Masters Pharmaceutical, Inc. v. K-V-A-T Food Stores, Inc.

Full title: MASTERS PHARMACEUTICAL, INC., Plaintiff, v. K-V-A-T FOOD STORES, INC.…

Court: Court of Common Pleas of Ohio

Date published: Dec 20, 2012

A1202650 (Ohio Com. Pleas Dec. 20, 2012)

Opinion

A1202650

12-20-2012

MASTERS PHARMACEUTICAL, INC., Plaintiff, v. K-V-A-T FOOD STORES, INC., Defendant.

BETH A. MYERS, JUDGE

DECISION/ENTRY

This case is before the Court on the parties' cross motions for summary judgment. For the reasons discussed below, the Court finds that genuine issues of material fact exist as to whether there was a bona fide dispute between the parties so as to render Defendant's payment an accord and satisfaction. Therefore, both motions are denied.

STANDARD

Summary judgment is appropriate when there are no genuine issues of material fact that remain to be litigated and the moving party is entitled to judgment as a matter of law. Civ. R. 56(C); Celotex Corp. v. Catrett, 477 U.S. 317 (1986). Summary judgment should be granted if the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence in the pending case, if any, timely filed in the action and construed most strongly in favor of the non-moving party, show that there is no genuine issue as to any material fact. Civ. R. 56(C). The burden of establishing that the material facts are not in dispute, and that no genuine issue of fact exists, is on the party moving for summary judgment. Vahila

v. Hall, 11Ohio St.3d 421, 674 N.E.2d 1164 (1997). If the moving party asserts that there is an absence of evidence to establish an essential element of the non-moving party's claim, the moving party cannot discharge this burden with a conclusory allegation, but must specifically point to some part of the record which affirmatively demonstrates this absence of evidence. Dresher v. Burt, 75 Ohio St.3d 280, 662 N.E.2d 264 (1996).

The Ohio Supreme Court has established three factors to be considered upon a motion for summary judgment. These three factors are:

(1) That there is no genuine issue as to any material fact; (2) that the moving party is entitled to judgment as a matter of law; and (3) that reasonable minds can come to but one conclusion, and that the conclusion is adverse to the party against whom the motion for summary judgment is made, who is entitled to have the evidence construed most strongly in his favor.

Bostic v. Connor, 37 Ohio St.3d 144, 146 N.E.2d 881 (1988) (quoting Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64, 375 N.E.2d 46. (1978)).

Once a motion for summary judgment has been made and supported as provided in Civ. R. 56(C), the nonmoving party then has a reciprocal burden to set forth specific evidentiary facts showing the existence of a genuine issue for trial and cannot rest on the allegations or denials in the pleadings. Wing v. Anchor Media, Ltd. Of Texas, 59 Ohio St.3d 108,

111, 570 N.E.2d 1095 (1991).

DISCUSSION

Plaintiff sold pharmaceuticals to Defendant. Pharmacists employed by Defendant would place orders for products online and they would receive a confirming email with the price. After the product was shipped, Defendant would receive an invoice.

This dispute arises from the price for KVK Oxycodone. Defendant claims it was to receive a rebate on this product. When Plaintiff continued to charge Defendant a price higher than Defendant believed it should pay, Defendant refused to pay.

Plaintiff argues that while Defendant may have been entitled to a rebate, this was an issue between Defendant and KVT, not Plaintiff. Thus, Plaintiff argues there was never a bona fide dispute between it and Defendant - Plaintiff charged a certain price, invoiced for that price and expected Defendant to pay that price.

Defendant argues that there was a bona fide dispute between the parties and that an accord and satisfaction occurred. Defendant sent Plaintiff a check with a conspicuous restrictive endorsement that stated "Payee/Endorser accepts this payment as FULL SATISFACTION." The accompanying letter also made clear that it was being sent in full satisfaction. Thus, if there was a bona fide dispute, the Court finds that this was sufficient as an accord and satisfaction.

The parties agree that R.C. 1303.40 governs. That statute provides in relevant part:

If a person against whom a claim is asserted proves that that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, that the amount of the claim was unliquidated or subject to a bona fide dispute, and that the claimant obtained payment of the instrument, all the following apply:

(A) Unless division (B) of this section applies, the claim is discharged if the person against whom the claim is as'serted proved that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.

Division (B) does not apply here.

If Defendant can prove its affirmative defense of accord and satisfaction, the debt is discharged as a matter of law. City of Parma v. Wielicki, 2011 -Ohio-6291 (8^th Dist. 2011).

As stated by the First District Court of Appeals in Morgan v. The Village Printers, 2004-Ohio-3751 (1^st Dist. 2004):

Accord and satisfaction is available as a defense only when there is an actual disagreement as to the amount owed: there must be a "good-faith dispute about the debt." Allen v. R.G. Indus. Supply (1993), 66 Ohio St.3d 229, 611 N.E.2d 794, paragraph two of the syllabus. R.C, 1303.40 requires that the amount of the claim be "subject to a bona fide dispute" before accord and satisfaction is available as an affirmative defense to a claim for money damages. See, also, Allen v. R.G. Indus. Supply, 66 Ohio St.3d at 231, 611 N.E.2d 794; Blevins v. Uniglobe Blevins Travel, Inc. (Dec. 23, 1987), 1^st Dist. No. C-870129; Dawson v. Anderson (1997), 121 Ohio App.3d 9, 13, 698 N.E.2d 1014.

Whether a dispute is bona fide is ordinarily a question of fact to be resolved by the trier of fact. See Dawson v. Anderson, 121 Ohio App.3d at 14, 698 N.E.2d 1014; see, also, Blevins v. Uniglobe Blevins Travel, Inc., citing Indianapolis v. Domhoff & Joyce Co. (1941), 69 Ohio App. 109, 36 N.E.2d 153.

The dispute does not have to be well founded, but it does have to be bona fide and honestly believed in. Wielicki, supra.

The Court finds that whether the dispute in this case was bona fide is a question for the trier of fact. Plaintiff argues that the amount due was clearly stated and agreed upon and that if any rebate was owed to reduce the amount, that rebate was to come from KVK. Thus it argues that there was no bona fide dispute. Defendant argues that there was a genuine dispute, that Plaintiff overcharged it without applying the rebate and that Defendant made clear it disagreed with the amount charged by Plaintiff. These questions preclude summary judgment for either party.

As stated earlier, the Court does find that if there was a genuine dispute, an accord and satisfaction occurred. There are no disputes of fact regarding Defendant's tendering of a check with conspicuous notation.