Strategy Group for Media, Inc. v. Lowden ( 2013 )

[Cite as Strategy Group for Media, Inc. v. Lowden, 2013-Ohio-1330.]
COURT OF APPEALS
DELAWARE, OHIO
FIFTH APPELLATE DISTRICT
THE STRATEGY GROUP FOR : JUDGES:
MEDIA, INC. :
:
: Hon. Patricia A. Delaney, P.J.
Plaintiff-Appellant : Hon. W. Scott Gwin, J.
: Hon. William B. Hoffman, J.
-vs- :
: Case No. 12 CAE 03 0016
SUE LOWDEN AND SUE LOWDEN :
FOR U.S. SENATE :
:
:
Defendants-Appellees : OPINION
CHARACTER OF PROCEEDING: Appeal from the Delaware County Court of
Common Pleas, Case No. 10 CV C 08
1155
JUDGMENT: AFFIRMED
DATE OF JUDGMENT ENTRY: March 21, 2013
APPEARANCES:
For Appellant: For Appellees:
JEFFREY A. LIPPS GERALD P. FERGUSON
MICHAEL N. BEEKHUIZEN GINA R. RUSSO
280 Plaza, Suite 1300 52 East Gay Street
280 North High Street P.O. Box 1008
Columbus, Ohio 43215 Columbus, Ohio 43216-1008
[Cite as Strategy Group for Media, Inc. v. Lowden, 2013-Ohio-1330.]
Delaney, J.
{¶1} Plaintiff-Appellant The Strategy Group for Media, Inc. appeals the
February 28, 2012 final judgment entry of the Delaware County Court of Common
Pleas.
FACTS AND PROCEDURAL HISTORY
{¶2} In October 2009, Defendant-Appellee Sue Lowden announced her
candidacy in the Republican primary for U.S. Senate in Nevada. The primary was on
June 8, 2010. Lowden and her constituents formed a campaign committee named
Sue Lowden for U.S. Senate. Lowden hired Robert Uithoven of j3 Strategies, LLC, as
the campaign manager. The campaign committee also engaged a campaign
treasurer.
{¶3} Political contributions and Lowden’s personal finances funded the Sue
Lowden for U.S. Senate campaign. Lowden was, in part, a self-funded candidate.
Paul Lowden, Lowden’s husband, also contributed to his wife’s campaign, although
there was no evidence he was a member of her campaign committee. Sue Lowden
ultimately self-funded approximately $2 million towards her campaign.
{¶4} As campaign manager, Uithoven was responsible for hiring and
managing a media services consultant for the campaign. Rex Elsass, founder and
CEO of Plaintiff-Appellant The Strategy Group for Media, Inc. approached the
campaign about providing media services. Strategy Group is a GOP media firm
located in Delaware, Ohio. It produces and distributes media material for radio and
television to be used by a candidate during a political campaign.
Delaware County, Case No. 12 CAE 03 0016 3
{¶5} Elsass initially met with Uithoven to discuss terms of an agreement for
Strategy Group to provide media services for Lowden’s campaign. Elsass and other
Strategy Group employees met with Lowden and her husband to discuss their
services. Lowden liked the services offered by Strategy Group and that they were
from the Midwest. In December 2009, Strategy Group sent Uithoven a written
agreement for its services. The agreement stated it was between Strategy Group and
Sue Lowden for U.S. Senate. The agreement was never signed by Strategy Group or
Sue Lowden for U.S. Senate. A second agreement was provided by Strategy Group
to Uithoven in January 2010. It was not signed.
{¶6} While there was no written agreement governing the relationship
between the parties, Strategy Group began producing media material for the Sue
Lowden for U.S. Senate campaign with Sue Lowden’s participation. Strategy Group
sent invoices for its work directly to the campaign committee. The invoices were
reviewed by Uithoven. Strategy Group sent 19 invoices, the first invoice dated
February 11, 2010 and the last invoice dated June 3, 2010.
{¶7} Nearing the end of the primary campaign, Strategy Group alleges
Lowden told Uithoven that she was going to stop self-funding her campaign. Strategy
Group argues this statement was inconsistent with the messages she and the
campaign committee gave to Strategy Group that Lowden would spend whatever it
took to finish the race. Strategy Group argues the information that Lowden would not
donate more personal funds to the campaign was relevant to Strategy Group because
in May and June 2010, Strategy Group had the opportunity to cancel upcoming
Delaware County, Case No. 12 CAE 03 0016 4
advertising and to instead use those funds to pay off the campaign’s outstanding
invoices.
{¶8} Lowden did not prevail in the primary. At the close of the primary,
Strategy Group submitted invoices to the campaign committee in the amount of
$204,435.28. The campaign committee did not pay the invoices.
{¶9} On August 3, 2010, Strategy Group filed its complaint against Sue
Lowden and Sue Lowden for U.S. Senate in the Delaware County Court of Common
Pleas. Strategy Group filed a First Amended Complaint on August 30, 2010. In its
complaint, Strategy Group claimed breach of contract, unjust enrichment,
fraud/misrepresentation, and civil conspiracy against both Sue Lowden and Sue
Lowden for U.S. Senate. Strategy Group also requested attorney’s fees. Sue Lowden
and Sue Lowden for U.S. Senate answered the first amended complaint, arguing they
disputed the outstanding invoices.
{¶10} Lowden and Sue Lowden for U.S. Senate filed a partial motion for
summary judgment on December 6, 2011. In the motion, Lowden and Sue Lowden for
U.S. Senate argued there was no genuine issue of material fact to establish Strategy
Group’s claims for fraud and civil conspiracy against either party. On February 9,
2012, the trial court granted the partial motion for summary judgment and dismissed
the fraud and civil conspiracy claims.
{¶11} A jury trial commenced on February 14, 2012 and concluded on
February 17, 2012. At the close of Strategy Group’s case in chief, the trial court
granted directed verdicts (1) in favor of Sue Lowden on Strategy Group’s claims for
breach of contract and unjust enrichment, dismissing Sue Lowden from the case; (2)
Delaware County, Case No. 12 CAE 03 0016 5
in favor of Sue Lowden for U.S. Senate on Strategy Group’s unjust enrichment claim;
and (3) in favor of Sue Lowden and Sue Lowden for U.S. Senate on Strategy Group’s
request for attorney’s fees. The only claim presented to the jury was Strategy Group’s
breach of contract claim against Sue Lowden for U.S. Senate.
{¶12} On February 17, 2012, the jury returned a verdict in favor of the Strategy
Group for $193,554.71.
{¶13} The trial court entered its Final Judgment Entry on February 28, 2012. It
is from this decision Strategy Group now appeals.
ASSIGNMENTS OF ERROR
{¶14} Strategy Group raises four Assignments of Error:
{¶15} “I. THE TRIAL COURT ERRONEOUSLY GRANTED SUMMARY
JUDGMENT IN FAVOR OF DEFENDANTS SUE LOWDEN AND SUE LOWDEN FOR
U.S. SENATE ON PLAINTIFF THE STRATEGY GROUP FOR MEDICA, INC.’S
CLAIMS FOR FRAUD AND CIVIL CONSPIRACY.
{¶16} “II. THE TRIAL COURT ERRONEOUSLY DIRECTED A VERDICT IN
FAVOR OF SUE LOWDEN ON PLAINTIFF THE STRATEGY GROUP FOR MEDIA,
INC.’S CLAIMS FOR BREACH OF CONTRACT AND UNJUST ENRICHMENT.
{¶17} “III. THE TRIAL COURT ERRONEOUSLY DIRECTED A VERDICT IN
FAVOR OF SUE LOWDEN AND SUE LOWDEN FOR U.S. SENTATE ON PLAINTIFF
THE STRATEGY GROUP FOR MEDIA, INC.’S CLAIM FOR ATTORNEY FEES.
{¶18} “IV. THE TRIAL COURT ERRONEOUSLY EXCLUDED EVIDENCE
REGARDING STATEMENTS MADE BY DEFENDANTS’ CAMPAIGN MANAGER
ROBERT UITHOVEN AND STATEMENTS MADE IN DEFENDANT SUE LOWDEN
Delaware County, Case No. 12 CAE 03 0016 6
FOR U.S. SENATE’S PUBLIC FILINGS WITH THE FEDERAL ELECTION
COMMISSION.”
Delaware County, Case No. 12 CAE 03 0016 7
ANALYSIS
I.
Summary Judgment Standard of Review
{¶19} The trial court’s decision to grant partial judgment in favor of Sue
Lowden and Sue Lowden for U.S. Senate was rendered through Civ.R. 56. We review
a summary judgment de novo and without deference to the trial court's determination.
When an appellate court reviews a trial court's disposition of a summary judgment
motion, it applies the same standard of review as the trial court and conducts an
independent review, without deference to the trial court's determination. We must
affirm the trial court's judgment if any grounds the movant raised in the trial court
support it. Westbrook v. Swiatek, 5th Dist. No. 09CAE09–0083, 2011–Ohio–781, ¶
43.
{¶20} Pursuant to Civ.R. 56(C), summary judgment “shall be rendered forthwith
if the pleadings, depositions, answers to interrogatories, written admissions, affidavits,
transcripts of evidence, and written stipulations of fact, if any, timely filed in the action,
show that there is no genuine issue as to any material fact and that the moving party
is entitled to summary judgment as a matter of law.”
{¶21} The moving party bears the initial responsibility of informing the trial
court of the basis for the motion, and identifying those portions of the record before the
trial court, which demonstrate the absence of a genuine issue of fact on a material
element of the nonmoving party's claim. Dresher v. Burt, 75 Ohio St.3d 280, 292, 662
N.E.2d 264 (1996). The nonmoving party then has a reciprocal burden of specificity
and cannot rest on the allegations or denials in the pleadings, but must set forth
Delaware County, Case No. 12 CAE 03 0016 8
“specific facts” by the means listed in Civ.R. 56(C) showing that a “triable issue of fact”
exists. Mitseff v. Wheeler, 38 Ohio St.3d 112, 115, 526 N.E.2d 798, 801 (1988).
Fraud/Misrepresentation and Breach of Contract
{¶22} In count one of the first amended complaint, Strategy Group claimed Sue
Lowden and Sue Lowden for U.S. Senate entered into a contract for the provision of
media services for the political campaign. Strategy Group alleged Lowden and the
campaign committee breached their agreement to pay for the media services by failing
to pay outstanding invoices. The complaint alleged there were $204,435.28 in
outstanding invoices, of which were attached to the complaint.
{¶23} Strategy Group argued in count three of the first amended complaint that
Sue Lowden and Sue Lowden for U.S. Senate committed fraud and
misrepresentation. Sue Lowden partially self-funded her campaign for U.S. Senate.
Strategy Group’s claim for fraud and misrepresentation was based on alleged
statements made by Sue Lowden and members of her campaign that Sue Lowden
would use her personal funds to ensure that all of Strategy Group’s bills would be paid
in full. The first amended complaint stated:
* * * on or about June 3, 2010, Mr. Lowden participated in a
conference call with Nick Everhart, the president of Strategy Group for
Media’s media planning and buying arm. At that time, a significant
amount of “air time” for advertisements had been purchased. Strategy
Group for Media could have cancelled those advertisements and used
the funds to pay off outstanding bills for prior production work. During
the conference call, however, Mr. Lowden once again represented to
Delaware County, Case No. 12 CAE 03 0016 9
Strategy Group for Media that Sue Lowden would use her own personal
funds to ensure that all of Strategy Group for Media’s outstanding
production bills would be paid in full.
Based on these representations, and given Sue Lowden’s ability
to pay based on her enormous personal wealth, Strategy Group for
Media provided Media Services to Sue Lowden and her campaign from
January 2010 through June 2010. * * *
***
Sue Lowden and the Campaign Committee falsely represented to
Strategy Group for Media that they had the ability to pay, and would pay,
for the Media Services.
Sue Lowden and the Campaign Committee knew and intended at
the time they made the false representations that those representations
would be relied upon by the Strategy Group for Media.
Strategy Group for Media justifiably relied on the representations
made by Sue Lowden and the Campaign Committee.
The false representations made by Sue Lowden and the
Campaign Committee were material to Strategy Group for Media’s
decision to provide the Media Services to Sue Lowden and her
campaign.
As a result of Sue Lowden’s and the Campaign Committee’s
misrepresentations that induced Strategy Group for Media to take action
to its detriment, Strategy Group for Media suffered monetary damages in
Delaware County, Case No. 12 CAE 03 0016 10
an amount in excess of $25,000.00, and in an amount to be proven at
trial.
(First Amended Complaint, ¶27-28, ¶48-52.)
{¶24} Strategy Group’s claims for both breach of contract and fraud were the
basis for the motion for partial summary judgment filed by Lowden and Sue Lowden
for U.S. Senate. In their motion for partial summary judgment, the defendants argued
there was no genuine issue of material fact that Strategy Group could not prevail on its
claims for both fraud and breach of contract, as the two separate claims were based
on the same actions. To wit, “[i]n Ohio, a breach of contract does not create a tort
claim. (Citation omitted). Generally, ‘the existence of a contract action * * * excludes
the opportunity to present the same case as a tort claim.’ (Citation omitted).” Graphic
Enterprises, Inc. v. TAS International, Inc., 5th Dist. No. 1999CA0085, 2000 WL
330059 (Mar. 13, 2000) citing Textron Fin. Corp. v. Nationwide Mut. Ins. Co., 115 Ohio
App.3d 137, 151, 684 N.E.2d 1261 (9th Dist.1996). Lowden argues the basis of all
Strategy Group’s claims against her and the campaign committee is the failure to pay
the outstanding invoices for the media services. Lowden and the campaign committee
assert the committee disputed the outstanding invoices and therefore did not pay on
demand.
{¶25} In opposing the motion for partial summary judgment, Strategy Group
relies on the exception to this general rule as to tort and breach of contract that states,
“[a] tort claim based upon the same actions as those upon which a claim for contract
breach is based will exist independently of the contract action only if the breaching
party also breaches a duty owed separately from that created by the contract, that is,
Delaware County, Case No. 12 CAE 03 0016 11
a duty owed even if no contract existed.” Id. A party can bring a fraud claim and
breach of contract claim in the same action, as long as there is a duty owed by the
breaching party that is separate from the breach of contract claim. Strategy Group
argues there is a genuine issue of material fact whether Lowden and the campaign
committee owe Strategy Group an independent duty outside of the contract to pay for
the media services. We disagree.
{¶26} In order to demonstrate fraud, Strategy Group must show (a) a
representation, or where there is a duty to disclose, concealment of a fact, (b) which is
material to the transaction at hand, (c) made falsely, with knowledge of its falsity, or
with such utter disregard and recklessness as to whether it was true or false that
knowledge may be inferred, (d) with the intent of misleading another into relying upon
it, (e) justifiable reliance upon the representation or concealment, and (f) a resulting
injury proximately caused by the reliance. Developers Diversified Realty v. Coventry
Real Estate Fund II, LLC, 8th Dist. No. 97231, 2012-Ohio-1056, ¶ 20 citing Gaines v.
Preterm-Cleveland, Inc., 33 Ohio St.3d 54, 55, 514 N.E.2d 709 (1987).
{¶27} Strategy Group argues Sue Lowden and the campaign committee owed
Strategy Group the “duty to speak” of Lowden’s intentions to stop self-funding her
campaign. The Civ.R. 56 evidence shows that near the end of the campaign, Lowden
revealed to her campaign committee that she could not continue to self-fund her
campaign. Strategy Group points to a meeting on June 3, 2010 to demonstrate that
Lowden had the opportunity and should have disclosed to Strategy Group her
intention to stop self-funding her campaign: “on or about June 3, 2010, Mr. Lowden
participated in a conference call with Nick Everhart, the president of Strategy Group
Delaware County, Case No. 12 CAE 03 0016 12
for Media’s media planning and buying arm. At that time, a significant amount of ‘air
time’ for advertisements had been purchased. Strategy Group for Media could have
cancelled those advertisements and used the funds to pay off outstanding bills for
prior production work. During the conference call, however, Mr. Lowden once again
represented to Strategy Group for Media that Sue Lowden would use her own
personal funds to ensure that all of Strategy Group for Media’s outstanding production
bills would be paid in full.” (First Amended Complaint, ¶27.)
{¶28} The “duty to speak,” as characterized by Strategy Group, is more often
referred to as the “duty to disclose.” This Court has held that fraud is committed by a
failure to disclose only when the person is under a duty to disclose, and the duty to
disclose arises when one party has information that the other party is entitled to know
because of a fiduciary or another similar relation of trust and confidence between
them. Advanced Production Center, Inc. v. EMCO Maier Corp., 5th Dist.
No.2003CAE03020, 2003–Ohio–6206, ¶ 14 citing Fed. Mgt. Co. v. Coopers &
Lybrand, 137 Ohio App.3d 366, 383–384, 738 N.E.2d 842 (10th Dist.2000). A
“fiduciary relationship” is a relationship in which special confidence and trust is
reposed in the integrity and fidelity of another and there is a resulting position of
superiority or influence, acquired by virtue of this special trust. Ed Schory & Sons, Inc.
v. Soc. Natl. Bank, 75 Ohio St.3d 433, 442, 662 N.E.2d 1074 (1996). In business
transactions where parties deal at arm's length, each party is presumed to have the
opportunity to ascertain relevant facts available to others similarly situated, and
therefore, generally neither party has a duty to disclose material information to the
Delaware County, Case No. 12 CAE 03 0016 13
other. Advanced Production Center, Inc., supra, citing Blon v. Bank One (1988), 35
Ohio St.3d 98, 101, 519 N.E.2d 363.
{¶29} The question of whether Sue Lowden and the campaign committee were
under a duty to disclose is dependent on whether Sue Lowden and the campaign
committee had a fiduciary relationship or some other relationship of special trust and
confidence with Strategy Group. Alternatively, was the relationship between Sue
Lowden, the campaign committee, and Strategy Group merely a business transaction?
A fiduciary duty is generally defined as “‘[a] duty of utmost good faith, trust,
confidence, and candor owed by a fiduciary * * * to the beneficiary * * *; a duty to act
with the highest degree of honesty and loyalty toward another person and in the best
interests of the other person.’” In re Trust of Bernard, 9th Dist. No. 24025, 2008-Ohio-
4338, ¶ 20, quoting from Black's Law Dictionary (8th Ed.Rev.2004) 545. The term
“fiduciary” is defined as “a person having a duty, created by his undertaking, to act
primarily for the benefit of another in matters connected with his undertaking.” Groob
v. KeyBank, 108 Ohio St.3d 348, 2006-Ohio-1189, 843 N.E.2d 1170, ¶ 16.
{¶30} The second element necessary to determining whether a fraud claim and
breach of contract claim can coexist in the same action assists in clarifying the
question of whether an independent duty existed. “In addition to containing a duty
independent of that created by contract, an action arising out of contract which is also
based upon tortious conduct must include actual damages attributable to the wrongful
acts of the alleged tortfeasor which are in addition to those attributable to the breach
of contract.” (Emphasis sic.) Textron Financial Corp. v. Nationwide Mut. Ins. Co., 115
Ohio App.3d 137, 151, 684 N.E.2d 1261 (9th Dist. 1996).
Delaware County, Case No. 12 CAE 03 0016 14
{¶31} In this case, Strategy Group alleges it suffered damages from Sue
Lowden and the campaign committee’s failure to disclose that Lowden would no
longer self-fund her campaign. It states that if it had known, Strategy Group would not
have proceeded in producing additional media material and would have applied those
monies to the campaign’s outstanding invoices. The result of Lowden’s alleged failure
to disclose was that Strategy Group produced the material and the campaign was
invoiced for producing the material. Lowden and her campaign did not pay the
invoices.
{¶32} We compare these damages to those alleged in Strategy Group’s breach
of contract claim. The first amended complaint alleges Lowden and the campaign
refused to pay $204,435.28 due and owing to Strategy Group for producing media
material. Strategy Group attached the supporting invoices to the complaint. Strategy
Group did not provide separate invoices from those alleged were the result of fraud
and those from the breach of contact.
{¶33} The trial court found that Strategy Group did not allege any separate
damages resulting from the defendants’ alleged fraud. The only damages alleged
were the amounts alleged to be due and owing upon the invoices. Upon our de novo
review, we reach the same conclusion. The damages alleged under the claim for
fraud and the claim for breach of contract are based upon the same outstanding
invoices. This does not meet the second element to allow a breach of contract action
and a fraud action in the same claim because the damages attributable to the wrongful
acts of Lowden and her campaign committee were the same, not in addition, to the
damages incurred as a result of the breach of contract.
Delaware County, Case No. 12 CAE 03 0016 15
{¶34} This result supports our conclusion that the relationship between
Strategy Group, Sue Lowden, and the campaign committee was a business
transaction rather than a fiduciary relationship or a special relationship of confidence
and trust. We find that reasonable minds could only conclude that Strategy Group
could not establish a genuine issue of material fact that there was independent duty
from that created by the contract and it suffered damages from the fraud in addition to
the breach of contract.
Fraudulent Inducement
{¶35} Strategy Group argues its claim for fraud may coexist with the breach of
contract claim because the fraud is also based on fraudulent inducement. A claim for
fraudulent inducement arises when a party is induced to enter into an agreement
through fraud or misrepresentation. Home S. & L. Co. v. Eichenberger, 10th Dist.
12AP-1, 2012-Ohio-5662, ¶ 21 citing ABM Farms, Inc. v. Woods, 81 Ohio St.3d 498,
502 (1998). To prove fraud in the inducement, a plaintiff must establish that the
defendant made a knowing, material misrepresentation with the intent of inducing the
plaintiff's reliance, and that the plaintiff relied on that misrepresentation to his
detriment. Id.{¶36} Strategy Group states when the parties entered into the agreement to
provide media services, Lowden had no intention of performing her promise to pay for
their services. The basis of Strategy Group’s claim is upon Lowden’s significant
personal wealth. When the parties entered into the agreement, Strategy Group was
aware of her wealth and her choice to partially self-fund her campaign. “When Sue
Lowden said she would self fund and use her own personal funds to pay for the costs
Delaware County, Case No. 12 CAE 03 0016 16
of the campaign, Strategy Group for Media believed and relied on these
representations because of her enormous personal wealth.” (Plaintiff’s Memorandum
in Opposition to Defendants’ Motion for Partial Summary Judgment, Dec. 27, 2011, p.
18.)
{¶37} There is no factual dispute that Lowden is wealthy. There is also no
dispute Lowden partially self-funded her campaign with personal contributions and a
$1,250,000 line of credit. The trial court found there was no Civ.R. 56 evidence to
demonstrate, that at the time the agreement with Strategy Group was created, Lowden
and the campaign did not intend to keep their promise to pay for campaign services.
Upon our de novo review, we agree.
Civil Conspiracy
{¶38} When the trial court dismissed the underlying fraud claims, it also
dismissed Strategy Group’s claim for civil conspiracy. “The elements of a civil
conspiracy claim are: ‘(1) a malicious combination, (2) involving two or more persons,
(3) causing injury to person or property, and (4) the existence of an unlawful act
independent from the conspiracy itself.’“ Ogle v. Hocking Cty., 4th Dist. No. 11CA31,
2013-Ohio-597, ¶ 14 citing Cook v. Kudlacz, 974 N.E.2d 706, 2012–Ohio–2999, ¶ 90
(7th Dist.), quoting State ex rel. Fatur v. Eastlake, 11th Dist. No.2009–L–037, 2010–
Ohio–1448, ¶ 45.
{¶39} “A civil conspiracy claim is derivative and cannot be maintained absent
an underlying tort that is actionable without the conspiracy.” Morrow v. Reminger &
Reminger Co., L.P.A., 183 Ohio App.3d 40, 2009–Ohio–2665, 915 N.E.2d 696, ¶ 40
(10th Dist.). As we have held that Lowden and the campaign committee are entitled to
Delaware County, Case No. 12 CAE 03 0016 17
judgment as a matter of law on Strategy Group’s claim for fraud, we agree with the
decision to also grant judgment in favor of Lowden and the campaign committee on
the claim for civil conspiracy.
{¶40} We find no error for the trial court to grant partial summary judgment in
favor of Sue Lowden and Sue Lowden for U.S. Senate. Strategy Group’s first
Assignment of Error is overruled.
II.
{¶41} Strategy Group argues in its second Assignment of Error that the trial
court erred in granting Sue Lowden’s motion for directed verdict on Strategy Group’s
claims for breach of contract and unjust enrichment. We disagree.
{¶42} The trial court granted Lowden’s motion for directed verdict by finding,
“[b]ased on the evidence in the record, the court is of the opinion that reasonable
minds cannot differ on this issue, reasonable minds, can only – it does not – it does
not apply against her individually. There is no evidence whatsoever that she did
anything to guarantee a payment. The agreement was with her campaign committee.
There was a lot of inferences raised because of her wealth and because she is or was
a candidate, the court does not believe that that is enough to generate an unjust
enrichment claim.” (Trial Transcript, p. 681-682.) The trial court dismissed Sue
Lowden from the cause of action. The matter proceeded only against Sue Lowden for
U.S. Senate on the breach of contract claim.
Directed Verdict Standard of Review
{¶43} A trial court's decision on a motion for directed verdict presents a
question of law, which an appellate court reviews de novo. Groob v. Keybank, 108
Delaware County, Case No. 12 CAE 03 0016 18
Ohio St.3d 348, 2006–Ohio–1189, 843 N.E.2d 1170, ¶ 14. Civ. R. 50 provides for a
motion for directed verdict, which may be made at the opening statement of the
opponent, at the close of the opponent's evidence, or at the close of all the evidence.
Upon receiving a motion for directed verdict, the trial court must construe the evidence
most strongly in favor of the party against whom the motion is directed, see Civ. R.
50(A)(4). If the trial court finds on any determinative issue reasonable minds could
come but to one conclusion on the evidence submitted, then the court shall sustain the
motion and direct the verdict as to that issue. A directed verdict is appropriate where
a plaintiff fails to present evidence from which reasonable minds could find in the
plaintiff's favor, see Hargrove v. Tanner, 66 Ohio App.3d 693, 586 N.E.2d 141 (9th
Dist.1990).
Breach of Contract and Unjust Enrichment
{¶44} Strategy Group claimed it produced evidence at trial to demonstrate Sue
Lowden promised to pay her campaign debts, including Strategy Group’s bills. There
is no dispute there was no written contract between Sue Lowden and Strategy Group
or Sue Lowden for U.S. Senate and Strategy Group. Strategy Group proceeded under
the theory there was an implied contract between Sue Lowden to pay for the media
services, or in the alternative, that she was unjustly enriched by using the media
services.
{¶45} In order to prove a claim for breach of contract by Lowden, Strategy
Group had to show: 1) the existence of a contract; 2) performance by the plaintiff; 3)
nonperformance by the defendant; and 4) damages as a result. Textron Fin. Corp. v.
Nationwide Mutual Insurance Co., 115 Ohio App.3d 137, 144, 684 N.E.2d 1261 (9th
Delaware County, Case No. 12 CAE 03 0016 19
Dist.1996), citing Garofalo v. Chicago Title Insurance Co., 104 Ohio App.3d 95, 108,
661 N.E.2d 218 (8th Dist.1995). A plaintiff must prove the elements of a breach of
contract by a preponderance of the evidence. Cooper & Pachell v. Haslage, 142 Ohio
App.3d 704, 707, 756 N.E.2d 1248 (9th Dist.2001).
{¶46} Strategy Group asserts it established through testimony of
conversations with Sue Lowden, Sue Lowden promised to pay the campaign debts.
At trial, Rex Elsass, Scott Schweitzer, and Nicholas Everhart of Strategy Group
testified that in their conversations with Sue Lowden and her husband, Paul Lowden,
Sue Lowden orally agreed she would pay the invoices of Strategy Group.
{¶47} However, when reviewing the evidence in a light most favorable to
Strategy Group, the trial court found that reasonable minds could only conclude that
Sue Lowden did not enter into an oral agreement with Strategy Group to personally
pay its bills. In doing so, the trial court found that Strategy Group relied too much
upon the inferences made at trial as to Sue Lowden’s personal wealth and the choice
she made to partially self-fund her campaign. It was undisputed that Sue Lowden
partially self-funded her campaign, but other evidence was presented to support the
decision she did not personally enter into an oral agreement with Strategy Group to
use her individual funds to pay for the media services. Lowden assigned her
campaign manager, Uithoven, the task of managing the media services for her
campaign. Uithoven negotiated the terms of the agreement to provide media services
with Strategy Group. The written contracts provided by Strategy Group, while never
signed, were to be signed on behalf of Sue Lowden for U.S. Senate. Uithoven
Delaware County, Case No. 12 CAE 03 0016 20
reviewed the invoices and the campaign treasurer was responsible for paying the
invoices. Lowden did not personally review the invoices prior to the lawsuit.
{¶48} While Sue Lowden did contribute to her campaign, her financial support
did not prove the existence of a contract. Upon our de novo review of the evidence
presented, we find the trial court’s conclusion was correct that reasonable minds could
only conclude that Sue Lowden did not enter into an individual implied contract with
Strategy Group for the provision of media services for her campaign.
{¶49} Strategy Group also claimed Sue Lowden was unjustly enriched by its
services. The trial court granted a directed verdict in favor of Sue Lowden on Strategy
Group’s claim for unjust enrichment. Strategy Group argued the relationship between
Sue Lowden, Sue Lowden for U.S. Senate, and Strategy Group was governed by an
implied contract. The trial court, in granting the directed verdict in favor of Sue
Lowden by determining reasonable minds could not find there was a contract between
Sue Lowden and Strategy Group, the trial court concluded there was a viable claim for
breach of contract between Strategy Group and Sue Lowden for U.S. Senate. The
trial court stated:
As to the unjust enrichment. The evidence in this case is pretty
clear, both sides talked about the memorandum of understanding, the
court is of the opinion reasonable minds cannot differ, there was in fact a
contract implied by the documents, and the issue is whether or not the
contract was breached. The plaintiff has the remedy of the contract
claim therefore under this recent case of Westbrook versus Switech (sic),
the court is of the opinion the unjust enrichment does not apply as to the
Delaware County, Case No. 12 CAE 03 0016 21
plaintiff’s claim, that the unjust enrichment still could apply as to the
individual Sue Lowden, individually.
(Trial Tr., p. 681.)
{¶50} Unjust enrichment operates in the absence of an express contract.
Delicom Sweet Goods of Ohio, Inc. v. Mt. Perry Foods, Inc., 5th Dist. No. 04 CA 4,
2004-Ohio-6645, ¶ 31. This Court in Westbrook v. Swiatek, 5th Dist. No. 09CAE09-
0083, 2011-Ohio-781 held, “[t]he equitable doctrine of unjust enrichment or quantum
meruit is generally applied when one party confers some benefit upon another without
receiving just compensation for the reasonable value of services rendered. Aultman
Hosp. Assn. v. Cmty. Mut. Ins. Co. (1989), 46 Ohio St.3d 51, 55, 544 N.E.2d 920,
citing Ullman v. May (1947), 147 Ohio St. 468, 72 N.E.2d 63, paragraph three of the
syllabus. However, where a contract describes the nature of services to be rendered
and the compensation to be paid, the contract affords the appropriate relief and the
equitable doctrine is inapplicable. Ullmann, 147 Ohio St. at 477–478, 72 N.E.2d 63.”
Id. at ¶ 98. In this case, the case proceeded to the jury on the issue of breach of
contract between Strategy Group and Sue Lowden for U.S. Senate for which the jury
found Sue Lowden for U.S. Senate liable in the amount of $193,554.71. The trial
court did not err in determining an unjust enrichment claim could not stand where
there was a claim predicated upon the existence of a contract between the parties.
{¶51} The second Assignment of Error of Strategy Group is overruled.
Delaware County, Case No. 12 CAE 03 0016 22
III.
{¶52} In Strategy Group’s third Assignment of Error, Strategy Group argues the
trial court erred in granting Sue Lowden and Sue Lowden for U.S. Senate a directed
verdict on Strategy Group’s request for attorney’s fees. We disagree.
Directed Verdict Standard of Review
{¶53} A trial court's decision on a motion for directed verdict presents a
question of law, which an appellate court reviews de novo. Groob v. Keybank, 108
Ohio St.3d 348, 2006–Ohio–1189, 843 N.E.2d 1170, ¶ 14. Civ. R. 50 provides for a
motion for directed verdict, which may be made at the opening statement of the
opponent, at the close of the opponent's evidence, or at the close of all the evidence.
Upon receiving a motion for directed verdict, the trial court must construe the evidence
most strongly in favor of the party against whom the motion is directed, see Civ. R.
50(A)(4). If the trial court finds on any determinative issue reasonable minds could
come but to one conclusion on the evidence submitted, then the court shall sustain the
motion and direct the verdict as to that issue. A directed verdict is appropriate where
a plaintiff fails to present evidence from which reasonable minds could find in the
plaintiff's favor, see Hargrove v. Tanner, 66 Ohio App.3d 693, 586 N.E.2d 141 (9th
Dist.1990).
Attorney’s Fees
{¶54} Strategy Group first argues it was entitled to pursue its request for
attorney’s fees because a provision as to attorney’s fees was included in the written
contract submitted to Sue Lowden for U.S. Senate. It is undisputed the written
contract was never signed by Strategy Group or Sue Lowden for U.S. Senate. The
Delaware County, Case No. 12 CAE 03 0016 23
parties proceeded at trial under the theory the relationship was governed by an
implied contract, as was stated in the jury instructions. (Trial Tr., p. 809.) Strategy
Group states that while it went unsigned, the terms and provisions of the written
contract still governed the relationship between the parties because the campaign
committee failed to object to the terms of the written contract. This Court is unwilling
to adopt Strategy Group’s proposition that the terms of a written, but unsigned,
contract govern the terms of an undisputed implied contract, which is to be determined
by the words, deeds, acts, and silences of the parties. Union Sav. Bank v. White
Family Cos., Inc., 183 Ohio App.3d 174, 2009-Ohio-2075, 916 N.E.2d 816, ¶ 14 (2nd
Dist.). A review of the record shows no evidence as to whether there was an
agreement as to an attorney’s fees provision in the implied contract.
{¶55} Strategy Group next argues it was entitled to attorney’s fees based on
bad faith breach of contract. Ohio follows the American rule which provides in a
breach of contract case each party is responsible for their own attorney fees except as
otherwise provided for by statute or contract or when the opposing party acted in bad
faith, vexatiously, wantonly, obdurately, for malicious reasons, or otherwise engaged
in malicious conduct. Stambaugh v. T.C. Wood Realty, Inc., 5th Dist. No. 09 CA
00008, 2010-Ohio-3763, ¶ 36.
{¶56} Strategy Group states the campaign committee demonstrated its bad
faith by failing to pay the amount due on the invoices when the campaign had the
ability to pay the amounts due through Sue Lowden and her access to her personal
wealth. Strategy Group’s example of the bad faith was the conference on June 3,
Delaware County, Case No. 12 CAE 03 0016 24
2010 when the campaign was aware Sue Lowden would no longer self-fund the
campaign but continued to order media production for the campaign.
{¶57} The campaign committee argues the failure to pay the invoices was not
due to its bad faith but rather due to a dispute over the invoices. The majority of the
testimony at trial concerned the advertisements produced by Strategy Group for use
during the primary campaign and invoiced to the campaign. An example of such a
disputed advertisement was entitled the “Gulliver Ad.” In the Gulliver Ad, a group of
Nevadans is seen pulling a rope. The rope is attached to a statue of Senator Harry
Reid, which has a plaque on it stating, “Harry Reid, Senator for Life.” The people pull
the statue of Senator Harry Reid down and it smashes to bits. Sue Lowden and her
campaign committee argued at trial that Strategy Group developed the advertisement
on their own accord and when the campaign reviewed the advertisement, the
campaign refused to use the advertisement. Uithoven testified the early reviewers of
the advertisement thought it should be destroyed.
{¶58} Upon the evidence presented at trial reviewed in a light most favorable to
Strategy Group, we find the trial court did not err in finding that there was nothing
presented at trial to take the request for attorney’s fees “out of the American rule.”
(Trial Tr., p. 680.)
{¶59} Strategy Group’s third Assignment of Error is overruled.
IV.
{¶60} In its final Assignment of Error, Strategy Group contends the trial court
erred by excluding certain documentary evidence at trial. The admission or exclusion
of relevant evidence lies within the sound discretion of the trial court. State v. Sage,
Delaware County, Case No. 12 CAE 03 0016 25
31 Ohio St.3d 173, 510 N.E.2d 343 (1987). In order to find an abuse of discretion, we
must find that the trial court's decision was arbitrary, unconscionable, or
unreasonable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140(1983).
Statements by Robert Uithoven
{¶61} At trial, Strategy Group attempted to introduce two statements made by
Robert Uithoven, campaign manager for the Sue Lowden for U.S. Senate campaign.
The first was a May 27, 2010 news article in which Uithoven was quoted as saying the
campaign had enough money to operate through to the June 8 primary and that
Lowden made it clear that she will spend what it took from her own purse to finish the
race. (Uithoven, Ex. 16.) The second was June 2, 2010 email from Uithoven to a
reporter where he stated that if Lowden believed that she needed to add more
personal money to “up the buys,” she does. (Uithoven, Ex. 18.)
{¶62} Strategy Group attempted to use Uithoven’s statements to support its
claim of fraud and misrepresentation against Lowden. Strategy Group argued the
statements corroborated Lowden’s representations to Strategy Group that she would
use her own personal funds to pay Strategy Group’s bills.
{¶63} The trial court excluded the statements. We find no abuse of discretion
because there was no factual dispute that Lowden was a self-funded candidate. The
trial court found the statements were not pertinent because the statements made by
Uithoven as to Lowden’s self-funding capability does not demonstrate
misrepresentations by Lowden to Strategy Group as to whether she intended to pay
its invoices.
Delaware County, Case No. 12 CAE 03 0016 26
Filings with the Federal Election Commission
{¶64} The trial court excluded Strategy Group’s Exhibits 22 through 24, which
were copies of the campaign’s Federal Election Commission filings. Exhibit 22 shows
Lowden’s personal contributions of her funds to the campaign and the debt owed to
Strategy Group. Exhibit 23, filed with the FEC on October 19, 2011, shows payments
to other vendors. Exhibit 24 is a Debt Settlement Plan that showed Lowden
contributed personal funds to settle the campaign’s debt.
{¶65} The trial court rejected the documents because they were filed in 2011,
after the primary campaign. The trial court found Lowden and her campaign
committee’s actions after the primary campaign and the conclusion of its relationship
with Strategy Group to be irrelevant and prejudicial to the issue of whether Lowden
and the campaign engaged in fraud, fraudulent inducement, or breach of contract in its
dealings with Strategy Group.
{¶66} We find no abuse of discretion for the trial court’s decision to exclude the
FEC filings from trial.
{¶67} Strategy Group’s fourth Assignment of Error is overruled.
Delaware County, Case No. 12 CAE 03 0016 27
CONCLUSION
{¶68} The four Assignments of Error of Plaintiff-Appellant The Strategy Group
for Media, Inc. are overruled.
{¶69} The judgment of the Delaware County Court of Common Pleas is
affirmed.
By: Delaney, P.J.
Gwin, J. and
Hoffman, J. concur.
HON. PATRICIA A. DELANEY
HON. W. SCOTT GWIN
HON. WILLIAM B. HOFFMAN
PAD:kgb
[Cite as Strategy Group for Media, Inc. v. Lowden, 2013-Ohio-1330.]
IN THE COURT OF APPEALS FOR DELAWARE COUNTY, OHIO
FIFTH APPELLATE DISTRICT
THE STRATEGY GROUP FOR :
MEDIA, INC. :
:
:
Plaintiff-Appellant :
:
-vs- : JUDGMENT ENTRY
:
SUE LOWDEN AND SUE LOWDEN :
FOR U.S. SENATE :
:
: Case No. 12 CAA 03 0016
Defendants-Appellees :
For the reasons stated in our accompanying Opinion on file, the judgment of the
Delaware County Court of Common Pleas is affirmed. Costs assessed to Appellant.
HON. PATRICIA A. DELANEY
HON. W. SCOTT GWIN
HON. WILLIAM B. HOFFMAN