[Cite as Imagine Nation Books, Ltd. v. STG Ents., Inc., 195 Ohio App.3d 286, 2011-Ohio-4639.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 96215
IMAGINE NATION BOOKS, LTD.,
APPELLANT,
v.
STG ENTERPRISES, INC., ET AL.,
APPELLEES.
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-689361
BEFORE: Celebrezze, J., Blackmon, P.J., and Jones, J.
RELEASED AND JOURNALIZED: September 15, 2011
Goldman & Rosen, Ltd., and James R. Russell Jr.; and
Faruki Ireland & Cox, P.L.L., and D. Jeffrey Ireland, for appellant.
David M. Leneghan and K. Scott Carter, for appellees.
FRANK D. CELEBREZZE JR., Judge.
{¶ 1} Plaintiff-appellant, Imagine Nation Books, Ltd. (“INB”), brings this appeal
challenging the trial court’s determination that defendants-appellees, STG Enterprises, Inc.
(“STG”) and Steven Traina, its only officer, did not breach the terms of an agreement
between the parties because there was no valid, enforceable contract. INB now argues that
there was a valid agreement or, in the alternative, that it is entitled to the return of an $8,000
signing bonus it had advanced to Traina. After a thorough review of the record and law, we
affirm the decision of the trial court.
{¶ 2} Traina had been a representative of Books Are Fun (“BAF”) for several years.
BAF was a competitor of INB in the retail sale of books and other items to children at in-
school events. In July 2008, Traina flew to INB’s headquarters in Boulder, Colorado, to
discuss becoming a representative for INB. While there, Traina signed one of two
nondisclosure agreements on July 7, 2008.1 INB’s Vice President of Displays Division, Tony
Gilio, discussed Traina’s defection from BAF, and the two reached an understanding that
Traina would become an INB sales representative starting August 20, 2008, in time for the
new school year. Traina was supplied with a representative agreement with a three-page
1
The other nondisclosure agreement was signed on June 18, 2008.
cover letter laying out some key terms of the representative agreement, including its own
liquidated-damages provision if Traina did not begin work by August 20, 2008. Traina
signed and returned both of these documents on July 16, 2008. Traina received a check from
INB for $8,000 dated July 17, 2008, described as a signing bonus. The letter accompanying
the check was dated June 17, 2008.
{¶ 3} However, Traina and INB were never able to agree on the counties to which
Traina would have exclusive sales rights, and an INB representative never signed the
agreement.2 Evidence was adduced at trial that Traina had signed on as a representative for
INB so that INB would not have a sales representative in his area, and he would be free of
any competition for the beginning of the 2008-2009 school year as he continued to sell for
BAF.
{¶ 4} In November 2008, INB arranged to buy all BAF’s inventory and intellectual
property, an arrangement that was consummated in an asset-purchase agreement. This
essentially terminated Traina’s relationship with either company. After the asset-purchase
agreement was signed, Traina inquired about a position with INB, but INB demanded the
return of the signing bonus.3 After Traina refused, INB contracted with another
representative for Cuyahoga and surrounding counties.
{¶ 5} INB filed suit against Traina and STG on April 6, 2009, asserting various
claims, including a breach-of-contract claim in its second amended complaint, arguing for
2
A provision of the agreement specifically made signature by both parties necessary for contract formation.
3
INB indicated to Traina that it would settle for a return of $6,000.
liquidated damages under the representative agreement.4 A three-day trial began on August
10, 2010, in which INB argued that the representative agreement was a valid, binding
contract that entitled it to damages under the liquidated-damages provision of the
representative agreement and the separate liquidated-damages provision in the three-page
document prefacing the representative agreement, which INB now terms the “letter
agreement.” Traina argued that this letter agreement was simply a cover sheet to the
representative agreement and that in any event, an injury excused him from performance in
accordance with that document. INB also argued for the return of the signing bonus because
there was no meeting of the minds with regard to the representative agreement. Traina
countered that the signing bonus was consideration for his agreement not to disclose any of
INB’s plans or discussions with his then employer, BAF. Importantly, no written agreement
referenced this bonus.
{¶ 6} The trial court found that no contract existed between INB and Traina and that
the signing bonus was in consideration for signing a nondisclosure agreement, as evidenced
by the letter accompanying the check. This letter was dated June 17, 2008, contemporaneous
with the execution of a nondisclosure agreement. However, the check was dated July 16,
2008, which is contemporaneous with Traina’s signature on the representative agreement.
INB argued that the letter had been misdated. The trial court ruled in favor of Traina and
STG on these claims. INB then timely appealed, assigning two errors for our review.
4
INB’s second amended complaint asserted ten claims, including a claim for replevin, conversion, tortious
interference with business relationships, breach of guaranty, unjust enrichment, deceptive trade practices, unfair
competition, injunctive relief, and two claims for breach of contract. Breach of the representative agreement is the only
one at issue here.
Law and Analysis
I. Judgment Entry Disposing of all Claims
{¶ 7} Although not raised as an issue by the parties, the trial court’s order of decision
does not specifically address all claims raised in INB’s complaints by name. However, the
unmentioned claims are resolved by the holding that INB did not prove damages and that
Traina and STG did not breach various contracts.
{¶ 8} “For a court order to be final and appealable, it must satisfy the requirements of
R.C. 2505.02, and if the action involves multiple claims and the order does not enter a
judgment on all the claims, the order must also satisfy Civ.R. 54(B) by including express
language that ‘there is no just reason for delay.’ State ex rel. Scruggs v. Sadler, 97 Ohio
St.3d 78, 2002-Ohio-5315, 776 N.E.2d 101, ¶ 5-7.
{¶ 9} “In the absence of express Civ.R. 54(B) language, an appellate court may not
review an order disposing of fewer than all claims. Scruggs at ¶ 6. The trial court may revise
the order until all claims are adjudicated. Civ.R. 54(B). A court may not bypass the
requirement to include the express language of Civ.R. 54(B) simply by designating the order
as final. Under Civ.R. 54(B), ‘any order or other form of decision, however designated,
which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the
parties’ does not terminate the action without a determination that there is no just reason for
delay.” Internatl. Bhd. of Elec. Workers, Local Union No. 8 v. Vaughn Industries, L.L.C.,
116 Ohio St.3d 335, 2007-Ohio-6439, 879 N.E.2d 187, ¶ 7-8.
{¶ 10} The trial court’s order disposes of INB’s trademark claims, but does not
specifically address the tortious-interference claim. At trial, INB elicited testimony that
Traina or a party under contract with STG entered schools giving school personnel the
impression that they were BAF representatives after December 2008. This, INB argued,
interfered with contracts that INB had with those schools. However, the trial court’s order
states that “[t]he evidence presented to the Court is unreliable hearsay. Debbie Boyle did not
testify about the email supposedly proving that Mr. Elias and Mr. Traina were holding
themselves out as BAF representatives.”
{¶ 11} The trial court found that STG did not breach its contract with BAF, which also
disposes of the breach-of-guaranty claim against Traina. Further, the holding that INB did
not prove its damages renders the unjust-enrichment claims moot. Traina’s counterclaim was
also disposed of by summary judgment, which merged with the trial court’s final order in this
case. Therefore, this is a final, appealable order.
II. Breach of Contract
{¶ 12} INB first asserts that “[t]he trial court erred by failing to consider whether there
was an enforceable letter agreement that appellee[s] breached entitling [INB] to liquidated
damages in the amount of $11,560.”
{¶ 13} The interpretation of an unambiguous contract is generally reviewed de novo.
Cleveland-Akron-Canton Advertising Coop. v. Physician’s Weight Loss Ctrs. of Am., 184
Ohio App.3d 805, 2009-Ohio-5699, 922 N.E.2d 1012, ¶ 9. However, that is not the situation
presented here. Reviewing conflicting evidence about whether a party established that it
should be excused from performance based on a contract provision is a question of fact, not
of law. This question of fact requires that due deference be afforded to the trial court’s
determination. Gutbrod v. Schuler, Cuyahoga App. No. 94228, 2010-Ohio-3731, ¶ 17;
Nationwide Mut. Fire Ins. Co. v. Guman Bros. Farm (1995), 73 Ohio St.3d 107, 108, 652
N.E.2d 684.
{¶ 14} Traina claims that he was prevented from performing because of a physical
injury. The existence of such an injury is not a question of contract, but one of evidence
adduced at trial that includes a weighing of credibility best left to the trier of fact. Seasons
Coal Co., Inc. v. Cleveland (1984), 10 Ohio St.3d 77, 80, 461 N.E.2d 1273. Therefore, we
apply an abuse-of-discretion standard to this portion of INB’s argument. To constitute an
abuse of discretion, the ruling must be unreasonable, arbitrary, or unconscionable.
Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 450 N.E.2d 1140.
{¶ 15} The letter agreement that INB refers to is a three-page document prefacing the
representative agreement that highlights some key terms in it, but also sets forth some
independent provisions. The letter agreement states that Traina will ensure that he is
contractually free to work as an INB representative prior to August 20, 2008, and that he will
begin work on that date. Traina asked that a provision be added excusing performance if
“the early termination [of the agreement] results from [Traina’s] death, injury or
incapacitation, acts of God, or other circumstances outside of the direct control of [Traina].”
{¶ 16} Traina presented medical records that he had previously submitted to INB
demonstrating that a back injury prevented him from lifting heavy items, a necessary duty
under the INB contract. The trial court found that Traina did not breach the representative
agreement, if it was enforceable, because it contained the same provision regarding injury.
This conclusion applies equally to the letter agreement because it contains the same injury
provision. Therefore, the trial court did not abuse its discretion in finding that Traina did not
breach the agreement.
{¶ 17} Although the trial court did not include a separate section in its findings of fact
and conclusions of law addressing the letter agreement, that is because INB, at trial, referred
to both simply as the representative agreement. The term “letter agreement” arises only in
INB’s motion for reconsideration after the verdict.
{¶ 18} The trial court did not fail to consider the letter agreement as INB now argues.
This agreement was lumped together with the representative agreement during INB’s
arguments, and even if it was not, Traina was excused from performance due to injury.5
Therefore, INB was not entitled to $11,560 in liquidated damages.
III. Signing Bonus
{¶ 19} Appellant asserts, “Alternatively, if the letter agreement was not binding, the
trial court erred by not finding that there was a failure of return consideration6 for appellant’s
payment of the $8,000 signing bonus and requiring appellee to repay it.”
5
INB takes issue with the propriety of the evidence that Traina submitted and the fact that no medical expert
testified about his injuries. However, it is well established that pursuant to Evid.R. 104, the introduction of evidence at
trial falls within the sound discretion of the trial court. State v. Jacks (1989), 63 Ohio App.3d 200, 207, 578 N.E.2d 512.
6
“Failure of consideration exists when a promise has been made to support a contract, but that promise has not
been performed.” Rhodes v. Rhodes Indus., Inc. (1991), 71 Ohio App.3d 797, 807, 595 N.E.2d 441, citing Franklin v.
Lick (Apr. 19, 1979), Cuyahoga App. No. 37770.
{¶ 20} INB again argues that a de novo standard of review should apply to this
assigned error as a matter of contract interpretation. However, no written agreement refers to
the signing bonus. This issue requires a weighing of conflicting evidence in the record and is
one that the trier of fact is in the best position to undertake. Absent an abuse of discretion,
that determination should not be disturbed on appeal. Also, INB’s arguments in this assigned
error attack the weight of the evidence rather than the interpretation of an unambiguous
contract provision. Accordingly, every reasonable presumption of the trial court’s judgments
should be afforded deference. Seasons Coal, 10 Ohio St.3d at 80.
{¶ 21} The letter included with the check states that it is a signing bonus, but does not
specify that it was for beginning employment with INB. It states:
{¶ 22} “Enclosed please find your signing bonus.
{¶ 23} “We all look forward to a long prosperous relationship together.
{¶ 24} “Please call me anytime with any questions, comments or concerns.”
{¶ 25} INB now argues that the $8,000 constituted a signing bonus as “an inseverable
part of the cost of business of obtaining a new employee’s service.” Jack P. Friedman,
Dictionary of Business Terms (4th Ed.2007) 615. While this may be the understood term in
common parlance, no contract language in the record evidences that the signing bonus was
for engaging in employment rather than for signing a nondisclosure agreement.
{¶ 26} The trial court heard the testimony, examined the dates of the documents in
question, and determined that the $8,000 was consideration for signing the nondisclosure
agreement, as Traina testified.7 The letter accompanying the check was dated June 17, 2008,
one day before a nondisclosure agreement was signed by Traina. The check was dated July
17, 2008, the day after Traina signed the representative agreement. The conflicting dates of
the letter and the check and the various agreements created an ambiguity that the trial court
resolved in Traina’s favor. This decision is supported in the record. Therefore, this
assignment of error is overruled.
Judgment affirmed.
BLACKMON, P.J., and JONES, J., concur.
7
INB points out that Traina admitted that the letter accompanying the check should have been dated sometime
in July, but Tony Gilio, the author of the letter, testified that it was correctly dated.