Case: 1:13-cv-02831-SL Doc #: 101 Filed: 11/08/16 1 of 37. PageID #: 1703
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF OHIO
`EASTERN DIVISION
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`CASE NO. 1:13-cv-2831
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`JUDGE SARA LIOI
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`MEMORANDUM OPINION
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`JBLANCO ENTERPRISES,
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`Plaintiff/Third-party Defendant,
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`vs.
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`SOPREMA ROOFING AND
`WATERPROOFING, INC.,
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`Defendant/Third-party Defendant,
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`vs.
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`BARLOVENTO, LLC,
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`Third-party Plaintiff/Intervenor,
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`vs.
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`GREAT AMERICAN INSURANCE GROUP,
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`Third-Party Defendant.
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`This matter is before the Court upon the motion of defendant and third-party defendant
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`Soprema Roofing and Waterproofing, Inc.1 (“Soprema”) for summary judgment on: (1) the
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`complaint of plaintiff JBlanco Enterprises, Inc. (“JBlanco”); (2) counts II, III, IV, and VII of the
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`complaint of intervenor/third-party plaintiff Barlovento, LLC’s (“Barlovento”); and (3)
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`Soprema’s breach of contract claim against JBlanco. (Doc. Nos. 67 and 67-1 [“Mot.”].) Both
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`JBlanco and Barlovento opposed Soprema’s motion. (Doc. No. 68 [“Barlovento Opp’n”]; Doc.
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`1 In its motion for summary judgment, Soprema states that it has been improperly named as Soprema Roofing and
`Waterproofing, Inc., and that its correct name is Soprema, Inc. (Mot. at 495 (All references to page numbers are to
`the page identification numbers generated by the Court’s electronic docketing system.).)
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`Case: 1:13-cv-02831-SL Doc #: 101 Filed: 11/08/16 2 of 37. PageID #: 1704
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`No. 70 [“JBlanco Opp’n”].) Soprema filed separate replies. (Doc. No. 72 [“Reply to
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`Barlovento”]; Doc. No. 73 [“Reply to JBlanco”].) Barlovento was granted leave to file a sur-
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`reply. (Doc. No. 74-3 [“Barlovento Sur-reply”].)
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`For the reasons that follow, Soprema’s motion for summary judgment is granted.
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`I. BACKGROUND
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`JBlanco’s complaint
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`This case, before the Court on diversity jurisdiction pursuant to 28 U.S.C. § 1332, was
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`originally filed in district court in Colorado and transferred to the Northern District of Ohio.
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`(Doc. No. 21.) JBlanco, a Colorado corporation, is a commercial roofing contractor. (Doc. No. 1
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`[“JBlanco Compl.”] ¶ 1.) Soprema, an Ohio corporation, sells roofing materials to contractors
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`like JBlanco. (Id. ¶ 2.) Soprema provided roofing materials to JBlanco for installation on certain
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`government buildings at the United States Air Force Academy (“Academy”).2 (Id. ¶¶ 8-9.)
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`Problems arose with those government roofing projects. JBlanco claims the problems are caused
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`by the roofing materials supplied by Soprema, and asserts a single contract claim against
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`Soprema for breach of express and implied warranties under the law of the State of Colorado.
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`(Id. ¶¶ 10-24.)
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`Soprema’s complaint
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`Soprema sued JBlanco in a separate lawsuit, Case No. 1:14-cv-79,3 for failing to pay
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`Soprema for the roofing materials purchased by JBlanco for the government roofing projects at
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`issue in JBlanco’s complaint. (Doc. No. 1-2 in Case No. 1:14-cv-79 [“Soprema Compl.”].)
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`2 JBlanco’s complaint identifies the buildings at issue as Vanderberg Hall, Arnold Hall, and GSA Building No. 50.
`(JBlanco Compl. ¶ 9.)
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`3 Soprema’s lawsuit, filed in the Medina County Court of Common Pleas, was removed by JBlanco to this Court on
`the basis of diversity jurisdiction, 28 U.S.C. § 1332.
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`2
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`Soprema’s complaint asserts four causes of action in that regard: (1) breach of the
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`authorized roofing contractor agreement between Soprema and JBlanco; (2) breach of JBlanco’s
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`application for credit contract with Soprema; (3) conversion of roofing materials supplied by
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`Soprema to JBlanco; and (4) unjust enrichment. (Id. ¶¶ 14-39.) The Court consolidated
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`Soprema’s case with the above-captioned action, treating Soprema’s complaint in Case No. 1:14-
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`cv-79 as a counterclaim to JBlanco’s complaint. (Doc. No. 15 in Case No. 1:14-cv-79.) On
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`summary judgment, Soprema seeks $556,693.41 in unpaid invoices and finance charges, as well
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`as attorney fees.4
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`Barlovento’s complaint
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`Barlovento was granted leave to intervene as a third-party plaintiff in the above-captioned
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`case when the roof repairs to the Air Force’s Consolidated Educational Training Facility
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`(“CETF”) at the Academy in Colorado (the “CETF project”) were added by JBlanco and
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`Soprema to the scope of the litigation between them. (Doc. No. 49-1 at 239; Minute Order
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`09/09/2015.) Barlovento’s complaint raises allegations against JBlanco and Soprema with
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`respect to the CETF project only, and not the other government roofing projects at issue between
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`JBlanco and Soprema. (See Doc. No. 50 [“Barlovento Compl.”].)
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`Barlovento, an Alabama limited liability company, provides general contractor, design,
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`and construction services to the government and industry clients. (Id. at ¶ 7.) Barlovento
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`contracted with the United States Department of the Air Force to replace the roof on the CETF,
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`and subcontracted with JBlanco to provide the labor, materials, and equipment for that job. (Id.
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`¶¶ 8-10.) JBlanco purchased the roofing materials from Soprema. Barlovento does not have a
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`4 If Soprema’s motion on the counterclaim is granted, Soprema requests a hearing at which it will present evidence
`of reasonable attorney fees.
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`3
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`contract with Soprema. As part of the subcontract with Barlovento, JBlanco was required to
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`obtain a performance bond, and did so from Great American Insurance Group (“Great
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`American”). (Id. ¶¶ 11-12.)
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`After the CETF project was complete, the Air Force would not accept the roof because of
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`discoloration, cracking, and blistering, and required the roof to be replaced in its entirety. (Id. ¶¶
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`19-21.) Barlovento claims: (1) breach of contract against JBlanco (counts I5 and V6) for failing to
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`properly store, prepare and apply the roofing materials on the CETF project, and for failing to
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`indemnify Barlovento in accordance with the terms of the subcontract between them; (2) breach
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`of contract against Soprema (Count II7) for breaching implied warranties of merchantability and
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`fitness for a particular purpose in Soprema’s agreement with JBlanco, to which Barlovento
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`alleges it is a third-party beneficiary; (3) negligence against both JBlanco and Soprema (counts
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`III8 and IV9); (4) breach of express warranty against JBlanco (count VI10) with respect to the
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`subcontract between Barlovento and JBlanco; (5) breach of express warranty against Soprema
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`(count VII11) with respect to an alleged 10-year written manufacturer’s warranty issued by
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`Soprema to the Air Force for the CETF project, to which Barlovento alleges it is a third-party
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`beneficiary; and (6) breach of performance bond against Great American (count VIII12).
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`Soprema moves for summary judgment on all of Barlovento’s claims against it.
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`5 Barlovento Compl. ¶¶ 22-26.
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`6 Barlovento Compl. ¶¶ 48-52.
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`7 Barlovento Compl. ¶¶ 27-32.
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`8 Barlovento Compl. ¶¶ 33-39.
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`9 Barlovento Compl. ¶¶ 40-47.
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`10 Barlovento Compl. ¶¶ 53-59.
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`11 Barlovento Compl. ¶¶ 60-65.
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`12 Barlovento Compl. ¶¶ 66-71.
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`4
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`II. DISCUSSION
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`A. Summary Judgment Standard
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`Summary judgment is appropriate where “there is no genuine dispute as to any material
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`fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is
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`material if its resolution affects the outcome of the lawsuit under the governing law. Anderson v.
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`Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). A dispute is
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`genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving
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`party.” Id. If a reasonable jury could return a verdict for the nonmoving party, then summary
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`judgment is not appropriate. Id.
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`The moving party must provide evidence to the Court which demonstrates the absence of
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`a genuine dispute as to any material fact. Once the moving party meets this initial burden, the
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`opposing party must come forward with specific evidence showing that there is a genuine issue
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`for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986);
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`Anderson, 477 U.S. at 250. The nonmoving party may oppose a summary judgment motion “by
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`any of the kinds of evidentiary material listed in Rule 56(c), except the mere pleadings
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`themselves[.]” Celotex, 477 U.S. at 324. The Court must view all facts and evidence, and
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`inferences that may be reasonably drawn therefrom, in favor of the non-moving party. United
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`States v. Diebold, Inc., 369 U.S. 654, 655, 82 S. Ct. 993, 8 L. Ed. 2d 176 (1962).
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`General averments or conclusory allegations of an affidavit do not create specific fact
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`disputes for summary judgment purposes. See Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888-
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`89, 110 S. Ct. 3177, 111 L. Ed. 2d 695 (1990). “Summary judgment requires that a plaintiff
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`present more than a scintilla of evidence to demonstrate each element of a prima facie case.”
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`Garza v. Norfolk S. Ry. Co. 536 F. App’x 517, 519 (6th Cir. 2013) (citing Van Gorder v. Grand
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`5
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`Trunk W. R.R., 509 F.3d 265, 268 (6th Cir. 2007)). “‘The mere existence of a scintilla of
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`evidence in support of the [nonmoving party’s] position will be insufficient; there must be
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`evidence on which the jury could reasonably find for the [nonmoving party].’” Street v. J.C.
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`Bradford & Co., 886 F.2d 1472, 1477 (6th Cir. 1989) (quoting Anderson, 477 U.S. at 252).
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`The district court’s review on summary judgment is a threshold inquiry to determine
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`whether there is the need for a trial due to genuine factual issues that must be resolved by a
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`finder of fact because those issues may reasonably be resolved in favor of either party. Anderson,
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`477 U.S. at 250. Put another way, this Court must determine “whether the evidence presents a
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`sufficient disagreement to require submission to a jury or whether it is so one-sided that one
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`party must prevail as a matter of law.” Id. at 251-52; see also Wexler v. White’s Fine Furniture,
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`Inc., 317 F.3d 564, 578 (6th Cir. 2003).
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`Summary judgment is required:
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`against a party who fails to make a showing sufficient to establish the existence of
`an element essential to that party’s case, and on which that party bears the burden
`of proof at trial. In such a situation, there can be no genuine issue as to any
`material fact, since a complete failure of proof concerning an essential element of
`the nonmoving party’s case necessarily renders all other facts immaterial. The
`moving party is entitled to judgment as a matter of law because the nonmoving
`party has failed to make a sufficient showing of an essential element of [his] case
`with respect to which [he] has the burden of proof.
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`Celotex, 477 U.S. at 322-23 (internal quotation marks and citation omitted).
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`B. Soprema’s Motion as to JBlanco’s Complaint
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`Soprema maintains that it is entitled to judgment as a matter of law on JBlanco’s single
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`contract claim against it for breach of express and implied warranties because all warranties to
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`JBlanco were expressly disclaimed by Soprema in a 2008 agreement between them. (Mot. at
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`504-05.) The parties do not dispute that on May 29, 2008, JBlanco entered into a Soprema
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`Authorized Roofing Contractor Agreement (“Agreement”) with Soprema, or that paragraph 7.1
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`6
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`Case: 1:13-cv-02831-SL Doc #: 101 Filed: 11/08/16 7 of 37. PageID #: 1709
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`of the Agreement disclaims all express and implied warranties as to the roofing contractor—in
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`this case, JBlanco. (Doc. No. 67-2 at 517-25 [“Agreement”].) The Agreement is signed on behalf
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`of JBlanco by Jeannette Wellers (“Wellers”) as JBlanco’s president. (Id. at 525.)
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`JBlanco opposes the motion on two grounds. First, JBlanco argues that the terms of the
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`Agreement do not apply to the government roofing projects at issue in this case. Second, even if
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`the Agreement does apply, JBlanco contends that the Agreement’s warranty disclaimer is
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`unenforceable because it is unconscionable as a matter of law.13 (JBlanco Opp’n at 730-31.)
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`Soprema disagrees, contending that the Agreement applies to all roofing projects performed by
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`JBlanco utilizing Soprema’s roofing products,14 and that paragraph 7.1 of the Agreement is not
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`unconscionable.
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`Although JBlanco’s claims against Soprema are based Colorado law, both Soprema and
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`JBlanco cite Ohio law in support of their respective arguments regarding interpretation of the
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`Agreement and unconscionability of the warranty disclaimer provision. Paragraph 13.11 of the
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`Agreement provides that the Agreement, and all amendments and modifications thereto, are
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`governed and construed “in accordance with the internal law, not the law of conflicts, of Ohio.”15
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`The Agreement applies to the government roofing projects at issue
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`“Under Ohio law, the interpretation of written contract terms, including the determination
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`of whether those terms are ambiguous, is a matter of law for initial determination by the court.”
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`13 After Soprema’s motion was fully briefed, the Court conducted an evidentiary hearing on September 2, 2016, on
`the issue of unconscionability of Soprema’s warranty disclaimer. Wellers testified on behalf of JBlanco, and Todd
`Jackson (“Jackson”) testified on behalf of Soprema. In ruling on Soprema’s motion, the Court has considered the
`testimony of the witnesses, the arguments of counsel, and the exhibits admitted at the hearing in ruling on the issue
`of unconscionability, as well as the parties’ summary judgment briefing.
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`14 See Doc. No. 67-2 (Affidavit of Todd Jackson [“Jackson Aff.”]) ¶¶ 13-14).
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`15 The parties did not address the issue of what substantive law applies if the Agreement does not apply to the
`government roofing projects in this case. Courts sitting in diversity apply the law of the forum state, including the
`choice of law rules. Himmel v. Ford Motor Co., 342 F.3d 593, 598 (6th Cir. 2003) (citations omitted).
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`7
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`Savedoff v. Access Grp., Inc., 524 F.3d 754, 763 (6th Cir. 2008) (citations omitted). The Court’s
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`role in interpreting a contract is to ascertain the intent of the parties, which is presumed to reside
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`in the language they used in their agreement. Id. at 763 (quoting City of St. Mary’s v. Auglaize
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`Cnty. Bd. of Commrs., 875 N.E.2d 561, 566 (Ohio 2007) and Graham v. Drydock Coal Co., 667
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`N.E.2d 949, 952 (Ohio 1996)).
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`When interpreting a contract, “the contract must be construed as a whole” in order to give
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`“reasonable effect to every provision in the agreement.” Id. (quoting Tri-State Grp., Inc. v. Ohio
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`Edison Co., 782 N.E.2d 1240, 1246 (Ohio Ct. App. 2002) and Stone v. Nat’l City Bank, 665
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`N.E.2d 746, 752 (Ohio Ct. App. 1995)); see also Saunders v. Mortensen, 801 N.E.2d 452, 455
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`(Ohio 2004) (“We have long held that a contract is to be read as a whole and the intent of each
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`part gathered from a consideration of the whole. If it is reasonable to do so, we must give effect
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`to each provision of the contract.”) (citation omitted).
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`Contract language is ambiguous when its meaning cannot be determined from the four
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`corners of the agreement, or when the language at issue is subject to two or more reasonable
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`interpretations. Savedoff, 524 F.3d at 763 (quoting Covington v. Lucia, 748 N.E.2d 186, 190
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`(Ohio Ct. App. 2003)). Common words are to be given their plain and ordinary meaning unless a
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`“manifest absurdity results or unless some other meaning is clearly intended from the face or
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`overall contents of the instrument.” Id. at 764 (quoting Alexander v. Buckeye Pipe Line Co., 374
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`N.E.2d 146, 150 (Ohio 1978)). “If a contract is clear and unambiguous, then its interpretation is a
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`matter of law and there is no issue of fact to be determined.” Inland Refuse Transfer Co. v.
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`Browning-Ferris Indus. of Ohio, 474 N.E.2d 271, 272 (Ohio 1984) (citation omitted).
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`JBlanco contends that there is a genuine issue of material fact regarding whether the
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`Agreement applies to any other project than the Dick Cheney Federal Building (“Dick Cheney
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`8
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`project”) because the terms of the Agreement are ambiguous as to its scope and applicability.
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`(JBlanco Opp’n at 735-36.) In support of this argument, JBlanco offers the affidavit of Wellers.
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`The affidavit purports to aver that Wellers understood the Agreement only applied to the Dick
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`Cheney project—the project for which JBlanco first entered the Agreement in 2008 to purchase
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`Soprema roofing supplies. According to Wellers’ affidavit, her understanding is evidenced by the
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`handwritten note she added when she signed the agreement, which states: “We need 60 day
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`terms for this job.” (Doc. No. 70-1 at 742-44 [“Wellers Aff.”] ¶¶ 5-6; Agreement at 525.)
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`JBlanco argues that Wellers’ handwritten note creates an ambiguity regarding the scope of the
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`Agreement that requires a factfinder to resolve.
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`Wellers’ affidavit, however, is unsigned. In its brief, JBlanco states that the affidavit is
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`unsigned because Wellers was out of town without access to a notary, but that “[a]n executed,
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`notarized copy will be filed shortly after her return.” (JBlanco Opp’n at 732 n. 1.) An executed
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`and notarized affidavit was never filed. Unsigned affidavits do not qualify as proper Rule 56
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`evidence in support of or opposition to a motion for summary judgment. See Nassif Ins. Agency,
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`Inc. v. Civic Prop. & Cas. Co., No. 03-2618, 2005 WL 712578, at *3 (6th Cir. Mar. 30, 2005)
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`(citations omitted). Therefore, the Court may not consider Wellers’ affidavit in ruling on the
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`motion for summary judgment. Finch v. Xavier Univ., 689 F. Supp. 2d 955, 962 (S.D. Ohio
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`2010) (citing, among authority, Dole v. Elliott Travel & Tours, Inc., 942 F.2d 962, 968–69 (6th
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`Cir. 1991) (“[A] court may not consider unsworn statements when ruling on a motion for
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`summary judgment.”)).
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`Regardless, the plain language of the Agreement is unambiguous regarding its scope and
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`applicability. First, an examination of the Agreement reveals that it contains no reference to the
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`Dick Cheney project.16
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`Second, section 11 of the Agreement governs “Term and Termination.” This section
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`plainly and unambiguously provides that the Agreement automatically renews on a calendar year
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`basis unless terminated by either party in writing. (See Agreement ¶¶ 11.1-11.4.) Because the
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`language of the Agreement regarding duration of the contract is plain and unambiguous, even if
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`Wellers’ affidavit was signed, neither her affidavit nor her testimony at the evidentiary hearing
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`can be introduced to create an ambiguity in the Agreement’s evergreen clause. See Plastech
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`Engineered Prod., Inc. v. Cooper-Standard Auto., Inc., No. 3:01 CV 7658, 2003 WL 22436210,
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`at *5 (N.D. Ohio Oct. 23, 2003) (“If the terms are not ambiguous, the court determines the
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`meaning of the contract without reference to any parol/extrinsic evidence.”) (citing Shifrin v.
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`Forest City Enters., Inc., 597 N.E.2d 499, 501 (Ohio 1992)). Moreover, even were the Court to
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`credit the unsigned affidavit of Wellers that she added the 60 day term language as a condition of
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`her acceptance of the Agreement, JBlanco has advanced no evidence that this purported
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`alteration or amendment to the Agreement was accepted by Soprema in accordance with the
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`plain and unambiguous terms of paragraph 13.1, which requires any alteration or amendment of
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`the Agreement to be in writing and signed by an officer of Soprema. (Agreement ¶ 13.1.)
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`16 Although the evidentiary hearing was scheduled by the Court only to address the issue of unconscionability of
`Soprema’s warranty disclaimer, Wellers also testified at the hearing regarding the applicability of the Agreement to
`the government roofing projects at issue herein. At the hearing, Wellers testified that the Dick Cheney project is not
`mentioned in the Agreement.
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`Case: 1:13-cv-02831-SL Doc #: 101 Filed: 11/08/16 11 of 37. PageID #: 1713
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`According to Soprema’s records, the Agreement was in effect during the CETF project.
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`(Doc. No. 73-1 (June 20, 2016 Affidavit of Todd Jackson [“6/20/16 Jackson Aff.”]) ¶ 8.) JBlanco
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`offers no evidence that the Agreement was terminated in accordance with its provisions by either
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`party before the CETF project was consummated.
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`“‘In a contract dispute, summary judgment is permissible when the contractual language
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`of the contract is unambiguous, or, if the language is ambiguous, where extrinsic evidence leaves
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`no genuine issue of material fact and permits contract interpretation of the agreement as a matter
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`of law.’” Dragomier v. Local 1112 Int’l Union United Auto. Aerospace & Agr. Implement
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`Workers of Am., 64 F. Supp. 3d 1033, 1042 (N.D. Ohio 2014) (quoting Averill v. Gleaner Life
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`Ins. Soc., 626 F.Supp. 2d 756, 761 (N.D. Ohio 2009)). Here, the plain and unambiguous
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`language of the Agreement provides for automatic renewals unless terminated. There is no
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`evidence that the Agreement was terminated by either party before the government roofing
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`projects at issue in this case commenced. Thus, the Court concludes that there is no genuine issue
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`of material fact that the Agreement was in effect and applicable to the government roofing
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`projects at issue in this action, including the CETF project.
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`Section 7 is not unconscionable
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`Paragraph 7.1 of the Agreement clearly and unambiguously provides that Soprema makes
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`no express or implied warranties to JBlanco with respect to Soprema’s roofing products used by
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`JBlanco in the government projects at issue in this case:
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`7. Soprema’s Warranty
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`7.1 UNLESS OTHERWISE AGREED TO BY SOPREMA IN A WRITING
`SIGNED BY AN OFFICER OF SOPREMA, ANY PRODUCTS SOLD BY
`SOPREMA TO CONTRACTOR ARE SOLD AS IS AND WHEREIS [SIC].
`SOPREMA DOES NOT MAKE ANY WARRANTIES TO CONTRACTOR
`EXPRESS OR IMPLIED. IN NO EVENT WILL SOPREMA BE LIABLE
`TO CONTRACTOR, ITS EMPLOYEES, AGENTS, INDEPENDENT
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`SHAREHOLDERS,
`CONTRACTORS, OFFICERS, DIRECTORS,
`MANAGERS, MEMBERS OR PARTNERS, AS THE CASE MAY BE, FOR
`ANY DAMAGES, INCLUDING ANY LOST PROFITS, LOST SAVINGS
`OR ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES
`ARISING OUT OF THE USE, SALE, OR MARKETING OF ANY
`PRODUCTS SOLD BY SOPREMA TO CONTRACTOR.
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`7.2 Even though Soprema is not warranting any products to Contractor, Soprema
`reserves the right, in its discretion, to issue a warranty to any building owner
`relating to its products and/or any roofing application or system. In the event
`Soprema delivers its warranty to Contractor, Contractor shall promptly deliver
`that warranty to the building owner or return it to Soprema.
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`(Agreement ¶¶ 7.1-7.2 (all capitalization and bold in original).)
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`JBlanco argues that paragraph 7.1 is unconscionable under Ohio law, and therefore
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`unenforceable, because Soprema’s disclaimer of warranties completely abdicates any
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`responsibility for its products and leaves JBlanco with no remedy or avenue for recourse if
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`Soprema’s products are defective. (JBlanco Opp’n at 737.) But in Ohio, contracting parties in
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`Ohio are free to agree to exclude or limit warranties if the exclusion or modification satisfies the
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`requirements of Ohio Rev. Code § 1302.29(B).17 Chemtrol Adhesives, Inc. v. Am. Mfr. Mut. Ins.
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`Co., 537 N.E.2d 624, 638 (Ohio 1989); Brondes Ford, Inc. v. Habitec Sec., 38 N.E.3d 1056,
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`1079 (Ohio Ct. App. 2015) (“R.C. 1302.92(B), part of Ohio's version of the Uniform
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`Commercial Code (“UCC”), allows for contracting parties to limit or alter damages, provided
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`that such disclaimers are conspicuous.”) (citing Ins. Co. of N. Am. v. Automatic Sprinkler Corp.
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`of Am., 423 N.E.2d 151 (Ohio 1981)).
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`17 Section 1302.29(B) provides that:
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`(B) Subject to division (C) of this section, to exclude or modify the implied warranty of
`merchantability or any part of it the language must mention merchantability and in case of a
`writing must be conspicuous, and to exclude or modify any implied warranty of fitness the
`exclusion must be by a writing and conspicuous. Language to exclude all implied warranties of
`fitness is sufficient if it states for example, that “There are no warranties which extend beyond the
`description on the face hereof.”
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`
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`Case: 1:13-cv-02831-SL Doc #: 101 Filed: 11/08/16 13 of 37. PageID #: 1715
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`
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`Paragraph 7.1 satisfies the requirements of § 1302.29(B). The warranty disclaimer in the
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`Agreement is conspicuous in bold face type and all capital letters, and specifically states that
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`Soprema makes no express or implied warranty to the roofing contractor, and is not liable for
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`any damages arising out of the use or sale of Soprema’s products. Limitation of consequential
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`damages where the loss is commercial is not prima facie unconscionable. Chemtrol Adhesives,
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`537 N.E.2d at 639 (citing Ohio Rev. Code § 1302.93(C)).
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`Whether paragraph 7.1 is unconscionable is an issue of law for the Court,18 and in Ohio,
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`is governed by Ohio Rev. Code. § 1302.15:19
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`(A) If the court as a matter of law finds the contract or any clause of the contract
`to have been unconscionable at the time it was made the court may refuse to
`enforce the contract or it may enforce the remainder of the contract without the
`unconscionable clause, or it may so limit the application of any unconscionable
`clause as to avoid any unconscionable result.
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`(B) When it is claimed or appears to the court that the contract or any clause
`thereof may be unconscionable the parties shall be afforded a reasonable
`opportunity to present evidence as to its commercial setting, purpose, and effect to
`aid the court in making the determination.
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`Ohio Rev. Code § 1302.15.
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`Unconscionability has both a procedural and substantive element. Traxler v. PPG Indus.,
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`Inc., 158 F. Supp. 3d 607, 616 (N.D. Ohio 2016). “The procedural element focuses on
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`oppression and surprise, which arise, respectively, from an inequality in bargaining power
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`resulting in the absence of a meaningful choice or hidden, unexpected terms.” Id. (citations
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`omitted). “The substantive element, on the other hand, turns on reasonableness. Courts have
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`found a term to be substantively suspect if it reallocates the risks of the bargain in a[n]
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`18 Hurst v. Enter. Title Agency, Inc., 809 N.E.2d 689, 694 (Ohio Ct. App. 2004) (quoting Ins. Co. of N. Am. v.
`Automatic Sprinkler Corp. of Am., 423 N.E.2d 151, 156 (Ohio 1981)).
`19 Uniform Commercial Code § 2-302 (Unconscionable contract or clause) is codified in Ohio as Ohio Rev. Code §
`1302.15.
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`objectively unreasonable or unexpected manner.” Id. (quotation marks and citations omitted).
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`“‘The party asserting unconscionability of a contract bears the burden of proving that the
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`agreement is both procedurally and substantively unconscionable.’” Ahmmad v. Ahmed, 38
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`N.E.3d 434, 444 (Ohio Ct. App. 2015) (quoting Hayes v. Oakridge Home, 908 N.E.2d 408, 412
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`(Ohio 2009) (further citation omitted)). Findings of unconscionability in commercial settings are
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`rare. Chemtrol Adhesives, 537 N.E.2d at 639 (“[W]e agree with the Arizona Supreme Court that
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`‘[a]lthough a commercial purchaser is not doomed to failure in pressing an unconscionability
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`claim, * * * findings of unconscionability in a commercial setting are rare.’”) (internal citations
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`omitted).
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`
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`Warranty disclaimer is not procedurally unconscionable
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`
`
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`JBlanco has failed to carry its burden to establish that paragraph 7.1 of the Agreement is
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`procedurally unconscionable. The procedural element of unconscionability focuses on
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`“oppression and surprise, which arise, respectively, from an inequality in bargaining power
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`resulting in the absence of a meaningful choice or hidden, unexpected terms.” Traxler, 158 F.
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`Supp. 3d at 616 (collecting cases). Wellers testified at the hearing that JBlanco has been a
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`roofing contractor on “lots of” roofing contracts—primarily government contracts. Although she
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`could not provide a specific number of roofing projects, Wellers testified that at least eighteen
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`(18) of those projects since 2008 were performed with Soprema roofing materials. Wellers
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`testified that, over the last five years, JBlanco did between three and nine million dollars in
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`business annually, and employs approximately 70 employees.
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`The evidence advanced by JBlanco fails to establish that there was significant inequality
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`in bargaining power between JBlanco and Soprema. Both JBlanco and Soprema are commercial
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`entities involved in the roofing industry. JBlanco is a multimillion dollar operation, and has been
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`Case: 1:13-cv-02831-SL Doc #: 101 Filed: 11/08/16 15 of 37. PageID #: 1717
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`a roofing contractor for many years. Over the past several years, 18 of JBlanco’s roofing projects
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`utilized Soprema roofing products.
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`Even if there was a disparity in bargaining power between them, JBlanco has offered no
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`evidence that any such inequality resulted in an absence of meaningful choice, or hidden and
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`unexpected terms in Soprema’s roofing contractor agreement with JBlanco. There is no evidence
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`that JBlanco lacked a meaningful choice in electing to become an authorized Soprema roofing
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`contractor and did not willingly enter into the Agreement.20 There is no evidence that JBlanco
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`entered into the Agreement under coercion or duress. If Wellers considered the warranty
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`disclaimer unsatisfactory, JBlanco was free to secure roofing materials from other manufacturers
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`with potentially more favorable warranty terms.
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`Finally, because of JBlanco’s extensive commercial dealings with Soprema, JBlanco
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`should have not been surprised by Soprema’s warranty terms. If JBlanco determined at any time
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`that Soprema’s warranty disclaimer was unsatisfactory, JBlanco was free to terminate the
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`Agreement in accordance with its terms.
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`The Court finds that JBlanco has failed carry its burden to establish that Soprema’s
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`warranty disclaimer is procedurally unconscionable because there was an inequality of
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`bargaining power between JBlanco and Soprema that resulted in the absence of a meaningful
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`choice on behalf of JBlanco, or hidden or unexpected terms in the Agreement. Traxler, 158 F.
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`Supp. 3d at 616 (citations omitted); see also Haga v. Martin Homes, Inc., No. 2000AP020018,
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`20 Wellers testified that she read and signed the Agreement on behalf of JBlanco. Under Ohio law, parties to a
`contract are presumed to have read and understood, and agreed to be bound by, a contract that they willingly signed.
`See Preferred Capital, Inc. v. Power Eng'g Grp., Inc., 860 N.E.2d 741, 745 (Ohio 2007) (it is a “long-held principle
`that parties to contracts are presumed to have read and understood them and that a signatory is bound by a contract
`that he or she willingly signed[]”) (citation omitted); see also State ex rel. DeWine v. C & D Disposal Techs., 58
`N.E.3d 614, 619 (Ohio Ct. App. 2016) (signatory to consent order presumed to have actual knowledge of its terms)
`(citation omitted).
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`
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`2000 WL 1133267, at *3 (Ohio Ct. App. Aug. 4, 2000) (facts sufficient to support finding that an
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`arbitration clause is not unconscionable where appellants were previously involved in retail
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`installment contracts, appellant was the manager of a “rent-to-own” business involved in sales
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`agree