Lynn v. Schulte , 2015 Ohio 5527 ( 2015 )

[Cite as Lynn v. Schulte, 2015-Ohio-5527.]
IN THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
ASHTABULA COUNTY, OHIO
LARRY LYNN, : OPINION
Plaintiff-Appellant, :
CASE NOS. 2015-A-0017
- vs - : 2015-A-0026
DANA SCHULTE, :
Defendant-Appellee. :
Civil Appeal from the Ashtabula County Court of Common Pleas, Case No. 2013 CV
151.
Judgment: Reversed and remanded.
Larry Lynn, pro se, 4243 Harper Street, Perry, OH 44081 (Plaintiff-Appellant).
Christopher M. Newcomb, Christopher M. Newcomb, Esq., LLC, 213 Washington
Street, Conneaut, OH 44030 (For Defendant-Appellee).
DIANE V. GRENDELL, J.
{¶1} Plaintiff-appellant, Larry Lynn, appeals the judgment of the Ashtabula
County Court of Common Pleas, finding in favor of defendant-appellee, Dana Schulte,
for breach of contract. The issues before this court are whether a determination that a
party has materially breached a contract is nullified where the non-breaching party
subsequently enters into a purportedly illegal contract with a third party in mitigation of
the breach, and whether a trial court may award, as damages for breach of contract, the
costs of hiring a third-party to complete the contract without considering the original
contract price. For the following reasons, we reverse the decision of the lower court
with respect to damages and remand this matter with instructions for the court to award
damages in a manner consistent with this opinion.
{¶2} On February 1, 2013, Lynn filed a Small Claims Complaint against Schulte
in Ashtabula Municipal Court, Small Claims Division, seeking judgment in the amount of
$3,000 for “labor and materials provided at 1636 West 8th Street, Ashtabula.”
{¶3} On February 21, 2013, Schulte filed an Answer and Counterclaims,
seeking judgment in excess of $15,000 for Breach of Contract, Negligence, Slander of
Title, and Fraudulent Inducement.
{¶4} On February 25, 2013, the case was transferred to the Ashtabula County
Court of Common Pleas.
{¶5} On September 18, 2014, the case was tried before a magistrate.
{¶6} On December 4, 2014, a Magistrate’s Decision was issued. The following
findings were made by the magistrate:
Defendant is the owner of residential rental property located at
1636 West 8th Street in Ashtabula, Ohio. On September 13, 2010,
the Ohio Department of Health (“ODH”) conducted a public health
lead risk assessment at Defendant’s property, whereupon hazards
related to lead paint were discovered. Defendant received an order
from the ODH dated October 21, 2010 which detailed the work
necessary to abate the hazard. * * * The order demanded that the
hazard be abated within 90 days, and specified that the work was
to be done by individuals who had been properly trained and/or
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certified in lead abatement. The parties entered into a one-page
contract * * *, dated September 28, 2011. * * * The contract listed
[six] tasks which Plaintiff was to perform in order to bring the
residence into compliance with the ODH order. * * * The parties
originally agreed that Defendant would provide the new windows
and doors, and agreed on a total contract price of $7,500.00.
However, this term was changed to $10,000.00 when it was agreed
that Plaintiff would provide the new windows and doors. On the
contract signed by the parties, the original contract price of
$7,500.00 is crossed off and the new $10,000.00 price is
handwritten above it. The contract called for three (3) equal
payments, an initial payment of $2,500.00, a second $2,500.00
payment upon completion of items 1-4 [listed in the contract], and a
third $2,500.00 payment when all of Plaintiff’s obligations under the
contract had been performed. Despite the payment plan set forth in
the written contract, which the parties opted not to amend, both
parties testified that Defendant’s initial payment to Plaintiff was
$5,000.00. * * * Plaintiff and his Son, Levi Lynn, testified that at
some point they completed all the work set forth in items 1-4 above.
Both parties testified that when Plaintiff felt he had completed items
1-4, he demanded further payment. * * * Defendant refused to pay
Plaintiff any additional funds because Plaintiff did not complete
items 1-4 prior to demanding further payment. Plaintiff refused to
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perform any more work under the contract until he received further
payment. Defendant testified that because the work set forth in the
ODH order dated October 21, 2010 * * * was not completed within
the specified 90 days, he received from the ODH a Notice of
Noncompliance and Order to Vacate dated February 10, 2012.
Defendant then contacted the Health Department, advising them of
the situation with Plaintiff. An ODH inspector then came to the
residence, met with general contractor and project manager, Jason
Hamilton, and advised Hamilton as to the work which needed to be
done in order to comply with the October 21, 2010 order. Mr.
Hamilton is not licensed or trained in lead abatement, but
completed the work under the guidance and direction of the ODH
inspector. Mr. Hamilton submitted a bill to Defendant for the work
completed. * * * The ODH conducted a clearance examination,
and Defendant received an ODH Notice of Compliance dated
March 13, 2012 * * * indicating that the hazards set forth in the
initial October 21, 2010 order * * * had been abated. * * * [U]pon
weighing the credibility and weight of the evidence presented, the
Magistrate does not find that Plaintiff completed the work set forth
under items #3 and 4 of the contract prior to demanding additional
payment. * * * The evidence dictates that Defendant is entitled to
compensation from Plaintiff for funds paid to Jason Hamilton for the
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completion of Plaintiff’s contractual obligations, and for any rent lost
due to Plaintiff’s breach of contract.
{¶7} On December 24, 2014, Lynn filed objections to the Magistrate’s Decision.
{¶8} On January 5, 2015, the trial court dismissed the objections as untimely,
inadvertently citing Civil Rule 53(D)(2)(b), which pertains to magistrate’s orders.
{¶9} On January 23, 2015, Lynn asked the trial court to review the timeliness of
his objections.
{¶10} On January 29, 2015, the trial court overruled Lynn’s request, construed
as a motion for reconsideration.
{¶11} On March 13, 2015, Lynn filed a Notice of Appeal from the January 29,
2015 Judgment Entry and the December 4, 2014 Magistrate’s Decision, assigned Court
of Appeals No. 2015-A-0017.
{¶12} On March 17, 2015, a hearing was held on damages before the trial court.
{¶13} On March 18, 2015, the trial court awarded Schulte “the sum of $3,846.26
for attorney fees; $5,200.00 for monies paid to Jason Hamilton to complete the job that
the Plaintiff was originally supposed to perform; the sum of $4,800.00 for lost rent; and
the sum of $365.00 for the final lead inspection.”
{¶14} On April 17, 2015, Lynn filed a Notice of Appeal from the March 18, 2015
Judgment Entry and the December 4, 2014 Magistrate’s Decision, assigned Court of
Appeals No. 2015-A-0026.
{¶15} On May 5, 2015, this court consolidated the appeals “for purposes of
briefing, oral argument, and disposition.”
{¶16} On appeal, Lynn raises the following assignments of error:
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{¶17} “[1.] The trial court committed prejudicial error in granting defendant-
appellees’ DANA SCHULTE favorable judgment based on the conclusion that his
handyman, JASON HAMILTON, could somehow go around the laws of the STATE OF
OHIO DEPARTMENT OF HEALTH (otherwise known as ODH) and perform [the] work
of a Licensed Lead Abatement Contractor without having the proper Lead Abatement
License nor the proper training to do so.”
{¶18} “[2.] The trial court committed prejudicial error in granting defendants-
appellees’ request for reimbursement of loss of rent (8 months x 600.00 per month or
4800.00) and for claimed wages paid to the handyman (in the amount of 5200.00) for
work that had nothing at all in common with the contract between plaintiff and
defendant.”
{¶19} As an initial matter, we note that this court’s ability to consider Lynn’s
arguments is limited by his failure to file timely objections to the Magistrate’s Decision
and failure to provide a transcript of the March 17, 2015 hearing on damages.
{¶20} “If the appellant intends to present an assignment of error on appeal that a
finding or conclusion is unsupported by the evidence or is contrary to the weight of the
evidence, the appellant shall include in the record a transcript of proceedings that
includes all evidence relevant to the findings or conclusion.” App.R. 9(B)(4). “[I]t is the
obligation of the appellant to make reasonable arrangements to ensure that the
proceedings the appellant considers necessary for inclusion in the record * * * are
transcribed * * *.” App.R. 9(B)(1).
{¶21} The Rules of Civil Procedure provide that the failure to file objections to a
magistrate’s decision results in the waiver of the right to assign its adoption by the trial
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court as error on appeal: “Except for a claim of plain error, a party shall not assign as
error on appeal the court’s adoption of any factual finding or legal conclusion * * * unless
the party has objected to that finding or conclusion as required by Civ.R. 53(D)(3)(b).”
Civ.R. 53(D)(3)(b)(iv).
{¶22} In his first assignment of error, Lynn contends that the magistrate erred in
determining that Jason Hamilton could perform lead abatement work without being
licensed: “Not only did the handyman, Mr. Hamilton, neither qualify nor perform the work
of the Licensed Abatement Contractor on the job, but it would have been illegal for him
to attempt such.” Appellant’s brief at 3. See R.C. 3742.02(B) (“[n]o person shall
knowingly authorize or employ an individual to perform lead abatement on a residential
unit * * * unless the individual who will perform the lead abatement holds a valid license
issued under section 3742.05 of the Revised Code”) and (C)(5) (“[n]o person shall * * *
[p]erform lead abatement without a valid lead abatement worker license issued under
section 3742.05 of the Revised Code”).
{¶23} Lynn’s argument fails to identify a reversible error in the Magistrate’s
Decision. Assuming, arguendo, that it was illegal for Schulte to employ Hamilton to
perform lead abatement work, that fact has no bearing on whether Lynn materially
breached the terms of the contract he entered into with Schulte. Primary responsibility
for the enforcement of Ohio’s lead abatement statutes resides with the director of
health. R.C. 3742.15 (complaints to the director of health); R.C. 3742.18 (the director of
health may request that civil action be taken); R.C. 3742.99 (the director of health may
request that criminal action be taken).
{¶24} The first assignment of error is without merit.
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{¶25} In his second assignment of error, Lynn contends that the trial court erred
in awarding $4,800 for lost rent and $5,200 to have Hamilton complete the work. Lynn
maintains it was impossible for Schulte to have lost eight months of rent at $600 per
month, when the initial contract was entered into in September 2011 and Schulte
received a favorable Clearance Examination Report in February 2012. Lynn further
notes that the invoice for services submitted by Hamilton was not signed, dated, or
properly itemized.
{¶26} Lynn’s arguments must necessarily fail because they rely on evidentiary
materials outside of the record on appeal, i.e., documents attached to his appellate
brief. These documents, which appear to be evidentiary exhibits, are not included in the
record inasmuch as the transcript of the hearing on damages was neither transcribed
nor filed. Such exhibits are to be filed with the transcript of the proceedings. App.R.
9(A)(1) and (B)(6)(g). Attaching evidentiary exhibits to the appellate brief does not
make them part of the record on appeal and, thus, subject to consideration in
determining the merits of the appeal. Jefferson Golf and Country Club v. Leonard, 10th
Dist. Franklin No. 11AP-434, 2011-Ohio-6829, ¶ 10 (“[e]xhibits solely appended to
appellate briefs are not properly part of the record, do not augment the record, and may
not be considered by us in the determination of an appeal”) (cases cited); State v.
Barnett, 3rd Dist. Auglaize No. 2-13-26, 2015-Ohio-224, ¶ 20 (“[e]vidence not made part
of the record that is attached to an appellate brief cannot be considered by a reviewing
court”) (citation omitted).
{¶27} Despite the lack of a transcript of the hearing on damages in the record,
the trial court’s award of damages is deficient on its face.
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{¶28} The trial court awarded Schulte “$5,200.00 for monies paid to Jason
Hamilton to complete the job that the Plaintiff was originally supposed to perform.” As
determined by the magistrate, the total contract price was $10,000 and Schulte had paid
Lynn $5,000. The proper measure of damages for a contractor’s breach in these
circumstances “is the cost of completing the work minus the unpaid part of the contract
price.” ABLE Roofing v. Pingue, 10th Dist. Franklin No. 10AP-404, 2011-Ohio-2868, ¶
24 (cases cited). Damages, representing the cost to Schulte of completing work under
the contract, “must be reduced by the amount withheld by [Schulte] (i.e., the unpaid
portion of the contract price) to avoid a windfall to [Schulte] in receiving the benefit of
the bargain.” Id. Here, the record fails to indicate that the cost of completing the work
was offset by the unpaid portion of the contract price.
{¶29} The second assignment of error is with merit to the extent indicated
above.
{¶30} For the foregoing reasons, the judgment of the Ashtabula County Court of
Common Pleas determining the amount of damages for Lynn’s breach of contract is
reversed and this matter is remanded with instructions for the trial court to enter a new
entry on damages that offsets the cost of completing the work under the contract by the
unpaid portion of the contract price. Costs to be taxed against the appellee.
TIMOTHY P. CANNON, P.J.,
THOMAS R. WRIGHT, J.,
concur.
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