DeCastro v. Wellston City School Dist. Bd. of Edn.

[This decision has been published in Ohio Official Reports at 94 Ohio St.3d 197.]

DECASTRO, APPELLEE, v. WELLSTON CITY SCHOOL DISTRICT BOARD OF

EDUCATION ET AL., APPELLANTS.

[Cite as DeCastro v. Wellston City School Dist. Bd. of Edn.,

2002-Ohio-478.]

Torts—If plaintiff proves breach of contract but fails to prove actual damages

resulting from breach, trial court may enter judgment for plaintiff and

award nominal damages.

(Nos. 00-1853 and 00-2187—Submitted October 3, 2001—Decided February 6,

2002.)

APPEAL from and CERTIFIED by the Court of Appeals for Jackson County,

No. 00CA06.

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SYLLABUS OF THE COURT

If a plaintiff proves breach of contract at trial but fails to prove actual damages

resulting from that breach, the trial court may enter judgment for the plaintiff

and award nominal damages.

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MOYER, C.J.

{¶ 1} Appellee Mark DeCastro filed this action asserting two causes of action

in tort and one cause of action for breach of contract. He named as defendants the

Wellston City School District Board of Education, the Superintendent of the Wellston

City Schools, and the Principal of Wellston High School during the 1997-1998

academic year. That year was DeCastro’s senior year at the high school.

{¶ 2} The board and the Wellston Teachers Association (“WTA”) were

involved in a labor dispute and work stoppage on March 17, 1998. On that afternoon,

a replacement teacher, while being escorted after school from the high school building

SUPREME COURT OF OHIO

to a van, was hit by a thrown egg. DeCastro, who denied having thrown the egg,

asserted that the teacher then looked directly at him, gestured to challenge him, and

verbally threatened him before getting into the van. DeCastro further asserted that the

replacement teacher continued gesturing from the van and that DeCastro responded

by pounding his hands on the side of the van and pointing his index finger at the

teacher from outside the van window.

{¶ 3} The board thereafter imposed a four-day in-school suspension upon him,

which he served in May 1998 and which coincided with his last four days of high

school. He asserted that the suspension caused him to miss out on “activities that are

unique to the final days of a high school senior.”

{¶ 4} In support of his claim of breach of contract, DeCastro asserted that in

settling the labor dispute, the board and the WTA entered into a written agreement

that included a nonreprisal clause that provided as follows: “There shall be no

reprisals of any kind against the Association, its officers, members, agents or against

any employees, parents, or students for any action or activity by or failure to act

occurring during the March, 1998 Wellston School strike or related in any way to said

strike by the Board of Education as individuals or in a collective body or by any

administrator, other person employed by the Board of Education or any agent of the

Board of Education.”

{¶ 5} DeCastro claimed that his actions on March 17, 1998, were “related *

* * to said strike” within the contemplation of the contractual agreement, that he was

a third-party beneficiary of the agreement, and that the defendants violated the

agreement in imposing disciplinary action against him.

{¶ 6} DeCastro prayed for relief in the form of “appropriate compensatory

damages,” reasonable attorney fees and costs, and such further relief as the court

deemed just and proper.

{¶ 7} Following discovery, the appellants moved for summary judgment,

asserting, inter alia, that DeCastro had failed to “allege any economic losses that can

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be compensable under a breach of contract action” and had, in fact, suffered no

economic loss.

{¶ 8} In response, DeCastro acknowledged that the facts before the court did

not support his tort claims, leaving only his contract claim as a third-party beneficiary.

He denied that he was required to allege economic loss to state a cause of action for

breach of contract, arguing that he had been “damaged by the discipline imposed upon

him which should not have been issued under the nonreprisal clause” and that a jury

could “adequately and fairly assess the value of such a failure to abide by the

agreement.”

{¶ 9} The trial court entered summary judgment in favor of the appellants

based upon DeCastro’s acknowledgement that his tort claims lacked merit and upon

its finding that DeCastro failed to establish any measurable item of damage that would

be compensable under a contract claim.

{¶ 10} The court of appeals, in a split decision, deemed itself bound to follow

the first paragraph of the syllabus of First Natl. Bank of Barnesville v. W. Union Tel.

Co. (1876), 30 Ohio St. 555, 1876 WL 210, which provides, “In case of a breach of

contract, actual damages not being proved, nominal damages may be recovered.” It

reversed and remanded the cause for further proceedings.

{¶ 11} The court of appeals certified a conflict to this court, finding that its

decision conflicted with those of the Sixth District in Munoz v. Flower Hosp. (1985),

30 Ohio App.3d 162, 30 OBR 303, 507 N.E.2d 360, and the Ninth District in Textron

Fin. Corp. v. Nationwide Mut. Ins. Co. (1996), 115 Ohio App.3d 137, 684 N.E.2d

1261, and Hackathorn v. Springfield Local School Dist. Bd. of Edn. (1994), 94 Ohio

App.3d 319, 640 N.E.2d 882.

{¶ 12} The case is now before this court upon our determination that a conflict

exists (case No. 00-2187) and upon the allowance of a discretionary appeal (case No.

00-1853).

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{¶ 13} The question certified by the court of appeals asks “whether nominal

damages can be recovered where actual monetary damages cannot be proven in a

breach of contract claim.” It is established, both by our controlling precedent in First

Natl. Bank of Barnesville and multiple legal treatises, that the answer to this question,

strictly speaking, is in the affirmative. See 11 Williston on Contracts (3 Ed.1968),

Section 1339A (“An unexcused failure to perform a contract is a legal wrong. Action

will lie for the breach although it causes no injury. Nominal damages are then

awarded.”); see, also, 3 Restatement of the Law 2d, Contracts (1981), Section 346

(“[1] The injured party has a right to damages for any breach by a party against whom

the contract is enforceable unless the claim for damages has been suspended or

discharged. [2] If the breach caused no loss or if the amount of the loss is not proved

under the rules stated in this Chapter, a small sum fixed without regard to the amount

of loss will be awarded as nominal damages.”).

{¶ 14} We affirm the first paragraph of the syllabus of First Natl. Bank of

Barnesville only to the extent that we hold that in a case where a plaintiff proves

breach of contract at trial but fails to prove actual damages resulting from that breach,

the trial court may enter judgment for the plaintiff and award nominal damages.

{¶ 15} However, an affirmative answer to the question certified to us is not

dispositive of the case at bar, as we are left with the question whether nominal

damages must always be awarded upon the breach of a contractual duty. Specifically,

we are called upon to resolve a case in which the plaintiff not only failed to provide

evidence of actual damages in response to a motion for summary judgment but could

not even theorize the existence of economic damages.

{¶ 16} Although the law cited above establishes that nominal damages are

recoverable upon proof of a breach of contract, courts have expressed “puzzlement”

with the rule, Scallon v. U.S. Ag. Ctr., Inc. (N.D.Iowa 1999), 42 F.Supp.2d 867, 871,

citing Chronister Oil Co. v. Unocal Refining & Marketing (C.A.7, 1994), 34 F.3d 462.

The court in Chronister reversed a case and remanded it for entry of nominal damages,

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acknowledging, however, that “for reasons we do not understand every victim of a

breach of contract, unlike a tort victim, is entitled” to nominal damages. Id. at 466.

{¶ 17} Not surprisingly, courts have grafted limitations onto the doctrine.

Perhaps the most common limitation is refusal to apply the doctrine to cases on appeal

where the practical result would be to reverse a case for the sole purpose of allowing

a judgment for nominal damages. Thus, paragraph four of the syllabus to Smith v.

Weed Sewing Machine Co. (1875), 26 Ohio St. 562, 1875 WL 113, provides, “On the

breach of a contract, where no actual damages are proved, the failure of the court to

allow nominal damages constitutes no ground for reversal, on error, if such failure

does not affect the question of costs.” Moreover, although acknowledging the general

rule allowing nominal damages, Williston on Contracts also states that “a judgment

for the defendant will not be reversed merely to give the plaintiff nominal damages

unless some substantial right of the latter will thereby be protected,” 11 Williston (3

Ed.1968) at 206, and that “ ‘[a]pplying the maxim “de minimis non curat lex” [the law

cares not for small things], an appellate court should not reverse because of failure to

award nominal damages, where no question of costs or other substantial right of the

appellant is involved,’ ” id. at 208, quoting Ferreira v. Honolulu Star-Bulletin, Ltd.

(1960), 44 Haw. 567, 578, 356 P.2d 651, 657. See, also, 3 Restatement 2d Contracts,

Section 346, Comment b (“Unless a significant right is involved, a court will not

reverse and remand a case for a new trial if only nominal damages could result.”);

Hummel v. Mid Dakota Clinic, P.C. (N.D.1995), 526 N.W.2d 704, 709 (summary

judgment for defendant for breach of employment agreement affirmed where the

undisputed evidence showed that the employee suffered no damages even if breach of

employment agreement occurred); Sessa v. Gigliotti (1973), 165 Conn. 620, 622, 345

A.2d 45, 46 (“Ordinarily, we will not grant a new trial in order to entitle a plaintiff to

recover merely nominal damages.”); Roemer v. Green Pastures Farms, Inc. (1976),

97 Idaho 591, 593, 548 P.2d 857, 859 (“Assuming without deciding that the plaintiffs

were entitled to nominal damages, we will not reverse ‘for mere failure to allow

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nominal damages where, as here, the issue is one of damages alone.’ ” quoting Weaver

v. Pacific Fin. Loans [1971], 94 Idaho 345, 347, 487 P.2d 939, 941.).

{¶ 18} We agree with these authorities and hold that unless a significant right

is involved, including inequitable assessment of costs, an appellate court should not

reverse and remand a case for a new trial if only nominal damages could result.

{¶ 19} This holding, however, does not determine the propriety of summary

judgment in the first instance where the plaintiff is unable even to theorize the

existence of economic damages. This issue was cogently summarized by the

magistrate judge in Atlantic Research Marketing Sys., Inc. v. Saco Defense, Inc.

(D.C.Mass.1998), 997 F.Supp. 159, 166: “[M]ay summary judgment ever be granted

to a defendant in a breach of contract case where the only basis for doing so is the

plaintiff’s inability to prove damages? On the one hand, it can certainly be argued

that disputes about liability, even if ‘genuine,’ can never be ‘material’ within the

meaning of Fed.R.Civ.P. 56(c) if plaintiff cannot prove damages and, as here, is not

seeking or entitled to equitable relief. In fact, the First Circuit has implicitly held that,

in an action for breach of contract, a plaintiff must put forth ‘competent evidence’ of

damages in order to survive summary judgment. * * * On the other hand, however,

Massachusetts law, which governs the [contract at issue] appears to provide that a

plaintiff is at least entitled to nominal damages for a defendant’s breach of contract.

* * * If so, then the very real prospect exists that a court, counsel, and jurors could

be tied up for days or even weeks or more in a trial of a case where, from the outset,

no possibility exists that plaintiff will obtain any substantial relief.” (Emphasis added

and citations omitted.)

{¶ 20} In such a situation, the defendant would be required to spend time and

money in litigation having no purpose other than to judicially establish that he or she

had committed a breach of contract with no economic consequences. It is difficult to

differentiate that circumstance from a penalty based on a breach of contract. We have,

however, recognized that because “the sole purpose of contract damages is to

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compensate the nonbreaching party for losses suffered as a result of a breach,

‘[p]unitive damages are not recoverable for a breach of contract unless the conduct

constituting the breach is also a tort for which punitive damages are recoverable.’

3 Restatement of the Law 2d, Contracts (1981) 154, Section 355. ‘Punishment of

a promisor for having broken his promise has no justification on either economic

or other grounds and a term providing such a penalty is unenforceable on grounds

of public policy. Id. at 157, Section 356, Comment a.’ ” Lake Ridge Academy v.

Carney (1993), 66 Ohio St.3d 376, 381, 613 N.E.2d 183, 187.

{¶ 21} In accordance with these established legal concepts, we hold that

summary judgment may be granted to the defendant in a breach-of-contract case

where the plaintiff has failed to provide evidence of economic damages resulting from

a breach of contract and has failed to seek injunctive relief or specific performance of

a contractual duty, but instead rests his or her right to proceed to trial solely on a claim

for nominal damages. That is the status of the case at bar.

{¶ 22} In his deposition, DeCastro affirmatively acknowledged that he had

suffered no out-of-pocket expenses or otherwise lost any money in any way as the

result of his in-school suspension. He identified his sole damages resulting from his

suspension as loss of the opportunity to participate in traditional activities associated

with the end of a high school career, including participating in in-class reminiscing

and informal senior assemblies. He testified that he was left with a feeling of “overall

sadness as though I missed out on something that I will never be able to do again,” as

well as anger, but that he did not become ill or seek counseling of any kind.

{¶ 23} This is not a case where nominal damages are warranted because a

plaintiff pleaded economic damages resulting from a breach of contract but failed to

prove them at trial. Rather, this is a case where the plaintiff acknowledged at the

outset that no economic damage occurred. DeCastro’s prayer for relief did not demand

injunctive relief or specific performance but specifically requested an award of

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compensatory damages. We find no error in the entry of summary judgment in favor

of the defendants under these facts.

{¶ 24} We acknowledge that the wrongful imposition of a school suspension

is not a trivial matter and that the alleged nonreprisal clause may well have been of

great significance to those for whose benefit it was included in settling the labor

dispute between the Wellston school district and the WTA. However, even assuming

that DeCastro had established a genuine issue of fact as to whether he should be

deemed a third-party beneficiary of that alleged settlement agreement and that the

disciplinary actions taken against him were a form of prohibited reprisal, DeCastro is

not invoking the protection of the nonreprisal clause at a time when the clause might

preclude the imposition of the suspension. He could have invoked the clause as a

defense in the hearings before the school principal and the school board. He could

have sought a temporary restraining order or specific performance of the nonreprisal

clause. He is not seeking in this action an order that the records of his suspension be

purged. Cf. California Teachers Assn. v. Nielsen (1978), 87 Cal.App.3d 25, 149

Cal.Rptr. 728.

{¶ 25} The harm DeCastro alleges to have resulted from a breach of

contractual duty simply does not have an economic value sufficient to support an

award of compensatory damages in a breach-of-contract case. Accordingly, in view

of the specific facts before us, we find no error by the trial court in entering summary

judgment against DeCastro. The judgment of the court of appeals is reversed, and

summary judgment in favor of appellants is reinstated.

Judgment reversed.

F.E. SWEENEY, J., concurs.

RESNICK, PFEIFER and LUNDBERG STRATTON, JJ., concur in syllabus and

judgment.

DOUGLAS and COOK, JJ., dissent.

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DOUGLAS, J., dissenting.

{¶ 26} I dissent from the judgment of the majority. Barnesville is good law

and I would retain it as is.

COOK, J., concurs in the foregoing dissenting opinion.

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Cloppert, Portman, Sauter, Latanick & Foley, William J. Steele and Rory P.

Callahan, for appellee.

Mollica, Gall, Sloan & Sillery Co., L.P.A., James D. Sillery and Larry D.

Wines, for appellants.

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