Court Opinion

ID: 4504428
Source: CourtListenerOpinion
Date Created: 2020-02-04 21:09:26.695093+00
Date Added: 2024-06-11T13:38:48.052449
License: Public Domain

[Cite as 2454 Cleveland, L.L.C. v. TWA, L.L.C., 2020-Ohio-362.]

                             IN THE COURT OF APPEALS OF OHIO

                                  TENTH APPELLATE DISTRICT

2454 Cleveland, LLC,                                :

                Plaintiff-Appellee,                 :
                                                                       No. 19AP-157
v.                                                  :               (C.P.C. No. 17CV-6605)

TWA, LLC,                                           :             (REGULAR CALENDAR)

                Defendant-Appellant.                :

                                           D E C I S I O N

                                    Rendered on February 4, 2020

                On brief: Omar Tarazi, for appellee. Argued: Omar Tarazi.

                On brief: Strip, Hoppers, Leithart, McGrath & Terlecky Co.,
                L.P.A., and A.C. Strip, for appellant. Argued: A.C. Strip.

                  APPEAL from the Franklin County Court of Common Pleas
DORRIAN, J.
        {¶ 1} Defendant-appellant, TWA, LLC, appeals from a judgment of the Franklin
County Court of Common Pleas granting summary judgment in favor of plaintiff-appellee,
2454 Cleveland, LLC, on its claim for breach of contract and awarding $50,000 in damages.
For the following reasons, we affirm.
I. Facts and Procedural History
        {¶ 2} Appellant owned real estate located at 6380 Nicholas Drive in Columbus,
Ohio ("the Property"). On June 14, 2017, appellee made an offer to purchase the Property
using a form real estate document ("June 14th purchase offer"). Appellee offered to pay
$900,000 for the Property, with appellee putting down 40 percent of the purchase price
and obtaining financing for the remainder. The offer also included contingencies, including
an inspection contingency providing that appellee would have 30 days after acceptance of
the offer to have the Property inspected. The offer stated that if appellee did not provide
No. 19AP-157                                                                                 2

written notice to appellant within the relevant time periods that the contingencies were
satisfied or that appellee wished to terminate the transaction, the contingencies would be
deemed waived. The offer provided for a closing date of August 31, 2017, or within 20 days
of all contingencies being removed.
       {¶ 3} Appellant responded on June 19, 2017, with a counteroffer ("June 19th
counteroffer"), accepting the terms of the June 14th purchase offer with the following
changes: (1) a purchase price of $975,000, (2) the Property being sold "as is," (3) appellant
paying prorated taxes and assessments through the date of closing, but not retroactive taxes
or assessments after closing, and (4) a closing date of July 31, 2017. On June 22, 2017,
appellee responded with another counteroffer ("June 22nd counteroffer"), with the
following changes to the June 14th purchase offer: (1) a purchase price of $975,000, (2) the
purchase being contingent on an inspection of the Property, (3) appellant paying prorated
taxes and assessments through the date of closing, but not retroactive taxes or assessments
after closing, and (4) a closing date of July 31, 2017 with the option for one 15-day extension
to be granted if requested. That same date, appellant accepted the June 22nd counteroffer
by initialing and signing the counteroffer document.
       {¶ 4} After an inspection of the Property was conducted, appellee sent a proposed
contract addendum on July 11, 2017, using a form document, requesting a reduction in the
purchase price to $950,000 ("July 11th addendum"). Appellant responded on July 14, 2017
indicating it would agree to a new purchase price of $965,000 provided that appellee would
agree to waive all contingencies, appellee's earnest money deposit would be non-refundable
to be applied to the purchase price at closing, and that closing would be completed on or
before July 28, 2017. On July 17, 2017, appellee responded with another proposed contract
addendum ("July 17th addendum") agreeing to a purchase price of $965,000 and
indicating it was satisfied with any contingencies related to the property inspection, and
that all other terms and conditions from the June 14th purchase offer would remain the
same. On July 19, 2017, appellant responded by sending a termination notice, indicating it
did not accept the terms contained in the July 17th addendum and that it deemed the
contract for purchase of the Property to be terminated. That same day, appellant entered
into a contract to sell the Property to another entity, Todd Real Estate, Inc., for $1,025,000.
No. 19AP-157                                                                               3

       {¶ 5} Appellee filed a complaint in the Franklin County Court of Common Pleas
asserting claims for breach of contract, breach of the duty of fair dealing, and fraudulent
inducement. Appellee alleged the parties had a contract for sale of the Property that
appellant breached by unilaterally terminating it. Appellee moved for partial summary
judgment on its breach of contract claim, asserting the parties had entered into a contract
for sale of the Property based on the June 14th purchase offer, as modified by the June 22nd
counteroffer, and that there was no genuine issue of material fact as to whether appellant
breached the contract by unilaterally terminating it on July 19, 2017, and entering into a
contract for sale of the Property to Todd Real Estate, Inc. Appellant also filed a motion for
summary judgment, arguing there was no contract between the parties because they never
came to a meeting of the minds on the essential terms of the purchase.
       {¶ 6} In June 2018, the trial court issued a judgment granting appellee's motion for
partial summary judgment and denying appellant's motion for summary judgment. The
court concluded the parties entered into a contract for sale of the Property, based on the
June 14th purchase offer, the June 19th counteroffer, and the June 22nd counteroffer, and
the subsequent proposed contract addendums did not constitute termination of that
contract. The court further concluded appellant lacked authority to unilaterally terminate
the contract prior to the expiration of the contingencies and that by doing so appellant
breached the contract. In January 2019, the trial court conducted a damages hearing, and
subsequently issued a decision concluding that appellee's damages were $50,000,
determined by the difference between the contract price ($975,000) and the subsequent
sale price of the Property to Todd Real Estate, Inc. ($1,025,000). The trial court combined
its decision on the issue of damages with its earlier decision and entered a final judgment
granting summary judgment in favor of appellee on the breach of contract claim in the
amount of $50,000, plus interest.
II. Assignments of Error
       {¶ 7} Appellant appeals and assigns the following two assignments of error for our
review:
               [I.] The trial court erred when it granted partial summary
               judgment to the Appellee and denied the summary judgment
               motion of Appellant on the issue of whether an enforceable
               contract existed.
No. 19AP-157                                                                                4

               [II.] The trial court erred in determining damages when it
               used an arbitrary measure of damages for a breach of a real
               estate contract by seller.

III. Analysis
A. Determination that Appellant Breached a Contract With Appellee
       {¶ 8} Appellant asserts in its first assignment of error the trial court erred by
granting appellee's motion for partial summary judgment on the issue of breach of contract
and denying its motion for summary judgment on all claims. We review a grant of summary
judgment under a de novo standard. Capella III, LLC v. Wilcox, 190 Ohio App.3d 133,
2010-Ohio-4746, ¶ 16 (10th Dist.), citing Andersen v. Highland House Co., 93 Ohio St.3d
547, 548 (2001).      "[D]e novo appellate review means that the court of appeals
independently reviews the record and affords no deference to the trial court's decision."
(Internal quotations and citations omitted.) Holt v. State, 10th Dist. No. 10AP-214, 2010-
Ohio-6529, ¶ 9. Summary judgment is appropriate where "the moving party demonstrates
that: (1) there is no genuine issue of material fact, (2) the moving party is entitled to
judgment as a matter of law, and (3) reasonable minds can come to but one conclusion and
that conclusion is adverse to the party against whom the motion for summary judgment is
made." Capella III at ¶ 16, citing Gilbert v. Summit Cty., 104 Ohio St.3d 660, 2004-Ohio-
7108, ¶ 6. In ruling on a motion for summary judgment, the court must resolve all doubts
and construe the evidence in favor of the non-moving party. Pilz v. Ohio Dept. of Rehab. &
Corr., 10th Dist. No. 04AP-240, 2004-Ohio-4040, ¶ 8.
       {¶ 9} The trial court concluded that appellant entered into a contract to sell the
Property to appellee and appellant breached that contract through its July 19, 2017 notice
of termination. The elements of a contract include an offer, acceptance, contractual
capacity, consideration, a manifestation of mutual assent, and legality of purpose. You v.
Northeast Ohio Med. Univ., 10th Dist. No. 17AP-426, 2018-Ohio-4838, ¶ 19. A meeting of
the minds as to the essential terms of a contract is a requirement to enforcing the contract.
Id. "In order to establish a claim for breach of contract, the plaintiff must show the
existence of a contract, performance by the plaintiff under the terms of that contract, breach
by the defendant, and damage or loss to the plaintiff." CosmetiCredit, LLC v. World Fin.
Network Natl. Bank, 10th Dist. No. 14AP-32, 2014-Ohio-5301, ¶ 13. The existence of a
contract and its meaning are questions of law. You at ¶ 20.
No. 19AP-157                                                                               5

       {¶ 10} Based on our review of the record, we find that appellee's June 14th purchase
offer, as modified by appellee's June 22nd counteroffer and accepted by appellant,
constituted a contract. All essential elements of a contract were present: appellee made an
offer to purchase the Property, which was specifically identified, appellant accepted that
offer, and the agreement involved consideration, in the form of a $975,000 payment for the
Property. Thus, as of June 22, 2017, when appellant accepted the June 22nd counteroffer,
the parties had a contract for sale of the Property.
       {¶ 11} Pursuant to the property inspection contingency included in the contract,
appellee had 30 days after the offer was accepted to have the property inspected. Under
the terms of the contract, appellee could give written notice within that same 30-day period
that the contingencies had been satisfied or that appellee wished to terminate the contract.
If appellee failed to do so, the contingencies would be deemed to have been waived.
Therefore, appellee had until July 22, 2017 to have the Property inspected and notify
appellant that the contingencies were satisfied or that it wished to terminate the contract.
The agreement provided that the transaction would close no later than July 31, 2017 unless
appellee requested a 15-day extension, which appellant was obligated to grant. As of
July 19, 2017, when appellant sent its termination notice, the time for appellee to act under
the inspection contingency had not expired.
       {¶ 12} Appellant argues the July 11th addendum constituted a rejection of the
parties' agreement and a counteroffer by appellee. Because we have concluded there was a
contract for sale of the Property as of June 22, 2017, appellant appears to effectively argue
that the July 11th addendum was a repudiation of the existing contract and an attempt to
negotiate a new contract on different terms. Repudiation of a contract must be expressed
in clear and unequivocal terms. Haman Ents. Inc. v. Sharper Impressions Painting Co.,
10th Dist. No. 15AP-50, 2015-Ohio-4967, ¶ 23. "A mere request for a change in terms or
for cancellation does not constitute a repudiation." Id. Appellant cites language in the
July 11th addendum stating it would supersede the contract and claims that use of the term
"supersede" indicated appellee sought to renegotiate the parties' agreement, rather than
simply modify the existing agreement. However, the language of the July 11th addendum
indicated it would only supersede any conflicting provisions in the contract, thus implicitly
acknowledging the existing agreement formed by the June 14th purchase offer, as modified
No. 19AP-157                                                                                 6

by the June 22nd counteroffer. Under these circumstances, we find the July 11th addendum
did not constitute a repudiation of the contract by appellee or a notice of termination by
appellee under the contingency provisions of the contract. As of July 19, 2017, when
appellant sent its notice of termination, the parties had a binding contract which did not
include provisions permitting appellant to unilaterally terminate the contract. Therefore,
appellant's July 19, 2017 termination notice constituted a breach of contract.
          {¶ 13} Appellant further argues it was excused from performing under the contract
because appellee did not secure financing for a portion of the purchase price, as provided
in the June 14th purchase offer. Appellee attached to its complaint a commitment letter
from a bank arranging for financing of the transaction. Appellant argues this letter was
insufficient because it was not signed by appellee until July 19, 2017, which was the same
day the acceptance window for the July 17th addendum closed. However, under the terms
of the contract the sale would not close until July 31, 2017. Because nearly two weeks
remained until the closing date, appellee had additional time to secure financing before
closing. Moreover, appellee's owner testified at the damages hearing that the company had
sufficient cash to purchase the Property if there were any problems with financing.
          {¶ 14} Based on our review of the record, we conclude the trial court did not err by
granting appellee's motion for summary judgment because there was no genuine issue of
material fact as to whether the parties had a contract for sale of the Property and whether
appellant breached that contract by terminating it and selling the Property to another
entity.
          {¶ 15} Accordingly, we overrule appellant's first assignment of error.
B. Determination of Damages for Breach of Contract
          {¶ 16} Appellant claims in its second assignment of error the trial court erred in
determining the damages due to appellee. The amount of damages to be awarded in a
breach of contract action is a factual issue; therefore, it is within the factfinder's province
to determine the amount of damages to be awarded. Mid Am. Constr., LLC v. Univ. of
Akron, 10th Dist. No. 18AP-846, 2019-Ohio-3863, ¶ 88. "[A]ppellate courts review an
award of damages in a bench trial under the manifest-weight-of-the-evidence standard."
Id. Under the manifest-weight standard, we must determine whether some competent,
No. 19AP-157                                                                               7

credible evidence supports the trial court's damages award. Alternatives Unlimited-
Special, Inc. v. Ohio Dept. of Edn., 10th Dist. No. 12AP-647, 2013-Ohio-3890, ¶ 35.
       {¶ 17} One measure of damages for breach of a real estate contract is the difference
between the original contract price and the fair market value of the property at the time of
the breach. Triangle Properties, Inc. v. Homewood Corp., 10th Dist. No. 12AP-933, 2013-
Ohio-3926, ¶ 46. See also Alternatives Unlimited-Special at ¶ 29-31 (discussing
expectation and reliance damages for breach of contract). "It 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 Properties at ¶ 46, citing Roesch v. Bray, 46 Ohio App.3d 49, 50 (6th
Dist.1988). See also Father's House Internal., Inc. v. Kurguz, 10th Dist. No. 15AP-1046,
2016-Ohio-5945, ¶ 19 (noting the general rule that a seller may recover the difference
between the contract price and the fair market value of property at the time of the breach
of contract).
       {¶ 18} The trial court concluded the appropriate measure of damages in this case
was the difference between appellee's contract price to purchase the Property and the fair
market value of the Property at the time of the breach. Appellee attached to its complaint
a copy of a real estate purchase contract dated July 17, 2017, and signed by appellant on
July 19, 2017, providing that Todd Real Estate, Inc. would purchase the Property from
appellant for $1,025,000. Appellant and appellee stipulated to the accuracy of the contract.
The trial court relied on the contract between appellant and Todd Real Estate, Inc. to
establish the fair market value of the Property at the time of the breach, asserting it was a
sale on the open market within two weeks of the breach of contract. The court held appellee
was entitled to the difference between its contract price with appellant ($975,000) and the
contract price between appellant and Todd Real Estate, Inc. ($1,025,000) and, thus,
awarded appellee $50,000 in damages.
       {¶ 19} Appellant argues the trial court erred by relying on the sale price of the
Property to Todd Real Estate, Inc. as the fair market value of the property without any other
evidence that this was a true indicator of fair market value at the time of the breach of
contract. Citing this court's decision in Mildred Hine Trust v. Buster, 10th Dist. No. 07AP-
277, 2007-Ohio-6999, appellant argues appellee failed to satisfy the burden of establishing
No. 19AP-157                                                                                 8

that the subsequent sale price was the fair market value of the property at the time of the
breach.
       {¶ 20} Hine Trust involved a scenario where prospective buyers rescinded an offer
to purchase a residential property, which had been accepted by the seller, and the property
ultimately sold for a lower price than the original bid. Hine Trust at ¶ 6. The seller sued
the prospective buyers to recover the difference between their bid and the resale price. The
trial court granted summary judgment in favor of the seller and awarded damages equal to
the difference between the original contract price and the resale price. Id. at ¶ 8. On appeal,
this court noted that, as a general rule, Ohio courts held that a party seeking to recover
damages needed to present sufficient evidence to establish that a resale price was a true
indicator of fair market value at the time of a breach. Id. at ¶ 13. Accordingly, Ohio courts
held that a trial court generally erred by simply awarding the difference between an original
contract price and a resale price on the assumption that the resale price constituted the fair
market value of the property. Id. at ¶ 14. The court noted it was necessary to consider
factors such as " 'the length of time between the breach and resale, the terms of the original
contract and the resale, and any evidence as to the stability of the real estate market during
the months between the breach and resale, along with any other relevant factors, to
determine if the resale price is sufficient evidence of the fair market value of the property
on the date of the breach.' " Id., quoting Loft v. Sibcy-Cline Realtors, 1st Dist. No. C-
880446 (Dec. 13, 1989).
       {¶ 21} Although the seller in Hine Trust submitted only the settlement statement
from the resale of the property to establish the fair market value, this court affirmed the
trial court's damages award. The court held that the seller satisfied its burden of proof by
submitting the resale settlement statement because the resale occurred as a result of
competitive bidding within one month of the breach on terms identical to those offered in
the original contract. Hine Trust at ¶ 16. Thus, the court effectively found that under those
circumstances the resale settlement statement was sufficient and independent evidence
was not necessary to establish the fair market value of the property.
       {¶ 22} In the present case appellee only submitted evidence of the subsequent sale
price of the Property to Todd Real Estate, Inc. and did not provide any independent
appraisal or assessment of the fair market value of the Property at the time of the breach.
No. 19AP-157                                                                              9

Appellant claims this was insufficient to satisfy the burden of establishing that the
subsequent sale price was a true indicator of the fair market value of the Property. As in
Hine Trust, however, the subsequent sale of the Property in this case occurred close in time
to the breach of contract, with appellant accepting the subsequent purchase offer the same
date it notified appellee it was terminating the contract. The terms of both contracts were
similar, with appellant due to receive the purchase price in cash at closing, although the
financing details of each transaction were different.     The trial court concluded that
subsequent sale represented the fair market value of the Property because it occurred on
the open market shortly after the breach of contract. Thus, similar to Hine Trust, in
awarding damages the trial court considered the relevant factors of timing and terms in
ascertaining whether the subsequent sale price established the fair market value of the
Property. Applying the manifest weight standard, we conclude the subsequent sale contract
constituted competent, credible evidence to support the trial court's damage award.
       {¶ 23} Accordingly, we overrule appellant's second assignment of error.
IV. Conclusion
       {¶ 24} For the foregoing reasons, we overrule appellant's two assignments of error
and affirm the judgment of the Franklin County Court of Common Pleas.
                                                                       Judgment affirmed.
                          SADLER, P.J., and KLATT, J., concur.