Accelerated Moving & Storage v. Herc Rentals, Inc. , 2022 Ohio 3016 ( 2022 )

[Cite as Accelerated Moving & Storage v. Herc Rentals, Inc., 2022-Ohio-3016.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Accelerated Moving and Storage, :
Plaintiff-Appellant, :
No. 21AP-523
v. : (C.P.C. No. 20CV-6122)
Herc Rentals, Inc., et al. : (REGULAR CALENDAR)
Defendants-Appellees. :
D E C I S I O N
Rendered on August 30, 2022
On brief: Percy Squire Co., LLC, and Percy Squire, for
appellant. Argued: Percy Squire.
On brief: Vorys, Sater, Seymour, and Pease, LLP, Rodney
A. Holaday, and Danielle S. Rice, for appellees. Argued:
Danielle S. Rice.
APPEAL from the Franklin County Court of Common Pleas
BEATTY BLUNT, J.
{¶ 1} Plaintiff-appellant, Accelerated Moving and Storage ("Accelerated"), appeals
the decision of the Franklin County Court of Common Pleas granting the motion filed by
defendants-appellees, Herc Rentals, Inc. ("Herc Rentals"), Lawrence Silber (President and
CEO of Herc Rentals, Inc.), and John Ehret (Attorney and Risk Manager for Herc Rentals,
Inc.), and dismissing Accelerated's complaint based on Civ.R. 12(B)(6). The complaint
purported to assert claims for commercial disparagement and trade libel against appellees,
and those claims arose exclusively from a work order invoice in the amount of $13,623.96
issued by Herc Rentals to Accelerated.
{¶ 2} Herc Rentals is a national company incorporated in Delaware that rents out
equipment that is used for construction, excavating, and other heavy labor. Accelerated is
an Ohio corporation. The invoice in question arose from damage to a rented piece of
No. 21AP-523 2
equipment, a "compact track loader," which had been rented at and returned to a Herc
Rentals office in Bonita Springs, Florida. Accelerated had an account with Herc Rentals,
and had previously rented equipment at the Bonita Springs office. The track loader was
apparently rented using Accelerated's account but Accelerated professed no knowledge of
the rental and no responsibility for the damage to it. After receiving email correspondence
from Herc Rentals about the damage to the track loader, Accelerated investigated the
situation and allegedly discovered that the rental had actually been made by a third party,
Daniel Patricio, who had previously done contract work for Accelerated's CEO on a property
in Florida and was on a previous occasion authorized to rent equipment for Accelerated.
(See Todd G. Wilson, Aff. attached as Ex. C to Pl's Resp. & Memo. in Opp.) ("I learned the
credit card [used to pay for the rental] belonged to Daniel Patricio, a person who had done
work for me personally in the past and in a very specific [sic] single instance was authorized
to rent equipment for Accelerated."). Accelerated's CEO indicated that Patricio was not an
employee of Accelerated and had not been authorized to make the rental at issue, but Herc
Rentals maintained that Accelerated was at least in part responsible for the damage to the
track loader. According to an email Accelerated's CEO sent to Herc Rentals:
Daniel Patricio is a contractor who has done work for us in
Florida. Daniel "is not" an employee for Accelerated, nor does
he perform work on behalf of Accelerated, which is an Ohio
based corporation. In October of 2019 he did landscaping work
for us, as a vendor, to cut trees at a location in Apopka. Living
in Ohio, I was the POC for the rental and payment of that
equipment. At all times I was in dialogue with your salesperson
regarding the rental of equipment through the payment, which
I made in person.
Acting on his own, on January 5, 2020, Daniel went back to
Herc and was able to rent, under our name and customer
number, a Track Loader which was involved in an accident. At
no time did I, or anyone at Accelerated, know about, or
authorize this rental.
***
Accelerated is not responsible for the rental or the damage that
occurred. I want you to immediately remove these charges
from my account and provide a letter absolving us from this
claim.
No. 21AP-523 3
If you persist on continuing this course of action, I will retain
legal counsel, sue you for making an unauthorized rental to our
account, knowingly making a false damage claim to our
account, for punitive damages, and legal fees.
I am giving you 72 hours to respond before taking legal action.
We are not going to be your scapegoat.
(Aug. 30, 2020 Email from Pl., attached as Ex. 6 to Resp. & Memo. in Opp.) Accelerated's
attorney was copied on this email, and subsequent discussions between the attorney and
Herc Rentals' in-house counsel (appellee Ehret) were perfunctory and unsuccessful. The
case was referred by Herc Rentals to outside collections counsel two weeks later, and
Accelerated's complaint was filed that same day.
{¶ 3} Appellees filed a joint motion to dismiss on November 19, 2020, arguing that
neither appellee Silber nor appellee Ehret were subject to the personal jurisdiction of the
court and therefore the claims against them should fail pursuant to Civ.R. 12(B)(2), and
also that Accelerated had failed to state valid claims against any of the appellees and
therefore the case should be dismissed pursuant to Civ.R. 12(B)(6). On October 13, 2021,
the trial court granted the motion to dismiss based on Civ.R. 12(B)(6), holding that the
complaint did not allege sufficient facts to establish that the defendants had made any false
representations in the invoice, and that Accelerated's claims for commercial disparagement
and trade libel could not prevail, and also that as to the trade libel claim that Accelerated
did not allege "that the invoice was made and sent with the necessary degree of fault and
that it reflected injuriously on Plaintiff's business." (Oct. 13, 2021 Decision & Entry on
Defs'. Mot. to Dismiss at 5.)
{¶ 4} This appeal followed and Accelerated now asserts assignments of error with
the trial court's judgment.
1. The trial court erred when it granted Defendants' motion to
dismiss for failure to state a claim upon which relief may be
granted.
2. The trial court should have granted Appellant leave to file an
amended complaint.
{¶ 5} Accelerated's first assignment of error asserts that the trial court erred in
holding that it failed to state claims for commercial disparagement or trade libel. Pursuant
to Civ.R. 12(B)(6), "[w]hen reviewing a judgment on a Civ.R. 12(B)(6) motion to dismiss for
No. 21AP-523 4
failure to state a claim upon which relief can be granted, an appellate court's standard of
review is de novo." Matthews v. D'Amore, 10th Dist. No. 05AP-1318, 2006-Ohio-5745,
¶ 51. In its review, "[t]he court must presume all factual allegations contained in the
complaint to be true and must make all reasonable inferences in favor of the plaintiff," but
it "need not [] accept as true any unsupported and conclusory legal propositions advanced
in the complaint." Bullard v. McDonald's, 10th Dist. No. 20AP-374, 2021-Ohio-1505, ¶ 11.
{¶ 6} Initially, we must clear up some confusion about the claims that Accelerated
purports to assert. Accelerated's complaint denominates its first cause of action as
"commercial disparagement" and its second cause of action as "trade libel," but on review
it is apparent that both claims are misnamed.
{¶ 7} In Ohio, commercial disparagement is a statutory deceptive trade practice
claim under R.C. 4165.02(A)(10) and accrues when a person "disparages the goods,
services, or business of another by false representation of fact." (Emphasis added.) But
Ohio courts have determined that the statute applies only "when [the] quality of a business's
goods or services has been demeaned a [statutory] commercial disparagement claim may
be asserted," and that "if allegations relate to integrity, defamation is [the] proper claim."
Toledo Heart Surgeons, Inc. v. Toledo Hosp., 154 Ohio App.3d 694, 697, 2003-Ohio-5172,
¶ 12 (6th Dist.), citing Blue Cross & Blue Shield of Ohio v. Schmidt, 6th Dist. No. L-24-291,
1996 WL 71006 at * 3 (Feb. 16, 1996).
{¶ 8} Accelerated's complaint asserts that "[d]efendants * * * published a false
statement against Accelerated, a claim that Accelerated is liable for damage to HERC
property." (Sept. 16, 2020 Compl. at ¶ 9.) But the invoice, attached to Accelerated's
complaint, contains no such statement. Rather, it simply identifies itself as a "Bill" and
"Work Order Invoice" addressed to Accelerated. The invoice states that the track loader
"WAS INVOLVED IN [AN] ACCIDENT WHILE IT WAS BEING TRANSPORTED ON
TRAILER. THE UNIT CAME OFF THE TRAILER WHILE TRAVELING DOWN [THE]
HIGHWAY. CAB IS BENT BEYOND REPAIR. RPLC CAB," but does not specifically assert
that Accelerated is responsible for that accident or liable for that damage. (Invoice at 2,
attached to Compl.) And in its reply brief to this court, Accelerated has clarified its claim
and asserts that, simply by issuing the invoice, defendants made the "false statements that
Accelerated - - a moving company — rented and then damaged an expensive piece of
No. 21AP-523 5
equipment and thereafter then refused to pay for this damage," and thereby "impugns
Accelerated's moving services, business practices and veracity." (Emphasis sic.) (Feb. 22,
2022 Appellant's Reply Brief at 2.)
{¶ 9} But these specific allegations are not contained in the complaint or supported
by the invoice—nowhere does the invoice indicate or imply anything about Accelerated's
moving services or business practices. In fact, the invoice does not even suggest that
Accelerated has "refused" to pay for the damage; rather, it indicates simply that the
damages have not yet been paid. Ironically, by admitting that its actual complaint is that
the invoice "impugn [s Accelerated's] veracity," Accelerated demonstrates its claim cannot
be stated as "commercial disparagement"—"veracity" clearly does not relate to the "quality
of [Accelerated's] goods or services," and as noted above, claims about "integrity" are not
covered by R.C. 4165.02(A)(10). Toledo Heart Surgeons, Inc. at ¶ 12. Accordingly,
Accelerated's first cause of action cannot be a claim under R.C. 4165.02(A)(10). Schmidt
quoting Crinkley v. Dow Jones & Co., 67 Ill. App.3d 869, 876 (1st Dist.1978) (holding that
" 'the allegedly offending statement did not disparage the quality of plaintiff's services * * *
[but instead] appears to have imputed want of integrity to plaintiff in his business, which
may be actionable under a defamation theory.' "). See also Fairfield Mach. Co., Inc. v.
Aetna Cas. & Sur. Co., 7th Dist. No. 2000 CO 14, 2001 Ohio App. LEXIS 5982 at 16
(Dec. 28, 2001), quoting Schmidt, 1996 WL 71006 at * 3 (holding that "libel refers to written
defamatory words," and that common-law defamation applies "[w]hen the integrity or
credit of a business has been impugned"). We conclude that despite the way it is titled on
the complaint, Accelerated's essential contention under its first cause of action is not one of
"commercial disparagement," but rather sounds in common-law defamation by a writing,
otherwise known as libel.
{¶ 10} A similar issue affects Accelerated's second alleged cause of action, "trade
libel." Here, Accelerated asserts that defendants "made false statements concerning
Accelerated's liability for damage" and "published the false statement by sending a claim to
Ohio counsel and commencing collection action against Accelerated." (Compl. at ¶ 15-16.)
But again, Accelerated has misidentified its claim—as one treatise has observed, "[t]rade
libel is not libel and slander of title is not slander," Dobbs, Hayden, Bublick, The Law of
Torts, Section 656 (2d Ed.2011). Moreover, Ohio has not recognized a separate tort of trade
No. 21AP-523 6
libel, but has instead dealt with all commercial falsehoods within R.C. 4165 the statutes
governing Deceptive Trade Practices, and has folded the claim into commercial
disparagement—the same statutory claim analyzed above. Compare R.C. 4165.02(A)(10)
(commercial disparagement) with Auvil v. CBS "60 Minutes," 67 F.3d 816, 820 (9 C.A.
1995), citing Restatement 2d, Torts, Section 623A, 651(1). ("To establish a claim of product
disparagement, also known as trade libel, a plaintiff must allege that the defendant
published a knowingly false statement harmful to the interests of another and intended
such publication to harm the plaintiff's pecuniary interests.").
{¶ 11} In short, Accelerated's complaint asserts the same claim twice, and
misidentifies that single claim both times. Notwithstanding, we will review Accelerated's
complaint as one which attempts to state a cause of action for libel. To assert a claim under
the common-law theory, a plaintiff must assert that (1) a false statement of fact was made
regarding the integrity or credit of a business, (2) the statement was defamatory in that it
impugned the integrity or credit of that business, (3) the statement was published, (4) the
plaintiff suffered injury as a proximate result of the publication, and (5) the defendant acted
with the required degree of fault in publishing the statement. See, e.g., Toledo Heart
Surgeons, Inc. at ¶ 15. See also A & B-Abell Elevator Co, Inc. v. Columbus/Cent. Ohio Bldg.
& Constr. Trades Council, 73 Ohio St.3d 1, 7 (1995) (holding that " 'libel' is defined generally
as a false written publication, made with some degree of fault, reflecting injuriously on a
person's reputation, or exposing a person to public hatred, contempt, ridicule, shame or
disgrace, or affecting a person adversely in his or her trade, business or profession").
{¶ 12} While Accelerated's complaint does clearly assert that the invoice is "false"—
insofar that it is not the "customer" that is responsible for the "customer damage" reflected
on the invoice—it does not assert and probably cannot assert that the "statement" was
"defamatory," in that it "impugned" Accelerated's "integrity or credit." The invoice merely
reflects a debt alleged to be owed to Herc Rentals by Accelerated—it does not allege any
unethical action by Accelerated, and it does not suggest that Accelerated is unable to pay
the alleged debt.
{¶ 13} And assuming for purposes of Civ.R. 12(B)(6) analysis that Accelerated is not
in any way responsible for the debt, the complaint alleges only that Accelerated "provided
evidence" that the "rental in question was not authorized by Accelerated or the
No. 21AP-523 7
responsibility of Accelerated." We observe that Accelerated's complaint does not address
the question of whether Daniel Patricio had apparent authority (as opposed to actual
authority, which it does specifically address) to obtain the rental on behalf of Accelerated.
See, e.g., Geo-Pro Servs., Inc., v. Solar Testing Laboratories, Inc., 145 Ohio App.3d 514,
523-24 (10th Dist.2001) (holding that for a principal to be bound by an alleged agent with
apparent authority, the evidence must show "(1) that the principal held the agent out to the
public as possessing sufficient authority to embrace the particular act in question, or
knowingly permitted him to act as having such authority, and (2) that the person dealing
with the agent knew of the facts and acting in good faith had reason to believe and did
believe that the agent possessed the necessary authority")1.
{¶ 14} But the more important issue is that Accelerated has not cited and we are not
aware of any authority establishing that it is defamatory for Herc Rentals to assert that
Accelerated is responsible for at least some portion of the debt. We cannot conclude that
the mere statement of an alleged debt—no matter the context in which is made—can be said
to be defamatory in and of itself. As one treatise has observed, while "aspersions on the
plaintiff's creditworthiness have been treated as defamation * * * indebtedness by itself does
not seem likely to cause members of the community to hold the plaintiff in lower esteem,
unless it implies that the plaintiff was chargeable with a characteristic incompatible with its
trade or business." Dobbs, Hayden, Bublick, The Law of Torts, Section 536 (2d Ed.2011).
While it is true that the complaint alleges appellees were aware that Accelerated was in the
process of "a major financial transaction" and that as a result of the invoice it suffered
financial harm, but the fact that a business allegedly has an unpaid debt does not ipso facto
imply that the business has acted unethically—which is what the complaint must allege in
order to state a claim of defamation.
{¶ 15} Stated another way, Accelerated's complaint actually asserts a species of
"commercially injurious falsehood" that is not currently recognized under Ohio law.
Compare id. at Section 656 (distinguishing commercial disparagement, trade libel, and
1In an affidavit Accelerated attached to its memo in response to the motion to dismiss, Accelerated's CEO
stated that Daniel Patricio was "a person who had done work for me personally in the past and in a very
specicfic [sic] single instance was authorized to rent equipment for Accelerated." (Emphasis added.) (Todd
G. Wilson Aff. at ¶ 10, attached as Ex. C to Pl's Resp. and Memo. in Opp.) This admission establishes that it is
at least a colorable question whether Daniel Patricio had apparent authority to use Accelerated's account to
rent the track loader.
No. 21AP-523 8
commercial injurious falsehoods from defamation generally) with R.C. 4165.02. See also 3
Restatement of the Law 2d, Torts, Chapter 28, Injurious Falsehood (1977) (Including
Slander of Title and Trade Libel). But recognition of such a claim must be made by the Ohio
General Assembly rather than this court. And Accelerated's complaint has failed to assert
any actionable claim for commercial disparagement, trade libel, or common-law libel.
Therefore, the trial court correctly dismissed Accelerated's complaint under Civ.R.
12(B)(6), and we accordingly overrule Accelerated's first assignment of error.
{¶ 16} In its second assignment of error, Accelerated contends that the trial court
erred by not granting it leave to file an amended complaint. Civ.R. 15(A) provides in
pertinent part that after a Civ.R. 12(B) motion has been filed, "a party may amend its
pleading only with the opposing party's written consent or the court's leave. The court shall
freely give leave when justice so requires." In Peterson v. Teodosio, 34 Ohio St.2d 161, 175
(1973), the Supreme Court of Ohio observed:
The mandate of Civ. R. 15(A) as to amendments requiring leave
of court, is that leave "shall be freely given when justice so
requires." Although the grant or denial of leave to amend a
pleading is discretionary, where it is possible that the plaintiff,
by an amended complaint, may set forth a claim upon which
relief can be granted, and it is tendered timely and in good faith
and no reason is apparent or disclosed for denying leave, the
denial of leave to file such amended complaint is an abuse of
discretion.
See also Terry v. Markoff, 26 Ohio App.3d 20, 23-24 (2d Dist.1986) (quoting Peterson).
{¶ 17} But here, Accelerated has not tendered a proposed amended complaint at any
point in this litigation, and has never filed a motion requesting leave to file such a
complaint. Instead, Accelerated made a conditional request to amend its complaint in an
unspecified manner ("to cure any defects") at the conclusion of its memorandum in
opposition to defendants' motion to dismiss. And in this situation, that conditional request
was not sufficient. Accelerated did not demonstrate that "it is possible that * * * an amended
complaint, may set forth a claim upon which relief can be granted," Peterson, 34 Ohio St.2d
at 175; did not present any basis to suggest that it could state a prima facie case against the
defendants; did not tender a proposed amended complaint stating a valid cause of action
against the defendants; and did not file a motion for leave to file such a tendered complaint.
In light of these omissions, we cannot say that the trial court's denial of leave was an abuse
No. 21AP-523 9
of its broad discretion over such matters. Compare Wilmington Steel Prods., Inc. v.
Cleveland Elec. Illum. Co., 60 Ohio St.3d 120, 123 (1991) (holding that prior to a grant of
leave to file "there must be at least prima facie showing that the movant can marshal
support for the new matters sought to be pleaded"). Accelerated's second assignment of
error must accordingly be overruled.
{¶ 18} Having overruled Accelerated's two assignments of error, we affirm the
judgment of the Franklin County Court of Common Pleas in this matter.
Judgment affirmed.
KLATT and SADLER, JJ., concur.