Opinion
20 CO 0014
06-25-2021
THOMPSON FARMS, INC., Plaintiff/ Counterclaim Defendant-Appellee, v. ESTATE OF JAMES E. THOMPSON, DECEASED, Defendant/ Counterclaim Plaintiff-Appellant.
Atty. Glenn Osborne and Atty. T. Kamenitsa, Friedman & Rummell Co., L.P.A., for Plaintiff/ Counterclaim Defendant-Appellee and Atty. Robert Tscholl, Atty. James Mathews, and Atty. Jennifer Arnold, Baker, Dublikar, Beck, Wiley & Mathews, for Defendant/ Counterclaim Plaintiff-Appellant.
Civil Appeal from the Court of Common Pleas of Columbiana County, Ohio Case No. 2017 CV 600
Atty. Glenn Osborne and Atty. T. Kamenitsa, Friedman & Rummell Co., L.P.A., for Plaintiff/ Counterclaim Defendant-Appellee and
Atty. Robert Tscholl, Atty. James Mathews, and Atty. Jennifer Arnold, Baker, Dublikar, Beck, Wiley & Mathews, for Defendant/ Counterclaim Plaintiff-Appellant.
BEFORE: David A. D'Apolito, Gene Donofrio, Cheryl L. Waite, Judges.
OPINION AND JUDGMENT ENTRY
D'APOLITO, J.
{¶1} Defendant-Appellant, Estate of James E. Thompson ("Appellant" or "Estate"), appeals three judgment entries of the Columbiana County Court of Common Pleas, the first - overruling Appellant's second motion to amend its counterclaims; the second - overruling Appellant's motion in limine to prohibit Appellee, Thompson Farms, Inc. ("TFI") from offering certain testimony, and the third - granting TFI's motion for prejudgment interest, following a jury trial in this action for declaratory judgment and damages based on the breach of an oral contract. Appellant asserts counterclaims for conversion of farming equipment, breach of an oral contract, and unjust enrichment.
{¶2} Appellant argues that the trial court abused its discretion by: (1) overruling Appellant's motion to amend its counterclaims, which sought leave to add an unjust enrichment claim for goods and services performed by James E. Thompson ("Jim") at TFI and was filed one month prior to the jury trial; (2) overruling Appellant's motion in limine to prohibit testimony regarding Jim's alcoholism; and (3) sustaining TFI's motion for prejudgment interest from the date that TFI's claim was presented to the Estate
{¶3} For the following reasons, we find that the trial court did not abuse its discretion when it overruled Appellant's motion to amend its counterclaims, nor did it commit plain error when it overruled Appellant's motion in limine regarding Jim's alcohol abuse. Finally, we find that the trial court did abuse its discretion when it awarded prejudgment interest to Appellee, due to uncertainty regarding the amount attributable to the breach of oral contract claim created by the general verdict forms.
FACTS AND PROCEDURAL HISTORY
{¶4} TFI is a closely-held corporation, which operates a grain farm in Columbiana County. Harold Thompson and his wife, Shirley Thompson began the farming enterprise in 1968. Trusts in their names own the approximately 800 acres of tillable ground upon which TFI plants soybeans, corn, and winter wheat, then harvests and sells grain.
{¶5} The trusts each owned 34 of the 100 shares of the incorporated entity, at all times relevant to the complaint. Harold was the president and Shirley was the secretary/treasurer of TFI for over fifty years. Harold died a few days short of their seventieth wedding anniversary.
{¶6} Prior to Harold's death, Shirley performed bookkeeping duties for TFI and maintained a ledger for tax purposes. Her fastidiousness is reflected in her children's reference to the ledger as her "bible." (Id. at 352.)
{¶7} Their sons, Jim and David Thompson each owned 16 shares of the remaining 32 shares of stock. Both Jim and David worked on the farm from 2000 to 2008. They each received a salary ranging from $10,000.00 to $20,000.00 annually. Shirley testified that it was important to Harold to compensate their children for their work on the farm. Harold was exasperated when he heard other people's children complain about working for the family business and receiving no compensation.
{¶8} David suffers from cerebral palsy. Beginning in 2005, Harold, Shirley, and David spent the winter months in Arizona.
{¶9} In addition to the boys, Harold and Shirley have two daughters. Lynelle Thompson Zimmerman ("Lynelle") is a certified public accountant. She assumed responsibility for the bookkeeping when the family was in Arizona during the winter. Diane Thompson Baltputnis ("Diane") is a school teacher.
{¶10} In addition to working on the farm prior to 2008, Jim was also employed as a commercial truck driver. He used his combined income to purchase a 125-acre farm. In 2000, Jim married Susan Mowery. Mowery owned a 93-acre dairy farm. After they were married, Jim farmed grain on both properties, which comprised roughly 211-acres of tillable ground ("Jim's farm").
{¶11} In order to take advantage of TFI's volume discounts, TFI purchased chemicals, fertilizer, and seed ("inputs") for both TFI and Jim's farm. Jim was responsible each year for maintaining a record of the inputs used at his farm, for which he was billed annually by TFI. During that time, the grain produced by the respective farms was stored in separate grain bins.
{¶12} Witnesses for both sides testified that Harold managed TFI until 2008, when he transferred the responsibility for the day-to-day grain operations to Jim. Prior to 2008, TFI was a cattle and grain farm, but Harold sold the cattle in 2008, when, at age 82, he was no longer capable of the rigorous demands of cattle farming.
{¶13} Eric Baltputnis ("Eric"), Diane's son, has been employed by TFI since January of 2011. He testified that Jim ran the grain business at TFI until his death in 2017. Kenneth Thompson, Jim's cousin and good friend, described Jim as the "go to man" at TFI "at the end there." (Id. at 541.) Charles Parker, who was an agent for Pioneer Seed testified that Jim determined the crops that TFI planted each year. Charles Grubbs, who sold fertilizer and chemical to TFI, testified that Jim chose the chemicals purchased by TFI.
{¶14} Jim was a well-respected farmer and a well-liked man. Parker testified that Jim was "at the top of his farming abilities." (Id. at 558.) Grubbs described Jim as a "great guy" who would "give you the shirt off his back." (Id. at 571.)
{¶15} However, Shirley testified that TFI was a "family farm" and that Jim had no greater responsibility than any of the other family members. According to her testimony, Harold never told her that Jim had assumed day-to-day control of the grain business. However, Shirley conceded that Jim negotiated purchases and sales after 2008 because he was a "good talker." (Id. at 372-373.)
{¶16} Despite Jim's enhanced role at TFI, Harold continued to work on both farms and continued in his capacity as an officer of the corporation until his death in October of 2016. Jim died six months later in April of 2017.
{¶17} Jim's actions and decision-making on behalf of TFI from 2008 to his death in 2017 provide the substance of the above-captioned action against the Estate. Because Harold and Jim were the only individuals privy to the facts and circumstances at issue in this case, both parties to the lawsuit relied on hearsay testimony to support their opposing theories of the case.
{¶18} At trial, TFI alleged that, from 2008 to 2016, Jim had: (1) converted inputs and fuel purchased by TFI for use on his farm; (2) sold grain harvested from TFI and kept the profit for himself; and (3) mischaracterized four $40,000.00 annual payments for the purchase of a combine by TFI from Jim as payments for "custom combining." The Estate countered that Jim's actions on behalf of TFI from 2008 to 2017 were based on an oral agreement between Jim and Harold, and the inputs and grain sales constituted payment for Jim's increased duties at TFI. The Estate further argued that Jim performed custom combining for TFI in 2012-2015, for which he was paid, and for 2016, for which he was not paid. Finally, the Estate argues that Jim was owed dividends from his TFI stock.
{¶19} Shirley testified that Harold confided every detail about the day-to-day operations at TFI to her for fifty years. As a consequence, TFI argued that any inference drawn by the Estate regarding Harold's actions or his alleged knowledge of a fact or decision that was unknown to Shirley was unworthy of credence. Several incriminating statements purportedly made by Jim were admitted by the trial court under the exception for statements against pecuniary interest.
{¶20} It is undisputed that from 2008 to 2017, Jim did not receive a salary from TFI. Shirley testified that Jim told her during a heated conversation in 2008 that he no longer wanted any withholding for social security or worker's compensation deducted from his paycheck. Based on her fear that Jim might be injured at TFI or that she might run afoul of federal and state law, Shirley adamantly refused, so Jim told her he did not want a salary. Shirley conceded that Jim received no compensation for his work at TFI from 2008 to 2017.
{¶21} It is likewise undisputed that, although TFI continued to buy inputs and fuel for both farms from 2008 to 2017, Jim did not reimburse TFI for inputs used on his farm. Neither TFI's records nor its tax returns reflect accounts receivables due and owing from Jim to TFI for the inputs used on Jim's farm from the years 2008 to 2017. Both Shirley and Lynelle testified that no accounts receivable from Jim were listed those years because Jim was responsible for providing the amount due and owing for the inputs to TFI. (Id. at 369.) As a consequence, TFI reported the full cost of the inputs as an expense on its tax returns from 2008- 2017.
{¶22} In order to determine the value of the inputs and fuel used at the respective farms between 2008 and 2017, TFI combined their total cost, then multiplied the number by eighty percent based on the acreage owned by TFI, and twenty percent based on the acreage owned by Jim. Based on the foregoing calculation, TFI argued at trial that the value of the inputs and fuel financed by TFI but expended at Jim's farm from 2008 to 2017 totaled $440,595.00. Appellant countered that an individual annual breakdown using actual percentages showed that Jim's percentage of the inputs, without fuel, was, on average, fourteen percent, not twenty percent, of the total inputs purchased.
{¶23} The Estate asserted at trial that a "gentleman's agreement" was reached between Harold and Jim that Jim would forego his salary and accept the inputs and fuel each year in lieu of compensation. The Estate further asserted that the notable difference in the value of the inputs and fuel (roughly $40,000.00 plus per year) versus Jim's salary from 2000-2007 ($10,000.00 to $20,000.00 per year) was a reflection of his increased responsibility for the operations at TFI beginning in 2008.
{¶24} During the roughly ten-year period when Jim ran both farms, he commingled the grain from both farms in the same bins. Testimony at trial established that Harold visited TFI virtually every day until his death and was aware that Jim was commingling the grain. Based on the same calculus employed with respect to the inputs and fuel, TFI alleged that Jim converted grain valued at $148,000.00 from TFI from 2008 to 2017.
{¶25} In 2011, Jim and his parents entered into oil and gas leases with Chesapeake Energy Corporation for their respective acreages and received substantial bonuses. Jim's bonus totaled $237,000.00.
{¶26} In March of 2011, TFI purchased a John Deere 9670 combine from Cope Farm Equipment. The combine had a list price of $280,000.00, however, Cope reduced the price of the combine to $230,650.00 because the transaction included a trade for a John Deere 9560-TS. With the total cost of $230,650.00 further reduced by the John Deere trade-in value of $139,000.00, TFI tendered a check to Cope for $91,650.00. TFI opted to take a deduction on the combine under 26 U.S.C. 179, referred to as a "lifetime deduction," which allows the taxpayer to deduct the entire value of purchase in a single tax year, rather than amortizing the cost over the standard four-year period for tractors and light-duty trucks.
{¶27} Roughly nine months later, on December 23, 2011, Jim purchased the combine from TFI with a check in the amount of $230,000.00. That same month, Jim pre-purchased inputs for 2012 for himself in the amount of $48,623.00 and on behalf of TFI in the amount of $388,408.00. Tax Year 2011 is the only year that Jim paid for the inputs used on for his farm.
{¶28} The sale of the combine from TFI to Jim was not memorialized in the corporate minutes, and Shirley testified that she was not aware of the transaction. Harold and Shirley were in Arizona when Jim tendered payment for the combine to TFI. Lynelle testified that she was struggling to reconcile the bank statements in January of 2012, while Shirley was in Arizona, when Jim explained that he purchased the combine from TFI. Despite the alleged sale, TFI paid for maintenance on the combine, as well as other farming equipment owned by Jim but housed at TFI.
{¶29} Russell Kiko, a certified appraiser and local auctioneer, performed an appraisal of TFI's farm equipment in February of 2017 on behalf of Harold's estate. Jim and Eric were present during Kiko's visit to TFI. The combine was not included in the appraisal. However, the 625 flex head and the 606 corn head, which are attachments for the combine, were included in the appraisal.
{¶30} Jim bought a truck from Fyda Freightliner in August of 2011. The purchase price of $55,000.00 was reduced based on trade for one of Jim's trucks valued at $13,000.00 for a total purchase price of $42,150.00. Despite the fact that Jim purchased the vehicle with his own money, he titled the Freightliner in TFI's name.
{¶31} Mowery testified that Jim was on the road with the Freightliner on behalf of TFI a lot more often than for his farm, and he wanted the Freightliner protected by the corporation's insurance policy. Nonetheless, Jim took deductions for depreciation on the Freightliner, as well as the combine, on his federal tax returns. He also paid for a series of repairs to the Freightliner. Kiko could not recall whether the Freightliner was on the property when he visited TFI to perform the appraisal, but testified that the Freightliner was not included in the appraisal.
{¶32} From 2012 to 2015, Shirley wrote an annual check to Jim for "custom combining" in the amount of $40,000.00. Shirley testified that she wrote the check under protest because, to her knowledge, Jim was using TFI's combine. Shirley testified that Jim always responded, "[d]on't worry. It will be alright." (Id. at 358.)
{¶33} Jim provided the same response to Shirley's inquiries regarding the commingling of the grain from both farms. According to Shirley, she witnessed Jim remove grain from the bins on one occasion, but she never received a check. Shirley testified that she never expressed her concerns to Harold in the years preceding his death because his health was failing and she did not want to upset him.
{¶34} In late 2016, after David was gravely injured when he was struck by an automobile in a cross-walk in Arizona, Lynelle assumed Shirley's bookkeeping responsibilities at TFI on a full-time basis. Lynelle had recently retired from a position as a certified public accountant with a local accounting firm.
{¶35} In December of 2016, Lynelle conducted a "mini-audit" of TFI, which revealed that Jim had not reimbursed TFI for inputs used on his farm since 2008. (Id. at 266-267.) Lynelle testified that her relationship with Jim was strained at the time due to his alcohol abuse. She testified that Jim was sad, depressed, and argumentative after his addiction took hold of his life.
{¶36} According to Lynelle's testimony, she confronted Jim about his failure to reimburse TFI for the inputs since 2008, and he told her that all of his equipment that was stored at TFI was collateral for the debt. During a discussion in February of 2017, Jim agreed that a written document memorializing the foregoing collateralization arrangement would be executed in the spring when Shirley and David returned from Arizona.
{¶37} Lynelle also confronted Jim about the $160,000.00 payments from TFI for "custom combining." The "invoices" provided by Jim for the annual $40,000.00 of service were actually blank TFI invoices. Jim obliterated the TFI heading and wrote "1, 000 acres," which would be the acreage of both farms, not just TFI. Lynelle testified that Jim's carelessness was an example of the impact of his alcohol consumption on his work.
{¶38} Lynelle testified that many farms execute contracts for "custom combining," but that the service typically includes the use of the combining company's combine and grain head. She further testified that the combining company also pays for its own labor and insurance. According to Lynelle, Jim told her that the $40,000.00 annual payments actually constituted payments for the combine, which TFI was repurchasing from Jim over time, so he could spread the proceeds from the sell-back over several years for tax purposes.
{¶39} After Jim's death, TFI issued a rental check to the Estate to plant crops on Jim's farm in 2017. Appellant argued at trial that TFI never paid the proceeds of the grain harvested in 2017 to Appellant, which totaled $11,000.00, and Appellant was never paid the $40,000.00 invoice for custom combining in 2016. A forensic accountant who provided expert testimony on behalf of the Estate asserted that TFI also failed to pay dividends to Jim on his sixteen shares of stock between 2008-2017, which totaled $2,528.00.
{¶40} Mowery testified that Jim hated to be indebted to anyone. Jim preferred to pay cash for his purchases, and, when he was forced to incur debt, he would pay off any indebtedness immediately after the harvest.
{¶41} Mowery further testified that she never attended Thompson holiday celebrations or family functions because she felt unwelcome. Shirley testified that she was invited to Jim and Mowery's home one time, that is, to see renovations undertaken at Jim's expense after he and Mowery were married. Mowery and Shirley both agreed that there was no fight or disagreement that caused the rift, but each one blamed the other for the bad blood. Mowery's young daughter, Philadelphia Howell accompanied Jim to the family functions in Mowery's stead.
{¶42} According to Mowery's testimony, Jim loved his family but was averse to family conflict, particularly with Lynelle. The problem between Jim and Lynelle stemmed from a real estate purchase made by Lynelle with a loan provided by Jim. When Jim requested repayment of the loan, Lynelle refused to repay him or partition the property. Mowery testified that Jim asked Lynelle if she wanted to purchase the combine with him, but she declined because she was building a house.
{¶43} Mowery further testified that Jim was generally uncomfortable in public, and unbeknownst to his family, he took anti-anxiety medicine to combat his emotional problems. Mowery also acknowledged Jim's struggle with alcohol, which first revealed itself in 2010. She conceded that he attended meetings of Alcoholic Anonymous and saw a psychologist in an effort to overcome his problem. She further conceded that Jim's drinking increased during the winter months, but that he would "straighten up" when his parents were due to return from Arizona.
{¶44} In January of 2011, Eric Baltputnis, Diane's son, graduated from college and asked his grandparents for full-time employment at TFI. After Jim's death, Eric assumed responsibility for managing TFI, having worked side-by-side with Jim for six years.
{¶45} Eric described Jim's responsibilities at TFI as "on the grain side," that is, planting, harvesting, storing, and selling grain. (Id. at 194.) Eric described Harold's role at TFI as "on the hay side. Getting the hay cut. That sort of thing." (Id. at 193.) Eric provided the following annual farming schedule at TFI: January through March -equipment maintenance; April - working the fields; May through June - planting corn and soybeans; July - planting winter wheat; August - spraying the fields; end of September to October - harvesting beans; October to November - harvesting corn; December either fixing things or hauling grain. According to Eric, seasonal workers at TFI worked on both farms, but Jim's farm was never billed for labor.
{¶46} Eric worked closely with Jim, who was Eric's favorite uncle. Eric testified that he noticed Jim's alcohol problem almost immediately when he began working at TFI in January of 2011. Jim would operate heavy machinery at TFI while he was intoxicated and would occasionally disappear. Jim disappeared for a month one winter.
{¶47} According to Eric, Jim would admit his problem when he was drunk, but deny it when he was sober. Like Mowery, Eric testified that Jim's drinking increased in the winter months. TFI argued that Jim's drinking, which peaked in the month leading to his parents' return from Arizona, was indicative of his shame for stealing inputs, fuel, and grain from TFI.
{¶48} Both Mowery and Eric testified that Jim did not relish Harold's diminishing role at TFI because he loved working with his father. They were one another's sounding board for ideas and plans.
{¶49} According to Eric's testimony, he expressed concern that TFI was not generating the expected level of profits during his early years when grain prices were high. Jim confessed that he was not reimbursing TFI for inputs used on his farm, but that it would "all even out in the end. And that any equipment he purchased was going to stay at the farm for collateral for not paying for the inputs." (Id. at 194.) Jim also told Eric that the four annual $40,000.00 payments for "custom combining" were actually payments by TFI for the repurchase of the combine.
{¶50} Eric testified that TFI could have hired a company to perform custom combining at a substantially lower rate than the rate charged by Jim. ($40,000.00/800 acres = $50.00 per acre). TFI contracted for custom combining in 2017 and 2018 by "Mr. Baker and paid $30.00 per acre.
{¶51} James Witherow, a lifelong friend of Jim, testified that Jim's personality completely changed in the final years of his life. When the two men attended a Cleveland Cavaliers game, Jim told Witherow that Jim was "doing some things that [he] shouldn't be doing [with his taxes]." (Id. at 334.) According to Witherow, Jim confessed that "he was writing off things that belonged to the [TFI] on his own personal taxes. And [Jim] said, if [he] ever [got] audited, [Jim] said, you may have to visit me in jail." (Id. at 336.)
{¶52} According to Mowery, Jim and Harold agreed that "they were going to do things differently" in 2008. (Id. at 418.) It is important to note that Mowery did not provide any testimony regarding the specific terms of the new arrangement purportedly entered into by Harold and Jim.
{¶53} Mowery testified that Jim began purchasing farm equipment in 2003, which was used on both farms, and that "it was getting too cumbersome for them to keep track of who was using what here and who was using what there." (Id.) Mowery implied that the new arrangement was undertaken to obviate the need to maintain records of work performed and inputs and fuel expended at the respective farms. Contrary to the testimony that TFI held a security interest in Jim's equipment housed at TFI, Mowery testified that Jim referred to the equipment as the couples' "retirement fund." (Id. at 451-452.) Philadelphia likewise testified that she and Jim shared a preoccupation with saving for retirement, and he told her that he considered his farm equipment to be an investment for the future.
{¶54} During Mowery's testimony, she emphasized the fact that TFI was able to write off the total amount of the cost of the inputs and fuel as expenses for tax purposes, a benefit denied to Jim during that time, with the exception of the inputs he purchased personally in 2011. Mowery testified that Jim paid a considerable amount of taxes each year, which was contrary to the Estate's efforts to characterize him as a man who engaged in fraud to avoid paying taxes.
{¶55} After Jim died, Lynelle and Mowery attended a meeting at the farm with counsel for Appellant. Philadelphia and her husband, Luke Howell were also present. The Estate sent a letter to TFI indicating that Jim's equipment would be housed at TFI, and that Luke and Eric would run the day-to-day operations, as Jim and Eric had in the past. However, Lynelle refused to employ Luke at TFI.
{¶56} When Mowery arrived at TFI, Jim's equipment, with the exception of the combine, which was stored in the barn, was on display. Jim's property included a John Deere 6310 tractor and the Freightliner. Mowery testified that Lynelle was not aware that the 1535 drill was in the barn. Lynelle informed Mowery that Luke could use any of Jim's equipment, but he was not permitted to use TFI's equipment. At the time, Mowery was unable to remove the equipment to Jim's farm, so she made arrangements with Lynelle to collect the manuals for the equipment. Mowery planned to retrieve the equipment and the corresponding manuals later that week.
{¶57} However, when Mowery attempted to retrieve the equipment and manuals, Lynelle told Mowery that "it's all in question now." (Id. at 460.) A month or so later, Mowery was permitted to retrieve the combine, the John Deere 6310 tractor, a John Deere 6330 tractor, a hay bine, the 1535 drill, a trailer, and fuel tanks. Mowery was prohibited from retrieving the Freightliner, and a 350 Computrac monitor and a radar gun.
{¶58} At trial, a copy of a handwritten statement on a Thompson Farms invoice was offered by Appellant and admitted into evidence. The statement is signed by Harold and dated November 13, 2008. The italicized portions were written with a different pen and a lighter hand, and Mowery conceded that the original document was amended to reflect purchases made after the handwritten statement was originally executed.
{¶59} The handwritten statement reads, in its entirety:
I Harold Thompson do hereby agree that my son, James owns the following equipment:
one trailer to haul dozer 1535 6310
clear-free: 1560 drill, 5671 [unintelliglbe]
outback gps, 1000 gal gas tank,
Hardi 1000 m sprayer 09 Freightliliner
½ of HD11 dozer, 2000 Int 9400 truck
6330
7630 hay bine
{¶60} In a letter dated August 22, 2017, TFI demanded payment for the seed, fertilizer, and chemicals used on Jim's farm from 2010-2016 in the amount of $460,699.13 based on a calculation that Jim owned 27.2% of the total land. On September 18, 2017, a claim for that amount was filed against Appellant in probate court and rejected by the estate. In a letter dated November 1, 2017, TFI amended its demand to $361,134.22 based on an amended calculation attributing Jim's ownership of 21.4% of the land.
{¶61} On December 1, 2017, TFI filed the complaint for declaratory judgment in the above-captioned case alleging that Appellant owed $460,000.00 to TFI for the inputs and $160,000.00 for the payments made by TFI for the combine, for a total of $620,000.00. However, the prayer requested the original amount of $460,699.13, which was admitted to be erroneous in the November 1, 2017 correspondence.
{¶62} With leave of court, Appellant filed its answer and counterclaim on March 5, 2018, stating counterclaims for declaratory judgment, breach of contract relating to distributions owed to Jim from TFI, conversion, and unjust enrichment. The counterclaim stated that TFI was comprised of 1, 000 acres, the same error made in the custom combining invoices. Appellant alleged that Jim and Harold had an oral agreement with respect to the inputs, and that TFI had been unjustly enriched, having benefitted from Jim's work and the use of his equipment for roughly ten years without compensation. Appellant also accused TFI of converting Jim's farm equipment and the grain harvested on Jim's farm in 2017 after his death, and failing to pay distributions on Jim's stock.
{¶63} The case management scheduling order deadlines were continued several times during the pendency of this case. The close of discovery, originally scheduled for November 30, 2018, was extended to May 17, 2019. The deadline for dispositive motions originally scheduled for December 31, 2018 was extended to June 21, 2019, with the final pretrial conference and trial scheduled on August 30 and September 9, 2019, respectively.
{¶64} On June 3, 2019, Appellant filed a motion for leave to amend its answer and counterclaim. The amended counterclaim alleges that TFI is comprised of 1, 000 acres of land, the same misstatement made in the custom combining invoices. The amended counterclaim seeks compensation and distributions allegedly due and owing to Jim, as well as the proceeds of the wheat planted on Jim's farm and sold in 2017.
{¶65} The farm equipment listed in the amended counterclaim is the Freightliner, the Computrac and radar gun; tractor weights removed from the John Deere 6330 tractor; a tractor on which $20,000.00 in payments were made by Jim; a half-interest in the dozer; a hay rake; a center three connection for the tractors; and combine equipment manuals.
{¶66} Cross-motion for summary judgment were filed on June 21, 2019. The final pretrial conference, scheduled for August 30, 2019, was converted into a telephone conference. At the telephone conference, the final pretrial conference and trial were rescheduled for November 21, 2019 and December 16, 2019, respectively.
{¶67} However, the pretrial conference materials - exhibit and witness lists, proposed jury instructions - were filed in late August and early September, then amended in late November and early December. After opposition and reply briefs were filed, the trial court denied both motions, and granted the Estate's motion to amend its answer and counterclaim on September 19, 2019. Numerous subpoenas were filed for the upcoming December 16, 2019 trial.
{¶68} On December 17, 2019, due to the Christmas holiday, the trial was continued to March 16, 2020. TFI filed a motion to continue the trial on February 5, 2020, due to the specific demands of the cattle business, which evidently resumed at TFI after Harold's death (calves are born in March) and the fact that Shirley was in Arizona. The Estate opposed the motion, but the trial was continued to June 29, 2020.
{¶69} On March 10, 2020, the Estate filed a motion in limine seeking to prohibit the introduction of testimony regarding Jim's alcohol abuse, arguing that the testimony would prejudice the jury against Jim, while providing no insight into the existence of an oral agreement between Jim and Harold, or the conversion of Jim's property by TFI. The motion in limine was overruled prior to the commencement of trial.
{¶70} On May 29, 2020, Appellant sought leave of court to amend its answer and counterclaim for a second time "in order to assert more specific claims of unjust enrichment." (5/29/20 Mot. at p. 1.) Appellant explained that "[t]he unjust enrichment claims were asserted in the original counterclaim and have been fleshed out through discovery and during the progression of this case." (Id. at p. 2.) TFI opposed the motion for leave to amend and accused Appellant of "attempting to dramatically expand the scope of its case, with entirely new claims being asserted for the first time, on the eve of trial." (6/11/20 Opp. Br., p. 2.)
{¶71} In the proposed amended counterclaim, the equipment alleged to have been converted by TFI is the Computrac monitor and radar gun for the 1535 grain drill, a tractor on which Jim made payments in the amount of $60,000.00 (not $20,000.00); a half-interest in the dozer; wheat concave inserts for the combine; and "[Jim's] paycheck for March 2017 of $3,333.00." The amended counterclaim also sought recovery of $11,838.41 of proceeds from the sale of 56 acres of wheat harvested on Jim's farm in 2017.
{¶72} Further, the unjust enrichment claim was expanded to include not only Jim's labor but also the use of his equipment as follows: sprayer from 2010 to 2016, $40,868.40; 1535 drill from 2010 to 2016, $44,125, 26, and for 2017, $4,206.16; corn planter from 2010 to 2016, $21,754.50; John Deere 6310 tractor in 2017, $16,438.50; combine in 2017, $7,813.60, and an undefined amount for depreciation on the Frieghtliner. The unjust enrichment claim also states, for the first time, a claim for "$40,000 [sic] bales of straw" valued at $160,498.00, $40,000.00 for custom combining in 2016, and rent for the use of Jim's farmland in 2017 in the amount of $6,543.00. The motion for leave, which was filed exactly one month before the commencement of the trial, was summarily overruled.
{¶73} The case proceeded to a jury trial on June 29, 2020. The jury began its deliberations on July 2, 2020. During deliberations, the jury asked the following question: Can we change the monetary value awarded to a party or do we have to use the estimates presented to us? The trial court, with the agreement of the parties, responded that "it is within the province of the jury to determine the amount of damages, if any, awarded to any party." (Trial Tr., 737.)
{¶74} Through a general verdict form for damages, the jury found in favor of TFI and against the Estate and awarded damages in the amount of $260,000.00. Through a general verdict form for damages, the jury found in favor of the Estate and against TFI and awarded damages in the amount of $42,528.00. Through a general verdict form for equipment, the jury awarded ownership of the Computrac and radar gun to the Estate. On July 6, 2020, the trial court issued a judgment entry in favor of TFI in the amount of $217,472.00, and ownership and possession of the Computrac and radar gun to the Estate.
{¶75} Because the verdict forms were general verdict forms, the jury's calculation of damages is not clear from the record. At first blush, the damages award in favor of the Estate appears to be the value of the Freightliner, which had a purchase price of $42,150. However, upon closer inspection, the $42,528.00 seems to be comprised on the corporate distributions alleged to be owed to Jim by the TFI - $2,528.00, plus $40,000.00 - presumably the value of the custom combining performed by Jim in 2016. As the $260,000.00 damage award in favor of TFI finds no precise correlation in the record, we cannot determine what part, if any, of the award is for the use of inputs, fuel, or the conversion of grain by Jim from TFI.
{¶76} On July 9, 2020, TFI filed a motion for prejudgment interest. On July 31, 2020, Appellant filed its opposition brief, in which it argued that TFI's claim against the Estate began at $460,000.00, was reduced to $321, 00.00, and increased to $748,000.00 at trial. Because the amount claimed by TFI was never a fixed amount and was reduced by the jury, the Estate argued that the damages award did not become due and payable until the jury entered its verdict. On September 16, 2020, the trial court sustained the motion for prejudgment interest in the amount of $27,174.71, accruing from the date that TFI's claim was presented to the Estate, and entered judgment in the combined amount of $244,656.71 from July 1, 2020, plus interest at the statutory rate until paid in full. (9/16/20 J.E. p. 2.)
{¶77} This timely appeal followed.
ASSIGNMENT OF ERROR NO.1
THE TRIAL COURT ERRED IN DENYING APPELLANT'S MOTION TO AMEND ITS COUNTERCLAIM.
{¶78} Civil Rule 13(A), captioned "compulsory Counterclaims," reads, in pertinent part, "A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction." Civil Rule 13(F), captioned "omitted Counterclaims," provides, in its entirety, that "[w]hen a pleader fails to set up a counterclaim through oversight, inadvertence, or excusable neglect, or when justice requires, he may by leave of court set up the counterclaim by amendment."
{¶79} Pursuant to Civ.R. 15(A), when a party requests leave to amend a pleading, the trial court "shall freely give leave when justice so requires." Nevertheless, the trial court has discretion in determining whether to grant leave to amend a pleading. Hanick v. Ferrara, 7th Dist. No. 19 MA 0074, 2020-Ohio-5019, 161 N.E.3d 1, ¶ 43, appeal not allowed, 161 Ohio St.3d 1420, 2021-Ohio-254, 161 N.E.3d 716, ¶ 43, citing Turner v. Central Local School Dist, 85 Ohio St.3d 95, 99, 706 N.E.2d 1261 (1999). "While the rule allows for liberal amendment, motions to amend pleadings pursuant to Civ.R. 15(A) should be refused if there is a showing of bad faith, undue delay, or undue prejudice to the opposing party." Id. (reversing a decision allowing amendment). An abuse of discretion is more than an error of law or judgment; it implies that the court's attitude is unreasonable, arbitrary or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983).
{¶80} In the above-captioned case, discovery closed on May 19, 2019. Cross-motions for summary judgment were filed on June 21, 2019. The pretrial conference materials - exhibit and witness lists, proposed jury instructions - were filed in late August and early September, then amended in late November and early December of that same year. Numerous subpoenas were filed for the impending December 16, 2019 trial. The trial was continued two additional times, to February 5, 2020 and June 29, 2020. The June 29, 2020 trial date was set in March of 2020.
{¶81} The motion for leave to amend at issue in this appeal was the second motion to amend the counterclaims filed by the Estate. The first motion for leave to amend the counterclaims was filed on June 3, 2019, a few weeks after the close of discovery.
{¶82} The second motion for leave to amend was filed exactly one month before the jury trial commenced. It sought to add substantive counterclaims valued at roughly $350,000.00. If the trial court sustained the motion for leave to amend, TFI would have had thirty days to determine whether the products and services alleged in the amended unjust enrichment counterclaim had been provided by Jim, as well as offer testimonial evidence regarding the actual value of the services and products. In order to provide additional time for discovery, which would have likely been required by TFI, the trial court would have had to continue the trial for a fifth time.
{¶83} We find that the trial court did not abuse its discretion in overruling the second motion for leave to amend. Discovery had closed a full year prior to the filing of the second motion to amend. Cross-motion for summary judgment had been filed eleven months earlier. Trial preparation, including the filing of witness and exhibit lists and proposed jury instructions, began in earnest the previous fall. The Estate should have been aware of the proposed claims at the very latest by December 16, 2019. We have previously held that the failure to timely file a motion to amend based on evidence in the movant's possession constitutes undue delay, and the court has discretion to deny the motion to amend. Clay v. Shriver Allison Courtley Co., 2018-Ohio-3371, 118 N.E.3d 1027, ¶ 116 (7th Dist.)
{¶84} Further, the Estate offered no explanation for the eleventh-hour amendment of the counterclaims. Appellant simply asserted that the amendment was the original counterclaim for unjust enrichment "fleshed out through discovery and during the progression of this case." (5/29/20 Mot., p. 2.) We have previously observed that a trial court does not abuse its discretion where there is no apparent reason to justify the delay associated with an untimely motion to amend. State ex rel. Smith v. Adult Parole Auth., 61 Ohio St.3d 602, 603-604, 575 N.E.2d 840 (1991).
{¶85} As a consequence, we find that the trial court did not abuse its discretion when it concluded that the second motion for leave to amend the counterclaims was untimely and would have resulted in prejudice to TFI, or, in the alternative, undue delay of the trial. For the foregoing reasons, we find that Appellant's first assignment of error has no merit.
ASSIGNMENT OF ERROR NO. 2
THE TRIAL COURT ERRED IN ALLOWING TESTIMONY REGARDING ALLEGED ALCOHOL ABUSE BY DEFENDANT/APPELLANT'S DECEDENT.
{¶86} "[A] motion in limine, if granted, is a tentative, interlocutory, precautionary ruling by the trial court reflecting its anticipatory treatment of the evidentiary issue." Grubb, 28 Ohio St.3d at 201-202. "As related to trial, a motion in limine is a precautionary request, directed to the inherent discretion of the trial judge, to limit the examination of witnesses by opposing counsel in a specified area until its admissibility is determined by the court outside the presence of the jury." State v. Charley, 7th Dist. Belmont No. 05 BE 34, 2007-Ohio-1108, ¶ 49 quoting State v. Grubb, 28 Ohio St.3d 199, 503 N.E.2d 142 (1986).
{¶87} Decisions granting or denying motions in limine are reviewed for abuse of discretion. Estate of Johnson v. Randall Smith, Inc., 135 Ohio St.3d 440, 2013-Ohio-1507, 989 N.E.2d 35, ¶ 22. Likewise, a reviewing court will not disturb a trial court's determination on admissibility of evidence during trial absent an abuse of discretion. Matter of J.R.P., 7th Dist. Mahoning No. 17 MA 0169, 2018-Ohio-3938, 120 N.E.3d 83, ¶ 48, citing State v. Sage, 31 Ohio St.3d 173, 510 N.E.2d 343 (1987), paragraph two of the syllabus. Even upon a showing of an abuse of discretion, a reviewing court shall uphold a trial court's evidentiary ruling unless the appellant also establishes that the abuse of discretion caused material prejudice. PNC Mtge., a Div. of PNC Bank, Natl. Assn. v. Krynicki, 7th Dist. No. 15 MA 0194, 2017-Ohio-808, 85 N.E.3d 1024, ¶ 14, citing Banford v. Aldrich Chem. Co., Inc., 126 Ohio St.3d 210, 2010-Ohio-2470, 932 N.E.2d 313, ¶ 38.
{¶88} Ohio Evid. R 103 reads, in relevant part, "[e]rror may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected." Ohio Evid. R. 103(A). In formulating the standard of review for improperly-admitted evidence in the criminal context, the Ohio Supreme Court has observed that "while courts may determine prejudice in a number of ways and use language that may differ, they focus on both the impact that the offending evidence had on the verdict and the strength of the remaining evidence." State v. Morris, 141 Ohio St.3d 399, 2014-Ohio-5052, 24 N.E.3d 1153, ¶ 25. The Morris Court continued, "Both the error's impact on the verdict and the weight of the remaining evidence must be considered on appellate review." Id.
{¶89} Relevant evidence, according to Evid.R. 401, is that evidence "having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Evid.R. 401.
{¶90} Further, even relevant evidence is inadmissible "if its probative value is substantially outweighed by the danger of unfair prejudice, of confusion of the issues, or of misleading the jury." Evid.R. 403(A). Appellant argues that the probative value of the testimony regarding Jim's alcoholism was outweighed by the prejudice it likely inspired in the jury.
{¶91} In limine rulings are not final; they can be revisited and changed during the course of a trial. State v. Croom, 7th Dist. Mahoning No. 12 MA 54, 2013-Ohio-5682, ¶ 173. Failing to lodge a contemporaneous objection to the disputed evidence during trial waives review of the purported error on appeal. Voleck v. Tennant, 7th Dist. Belmont No. 18 BE 0036, 2019-Ohio-4230, ¶ 21-23, appeal not allowed, 158 Ohio St.3d 1452, 2020-Ohio-1090, ¶ 21-23 (2020), citing State v. Hill, 75 Ohio St.3d 195, 203, 661 N.E.2d 1068 (1996) (the denial of a motion in limine does not preserve a claimed error for review in the absence of the defendant making a contemporaneous objection to the actual admission of the evidence at trial). In order to preserve any objection to a pretrial ruling, the defendant has to raise the issue again at the proper place at trial. State ex. Rel. Dewine, supra, citing State v. Hill, 75 Ohio St.3d 195, 202-203, 661 N.E.2d 1068 (1996) (the denial of a motion in limine does not preserve a claimed error for review in the absence of the defendant making a contemporaneous objection to the actual admission of the evidence at trial).
{¶92} Appellant did not object to the introduction of evidence regarding Jim's alcoholism at trial. Absent an objection contemporaneous with the offer of evidence at trial, the grant or denial of a motion in limine may be reviewed only for plain error. State v. Hill (1996), 75 Ohio St.3d 195, 202-203, 661 N.E.2d 1068 (1996). Notice of plain error is undertaken with utmost caution, under exceptional circumstances, and only to prevent a manifest miscarriage of justice. State v. Long, 53 Ohio St.2d 93, 372 N.E.2d 804 (9178), paragraph three of the syllabus.
{¶93} Having reviewed the record, we find that no manifest miscarriage of justice occurred as a result of the admission of testimony regarding Jim's alcoholism. The Estate argued in its closing:
Jim did drink. [Mowery] testified that Jim drank and that he tried to fight the problem. Jim tried to beat that substance abuse problem, but he couldn't do so. He drank until the end of his life.
Now, I think drinking here has been equated with some sort of moral failure that led to theft. I think we all know how drinking is an illness. It does not equate to that moral failure. To repeat, it's an illness that the best people are afflicted with.
Jim dealt with it as best he could. And it did not impact, and he clearly loved his family, and they loved him. Both Shirley and Harold; and [Mowery] and [Philadelphia].
The characterization of Jim as a thief because he was drinking is unfair, and unwarranted, and unproven.(Trial Tr. at 693.)
{¶94} Appellant's trial counsel correctly argued that the evidence adduced at trial demonstrated no correlation between Jim's illness and his breach of the oral contract at issue in this appeal. Although TFI argued that Jim's guilt regarding his actions at TFI was the cause for his increased alcohol consumption in the wintertime, there was no evidence that Jim's drinking had any impact on his farming ability or his financial situation. To the contrary, even though he struggled with alcoholism, Jim was a well-respected and successful farmer. Insofar as his financial situation had not been jeopardized by his drinking, this Court should find that the jury was unlikely to attribute Jim's actions at TFI to his difficulty maintaining his sobriety.
{¶95} Further, although Mowery testified that Jim and Harold decided to run TFI in a different way beginning in 2008, she did not testify that Jim told her that he and Harold agreed that Jim would be compensated for his work with inputs, fuel and grain instead of a salary. Appellant's theory of the case was predicated upon suppositions derived from Jim's failure to reimburse TFI for inputs and fuel from 2008 to 2016. Appellee's theory of the case was predicated upon actual statements against pecuniary interest made by Jim to family members and friends. In other words, the greater weight of the evidence supported TFI's argument that Jim and Harold's original oral contract regarding the inputs was not amended in 2008.
{¶96} Finally, the jury awarded ownership of the combine and Computrac to the Estate, and also appears to have compensated the Estate for Jim's contribution to TFI from 2008-2017, by reducing the damages award to TFI for the inputs in an amount that equal $20,000.00 per year. The jury efforts to quantify Jim's work belie Appellant's argument that the jury was prejudiced by the evidence regarding his alcoholism.
{¶97} For the foregoing reasons, we find that the admission of the evidence regarding Jim's alcoholism did not result in a miscarriage of justice. We further find that Appellant's second assignment of error has no merit.
ASSIGNMENT OF ERROR NO. 3
THE TRIAL COURT ERRED IN AWARDING PREJUDGMENT INTEREST PRIOR TO A CLAIM BEING DUE AND PAYABLE.
{¶98} The trial court awarded prejudgment interest from the date that TFI presented its claim to the Estate. R.C. 1343.03(A), reads in relevant part:
[W]hen money becomes due and payable upon any bond, bill, note, or other instrument of writing, upon any book account, upon any settlement between parties, upon all verbal contracts entered into, and upon all judgments, decrees, and orders of any judicial tribunal for the payment of money arising out of tortious conduct or a contract or other transaction, the creditor is entitled to interest at the rate per annum determined pursuant to section 5703.47 of the Revised Code, unless a written contract provides a different rate of interest in relation to the money that becomes due and payable, in which case the creditor is entitled to interest at the rate provided in that contract.
{¶99} The Ohio Supreme Court of Ohio has observed that "the award of prejudgment interest is compensation to the plaintiff for the period of time between the accrual of the claim and judgment, regardless of whether the judgment is based on a claim which was liquidated or unliquidated and even if the sum due was not capable of ascertainment until determined by the court." Royal Elec. Constr. Corp. v. Ohio State Univ., 73 Ohio St.3d 110, 117, 652 N.E.2d 687 (1995). After judgment is rendered for the plaintiff on a contract claim, the only remaining issue to be resolved by the trial court "with respect to prejudgment interest under R.C. 1343.03(A) is how much interest is due." Zunshine v. Cott, 10th Dist. No. 06AP-868, 2007-Ohio-1475, 2007 WL 926969, ¶ 26.
{¶100} While the award of prejudgment interest is required by law, the trial court must determine when the debt became due and payable and calculate the amount of interest due. Landis v. Grange Mut. Ins. Co., 82 Ohio St.3d 339, 342, 695 N.E.2d 1140 (1998). While these determinations are factual in nature, Dwyer Elec., Inc. v. Confederated Builders, Inc., 3d Dist. Crawford No. 3-98-18, 1998 WL 767442, *4 (Oct. 29, 1998), they are within the trial court's discretion. Persello v. Allstate Ins. Co., 7th Dist. Mahoning No. 10 MA 18, 2011-Ohio-3230, ¶ 19.
{¶101} Appellant contends that the amount of the judgment became due and payable when the judgment was issued because there were no written contractual terms, Appellees' claim for damages changed several times during the pendency of the civil action, and, finally, the damages awarded to TFI were reduced substantially based on Appellant's counterclaims. While we agree that the trial court acted arbitrarily when it awarded pre-judgment interest to Appellee, we reach our conclusion for a different reason.
{¶102} According to the testimony offered at trial, Jim's promise under the original oral contract was to reimburse TFI for inputs. However, in this case, TFI advanced claims for the inputs, as well as fuel, the combine, and grain, which were allegedly converted by Jim. The general verdict forms, which were provided to the jury, make it impossible to calculate the amount of the award attributable to the oral contract, as opposed to fuel, the combine, and the grain. The jury's decision to calculate their own award further muddied any possible calculation. Accordingly, we find that Appellant's third assignment of error to be meritorious, that is, the trial court acted arbitrarily when it awarded prejudgment interest to TFI based on the damages awarded on the oral contract, when said damages are not determinable from the general verdict forms.
CONCLUSION
{¶103} In summary, we find that the trial court did not abuse its discretion in overruling Appellant's second motion to amend its counterclaims, which was filed one month prior to the commencement of trial and long after cross-motions for summary judgment were resolved. The trial court did not abuse its discretion in concluding that the amendment would have prejudiced TFI and/or unduly delayed the trial.
{¶104} Next, we find that the trial court did not commit plain error when it admitted evidence regarding Jim's alcoholism. TFI did not offer any connection between Jim's alcoholism and his actions at TFI from 2008 to 2017. There is no evidence in the record that Jim's alcoholism affected his financial situation or his ability to farm. Accordingly, the judgment entries on the motion to amend counterclaims and the motion in limine are affirmed.
{¶105} Finally, we find that the trial court acted arbitrarily when it awarded prejudgment interest to TFI beginning on the date that TFI presented its claim to the Estate. Based on the general verdict forms, we find that the trial court could not calculate the amount of the award attributable to the oral contract. Accordingly, the judgment entry awarding pre-judgment interest is reversed and vacated.
Donofrio, P.J., concurs.
Waite, J., concurs.
For the reasons stated in the Opinion rendered herein, the judgment entries from the Court of Common Pleas of Columbiana, Ohio, on the motion to amend counterclaims and the motion in limine are affirmed. The judgment entry awarding pre-judgment interest is reversed and vacated. Costs to be split equally between the parties.
A certified copy of this opinion and judgment entry shall constitute the mandate in this case pursuant to Rule 27 of the Rules of Appellate Procedure. It is ordered that a certified copy be sent by the clerk to the trial court to carry this judgment into execution.
NOTICE TO COUNSEL
This document constitutes a final judgment entry.