[Cite as Homestead Am., Ltd. v. Brown, 2024-Ohio-3253.]

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

Homestead America, Ltd. et al., :

Plaintiffs-Appellees, : No. 23AP-377

No. 23AP-382

v. : (C.P.C. No. 19CV-9720)

Matthew R. Brown et al., : (REGULAR CALENDAR)

Defendants-Appellants. :

:

D E C I S I O N

Rendered on August 27, 2024

On brief: Arnold & Clifford LLP, James E. Arnold, 

Gerhardt A. Gosnell II, Damion M. Clifford, and Tiffany L. 

Carwile, for Homestead America, Ltd. Argued: Damion M. 

Clifford.

On brief: Madison & Rosan LLP, Kristin E. Rosan, and 

Timothy G. Madison, for Matthew R. Brown and The 

Wagenbrenner Company. Argued: Kristin E. Rosan.

On brief: Zeiger, Tigges & Little LLP, Marion H. Little Jr., 

and Matthew S. Zeiger, for Michael Wagenbrenner. Argued: 

Marion H. Little Jr.

APPEALS from the Franklin County Court of Common Pleas

EDELSTEIN, J.

{¶ 1} Defendants-appellants, Michael Wagenbrenner, Matthew R. Brown, and The 

Wagenbrenner Company, appeal from judgments of the Franklin County Court of Common 

Pleas denying appellants’ motions for directed verdict, entering judgment in favor of 

plaintiffs-appellees, Homestead America Ltd. (“Homestead”) and David Anderson, and 
No. 23AP-377 & 23AP-382 2

denying appellants’ motions for directed verdict and judgment notwithstanding the verdict

(“JNOV”). For the reasons that follow, we reverse and remand the case for proceedings 

consistent with this decision.

I. Facts and Procedural History

{¶ 2} On December 5, 2019, Homestead, Mr. Anderson, Winchester Oaks LLC

(“Winchester Oaks”), and Brian Barker filed a complaint against appellants asserting 

claims for breach of fiduciary duty and fraud. The allegations in the complaint concerned 

events that transpired in 2015, when Homestead submitted an offer to purchase several 

multi-family residential buildings located near the intersection of Star Ave. and King Ave. 

in Grandview, Ohio (the “Star King Portfolio”).

{¶ 3} On April 14, 2015, Mark Crosby and Michael Kirch (the “sellers”) executed an 

agreement granting The Wagenbrenner Company the exclusive right to sell the Star King 

Portfolio. Mr. Wagenbrenner was the broker of record for The Wagenbrenner Company in 

2015. Mr. Brown was a licensed real estate agent employed by The Wagenbrenner 

Company at that time and the listing agent for the Star King Portfolio. Mr. Kirch explained 

that “price was the major factor” in the sellers’ decision to sell the Star King Portfolio, and 

that the sellers expected Mr. Brown to get the “highest and best price possible” for the 

property. (Oct. 10, 2022 Tr. Vol. 6 at 1072, 1153.)

{¶ 4} Mr. Anderson was the managing member of Homestead, an entity that owns 

and manages several multi-family and student housing properties in Ohio, Arizona, and 

Texas. On May 18, 2015, Mr. Brown contacted Mr. Anderson and informed him of the Star 

King Portfolio listing. Mr. Anderson told Mr. Brown he was “absolutely” interested in the 

property and that the “timing couldn’t be better.” (Oct. 4, 2022 Tr. Vol. 2 at 346, 349.) In 

2015, Mr. Anderson and Mr. Barker were in the process of selling a multi-family property 

they owned and wanted to use the proceeds from the sale to purchase another property.

Mr. Anderson stated that, when he spoke with Mr. Brown on May 18, 2015, he asked Mr. 

Brown if “Mike Wagenbrenner [was] buying this deal” and Mr. Brown “said no. * * * Mike 

Wagenbrenner’s not going to buy the property.” (Tr. Vol. 2 at 348-49.) Mr. Anderson also 

stated that he asked Mr. Brown to be his broker on May 18, 2015, and that Mr. Brown said 

“[y]es, he would.” (Tr. Vol. 2 at 346-47.) Mr. Brown informed Mr. Anderson that offers for 

the Star King Portfolio were due by 5:00 p.m. on July 10, 2015. 
No. 23AP-377 & 23AP-382 3

{¶ 5} Following their initial conversation, Mr. Brown emailed Mr. Anderson a

confidentiality agreement for the Star King Portfolio. Mr. Anderson executed the 

confidentiality agreement and returned it to Mr. Brown. The confidentiality agreement 

stated that Mr. Anderson had “requested information * * * for the purpose of evaluating a 

possible acquisition of the Property” and that Mr. Anderson agreed not to “disclose, permit 

the disclosure of, release, disseminate or transfer, any information hereunder * * * to any 

other person or entity.” (Dec. 5, 2019 Compl., Ex. A, Confidentiality Agreement at 1.) The 

agreement also stated that Mr. Anderson “intend[ed] to utilize the services of Matthew 

Brown & The Wagenbrenner Company with the understanding that The Wagenbrenner 

Company Real Estate Investment Brokerage Company is representing the Seller.” (Id.)

{¶ 6} On May 18, 2015, Mr. Brown emailed Michael Wagenbrenner and Jeff

Wagenbrenner the marketing brochure for the Star King Portfolio. Michael Wagenbrenner 

responded to Mr. Brown’s email stating, “That’s an impressive brochure. What do you 

think it will take to buy it and will it make financial sense?” (Pl.’s Trial Ex. 5.) Mr. Brown 

responded stating that it would cost “[p]robably north of $12.5 [million]” to purchase the 

property. (Pl.’s Trial Ex. 5; Oct. 5, 2022 Tr. Vol. 3 at 626.) In response, Michael

Wagenbrenner noted that it would “be nice to add that to our portfolio, but we would have 

to put about $2.5 mil[lion] down which we don’t have.” (Pl.’s Trial Ex. 5.)

{¶ 7} By July 1, 2015, a group comprised of Jeff Wagenbrenner, Michael 

Wagenbrenner, Sam Powers, Dave Powers, and Chris Paul (the “purchasing group”) “were 

discussing purchasing the [Star King] portfolio.” (Tr. Vol. 3 at 563.) On July 6, 2015, Jeff 

Wagenbrenner sent an email to Matthew Brown and the members of the purchasing group

discussing different financing scenarios for the group’s purchase of the Star King Portfolio. 

{¶ 8} On July 8, 2015, Mr. Anderson learned from his uncle that Michael 

Wagenbrenner was “buying a new property in Grandview.” (Tr. Vol. 2 at 365.) That day, 

Mr. Anderson called Mr. Brown and asked whether Michael Wagenbrenner intended to 

purchase the Star King Portfolio. In response, Mr. Brown stated, “No. I already told you 

he’s not buying the portfolio.” (Tr. Vol. 2 at 366.) Mr. Anderson claimed that, if he had

known Michael Wagenbrenner was interested in purchasing the property on July 8, 2015, 

he would have found “[his] own broker, to advocate [Homestead] for the deal” and would 

have submitted a “sealed bid.” (Tr. Vol. 2 at 380.) 
No. 23AP-377 & 23AP-382 4

{¶ 9} Prior to the 5:00 p.m. deadline on July 10, 2015, Mr. Anderson called Mr. 

Brown and asked where Homestead “need[ed] to be” in order to “be the outlier.” (Tr. Vol. 

2 at 367.) Mr. Brown told Mr. Anderson the sellers would “only sell if it’s [$]12” million,

and that “[n]one of [his] buyers [were] up to a 12.” (Tr. Vol. 2 at 367.) On July 10, 2015, 

just before 5:00 p.m., Homestead submitted a letter of intent offering to purchase the Star 

King Portfolio for $12.275 million. 

{¶ 10} On July 11, 2015, Mr. Brown drafted a letter of intent for the purchasing 

group, offering to purchase the Star King Portfolio for $12.3 million. The purchasing group 

submitted their letter of intent for the property on July 11, 2015. The sellers countered the 

purchasing group’s offer requesting $12.5 million, and the purchasing group accepted the 

sellers’ $12.5 million counteroffer. On July 20, 2015, Mr. Brown informed Homestead and 

the other prospective purchasers that the sellers had not accepted their offers. 

{¶ 11} On July 24, 2015, Mr. Anderson asked Mr. Brown to inform the sellers that 

Homestead would increase its offer for the Star King Portfolio to $12.625 million. Mr. 

Brown informed the sellers of Homestead’s increased offer on July 30, 2015. Mr. Kirch

explained that, because the sellers felt they had a “handshake deal” with the purchasing 

group, and because Homestead’s increased offer was only $125,000 more than the agreed 

upon $12.5 million selling price, the sellers decided to “go ahead in good faith and forego 

the 100,000, or whatever it was, and close” with the purchasing group. (Tr. Vol. 6 at 1154, 

1094.) On August 5, 2015, Mr. Brown informed Mr. Anderson that the sellers had rejected 

Homestead’s increased offer. The sale of the Star King Portfolio to the purchasing group 

closed on December 15, 2015. 

{¶ 12} In their complaint, plaintiffs presented claims asserting: (1) Mr. Brown 

breached fiduciary duties he owed to plaintiffs as their real estate agent; (2) Mr. Brown 

committed fraud on July 8, 2015 when he told Mr. Anderson that Mr. Wagenbrenner was 

not interested in purchasing the property; and (3) Mr. Brown committed fraud on July 10, 

2015 when he told plaintiffs the other offers for the Star King Portfolio were less than $12 

million. Plaintiffs alleged that The Wagenbrenner Company and Mr. Wagenbrenner were 

vicariously liable for the acts and omissions of Mr. Brown. 

{¶ 13} On February 11, 2022, appellants filed Civ.R. 56(C) motions for summary 

judgment. The trial court granted in part and denied in part appellants’ motions for 
No. 23AP-377 & 23AP-382 5

summary judgment. The court granted appellants summary judgment on all claims 

asserted by Winchester Oaks and Mr. Barker, and granted appellants summary judgment 

on plaintiffs’ fraud claim pertaining to Mr. Brown’s July 10, 2015 statements. The trial 

court found genuine issues of material fact pertaining to Homestead’s and Mr. Anderson’s 

remaining claims.

{¶ 14} On April 13, 2022, Mr. Wagenbrenner filed a motion in limine to preclude 

plaintiffs from offering evidence at trial of damages in excess of their out-of-pocket losses.

Mr. Wagenbrenner asserted that, because Mr. Brown’s allegedly fraudulent statements did 

not result in a contract for plaintiffs to purchase the Star King Portfolio, plaintiffs could not 

recover benefit-of-the-bargain damages. Mr. Wagenbrenner relied on the Restatement of 

the Law 2d, Torts, § 549 (1977) (“Restatement § 549”), Auto Chem Laboratories, Inc. v. 

Turtle Wax Inc., S.D.Ohio No. 3:07cv156, 2010 U.S. Dist. LEXIS 100677 (Sept. 24, 2010),

Roboserve, Inc. v. Kato Kagaku Co., 78 F.3d 266 (7th Cir.1996), and LHC Nashua 

Partnership, Ltd. v. PDNED Sagamore Nashua, LLC, 659 F.3d 450 (5th Cir.2011) to 

support his argument. Mr. Brown and The Wagenbrenner Company joined Mr. 

Wagenbrenner’s motion in limine. 

{¶ 15} Plaintiffs responded to Mr. Wagenbrenner’s motion in limine on April 27, 

2022, asserting they were entitled to receive benefit-of-the-bargain damages because they

“entered into a transaction with Brown” when they “asked Brown to be their real estate 

agent and Brown accepted.” (Memo in Opp. to Mot. in Lim. at 5-6.) Plaintiffs asserted that, 

pursuant to Northpoint Properties v. Charter One Bank, 8th Dist. No. 94020, 2011-Ohio2512, they could receive benefit-of-the-bargain damages so long as they presented 

“ ‘competent evidence of damages * * * to establish with reasonable certainty an amount 

sufficient to fully and fairly compensate the aggrieved party.’ ” (Memo in Opp. to Mot. in 

Lim. at 6, quoting Northpoint Properties at ¶ 36.) 

{¶ 16} On October 3, 2022, a ten-day jury trial commenced. Prior to the 

presentation of evidence, the trial court denied Mr. Wagenbrenner’s motion in limine. 

(Oct. 3, 2022 Tr. Vol. 1 at 78.) At trial, appellants objected when plaintiffs presented

evidence pertaining to their benefit-of-the-bargain damages. The trial court overruled the

objections. (Tr. Vol. 3 at 610-12; Oct. 6, 2022 Tr. Vol. 4 at 775-76.) Plaintiffs presented 

evidence addressing the acquisition fee they would have earned from purchasing the Star 
No. 23AP-377 & 23AP-382 6

King Portfolio, the profits they would have made from operating and managing the Star 

King Portfolio, and the proceeds they would have made from selling the Star King Portfolio 

in July 2020. Plaintiffs claimed their benefit-of-the-bargain damages totaled $7,081,478. 

{¶ 17} Appellants moved for a directed verdict at the conclusion of the plaintiffs’

case-in-chief and at the conclusion of all the evidence. (Tr. Vol. 6 at 1209; Oct. 12, 2022 Tr. 

Vol. 8 at 1711.) Appellants argued plaintiffs failed to establish the injury element of their 

fraud claim, because plaintiffs failed to present any evidence regarding their out-of-pocket 

losses. The trial court denied appellants’ motions for directed verdict.

{¶ 18} On October 14, 2022, the jury returned a verdict in favor of plaintiffs on their

fraud claim and a verdict in favor of appellants on plaintiffs’ breach of fiduciary duty claim. 

The jury awarded plaintiffs $3,540,739 in compensatory damages and found The 

Wagenbrenner Company vicariously liable for the fraud committed by Mr. Brown. The jury

determined that punitive damages were not warranted in the case. On October 26, 2022,

the trial court issued a judgment entry enforcing the jury verdict. 

{¶ 19} On November 22, 2022, appellants filed motions for JNOV, asserting that

plaintiffs were limited to recovering out-of-pocket damages because the alleged fraud did 

not result in a contract for plaintiffs to purchase the Star King Portfolio. Because plaintiffs 

failed to present any evidence to establish their out-of-pocket damages at trial, appellants 

argued that plaintiffs failed to establish their claim for fraud. Plaintiffs filed a combined 

memorandum in opposition to appellants’ motions for JNOV, asserting fraud damages 

could “include both out-of-pocket expenses and/or expectancy-type damages so long as 

there is competent evidence of any such damages with reasonable certainty.” (Dec. 13, 2022 

Memo in Opp. at 1.)

{¶ 20} On May 30, 2023, the trial court issued a decision and entry denying 

appellants’ motions for JNOV. The court found that while “Ohio courts ha[d] followed 

Restatement (Second) Torts § 549,” there was “no evidence provided that Ohio ha[d]

adopted Restatement (Second) Torts § 549.” (JNOV Decision and Entry at 5.) As such, the 

court concluded that the jury properly “applied Ohio law” and awarded plaintiffs benefitof-the-bargain damages. (JNOV Decision and Entry at 5.)

II. Assignments of Error
No. 23AP-377 & 23AP-382 7

{¶ 21} Mr. Brown and The Wagenbrenner Company appeal, assigning the following 

errors for our review:

1. The Trial Court Erred in Denying Appellant Brown 

and Wagenbrenner Co.’s Motion for Directed Verdict 

and Motion for Judg[]ment Notwithstanding the 

Verdict Because Appellee is Only Entitled to Out-ofPocket Damages.

2. The Trial Court Erred in Denying Appellant Brown 

and Wagenbrenner Co.’s Motion for Directed Verdict 

and Motion for Judg[]ment Notwithstanding the 

Verdict Because Appellee Homestead’s Damages are 

Speculative.

3. The Trial Court Erred in Denying Appellant Brown 

and Wagenbrenner Co.’s Motion for Directed Verdict 

and Motion for Judg[]ment Notwithstanding the 

Verdict Because in Appellee’s Fraud Claim Appellee 

Did Not Demonstrate Justifiable Reliance.

4. The Trial Court Erred in Denying Appellant Brown 

and Wagenbrenner Co.’s Motion for Directed Verdict 

and Motion for Judg[]ment Notwithstanding the 

Verdict Because in Appellee’s Fraud Claim Appellee 

Did Not Demonstrate Appellant Brown and 

Wagenbrenner Co. Proximately Caused Appellee’s 

Damages.

5. The Trial Court Erred by Providing the Jury with 

Incorrect Instructions.

{¶ 22} Mr. Wagenbrenner also appeals, assigning the following errors for our 

review:

Assignment of Error No. 1: The trial court committed 

reversible error by allowing Homestead America, Ltd. 

(“Homestead”) to offer evidence of expectancy damages at 

trial.

Assignment of Error No. 2: The trial court committed 

reversible error by allowing Homestead to offer evidence at 

trial of expectancy damages occurring after the date of the 

fraudulent statements.
No. 23AP-377 & 23AP-382 8

Assignment of Error No. 3: The trial court erred in 

admitting the testimony of any expert witness who relied 

upon hearsay statements and other materials and 

assumptions not contained in the record in violation of 

Evidence Rule 703.

Assignment of Error No. 4: The trial court erred in 

admitting expectancy damages based upon assumptions, 

speculation, and/or hearsay.

Assignment of Error No. 5: The trial court erred in 

denying Defendant’s motion for a directed verdict.

Assignment of Error No. 6: The trial court erred in not 

entering judgment for Defendants given Homestead’s failure 

to offer any evidence of out-of-pocket damages.

Assignment of Error No. 7: The trial court erred in not 

entering judgment for Defendants given Homestead’s lack of 

reasonable reliance.

Assignment of Error No. 8: The trial court erred by 

rejecting Wagenbrenner’s Proposed Jury Instruction No. 31 to 

instruct the jury on written disclaimers.

Assignment of Error No. 9: The trial court committed 

reversible error in failing to instruct the jury on the proper 

measure of damages.

Assignment of Error No. 10: The trial court erred in 

rejecting Wagenbrenner’s Proposed Jury Instruction No. 35 

and No. 36 of Wagenbrenner’s First Amended Jury 

Instructions to instruct the jury on out-of-pocket damages 

being the proper measure of damages.

Assignment of Error No. 11: The trial court erred in 

denying Defendants’ Motion for Judgment Notwithstanding 

the Verdict And, Alternatively, A New Trial. 

III. Mr. Brown’s and The Wagenbrenner Company’s First 

Assignment of Error and Mr. Wagenbrenner’s Fifth, Sixth,

and Eleventh Assignments of Error: Directed Verdict and

Judgment Notwithstanding the Verdict 

{¶ 23} Mr. Brown’s and The Wagenbrenner Company’s first assignment of error and 

Mr. Wagenbrenner’s fifth, sixth, and eleventh assignments of error assert the trial court 
No. 23AP-377 & 23AP-382 9

erred by denying their respective motions for directed verdict and for JNOV. “The standard 

for granting a motion for judgment notwithstanding the verdict * * * pursuant to Civ. R. 

50(B) is the same as that for granting a motion for a directed verdict pursuant to Civ. R. 

50(A).” Texler v. D.O. Summers Cleaners & Shirt Laundry, Co., 81 Ohio St.3d 677, 679 

(1998), citing Wagner v. Roche Laboratories, 77 Ohio St.3d 116, 121 (1996), fn. 2. 

{¶ 24} Civ.R. 50(A)(4) directs a trial court to grant a motion for directed verdict if, 

after construing the evidence most strongly in favor of the party against whom the motion 

is directed, the court “finds that upon any determinative issue reasonable minds could come 

to but one conclusion upon the evidence submitted and that conclusion is adverse to such 

party.” “The ‘reasonable minds’ test mandated by Civ.R. 50(A)(4) requires the court to 

discern only whether there exists any evidence of substantive probative value that favors 

the position of the nonmoving party.” Goodyear Tire & Rubber Co. v. Aetna Cas. & Sur. 

Co., 95 Ohio St.3d 512, 2002-Ohio-2842, ¶ 3. 

{¶ 25} Civ.R. 50(B)(1) governs motions for JNOV, providing that “a party may serve 

a motion to have the verdict and any judgment entered thereon set aside and to have 

judgment entered in accordance with the party’s motion.” “When ruling on a motion for 

judgment notwithstanding the verdict, a trial court applies the same test as in reviewing a 

motion for a directed verdict,” and determines “whether the evidence is totally insufficient 

to support the verdict.” Harper v. Lefkowitz, 10th Dist. No. 09AP-1090, 2010-Ohio-6527, 

¶ 8. 

{¶ 26} Although the analysis for both motions “ ‘requires a court to review and 

consider the evidence, motions for directed verdict and judgment notwithstanding the 

verdict present a question of law because a court must examine the sufficiency of the 

evidence, not weigh the evidence or try the credibility of the witnesses.’ ” Hale v. Spitzer 

Dodge, Inc., 10th Dist. No. 04AP-1379, 2006-Ohio-3309, ¶ 15, quoting Miller v. LindsayGreen, Inc., 10th Dist. No. 04AP-848, 2005-Ohio-6366, ¶ 52. Accord Goodyear Tire & 

Rubber Co. at ¶ 4, quoting O’Day v. Webb, 29 Ohio St.2d 215 (1972), paragraph three of the 

syllabus (stating that a “ ‘motion for directed verdict * * * does not present factual issues, 

but a question of law, even though in deciding such a motion, it is necessary to review and 

consider the evidence’ ”). See also Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio2179, ¶ 25 (stating that, “[f]aced with the question of sufficiency through a directed verdict 
No. 23AP-377 & 23AP-382 10

motion, the court must determine whether any evidence exists on every element of each 

claim or defense for which the party has the burden to go forward”). Appellate review of 

both motions for directed verdict and motions for JNOV is de novo. Hale at ¶ 15. 

{¶ 27} The tort of fraud consists of six elements:(1) a representation or, where there 

is a duty to disclose, concealment of a fact; (2) which is material to the transaction at hand; 

(3) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness 

as to whether it is true or false that knowledge may be inferred; (4) with the intent of 

misleading another into relying upon it; (5) justifiable reliance upon the representation or 

concealment; and (6) a resulting injury proximately caused by the reliance. San v. Scherer, 

10th Dist. No. 97APE03-317, 1998 Ohio App. LEXIS 405, * 18 (Feb. 5, 1998), citing Burr v. 

Bd. of Cty. Commrs., 23 Ohio St.3d 69 (1986), paragraph two of the syllabus, superseded 

by statute on other grounds. Accord Tokles & Son v. Midwestern Indem. Co., 65 Ohio 

St.3d 621, 632 (1992). Appellants contend they were entitled to a directed verdict and/or 

JNOV on plaintiffs’ fraud claim because plaintiffs failed to establish any injury resulting 

from their reliance on Mr. Brown’s July 8, 2015 representation. Appellants assert that 

expectancy or benefit-of-the-bargain-type damages were legally unavailable to plaintiffs

because plaintiffs never had a contract to purchase the Star King Portfolio. Appellants 

further assert that, while plaintiffs could have recovered their out-of-pocket losses resulting 

from Mr. Brown’s misrepresentation, plaintiffs failed to present any evidence to establish 

their out-of-pocket damages.

{¶ 28} It “has long been the rule in our state that ‘[a] person injured by fraud is 

entitled to such damages as will fairly compensate him for the wrong suffered; that is, the 

damages sustained by reason of the fraud or deceit, and which have naturally and 

proximately resulted therefrom.’ ” Burr at 74, quoting Foust v. Valleybrook Realty Co., 4 

Ohio App.3d 164, 166 (6th Dist.1981). Accord Shover v. Cordis Corp., 61 Ohio St.3d 213, 

217 (1991), overruled on other grounds; Brewer v. Brothers, 82 Ohio App.3d 148, 154 (12th 

Dist.1992) (stating the “person injured by fraud is entitled to recover damages naturally 

and proximately resulting from the fraud”).

{¶ 29} In Molnar v. Beriswell, 122 Ohio St. 348 (1930) the Supreme Court of Ohio 

held that, where a sale of property is procured “by a vendor’s fraudulent representation,” 

the proper measure of damages is “the difference between the actual value of the property 
No. 23AP-377 & 23AP-382 11

at the time of the purchase and its value had it been as represented.” Id. at paragraph one 

of the syllabus. This measure of damages is known as the “benefit of the bargain” rule. 

Brewer at 154, citing Molnar at paragraph one of the syllabus. Accord Dziedzicki v. 

Bonafine, 9th Dist. No. 15597, 1992 Ohio App. LEXIS 6393, *6 (Dec. 16, 1992); Mazzurco 

v. Aeon Fin., L.L.C., 8th Dist. No. 103537, 2016-Ohio-3324, ¶ 10-11. See also Alternatives 

Unlimited-Special, Inc. v. Ohio Dept. of Edn., 10th Dist. No. 12AP-647, 2013-Ohio-3890, 

¶ 29, citing Restatement of the Law 2d, Contracts, Section 344(a) (1981) (explaining that 

damages that place the non-breaching party to a contract “in the position it would have 

been had the contract been fully performed” protect the party’s “expectation interest, i.e., 

its interest in having the benefit of the bargain”). In Molnar, the purchaser of an apartment 

building relied on the seller’s misrepresentation that the building was fully rented, when it

was in fact only partially rented. The court held that, in their fraud action against the seller,

the purchaser was entitled to receive the difference between the actual value of the 

apartment building as partially rented and the value of the apartment building if it had been

fully rented. Molnar at paragraph two of the syllabus.

{¶ 30} When a vendor’s fraudulent misrepresentations induce the sale of property, 

courts of this state have also held that the buyer may choose between benefit-of-the-bargain 

damages and out-of-pocket damages in their fraud action against the vendor. For instance, 

in Brewer, the buyer purchased property relying on the seller’s fraudulent 

misrepresentation regarding the property’s electrical system. The buyer filed an action for 

fraud against the seller and presented evidence at trial of the cost he incurred to repair the 

property’s electrical system. The reviewing court held that, while benefit-of-the-bargain 

damages were appropriate “[w]here there is fraud inducing the purchase or exchange of 

real estate,” courts had “also held that the cost of repair or replacement is a fair 

representation of damages.” Id. at 154. As such, the Brewer court held that the “repair or 

replacement cost [was] an adequate measure of damages, particularly given that the goal is 

to compensate the owner for the loss sustained” by the fraud. Id. Accord Dziedzicki at *7.

{¶ 31} In Northpoint Properties, 2011-Ohio-2512, the court also held that a 

purchaser’s cost to repair property can be an appropriate measure of damages. The 

purchaser in Northpoint Properties relied on the seller’s misrepresentations regarding a 

commercial office building’s fire-suppression system when purchasing the property, and 
No. 23AP-377 & 23AP-382 12

the purchaser sued the seller for fraud. The purchaser presented evidence at trial 

demonstrating the cost incurred to repair the building’s fire-suppression system. The trial 

court concluded the purchaser failed to establish an injury resulting from the seller’s fraud

because the purchaser failed to present evidence of its benefit-of-the-bargain damages

pursuant to Molnar.

{¶ 32} On appeal, the Northpoint Properties court considered Restatement § 549

and determined that “the benefit-of-the-bargain rule may be an appropriate measure of 

damages when this measure can be established by proof in accordance with the usual rules 

of certainty in damages.” Id. at ¶ 35, citing Restatement § 549, Comments g and h. 

However, the court noted that, “ ‘[i]n order to give the plaintiff the benefit of the bargain, it 

is not necessary in all cases to give him the value of the thing as represented. He may be 

fully and fairly compensated if he is given the cost of making it as represented.’ ” Id. at ¶ 35, 

quoting Restatement § 549 Comment l. As such, the Northpoint Properties court 

concluded the “appropriate inquiry [was] whether competent evidence of damages has 

been presented to establish with reasonable certainty an amount sufficient to fully and 

fairly compensate the aggrieved party.” Id. at ¶ 36. Because the purchaser presented 

competent evidence of its cost to repair the building’s fire-suppression system, the court 

held the purchaser was entitled to receive the “reasonable cost to repair” the property as 

damages resulting from the sellers’ fraud. Id. at ¶ 37.

{¶ 33} Plaintiffs contend that Brewer and Northpoint Properties demonstrate the 

“proper measure of damages for fraud may include both benefit-of-the-bargain and/or outof-pocket expenses, depending on which measure of damage will adequately compensate 

the plaintiff for the fraud and prevent the defrauding party from escaping liability.”

(Appellee’s Brief at 25.) Unlike the present case, however, the plaintiffs in both Brewer and 

Northpoint Properties purchased property relying on a seller’s misrepresentation, and the 

reviewing court held that the plaintiff could recover either benefit-of-the-bargain damages

or their reasonable costs to repair the property. Neither Brewer nor Northpoint Properties

address a situation similar to the one presented here, where the plaintiff never purchased 

the property and never had a contractual agreement with the seller.

{¶ 34} In Burke v. Gene Hoffman Dev. Corp., 8th Dist. No. 35192, 1977 Ohio App. 

LEXIS 8099 (Apr. 14, 1977), the court addressed a situation where the plaintiff sued a 
No. 23AP-377 & 23AP-382 13

defendant for fraud and sought lost profits from the plaintiff’s contract with a third party 

as damages. In Burke, the Gene Hoffman Development Corporation (“Hoffman”) 

contracted with the J.H. Burke Company (“Burke”) for Burke to remodel a building. 

Hoffman agreed to pay Burke his costs and an extra ten percent of his costs monthly. 

Unbeknownst to Burke, Hoffman was using proceeds from loans he obtained from a bank

to pay Burke’s bills. The manager of the bank, Timothy Wayne, approved the loans to 

Hoffman, but Wayne did not have authority to approve the loans. When Hoffman failed to 

pay one of Burke’s monthly bills, Burke had a meeting with Hoffman and Wayne. Burke 

asked Wayne whether there was a commitment from the bank for the remodeling project. 

Wayne responded that there was a commitment of about $800,000 and Burke would

receive payment in a few days. Burke relied on Wayne’s representations and continued to 

work on the remodeling project. Thereafter, Hoffman again failed to pay Burke and Burke 

sued the bank for fraud based on Wayne’s misrepresentations regarding the loan. The jury 

awarded Burke both his out-of-pocket losses and his lost profits from his contract with 

Hoffman as damages.

{¶ 35} The reviewing court noted that, generally, “damages for fraud are determined 

under the ‘benefit of the bargain rule,’ whereby the plaintiff is entitled to lost profits 

resulting from the fraud.” Id. at *16, quoting Restatement (Second) of Torts § 549 (Tent. 

Draft No. 11 April 15, 1965). However, the court found “persuasive authority for the 

proposition that where the fraudulent representations of the defendant induce the plaintiff 

to engage in a transaction with a third party, the damages should be determined not 

according to the ‘benefit-of-the-bargain rule’, but should be determined based on the outof-pocket losses resulting from the fraud.” Id. at *17, citing Sorenson v. Gardner, 215 Ore. 

255 (1959). Thus, because Wayne’s fraudulent misrepresentation induced Burke to 

continue performing pursuant to his contract with a third party, the court of appeals held 

that “Burke’s recovery against the bank should have been limited to his out-of-pocket 

losses.” Id. at *17. See Sorenson at 266 (holding the plaintiff/purchaser was limited to 

recovering out-of-pocket losses in their action against the defendant for fraud, where the 

defendant’s misrepresentations induced the plaintiff to purchase property from a third 

party because “there [was] no warranty and no advantage which would inure to the 
No. 23AP-377 & 23AP-382 14

wrongdoer, because there [was] no contract between the purchaser and the maker of the 

representations”).

{¶ 36} Plaintiffs assert Burke is not applicable to the present case because Mr. 

Brown’s “fraud prevented the consummation of a transaction by the plaintiff,” whereas 

Wayne’s fraud in Burke “induce[d] the plaintiff to engage in a transaction with a third 

party.” (Emphasis sic.) (Appellee’s Brief at 30, 32.) However, whether the defendant’s 

fraudulent misrepresentations induced or prevented the plaintiff’s contract with a third 

party, in both scenarios the plaintiff lacks a contractual agreement with the defendant who 

engaged in fraud.

{¶ 37} Plaintiffs further assert that Ohio has not “adopted” Restatement § 549 “as a 

reflection of Ohio law for purposes of determining fraud damages.” (Appellee’s Brief at 30.)

While no Ohio court has expressly adopted Restatement § 549, Ohio courts have relied on 

Restatement § 549 when assessing the appropriate measure of damages for fraud. In 

Northpoint Properties, the court observed that “ ‘Ohio courts have generally followed, 

whether specifically noted or not, the principles set forth in the Restatement (Second) of 

Torts when discerning the propriety and amount of damages in fraud cases.’ ” Northpoint 

Properties, 2011-Ohio-2512 at ¶ 32, quoting Auto Chem Laboratories, Inc., 2010 U.S. Dist. 

LEXIS 100677 at *22. See also Burke (relying on a 1965 tent. draft of Restatement § 549);

DeFilippo v. Szabo, 9th Dist. No. 918, 1980 Ohio App. LEXIS 14262, *3-4 (May 14, 1980) 

(relying on Restatement § 549); MADFAN, Inc. v. Makris, 8th Dist. No. 103655, 2017-Ohio979, ¶ 8 (relying on Restatement § 549). As such, we find Restatement § 549 instructive 

regarding the proper measure of damages for fraud.

{¶ 38} Restatement § 549 provides as follows:

(1) The recipient of a fraudulent misrepresentation is entitled

to recover as damages in an action of deceit against the maker

the pecuniary loss to him of which the misrepresentation is a

legal cause, including

(a) the difference between the value of what he has received in

the transaction and its purchase price or other value given for

it; and

(b) pecuniary loss suffered otherwise as a consequence of the

recipient’s reliance upon the misrepresentation.
No. 23AP-377 & 23AP-382 15

(2) The recipient of a fraudulent misrepresentation in a

business transaction is also entitled to recover additional

damages sufficient to give him the benefit of his contract with

the maker, if these damages are proved with reasonable

certainty.

{¶ 39} In Northpoint Properties, the court explained that “[d]amages awarded 

under subsection (1) [of Restatement § 549] are known as ‘out-of-pocket’ damages, while 

those awarded under subsection (2) are ‘benefit-of-the-bargain damages.’ ” Northpoint 

Properties at ¶ 33, citing Auto Chem Laboratories, Inc. The comments to Restatement § 

549 explain that the out-of-pocket losses described in subsection (1) are the “rules normally 

applicable to determine the measure of damages recoverable for a fraudulent 

misrepresentation” because “the purpose of a tort action is to compensate for loss sustained 

and to restore the plaintiff to his former position, and not to give him the benefit of any 

contract he has made with the defendant.” Restatement § 549 at Comment g. Indeed, 

“ ‘[r]ecovery in tort seeks to restore the plaintiff to where he was before the defendant’s 

wrongful conduct injured him, whereas contract law seeks to put the plaintiff where he 

would be had the defendant properly performed his duty under the contract.’ ” Motorists 

Mut. Ins. Co. v. Ironics, Inc., 168 Ohio St.3d 467, 2022-Ohio-841, ¶ 27, quoting Detroit 

Edison Co. v. NABCO, Inc., 35 F.3d 236, 239 (6th Cir.1994).

{¶ 40} The comments to Restatement § 549 further explain that, “[w]hen the 

plaintiff has not entered into any transaction with the defendant but has suffered his 

pecuniary loss through reliance upon the misrepresentation in dealing with a third person, 

[the rules stated in subsection (1)] must of necessity be applied.” Restatement § 549 at 

Comment g. Accordingly, when the plaintiff has not entered into a transaction with the 

defendant and suffers loss in dealing with a third party, the plaintiff is limited to recovering 

out-of-pocket losses. Accord Sorenson; Burke. When the plaintiff has a contract with the 

defendant, however, subsection (2) of Restatement § 549 provides that the plaintiff is 

entitled to recover damages “sufficient to give him the benefit of his contract with the 

maker.” The comments to Restatement § 549 explain that, while many jurisdictions have 

adopted the benefit-of-the-bargain rule as the sole measure of damages for fraud, 

Restatement § 549(2) “does not take this position.” Restatement § 549 at Comment g. 

Instead, Restatement § 549 follows the “compromise position adopted by some 
No. 23AP-377 & 23AP-382 16

jurisdictions, giving the plaintiff the option of either the out-of-pocket or the benefit-of-thebargain rule in any case in which the latter measure can be established by proof in 

accordance with the usual rules of certainty in damages.” Id. at Comment h. Accord

Brewer; Northpoint Properties.

{¶ 41} Plaintiffs contend that Restatement § 549 gives them the option to recover 

either out-of-pocket or benefit-of-the-bargain damages in the present case. (Appellee’s 

Brief at 26-27.) We disagree. The comments to Restatement § 549 plainly provide that 

“[w]hen the plaintiff has not entered into any transaction with the defendant,” the plaintiff 

is limited to recovering out-of-pocket losses. Id. at Comment g. Thus, when the plaintiff 

has entered into a contract with the defendant, Restatement § 549 provides the plaintiff

with the option to pursue either out-of-pocket or benefit-of-the-bargain damages. When 

the plaintiff has not entered into a contract with the defendant, however, they do not have 

the option to recover benefit-of-the-bargain damages.

{¶ 42} A majority of courts have applied the principles expressed in Restatement § 

549. In Auto Chem Laboratories, Inc. a federal district court relied on Restatement § 549 

to hold that, if the plaintiffs established the defendant was “liable to them for fraud, based 

on a valid contract that existed between the parties, [plaintiffs were] entitled to benefit-ofthe bargain damages.” 2010 U.S. Dist. LEXIS 100677 at *27. The court further explained 

that, if the plaintiffs established the defendant was “liable to them for fraud, but not based 

on a valid contract, however, they are only entitled to the pecuniary loss of which the 

fraudulent conduct was a legal cause.” Id. The Auto Chem Laboratories, Inc. court noted

that, while the “Ohio Supreme Court has not ruled on this particular issue,” the court in 

Burke “used the ‘out-of-pocket’ expense approach in a situation not involving a contractual 

relationship between the parties, as have courts in other jurisdictions.” Id. at *27, fn. 7. See

Maranda v. Stanfill, N.D.Ohio No. 5:22-cv-02015, 2023 U.S. Dist. LEXIS 153797, *3-4 

(Aug. 31, 2023), (following Auto Chem Laboratories, Inc.); IPFS Corp. v. Continental Cas. 

Co., W.D.Mo. No. 4:11-CV-00256-BCW, 2013 U.S. Dist. LEXIS 191451, *84-85 (Aug. 15, 

2013) (stating that “the benefit of the bargain rule [was] not applicable as a measure of 

damages” in the plaintiff’s fraud action because the plaintiff did not have a contract with 

the defendant); Edward J. DeBartolo Corp. v. Coopers & Lybrand, 928 F.Supp. 557, 566 

(W.D.Pa.1996) (noting that the “rationale for limiting benefit of the bargain damages to the 
No. 23AP-377 & 23AP-382 17

situation where the plaintiff has made a bargain with the defendant applies equally to 

federal securities laws claims as it does to common law tort claims”).

{¶ 43} In Roboserve, Inc., 78 F.3d 266, Roboserve entered into a five-year contract 

with the Hyatt Corporation (“Hyatt”)for Roboserve to install 1,000 of its minibars in rooms 

at the Hyatt Regency Chicago (“HRC”). Kato Kagaku Co., Ltd. (“Kato”) owned the HRC and 

employed Hyatt to manage the HRC. After contracting with Roboserve, Hyatt also 

contracted with another company, ServiBar, to install its minibars in other rooms at the 

HRC. Hyatt “explained this as a test ‘to evaluate the two Honor Bar systems’ ” and Hyatt 

told Roboserve that the “winner of the test would become the preferred minibar provider 

for Hyatt hotels.” Id. at 271. However, the evidence demonstrated that the “test” was a 

pretext, as Hyatt had already signed a seven-year contract with ServiBar when it announced 

the test to Roboserve. Id. at 271. Roboserve sued Kato for breach of contract and fraud.

Roboserve’s fraud claim asserted Kato’s agent, Hyatt, “defrauded Roboserve of further 

Hyatt business.” Id. at 272. The jury awarded Roboserve $1 million in benefit-of-thebargain damages on its fraud claim.

{¶ 44} The reviewing court noted that Illinois, whose law the court was applying, 

had formally adopted Restatement § 549. As such, the court held that “benefit-of-thebargain damages [were] limited to ‘situations where the transaction between the parties 

ha[d] actually been consum[m]ated based on the fraudulent misrepresentation.’ ” Id. at 

274, quoting Gold v. Dubish, 193 Ill.App.3d 339, 352 (1989). The court noted that benefitof-the-bargain damages “[were] clearly not appropriate * * * in the absence of an actual, 

binding agreement,” because damages for fraud “are not intended to restore what one never 

had.” Id. at 274. Accordingly, because Hyatt’s “alleged fraud did not induce any contract,” 

the court held that Roboserve was limited to recovering its out-of-pocket losses. Id. at 274. 

See also Elliott v. Aspen Brokers, 811 F.Supp. 586, 591 (D.Colo.1993)(holding that, because 

the plaintiff “was not induced by the fraudulent misrepresentations to consummate the 

transaction,” the plaintiff could not “recover benefit-of-the-bargain damages in this lawsuit, 

only her out-of-pocket expenses”).

{¶ 45} In LHC Nashua Partnership, Ltd., 659 F.3d 450, the court also relied on 

Restatement § 549 to limit the plaintiff to out-of-pocket losses. In LHC Nashua

Partnership, Ltd., the plaintiff and defendant entered into a Purchase and Sale Agreement 
No. 23AP-377 & 23AP-382 18

(“P&S Agreement”) for the plaintiff to purchase the defendant’s option to purchase a 

shopping mall. The defendant also had an agreement with Lowe’s Home Improvement 

(“Lowe’s”) that gave Lowe’s a right of first refusal to purchase the mall. The defendant 

informed the plaintiff that Lowe’s would execute a lease with the plaintiff, and the P&S 

Agreement made Lowe’s executing a lease with the plaintiff a condition precedent to 

closing. However, Lowe’s refused to sign the lease agreement and ultimately exercised its 

option to purchase the property. The plaintiff sued the defendant for fraud and the jury 

awarded the plaintiff both out-of-pocket and benefit-of-the-bargain damages. The 

reviewing court explained that, while the defendant “induced [the plaintiff] into signing the 

P&S Agreement—the contract to buy—the transaction transferring the property was never 

entered into. [The plaintiff] never bought the property. Therefore, [the plaintiff] did not 

suffer any losses as a result of owning the property.” Id. at 464. The court held that “the 

benefit-of-the-bargain measure simply ha[d] no application at all” because the plaintiff 

could not “recover lost profits flowing from an agreement to purchase property that never 

closed due to the failure of that agreement’s express conditions.” Id. at 465.

{¶ 46} In Twin Fires Invest., LLC v. Morgan Stanley Dean Witter & Co., 445 Mass. 

411 (2005)the court held that, although Massachusetts courts typically award benefit of the 

bargain damages for fraud, that state had “consistently limited the award of benefit of the

bargain damages to cases * * * where the person who was the target of the 

misrepresentation has actually acquired something in a transaction that is of less value than 

he was led to believe it was worth when he bargained for it.” Id. at 425. In Twin Fires 

Invest., LLC, a stockbroker convinced a group of investors to purchase certain shares the 

stockbroker believed he would receive in a company the stockbroker was about to take 

public. Prior to the initial public offering, the stockbroker learned he would not receive the 

shares. However, on the afternoon of the initial public offering, the stockbroker 

“ ‘congratulated’ ” the investors and “appeared to accept” their order to sell the shares. Id. 

at 418. The stockbroker eventually told the investors he had no shares to sell them. The 

investors filed an action against the stockbroker for fraud claiming they were entitled to $12 

million in benefit-of-the-bargain damages. The reviewing court explained that the 

investors were limited to recovering the “pecuniary loss [they] actually suffered as a result 

of the misrepresentation, rather than the ‘loss’ claimed from disappointed expectation.” Id. 
No. 23AP-377 & 23AP-382 19

at 426. The court noted that the stockbroker’s fraudulent misrepresentations “did not lead 

the [investors] to purchase something that was worth less than represented. [The 

investors] did not acquire anything, nor did [they] pay for anything [they] did not want. 

[They] ‘lost’ only the opportunity to make a considerable profit on securities [they] did not 

own.” Id. at 426.

{¶ 47} Plaintiffs rely on two cases—Am. Family Serv. Corp. v. Michelfelder, 968 

F.2d 667 (8th Cir.1992) and Nordyne, Inc. v. Florida Mobile Home Supply, 625 So.2d 1283 

(Fla.App.1993)—to support their contention that benefit-of-the-bargain damages are 

available in situations “where the fraud prevented the plaintiff from reaping the benefits of 

future commercial transactions.” (Appellee’s Brief at 35.) For the reasons that follow, we 

do not find either case persuasive. 

{¶ 48} In Michelfelder, the American Family Service Corporation (“American 

Family”) entered into negotiations with Pamela and Ted Michelfelder to purchase their 

childcare business. The Michelfelders and American Family executed a letter of intent 

regarding the sale that included a “no-shop clause.” Id. at 669. The no-shop clause 

precluded the Michelfelders from negotiating with any party other than American Family. 

However, the Michelfelders began negotiating with another individual and ultimately 

executed an “agreement in principle” for the other individual to purchase their business.

Id. American Family sued the Michelfelders for fraud and breach of the no-shop clause. 

The trial court limited American Family to its out-of-pocket damages on its fraud claim.

The reviewing court reversed, noting that Iowa law permitted benefit-of-the-bargain

damages on a claim for fraud. The reviewing court also noted that, “if the Michelfelders 

had dealt exclusively with [American Family] as they promised” in the no-shop clause, 

American Family “would have bought the Michelfelders’ child care business and benefitted 

financially.” Id. at 671.

{¶ 49} In Michelfelder, the no-shop clause was a consummated contract between 

American Family and the Michelfelders. As such, American Family was entitled to recover 

the benefit of its bargain resulting from the no-shop clause, and the evidence demonstrated 

that the Michelfelders would have sold their business to American Family had the

Michelfelders honored the no-shop clause. In the present case, plaintiffs never had a 

contract with the sellers of the Star King Portfolio, let alone a contract for the sellers to 
No. 23AP-377 & 23AP-382 20

negotiate exclusively with plaintiffs. As such, we do not find Michelfelder applicable to the 

present case. 

{¶ 50} The Nordyne, Inc. case does not contain a statement of the facts underlying 

the dispute between the parties. The decision indicates that Florida Mobile Home Supply 

(“FMHS”) was distributing Nordyne’s product, and Nordyne “made false statements to 

FMHS regarding * * * its intent to continue to permit FMHS to distribute its product.” Id. 

at 1285. FMHS sued Nordyne for fraud and sought its lost future profits as damages. The 

reviewing court stated that Florida law “permit[ted] the court to use either the ‘out-ofpocket’ or the ‘benefit-of-the-bargain’ rule, depending upon which is more likely fully to 

compensate the injured party.” Id. at 1286. See DuPuis v. 79th Street Hotel, Inc., 231 So.2d 

532 (Fla.App.1970). The Nordyne, Inc. court concluded that, but for Nordyne’s fraudulent 

misrepresentations, “FMHS would have continued, for at least the next five years, to enjoy 

annual profits, as it had for many years.” Id. at 1287. The court found the evidence of 

FMHS’s lost future profits “relevant under the ‘out-of-pocket rule,’ because it tended to 

prove the position that FMHS would have been in but for Nordyne’s wrongful acts.” Id. at 

1287. The court further stated that, “[t]o the extent that the evidence may be characterized 

as relevant only to the ‘benefit-of-the-bargain rule,’ we do not believe that the trial court 

abused its discretion by admitting it, on the theory that evidence of such damages was 

necessary to achieve justice.” Id. at 1287.

{¶ 51} We do not find Nordyne, Inc. to be reliable or persuasive. Initially, because 

the Nordyne, Inc. decision does not contain a statement of facts, the full context of the 

relationship between Nordyne and FMHS is unclear. Nordyne, Inc. also incorrectly 

identifies FMHS’s lost future profits as out-of-pocket losses. See Elliott, 811 F.Supp. at 591 

(stating that “[o]ut-of-pocket expenses do not include lost profits”). Finally, at least one 

other Florida appellate court has followed the general rule that benefit-of-the-bargain 

damages are not available for fraud absent a consummated transaction between the parties. 

See Greater Coral Springs Realty, Inc. v. Century 21 Real Estate of Southern Florida, Inc., 

412 So.2d 940 (Fla.App.1982).

{¶ 52} In Greater Coral Springs Realty, Inc., the appellant, Greater Coral Springs 

Realty, spoke with a Century 21 employee about acquiring another Century 21 franchise.

The Century 21 employee “gave assurances that the next available franchise would be 
No. 23AP-377 & 23AP-382 21

granted to appellant along with an exclusive in the Coral Springs area. Based upon this 

representation, appellant’s vice president made a deposit of two thousand dollars to reserve 

the franchise.” Id. at 940. Subsequently, Century 21 refunded the appellant’s money and 

granted the franchise to another broker. Id. The appellant sued Century 21 for fraud and 

the trial court awarded the appellant nominal and punitive damages. The reviewing court 

affirmed, explaining that the “[f]ailure to establish the contract [between appellant and 

Century 21] limited appellant to tort remedies for the fraud and precluded recovery of the 

‘benefit of the bargain.’ ” Id. at 941. The court noted that an “award of lost profits, the 

equivalent of the performance of the bargain, was clearly not warranted under the facts of 

this case since the parties never reached an agreement.” Id. As such, the reviewing court 

concluded that the trial court “properly awarded nominal and punitive damages.” Id.

{¶ 53} Based on our review of this issue, we agree with appellants and find that 

plaintiffs were not entitled to recover benefit-of-the-bargain damages for their fraud claim. 

Burke and Restatement § 549, as well as numerous out-of-state decisions, demonstrate that 

when a defendant is liable to a plaintiff for fraud but there is no contractual agreement

between the parties, the plaintiff is limited to recovering their out-of-pocket losses. This 

conclusion comports with the general rule that tort damages should restore the plaintiff to 

the position they were in before the defendant’s tortious conduct occurred. Motorists Mut. 

Ins. Co., 2022-Ohio-841 at ¶ 27; Keiber v. Spicer Constr. Co., 2d Dist. No. 98CA23, 1999 

Ohio App. LEXIS 2391, *22-23 (May 28, 1999), quoting 4 Restatement of the Law, Torts 

452, Section 901, Comment a (noting “ ‘the law of torts attempts primarily to put an injured 

party in a position as nearly as possible equivalent to his position prior to the tort’ ”). When 

the defendant is liable to the plaintiff for fraud and the parties have a consummated 

contract, the plaintiff may recover benefit-of-the-bargain damages from the defendant.

Where the plaintiff has not entered into a bargain or contract with the defendant, however, 

benefit-of-the-bargain damages do not “naturally and proximately result[]” from the 

defendant’s fraud. Burr, 23 Ohio St.3d at 74.

{¶ 54} In response to appellants’ motions for directed verdict, plaintiffs argued that 

they had a contract with Mr. Brown because Mr. Brown agreed to be their real estate agent. 

(Tr. Vol. 8 at 1754.) Plaintiffs never claimed to have a consummated contract to purchase 

the Star King Portfolio. As such, plaintiffs were not entitled to receive damages that would 
No. 23AP-377 & 23AP-382 22

give them the benefits of a bargain to purchase the property. Even if we accept plaintiffs’

contention that Mr. Brown’s fraudulent statements prevented them from submitting a

successful bid for the Star King Portfolio, plaintiffs still lost only the opportunity to make a 

profit from the property. Plaintiffs never bought the property and never suffered any losses 

as a result of owning the property. Plaintiffs were free to use the more than $12 million 

they did not expend on purchasing the Star King Portfolio to purchase other property or 

make other investments. As such, plaintiffs were not entitled to receive benefit-of-thebargain damages on their fraud claim, and instead were limited to recovering their out-ofpocket losses resulting from the fraud and any punitive damages they could have 

established. See Curran v. Vincent, 175 Ohio App.3d 146, 2007-Ohio-3680, ¶ 20 (1st Dist.)

(noting that “[f]raud can lead to both compensatory damages and punitive damages”).

{¶ 55} While the trial court allowed plaintiffs to present benefit-of-the-bargain 

damages evidence at trial, the court did not prevent plaintiffs from presenting evidence of

their out-of-pocket damages. Prior to trial, plaintiffs argued they were entitled to recover 

“both the benefit of the bargain and out of pocket expenses due to Defendants’ tortious 

conduct.” (Emphasis added.) (Memo in Opp. to Mot. in Lim. at 6-7.) Yet, plaintiffs chose 

to present only evidence pertaining to their benefit-of-the-bargain damages at trial. 

Compare Burke, 1977 Ohio App. LEXIS 8099 at *18 (noting that Burke presented evidence 

demonstrating his “total out-of-pocket losses * * * could not have exceeded $ 166,504.76,”

but the jury “impermissibly considered Burke’s lost profits” to arrive at its verdict of 

$213,000); Roboserve, Inc., 78 F.3d at 274-75 (concluding that the “jury’s $ 1 million 

verdict * * * obviously included benefit-of-the-bargain damages,” because Roboserve’s 

evidence demonstrated it incurred only $37,810 in out-of-pocket losses resulting from the 

fraud); LHC Nashua Partnership, Ltd., 659 F.3d at 465 (vacating the “jury’s award of 

$25,500,000 in lost-profits damages,” and affirming that “jury’s award of $534,380 in outof-pocket damages,” because the plaintiff could only recover its out-of-pocket losses 

resulting from the fraud).

{¶ 56} Because plaintiffs failed to present any evidence to establish their out-ofpocket damages, and benefit-of-the-bargain damages are not available under these 

circumstances, plaintiffs failed to establish the injury element of their fraud claim. The trial 

court therefore erred by failing to grant appellants’ motions for directed verdict and JNOV
No. 23AP-377 & 23AP-382 23

on plaintiffs’ fraud claim. See Textron Fin. Corp. v. Nationwide Mut. Ins. Co., 115 Ohio 

App.3d 137, 154 (9th Dist.1996) (noting that because “Textron failed to prove elements 

essential to its tort claims,” the “trial court erred in failing to grant Nationwide’s motions 

for directed verdict and judgment notwithstanding the verdict”).

{¶ 57} Based on the foregoing, we sustain Mr. Brown’s and The Wagenbrenner 

Company’s first assignment of error and Mr. Wagenbrenner’s fifth, sixth, and eleventh 

assignments of error. Our ruling on these assignments of error renders appellants’

remaining assignments of error moot. See App.R. 12(A)(1)(c). We remand for the trial 

court to enter judgment in favor of appellants on plaintiffs’ fraud claim.

IV. Conclusion

{¶ 58} Having sustained Mr. Brown’s and The Wagenbrenner Company’s first 

assignment of error, and Mr. Wagenbrenner’s fifth, sixth, and eleventh assignments of 

error, thereby rendering the parties’ remaining assignments of error moot, we remand the 

case to the Franklin County Court of Common Pleas for proceedings consistent with this 

decision. 

Judgments reversed; case remanded. 

MENTEL, P.J. and LELAND, J., concur.

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