NOT RECOMMENDED FOR PUBLICATION

File Name: 23a0128n.06

Nos. 22-3303/3367

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

CINCINNATI DEVELOPMENT III, LLC,

Plaintiff-Appellee/Cross-Appellant,

v.

CINCINNATI TERRACE PLAZA, LLC,

Defendant-Appellant/Cross-Appellee.

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ON APPEAL FROM THE UNITED 

STATES DISTRICT COURT FOR 

THE SOUTHERN DISTRICT OF 

OHIO

OPINION

Before: READLER, MURPHY, and MATHIS, Circuit Judges.

The court delivered a PER CURIAM opinion. MATHIS, J. (pp. 32–38), delivered a 

separate opinion concurring in part and dissenting in part.

PER CURIAM. This case concerns a dispute over the sale of a property in Cincinnati (the 

“Property”). Initially, Cincinnati Terrace Plaza, LLC (“Seller”) agreed to sell the Property to 

Cincinnati Development III, LLC (“First Buyer”) with the caveat that Seller could continue to 

market the Property to other potential buyers subject to First Buyer receiving a right of first refusal 

to match any subsequent offer.

As permitted by Seller and First Buyer’s contract, Seller continued to market the Property 

and, during First Buyer’s Inspection Period, agreed to sell the Property to Cincinnati Terrace 

Associates, LLC (“Second Buyer”) for a higher purchase price. But, Seller never informed First 

Buyer of the second offer, nor provided First Buyer with the right of first refusal to match Second 
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Buyer’s terms. The Property was then conveyed to Second Buyer for a higher purchase price. 

First Buyer learned of Seller’s contract with Second Buyer only after the Property had already 

been sold. 

First Buyer filed suit against both Seller and Second Buyer asserting several contractual 

and statutory claims. After a bench trial, the district court ruled in favor of First Buyer on its 

contractual claims but dismissed First Buyer’s statutory and equitable claims. The court awarded 

First Buyer damages in the amount of $1.7 million. Seller appeals the district court’s judgment 

and First Buyer cross-appeals the court’s dismissal of its statutory claim. For the following 

reasons, we AFFIRM the district court’s judgment on all liability issues, REVERSE the court’s 

damages award to First Buyer, and REMAND for modification of that award.

I.

The Property was formerly known as the Terrace Plaza Hotel, a mid-century hotel, office, 

and retail building with historical and architectural significance. While once a luxury hotel, the 

building had been mostly vacant for years and had fallen into serious disrepair. As a result, the 

Property was difficult to sell and costly to maintain. 

A. The 2017 Purchase Agreement

Seller started marketing the Property for sale in late 2016. After receiving several offers, 

Seller determined that First Buyer’s was the most attractive, and they entered contract negotiations. 

These negotiations culminated in the June 30, 2017, Membership Interest Purchase Agreement 

(“2017 Purchase Agreement”) to purchase the Property for $12.5 million. 

The 2017 Purchase Agreement provided for a 75-day inspection period and gave First 

Buyer the option to extend the inspection period by 30 days for a non-refundable payment of 
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$15,000. It also required First Buyer to deposit $150,000 into an escrow account as earnest money 

within five days of the agreement’s effective date, which First Buyer did. 

For the building to be worth the $12.5 million purchase price, First Buyer determined that 

it needed to obtain tax options and incentives from the City of Cincinnati (“City”). As a result, 

during the inspection period, and in addition to its due diligence, First Buyer met with City 

officials, business leaders, real estate development companies, and various banks to obtain such 

options and incentives. After conducting its due diligence, First Buyer terminated the 2017 

Purchase Agreement. 

B. The 2018 Purchase Agreement

Despite terminating the 2017 Purchase Agreement, First Buyer remained interested in the 

Property, and the parties continued to work with each other on a potential new deal. Ultimately, 

First Buyer entered into another Membership Interest Purchase Agreement (“2018 Purchase 

Agreement”) with Seller to purchase the Property for $9.5 million. The effective date of the 

Agreement was June 1, 2018. 

The 2018 Purchase Agreement’s contemplated conveyance structure mirrored that of the 

2017 Purchase Agreement to avoid certain Ohio transfer taxes. Specifically, no later than three 

days prior to the closing date, First Buyer would, with Seller’s involvement and consent, form a 

new Ohio LLC in which Seller would be the sole member. Then, one day prior to the closing, 

Seller would convey the Property to the newly formed LLC through a limited warranty deed. 

Subsequently, on the closing date, Seller would sell 100% of the membership interests in the LLC 

to First Buyer. 

The 2018 Purchase Agreement also required First Buyer to deposit $150,000 into an 

escrow account five days after the Agreement’s effective date. But, at the time of the Agreement’s 
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execution, First Buyer had no legal representation or escrow agent to manage the process for 

making the payment. Thus, in the executed Agreement, the escrow section contains a blank space 

for First Buyer’s counsel, and no one signed the Agreement as escrow agent on First Buyer’s 

behalf. 

The 2018 Agreement provided First Buyer with a 60-day period for First Buyer to 

investigate the Property (the “Inspection Period”), during which First Buyer could terminate the 

contract without forfeiting its escrow payment. But, after the Inspection Period, the payment 

would become nonrefundable and would be applied to the purchase price at closing. 

The 2018 Purchase Agreement provided for a closing within 30 days after the expiration 

of the Inspection Period as long as the Agreement had not been terminated before that expiration. 

Importantly, if the parties failed to close on the Property due to Seller’s breach, First Buyer could 

either (1) “elect to enforce the terms [of the 2018 Purchase Agreement] by action for specific 

performance, and/or exercise any other right or remedy available to it at law or in equity” or 

(2) “terminate [the agreement] by notice to Seller and receive a full refund of the Earnest Money 

plus reimbursement” from Seller for due diligence costs not to exceed $50,000. Agreement, R. 7-

4, PageID 347.

The 2018 Purchase Agreement permitted Seller to continue marketing the Property to third 

parties until the closing occurred. But, an amendment to the Agreement was also 

contemporaneously executed to provide First Buyer with a right of first refusal to match any 

subsequent third-party offers (“ROFR Amendment”). Specifically, if Seller agreed to sell the 

Property to a third party before the Inspection Period expired, Seller had to provide notice of the 

closing to First Buyer. First Buyer would then have the option to purchase the Property by 

matching the third party’s terms, including the purchase price. If First Buyer chose not to match, 
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Seller could terminate the 2018 Purchase Agreement by providing written notice of termination 

and paying a $100,000 termination fee within ten days. 

Despite being required to make its $150,000 escrow payment no more than five days after 

the 2018 Purchase Agreement’s effective date, First Buyer failed to do so. In fact, First Buyer 

failed to make the payment at any time during the Inspection Period. First Buyer also never 

inserted the name of its legal counsel in whose name the escrow account was to be jointly titled 

with Seller’s counsel. Ultimately, First Buyer and Seller never jointly opened an escrow account 

at the contractually listed bank or any other agreed-upon bank. 

From the outset of the 2018 Purchase Agreement’s negotiation, “and due to a combination 

of the Property’s decline and [First Buyer’s] intent to limit [its] risk, First Buyer made it clear to 

Seller that, unless First Buyer received a tax incentive package from the City, it would not be 

willing to close the purchase of the Property. One piece of First Buyer’s desired tax incentive 

package was tax increment financing (‘TIF’).” Op., R. 111, PageID 3958. But, “the City gave 

First Buyer push-back that resulted in delays due to the timing of certain City meetings required 

for TIF approval.” Id. at 3959. These delays caused First Buyer to request extensions of the 2018 

Purchase Agreement’s Inspection Period almost immediately after the Agreement’s execution. 

Seller did not authorize or approve any extensions of the Inspection Period. 

C. The Second Buyer Contract

As permitted by the 2018 Purchase Agreement, Seller continued to market the Property to 

potential third-party buyers. On June 12, 2018, Second Buyer entered into a Membership Interest 

Purchase Agreement (“Second Buyer Contract”) with Seller to purchase the Property for $11 

million.1

1 Technically, Cincinnati Terrace Associates purchased the Property, but it was a company formed and purchased by 

Cincinnati Terrace Member, LLC as part of the Second Buyer Contract’s conveyance structure. 
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Structurally, the Second Buyer Contract was very similar to the 2018 Purchase 

Agreement—Second Buyer would establish an LLC with Seller as the sole member, Seller would 

then transfer the Property into the LLC before the closing, after which, on the date of the closing, 

Seller would sell 100% of its membership interests in the LLC to Second Buyer. This arrangement 

was intended to avoid certain Ohio transfer taxes. That being said, the Second Buyer Contract was 

more favorable to Seller in several ways—the purchase price was higher, it lacked an inspection 

period (which enabled a quicker closing), and the initial escrow payment was both larger and 

nonrefundable. 

D. Subsequent Developments 

Seller never provided First Buyer with a right of first refusal to match Second Buyer’s 

terms and failed to inform either buyer as to the existence of the other buyer’s agreement. Instead, 

Seller actively assured both buyers that their contracts were valid. For example, on July 18, 2018, 

First Buyer met with Seller in anticipation of a meeting that First Buyer had with the City Planning 

Commission regarding First Buyer’s TIF request. During the meeting, First Buyer pressed Seller 

on Seller’s commitment to sell the Property to First Buyer and was assured by Seller that the parties 

were under contract. 

Additionally, despite the 2018 Purchase Agreement being in place, Seller represented and 

warrantied in the Second Buyer Contract that the contract would not “conflict or result in a breach 

of any agreement to which Seller [was] a party.” Second Buyer Contract, R. 56-1, PageID 1586.

Unaware of each other’s contract, both buyers continued to work toward closing on the 

Property. First Buyer met with the City Planning Commission regarding its TIF proposal and 

received unanimous approval to move the proposal forward. Second Buyer secured financing, 

which included a $7 million loan and numerous other agreements to finance the transaction. In 
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sum, both buyers expended significant resources under the impression that they would be 

purchasing the Property. 

Ultimately, and per the terms of the Second Buyer Contract, Seller conveyed the Property 

to Second Buyer on August 1, 2018, the day after First Buyer’s Inspection Period expired. Two 

days later, First Buyer learned of the Property’s sale to Second Buyer. First Buyer put $150,000 

into an escrow account the same day. 

E. First Buyer’s Lawsuit 

On August 7, 2018, First Buyer filed suit against Seller in Ohio state court and obtained a 

temporary restraining order to enjoin the recording of the deed for 14 days. Nevertheless, the deed 

was recorded on the same day First Buyer filed suit. Subsequently, on August 10, 2018, First 

Buyer amended its complaint to include Second Buyer as a defendant and obtained an amended 

temporary restraining order to include Second Buyer. Seller then removed the case to the district 

court. 

First Buyer’s suit asserted the following claims: (1) breach of contract against Seller for 

failure to convey the Property to First Buyer, provide First Buyer with a right of first refusal, or 

give notice of termination to First Buyer during the Inspection Period and pay a $100,000 

termination fee; (2) breach of the implied duty of good faith and fair dealing against Seller in 

connection with the manner in which Seller allegedly breached the 2018 Purchase Agreement;

(3) promissory and equitable estoppel against Seller based on its contractual and extracontractual 

affirmations and representations regarding the validity and enforceability of the 2018 Purchase 

Agreement; (4) tortious interference against Second Buyer for allegedly knowing about First 

Buyer’s contract but nevertheless contracting to purchase the Property and inducing Seller’s 

breach of its contract with First Buyer; and (5) violation of the Ohio Uniform Fraudulent Transfer 
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Act (“UFTA”) against Seller and Second Buyer regarding the manner in which the Second Buyer 

Contract conveyed the Property to Second Buyer. First Buyer also sought declaratory and 

injunctive relief with regard to the 2018 Purchase Agreement’s validity and enforceability, and 

specific performance in connection with Seller’s alleged breach. 

F. The District Court’s Decision 

The case ultimately proceeded to a bench trial. The district court then issued bifurcated 

decisions on liability and damages. The Liability Order was issued on June 7, 2021. The Damages 

Order was issued on December 28, 2021. 

Findings of Fact. After considering the physical and testimonial evidence submitted at 

trial, the district court found that Seller ultimately “wanted to sell the Property as fast as possible 

for the highest price”—an understandable desire given the state of the building and the cost of its 

upkeep. Op., R. 111, PageID 3971. As such, Seller was concerned about First Buyer’s willingness 

to close on the Property, given First Buyer’s prior termination of the 2017 Purchase Agreement 

and repeated requests to extend the 2018 Purchase Agreement’s Inspection Period. For its part, 

First Buyer “was reluctant to put hard money down until it had a clear read on the City’s intentions 

regarding” the TIF funding, given the funding’s necessity in minimizing First Buyer’s risk. Id. at 

3972. As a result, the district court was “convinced” that, if First Buyer had been tendered the 

right of first refusal, it would not have matched Second Buyer’s terms. Id.

On the other hand, Seller was concerned that Second Buyer would not ultimately close on 

the Property because the intermediary facilitating the sale had previously brought Seller deals that 

failed to close. As a result, “Seller had two choices: honor the [right of first refusal] or violate the 

[right of first refusal].” Id. at 3972–73.

With respect to violating the [right of first refusal], there were two possible 

options for Seller. First option: if Second Buyer did not close, then Seller could 
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continue to negotiate with First Buyer about the 2018 Purchase Agreement with the 

[$9.5 million] purchase price. Second option: if Second Buyer actually closed, then 

Seller would receive [$11 million] and risk being sued by First Buyer under the 

[right of first refusal]. Seller chose the second option as a calculated, contractual 

risk because the Property was, and is, rapidly deteriorating and Seller did not want 

to be stuck with it any longer. Seller gambled that a court would rule in its favor 

by finding that First Buyer’s non-payment of the [escrow amount] would invalidate 

the 2018 Purchase Agreement.

Id. at 3973.

Conclusions of Law. The district court found that First Buyer did not materially breach the 

2018 Purchase Agreement by failing to timely make the escrow payment and that First Buyer did 

not anticipatorily breach the Agreement by seeking extensions of the Inspection Period. The 

district court found that Seller materially breached the 2018 Purchase Agreement by not providing 

First Buyer with: (1) notice of the Second Buyer Contract, including the closing date in that 

contract, and (2) an opportunity to match Second Buyer’s offer. The district court also found that 

the way Seller breached the Agreement violated its implied duty of good faith and fair dealing.2 

The court also found that Second Buyer was a bona fide purchaser of the Property and acted in 

good faith during the closing process, thus disallowing First Buyer’s requests for specific 

performance and injunctive relief, and its claim of tortious interference. Lastly, the district court 

found that First Buyer did not fit the UFTA’s definition of a “creditor” and thus lacked standing 

to bring a claim under the statute. 

Damages. For the breach of contract claim, the district court awarded First Buyer $1.5 

million in expectation damages, or the difference between the 2018 Purchase Agreement’s 

purchase price ($9.5 million) and the Second Buyer Contract’s purchase price ($11 million), which 

the court concluded was the fair market value of the Property at the time of the breach. It further 

2 The district court dismissed First Buyer’s claim for equitable and promissory estoppel based on its rulings in favor 

of First Buyer for breach of contract and the implied duty of good faith and fair dealing. 
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awarded First Buyer $200,000 in “special damages” for the amount that First Buyer expended in 

connection with its normal due diligence processes and efforts to obtain TIF funding as the 

“reasonable and natural consequence of [Seller’s] actions,” which were “reasonably contemplated 

by [Seller] at the time of contracting.” Op., R. 114, PageID 4002–03. 

II.

Because this appeal is from a judgment following a bench trial, we utilize different 

standards of review depending on the part of the judgment being challenged. Findings of fact are 

reviewed for clear error. See Lyngaas v. Curaden AG, 992 F.3d 412, 419 (6th Cir. 2021) (citation 

omitted). A district court’s factual finding is “clearly erroneous when ‘although there is evidence 

to support it, the reviewing court on the entire evidence is left with the definite and firm conviction’ 

that the district court made a mistake.” United States v. Ellis, 938 F.3d 757, 761 (6th Cir. 2019) 

(quoting United States v. Vasquez, 352 F.3d 1067, 1070 (6th Cir. 2003)). We do not decide factual 

issues de novo; instead, we generally defer to the trier of fact “who is usually in a superior position 

to appraise and weigh the evidence.” Zenith Radio Corp. v. Hazeltine Res., Inc., 395 U.S. 100, 

123 (1969). 

Questions of law are reviewed de novo. See Lyngaas, 992 F.3d at 419 (citation omitted). 

This standard of review often includes the district court’s application of the law to the facts. See 

Max Trucking, LLC v. Liberty Mut. Ins. Corp., 802 F.3d 793, 803 (6th Cir. 2015); cf. U.S. Bank 

Nat’l Ass’n v. Village at Lakeridge, LLC, 138 S. Ct. 960, 966–69 (2018).

Awards of money damages are reviewed for abuse of discretion. See New London Tobacco 

Mkt., Inc. v. Ky. Fuel Corp., 44 F.4th 393, 402 (6th Cir. 2022). Under this standard, “[a] district 

court abuses its discretion when it relies on clearly erroneous findings of fact, when it improperly 
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applies the law, or uses an erroneous legal standard.” Bisig v. Time Warner Cable, Inc., 940 F.3d 

205, 218 (6th Cir. 2019).

This is a diversity case, and the parties agree that Ohio substantive law applies. See Wilton 

Corp. v. Ashland Castings Corp., 188 F.3d 670, 673 n.2 (6th Cir. 1999) (observing that we need 

not conduct a choice-of-law inquiry when there is no dispute on the applicable substantive law).

III.

A plaintiff must prove four elements to establish an Ohio breach of contract claim: (1) the 

existence of a contract, (2) performance by the plaintiff, (3) breach by the defendant, and 

(4) damages caused by the breach. See Quest Workforce Sols., L.L.C. v. Job1USA, Inc., 75 N.E.3d 

1020, 1030 (Ohio Ct. App. 2016) (citation omitted). The parties do not contest that the 2018 

Purchase Agreement was a valid and enforceable contract. As a result, we will address only the 

three elements that the parties dispute. 

On June 1, 2018, Seller agreed to sell the Property to First Buyer for $9.5 million. As part 

of the purchase price, First Buyer was required to deposit $150,000 into an escrow account. First 

Buyer had until July 31, 2018, to investigate the Property. If the 2018 Purchase Agreement was 

not terminated by July 31, 2018, Seller and First Buyer agreed to close the purchase and sale of 

the Property by August 30, 2018. The parties raise several “breach” claims. Seller argues that 

First Buyer failed to perform because it did not provide a timely escrow payment and indicated 

immediately that it would need a longer Inspection Period. First Buyer argues that Seller breached 

because it did not provide First Buyer with a right of first refusal. Seller also reasserts its UFTA 

claim. And both sides raise arguments about the proper remedies.
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A. Whether First Buyer’s Failure to Timely Make Its Escrow Payment and Stated 

Inability to Close on the Contracted-For Closing Date Excused Seller’s 

Subsequent Performance

Seller initially argues that First Buyer did not perform under the 2018 Purchase Agreement 

both because it failed to make a timely escrow payment and because it engaged in an anticipatory 

breach by indicating that it would need a longer Inspection Period. 

First Buyer’s Failure to Timely Make Its Escrow Payment. Section 2(c)(i) of the 2018 

Purchase Agreement provides: 

Within five business days after the Effective Date of this Agreement 

Purchaser shall deposit $150,000 (“Earnest Money”) into an escrow account titled 

jointly in the names of Michael A. Galasso (Seller’s counsel) and [blank space]

(Purchaser’s counsel). Seller’s counsel and Purchaser’s counsel shall collectively 

serve and be referred to herein as “Escrow Agent.” The signature of both Seller’s 

counsel and Buyer’s counsel shall be required for all withdrawals from the escrow 

account. The escrow account shall be opened and held at Huntington National 

Bank, or such other bank as Seller’s counsel and Buyer’s counsel may agree.

2018 Agreement, R. 7-4, Page ID 343. The district court found that First Buyer failed to make its 

escrow payment within five days of the 2018 Purchase Agreement’s effective date, or at any time 

during the Inspection Period. That fact is undisputed. 

First Buyer disputes whether this failure breached the escrow payment requirement of the 

Agreement, arguing that Seller prevented it from timely making its escrow payment. Additionally, 

First Buyer argues that, after First Buyer eventually retained counsel, Seller was unresponsive to 

First Buyer’s attempts to finalize “a complete set of escrow terms” and that Seller never declared 

First Buyer in breach of the Agreement. 

Ultimately, First Buyer’s arguments appear to be an attempt to impose obligations on Seller 

that the Agreement does not require. The clause’s text is clear—First Buyer was required to 

deposit $150,000 into a qualified escrow account within five days of the effective date of the 

Agreement (i.e., June 1, 2018). Apart from any efforts that the bank may have required to establish 
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Seller’s counsel as joint holder of the account (e.g., counsel’s in-person signature), the obligation 

was First Buyer’s and First Buyer’s alone.

Seller had no obligation to monitor the status of First Buyer’s escrow payment or take the 

lead on opening the escrow account. Seller also had no obligation to review or approve First 

Buyer’s escrow agent. By failing to timely make the escrow payment, First Buyer breached the 

2018 Purchase Agreement.

The question remains whether First Buyer’s failure to comply with the escrow requirement

was a material breach of the 2018 Purchase Agreement that excused Seller’s performance. “It is 

an old rule of law, as old as the law of contracts, that where one party has substantially performed 

his part of the contract, he may call upon the other party to perform his part of the contract; or, 

such party failing so to perform, he may sue for breach of contract.” Ohio Farmers’ Ins. Co. v. 

Cochran, 135 N.E. 537, 539 (Ohio 1922). “For the doctrine of substantial performance to apply, 

the part unperformed must not destroy the value or purpose of the contract.” Hansel v. Creative 

Concrete & Masonry Constr. Co., 772 N.E.2d 138, 141 (Ohio Ct. App. 2002). 

For example, in Hansel, homeowners sued a contractor for failing to finish their driveway 

in a workmanlike manner with proper techniques, alleging that the driveway had problems with 

the placement of the wire mesh and an uneven subbase. See id. at 141–42. Ultimately, the court 

found that the evidence supported the magistrate’s conclusion that the contractor “substantially 

performed under the contract in that the driveway had not failed in its essential purpose.” Id. at 

142. Furthermore, although the homeowners in Hansel submitted expert testimony that the 

driveway had suffered significant damage after only one or two years, the same expert also testified 

that the concrete itself was satisfactory. The crucial linchpin in Hansel was that, while the 

homeowners “did not receive exactly what they bargained for, the driveway still met its essential 
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purpose. There was no testimony that the driveway was unusable or would become so in the near 

future. Pictures admitted at trial showed some surface defects, but the driveway was clearly 

useable.” Id. at 142–43. The contractor had thus substantially performed under the contract and 

was entitled to be paid for that performance “less an allowance for the defects in the performance 

or damages for failure to strictly comply with the contract.” Id. at 143. 

Here, after the Inspection Period, the escrow payment became nonrefundable and was to 

be applied to the purchase price. The only substantive effect of First Buyer’s failure to timely 

make its escrow payment was that it would need to pay that $150,000 at closing. It is unlikely that 

a failure to prepay 1.6% of the Agreement’s purchase price “destroy[ed] the value or purpose of 

the contract.” Hansel, 772 N.E.2d at 141. As a result, First Buyer’s failure to timely make its 

escrow payment was not a material breach of the 2018 Purchase Agreement such that Seller’s 

obligation to perform was excused. 

First Buyer’s Requested Extensions of the 2018 Purchase Agreement’s Inspection Period. 

Apart from First Buyer’s failure to timely make its escrow payment, Seller argues that First 

Buyer’s repeated requests for extensions of the Inspection Period constituted an anticipatory 

breach of the 2018 Purchase Agreement such that Seller’s performance was excused. “Under Ohio 

law, ‘[a] party repudiates a contract when the party insists upon terms contrary to the parties’ 

agreement to the point where that insistence amounts to a statement of intention not to perform 

except on conditions which go beyond the contract.’” Bank One, N.A. v. Echo Acceptance Corp., 

380 F. App’x 513, 518 (6th Cir. 2010) (quoting Mihelich v. Active Plumbing Supply Co., No. 

90965, 2009 WL 1351031, at *3 (Ohio Ct. App. May 14, 2009) (alteration in original)). “The 

repudiating party must clearly and unequivocally relay its intention not to perform its contractual 

obligations.” Mihelich, 2009 WL 1351031, at *3. In other words, “[a] mere request for a change 
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in the terms or a request for cancellation of the contract is not in itself enough to constitute a 

repudiation.” Id.

Here, almost immediately after execution of the 2018 Purchase Agreement, First Buyer 

began requesting extensions of the Inspection Period to permit it more time to negotiate for TIF 

funding with the City. But, First Buyer never requested a conditional closing based on the City’s 

timing and continued to expend resources in furtherance of its obligation to purchase the Property 

as dictated by the Agreement. First Buyer’s requests for extensions of the Inspection Period do 

not rise to the level of an insistence that First Buyer would not substantially perform under the 

Agreement without such extensions. See Bank One, 380 F. App’x at 518–20. Therefore, First 

Buyer’s requests for extensions of the Inspection Period did not constitute an anticipatory 

repudiation of the 2018 Purchase Agreement such that Seller was excused from performance. 

B. Whether Seller’s Failure to Provide First Buyer with a Right of First Refusal 

Breached the 2018 Purchase Agreement

The 2018 Purchase Agreement allowed Seller to continue marketing the Property even 

though it was under contract with First Buyer. But, there was a catch contained in the ROFR 

Amendment: “If Seller agrees to sell the Property . . . to a third party before the expiration of the 

Inspection Period, Seller shall provide notice of the closing to [First Buyer] and [First Buyer] may 

purchase the Property upon the same terms and conditions as the third party buyer’s . . . .” ROFR 

Amendment, R. 7-5, PageID 360.

Seller argues that, under the Agreement, its duty to provide First Buyer with a right of first 

refusal was only triggered if a subsequent agreement with a third-party buyer had a closing date 

before First Buyer’s Inspection Period expired on July 31, 2018. But this argument misreads the 

clause because it conflates two separate concepts—agreement and fulfillment. To “agree” is to 

“accede,” “consent,” or “come to an agreement with another.” Agree, OXFORD ENGLISH 
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DICTIONARY (2012). Thus, by definition, nothing further is imposed on the parties after the 

achievement of mutual consent. Seller’s obligation to provide First Buyer with a right of first 

refusal triggered when Seller agreed to sell the Property to a third party during the Inspection 

Period, regardless of when the closing date of that agreement was to take place. As a result, finding 

no clear error in the district court’s factual findings that Seller failed to provide First Buyer with a 

right of first refusal to match Second Buyer’s terms, the Court finds that Seller breached the 

Agreement by failing to provide the right of first refusal. 

C. Whether Seller Breached the Implied Duty of Good Faith and Fair Dealing

“In addition to a contract’s express terms, every contract imposes an implied duty of good 

faith and fair dealing in its performance and enforcement.” Lucarell v. Nationwide Mut. Ins. Co., 

97 N.E.3d 458, 463 (Ohio 2018). The requirement of good faith is thus a “compact reference to 

an implied undertaking not to take opportunistic advantage in a way that could have not been 

contemplated at the time of drafting, and which therefore was not resolved explicitly by the 

parties.” Id. (citation and quotation omitted). In other words, “‘[g]ood faith performance or 

enforcement of a contract emphasizes faithfulness to an agreed common purpose and consistency 

with the justified expectations of the other party. . . . [Conversely,] [b]ad faith may consist of 

inaction, or may be the abuse of a power to specify terms, [or] interference with or failure to 

cooperate in the other party’s performance.’” Matus v. Lorain Cnty. Gen. Health Dist., 707 

F. App’x 304, 312 (6th Cir. 2017) (quoting Littlejohn v. Parrish, 839 N.E.2d 49, 54 (Ohio Ct. App. 

2005)) (internal quotation omitted) (alteration in original). 

Ohio does not recognize an independent cause of action for breach of the implied duty of 

good faith and fair dealing. See Lucarell, 97 N.E.3d at 469 (citation omitted). “Thus, there is no 

violation of the implied duty unless there is a breach of a specific obligation imposed by the 
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contract, such as one that permits a party to exercise discretion in performing a contractual duty or 

in rejecting the other party’s performance.” Id. 

As discussed above, Seller materially breached the 2018 Purchase Agreement when it 

failed to provide First Buyer with notice of the closing of the sale to Second Buyer and when Seller 

failed to provide First Buyer with a right of first refusal to match Second Buyer’s terms. The 

question is whether Seller’s actions were sufficiently dishonest or in bad faith to violate its implied 

duty of good faith and fair dealing. 

The 2018 Purchase Agreement permitted Seller to continue marketing the Property to 

prospective third-party buyers. But, if Seller agreed to sell the Property to a third party during 

First Buyer’s Inspection Period, it had to provide First Buyer with notice of the closing and with a 

right of first refusal. Not only did Seller fail to satisfy its contractual obligations to First Buyer, 

but it also continued to work with First Buyer towards a potential closing, assuring First Buyer 

that the parties had a contract in place. It did so to keep First Buyer “on the hook” in case Second 

Buyer failed to close on the Property. Thus, Seller’s failure to provide First Buyer with notice of 

the closing of the Second Buyer Contract and with the right of first refusal was less accidental 

omission and more purposeful concealment to inure to Seller’s financial benefit. Seller’s conduct 

falls within the type of bad faith inaction that rises to the level of violating the implied duty of 

good faith and fair dealing. As such, the district court did not err in finding that Seller violated its 

implied duty of good faith and fair dealing. 

D. The Applicability of the UFTA to the Second Buyer Contract

First Buyer’s UFTA claims arise under Ohio Revised Code §§ 1336.04(A) and 1336.05(A). 

Section 1336.04(A) provides that a fraudulent transfer occurs as to a creditor if the debtor made 

the transfer or incurred the obligation in either of the following ways: 

(1) With actual intent to hinder, delay, or defraud any creditor of the debtor; [or] 
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(2) Without receiving a reasonably equivalent value in exchange for the transfer or 

obligation, and if either of the following applies: (a) [t]he debtor was engaged or 

was about to engage in a business or a transaction for which the remaining assets 

of the debtor were unreasonably small in relation to the business or transaction [or] 

(b) [t]he debtor intended to incur, or believed or reasonably should have believed 

that the debtor would incur, debts beyond the debtor’s ability to pay as they became 

due.

Similarly, § 1336.05(A) also requires that First Buyer show that Seller’s transfer of the 

Property under the Second Buyer Contract was made “without receiving a reasonably equivalent 

value in exchange for the transfer . . . .” 

First Buyer argues that the district court erred by finding that First Buyer was not a 

“creditor” under the UFTA and, further, that the Second Buyer Contract involved a fraudulent 

transfer when Seller conveyed the Property to an LLC to avoid certain Ohio transfer taxes. The 

question is thus whether First Buyer qualifies as a “creditor” under the UFTA and subsequently 

whether it can sustain a claim under § 1336.04(A) or 1336.05(A). 

The UFTA defines a “creditor” as “a person who has a claim,” with a “claim” being defined 

as a “right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, 

fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or 

unsecured.” Ohio Rev. Code Ann. § 1336.01(C)–(D). The Supreme Court of Ohio has interpreted 

“creditor” to encompass individuals with causes of action in tort. See Stein v. Brown, 480 N.E.2d 

1121, 1123–24 (Ohio 1985). The tort claimant would then become a creditor “at the moment in 

which the cause of action accrues.” Id. Under an earlier version of this statute defining a creditor 

as a person having “any claim,” moreover, Ohio courts recognized that creditors include “all 

persons having a valid cause of action arising from torts as well as from contracts.” Foster v. 

Gibson, 202 N.E.2d 202, 204 (Ohio Ct. App. 1964) (emphasis added). 

As First Buyer correctly points out, there appears to be no precedent under the current 

statutory language differentiating contract claims from tort claims to determine whether a claimant 
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is a “creditor” under the UFTA. Therefore, we find that First Buyer established that it is a 

“creditor” under the UFTA and has standing to sue under §§ 1336.04(A) and 1336.05(A). That 

said, based on the record, we find as a matter of law that First Buyer did not prove that Seller 

violated the UFTA under either § 1336.04(A) or § 1336.05(A). 

Section 1336.04(A)(1) required First Buyer to prove that Seller transferred the Property to 

an LLC under the Second Buyer Contract with “actual intent to hinder, delay, or defraud” First 

Buyer in connection with the supposed creditor-debtor relationship. First Buyer argues that it 

sufficiently showed that “Seller was aware of its contract with First Buyer and its obligations 

thereunder, including its obligation to offer a right of first refusal” and that Seller “intentionally, 

secretly, and maliciously transferred the Property to [Second Buyer] as part of the closing with 

Second Buyer.” Appellee’s Br. at 51–52. This argument appears to fail by its own terms. Seller 

transferred the Property under the Second Buyer Contract as part of the closing with Second Buyer, 

not as an attempt to avoid paying First Buyer on its “claim” (i.e., the breach of contract action). 

Even assuming that the claim for the breach of the right of first refusal arose prior to closing, the 

district court found that Seller received funds from Second Buyer corresponding to the Property’s 

value in an arms-length deal. See Ohio Rev. Code § 1336.04(B). Because § 1336.04(A) requires 

a transfer to be “fraudulent as to a creditor,” the evidence does not support First Buyer’s claim that 

Seller transferred the Property pursuant to the Second Buyer Contract to avoid paying damages to 

First Buyer in connection with its breach of contract claim. 

Section 1336.04(A)(2) required First Buyer to prove that Seller transferred the Property 

pursuant to the Second Buyer Contract “[w]ithout receiving a reasonably equivalent value in 

exchange for the transfer . . . .” First Buyer argues that the facts are “undisputed that Seller 

transferred the Property to its affiliate for no consideration,” and then Second Buyer purchased the 
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membership interests of that affiliate. It is slightly disingenuous for First Buyer to argue that the 

sales arrangement created by the Second Buyer Contract was a fraudulent conveyance when the 

2018 Purchase Agreement’s conveyance structure almost completely mirrors that of the Second 

Buyer Contract. Nevertheless, looking at the Second Buyer Contract as a whole, the facts do not 

support First Buyer’s argument that Seller conveyed the Property pursuant to the Second Buyer 

Contract for “no consideration.” While the Second Buyer Contract required Seller to convey the 

Property to an LLC as a “capital contribution” for no compensation, the Contract also required 

Second Buyer to purchase 100% of the LLC’s membership interests from Seller on the date of the 

closing for $11 million. Thus, looking at the transfer structure as a whole, the facts indicate that 

Seller transferred the Property pursuant to the Second Buyer Contract in exchange for $11 million. 

Cf. Columbus City Schs. Bd. of Educ. v. Franklin Cnty. Bd. of Revision, 150 N.E.3d 877, 881, 886

(Ohio 2020). As a result, the facts do not support the claim that Seller’s receipt of millions of 

dollars was not a “reasonably equivalent value in exchange for the transfer . . . .” § 1336.04(A)(2). 

And for the same reasons that First Buyer’s claim under § 1336.04(A)(2) fails, its claim 

under § 1336.05(A) must also fail because the section similarly required First Buyer to show that 

Seller’s transfer of the Property under the Second Buyer Contract was made “without receiving a 

reasonably equivalent value in exchange for the transfer . . . .” § 1336.05(A). All told, First Buyer 

failed to prove that Seller violated the UFTA.

E. Remedies

First Buyer argues that the district court erred by denying it specific performance under the 

UFTA, namely, transfer of the Property from Second Buyer to First Buyer. Seller argues that 

specific performance is not warranted and that the district court erred in calculating its damages 

award because (1) the district court’s expectation damages award was improperly calculated, 
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(2) the district court failed to follow the 2018 Purchase Agreement’s liquidated damages provision, 

which permitted an award of no more than $100,000, and (3) the district court’s special damages 

award of $200,000 was not supported by credible evidence. We conclude that First Buyer cannot 

obtain specific performance and that it was entitled to only $100,000 damages—whether we 

calculate those damages using an “expectation” or “reliance” measure.

1. Specific Performance. First Buyer initially argues that it would be entitled to specific 

performance and an unwinding of the sale to Second Buyer if its claim under the UFTA succeeded. 

Because this claim fails, we need not consider this requested remedy for the UFTA violation.

2. Damages. That fact leaves First Buyer with a potential damages award. “[T]he sole 

purpose of contract damages is to compensate the nonbreaching party for losses suffered as a result 

of a breach[.]” Infinity Cap. LLC v. Francis David Corp., 851 F. App’x 579, 590–91 (6th Cir. 

2021) (quoting Lake Ridge Acad. v. Carney, 613 N.E.2d 183, 187 (Ohio 1993)) (alteration in 

original). These damages generally serve to protect the non-breaching party’s expectation interest 

(“i.e., its interest in having the benefit of the bargain” by being put in as good of a position as it 

would have been in had the contract been performed) or the party’s reliance interest (“i.e., its

interest in being reimbursed for loss caused by reliance on the contract” by being put in as good 

of a position as it would have been in had the contract not been made). Father’s House Int’l, Inc. 

v. Kurguz, 71 N.E.3d 711, 718 (Ohio Ct. App. 2016) (quoting Alts. Unlimited-Special, Inc. v. Ohio 

Dep’t of Educ., No. 12AP-647, 2013 WL 4807016, at *6 (Ohio Ct. App. Sept. 10, 2013)); see 

Restatement (Second) of Contracts § 344 (Am. L. Inst. 1981). “Expectation damages and reliance 

damages are fundamentally different: ‘[t]he expectancy recovery affirms the existence of a 

contract; the reliance recovery tries to deny it.’” Father’s House, 71 N.E.3d at 718 (quoting Alts. 

Unlimited-Special, 2013 WL 4807016, at *6). Under standard principles of contract law, a party 
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has the option to choose either its expectation damages or its reliance damages. But it cannot 

recover both types of damages. See id. at 718–19; Restatement (Second) of Contracts §§ 344–45.

In this case, the district court awarded First Buyer $1.5 million in “expectation” damages 

and $200,000 in “special” damages. Its award rested on two mistakes. The court used an improper 

calculation to measure expectation damages. It also treated reliance damages as special damages 

and so improperly allowed First Buyer to recover both expectation and reliance damages. 

Expectation Damages. When a court does not order specific performance for a

conventional breach of a real estate agreement, the traditional damages award is expectation 

damages, measured by “the difference between the original contract price and the fair market value 

of the property at the time of the breach.” Kaufman v. Byers, 823 N.E.2d 530, 539 (Ohio Ct. App. 

2004) (quotation omitted). For fair market value, “[i]t has been held that when the sale of real 

estate after a breach of contract is made within a reasonable time and at the highest price obtainable 

after the breach, it is evidence of the market value on the date of the breach.” Triangle Props., 

Inc. v. Homewood Corp., 3 N.E.3d 241, 254 (Ohio Ct. App. 2013) (citing Roesch v. Bray, 545 

N.E.2d 1301, 1303 (Ohio Ct. App. 1988)); see Spalla v. Fransen, 936 N.E.2d 552, 557 (Ohio Ct. 

App. 2010) (same). The district court relied on this traditional number. First Buyer agreed to buy 

the Property for $9.5 million and Seller sold it to Second Buyer for $11 million. The court thus 

awarded the difference: $1.5 million.

But this case does not involve a conventional breach. The district court held that Seller 

breached a unique provision of the real-estate contract: the right of first refusal. When a contract 

has this type of provision and the seller communicates a second offer to the holder of the firstrefusal right, those terms override any terms that the right holder may have originally obtained. 

See generally 3 Corbin on Contracts § 11.3 (2022 ed.). The holder of the first-refusal right “has a 
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privilege, without the obligation, to purchase real property at a price determined by an offer by a 

third party within an agreed upon period of time following notice of such third party’s offer.” 

Loeffler v. Crosser, No. OT-98-034, 1999 WL 375525, at *3 (Ohio Ct. App. June 11, 1999) (citing 

4 Robert M. Curry & James Geoffrey Durham, Ohio Real Property Law and Practice § 1-1(e) (5th 

ed. 1996)). 

When a party has breached a right of first refusal, expectation damages accordingly must

reflect the third-party offer, not the original price, in order to put the victim of the breach in as 

good of a position as if it had been able to exercise its first-refusal right. Otherwise, the holder of 

the first-refusal right would receive a windfall by basing damages on a lower price that was no 

longer available to that party. See Koch Indus., Inc. v. Sun Co., Inc., 918 F.2d 1203, 1214 (5th Cir. 

1990); Pantry Pride Enters., Inc. v. Stop & Shop Cos., Inc., 806 F.2d 1227, 1231 (4th Cir. 1986); 

see also Abdallah v. Abdallah, 359 F.2d 170, 173 (3d Cir. 1966) (collecting authorities). And if a 

buyer showed no interest in purchasing that property at the third-party price, the buyer cannot 

obtain expectation damages for breach of a right that it would not have exercised. Cf. Christiansen 

v. Schuhart, 951 N.E.2d 107, 114–15 (Ohio Ct. App. 2011); Treinen v. Kollasch-Schlueter, 902 

N.E.2d 998, 999–1002 (Ohio Ct. App. 2008); see also Koch Indus., 918 F.2d at 1214–15.

That is the case here. The district court was “convinced” (and found as a fact) that First 

Buyer would not have matched the $11 million purchase price offered by Second Buyer. Op., 

R. 111, PageID 3972. Thus, First Buyer would have declined to exercise its right to purchase the 

Property at the higher price under the right of first refusal. If Seller had properly given notice of 

Second Buyer’s offer and First Buyer had declined to exercise its right of first refusal (as the 

district court found it would), what would have been First Buyer’s expectation? The ROFR 

Amendment leaves the answer to this question clear: “Purchaser’s right of first refusal shall 
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terminate, and Seller may terminate the Purchase Contract in accordance with section 3 below.” 

ROFR Amendment, R. 7-5, PageID 360. Sections 3 and 4 of the amendment then provide: 

3. RIGHT TO TERMINATE: Seller may terminate the Purchase Contract at any 

time during the Inspection Period, by providing Purchaser with written notice of 

termination (the “Termination Notice”). Within ten days of Seller’s delivery of the 

[notice], Seller shall pay $100,000 to Purchaser (the “Termination Fee”). 

4. TERMINATION FEE: The Termination Fee shall serve as liquidated damages 

under the Purchase Contract, and shall be Purchaser’s sole remedy for Seller’s 

failure to perform under the Purchase Contract. Upon Seller’s payment of the 

Termination Fee, Purchaser shall have no further rights or claims of any kind 

against Seller, and Purchaser shall have waived all remedies for Seller’s breach of 

the Purchase Contract, including, without limitation, specific performance.

Id. Under these terms, First Buyer would have received only the $100,000 fee if Seller had not 

breached the ROFR Amendment by failing to give it the right of first refusal. We therefore hold 

that First Buyer was entitled to $100,000 in expectation damages, the amount that would put it in 

as good of a position as if Seller had presented First Buyer with Second Buyer’s offer, First Buyer 

had declined, and Seller had terminated the agreement and paid the Termination Fee. 

In response, First Buyer invokes a different theory about the terms that Seller “breached.” 

First Buyer argues that the 2018 Purchase Agreement obligated Seller to sell the Property to First 

Buyer for $9.5 million once the Inspection Period ended regardless of the right of first refusal. 

According to this theory of breach, once the time to notify First Buyer of another sale had expired, 

Seller’s right to sell the Property to Second Buyer also expired, and the contract required Seller to 

close on the sale to First Buyer at the original $9.5 million price. This theory of breach has several 

problems. To begin with, the theory made its first appearance during our questioning at oral 

argument. Because First Buyer did not brief this breach theory, it has forfeited the argument. See 

Bannister v. Knox Cnty. Bd. of Educ., 49 F.4th 1000, 1011–13 (6th Cir. 2022). 

In any event, the district court’s conclusions do not support this theory. The district court 

found that Seller breached the agreement because it “did not provide First Buyer notice of the 
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Second Buyer Contract’s existence” and “did not provide First Buyer with the opportunity to 

purchase the Property under the same terms and conditions as found in the Second Buyer 

Contract.” Op., R. 111, PageID 3977. In its damages order, the district court similarly noted that 

the breach occurred “by failing to offer First Buyer its [right of first refusal].” Op., R. 114, PageID 

3999. The court did not find that First Buyer and Seller were locked into a contract to transact the 

property at the original price after the close of the Inspection Period. Nor did it make findings that 

would have supported First Buyer’s theory of breach, such as that First Buyer would have been 

willing and able to purchase the Property for $9.5 million by August 30, 2018. This theory thus 

cannot save the district court’s $1.5 million expectation damages award. That award is an 

improper windfall. 

“Special” Damages. Apart from expectation damages, the district court awarded First 

Buyer $200,000 to reimburse its due diligence costs. First Buyer argues that it can recover these 

costs in addition to its expectation damages because they are “special damages.” We disagree. 

These due diligence damages seek to protect First Buyer’s “reliance interest, i.e., its interest 

in being reimbursed for loss caused by reliance on the contract.” Alts. Unlimited-Special, 2013 

WL 4807016, at *6. In that respect, First Buyer would have engaged in these same due diligence 

practices even if Seller had offered it the right of first refusal. See Op., R. 111, PageID 3958, 3967. 

Indeed, First Buyer incurred these expenses while it believed the contract was still in effect, not 

after learning of the breach. Cf. Sharp v. Andisman, Nos. 24999, 25002, 2010 WL 3676865, at 

*8–9 (Ohio Ct. App. Sept. 22, 2010). As a result, these expenses formed “a part of the expected 

cost of the transaction” that First Buyer presumably believed it would recoup through profitable 

operation of the property. Callahan v. Richardson, No. C-780119, 1979 WL 208683, at *2 (Ohio 

Ct. App. Apr. 4, 1979) (per curiam) (quotation omitted). As a matter of law, however, First Buyer 
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could not recover both expectation damages and reliance damages. See Father’s House, 71 N.E.3d 

at 718–19.

Nor can First Buyer sidestep this black-letter limitation on the proper relief by relabeling 

its “reliance” damages as “special” damages. What Ohio has sometimes called “special” damages 

are what we more commonly today call “consequential” damages. See 24 Williston on Contracts

§ 64:16 (4th ed. 2022); Restatement (Second) of Contracts § 351 cmt. b; cf. MacDonald v. 

Authentic Invests., L.L.C., No. 15AP-801, 2016 WL 3522193, at *8–9 (Ohio Ct. App. June 28, 

2016); Cleveland Punch & Shear Works Co. v. Consumers’ Carbon Co., 5 Ohio C.C. (n.s.) 258 

(1904). Consequential damages are a special form of expectation damages that correspond not to 

the direct loss of the bargained-for promise but the foreseeable consequences that proximately 

result from the breach. See 24 Williston on Contracts § 64:16; Restatement (Second) of Contracts 

§ 351. In other words, special damages allow a party to recover certain costs that a party has 

suffered because of that breach; they do not allow the recovery of expenses that would have been 

borne even without the breach. See MacDonald, 2016 WL 3522193, at *9; Callahan, 1979 WL 

208683, at *2; see also 30 Ohio Jur. (Third) Damages § 20 (2022) (discussing the elements of 

special damages). In this case, the district court denied First Buyer’s request for special damages 

(without labeling them as such) when it held that its request for lost profits were “too remote and 

speculative.” Op., R. 114, PageID 4003. 

In contrast to these types of consequential damages, Ohio case law makes it clear that due

diligence costs that a party would have incurred even if the other side had not breached do not

qualify as special damages in the real estate context. For instance, a party may receive special 

damages for the costs of removing a cloud on title caused by the breach, see Moorman v. Levitch, 

26 Ohio N.P. (n.s.) 540, 545–46 (Ohio C.P. Hamilton Cnty. 1927), but not the expenses of 
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procuring the “certificate of title . . . in anticipation of the contract being fulfilled,” Dudock v. 

Alexander, 1928 WL 2508, at *2 (Ohio Ct. App. 1928). The sellers of real estate may be able to 

recover for additional costs of insurance and utilities needed “for the preservation of the property” 

pending another sale if the breach had caused these costs because the sellers had moved out 

because of the contract, Callahan, 1979 WL 208683, at *3, but not if they had vacated that property 

before putting it up for sale and so demonstrated that those costs were incidental to their continued 

ownership, see Sharp, 2010 WL 3676865, at *8–9 (citing Peterman v. Dimoski, No. C-020116, 

2002 WL 31894859, at *4 (Ohio Ct. App. Dec. 31, 2002)); Hiatt v. Giles, No. 1662, 2005 WL 

3346172, at *8 (Ohio Ct. App. Dec. 9, 2005). And while sellers can recover for the costs of hiring 

a broker to relist a home following the breach in order to mitigate damages, see Callahan, 1979 

WL 208683, at *3, special damages remain unavailable when the seller engaged that broker to 

arrange the initial sale, see Czerniak v. Aziz, 2011 WL 2535584, at *8 (Ohio Ct. App. June 24, 

2011). First Buyer’s due diligence expenditures in this case fall on the wrong side of this divide.

It would have incurred those costs even if Seller had not breached and so the costs qualify as 

“reliance” damages rather than “special” damages. 

To be sure, First Buyer could choose the larger of its expectation damages (which, under 

the proper calculation, were $100,000) and its reliance damages (which the district court calculated 

as $200,000). Yet the district court legally erred in another way by finding First Buyer entitled to 

recover all of its $200,000 in alleged reliance expenditures. Recall that under § 4 of the ROFR 

Amendment, First Buyer’s “sole remedy for Seller’s failure to perform under the Purchase 

Contract” was $100,000 in “liquidated damages.” ROFR Amendment, R. 7-5, PageID 360. 

Businesses commonly include such “breakup fees” in their contracts to assure potential buyers that 

they will be able to recover the costs that they expended in reliance on the deal coming to fruition
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in the event the deal does not go through. Cf. Frazier Indus., L.L.C. v. Gen. Fasteners Co., 137 

F. App’x 723, 727–28, 733–34 (6th Cir. 2005); Edelman v. Fruehauf Corp., 798 F.2d 882, 885 

(6th Cir. 1986); Sunde v. Highline Corp., No. 19337, 1999 WL 635727, at *3 (Ohio Ct. App. Aug. 

18, 1999).

The $100,000 Termination Fee serves that same function. Cf. Restatement (Second) of 

Contracts § 349. As the district court found, the parties intended that this fee would suffice “to 

cover the expenses that First Buyer would incur performing its due diligence and working to secure 

incentives from the City.” Op., R. 111, PageID 3958 n.8. First Buyer also does not claim that the 

Termination Fee is an unenforceable penalty clause instead of a legitimate liquidated damages 

provision, such as might occur if $100,000 was an unreasonably small estimate of anticipated 

expenditures. See Restatement (Second) of Contracts, § 356; see also Infinity Cap., 851 F. App’x 

at 583–84; cf. Frazier Indus., 137 F. App’x at 735. Under § 4’s Termination Fee, therefore, First 

Buyer can receive only $100,000 in reliance damages for its due diligence costs. 

In response, First Buyer says that § 4’s limitation on the amount of damages should not 

apply to Seller’s breach in this case. Section 11(b) of the 2018 Purchase Agreement provided other

remedies that First Buyer could seek upon Seller’s breach of the Agreement: 

If the Closing is not concluded due to Seller’s breach of this Agreement, 

Purchaser, at its option, (a) may elect to enforce the terms hereof by action for 

specific performance, and/or exercise any other right or remedy available to it at 

law or in equity, or (b) may terminate this Agreement by notice to Seller and receive 

a full refund of the Earnest Money plus reimbursement from Seller for Purchaser’s 

out of pocket costs incurred investigating the Property in an amount not to exceed 

[$50,000]. Upon any termination under (b) above, the parties shall have no further 

rights and obligations hereunder other than those rights and/or obligations which 

are expressly stated to survive expiration or termination of this Agreement. 

2018 Agreement, R. 7-4, PageID 347. According to First Buyer, this provision, not § 4 of the 

ROFR Amendment, applied to Seller’s breach and gave it a right to seek $200,000 in reliance 
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damages. Yet it limited due-diligence costs to an even smaller number: $50,000. Regardless, we 

do not think that this provision applied here.

At first glance, there appears to be a conflict between § 11(b) of the 2018 Purchase 

Agreement and § 4 of the ROFR Amendment. How could § 11(b) serve as a basis for damages 

when § 4 of the ROFR Amendment states that the Termination Fee is First Buyer’s “sole remedy 

for Seller’s failure to perform”? While an amendment generally supersedes a contract’s prior 

terms, “construction of the contract should attempt to harmonize all the provisions rather than 

produce conflict in them. . . . To that end, no provision of the contract should be ignored as 

inconsistent if there exists a reasonable interpretation [that] gives effect to both.” Lincoln Elec. 

Co. v. St. Paul Fire & Marine Ins. Co., 210 F.3d 672, 685 (6th Cir. 2000) (quoting Ottery v. Bland, 

536 N.E.2d 651, 654 (Ohio Ct. App. 1987)). 

But we interpret § 4’s Termination Fee as serving as First Buyer’s “sole remedy” whenever 

Seller breached the termination procedure of the ROFR Amendment. Section 4 provides First 

Buyer with this remedy “for Seller’s failure to perform under the Purchase Contract” and states 

that Purchaser waives all other remedies for “Seller’s breach of the Purchase Contract[.]” ROFR 

Amendment, R. 7-5, PageID 360 (emphasis added). Because § 3 of the ROFR Amendment grants 

Seller the option of selling the property to someone else, and because First Buyer acknowledged 

in the Purchase Agreement that Seller could continue to market the property until closing, no 

breach would occur simply because Seller chose another offer and properly gave First Buyer 

timely notice of termination. Thus, § 4 must contemplate a situation other than when Seller gave 

notice of termination of the contract during the Inspection Period. Instead, the same termination 

fee as owed under § 3 would serve as First Buyer’s sole remedy when Seller sold the property to 

another buyer without offering First Buyer its right of first refusal (in breach of § 2 of the ROFR 
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Amendment) or providing notice (in breach of § 3). If Seller never agreed to sell to another 

purchaser, by contrast, § 3’s termination requirements would not arise, and absent a need for 

termination, First Buyer would not be entitled to a Termination Fee as its sole remedy. In that 

case, Section 11(b) would continue to govern First Buyer’s remedies, as Seller’s conduct had not 

implicated the right of first refusal. 

First Buyer rejects this reading as absurd by suggesting that Seller could profit from its 

breach by paying First Buyer $100,000 while retaining the $150,000 deposited into escrow. That 

speculation (First Buyer does not claim that Seller retained the $150,000) misstates the mechanics 

of escrow. In an escrow agreement, a grantor places property with a depository, who is both an 

agent for the parties and a trustee of the property pursuant to the escrow agreement. Squire v. 

Branciforti, 2 N.E.2d 878, 882 (Ohio 1936); Standard Asbestos Mfg. Co. v. Fulton, 4 N.E.2d 713, 

715 (Ohio Ct. App. 1935). Even though delivery of the property is irrevocable and the transferee 

obtains some conditional rights in that property, the grantor retains ownership of the property until 

the escrow conditions are satisfied. In re Arctic Exp. Inc., 636 F.3d 781, 792 (6th Cir. 2011); 

Lloyd’s Lessee v. Giddings, 7 Ohio 50, 53 (1836); Bank Street Bldg. Ass’n v. Schnell, 29 Ohio N.P. 

(n.s.) 579, 581 (Ohio C.P. Hamilton Cnty. 1932). The escrow agent accordingly can disperse 

property held in escrow only as the contract of deposit permits. Waffen v. Summers, No. OT-08-

34, 2009 WL 1741731, at *5 (Ohio Ct. App. June 19, 2009). The 2018 Purchase Agreement gave 

Seller the right to retain First Buyer’s earnest money only if closing occurred or First Buyer 

breached the agreement. 2018 Agreement, R. 7-4, PageID 343, 347. The escrow agent 

accordingly would be obligated to return the earnest money to First Buyer whenever Seller 

prevented First Buyer from closing on the Property, even if Seller did not breach the right of first 

refusal in the process. See Escrow Agreement, R. 7-7, PageID 392–94. If Seller refused to consent 
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to returning the earnest money, the escrow agent could then bring an interpleader action that would 

result in the money being returned to First Buyer without First Buyer ever having to seek a 

“remedy” against Seller directly for the $150,000 under the 2018 Purchase Agreement. Id. at 394. 

In sum, because of the way § 4 of the ROFR Amendment operates, First Buyer’s 

expectation and reliance damages both equal $100,000. We therefore hold that the district court 

erred by awarding First Buyer damages greater than $100,000.

IV.

For the aforementioned reasons, we AFFIRM the district court’s judgment regarding the 

respective liabilities of the parties. But we REVERSE its damages award to First Buyer and 

REMAND with instructions to reduce that award from $1.7 million to $100,000.
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MATHIS, Circuit Judge, concurring in part and dissenting in part. I concur in the 

majority opinion, except as to the expectation damages analysis in Section III.E. I agree with the 

majority that the district court did not err in its liability determinations. I further agree that the 

award of expectation damages to First Buyer should be reduced, just not by as much as determined 

by the majority opinion. For the reasons below, I would reduce the expectation damages awarded 

by the district court to First Buyer to $900,000 rather than $100,000.

I.

To briefly recap, on June 1, 2018, Seller entered into the 2018 Purchase Agreement to sell 

the Property to First Buyer for $9.5 million. Seller and First Buyer also executed the ROFR 

Amendment, which amended and became part of the 2018 Purchase Agreement. The 2018 

Purchase Agreement allowed First Buyer to inspect and investigate the Property up to July 31, 

2018. Seller and First Buyer were required to close on the Property no later than August 30, 2018. 

First Buyer was unable to purchase the Property from Seller because Seller secretly sold the 

Property to Second Buyer on August 1, 2018, the day after the 2018 Purchase Agreement’s 

Inspection Period concluded. Thus, Seller materially breached the 2018 Purchase Agreement, and 

its duty of good faith and fair dealing, when it sold the Property to Second Buyer without 

complying with the ROFR Amendment.

II.

Under Ohio law, “[i]n all cases involving contract interpretation, [courts] start with the 

primary interpretive rule that courts should give effect to the intentions of the parties as expressed 

in the language of their written agreement.” Sutton Bank v. Progressive Polymers, L.L.C., 163 

N.E.3d 546, 552 (Ohio 2020) (citation omitted). In doing so, “common words appearing in a 

written instrument will be given their ordinary meaning unless manifest absurdity results or unless 
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some other meaning is clearly intended from the face or the overall contents of the instrument.” 

Alexander v. Buckeye Pipe Line Co., 374 N.E.2d 146, 150 (Ohio 1978); see Sutton Bank, 163 

N.E.3d at 552.

There are several provisions in the 2018 Purchase Agreement and ROFR Amendment that 

address the remedies First Buyer can seek upon Seller’s breach, or termination, of the Agreement. 

Section 11(b) of the 2018 Purchase Agreement provides:

If the Closing is not concluded due to Seller’s breach of this 

Agreement, Purchaser, at its option, (a) may elect to enforce the 

terms hereof by action for specific performance, and/or exercise any 

other right or remedy available to it at law or in equity, or (b) may 

terminate this Agreement by notice to Seller and receive a full 

refund of the Earnest Money plus reimbursement from Seller for 

Purchaser’s out of pocket costs incurred investigating the Property 

in an amount not to exceed [$50,000]. Upon any termination under 

(b) above, the parties shall have no further rights and obligations 

hereunder other than those rights and/or obligations which are 

expressly stated to survive expiration or termination of this 

Agreement. 

[R. 7-4, PageID 347]. Sections 3 and 4 of the ROFR Amendment contain additional language 

regarding First Buyer’s remedies to Seller’s breach of the 2018 Purchase Agreement: 

3. RIGHT TO TERMINATE: Seller may terminate the Purchase 

Contract at any time during the Inspection Period, by providing 

Purchaser with written notice of termination (the “Termination 

Notice”). Within ten days of Seller’s delivery of the [notice], Seller 

shall pay $100,000 to Purchaser (the “Termination Fee”). 

4. TERMINATION FEE: The Termination Fee shall serve as 

liquidated damages under the Purchase Contract, and shall be 

Purchaser’s sole remedy for Seller’s failure to perform under the 

Purchase Contract. Upon Seller’s payment of the Termination Fee, 

Purchaser shall have no further rights or claims of any kind against 

Seller, and Purchaser shall have waived all remedies for Seller’s 

breach of the Purchaser Contract, including, without limitation, 

specific performance.

[R. 7-5, PageID 361]. 
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At first glance, there appears to be a conflict between § 11(b) of the 2018 Purchase 

Agreement and § 4 of the ROFR Amendment. How could § 11(b) serve as a basis for damages 

when § 4 of the ROFR Amendment states that the Termination Fee is First Buyer’s “sole remedy 

for Seller’s failure to perform”? 

While an amendment generally supersedes a contract’s prior terms, “‘construction of the 

contract should attempt to harmonize all the provisions rather than produce conflict in them. . . . 

To that end, no provision of the contract should be ignored as inconsistent if there exists a 

reasonable interpretation [that] gives effect to both.’” Lincoln Elec. Co. v. St. Paul Fire & Marine 

Ins. Co., 210 F.3d 672, 685 (6th Cir. 2000) (quoting Ottery v. Bland, 536 N.E.2d 651, 654 (Ohio 

Ct. App. 1987)). A literal interpretation of § 4 of the ROFR Amendment fails to give effect to all 

provisions of the 2018 Purchase Agreement in a manner that expresses the reasonable expectations 

of the parties. 

Section 4 of the ROFR Amendment should be interpreted to only foreclose First Buyer 

from obtaining remedies against Seller beyond the Termination Fee solely for exercising its right 

to terminate the 2018 Purchase Agreement during the Inspection Period. In other words, First 

Buyer cannot seek specific performance, reliance damages, or other equitable remedies from Seller 

simply because Seller exercised its contractual right to back out of the deal. Section 4 does not 

encompass other breaches of the Agreement, nor Seller’s attempt to terminate the Agreement after 

the Inspection Period. 

Section 4 of the ROFR Amendment was not triggered in this case. Seller purported to 

terminate the 2018 Purchase Agreement nine days after the close of the Inspection Period. 

Furthermore, when it purported to terminate the Agreement, Seller failed to pay First Buyer the 

Termination Fee within 10 days of providing notice of termination. By its own terms, § 4 does 
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not apply. As a result, the liquidated damages provision in § 4 does not limit the amount of 

damages First Buyer can recover damages from Seller.

Seller argues that § 4 should be read literally and that under such a reading, § 4 “is First 

Buyer’s sole remedy and damages for any breach of the [A]greement by Seller.” [D. 21 at p.27]. 

Looking at the plain language of § 4, it appears to limit First Buyer’s damages to the $100,000 

Termination Fee for any claims in connection with Seller’s breach. Thus, because “the additional 

terms supersede the original terms to the extent the two are contradictory,” Seller appears correct 

that, under a literal reading, First Buyer was entitled to $100,000 in damages and nothing more. 

Ottery, 536 N.E.2d at 654. But there are two reasons why a literal reading of § 4 leads to “manifest 

absurdity” in the interpretation of the 2018 Purchase Agreement. Alexander, 374 N.E.2d at 150.

First, in its briefing, First Buyer raises a compelling counterargument to Seller’s rigid 

interpretation of § 4: “Under Seller’s interpretation, Seller could theoretically keep First Buyer’s 

$150,000 [escrow payment] and pay out only $100,000 as liquidated damages,” producing a 

financial windfall for Seller. [D. 22 at p.43]. Such an arrangement appears to give Seller all the 

upside and leave First Buyer with all the risk. Ultimately, it is highly unlikely that the parties 

would have negotiated for such a result. As such, another meaning appears “clearly intended from 

the face or the overall context of the instrument.” Alexander, 374 N.E.2d at 150. 

Second, putting aside § 4’s effect on the other relevant damages provisions, a literal reading 

of § 4’s extent appears similarly misguided. Pursuant to § 3 of the ROFR Amendment, Seller can 

terminate the 2018 Purchase Agreement by providing written notice of termination during the 

Inspection Period and paying First Buyer the $100,000 Termination Fee within ten days of the 

notice. If Seller fails to fulfill either requirement, the termination is void. But if one looks solely 

at § 4, it appears that Seller could simply breach the 2018 Purchase Agreement for any reason and 
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still only be required to pay $100,000. Why, then, would Seller ever choose to properly terminate 

the Agreement during the Inspection Period and immediately pay $100,000 when it could breach 

the Agreement at a later time and still only have to pay the same $100,000 years down the line?

An interpretation of § 4 that would permit the above scenario appears to fall under the 

exception for giving words their common meaning “unless manifest absurdity results.” Alexander, 

374 N.E.2d at 150. Of course, § 4 directly follows § 3 in the ROFR Amendment. It would be 

absurd to conclude that the Termination Fee is highly conditioned in one paragraph and nearly 

unconditioned in the next, especially when the later paragraph subsumes the circumstances 

outlined in the former. See id. The question then turns to what the proper amount of expectation 

damages should be in this case. 

III.

“[T]he sole purpose of contract damages is to compensate the nonbreaching party for 

losses suffered as a result of a breach[.]” Infinity Cap. LLC v. Francis David Corp., 851 F. App’x 

579, 590–91 (6th Cir. 2021) (quoting Lake Ridge Acad. v. Carney, 613 N.E.2d 183, 187 (Ohio 

1993)) (alteration in original). In breaches of real estate agreements, the traditional damages award 

is expectation damages, measured by “the difference between the original contract price and the 

fair market value of the property at the time of the breach.” Kaufman v. Byers, 823 N.E.2d 530, 

539 (Ohio Ct. App. 2004) (quotation omitted). In determining fair market value, “[i]t has been 

held that when the sale of real estate after a breach of contract is made within a reasonable time 

and at the highest price obtainable after the breach, it is evidence of the market value on the date 

of the breach.” Triangle Props., Inc. v. Homewood Corp., 3 N.E.3d 241, 254 (Ohio Ct. App. 2013) 

(citing Roesch v. Bray, 545 N.E.2d 1301, 1303 (Ohio Ct. App. 1988)); see Spalla v. Fransen, 936 

N.E.2d 552, 557 (Ohio Ct. App. 2010) (same). 
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The Property’s sale to Second Buyer took place on August 1, 2018, shortly after Seller 

breached the 2018 Purchase Agreement. This led the district court to use the price difference 

between the 2018 Purchase Agreement ($9.5 million) and the Second Buyer Contract ($11 million) 

as the measure of First Buyer’s expectation damages. This was incorrect. 

The district court found that Seller sold the Property to Second Buyer for $10.4 million. 

Thus, “the highest price obtainable after the breach” was $10.4 million, not $11 million. Triangle 

Props., 3 N.E.3d at 254. Spalla is instructive on this point. In Spalla, the parties disputed whether 

the highest obtainable price for a real estate sale was the purchase agreement’s contract price or 

the amount the buyer actually paid for the property. See Spalla, 936 N.E.2d at 557. Specifically, 

the purchase agreement stipulated that $15,000 of the sale proceeds would be held in escrow in 

case the property’s septic tank failed to pass inspection and needed repair. Id. at 558. The septic 

tank ultimately failed its inspection and the court determined that this condition reduced the 

property’s highest obtainable price by $15,000. Id. In other words, the focus was on how much 

the buyer actually paid from the sale of the property, not the purchase price in the purchase 

agreement. See id.

While it was not an abuse of discretion for the district court to award First Buyer the 

traditional measure of damages for breaches of real estate agreements (i.e., expectation damages), 

the district court erred when it found that the Second Buyer Contract price ($11 million) was the 

fair market value for the Property rather than the actual purchase price ($10.4 million). See Bisig 

v. Time Warner Cable, Inc., 940 F.3d 205, 218 (6th Cir. 2019) (“A district court abuses its 

discretion when it . . . improperly applies the law[.]”) (quotation omitted). Therefore, the proper 

expectation damages award to First Buyer should have been $900,000, not $1.5 million. This 

amount would put First Buyer in the position it would have been had the 2018 Purchase Agreement 
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been performed—i.e., if Seller had sold the Property to First Buyer for $9.5 million as it was 

required to do when it, instead, sold the Property to Second Buyer. See Father’s House Int’l, Inc. 

v. Kurguz, 71 N.E.3d 711, 718 (Ohio. Ct. App. 2016) (citation omitted).

The majority opinion limits First Buyer’s expectation damages to the $100,000 

Termination Fee in the ROFR Amendment because “[t]he district court was ‘convinced’ . . . that 

First Buyer would not have matched the $11 million purchase price offered by Second Buyer.” 

[Op. at 23]. There are a couple of problems with this reasoning. First, the district court expressly 

found that its belief that First Buyer would not have matched the purchase price in the Second 

Buyer Agreement was “hypothetical” and “irrelevant.” [R. 111, PageID 3972]. And second, when 

Seller sold the Property to Second Buyer on August 1, 2018, the termination terms of the ROFR 

Amendment no longer applied. To limit First Buyer’s damages to $100,000, Seller had to 

terminate the 2018 Purchase Agreement on or before July 31, 2018, and pay the Termination Fee 

to First Buyer within 10 days of the termination. As the district court found, Seller did not attempt 

to terminate the 2018 Purchase Agreement until August 9, 2018, and it never paid the Termination 

Fee. 

I respectfully dissent from the expectation damages analysis in Section III.E of the majority 

opinion.