Court Opinion

ID: 3727444
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:56:21.087055+00
Date Added: 2024-06-11T18:01:40.839589
License: Public Domain

I respectfully dissent from the judgment rendered by the majority.
With respect to the firm's breach of contract claim, it must be noted that the parties' oral agreement may constitute an express agreement. Lucas v. Costantini (1983), 13 Ohio App. 3d 367,368, 13 OBR 449, 450, 469 N.E.2d 927, 928. An express contract, unlike an implied contract, connotes a formal exchange of *Page 635 
promises when the parties have communicated in some manner the terms to which they agree to be bound. Id. at 369, 13 OBR at 451, 469 N.E.2d at 929. However, the court will give effect to the manifest intent of the parties where there is clear evidence demonstrating that the parties did not intend to be bound by the terms of an agreement until formalized on a written document and signed by both. Richard A. Berjian, D.O., Inc. v. Ohio Bell Tel.Co. (1978), 54 Ohio St. 2d 147, 151, 8 O.O.3d 149, 151,375 N.E.2d 410, 413.
Further, with respect to the authority of an agent to bind his principal to a lease agreement, it is essential that two facts be clearly established:
"(1) that the principal held the agent out to the public as possessing sufficient authority to embrace the particular act in question, or knowingly permitted him to act as having such authority, and (2) that the person dealing with the agent knew of the facts and acting in good faith had reason to believe and did believe that the agent possessed the necessary authority. * * *" Ammerman v. Avis Rent A Car System (1982), 7 Ohio App. 3d 338,340-341, 7 OBR 436, 438-439, 455 N.E.2d 1041, 1045.
In this case, the majority asserts that Crystal's deposition demonstrates that Roth orally negotiated leases which were honored by First Union and that Roth developed "expertise" and "a reputation that his word would be relied upon." Crystal's actual statements, however indicate that Crystal was familiar with the legend on First Union's proposed leases which indicated that the lease was not effective until accepted and executed by the landlord, and he continued to negotiate changes on behalf of the tenant even after a written, proposed lease was submitted to him. In addition, when Crystal and Haiman left the meeting at issue here, they stated that they needed to review the plan with their partners, and that it was subject to the partners' approval. Crystal likewise admitted that Roth indicated that he had to discuss some of the points with his superiors and that First Union's attorneys were to prepare a written lease for the parties.
Haiman's affidavit similarly acknowledges that he presented the substance of the terms announced by Roth to his partners for their agreement and that the parties intended that a written lease was to be prepared.
Finally, Roth stated that as a "disclaimer," he told Crystal and Haiman that the deal had to be approved by his superiors, and that there were in fact three separate entities which had to approve the deal in writing on a lease deal sheet.
Thus, oral leases were clearly not negotiated and neither Roth nor Crystal and Haiman could bind the parties absent approval from their principals. Accordingly, I would find that the firm's claim that it had an oral contract is unsupportable as the firm and First Union clearly did not intend to be bound until a written lease was prepared and executed. Moreover, Roth lacked actual and apparent *Page 636 
authority to bind First Union as he told Crystal and Haiman that he needed his superiors' approval and they therefore could not reasonably believe that Roth could bind First Union on the basis of his word alone.
Moreover, where the evidence is uncontroverted that no written lease, or memorandum thereof was ever executed, any oral agreement by the parties is properly held unenforceable.Manifold v. Schuster (1990), 67 Ohio App. 3d 251, 254,586 N.E.2d 1142, 1144.
A lease will be taken out of the statute of frauds by partial performance. See, e.g., Delfino v. Paul Davies Chevrolet, Inc.
(1965), 2 Ohio St. 2d 282, 286, 31 O.O.2d 557, 559,209 N.E.2d 194, 197, and the statute of frauds may not be interposed in furtherance of fraud. Marion Credit Assn. v. Cochran (1988),40 Ohio St. 3d 265, 533 N.E.2d 325, paragraph two of the syllabus. The firm also cites authority for the proposition that, in an employment context, promissory estoppel may be asserted in opposition to the defense that a contract is unenforceable pursuant to the statute of frauds. See, e.g., Gathagan v.Firestone Tire  Rubber Co. (1985), 23 Ohio App. 3d 16, 18, 23
OBR 49, 51, 490 N.E.2d 923, 925. Estoppel was rejected as a bar to the statute of frauds in cases involving real estate, however, in Leesburg Fed. S.  L. v. Dunlap (Mar. 28, 1988), Highland App. No. 658, unreported, 1988 WL 35791. The court stated:
"In Seale v. Citizens Savings and Loan Assn. (C.A. 6, 1986),806 F.2d 99, 102-104, the court held the doctrine of promissory estoppel should not apply to statute of frauds cases involving real estate. The court, noting the Gathagan case involved an alleged employment contract, conjectured that our state courts would not allow promissory estoppel to defeat the statute of frauds in cases involving real estate:
"`We do not find this Court of Appeals decision to be persuasive authority for the proposition that the Supreme Court of Ohio would allow promissory estoppel to defeat the statute of frauds in a real estate context, however. Gathagan involved a breach of an oral contract for employment for two years. We are not convinced that the Ohio courts would treat employment contracts and real estate transactions as co-extensive, since the latter implicate interests that are generally regarded as more deserving of protection.
"`Real estate transactions are usually formal undertakings involving significant sums of money.'
"The Seale court further wrote:
"`If a court allows parol evidence of an unwritten contract, it can never be certain that it is not perpetuating rather than preventing a fraud. Had the agreement been reduced to writing, however, there would be little opportunity for fraud or mistake to arise.' *Page 637 
"We agree with the reasoning of the Seale court and we decline to apply the Gathagan case to cases involving real estate. Accordingly, we find no issue of fact concerning whether appellee should be equitably estopped from asserting the statute of frauds in the case at bar."
I would apply the rationale set forth in Seale v. Citizens S. L. Assn., supra, expressly adopted by the Highland County Court of Appeals, and would not allow the promissory estoppel claim to defeat application of the statute of frauds.
Finally, as to the claim for negligent misrepresentation, I would conclude that, assuming such a claim may defeat application of the defense of the statute of frauds in a case such as this where a written lease is contemplated, the firm presented no evidence that anyone at First Union ever represented that Roth could bind First Union by an oral statement. Moreover, even assuming such a representation had been made, since the parties contemplated execution of a written lease and further negotiations, the firm could not justifiably rely upon such representation.
I would therefore overrule each of the assigned errors and affirm the judgment rendered below.