Date: 01-03-2019

Case Style:

METAL SEAL PRECISION, LTD., AN OHIO LIMITED LIABILITY COMPANY - vs - GOOD TIME OUTDOORS, INC., d.b.a. CORE15 RIFLE SYSTEMS, et al.

Case Number: 2017-L-142

Judge: TIMOTHY P. CANNON

Court: COURT OF APPEALS ELEVENTH APPELLATE DISTRICT LAKE COUNTY, OHIO

Plaintiff's Attorney: Grant J. Keating
JoAnna Tatarko

Defendant's Attorney: Richard J. Marco, Jr., Esq.

Description:

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This case stems from Metal Seal’s business relationship with Good Time
Outdoors. Metal Seal is a machine shop located in Mentor, Ohio. A portion of its business
includes manufacturing machine parts for the firearms industry. Good Time Outdoors,
Inc. is located in Ocala, Florida and conducts business under three divisions: Good Time
Outdoors Airboats, Bluegrass Armory, and Core15 Rifle Systems. Core15 Rifle Systems
assembles AR-15 rifles for sale to retailers and individuals.
{¶3} In early 2012, Metal Seal began supplying Good Time Outdoors with bolt
carrier groups (“BCGs”), a critical component of AR-15 rifles. The parties engaged in
business together until 2014.
{¶4} On January 23, 2015, Metal Seal filed in the Lake County Court of Common
Pleas a complaint against Good Time Outdoors and its president, Norman P. Clifton, III.
The complaint alleged that the parties entered into a General Terms and Conditions of
Sale agreement (“General Terms”), pursuant to which Metal Seal agreed to manufacture
certain goods, and Good Time Outdoors agreed to purchase those goods. The complaint
alleged Good Time Outdoors breached the General Terms, and Metal Seal was entitled
to relief. In addition to breach of the General Terms, the complaint also raised claims for
unjust enrichment, promissory estoppel, and action on account. With leave of court, Metal
Seal filed an amended complaint.1
{¶5} Good Time Outdoors and Clifton filed an answer and counterclaim on March
20, 2015. The counterclaim was later withdrawn.
1. In the amended complaint, the date the General Terms were entered into by the parties was changed from “January of 2013” to “June, 2012,” and the section of the General Terms regarding damages for breach was changed from “Section 16(c)” to “Section 15(c).”
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{¶6} Metal Seal filed a motion for summary judgment on December 18, 2015.
Good Time Outdoors filed a brief in opposition, and Metal Seal filed a reply. The trial
court denied the motion for summary judgment.
{¶7} The matter proceeded to a bench trial on January 31 through February 3,
2017. The following facts are summarized from the testimony and evidence presented at
trial.
Purchase Orders 11028 & 11139
{¶8} Metal Seal and Good Time Outdoors began conducting business together
after meeting at a firearms convention in January 2012. In February 2012, David
Blackburn, Metal Seal’s salesman, exchanged several e-mails with Thomas Cistola, the
purchasing and sales manager for Good Time Outdoors. They discussed pricing,
quantity, and lead time for the manufacture of both manganese phosphate (“MagPhos”)
and nickel boron (“NiBr”) BCGs. Per Cistola’s request, Blackburn sent an e-mail on
February 13, 2012, quoting $108.00 per unit for 100 NiBr BCGs per month for 12 months,
with a lead time of 12 to 14 weeks to the first delivery. The next day, Cistola sent
Purchase Order 11028 for the purchase of 100 NiBr BCGs per month, totaling $10,800.00
per month. The purchase order indicated the initial shipment would be sent May 15 to
June 1, 2012, and ordered the same quantity be shipped once per month, through
December 2012, on the 15th of each month.
{¶9} On February 20, 2012, Blackburn and John Habe, the president of Metal
Seal, met with Clifton and Cistola to persuade Good Time Outdoors to provide Metal Seal
with a “request for quote” for MagPhos BCGs. During the meeting, they discussed
quantities and pricing. On February 25, 2012, Blackburn sent Cistola an e-mail, quoting
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$73.00 per unit for MagPhos BCGs for a total of 2,300 units. The quote proposed
components would be shipped June through December 2012 in the following quantities
per month: 200 units in June and July 2012; 300 units in August and September 2012;
400 units in October and November 2012; and 500 units in December 2012. The lead
time to the first delivery would be 12 to 14 weeks. Cistola replied to the quote, indicating
he wanted to “bump up the quantities from Aug on out.” Cistola e-mailed Purchase Order
11139 on March 13, 2012, for a total of 35,000 units of MagPhos BCGs at a unit price of
$69.00 in the following quantities per month: 2,000 units in May and June 2012; 2,500
units in July through September 2012; 3,000 units in October and November 2012; and
3,500 units in December 2012 through February 2013. Cistola’s e-mail stated: “If we can
get the first 500 shipped the second week of May and are on track with the PO by June
1 that would be fantastic.” The next day, Cistola sent Blackburn an e-mail, stating: “Per
our discussion earlier, here are the revisions.” The revised purchase order added
shipments for 3,500 units in March and April 2013. It also indicated “net 15 terms.” Habe
testified that meant Good Time Outdoors would pay Metal Seal “in 15 days after we
shipped the parts.”
{¶10} Habe testified this was the “[l]argest firearms order Metal Seal had ever
received.” To manufacture the higher volume of parts, Metal Seal had to increase its
capacity and purchased $2,168,735.00 in additional equipment and machinery. Metal
Seal also spent additional sums on tooling, training, and set-up. Habe testified the cost
to increase capacity was incorporated in Metal Seal’s price quotes.
General Terms and Conditions of Sale
{¶11} On May 31, 2012, Blackburn sent an e-mail to Cistola offering to extend the
payment terms to “net 30” if Clifton would sign a “personal guarantee of payment.” On
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June 7, 2012, a little more than three months after the first purchase order between the
parties, Blackburn sent Cistola an e-mail with the General Terms document attached.
The last section of the document was titled “Personal Guaranty.” On June 8, 2012, Cistola
e-mailed the document back to Blackburn with Clifton’s signature assenting to the terms
and conditions and the personal guaranty.
{¶12} Good Time Outdoors could not get parts fast enough to meet customer
demand, and throughout the summer of 2012, Metal Seal’s BCG shipments fell well below
the ordered quantities. Metal Seal shipped the following quantities of parts from May
through September 2012 under Purchase Order 11028: 0 of 100 units in May; 200 of 100
units in June; 0 of 100 units in July; 0 of 100 units in August; and 100 of 100 units in
September. The following shipments were made May through September 2012 under
Purchase Order 11139: 428 of 2,000 units in May; 975 of 2,000 units in June; 650 of
2,500 units in July; 2,000 of 2,500 units in August; 1,250 of 2,500 units in September.
Purchase Order 11139 Revised
{¶13} At the request of Metal Seal, in September 2012, Good Time Outdoors
revised Purchase Order 11139 to reflect an increased price per unit for MagPhos BCGs.
The increased unit price accounted for the additional capacity required to meet Good
Time Outdoors’ need for greater quantities of parts.
{¶14} On September 27, 2012, Cistola sent Blackburn revised Purchase Order
11139, reflecting 3,200 units of MagPhos BCGs at $70.36 per unit “[e]ffective 10/1/12
through 12/1/13.” The purchase order further stated: “Core 15 retains the right to reduce
quantities w/ 30 days notice. Any additional will be added to the end of the PO. Min qty
per month of 2,000 pcs.”
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{¶15} In October 2012, Metal Seal shipped 800 of 3,200 units that were ordered
under Purchase Order 11139. No shipments were made under Purchase Order 11028
that month.
{¶16} On November 8, 2012, Blackburn sent an e-mail to the bookkeeper for
Good Time Outdoors, stating no payment had been made on a past due amount of
$62,550.00. The e-mail indicated Good Time Outdoors was placed on a credit hold, and
Metal Seal would suspend shipments of product until the account was current. Habe
testified the parties communicated about payment on a “regular basis,” and Good Time
Outdoors requested continued shipments and made promises that the payments would
be made.
{¶17} On November 19, 2012, Clifton sent an e-mail to Blackburn, requesting an
immediate shipment of 400 BCGs. Clifton sent another e-mail on November 27, 2012,
requesting “ETAs on shipments over the next 30 days.” Clifton further explained: “We will
be out of BCG by the end of today. We are overnight a check for $33,421.00 on Invoice
# 12091. If you can send us an Invoice for the 800 that we received on 11/16, I will get a
check to you this week also. I will commit to paying Metal Seal on a 15 day bases going
forward, But I need Product. [sic.]” The same day, Blackburn responded, stating 400
BCGs were being shipped that day and that Metal Seal planned on shipping 800 units
per week going forward. Blackburn explained a two-day power outage at the plant caused
a disruption in production. He further stated: “We want to keep Core 15 as a long term
customer and are committed to do our best to get product to you when you need it. Our
guys have been advised that you were running low on BCG inventory and to make Core
15 shipments a priority.”
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{¶18} Metal Seal’s shipments continued to fall below the ordered quantities. In
November 2012, Metal Seal shipped 100 of 100 units under Purchase Order 11028 and
1,200 of 3,200 units under Purchase Order 11139. Metal Seal shipped 0 of 100 units
under Purchase Order 11028 in December 2012.
New Arrangement with Slabe Machine Parts, Co.
{¶19} Habe testified that in December 2012, Cistola visited the Metal Seal facility
to discuss delivery and quality control problems. One of the issues Metal Seal
experienced was producing the “bolt carrier” for the MagPhos BCGs. Cistola learned that
Slabe Machine Parts, Co. (“Slabe”) manufactured bolt carriers. A new arrangement was
made, pursuant to which Good Time Outdoors would purchase the bolt carrier component
for the MagPhos BCGs directly from Slabe. It would continue to purchase the rest of the
MagPhos BCG components and the complete NiBr BCGs from Metal Seal. Good Time
Outdoors would assemble the MagPhos BCGs at its facility and absorb any extra costs
for doing so.
{¶20} Good Time Outdoors issued new purchase orders to reflect the new
arrangement. These purchase orders superseded Purchase Order 11139.
{¶21} On December 7, 2012, Cistola sent Purchase Order 12212, and on
December 14, 2012, he sent Purchase Order 12253. The purchase orders reflected the
different MagPhos BCG components Good Time Outdoors was ordering from Metal Seal
and indicated different quantities and prices depending on the component. Metal Seal
shipped the parts for those orders on the dates they were issued.
{¶22} On December 20, 2012, Purchase Orders 12270 through 12281 were
issued for January through December 2013.
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Purchase and Supply Agreement
{¶23} On January 28, 2013, Blackburn sent Cistola a “Purchase and Supply
Agreement” (“Purchase Agreement”) for review and signature. The Purchase Agreement
included an “Exhibit A.” Good Time Outdoors refused to sign the Purchase Agreement.
{¶24} In June 2013, Good Time Outdoors issued Purchase Orders 13135 through
13146 for MagPhos BCG components to be shipped January through December 2014.
It also issued Purchase Order 13167 for complete NiBr BCGs at a price of $108.00 per
unit to be shipped June 2013 through May 2014 in the following quantities: 200 units per
month in June and July 2013, and 500 units per month for August 2013 through May
2014. Under Purchase Order 13167, Good Time Outdoors also ordered uncoated
MagPhos BCG components to be sent monthly from May 2013 through May 2014.
{¶25} Habe testified that in spite of the new purchase orders, Cistola indicated he
would take as many parts Metal Seal could produce, and Purchase Order 11139 was left
open for Metal Seal to send Good Time Outdoors the rest of its completed MagPhos
inventory. Metal Seal shipped complete MagPhos BCGs under purchase order 11139 in
the following quantities: 900 units in December 2012; 450 units in January 2013; 541 units
in February 2013; and 900 units in March 2013. The complete MagPhos BCGs were
shipped in addition to the components under the new arrangement.
Purchase Orders Suspended
{¶26} Metal Seal made shipments pursuant to Purchase Orders 12270 through
12278 from January through September 2013. Of these purchase orders, the only month
in which Metal Seal’s shipments met the quantity of parts ordered was Purchase Order
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12276 in July 2013. During the same time frame, under Purchase Order 13167, Metal
Seal sent 200 of 200 units in June 2013 and 200 of 200 units in July 2013.
{¶27} By mid-2013, Good Time Outdoors no longer needed a large quantity of
parts. Douglas Gifford, Good Time Outdoors’ Director of Operations, testified Good Time
Outdoors was having cash flow issues. Good Time Outdoors became overdue to Metal
Seal on several invoices. On August 27, 2013, Habe, Blackburn, Clifton, and Gifford met
in Clifton’s office in Florida to discuss past due balances and quantities. On August 30,
2013, Habe sent an e-mail to Gifford proposing a reduced shipping schedule and price
adjustments for MagPhos BCG components and complete NiBr BCGs. After follow-up e
mails from Habe requesting a phone call, Gifford sent an e-mail response on September
5, 2013, indicating someone would be in touch with him. On September 6, 2013,
Blackburn sent an e-mail to Good Time Outdoors’ bookkeeper to follow up on Good Time
Outdoors’ past-due balance. The bookkeeper indicated Good Time Outdoors hoped to
get a payment to Metal Seal in the next week. On September 9, 2013, Habe e-mailed
Gifford and explained that Metal Seal was still producing MagPhos BCG components and
complete NiBr BCGs and would be sending out shipments that day. Habe stated that
Good Time Outdoors had an overdue balance of $317,686.00 and that Metal Seal’s bank
was involved.
{¶28} On September 12, 2013, Habe sent Clifton an e-mail with the General
Terms attached. The parties talked by telephone the next day. Metal Seal indicated
Good Time Outdoors had failed to pay on numerous invoices. Clifton sought to suspend
the remaining purchase orders because Good Time Outdoors could not keep accepting
product it could not use.
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{¶29} On September 23, 2013, Gifford sent Habe an e-mail, stating:
Per the teleconference of Tuesday, September 17th between Yourself, Mr. Blackburn, Mr. Clifton and myself, I am reconfirming that Core Rifle Systems has suspended all P.O.’s with Metal Seal Precision until further notice.

Please feel free to contact me with any questions or concerns.

We look forward to meeting with you on the 27th.

{¶30} Habe responded the same day. Habe stated that Metal Seal “purchased
raw material, tooling, machines, etc. to build parts for your orders and have millions of
dollars of inventory built or in the process of being built to fill your orders.” The e-mail
further stated that Metal Seal could not accept Good Time Outdoors’ position in
suspending the purchase orders, and Metal Seal was looking to “negotiate a solution.”
{¶31} On September 27, 2013, Habe sent Gifford an e-mail outlining a proposed
solution that had been discussed by the parties. The e-mail proposed a new shipping
and price schedule. The unit price for MagPhos components and complete NiBr BCGs
was to increase with decreased monthly shipment quantities. It also indicated that Good
Time Outdoors could request shorter lead times. The e-mail proposal further stated that
Good Time Outdoors “will not purchase these parts from any other supplier unless [Metal
Seal] cannot meet [Good Time Outdoors’] delivery dates and quantities. In this scenario
Good Time Outdoors can purchase the quantity needed to subsidize the shortfall.”
{¶32} Gifford responded by e-mail on October 1, 2013, with Purchase Orders
13905 through 13909 for October 2013 through February 2014, reflecting the proposed
arrangement. Gifford indicated the new purchase orders would supersede the previous
purchase orders for that time period. These purchase orders did not reflect that Good
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Time Outdoors would not purchase the parts from other suppliers unless Metal Seal failed
to meet delivery dates and quantities.
{¶33} On October 8, 2013, Blackburn sent Gifford an e-mail with Metal Seal’s own
proposed purchase orders reflecting the proposed agreement. Blackburn indicated
Gifford could use those purchase orders “as reference.” Metal Seal’s purchase orders
included greater detail regarding the terms outlined in the September 27, 2013 e-mail and
contained language that Good Time Outdoors would not purchase the parts from other
suppliers unless Metal Seal failed to meet the delivery dates and quantities. Ultimately,
no agreement was reached by the parties with regard to these new proposals.
{¶34} Habe testified that Metal Seal ceased shipments as of the September 23,
2013 e-mail from Good Time Outdoors. Metal Seal’s last shipment went out on
September 18, 2013. Habe affirmed that at the time the purchase orders were suspended
Metal Seal was “sitting on finished product that had not yet been delivered.” Habe
explained: “We had a lot of product. We had nickel boron carrier groups and we had a
bunch of components for the mag phos components that they asked us to deliver. We
had those built. And we also had the ones that were not plated. We had some of those
bolts as well.” Habe further testified that Metal Seal had 4,295 NiBr BCGs that were
completed but never shipped to Good Time Outdoors. This amounted to over
$400,000.00 in completed NiBr BCGs. Metal Seal was able to sell approximately 4,000
of those parts to a different customer at $105.00 per unit, $3.00 less per unit than what
Good Time Outdoors had agreed to pay. Metal Seal also had to put “about five bucks
into each part” because the new customer wanted the parts customized. Habe testified
that Metal Seal lost a total of $8.00 per part and sustained a total loss of $32,000.00 for
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the parts sold. Habe further testified that Metal Seal had 295 NiBr BCGs remaining. Each
part cost $102.00 to produce, totaling $30,090.00 to produce the 295 units. Habe
explained the total cost for goods that were finished but never shipped to Good Time
Outdoors was $62,090.00.
{¶35} Habe further testified that at the time the orders were suspended, Metal
Seal had numerous purchase orders that were unfulfilled. Habe testified to 15 months of
outstanding purchase orders for MagPhos BCG components: 12279 through 12281 and
13135 through 13146, each totaling $184,835.00. In addition to those purchase orders,
Habe testified to a total unfulfilled order of 5,000 units for NiBr BCGs. Metal Seal had
built 4,295 units, discussed above, leaving a balance of 705 units at $108.00 per unit for
a total of $76,140.00. Habe further testified Good Time Outdoors also ordered
$68,000.00 in uncoated parts. The total of unfulfilled orders was $2,916,665.00. Habe,
however, testified that Metal Seal was not requesting that full amount in damages.
Pursuant to the liquidation clause in the General Terms, Metal Seal was requesting 45%
of the total unfulfilled orders, or $1,312,499.25.
Firing Pins & Components Returned to Metal Seal
{¶36} By early 2014, Good Time Outdoors had made payments that reduced the
amount it owed to Metal Seal for parts delivered to $84,606.00. However, in June 2014,
Good Time Outdoors returned 1,545 chrome plated firing pins to Metal Seal claiming for
the first time that they had defective coatings. The problem had not been noticed until
Good Time Outdoors used up its inventory. Metal Seal took receipt of the returned firing
pins and had them recoated. Blackburn retained the firing pins at the direction of Habe
due to Good Time Outdoors’ outstanding balance with Metal Seal. Good Time Outdoors
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repeatedly requested the return of the firing pins so it could complete orders for rifles and
pay off the remaining arrears. Metal Seal did not return the firing pins, and Good Time
Outdoors returned the remainder of the BCG components in its inventory back to Metal
Seal.
{¶37} Habe and Clifton met at the Las Vegas Shot Show in January 2015 and
attempted to resolve the issues between the parties. They were unable to come to an
agreement to settle their dispute.
{¶38} After a bench trial, the trial court entered judgment on October 3, 2017. The
trial court concluded that the General Terms document signed in June 2012 was not an
enforceable contract because it did not contain adequate terms. The trial court further
concluded that the parties’ conduct was not evidence of a contract because, “[w]hile the
parties clearly wanted to maintain their business relationship and were flexible, there was
no meeting of the minds on the essential terms of a contract.” The court found in favor of
Good Time Outdoors on Metal Seal’s breach of contract claim. The trial court further
ruled in favor of Good Time Outdoors on Metal Seal’s claims for unjust enrichment,
promissory estoppel, and action on account.
{¶39} Metal Seal noticed a timely appeal and raises five assignments of error,
which we review out of order.
Extrinsic Evidence
{¶40} Metal Seal’s second assignment of error states:
{¶41} “The Trial Court erred as a matter of law when it considered inadmissible
evidence.”
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{¶42} Metal Seal argues the General Terms agreement is unambiguous, and it
was therefore improper for the trial court to consider extrinsic evidence to interpret the
General Terms agreement.
{¶43} “The standard of review in a breach of contract action is whether the trial
court erred as a matter of law.” Falcone Bros., Inc. v. Pawmew, Inc., 5th Dist. Stark No.
2016CA00209, 2017-Ohio-6958, ¶15, citing Unifund, CCR, L.L.C. v. Johnson, 8th Dist.
Cuyahoga No. 100600, 2014-Ohio-4376, ¶7. “We must therefore ‘determine whether the
trial court’s order is based on an erroneous standard or a misconstruction of the law.’”
Id., quoting Unifund, supra, at ¶7. However, due deference must be given to the trial
court’s findings of fact if the findings are supported by competent, credible evidence.
Id.(citation omitted).
{¶44} There is no dispute that the transaction at issue involves the sale of goods.
Accordingly, Ohio’s version of the Uniform Commercial Code (“UCC”), found in Revised
Code Chapters 1301 and 1302, is applicable to this case. See Tubelite Co., Inc. v.
Original Sign Studio, Inc., 176 Ohio App.3d 241, 2008-Ohio-1905, ¶12 (10th Dist.).
{¶45} “In construing the terms of any contract, the principal objective is to
determine the intention of the parties.” Hamilton Ins. Serv., Inc. v. Nationwide Ins. Cos.,
86 Ohio St.3d 270, 273 (1999) (citation omitted). “We presume the intent of the parties
to a contract resides in the language used in the written instrument.” Oryann, Ltd. v. SL
& MB, LLC, 11th Dist. Lake No. 2014-L-119, 2015-Ohio-5461, ¶25, citing Kelly v. Med.
Life Ins. Co., 31 Ohio St.3d 130 (1987), paragraph one of the syllabus.
{¶46} Generally, at common law, only where the language of a writing “is unclear
or ambiguous, or when the circumstances surrounding the agreement invest the language
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with a special meaning, will extrinsic evidence be considered in an effort to give effect to
the parties’ intentions.” Shifrin v. Forest City Ent., Inc., 64 Ohio St.3d 635, (1992), at
syllabus. Ohio’s UCC, however, rejects the common law rule that extrinsic evidence is
admissible only where the terms of a writing are ambiguous. See R.C. 1302.05 Official
Comment 1(c). R.C. 1302.05 provides:
Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented:

(A) by course of performance, course of dealing, or usage of trade as provided in section 1301.303 of the Revised Code; and

(B) by evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement.

{¶47} Where the parties have reached a written agreement that is final with
respect to the terms contained in the writing, evidence of prior agreements or
contemporaneous oral agreements cannot be used to contradict those terms, but extrinsic
evidence of trade usage, course of dealing, or course of performance may be used to
explain or supplement the writing. Camargo Cadillac Co. v. Garfield Ents., Inc., 3 Ohio
App.3d 435, 438 (1st Dist.1982) (citations omitted). Further, if the writing is not “a
complete and exclusive statement of the agreement,” the writing may also be explained
or supplemented by consistent additional terms. Id. To determine whether the parties
intended the writing to be the complete and exclusive statement of their agreement, the
court must look outside the four corners of the document and consider the surrounding
facts and circumstances. Id. at 437-438; Abele v. Bayliner Marine Corp., 11 F.Supp.2d
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955, 963 (N.D.Ohio 1997); In re Manchester Steel, Inc., 156 B.R. 988, 993 (N.D.Ohio
1993); see also Allapattah Servs., Inc. v. Exxon Corp., 61 F.Supp.2d 1308, 1315 (S.D.Fla.
1999), citing Nanakuli Paving & Rock Co. v. Shell Oil Co., Inc., 664 F.2d 772, 794, 796
797 (9th Cir.1981) and Transamerica Oil Corp. v. Lynes, Inc., 723 F.2d 758, 765 (10th
Cir.1983).
The General Terms agreement provides, in relevant part:
These General Terms and Conditions of Sale (this “Agreement”) govern the manufacturing and sale of Products by Metal Seal Precision, Ltd., an Ohio limited liability company (the “Seller”) to Core15Rifle Systems, Inc. (the “Purchaser”). Seller and Purchaser may herein be individually referred to as a “Party” or collectively as “Parties.”

1. CONTRACT SCOPE AND DOCUMENTS

Absent a * * * contrary written agreement signed by both Parties, the contract between Seller and Purchaser shall be governed by Seller’s written Quotation to Purchaser (“Quote”), Purchaser’s written acceptance of the Quote (“Purchase Order”), and the terms stated in this Agreement (collectively the “Contract”). Absent Seller’s prior written agreement, any term or provision stated in Purchaser’s Purchase Order that is inconsistent with either the Quote and/or the within Agreement shall be ineffective and no part of the Contract. The Contract may not be modified except by a written agreement signed by both Parties. For purposes of the Contract, any notices or modifications that must be in writing may be satisfied by an exchange of e mail communications.

2. DESCRIPTION OF PRODUCTS/AGREEMENT TO SELL AND PURCHASE

The materials/parts/services covered under this Agreement (“the Products”) are defined in Seller’s Quote, which is incorporated by reference. * * * Seller agrees to manufacture and sell to Purchaser, and Purchaser agrees to purchase from Seller, the quantity of Products, at the prices and at the delivery dates stated in Seller’s Quote. * * *

* * *

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9. ENTIRE AGREEMENT

The terms of the Contract represent the entire understanding of the Parties regarding the subject matter hereof, and supersedes all prior understandings whether written or oral. Further amendments or modifications may only be made in writing, and must be signed by an authorized representative of each Party. No waiver of the breach of any term or condition of this Agreement shall be deemed to constitute the waiver of any other breach of the same or any other term or condition.

{¶48} The trial court determined that although Good Time Outdoors denied a
contract existed, “Clifton’s signature on the [General Terms] agreement is valid.” The trial
court, however, concluded the General Terms agreement was not enforceable because
it lacked “sufficient essential terms.” In coming to this conclusion, the trial court compared
the General Terms agreement to the later Purchase Agreement. The trial court noted the
two documents were similar, but that the Purchase Agreement contained “substantive
changes clearly establishing a requirements contract.” The trial court stated the fact that
no price quotation was included with the General Terms document was “unlike the later
‘Purchase and Supply Agreement’ that was proposed by Metal Seal in December 2012
and rejected by Good Time Outdoors in the first half of 2013. The latter agreement
provided exhibit A that did provide [the essential terms] information.” The trial court
explained:
Exhibit A of the document specified delivery of components for 39,000 BCGs in 2013 with deliveries of 750 BCG components per week. The cost of the parts would be $51.31 per BCG. These components did not include the bolt carrier which was being manufactured by Slabe but included all of the other necessary parts for complete Mag Phos BCG. This exhibit also specified an annual quantity of complete (i.e. including the bolt carrier) Ni Br BCGs of 1,300 for 2013 for a unit cost of $109.00. 25 complete Ni Br BCGs were to be shipped weekly from April 15, 2013 through April 14, 2014. As mentioned earlier, the earlier General Terms and Conditions of Sale agreement did not have a similar exhibit.
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{¶49} Although the trial court determined the General Terms agreement was not
an enforceable contract and concluded “the actual terms of their relationship was not
formally documented in writing,” it found the parties’ conduct indicated they had an
“arrangement.” The trial court analyzed the parties’ conduct to determine whether the
“arrangement” established a contract. The trial court concluded that, “[w]hile the parties
clearly wanted to maintain their business relationship and were flexible, there was no
meeting of the minds on the essential terms of a contract.”
{¶50} Whether the signed General Terms agreement expressed terms that were
enforceable in the business relationship should be determined without regard to a
comparison with the subsequent Purchase Agreement that was never signed. Because
the Purchase Agreement was never signed by Good Time Outdoors, it cannot provide
consistent additional terms and is not evidence of the parties’ intent at the time the
General Terms agreement was signed. The Purchase Agreement cannot be used to
supplement or explain the General Terms agreement because it is not a usage of trade,
course of dealing, or course of performance.
{¶51} Further, because the General Terms agreement was a writing that
documented at least a portion of the parties’ agreement, the trial court did not need to
determine whether the parties’ conduct created a contract independent of the writing.
Their conduct, however, is relevant to explain or supplement the writing to the extent the
conduct is a trade usage, a course of performance, or a course of dealing.
{¶52} We determine that the surrounding circumstances indicate the parties did
not intend the General Terms agreement to be the complete and exclusive statement of
their agreement. Although the General Terms agreement contains an integration clause,
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the agreement is unclear because the surrounding circumstances indicate the “Seller’s
Quote” and “Purchase Order” as defined in the General Terms agreement do not exist.
The General Terms agreement states that the “Contract” is comprised of the General
Terms agreement, “Seller’s Quote”, and “Purchase Order.” The “Seller’s Quote” operates
as an offer, and the “Purchase Order” is the written acceptance of the “Seller’s Quote”
and must contain the same terms as the “Seller’s Quote.” The General Terms agreement
purports that the price, quantity, and delivery terms are included in the “Seller’s Quote.”
However, the only price quotations exchanged between Metal Seal and Good Time
Outdoors were those sent in e-mails from Blackburn to Cistola on February 13, 2012, and
February 25, 2012. Those quotes, however, were not assented to by Good Time
Outdoors as contemplated by the General Terms. Rather, without prior approval from
Metal Seal, Good Time Outdoors sent purchase orders with different terms than those
contained in the price quotes. The General Terms is therefore final as to some but not
all the terms of the parties’ agreement, and under R.C. 1302.05, the General Terms may
be supplemented or explained by a course of dealing, usage of trade, course of
performance, or by consistent additional terms.
{¶53} Although it was error for the trial court to compare the General Terms
agreement with the later Purchase Agreement and to analyze the parties’ conduct as a
separate contract, this was harmless error. The trial court’s findings pertaining to the
parties’ conduct are relevant to explain or supplement the writing.
{¶54} Metal Seal’s second assignment of error is without merit.
Breach of Contract
{¶55} We address Metal Seal’s first and fifth assignments of error together. They
state:
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[1.] The Trial Court Erred as a matter of law when it held no contract existed between the parties.

[5.] The trial court’s conclusion that Metal Seal never formally placed Good Time Outdoors in default was against the weight of the evidence.

{¶56} Metal Seal argues it is entitled to judgment as a matter of law on its claim
for breach of contract. Metal Seal contends that Good Time Outdoors had “no right to
unilaterally walk away from its obligations” and that “suspension and refusal to accept
delivery of Metal Seal’s goods in September 2013” constituted a failure by Good Time
Outdoors to perform its obligations under the General Terms agreement and purchase
orders. Metal Seal further maintains that “[n]either the language in the General Terms
nor the Suspended Purchase Orders permit Appellees to unilaterally suspend their orders
unless Metal Seal was in Default.”
{¶57} Metal Seal maintains the following purchase orders were unfulfilled due to
the suspension: 12279 through 12281 for MagPhos BCG components to be delivered
from October 2013 through December 2013; 13135 through 13146 for MagPhos BCG
components to be delivered from January 2014 through November 2014; and 13167 for
complete NiBr BCGs and uncoated parts to be delivered from August 2013 through May
2014. Metal Seal further maintains that under purchase order 12278, it only made a
partial shipment in September 2013 and would have completely fulfilled that order if the
purchase orders had not been suspended.
{¶58} A cause of action for a breach of contract requires the claimant to establish:
(1) the existence of a contract, (2) the other party’s failure without legal excuse to perform
when performance is due, and (3) damages or loss resulting from the other party’s breach.
21
Lucarell v. Nationwide Mutual Ins. Co., 152 Ohio St.3d 453, 2018-Ohio-15, ¶41 (citations
omitted).
{¶59} “‘A contract is generally defined as a promise, or a set of promises,
actionable upon breach.’” Kostelnik v. Helper, 96 Ohio St.3d1, 2002-Ohio-2985, ¶16,
quoting Perlmuter Printing Co. v. Strome, Inc., 436 F.Supp. 409, 414 (N.D.Ohio 1976).
“A contract for the sale of goods imposes on the seller the obligation to transfer and deliver
the goods in accordance with the contract and imposes on the buyer the obligation to
accept and pay in accordance with the contract.” GJP Ents., Inc. v. Performance
Contracting, Inc., N.D.Ohio No. 1:05CV0670, 2006 WL 2381492, *16 (Aug. 16, 2006),
citing R.C. 1302.14.
{¶60} Under R.C. 1301.201(B)(3), “‘[a]greement, as distinguished from ‘contract’,
means the bargain of the parties in fact, as found in their language or inferred from other
circumstances, including course of performance, course of dealing, or usage of trade[.]”
“‘Contract’, as distinguished from ‘agreement’, means the total legal obligation that results
from the parties’ agreement[.]” R.C. 1301.201(B)(12).
{¶61} The General Terms agreement was clearly intended to govern the
relationship between Metal Seal and Good Time Outdoors and states that: “Seller agrees
to manufacture and sell to Purchaser, and Purchaser agrees to purchase from Seller, the
quantity of Products, at the prices and at the delivery dates stated in Seller’s Quote.” As
discussed above, there was no “Seller’s Quote” as defined in the General Terms
agreement. Instead, Good Time Outdoors sent Metal Seal purchase orders that
contained price, quantity, delivery, and payment terms.
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{¶62} However, the parties’ course of performance further indicates they did not
intend to manufacture and purchase exactly in accordance with the terms of the purchase
orders. R.C. 1301.303(A) defines “course of performance” as
a sequence of conduct between the parties to a particular transaction that exists if: (1) The agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and (2) The other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.

{¶63} In considering the parties’ conduct, the trial court found:
The evidence shows that over time, the parties changed the unit prices of the components, the terms of payment, the amount of product ordered and the delivery date. The POs had minimal language that ordered certain products at a set price. The expectation was that if product is delivered, the buyer must pay for it. * * * Although [PO11139] considerably exceeded the capacity of Metal Seal to deliver, there was no formal or written correspondence addressing this problem. The purchase order was not rejected by Metal Seal nor did Good Time Outdoors declare a default when Metal Seal failed to timely deliver the desired quantities. Blackburn testified that everyone knew there would be no compliance with the PO. Cistola told him to just get him as much product as you can. Subsequent purchase orders followed the same pattern and in many cases replaced previous orders. * * * Rather than one cohesive, implied contract, the parties engaged in a series of separate POs, many of which replaced earlier ones. The terms were loosely defined and were based on the needs and circumstances of the parties at the time.

The parties modified the terms of the purchase orders on an almost monthly basis. Each
party regularly failed to comply with the terms of the purchase orders due to their
circumstances and market conditions. On multiple occasions, Metal Seal sent no product,
and it regularly sent quantities below those stated in the purchase orders; Good Time
Outdoors was continually behind on payment. This course of performance evidences the
parties’ intent to be bound only from month-to-month, rather than to the multiple months
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and set quantity of parts covered by the purchase orders. Good Time Outdoors’
suspension of the purchase orders at issue was consistent with the parties’ conduct
throughout their relationship. Further, after Good Time Outdoors suspended the
purchase orders, the parties made attempts to resolve their issues but were unable to
come to an agreement. We cannot conclude that suspension of the purchase orders was
a breach of the General Terms agreement. Accordingly, the trial court did not err by
finding in favor of Good Time Outdoors on Metal Seal’s breach of contract claim.
{¶64} Metal Seal argues the trial court’s findings regarding the parties’ conduct
and “flexible” relationship is evidence of a course of dealing. R.C. 1301.303(B) defines
“course of dealing” as “a sequence of conduct concerning previous transactions between
the parties to a particular transaction that is fairly to be regarded as establishing a
common basis of understanding for interpreting their expressions and other conduct.”
Here, the parties’ transaction involves multiple purchase orders that encompass several
months with performance due each month. Their conduct did not pertain to previous
transactions. Further, the trial court made findings regarding each party’s acquiescence
to the other’s nonconforming performance. Accordingly, the trial court’s findings
regarding the parties’ “flexible” relationship are evidence of a “course of performance”
and are relevant to explain or supplement the General Terms agreement and to “show a
waiver or modification of any term inconsistent with the course of performance.” R.C.
1301.303(F). Metal Seal’s argument is not well taken.
{¶65} The trial court did not err in determining Metal Seal was not entitled to
judgment on its claim for breach of contract.
{¶66} Metal Seal’s first and fifth assignments of error are without merit.
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Promissory Estoppel
{¶67} Metal Seal’s fourth assignment of error states:
{¶68} “The trial court erred as a matter of law by concluding in the absence of an
agreement, Metal Seal could not prove its claim for promissory estoppel.”
{¶69} Metal Seal claims that in response to Good Times Outdoors’ purchase
orders, it purchased more than $2.1 million worth of equipment and hired and trained
additional personnel.
{¶70} The elements required to establish a claim of promissory estoppel are “(1)
a clear and unambiguous promise; (2) reliance on the promise; (3) the reliance is
reasonable and foreseeable; and (4) the party relying on the promise was injured by his
or her reliance.” Connolly v Malkamaki, 11th Dist. Lake No. 2001-L-124, 2002-Ohio-6933,
¶16 (citation omitted). As noted by the trial court, this claim was not specifically addressed
by either party during trial or in the closing briefs. However, the trial court included
findings of fact with regard to this claim in its October 3, 2017 judgment entry.
{¶71} The trial court found that the initial General Terms never committed Good
Times Outdoors to a contract that required it to purchase a set quantity of parts for a set
price. However, when asked to sign the Purchase Agreement, which did contain such
terms, Good Time Outdoors refused to sign. In addition, as stated above, the record
supports the fact that contrary to a fixed requirement contract for a period of time, the
parties modified the purchase orders almost on a monthly basis. Metal Seal did not
deliver the quantities ordered on the dates required, and Good Times Outdoors did not
pay invoices when due. Thus, there is support in the record for the trial court’s finding
that there was “no evidence the parties had a meeting of the minds on the requirement
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that Good Time Outdoors commit itself to purchasing a set quantity of parts regardless of
market demand for assault rifles. Good Time Outdoors presented testimony it would
never have agreed to such terms[.] Absent an agreement from Good Time Outdoors, the
court cannot conclude that Metal Seal’s reliance was reasonable and foreseeable.”
{¶72} The trial court did not err in determining the elements of promissory estoppel
had not been established.
{¶73} Metal Seal’s fourth assignment of error is without merit.
Action On Account
{¶74} Metal Seal’s third assignment of error states:
{¶75} “The Trial Court’s refusal to award Metal Seal damages on its claim on an
account was against the manifest weight of the evidence.”
{¶76} In its judgment entry, the trial court noted that Metal Seal’s claim for action
on account was not specifically addressed by either party at trial or in their closing briefs.
The trial court found the “Aged Receivables Report” attached to Metal Seal’s amended
complaint showed Good Time Outdoors owed Metal Seal $84,606.33 and was adequate
to show an “account.” The trial court found that the evidence at trial “showed that Good
Time Outdoors caught up with its arrears with Metal Seal” except for the $84,606.33.
However, the trial court determined that Good Time Outdoors returned the equivalent
amount of parts in June and November 2014. The trial court concluded the “return of the
firing pins and other BCG components extinguished the remaining arrears owed by Good
Time Outdoors.”
{¶77} On appeal, Metal Seal argues it was improper for the trial court to determine
the return of the parts to Metal Seal released Good Time Outdoors from its obligation to
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pay the past due account balance. Metal Seal maintains it never agreed to accept the
return of parts in lieu of payment, and Good Time Outdoors had no right to return
previously accepted conforming parts. In response, Good Time Outdoors does not
dispute that it did have an outstanding unpaid balance of $84.606.33 on its account with
Metal Seal or that it had accepted the parts at issue. Instead, Good Time Outdoors
argues the trial court appropriately found that it had satisfied its obligation of payment
when it returned the firing pins and other parts to Metal Seal.
{¶78} R.C. 1302.66(A) provides, in pertinent part:
The buyer may revoke his acceptance of a lot or commercial unit whose non-conformity substantially impairs its value to him if he has accepted it:

(1) on the reasonable assumption that its non-conformity would be cured and it has not been seasonably cured; or

(2) without discovery of such non-conformity if his acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the seller’s assurances.

{¶79} The trial court found that the remaining components could not be used by
Good Time Outdoors after Metal Seal failed to return the allegedly defective firing pins,
because “the firing pins are matched to the other components of BCGs and that even a
slight variation in firing pin dimensions (presumably from firing pins from another vendor)
could result in a malfunctioning BCG.” Thus, Metal Seal’s failure to return the firing pins
substantially impaired the value of the rest of the parts. However, Good Time Outdoors
failed to establish that the firing pins it returned were defective and that its acceptance
was properly revoked. The trial court stated it was “unable to resolve if the firing pins
were defective.” Accordingly, we determine that Good Time Outdoors’ burden to
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establish proper revocation of its acceptance of the firing pins and other components was
not met.
{¶80} However, in order to establish entitlement to recovery on the account, the
seller cannot simply rely on the amount invoiced. R.C. 1302.77, titled “Seller’s remedies
in general,” provides, in pertinent part: “Where the buyer wrongfully rejects or revokes
acceptance of goods * * *, then with respect to any goods directly affected * * *, the
aggrieved seller may: (D) resell and recover damages as provided in section 1302.80 of
the Revised Code[.]” R.C. 1302.80(A) provides:
Under the conditions stated in section 1302.77 of the Revised Code on seller’s remedies, the seller may resell the goods concerned or the undelivered balance thereof. Where the resale is made in good faith and in a commercially reasonable manner the seller may recover the difference between the resale price and the contract price together with any incidental damages allowed under section 1302.84 of the Revised Code, but less expenses in consequences of the buyer’s breach.

{¶81} The trial court determined “[t]he design of the AR 15 assault rifle has been
in the public domain for years and presumably the Mag Phos BCG at issue can be resold
to another party. Metal Seal, in fact, was able to resell 4,000 Ni Br BCGs to a third party
in June 2016[.]” Metal Seal had the burden to establish that it attempted to resell the
MagPhos BCG parts at issue in good faith and in a commercially reasonable manner.
However, there is nothing in the record or in its argument that establishes what damages
Metal Seal should be entitled to after the attempts to sell the parts in mitigation. As the
trial court noted, this claim on account was not specifically addressed by the parties at
trial or in their final argument.
{¶82} The trial court did not err in refusing to award Metal Seal damages on its
claim on an account.

Outcome: The judgment of the Lake County Court of Common Pleas is affirmed.

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