COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NOS. 69301 and 69446 [CASE NO. 69301] : MAXINE G. SLONE, EXECUTRIX : Plaintiff-Appellee : v. : AEROSPACE DESIGN & FABRICATION, : INC. : Defendant-Appellant : JOURNAL ENTRY AND AND [CASE NO. 69446] : OPINION ALPHACOR, INC., ET AL. : Plaintiffs-Appellants : v. : STRIPMATIC PRODUCTS, INC., : ET AL. : Defendants-Appellees : DATE OF ANNOUNCEMENT OF DECISION: JUNE 6, 1996 CHARACTER OF PROCEEDING: Civil appeals from Common Pleas Court, Nos. CV-263314 and CV-248462. JUDGMENT: AFFIRMED IN PART, VACATED IN PART, AND JUDGMENT ENTERED IN FAVOR OF DEFENDANT- APPELLANT. DATE OF JOURNALIZATION: APPEARANCES: For Maxine G. Slone and Anthony J. DiVenere, Esq. Alphacor, Inc., et al.: Tyler L. Mathews, Esq. McDonald, Hopkins, Burke & Haber 2100 Bank One Center 600 Superior Avenue, East Cleveland, OH 44114 For Aerospace Design & Donet D. Graves, Esq. Fabrication, Inc.: Harold C. Reeder, Esq. National City - East 6th Building Suite 1000 1965 E. 6th Street Cleveland, OH 44114 -2- For Stripmatic Products, Inc. William J. Muniak, Esq. et al.: Frank R. Osborne, Esq. Arter & Hadden 1100 Huntington Building 925 Euclid Avenue Cleveland, OH 44115-1475 -4- DAVID T. MATIA, P.J.: This is a consolidated appeal arising out of two separate judgments from the Cuyahoga County Court of Common Pleas, case nos. CV-263314 and CV-248462 respectively, dealing with the issue of whether a covenant not to compete terminates upon the death of the covenantor. In appellate case no. 69301, Aerospace Design and Fabrication, Inc., defendant-appellant, challenges the judgment of the trial court granting the motion for judgment on the pleadings filed by Maxine G. Slone, Executrix of the Estate of Henry D. Slone, deceased, plaintiff-appellee. In that case, the trial court determined that the covenant not to compete was not terminated by the death of Henry Slone enabling Mr. Slone's estate to continue receiving payments under the covenant. Aerospace Design and Fabrication, Inc., defendant-appellant, assigns three errors for this court's review. In appellate case no. 69446, Alphacor, Inc., et al., plaintiffs- appellants, challenge the trial court's granting of the motion for summary judgment filed by Stripmatic Products, Inc., et al., defendants-appellees. In that case, the trial court determined that, since the covenant not to compete entered into between Mr. Theodore Lanza (Alphacor) and Stripmatic Products, Inc., et al., defendants-appellees, constituted a personal services contract, the death of Mr. Lanza terminated the covenant precluding Mr. Lanza's estate from collecting further payments under the covenant. -5- Alphacor, Inc., et al., plaintiffs-appellants, assign two errors for this court's review. I. THE FACTS RELATING TO APPELLATE CASE NO. 69301 On January 1, 1992, Henry D. Slone entered into a covenant not to compete with Aerospace Design and Fabrication, Inc., defendant- appellant, an aerospace engineering company. Mr. Slone agreed not to directly or indirectly engage in any business or assist in any business in competition with Aerospace Design and Fabrication anywhere in the United States, effective with the dates of the agreement and during the term of his employment with Aerospace Design and Fabrication. Mr. Slone agreed further that upon the termination of his officer and/or directorship positions with Aerospace Design and Fabrication and for an additional 72 months thereafter, he would not disclose or utilize any confidential information which he learned as a result of his association with Aerospace Design and Fabrication. In exchange for this covenant executed by Mr. Slone, Aerospace Design and Fabrication, defendant-appellant, agreed to pay Mr. Slone $3,000 per month beginning in February, 1992 and continuing for 72 months after Mr. Slone terminated his position with Aerospace Design and Fabrication. In accordance with the covenant not to compete, Aerospace Design and Fabrication, defendant-appellant, made payments to Mr. Slone through and including May, 1993. On May 28, 1993, Mr. Slone died. Soon after, Aerospace Design and Fabrication ceased making any -6- further payments despite repeated demands for payment by the Estate of Mr. Slone. On December 27, 1993, Maxine G. Slone, Executrix of the Estate of Henry D. Slone, deceased, plaintiff-appellee, initiated this action to recover the balance allegedly due under the covenant not to compete. On June 19, 1995, the trial court granted the Estate of Henry Slone's, plaintiff-appellee's, motion for judgment on the pleadings and entered judgment accordingly. On July 13, 1995, Aerospace Design and Fabrication, defendant- appellant, filed a timely notice of appeal from the judgment of the trial court. II. THE FACTS RELATING TO APPELLATE CASE NO. 69446 On December 27, 1991, an asset purchase agreement and bill of sale were executed between Stripmatic, Inc. (seller) and Stripmatic Products, Inc. (buyer). The purchase price for the company was approximately $625,000, plus $100,000 in exchange for a consulting and non-competition agreement. Payments due under the consulting and non-competition agreement were payable over a five year period. The consulting agreement provided that, for a five year period, Stripmatic Products, Inc., defendants-appellees, would pay to Mr. Theodore Lanza and Alphacor, a company founded by Mr. Lanza to provide consulting services, the sum of $1,666.67 per month beginning March 1, 1992 for assisting in the management and operations of Stripmatic Products, Inc., defendants-appellees. The covenant not to compete agreement provided that, as long as Mr. -7- Lanza did not compete directly or indirectly with the Stripmatic Products, Inc. or solicit customers or employees of Stripmatic Products, Inc., Mr. Lanza would receive $3,750 per month beginning on March 1, 1992 and continuing for sixty months. On August 8, 1992, Mr. Lanza died and Stripmatic Products, Inc. ceased making payments under the consulting agreement as well as the covenant not to compete. On March 5, 1993, Alphacor and Mrs. Lanza, Executrix of the Estate of Theodore Lanza, instituted a two-count breach of contract action against Stripmatic Products, Inc., for payments due under the consulting services contract and the covenant not to compete. On April 22, 1994, the trial court granted summary judgment in favor of Stripmatic Products, Inc., defendants-appellees, regarding payments due under the non-competition agreement. On February 22, 1995, a bench trial began regarding the consulting services contract. In a journal entry dated May 17, 1995, the trial court entered judgment in favor of Stripmatic Products, Inc., defendants-appellees, removing all liability under the consulting services contract. On August 17, 1995, the Estate of Theodore Lanza and Alphacor, Inc., et al., plaintiffs-appellants, filed a timely notice of appeal from the judgment of the trial court. III. ASSIGNMENTS OF ERROR IN APPELLATE CASE NO. 69301 Aerospace Design and Fabrication, Inc.'s, defendant- appellant's, first assignment of error states: -8- THE COMMON PLEAS COURT ERRED IN GRANTING APPELLEE JUDGMENT ON THE PLEADINGS BECAUSE THE COVENANT NOT TO COMPETE WAS A PERSONAL COVENANT WHICH TERMINATED UPON THE DEATH OF THE COVENANTOR AS A MATTER OF LAW. Aerospace Design and Fabrication, Inc.'s, defendant- appellant's, second assignment of error states: THE COMMON PLEAS COURT ERRED IN GRANTING APPELLEE JUDGMENT ON THE PLEADINGS BECAUSE THE COVENANT NOT TO COMPETE TERMINATED AS A MATTER OF LAW UPON THE DEATH OF THE COVENANTOR FOR A FAILURE OF CONSIDERATION. Aerospace Design and Fabrication, Inc.'s, defendant- appellant's, third assignment of error states: THE COMMON PLEAS COURT ERRED IN FINDING THAT UNDER THE COVENANT NOT TO COMPETE AGREEMENT ADF HAD PROMISED TO PAY SLONE $3,000.00 PER MONTH FOR A PERIOD OF 22 MONTHS BECAUSE THE COVENANT DID NOT PROVIDE SUCH. Having a common basis in both law and fact, this court shall consider Aerospace Design and Fabrication, Inc.'s, defendant- appellant's, first, second and third assignments of error simultaneously. A. THE ISSUE RAISED: WHETHER A COVENANT NOT TO COMPETE TERMINATES UPON THE DEATH OF THE COVENANTOR? Aerospace Design and Fabrication, Inc., defendant-appellant, argues through its first, second and third assignments of error, that the trial court erred in granting the motion for judgment on the pleadings filed by Maxine G. Slone, Executrix of the Estate of Harry D. Slone, deceased, plaintiff-appellee. It is defendant-appellant's position that plaintiff-appellee was not entitled to judgment since the covenant not to compete -9- constituted a personal service's contract which terminated upon the death of Harry Slone. Defendant-appellant argues further that the trial court incorrectly interpreted the terms of the covenant not to compete. Aerospace Design and Fabrication's argument has merit. B. STANDARD OF REVIEW FOR JUDGMENT ON THE PLEADINGS. Civ.R. 12(C) provides that a party may move for judgment on the pleadings: (1) after the pleadings are closed; and (2) but within such time as not to delay the trial, any party may move for judgment on the pleadings. The standard of review a trial court must use in ruling upon a motion for judgment on the pleadings pursuant to Civ.R. 12(C) was set forth in Case Western Reserve University v. Friedman (1986), 33 Ohio App.3d 347, 348: A motion for judgment on the pleadings is the same as a motion to dismiss filed after the pleadings are closed and raises only questions of law. The pleadings must be construed liberally and in a light most favorable to the party against whom the motion is made, and every reasonable inference in favor of the party against whom the motion is made should be indulged. Vaught v. Vaught (1981), 2 Ohio App.3d 264, 2 OBR 293, 447 N.E.2d 811; Peterson v. Teodosie (1973), 34 Ohio App.2d 161, 63 O.O.2d 22, 297 N.E.2d 113. The motion should be denied if it cannot be determined from the face of the pleadings that the pleading does not state a claim upon which relief can be granted. Calhoun v. Supreme Court of Ohio (1978), 61 Ohio App.2d 1, 15 O.O.3d 13, 399 N.E.2d 559. Judgment on the pleadings may be granted where no material factual issue exists. However, it is axiomatic that a motion for judgment on the pleadings is restricted solely to the allegations -10- contained in those pleadings. Flanagan v. Williams (1993), 87 Ohio App.3d 768. See, also, Nelson v. Pleasant (1991), 73 Ohio App.3d 478, 481; Barilatz v. Luke (Dec. 7, 1995), Cuyahoga App. No. 68304, unreported. C. STANDARD OF REVIEW FOR COVENANT NOT TO COMPETE. In Ohio, a covenant not to compete is valid and enforceable as long as the restrictions set forth in the covenant are reasonable. Raimonde v. Van Vlerah (1975), 42 Ohio St.2d 21. In determining the validity of a covenant or any agreement in restraint of trade, each case must be decided upon its own facts. Extine v. Williamson Midwest (1964), 176 Ohio St. 403. The issue of whether a covenant not to compete terminates upon the death of the covenantor seems to be one of first impression in Ohio. Other jurisdictions have held that a covenant not to compete would be terminated upon the death of the covenantor, not fully performed. Frantz v. Parke (Idaho App. 1986), 729 P.2d 1068, 1071; Bloom v. K & K Pipe and Supply, Co., Inc. (Fla. App. 1980), 390 So.2d 770, 773. Professor Williston, in his well known treatise on contracts, endorsed this view. It is obvious, however, that the contract would not be fully performed under the circumstances; it would merely have become certain that the contract would be performed since the promisor being dead could no longer break a negative promise. *** 3 S. Williston, a Treatise on the Law of Contracts 497 (W. Jaeger, 3d Ed. 1960). The theory behind this position is that a covenant not to compete is personal in nature and therefore the -11- death of the covenantor must terminate the covenant. International Match Corporation (1937 D.C. N.Y.) 20 F. Supp. 420. Personal service contracts have been classified as those contracts wherein the personal performance by the promisor is the essence and the duty imposed cannot be done as well by others as by the promisor. Sanfillipo v. Oehler (Mo. App. 1993), 869 S.W. 2d 159. The issue of whether noncompetition agreements which are ancillary to the sole of a business constitute personal services contracts has also been addressed by other jurisdictions. The majority rule is that noncompetition agreements which are not part of larger agreements such as employment contracts containing affirmative promises of personal services are not personal services contracts. Where noncompetition agreements executed in conjunction with the sale of a business are joined with affirmative promises, the covenant not to compete is a personal services contract which terminates upon the death of the covenantor. Mail & Media (1994), 213 Ga. App. 826, 827, 446 S.E.2d 517; Sanfillipo v. Oehler, supra; TPS Freight Distribution v. Texas Commerce Bank-Dallas (Tex. App. 1990), 788 S.W.2d 456 (emphasis added). D. THE COVENANT NOT TO COMPETE TERMINATED UPON THE DEATH OF THE COVENANTOR. In the case sub judice, a review of the record demonstrates that the covenant not to compete agreement entered into between Henry Slone and Aerospace Design and Fabrication, Inc., -12- defendant-appellant, constituted a personal services contract and therefore terminated upon Mr. Slone's death. The covenant itself was signed only by Mr. Slone and a representative of Aerospace Design and Fabrication, Inc., defendant-appellant. Significantly, the covenant did not contain any language which could be construed to extend the rights and duties set forth in the covenant to Mr. Slone's executors, heirs or assigns. More importantly, the covenant not to compete agreement provided that Mr. Slone would be paid $3,000 per month after terminating his relationship with Aerospace Design and Fabrication, Inc., defendant-appellant. These payments were in exchange for Mr. Slone's promise not to compete and would continue for a 72-month period. Under the circumstances, the covenant not to compete would not have been completed upon Mr. Slone's death but terminated since the purpose of the contract was frustrated by Mr. Slone's death. Collection and Investigation Bureau of Maryland, Inc. v. Linsley (37 Md. App. 66, 1977), 375 A.2d 47, 51. Maxine Slone, Executrix of the Estate of Henry Slone, deceased, plaintiff-appellee, argues that the covenant not to compete agreement was fully performed upon Mr. Slone's death. However, the cases plaintiff-appellee relies upon in support of her argument are factually distinguishable from the case at bar since those cases dealt with noncompetition agreements executed in conjunction with the sale of a business. Although, plaintiff- appellee maintains that the covenant not to compete agreement at -13- issue was executed in conjunction with the sale of Mr. Slone's stock in Aerospace Design and Fabrication, Inc., a review of the record from the trial court demonstrates that any sale of stock occurred after the covenant not to compete was executed and was a separate and distinct transaction. Therefore, the cases relied upon by plaintiff-appellee are inapplicable. E. CONCLUSION. For the foregoing reasons, the trial court erred in entering judgment on the pleadings in favor of the Estate of Henry Slone since the covenant not to compete in question terminated upon Mr. Slone's death. Judgment of the trial court in appellate case no. 69301 is hereby vacated and judgment shall be entered in favor of Aerospace Design and Fabrication, Inc., defendant-appellant. IV. FIRST ASSIGNMENT OF ERROR IN APPELLATE CASE NO. 69446 Alphacor, Inc. and Susan Lanza, Executrix of the Estate of Theodore Lanza, plaintiffs-appellants', first assignment of error states: THE TRIAL COURT ERRED AS A MATTER OF LAW WHEN IT GRANTED SUMMARY JUDGMENT IN EFFECT HOLDING THAT A NON-COMPETITION AGREEMENT WHICH DID NOT AFFIRMATIVELY OBLIGATE THE PROMISOR TO PERFORM ANY SERVICES IS A PERSONAL SERVICES CONTRACT THAT TERMINATES UPON THE DEATH OF THE PROMISOR. A. THE ISSUE RAISED: WHETHER A COVENANT NOT TO COMPETE TERMINATES UPON THE DEATH OF THE COVENANTOR? Plaintiffs-appellants argue, through their first assignment of error, that the trial court erred in granting the motion for summary judgment filed by Stripmatic Products, Inc., defendants- -14- appellees. It is plaintiffs-appellants' position that the non- competition agreement at issue was not a personal services contract and therefore was not terminated upon the death of Theodore Lanza. Plaintiffs-appellants' first assignment of error is not well taken. B. STANDARD OF REVIEW FOR SUMMARY JUDGMENT. Civ.R. 56(C) provides that before summary judgment may be granted, the court must determine that (1) no genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party. Osborne v. Lyles (1992), 63 Ohio St.3d 326. A motion for summary judgment forces the non-moving party to produce evidence on issues for which that party bears the burden of production at trial. Wing v. Anchor Media, Ltd. of Texas (1991), 59 Ohio St.3d 108 (syllabus). The non-movant must also present specific facts and may not rely merely upon the pleadings or upon unsupported allegations. Shaw v. Pollack & Co. (1992), 82 Ohio App.3d 656. When a party moves for summary judgment supported by evidentiary material of the type and character set forth in Civ.R. 56(E), the opposing party has a duty to submit affidavits or other material permitted by Civ.R. 56(C) to show that there is a genuine issue -15- for trial. Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64. This court's analysis of an appeal from a summary judgment is conducted under a de novo standard of review. See Maust v. Bank One Columbus, N.A. (1992), 83 Ohio App.3d 103, 107; Howard v. Willis (1991), 77 Ohio App.3d 133. No deference is given to the decision under review, and this court applies the same test as the trial court. Bank One of Portsmouth v. Weber (Aug. 7, 1991), Scioto App. No. 1920, unreported. C. THE TRIAL COURT PROPERLY ENTERED SUMMARY JUDGMENT. In the case sub judice, a review of the consulting and non- competition agreement entered into between Alphacor, Inc., et al., plaintiffs-appellants, and Stripmatic Products, Inc, et al., defendants-appellees, demonstrates that the non-competition agreement was a contract for personal services. Section 8, paragraph i of the agreement provides: (i) Personal Services. This Agreement, in part, is based upon the personal services of Mr. Lanza and the duties and obligations of Mr. Lanza shall not be transferable or assignable in any manner by Mr. Lanza or his personal representative. Pursuant to the authority previously cited by this court in this opinion, personal services contracts are terminated upon the death of the promisor. Frantz v. Parke, supra; Bloom v. K & K Pipe and Supply, Co., Inc., supra; and Keller v. California Liquid Gas Corporation (1973, D.C. Wyoming), 363 F.Supp. 123. Accordingly, the trial court properly granted summary judgment in -16- favor of Stripmatic Products, Inc., defendants-appellees, as the Estate of Theodore Lanza was not entitled to collect upon the terminated contract. D. CONCLUSION. For the foregoing reasons, plaintiffs-appellants' first assignment of error is not well taken as the covenant not to compete terminated upon the death of Mr. Theodore Lanza. V. SECOND ASSIGNMENT OF ERROR IN APPELLATE CASE NO. 69446 Alphacor, Inc. and Susan Lanza, Executrix of the Estate of Theodore Lanza, plaintiffs-appellants', second assignment of error states: THE TRIAL COURT'S JUDGMENT IS CONTRARY TO THE EXPRESS TERMS OF THE CONSULTING AGREEMENT AND, THEREFORE, THE TRIAL COURT'S JUDGMENT IS CONTRARY TO LAW AND AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE. A. THE ISSUE RAISED: MANIFEST WEIGHT OF THE EVIDENCE. Plaintiffs-appellants argue, through their second and final assignment of error, that the consulting agreement in question was breached by Stripmatic Products, Inc., et al., defendants- appellees, since the agreement was between defendants-appellees and Alphacor, Inc., not Theodore Lanza, and therefore was not terminated upon the death of Mr. Lanza. It is plaintiffs- appellants' position that the judgment of the trial court relating to the consulting agreement was against the manifest weight of the evidence. -17- Plaintiffs-appellants' second assignment of error is not well taken. B. STANDARD OF REVIEW FOR MANIFEST WEIGHT. In Ohio, an appellate court must adhere to the finding of the trial court unless the judgment or decision being appealed is manifestly against the weight of the evidence. Seasons Coal Co. v. Cleveland (1984), 10, Ohio St.3d 77. The Supreme Court of Ohio, in C.E. Morris Co. v. Foley Constr. Co. (1978), 54 Ohio St.2d 279, 376 N.E.2d 578, examined the issue of manifest weight and held that: Judgments supported by some competent, credible evidence going to all the essential elements of the case will not be reversed by a reviewing court as being against the manifest weight of the evidence. Id. at syllabus; see, also, Flynn v. Flynn (1984), 15 Ohio App.3d 34. The underlying rationale for giving deference to the findings of the trial court rests with the knowledge that the trial court is in the best position to view the witnesses and observe their demeanor, gestures and voice inflections, and use these observations in weighing the credibility of the proffered testimony. Seasons Coal, supra at 80. C. THE JUDGMENT OF THE TRIAL COURT WAS NOT AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE. A review of the record from the trial court fails to support plaintiffs-appellants' contention that the judgment was against the manifest weight of the evidence. Initially, sufficient -18- evidence was set forth to demonstrate that the consulting and non-competition agreement was based in part upon the personal services of Mr. Lanza. Further evidence was presented to demonstrate that Alphacor, Inc. was merely a corporate entity established by Mr. Lanza through which he would render the consulting services called for pursuant to the contract. Given the nature of the evidence admitted, the finder of fact was well within its prerogative in finding that the consultation agreement was in fact based upon the unique knowledge and expertise of Mr. Lanza and was therefore terminated upon his death. Since the judgment of the trial court was supported by some competent and credible evidence going to all the essential elements of the case, this court cannot now say that it was manifestly against the weight of the evidence. Caresani v. Morgan Uniform Serv. of America (Oct. 13, 1994), Cuyahoga App. No. 66239, unreported. D. CONCLUSION. For the foregoing reasons, the trial court's judgment regarding the termination of the consultation agreement was not against the manifest weight of the evidence. Plaintiffs- appellants' second and final assignment of error is not well taken. VI. SUMMARY Judgment of the trial court in appellate case no. 69301 is hereby vacated and judgment is entered in favor of Aerospace Design and Fabrication, Inc., defendant-appellant. -19- Judgment of the trial court in appellate case no. 69446 is hereby affirmed. -20- It is ordered that each party bear its own costs. The court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this court directing the Common Pleas 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. NAHRA, J. and O'DONNELL, J., CONCUR. DAVID T. MATIA PRESIDING JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof this document will be stamped to indicate .