and fair dealing which arose from a lease agreement between the parties. Plaintiff argued that the construction of a food court in the mall where plaintiff was a tenant violated the obligation of good faith and fair dealing implied in the lease. The court examined the language of the lease which stated that defendant had the discretion to change the location of other tenants and to change the nature of any occupancy of any store unit in the mall at any time. Based on the express language of the contract, the court found that no obligation of good faith and fair dealing arose from the contract because the language specifically manifested an intention by the parties that defendant would have complete discretion over future tenants in the mall. See also Fodor, 1990 Ohio App. LEXIS 2779, at *7-8 (trial court erred in finding a breach of obligation of good faith and fair dealing where express language of contract did not prevent defendant from relocating its operations, and therefore, no such obligation could be implied from the contract).
Based on the above rules, we also find there can be no obligation of good faith and fair dealing construed from the language of the Agreement. As stated previously, the express language of the contract provides that defendant did not have an obligation to provide financing. The contract also provides that defendant could terminate the contract upon ten days notice anytime after June 3, 1991. Contrary to what plaintiff asserts, there can be no obligation of defendant implied from the Agreement to provide plaintiff with more than ten days notice upon its decision to terminate the contract. Plaintiff had negotiated these terms with defendant, and was fully aware of these terms. If plaintiff intended for defendant to provide it with more time to arrange for financing prior to termination, it should have included such language in the contract. Thus, as in Carrols and Fodor, no implied covenant of good faith and fair dealing arises from the language of the contract, and defendant's motion for summary judgment on Count II of the complaint is granted.
IV. Bad faith tort
Defendant next asserts that there is no cause of action in Ohio for the tort of bad faith, and even if there was, summary judgment is warranted because plaintiff cannot prove causation in this case. While plaintiff does not specifically address defendant's argument, it appears that plaintiff's argument regarding the breach of the implied covenant of good faith and fair dealing also applies to its claim for the tort of bad faith.
After careful review of Ohio law, it does not appear that there is a specific cause of action for bad faith tort, other than against insurance companies for a "breach of a duty established by a particular contractual relationship." Zoppo v. Homestead Ins. Co., 1993 Ohio App. LEXIS 3459, No. 62926, 1993 WL 262641, at 2 (Ohio App. July 8, 1993) (citing Motorists Mutual Ins. Co. v. Said, 63 Ohio St. 3d 690, 590 N.E.2d 1228 (1992)). Regarding insurance companies, this tort arises by virtue of the duty of good faith imposed on them in the handling and payment of the claims of the insured. Zoppo, 1993 Ohio App. LEXIS 3459, 1993 WL 2626, at 2. "Showing a breach of the covenants of good faith and fair dealing is equivalent to showing bad faith." Phillips v. State Farm Fire & Casualty Co., 1993 Ohio App. LEXIS 4583, No. CA92-11-215, 1993 WL 386291, at 3 (Ohio App. Sept. 27, 1993) (citing Slater v. Motorists Mutual Ins. Co., 174 Ohio St. 148, 187 N.E.2d 45 (1962)). No Ohio cases were found dealing with this tort other than cases dealing with insurance contracts.
As previously explained, plaintiff has failed to establish a cause of action for breach of the implied covenant of good faith and fair dealing. Likewise, it follows that plaintiff's claim for bad faith tort must also fail. Even if Ohio courts recognized a cause of action for bad faith arising from contracts other than insurance contracts, plaintiff fails to establish any duty owed by defendant that was breached which would trigger this cause of action. As such, defendant's motion for summary judgment is granted with respect to Count III of the complaint.
Defendant next argues that it is entitled to summary judgment with respect to plaintiff's claim for fraud because plaintiff has failed to establish any evidence showing that the elements of fraud have been satisfied. In its response, without specifically stating how each element has been satisfied, plaintiff states that the "totality of the circumstances" shows that plaintiff has established a jury question as to its fraud claim.
To state a cause of action for fraud in Ohio, a party must show:
a) a representation or, where there is a duty to disclose, concealment of a fact, b) which is material to the transaction at hand, c) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred, d) with the intent of misleading another into relying upon it, e) justifiable reliance upon the representation or concealment, and f) a resulting injury proximately caused by the reliance.
Gaines v. Preterm-Cleveland, Inc., 33 Ohio St. 3d 54, 55, 514 N.E.2d 709, 712 (1987). Further, a promise to perform in the future cannot constitute a representation that is the basis for fraud unless it can be shown that at the time the promise was made, the promisor intended not to perform the promise. Link v. Leadworks Corp ., 79 Ohio App. 3d 735, 742-43, 607 N.E.2d 1140, 1145 (Ohio App. 1992); Freeman v. Westland Builders, Inc., 2 Ohio App. 3d 212, 217, 441 N.E.2d 283, 289 (Ohio App. 1981).
Plaintiff alleges the following false representations by defendant in its complaint: 1) misrepresenting it would operate the CSD only in the usual course of business and consistent with its past practices; 2) misrepresenting the true amount of CSD accounts receivable in the Agreement which stated it contained "some" evergreen billings when in reality there was about one to two million dollars worth of evergreen billings; 3) misrepresenting it would obtain environmental clearances; 4) misrepresenting it would obtain consents to the assignment of contracts; 5) misrepresenting it would negotiate in good faith up until closing; and 6) misrepresenting it would comply with the Agreement as amended and perform in accordance thereto. Complaint, para. 54.
We find that plaintiff has not presented any evidence to show that a genuine issue of material fact exists with regard to its fraud claim because plaintiff cannot show that defendant made false representations of any sort. Regarding defendant's future promises to obtain environmental clearances and consents to the assignment of contracts, defendant presents evidence that plaintiff admitted it had no evidence to support its claim that defendant was lying when it made these promises. See deposition of Herbert Balzuweit, pp. 313-14. Defendant also presents evidence that plaintiff's attorneys admitted in their depositions that they had no knowledge that defendant did not comply with those representations. See depositions of Lori Smith, pp. 31-32, Harry Tillis, pp. 91-92. Plaintiff presents no evidence to the contrary, therefore, there is nothing to show that these representations were false.
Regarding defendant's promises to negotiate in good faith and comply with the Agreement as amended, defendant has also presented evidence that plaintiff stated it has no evidence showing that defendant did not intend to comply with these representations when it made them. Deposition of Herbert Balzuweit, pp. 314-16. Further, although plaintiff claims that these misrepresentations are evidenced by the fact that defendant did not provide financing, plaintiff further admits that it does not think Mr. Van Skilling was lying when he allegedly stated on May 1, 1991 that defendant would provide financing. Id. at 338-41. Moreover, given that the clear language of the contract indicates defendant had no obligation to provide financing, the fact that defendant did not provide financing cannot constitute any sort of misrepresentation that is inconsistent with its promises to comply with the Agreement and to negotiate in good faith.
Regarding defendant's promise to operate the CSD in the ordinary course of business, defendant demonstrates that plaintiff has no evidence to support this claim. In response to a deposition question of whether that promise "was false when made or that TRW turned out to have breached that promise," plaintiff states defendant turned out to have breached that promise. Id. at 345. However, the affidavit by Mr. Balzuweit and the report of plaintiff's expert both state that the acceleration of the accounts receivable by defendant constituted a misrepresentation of that promise. Even accepting plaintiff's evidence as true, and assuming defendant did accelerate the accounts receivable, plaintiff still has not shown how this constitutes a misrepresentation. There is nothing in the Agreement stating that defendant could not collect its accounts receivable, nor is there anything in the Agreement stating at what rate they could be collected. Plaintiff argues that there is evidence of fraud because under the Agreement, defendant was entitled to all of the cash and plaintiff was entitled to all accounts receivable. However, simply because defendant accelerated the collection of accounts receivable does not mean it did not operate the CSD in the ordinary course of business. While plaintiff may have thought there would be a specific amount of accounts receivable available when the business was transferred, there is no evidence that defendant made any promises to that effect. Plaintiff's thoughts about these matters are not evidence upon which to deny a motion for summary judgment. As such, there is no specific misrepresentation by defendant regarding the promise to operate the CSD in the ordinary course of business.
Finally, plaintiff argues there was a misrepresentation by defendant regarding the evergreen billings. Again, there is no misrepresentation here because defendant disclosed the existence of the evergreen billings in the Agreement. The Agreement states: "In accordance with the Supplemental Accounting Principles, some receivables are invoiced in advance of the rendering of service. Under some service contracts, the customer may be subsequently entitled to a credit for such matters as changes in the equipment schedule for such customer, or nonrenewal, cancellation or early termination of a contract." Agreement, part C, para. 3(b). While plaintiff states that the word "some" is misleading because it turned out to be one to two million dollars worth of evergreen billings out of a total of seventeen million dollars worth of accounts receivable, this does not constitute a misrepresentation but rather, a misunderstanding about the Agreement in plaintiff's mind. It is true that some of the accounts receivable consisted of evergreen billings. Defendant presents evidence that it did not know what amount of accounts receivable consisted of evergreen billings, and plaintiff presents no evidence to the contrary. Moreover, defendant did not represent that none of the accounts receivable consisted of evergreen billings, rather, it stated there were some, and some turned out to be less than ten percent of the entire accounts receivable. Thus, there is no misrepresentation by defendant regarding the evergreen billings.
Given that plaintiff has failed to provide any evidence showing defendant made any false representations of any sort, plaintiff fails to rebut defendant's evidence regarding the claim for fraud. As such, summary judgment is granted in favor of defendant with respect to Count IV of the complaint.
VI. Negligent misrepresentation
Defendant next argues that plaintiff has not provided adequate evidence to sustain its claim for negligent misrepresentation. While the complaint alleges that "defendant negligently supplied false information to plaintiff," plaintiff does not expand on this in its response to the motion for summary judgment and instead merely points to the affidavit of Mr. Balzuweit as evidence of its claim. Plaintiff's lack of clarity notwithstanding, it still fails to produce any evidence to support its claim for negligent misrepresentation.
Ohio has adopted the definition of the Restatement of Torts regarding negligent misrepresentation. "One who...supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information." Brown v. Woodmen Accident and Life Co., 84 Ohio App. 3d 52, 55, 616 N.E.2d 278, 279-80 (Ohio App. 1992) (quoting Restatement (Second) of Torts, § 552(1) (1965) as cited in Delman v. Cleveland Heights, 41 Ohio St. 3d 1, 4, 534 N.E.2d 835, 838 (1989)); Doe v. Blue Cross/Blue Shield of Ohio, 79 Ohio App. 3d 369, 383, 607 N.E.2d 492, 501 (1992).
As stated above, there is no evidence that defendant has misrepresented any facts to plaintiff, and as such, plaintiff cannot then prove that defendant provided "false information" in order to satisfy its claim for negligent misrepresentation. Moreover, even if there is a question of fact as to whether defendant agreed to provide financing, plaintiff's reliance on that statement was not reasonable, thus, there can be no justifiable reliance. Given that the language of the fourth amendment stated that defendant had no obligation to provide financing, plaintiff acted at its own peril if it ceased looking for other financing in reliance on defendant's alleged promise. See Brown, 84 Ohio App. 3d at 56, 616 N.E.2d at 280 (appellant's reliance on insurance agent's misrepresentation as to amount of insurance coverage was not justified when the amount of coverage was stated in clear and unambiguous terms in the insurance policy, to which appellant had access). Therefore, we will grant summary judgment for defendant with regard to Count V of the complaint.
VII. Promissory estoppel
Finally, we address defendant's argument that plaintiff has not provided sufficient evidence to satisfy its claim of promissory estoppel. The doctrine of promissory estoppel provides that "a promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise." Mers v. Dispatch Printing Co., 19 Ohio St. 3d 100, 104, 483 N.E.2d 150, 154 (1985) (citations omitted). Thus, to establish a cause of action, it must be proven that there was a clear and unambiguous promise, upon which plaintiff relied, that the reliance was reasonable and foreseeable, and that plaintiff was injured by said reliance. Healey v. Republic Powdered Metals, Inc., 85 Ohio App. 3d 281, 284, 619 N.E.2d 1035, 1037 (Ohio App. 1992) (citations omitted).
Plaintiff argues that the conduct of defendant in promising to finance and then conducting due diligence with respect to the promise, caused plaintiff to rely to its detriment that defendant would provide financing. Plaintiff asserts that it was injured when defendant terminated the Agreement while it was still conducting due diligence because plaintiff could not obtain financing within the ten day notice period. Even assuming that plaintiff's evidence about the alleged promise to provide financing is true, however, plaintiff's claim still fails because its reliance was unreasonable in light of the clear language of the contract which stated that defendant was not obligated to provide financing. Thus, we will grant defendant's motion with respect to Count VI of the complaint.
In sum, plaintiff fails to produce any evidence to defeat defendant's motion for summary judgment. Plaintiff has not proven that it was damaged by any alleged breaches of the Agreement and therefore its breach of contract claim fails. Ohio law does not provide a cause of action for breach of an implied covenant of good faith and fair dealing or a claim for bad faith tort under these circumstances, nor do the circumstances justify imposing an obligation of good faith and fair dealing upon defendant. Plaintiff has also failed to present evidence establishing any sort of misrepresentations by defendant with respect to its fraud claim. The lack of misrepresentations and justifiable reliance both defeat plaintiff's claim for negligent misrepresentation. Finally, plaintiff's claim of promissory estoppel also fails because any reliance on defendant's alleged promise was unreasonable. An appropriate order follows.
AND NOW, this 5th day of January, 1994, upon consideration of the motion of defendant, TRW, Inc., for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, and all responses thereto, it is hereby ORDERED that defendant's motion is GRANTED, and summary judgment is entered on all counts of the complaint in favor of defendant and against plaintiff.
BY THE COURT:
J. Curtis Joyner, J.