Wednesday, January 8, 2025
State ex rel. Center for Media and Democracy et al. v. Office of Attorney General David Yost, Case No. 2023-0270
Tenth District Court of Appeals (Franklin County)
In the Matter of the Application of South Branch Solar LLC, Case No. 2023-1020
Ohio Power Siting Board
Matthew Snyder et al. v. Old World Classics LLC, Case Nos. 2023-1616 and 2024-0074
Ninth District Court of Appeals (Medina County)
Ashland Global Holdings Inc. et al. v. SuperAsh Remainderman Limited Partnership, Case Nos. 2023-1448 and 2023-1588
Tenth District Court of Appeals (Franklin County)
Are Discovery and Deposition Needed To Decide if Attorney General Communications Are Public?
State ex rel. Center for Media and Democracy et al. v. Office of Attorney General David Yost, Case No. 2023-0270
Tenth District Court of Appeals (Franklin County)
ISSUES:
- Are court orders for discovery of interactions of the Ohio Attorney General’s Office with two national organizations, and regarding one organization’s meeting, irrelevant and out of proportion to the needs of the case?
- Does the Ohio Supreme Court have jurisdiction to hear an immediate appeal of lower court orders for discovery?
BACKGROUND:
In March 2020, the Center for Media and Democracy (CMD) and its research director David Armiak submitted a request for public records to the Ohio Attorney General’s Office. The center requested all records of the attorney general’s interactions with the Republican Attorneys General Association (RAGA) and the Rule of Law Defense Fund (RLDF), and all records of Attorney General Dave Yost’s participation in the RAGA winter meeting in 2020. The request asked for records between Feb. 3, 2019, and the date of the office’s final response.
In its response, the office stated that information responsive to the request was exempt from release because the materials weren’t a record of the office. CMD sought reconsideration, contending that the records were documentation of the functions of the attorney general’s office. The office responded that it had no emails, texts, drafts, memos, minutes, or other correspondence records that were responsive to the request, and that any other information wasn’t a record as defined in the Ohio Public Records Act.
Center Turns to Court After Denial of Records Request
CMD asked the Tenth District Court of Appeals for a writ of mandamus to compel the attorney general to turn over the records requested. The magistrate ordered discovery in the case.
In March 2021, CMD submitted its written discovery requests. The attorney general’s office objected to each request, but answered a few interrogatories by providing the names of people tasked with searching for the requested records. The office produced one document, which was a retention schedule. CMD also had requested depositions of Yost and certain members of his staff. Yost didn’t appear for his deposition.
As part of a follow-up with the court to compel discovery from the attorney general, CMD presented evidence from attorney general staff depositions and showing Yost forwarded emails from RAGA and RLDF in his official account to his personal email. Other exhibits asserted that RAGA and RLDF coordinated regulatory filings later signed by Republican attorneys general, including Yost, in their official capacities, and that the organizations’ staffs circulated briefs for review by attorneys general and for discussion at meetings. Yost submitted an affidavit stating he had searched his personal email account and found no records of his office in his personal accounts or on his personal devices.
The magistrate concluded that the bulk of the written discovery requests involved information that would help answer whether the withheld materials and the information submitted in camera to the court were “records.” The magistrate also ordered Yost to appear for a deposition. The Tenth District upheld the magistrate’s decision, with an agreed-to narrowing of one of the records requests.
The attorney general appealed the orders for discovery and his deposition to the Ohio Supreme Court, which is required to accept the appeal.
State Contends That Discovery Orders Not Relevant or Proportional
The attorney general’s office explains that Rule 26 of the Ohio Rules of Civil Procedure governs discovery in civil cases, which includes public records cases. The rule explains that “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case.”
The attorney general’s office argues the order to depose Yost isn’t proportional to the case needs. The office explains that CMD has already deposed several staff. They can provide what’s needed to determine whether the requested records document the office’s official activities, the attorney general maintains.
The office also argues the attorney general holds a constitutional office and even a short deposition would distract him from his duties. Courts can order a high-ranking official to sit for a deposition only in extraordinary circumstances, the office notes. It contends that the issue in the case isn’t extraordinary or substantial, and CMD hasn’t established a necessity to depose Yost. CMD would also have an inappropriate opportunity during a deposition to dig for information unrelated to Yost’s official duties or the public records request, the office asserts.
The attorney general also objects to the Tenth District’s order that the office produce, and conduct searches for, documents related to letters, amicus curiae briefs, or meetings in which another Republican attorney general’s office participated. The search would include the personal and campaign accounts of the Ohio office’s staff who were involved with these materials or meetings, the office maintains. It argues the order would sweep in a lot of irrelevant information. As examples, the attorney general points to joint efforts among state attorneys general and their staffs – such as a 33-state settlement with an e-cigarette maker or a lawsuit against Google involving 40 states – and asserts that these documents also would fall under the order. However, those records don’t involve RAGA or RLDF, the attorney general maintains.
Complying with the orders would expend substantial resources of hundreds of attorneys, the office also contends. The attorney general further argues that the orders would give CMD improper access to records and information via discovery beyond what the organization would obtain even if it won the lawsuit. The attorney general maintains overall that the Tenth District’s orders to provide documents is improper because it allows discovery that is irrelevant and disproportionate to the case.
In its appeal of the case, the attorney general’s office assured the Supreme Court that it has jurisdiction to hear the appeal now. The attorney general maintains that the Court can consider cases involving overbroad and burdensome discovery orders, and that would cause harm that can’t be undone if the case is appealed later.
Center Asserts That Orders Are Limited and Necessary
CMD counters that the Court’s precedent prohibits an appeal of a court order for this type of discovery. However, CMD offers its arguments on the substantive issues if the Court hears the case.
CMD argues that the attorney general’s office is withholding records based on a blanket claim that the records don’t document the office’s public functions. In such cases, a court can order the deposition of the only official with firsthand knowledge of what is detailed in the requested records, and a court can order written responses through discovery, CMD maintains.
The center contends that the reasons for the attorney general’s opposition to the orders have changed repeatedly throughout the litigation. His initial claim was that the only responsive record was his calendar, from which he redacted RAGA and RLDF events. However, other records came to light, through some of the office’s disclosures and records reviewed by the court in camera, that showed correspondence in both his personal and official email accounts with RAGA and RLDF and about the groups, CMD maintains. It agrees with the Tenth District that public records cases are not resolved only by accepting the documents the public office voluntarily produces or by taking the word of public office’s staff that they have released the public’s records.
This evidence and the depositions with Yost’s staff convinced the Tenth District that discovery is necessary to clarify whether the interactions of the attorney general and his staff with RAGA and RLDF related to the functions of the office, CMD maintains. It argues it has carefully tailored its requests for records that would illuminate: 1) the level of state employee involvement in RAGA and RLDF activities; 2) the nature and timing of meetings attended, and calls made, by Yost and his staff to the groups; and 3) the participation of RAGA and RLDF in organizing support across states for amicus briefs and in coordinating regulatory filings.
CMD contends that the attorney general’s claims of the requests being too burdensome have been contradicted by his own staff, who have explained that searches are easily performed and are done routinely for other reasons.
Deposing Yost also is necessary because he is the only one who can explain documents that he has on his personal devices and in his personal email regarding business with RAGA and RLDF, the center maintains. CMD argues that although the attorney general’s duties are important, they aren’t endless or all-consuming, and he and CMD can work cooperatively to find enough unscheduled time for him to prepare and be deposed.
This case speaks to whether the public can see emails and other documents demonstrating the relationship between a public official and interest groups that have claimed a role in the policy decisions of the offices of attorneys general, including Ohio’s, CMD concludes.
Other States and Groups Submit Briefs
An amicus brief supporting the attorney general’s position was submitted by 19 states, led by Utah’s attorney general and including Alabama, Alaska, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Oklahoma, South Carolina, Texas, and Virginia.
The League of Women Voters of Ohio, Marshall Project, and Ohio NOW Education and Legal Fund filed a joint amicus brief supporting CMD.
– Kathleen Maloney
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.
Contacts
Representing the Ohio Attorney General’s Office: Michael Hendershot, michael.hendershot@ohio ago.gov
Representing the Center for Media and Democracy and David Armiak: Frederick Gittes, fgittes@gitteslaw.com
Is Proposed Hancock County Solar Farm Entitled to Certificate To Operate?
In the Matter of the Application of South Branch Solar LLC, Case No. 2023-1020
Ohio Power Siting Board
ISSUE: Did the Ohio Power Siting Board improperly grant a certificate to construct and operate the South Branch Solar facility in Hancock County?
BACKGROUND:
South Branch Solar filed an application in 2021 to construct a solar-powered electric generation facility, which is to be constructed on 610 acres within 712 acres of private property acquired in Washington Township, Hancock County. The solar farm is projected to generate about 130 megawatts of power. The project will also include associated facilities such as access roads, electrical collection lines, a substation, and other generation-related equipment. South Branch Solar will use fencing and vegetation around the solar farm’s perimeter to make its appearance consistent with the rural community, which is near the village of Arcadia.
The project requires the approval of the Oho Power Siting Board. It has drawn opposition from neighboring property owners. It has both the support and opposition of local elected officials. Travis Bohn, who lives near the property, was among those objecting to the project. He is a local firefighter and has a young child with hearing difficulties.
Bohn has asserted the project will pose a threat to the safety of the community and that noise from the facility will cause harm to his son. Two Washington Township trustees testified against the project, but the township didn’t take an official position. The Hancock County Board of Commissioners and the Ohio Farm Bureau Federation joined the siting board staff and South Branch in negotiating proposed changes to the original application. An agreement developed by those four parties was presented to the siting board, which in February 2023 approved South Branch’s application to construct and operate the facility.
Bohn appealed the decision to the Ohio Supreme Court, which is required to hear such appeals.
Solar Facility Will Be Detrimental to Community, Neighbor Asserts
Bohn has raised several objections to the board’s approval of the project and claims the board has violated R.C. 4906.10. The law requires a project be approved only after the board determines several factors, including a project’s probable environmental impact, whether the facility represents the minimum adverse environmental impact, and if it will serve the public interest. Bohn asserts the board hasn’t fully assessed the impact of the solar farm, particularly its effect on the neighboring properties, area wildlife and livestock, and the local economy.
Bohn maintains the project’s setbacks are insufficient to protect the neighboring properties. South Branch modified its proposal to set back the facility’s operations from a proposed 160 feet to 300 feet from any residence that hasn’t agreed to lease their land to South Branch. The project also will be set back 150 feet from any public road, up from 60 feet that South Branch originally proposed, and 50 feet from any non-participating landowner’s property line.
Bohn argues these distances are still too close to neighboring homes, subjecting them to loud noise, especially during the facility’s construction, and leaving them with unpleasant views. Bohn notes the testimony from the owner of a bison farm that is adjacent to the proposed site. The landowner stated that bison are easily agitated, and the constant construction noise would be extremely difficult for the bison. The owner, who sells bison meat to local restaurants, maintains that if the solar farm impacts the bison’s production and procreation, it could have a negative impact on Arcadia and its residents.
Bohn also argues South Branch has failed to adequately address how potential flooding could damage drainage tiles underneath the farmland. He claims the area is prone to flooding and that South Branch hasn’t adequately analyzed how its project could impact flooding and hasn’t committed to repairing any damages to the drainage system should it occur. Bohn makes similar claims about South Branch’s diligence to protect wildlife near the project site. He says the company hasn’t met the siting board’s requirements for documenting plant and wildlife species in the area and can’t claim its plans provide the minimum adverse environmental impact required by state law.
Project Meets All Requirements, Board Maintains
The siting board explains that every contested point raised by Bohn was addressed in its order approving the project, and provided evidence to support its conclusions. It notes the board staff investigated the project thoroughly, and South Branch has taken several steps to ensure its impacts on the environment are minimal. The board explains that landscaping will be used to offset any visual impacts, any noise will be temporary and intermittent, and the company will use equipment to mitigate the potential noise.
South Branch also provided sufficient information about the project’s impact on animals and plants and included information from the Ohio Department of Natural Resources and the U.S. Fish and Wildlife Services. Those departments didn’t identify any concerns regarding impacts to threatened plants or animals, the board notes. South Branch also presented a stormwater management report, which explained how it would address any potential flooding and agreed to staff recommendations to mitigate flooding risks. One of those recommendations was to avoid construction near drainage tiles and to promptly repair any damages to the drainage system.
The board found the project is in the public interest and offers significant benefits, including zero-emission energy generation and increases in local revenues through payments in lieu of taxes.
Company Supports Board Approval
The Court allowed South Branch to intervene and participate in the case. South Branch notes that it made several changes to the project to address concerns. It reduced the overall size of the facility from a plan to generate 205 megawatts of power using 1,000 acres of land, to 130 megawatts on 700 acres. It notes that with increased setbacks, its equipment will only cover 500 acres and that it has committed to not building within 25 feet of any known drainage tiles.
South Branch notes that while many area residents expressed their objections, others supported the project, and no one has provided evidence contradicting the board’s finding that the project meets all legal requirements. South Branch maintains that Bohn did not provide any expert witness to support his theories about the danger the project presents and he presented unsubstantiated speculation.
The company notes the Supreme Court established a standard in recent siting board cases in which it wouldn’t alter a board order unless it concluded the order was “unlawful” or “unreasonable.” South Branch maintains the board’s order is consistent with other approved solar farms and nothing about the board’s approval is unlawful or unreasonable. The project provides significant benefits to the state and the local area and should be approved, South Branch asserts.
– Dan Trevas
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.
Contacts
Representing himself, Travis Bohn: bohnt398@gmail.com
Representing the Ohio Power Siting Board from the Ohio Attorney General’s Office: Thomas Lindgren, thomas.lindgren@ohioattorneygeneral.gov
Representing South Branch Solar LLC: Sommer Sheely, ssheely@brickergraydon.com
Must Courts Hold Hearings on Requests To Order Arbitration?
Matthew Snyder et al. v. Old World Classics LLC, Case Nos. 2023-1616 and 2024-0074
Ninth District Court of Appeals (Medina County)
ISSUE: Does R.C. 2711.03 require a trial court to hold an oral hearing when considering a motion to compel arbitration?
BACKGROUND:
Matthew and Katherine Snyder purchased land in Medina County and hired construction company Old World Classics in October 2020 to build a home on the property. The contract contained a provision requiring the parties to resolve disputes through private mediation first and, if that failed, through arbitration.
In January 2023, the Snyders filed a lawsuit against Old World alleging that the home hadn’t been finished. They made several claims, including fraud and breach of contract. Old World responded with a request to pause the case and, based on the contract, to compel arbitration. The Snyders countered that Old World had fraudulently induced them into agreeing to the arbitration clause, so the provision was void.
Trial Court Rules on Motion Without Holding Hearing
The Medina County Common Pleas Court did not hold a hearing on Old World’s motion, and neither party requested a hearing. In March 2023, the court granted Old World’s request to order arbitration and stay the case while the dispute was arbitrated. The Snyders appealed that decision to the Ninth District Court of Appeals.
The couple argued the trial court shouldn’t have granted the motion or compelled arbitration. The Ninth District agreed, but for different reasons than argued by the Snyders. The opinion pointed to R.C. 2711.03, which addresses motions to compel arbitration. The law states that a common pleas court “shall hear the parties” in disputes over written agreements that require arbitration. Following its own 2019 ruling, the Ninth District concluded that the law requires a trial court to hold an oral hearing on these types of motions. The appeals court reversed the trial court decision in the Snyders’ case, returning it for an oral hearing.
Old World appealed the decision to the Ohio Supreme Court, which accepted the case. Old World also notified the Supreme Court that the Ninth District certified that its decision conflicts with rulings on the issue in other appeals courts. The Court agreed to consider the conflict.
Law Doesn’t Mandate Hearings, Homebuilder Maintains
Old World contends that the statute doesn’t require a trial court to hold a hearing on these types of motions because the language “[t]he court shall hear the parties” doesn’t directly mention oral hearings. The business notes that the Fourth District Court of Appeals and the Eighth District Court of Appeals agreed, finding R.C. 2711.03 is different from other laws that use definitive language stating that a court must “hold a hearing” or “schedule a hearing.”
The business rejects the relevance of the Supreme Court of Ohio decision in Maestle v. Best Buy Co. (2003). The case examined R.C. 2711.03 and R.C. 2711.02, which deals with requests to stay a trial while arbitration takes place. The Supreme Court ruled that motions based on R.C. 2711.02 don’t need to comply with procedural requirements in R.C. 2711.03. The decision didn’t consider what R.C. 2711.03 motions specifically require from courts, according to Old World’s brief.
Old World also maintains that because R.C. 2711.03 doesn’t definitively require a hearing, the decision whether to hold a hearing falls within the discretion of the judge, based on court rules for civil cases. In addition, a party has waived any right to a hearing under the law if the party doesn’t request one, Old World asserts.
Parties Don’t Disagree on Hearing Issue, Couple Explains
The Snyders respond that the hearing issue before the Supreme Court wasn’t argued by either side in the lower courts. Neither the Snyders nor Old World believe the trial court was mandated to hold an oral hearing, the couple explains. The issue before the Court is based solely on the Ninth District’s decision. The Snyders’ brief acknowledges that the question “is an important procedural issue that has flummoxed lower courts and litigants for years, and it certainly calls out for eventual resolution so that the law can be applied consistently throughout the state.” However, the issue should be briefed by parties who are adversarial and can provide the Court with full-fledged arguments on both sides of the issue, the Snyders maintain. Without that, this case isn’t appropriate for the Court to decide, they argue.
However, the Snyders assert that the Court should find no hearing was mandated in this particular case because a hearing wouldn’t affect the outcome. They support this position by asking the Court to consider a different argument – that the arbitration provision was voided when Old World fraudulently induced them to agree to the provision.
They contend that the extensive record in this case would allow the Court to decide the issue. They argued in the lower courts that they were pressured to sign the contract quickly to avoid a price increase, and signed it based on assurances regarding two concerns. They state that Old World told them its owner wasn’t the owner of a similarly named company with many lawsuits filed against it, and the company had been involved in only one mediation of a dispute over the years. However, based on their research, the couple maintains that Old World’s owner was the full owner of the other company, and he had been sued more than 20 times. Although not presented to the Court for review, a decision on the validity of an arbitration clause when there is proof of fraudulent inducement “could offer much-needed guidance to lower courts and consumers as they face increased arbitration clauses from businesses,” the Snyders’ brief concludes.
– Kathleen Maloney
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket (2023-1616 and 2024-0074).
Contacts
Representing Old World Classics LLC: Alex McCallion, ajmccallion@bmdllc.com
Representing Matthew and Katherine Snyder: Matthew Snyder, matthewlsnyder@gmail.com
Could Trial Court Override Terms of Contract When Party Made ‘Honest Mistake’?
Ashland Global Holdings Inc. et al. v. SuperAsh Remainderman Limited Partnership, Case Nos. 2023-1448 and 2023-1588
Tenth District Court of Appeals (Franklin County)
ISSUE: Can a court cite the “honest mistake doctrine” to allow for the renewal of a commercial lease that contradicts the unambiguous terms of the lease?
BACKGROUND:
Ashland Global Holdings, the parent company of Ashland Oil, engaged in a series of complex financial transactions in the 1990s to operate 24 Speedway gas stations and convenience stores in five states The eventual plan was for Ashland to transfer the stores to Speedway. Speedway was previously owned by Marathon Petroleum Corporation before becoming its own company.
Ashland entered into a sale and lease agreement with a trust in 1990, in which Ashland leased the properties for 20 years. In 2010, the remaining interest in the land transferred to SuperAsh Remainder Limited Partnership, a group of investors. Under the agreement, the “ground leases” would be owned by SuperAsh, and Ashland would pay a set rental fee for the 24 properties. Ashland paid a combined total of $512,400 annually in rent for all 24 properties, which the manager of SuperAsh characterized as bargain-rate rents.
Ashland had the option of entering two five-year leases and could then enter into one-year leases in 2020 and 2021 with the same terms. Starting in 2022, Ashland could renegotiate the leases with SuperAsh or buy the properties. Since 1998, Speedway had subleased the properties from Ashland for $1 a year, and during the course of Ashland’s ownership, Speedway invested about $11 million in improving the properties. After a legal dispute arose between Ashland and Speedway, Ashland was directed to buy the properties for Speedway. Between the value of the property and the improvements made, the 24 Speedways were valued at about $24 million.
Mistakes Occur in Renewal Process
Ashland leased the properties from SuperAsh through 2020 without incident. The lease required Ashland to notify SuperAsh in writing 120 days prior to the lease expiration that it intended to renew, which required notifications in early September. In 2020, an Ashland vice president conferred with an attorney representing Ashland. The attorney represented Ashland in several legal challenges against Speedway and other companies involved in the ownership of convenience stores once owned and operated by Ashland and Marathon.
The attorney directed the Ashland vice president to send the renewal notice directly to SuperAsh. The renewal wasn’t sent until November 2020, nearly 11 weeks after it was due, but was accepted by SuperAsh. In 2021, SuperAsh notified Ashland that it needed to send a renewal notice in September. Weeks before the renewal deadline, Ashland’s attorney provided a renewal notice for the vice president to sign. Unlike the year prior, when the vice president was going to send the notice to SuperAsh, the attorney requested that the notice be returned to him. The vice president believed the attorney would provide the notice to SuperAsh. The attorney did not send the notice and thought the vice president had sent a copy to SuperAsh.
In November 2021, SuperAsh informed Ashland that since it didn’t renew the leases, they would terminate at the end of 2021. The lease agreements stated that if Ashland didn’t renew, the ownership of the property and all Speedway store equipment would transfer to SuperAsh. The vice president contacted SuperAsh and said he thought the attorney had sent the notice. He then immediately sent a copy of the renewal notice that was intended to be sent to Ashland before the deadline.
SuperAsh and Ashland entered into a four-month agreement to resolve the dispute. Instead of paying the annual $512,400, Ashland would pay $1 million to rent the properties through April 2022 and continue negotiations.
SuperAsh proposed a new 15-year lease with an annual rent of $3 million plus an annual 2.5% increase. Ashland offered to pay $1 million. When negotiations broke down, SuperAsh filed a lawsuit in Franklin County Common Pleas Court arguing Ashland breached the lease agreement and asking to evict Ashland and take over the eight Speedways in Ohio. SuperAsh filed similar lawsuits in the other states where the remaining 16 disputed properties were located.
Speedway joined the lawsuit, arguing that the move would significantly impact the company. Speedway argued that Ashland’s failure to lease the stores or buy the property to give to Speedway would result in Speedway losing its $11 million improvements in the properties.
The trial court cited a 1980 Sixth District Court of Appeals decision, Ward v. Washington Distributors, Inc., which applied an equitable resolution even if an express provision of the contract had been violated. The court found that since Ashland made an “honest mistake” by failing to ensure its renewal notice reached SuperAsh in time, and because SuperAsh took no actual steps to take over the property or find a buyer, then Ashland was allowed to renew the lease and keep the Speedways operating in 2022.
SuperAsh appealed the decision to the Tenth District Court of Appeals. The Tenth District affirmed the trial court’s decision but found its ruling conflicted with a 2009 Second District Court of Appeals ruling. The Tenth District certified the conflict to the Ohio Supreme Court, which agreed to consider the conflict. SuperAsh also appealed to the Supreme Court, which accepted the case.
Court Shouldn’t Excuse Tenant’s Negligence, Investors Argue
SuperAsh notes the agreement between the investor group and Ashland was a sophisticated financial transaction, and Ashland was fully aware of the terms and ramifications of violating the contract. SuperAsh notes Ashland drafted the contract and now wants to be relieved from following the contract terms.
SuperAsh argues the lower courts violated both the principle of “freedom to contract” and rights under the Ohio Constitution by providing an equitable solution rather than following the contract. SuperAsh notes the trial court and Tenth District relied on the Ward decision, which would allow a tenant who makes an honest mistake to renew a lease after the renewal deadline if other conditions existed. If the tenant made valuable improvements to the leased property, which Ashland and Speedway did, and the landlord wouldn’t be prejudiced or negatively impacted by the late notice, then the equitable solution is to allow the tenant to renew the lease, the courts ruled.
SuperAsh disagrees, arguing the courts can’t impose their version of what is “fair” instead of applying the contract. SuperAsh asserts this wasn’t an honest mistake by Ashland; rather, it was Ashland’s own negligence by not sending the renewal notice or following up to see if the renewal notice was received. SuperAsh maintains a court can’t impose an equitable solution when a party to a contract is negligent.
SuperAsh cited the Second District’s 2009 Fifth Third Bank W. Ohio v. Carroll Bldg. Co. decision, which follows a line of cases that don’t allow a court to override contract terms if one party is negligent in abiding by the terms. The investors argue the Supreme Court shouldn’t allow a trial court to deviate from the terms when one party fails to follow the clear language of the contract.
Investors Scheming to Seize Property, Store Operators Assert
Ashland and Speedway filed separate briefs but made similar arguments. As part of the legal process, Ashland obtained a copy of the “gameplan” memo the leader of the investor group sent to other members of SuperAsh. SuperAsh had long complained that Ashland was paying bargain rates for the leases and should have to renegotiate and pay “fair market value” for the leases when the last contract expired. The gameplan memo indicated that SuperAsh would act on Ashland’s failure to renew on time in 2021, having forgiven the company for being late in 2020. Ashland notes that SuperAsh planned to seize the improved properties worth millions of dollars or to throw the negotiations into chaos, at which time SuperAsh would be in a better position to insist on much higher rents.
Ashland argues that courts across the nation recognize the equitable solutions that Ohio courts have imposed. SuperAsh isn’t entitled to a windfall because of an honest mistake made by Ashland, the store operators argue. Ashland’s vice president acted immediately when notified by SuperAsh about the renewal notice and sent a copy that was signed before the deadline.
Ashland argues the confusion between the vice president and the attorney as to who was responsible for sending the notice was an honest mistake, not an attempt by the company to avoid renewing the properties. Ashland intended to renew because it was under a court order to either renew or buy the properties for Speedway, so there was no intention by Ashland to delay the renewals, the store operators argue.
Ashland notes the trial judge explained that allowing the renewals to lapse would lead to store closures because SuperAsh hadn’t taken any steps to take them over or sell them. Closing the stores would have led to employees losing their jobs, cancellation of supplier contracts, and potentially initiating the long and expensive process of securing underground storage tanks, the judge stated. The store operators argue that SuperAsh was unharmed by the lower courts’ decisions, and renewal of the leases should be recognized as the parties work on a new lease agreement, Ashland concludes.
Friend-of-the-Court Brief Submitted
Networks USA I, owners of similar gas stations in Ohio, submitted an amicus curiae brief supporting SuperAsh’s position.
– Dan Trevas
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket (2023-1448 and 2023-1588).
Contacts
Representing SuperAsh Remainderman Limited Partnership: Richard Garner, rgarner@cruglaw.com
Representing Ashland Global Holdings et al.: James Arnold, jarnold@arnlaw.com
Representing Speedway LLC: Jeremy Young, jyoung@ralaw.com