COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 68617 RONALD W. WILLIS : : Plaintiff-appellee : : JOURNAL ENTRY vs. : and : OPINION AVERY LABEL SYSTEMS, a Division : of Avery Dennison Corp., et al : [Appeal by Avery Label Systems] : : Defendant-appellant : : : DATE OF ANNOUNCEMENT OF DECISION : MARCH 21, 1996 CHARACTER OF PROCEEDING : Civil appeal from : Court of Common Pleas : Case No. 258,412 JUDGMENT : AFFIRMED. DATE OF JOURNALIZATION : _______________________ APPEARANCES: For plaintiff-appellee: LAURA J. GENTILCORE JOSEPH W. DIEMERT, JR. Attorneys at Law 1360 S.O.M. Center Road Cleveland, Ohio 44124-2189 For defendant-appellant: MARK E. STAIB TERENCE E. COPELAND MARK GRIFFIN Attorneys at Law 3300 BP-America Building 200 Public Square Cleveland, Ohio 44114-2301 TIMOTHY E. McMONAGLE, J.: Defendant-appellant Avery Dennison Corp. (hereafter referred to as "Avery") appeals from the jury verdict rendered in favor of plaintiff-appellee Ronald W. Willis in Willis's action for breach of contract and other claims. For the reasons set forth below, we affirm. The record reveals that plaintiff worked at Avery from August 1, 1977 until October 25, 1990. On October 25, 1990, plaintiff and Avery entered into a Settlement Agreement, which provides in relevant part as follows: 1. (a) Willis will resign his employment with Avery effective October 25, 1990. * * * (d) Avery will provide a letter of reference, a copy of which is attached hereto as Exhibit 3. * * * 8. It is further understood and agreed that the terms and conditions of this Settle- ment Agreement and Release are absolutely confidential and that no party hereto or attorney thereof will disclose, except pursuant to a court order, to any third person including, but not limited to, other Avery employees, the terms and conditions of this Settlement Agreement and Release or the facts, circumstances or manner of its negotiation and consum- mation. In the event that there is an - 3 - attempt to obtain disclosure of this Settlement Agreement and Release by any outside parties, including but not limited to, any governmental agency, the parties hereto will cooperate and jointly take any necessary steps to resist such disclosure and seek appropriate protective order. This paragraph does not preclude disclosure, if necessary, solely for tax purposes. Such disclosure will be made only to Willis' confidential tax advisor and/or the federal, state and local taxing authorities. Further, such disclosure will not in any way affect, restrict or limit the parties' agreement of absolute confidentiality with respect to all other third parties. Violation of this confidentiality agreement shall constitute a material breach of the Settlement Agree- ment and Release. The letter of recommendation in turn states: During most of his thirteen years with our company Mr. Willis worked as a journeyman press operator, gained valuable experience on a wide variety of printing press equipment and competently performed his job. From March 4, 1984 until November 11, 1985 Mr. Willis worked as a leadperson and performed his functions in a satisfactory manner. On September 21, 1993, plaintiff filed this action against Avery, Avery Label Systems, Production Manager Ron Jones, Plant Manager Matthew Mellis, Human Resources Manager Daniel Fetherolf and Vice President Robert Smith. Plaintiff alleged that defen- dants: (1) provided a negative reference to a potential employer in violation of Section 2(d) of the Settlement Agreement; (2) revealed the contents of the Settlement Agreement to a prospective employer and to a state agency in violation of Section 8 of the Settlement Agreement; (3) fraudulently induced him to sign the Settlement - 4 - Agreement; (4) tortiously interfered with a business opportunity with a prospective employer; (5) intentionally inflicted emotional distress; and (6) acted in violation of R.C. 4112.02, R.C. 4112.99, 42 U.S.C. 1981, and 42 U.S.C. 2000(e). On October 3, 1994, defendants moved for partial summary judgment. On December 14, 1994, the trial court granted the motion as to plaintiff's claims that defendants violated R.C. 4112.02, R.C. 4112.99, 42 U.S.C. 1981 and 42 U.S.C. 2000(e). The matter then proceeded to a jury trial on plaintiff's remaining claims. The evidence demonstrated that following his resignation from Avery, plaintiff applied for unemployment compensation. Mellis opposed plaintiff's receipt of benefits, so he instructed Fetherolf to appear at a hearing before the Bureau of Unemployment Compensation with a copy of the Agreement in a sealed envelope. The Agreement was eventually disclosed to the hearing officer, and plaintiff's claim for unemployment benefits was initially granted. Upon further review, however, the Board of Review determined that plaintiff's "primary motivation for the resignation was to obtain the monetary settlement from his employer, [and that plaintiff] quit work with Avery International Corp., without just cause." Plaintiff was therefore denied benefits and ordered to repay the benefits which he had already received. The evidence further demonstrated that plaintiff sought employment with other companies but did not receive any offers despite being well received in interviews. On May 20, 1991, - 5 - plaintiff contacted Robert Smith to express his concern that Avery had breached the confidentiality provision of the Settlement Agreement. Matthew Mellis investigated the matter but determined from Jones and Fetherolf that there had been no inquiries regard- ing plaintiff's job performance at Avery. Also in May 1991, plaintiff interviewed at Container Company of America (hereafter referred to as "CCA") for the position of "sheeter," and he gave Director of Personnel Beth Butcher a copy of the reference letter from Avery. He also completed an application for employment which provided in relevant part as follows: In filling out this application form, I un- derstand that the Company may wish to inves- tigate any of the facts or statements sub- mitted by me. I hereby authorize my former employers whose names I have given, to furnish any information concerning any personal character, habits, ability, disposition, etc., releasing them from any and all liabilities or damages of whatsoever nature on account of furnishing same. Plaintiff signed his name beneath this provision. He further listed Ronald Jones as his "immediate supervisor" at Avery and stated that he left Avery for "lack of work." Butcher subsequently determined that he was qualified for this position, so she sent him to speak with Printing Manager William Rush. Rush likewise determined that he was well qualified. Butcher then proceeded to the next step in her hiring process and contacted plaintiff's references. She called Avery and asked to speak with Ronald Jones. The switchboard operator transferred the - 6 - call to Jones, then transferred it to Ronald Gainer when Jones did not answer. According to Gainer, he was assured that his remarks were confidential, and he then "blurted out some rumors that [he] shouldn't have," including that plaintiff had attendance problems and that he left after receiving an arbitration settlement and not for lack of work. Butcher considered Gainer's remarks to reflect negatively, and plaintiff was not hired for the position. Speci- fically, Butcher testified that she decided not to hire plaintiff due to the contradiction regarding his statement that he left Avery for lack of work. The evidence also established that Avery had a general policy which required that requests for references be directed to the human resources department, that Gainer had never been asked for a reference prior to this incident and that no special instructions were given regarding the manner in which to handle a request for a reference regarding plaintiff in light of the Settlement Agreement. Finally, the evidence indicated that plaintiff had been given a written warning regarding absenteeism and one regarding tardi- ness. Plaintiff subsequently withdrew his claim for intentional infliction of emotional distress, and the remaining claims were submitted to the jury. The jury then found for plaintiff and - 7 - awarded him a general verdict of $84,000.00. Defendants now appeal. I. Defendant-appellant's first assignment of error states: ON PLAINTIFF-APPELLEE'S CLAIM FOR BREACH OF CONTRACT, THE COURT ERRED IN NOT GRANTING AVERY'S MOTIONS FOR DIRECTED VERDICT AND JNOV BECAUSE THE VERDICT WAS UNSUPPORTED BY AND CONTRARY TO THE EVIDENCE, SINCE THE EVIDENCE PROVED THAT AVERY DID NOT BREACH THE SETTLE- MENT AGREEMENT. With regard to procedure, we note that in ruling upon a motion for a directed verdict and a motion for judgment notwithstanding the verdict, a trial court applies the same test: the motion must be denied where, construing all the evidence most strongly in favor of the non-movant, there is substantial evidence supporting the non-movant's position on which reasonable minds may differ. Nickell v. Gonzalez (1985), 17 Ohio St.3d. 136, 137; Cardinal v. Family Foot Care Centers., Inc. (1987), 40 Ohio App.3d 181, 183. The "reasonable minds" test calls upon the court only to determine whether there exists any evidence of substantial probative value in support of that party's claim. Ruta v. Breckenridge-Remy Co. (1982), 69 Ohio St.2d 66, 69 (explaining standard with regard to motion for directed verdict); Osler v. Lorain (1986), 28 Ohio St.3d 345, 347 (applying same standard in reviewing ruling upon motion for judgment notwithstanding the verdict). - 8 - With regard to the substantive law, we note that in order to recover on a breach of contract claim, a proponent must show that the parties reached an agreement to which they intended to be bound based upon a meeting of the minds and mutual assent. Lucas v. Constantini (1983), 13 Ohio App.3d 367, 369. The proponent must also show that the opposing party breached the contract and that he has been damaged by the breach. Logsdon v. Ohio Northern University (1990), 68 Ohio App.3d 190, 195. With regard to Avery's claimed defense to the breach of contract cause of action, we further note that a contract cannot be unilaterally modified. Nagle Heating & Air Conditioning Co. Heskett (1990), 66 Ohio App.3d 547, 550. In order to modify a contract, the parties to that contract must mutually consent to the modification. Id. With regard to releases, it is well settled that a release of a cause of action for damages is ordinarily an absolute bar to a later action on any claim encompassed within the release, Haller v. Borror (1990), 50 Ohio St.3d 10, 13, but the overriding consideration in interpreting a release is the intent of the parties. Whitt v. Hutchison (1975), 43 Ohio St.2d 53, 58; Dickson v. Pandya (1984), 21 Ohio App.3d 10, 11. Applying the foregoing to appellee's claim of breach of contract, which stemmed from disclosure of the Settlement Agree- ment at the hearing before the Bureau of Unemployment Compensa- tion, we note that the unrefuted evidence of record established - 9 - 1 that appellee was not entitled to unemployment compensation. Therefore, he failed to establish any damages resulting from the disclosure of the Agreement, an essential element of this cause of action. Upon the failure of proof going to this essential ele- ment, judgment should have been rendered for appellant on the cause of action related to this disclosure. However, since there was a general verdict in this matter which was neither tested nor contradicted by special interrogatories, we must consider whether, by virtue of the two-issue rule, the verdict is supportable on the other theories submitted to the jury. See McCarthy v. Kasperak (1981), 3 Ohio App.3d 206, 208. Considering appellee's claim for breach of contract, which stemmed from Gainer's conversation to Butcher, the evidence of record irrefutably established that the parties' Settlement Agree- ment was a prior existing agreement in effect between the parties and that it was never modified. Moreover, the letter of reference contemplated within this Agreement demonstrated that the parties to the Settlement Agreement intended that the appellee would apply for other employment and receive, at minimum, a neutral evaluation from Avery. Avery claims, however, that the release signed by the appel- lee as part of his employment application with CCA precludes 1 A recurring problem in this case stems from the settlement agreement's failure to anticipate future events specifically and deal with them directly. For example, the parties could have negotiated a provision in the agreement that the employer would not object to plaintiff's application for unemployment benefits. - 10 - recovery. Avery further claims to be a third-party beneficiary of that release. These claims must fail. Even assuming, without specifically deciding herein, that the release is not, in fact, unenforceable for being overly broad, we note that it is undisputed that appellee intended that the pre-existing Settlement Agreement would remain in effect. It cannot be disputed that the parties contemplated that appellee, at some point in time subsequent to the Agreement, would seek further employment and would need a reference from Avery. Further, it is undisputed that appellee and Avery intended that any disclosure of information would be handled in the specific manner set forth in that Agreement, notwithstanding appellee's execution of the CCA release. Accordingly, the CCA release does not bar appellee's recovery on the breach of contract claim. Similarly, as to Avery's claim that it is a third-party beneficiary of the release, it is essential that the contracting parties intend that the third party benefit from the contract in order for the third party to have enforceable rights under the contract. Construction Advancement Program of North Central and East Central Ohio v. A. Bentley & Sons Co. (1975), 45 Ohio App.2d 13, 17. Accord Hines v. Amole (1982), 4 Ohio App.3d 263, 268 (third person need not be named in contract but must be within contemplation of parties). In this instance, the evidence estab- lished that appellee never intended to waive the confidentiality provision of the Settlement Agreement and that he called Avery for - 11 - assurances of continued confidentiality shortly before Gainer spoke to Butcher. Appellee, therefore, never intended, or even contemplated, that Avery would be a third-party beneficiary of the release, and therefore Avery was not entitled to seek its enforce- ment. Avery next contends that no breach occurred because "Gainer did not tell Butcher anything that violated the Settlement Agree- ment." The Agreement explicitly precluded disclosure of the "facts, circumstances or manner of its negotiation and consumma- tion," and it is undisputed that these circumstances concern an allegation that appellee had a tardiness problem at Avery. In accordance with the mutual understanding of the parties in this matter, appellee could truthfully deny any tardiness problem at Avery because, in fact, this issue was resolved by the Settlement Agreement. Moreover, the Agreement required dissemination of the neutral reference letter upon inquiry of a prospective employer, and Gainer's information exceeded the letter and was not neutral. Accordingly, this contention is unsupported by the record. Avery next asserts that pursuant to the "after-acquired evidence rule," it is not responsible for CCA's failure to hire appellee. As set forth in Milligan-Jensen v. Michigan Technologi- cal Univ. (1992), 975 F.2d 302, limited in McKennon v. Nashville Banner Pub. Co. (1995), ___ U.S. ___ , 130 L.Ed.2d 852, this defense may be available to an employer where an employee made a material misrepresentation and would not have been hired had the - 12 - employer known of the misrepresentation at the time it was made. Assuming that this defense is applicable to Avery herein, we note that, in this instance, appellee made no misrepresentation. Rather, appellee supplied CCA with information which was in accord with the parties' mutual understanding as set forth in the Settle- ment Agreement. This information was then contradicted by Gainer in violation of that Agreement, and CCA refused to hire plaintiff due to the contradiction in information. Accordingly, the essen- tial element of this defense is not established. Finally, Avery asserts that it was entitled to judgment since Gainer exceeded the scope of his authority in providing the refer- ence. This claim must fail since the Agreement gave Avery the affirmative duty to "take any necessary steps to resist" disclo- sure to any outside parties. The undisputed facts reveal that appellee's employment opportunity was foreclosed solely due to Avery's failure to take any measures to bar the disclosure. Cf. Wells v. Uvex Winter Optical (R.I. 1994), 635 A.2d 1188. In accordance with the foregoing, Avery's first assignment of error is overruled. II. Defendant-appellant's second assignment of error states: ON PLAINTIFF-APPELLEE'S CLAIM OF FRAUD, THE COURT ERRED IN NOT GRANTING AVERY'S MOTIONS FOR DIRECTED VERDICT AND JNOV BECAUSE THE VERDICT WAS UNSUPPORTED BY AND CONTRARY TO THE EVIDENCE, SINCE THE EVIDENCE PROVED THAT AVERY DID NOT COMMIT ANY FRAUD. - 13 - As noted previously, a motion for a directed verdict and for judgment notwithstanding the verdict must be denied where, con- struing all the evidence most strongly in favor of the non-movant, there is substantial evidence supporting the non-movant's position on which reasonable minds may differ. Nickell v. Gonzalez, supra,; Cardinal v. Family Foot Care Centers., Inc., supra. In order to recover upon a claim of fraudulent inducement to enter into a contract, a claimant must prove: (1) a false repre- sentation concerning a fact or, in the face of a duty to disclose, concealment of a fact material to the transaction; (2) knowledge of the falsity of the representation or utter disregard for its truthfulness; (3) an intent to induce reliance upon the represen- tation under circumstances manifesting a right to rely; and (4) injury proximately caused by the reliance. Mussivand v. David (1989), 45 Ohio St.3d 314, 322. The focus is on whether the defendant made a promise with the present intention not to perform and thereby misrepresented the existing fact of his or her present state of mind. Link v. Leadworks Corp. (1992), 79 Ohio App.3d 735, 742. In this instance, appellee failed to present evidence that Avery entered into the Settlement Agreement with the intention of not honoring it. To the contrary, the evidence revealed that Gainer's disclosure was the unintended result of the operator misdirecting Butcher's telephone call. - 14 - Avery's second assignment of error is well taken but not dispositive in light of the two-issue rule since a general verdict was rendered in this matter. See McCarthy v. Kasperak, supra. III. Defendant-appellant's third assignment of error states: ON PLAINTIFF-APPELLEE'S CLAIMS OF TORTIOUS INTERFERENCE, THE COURT ERRED IN NOT GRANTING AVERY'S MOTIONS FOR DIRECTED VERDICT AND JNOV BECAUSE THE VERDICT WAS UNSUPPORTED BY AND CONTRARY TO THE EVIDENCE. As pertains to this assignment of error, the trial court was required to determine whether there existed any evidence of sub- stantial probative value in support of appellee's claims. Ruta v. Breckenridge-Remy Co., supra. To establish a claim of tortious interference with a business opportunity, a plaintiff must prove: (1) contract or negotiations with regard to a contract; (2) defen- dant's knowledge of the contract or negotiations; (3) defendant's interference in contract or negotiations; (4) that defendant's conduct was malicious and without legal justification; and (5) damages. Universal Coach, Inc. v. New York City Transit Authori- ty, Inc. (1993), 90 Ohio App.3d 284, 292. Malice is defined as publication of a statement with knowledge that it is false or with reckless disregard of whether it is false. Scott v. News-Herald (1986), 25 Ohio St.3d 243, 248. In this instance, plaintiff's evidence established that he was involved in negotiations with regard to employment, that Avery, - 15 - through Gainer, was aware of that fact and that Avery interfered with those negotiations by disclosing information which had been rendered confidential in the Settlement Agreement. Appellee's evidence further established that Gainer admittedly repeated "rumors" with reckless disregard of whether they were true or false, without legal justification to do so in light of the confidentiality provision of the Settlement Agreement. Finally, appellee established that Butcher did not hire him as the result of Gainer's disclosure and that he thereby sustained damages. From the foregoing, appellee presented evidence going to each element of this cause of action, and the trial court properly denied Avery's motions for directed verdict and judgment notwith- standing the verdict. Avery's third assignment of error is over- ruled. Judgment affirmed. - 16 - It is, therefore, considered that said appellee recover of said appellants his costs herein. It is ordered that a special mandate be sent to said court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. SARA J. HARPER, P.J. and DIANE KARPINSKI, J. CONCUR JUDGE TIMOTHY E. McMONAGLE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announce- ment of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journalization, .