Home   Federal Cases   State Cases   News   Search   Cart   Log In 
 
Search 591,342 Cases and Articles on TJV!
 
Ohio State Categories







Entire Energy & Renewables, LLC v Duncan

Case No. 12AP-1056 (OH Ct. App., Dist. 10, Sep. 26, 2013)

This is an appeal from a decision and entry denying defendants-appellants', EnviroWave Energy, LLC, John Novak and Judy Novak (collectively, "EnviroWave"), motion to compel arbitration and to dismiss or stay litigation. For the reasons that follow, we affirm.

Facts



The following facts are from the allegations in the amended complaint.

Appellant John Novak and his company, EnviroWave, invented, developed and patented a technology to use microwave energy to process shredded tires into renewable energy, fuel, and industrial process commodities. The only existing EnviroWave Tire System was located in Ashtabula, Ohio. Sometime during 2010, the project ran out of money and was idled. The tire system continued to be stored at the Ashtabula location until May 9, 2012.

In March 2011, Richard Sloan, the CEO of appellee FWD:Power, LLC ("FWD:Power") executed an agreement with EnviroWave to purchase and license tire systems from EnviroWave. That agreement contained an arbitration clause and was for territories other than Franklin County, Ohio.

In addition to his out-of-state dealings with John Novak and EnviroWave, Sloan and FWD:Power wanted to relocate the existing tire system from Ashtabula, Ohio to Grove City, Ohio, where a large scrap tire facility was located. Sloan was also communicating with the purchasers of the existing EnviroWave Tire System, appellants known as the "Duncan Defendants" and/or appellant Enterprise 620, LLC ("E620"). In 2011, Sloan was introduced to Gary Curry. Curry is the owner of the Chestershire Group ("TCG"), the trustee for appellee, the Gary L. Curry Revocable Living Trust ("Curry Trust"), and the manager of non-party, Franklic LLC ("Franklic").
 

 

Judge(s): Gary Tyack
Jurisdiction: Ohio Court of Appeals, District 10
Related Categories: Contracts
 
Court of Appeals Judge(s)
Thomas Bryant
William Klatt
Gary Tyack

 
Appellant Lawyer(s) Appellant Law Firm(s)
Allen Boseman, Jr. Hahn Loeser & Parks LLP
John Marsh Hahn Loeser & Parks LLP

 
Appellee Lawyer(s) Appellee Law Firm(s)
Josef Keglewitsch Ice Miller LLP
Stephen Kleinman Ice Miller LLP
Edward Hubbard Lane Alton & Horst LLC
Daniel Mordarski Law Offices of Daniel R Mordarski LLC

 

CUSTOM EMAIL ALERTS!

With your FREE registration, you can select an unlimited number of Alert categories for daily, weekly or monthly deliveries of the Federal and State Cases most relevant
to you!

Click Here to sign up.

 



Click the maroon box above for a formatted PDF of the decision.
beneficiary of one of the agreements and therefore subject to as whether the parties intended to arbitrate the claims. territories other than franklin county, ohio. fwd:power invoked the arbitration process interpretation that covers the asserted dispute. academy of medicine of cincinnati v. arbitration provision. who has no rights of enforcement. hill v. sonitrol of franklic agreement, the action must be covered under the arbitration proceeding. in court may not rule on the potential merits of the underlying claim; and (4) that when a quoting at&t technologies at 648-69, quoting united steelworkers of am. v. warrior & {¶ 25} here, there can be no application of the arbitration clause in the first license the trial court to overlook the fact that fwd:power was asserting the same fraud and {¶ 5} in addition to his out-of-state dealings with john novak and envirowave, he was entitled to various credits because envirowave owed him money. in a massive fraud scheme. they alleged securities laws violations, theft, churning, no. 12ap-1056 5 contract and that creative pleading cannot overcome a broad arbitration provision. id. at presumption favoring arbitration. {¶ 26} because eer is no more than an incidental beneficiary under the franklic boseman, jr., for appellants envirowave energy, llc, john for claims arising under that license agreement. those claims are distinct from the tort tyack, j. action is within the scope of an arbitration agreement, a state court in ohio may base that by relocating and utilizing the ashtabula assets. appellee fwd:power, llc ("fwd:power") against grove city, ohio, where a large scrap tire facility was located. sloan was also motion to compel arbitration and to dismiss or stay litigation. for the reasons that follow, (emphasis added.) arbitrability applied since eer was not a signatory to the agreements. the second county project is limited to its minority ownership of eer. eer could not have been a {¶ 12} plaintiffs eer, fwd:power, tcg, and the curry trust brought this action appellees the chestershire group, llc and the gary l. curry ohio app.3d 281 (10th dist.1999): judgment affirmed. fact that at least two of the claims were already being license for envirowave's technology for the tire systems. franklic was required to renewable energy, fuel, and industrial process commodities. the only existing {¶ 34} the supreme court of ohio found the federal fazio analysis to be consistent {¶ 15} appellants have assigned the following as errors: and patented a technology to use microwave energy to process shredded tires into envirowave tire system was located in ashtabula, ohio. sometime during 2010, the the academy of medicine, the butler county medical society, and various physicians. further license or sublicense any rights associated with the transcontinental at ¶ 20. formed at the time fwd:power and envirowave entered into the agreement. therefore, use of the correct presumptions and standards inducing the plaintiffs into forming eer. plaintiffs claimed that envirowave engaged in a 1. the trial court erred by failing to recognize that appellee eer is not asserting claims that arose under the agreement, but rather claims that sound more than $2 million for the ashtabula assets. plaintiffs further claimed that ¶ 19. however, the overarching issue is whether the parties agreed to arbitrate the issue. {¶ 40} the fourth assignment of error is overruled. appellants. abm farms, inc. v. woods, 81 ohio st.3d 498, 500 (1998). this presumption applies to {¶ 2} the following facts are from the allegations in the amended complaint. encumbrances. the curry trust provided additional debt financing to the company to unauthorized trading, and excessive risk taking. the court stated that even real torts can ongoing arbitration sublicense for the technology. e620 contributed equipment known as the "ashtabula envirowave some undetermined amount of money for the tire system. he also claimed technology. franklic, llc may sublicense its rights for the account agreements, were valid. {¶ 31} in their third assignment of error, envirowave claims the arbitration owed by the promisee to the third-party beneficiary, he or she is an intended beneficiary, 3. the trial court erred by failing to apply the correct analysis {¶ 8} from january through early march 2012, eer continued forward with the {¶ 28} in its second assignment of error, envirowave asserts that the trial court assignments of error was neither a party nor an intended beneficiary under the license agreements. eer never position eer to construct, own, and operate a tire system plant in franklin county, ohio envirowave, the consent for which shall not be unreasonably {¶ 6} after months of due diligence, and based upon envirowave's covered the franklin county, ohio territory. [franklin county, ohio] only to the joint venture entire reference to the contract or relationship at issue. it found the claims to be within the proceed with the purchase, relocation, and operation of a tire system plant in franklin novak and judith novak. {¶ 41} having overruled the four assignments of error raised in the case, the arbitrate is a question of law, and the standard of review on appeal is de novo. stromberg failed to apply the arbitration clause broadly and consistently with the strong 04ap-1243, 2005-ohio-5081, ¶ 19-20, we explained the concept of a third-party county. tenth appellate district id. furthermore, none of the claims arise out of any performance obligation under the trust"), and the manager of non-party, franklic llc ("franklic"). contracts. the first assignment of error is overruled. argument that an account holder's children were bound under an arbitration clause prosecuted in a pending and ongoing arbitration initiated by envirowave made knowing, material misrepresentations with the intent of inducing not enforce any provisions of the franklic agreement, therefore it could not be bound by agreement that names eer provides, in pertinent part, as follows: {¶ 4} in march 2011, richard sloan, the ceo of appellee fwd:power, llc cincinnati, 2006-ohio-657; fazio v. lehman bros., inc., 340 f.3d 386, 395 (6th of interference with an expectancy of inheritance or gift. the court addressed the intentionally did not disclose the claimed debt owed by the duncan defendants because it the agreement does not give eer any rights under the contract. the key portion of the based on the arbitration clauses contained in envirowave's december 21, 2011 agreement no. 12ap-1056 3 no. 12ap-1056 8 trial court was "too tenuous." entry dated december 11, 2012 denying motion to compel article 2.4 of the franklic agreement, franklic could, at its discretion, sublicense its rights entire energy & renewables, llc ("eer") was a ownership of which will vary. franklic, llc may sublicense additional entities, subject to the prior written approval by sloan and fwd:power wanted to relocate the existing tire system from ashtabula, ohio to {¶ 30} here, eer is a non-signatory to the contracts containing arbitration clauses. v. ltd. brands, inc., 10th dist. no. 09ap-702, 2010-ohio-1994, ¶ 10; council of smaller license, eer would have no recourse under the franklic agreement to demand that t. bryant, j., retired, of the third appellate district, 110 ohio app.3d 427, 436. support of this argument, envirowave believes the analysis in academy of medicine of {¶ 1} this is an appeal from a decision and entry denying defendants-appellants', processing of plastics and the processing of shingles to no. 12ap-1056 9 asserted in the underlying case were covered under the lane, alton & horst llc, and edward g. hubbard, for clause broadly and should have found that tort claims fwd:power grant it a sublicense. nor would eer have any claim under the contract written agreement with envirowave ("the franklic agreement") that granted a limited fwd:power, tcg, and the curry trust to rely upon those misrepresentations, thereby dispute which he has not agreed so to submit." ' " council of smaller enterprises, at 665, southwestern ohio (1988), 36 ohio st.2d 36, 40. * * * to have clauses at issue were written with extremely broad language and, therefore, if the lawsuit v. : no. 12ap-1056 {¶ 18} a corollary to the fourth principle is that in determining whether a cause of arbitration provisions in those agreements do not bind eer to arbitrate its claims. and one-third owner of eer, and who was not bound by the franklic agreement that 4. the trial court erred when it overlooked the undisputed beneficiary. also, as this court stated in berge v. columbus community cable access, 136 envirowave intentionally interfered in eer's business relationships (of which party beneficiary of the franklic agreement, and therefore bound under the contract's withheld. assets," and those assets were supposedly free and clear of all security interests or other under the contract, in contrast to an incidental beneficiary, known as the "duncan defendants" and/or appellant enterprise 620, llc ("e620"). in agreement and is not involved at all in the fwd:power/envirowave agreement, the 2.4 envirowave acknowledges that franklic, llc intends to namely, that a lawsuit must be arbitrated if it cannot be contracts containing arbitration clauses. therefore, regardless of their status as third- movement of the ashtabula assets. the complaint alleged that all these actions were mordarski, for appellees entire energy & renewables, llc. party beneficiaries; instead, the issue was whether they were asserting their claims on that cincinnati, 2006-ohio-657 at ¶ 29. under that agreement, fwd:power is not licensed to law offices of daniel r. mordarski llc, and daniel r. aetna health, inc., 108 ohio st.3d 185, 2006-ohio-657, ¶ 10-14. revocable living trust. franklic agreement included an arbitration clause. purchase and build, or relocate at least one tire system in franklin county, ohio. under connection, if any, between the arbitration provisions and the actual claims before the {¶ 16} the question of whether an agreement creates a duty for the parties to {¶ 38} in its fourth assignment of error, envirowave argues that it was error for any arbitration provision within the franklic agreement. plaintiffs filed suit against the brokerage houses that had employed a stockbroker engaged allegedly committed by envirowave and the duncan defendants. plaintiffs alleged that with the intent to benefit that person. doe v. adkins (1996), not mean that every dispute between the parties is arbitrable." academy of medicine of maintained without reference to the contract that contains the {¶ 29} there exists a strong public policy in favor of arbitration, but not in any or based on a broad arbitration clause in the physicians' provider agreements with the hmo. appeal from the franklin county court of common pleas the same claims in the instant action. consistently with the presumption of arbitrability. in fact, the presumption against {¶ 9} on march 22, 2012, envirowave claimed that the duncan defendants owed form additional entities to operate the equipment and tire arbitration any dispute which he has not agreed to so submit; (2) that the question ultimately, the project was so delayed that the plant was unable to be constructed. they sued a large hmo, alleging conspiracy to maintain artificially low reimbursement matthew duncan et al., : standards of review and arbitrability {¶ 23} another reason eer is not bound under the franklic agreement is that 2. the trial court erred by failing to apply the arbitration {¶ 27} we recognize that arbitration is not limited to claims alleging breach of appellees fwd: power, llc. id. its arbitration provision. {¶ 13} envirowave moved to compel arbitration and to dismiss or stay litigation children of an account holder brought an action against a brokerage firm based on the tort containing the arbitration clause, their claims sounded in tort and were not based on the {¶ 37} the third assignment of error is overruled. parties' business relationships. tortuous interference claims in an arbitration initiated by fwd:power as well as making all circumstances. "ohio and federal courts encourage arbitration to settle disputes." systems from envirowave. that agreement contained an arbitration clause and was for third-party beneficiary to the march 2011 agreement because eer had not yet been beneficiaries to have an arbitration clause construed in the manner of fazio and academy be covered by arbitration clauses if the allegations underlying the claims touch matters and consequently is not an intended beneficiary to the franklic agreement. arbitration provision consistent with the strong presumption (accelerated calendar) for the processing of scrap tire shards to eer, and to eer alone in franklin county. the deciding whether the parties have agreed to submit a particular claim to arbitration, a no. 12ap-1056 6 no. 12ap-1056 10 of medicine of cincinnati, even an extremely broad provision. the primary issue remains ashtabula location until may 9, 2012. {¶ 20} in transcontinental ins. co. v. exxcel project mgt., inc., 10th dist. no. operate envirowave's technology in ohio. fwd:power's involvement in the franklin covered by the agreement. id. at 395. the court agreed and remanded the matter for a {¶ 10} at one point, duncan admitted to falsifying wire transfers and to owing {¶ 19} in its first assignment of error, envirowave asserts that eer was a third- agreed to arbitrate anything. eer's status as an incidental beneficiary means that it could constitution, article iv, section 6(c). was confidential to envirowave and the duncan defendants. contemplated and specifically identified third-party against the appellants alleging various tort claims arising out of fraud and other torts {¶ 33} in academy of medicine of cincinnati, 2006-ohio-657, the plaintiffs were {¶ 32} in both of those cases, the parties to the agreements containing broad d e c i s i o n territories other than franklin county, ohio. cir.2003), applies to the instant case. project ran out of money and was idled. the tire system continued to be stored at the ice miller llp, josef keglewitsch and stephen kleinman, for party beneficiaries, the children were not subject to the contractual arbitration provisions. either were not parties to the suit or were not implicated in plaintiffs' claims. arbitration, at 2. the trial court stated that the agreements were between entities that ex rel. rogers v. philip morris, inc., 10th dist. no. 06ap-1012, 2008-ohio-3690, ¶ 19. third-party beneficiary was fully briefed and argued before the trial court. the trial court concluded that the no. 12ap-1056 7 2011, sloan was introduced to gary curry. curry is the owner of the chestershire group we affirm. but where the performance of a promise merely confers some benefit and is not in contract contains an arbitration provision, there is a presumption of arbitrability in the made with the intent to induce the plaintiffs to rely upon them, to form eer, and to formed and funded the joint venture entire energy & renewables, llc ("eer"). eer that arbitration is a matter of contract and a party cannot be required to so submit to no. 12ap-1056 4 agreement between fwd:power and envirowave executed in march 2011. as the (envirowave energy, llc et al., : issue. the trial court was not required to interpret the arbitration clause broadly and {¶ 39} fwd:power and envirowave entered into a licensing agreement for in the court of appeals of ohio misrepresentations regarding the $2 million debt and by not allowing the transfer or assignment of error is overruled. the march 2011 agreement has no application to the claims in this case. not signed an arbitration agreement, a presumption arises against arbitration. id.; state in tort. holders who had brokerage account agreements that contained arbitration clauses. the claims as torts, the court stated that a tort claim does not become contractual simply envirowave energy, llc, john novak and judy novak (collectively, "envirowave"), supreme court of ohio has stated, "the existence of a contract between the parties does klatt, p.j., and t. bryant, j., concurs. cannot be maintained without reference to the license and sublicense provided under the [cite as entire energy & renewables, l.l.c. v. duncan, 2013-ohio-4209.] to operate the plant and instead chose to construct and operate the plant under its own plaintiffs-appellees, : {¶ 7} in december 2011, curry negotiated and executed on behalf of franklic, a favoring arbitration. procedural posture facts without reference to the contract or relationship at issue. if it could, it is likely outside the systems to produce the product in the territory, the {¶ 35} the crucial distinction between those cases and the instant case is that eer (c.p.c. no. 12cvh05-6603) entire energy & renewables, llc et al., : in excess of $2 million for the tire system and that envirowave had a security interest in may be said with positive assurance that the arbitration clause is not susceptible of an because an element of proof may relate to a contract. as non-signatories to the agreement determination on a federal standard that inquires whether the action could be maintained defendants-appellees, : ("tcg"), the trustee for appellee, the gary l. curry revocable living trust ("curry hahn loeser & parks llp, john f. marsh and f. allen defendants-appellants). : rendered on september 26, 2013 arbitration provisions were the parties in litigation. in fazio, the plaintiffs were account identified by this court and the ohio supreme court — arbitration provision. scope of a broadly worded arbitration provision that covered any disputes about the judgment of the franklin county court of common pleas is affirmed. representations and silence, fwd:power, tcg, e620, and the duncan defendants whether a particular claim is arbitrable is one of law for the court to decide; (3) that when if the party in litigation has not agreed to submit its disputes to arbitration. if a party has parties to the agreement, " ' "and a party cannot be required to submit to arbitration any promise. chitlik v. allstate ins. co. (1973), 34 ohio app.2d because their lawsuit arose from their status as third-party beneficiaries. the court conspiracy with the duncan defendants and e620 to conceal claims that it was owed {¶ 22} the "may" language in section 2.4 does not create any enforceable rights {¶ 3} appellant john novak and his company, envirowave, invented, developed gulf nav., 363 u.s. 574, 582 (1960). there can be no presumption in favor of arbitration id. at 303. "thus, where the performance of a promise under the contract satisfies a duty an intended beneficiary, the contract must be entered into a third-party beneficiary is one for whose benefit a promise is against envirowave. thus, eer had no rights under the contract that it could enforce, the tire system, albeit one that had not been perfected by a filing. envirowave {¶ 17} ohio and federal courts recognize four principles that guide arbitrability: (1) was formed on september 9, 2011 to secure funding for the move and to obtain a {¶ 24} in jankovsky v. grana-morris, 2d dist. no. 2000-ca-62 (sept. 7, 2001), scope of the arbitration agreement. its rights for the processing of scrap tire shards within sense that [a]n order to arbitrate the particular grievance should not be denied unless it {¶ 36} we are not aware of cases involving non-signatories, or non-third-party ("fwd:power") executed an agreement with envirowave to purchase and license tire energy & renewables, llc. this joint venture may not claims in this case which were brought by fwd:power, not as licensee, but as an investor the intention of the parties to benefit eer under the contract, but the actual wording of basis. while acknowledging that parties cannot avoid arbitration by casting contract thus, there is no presumption in favor of arbitration when construing the contracts at {¶ 11} envirowave forbade moving the ashtabula assets to franklin county. project believing that it had a clear title to the ashtabula assets. indicated the issue was not whether the children had standing to bring an action as third- fwd:power was an investor and one-third owner), by making fraudulent rates in violation of ohio antitrust provisions. the hmo moved to compel arbitration communicating with the purchasers of the existing envirowave tire system, appellants {¶ 21} here, eer is not a signatory to the franklic agreement. it may have been determination of whether the arbitration clauses, analyzed independently from the under the franklic agreement for eer. if fwd:power decided not to sublicense its rights ents. v. gates, mcdonald & co., 80 ohio st.3d 661 (1998). assigned to active duty under the authority of ohio 193, 196 * * * an intended beneficiary has enforceable rights with franklic's and envirowave's march 4, 2011 agreement with fwd:power. the matter with ohio law, interpreting the test as whether the action could be maintained without {¶ 14} this appeal followed. no. 12ap-1056 2 made, but who is not a party to the contract encompassing the satisfaction of a duty, the third-party beneficiary is an incidental beneficiary."


All Content © 2007-2012 The Judicial View, L.L.C. All Right Reserved.
About The Judicial View ®  | Privacy Policy   |  Terms of Use   |  Contact Us  |  Advertise