[Cite as Am. Trim, L.L.C. v. L&T Technologies, Inc., 2014-Ohio-1879.]




                      IN THE COURT OF APPEALS OF OHIO
                          THIRD APPELLATE DISTRICT
                              AUGLAIZE COUNTY




AMERICAN TRIM, LLC,

        PLAINTIFF-APPELLEE,                                        CASE NO. 2-13-25

        v.

L & T TECHNOLOGIES, INC., ET AL.,                                  OPINION

        DEFENDANTS-APPELLANTS.




                Appeal from Auglaize County Common Pleas Court
                          Trial Court No. 2011 CV 0185

      Judgment Affirmed in Part, Reversed in Part and Cause Remanded

                              Date of Decision: May 5, 2014




APPEARANCES:

        Richard E. Siferd for Appellant

        Lawrence A. Huffman for Appellee
Case No. 2-13-25


ROGERS, J.

        {¶1} Defendants-Appellants, L&T Technologies, Inc. (“L&T”) and Thomas

Belmont, appeal the judgment of the Court of Common Pleas of Auglaize County

awarding Plaintiff-Appellee, American Trim, LLC (“American Trim”), a

monetary award. On appeal, L&T and Belmont argue that the court committed the

following errors: (1) finding that American Trim expressly rejected goods by

notifying L&T as required by the Uniform Commercial Code (“UCC”); and (2)

finding that Belmont had engaged in fraud. For the reasons that follow, we affirm

in part and reverse in part the trial court’s judgment.

        {¶2} On July 11, 2011, American Trim filed a complaint (“Original

Complaint”) against L&T seeking damages stemming from the sale and delivery

of a defective Electro-Deionization Nickel Recovery Unit (“EDI Unit”), which it

alleged breached the parties’ contract. On November 28, 2011,1 L&T filed its

answer (“Original Answer”) in which it denied the allegations set forth in

American Trim’s complaint and asserted four specific defenses: (1) American

Trim failed to mitigate damages; (2) American Trim’s complaint failed to state a

claim upon which relief can be granted; (3) insufficient service of process; and (4)

lack of jurisdiction over L&T.            On November 30, 2011, L&T filed an amended

answer (“Amended Answer”) and asserted two additional defenses: (1) American

1
 We note that L&T filed its Original and Amended Answer outside the period set forth in the Ohio Rules
of Civil Procedure; however, both parties stipulated that L&T’s Answer was timely filed. See (Docket No.
16, p. 1).

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Trim failed to allow L&T to cure the alleged non-conforming tender; and (2)

American Trim did not make an effective rejection of the goods.

      {¶3} The discovery in this matter was quite contentious. American Trim

filed its first notice to take Belmont’s deposition on July 25, 2012. (Docket No.

22, p. 1). According to American Trim, this was a date that was suggested by

L&T and accepted by American Trim. However, Belmont asked, one week before

the scheduled deposition, to change the date. American Trim rescheduled the

deposition to August 21, 2012, but Belmont once again cancelled. American Trim

then filed its third notice to take Belmont’s Deposition on October 8, 2012. On

September 17, 2012, American Trim filed a Motion to Compel, and moved the

court to compel Belmont’s attendance at the October 8 deposition and to also

compel L&T to answer interrogatories that were served on L&T “on or about July

10, 2012[.]” (Docket No. 25, p. 1).

      {¶4} L&T filed its response to American Trim’s Motion to Compel and

asked the court to deny the motion requiring Belmont’s attendance at the October

8, 2012 deposition because he would be “out of the country on that date.” (Docket

No. 26, p. 1). Further, L&T claimed that it offered to take Belmont’s deposition

on September 9, 2012 by telephone or others means, which was refused by

American Trim. L&T explained that Belmont was reluctant to come to Lima,

Ohio for his deposition because he “does not fly since 9/11 as he was scheduled,


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but missed, a flight which subsequently flew into one of the [World Trade Center]

Towers.” (Id. at p. 1-2). L&T suggested that Belmont’s deposition be taken on

October 15, 2012 via video conference.

        {¶5} On September 21, 2012, the court issued its judgment entry and

ordered L&T to answer American Trim’s interrogatories by September 28, 2012

and also ordered that Belmont appear at the October 8, 2012 deposition in Lima,

Ohio.

        {¶6} On October 11, 2012, American Trim filed a Motion for Sanctions.

The motion alleged that Belmont did not appear at the October 8, 2012

deposition.2 On October 23, 2012, L&T filed its Response to Motion to Compel

and Objection to Order of Court asserting that Belmont is not a party to the matter

and thus may only be compelled to testify at a deposition by the use of a subpoena

pursuant to Civ.R. 30.

        {¶7} On October 25, 2012, American Trim filed a Motion to Withdraw

Motion for Sanctions and also filed a Motion to Amend its Complaint, which the

trial court granted on October 26, 2012. On November 1, 2012, American Trim

filed its first amended complaint (“Amended Complaint”) which added Belmont

as a defendant and also added a claim of fraud against Belmont. In its Amended

Complaint, American Trim alleged that it had “purchased the [ED45 Unit] on the

2
  The reason for Belmont’s absence from the deposition was not that he was out of the country, as L&T
conveyed to the trial court in its Response to Motion to Compel. Instead, Belmont was advised by his
cardiologist on October 4, 2012, that he should not travel to Ohio for his court ordered deposition.

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representation of Defendant Thomas V. Belmont, Sr. that his company was

proficient in producing the nickel recovery system which he designed and

installed.” (Docket No. 52, p. 3). American Trim also alleged that in the course

of discovery, it was made aware that Belmont had no experience building ED45

Units.

         {¶8} On November 21, 2012, L&T filed a motion for a more definite

statement claiming that American Trim did not plead with particularity its claim

for fraud, as required by the Ohio Rules of Civil Procedure. That same day, L&T

filed its amended answer to American Trim’s Amended Complaint (“Second

Amended Answer”) wherein it asserted one additional defense: L&T “only

warranted the system to perform removal of nickel in the concentrations found in

the sample. The warranty excluded impliedly and/or expressly removal of nickel

in other concentrations.” (Docket No. 55, p. 2). On November 26, 2012, the trial

court denied L&T’s motion for a more definite statement, stating that their motion

was moot as it had already filed its Second Amended Answer.

         {¶9} On February 6, 2012, L&T filed a motion to dismiss for failure to

state a claim.3 L&T argued that, because fraud must be pleaded with particularity,

American Trim “is required to plead ‘specific statements claimed to be false’ and

the time and place they were made.” (Docket No. 73, p. 4). On February 12,

3
  L&T filed a second motion to dismiss on May 17, 2013, alleging that American Trim did not properly
sign its interrogatories. Therefore, L&T argued that American Trim should be precluded from introducing
evidence of fraud. On May 28, 2013, the trial court denied L&T’s motion.

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2013, the trial court denied L&T’s motion to dismiss, finding that the Amended

Complaint was sufficient to allege fraud.

      {¶10} L&T served American Trim with interrogatories on February 19,

2013. These interrogatories asked what specific statements Belmont made, which

American Trim claimed to be false. However, at this point in time, Belmont’s

deposition still had not been taken. It was not until March 28, 2013, when

Belmont was finally deposed.

      {¶11} L&T filed its own Motion to Compel on April 26, 2013, claiming

that the interrogatories it served on American Trim had not yet been answered.

That same day, the trial court ordered American Trim to answer the interrogatories

within seven days. It appears from the record, that American Trim answered

L&T’s interrogatories on May 3, 2013. This matter was originally scheduled for

trial on May 7, 2013.

      {¶12} The interrogatories detailed five specific statements Belmont made,

which American Trim alleged were fraudulent. Two statements were made after

American Trim and L&T entered into a contract. The other three statements

American Trim alleged were fraudulent were made in L&T’s written proposal.

These three statements were:




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        [1] The most cost effective and efficient system that meets the water
        quality for R1 water recycle and nickel concentration for reclaim
        back to process, is electro dialysis through an LTED-404 System.

        [2] A complete operation and maintenance manuals [sic] will be
        provided on CD and the manual shall include but not be limited to,
        installing, detail schematics, Manufacturer’s literature, sequence of
        operations and of the complete LTED Tech Inc. system catered to
        the custom design of the system.

        [3] LT Technologies, Inc., a global firm is uniquely qualified in the
        marketplace as a design build firm, by offering a total dedicated
        engineering and manufacturing dynamic to each project we
        undertake. By employing this dedicated approach, LT technologies
        consistently meets or exceeds budget and timeline goals, which in
        turn, ensures our clients meet their responsibilities for compliance
        and /or production. The Core strategy of design build is what stands
        LT apart from firms that do either engineering, or experimental
        design analysis, as well as real time data gathering being turned into
        production improvements. The result is a robust, industrial grade
        system with the people and the firm to stand behind it. Superior
        quality is not our goal it is our standard.

(Docket No. 140, Exhibit A, p. 2).

        {¶13} On May 7, 2013, L&T moved for a continuance arguing that it was

unable to defend the fraud claim because American Trim’s answers to L&T’s

interrogatories raised completely new allegations of fraud that were not raised in

its Amended Complaint. The court granted L&T’s motion for a continuance based

upon the failure of American Trim to timely provide discovery.




4
  The number “40” was a typographical error and it should have read “an LTED-45” system. However,
there is no difference between an LTED-40 or an LTED-45 system because “it’s a made-up number. [L&T
has] never built one, so we just made that number up.” Belmont Dep., p. 61-62.

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       {¶14} On July 12, 2013, a bench trial was held in this matter.            The

following relevant evidence was adduced at trial.

       {¶15} Aaron Art, a plant engineer at American Trim, was the first witness

to testify. Art testified that American Trim makes burner bowls and decorative

chrome pieces for the appliance industry. Art explained how American Trim

makes these burner bowls and chrome pieces:

       We actually start with the raw coil and we’ll actually stamp and
       draw the parts out in our plant, move them down to another process
       which we nickel chrome plate them. Nickel is put on as a base
       coating on the steel to make it more shiny and then chrome is put on
       top of that. So as the parts are processed through the plater they go
       through multiple cleaners, then the nickel tanks and then a chrome
       tank. And between the nickel and chrome are multiple rinses. And
       after the nickel process, we have hems in the parts, we have residue
       on the parts, and after we go through the nickel process, we rinse
       those parts and that’s where all that nickel builds up, in those rinse
       tanks.

       ***

       That residue that’s rinsed off is very high latent in liquid nickel
       which is a little confusing, because we actually put nickel chips in
       the tank, but it changes the state into a liquid and it’s not a heated
       liquid, it’s just dissolved. So this nickel builds up in our rinses and
       to be cost competitive and compete with China, you know, for years
       we’ve recycled this nickel back into our process. Nickel varies
       anywhere from six to twenty-four dollars a pound, it’s a very high
       commodity item and moves and fluctuates.

Trial Tr., p. 17-18.

       {¶16} Art testified that recycling the nickel is very important to American

Trim since it keeps costs down and makes the company competitive. Not only


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does recycling the nickel allow American Trim to buy less nickel, it also lowers

the cost when it treats its wastewater.    In order to recycle its nickel, American

Trim has been using an eco-tech nickel recovery system (“Eco-Tech Unit”). The

Eco-Tech Unit was more than 20 years old and began to act inconsistently in its

removal of nickel.

       {¶17} Art explained how the Eco-Tech Unit worked:

       A: It is not really an evaporation. What it does is it uses acid to
       activate a resin and the resin, as the nickel solution goes through it,
       concentrates the nickel and you have almost water come out. In
       other words, there’s very, very, very little nickel in that water.

       Trial Court: So it coagulates?

       A: It coagulates actually in the resin. So then you use the acid to
       regenerate this resin and when you flush that resin out, that’s when
       you get your concentrated nickel back.

       Trial Court: You coagulate the nickel down with the resin then wash
       the resin with the acid and end up with just the, -

       A: It rejuvenates the resin ready for more nickel to be recovered.
       It’s kind of like a water softener on acid. I mean, it works in that
       concept.

Id. at p. 19-20. Art testified that Eco-Tech systems are popular and still in use.

       {¶18} Around January of 2010, American Trim decided that it needed to

replace the Echo-Tech Unit because it was not recovering as much nickel as it

wanted. Art testified that he spoke with Eric Todd, who worked for Electrix, a

company that builds, installs, and removes plating systems, to see if he had any

new or used Eco-Tech systems. Todd told Art that he knew of a fairly new, but

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used, Eco-Tech system owned by L&T. Todd referred Belmont to Art, and the

two began communicating about L&T’s used Eco-Tech system.

      {¶19} Art stated that Belmont “recommended that he could come in, look at

the whole process, look at our existing machinery, have the waste analyzed, the

wastewater, so he could know how much savings was there, and look at what he

could do to help us recycle that.” Id. at p. 23. American Trim and L&T entered

into an agreement wherein L&T was to complete an engineering study and

“supply preliminary Nickel Recovery System quotations and schematics of the

treatment alternatives along with anticipated area, and power consumption

required for a complete system.” (Docket No. 140, Exhibit 1, p. 2).

      {¶20} Belmont came to American Trim in late February of 2010. Belmont

met with Dan Motter, who is the plating manager who has 30 plus years of

experience at American Trim. After Belmont left American Trim, he emailed Art

stating that Belmont needed more samples of the wastewater, which Art sent to

him. Belmont told Art that getting samples were “critical to make sure that [L&T]

siz[ed] the unit right.” Trial Tr., p. 27. Art testified that Belmont could not

believe how high the nickel readings were in the wastewater and that he eventually

came “to the realization that that is really how much nickel needs recovered.” Id.

Belmont stated, in an email dated March 9, 2010, that “we are going to look at 2 or

3 technologies that would be applicable for this application. One that may work


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better than the resin based system is EDI or Electro Deionization ion

exchange/which [sic] is a membrane based system that has very good success on

watts nickel based baths as well as sulfamate.” (Docket No. 140, Exhibit 3, p. 1).

Belmont then asked Art to send a 5 gallon container of the wastewater so L&T

could run a “bench scale pilot test in order to size up the proper system design.”

(Id.).

         {¶21} Art testified in “verbal discussions” with Belmont, Belmont

“basically expressed that he was very familiar with the resin base as well as the

reverse osmosis. He’s done desalinization of water so there’s a lot of water

purification he’s been involved with.” Trial Tr., p. 31.

         {¶22} After Art sent Belmont the five gallon jug sample, Belmont indicated

that the pilot test was “very successful and that he was going to go ahead and

quote the electro-dialysis machine.” Id. at p. 33. However, American Trim was

never provided with the lab results before litigation was initiated. When the lab

results were provided in the course of discovery, it did not show the results of the

pilot test. See (Docket No. 140, Exhibit 7, p. 1).

         {¶23} In March of 2010, Belmont recommended to Art that American Trim

purchase the EDI Unit, instead of L&T’s used Eco-Tech Unit. Art was able to

explain how the EDI Unit differs from the Eco-Tech Unit:

         The EDI System uses membranes and has positively and negatively
         charged fields as you go through the membrane. So it’s literally like

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       electro-dialysis, if you would, for your kidney or something.
       They’re using fields of electrons on each side. So as it passes
       through the membranes, the nickel concentration should be going
       out one (1) membrane and the water out another one as it’s passing
       through. So the membrane is like a thirty by thirty (30 x 30) inch
       box of the total unit.

Id. at p. 38.

       {¶24} On May 28, 2010, American Trim decided to purchase the EDI Unit

and entered into a contract with L&T to build the EDI Unit for $104,500.

According to the contract, 40% of the payment was due upon placement of the

order; 40% was due seven days prior to delivery; and the final 10% was due upon

the completion of installation and start-up.

       {¶25} Art testified that Belmont told him that the EDI Unit would recover

1.87 to 2.47 pounds of nickel per hour and that assurance was outlined in the

written proposal. Trial Tr., p. 59; (Docket No. 140, Exhibit 2, p. 1-2). The written

proposal specified that American Trim would see a return on its investment. L&T

stated that American Trim, with its old Eco-Tech Unit, hauled off 6,000 pounds of

nickel last year, which they would save with the new EDI Unit, thus, saving the

company $78,000 a year. See (Docket No. 140, Exhibit 2, p. 2); Trial Tr., p. 56-

57.   Further, the contract stated that after the installation of the EDI Unit,

American Trim would save an additional $9,000 by purifying the wastewater. Id.

       {¶26} The EDI Unit was delivered to American Trim in November of 2010.

Per the contract, Bill Sardo, an employee of L&T, was supposed to visit American

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Trim to train its employees and help with the start-up of the EDI Unit. However,

Sardo was unable to come to American Trim until January of 2011.

      {¶27} Art testified that Sardo had trouble getting the EDI Unit to start.

Initially, Sardo was only scheduled to be at American Trim for two days.

However, on the first day, when Sardo tried to start the machine, the motor burnt

out and he had to wait a day and a half for L&T to ship another motor.       There

were other equipment problems that delayed starting the EDI Unit and delayed the

training of American Trim’s employees on how to operate the EDI Unit. As a

result, Sardo decided to stay one day longer than planned. Art was under the

impression that Sardo would schedule another visit to complete the training;

however, Sardo never returned to American Trim after his initial visit.

      {¶28} When Sardo began the startup, he recommended running the

machine around 20 volts and then gradually ramping it up, a week at a time, until

it would eventually run on 80 volts. Art also testified that Sardo brought an

operation manual with him, but the “operation manual wasn’t even related to the

[EDI Unit]. It was very generic, it was more of a [manual for] wastewater or an

R-O system.” Id. at p. 43. Sardo had to contact Dan Bailey, an engineer at Mech-

Chem who performed the application and engineering of the membrane cell in the

EDI Unit, for the operation manual for the cell.        Art testified that Bailey’s

operation manual was much more helpful and informative than L&T’s.


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      {¶29} Art testified that after the machine was up and running, American

Trim created a spreadsheet, checking different concentrations and recording how

much nickel it was recovering. These spreadsheets were sent to Belmont and

Bailey. Art would have conference calls to discuss the data with Belmont and

Bailey because the data revealed that the recovery of nickel was much lower than

everyone had anticipated. Instead of recovering 1.87 to 2.47 pounds of nickel per

hour, like Belmont had promised in his proposal, the EDI Unit was only

recovering 1/3 to 1/2 of a pound of nickel per hour. Art testified that American

Trim runs its plants 24 hours a day, five to six days a week, thus, these low levels

of recovery were very troubling for American Trim. Further, American Trim was

unable to recycle water, because there was too much nickel in the water. Bailey

confirmed that the most nickel the EDI Unit would recover was between 1/3 to 1/2

a pound of nickel per hour.

      {¶30} On January 28, 2011, Art sent Belmont an email stating:

      I NEED A PLAN! What can be done to get this unit to perform, to
      quote and [sic] savings justification we used?

      There is more and more discussion happening about sending it back!
      Our plant manager is tanking [sic] this up the ladder to our president
      today!

      What resolutions or offers can you make! Are we better sending it
      back?




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(Emphasis sic.) (Docket No. 140, Exhibit 8, p. 1). Belmont responded to Art’s

email that same day, stating that his solution would be to add “2 more 45 cell pair

stacks” to the EDI Unit. Id. Further, Belmont stated:

       Please remember that our proposal was based on the small amount of
       data at that time and things have changed. We have a warranty for
       parts and materials there was no implied performance warranties in
       our proposal the items called out in the proposal were general
       estimated parameters. We wish to work with you and your company
       in developing a more workable process but we also need for there to
       be an amicable solution with give and take being mutual.

Id. On February 9, 2011, Belmont stated that the two extra cells would cost

American Trim an additional $145,000 and would “allow [American Trim] to

recovery [sic] the majority of all your nickel dragout.” (Docket No. 140, Exhibit

5, p. 1); Trial Tr., p. 50.

       {¶31} Art stated that Belmont’s January 28th email was the first time he

heard Belmont state that the EDI Unit was not warranted to work. Art also

explained that if American Trim added two additional cells the entire EDI Unit

would have to be remounted and reskidded. Art testified that he had relied on

Belmont’s representations in the proposal that the EDI Unit would work and

recycle nickel close to the amounts that were quoted in their contract. Between

January and March 2011, there were numerous conference calls between

American Trim and L&T. Art testified that he asked Belmont for American

Trim’s money back during these phone calls. Art also stated:


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       Q: Did he ever give you any indication that he would ever give you
       any money back?

       A: No. We were, - there was quite a few of us, there was three (3)
       or four (4) of us involved in most of the conference calls and what
       was so frustrating was in the conference calls was is [sic] we were
       more worried about the machine not performing than they were. It
       was almost a headache because we wanted to have a conference call
       again about it and what was very frustrating was is [sic] we were
       literally bending over backwards trying to make this machine work
       and that’s not what we felt we were getting from them.

        ***

       Q: Is there any question in your mind that Mr. Belmont knew that
       you weren’t satisfied with the machine and you wanted to give it
       back to him and you wanted your money back?

       A: He definitely knew. I mean, we tried to get Bill Sardo back to
       make it work and he wouldn’t even offer sending him back.

       Q: He wouldn’t send him back?

       A: No.

       Q: But is there any doubt in your mind that you made it clear to Mr.
       Belmont that you wanted your money back and he could have his
       machine back?

       A: Yes.

       Q: You believe you made that clear to him?

       A: Yes.

Trial Tr., p. 81-82.

       {¶32} American Trim had to stop using the EDI Unit in early March 2011,

and was forced to use its old Eco-Tech Unit. Since Belmont would not refund any

portion of the purchase price of EDI Unit, American Trim decided to keep the EDI


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Unit as collateral until a resolution could be sorted out. At the time of trial, the

EDI Unit was sitting in storage in one of American Trim’s plants, and it has not

made any attempt to try to sell the parts. Art testified that American Trim would

have no problem sending the EDI Unit back to L&T in its entirety.

       {¶33} On cross-examination, Art admitted that Todd had recommended

Belmont. Art stated that the electro-dialysis is a newer technology, but has been

around for 20 plus years. Art also had the following relevant exchange:

       Q: Now, is it a fair statement that the quote was actually more or
       less a collaborative effort? I mean, you told [Belmont] what you
       needed in the quote, didn’t you?

       A: Basically Tom asked me what savings areas there would be and I
       did not give him the actual data, he helped figure that out.

       ***

       Q: Alright. And so you talked to him about what some of the things
       you needed in the quote to help justify it. Is that a fair statement?

       A: That is true.

       Q: And so, for example, the cost savings for nickel, things like that.
       These are things that you wanted in the quote?

       A: Correct.

Id. at p. 86-87.

       {¶34} Art stated he learned, for the first time, that L&T bought the

membrane cell from Mech-Chem when Sardo came to set up the EDI Unit. Art

also testified that American Trim was unsatisfied with the solutions that L&T



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proposed to fix the EDI Unit. Art stated that he did not find that L&T’s solutions

were credible. Art explained:

       A: Well, one of his proposals he has is he wanted us to have a dry
       R-1 tank, which I cannot have a dry tank there or else I literally get
       what they call “dry down” on the parts. It would be, --

       Q: And that effects [sic] the quality of the parts?

       A: --, permanent streaking and every part will be bad. The other
       proposal he wanted us to do was take the R-1 tank, feed it to a
       reverse osmosis system, super concentrate the nickel, then feed it to
       the EDI cell to be re-concentrated. So four (4) spaced skid plates,
       skid spot, plumbing, there was quite an elaborate thing needed there.

Id. at 101. Art testified, that in his opinion, Belmont was offering these solutions

because “he was grasping at straws.” Id. at p. 102.

       {¶35} Dan Motter was the next witness to testify for American Trim.

Motter is the plating manager and is responsible for the plating departments and

keeping all of American Trim’s machines running. Motter testified that he helped

Art pick out a new nickel-recovery unit for American Trim.               Motter also

confirmed that Belmont visited American Trim in February of 2010.

       {¶36} Motter testified that he gave Belmont samples of American Trim’s

wastewater after it came out of the plating line, but before it went through the Eco-

Tech Unit. When asked whether Belmont made any representations to Motter,

Motter replied:

       A: Basically it was just a, - to us, it was a different type of recovery
       system that he felt pretty confident that it would meet our needs.


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       Q: Well, I’m talking about in the first meeting, in February of 2010,
       what did he say about his company, about what experience they had
       with wastewater, recovery, etcetera.

       A: Different experiences with different precious metals. That was
       about it really.

Id. at p. 109.

       {¶37} When Sardo arrived in January of 2011 to help install the new EDI

Unit, Motter testified that Sardo stated that the EDI Unit was a “beta unit” and that

“he would not really use it on nickel recovery.” Id. at p. 110. Motter explained

what he meant by “beta unit”:

       A: A trial, first time using it for this type of thing.

       Q: Did he say, - did Bill Sardo say anything at that time, you
       mentioned a minute ago, “the first time we’ve done this with nickel
       recovery”.

       A: Umm hum.

       Q: Tell me and tell the Court, best you can exactly what you
       remember Bill Sardo saying in January of 2011.

       A: Just pretty much that he’d not ever used it as a nickel recovery
       system before.

Id. at p. 110-111.

       {¶38} Motter testified that American Trim had its new Eco-Tech Unit

installed in January or February of 2012 and that from May of 2011 to early 2012,

American Trim had to use its old Eco-Tech Unit. Motter stated that the new Eco-

Tech Unit recovers almost 100% of the nickel drag out. With the old Eco-Tech



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Unit, Motter estimated that American Trim was recovering 75%, whereas the EDI

Unit would only recover about 30%.

       {¶39} After Motter’s testimony, American Trim and L&T stipulated that

the trial court admit the deposition of Belmont into evidence.

       {¶40} At his deposition, Belmont testified that L&T was started in 1990.

Before then, Belmont was involved in a similar business named Wastewater

Systems Engineering. Belmont stated that the majority shareholder of L&T is his

wife, owning 60% of the stock in L&T. Belmont testified that he owns 40% of the

stock. Belmont’s son, Thomas M. Belmont, also works for L&T, but does not

own any shares.

       {¶41} Belmont testified that he is a chemical engineer. He stated that he

first came into contact with American Trim through a company called Electrix.

Belmont explained that a representative from Electrix had mentioned that

American Trim was having wastewater difficulties. Belmont was given American

Trim’s contact information and subsequently called American Trim.

       {¶42} After Belmont initiated contact with American Trim, they discussed

American Trim’s wastewater needs and came to the agreement that Belmont

would come to Wapakoneta, Ohio for an “engineering evaluation[.]” Belmont

Dep., p. 12.   Belmont visited American Trim in February of 2010. During his

visit, Belmont stated he met with Motter. Belmont described his visit:


                                        -20-
Case No. 2-13-25


       Q: Okay. And how long were you down there?

       A: Probably about an hour or so.

       Q: One hour?

       A: Yeah, an hour.

       Q: Okay. Tell me what all you did while you were there in Wapak
       in talking with Dan Motter. What did you see, look at, et cetera?

       A: Well, when we first came in, we sat in the conference room, we
       took out our brochures of what we do.

       Q: Um-hum.

       A: And then we looked at those items. After that they proceeded in,
       showed me their wastewater treatment area.

       Q: Um-hum.

       A: Showed me the old Eco-Tech system they needed to do
       something with, either replace or repair.

Id. at p. 20.

       {¶43} Belmont testified that he never gathered wastewater samples at

American Trim, but small samples were later mailed to L&T. When Belmont

returned to Massachusetts, he contact Bailey, and they discussed whether an EDI

Unit would be appropriate for American Trim. Concerning their conversation,

Belmont testified:

       A: I described to [Bailey] the operation at American Trim.

       Q: Okay.

       A: And that it’s a lot of nickel, they have a lot of nickel drag-out
       because of the types of parts they do.


                                      -21-
Case No. 2-13-25


       Q: Right.

       A: And so I asked him, what do you think about the EDI process
       that you people have?

       Q: Um-hum.

       A: Would it work? He says, yeah, it’s an excellent way to do it, he
       said; because, he said, we have them at General Electric,
       Westinghouse, places like that who use them. And he said, you just,
       the higher the concentration, he said, the faster it works.

Id. at p. 30.

       {¶44} In late February, early March 2010, Belmont recommended to Art

that they go forward with the EDI system instead of the Eco-Tech system.

Belmont also testified that he told American Trim that it could expect to recover

more nickel with the EDI Unit and that the EDI Unit would be the more efficient

than an Eco-Tech system. Id. at p. 28.

       {¶45} Belmont testified that when he learned that the EDI Unit did not

work, he proposed a solution in late February, which would cost American Trim

an extra $145,000. L&T also offered another solution in July of 2011, which L&T

would manufacture and install, at its own costs.

       {¶46} Belmont testified that American Trim has not paid the full purchase

price and has only paid $98,500. Belmont conceded that the EDI Unit did not

perform the way American Trim expected it would.         Belmont then had the

following relevant exchange:



                                         -22-
Case No. 2-13-25


       Q: * * * Why shouldn’t [American Trim] get their 98,950 whatever
       it was that they paid you for this system if it doesn’t do what they
       expected it would do?

       A: Well, we were not allowed to remedy the situation the way we
       normally would.

       Q: You were not allowed to remedy the situation.

       A: Remedy the situation, yes. I mean, we gave them a proposal to
       expand the system.

       Q: That was the proposal that would have cost them - -

       A: Right, yeah, we looked at that. That was open to discussion. We
       never got a call back on it. I mean, there was no - -

       Q: But that one involved them paying another $145,000, didn’t it?

       A: Or less.

Id. at p. 95-96.

       {¶47} Regarding his brochures and advertising, Belmont stated:

       Q: Okay. In that initial conference with Dan Motter and you had
       your brochures out, I read some of your brochures talked about your
       company being the leading [sic] in this type of process.

       A: Yes, I know. That’s kind of, that’s my son’s language. It’s more
       on our website.

       Q: Are you saying it’s puffery? I’m sorry, that’s a legal term. * * *

       A: Well, it’s, you know, like all companies do, you know.

       ***

       Q: Well, now that you mention that, I mean, isn’t that why that’s in
       there is to encourage people to buy from you?

       A: Of course.


                                        -23-
Case No. 2-13-25


       Q: All right. Well, I appreciate that, and that’s part of my question
       is your, you felt comfortable making that statement in there because
       of machines you had built in the past and projects you had worked
       on in the past.

       A: Right.

Id. at p. 65, 67.

       {¶48} Belmont’s experience was also discussed in greater detail. When

asked whether Belmont was familiar with American Trim’s old Eco-Tech Unit,

Belmont replied, “[s]omewhat, yeah. I wasn’t an expert on it, but I somewhat

knew about it.” Id. at p. 21. Belmont testified that he has built other types of

recovery systems.

       Q: All right. Okay. Had you before designed and installed a
       reverse osmosis system before?

       A: A R.O., yes. Yes, we have.

       Q: Okay. How many R.O.s prior to January of 2011 had you
       designed and installed?

       A: Not on nickel recovery but on many other things.

       Q: Okay. Like what?

       A: We do a lot of R.O. desalination.

       Q: Desalination? Okay.

       A: Desalination. City water, clean up what they need.

       Q: Okay.

       A: High purity water systems.

       ***


                                       -24-
Case No. 2-13-25


       Q: And the iron exchange system, how many of those had you done
       before then?

       A: Oh, many, many.

       Q: Okay. Had you ever designed any kind of system that was
       designed to remove nickel from wastewater before this one?

       A: Yes, yeah.

       Q: Okay. When was that?

       A: 10, 12 years ago.

Id. at p. 88, 90-91.

       {¶49} In regard to the EDI systems, Belmont testified that he has known

about the EDI process for a “few years.” Id. at p. 24. He stated that EDI Units are

“commonly used in a lot of plating shops.” Id. However, when asked in what

shops he has seen a working EDI Unit, he could not name one and stated that

“[u]nfortunately, a lot of them are out of business right now.” Id. Belmont

admitted that he has only built one EDI Unit in his lifetime, which was the unit he

built for American Trim. Belmont also testified that it was his belief that an EDI

Unit was capable of recovering 1.87 to 2.43 pounds of nickel per hour. He based

that belief on Bailey’s advice and on the “data that Aaron Art sent[.]” Id. at p. 50.

Belmont denied ever representing to American Trim that he was proficient in

producing nickel recovery systems.        However, Belmont never disclosed to

American Trim that he had never built a nickel recovery system before.




                                        -25-
Case No. 2-13-25


       Q: Okay. In any of that discussion with Dan Motter or Aaron Art,
       did you ever tell them, I’ve never made one of these before, yours
       will be the first?

       A: I don’t know if I did or not. I mean…

       Q: Okay.

       A: I may have.

       Q: You wouldn’t be surprised if they both say we didn’t know this
       was the first one he built? You wouldn’t be surprised if they said
       that, right?

       A: No.

Id. at p. 67-68.

       {¶50} At the close of American Trim’s evidence, L&T moved to dismiss

the fraud claim against Belmont pursuant to Civ.R. 41(B)(2). At this time, the trial

court and American Trim’s counsel had the following relevant exchange:

       Trial Court: Now the rest of the stuff about global world leader,
       blah, blah, blah, isn’t that just permitted puffery?

       A: I wouldn’t, - the answer, -

       Trial Court: I mean, you understand the difference between, -

       A: I do.

       Trial Court: --, a specific representation and, “Oh, I’m the best”?

       A: I do, and you’re absolutely right, Your Honor.

       Trial Court: Okay. * * * [W]here specifically is there a specific
       representation that they have done nickel recovery before?

       A: Him verbally. There is evidence in the record where he’s
       verbally represented to him he’s done nickel recovery before and he
       said that in his deposition. But there is evidence that before May of

                                        -26-
Case No. 2-13-25


       2010, he says “I’ve done a lot of these nickel recovery events.” That
       testimony came from Aaron Art.

       ***

       Trial Court: Okay, I need to know specifically, what was the
       specific misrepresentation that was relied upon?

       A: Specific misrepresentation that was relied upon is one, “I know
       how to build nickel recovery units.” Two, “This EDI Unit will
       recover nickel for you of one point eight seven (1.87) to two point
       four three (2.43) pounds per hour.” * * * [I]n [Belmont’s] testimony
       he admits, “Well, yeah, Dan Bailey said it’ll get one-third to half a
       pound per hour.” And that’s off of the, - what was known, what was
       represented to them it could recover.

       Trial Court: * * * I don’t remember a specific question about
       [Belmont] telling [American Trim] that he had done nickel recovery
       before. What page is that?

       A: In the deposition?

       Trial Court: Yes, sir.

       A: I don’t remember it in the deposition, it’s in those e-mails
       though. I think it’s in the emails and I do remember, -

       Trial Court: I’m sorry, you just argued that, “and he said so in his
       deposition.”

       ***

       A: I think if you review the record and testimony from Aaron Art,
       you will hear from Aaron Art that Tom Belmont said, “I’ve done
       nickel recovery systems.”

Id. at p. 135-138.

       {¶51} The trial court declined to render any judgment until the close of all

the evidence. L&T offered American Trim’s answers to its interrogatories as its

first and only exhibit and then rested.
                                          -27-
Case No. 2-13-25


       {¶52} On August 29, 2013, the trial court issued its judgment entry, finding

that American Trim properly rejected the EDI Unit and that Belmont had engaged

in fraud. The trial court also found that L&T and Belmont were jointly and

severally liable for $98,500, the purchase price of the EDI Unit.

       {¶53} L&T and Belmont filed this timely appeal, presenting the following

assignments of error for our review.

                            Assignment of Error No. I

       AS THERE IS NO EVIDENCE IN THE RECORD THAT
       AMERICAN TRIM EXPRESSLY REJECTED THE GOODS
       BY NOTIFYING L&T TECHNOLOGIES AS REQUIRED BY
       THE UNIFORM COMMERCIAL CODE, A FINDING OF
       SUCH REJECTION BY THE TRIAL COURT IS ERROR AS
       A MATTER OF LAW.

                           Assignment of Error No. II

       FRAUD BY THOMAS BELMONT WAS NOT ESTABLISHED
       AS A MATTER OF LAW.

                             Assignment of Error No. I

       {¶54} In their first assignment of error, L&T and Belmont argue that the

trial court erred in finding that American Trim properly rejected the EDI Unit as

there is no evidence in the record that American Trim notified L&T that it was

rejecting the EDI Unit. We disagree.




                                        -28-
Case No. 2-13-25


                                         Standard of Review

        {¶55} Contrary to L&T’s and Belmont’s request that this court conduct a

do novo review of the evidence, “an appellate court is not permitted to reverse a

trial court’s judgment when it is supported by competent, credible evidence going

to all the essential elements of the case.”5 Huntington Natl. Bank v. Findlay

Machine & Tool, Inc., 3d Dist. Hancock No. 5-11-27, 2012-Ohio-748, ¶ 29, citing

C.E. Morris Co. v. Foley Constr. Co., 54 Ohio St.2d 279 (1978). Further, it is well

established that when a trial court’s decision involving R.C. 1302.01 et seq. is

based on competent, credible evidence, the reviewing court may not reverse it on

appeal. Findlay Machine & Tool, ¶ 29; Builder’s Kitchens of Stark Cty., Inc. v.

Sibel, 5th Dist. Stark No. 2009CA00065, 2010-Ohio-890, ¶ 21; George v. Fannin,

67 Ohio App.3d 703, 709 (12th Dist.1990); Konicki v. Salvaco, Inc., 16 Ohio

App.3d 40, 42 (2d Dist.1984).

        {¶56} “Under this highly deferential standard of review, a reviewing court

does not decide whether it would have come to the same conclusion as the trial

court. Rather, we are required to uphold the judgment so long as the record, as a

whole, contains some evidence from which the trier of fact could have reached its

ultimate conclusions.” Hooten Equip. Co. v. Trimat, Inc., 4th Dist. Gallia No.


5
  In its brief, Appellants contend that we should conduct a de novo review as the appeal is based upon a
question of law. However, Appellants fail to state how the trial court misapplied the law. Instead,
Appellants argue that there is a lack of evidence upon which the court could base its finding. This does not
attack the law, but the facts in this case.

                                                   -29-
Case No. 2-13-25


03CA16, 2004-Ohio-1128, ¶ 7. We defer to the findings of the trial court because

in a bench trial, it is the judge that “is best able to view the witnesses and observe

their demeanor, gestures and voice infections, and use these observations in

weighing the credibility of the proffered testimony.” Seasons Coal Co., Inc. v.

Cleveland, 10 Ohio St.3d 77, 80 (1984).

       {¶57} On appeal, the parties do not dispute that the merits of this

assignment of error is governed by R.C. 1302.01 et seq., “Ohio’s codification of

the U.C.C. for the sale of goods.” Findlay Machine & Tool, ¶ 30. Nor do the

parties dispute that the EDI Unit did not perform as it was guaranteed to in the

written proposal, thus breaching the terms of their contract. Rather, the resolution

to this assignment of error centers on whether American Trim ever accepted the

EDI Unit as a nonconforming good by failing to properly reject the EDI Unit, as

required by R.C. 1302.61.

       {¶58} Under R.C. 1302.64, an acceptance of goods occurs when the buyer:

       (1) after a reasonable opportunity to inspect the goods signifies to
       the seller that the goods are conforming or that he will take or retain
       them in spite of their non-conformity; or

       (2) fails to make an effective rejection * * *; but such acceptance
       does not occur until the buyer has had a reasonable opportunity to
       inspect them; or

       (3) does any act inconsistent with the seller’s ownership; but if
       such act is wrongful as against the seller it is an acceptance only if
       ratified by him.


                                        -30-
Case No. 2-13-25


Further, a “[r]ejection of goods must be within a reasonable time after their

delivery or tender. It is ineffective unless the buyer seasonably notifies the seller.”

R.C. 1302.61.

       {¶59} The EDI Unit was delivered to American Trim in November 2010.

However, L&T was not able to send someone out to American Trim to set up the

machine, as guaranteed in the contract, until January of 2011. There were many

problems during the startup of the EDI Unit, which further delayed the installation

of the EDI Unit. Additionally, once L&T was able to get the EDI Unit running,

American Trim was told that it would have to gradually ramp up the machine until

it would be able to run at its full capacity. Thus, the EDI Unit was not running at

its full capacity until late January or early February of 2011.

       {¶60} It is uncontested that once the EDI Unit started running, it never

produced the results that L&T guaranteed in its contract and that American Trim

immediately started to complain to L&T and Belmont. This was evidenced by an

email that Art wrote to Belmont, asking whether any solutions existed or whether

American Trim was better off sending the EDI Unit back to L&T. Art also told

Belmont that he and other representatives of American Trim were talking about

sending the EDI Unit back to L&T.

       {¶61} Belmont wrote Art back on February 9, 2011, proposing a solution to

the problem with the EDI Unit. Belmont offered to add two extra cells to the EDI


                                         -31-
Case No. 2-13-25


Unit; however, that solution would cost American Trim an additional $145,000.

Understandably, American Trim was suspicious of this solution, as L&T’s first

cell provided dismal results. Throughout February and March, American Trim

and L&T had numerous conference calls in an attempt to get the EDI Unit to start

working properly. L&T offered two more solutions, both of which were not

feasible or ideal for American Trim. Art testified that he asked Belmont for

American Trim’s money back during the conference calls; however, Belmont

refused to refund any portion of the purchase price. Art testified:

       Q: Is there any question in your mind that Mr. Belmont knew that
       you weren’t satisfied with the machine and you wanted to give it
       back to him and you wanted your money back?

       A: He definitely knew.

       ***

       Q: But is there any doubt in your mind that you made it clear to Mr.
       Belmont you wanted your money back and he could have his
       machine back?

       A: Yes.

       Q: You believe you made that clear to him?

       A: Yes.

Trial Tr., p. 81-82.

       {¶62} Art stated that American Trim stopped using the EDI Unit in early

March 2011.       Since Belmont would not refund American Trim’s money,


                                        -32-
Case No. 2-13-25


American Trim dissembled the EDI Unit and kept it in storage. Further, Art stated

that American Trim never paid the final 10% of the purchase price.

         {¶63} We find that the record contains competent, credible evidence to

support the trial court’s finding that American Trim rejected the EDI Unit “within

a reasonable period of time after its delivery and within a reasonable period of

time after [L&T’s] failed attempts to rectify the problems * * *.” (Docket No.

131, p. 2). L&T was unable to offer any reasonable solution to fix the EDI Unit

and Art testified that he rejected the EDI Unit in phone calls to Belmont.

Therefore, we find that the trial court did not err in finding that American Trim

rejected the EDI Unit and that it is entitled to $98,500 in damages.

         {¶64} Accordingly, we overrule L&T’s and Belmont’s first assignment of

error.

                             Assignment of Error No. II

         {¶65} In their second assignment of error, L&T and Belmont argue that the

trial court erred in finding that Belmont engaged in fraudulent conduct. We agree.

         {¶66} “A claim of fraud in the inducement arises when a party is induced to

enter into an agreement through fraud or misrepresentation.” ABM Farms, Inc. v.

Woods, 81 Ohio St.3d 498, 502 (1998). The fraud must not relate “ ‘to the nature

or purport of the [contract], but to the facts inducing its execution * * *.’ ” Id.,

quoting Haller v. Borror Corp., 50 Ohio St.3d 10, 14 (1990). Thus, in order to


                                         -33-
Case No. 2-13-25


prove fraud in the inducement, it is the plaintiff’s burden to establish that the

defendant “made a knowing, material misrepresentation with the intent of

inducing the plaintiff’s reliance, and that the plaintiff relied upon that

misrepresentation to her detriment.” ABM Farms at 502, citing Beer v. Griffith, 61

Ohio St.2d 119, 123 (1980).

      {¶67} Further, “[i]n all averments of fraud or mistake, the circumstances

constituting fraud or mistake shall be stated with particularity.” Civ.R. 9(B).

There are three reasons used to justify the particularity requirement mandated by

Civ.R. 9(B):

      First, particularity is required to protect defendants from potential
      harm to their reputations which may attend general accusations of
      acts involving moral turpitude. Second, particularity ensures that the
      obligations are concrete and specific so as to provide defendants
      notice of what conduct is being challenged. Finally, the particularity
      requirement inhibits the filing of complaints as a pretext for
      discovery of unknown wrongs. The Supreme Court of Ohio has held
      that the first and second reasons are of paramount importance for
      purposes of Civ.R. 9(B).

(Citations omitted.) Korodi v. Minot, 40 Ohio App.3d 1, 4 (10th Dist.1987).

      {¶68} Courts in Ohio have looked to federal courts for guidance on how to

interpret Civ.R. 9(B).   The Second Circuit has stated that the particularity

requirement found in Fed.R.Civ.P. 9(B) mandates: “(1) plaintiff must specify the

statements claimed to be false; (2) the complaint must state the time and place

where statements were made; and (3) plaintiff must identify the defendant claimed


                                      -34-
Case No. 2-13-25


to have made the statement.” Korodi at 4, citing Goldman v. Belden, 754 F.2d

1059, 1069-1070 (2d Cir.1985).                  However, this particularity requirement must

also be read in conjunction with Civ.R. 8, which requires the parties’ pleadings to

be brief and succinct.

         {¶69} In American Trim’s Amended Complaint it alleged that it “purchased

[the EDI Unit] based on the representation of Defendant Thomas V. Belmont, Sr.

that his company was proficient in producing the nickel recovery system which he

designed and installed.”6              (Docket No. 52, p. 3). However, in a set of

interrogatories answered seven months later, American Trim specified five

different fraudulent misrepresentations allegedly made by Belmont.                               The trial

court’s judgment entry did not find Belmont made any fraudulent statements that

were alleged in the answers to L&T’s interrogatories. Instead, the trial court

found that Belmont’s fraudulent statements concerned his “knowledge and

expertise” of nickel recovery systems, as originally alleged by American Trim.

(Docket No. 131, p. 2).

         {¶70} Initially, we must note that American Trim’s Amended Complaint

and its answers to L&T’s interrogatories are irreconcilable.                             The Amended

6
  L&T never raises in a separate assignment of error, nor argues in its brief, that the trial court erred in
denying its Motion to Dismiss for failing to satisfy the particularity requirements of Civ.R. 9(B). However,
after reviewing the record, we find it troubling that the trial court did not grant L&T’s motion for a more
definite statement or its motion to dismiss the fraud claim. It appears that American Trim’s Amended
Complaint falls short of satisfying the particularity requirement that is mandated by Civ.R. 9(B). American
Trim generally states that Belmont made a representation that he was “proficient in producing the nickel
recovery system” but fails to provide a date or time when this alleged statement occurred. However, since
L&T does not raise this in its own separate assignment of error, we decline to address the issue any further.

                                                   -35-
Case No. 2-13-25


Complaint alleged a general fraudulent statement concerning Belmont’s expertise.

However, when asked for a more specific explanation of Belmont’s alleged

fraudulent conduct, American Trim specified a completely different allegation of

fraud regarding statements Belmont made in his written proposal, and completely

ignored its initial allegation of fraud it made in its Amended Complaint.

       {¶71} Even more inexplicable, when hearing L&T’s and Belmont’s Civ.R.

41(B)(2) motion, the trial court asked American Trim, again, what specific

fraudulent statement Belmont made, American Trim responded with a different

statement that was never pleaded in its Amended Complaint or disclosed in its

answers to L&T’s interrogatories:

       Trial Court: Okay, I need to know specifically, what was the
       specific misrepresentation that was relied upon?

       A: Specific misrepresentation that was relied upon is one, “I know
       how to build nickel recovery units.” Two, “This EDI Unit will
       recover nickel for you of one point eight seven (1.87) to two point
       four three (2.43) pounds per hour.” * * * [I]n [Belmont’s]
       testimony he admits, “Well, yeah, Dan Bailey said it’ll get one-third
       to half a pound per hour.” And that’s off of the, - what was known,
       what was represented to them it could recover.

Trial Tr., p. 137.

       {¶72} American Trim’s failure to specify, with particularity, its allegation

of fraud in its Amended Complaint denied L&T and Belmont proper notice of

what specific statement was being challenged as fraudulent. Situations like the




                                        -36-
Case No. 2-13-25


one we find here in this matter are the very situations which Civ.R. 9(B) was

designed to prevent.

       {¶73} The trial court only made a finding as to Belmont’s fraudulent

statements concerning his knowledge and expertise of nickel recovery systems;

however, after a review of the record, we cannot find any competent, credible

evidence in the record to support this finding or any finding of fraud.

              Fraudulent Statements Alleged in Amended Complaint

       {¶74} In its Amended Complaint, American Trim alleged that Belmont

made the representation that L&T “was proficient in producing the nickel recovery

system which he designed and installed.” (Docket No. 52, p. 3). However, Art

only testified that in “verbal discussions” with Belmont, Belmont “basically

expressed that he was very familiar with the resin base as well as the reverse

osmosis. He’s done desalinization of water so there’s a lot of water purification

he’s been involved with.” Trial Tr., p. 31. Further, Motter testified that the only

representation made by Belmont was that he had “[d]ifferent experience with

different precious metals. That was about it really.” Id. at p. 109. Neither Art nor

Motter ever testified that Belmont made a representation to either of them that he

was proficient with nickel recovery systems.

       {¶75} There was no evidence produced at trial that Belmont was, indeed,

not proficient with the resin base systems as well as reverse osmosis systems or


                                        -37-
Case No. 2-13-25


that he was unfamiliar with the process of desalinization.      To the contrary,

Belmont testified that he has designed and installed reverse osmosis systems

before and that L&T is involved with many water desalinization projects.

Belmont Dep., p. 88. Further, Belmont stated that he has designed many iron

exchange systems in his career. But when asked whether he ever represented to

American Trim whether L&T was proficient in producing nickel recovery

systems, Belmont replied in the negative.

      {¶76} Belmont denied making any statements regarding his expertise in

nickel recovery systems, and Art and Motter both failed to testify that Belmont

represented to either of them that he was proficient in nickel recovery systems.

Therefore, we cannot find any competent, credible evidence which would

demonstrate that Belmont made fraudulent statements to American Trim

concerning his experience in designing and building nickel recovery systems.

           Fraudulent Statements Alleged in Answer to Interrogatories

      {¶77} In its answer to L&T’s interrogatories asking for the specific

fraudulent statements Belmont made, American Trim outlined five different

statements that it alleged were fraudulent. Two of these statements were made

after American Trim entered into the contract with L&T.        Thus, there is no

conceivable way these two statements induced American Trim to enter into a

contract with L&T, since American Trim was already in a contract with L&T.


                                       -38-
Case No. 2-13-25


      {¶78} The three remaining statements that American Trim claims were

fraudulent were that:

      [1] The most cost effective and efficient system that meets the water
      quality for R1 water recycle and nickel concentration for reclaim
      back to process, is electro dialysis through an LTED-40 System.

      [2] A complete operation and maintenance manuals [sic] will be
      provided on CD and the manual shall include but not be limited to,
      installing, detail schematics, Manufacturer’s literature, sequence of
      operations and of the complete LTED Tech Inc. system catered to
      the custom design of the system.

      [3] LT Technologies, Inc., a global firm is uniquely qualified in the
      marketplace as a design build firm, by offering a total dedicated
      engineering and manufacturing dynamic to each project we
      undertake. By employing this dedicated approach, LT technologies
      consistently meets or exceeds budget and timeline goals, which in
      turn, ensures our clients meet their responsibilities for compliance
      and /or production. The Core strategy of design build is what stands
      LT apart from firms that do either engineering, or experimental
      design analysis, as well as real time data gathering being turned into
      production improvements. The result is a robust, industrial grade
      system with the people and the firm to stand behind it. Superior
      quality is not our goal it is our standard.

(Docket No. 140, Defendant’s Exhibit A, p. 2).

      {¶79} As to the first statement, American Trim never provided any

evidence that Belmont knew that the EDI Unit would not be cost effective and

efficient for American Trim’s purposes when he made that representation to

American Trim. To the contrary, Belmont testified that it was his belief that an

EDI system was, indeed, a cost effective and efficient system to use for nickel

recovery. Belmont talked to Bailey, who American Trim acknowledges is one of

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the leading experts in EDI systems, and asked for his advice before recommending

the EDI Unit to American Trim. Belmont also testified that it was his belief that

an EDI Unit was capable of recovering 1.87 to 2.43 pounds of nickel per hour. He

based that belief on Bailey’s advice and on the “data that Aaron Art sent[.]”

Belmont Dep., p. 50. Belmont elaborated on his discussion with Bailey:

       A: I described to [Bailey] the operation at American Trim.

       Q: Okay.

       A: And that it’s a lot of nickel, they have a lot of nickel drag-out
       because of the types of parts they do.

       Q: Right.

       A: And so I asked him, what do you think about the EDI process
       that you people have?

       Q: Um-hum.

       A: Would it work? He says, yeah, it’s an excellent way to do it, he
       said; because, he said, we have them at General Electric,
       Westinghouse, places like that who use them. And he said, you just,
       the higher the concentration, he said, the faster it works.

Id. at p. 30.

       {¶80} Belmont was told, by an expert in the field, that the EDI process

would be an “excellent” option for American Trim, and that other major

companies, such as General Electric and Westinghouse, use the EDI process.

Without any evidence proving otherwise, it appears that Belmont had every reason

to believe that the EDI Unit would be cost effective and efficient for American



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Trim.    We fail to see how Belmont made a knowing misrepresentation to

American Trim.

        {¶81} Regarding the second statement, it relates to the terms of the contract

and is therefore, not fraudulent. In addition to the EDI Unit, Belmont was also

required to provide an operation and maintenance manual. Art testified that L&T

provided an operation and maintenance manual, although it was generic and

unhelpful. However, “[a] classic claim of fraudulent inducement asserts that a

misrepresentation of facts outside the contract or other wrongful conduct induced

a party to enter into the contract.” (Emphasis added.) Haller, 50 Ohio St.3d at 14.

We fail to see how the promise of an operation manual was somehow outside of

the contract and induced American Trim to enter into the contract with L&T. The

fact that Belmont provided an insufficient operation manual to American Trim

gives rise to a breach of contract claim, not to a fraud in the inducement claim.

        {¶82} Finally, the third statement was mere puffery, a fact that both the trial

court and American Trim’s counsel seemed to acknowledge during the arguments

for L&T’s and Belmont’s Civ.R. 41(B)(2) motion:

        Trial Court: Now the rest of the stuff about global world leader,
        blah, blah, blah, isn’t that just permitted puffery?

        A: I wouldn’t, - the answer, -

        Trial Court: I mean, you understand the difference between, -

        A: I do.

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       Trial Court: --, a specific representation and, “Oh, I’m the best”?

       A: I do, and you’re absolutely right, Your Honor.

Trial Tr., p. 135-136.

       {¶83} We are unable to find any fraudulent statements that were made by

Belmont. Thus, the trial court abused its discretion in finding that Belmont made

fraudulent representations to American Trim, which induced it into entering into a

contract with L&T. It was also an abuse of discretion to base a finding of fraud on

matters that were not pled with particularity by American Trim.

       {¶84} Accordingly, L&T’s and Belmont’s second assignment of error is

sustained.

       {¶85} Having found no error prejudicial to L&T and Belmont in the first

assignment of error, but having found error prejudicial to L&T and Belmont in the

second assignment of error, we affirm in part and reverse in part the trial court’s

judgment and remand this matter for further proceedings consistent with this

opinion.

                                                        Judgment Affirmed in Part,
                                                             Reversed in Part, and
                                                                 Cause Remanded

WILLAMOWSKI, P.J. and PRESTON, J., concur.

/jlr



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