary judgment in favor of Aster Elements, Inc.
(“Aster”) and Travelers Casualty & Surety Company of America (“Travelers”). We reverse and
remand.
I.
{¶2} In October 2013, Ohio Fabricators entered into a subcontract agreement with
Aster for the installation of exterior panels on a construction project for Cincinnati Children’s
Hospital. The hierarchy of contractors began with the general contractor, Messer Construction,
which hired the exterior general contractor, Pioneer Cladding and Glazing (“Pioneer”), which
hired Aster as an exterior subcontractor. Aster subsequently hired Ohio Fabricators. Travelers
issued a payment bond and a performance bond for Aster’s scope of the project, with Pioneer as
the obligee and Aster as the principal.
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{¶3} In 2016, Ohio Fabricators commenced an action against Aster and Travelers,
alleging multiple claims for breach of contract, detrimental reliance, and unjust enrichment.
Both Aster and Travelers asserted several counterclaims against Ohio Fabricators. In November
2017, upon motions for summary judgment filed by all parties, the trial court granted summary
judgment in favor of Aster and Travelers on all five counts of Ohio Fabricators’ amended
complaint; denied Ohio Fabricators’ motion for summary judgment as to Aster’s amended
counterclaim and as to counts one and two of Travelers’ amended counterclaim; and granted
summary judgment in favor of Ohio Fabricators on the third count of Travelers’ amended
counterclaim.
{¶4} Ohio Fabricators’ now appeals, raising six assignments of error, which we have
reordered for the purposes of our analysis.
II.
{¶5} Appellate review of an award of summary judgment is de novo. Grafton v. Ohio
Edison Co., 77 Ohio St. 3d 102, 105 (1996). Summary judgment is appropriate under Civ.R. 56
when: (1) no genuine issue as to any material fact remains to be litigated; (2) the moving party is
entitled to judgment as a matter of law; and (3) viewing the evidence most strongly in favor of
the nonmoving party, reasonable minds can come to but one conclusion and that conclusion is
adverse to the nonmoving party. Temple v. Wean United, Inc., 50 Ohio St. 2d 317, 327 (1977),
citing Civ.R. 56(C). A court must view the facts in the light most favorable to the non-moving
party and must resolve any doubt in favor of the non-moving party. Murphy v. Reynoldsburg, 65
Ohio St. 3d 356, 358–359 (1992). A trial court does not have the liberty to choose among
reasonable inferences in the context of summary judgment, and all competing inferences and
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questions of credibility must be resolved in the nonmoving party’s favor. Perez v. Scripps–
Howard Broadcasting Co., 35 Ohio St. 3d 215, 218 (1988).
{¶6} The Supreme Court of Ohio has set forth the nature of this burden-shifting
paradigm:
[A] party seeking summary judgment, on the ground that the nonmoving party
cannot prove its case, bears the initial burden of informing the trial court of the
basis for the motion, and identifying those portions of the record that demonstrate
the absence of a genuine issue of material fact on the essential element(s) of the
nonmoving party’s claims. The moving party cannot discharge its initial burden
under Civ.R. 56 simply by making a conclusory assertion that the nonmoving
party has no evidence to prove its case. Rather, the moving party must be able to
specifically point to some evidence of the type listed in Civ.R. 56(C) which
affirmatively demonstrates that the nonmoving party has no evidence to support
the nonmoving party’s claims. If the moving party fails to satisfy its initial
burden, the motion for summary judgment must be denied. However, if the
moving party has satisfied its initial burden, the nonmoving party then has a
reciprocal burden outlined in Civ.R. 56(E) to set forth specific facts showing that
there is a genuine issue for trial and, if the nonmovant does not so respond,
summary judgment, if appropriate, shall be entered against the nonmoving party.
Dresher v. Burt, 75 Ohio St. 3d 280, 293 (1996).
ASSIGNMENT OF ERROR TWO
THE TRIAL COURT ERRED IN FINDING A PAY-IF-PAID CLAUSE
APPLIED[.]
{¶7} In its second assignment of error, Ohio Fabricators argues the trial court erred in
finding that a pay-if-paid clause was applicable to the project. We agree.
{¶8} In granting summary judgment on the amended complaint in favor of Aster and
Travelers, the trial court found that because final payment had not been made to Aster, Aster was
under no obligation to pay Ohio Fabricators for any outstanding payments because of the
application of a pay-if-paid provision in the subcontract.
{¶9} Generally, there are two types of contractual provisions that establish the manner
of payment from a general contractor to a subcontractor: pay-when-paid and pay-if-paid.
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Transtar Elec., Inc. v. A.E.M. Elec. Servs. Corp., 140 Ohio St. 3d 193, 2014-Ohio-3095, ¶ 10. A
pay-when-paid provision is an unconditional promise to pay the subcontractor that is not
dependent upon the owner’s nonpayment. Id. Alternatively, a pay-if-paid provision is a
conditional promise to pay the subcontractor that is enforceable only if a condition precedent,
such as the payment by the owner to the general contractor, occurs. Id. at ¶ 11. Such a provision
requires the general contractor to pay the subcontractor only if the general contractor is paid by
the owner, therefore transferring the risk of nonpayment to the subcontractor. Id.
{¶10} In finding that a pay-if-paid clause was dispositive of Ohio Fabricators’ claims,
the trial court relied upon Article 8.1.3 as contained in the General Conditions of the
Subcontract, which provides:
It is specifically understood and agreed that payment to the Subcontractor
including any retention shall be made only after receipt of payment by Aster
Elements, Inc. from the Owner, and such payment by Owner to Aster Elements,
Inc. is a condition precedent to Aster Elements, Inc.’s obligation to pay the
Subcontractor.
Ohio Fabricators argue that the trial court erred in finding the pay-if-paid clause was applicable
because it improperly interpreted the language of the provision in determining that it applied to
Pioneer’s nonpayment of funds to Aster.
{¶11} “When confronted with an issue of contract interpretation, our role is to give
effect to the intent of the parties. We will examine the contract as a whole and presume that the
intent of the parties is reflected in the language of the contract.” Sunoco, Inc. (R & M) v. Toledo
Edison Co., 129 Ohio St. 3d 397, 2011–Ohio–2720, ¶ 37. “In addition, we will look to the plain
and ordinary meaning of the language used in the contract unless another meaning is clearly
apparent from the contents of the agreement. When the language of a written contract is clear, a
court may look no further than the writing itself to find the intent of the parties.” Id. “Only when
 5
the language of a contract is unclear or ambiguous, or when the circumstances surrounding the
agreement invest the language of the contract with a special meaning will extrinsic evidence be
considered in an effort to give effect to the parties’ intentions.” Shifrin v. Forest City Ents., 64
Ohio St. 3d 635 (1992), syllabus. The determination of whether a contract is ambiguous is a
question of law that this Court reviews de novo. Salter v. Salter, 9th Dist. Summit No. 26440,
2013–Ohio–559, ¶ 6, citing Hahn v. Hahn, 9th Dist. Medina No. 11CA0064–M, 2012–Ohio–
2001, ¶ 9. See also Denman v. State Farm Ins. Co., 9th Dist. Lorain No. 05CA008744, 2006–
Ohio–1308, ¶ 12.
{¶12} The trial court is given great latitude in determining the meaning of ambiguous
terms, including the intent of the parties and the equities involved. In re Dissolution of Marriage
of Seders, 42 Ohio App. 3d 155, 156 (9th Dist.1987). However, the trial court must remain true
to the guiding principle of contract interpretation: “[I]f the contract terms are clear and precise,
the contract is not ambiguous and the trial court is not permitted to refer to any evidence outside
of the contract itself, including the purported intentions of the parties.” Ryan v. Ryan, 9th Dist.
Summit No. 19347, 1999 WL 980572, *1 (Oct. 27, 1999); see also Lawler v. Burt, 7 Ohio St.
340, 350-351 (1857). “Common words appearing in a written instrument will be given their
ordinary meaning unless manifest absurdity results, or unless some other meaning is clearly
evidenced from the face or overall contents of the instrument.” Alexander v. Buckeye Pipe Line
Co., 53 Ohio St. 2d 241 (1978), paragraph two of the syllabus. Thus, if a contract is
unambiguous, the language of the contract controls and “[i]ntentions not expressed in the writing
are deemed to have no existence and may not be shown by parol evidence.” Aultman Hosp. Assn.
v. Community Mut. Ins. Co., 46 Ohio St. 3d 51, 53 (1989).
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{¶13} On the other hand, “[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 v. Drydock Coal Co., 76 Ohio
St.3d 311, 313-314 (1996). Ambiguity refers to “the condition of admitting of two or more
meanings, of being understood in more than one way, or of referring to two or more things at the
same time[.]” Robinson v. Beck, 9th Dist. Summit No. 21094, 2003–Ohio–1286, ¶ 25, quoting
Boulger v. Evans, 54 Ohio St. 2d 371, 378 (1978). Only if the terms of a contract may reasonably
be understood in more than one sense can they be construed as ambiguous. Preferred Tax &
Fin. Servs., Inc. v. Mark W. Boslett, Inc., CPA, 9th Dist. Summit No. 22801, 2006–Ohio–2690, ¶
14.
{¶14} In its judgment entry, the trial court stated that “[w]hether the subcontract
contained the word “Owner,” as it does, or “Pioneer,” as Ohio [Fabricators] argues would be
necessary, the contract language was not ambiguous and was fully understood by the signers.”
Although the trial court concluded the language was not ambiguous, it improperly looked to
extrinsic evidence to determine the intentions of the parties. Furthermore, despite stating the
language was unambiguous, the trial court’s interpretation of the provision necessarily indicated
it arrived at a definition of “Owner” outside of the plain and ordinary meaning of the word.
{¶15} The payment provision at issue provides that “[i]t is specifically understood and
agreed that * * * payment by Owner to Aster Elements, Inc. is a condition precedent to Aster
Elements, Inc.’s obligation to pay the Subcontractor.” In reviewing the subcontract, we conclude
the term “Owner” is a common word to be given its ordinary meaning. It is not disputed that the
owner of the property at the heart of this matter is Cincinnati Children’s Hospital. The term is
used numerous times throughout the subcontract and there is nothing in its usage to suggest
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another meaning, nor may the term be reasonably understood to have another meaning. We
therefore conclude the language of the provision is unambiguous, and we look no further to
determine the intent of the parties. As a result, there is no pay-if-paid provision in Article 8.1.3
requiring payment by Pioneer to Aster as a condition precedent to Aster’s obligation to pay Ohio
Fabricators.
{¶16} While we acknowledge that Ohio Fabricators contends that Aster was not in
privity with or paid by Cincinnati Children’s Hospital, we make no further determination of the
applicability of the clause as to Cincinnati Children’s Hospital as that issue is not before us for
review.
{¶17} Ohio Fabricators’ second assignment of error is sustained.
ASSIGNMENT OF ERROR FOUR
THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT TO
THE BONDING COMPANY[.]
{¶18} In its fourth assignment of error, Ohio Fabricators argues that the trial court erred
in granting summary judgment in favor of Travelers. We agree.
{¶19} In granting summary judgment, the trial court determined: “The evidence is
undisputed that final payment has not been made to Aster, and Aster is under no obligation to
pay Ohio [Fabricators] if in fact there are outstanding payments to be made. Therefore, as to
Counts I and II of Ohio [Fabricators’] amended complaint, the court finds summary judgment in
favor of Aster and Travelers to be appropriate and hereby grants the same.” The second count of
the complaint alleged that Travelers had breached its obligation to pay Ohio Fabricators under
the issued payment bonds.
{¶20} The trial court provided no further analysis, as its decision to grant summary
judgment in favor of Travelers hinged upon its determination of the applicability of the pay-if-
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paid clause. As we have concluded that the pay-if-paid clause is inapplicable, we likewise
sustain Ohio Fabricators’ fourth assignment of error.
ASSIGNMENT OF ERROR FIVE
THE TRIAL COURT ERRED IN DENYING PLAINTIFF’S MOTION FOR
SUMMARY JUDGMENT[.]
{¶21} In its fifth assignment of error, Ohio Fabricators argues the trial court erred in
denying its motion for summary judgment.
{¶22} The trial court granted summary judgment in favor of Aster and Travelers as to
the claims of Ohio Fabricators. The trial court denied Ohio Fabricators’ motion for summary
judgment as to Aster’s amended counterclaim and as to counts one and two of Travelers’
amended counterclaim. In its subsequent order, the trial court revised its judgment to include
Civ.R. 54(B) language stating “there is no just reason for delay.” The trial court stated that the
addition of the language “render[ed] that order disposing of the plaintiff’s claims final and
appealable as to those claims.” Appropriately, it makes no mention of the denial of summary
judgment on the counterclaims being likewise rendered final and appealable.
{¶23} When more than one claim for relief is presented in an action or when multiple
parties are involved, the trial court may enter final judgment as to one or more but fewer than all
of the claims or parties only upon an express determination that there is no just reason for delay
pursuant to Civ.R. 54(B), however such a finding of no just reason for delay does not make
appealable an otherwise non-appealable order. Rosenbaum v. Chronicle Telegram, 9th Dist.
Lorain Nos. 01CA0079896 and 01CA007908, 2002-Ohio-7319, ¶ 12, citing Chef Italiano Corp.
v. Kent State Univ., 44 Ohio St. 3d 86, 88 (1989).
{¶24} Article IV, Section 3(B)(2), of the Ohio Constitution limits this Court’s appellate
jurisdiction to the review of final judgments of lower courts. For a judgment to be final and
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appealable, it must satisfy the requirements of R.C. 2505.02 and, if applicable, Civ.R. 54(B).
Chef Italiano at 88. The denial of a motion for summary judgment does not determine the action
and prevent a judgment, and thus generally does not constitute a final appealable order under
R.C. 2505.02. Celebrezze v. Netzley, 51 Ohio St. 3d 89, 90 (1990). A trial court’s Civ.R. 54(B)
certification cannot make a non-final order appealable, because the requirements of both R.C.
2505.02 and Civ.R. 54(B) must be satisfied to permit appellate review. Noble v. Colwell, 44
Ohio St. 3d 92, 96 (1989).
{¶25} The trial court certified only the disposition of Ohio Fabricators’ claims as being
final and appealable pursuant to Civ.R. 54(B), it did not likewise certify the remaining
counterclaims. Moreover, the trial court’s finding that there was no just reason for delay did not
make appealable other portions of the order that were otherwise non-appealable. See
MacFarland v. Niekamp, Weisensell, Mutersbaugh & Mastrantonio, LLP, 9th Dist. Summit No.
28462, 2017-Ohio-8394, ¶ 35. Accordingly, those aspects of the trial court’s order that denied
motions for summary judgment are not final or appealable.
{¶26} Ohio Fabricators’ fifth assignment of error is therefore overruled.
ASSIGNMENT OF ERROR ONE
THE TRIAL COURT ERRED IN FINDING THAT A CONTRACTOR WAS
THE OWNER[.]
ASSIGNMENT OF ERROR THREE
THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT IN
FAVOR OF THE DEFENDANTS[.]
ASSIGNMENT OF ERROR SIX
THE TRIAL COURT ERRED IN DENYING PLAINTIFF’S MOTION TO
VACATE[.]
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{¶27} In its first assignment of error, Ohio Fabricators argues that the trial court erred in
finding Pioneer to be the “Owner.” In its third assignment of error, Ohio Fabricators argues the
trial court erred in granting summary judgment in favor of the defendants because there were a
series of disputed issues of material fact. In its sixth assignment of error, Ohio Fabricators
argues the trial court erred in denying its motion to vacate under Civ.R. 60(B).
{¶28} We decline to reach the merits of these arguments as our resolution of Ohio
Fabricators’ second assignment of error has rendered them moot. See App.R. 12(A)(1)(c).
III.
{¶29} Ohio Fabricators’ second and fourth assignments of error are sustained. The fifth
assignment of error is overruled. The first, third, and sixth assignments of error have been
rendered moot. The judgment of the Summit County Court of Common Pleas is reversed and
remanded for further proceedings consistent with this opinion.
Judgment reversed
and remanded.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
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instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed to Appellees.
THOMAS A. TEODOSIO
FOR THE COURT
HENSAL, J.
CALLAHAN, J.
CONCUR.
APPEARANCES:
MICHAEL R. STAVNICKY, Attorney at Law, for Appellant.
TIMOTHY FITZGERALD, Attorney at Law, for Appellee.
ALAN TORRANCE, Attorney at Law, for Appellee.