[Cite as Quest Workforce Solutions, L.L.C. v. Job 1USA, Inc., 2018-Ohio-3304.]




                            IN THE COURT OF APPEALS OF OHIO
                                SIXTH APPELLATE DISTRICT
                                     LUCAS COUNTY


Quest Workforce Solutions, LLC                             Court of Appeals Nos. L-17-1194
                                                                                 L-17-1246
        Appellee
                                                           Trial Court No. CI0201403549
v.

Job1USA, Inc.                                              DECISION AND JUDGMENT

        Appellant                                          Decided: August 17, 2018

                                                 *****

        Eugene F. Canestraro, for appellee.

        William R. Lindsley, for appellant.

                                                 *****

        SINGER, J.

        {¶ 1} Appellant, Job1USA, Inc. (“Job1”), appeals the June 29 and September 19,

2017 judgments of the Lucas County Court of Common Pleas awarding damages and

prejudgment interest to appellee, Quest Workforce Solutions, LLC (“Quest”). For the

following reasons, we reverse.
                                   I. Background and Facts

       {¶ 2} This consolidated appeal involves a business dispute between Quest and

Job1 that is before us for the second time. In the first case, Quest Workforce Solutions,

LLC v. Job1USA, Inc., 6th Dist. Lucas No. L-15-1189, 2016-Ohio-8380 (“Quest I”), we

reversed the trial court’s decision finding in favor of Job1 on Quest’s breach of contract

and accounting claims and remanded the case for a determination of damages. Although

we thoroughly discussed the facts in Quest I, we will briefly summarize the facts that are

pertinent to the current appeal.

       {¶ 3} In 2007, Job1 and Quest entered into a “Memorandum of Understanding

Referral and Profit Sharing Agreement” (“PSA”) under which Job1 was to serve as the

staffing agency for any companies referred to it by Quest and the parties would equally

divide any profits from the accounts. Job1 properly terminated the PSA in 2012.

       {¶ 4} The only Quest referral that generated any business for Job1 was a company

called Yamada.1 According to income statements created by Job1’s chief financial

officer (“CFO”), Matt Wolfe, the Yamada account operated at a loss every year from

2008 to 2012. Quest, through the testimony of member Jack Hackett, disputed many of

the expenses reflected in the statements, including: a monthly expense equal to three

percent of the gross sales generated by the Yamada account that Job1 charged for

Yamada’s share of certain direct expenses that were common to all of Job1’s clients (e.g.,


1
  There was a second client that was part of the PSA, but the company unexpectedly
closed shortly after the PSA was signed.




2.
payroll and human resources staff, insurance premiums, and banking costs) (“add-on

expenses”); numerous direct expenses for which Job1 did not retain or produce any

supporting documents, as was required by the PSA; and the amount of workers’

compensation premiums that Job1 deducted from the gross profits. When the improper

expenses were removed from the income statements, Quest claimed, the Yamada account

made a profit every year. We addressed each category of expenses in Quest I.

       {¶ 5} The PSA defined “profits” as gross profit minus direct expenses and the

costs of one account manager. The parties disputed the meaning of “direct expenses.”

Job1 claimed (based on Wolfe’s expert testimony as a certified public accountant) that

direct expenses included the add-on expenses, while Quest claimed (based only on parol

evidence) that the parties specifically excluded those costs from direct expenses. In

Quest I, we found that the trial court properly interpreted the phrase to include add-on

expenses, which were reflected in Job1’s deduction from the gross profits of an amount

equal to three percent of sales. Quest I, 6th Dist. Lucas No. L-15-1189, 2016-Ohio-8380,

at ¶ 49.

       {¶ 6} As to the undocumented expenses, the PSA required that both parties

“jointly maintain all necessary recordkeeping pertaining to” the Yamada account. We

found in Quest I that Job1 breached its duty under the PSA to retain the documents

supporting its gross profit calculations and its duty in discovery to supply Quest with

accurate financial information that Quest could use to substantiate its claimed damages.

Id. at ¶ 52-53.




3.
       {¶ 7} The workers’ compensation premiums were the subject of exhaustive

testimony at the trial. As we stated in Quest I, “the evidence is undisputed that there was

a significant error either in the [workers’ compensation] rate, [workers’ compensation]

payments, or [workers’ compensation] cost allocation.” Id. at ¶ 52.

       {¶ 8} Everyone agreed that the workers’ compensation expenses that Job1

reported in the income statements for 2008 to 2012 did not reflect Job1’s actual workers’

compensation expenses. In November 2013, in response to Hackett’s inquiry, Job1 sent

Quest new workers’ compensation figures. The 2013 numbers included the rates that the

Ohio Bureau of Workers’ Compensation (“BWC”) charged for Yamada’s classification

code and the portions of two rebates from BWC that were allocated to the Yamada

classification code. Approximately a year later, Job1’s vice president of human

resources, Kimberly Hall, who was responsible for filing premium reports with BWC,

provided printouts from BWC’s payment system relating to Job1’s account. The 2014

numbers showed the rates that BWC charged for Yamada’s classification code, the

amount of payroll Job1 reported to BWC, and the premium payments Job1 actually made

for each of the five years. The rate for Yamada’s classification code is the same in both

the 2013 workers’ compensation figures and the 2014 BWC printouts. While the wages

reported in the income statements and the 2013 documents are consistent, the wages

reported in the BWC system are significantly lower. Both Hall and Wolfe testified that

the wages conveyed to BWC were underreported and, consequently, Job1’s workers’

compensation payments (as reflected on the BWC printouts) were inaccurate. Neither




4.
was able to provide the amount Job1 actually owed to BWC as a result of the

underreported wages. Quest and its counsel learned at trial about Job1’s claim that it had

underreported wages to BWC.

         {¶ 9} On remand, the trial court (ostensibly relying on our decision in Quest I)

found that the only evidence of damages before it was Hackett’s testimony. Quest based

its calculation of damages on the income statements that Wolfe prepared, but removed

the three percent add-on expenses, removed all undocumented expenses, and adjusted the

workers’ compensation premiums to the amounts reflected on the BWC printouts. In its

June 29, 2017 judgment entry, the trial court fully adopted Quest’s calculations and

awarded Quest damages in the amount of $418,911, plus prejudgment interest of

$52,137, for a total award of $471,048.

         {¶ 10} On September 19, 2017, the trial court issued a judgment entry amending

its award of prejudgment interest. Quest asked for the amendment because the initial

prejudgment interest amount was based on a judgment rendered in May 2015, but it

claimed that interest should have been calculated as of June 29, 2017, the date the court

issued its judgment on remand. Job1 argued that Quest was not entitled to prejudgment

interest as a matter of law and asked the court to deny Quest’s motion. The court agreed

with Quest and amended its prejudgment interest award to $80,569, bringing the total

damages award to $499,480.

         {¶ 11} Job1 appeals the trial court’s decision, setting forth two assignments of

error:




5.
              ASSIGNMENT OF ERROR NO. 1. THE TRIAL COURT ERRED

       BECAUSE IT FAILED TO CONSIDER THE OVERWHELMING

       EVIDENCE PRESENTED BY THE DEFENDANT TO REBUT THE

       PLAINTIFF’S CLAIMS OF DAMAGES. NEVERTHELESS, THE

       TRIAL COURT INCORRECTLY RULED THAT “…THE ONLY

       EVIDENCE OF DAMAGES BEFORE THIS COURT IS THE

       TESTIMONY OF MR. HACKETT.”

              ASSIGNMENT OF ERROR NO. 2. THE TRIAL COURT ERRED

       IN AWARDING PREJUDGMENT INTEREST WITHOUT FIRST

       CONDUCTING AN EVIDENTIARY HEARING TO DETERMINE

       WHEN THE PLAINTIFF’S DAMAGES BECAME DUE AND

       PAYABLE AND IN DOING SO, ABUSED ITS DISCRETION.

                                  II. Law and Analysis

       {¶ 12} In its first assignment of error, Job1 argues that the trial court’s damages

award is against the manifest weight of the evidence because the trial court either failed

to consider or ignored Job1’s evidence supporting its theory that the PSA was not

profitable. In its second assignment of error, Job1 contends that the trial court abused its

discretion by not conducting a hearing to determine when Quest’s damages became due

and payable. Quest responds that Job1 fails to show that the damages award is

unsupported by the manifest weight of the evidence and that the trial court correctly

determined that date when prejudgment interest began to accrue.




6.
                                   A. Damages Award

       {¶ 13} Job1’s first assignment of error focuses on the shortcomings it perceives in

the trial court’s decision on damages. Namely, Job1 contends that the trial court ignored

all of the evidence Job1 presented at trial showing that the Yamada account was not

profitable for any of the five years that the PSA existed. We agree with Job1 to the

extent that the trial court excluded the three percent charges for add-on expenses.

       {¶ 14} Initially, we note that Job1 challenges the trial court’s award of damages as

against the manifest weight of the evidence. We generally review a trial court’s

judgment from a bench trial under a manifest-weight standard of review. E.G. Licata,

LLC v. E.G.L., Inc., 6th Dist. Lucas Nos. L-17-1124 and L-17-1125, 2018-Ohio-2032,

¶ 12, citing United States Fire Ins. v. Am. Bonding Co., 1st Dist. Hamilton Nos. C-

160307 and C-160317, 2016-Ohio-7968, ¶ 16-17. Job1 is not challenging the trial

court’s judgment on the merits of Quest’s complaint, however, but essentially argues that

the damages award is excessive. We review a trial court’s determination of damages for

an abuse of discretion. Universal Marble & Granite, LLC v. Gerner, 6th Dist. Wood No.

WD-13-052, 2014-Ohio-4349, ¶ 11, citing Roberts v. United States Fid. & Guar. Co., 75

Ohio St.3d 630, 634, 665 N.E.2d 664 (1996). Abuse of discretion means that the trial

court’s decision was unreasonable, arbitrary, or unconscionable. State ex rel. Askew v.

Goldhart, 75 Ohio St.3d 608, 610, 665 N.E.2d 200 (1996).

       {¶ 15} Damages in a breach-of-contract case are intended to compensate the non-

breaching party for the losses suffered as a result of a breach. Decastro v. Wellston City




7.
School Dist. Bd. of Edn., 94 Ohio St.3d 197, 201, 761 N.E.2d 612 (2002). Thus, money

damages awarded for breach of contract are designed to put the non-breaching party in

the same position it would have been in if the contract had not been violated. State ex rel.

Stacy v. Batavia Local School Dist. Bd. of Edn., 105 Ohio St.3d 476, 2005-Ohio-2974,

829 N.E.2d 298, ¶ 26.

       {¶ 16} As a general rule, although a plaintiff in a civil case must prove its damages

with certainty, it is permitted to reasonably estimate the amount of the damages.

Gateway Consultants Group, Inc. v. Premier Physicians Ctrs., Inc., 8th Dist. Cuyahoga

No. 104014, 2017-Ohio-1443, ¶ 30, quoting TJX Cos. v. Hall, 183 Ohio App.3d 236,

2009-Ohio-3372, 916 N.E.2d 862, ¶ 32 (8th Dist.). That is, the plaintiff must prove that

it suffered damages, but is not necessarily required to prove the amount of the damages

with absolute precision. Id.; Secy. of Veterans Affairs v. Shaffer, 5th Dist. Richland No.

14 CA 61, 2015-Ohio-2237, ¶ 53 (“It is uncertainty as to the existence of damages rather

than uncertainty as to their amount which precludes recovery.” (Emphasis sic.)). This is

particularly true in cases where the plaintiff is unable to precisely calculate its damages

because of the defendant’s actions. Gateway Consultants at ¶ 31. In such cases, the

plaintiff’s proof of damages is sufficient if it provides a reasonable basis for estimating

the damages. TJX Cos. at ¶ 32, citing Palmer v. Connecticut Ry. & Lighting Co., 311

U.S. 544, 559-560, 61 S.Ct. 379, 85 L.Ed. 336 (1941) and Eastman Kodak Co. v. S.

Photo Materials Co., 273 U.S. 359, 379, 47 S.Ct. 400, 71 L.Ed. 684 (1927).




8.
       {¶ 17} In this case, the trial court found that Hackett’s testimony was the only

evidence of damages before it and that Job1 failed to refute Hackett’s “simple arithmetic

calculations.” It then fully adopted Hackett’s calculations. While we find that the trial

court correctly excluded certain undocumented expenses from the figures in the 2008 to

2012 income statements and properly used the payment information from the BWC

system, we conclude that its exclusion of the three percent charges for add-on expenses

was in error.

       {¶ 18} First, we find that the trial court properly excluded the expenses that Job1

claimed against the Yamada profits, but for which it did not provide supporting

documentation. As we discussed in Quest I, Job1 had a duty under the PSA to maintain

documents that support its profit calculations. Quest I, 6th Dist. Lucas No. L-15-1189,

2016-Ohio-8380, at ¶ 52. Using the entries from Job1’s ledger that Job1 provided in

discovery, Hackett identified numerous expenses that would have been proper if Job1 had

also provided supporting documents such as invoices, receipts, or canceled checks.

Hackett testified about the “simple arithmetic calculations” that he did using the figures

in each income statement to arrive at the profits that Hackett believed were proper under

the PSA. The only evidence Job1 proffered to refute Hackett’s testimony about the

undocumented expenses was Wolfe’s testimony that Job1 incurred each expense.

Considered with Wolfe’s admission that he did not know if some of the ledger entries

were accurate because he never audited the underlying financial information, we find that




9.
the trial court did not abuse its discretion by discrediting Wolfe’s testimony and

excluding these expenses from its damage calculations.

       {¶ 19} We also find that using the payment details from BWC as Job1’s workers’

compensation expenses for Yamada was not an abuse of discretion. In cases where the

plaintiff cannot precisely calculate its damages, the plaintiff is responsible for providing

the trial court with a reasonable means of estimating damages. TJX Cos., 183 Ohio

App.3d 236, 2009-Ohio-3372, 916 N.E.2d 862, at ¶ 32. Here, Quest proposed that the

court use the evidence of Job1’s actual payments to BWC as the amount of workers’

compensation expenses that Job1 had for Yamada. Its basis for using the BWC numbers

was that Job1’s reporting errors and failure to provide accurate information made it

impossible for Quest to calculate its damages accurately. By fully adopting Quest’s

damages calculations, the trial court implicitly adopted Quest’s means of estimating

damages. We agree with the trial court that Quest’s estimations were reasonable.

       {¶ 20} The testimony showed that no one—including Job1 and its executives—

could articulate the actual workers’ compensation expenses related to the Yamada

account. The premiums included in the 2008 to 2012 income statements were grossly

overstated compared to the premiums reported in the 2013 numbers. And the premiums

in the 2013 numbers were grossly overstated compared to the payments that Job1 made to

BWC. For example, in 2011 (the year with the smallest discrepancies), the income

statement claimed workers’ compensation expenses of $74,744, the 2013 numbers

claimed expenses of $59,532.94, and the BWC system showed payments totaling




10.
$25,828.54. The difference between the expenses in the income statement and the

expenses in the 2013 numbers is $15,211.06; the difference between the 2013 numbers

and the actual BWC payment is $33,704.40. Wolfe and Hall both testified that the

discrepancies must have been caused by some error in their accounting system; they each

denied intentionally reporting incorrect figures. But Wolfe, who is both Job1’s CFO and

a certified public accountant, did not conduct an audit or attempt to identify the reason for

the system errors before trial. Given this information, it would have been unreasonable

for the trial court to take Job1 at its word that the 2013 numbers accurately reflect its

workers’ compensation expenses. We therefore find that the trial court did not abuse its

discretion by using the BWC payment numbers in calculating Quest’s damages.

       {¶ 21} Finally, we find that the trial court erred by deducting the three percent

add-on expenses from the figures in the 2008 to 2012 income statements. Again, as we

discussed in Quest I, the interpretation of the term “direct expenses” was a matter of law

for the court to decide, and the only non-parol evidence of the meaning was Wolfe’s

expert testimony that it included the add-on expenses. Quest I, 6th Dist. Lucas No.

L-15-1189, 2016-Ohio-8380, at ¶ 49. Thus, the PSA allowed Job1 to deduct the add-on

expenses from the gross profits generated by Yamada, as Wolfe did when he prepared the

income statements. By adopting Hackett’s damages calculations wholesale, the trial

court refused to credit Job1 with the add-on expenses, which was contrary to the terms of

the parties’ contract. Accordingly, we find that the trial court erred by failing to consider

the add-on expenses in awarding damages.




11.
         {¶ 22} In sum, the trial court correctly excluded undocumented expenses and used

the evidence of Job1’s actual payments to BWC in determining damages. But we find

that the trial court abused its discretion because it failed to include the add-on expenses in

its damages calculations. Therefore, we find that Job1’s first assignment of error is well-

taken.

         {¶ 23} Under App.R. 12(A)(1)(a) and (B), we have the authority to “affirm,

modify, or reverse” trial court judgments, which encompasses the ability to “render the

judgment the trial court should have entered.” Bell v. Turner, 4th Dist. Highland Nos.

12CA14 and 12CA15, 2013-Ohio-1323, ¶ 20, citing Superior Metal Prods., Inc. v.

Admr., Ohio Bur. of Emp. Servs, 41 Ohio St.2d 143, 145, 324 N.E.2d 179 (1975). After

reviewing the evidence in the record, we find that the appropriate damages award is

$185,627.34. This amount reflects a deduction of $233,283.66 from the trial court’s

award of $418,911.2 Therefore, pursuant to App.R. 12(A)(1)(a) and (B), we modify the

damages award to $185,627.34.

                                  B. Prejudgment Interest

         {¶ 24} In its second assignment of error, Job1 contends that the trial court abused

its discretion by awarding prejudgment interest to Quest without conducting a hearing to



2
  The add-on expenses are: $27,295.65 for 2009; $58,657.17 for 2010; $46,063.11 for
2011; and $101,267.73 for 2012. There are no add-on expenses for 2008. Wolfe testified
that his predecessor prepared the income statement for 2008, and he did not modify the
2008 numbers compiled by his predecessor. Thus, the 2008 income statement does not
contain a three percent charge for add-on expenses.




12.
determine when Quest’s damages became due and payable. Quest argues that the trial

court had sufficient information before it (in the form of trial testimony) to select a date

on which profits became due and payable to Quest, so no separate hearing was required.

       {¶ 25} An award of prejudgment interest is governed by R.C. 1343.03(A). The

statute provides, in relevant part, that

              [W]hen money becomes due and payable * * * upon all judgments,

       decrees, and orders of any judicial tribunal for the payment of money

       arising out of * * * a contract * * *, the creditor is entitled to interest at the

       rate per annum determined pursuant to section 5703.47 of the Revised

       Code, unless a written contract provides a different rate of interest in

       relation to the money that becomes due and payable, in which case the

       creditor is entitled to interest at the rate provided in that contract.

The statute does not require the court to hold a postjudgment hearing before awarding

prejudgment interest. Bischoff v. Bischoff, 6th Dist. Huron No. H-05-005, 2005-Ohio-

5879, ¶ 10.

       {¶ 26} Generally speaking, prejudgment interest “acts as compensation and serves

ultimately to make the aggrieved party whole.” Royal Elec. Constr. Corp. v. Ohio State

Univ., 73 Ohio St.3d 110, 117, 652 N.E.2d 687 (1995). The purpose of prejudgment

interest is to compensate the plaintiff “for the period of time between accrual of the claim

and judgment, regardless of whether the judgment is based upon a claim which was




13.
liquidated or unliquidated and even if the sum due was not capable of ascertainment until

determined by the court.” Id. at syllabus.

         {¶ 27} In contract cases, the prevailing plaintiff is entitled to prejudgment interest

as a matter of law. Kott Enters., Inc. v. Brady, 6th Dist. Lucas No. L-03-1342, 2004-

Ohio-7160, ¶ 73. Once judgment is rendered for the plaintiff, the only issue remaining

for the trial court to resolve with respect to prejudgment interest is how much interest is

due. Brondes Ford, Inc. v. Habitec Sec., 2015-Ohio-2441, 38 N.E.3d 1056 (6th Dist.),

¶ 166, citing Zunshine v. Cott, 10th Dist. Franklin No. 06AP-868, 2007-Ohio-1475, ¶ 26.

To properly award prejudgment interest, the trial court must make factual findings about

the date the interest begins to accrue (based on when the claim became due and payable)

and the rate of interest that applies. Id., citing Dwyer Elec., Inc. v. Confederated

Builders, Inc., 3d Dist. Crawford No. 3-98-18, 1998 Ohio App. LEXIS 5490 (Oct. 29,

1998).

         {¶ 28} Prejudgment interest accrues on a contract claim from the time that the

money due to the plaintiff should have been paid. Bell v. Teasley, 10th Dist. Franklin No.

10AP-850, 2011-Ohio-2744, ¶ 27. The trial court must decide the date of accrual on a

case-by-case basis. Brondes at ¶ 164, citing Miller v. Gunckle, 96 Ohio St.3d 359, 2002-

Ohio-4932, 775 N.E.2d 475, ¶ 32, fn. 4, and Gates v. Praul, 10th Dist. Franklin No.

10AP-784, 2011-Ohio-6230, ¶ 62. Indeed, the Supreme Court of Ohio has “specifically

and clearly” declined to create a bright-line rule for establishing the accrual date of

prejudgment interest. Id.




14.
         {¶ 29} We review the trial court’s award of prejudgment interest for an abuse of

discretion. Brondes at ¶ 167.

         {¶ 30} Here, the trial court had no duty to hold a hearing on prejudgment interest.

Consequently, its failure to do so was not an abuse of discretion. Nevertheless, we find

that the trial court abused its discretion by issuing the award without determining when

the money owed to Quest became due and payable or the appropriate interest rates.

         {¶ 31} It appears from the record that the court adopted the interest calculations

Quest submitted with its post-trial brief and its motion to amend prejudgment interest.

Regardless, the court’s September 19, 2017 judgment entry amending its initial award of

prejudgment interest does not indicate when the interest began to accrue or specify the

applicable interest rate. “[A] court speaks only through its journal entries” and “[n]either

the parties nor a reviewing court should have to review the trial court record to determine

the court’s intentions. Rather, the entry must reflect the trial court’s action in clear and

succinct terms.” Infinite Sec. Solutions, LLC v. Karam Props. II, Ltd., 143 Ohio St.3d

346, 2015-Ohio-1101, 37 N.E.3d 1211, ¶ 29. Because we cannot determine from the trial

court’s entry how it calculated the prejudgment interest award, we find that the award

constitutes an abuse of discretion. Therefore, Job1’s second assignment of error is well-

taken.

                                       III. Conclusion

         {¶ 32} After carefully reviewing the record, we find that the trial court abused its

discretion in awarding damages to Quest because the court excluded the three percent




15.
charges for add-on expenses from its calculations. Factoring those costs into the damages

award results in an award of $185,627.34 to Quest.

       {¶ 33} We also find that the trial court abused its discretion by failing to determine

when prejudgment interest began to accrue and the interest rates that apply.

       {¶ 34} Accordingly, the June 29 and September 19, 2017 judgments of the Lucas

County Court of Common Pleas are reversed. The award of damages is modified to

$185,627.34 and this matter is remanded for determination of prejudgment interest

consistent with this decision. Quest is ordered to pay the costs of this appeal pursuant to

App.R. 24.


                                                                        Judgments reversed.



       A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.



Mark L. Pietrykowski, J.                        _______________________________
                                                            JUDGE
Arlene Singer, J.
                                                _______________________________
James D. Jensen, J.                                         JUDGE
CONCUR.
                                                _______________________________
                                                            JUDGE

           This decision is subject to further editing by the Supreme Court of
      Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
           version are advised to visit the Ohio Supreme Court’s web site at:
                    http://www.supremecourt.ohio.gov/ROD/docs/.




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