## Facts

- On October 9, 2017, Eric Taylor leased a 2017 Honda Accord from Honda Motorcars, Inc. under a closed-end vehicle lease agreement.
- Eric Taylor was the only lessee identified in the lease agreement.
- A few hours before Eric took possession, another Honda Accord was stolen from the dealership.
- Honda Motorcars reported the stolen vehicle to the police.
- The dealership mistakenly assigned the same temporary license plate number to both the stolen Accord and the Accord leased by Eric.
- Later that day, Marcia Taylor (Eric’s wife) was driving the leased Accord, and the Taylors’ minor daughter was a passenger.
- Because the temporary plate matched the plate associated with the stolen car, police stopped the vehicle and detained Marcia Taylor and the child.
- The plate error was discovered, and no criminal charges were filed against the Taylors.
- Shortly thereafter, Eric Taylor returned the vehicle to the dealership.
- Honda Motorcars returned the money Eric had paid under the lease, and the parties mutually terminated the lease agreement.
- The Taylors (Eric and Marcia, individually and on behalf of their minor daughter) sued Honda Motorcars asserting multiple claims; on appeal, they challenged only the grant of summary judgment on their breach-of-contract claim.
- On the contract claim, the Taylors alleged the dealership breached the lease by placing an incorrect temporary tag on the car, which led to its seizure/detention by police.
- The Taylors sought only emotional-distress damages for humiliation and emotional harm from the detention; they asserted Marcia and the child could recover because they were intended third-party beneficiaries.
- In support of third-party-beneficiary status, the Taylors claimed they told dealership employees the vehicle was for Marcia’s use and that she was involved in selecting it, but their affidavits stated only that dealership representatives knew the car was being leased for Marcia’s use.
- The trial court granted summary judgment to Honda Motorcars, finding no genuine issue of material fact; the Taylors appealed.

## Issues

1. Whether Marcia Taylor and the Taylors’ minor daughter presented sufficient evidence that they were intended third-party beneficiaries of Eric Taylor’s lease agreement and therefore could enforce it.
2. Whether the Taylors could recover only emotional-distress damages for an alleged breach of an ordinary automobile lease after the dealership refunded all amounts paid and the parties terminated the lease.

## Decision

- The Court of Appeals of Ohio, Eighth Appellate District, affirmed summary judgment for Honda Motorcars, Inc.
- The court held the Taylors failed to produce evidence creating a genuine issue of fact that Marcia Taylor or the minor daughter were intended third-party beneficiaries of the lease.
- The court held the Taylors’ claimed damages—emotional distress and humiliation—were not recoverable contract damages for this type of agreement.
- The court also noted the record showed no other compensable contract damages because the dealership refunded Eric Taylor’s lease payments and the lease was mutually terminated.

## Legal Principles

- Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.
- Under Ohio law, only an intended third-party beneficiary may enforce a contract; an incidental beneficiary may not.
- Intended-beneficiary status requires evidence that the contracting parties meant to confer a direct benefit on the third party; a defendant’s awareness that someone else may use the subject of the contract, without more, does not establish such intent.
- A plaintiff must show legally recoverable damages as an element of a breach-of-contract claim.
- Emotional-distress damages are generally not recoverable for breach of contract in Ohio, except in limited categories of agreements where serious emotional distress is a particularly likely result of breach.
- A standard automobile lease is not the kind of agreement that supports recovery of emotional-distress damages for breach, and refund of payments may leave no remaining contract damages.

## Conclusion

The appellate court affirmed summary judgment for Honda Motorcars because the lease named only Eric Taylor and the Taylors did not present evidence that the dealership and Eric intended to give Marcia Taylor or the couple’s child enforceable rights under the lease; further, the Taylors sought only emotional-distress damages, which are not available for breach of an ordinary vehicle lease, and the dealership’s refund and termination of the lease left no other compensable contract damages.


Taylor v. Honda Motorcars, Inc., 135 N.E. 3d 1284 (2019)