Bush Truck Leasing, Inc. v. All Ways Auto Transport, LLC

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

BUSH TRUCK LEASING, INC., Case No. 1:20-cv-511

Plaintiff, Dlott, J.

Litkovitz, M.J.

vs.

ALL WAYS AUTO TRANSPORT, LLC, REPORT AND

Defendant. RECOMMENDATION

Plaintiff Bush Truck Leasing, Inc. (BTL), initiated this breach of contract action on July

1, 2020 against defendant All Ways Auto Transport, LLC (AWA). (Doc. 1). AWA filed its

answer, affirmative defenses, and four counterclaims against BTL on September 21, 2020. (Doc.

9). This matter is before the Court on BTL’s motion to dismiss all of AWA’s counterclaims

(Doc. 16), AWA’s response (Doc. 19), and BTL’s reply (Doc. 20).

I. Background1

BTL is an Ohio corporation that finances and leases vehicles for business purposes to

independent contractors. AWA is an Illinois limited liability company that uses a network of

independent contractor truckers to deliver products to its customers. The parties executed a

Program Agreement on November 4, 2016. AWA alleges that it executed the Program

Agreement based on a series of oral and written representations by BTL that it had a

comprehensive maintenance program (including preventative maintenance) (hereafter,

maintenance-related representations). (See Doc. 9 at PAGEID 45-49; Docs. 9-1 to 9-2 at

PAGEID 57-82). AWA further alleges that BTL knew that the maintenance-related

representations were false. (Doc. 9, PAGEID 45 at ¶ 5). AWA alleges that the maintenance-

1 The Court derives the information contained in this section from AWA’s answer and counterclaims (Doc. 9) and

the attached Program Agreement (Doc. 9-5).

related representations, together with the Program Agreement, comprise the overarching

agreement at issue between the parties (Contract). (See id., PAGEID 52 at ¶ 31).

According to the Program Agreement’s recitals, AWA’s purpose in entering into that

agreement was “to facilitate the financing and/or leasing by Independent Contractors2 of

Delivery Vehicles3. . . .” (Doc. 9-5 at PAGEID 97). AWA agreed that it would “exclusively

refer any and all existing or prospective Independent Contractor requiring financing or leasing of

a Delivery Vehicle to BTL” and that BTL would have “first right of refusal to provide financial

or leasing for all such Independent Contractors.” (Id. at ¶ 1). AWA also agreed to:

either (i) endorse BTL’s maintenance program for all of its Independent

Contractors requesting financing from BTL, or (ii) contractually require that its

Independent Contractors receive written prior approval from BTL to use an

alternative program for the maintenance of Delivery Vehicles during the term of

each Independent Contractor’s financing or leasing agreement with BTL.

(Id. at ¶ 2). AWA also assumed certain obligations in the event that its Independent Contractors

defaulted under financing agreements with BTL for Delivery Vehicles. In particular, AWA

agreed that, in the event of a default and resulting repossession of a Delivery Vehicle, “[a]ny

repairs required by BTL to bring a Repossessed Delivery Vehicle4 to acceptable condition, in

BTL’s sole discretion, normal wear and tear excepted, shall be the responsibility of and paid by

[AWA].” (Id.).

AWA argues that BTL’s failure to follow through on its maintenance-related

representations caused AWA significant damages in the form of (1) lost revenue when its

Independent Contractors were sidelined by delayed repairs; (2) monies AWA advanced to its

2 This term refers to independent contractors working for AWA. (Doc. 9-5 at PAGEID 97).

3 This term refers to “one or more trucks and or trailers meeting [AWA’s] requirements and specifications for

delivery of certain products[.]” (Id.).

4 This term refers to Delivery Vehicles repossessed under ¶ 4 of the Program Agreement following a “default by an

Independent Contractor under a financing agreement with BTL. . . .” (Id., PAGEID 98 at ¶ 4).

Independent Contractors for repairs and lease payments owed to BTL; (3) the loss of quality

Independent Contractors, who quit as a result of BTL’s subpar maintenance program; and (4) the

costs of replacing such Independent Contractors.

AWA brings four counterclaims against BTL. First, AWA alleges that the execution of

the Program Agreement was based on fraud. Second, AWA alleges that the maintenance-related

representations made by BTL are a part of the parties’ overarching Contract, and BTL’s failure

to perform consistent with those representations therefore constitutes a contractual breach.

Third, in the alternative, AWA alleges that BTL was unjustly enriched in the form of the funds

AWA advanced to its Independent Contractors for leases and repairs while they were sidelined

from driving due to BTL’s lack of a functional maintenance program. Finally, AWA alleges that

BTL’s maintenance-related representations violated Ohio’s Deceptive Trade Practices Act

(ODTPA).

II. Standard of law

In deciding a motion to dismiss under Rule 12(b)(6), the Court must accept all factual

allegations as true and make reasonable inferences in favor of the non-moving party. Keys v.

Humana, Inc., 684 F.3d 605, 608 (6th Cir. 2012) (citing Harbin-Bey v. Rutter, 420 F.3d 571, 55

(6th Cir. 2005)). Here, the Court therefore accepts the counterclaimant’s (AWA’s) factual

allegations as true and construes the counterclaims in favor of AWA. See United Food & Com.

Workers Union-Emp. Pension Fund v. Rubber Assocs., Inc., 812 F.3d 521, 524 (6th Cir. 2016)

(citation omitted) (setting forth the motion to dismiss standard in the context of a counterclaim).

Only “a short and plain statement of the claim showing that the pleader is entitled to relief” is

required. Keys, 684 F.3d at 608 (quoting Fed. R. Civ. P. 8(a)(2)). “[T]he statement need only

give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Id.

(quoting Erickson v. Pardus, 551 U.S. 89, 93 (2007)) (internal quotation marks omitted) (quoting

Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Although the plaintiff need not

plead specific facts, the “[f]actual allegations must be enough to raise a right to relief above the

speculative level” and to “state a claim to relief that is plausible on its face.” Id. (quoting

Twombly, 550 U.S. at 555, 570). A plaintiff must “plead[] factual content that allows the court to

draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

III. BTL’s motion to dismiss

A. Breach of contract5

BTL begins with AWA’s breach of contract counterclaim. The parties do not dispute that

the maintenance-related representations are not included in the parties’ written Program

Agreement. The dispute, rather, is whether the maintenance-related representations are

otherwise part of an overarching contract between BTL and AWA (i.e., the Contract alleged by

AWA). (See Doc. 9, PAGEID 52 at ¶ 31).

BTL first argues that AWA “has not alleged and cannot point to any obligation in the

Program Agreement that BTL failed to perform. . . .” (Doc. 16 at PAGEID 138). BTL argues

that the maintenance-related representations contradict the terms of the Program Agreement

because the Program Agreement imposes no maintenance obligations upon BTL. Second, BTL

argues that AWA’s allegations pertaining to the maintenance-related representations are barred

by the parol evidence rule because the Program Agreement is fully integrated. Even if the

5 In its response, AWA makes a cursory reference to the fact that it was a third-party beneficiary to maintenance

agreements between its Independent Contractors and BTL. (See Doc. 19 at PAGEID 169-70). AWA’s

counterclaims, however, make no mention of such a claim. The Court therefore declines to address this perfunctory

argument, which is not tied to any allegation in AWA’s counterclaims. Cf. Kuhn v. Washtenaw Cnty., 709 F.3d 612,

624 (6th Cir. 2013) (“This court has consistently held that . . . arguments adverted to in only a perfunctory manner,

are waived.”) (citation omitted).

Program Agreement were not fully integrated, BTL argues, AWA seeks to introduce parol

evidence that is both (1) inconsistent with and (2) the natural subject of the Program Agreement.

Finally, BTL argues that the maintenance-related representations do not amount to an

enforceable oral agreement.

AWA argues that the parties’ Contract contained both written and oral terms (i.e., the

Program Agreement and the maintenance-related representations). AWA argues that parol

evidence may be considered because the Program Agreement was not fully integrated. AWA

points to the lack of an integration clause6 and multiple references to maintenance in the

Program Agreement as demonstrating that the Program Agreement was not fully integrated.

Finally, AWA argues that, because the maintenance-related representations did not form a

separate contract (only part of the overarching Contract alleged), the defects in the traditional

breach of contract elements that BTL raises are irrelevant.

“Under Ohio law, the elements of a breach of contract claim are: (1) the existence of a

contract; (2) performance by the plaintiff; (3) breach by the defendant; and (4) damage or loss to

the plaintiff as a result of the breach.” V & M Star Steel v. Centimark Corp., 678 F.3d 459, 465

(6th Cir. 2012) (citations omitted). In addition to what comprises the parties’ contract in the first

place, the parties dispute whether AWA has sufficiently pleaded element three: a breach of the

parties’ agreement. AWA alleges that BTL breached its maintenance-related representations that

were not contained in the written Program Agreement but that were part of the parties’

overarching Contract.

AWA’s position depends on the Court’s consideration of evidence extrinsic to the written

Program Agreement. Such evidence is subject to the parol evidence rule. The parol evidence

6 “[T]he absence of an integration clause does not preclude a finding that all or part of a contract is, in fact, an

integrated writing. . . .” Bellman v. Am. Internat’l Grp., 865 N.E.2d 853, 857 (Ohio 2007).

rule is a rule of substantive law providing that “absent fraud, mistake or other invalidating cause,

the parties’ final written integration of their agreement may not be varied, contradicted or

supplemented by evidence of prior or contemporaneous oral agreements, or prior written

agreements.” Galmish v. Cicchini, 734 N.E.2d 782, 788 (Ohio 2000) (quoting 11 Williston on

Contracts (4th ed. 1999) 569-70, Section 33:4). The rule’s purpose is “to protect the integrity of

written contracts[,]” id. at 789 (citing Ed Schory & Sons, Inc. v. Soc. Nat’l Bank, 662 N.E.2d

1074, 1080 (Ohio 1996)), against “earlier statements, negotiations, or oral agreements by

deeming those earlier expressions to be merged into or superseded by the written document.”

Id. (quoting Williston on Contracts (4 ed. 1999) 541-48, Section 33:1).

One corollary to the parol evidence rule is contract integration. TRINOVA Corp. v.

Pilkington Bros., P.L.C., 638 N.E.2d 572, 575 (Ohio 1994). An integrated contract “fully

expresses the intent of the parties.” Williams v. Spitzer Autoworld Canton, L.L.C., 913 N.E.2d

410, 419 (Ohio 2009) (Cupp, J., concurring) (citing Black’s Law Dictionary (9th ed. 2009), 880).

“Contract integration provides that where the parties’ intent is sought to be ascertained from

several writings, a prior writing will be rejected in favor of a subsequent one if the latter writing

contains the whole of the parties’ agreement.” TRINOVA Corp., 638 N.E.2d at 575. Thus, when

the latter writing “is complete and unambiguous on its face, parol evidence is inadmissible to

show a contrary intent of the parties.” Id.

As noted in Galmish, the parol evidence rule applies to the parties “final written

integration of their agreement. . . .” Galmish, 734 N.E.2d at 788 (emphasis added) (quoting 11

Williston on Contracts (4th ed. 1999) 569-70, Section 33:4)). The parol evidence rule does not

apply in the event of a “partial integration” in which a written agreement “does not fully express

the parties’ intent. . . .” Id. In the event of partial integration, extrinsic evidence may be

introduced to “supplement, but not . . . vary or contradict the terms” of a written agreement.

Mishler v. Hale, 26 N.E.3d 1260, 1270 (Ohio Ct. App. 2014).

Integration is therefore the threshold question for AWA’s breach of contract

counterclaim. In order to consider extrinsic evidence of the alleged maintenance-related

representations made by BTL, the Court must first determine that the parties’ written Program

Agreement is not fully integrated.

Integration is a rule of substantive law to be decided by the trial judge in the first

instance. See 4 Williston on Contracts 3d (1961) 955, Section 633. The question

of partial integration must be determined from the four corners of the document

itself and not by a prefatory table of documents. . . . See 2 Restatement of the

Law 2d, Contracts (1981) 117[-]118, Section 210(3).

TRINOVA Corp., 638 N.E.2d at 576.

AWA highlights the following aspects of the Program Agreement that mention the term

“maintenance” to demonstrate that it is not fully integrated:

• Section 2 specifically refers to Bush’s “maintenance program” but does not

define that program. This is because Bush had already informed AWA of the

content of the maintenance program through prior representations.

• Section 3 provides that AWA is to withhold payments from the Drivers to cover

payments for Bush’s “financing, maintenance program or any other agreement”

between Bush and the Drivers. The same section expressly incorporates a term

from Bush’s agreements with the Drivers relating to late fees.

• Section 4 states that AWA has certain obligations upon the default by Drivers

under the Drivers’ agreements with Bush. Bush and AWA thus cannot even

determine their obligations under the Program Agreement without looking to

the Drivers’ agreements with Bush.

• Section 5 provides that AWA is required to “support[] BTL and its efforts…to

keep trucks properly maintained[.]” The Program Agreement, however, does not

expressly detail Bush’s maintenance efforts.

• Section 7 states that if AWA terminates the Program Agreement, “all terms and

conditions contained herein shall survive and continue to apply to the Delivery

Vehicles, the lease agreements and the maintenance agreements that were

financed by BTL….”

(AWA’s Mem. in Opp’n, Doc. 19 at PAGEID 157) (emphasis in the original).

While the specific provisions cited by AWA reference a maintenance program or

maintenance agreements, when read in context these terms do not show that the Program

Agreement is partially integrated. The language used by the parties does not reflect a need to

reference any other alleged written or oral agreements to ascertain the parties’ intent. The

Program Agreement is complete on its face and couched in terms expressing the unambiguous

responsibilities and obligations of the respective parties. For example, AWA contends that

Section 2 of the Program Agreement specifically refers to BTW’s “maintenance program” but

does not define that program. Section 2 states:

Maintenance Program for Independent Contractors. So long as this Agreement is

in effect between the parties and has not otherwise been terminated by either party,

Sponsor [AWA] shall either (i) endorse BTL’s maintenance program for all of its

Independent Contractors requesting financing from BTL, or (ii) contractually

require that its Independent Contractors receive written prior approval from BTL

to use an alternative program for the maintenance of Delivery Vehicles during the

term of each Independent Contractor’s financing or leasing agreement with BTL.

(Doc. 9-5 at PAGEID 97). AWA’s obligation under this section is not dependent on a specific

definition of “maintenance program.” Rather, regardless of the the quality or nature of BTL’s

maintenance program, AWA is required to “endorse” the program to those contractors requesting

BTL financing or require, by contract, that its contractors receive written prior approval from

BTL before using a non-BTL maintenance program. Similarly, the other provisions of the

Program Agreement cited by AWA that reference BTL’s maintenance and maintenance

program: (1) set forth AWA’s maintenance responsibilities upon a financing-agreement default

by one of its Independent Contractors, (2) reflect that any maintenance agreements between BTL

and AWA’s Independent Contractors were independent agreements, or (3) set forth

“miscellaneous” responsibilities of the parties, including that AWA “will educate its

management team on the importance of supporting BTL and its efforts” to keep leases current,

keep trucks properly maintained, and recruit new independent contractors for repossessed trucks.

(See Doc. 9-5, PAGEID 97 at ¶¶ 2-3, PAGEID 98 at ¶ 4, PAGEID 99 at ¶¶ 5, 7). These terms of

the Program Agreement do not set forth any parameters requiring that BTL provide a

maintenance program of a certain quality or according to certain specifications that would

necessitate review of information outside the four corners of the Program Agreement to

understand the respective obligations of the parties. The obligations of the parties are clear, and

the undefined term “maintenance program” does not give rise to a finding of partial integration.

There is nothing within the four corners of the Program Agreement to demonstrate that it was

drafted and executed with the intention of establishing or defining BTL’s maintenance

responsibilities. See TRINOVA Corp., 638 N.E.2d at 576. Rather, BTL’s obligation, “expressed

by clear and unambiguous language” in the Program Agreement, see id. (quoting Blosser v.

Enderlin, 148 N.E. 393, paragraph two of the syllabus (Ohio 1925)) (remaining citation omitted),

was “to extend financing and/or leasing of Delivery Vehicles to one or more Independent

Contractors” because AWA’s business model depends on its Independent Contractors having

access to Delivery Vehicles to deliver products. (Doc. 9-5 at PAGEID 97).

The primary cases relied upon by the parties illustrate the difference between partial and

full integration and support the conclusion that the Program Agreement is fully integrated. In

Allied Erecting & Dismantling Co. v. Ohio Edison Co., No. 10-MA-25, 2011 WL 2138975 (Ohio

Ct. App. May 26, 2011), a manufacturing company and utility company engaged in negotiations

regarding the construction of an electrical substation, which required two transformers. Id. at *1.

After these negotiations, the parties entered into a written agreement that covered only “the

design and procurement of the two transformers required for the substation.” Id. Although the

appellant argued that the written contract “was part of an overarching agreement to design and

build a substation which was orally agreed upon[,]” id. at *2, the court found that the written

contract regarding the transformers was “clear, unambiguous, and susceptible of only one

interpretation. It was of the sale of two transformers with certain specifications for [a sum

certain].” Id. at *5. The court therefore found the partial integration exception to the parol

evidence rule inapplicable. Id. Cf. Ctr. Ridge Ganley, Inc. v. Stinn, 511 N.E.2d 106, 109 (Ohio

1987) (emphasis added) (“[T]he real estate agreement was not altogether complete on its face,

but rather its very terms indicated that it was part of a larger transaction involving the sale of an

automobile dealership.”).

Like the appellant in Allied, AWA here relies on a theory of an overarching agreement

including both the Program Agreement and the oral and written maintenance-related

representations. In Allied, even acknowledging how interconnected the written transformer

agreement and alleged oral electrical substation agreement were, the court would not disrupt the

facially integrated agreement regarding only the transformers. Allied is distinguishable in the

fact that the facially integrated agreement therein appears not to have mentioned the electrical

substation at all, whereas here, the Program Agreement does reference BTL’s maintenance

program. References to BTL’s maintenance program alone, however, do not clearly suggest a

larger agreement or transaction between the parties—particularly absent any mention of

conditions or qualities associated with BTL’s maintenance program. Cf. Stinn, 511 N.E.2d at

109.

In Mulch Mfg., Inc. v. Advanced Polymer Sols., LLC, 947 F. Supp. 2d 841 (S.D. Ohio

2013), the court came to the opposite conclusion. Therein, a mulch company had entered into an

agreement with a research and development company to develop a fire retardant for the former’s

product. Id. at 846-47. Under that agreement, the research and development company was “to

develop a formulation according to [the mulch company’s] specifications”—not just any

formulation. Id. at 860 (emphasis added). The agreement between the parties, however, did not

define those specifications. Id. at 859. The court accordingly found the agreement only partially

integrated. Id. at 858.

Unlike Mulch Mfg., where the parties contracted for a specific product formulation of a

particular quality, there is no such condition included in the four corners of the Program

Agreement with respect to BTL’s maintenance program that requires supplementation. The

references to maintenance cited by AWA (see Doc. 19 at PAGEID 157) do not demonstrate that

clarifying the existence and extent of BTL’s maintenance program is necessary to divining the

intent of the parties in executing the Program Agreement.

On the basis of the foregoing, the Court concludes that the Program Agreement is fully

integrated, and AWA’s allegations pertaining to the maintenance-related representations are

barred by the parol evidence rule. Because the Court determines that the Program Agreement is

fully integrated, it need not consider BTL’s arguments on partial integration. AWA has failed to

demonstrate that there is a contract between the parties other than the Program Agreement and

has failed to identify any provision of the parties’ Program Agreement that has been breached.7

Accordingly, BTL’s motion to dismiss should therefore be granted as to Count II of AWA’s

counterclaims.

B. Fraud

BTL argues that AWA’s fraud counterclaim should be dismissed on the basis that it, too,

is premised on material barred by the parol evidence rule (i.e., the maintenance-related

representations). In addition, BTL argues that Count II is insufficient under Rule 9(b) of the

7 Because AWA does not argue that the maintenance-related representations formed an oral contract separate and

apart from the Program Agreement, the Court also does not consider BTL’s arguments relative thereto.

Federal Rules of Civil Procedure because AWA has not pled (1) representations, (2) that such

representations were false, or (3) justifiable reliance on any representations. BTL characterizes

AWA’s theories of fraud as relying on alleged representations by BTL that are based on

promised future action, contingent action, or mere puffery—any of which is insufficient under

Ohio law to support a claim of fraud.8

AWA argues in response that its fraud counterclaim is not barred by the parol evidence

rule because fraud is an exception to the rule. Extrinsic evidence is permitted where the purpose

of the evidence is to show fraudulent inducement or promissory fraud related to a contract, and

the parol evidence to be considered does not contradict the terms of such contract. AWA further

argues that its fraud counterclaim alleges promises by BTL that did not constitute mere

puffery—namely, AWA alleges that BTL represented the existence of a maintenance program

and its then-existing intent and capability to deliver such a program. AWA also argues that it

alleges with particularity BTL’s false representations, who made them, when they were made,

how they were communicated, and why they were false.

1. Parol evidence rule

As discussed in the integration context, there are exceptions to the parol evidence rule.

Applicable to AWA’s fraud counterclaim, the parol evidence rule does not “prohibit a party from

introducing parol or extrinsic evidence for the purpose of proving fraudulent inducement[,]” as

8 Because the Court concludes that AWA’s breach of contract counterclaim fails, it need not address BTL’s

arguments regarding the independent duty doctrine, see Aero Fulfillment Servs. Corp. v. Oracle Corp., 186 F. Supp.

3d 764, 774 (S.D. Ohio 2016) (citation omitted) (“The law prohibits a plaintiff from asserting a tort claim based

upon the same actions as those that form a claim for breach of contract, unless the alleged breaching party also

breaches a separate duty.”), and economic loss doctrine, see Corporex Dev. & Constr. Mgt., Inc. v. Shook, Inc., 835

N.E.2d 701, 704 (Ohio 2005) (citations omitted) (“The economic-loss rule generally prevents recovery in tort of

damages for purely economic loss.”).

such a prohibition would erode all legal protections against fraudulent dealings. Galmish, 734

N.E.2d at 789 (citing Drew v. Christopher Constr. Co., Inc., 41 N.E.2d 1018, paragraph two of

the syllabus (Ohio 1942)) (remaining citation omitted). At the same time, “an oral agreement

cannot be enforced in preference to a signed writing which pertains to exactly the same subject

matter, yet has different terms.” Id. at 790 (quoting Marion Prod. Credit Ass’n v. Cochran, 533

N.E.2d 325, paragraph three of the syllabus (Ohio 1988)) (remaining citation omitted). See, e.g.,

Forest City Mgmt., Inc. v. Int’l Total Servs., Inc., No. 64188, 1993 WL 526670, at *7 (Ohio Ct.

App. Dec. 16, 1993) (parol evidence demonstrating an indefinite tenancy term could not be

considered where the written lease specifically provided for a fixed tenancy term).

AWA also raises promissory fraud as a distinctly applicable exception to application of

the parol evidence rule. Under Ohio law, promissory fraud occurs when a party “mak[es] a

contractual promise with no present intention of performing it. . . .” Coal Res., Inc. v. Gulf & W.

Indus., Inc., 756 F.2d 443, 446 (6th Cir. 1985). In Coal Res., the Sixth Circuit explained that

extrinsic evidence may be used to show that, at the time the parties contracted, a party had no

intention to perform the promises made and reflected in the parties’ written agreement. Id. It

went on to explain that where a promise is made without the intention of performing, but that

promise is not reflected in the parties’ agreement, parol evidence might be admissible if the

agreement is not fully integrated; if the agreement is fully integrated, however, a party would not

be permitted to introduce extrinsic evidence of a promise falling outside the subject matter of the

written agreement. Id. at 446-47.

The Court begins with the promissory fraud issue. AWA does not allege that BTL

breached a promise contained in the parties’ written Program Agreement. Because the Court has

concluded that the Program Agreement is fully integrated, based on the holding in Coal Res.,

AWA’s promissory fraud theory is inapplicable to allow parol evidence of a promise not

reflected in that agreement. The Court therefore considers only the fraudulent inducement

exception to the parol evidence rule.

The fraudulent inducement exception cannot apply if the Court determines that the

maintenance-related representations “pertain[] to exactly the same subject matter [as the Program

Agreement], yet ha[ve] different terms.” Galmish, 734 N.E.2d at 790 (quoting Marion Prod.,

533 N.E.2d at paragraph three of the syllabus) (remaining citation omitted). The Court,

therefore, turns again to the terms of the Program Agreement and the content of the maintenance-

related representations.

BTL characterizes AWA’s counterclaims regarding the maintenance-related

representations as making BTL responsible for all maintenance and repairs under all

circumstances (see Doc. 16 at PAGEID 136, 152), which would contradict the terms of the

Program Agreement dealing with maintenance in the event of a default. (See Doc. 9-5, PAGEID

98 at ¶ 4). The Court, however, does not read AWA’s counterclaims to make such broad

allegations. Instead, construed in its favor, AWA’s counterclaims allege that BTL represented

that it had a full-service maintenance program that had the capability to provide all preventative

maintenance for Independent Contractors using BTL’s program. This does not contradict the

terms of the Program Agreement relating to BTL’s maintenance program, which goes little

beyond contemplating that BTL offered some kind of maintenance program. Overall, the

Program Agreement does not address which entity is generally responsible for maintenance

outside of the default context, much less the required existence and characteristics of BTL’s

maintenance program—the subject of the maintenance-related representations. See supra pp. 8-

9. The maintenance-related representations therefore do not contradict the terms of the Program

Agreement.

BTL also argues that the maintenance-related representations naturally should have been

included in the Program Agreement, also precluding application of the fraudulent inducement

exception to the parol evidence rule. BTL relies on the concurring opinion in Williams, 913

N.E.2d at 419 (Ohio 2009) (Cupp, J., concurring), in which Justice Cupp describes the “collateral

agreement” exception to the parol evidence rule as requiring both that a collateral agreement “not

contradict the terms of the written agreement” and “be one that would naturally be omitted from

the written instrument.” Id. (quoting Patrick v. Ressler, No. 04AP-149, 2005 WL 2303687, at *6

(Ohio Ct. App. Sept. 22, 2005)). See also Bollinger, Inc. v. Mayerson, 689 N.E.2d 62, 69 (Ohio

Ct. App. 1996) (citing Wall v. Firelands Radiology, Inc., 666 N.E.2d 235, 242 (Ohio Ct. App.

1995) and Busler v. D & H Mfg., Inc., 611 N.E.2d 352, 355 (Ohio Ct. App. 1992)) (“Parties may

not prove fraud by claiming that the inducement to enter into an agreement was a promise that

was within the scope of the integrated agreement but was ultimately not included in it.”). But see

Acad. Imaging, LLC v. Soterion Corp., 352 F. App’x 59, 66 (6th Cir. 2009) (quoting Galmish,

734 N.E.2d at 790-91) (emphasis added) (“[T]he parol evidence rule does apply . . . [u]nless the

false promise is either independent of or consistent with the written instrument. . . .”).

Assuming that AWA must show both that the extrinsic evidence (maintenance-related

representations) naturally would have been omitted from the Program Agreement and that it does

not contradict the terms of the Program Agreement, the Court finds that AWA has done both. As

to the former, this conclusion flows naturally from the Court’s determination that the Program

Agreement was fully integrated.

Resisting this conclusion, BTL characterizes the maintenance-related representations as

consideration for AWA entering into the Program Agreement and notes that AWA elsewhere

argues that these representations were part of an overall “AWA-Bush Contract.” (See Doc. 19 at

PAGEID 172). The Court does not find, however, that information related to BTL’s

maintenance program would naturally be included in the Program Agreement—a document that

itself refers, twice, to the fact that maintenance agreements were to be independently executed

between the Independent Contractors and BTL. (See Doc. 9-5, PAGEID 97 at ¶ 3 (emphasis

added) (“[AWA] will withhold sufficient pro-rata portion of monies representing Independent

Contractor’s gross monthly obligations due BTL under . . . maintenance program . . . agreements

between BTL and each Independent Contractor.”), PAGEID 99 at ¶ 7 (emphasis added) (“The

survival of terms and conditions shall extend through performance of all of the terms and

conditions and the expiration by its terms of each Delivery Vehicle . . . maintenance contract

between BTL . . . and the Independent Contractors. . . .”)).

In addition, the fact that the Program Agreement mentions maintenance is not tantamount

to maintenance obligations being “part and parcel” of the parties’ agreement concerning Delivery

Vehicle leasing and financing. Bollinger, 689 N.E.2d at 69 (parol evidence of a promise to

provide “limitless funding” to a new company held inadmissible under fraudulent inducement

exception where such a promise would have been “part and parcel” of agreements related to “all

aspects” of that new company’s purchase of assets from another company). The Bollinger court

acknowledged that parol evidence may fall within the fraudulent inducement exception if “it

covers a subject matter distinct from, though closely related to, the express subject matter of the

written contract and not embodied in the written contract.” Id. (emphasis added) (citing

Sparhawk v. Gorham, 139 N.E.2d 652, 655 (Ohio Ct. App. 1956)). Though maintenance is

related (perhaps even “closely”) to the Program Agreement’s subject matter, it is distinct and

therefore fits within the fraudulent inducement exception to the parol evidence rule. Id.

Finally, although AWA argues in its response that the maintenance-related

representations “were material to [its] decision to sign the Program Agreement” (Doc. 19 at

PAGEID 160) (emphasis added), this is not the equivalent of such representations falling within

the subject matter of the Program Agreement. Cf. Acad. Imaging, LLC, 352 F. App’x at 66

(distinguishing admissible parol evidence going to the “making of” a contract from parol

evidence going to a “provision of” a contract under the fraudulent inducement exception).

In sum, the Court finds that AWA’s fraudulent inducement counterclaim is premised on

representations both consistent with the terms and distinct from the subject matter of the Program

Agreement. The Court therefore concludes that the fraudulent inducement exception to the parol

evidence rule applies to allow consideration of the maintenance-related representations.

2. Heightened pleading standard for fraud

To state a claim for fraud under Ohio law, plaintiff must allege:

(a) a representation, or when there is a duty to disclose, concealment of fact, (b)

which is material to the transaction at hand, (c) made falsely with knowledge of

falsity, or with such utter disregard and recklessness as to whether it is true or

false that knowledge may be inferred, (d) with the intent of misleading another

into relying upon it, (e) justifiable reliance upon the representation or

concealment, and (f) a resulting injury proximately caused by the reliance.

Glassner v. R.J. Reynolds Tobacco Co., 223 F.3d 343, 352 (6th Cir. 2000) (quoting Burr v. Bd.

of Cnty. Comm’rs, 491 N.E.2d 1101, 1105 (Ohio 1986)). A party alleging fraud must plead

“with particularity the circumstances constituting fraud or mistake.” W. & S. Life Ins. Co. v.

JPMorgan Chase Bank, N.A., 54 F. Supp. 3d 888, 899 (S.D. Ohio 2014) (quoting Fed. R. Civ. P.

9(b)) (remaining citation omitted). This requires specifying: “1) what the fraudulent statements

were, 2) who made them, 3) when and where the statements were made, and 4) why the

statements were fraudulent.” Id. (quoting Morris Aviation, LLC v. Diamond Aircraft Indus., Inc.,

536 F. App’x 558, 562 (6th Cir. 2013)).

BTL first argues that AWA has not pleaded the misrepresented fact with the requisite

particularity. The Court disagrees. AWA’s counterclaim alleges that “[i]n October and

November of 2016, [BTL] represented that it had a full-service maintenance program that,

among other things, (1) included preventative, scheduled maintenance; (2) provided 24-hour

support to drivers; and (3) ensured drivers would benefit from bulk-repair discounts obtained by

Bush.” (Doc. 9, PAGEID 45 at ¶ 4) (see also id. PAGEID 49 at ¶ 17 (describing representations

made about the maintenance program)). The counterclaim goes on to allege that the

representations were made by Michael Bush (BTL’s then-president and CEO) (see Doc. 9 at

PAGEID 46)), among others, to Jordan Georgiev (AWA’s then- and current-authorized Member)

(see id.), both orally and in writing. (Id., PAGEID 46 at ¶ 11). Finally, the counterclaim

provides two examples of specific emails from Mr. Bush to Mr. Georgiev related to these

representations. (Id., PAGEID 46-47 at ¶¶ 12-13). The Court concludes that these allegations,

together, are sufficiently particular to support a claim for fraud.

BTL next argues that AWA cannot demonstrate falsity because the maintenance-related

representations concerned future promises. See Waste Mgmt., Inc. v. Danis Indus. Corp., No.

3:00-cv-256, 2009 WL 347773, at *28 (S.D. Ohio Feb. 10, 2009) (holding that predictions as to

future events do not constitute actionable misrepresentations under Ohio law); Tibbs v. Nat’l

Homes Const. Corp., 369 N.E.2d 1218, 1222 (Ohio Ct. App. 1977) (“It is generally true that

fraud cannot be predicated upon promises or representations relating to future actions or conduct.

. . .”). The Court finds that the maintenance-related representations concern the existence (or

not) of a functional maintenance program operated by BTL that offered particular features;

therefore, this fraud counterclaim does not necessarily concern any future performance, and

AWA sufficiently pleads falsity. (See also Doc. 9, PAGEID 45 at ¶¶ 4-5) (“[BTL] represented

that it had a full-service maintenance program. . . . These representations were false. . . .”).

BTL’s argument otherwise focuses on a single phrase in AWA’s counterclaim: that AWA

relied on BTL’s “factual representations that it had a full-service maintenance program and

would perform [various services on Independent Contractors’ Delivery Vehicles]. . . .” (Id.,

PAGEID 49 at ¶ 20). The Court finds that the overarching allegation in the counterclaim is that

BTL represented that it had “a full-service maintenance program” when, in fact, it did not

operate such a maintenance program—as evidenced, for example, by BTL’s insufficient staffing

levels. (See id., PAGEID 51 at ¶ 25).

BTL finally argues that AWA’s fraud counterclaim is based on mere opinions and

puffery that cannot support justifiable reliance. “A statement of opinion or belief such as occurs

in ‘puffing’ generally cannot constitute a misrepresentation.” Miami Valley Paper, LLC v.

Lebbing Eng’g & Consulting Gmbh, No. 1:05-cv-00702, 2009 WL 818618, at *12 (S.D. Ohio

Mar. 26, 2009) (quoting Kondrat v. Morris, 692 N.E.2d 246, 252 (Ohio Ct. App. 1997)). BTL

highlights various statements in the counterclaim concerning the alleged substance of BTL’s

maintenance program, e.g., “the most competitive prices[,]” a “network of maintenance and

repair coverage” that “continues to grow[,]” and “proactive communication” about needed

maintenance, and argues that these are vague advertising claims upon which AWA could not

have justifiably relied. (Doc. 9, PAGEID 47-48). The Court finds, however, that BTL glosses

over the much more detailed services that it purported to specifically cover and which were

targeted directly at AWA. (See id., PAGEID 46-47 at ¶ 13) (describing, e.g., “All Preventative

Maintenance . . . All repairs . . . Tire replacements & alignments . . . 24 Hour Emergency Road

Service. . . .”); (see also Doc. 9-2) (BTL’s maintenance program guide designed specifically for

AWA). Cf. Bryant v. Walt Sweeney Auto., Inc., Nos. C-010395, C-010404, 2002 WL 1071943,

at *5 (Ohio Ct. App. May 13, 2002) (a misrepresentation in an advertisement for a particular

vehicle that the vehicle had had only one prior owner was sufficient to state a claim for fraud).

To the extent that BTL argues that AWA’s reliance was otherwise not justifiable, the Court finds

that this question is one of fact and therefore weighs in AWA’s favor for purposes of the present

motion. See Amerifirst Sav. Bank of Xenia v. Krug, 737 N.E.2d 68, 87 (Ohio Ct. App. 1999)

(quoting Crown Prop. Dev., Inc. v. Omega Oil Co., 681 N.E.2d 1343, 1349 (Ohio Ct. App.

1996)) (“The question of justifiable reliance is one of fact and requires an inquiry into the

relationship between the parties.”). (See also Doc. 9, PAGEID 45 at ¶ 6, PAGEID 51 at ¶ 27)

(AWA’s counterclaim allegations regarding its justifiable reliance on the maintenance-related

representations).

The Court concludes that AWA’s fraudulent inducement counterclaim, though based on

evidence extrinsic to the Program Agreement, falls within an exception to the parol evidence

rule. The Court further concludes that AWA’s fraudulent inducement counterclaim meets the

heightened pleading standard applicable to fraud claims. BTL’s motion to dismiss should be

denied as to Count I of AWA’s counterclaims.

C. Unjust enrichment

AWA alleges in this counterclaim that BTL’s failure to follow through on its

maintenance-related promises caused the Independent Contractors to spend thousands of hours

off the road. During that time, the Independent Contractors still owed BTL money pursuant to

independent leases and Delivery Vehicle maintenance contracts. In order to keep generating

revenue, AWA was forced to “advance [its Independent Contractors] funds to pay for their leases

and for repairs” that “in turn, were paid to [BTL].” (Doc. 9, PAGEID 53 at ¶¶ 38-39). AWA

alleges that retention by BTL of these advanced funds constitutes unjust enrichment.

First, BTL argues that AWA’s unjust enrichment claim must fail because the Program

Agreement covers BTL’s maintenance program, AWA’s unjust enrichment claim is premised on

BTL’s failure to provide such a program, and AWA is precluded using equitable means to

recover contractual damages. Second, BTL argues that AWA did not allege that it conferred any

direct benefit on BTL or that BTL had knowledge of that benefit—both necessary elements of an

unjust enrichment claim under Ohio law. Any benefit that AWA conferred, BTL argues, was

indirect and in the form of a funding advance to AWA’s Independent Contractors that was

thereafter paid to BTL by the Independent Contractors for leases and repairs.

AWA argues in response that it is permitted to plead unjust enrichment in the alternative

to its breach of contract claim because it has alleged fraud. AWA also argues that it “made the

subject payments directly to [BTL].” (Doc. 19 at PAGEID 174) (citing the Program Agreement

(Doc. 9-5, PAGEID 97-98 at ¶ 3), which in turn describes the process by which AWA agreed to

withhold funds owed to BTL by Independent Contractors under the independent maintenance,

financing, or other agreements between the latter two).9

To state an unjust enrichment claim under Ohio law, a complaint must allege: “(1) a

benefit conferred by a plaintiff upon a defendant; (2) knowledge by the defendant of the benefit;

and (3) retention of the benefit by the defendant under circumstances where it would be unjust to

do so without payment.” In re Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig., 684

F. Supp. 2d 942, 951 (N.D. Ohio 2009) (quoting Hambleton v. R.G. Barry Corp., 465 N.E.2d

1298, 1302 (Ohio 1984)). An unjust enrichment claim cannot encompass a matter that is the

9 BTL also argues that AWA cannot plead unjust enrichment in the alternative without a valid fraud claim, but this

argument is mooted by the Court’s conclusion above. See supra p. 18.

subject of an express contract between two parties. See Great Water Cap. Partners, L.L.C. v.

Down-Lite Int’l, Inc., Nos. C-150015, C-150023, 2015 WL 7459284, at *4 (Ohio Ct. App. Nov.

18, 2015) (citation omitted). In addition, the purpose of an unjust enrichment claim is not to

compensate any loss or damage suffered by a plaintiff but instead only to compensate “the

benefit [a plaintiff] has conferred on the defendant.” Johnson v. Microsoft Corp., 834 N.E.2d

791, 799 (Ohio 2005) (quoting Hughes v. Oberholtzer, 123 N.E.2d 393, 397 (Ohio 1954)). To

assert a common law unjust enrichment claim, a claimant must “establish[] that a benefit ha[s]

been conferred upon that defendant by [that claimant].” Id.

Because the Court has concluded that the Program Agreement does not encompass BTL’s

maintenance program, the Court is not persuaded by BTL’s first argument. Moreover, even if

the Court were to conclude that AWA’s unjust enrichment claim fell within the subject matter of

the Program Agreement, it has already determined that AWA has sufficiently pleaded a

fraudulent inducement claim, and an unjust enrichment claim “may be maintained despite the

existence of an express contract where there is evidence of fraud, bad faith, or illegality.”

Gascho v. Glob. Fitness Holdings, LLC, 863 F. Supp. 2d 677, 699 (S.D. Ohio 2012) (citing Res.

Title Agency, Inc. v. Morreale Real Est. Servs., Inc., 314 F. Supp. 2d 763, 772 (N.D. Ohio

2004)); see also Ice v. Hobby Lobby Stores, Inc., No. 1:14-cv-744, 2016 WL 10489843, at *2

(N.D. Ohio Aug. 30, 2016) (affirming denial of judgment on the pleadings regarding the

plaintiff’s unjust enrichment claim where the plaintiff had also alleged that a contract was

procured through in illusory and deceptive discount offer).

AWA alleges that it “advance[d] [its Independent Contractors] funds to pay for their

leases and for repairs” that, in turn, “were paid to [BTL].” (Doc. 9, PAGEID 53 at ¶¶ 38-39).

AWA alleges that these advances were necessary because BTL’s “fail[ure] to provide the

promised maintenance program” left AWA’s Independent Contractors “off the road” for

“thousands of hours” and “unable to generate revenue. . . .” (Id. at ¶¶ 37-38). In its response,

AWA gives more context to these allegations, referring to the portion of the Program Agreement

that sets forth AWA’s promises to (1) withhold its Independent Contractors’ wages in an amount

necessary to cover the Independent Contractors’ obligations under “financing, maintenance

program or other agreements” with BTL and (2) “remit such payments directly to BTL. . . .”

(Doc. 9-5, PAGEID 97 at ¶ 3) (emphasis added). With this context, the Court understands AWA

to allege that it directly advanced to BTL to satisfy the amounts that the Independent Contractors

owed BTL under their separate maintenance agreements.

BTL cites two cases in support of its position that the benefit allegedly conferred here is

too indirect to support a claim for unjust enrichment: Microsoft, 834 N.E.2d 791, and Liberty

Mut. Ins. Co. v. Three-C Body Shop, Inc., No. 19AP-775, 2020 WL 2042916 (Ohio Ct. App.

April 28, 2020), appeal not allowed, 150 N.E.3d 960 (Ohio 2020). In Microsoft, the Supreme

Court of Ohio held that the purchaser of a computer from a third-party retailer, which contained

software distributed to that retailer by Microsoft, could not bring an unjust enrichment claim

against Microsoft. 834 N.E.2d at 793, 799. The court emphasized that “no economic transaction

occurred between [the plaintiff purchaser] and Microsoft,” which foreclosed the finding of a

benefit conferred by the plaintiff to Microsoft to which Microsoft was not justly entitled. Id. at

799 (citing Keco Indus., Inc. v. Cincinnati & Suburban Bell Tel. Co., 141 N.E.2d 465, 467 (Ohio

1957)).

In Liberty Mut., a collision repair shop filed a counterclaim against a car insurance

company for unjust enrichment based on prior underpayments by the car insurance company for

repairs made for the car insurance company’s insureds. Liberty Mut., 2020 WL 2042916, at *1.

Under its contracts with insureds, the car insurance company was required to pay for reasonable

and necessary repairs. Id. at *3. The collision repair shop argued that when it made repairs, the

car insurance company received the benefit of having its “contractual legal duty . . . to its

insured” satisfied. Id. The court concluded, however, that any benefit the collision shop

conferred on the car insurance company was “merely an incidental consequence of [the collision

repair shop’s] agreements with its customers to repair their vehicles. [The collision repair shop]

did not repair the vehicles to satisfy [the car insurance company’s] contracts but to satisfy its

own contracts with the vehicle owners.” Id. at *4.

This case presents a different factual scenario from both Microsoft and Liberty Mut.

Given the payments AWA made to BTL for maintenance on behalf of its Independent

Contractors, the connection between AWA and BTL is much less attenuated than that between

the computer purchaser and software distributor in Microsoft. Unlike Liberty Mut., where the

collision repair shop acted based on its independent duties to third-party vehicle owners, see

Liberty Mut., 2020 WL 2042916, at *4, BTL does not point to a separate agreement between

AWA and its Independent Contractors upon which AWA based its payments to BTL.

Construing the allegations of the counterclaim in AWA’s favor (including the attached Program

Agreement), neither case compels a finding that the alleged benefit conferred here was too

indirect.

In two other cases discussing the concept of direct versus indirect benefit in the context

of the first element of an unjust enrichment claim under Ohio law, federal district courts within

the Sixth Circuit have found that a narrowly defined direct benefit is not a prerequisite to

application of the doctrine. In Gorsuch v. OneWest Bank, FSB, No. 3:14-cv-152, 2015 WL

2384110 (N.D. Ohio May 19, 2015), the court found that the plaintiff borrower adequately

alleged unjust enrichment where she was required to assume additional debt on her loan for flood

insurance, even though it was her mortgage servicer that actually advanced the cost of the flood

insurance on her behalf. Id. at *8. The court concluded that the plaintiff had adequately alleged

unjust enrichment where she was the “ultimate source” of the premiums and “bore the costs of

benefits retained” by the defendant. Id. Construing the counterclaim allegations in AWA’s

favor, AWA may have ultimately borne the cost associated with advancing funds to its

Independent Contractors. It is that ultimate cost burden on which the case turned in Gorsuch.

In Randleman v. Fid. Nat. Title Ins. Co., 465 F. Supp. 2d 812 (N.D. Ohio 2006), the

homeowner plaintiffs sued the defendant title insurance provider for charging premiums in

excess of those allowed under Ohio law. Id. at 816. The plaintiffs were not insured by the

defendant; instead, the plaintiffs’ lender had obtained the title insurance from the defendant. Id.

Nevertheless, the court concluded that the plaintiffs had adequately alleged unjust enrichment

because they alleged that they “paid premiums for the purchase of title insurance from defendant

in connection with a refinance transaction[,]” which showed a “transactional nexus between

plaintiffs and defendant” that distinguished the facts at bar from Microsoft, among other cases.

Id. at 825 (quoting the plaintiffs’ complaint).

Neither Microsoft nor Liberty Mut. are sufficiently factually similar to the facts at bar to

convince the Court that the alleged benefit conferred to BTL by AWA was too indirect to satisfy

the first element of an unjust enrichment claim as a matter of law. Moreover, both Gorsuch and

Randleman suggest that unjust enrichment claims may survive a motion to dismiss provided that

there are allegations of out-of-pocket losses and some transactional relationship between a

plaintiff and defendant. On the whole, the Court finds that AWA has sufficiently alleged that it

conferred a benefit on BTL for purposes of the first unjust enrichment claim element under Ohio

law.

BTL also argues that AWA’s counterclaim makes no allegation whatsoever regarding

BTL’s knowledge of a benefit conferred by AWA. AWA argues in response that BTL’s receipt

of the funds advanced is sufficient to demonstrate knowledge, and BTL was put on notice of the

benefit received via its unjust enrichment counterclaim. Neither party cites authority for its

position.

The knowledge element of an unjust enrichment claim does not appear to be frequently

litigated. In Parmater v. Internet Brands, Inc., No. 14AP-391, 2015 WL 329635 (Ohio Ct. App.

Jan. 27, 2017), the court provided some discussion of this element. Therein, the plaintiff had

been a minority shareholder in a company that owned and operated a website. Id. at *1. The

plaintiff was removed from that company’s board and executive position in 2002, and the

secretary of state later canceled the company. Id. The company’s majority shareholder

subsequently formed a new company that continued to operate the website without the plaintiff’s

involvement. Id. That new company ultimately sold the website to the defendant in 2008, and

the plaintiff sued the defendant for unjust enrichment. Id. The court granted summary judgment

to the defendant on the plaintiff’s unjust enrichment claim because there was no indication that

the defendant had any reason to know about the plaintiff’s involvement with the website over six

years ago or that the plaintiff conferred any benefit upon him. Id. at *6.

The court in Roberts v. McCoy, 88 N.E.3d 422 (Ohio Ct. App. 2017), also gives some

guidance on the question of knowledge. Therein, the court granted summary judgment to the

defendant seller on the plaintiff homebuyer’s unjust enrichment claim based on the inflated

purchase price of the property at issue. Id. at 430. The plaintiff argued that several issues should

have been, but were not, disclosed prior to sale. Id. The court concluded that the buyer “failed

to demonstrate that [the seller] had knowledge of any inaccuracies within the Disclosure Form”

and therefore “failed to demonstrate that [the seller] had knowledge of any benefit conferred

upon her that would require compensation for [the buyer] in equity.” Id. at 431.

The Court finds each of these cases distinguishable and concludes that AWA has

sufficiently pleaded BTL’s knowledge of a benefit conferred on it by AWA. By virtue of

paragraph 3 of the Program Agreement, BTL knew that AWA would serve as a conduit for

independent maintenance program payments owed by the Independent Contractors to BTL.

Construing the allegations of the counterclaim in AWA’s favor, BTL’s receipt of such payments

in accordance with the terms of the Program Agreement is sufficient to plausibly state the

knowledge element of AWA’s unjust enrichment claim. As such, the Court finds that AWA has

sufficiently pleaded the second element of its unjust enrichment claim and concludes that BTL’s

motion to dismiss Count III of AWA’s counterclaims should be denied at this stage of the

proceedings.

D. Ohio’s Deceptive Trade Practices Act

BTL argues that AWA, an Illinois company, does not have standing to bring a claim

under the Ohio Deceptive Trade Practices Act (ODTPA), Ohio Rev. Code § 4165.01 et seq.,

relying primarily on Loreto v. Procter & Gamble Co., 737 F. Supp. 2d 909 (S.D. Ohio 2010),

aff’d in part and rev’d in part on other grounds, 515 F. App’x 576 (6th Cir. 2013). BTL also

argues that, even if AWA had standing, it fails to plausibly allege that BTL made false

statements that actually or had the tendency to deceive for purposes of the statute and, instead,

alleges non-actionable puffery.

AWA argues in response that Loreto is not only not dispositive on non-Ohio-resident

standing under the ODTPA but that another federal court within the Sixth Circuit has allowed

non-Ohio-resident plaintiffs to sue under the ODTPA. AWA refutes BTL’s substantive

argument by reference to its arguments made in connection with its fraud claim.

1. Standing

The ODTPA states that “[a] person who is injured by a person who commits a deceptive

trade practice . . . may commence a civil action to recover actual damages from the person who

commits the deceptive trade practice.” Ohio Rev. Code § 4165.03(A)(2). The ODTPA defines

“person” as including limited liability companies, such as AWA. Id. at § 4165.01(D). The

statute does not address residency.

BTL unduly stretches the holding of Loreto as precluding non-resident standing. In

Loreto, the court concluded that the out-of-state plaintiffs could not bring claims under the

ODTPA because the only connection to Ohio was the fact that the defendant was headquartered

in Ohio. 737 F. Supp. 2d 909, 916-17. By contrast, while not explicitly addressing whether a

party’s out-of-state residence precluded standing, the court in Schumacher v. State Auto. Mut.

Ins. Co., 47 F. Supp. 3d 618, 621, 634 (S.D. Ohio 2014) allowed Kentucky residents to pursue

ODTPA claims. See also Rui He v. Rom, No. 15-cv-1869, 2016 WL 5682012, at *1, 4 (N.D.

Ohio Oct. 3, 2016) (allowing Chinese citizens to sue under the ODTPA). BTL identifies no

other case law or statutory provision limiting standing under the ODTPA to Ohio residents.

Moreover, AWA’s connection with Ohio is distinguishable from the plaintiffs in Loreto: AWA

conducts business in Ohio, BTL is an Ohio Corporation, and the parties agreed that Ohio law

would govern the Program Agreement. Loreto distinguishable and does not establish a per se

rule limiting standing under the ODTPA to Ohio residents. Therefore, the Court finds that AWA

has standing to bring an ODTPA claim and turns to BTL’s substantive argument.

2. Actually deceive or tendency to deceive

The parties do not appear to dispute the following formulation of the elements of an

ODTPA claim:

(1) a false statement or statement which is misleading; (2) which statement

actually deceived or has the tendency to deceive a substantial segment of the

target audience; (3) the deception is material in that it is likely to influence a

purchasing decision; and [(4)]the plaintiff has been or is likely to be injured as a

result.

Craven v. Aultman Coll. of Nursing & Health Scis., No. 2011-ca-00022, 2011 WL 4499307, at

*5 (Ohio Ct. App. Sept. 26, 2011). In addition, “[w]here claims are made under the Ohio

common law and [the ODTPA], Ohio courts are to apply essentially the same analysis as that

applied in assessing the law of unfair competition under the federal statutes.”10 Aero Fulfillment

Servs. Corp., 186 F. Supp. 3d at 778 (quoting Best v. AT & T Mobility, LLC, No. 1:12-cv-564,

2015 WL 1125539, at *7 (S.D. Ohio Mar. 12, 2015)) (footnote omitted discussing the

applicability of the analysis under the Lanham Act to ODTPA claims).

BTL argues that AWA fails to sufficiently plead element two because BTL’s

maintenance representations were “at most puffery” that cannot deceive or tend to deceive.

(Doc. 16 at PAGEID 152). “Mere puffing, advertising that is not deceptive for no one would

10 The Sixth Circuit has set out nearly identical elements for a claim under the Lanham Act to those identified in

Craven:

1) the defendant has made false or misleading statements of fact concerning his own product or

another’s; 2) the statement actually or tends to deceive a substantial portion of the intended

audience; 3) the statement is material in that it will likely influence the deceived consumer’s

purchasing decisions; 4) the advertisements were introduced into interstate commerce; and 5) there

is some causal link between the challenged statements and harm to the plaintiff.

Am. Council of Certified Podiatric Physicians & Surgeons v. Am. Bd. of Podiatric Surgery, Inc., 185 F.3d

606, 613 (6th Cir. 1999) (citation omitted).

rely on its exaggerated claims, is not actionable. . . .” Cincinnati Sub-Zero Prods., Inc. v.

Augustine Med., Inc., 800 F. Supp. 1549, 1551 (S.D. Ohio 1992) (quoting U.S. Healthcare, Inc.

v. Blue Cross of Greater Phila., 898 F.2d 914, 922 (3d Cir. 1990)) (construing the Lanham Act),

abrogated on other grounds by Balance Dynamics Corp. v. Schmitt Indus., Inc., 204 F.3d 683,

697-98 (6th Cir. 2000). In Cincinnati Sub-Zero Prods., the court held that the plaintiff had

shown a likelihood of success on the merits of its ODTPA claims because the defendant’s

advertisements used thermographic images that “misrepresent[ed] or mislead[]” the intended

purchaser and did not “accurately portray” the product’s effectiveness. Id. at 1558. But see, e.g.,

Interactive Prods. Corp. v. a2z Mobile Off. Sols., Inc., 326 F.3d 687, 699-700 (6th Cir. 2003)

(calling a product “redesigned” or “improved” is an opinion that is not actionable); Collins Inkjet

Corp. v. Eastman Kodak Co., No. 1:13-cv-664, 2014 WL 11516553, at *13 (S.D Ohio Mar. 31,

2014) (press releases stating that defendant’s customers received the “highest levels” of

“optimized system performance” or “optimal printing performance” constituted imprecise and

subjective puffery or opinion) (citing Interactive Prods., 326 F.3d at 699-700); Outdoor Techs.,

Inc. v. Vinyl Visions, LLC, No. 1:06-cv-044, 2006 WL 2849782, at *4 (S.D. Ohio Sept. 29, 2006)

(brochure statements that a product was the “most weatherable” with the “strongest warranty”

were mere subjective puffery).

When construed in AWA’s favor, the counterclaim sufficiently alleges statements by

BTL beyond mere puffery. AWA’s counterclaim alleges that the maintenance-related

representations deceived or had a tendency to deceive. For example, AWA alleges that BTL

represented that it had a full-service maintenance program (see Doc. 9, PAGEID 49 at ¶ 20),

which included all preventative maintenance, breakdown repairs, and 24/7 emergency road

service (see id., PAGEID 46 at ¶ 12). AWA alleges that these representations were false and

BTL knew they were false when they were made (see id., PAGEID 50 at § 21, PAGEID 51 at □

25). These alleged statements go beyond opinion, “blustering or subjective boasting” and

describe specific features about an offered program. Outdoor Techs., 2006 WL 2849782, at *4

(citation omitted). The Court finds that these statements are not mere puffery and Count IV of

AWA’s counterclaims should therefore not be dismissed at this stage of the proceeding.

IT IS THEREFORE RECOMMENDED THAT BTL’s motion to dismiss (Doc. 16) be

GRANTED as to Count II of AWA’s counterclaim (breach of contract) and DENIED as to

Counts I (fraud), III (unjust enrichment), and TV (ODTPA).

Date: 7/26/2021 Harn. K Rethind,

Karen L. Litkovitz

United States Magistrate Judge

31

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

BUSH TRUCK LEASING, INC., Case No. 1:20-cv-511

Plaintiff, Dlott, J.

Litkovitz, M.J.

vs.

ALL WAYS AUTO TRANSPORT, LLC, REPORT AND

Defendant. RECOMMENDATION

NOTICE

Pursuant to Fed. R. Civ. P. 72(b), WITHIN 14 DAYS after being served with a copy of

the recommended disposition, a party may serve and file specific written objections to the

proposed findings and recommendations. This period may be extended further by the Court on

timely motion for an extension. Such objections shall specify the portions of the Report objected

to and shall be accompanied by a memorandum of law in support of the objections. If the Report

and Recommendation is based in whole or in part upon matters occurring on the record at an oral

hearing, the objecting party shall promptly arrange for the transcription of the record, or such

portions of it as all parties may agree upon, or the Magistrate Judge deems sufficient, unless the

assigned District Judge otherwise directs. A party may respond to another party’s objections

WITHIN 14 DAYS after being served with a copy thereof. Failure to make objections in

accordance with this procedure may forfeit rights on appeal. See Thomas v. Arn, 474 U.S. 140

(1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).