Gimex Properties Corp., Inc. v. Reed

[Cite as Gimex Properties Corp., Inc. v. Reed, 

.]




                            IN THE COURT OF APPEALS OF OHIO
                                SIXTH APPELLATE DISTRICT
                                     LUCAS COUNTY

Gimex Properties Corp., Inc.,                              Court of Appeals No. L-22-1049
d/b/a T.A.C.
                                                           Trial Court No. CI0202101519
        Appellee

v.

Ashley Reed, et al.                                        DECISION AND JUDGMENT

        Appellants                                         Decided: December 29, 2022

                                                  *****

        Sarah K. Skow and Jennifer A. McHugh, for appellee.

        Matthew A. Leibert and David A. Bressman, for appellants.

                                                  *****
        ZMUDA, J.

                                          I.       Introduction

        {¶ 1} Appellants, Thomas and Ashley Reed, appeal the judgment of the Lucas

County Court of Common Pleas, granting judgment in favor of appellee, Gimex

Properties Corp., Inc., on its claims for breach of contract and misappropriation of trade

secrets. Finding no error in the proceedings below, we affirm.
                         A.     Facts and Procedural Background

         {¶ 2} Appellee is a corporation headquartered in Toledo, Ohio, which issues

licenses to certain franchisees to operate automotive service shops known as Tuffy Auto

Service Centers. In exchange for its wide-ranging business support it provides, appellee

receives royalty payments from its franchisees. Appellants were previously among

appellee’s franchisees, and they were licensed to operate Tuffy Auto Service Centers in

the Orlando, Florida area.

         {¶ 3} In early 2021, appellants were involved in an irreconcilable dispute with

their business partners, which led to the termination of their relationship with appellee.

Thereafter, appellants began working as employees of another automotive service shop in

the Orlando area, Fournier’s Performance Automotive (“Fournier’s”).

         {¶ 4} On March 11, 2021, upon learning of appellants’ subsequent employment

with a business it considered a competitor, appellee filed its complaint in this action. In

the complaint, appellee alleged that appellants’ affiliation with Fournier’s constituted a

breach of the terms of the parties’ license agreement, namely the non-competition and

confidentiality provisions contained therein.1 Thus, appellee asserted claims for breach

of contract and “trade secret misappropriation/inevitable discovery,” and sought a

preliminary injunction, “to be made permanent at trial,” enjoining appellants from




1
    A copy of the license agreement was attached to appellee’s complaint.


2.
operating Fournier’s or engaging in any other competitive activity for a period of two

years.

         {¶ 5} On June 2, 2021, appellants filed their answer to appellee’s complaint.

Throughout the proceedings before the trial court, appellants proceeded pro se.

Following pretrial discovery and motion practice, appellants amended their answer on

December 8, 2021. In their amended answer, appellants admitted that they were

signatories to the license agreement attached to appellee’s complaint, and thus obligated

to refrain from competing with appellee within a geographical area of five miles of a

Tuffy Auto Service Center for a period of two years after the expiration or termination of

the license.

         {¶ 6} Nonetheless, appellants asserted that their affiliation with Fournier’s was not

competitive in nature, because Fournier’s “specializes in Classic and Performance

Vehicles,” and does not “directly compete for work against [appellee].” Moreover,

appellants asserted that appellee was not entitled to the relief it requested because

appellee suffered no irreparable harm on account of their involvement with Fournier’s.

Appellants denied having any confidential information or trade secrets, and insisted that

the knowledge they possessed concerning operation of an automotive service business

was the product of decades of prior industry experience, not their association with

appellee.




3.
         {¶ 7} On December 20, 2021, the matter proceeded to a trial before the bench. At

the outset of the trial, appellee made several motions in limine. In one such motion,

appellee sought an order from the court precluding appellants from calling any witnesses

or taking the stand in their own defense based upon appellants’ failure to file a witness

list in accordance with the trial court’s scheduling orders. Upon consideration, the trial

court denied appellee’s request to preclude appellants from testifying, and stated: “So I

will allow [appellants] to testify as on cross for the defense and if they would like to also

– you can’t ask yourself a question necessarily. It’s kind of awkward to do that. But if

you’d like to present any testimony you think would help on your side, I’ll allow that as

well.”

         {¶ 8} The trial then proceeded to appellee’s case-in-chief. As its first witness,

appellee called its director of franchise development, Eric Schmitt. As director of

franchise development, Schmitt is responsible for creating the license agreements

appellee uses with its franchisees. According to Schmitt, these agreements specify the

responsibilities and obligations of franchisees as well as the support appellee provides to

its franchisees. Schmitt stated that appellee has continuously refined its business model

and practices since it was formed over 50 years ago, and thus “there’s just a lot that goes

into this business model. There’s operations manuals, there’s marketing manuals, it’s a

really a how-to kind of turnkey business.”




4.
       {¶ 9} When asked to describe appellee’s business model more specifically,

Schmitt responded that appellee has developed proprietary materials that are provided to

franchisees in order to facilitate the sale of automotive services. Further, Schmitt

explained that appellee is engaged in the provision of automotive services involving

“[e]verything from exhaust to brakes to mufflers, oil change, * * * anything to do with

fixing a car is what we are involved in.”

       {¶ 10} Later in his direct examination, Schmitt detailed appellee’s franchising

process. First, the prospective franchisee must complete an application. According to

Schmitt, appellants and one of their business partners completed such an application in

this case. Thereafter, appellee provides the prospective franchisee with a franchise

disclosure document for their review. The prospective franchisee is then “invited to

Toledo for a discover day and that’s a day that they meet with the current management

team.” Afterwards, appellee’s franchise review committee convenes and decides whether

to award the franchise. If the prospective franchisee is awarded a franchise, appellee

provides a license agreement for execution. Once the agreement is executed, the

franchise vetting process is complete and appellee considers the prospective franchisee as

an actual franchisee. Here, appellant executed such a license agreement, a copy of which

was admitted into the record as Plaintiff’s Exhibit H.

       {¶ 11} At the outset of the franchise relationship, appellee invites the franchisee to

Toledo for “new dealer training,” which occurs over a period of eight to ten days and



5.
“consists primarily of business development and [training on] how to run a business.” At

this time, the franchisee is provided with proprietary information such as operations

manuals, payment plans, marketing techniques, training on financial documents such as

profit/loss statements and the like, disclosure of vendors used by appellee and the

agreements appellee has with such vendors, customer lists, information about appellee’s

pricing margins and labor costs. Schmitt testified that appellants attended new dealer

training at which they received this proprietary information. A certificate of completion

was admitted into the record memorializing appellants’ completion of new dealer training

on September 19, 2018.

       {¶ 12} Once the franchise is up and running, franchisees are privy to continuing

education from appellee through Tuffy University and annual dealer meetings that

include breakout sessions where dealers discuss improving appellee’s brand and business

operations.

       {¶ 13} Schmitt testified that the business practices and credibility appellee has

developed over several decades has enabled it to be competitive in the automotive

services industry. He indicated that it would be “very difficult today” to start an

independent automotive repair shop given the competitive market dynamics and the fact

that the “automotive business is very difficult.”

       {¶ 14} Turning to the facts of this case, Schmitt testified that he first met

appellants when they arrived with a business partner, Nate Trombetti, at appellee’s



6.
Toledo headquarters for discover day on July 6, 2018. At the time, appellants were

interested in purchasing the Tuffy’s automotive service shop in Sanford, Florida.

Eventually, a franchise was awarded and a limited liability company, Sanford Tuff, LLC,

was formed to hold the franchise. The members of Sanford Tuff, LLC were TAR

Automotive, LLC (owned by appellants) and JNT Investments, LLC (owned by Ernest C.

Aulls, III). The ownership interest in Sanford Tuff, LLC was split evenly between TAR

Automotive, LLC and JNT Investments, LLC.

      {¶ 15} The license agreement, which was executed by appellants in their

individual capacities, and by Thomas in his capacity as manager of Sanford Tuff, LLC,

became effective on October 24, 2018. In its introductory section, the agreement

references a franchise system, referred to throughout the agreement as the “Tuffy

System,” and states:

             Licensor licenses a system for operation of an automotive repair

      business that sells, installs and services automotive exhaust systems,

      brakes, front end, steering and suspension, alignment, air conditioning,

      engine diagnostics, batteries, tires and other automotive products and

      services. The distinguishing characteristics of the system include the

      Licensor’s trademarks and logos, training, operation procedures,

      promotional techniques and materials, location analysis, building design

      and layout, record keeping and reporting.



7.
       {¶ 16} Schmitt reviewed certain portions of the license agreement and provided

explanation of its terms during the trial. One such section was labeled “Article Twelve –

Confidentiality and Non-Competition.” In it, the agreement indicates that appellants

would have access to certain “proprietary and/or confidential information relating to

developing and operating a Center.” Such confidential information was identified as

including, without limitation:

              (a) Training manuals, policy manuals, operations manuals, operating

       methods, sales promotion aids, business forms, products and services,

       installation and service procedures, accounting procedures, marketing

       reports, supplier discounts and inventory systems, techniques, processes,

       policies, procedures, systems and data;

              (b) Knowledge and experience relating to Centers;

              (c) Advertising, marketing techniques and advertising programs used

       in developing and operating Centers;

              (d) All information regarding the identities and business transactions

       of customers and suppliers;

              (e) Computer software and similar technology that has been or may

       be developed by or for Licensor or its agents, which is proprietary to

       Licensor, including, without limitation, digital passwords and




8.
       identifications and any source code of, and data, reports, and other printer

       materials generated by, the software or similar technology;

              (f) Knowledge of the operating results and financial performance of

       Centers;

              (g) Other aspects of the Tuffy System now or later revealed to

       Licensee under this Agreement and all changes and enhancements in the

       Tuffy System, even if developed by Licensee.

              (h) Other property that Licensor describes as being Confidential

       Information or trade secrets of the Tuffy System.

       {¶ 17} The agreement went on to impose upon appellants an obligation to keep

this information confidential and to refrain from using the information in any business or

capacity other than in the franchise “for as long as the Confidential Information is not

generally known in the industry.” Moreover, Article Twelve of the agreement included a

non-compete clause, which provided in pertinent part:

              12.5 Covenant Not to Compete After Term.

              On the termination (including termination on transfer), expiration or

       non-renewal of this Agreement, Licensee, its shareholders, officers,

       directors, partners, owners and investors, must not, for a period of two

       years commencing on the later of the effective date of termination,

       expiration or non-renewal, or the date of any Court order enforcing this



9.
      provision if necessary, have an interest, directly or indirectly, as an owner

      (except ownership of no more than 1% of a publicly traded entity), partner,

      director, officer, manager, employee, consultant, representative or agent, or

      in any other capacity, or engage in any other capacity in any Competing

      Business or in any business * * * within any “Geographic Areas” (defined

      in Section 12.7).

             ***

             12.6 Other Restrictions on Activities.

             Licensee, its shareholders, officers, directors, partners, owners and

      investors must not, during the term of this Agreement and for a period of

      two years after the expiration or termination * * * of this Agreement: (a)

      divert or attempt to divert any business or customer of the Franchise

      Business or any other Center to any Competing Business by direct or

      indirect inducements or otherwise (whether or not Licensee has a direct or

      indirect interest in that business or person); (b) employ or seek to employ

      any person who was, at the time, employed by Licensor or its affiliates or

      by another Center, or directly or indirectly induce any person to leave their

      employment with Licensor or its affiliates or with another Center; * * *.




10.
             12.7 Definition of Competing Business and Geographic Areas.

             For purposes of this Agreement, a “Competing Business” includes

      any business that is the same or similar to a Center, including but not

      limited to a business that sells installs and services automotive exhaust

      systems, brakes, front end, steering, suspension, alignment, air

      conditioning, engine diagnostics, batteries, or tires at retail or other

      products or services that may be offered by Centers now or in the future.

      For purposes of this Agreement, the “Geographic Areas” include the area

      within five miles of the Licensed Location and the areas within five miles

      of any other Centers existing at the time the Licensee or its shareholders,

      officers, directors, partners, owners or investors begins to operate the

      Competing Business.

             12.8 Acknowledgements and Agreements Relating to

      Restrictions on Competition.

             Licensee agrees that the length of the term and the geographical

      restrictions contained in this Article are fair and reasonable. The parties

      have attempted to limit Licensee’s right to compete only to the extent

      necessary to protect the reasonable competitive business interests of

      Licensor and its franchisees. If the above restrictions or any part of these

      restrictions are invalid, this Article will be considered as imposing the



11.
       maximum restrictions allowed under the applicable state law in place of the

       invalid restriction or part of the restriction.

       {¶ 18} When asked to explain the purpose behind including the foregoing

competition provisions in the agreement, Schmitt testified that the provisions were a

necessary safeguard for appellee considering the resources it provides to its franchisees.

Schmitt explained that appellee “provide[s] the playbook” of resources and training to

enable the franchisee to take advantage of a “turnkey operation.” Schmitt agreed that

appellee’s enforcement of the covenants not to compete contained in its license

agreements was necessary to demonstrate appellee’s commitment to prevent unfair

competition from a former franchisee toward existing franchisees.

       {¶ 19} Next, Schmitt referenced Article 17.2 of the agreement, which provides for

injunctive relief to appellee in the event its franchisees engage in competitive practices

that violate the provisions of Article 12 of the agreement. Schmitt explained that

injunctive relief is an important component of the license agreement because monetary

damages would be difficult to measure in cases involving unfair competition.

       {¶ 20} After reviewing the terms of the license agreement, Schmitt turned his

attention to two letters that appellee sent to appellants upon learning of appellants’

involvement with Fornier’s Performance Automotive, a competing automotive service




12.
business located within five miles of a Tuffy franchise in Orlando, Florida.2 In the first

letter, dated January 26, 2021, appellee took the position that appellants’ involvement

with Fornier’s constituted a breach of the non-competition and confidentiality provisions

of the parties’ license agreement, and threatened to pursue legal action against appellants

if they refused to cease such involvement. Schmitt stated that appellants did not respond

to this letter. Consequently, appellee followed up with another letter dated February 3,

2021, again demanding that appellants refrain from any involvement in the operation of

Fornier’s Performance Automotive.

          {¶ 21} In response to appellee’s letters, appellants sent an email to appellee’s

corporate counsel on February 4, 2021, informing him that they “are not doing business

at [Fornier’s Performance Automotive]. We were interested in purchasing that business

and have reconsidered.” In another email sent four days later, Thomas indicated that the

owner of Fornier’s Performance Automotive was “in poor health and unable to work on

the classic cars he is currently restoring. He has agreed to teach me so I’m taking the

opportunity to obtain his knowledge in classic car restoration while applying for

employment elsewhere. I am not an employee nor am I pursuing a purchase of this

store.”




2
 According to maps admitted into the record in this case by appellee, Fornier’s
Performance Automotive is located 3.24 miles from the nearest Tuffy franchise “as the
crow flies,” and 4.8 miles in terms of driving distance.

13.
       {¶ 22} Schmitt testified that Fornier’s Performance Automotive’s focus on classic

vehicles is inconsequential to whether it is a competing business under the terms of the

parties’ license agreement, because there is no distinction between working on classic

vehicles and any other vehicles. He stated that Tuffy works on all types of vehicles,

including performance and classic cars.

       {¶ 23} During his testimony, Schmitt stated that the automotive repair service

industry was experiencing a shortage of good mechanics and employees amid the Covid-

19 pandemic. Given the market conditions, several Tuffy franchisees reached out to

appellee to voice their concerns about appellants’ involvement with Fornier’s

Performance Automotive and ask appellee to enforce its non-competition rights.

       {¶ 24} Schmitt explained that such enforcement is important in this case because

failure to insist upon adherence to the non-competition and confidentiality provisions in

the license agreement “would show the franchisees in the system that any article or

provision could probably be challenged.” Furthermore, Schmitt surmised that other

franchisees would become “very upset” with appellee if it did not seek to prevent

appellants from having any involvement with Fornier’s Performance Automotive. This

could also have a chilling effect on appellee’s ability to attract new franchisees according

to Schmitt.




14.
       {¶ 25} On cross examination, Schmitt was asked to identify the extent of

appellee’s damages attributable to appellants’ involvement with Fornier’s Performance

Automotive. He responded, “[t]here would be no way for me to qualify that.”

       {¶ 26} Appellee next called Scott Linde, appellee’s district manager who oversees

all corporate-owned and franchised Tuffy automotive service centers in the state of

Florida.

       {¶ 27} Linde testified as to the support and training appellee offers to its

franchisees, and also explained appellee’s “Tuffy Way” approach for providing services

such as oil changes in a manner that is unique in the industry. Additionally, Linde

testified that appellee services all types of vehicles, including classic cars and

performance vehicles.

       {¶ 28} In his capacity as district manager, Linde interacted with appellants during

the period in which they owned and operated the Tuffy franchise located in Sanford,

Florida. When he first met appellants, Thomas was a manager of the Sanford location.

At the time, the previous owner of the franchise was having financial difficulties and

Thomas expressed a desire to purchase the franchise. Eventually, appellants secured the

necessary financing and purchased two franchise locations: the Sanford location as well

as the Oviedo, Florida, location.

       {¶ 29} Linde testified that appellee provided appellants with proprietary

information, business development assistance, and training that was confidential in



15.
nature. He went on to indicate that appellee also shares its independent market research

information with its franchisees. While he acknowledged that Thomas was already a

“master technician” when he became a franchisee, Linde stated that appellee provided

Thomas with updated training to address “new developments” in the area of automotive

service, and also trained appellants on management and customer service techniques to

assist them with operating their automotive service business.

       {¶ 30} Turning his attention to the events that transpired around the time of

appellants’ termination of their relationship with appellee, Linde authenticated a brief text

message exchange he had with Thomas. On November 16, 2020, Linde informed

Thomas that another Florida Tuffy’s franchise was looking for a master technician and

asked Thomas whether one of his former master technicians, Russ, was looking for a job.

Nearly one month later, on December 15, 2020, Thomas responded to Linde’s message

and told Linde that he “had a job waiting for [Russ] and all the rest of my employees.”

Although Thomas provided no further explanation to Linde concerning where he planned

to take Russ and the rest of his employees, Linde testified that Russ eventually began

working with Thomas at Fournier’s. By the time of trial, however, Russ had returned to

appellee’s employ at another Tuffy franchise location in central Florida.

       {¶ 31} After appellants terminated their relationship with appellee, Linde

conducted an internet search to ascertain whether appellants were competing with

appellee. He discovered that appellants had formed a limited liability company, 

.
Performance Automotive LLC, which was registered with the Florida Secretary of State.

According to it articles of organization, the limited liability company’s principal office

and mailing address was the address at which Fournier’s is located. Ashley is the

registered agent, and appellants’ personal address is listed in the articles of organization.

Linde authenticated a map he created in Mapquest that showed a driving distance of 31.4

miles from appellants’ address to Fournier’s.

       {¶ 32} Upon discovering appellants’ registration of the aforementioned limited

liability company, Linde decided to drive by the address listed on the registration. When

he did so, he “saw a busy repair shop that works on cars” at that site. Despite Fournier’s

emphasis on performance vehicles, Linde testified that he did not recall seeing any

performance vehicles in the shop when he drove by. Linde observed “one or two classic

cars,” but mostly “late model vehicles like every shop works on.” Linde visited

Fournier’s on two additional occasions in 2021. While driving past the location, Linde

photographed the building and its parking lot. The photographs taken by Linde were

authenticated and admitted into the record at trial. Most of the vehicles depicted in those

photographs (including one vehicle that was parked inside the garage and elevated on a

car lift) are late model vehicles consistent with Linde’s prior testimony.

       {¶ 33} Given his observation of the types of vehicles serviced at Fournier’s, Linde

concluded that Fournier’s was one of appellee’s competitors. At trial, he explained that

Fournier’s “work[s] on the same vehicles. Same automotive repair. It’s not like it’s a



17.
body shop. * * * The same oil changes, brakes and they’re in the circle of the way we

market, so the circles overlap. So yes, they are a [competitor].” As additional support for

his conclusion that Fournier’s serviced the same type of vehicles serviced by appellee’s

franchisees, Linde recounted a customer with a late model Honda CR-V who returned to

a Tuffy franchise, the “Semoran store,” after having brakes serviced at Fournier’s. On

cross examination, Linde acknowledged that he was unaware whether this customer was

actually solicited by appellants.

       {¶ 34} Linde further testified concerning the impact of appellants’ affiliation with

Fournier’s on appellee and its franchisees in the Orlando area. Linde stated that these

franchisees, upon learning of appellants’ conduct, voiced concerns about the potential

loss of business they could suffer if appellee allowed appellants to continue to affiliate

with their regional competitors. The franchisees also questioned whether appellee’s

license agreements would protect their business interests moving forward if appellee

failed to enforce the non-competition and confidentiality provisions contained therein

against appellants. As to the Semoran store, which was the franchise located closest to

Fournier’s, Linde testified that the store was not performing as well as other stores in the

Orlando area, although he could not state with any certainty that the decline in

performance was due to appellants’ affiliation with Fournier’s. Nonetheless, Linde stated

that some franchisees were concerned that the Semoran store’s poor performance was

attributable to appellants’ involvement with Fournier’s.



18.
       {¶ 35} Linde testified that there are automotive service shops near appellants’

residence that are located more than five miles away from any Tuffy shops. For example,

Linde stated that appellants’ residence is located approximately as close to Daytona as it

is to Orlando, and there are no Tuffy franchises in Daytona.

       {¶ 36} Following Linde’s testimony, appellee called its chief financial officer,

Gary Swartzbeck, as its final witness. Swartzbeck first learned of appellants’ departure

from Tuffy in early 2021. At that time, Swartzbeck learned of a dispute between

appellants and their business partners that had caused the groups to decide to part ways.

       {¶ 37} Sometime in the middle of 2021, Swartzbeck began to hear “a lot of chatter

from * * * franchisees in the Central Florida area” about appellants’ formation of a new

limited liability company and eventual employment with Fournier’s. Specifically,

Swartzbeck stated that the franchisees at two locations (including the Semoran store)

contacted him and asked for a conference call with him, Schmitt, and appellee’s chief

executive officer to “vent their displeasure of what was going on and really kind of

wanting us to know, hold up our end of the bargain of them being a family and protecting

them and their rights as franchisees of Tuffy.”

       {¶ 38} Swartzbeck was asked to elaborate as to the likely financial ramifications to

appellee if it failed to enforce its license agreement with appellants in this case. He

responded:




19.
                 I think you’ll have a lot more turmoil in the franchisee community,

       the dealer community. You know, people expect when they pay a fee to

       become a member of a brand, in our case a Tuffy family, and then they pay

       those ongoing royalty fees, they expect to have the protection, they expect

       all the members of the Tuffy family to live up to their expectations. So if

       that’s not honored, I think they all feel hurt. They all feel damaged. And I

       think it makes it very difficult for us to have – to talk to our franchisees

       because they kind of have a grudge against corporate for not enforcing

       these things. I think it makes it difficult for [Schmitt] to go after and bring

       new franchisees into the system.

                 ***

                 It’s hard for me to say dollar-wise. It’s more about relationship

       damage than it is about financial damage.

       {¶ 39} Swartzbeck went on to testify that failure to enforce the license agreement

in this case would impact appellee’s ability to resolve future disputes with other

franchisees. Swartzbeck surmised that franchisees could attempt to use appellants’

competitive behavior, and appellee’s failure to challenge it, to justify a refusal to pay

franchise dues, claiming that appellee’s failure to protect them caused them to suffer a

loss in sales.




20.
       {¶ 40} At the conclusion of Swartzbeck’s testimony, appellee rested. Following

admission of appellee’s exhibits, the following colloquy took place between the court and

the parties:

       THE COURT: As I said before, I would anticipate having briefing begin

       and I know, folks, that you want to take that opportunity to file a brief

       before – on or before January 7th, correct?

       [ASHLEY]: Yes. We don’t do any kind of like a closing?

       THE COURT: I was going to provide you that opportunity, but I wanted to

       make sure that we kind of make sure that we get there in the right order. So

       the plaintiff is now resting with the admission of the exhibits?

       [APPELLEE’S COUNSEL]: Right, yes.

       ***

       THE COURT: And I believe, [Ashley], you said you’d like to give a

       closing statement, correct?

       [ASHLEY]: Yes, I would.

       {¶ 41} Thereafter, the trial court heard closing arguments from the parties, ordered

the parties to file post-trial briefs, and continued the matter for a decision at a later date.

Appellants made no request to testify, and the trial court did not ask appellants if they

wished to testify, prior to offering their closing arguments.




21.
       {¶ 42} Upon consideration of the evidence presented at trial, the trial court issued

a preliminary injunction on December 27, 2021. In its opinion, the trial court found that

the non-competition and confidentiality provisions contained in the parties’ license

agreement were fair and reasonable, and thus enforceable under Ohio law. Further, the

court found that appellants’ employment with Fournier’s constituted a breach of these

provisions, and that appellee’s witnesses provided adequate testimony to establish that

appellants’ continued breach of the licensing agreement “is likely to cause a negative

impact on [appellee’s] relationships with its existing franchisees that is difficult, if not

impossible, to quantify, and harms [appellee’s] good will with existing and prospective

franchisees alike.” Thus, the court concluded that appellee demonstrated it would suffer

immediate and irreparable harm as a consequence of appellants’ actions.

       {¶ 43} In addition, the trial court found that enforcing the license agreement

against appellants would not impose any undue hardship on them, because they would

not be restricted from working in the automotive repair industry “so long as they are not

working for a competing business” greater than five miles from another Tuffy Auto

Service Center. Finally, the court concluded that enforcement of the license agreement

furthered the public interest by promoting fair competition, enforcing contractual

obligations, and preventing unfair competition. In light of its findings, the trial court

granted appellee’s request for a preliminary injunction and thereby enjoined appellants




22.
from engaging in competitive activity in violation of the parties’ license agreement,

including employment at Fournier’s.

       {¶ 44} On February 7, 2022, after the parties submitted their post-trial briefs, the

trial court issued its “bench trial opinion, judgment entry and permanent injunction,” in

which the court largely reiterated the findings it set forth in its December 27, 2021

opinion and found that appellee was entitled to a permanent injunction barring appellants

from continued employment with Fournier’s, as well as an award of attorney’s fees and

costs associated with this action pursuant to the express terms of the license agreement

authorizing such an award. In total, the trial court awarded appellee attorney fees, expert

witness fees, and travel expenses totaling $81,457.09. Appellants do not separately

challenge this award on appeal.

       {¶ 45} Following the trial court’s issuance of its February 7, 2022 judgment entry,

appellants filed a timely notice of appeal.

                               B.     Assignments of Error

       {¶ 46} On appeal, appellants assign the following errors for our review:

              I. The trial court erred by refusing to let Ashley Reed and/or Thomas

       Reed testify on their own behalf in the injunction hearing against them.

       Plaintiffs/Appellees (sic.) would not have been either surprised or

       prejudiced by Appellants’ testimony.




23.
              II. The trial court erred by refusing to let Ashley Reed and/or

       Thomas Reed testify on their own behalf in the injunction hearing against

       them. Ohio has a pro-merits bias, and the court could not rule on the merits

       of the injunction without the testimony of the people against whom the

       injunction was sought to be enforced.

              III. The trial court erred in ruling that Plaintiff would suffer

       irreparable injury if the injunction was not granted.

       {¶ 47} Because appellants’ first and second assignments of error are interrelated,

we will address them simultaneously.

                                      II.     Analysis

                           A.     Appellants’ Ability to Testify

       {¶ 48} In their first and second assignments of error, appellants argue that the trial

court erred by denying them the opportunity to testify on their own behalf at trial.

       {¶ 49} The admission of evidence is within the discretion of the trial court and the

court’s decision will only be reversed upon a showing of abuse of that discretion. State v.

Barnes, 

, 

 (2002); State ex rel. Sartini v. Yost, 

, 

, 

. “The term ‘abuse of discretion’ *

* * implies that the court’s attitude is unreasonable, arbitrary or unconscionable.” State

v. Adams, 

, 

 (1980).




24.
       {¶ 50} Here, appellants do not challenge the trial court’s partial granting of

appellee’s motion in limine to prevent appellants from calling any non-party witnesses as

a consequence of appellants’ failure to file a witness list before trial. Instead, appellants

argue that the trial court erred in preventing them, as parties to the proceeding, from

testifying at trial. In response, appellee asserts that appellants’ argument is incompatible

with what transpired at the trial in this case. Having reviewed the record in its entirety,

we agree with appellee that the trial court did not prevent appellants from testifying at

trial. On the contrary, at the outset of trial, appellants were expressly informed by the

trial court that they would be permitted to testify if they wished to do so.

       {¶ 51} This issue arose in the trial court within the context of appellee’s pretrial

motions in limine, in which it sought an order from the court precluding appellants taking

the stand in their own defense due to appellants’ failure to file a witness list in accordance

with the trial court’s scheduling orders. In their brief to this court, appellants focus their

attention on the arguments they raised in opposition to appellee’s motion in limine,

namely that appellee had ample notice of their intent to testify at trial notwithstanding

their failure to proffer a witness list before trial. Appellants contend that their “names

were listed in appellee’s witness list and in their discovery responses. Therefore,

appellant’s names were properly listed as witnesses for appellee to see and know.”

       {¶ 52} Appellants’ arguments rest on the mistaken premise that the trial court

granted appellee’s motion in limine and thereby precluded them from testifying. In



25.
reality, precisely the opposite occurred. Indeed, the trial court denied appellee’s request

and affirmatively indicated that it would allow appellants to testify “as on cross for the

defense * * *. But if you’d like to present any testimony you think would help on your

side, I’ll allow that as well.” As such, there is no merit to appellants’ contention that they

were erroneously prevented from testifying at trial in their own defense.

       {¶ 53} In their reply brief, appellants assert two additional bases for their

argument that they were precluded from testifying at trial. First, appellants argue that the

trial court’s use of the phrase “testify as on cross” was unclear. When read in its entirety,

we do not find that the trial court’s ruling on appellee’s motion in limine was unclear.

While appellants focus on the phrase “testify as on cross,” they ignore the trial court’s

following statement, wherein the court informed them, “if you’d like to present any

testimony you think would help on your side, I’ll allow that as well.” Even if the first

statement was unclear, the trial court’s follow-up statement was unambiguous.

       {¶ 54} Second, appellants contend that the trial court should have directly asked

appellants if they wished to testify at the close of appellee’s case-in-chief. The record

confirms that the trial court did not expressly inquire of appellants as to whether they

wished to present testimony in their case-in-chief. Instead, the trial court moved from

admission of appellee’s exhibits right into a discussion about the filing of post-trial briefs.

Ashley then interjected and asked, “We don’t do any kind of like a closing?” The court

then assured appellants that they would be given an opportunity to make closing



26.
arguments at the appropriate time. Immediately thereafter, the trial court asked

appellee’s counsel if appellee was resting its case-in-chief. Counsel responded in the

affirmative and the trial court returned to Ashley and asked her if she would like to

provide a closing statement, to which Ashley responded, “Yes, I would.”

       {¶ 55} Neither Ashley nor Thomas indicated any intent to testify after the trial was

underway. Actually, the record is devoid of appellants requesting to testify or asserting

their right to testify. Further, to the extent they were confused by the trial court’s initial

decision on appellee’s motion in limine, it is noteworthy that appellants sought no

clarification of that ruling as to, for example, what impact the ruling would have on their

case-in-chief. Admittedly, the trial court did not inquire as to whether appellants wished

to take the stand to testify. While such an inquiry may be a best practice for trial courts,

appellants cite no statutory requirement or authority in the case law that obligates a trial

court to ask a party if they wish to present testimony at a trial, and we have found no such

authority to support that proposition. Rather, appellants emphasize their status as pro se

litigants and suggest that “any reasonable pro se litigant would have believed that they

were not allowed to testify.” But the fact that a party proceeds pro se is not a reason to

impose an obligation on the trial court to discern the party’s wish to testify where no such

obligation applies in cases involving represented parties.

       {¶ 56} Pro se litigants are presumed to have knowledge of the law and legal

procedures, and are held to the same standard as litigants who are represented by counsel.



27.
In re Application of Black Fork Wind Energy, L.L.C., 

, 2013-Ohio-

5478, 

, ¶ 22, citing State ex rel. Fuller v. Mengel, 

, 2003-

Ohio-6448, 

, ¶ 10. “[T]he trial court/magistrate is not there to try their

case or to exercise their rights for them.” Dupal v. Sommer, 5th Dist. Stark No.

2009CA00032, 

, ¶ 19. Moreover, “a pro se litigant may not be given any

greater rights than a party represented by counsel and bears the consequences of any

litigation mistakes.” Walker v. Metropolitan Environmental Services, Inc., 6th Dist.

Lucas No. L-17-1131, 

, ¶ 4, citing HSBC Bank United States NA v. Beins,

6th Dist. Lucas No. L-13-1067, 

, ¶ 6. Appellants had the right to choose to

proceed to trial pro se, but they bear the consequences of that decision and may not now

rely upon their ignorance of courtroom procedure as a basis for their argument that the

trial court committed reversible error.

       {¶ 57} In light of the foregoing, we conclude that the trial court did not refuse to

permit appellants to testify at trial. Rather, the trial court permitted appellants to testify,

but appellants failed to assert that privilege. Appellants have demonstrated no error on

the part of the trial court concerning this issue. Accordingly, we find appellants’ first and

second assignments not well-taken.

                                  B.      Irreparable Harm

       {¶ 58} In their third assignment of error, appellants argue that the trial court erred

in granting appellee’s request for a permanent injunction because appellee did not



28.
demonstrate that it is likely to suffer irreparable harm as a result of appellant’s affiliation

with Fournier’s.

       {¶ 59} The decision to grant or deny an injunction is within the discretion of the

trial court, and we review that decision on appeal for an abuse of discretion. Danis

Clarkco Landfill Co. v. Clark Cty. Solid Waste Management Dist., 

,

 (1995), paragraph three of the syllabus. An abuse of discretion implies

that the trial court’s attitude is unreasonable, arbitrary or unconscionable. Blakemore v.

Blakemore, 

, 

 (1983).

       {¶ 60} The grant of a permanent injunction is an “‘extraordinary remedy in equity

where there is no adequate remedy available at law.’” City of Toledo v. State, 

, 

, 

, quoting Garono v. State, 

, 

 (1988). Injunctive relief “is not available as a right but

may be granted by a court if it is necessary to prevent a future wrong that the law

cannot.” 

.

       {¶ 61} A party seeking a preliminary injunction bears the burden of establishing,

by clear and convincing evidence, that “(1) there is a substantial likelihood that the

plaintiff will prevail on the merits; (2) the plaintiff will suffer irreparable injury if the

injunction is not granted; (3) no third parties will be unjustifiably harmed if the injunction

is granted; and (4) the public interest will be served by the injunction.” Keefer v. Ohio

Dept. of Job and Family Servs., 10th Dist. Franklin No. 03AP-391, 

.
14, citing Procter & Gamble v. Stoneham, 

, 

(1st Dist.2000). As is typical of the law of equity, these four factors must be balanced

and no individual factor in the analysis is dispositive. 

       {¶ 62} The test for the granting or denial of a permanent injunction is substantially

the same as that for a preliminary injunction. However, in the case of a permanent

injunction, the plaintiff must prove that he has prevailed on the merits, not merely that

there is a “substantial likelihood” of prevailing on the merits. Miller v. Miller, 11th Dist.

Trumbull No. 2004-T-0150, 

, citing Ellinos, Inc. v. Austintown

Twp., 

 (N.D.Ohio 2002) and Edinburg Restaurant, Inc. v.

Edinburg Twp., 

 (N.D.Ohio 2002).

       {¶ 63} In actions involving covenants not to compete, courts have stated that “an

employer who seeks an injunction to enforce a noncompete clause must not only

establish the reasonableness of the noncompete clause at issue but must also show that

the employer is likely to suffer irreparable harm as a result of the employee’s breach of

that clause.” Brentlinger Enterprises v. Curran, 

, 

 (10th Dist.2001), citing Levine v. Beckman, 

, 

(10th Dist.1988).

       {¶ 64} Here, appellants do not challenge the trial court’s determination that the

non-competition and confidentiality provisions in the parties’ license agreement, which

are limited both in terms of time and geographic scope, are reasonable and enforceable.



30.
Nor do appellants contest the trial court’s conclusion that their employment at Fournier’s

is a breach of those provisions, a finding that is supported by the testimony of appellee’s

witnesses summarized above. Moreover, appellants do not argue that the trial court’s

injunction unjustifiably harms third parties or frustrates the public interest. Instead,

appellants’ argument that appellee failed to show irreparable injury, is limited to the

second Keefer injunction factor. Therefore, our analysis will focus solely on that factor.

       {¶ 65} A party seeking an injunction is not required to show actual harm, but must

prove the existence of a threat of harm. State v. City of Cincinnati Citizen Complaint

Authority, 

, 

, ¶ 26 (1st Dist.), citing e2 Solutions v.

Hoelzer, 6th Dist. Lucas No. L-08-1295, 

. This threat of harm must

be “immediately apparent and concrete.” Id. at ¶ 33. Actual threat of harm in the context

of covenants not to compete “exists when the employee possesses knowledge of the

employer’s trade secrets and begins working in a position that causes [the employee] to

compete directly with the former employer * * *.” Jacono v. Invacare Corp., 8th Dist.

No. 86605, 

, citing 

. Further,

       a threat of harm warranting injunctive relief can be shown by facts

       establishing that an employee with detailed and comprehensive knowledge

       of the former employer’s trade secrets and confidential information now

       works for a competitor of the former employer in a position that is

       substantially similar to the position held during the former employment.



31.


       {¶ 66} “‘It must be remembered that, in discussing “irreparable harm,” the proper

focus is not so much on what kind of damage the misappropriator has already inflicted,

but what damage the misappropriator may inflict in the future. * * * [I]njunctions

concern the prevention of future harm, not compensation for, or punishment of, past

harm.’” Litigation Management, Inc. v. Bourgeois, 8th Dist. Cuyahoga No. 95730, 2011-

Ohio-2794, ¶ 18, quoting Casagrande, Permanent Injunctions in Trade Secret Actions: Is

a Proper Understanding of the Role of the Inadequate at Law/Irreparable Harm

Requirement the Key to Consistent Decisions?, 

, 132 (2000).

       {¶ 67} In their pro se responses to appellee’s interrogatories, appellants

acknowledged that Thomas works at Fournier’s as a mechanic and Ashley works at

Fournier’s in a clerical position. In other words, the couple are presently engaged in

employment with Fournier’s in positions involving the business’s back office operations

as well as its customer-facing operations. While appellants are not presently owners of

Fournier’s, it is reasonable to infer from the evidence contained in the record that

appellants are using, or will at some point in the future likely use, the information they

received from appellee in their employment at Fournier’s. Therefore, the positions they

hold are substantially similar to their former positions for purposes of the present

analysis.




32.
       {¶ 68} Next, we must examine the nature of the information appellants received

from appellee to determine whether it constituted trade secrets. Under R.C. 1333.61(D),

a trade secret is defined as

       information, including the whole or any portion or phase of any scientific

       or technical information, design, process, procedure, formula, pattern,

       compilation, program, device, method, technique, or improvement, or any

       business information or plans, financial information, or listing of names,

       addresses, or telephone numbers, that satisfies both of the following:

              (1) It derives independent economic value, actual or potential, from

              not being generally known to, and not being readily ascertainable by

              proper means by, other persons who can obtain economic value from

              its disclosure or use.

              (2) It is the subject of efforts that are reasonable under the

              circumstances to maintain its secrecy.

       {¶ 69} At trial, appellee offered testimony from several witnesses who explained

the extensive training that appellee provided to appellants during their time as

franchisees. As part of its new dealer training program, appellee schooled appellants in

the Tuffy System, providing them with an abundance of proprietary information related

to appellee’s business processes, marketing techniques, pricing strategies, operational

procedures, and the like. Following new dealer training, appellants had access to further



33.
proprietary information through appellee’s provision of continuing education through

Tuffy University and annual dealer meetings.

       {¶ 70} According to Schmitt, this proprietary information was developed and

continuously refined by appellee over a period of five decades, and was instrumental in

allowing appellee’s franchisees to be profitable in the highly competitive automotive

services industry. In his testimony, Schmitt explained appellee includes the non-

competition and confidentiality provisions in its license agreements with franchisees

because the information it provides to franchisees is sensitive and valuable. Indeed, this

information constitutes the “playbook” for franchisees to follow to operate a “turnkey

operation.”

       {¶ 71} During his testimony, Linde testified that appellee’s training on the “Tuffy

Way” is unique in the automotive services industry. Further, Linde stated that the

information appellants received during their training and franchise operations was

confidential in nature. He explained that this information went beyond mechanical

training, extending into areas involving business operations and management.

       {¶ 72} Taken together, the foregoing testimony contains facts to establish that

appellants possessed knowledge of appellee’s trade secrets. The trial testimony provided

by appellee’s witnesses demonstrate that appellants were provided with extensive

information about appellee’s business operations, marketing techniques, customer and

vendor lists, pricing procedures, all of which valuable because such information was not



34.
generally known outside appellee’s franchise network and was kept secret by virtue of

appellee’s efforts in demanding confidentiality from its franchisees.

       {¶ 73} Schmitt testified that an injunction preventing appellants from continuing

to compete with appellee is necessary because the harm appellee would suffer on an

ongoing basis from such competition would be difficult to foresee, and thus a monetary

damage award would be difficult to fashion. Based upon the complaints he received

from other area franchisees, Schmitt surmised that appellee would have difficulty

attracting new franchisees and retaining existing franchisees if appellants were permitted

to continue working for Fournier’s. At least one other Ohio appellate court has found this

type of evidence demonstrative of irreparable harm. See ITS Financial, L.L.C. v. Gebre,

2d Dist. Montgomery Nos. 25416, 25492, 

 (“There is also evidence

in the record that if Gebre were permitted to breach the franchise agreements without

consequence it would be difficult for ITS to sell other franchises within that market area,

thereby resulting in lost revenue.”).

       {¶ 74} Further, Schmitt deduced that existing franchisees would interpret

appellants’ ongoing competitive activity as an indication that their license agreements

were unenforceable, thereby encouraging them to withhold royalty payments to appellee

and ignore other requirements under their respective license agreements.

       {¶ 75} Schmitt’s testimony regarding the harm caused by appellants’ affiliation

with Fournier’s was echoed by Swartzbeck. Swartzbeck testified that he was contacted



35.
by two franchisees who expressed their displeasure with appellants’ employment at

Fournier’s and demanded that appellee put a stop to such employment by enforcing the

covenant not to compete in its license agreement with appellants. In light of this reaction

from other franchisees, Swartzbeck was concerned that franchisees might attempt to use

appellants’ competitive behavior to justify a refusal to pay franchise dues, claiming that

appellee’s failure to protect them caused them to suffer a loss in sales. Like Schmitt,

Swartzbeck testified that a monetary award would be difficult to calculate, because the

damage caused by appellants’ breach of the license agreement is “more about relationship

damage than it is about financial damage.”

       {¶ 76} For their part, appellants introduced no testimony supporting their

contention that their continued affiliation with Fournier’s does not threaten appellee with

irreparable harm. As a consequence of appellants’ failure to testify, the record is devoid

of any such evidence. Further, appellants failed to engage appellee’s witnesses in any

meaningful cross examination, which may have elicited such testimony and placed into

the record facts to support appellants’ assignment of error.

       {¶ 77} In sum, we find that the record before us establishes by clear and

convincing evidence that appellants have detailed and comprehensive knowledge of

appellee’s trade secrets and confidential information, and are now working for one of

appellee’s competitors in a position that is substantially similar to the position they

formerly held with appellee. Consequently, we find that appellee demonstrated an actual



36.
threat of harm sufficient to show irreparable injury and thus meet the second Keefer

injunction factor. Since this is the only factor challenged by appellants, we find that the

trial court did not abuse its discretion in granting appellee’s request for a permanent

injunction.

       {¶ 78} Accordingly, appellants’ third assignment of error is not well-taken.

                                    III.    Conclusion

       {¶ 79} In light of the foregoing, the judgment of the Lucas County Court of

Common Pleas is affirmed. The costs of this appeal are assessed to appellants under

App.R. 24.

                                                                         Judgment affirmed.


       A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.


Mark L. Pietrykowski, J.                        ____________________________
                                                        JUDGE
Thomas J. Osowik, J.
                                                ____________________________
Gene A. Zmuda, J.                                       JUDGE
CONCUR.
                                                ____________________________
                                                        JUDGE

       This decision is subject to further editing by the Supreme Court of
  Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
       version are advised to visit the Ohio Supreme Court’s web site at:
                http://www.supremecourt.ohio.gov/ROD/docs/.




37.