United States District Court for the Northern District of Illinois, Eastern Division

June 8, 2022, Decided; June 8, 2022, Filed

Case No. 21-cv-6154

Reporter

2022 U.S. Dist. LEXIS 102271 *

COYOTE LOGISTICS, LLC, Plaintiff, v. BAJAN ENTERPRISE, INC., Defendant.

Core Terms

carriers, own negligence, indemnify, cheese, shippers, promisee, indemnification, losses, motor carrier, indemnity provision, transportation, unenforceable, motion to dismiss, broker, prohibits, includes, covers, contractual, misconduct, fault

Counsel:  [*1] For Coyote Logistics LLC, Plaintiff: Jason Orleans, LEAD ATTORNEY, Orleans Canty Novy, LLC, Chicago, IL; Nicky M Priovolos, Orleans Canty Novy, Chicago, IL.

For Bajan Enterprise, Inc., a Florida Corporation, Defendant: David Joseph Farina, LEAD ATTORNEY, Cray Huber Horstman Heil & VanAusdal LLC, Chicago, IL.

Judges: Hon. Steven C. Seeger, United States District Judge.

Opinion by: Steven C. Seeger

Opinion

MEMORANDUM OPINION AND ORDER

This case is about lost cheese. A supermarket chain needed to ship cheese across state lines, from Tennessee to Florida. Coyote Logistics LLC, a freight broker, coordinated the transportation and entrusted the cheese to Bajan Enterprise, Inc., a carrier.

The cheese never got there. Unfortunately, Bajan’s tractor trailer got in an accident, and the cheese was a casualty. The cargo was a complete loss. The supermarket never received the cheese, so it deducted the price of the cheese from its payables to Coyote.

Coyote, in turn, didn’t want to foot the bill for the demise of the dairy shipment. So it brought this action against Bajan, seeking to hold Bajan liable for its failure to deliver the product. Coyote brought a federal claim under the Carmack Amendment, and a state law claim for breach of contract based [*2]  on an indemnification provision.

Bajan moved to dismiss the second count, arguing that the indemnification provision is unenforceable under an Illinois statute. For the reasons stated below, the motion to dismiss is denied.

Background

At the motion to dismiss stage, the Court must accept as true the well-pleaded allegations of the complaint. See Lett v. City of Chicago, 946 F.3d 398, 399 (7th Cir. 2020). The Court “offer[s] no opinion on the ultimate merits because further development of the record may cast the facts in a light different from the complaint.” Savory v. Cannon, 947 F.3d 409, 412 (7th Cir. 2020).

Plaintiff Coyote Logistics, LLC is a freight broker. See Cplt., at ¶¶ 1, 5 (Dckt. No. 1). It arranges the transportation of freight by motor carriers in interstate and foreign commerce. Id. at ¶ 1. It is authorized to act as a broker by the Federal Motor Carrier Safety Administration. Id.

On September 13, 2019, Coyote tendered a load of cheese to Defendant Bajan Enterprise, Inc. Id. at ¶ 5. Coyote gave custody of the cheese to Bajan in Tennessee. Id. Bajan’s job was to haul the cheese to Florida. Id.

The complaint doesn’t reveal anything about the cheese, except that there was a lot of it. The cheese filled a tractor trailer. And it came with a big price tag, too. The cheese apparently was [*3]  worth tens of thousands of dollars. Id. at ¶ 8. That’s a lot of cheese.

The cheese was in good shape when it left Tennessee. Id. at ¶ 6. But during transit, Bajan’s tractor trailer was involved in an accident. Id. at ¶ 7. The complaint doesn’t explain what happened or who was at fault. The cheese was deemed a loss. Id.

It was not cheap cheese. Publix Super Market, Inc. – the owner of the cheese — issued a damage claim for $88,660.56. Id. at ¶ 8. Publix deducted that amount from Coyote’s payables as payment for the loss. Id. at ¶ 9.

Coyote, in turn, sued Bajan to recoup its losses. It brings two claims. First, Coyote claims that Bajan is liable for the loss of cheese under the so-called Carmack Amendment, 49 U.S.C. § 14706, a federal statute that allocates responsibility for losses in interstate shipping. Id. at ¶¶ 10-16. Second, in the alternative, Coyote brings a state law breach-of-contract claim. Coyote alleges that Bajan has breached its duty to indemnify under their Broker-Carrier Agreement. Id. at ¶¶ 17-22; see also Broker-Carrier Agreement (Dckt. No. 1-1).

Bajan moves to dismiss Count II, meaning the claim about the contractual duty to indemnify. See Def.’s Partial Mtn. to Dismiss (Dckt. No. 9). The gist of the [*4]  argument is that the indemnification provision is unenforceable under Illinois law.

Legal Standard

A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not the merits of the case. See Fed. R. Civ. P. 12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In considering a motion to dismiss, the Court must accept as true all well-pleaded facts in the complaint and draw all reasonable inferences in the plaintiff’s favor. See AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). To survive, the complaint must give the defendant fair notice of the basis for the claim, and it must be facially plausible. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.

When reviewing a motion to dismiss under Rule 12(b)(6), the court may consider “the complaint itself, documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice.” Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012). The complaint includes a breach of contract claim, so the contract itself is fair game.

Analysis

The dispute is about whether Coyote can pass along the costs of the failed delivery. Coyote seeks indemnification from Bajan for the loss of [*5]  the cheese. And Bajan responds that the indemnification provision is unenforceable under Illinois law. See Def.’s Partial Mtn. to Dismiss (Dckt. No. 9); Def.’s Mem., at 1 (Dckt. No. 10). The parties agreed that Illinois law applies, and no one disputes it. See Broker-Carrier Agreement, at § 11.N (Dckt. No. 1-1, at 7 of 16).

Illinois law prohibits certain types of indemnification provisions in motor carrier transportation contracts. See K. Miller Constr. Co. v. McGinnis, 238 Ill. 2d 284, 345 Ill. Dec. 32, 938 N.E.2d 471, 480 (2010); see also Ruan Transp. Corp. v. Sentry Ins., 2018 U.S. Dist. LEXIS 137812, 2018 WL 3869971, at *3-4 (N.D. Ill. 2018); Burke v. John Maneely Co., 2016 U.S. Dist. LEXIS 14053, 2016 WL 454330, at *2-3 (N.D. Ill. 2016); Northland Ins. Co. v. Barnhart Crane & Rigging Co., 2013 U.S. Dist. LEXIS 181045, 2013 WL 6859279, at *8 (N.D. Ill. 2013). Illinois law does not prohibit indemnification provisions generally. But it does prohibit indemnification when the first party wants to saddle the second party with the costs of the first party’s own negligence and intentional misconduct. Specifically:

Notwithstanding any other provision of law, a provision, clause, covenant, or agreement contained in, collateral to, or affecting a motor carrier transportation contract that purports to indemnify, defend or hold harmless, or has the effect of indemnifying, defending or holding harmless, the promisee from or against any liability for loss or damage resulting from the negligence or intentional acts or omissions of the promisee is against the public policy of this State and is void and unenforceable. [*6] 

See 625 ILCS 5/18c-4105(a) (emphasis added).

Simply put, an “agreement” to “indemnify” a party to a “motor carrier transportation contract” for “negligence or intentional acts or omissions” of the promisee is unenforceable. Id. A promisee cannot receive indemnification for the promisee’s own negligence or bad acts.

Notice what the statute does, and what it doesn’t do. The statute prohibits the promisee from recovering losses caused by the promisee’s own negligence or intentional misconduct. But it doesn’t prohibit indemnification agreements generally. If a party has a right to indemnification for some other reason, that contractual arrangement is fair game.

The phrase “motor carrier transportation contract” sweeps broadly. It covers a contract for (1) the transportation of property for compensation or hire by the motor carrier; (2) the entry on property to load, unload, or transport property; or (3) a service incidental to those activities, such as storage of property. See 625 ILCS 5/18c-4105(b)(1). So, just about any contract for hire involving moving, loading, unloading, and storing property counts.

There isn’t a lot of case law about this particular statute. Only a few cases are out there, and they often acknowledge how it protects [*7]  carriers from the negligence of shippers. “The purpose of such statutes ‘is to rectify what many states . . . have perceived to be an inequitable “shift of risk” in the shipper and carrier relationship in motor carrier transportation contracts when a carrier is contractually required to indemnify a shipper for the shipper’s own negligence.'” See Burke, 2016 U.S. Dist. LEXIS 14053, 2016 WL 454330, at *3 (quoting Ruiz v. Carmeuse Lime, Inc., 2011 U.S. Dist. LEXIS 86693, 2011 WL 3439221, at *5 (N.D. Ind. 2011)). So the purpose is protecting carriers from paying for the shippers’ negligence.

Reading the entire provision in isolation, and taking it at face value, one might think that carriers and shippers were on equal footing. That is, one might conclude that the statute protects both carriers and shippers. The statute reads like it prohibits carriers from indemnifying shippers for the shippers’ own negligence, and prohibits shippers from indemnifying carriers for the carriers’ own negligence. After all, the statute uses the all-inclusive word “promisee.”

But a dive into the definitions shows that the statute did not pave a two-way street. The statute defines “promisee” to mean “the promisee and any agents, employees, servants, or independent contractors who are directly responsible to the promisee except for motor carriers party to a motor [*8]  carrier transportation contract with promisee, and such motor carrier’s agents, employees, servants or independent contractors directly responsible to the motor carrier.” See 625 ILCS 5/18c-4105(b)(2) (emphasis added).

The phrase “except for motor carriers” means that carriers don’t fall within the definition of “promisee.” Id. Carriers aren’t promisees, so there is no statutory ban on contractual provisions that require shippers to indemnify carriers for the carriers’ own negligence. On the flipside, shippers are promisees, so a contractual provision that requires a carrier [i.e., a promisor] to indemnify a shipper [i.e., a promisee] for losses from the shipper’s [i.e., promisee’s] own negligence is void. The upshot is that the statute protects carriers from contracts that require carriers to pay for the negligence of shippers, but does not protect shippers from contracts that require shippers to pay for the negligence of carriers.¹

The Broker-Carrier Agreement at issue here includes language that fits within the statute. The agreement includes an indemnification clause that requires Bajan (the carrier, meaning [*9]  the company hauling the cheese) to indemnify Coyote (the broker) for losses. “CARRIER [i.e., Bajan] agrees to be responsible for, and to defend, indemnify and hold BROKER [i.e., Coyote] . . . harmless of and from any and all claims, liabilities, demands, actions and causes of action, suits at law and proceedings in equity . . . which may arise from or in connection with the operations performed or to be performed pursuant to this Agreement, without regard to fault or negligence on the part of CARRIER . . . .” See Broker-Carrier Agreement, at § 10 (Dckt. No. 1-1, at 6 of 16).

The provision is sweeping, covering claims “of any nature” and “howsoever arising,” including “all losses, damages (including, but not limited to: consequential, speculative, direct, indirect and punitive damages), personal injury, death and/or loss or damage to cargo or other property, and/or claim for any such loss or occurrence.” Id. Bajan has to indemnify Coyote “without regard to fault or negligence on the part of” Bajan. Id.

That general provision is the starting point, creating a duty to indemnify as the baseline. But a later provision ratchets it back. Bajan has no duty to indemnify when Coyote — and Coyote [*10]  alone — was negligent. “The indemnifications . . . shall NOT have application in instances when the claim, demand, liability, or expense results directly from the sole negligence of BROKER [i.e., Coyote].” Id. (all caps in original). So when Coyote is 100% at fault, Bajan is off the hook.

The Broker-Carrier Agreement thus includes a sweeping indemnification provision, and it covers just about anything and everything. Bajan has a duty to indemnify, and that duty covers “all losses, damages . . . and/or loss or damage to cargo or other property.” Id. And it doesn’t matter if Bajan was blameless, because the duty applies “without regard to fault or negligence on the part of CARRIER [i.e., Bajan] . . . .” Id. The only exception is if the losses stem from the “sole negligence of BROKER [i.e., Coyote].” Id.

For present purposes, the most important thing is that the agreement requires Bajan to indemnify Coyote for losses caused by negligence, unless Coyote is 100% responsible because of its own negligence. And that’s where the agreement goes off the rails and runs into trouble. Again, under Illinois law, a motor carrier transportation contract cannot require the carrier to indemnify the shipper [*11]  for the shipper’s own negligence. And that’s what this contract does: it requires Bajan to indemnify Coyote for Coyote’s own negligence (again, unless Coyote is 100% to blame).

The contract, at least in part, runs afoul of the Illinois anti-indemnification statute. It requires Bajan to indemnify Coyote for losses, even if the losses stem primarily from Coyote’s own negligence and misconduct. To that extent, the provision runs headlong into the text of the statute.

Even so, that’s not exactly the situation here. Coyote isn’t trying to recover losses from Bajan for Coyote’s own negligence. Or, at the very least, there’s no suggestion of that in the complaint, which is all that matters. It is not as if Coyote was negligent, and wants Bajan to pay for Coyote’s own negligence.

And, the provision does more than require Bajan to indemnify Coyote for Coyote’s own negligence and bad acts. It basically requires indemnification for just about anything. So it covers Coyote’s own negligence. But it covers lots of other situations, too.

Putting it all together, the contract includes a sweeping indemnification provision, and part of that provision runs afoul of Illinois law. The contract requires Bajan [*12]  to indemnify Coyote for Coyote’s own negligence, but Illinois law prohibits such an agreement. But by all appearances, Coyote is not invoking that provision to recoup something that it cannot recover under Illinois law. Coyote cannot receive indemnification for Coyote’s own negligence, but it seems that Coyote isn’t trying to do that anyway.

The question, then, is what to do about the fact that the provision, at least in part, runs afoul of Illinois law. Does the rest of the indemnification provision survive? From a textual perspective, does the baby get thrown out with the bathwater? Or does the indemnification provision otherwise remain intact, except to the extent that it violates Illinois law?

Another provision of the contract provides the answer. The Broker-Carrier Agreement includes a severability provision, and it confirms that unenforceable text can be thrown overboard without sinking the rest of the terms. “In the event any of the terms of this Agreement are determined to be invalid or unenforceable, no other terms shall be affected and the unaffected terms shall remain valid and enforceable as written.” See Broker-Carrier Agreement, at § 11.J (Dckt. No. 1-1, at 6 of 16).

Illinois [*13]  courts enforce such severability provisions. See, e.g., 1030 W. N. Ave. Bldg., LLC v. The Firm, LLC, 2022 IL App (1st) 200588-U, at ¶ 34 (2022) (“Here, both the mortgage and separate assignment had severability clauses, which ‘certainly strengthens the case for the severance of the unenforceable provisions because [they] indicate that the parties intended for the lawful portions of the contract to be enforced in the absence of the unlawful portions.'”) (quoting Abbott-Interfast Corp. v. Harkabus, 250 Ill. App. 3d 13, 189 Ill. Dec. 288, 619 N.E.2d 1337, 1343 (1993)); First Peek Ultrasound L.L.C. v. Weideman, 2018 IL App (1st) 180858-U, at ¶ 48 (2018) (“[T]he presence of a severability clause in a contract strengthens the case for the severance of unenforceable provisions because it indicates that the parties intended for the lawful portions of the contract to be enforced in the absence of the unlawful portions.”). Parties can agree ex ante to lop off what doesn’t pass muster, and keep the rest.

Taking a step back, and viewing everything as a whole, the breach of contract claim lives to fight another day. Coyote wants indemnification from Bajan for the costs of the failed delivery of the cheese. Under the agreement, Coyote is entitled to indemnification, unless Coyote is seeking indemnification for Coyote’s own negligence. That arrangement would violate Illinois law. See Burke, 2016 U.S. Dist. LEXIS 14053, 2016 WL 454330, at *3 (noting that the indemnification agreement was “void and unenforceable” only “to the [*14]  extent” that it allowed the shipper to evade liability for its own negligence). But that doesn’t seem to be the situation here. In the end, the indemnification provision might be too broad — meaning that it entitles Coyote to something that Illinois law prohibits — but that overbreadth does not doom the entire provision, thanks to the severability provision.

For now, the breach of contract claim survives. This Court has no reason to think that Coyote is attempting to recover losses caused by Coyote’s own negligence or intentional misconduct. If that’s right, then the claim can go forward. Illinois law does not prohibit indemnification for other losses, meaning losses for something other than the promisee’s own foul-ups. If Coyote is, in fact, attempting to get indemnification for Coyote’s own negligence or bad acts, then Bajan can raise that argument again at a later time. In the meantime, the claim can roll forward.

Conclusion

For the foregoing reasons, the motion to dismiss is denied.

Date: June 8, 2022

/s/ Steven C. Seeger

Steven C. Seeger

United States District Judge

End of Document

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¹ Apparently, most states have adopted anti-indemnification statutes covering the transportation industry. Some statutes are a two-way street, and some statutes are a one-way street. That is, some statutes protect carriers from contracts that require carriers to pay for shippers’ negligence and protect shippers from contracts that require shippers to pay for carriers’ negligence. That’s a two-way street. But some statutes protect only carriers from contracts that require carriers to pay for shippers’ negligence, and do not offer comparable protection in the other direction. That’s a one-way street. Iowa is a good example of a state with a two-way street, and North Dakota is a good example of a state with a one-way street (like Illinois). Compare ICA § 325B.1, with NDCC § 22-02-10; see also Gregory D. Podolak, Contractual Indemnity: Anti-Indemnity Statutes and Additional Insured Coverage, Saxe, Doernberger & Vita, P.C. (August 27, 2018), https://www.sdvlaw.com/insights/contractual-indemnity-anti-indemnity-statutes-and-additional-insured-coverage (“On a basic level, the transportation anti-indemnity laws function the same as the construction anti-indemnity laws: they impose limitations on the [liabilities] assumed by the contracting parties. The rationale behind these laws in this industry is identical to that in construction: there was a need to protect downstream parties, like truckers and other motor carriers with little to no bargaining power, from absorbing most of the risk. To date, 45 states have enacted motor carrier transportation anti-indemnity laws. Generally, these statutes take one of two forms: (1) they prohibit requirements in indemnification agreements where the motor carrier must indemnify the non-motor carrier, usually a shipper or broker, for liability arising out of the non-motor carrier’s negligent or intentional acts; or (2) they prohibit indemnification provisions in motor carrier contracts that have the effect of indemnifying an indemnitee for the indemnitee’s negligent or intentional acts.”).

Court of Appeals of Ohio, Twelfth Appellate District, Clermont County

May 31, 2022, Decided

CASE NO. CA2021-06-031

Reporter

2022-Ohio-1802 *; 2022 Ohio App. LEXIS 1666 **; 2022 WL 1741059

TOTAL QUALITY LOGISTICS, LLC, Appellant, -vs- TUCKER, ALBIN AND ASSOCIATES, et al., Appellees.

Prior History:  [**1] CIVIL APPEAL FROM CLERMONT COUNTY COURT OF COMMON PLEAS. Case No. 2019 CVH 01237.

Disposition: May 21, 2021 judgment entering summary judgment is affirmed in part and reversed in part. May 22, 2020 judgment dismissing claims is affirmed.

Core Terms

customers, damages, trial court, tortious interference, goodwill, business relationship, carriers, summary judgment, injunctive relief, loss of goodwill, lost goodwill, injunction, reputation, nominal damages, costs, trucking company, attorney’s fees, lost profits, allegations, irreparable harm, prevailing party, do business, contacting, Contracts, parties, accounts receivable, breach of contract, demand for payment, assigned error, speculation

Case Summary

Overview

HOLDINGS: [1]-The trial court properly granted the defendant’s summary judgment under Civ.R. 56(C) on the plaintiff’s request for a permanent injunction because the evidence did not show that it faces immediate and irreparable injury or harm. Also, the plaintiff identified its interests (i.e., goodwill and reputation) but offered nothing beyond mere speculation that an injunction was necessary to prevent the defendant from continuing to injure the interests; [2]-The trial court properly dismissed the plaintiff’s claim for tortious interference under Civ.R. 12(B)(6) because the complaint did not allege that the defendant induced or otherwise purposely caused a third person not to enter or to continue a business relation or not to perform a contract with it. Therefore the plaintiff could not be granted relief on the claim.

Outcome

Judgment affirmed in part and reversed in part.

LexisNexis® Headnotes

Civil Procedure > Appeals > Standards of Review > De Novo Review

Civil Procedure > Judgments > Summary Judgment > Entitlement as Matter of Law

Civil Procedure > … > Summary Judgment > Summary Judgment Review > Standards of Review

Civil Procedure > … > Summary Judgment > Entitlement as Matter of Law > Genuine Disputes

Civil Procedure > … > Summary Judgment > Entitlement as Matter of Law > Legal Entitlement

HN1  Standards of Review, De Novo Review

Under Civ.R. 56(C), summary judgment is proper when the movant demonstrates that there is no issue as to any material fact, that the moving party is entitled to judgment as a matter of law, and that reasonable minds can come to but one conclusion, and that conclusion is adverse to the nonmoving party. The appellate court reviews a trial court’s ruling on a summary-judgment motion de novo, that is, without deference to the trial court’s decision. De novo review means that the appellate court uses the same standard that the trial court should have used, and the court examines the evidence to determine whether as a matter of law no genuine issues exist for trial.

Business & Corporate Compliance > … > Breach > Breach of Contract Actions > Elements of Contract Claims

HN2  Breach of Contract Actions, Elements of Contract Claims

A plaintiff seeking to recover on a claim for breach of contract must prove not only a contractual violation but also that the plaintiff incurred damages as a result.

Civil Procedure > Remedies > Damages > Compensatory Damages

Contracts Law > … > Damages > Types of Damages > Compensatory Damages

HN3  Damages, Compensatory Damages

The sole purpose of contract damages is to compensate the nonbreaching party for losses suffered as a result of a breach.

Civil Procedure > Remedies > Damages > Compensatory Damages

Contracts Law > … > Measurement of Damages > Foreseeable Damages > Lost Profits

HN4  Damages, Compensatory Damages

Goodwill is, in essence, the probability that the old customers will resort to the old place. A loss of goodwill is a form of lost profits, both of which are recoverable as compensatory damages.

Civil Procedure > Remedies > Damages > Compensatory Damages

Contracts Law > … > Measurement of Damages > Foreseeable Damages > Lost Profits

HN5  Damages, Compensatory Damages

The comprehensive definition of goodwill is the advantage or benefit, which is acquired by an establishment, beyond the mere value of the capital, stock, funds, or property employed therein, in consequence of the general public patronage and encouragement, which it receives from constant or habitual customers, on account of its local position, or common celebrity, or reputation for skill or affluence, or punctuality, or from other accidental circumstances or necessities, or even from ancient partialities or prejudices.

Contracts Law > … > Measurement of Damages > Foreseeable Damages > Lost Profits

HN6  Foreseeable Damages, Lost Profits

The general rule for recovery of lost profits, which rule also applies to a claim for loss of goodwill, is that lost profits may be recovered by the plaintiff in a breach of contract action if: profits were within the contemplation of the parties at the time the contract was made, the loss of profits is the probable result of the breach of contract, and the profits are not remote and speculative and may be shown with reasonable certainty.

Contracts Law > … > Measurement of Damages > Foreseeable Damages > Lost Profits

HN7  Foreseeable Damages, Lost Profits

The loss of goodwill can be established with testimony by those who have first-hand knowledge of such loss.

Contracts Law > … > Measurement of Damages > Foreseeable Damages > Lost Profits

HN8  Foreseeable Damages, Lost Profits

Where loss of goodwill is not adequately proven by expert testimony, no speculation is allowed as to those damages.

Contracts Law > … > Measurement of Damages > Foreseeable Damages > Lost Profits

HN9  Foreseeable Damages, Lost Profits

It is commonsense that having a reputation of not paying bills hurts goodwill and results in lost profits.

Business & Corporate Compliance > … > Contracts Law > Breach > Nonperformance

HN10  Breach, Nonperformance

An unexcused failure to perform a contract is a legal wrong.

Contracts Law > … > Damages > Measurement of Damages > Nominal Damages

HN11  Measurement of Damages, Nominal Damages

If a plaintiff proves breach of contract at trial but fails to prove actual damages resulting from that breach, the trial court may enter judgment for the plaintiff and award nominal damages. The nominal damages constitute a penalty or punishment for breaching the contract, that is, a small sum fixed without regard to the amount of loss.

Contracts Law > … > Damages > Measurement of Damages > Nominal Damages

HN12  Measurement of Damages, Nominal Damages

If only nominal damages are available, an appellate court may reverse and remand only if a significant right is involved, including inequitable assessment of costs.

Civil Procedure > … > Attorney Fees & Expenses > Basis of Recovery > English Rule

HN13  Basis of Recovery, English Rule

A prevailing party is generally the party in whose favor the decision, verdict, or judgment is rendered. This includes the party to a suit who successfully prosecutes the action, prevailing on the main issue, even though not necessarily to the extent of his original contention.

Civil Procedure > Preliminary Considerations > Equity > Adequate Remedy at Law

Evidence > Burdens of Proof > Clear & Convincing Proof

Civil Procedure > … > Injunctions > Grounds for Injunctions > Irreparable Harm

Civil Procedure > Preliminary Considerations > Equity > Irreparable Injury

HN14  Equity, Adequate Remedy at Law

It is well-established that in order to obtain an injunction, the moving party must show by clear and convincing evidence that immediate and irreparable injury, loss or damage will result to the applicant and that no adequate remedy at law exists. Actual irreparable harm usually may not be presumed but must be proved. Injunctive relief may also be available to the extent that irreparable harm is actually threatened. Irreparable injury or harm has been defined as an injury for the redress of which, after its occurrence, there could be no plain, adequate and complete remedy at law, and for which restitution in specie (money) would be impossible, difficult or incomplete.

Civil Procedure > Appeals > Standards of Review > Abuse of Discretion

Civil Procedure > Remedies > Injunctions > Preliminary & Temporary Injunctions

Civil Procedure > Judicial Officers > Judges > Discretionary Powers

Civil Procedure > … > Injunctions > Grounds for Injunctions > Irreparable Harm

HN15  Standards of Review, Abuse of Discretion

The grant or denial of a motion for injunctive relief is solely within the trial court’s discretion. It follows that it is within the trial court’s discretion to make a reasonable determination whether an adequate remedy at law is available or whether irreparable injury will result to the party seeking an injunction if no injunction is issued. The appellate court reviews a decision on injunctive relief for abuse of discretion.

Civil Procedure > Appeals > Standards of Review > De Novo Review

Torts > Business Torts > Commercial Interference

HN16  Standards of Review, De Novo Review

In a tortious interference claim, the appellate court reviews the trial court’s decision de novo.

Civil Procedure > … > Defenses, Demurrers & Objections > Motions to Dismiss > Failure to State Claim

HN17  Motions to Dismiss, Failure to State Claim

A Civ.R. 12(B)(6) motion for failure to state a claim asks a court to determine if the allegations in a complaint set forth an actionable claim. A court may look only to the complaint to determine whether the allegations are legally sufficient to state a claim. The court must presume that all factual allegations in the complaint are true and must make all reasonable inferences in favor of the nonmoving party. The court should dismiss the claim if it appears beyond a reasonable doubt from the complaint that the plaintiff can prove no set of facts entitling it to relief.

Torts > … > Commercial Interference > Employment Relationships > Defenses

Torts > … > Business Relationships > Intentional Interference > Remedies

Torts > … > Business Relationships > Intentional Interference > Elements

Torts > … > Commercial Interference > Employment Relationships > Elements

HN18  Employment Relationships, Defenses

The torts of interference with business relationships and contract rights generally occur when a person, without a privilege to do so, induces or otherwise purposely causes a third person not to enter into or continue a business relation with another, or not to perform a contract with another. The elements essential to recovery for a tortious interference with a business relationship are: (1) a business relationship; (2) the wrongdoer’s knowledge thereof; (3) an intentional interference causing a breach or termination of the relationship; and (4) damages resulting therefrom. The elements of tortious interference with contract are (1) the existence of a contract, (2) the wrongdoer’s knowledge of the contract, (3) the wrongdoer’s intentional procurement of the contract’s breach, (4) the lack of justification, and (5) resulting damages.

Torts > … > Business Relationships > Intentional Interference > Elements

Torts > … > Prospective Advantage > Intentional Interference > Elements

HN19[]  Intentional Interference, Elements

Tortious interference requires at least two people who have a (prospective) business relationship or a contract plus one other person who interferes with that relationship or gets one of the first two to breach their contract.

Counsel: Lindhorst & Dreidame, and Barry F. Fagel and Elizabeth M. Johnson, for appellant.

Statman, Harris & Eyrick, and William B. Fecher, for appellees.

Judges: M. POWELL, P.J. S. POWELL and BYRNE, JJ., concur.

Opinion by: M. POWELL

Opinion

M. POWELL, P.J.

 [*P1]  Total Quality Logistics, LLC, (“TQL”) appeals the judgment of the Clermont County Court of Common Pleas granting summary judgment to appellees, Tucker, Albin and Associates (“Tucker”) and Chris Reed (“Reed”), on its claims for breach of contract and punitive damages and its request for a permanent injunction. TQL also appeals the judgment of the trial court dismissing, under Civ.R. 12(B)(6), its claim for tortious interference with contract and/or business relationships.

 [*P2]  TQL is a freight broker that arranges transportation of goods for its customers with third-party trucking companies. In this case, TQL arranged for Daansa Services, LLC (“Daansa”), to transport a load of goods to Prestige Kitchen and Bath (“Prestige”), a customer of The Corsi Group. Daansa had signed [**2]  a Broker-Carrier Agreement with TQL, paragraph 4(b) of which pertinently states that Daansa may seek payment only from TQL:

CARRIER [Daansa] agrees that BROKER [TQL] is the sole party responsible for payment of CARRIER’s invoices related to the Services and that, under no circumstances, will CARRIER contact or seek payment from any CUSTOMER or any other party responsible for any payment related to the Services. CARRIER waives any right to collect from CUSTOMERS, unless BROKER provides CARRIER with consent in a writing[.]

 [*P3]  A dispute developed between TQL and Daansa concerning the Corsi load, and TQL refused to pay Daansa, leaving Daansa with an account receivable on its balance sheet. Daansa sold the account to Tucker, a Texas company that purchases accounts receivable from trucking companies and tries to collect.

 [*P4]  On September 11, 2019, Tucker began efforts to collect upon the Daansa account. Reed, one of Tucker’s collections agents, called Prestige and demanded payment on the Daansa account. This call spawned a series of communications that day. Unsure what to do, Prestige emailed Corsi about the call, noting, “I guess TQL did not pay the trucking company.” Corsi forwarded Prestige’s [**3]  email to Kevin Fitzgerald at TQL, who evidently called Reed right away, because Reed sent Fitzgerald a follow-up email, stating, “Yes I agree calling 3rd parties creates hassle however it is part of the process.” Fitzgerald responded that he was transferring the matter to TQL’s legal department. Shortly after, TQL legal-claims specialist Amy Unger sent Reed an email telling him plainly that under the Broker-Carrier Agreement payment may be sought only from TQL and that contacting anyone else about payment violates the Agreement. Unger further told Reed, “Besides

being a blatant breach of our Agreement, contacting its customers is not something TQL takes lightly. * * * We will work with you on any payment disputes that you represent, but this unlawful contact is not something we will abide.”

 [*P5]  Less than a month later, on October 4, 2019, TQL filed suit against Tucker and Reed (herein collectively referred to as Tucker), asserting claims for breach of contract, tortious interference with contract and/or business relationships, and punitive damages. The complaint alleged that Tucker is bound by the Broker-Carrier Agreement signed by Daansa, because Tucker either is the assignee of Daansa’s [**4]  account receivable or was acting as Daansa’s agent. In addition to punitive damages, the complaint sought compensatory damages for injury to business goodwill, attorney fees, and costs. The complaint also sought “injunctive relief prohibiting the Defendants, or their agents, from contacting or suing any TQL customers, or TQL’s customers’ customers, demanding payment for invoices allegedly owed to trucking companies.”

 [*P6]  Tucker filed a motion to dismiss TQL’s tortious interference claim under Civ.R. 12(B)(6). On May 22, 2020, the trial court granted the dismissal motion, concluding that the complaint failed to allege that Tucker’s actions caused a breach in TQL’s relationship with a third party or caused the breach of a contract that existed between TQL and a third party. Tucker later filed a motion for summary judgment on the breach-of-contract and punitive-damages claims and separately filed a motion for summary judgment on the request for an injunction. On May 21, 2021, the trial court ruled on both summary-judgment motions together. The court granted summary judgment for Tucker on the breach-of-contract and punitive-damages claims as well as on TQL’s permanent-injunction request. The court found [**5]  that while Tucker had violated the Agreement, TQL failed to show that it suffered injury to goodwill as a result. Additionally, because TQL failed to show damages and failed to show that Tucker threatened imminent and irreparable harm, the court declined to grant injunctive relief.

 [*P7]  TQL now appeals, raising two assignments of error.

 [*P8]  Assignment of Error No. 1:

 [*P9]  THE TRIAL COURT ERRED AS A MATTER OF LAW WHEN IT GRANTED DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT.

 [*P10]  TQL first challenges the trial court’s May 21, 2021 decision granting summary judgment for Tucker regarding TQL’s claim for breach of contract and request for injunctive relief. TQL argues that the trial court erred by finding that it failed to show damage caused by Tucker’s violation of paragraph 4(B) of the Broker-Carrier Agreement. TQL maintains that its goodwill was injured because of Reed’s call to Prestige, because it suggests to TQL’s customers that TQL does not always pay the companies who might transport their goods. TQL also argues that the trial court erred by finding that it failed to show imminent and irreparable harm. TQL contends that Tucker will continue to violate the Agreement without an injunction prohibiting it [**6]  from doing so.

 [*P11]  HN1 Under Civ.R. 56(C), summary judgment is proper when the movant demonstrates “that there is no issue as to any material fact, that the moving party is entitled to judgment as a matter of law, and that reasonable minds can come to but one conclusion, and that conclusion is adverse to the nonmoving party.” Miller v. Bike Athletic Co., 80 Ohio St.3d 607, 617, 1998-Ohio-178, 687 N.E.2d 735. We review a trial court’s ruling on a summary-judgment motion de novo, that is, without deference to the trial court’s decision. Shannon v. Fischer, 12th Dist. Clermont No. CA2020-05-022, 2020-Ohio-5567, ¶ 13. “De novo review means that this court uses the same standard that the trial court should have used, and we examine the evidence to determine whether as a matter of law no genuine issues exist for trial.” Morris v. Dobbins Nursing Home, 12th Dist. Clermont No. CA2010-12-102, 2011-Ohio-3014, ¶ 14.

 [*P12]  HN2 A plaintiff seeking to recover on a claim for breach of contract must prove not only a contractual violation but also that “the plaintiff incurred damages as a result.” S&G Invests., L.L.C. v. United Cos., L.L.C., 12th Dist. Clermont No. CA2010-03-017, 2010-Ohio-3691, ¶ 12. Tucker does not dispute that it is bound by and violated the Agreement. The issue is whether TQL presented sufficient evidence to show that it is entitled to monetary relief for the violation.

 [*P13]  “‘HN3 [T]he sole purpose of contract damages is to compensate the nonbreaching party for losses suffered as a result of a breach[.]'” DeCastro v. Wellston City School Dist. Bd. of Edn., 94 Ohio St.3d 197, 201, 2002-Ohio-478, 761 N.E.2d 612, quoting 3 Restatement of the Law 2d, Contracts, Section 355, [**7]  at 154 (1981). TQL claims that it suffered a loss of business goodwill. HN4[] Goodwill is, in essence, “the probability that the old customers will resort to the old place.” Spayd v. Turner, Granzow & Hollenkamp, 19 Ohio St.3d 55, 60, 19 Ohio B. 54, 482 N.E.2d 1232 (1985).¹ A loss of goodwill is a form of lost profits, both of which are recoverable as compensatory damages. Charles R. Combs Trucking, Inc. v. Internatl. Harvester Co., 12 Ohio St.3d 241, 244, 12 Ohio B. 322, 466 N.E.2d 883 (1984); Homes by Calkins, Inc. v. Fisher, 92 Ohio App.3d 262, 269, 634 N.E.2d 1039 (12th Dist.1993) (referring to damages for lost goodwill as damages for lost profits).

 [*P14]  HN6 The general rule for recovery of lost profits, which rule also applies to a claim for loss of goodwill, is that “lost profits may be recovered by the plaintiff in a breach of contract action if: profits were within the contemplation of the parties at the time the contract was made, the loss of profits is the probable result of the breach of contract, and the profits are not remote and speculative and may be shown with reasonable certainty.” (Citation omitted.) Combs at 244. See also Fisher at 268-271 (applying this rule to a claim for lost goodwill).

 [*P15]  HN7 The loss of goodwill can be established with “testimony by those who have first-hand knowledge of such loss.” Kinetico, Inc. v. Indep. Ohio Nail Co., 19 Ohio App.3d 26, 31, 19 Ohio B. 92, 482 N.E.2d 1345 (8th Dist.1984). See also Combs, 12 Ohio St.3d at 244-245. In Combs, it was the testimony of the owner of the company and its secretary-treasurer whose goodwill the plaintiff claimed to have lost, along with testimony from the [**8]  plaintiff, that established a claim for lost goodwill. See Combs at 244-245. The testimony of an outside expert on goodwill was not required. Kinetico does not teach otherwise. HN8 The Kinetico court stated that “[w]here loss of goodwill is not adequately proven by expert testimony,” no speculation is allowed as to those damages. Kinetico at 31. The court’s use of the word “expert” appears to mean one with “first-hand knowledge of such loss,” consistent with Combs. It was the Kinetico plaintiff’s vice president who had testified about lost goodwill, and the appellate court never questioned whether he qualified as an expert on this matter.

 [*P16]  TQL argues that the principal evidence establishing lost goodwill is one of its interrogatory answers and the affidavit of one of its employees. In response to an interrogatory asking it to identify damages, TQL stated, “Defendants’ actions and false accusations have jeopardized TQL’s customer relationships. In addition, TQL is entitled to recover any loss of business because of defendants’ conduct as well as recovery of TQL’s attorney fees.” In her affidavit, TQL’s legal-claims specialist Amy Unger explained, “[A] reputation of not paying bills interferes with a broker’s ability to get and retain business. [**9]  False allegations that TQL does not pay the carriers significantly hurts our reputation and dissuades carriers and customers from doing business with TQL. This is especially harmful due to the tight market within the highly competitive freight brokerage industry.” According to Unger, “Tucker and Reed’s actions are extremely harmful to TQL’s ongoing relationships with its customers and carriers. As such, TQL’s reputation has been damaged.” In fact, said Unger, “[d]ue to Tucker and Reed’s actions, TQL’s customer threatened to stop doing business with TQL.” We note that Unger’s email to Reed, quoted earlier, shows how seriously TQL takes actions like Tucker’s. Indeed, paragraph 4(b) of the Broker-Carrier Agreement suggests that TQL thinks keeping payment disputes with carriers close to the vest is very important to its business.

 [*P17]  The action that forms the basis of TQL’s breach-of-contract claim is Reed’s phone call to Prestige demanding payment. This led Prestige to tell TQL’s customer Corsi about the demand and to suggest to Corsi that TQL did not pay Daansa. Thus, TQL believes that Reed’s single call is responsible for its loss of goodwill. TQL does not request any specific sum for lost [**10]  goodwill, though. Also, there are only what amount to self-serving declarations in TQL’s interrogatory answer and Unger’s affidavit that such a loss was sustained at all. Further, while Unger defined loss of goodwill as the loss of reputation, which harms TQL’s relationships with customers and carriers, she identified only one customer (presumably Corsi) who had merely “threatened to stop doing business with TQL.”

 [*P18]  HN9 It is commonsense that having a reputation of not paying bills hurts goodwill and results in lost profits. We recognize that a business’s reputation is often lost one allegation at a time. Perhaps one or two or even three allegations do not dissuade carriers or customers, but enough allegations can snowball. It is incredibly difficult, though, to determine how much any one allegation contributes to lost goodwill and ultimately to lost profits. In this case, while it is conceivable that Tucker’s actions might have injured TQL’s goodwill and might be part of the snowball that leads to lost profits down the road, TQL did not present any evidence that this is so or any evidence suggesting a specific amount for lost goodwill attributable to Tucker’s breach. Although an exact calculation [**11]  is not required at this stage of the litigation, there is no evidence that any amount could even be calculated, and it would be speculative to assign a dollar amount for TQL’s goodwill damages. A party cannot recover damages beyond the amount established with reasonable certainty.

 [*P19]  None of the evidence presented in this case shows that the violation of the Agreement—Reed’s call to Prestige—actually had an appreciable negative effect on TQL’s reputation or its customer relationships, resulted in the loss of business, or in any way affected TQL’s bottom line. Simply put, no reasonable mind could find a loss of goodwill from Reed’s one phone call. The vague, unsupported assertions in the evidence are—alone—not enough to find any lost goodwill. At most, the evidence shows that, due to this payment dispute, one customer threatened to stop doing business with TQL. Thus there is a lack of evidence that TQL’s goodwill was damaged. See Kinetico, 19 Ohio App.3d at 31-32 (concluding the same on similar evidence).

 [*P20]  In sum, TQL failed to show the existence of—not simply the calculation of—actual damage to its goodwill resulting from Tucker’s violation of the Agreement. Thus, the trial court properly found that Tucker failed to present [**12]  sufficient evidence that it suffered goodwill damages.

 [*P21]  However, Tucker unequivocally breached the Broker-Carrier Agreement by seeking payment from Prestige and that breach invaded a significant interest of TQL. Pursuant to paragraph 4(b) of the Broker-Carrier Agreement, TQL seeks to insulate its contracted shippers and their customers from dealing with payment disputes between TQL and its contracted carriers. By doing so, TQL’s customers are spared the hassle involved with those disputes, which makes doing business with TQL appealing. TQL is entitled to vindicate its rights in maintaining the integrity of its business model. Tucker’s efforts to collect the Daansa account by contacting Prestige frustrated the manner in which TQL conducts business.

 [*P22]  “‘HN10 An unexcused failure to perform a contract is a legal wrong.'” DeCastro, 94 Ohio St.3d at 199, quoting 11 Williston on Contracts, Section 1339A (3d Ed.1968). HN11 If “a plaintiff proves breach of contract at trial but fails to prove actual damages resulting from that breach, the trial court may enter judgment for the plaintiff and award nominal damages.” Id. See also Lacey v. Laird, 166 Ohio St. 12, 139 N.E.2d 25 (1956), paragraph two of the syllabus. The nominal damages constitute a penalty or punishment for breaching the [**13]  contract, that is, “‘a small sum fixed without regard to the amount of loss.'” Id., quoting 3 Restatement of the Law 2d, Contracts, Section 346 (1981). This means that despite TQL’s failure to prove a loss of goodwill from Tucker’s breach, the trial court may still enter judgment for TQL and award it nominal damages.

 [*P23]  The Ohio Supreme Court has held that HN12 if only nominal damages are available, an appellate court may reverse and remand only if “a significant right is involved, including inequitable assessment of costs.” Id. at 200. Here, there are significant rights involved: recovery of attorney fees and costs. The complaint seeks attorney fees and costs associated with bringing this lawsuit. It appears that TQL may be contractually entitled to these amounts under paragraph 15 of the Broker-Carrier Agreement, which pertinently states: “The prevailing party in any lawsuit between the Parties shall be entitled to all reasonable expenses, attorney fees, and costs (including court costs).”

 [*P24]  “Prevailing party” is not defined in the Agreement. HN13 “A prevailing party is generally the party in whose favor the decision, verdict, or judgment [is] rendered.” (Citation omitted.) Windward Ents., Inc. v. Valley City Dev. Group L.L.C., 9th Dist. Medina No. 18CA0001-M, 2019-Ohio-3419, ¶ 34, 142 N.E.3d 177; Marafiote v. Estate of Marafiote, 7th Dist. Mahoning No. 14 MA 0130, 2016-Ohio-4809, ¶ 13, 68 N.E.3d 238. This includes “‘[t]he party [**14]  to a suit who successfully prosecutes the action * * *, prevailing on the main issue, even though not necessarily to the extent of his original contention.'” (Emphasis sic.) Id., quoting Moga v. Crawford, 9th Dist. Summit No. 23965, 2008-Ohio-2155, ¶ 6. Here, despite not being able to show a loss of goodwill, TQL is entitled to recover nominal damages on its breach-of-contract claim. An award of nominal damages may serve to confer prevailing party status upon TQL, entitling it an award of attorney fees and costs pursuant to the Agreement.

 [*P25]  In sum, we conclude that TQL is entitled to nominal damages for Tucker’s violation of the Agreement and, subject to a determination of whether TQL is the prevailing party in the litigation, an award of reasonable expenses, attorney fees, and costs under the Agreement. We therefore remand this case to the trial court for an assessment of nominal damages and a prevailing party determination.

 [*P26]  The trial court also granted Tucker summary judgment on TQL’s request for a permanent injunction “prohibiting the Defendants, or their agents, from contacting or suing any TQL customers, or TQL’s customers’ customers, demanding payment for invoices allegedly owed to trucking companies.”

 [*P27]  HN14 “It is well-established that in order to [**15]  obtain an injunction, the moving party must show by clear and convincing evidence that immediate and irreparable injury, loss or damage will result to the applicant and that no adequate remedy at law exists. Actual irreparable harm usually may not be presumed but must be proved.” (Citation omitted.) Middletown v. Butler Cty. Bd. of Cty. Commrs., 12th Dist. Butler No. CA94-03-084, 1995 Ohio App. LEXIS 525, 1995 WL 55320, *2 (Feb. 13, 1995). Injunctive relief may also be available “to the extent that irreparable harm is actually threatened.” Id. Irreparable injury or harm has been defined as “an injury ‘for the redress of which, after its occurrence, there could be no plain, adequate and complete remedy at law, and for which restitution in specie (money) would be impossible, difficult or incomplete.'” (Citations omitted.) Connor Group v. Raney, 2d Dist. Montgomery No. 26653, 2016-Ohio-2959, ¶ 21.

 [*P28]  HN15 “The grant or denial of a motion for injunctive relief is solely within the trial court’s discretion.” Southwestern Ohio Basketball, Inc. v. Himes, 12th Dist. Warren No. CA2020-08-045, 2021-Ohio-415, ¶ 34. It follows that “[i]t is within the trial court’s discretion to make a reasonable determination whether an adequate remedy at law is available or whether irreparable injury will result to the party seeking an injunction if no injunction is issued.” Connor Group at ¶ 21. We review a decision on injunctive relief for abuse of discretion. See Deerfield Twp., Warren Cty. v. Loveland Park Baptist Church, 12th Dist. Warren No. CA2000-07-064, 2001 Ohio App. LEXIS 1415, 2001 WL 290270, *2 (Mar. 26, 2001).

 [*P29]  TQL argues that injunctive relief is needed to prevent imminent and irreparable [**16]  harm to its goodwill and reputation. Although Reed made only a single telephone call, TQL states that Tucker has indicated it would continue making collection calls, pointing out that Tucker has never said it would cease collection efforts. TQL speculates that other trucking companies could assign their accounts receivable to Tucker. TQL also cites Reed’s statement that “calling 3rd parties * * * is part of the process” and asserts that this shows Tucker will continue seeking to collect TQL accounts from others because that is how it does business.

 [*P30]  The trial court was not persuaded, concluding that there was no genuine issue of fact as to whether TQL faced imminent and irreparable harm. The court found little evidence that Tucker would continue violating the Agreement in its efforts to collect the Daansa account, reiterating its determination that there was no evidence that TQL had suffered any harm.

 [*P31]  We find that the trial court’s decision is eminently reasonable. The evidence does not show that TQL faces immediate and irreparable injury or harm. Nothing shows that Tucker has actually threatened TQL with continued harm. TQL identified its interests (i.e., goodwill and reputation) but [**17]  offered nothing beyond mere speculation that an injunction is necessary to prevent Tucker from continuing to injure these interests. Moreover, there is no evidence that other trucking companies have assigned their accounts receivable with TQL to Tucker or that Tucker will persist in contacting Prestige, Corsi, or anyone other than TQL to collect on Daansa’s—or any other—account. Although we do not hold that a single act may never serve as the basis for injunctive relief, under the circumstances of this case the trial court did not abuse its discretion by denying TQL’s request for a permanent injunction.

 [*P32]  The first assignment of error is sustained in part and overruled in part.

 [*P33]  Assignment of Error No. 2:

 [*P34]  THE TRIAL COURT ERRED WHEN IT DISMISSED COUNT 2 OF PLAINTIFF’S AMENDED COMPLAINT, WHICH MADE CLAIMS FOR TORTIOUS INTERFERENCE WITH CONTRACT AND TORTIOUS INTERFERENCE WITH A BUSINESS RELATIONSHIP.

 [*P35]  The trial court dismissed TQL’s tortious interference claim under Civ.R. 12(B)(6); TQL contends that it should not have done so. HN16 We review the trial court’s decision de novo. A N Bros. Corp. v. Total Quality Logistics, L.L.C., 12th Dist. Clermont No. CA2015-02-021, 2016-Ohio-549, ¶ 18, 59 N.E.3d 758.

 [*P36]  HN17 A Civ.R. 12(B)(6) motion for failure to state a claim asks a court to determine if the allegations in a complaint set forth an actionable claim. [**18]  Pyle v. Ledex, Inc., 49 Ohio App.3d 139, 143, 551 N.E.2d 205 (12th Dist.1988). A court may look only to the complaint to determine whether the allegations are legally sufficient to state a claim. Ward v. Graue, 12th Dist. Clermont No. CA2011-04-032, 2012-Ohio-760, ¶ 10. The court must presume that all factual allegations in the complaint are true and must make all reasonable inferences in favor of the nonmoving party. Mitchell v. Lawson Milk Co., 40 Ohio St.3d 190, 192, 532 N.E.2d 753 (1988). The court should dismiss the claim if it appears beyond a reasonable doubt from the complaint that the plaintiff can prove no set of facts entitling it to relief. LeRoy v. Allen, Yurasek & Merklin, 114 Ohio St.3d 323, 2007-Ohio-3608, ¶ 14, 872 N.E.2d 254.

 [*P37]  HN18 “The torts of interference with business relationships and contract rights generally occur when a person, without a privilege to do so, induces or otherwise purposely causes a third person not to enter into or continue a business relation with another, or not to perform a contract with another.” A & B-Abell Elevator Co. v. Columbus/Cent. Ohio Bldg. & Constr. Trades Council, 73 Ohio St.3d 1, 14, 1995-Ohio-66, 651 N.E.2d 1283. “The elements essential to recovery for a tortious interference with a business relationship are: (1) a business relationship; (2) the wrongdoer’s knowledge thereof; (3) an intentional interference causing a breach or termination of the relationship; and (4) damages resulting therefrom.” Ginn v. Stonecreek Dental Care, 12th Dist. Fayette No. CA2014-06-015, 2015-Ohio-1600, ¶ 11, 30 N.E.3d 1034. The elements of tortious interference with contract are “‘(1) the existence of a contract, (2) the wrongdoer’s knowledge of the contract, (3) the wrongdoer’s intentional procurement [**19]  of the contract’s breach, (4) the lack of justification, and (5) resulting damages.'” Id. at ¶ 12, quoting Fred Siegel Co., L.P.A. v. Arter & Hadden, 85 Ohio St.3d 171, 176, 1999-Ohio-260, 707 N.E.2d 853.

 [*P38]  TQL’s claim for tortious interference with contract and/or business states facts concerning Tucker’s collection call to Prestige. The claim pertinently alleges that “Tucker and Reed’s actions in demanding payment from customers and parties other than TQL amounts [sic] to a tortious interference with TQL’s contracts and/or business relationships with these customers and third parties.” As an initial matter, we note that the allegation that Tucker’s actions “amount[] to a tortious interference” is a legal conclusion, not a statement of fact. HN19 But more importantly, tortious interference requires at least two people who have a (prospective) business relationship or a contract plus one other person who interferes with that relationship or gets one of the first two to breach their contract. A & B-Abell at 14 (“purposely causes a third person not to enter into or continue a business relation with another, or not to perform a contract with another”). TQL’s only business relationship identified in the complaint is that with Corsi. It is not alleged that Tucker’s actions caused Corsi—or any other potential [**20]  or existing customer—not to continue or enter a business relationship with TQL. The only contract mentioned is the Broker-Carrier Agreement binding TQL, Daansa, and Tucker. The complaint does not allege that Tucker caused Daansa to violate the Agreement. The breach of contract in this case plainly was not a third-party breach caused by Tucker’s tortious interference but Tucker’s own first-party breach.

 [*P39]  The trial court properly dismissed TQL’s claim for tortious interference. The complaint does not allege that Tucker induced or otherwise purposely caused a third person not to enter or to continue a business relation or not to perform a contract with TQL. Therefore TQL cannot be granted relief on this claim.

 [*P40]  The second assignment of error is overruled.

 [*P41]  We have sustained the first assignment of error in part and overruled it in part. Accordingly, the trial court’s May 21, 2021 judgment granting summary judgment is reversed regarding the claim for monetary relief and affirmed regarding the denial of injunctive relief. We have overruled the second assignment of error in full. So the court’s May 22, 2020 judgment granting dismissal of the tortious interference claim is affirmed. This case [**21]  is remanded for further proceedings consistent with this Opinion.

 [*P42]  May 21, 2021 judgment entering summary judgment is affirmed in part and reversed in part.

 [*P43]  May 22, 2020 judgment dismissing claims is affirmed.

S. POWELL and BYRNE, JJ., concur.

End of Document

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¹ HN5 “The comprehensive definition of ‘goodwill’ is ‘the advantage or benefit, which is acquired by an establishment, beyond the mere value of the capital, stock, funds, or property employed therein, in consequence of the general public patronage and encouragement, which it receives from constant or habitual customers, on account of its local position, or common celebrity, or reputation for skill or affluence, or punctuality, or from other accidental circumstances or necessities, or even from ancient partialities or prejudices.'” Spayd v. Turner, Granzow & Hollenkamp, 19 Ohio St.3d 55, 59-60, 19 Ohio B. 54, 482 N.E.2d 1232 (1985), quoting Story, Commentaries on the Law of Partnership, Section 99, at 170 (6th Ed.1868).