Total Quality Logistics, LLC v. Tucker, Albin, and Assocs.

An Ohio appellate court affirmed the trial court’s denial of a permanent injunction to the plaintiff because the evidence did not show that it faced immediate and irreparable injury or harm. It was also held that the trial court properly dismissed the plaintiff’s claim for tortious interference because the plaintiff did not allege that the defendant induced a third party not to continue to do business with the plaintiff.

Total Quality Logistics LLC (TQL) (the plaintiff) appealed the judgment of the trial court granting summary judgment to the defendants (Tucker, Albin & Associates, and Chris Reed) on its claims for breach of contract and punitive damages and its request for a permanent injunction. “TQL also appeals the judgment of the trial court dismissing, under Civ.R. 12(B)(6), its claim for tortious interference with contract and business relationships.”

TQL is a freight broker that arranges transportation of goods between its customers and third-party trucking companies. TQL arranged for Daansa Services LLC to transport goods to Prestige Kitchen and Bath, a customer of the Corsi Group. Daansa had signed a broker-carrier agreement with TQL.

A dispute arose between TQL and Daansa concerning the Corsi load, and TQL refused to pay Daansa. Daansa sold the account to Tucker, a Texas company that buys receivables from trucking companies and tries to collect them. Tucker’s Mr. Reed contacted Prestige and demanded payment on the account. Prestige contacted Corsi. TQL notified Reed that its contact violated the broker carrier agreement. TQL filed suit against Tucker and Reed, asserting claims for breach of contract, tortious interference with contract and business relationships, and punitive damages. The complaint sought compensatory damages for injury to business goodwill. The complaint also sought injunctive relief prohibiting defendants from contacting or suing any TQL customers demanding payment for invoices allegedly owed to trucking companies.

Tucker filed a motion to dismiss TQL’s tortious interference claim. The trial court granted that motion. “Tucker later filed a motion for summary judgment on the breach-of-contract and punitive-damages claims and separately filed a motion for summary judgment on the request for an injunction.” The trial court granted summary judgment to Tucker on these motions. It found that, while Tucker had violated the agreement, TQL failed to show that it had suffered an injury to goodwill. The trial court also declined to grant injunctive relief. TQL appealed.

The trial court erred as a matter of law when it granted the defendants’ motions for summary judgment. TQL argued that the trial court erred by finding that TQL failed to show damage caused by Tucker’s violation of the agreement and that its goodwill was injured because of Reed’s call to Prestige. The appellate court reviewed this issue de novo. “De novo review means that this court uses the same standard that the trial court should have used, and we examine the evidence to determine whether no genuine issues exist for trial as a matter of law.” (Morris v Dobbins Nursing Home) Tucker agreed it was bound by and violated the agreement. The issue was whether TQL presented sufficient evidence to show it was entitled to damages.

TQL claimed it suffered a loss of business goodwill, a form of loss of profits. Testimony of an expert was not required to show loss of goodwill, but testimony from one who had firsthand knowledge of the loss will suffice. In summary, TQL believed that Reed’s single call was responsible for its loss of goodwill. “[W]hile Unger defined loss of goodwill as the loss of reputation, which harms TQL’s relationships with customers and carriers, she identified only one customer (presumably Corsi) who had merely ‘threatened to stop doing business with TQL.’” The appellate court noted that it was tough to determine how much any allegation contributed to lost goodwill. “[T]here is no evidence that any amount could be calculated, and it would be speculative to assign a dollar amount for TQL’s goodwill damages. A party cannot recover damages beyond the amount established with reasonable certainty.” No reasonable mind could find a loss of goodwill from Reed’s one phone call. TQL failed to show actual damage to goodwill resulting from Tucker’s breach of the agreement. “Thus, the trial court properly found that Tucker failed to present sufficient evidence that it suffered goodwill damages.”

Despite TQL’s failure to prove loss of goodwill, the Tucker breach of contract (i.e., of the agreement) did frustrate TQL’s way of doing business, and the trial court can still enter judgment in favor of TQL and award it nominal damages. Thus, the appellate court remanded the case for the award of nominal damages and the determination of the prevailing party regarding an award of attorneys’ fees and expenses.