Manifold & Phalor, Inc. v. Konecranes, Inc. , 2020 Ohio 7009 ( 2020 )

[Cite as Manifold & Phalor, Inc. v. Konecranes, Inc., 2020-Ohio-7009.]
THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Manifold & Phalor, Inc., :
Plaintiff-Appellant, :
No. 19AP-737
v. : (C.P.C. No. 19CV-2936)
Konecranes, Inc., et al., : (REGULAR CALENDAR)
Defendant-Appellee. :
D E C I S I O N
Rendered on December 31, 2020
On brief: Porter, Wright, Morris & Arthur LLP, Allen T.
Carter, and Elizabeth Moyo, for appellant. Argued:
Elizabeth Moyo.
On brief: Mazanec, Raskin & Ryder, Co., L.P.A., Paul-
Michael La Fayette and Cara M. Wright, for appellee,
Konecranes, Inc. Argued: Paul-Michael La Fayette.
APPEAL from the Franklin County Court of Common Pleas
BRUNNER, J.
{¶ 1} Plaintiff-appellant, Manifold & Phalor, Inc. ("M&P"), appeals from a
judgment of the Franklin County Court of Common Pleas entered on September 25, 2019
granting the motion to dismiss of defendant-appellee, Konecranes, Inc. ("Konecranes"), for
failure to state a claim upon which relief can be granted pursuant to Civ.R. 12(B)(6). For
the following reasons, this Court reverses the decision of the trial court and remands this
matter for trial on the issue on compensatory damages.
I. FACTS AND PROCEDURAL HISTORY
{¶ 2} This is a refiled action concerning a commercial transaction in which M&P
purchased from Konecranes two 10-ton cranes and remote control upgrades for each crane
in 2013. M&P alleges that, on October 4, 2013, one of the cranes and its upgrade
No. 19AP-737 2
malfunctioned, resulting in injury to an M&P employee.1 M&P first filed this action in 2016
and then voluntarily dismissed, Franklin C.P. No. 16CV-2032. On April 9, 2019, M&P
refiled this action seeking to recover damages under claims for breach of warranty, breach
of contract, conversion, and spoliation. On May 1, 2019, M&P filed its Amended Complaint,
dropping the conversion and spoliation claims. M&P attached several exhibits to its
Amended Complaint. M&P provided Exhibit "A" as "[t]he entire agreement" concerning
its purchase of the cranes and remote control upgrades from Konecranes. (Am. Compl. at
¶ 5.) Exhibit A consists of the purchase order, correspondence concerning the purchase,
commercial terms, Konecranes' Standard Terms and Conditions of Sale, and invoices and
receipts.
{¶ 3} M&P filed the underlying action to recoup damages it alleges it sustained, and
continues to sustain, as a result of Konecranes' alleged breach of express and implied
warranties and breach of contract. M&P alleges that Konecranes' breaches directly and
proximately caused M&P damage, "including but not limited to lost employee hours, lost
productivity and efficiency, Workers' Compensation payments, an increase in Workers'
Compensation premiums, an increase in other insurance premium costs, other related
business expenses, costs and losses, attorneys' fees, and experts' fees and costs." (Am.
Compl. at ¶ 15.)
{¶ 4} On May 29, 2019, Konecranes moved to dismiss the Amended Complaint
under Civ.R. 12(B)(6) and 12(F). Konecranes' memorandum in support of its motion stated
in pertinent part:
M&P's Amended Complaint seeks to recover consequential
damages exclusively, but the Agreement, attached to its
Amended Complaint and upon which M&P bases its claims,
expressly prohibits M&P from recovering any
consequential damages whether arising in contract (which
includes breach of warranty), tort, product liability or
otherwise. Thus, the Amended Complaint fails to state a claim
upon which relief can be granted. Even if the damages M&P
seeks are not merely consequential damages, the Agreement
expressly limits Konecranes's liability to the total price paid by
M&P for the goods. If the Court does not dismiss the Amended
1 The parties disagree as to the cause of the injury of M&P's employee that initiated the filing of the lawsuit.
M&P alleges its employee was operating the crane and using one of the remote control upgrades, and the
employee was injured when the Konecranes equipment malfunctioned. M&P further alleges that Konecranes'
representative(s) replicated the malfunction. Konecranes asserts the injury was caused by operator error.
No. 19AP-737 3
Complaint in its entirety, the Court should dismiss and strike
claims and allegations from the Amended Complaint that seek
consequential damages or damages in excess of the total price
paid.
Moreover, M&P has not and cannot state a claim for breach of
implied warranties. The Agreement disclaims implied
warranties, including the implied warranties of
merchantability and fitness for a particular purpose that M&P
has asserted against Konecranes. Because M&P waived its
implied warranty claims under the Agreement, the Court
should dismiss those claims.
(Emphasis sic.) (May 29, 2019 Def.'s Motion to Dismiss, Memo. in Support at 1.)
{¶ 5} On June 24, 2019, M&P filed a memorandum contra Konecranes' motion to
dismiss, to which Konecranes filed its response on July 8, 2019.
{¶ 6} On September 25, 2019, the trial court entered judgment granting
Konecranes' motion to dismiss. The trial court found that M&P's Amended Complaint
failed to state a claim upon which relief could be granted because it sought relief not
provided for in the contract. The trial court agreed with Konecranes that the damages M&P
sought were "consequential damages" for which recovery was barred by the terms of the
agreement. The trial court rejected M&P's arguments that (1) the sales contract with
Konecranes, which formed the basis for the underlying action, was invalid, (2) the
contract's limitation of liability provision was unenforceable because it was
unconscionable, and (3) the limitation of liability in unenforceable due to Konecranes'
fraud. (Sept. 25, 2019 Jgmt. Entry at 5-6.) Accordingly, the trial court held that "it appears
beyond doubt that M&P can prove no set of facts showing it is entitled to the Consequential
damages under the contract. Therefore, Konecranes' motion to dismiss is granted without
prejudice." Id. at 7.
{¶ 7} M&P now appeals.
II. ASSIGNMENT OF ERROR
{¶ 8} M&P presents for the Court's review a sole assignment of error.
The trial court erred in granting [Konecrane's] Motion to
Dismiss (Decision and Entry Granting [Konecrane's] Motion to
Dismiss Filed May 29, 2019).
No. 19AP-737 4
III. LEGAL ANALYSIS
A. Standard of Review
{¶ 9} This Court reviews de novo the trial court's decision to dismiss appellant's
complaint for failure to state a claim upon which relief can be granted under Civ.R. 12(B)(6).
(Additional citations omitted.) State ex rel. CannAscend Ohio LLC v. Williams, 10th Dist.
No. 18AP-820, 2020-Ohio-359, ¶ 23, citing Rooney v. Ohio State Hwy. Patrol, 10th Dist.
No. 16AP-204, 2017-Ohio-1123, ¶ 13.
{¶ 10} A Civ.R. 12(B)(6) motion to dismiss for failure to state a claim is procedural
and tests the sufficiency of a complaint. State ex rel. Hanson v. Guernsey Cty. Bd. of
Commrs., 65 Ohio St. 3d 545, 548 (1992); Powell v. Vorys, Sater, Seymour and Pease, 131
Ohio App. 3d 681, 684 (10th Dist.1998). In considering a Civ.R. 12(B)(6) motion to dismiss,
a trial court "may consider only statements and facts contained in the pleadings, and may
not consider or rely on evidence outside the complaint." Stainbrook v. Ohio Secy. of State,
10th Dist. No. 16AP-314, 2017-Ohio-1526, ¶ 11, quoting Powell at 684; State ex rel. Fuqua
v. Alexander, 79 Ohio St. 3d 206, 207 (1997). The trial court must limit its consideration to
the four corners of the complaint and may dismiss the case only if it appears beyond doubt
from the complaint that the plaintiff can prove no set of facts entitling the plaintiff to
recover. O'Brien v. Univ. Community Tenants Union, Inc., 42 Ohio St. 2d 242 (1975),
syllabus; Ritchie v. Ohio Adult Parole Auth., 10th Dist. No. 05AP-1019, 2006-Ohio-1210,
¶ 16, citing Singleton v. Adjutant Gen. of Ohio, 10th Dist. No. 02AP-971, 2003-Ohio-1838,
¶ 18. Documents attached to or incorporated into the complaint may be considered on a
motion to dismiss pursuant to Civ.R. 12(B)(6). Cline v. Mtge. Electronic Registration Sys.,
10th Dist. No. 13AP-240, 2013-Ohio-5706, ¶ 17. A trial court must presume that all factual
allegations in the complaint are true and must draw all reasonable inferences in favor of the
nonmoving party. Mitchell v. Lawson Milk Co., 40 Ohio St. 3d 190, 192 (1998).
Unsupported legal conclusions in the complaint do not enjoy this presumption, however,
and are not sufficient to withstand a motion to dismiss. Mitchell at 192-93; Rudd v. Ohio
State Hwy. Patrol, 10th Dist. No. 15AP-869, 2016-Ohio-8263, ¶ 12.
B. Discussion
{¶ 11} M&P asserts on appeal three arguments to demonstrate that the trial court
erred in granting Konecranes' motion to dismiss. First, M&P argues that its Amended
Complaint "sufficiently alleges breach of contract and breach of warranty with compensable
No. 19AP-737 5
damages." (M&P Corrected Brief at 4.) Second, M&P argues that no valid contract existed
between the parties because there was no meeting of the minds. Id. at 7. Third, it argues
that the contract's limitation on liability clause "cannot be enforced because Konecranes
engaged in willful and wanton conduct, the clause violates public policy and the clause is
unconscionable and should not be enforced." Id. at 10.
{¶ 12} Konecranes counters that M&P has no path to recovery because M&P seeks
only consequential damages that are precluded by the sales contract's enforceable
limitation of liability provision. Konecranes argues that this Court should affirm the trial
court's decision.
{¶ 13} This Court addresses M&P's three arguments individually.
1. M&P argues its First Amended Complaint sufficiently alleges breach
of contract and breach of warranty with compensable damages.
{¶ 14} The purchase agreement between M&P and Konecranes constitutes the
contract in this matter. The following facts are contained in the Amended Complaint and
in the contract (Exhibit A) attached thereto:
1. M&P is a domestic corporation engaged in the business of
design, welding, fabrication, machining, and repair services
with its primary place of business in Canal Winchester, Ohio.
(Am. Compl. at ¶ 1.)
2. Konecranes is a foreign corporation engaged in the business
of providing lifting equipment and services, with its primary
place of business in Springfield, Ohio. Id. at ¶ 2.
3. M&P purchased two 10-ton cranes from Konecranes. Id. at
¶ 3. The parties entered into a purchase agreement. Id. The
contract is attached to the Amended Complaint as Exhibit A.
4. M&P also purchased remote control upgrades for the cranes
for each crane. Id. at ¶ 6. Those were included in the purchase
contract. Id.
5. In October 2013, an M&P employee was injured while
operating one of the cranes and using a remote control
upgrade. Id. at ¶ 8.
6. M&P notified Konecranes of the accident, and Konecranes
immediately sent a representative to inspect the crane and
remote. Id. at ¶ 11.
No. 19AP-737 6
7. The Konecranes representative removed the remote control
from M&P's premises on or about the date of the accident. Id.
at ¶ 13.
8. M&P requested Konecranes to return the remote control to
M&P or reimburse it for the cost, but Konecranes refused to do
so unless M&P first signed a General Release of All Claims and
Covenant Not to Sue. Id. at ¶ 16-17, Ex. A.
9. M&P filed the underlying action seeking relief for breach of
express and implied warranties and breach of contract. Id. at
¶ 20-33, 34-40.
10. M&P alleged direct and consequential damages arising
from the accident. Id. at ¶ 15.
{¶ 15} Two of the relevant sections of the contract are the warranties section and the
limitation of damages section. The warranties section provides that M&P's purchase was
"subject to Konecranes Standard Warranty." (Ex. A at ¶ 8, attached to Am. Compl.) The
standard warranty is set forth conspicuously in a separate paragraph, in all capital letters
and bold font. It states:
THE KONECRANES STANDARD WARRANTY
REPRESENTS THE SOLE AND EXCLUSIVE
WARRANTY GIVEN BY KONECRANES TO BUYER
WITH RESPECT TO GOODS AND/OR SERVICES
PROVIDED UNDER THE QUOTATION AND IS IN
LIEU OF AND EXCLUDES ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, ARISING BY
OPERATION OF LAW OR OTHERWISE, INCLUDING,
BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
(Emphasis sic.) Id.
{¶ 16} The limitation of damages section also is set forth conspicuously in a separate
paragraph, in all capital letters and bold font. It states:
KONECRANES SHALL HAVE NO LIABILITY TO
BUYER OR ANY THIRD PARTY WITH RESPECT TO
THE SALE OF PRODUCTS OR PROVISION OF
SERVICES UNDER THE QUOTATION FOR LOST
PROFITS OR FOR SPECIAL, CONSEQUENTIAL,
EXEMPLARY OR INCIDENTAL DAMAGES OF ANY
LOST PROFITS OR DAMAGES. IN NO EVENT SHALL
KONECRANES BE LIABLE TO BUYER FOR ANY
No. 19AP-737 7
DAMAGES WHATSOEVER IN EXCESS OF THE
TOTAL PRICE PAID BY BUYER FOR GOODS AND/OR
SERVICES.
(Emphasis sic.) Id. at ¶ 9.
{¶ 17} The trial court found persuasive Konecranes' argument that the warranties
and damage limitation sections foreclosed the relief M&P sought. The trial court stated in
pertinent part as follows:
M&P's Amended Complaint fails to state a claim for which
relief can be granted, because it seeks relief that is not provided
for in the cont[r]act. First, there can be no breach of implied
warranties, because the contract's Warranties section clearly
states there are no implied warranties. Id., Ex. A, ¶ 8. Next, the
contract excludes liability for "lost profits or for special,
consequential, exemplary, or incidental damages of any lost
profits or damages. Id. Ex. A, ¶ 9. It goes on to clarify that
Konecranes [sic] liability is limited to the "total price paid by
the buyer for goods and/or services." Id. By those clear terms,
M&P cannot recover the Consequential damages sought in its
Amended Complaint.
(Jgmt Entry at. 5.)
{¶ 18} The trial court relied on the Supreme Court of Ohio's holding in a breach of
warranty or contract action in Chemtrol Adhesives, Inc. v. Am. Mfrs. Mut. Ins. Co., 42 Ohio
St.3d 40 (1989). The trial court applied the decision in holding enforceable contract
provisions limiting the amount of damages recoverable in the event of a breach and an
exclusion and limitation clause for being conspicuous and set off in a separate paragraph
in all-capital letters. The trial court also relied on the Supreme Court's holding in Sunoco,
Inc. (R&M) v. Toledo Edison Co., 129 Ohio St. 3d 397, 2011-Ohio-2720, ¶ 37, that, when the
language of a written contract is clear, a court's analysis is limited to the writing itself.
{¶ 19} However, the trial court was required to examine the factual allegations
contained in M&P's Amended Complaint and presume all of the allegations to be true,
drawing all reasonable inferences in favor of the nonmoving party, the plaintiff. If the trial
court conducted such a review, this Court does not discern it from its decision. This Court's
review of the complaint results in concluding that M&P can prove facts entitling it to
recover. M&P alleges in its Amended Complaint that one of its employees was injured while
properly operating the crane and using a remote control upgrade. It further alleges that,
No. 19AP-737 8
on or about the day of the workplace accident, Konecranes' representative(s) inspected the
crane and remote control upgrade and replicated the malfunction of the crane and/or
remote control. Konecranes' representative(s) did not repair the defective equipment, but
instead removed the remote control and placed guidewires so that the crane could be
operated manually. Konecranes' representative(s) then removed the remote from M&P's
premises on or about the day of the accident. M&P further alleges that it subsequently
requested that Konecranes either return the remote control or reimburse M&P for the
purchase price of the remote control, but that Konecranes refused to return the remote
unless and until M&P signed a "General Release of All Claims and Covenant not to Sue."
(Am. Compl. at ¶ 16-17.) M&P refused to sign the release.
{¶ 20} In its reply brief, M&P asserts that Konecranes did not return the remote until
December 2016. M&P further asserts that, "[u]pon further inspection by M&P's expert,
after the return of the remotes, the malfunction persisted. As a result, M&P was deprived
of the use of the malfunctioning controls for more than two years and, even after their
return, the remotes continue to malfunction and cannot be used. Notwithstanding this,
Konecranes refuses to honor the contract and the warranty provisions therein." (M&P
Corrected Brief at 2.) M&P claims to suffer damages because "the remotes that were
returned continue to have the same malfunction and are therefore cannot [sic] be safely put
back into service." Id. at 3.
{¶ 21} M&P alleged Konecranes breached its express and implied warranties in
Count One of M&P's Amended Complaint, quoting Konecranes' standard warranty in
relevant part as follows:
1. WARRANTY POLICY.
…KONECRANES warrants that all KONERANES
products conform in all material respects to the
description identified in the quotation to Buyer and will
be free from defects in material and workmanship for
two (2) years from the date of shipment.
(Am. Compl. at ¶ 22.) In Count One, M&P further alleges that "[t]he crane and/or remote
control were defective in either their design, their material or workmanship," and that
M&P's own injuries and damages were directly and proximately caused by "Konecranes'
negligence and breach(es) in failing to properly design, supply, manufacture, assemble,
No. 19AP-737 9
install, maintain and/or service the equipment." Id. at ¶ 23. In Count One, M&P also
alleges Konecranes breached its express and implied warranties when it provided the
defective equipment which directly and proximately caused various damages to M&P,
"including but not limited to * * * other related business expenses, costs and losses," for
which M&P sought and was entitled to receive compensatory damages. Id. at ¶ 24.
{¶ 22} M&P alleges Konecranes "specifically represented and warranted that its
goods and products were and would be fit for their intended purposes and that they did
meet and comply with [Konecranes'] warranties and representations as well as [M&P's] and
certain regulatory and engineering specifications and standards." Id. at ¶ 27. M&P further
alleges that, when it entered into the agreement and initially accepted delivery of the cranes
and remote control upgrades, it relied on Konecranes' representations "regarding the
design, manufacture, purpose, merchantability, supply, fitness, appropriateness and
durability of [Konecranes'] goods and products and that same met [Konecranes']
warranties and representations as well as [M&P's] and certain regulatory and engineering
specifications and standards." Id. at ¶ 28, 31. M&P alleges Konecranes "breached its
express warranties as well as the implied warranties of merchantability and fitness for a
particular purpose" because Konecranes' crane and remote control "were defective,
defectively designed, defectively manufactured and otherwise unfit for their intended use
and purpose." Id. at ¶ 30. M&P claimed that it sustained damages as a direct and proximate
result of Konecranes' breaches of express and implied warranties and failure to perform its
duties under the agreement.
{¶ 23} In its motion to dismiss, Konecranes argues that the damages M&P seeks are
consequential in nature, and that the contract "expressly forecloses M&P's recovery of each
of the types of damages it seeks in this case." (May 29, 2019 Def.'s Mot. to Dismiss at 4.)
Konecranes acknowledges that, while the contract excluded all of M&P's consequential
damages, it allows for other types of damages, although M&P's recoverable damages were
limited to, "at most, the contract price." Id. at 5. Konecranes states in its motion to dismiss
that, "[at] a minimum, and as a matter of law, the [trial court] should limit the total
damages allegations to the total cost that M&P paid: $63,517.00." (Footnote omitted.) Id.
at 6.
No. 19AP-737 10
{¶ 24} M&P argues on appeal that the allegations set forth in paragraphs 5 through
7 of its Amended Complaint clearly establish that M&P purchased not only two 10-ton
cranes from Konecranes but also remote controls for each crane, and that "[t]he inclusion
and functionality of the remote control was clearly a material term to the transaction."
(M&P's Corrected Brief at 2.)
{¶ 25} M&P further argues that it did, in fact, seek recovery for direct damages,
observing that "Paragraph 15 quite clearly states that it 'suffered damages, including but
not limited to lost employee hours, lost productivity and efficiency …. .' * * * The
allegation provided examples of damages that have been incurred and was never intended
to be an exhaustive list." (Emphasis sic.) Id at. 3-4. M&P submits the facts alleged in its
Amended Complaint "sufficiently state a claim based purely on the allegation that the
remote controls were defective and that, instead of repairing the remote controls,
Konecranes removed [them] from M&P's possession and refused to return them without
M&P signing a release. Id. at 4-5. M&P argues the following:
Indeed, the First Amended Complaint alleges that M&P
purchased two 10-ton cranes with remote control upgrades,
that Konecranes disabled the remote controls, took the remote
controls and did not return them upon request. First Amended
Complaint, ¶8-9, 10-11, 16-17. The remote controls were not
returned until December of 2016. [Fn. 1 omitted.] These
allegations establish that, in addition to the consequential
damages resulting from Konecranes' breaches, M&P also
experienced direct damages. In fact, the documents attached
to the First Amended Complaint establish that M&P paid
$1,375.00 for the remote controls that have been disabled and
removed from M&P's premises. First Amended Complaint,
Exhibit A. The fact that the remotes were ultimately returned
in December of 2016 does not alter the fact that M&P was
deprived of their use in the intervening years from the time they
were removed until they were returned. Further, the remotes
were returned in a condition such that the original malfunction
persists and, yet, Konecranes has refused even the
reimbursement of the cost of purchase as otherwise provided
under the limitation of liability provision. Thus, in addition to
consequential damages, the complaint alleges direct damages
resulting from Konecranes' breach.
Based upon the foregoing, Konecranes breached the terms of
the sales contract in as much that it continues to refuse to
compensate M&P for the defective remotes as and for both
No. 19AP-737 11
direct and consequential damages. Accordingly, M&P's
Complaint sufficiently stated a cause of action for breach of
contract and, [sic] the damages sought as a result of the breach
were not limited to consequential damages.
(M&P's Corrected Brief at 5-6.)
{¶ 26} The Court observes that Konecranes' Standard Warranty, attached as Exhibit
1 to Konecranes' motion to dismiss, provides a remedy procedure in the event the buyer
presents a claim for defective equipment. Section 5 of the Standard Warranty states:
5. WARRANTY PROCEDURE. To obtain Warranty
Remedies pursuant to this Standard Warranty, Buyer must
strictly adhere to the following procedure. Buyer's failure to
comply with the terms of this procedure shall void this
Standard Warranty.
a. Buyer shall, within seventy-two (72) hours of any claimed
nonperformance or defect in KONECRANES products, notify
the KONERANES Warranty Administrator in writing of the
alleged nonperformance or defect and request the issuance of
a Returned Goods Authorization ("RGA") number and form.
b. KONECRANES shall, within a reasonable time following its
receipt of the completed RGA form, advise Buyer of its
intention to initially accept or deny the warranty claim
pursuant to the terms of this Standard Warranty. If
KONECRANES elects to initially accept the warranty claim it
shall issue Buyer an RGA number and advise Buyer of its
intention to replace, repair or otherwise further inspect the
allegedly defective products (or component parts thereof (the
"Initial Acceptance"). [sic]
(1) Replacement of allegedly defective products.
Should KONECRANES provide Initial Acceptance of Buyer's
warranty claim and elect to replace the allegedly defective
product, or should KONECRANES elect to provide Initial
Acceptance of Buyer's warranty claim through notification to
Buyer that KONECRANES elects to inspect the allegedly
defective products and then subsequently elect to replace the
products, KONECRANES shall within a reasonable time, ship
new, comparable, replacement products to Buyer F.O.B. * * *
(2) Repair of allegedly defective products. Should
KONECRANES provide Initial Acceptance of Buyer's warranty
claim and elect to repair and/or permit the repair of the
allegedly defective products by approved third parties, or
should KONECRANES elect to provide Initial Acceptance of
No. 19AP-737 12
Buyer's warranty claim through notification to Buyer that
KONECRANES elects to inspect the allegedly defective
products and then subsequently elect to repair the products,
KONECRANES shall, unless otherwise agreed in writing by the
Warranty Administrator, pay only those direct labor costs
incurred to effectuate the repair and the cost of KONECRANES
replacement products consumed during said repair provided
however that the costs for all products and services were
approved in advance, in writing by the KONECRANES
Warranty Administrator.
(3) Inspection of allegedly defective products. Should
KONECRANES provide Initial Acceptance of Buyer's warranty
claim through notification to Buyer that KONECRANES elects
to inspect the allegedly defective products and then
subsequently determine the alleged defect is not covered under
this Standard Warranty, KONECRANES shall bill Buyer, and
Buyer shall pay KONECRANES any and all costs associated
with the performance of inspection of allegedly defective
products.
(Ex. 1 at 3, attached to Mot. to Dismiss.)
{¶ 27} It is undisputed that M&P immediately notified Konecranes that its products
had malfunctioned, resulting in serious accident, and that Konecranes immediately
dispatched a representative to the accident site. At the accident site, the Konecranes
representative was able to operate the allegedly defective products to replicate the
malfunction, after which the Konecranes representative removed the defective product (the
remote control) from the crane and installed guidewires on the crane, so that the crane
could be operated without the defective product, removed the defective product from
M&P's possession. It also is undisputed that M&P made multiple requests to Konecranes
for the return of the defective product or reimbursement for its contract purchase price.
Konecranes declined to comply with M&P's requests unless M&P first executed a release
waiving any and all claims against Konecranes arising from the defective part's
malfunction. The Court sees nothing in the record indicating that Konecranes complied
with its own warranty provision contained in its Standard Warranty in an attempt to
remedy the situation. Finally, when Konecranes finally returned the defective product to
M&P more than three years after the accident, the product was still defective and could not
safely be put into operation by M&P. Therefore, M&P has alleged facts that Konecranes
breached its Standard Warranty and is liable to M&P for direct damages.
No. 19AP-737 13
{¶ 28} Based on the foregoing and construing the facts of the Amended Complaint
in favor of M&P, the Court finds that M&P could prove facts entitling it to recovery of direct
damages for, at the very least, the loss of the defective remote control. Accordingly,
dismissal of M&P's Amended Complaint for failure to state a claim upon which relief can
be granted is not permissible as a matter of law, and this Court reverses the decision of the
trial court.
2. There was no valid contract because there was no meeting of the
minds.
{¶ 29} M&P asserts as a second argument in the alternative that it "is not limited in
its recovery because there was no valid contract from its inception." (M&P's Corrected Brief
at 7.) M&P argues it entered into the purchase of the crane with the expectation that, in
exchange for the purchase price, the crane would be fully functioning. Id. M&P argues,
therefore, that under the facts alleged in the Amended Complaint, "there was no meeting
of the minds, and as a result, no valid contract. Because no valid contract exists, the
limitation of damages clause contained within the putative contract should be found to be
wholly inapplicable and should not operate to bar M&P from recovery." (June 24, 2019
Pl.'s Memo. Contra Mot. to Dismiss at 3.)
{¶ 30} We do not find M&P's second argument to be compelling in supporting its
single assignment of error. M&P's signing of the agreement was sufficient to establish a
meeting of the minds, given that both parties to the agreement are commercial entities,
literate, and able to comprehend the contract. See Cuyahoga County Hosp. v. Price, 64
Ohio App. 3d 410, 415 (8th Dist.1989), quoting Kroeger v. Brody, 130 Ohio St. 559, 565
(1936). Moreover, the Amended Complaint alleges the contract attached thereto as Exhibit
A to "comprise the agreement between the parties: the purchase order along with the
proposal and acceptance, the standard terms and conditions of sale, and the standard
warranty-all provided to [M&P] by Konecranes." (Am. Compl. at ¶ 21.) This Court is
required to presume the truth of this allegation when reviewing under Civ.R. 16(B)(6). For
these reasons, this Court finds that a contract clearly exists between the parties, a fact that
is unaffected by M&P's dissatisfaction with some of its provisions after the fact.
3. M&P argues the contract is illusory.
{¶ 31} Third, M&P argues that the contract's limitation of damages section is
unenforceable because it is unconscionable. We agree with the trial court that, while
No. 19AP-737 14
unconscionable contract terms are unenforceable, the provision at issue in this matter is
both conscionable and enforceable. This was a commercial contract negotiated by two
business entities. The damages limitation section was conspicuously set off in all-capital
letters and bold font. See Chemtrol. Additionally, the damages limitation section does not
limit Konecranes' liability to a nominal amount, but specifically provides that Konecranes
may be liable up to the purchase price of the crane. We agreed with the trial court's finding
that this contractual limitation to be in line with Ohio law. See Jgmt. Entry at 6.
Accordingly, we find that the limitation section is conscionable and enforceable.
IV. CONCLUSION
{¶ 32} Having independently reviewed M&P's Amended Complaint, examined the
briefs, and heard oral arguments, this Court finds under the standard of review required
for motions to dismiss according to Civ.R. 12(B)(6) that M&P has alleged certain facts that
if proved to be true could entitle it to recover. The trial court's dismissal is therefore
improper under the law and this Court sustains M&P's sole assignment of error.
Accordingly, this Court reverses the judgment of the Franklin County Court of Common
Pleas and remands this matter for further proceedings.
Judgment reversed, cause remanded for trial.
KLATT and NELSON, JJ., concur in judgment only.
NELSON, J., concurring in judgment only.
{¶ 33} I agree that the contract's limitations on damages are enforceable. I concur
in the judgment of the court, which I understand to confine any potential damages to
"direct" damages as capped by the purchase costs (per the contract), and thus to exclude
company claims for consequential damages (including any claims for lost employee time,
lost profits, or any other damages arising "[a]s a result of" alleged injury as recited in
paragraph 15 of the amended complaint).