Quitifan v. Shafiq , 2016 Ohio 4555 ( 2016 )

[Cite as Quitifan v. Shafiq, 2016-Ohio-4555.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Jamal Qutifan et al., :
Plaintiffs-Appellants, :
No. 15AP-814
v. : (C.P.C. No. 13CV-5257)
Mohammad Shafiq et al., : (REGULAR CALENDAR)
Defendants-Appellees. :
D E C I S I O N
Rendered on June 23, 2016
On brief: Stephen A. Moyer, for appellants. Argued:
Stephen A. Moyer.
On brief: Wright & Noble, LLC, and Scott E. Wright, for
appellees Ranjit Takhar, Rachpal Takhar, R&R Takhar Oil
Company, Inc., and R&A Corporation. Argued: Scott E.
Wright.
APPEAL from the Franklin County Court of Common Pleas
BROWN, J.
{¶ 1} Jamal Qutifan ("Jamal"), J.S.T. LLC of Ohio ("J.S.T."), U.B.H. LLC, and
Khalil Qutifan ("Khalil"), plaintiffs-appellants, appeal from the judgment of the Franklin
County Court of Common Pleas, in which the court granted summary judgment to R&A
Corporation ("R&A"), R&R Takhar Oil Co., Inc. ("R&R"), Ranjit Takhar ("Ranjit") and
Rachpal Takhar ("Rachpal"), defendants-appellees, denied Khalil's motion for summary
judgment, and denied summary judgment filed by Mohammad Shafiq ("Shafiq")
defendant.
{¶ 2} In 2011, Jamal, through his company J.S.T., leased and managed a Fuel
America gas station and convenience store. Ranjit and Rachpal, who are brothers, owned
No. 15AP-814 2
R&A and R&R. R&A is a business that purchases gas stations and convenience stores.
R&R is a wholesale gasoline distributor.
{¶ 3} The owner of the gas station that Jamal leased and managed went into
receivership. Jamal and his father, Khalil, approached Ranjit and Rachpal and proposed
that if Ranjit and Rachpal purchased the Fuel America station, they would then purchase
the gas station from Ranjit and Rachpal.
{¶ 4} Appellees drafted an agreement entitled "INTENT TO PURCHASE" ("the
agreement"), which provided the following:
THIS IS A LETTER OF INTENT TO PURCHASE THE
BUSINESS KNOWN AS FUEL AMERICA, 2676 CLEVELAND
AVE, COLUMBUS, OHIO. THE PURCHASE PRICE IS
$270,000.00 PLUS ALL COSTS ASSOCIATED WITH
BRIGNGING THE LOCATION TO MEET BUSTR [BUREAU
OF UNDERGROUND STORAGE TANK REGULATIONS]
STANDARDS, PLUS ANY OTHER REASONABLE COSTS
INVOLVED IN BUYING THIS PROPERTY, PLUS A PROFIT
OF $25,000.00 TO R&R TAKHAR OR IT'S AFFILIATED
COMPANY. THE CLOSING WILL BE WITHIN THIRTY
DAYS AFTER R&R PURCHASES IT FROM RECEIVER. THE
BUYER IS PUTTING DOWN A UNREFUNDABLE DEPOSIT
OF $____$5,000.00______. THE PROPERTY WILL BE
SOLD TO KHALIL A QUTIFAN ON THE SAME CONDITION
AS THE SELLER IS BUYING FROM RECEIVER. IF R&R
TAKHAR OR IT'S AFFILIATED COMPANIES DO NOT BUY
THE PROPERTY FOR ANY REASON THEN THE $5,000.00
WILL BE REFUNDED BACK TO THE BUYER. THE BUYER
WILL ALSO BE REQUIRED TO SIGN A FUEL SUPPLY
AGREEMENT WITH R&R TAKHAR OIL COMPANY, INC.
(Sic passim; Pl.'s Ex. J.)
{¶ 5} Khalil and Rachpal signed the agreement on January 13, 2011. The actual
parties to the agreement were Khalil and R&R. Pursuant to the terms of the agreement,
Khalil paid R&R a $5,000 deposit upon signing the agreement. On January 17, 2011,
Khalil paid R&R $15,000. It is disputed whether the $15,000 payment was a fuel deposit,
paid pursuant to the terms of the agreement, or a payment for prior delinquencies
unrelated to the agreement.
{¶ 6} Appellants claim that Khalil told appellees in February 2011 that he was
ready to make payment and close the sale, but appellees continued to delay the sale.
No. 15AP-814 3
Appellees counter that Khalil never suggested that they close the sale. Appellants claim
that at a meeting in late February 2011, Rachpal told Khalil he could no longer close the
sale because it was past 30 days after signing the agreement, and the agreement contained
a deadline that specified closing had to occur prior to that time. Appellants claim Ranjit
then told Khalil that the new price to close the deal would be $393,000.
{¶ 7} On March 24, 2011, appellees purchased the property but, according to
appellants, would not sell it to appellants pursuant to the terms of the agreement. Jamal
continued to lease the property from appellees thereafter. Appellees claim that Jamal was
frequently late with his gasoline and lease payments during this time. On February 9,
2013, appellees changed the locks on the convenience store at the gas station. On
February 11, 2013, the convenience store reopened under a new lessee.
{¶ 8} On May 10, 2013, appellants filed the present action. On May 9, 2014,
appellants filed an amended complaint. On February 3, 2015, appellants filed a second
amended complaint, adding R&R as a defendant. On December 31, 2014, appellants filed
a motion for summary judgment. On January 16, 2015, appellees filed a motion for
summary judgment, seeking to dismiss the action. On March 24, 2015, Shafiq filed a
motion for partial summary judgment.
{¶ 9} On August 10, 2015, the trial court issued a judgment which denied
appellants' motion for summary judgment, denied Shafiq's motion for partial summary
judgment, and granted appellees' motion for summary judgment, finding that the
agreement was not a valid contact because it violated the statute of frauds. The court
found that the agreement was a mutual expression of the parties' intent to negotiate in
good faith a written contract for the sale of real property. The parties subsequently
dismissed all other pending claims. Appellants appeal the judgment of the trial court,
asserting the following assignment of error:
The trial court erred when it denied Appellant summary
judgment and granted Appellees summary judgment,
dismissing Appellant's claim for breach of contract and
specific performance.
(Sic passim.)
{¶ 10} Appellants argue in their assignment of error that the trial court erred when
it denied their motion for summary judgment and granted appellees' motion for summary
No. 15AP-814 4
judgment. Summary judgment is appropriate when 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 when
viewing the evidence most strongly in favor of the non-moving party, and that conclusion
is adverse to the non-moving party. Hudson v. Petrosurance, Inc., 127 Ohio St.3d 54,
2010-Ohio-4505, ¶ 29; Sinnott v. Aqua-Chem, Inc., 116 Ohio St.3d 158, 2007-Ohio-5584,
¶ 29. Appellate review of a trial court's ruling on a motion for summary judgment is de
novo. Hudson at ¶ 29. This means that an appellate court conducts an independent
review, without deference to the trial court's determination. Zurz v. 770 W. Broad AGA,
LLC, 192 Ohio App.3d 521, 2011-Ohio-832, ¶ 5 (10th Dist.); White v. Westfall, 183 Ohio
App.3d 807, 2009-Ohio-4490, ¶ 6 (10th Dist.).
{¶ 11} When seeking summary judgment on grounds that the non-moving party
cannot prove its case, the moving party bears the initial burden of informing the trial
court of the basis for the motion and identifying those portions of the record that
demonstrate the absence of a genuine issue of material fact on an essential element of the
non-moving party's claims. Dresher v. Burt, 75 Ohio St.3d 280, 293 (1996). The moving
party does not discharge this initial burden under Civ.R. 56 by simply making a
conclusory allegation that the non-moving party has no evidence to prove its case. Id.Rather, the moving party must affirmatively demonstrate by affidavit or other evidence
allowed by Civ.R. 56(C) that the non-moving party has no evidence to support its claims.
Id. If the moving party meets its burden, then the non-moving party has a reciprocal
burden to set forth specific facts showing that there is a genuine issue for trial.
Civ.R. 56(E); Dresher at 293. If the non-moving party does not so respond, summary
judgment, if appropriate, shall be entered against the non-moving party. Id.{¶ 12} In the present case, the trial court found that the agreement did not qualify
as a valid written document for the purchase of land in compliance with the statute of
frauds set forth in R.C. 1335.05. The trial court viewed the agreement as an inartfully
drafted document that could best be described as a mutual expression of the parties'
intent to negotiate in good faith a written contract for real property. The court found that
the agreement did not comply with R.C. 1335.05 for the following reasons: (1) the
agreement described an "INTENT TO PURCHASE THE BUSINESS KNOWN AS FUEL
No. 15AP-814 5
AMERICA," and not land, (2) even if the agreement did describe land, the parties knew
that the seller, R&R, was not the owner of the property and would have to first
successfully purchase the property before it could enter into any enforceable contract for
the sale of such property, (3) the agreement was not specific or ascertainable as to the
actual terms of purchase, because it indicated the purchase price was $270,000, plus
"ALL COSTS" associated with bringing the location to meet Bureau of Underground
Storage Tank Regulations ("BUSTR") standards, plus "ANY OTHER REASONABLE
COSTS" involved in buying the property, and these additional costs were not agreed upon.
The trial court concluded that appellants' claims for specific performance, breach of
contract, and anticipatory breach of contract failed due to the lack of a valid contract.
{¶ 13} As it applies to contracts concerning real estate, the statute of frauds
ensures " 'that transactions involving realty interests are commemorated with sufficient
solemnity. A signed writing provides greater assurance that the parties and the public can
reliably know when such a transaction occurs. It supports the public policy favoring
clarity in determining real estate interests and discourages indefinite or fraudulent claims
about such interests.' " Beaverpark Assocs. v. Larry Stein Realty Co., 2d Dist. No. 14950
(Aug. 30, 1995), quoting N. Coast Cookies, Inc. v. Sweet Temptations, Inc., 16 Ohio
App.3d 342, 348 (8th Dist.1984). Agreements that do not comply with the statute of
frauds are unenforceable. Hummel v. Hummel, 133 Ohio St. 520 (1938).
{¶ 14} R.C. 1335.05 sets forth Ohio's Statute of Frauds, providing, in pertinent
part:
No action shall be brought whereby to charge the defendant
* * * upon a contract or sale of lands, tenements, or
hereditaments, or interest in or concerning them * * * unless
the agreement upon which such action is brought, or some
memorandum or note thereof, is in writing and signed by the
party to be charged therewith or some other person thereunto
by him or her lawfully authorized.
{¶ 15} This court has previously found that " '[a]ny signed memorandum is
sufficient to satisfy the Statute of Frauds so long as it (1) identifies the subject matter of
the agreement, (2) establishes that a contract has been made, and (3) states the essential
terms with reasonable certainty.' " Lamkin v. First Community Bank, 10th Dist.
No. 15AP-814 6
No. 00AP-935 (Mar. 29, 2001), quoting Busler v. D & H Mfg., Inc., 81 Ohio App.3d 385,
389 (10th Dist.1992), citing N. Coast Cookies at 349.
{¶ 16} Applying the legal principles regarding the statute of frauds to the
agreement in the present case, we find the trial court erred when it found appellees were
entitled to summary judgment as a matter of law. Although we agree with the trial court
that the agreement initially describes only an "INTENT TO PURCHASE THE BUSINESS
KNOWN AS FUEL AMERICA" and not the actual land, the remainder of the agreement
includes the street address of the real property and refers several times to the subject
matter as "THIS PROPERTY" or "THE PROPERTY." There was no dispute between the
parties as to which parcel of land the agreement was referring. We find this language
sufficiently identifies the subject matter of the agreement as the real property and
business located thereon.
{¶ 17} The trial court also found that the agreement was not a valid contract
pursuant to the statute of frauds because the parties knew that the seller, R&R, was not
the owner of the property and would have to first successfully purchase the property
before they could enter into any enforceable contract for the sale of such property. We fail
to see how this fact places the agreement in violation of R.C. 1335.05. The trial court cites
no authority for this proposition, and we can find none. If the trial court was finding that
the agreement did not establish that a contract had been made, as referenced in the
second requirement in N. Coast Cookies, we find such finding erroneous. "An agreement
for the sale of real estate is binding even though the offeror may not own the property
at the execution of the agreement." Blackburn v. T & L Builders, 8th Dist. No. 71875
(Feb. 12, 1998). "The key element is whether at the time for consummation of the contract
the seller is in a position to carry out the contract." Id., citing Brow v. Cannady, 8th Dist.
No. 16903 (May 8, 1939). Here, the contract was clear that appellees could not sell the
property until they acquired it from the current owner. Both parties were completely
aware of the contingency, and this arrangement was the underlying basis for entering the
contract in the first place.
{¶ 18} As for the trial court's finding that the purchase price was not specific or
ascertainable from the agreement because it did not indicate specific figures for "ALL
COSTS" associated with bringing the location to meet BUSTR standards and "ANY
No. 15AP-814 7
OTHER REASONABLE COSTS" involved in purchasing the property, we find the
agreement stated the essential price terms with reasonable certainty. A contract price
must be definite and certain. Preston v. First Bank of Marietta, 16 Ohio App.3d 4, 6 (4th
Dist.1983). If a price term is "so vague and indefinite that one party may charge what he
will while the other party must guess at his obligation, the contract is illusory and
unenforceable." Id. However, a contract is not unenforceably vague if the agreed price is
not specifically stated. Id. (finding that, although a contract must be definite as to price, it
is just as well-established that parties may make a binding contract where the price is not
stated exactly). The law may impose a presumption of reasonableness or "fair value" when
services are performed pursuant to an express contract that does not specify a price.
Oglebay Norton Co. v. Armco, Inc., 52 Ohio St.3d 232, 236-37 (1990) (allowing an
analogy of the Uniform Commercial Code's presumption of reasonableness for a missing
or open price term to a services contract).
{¶ 19} In the present case, "all costs" is a reasonably descriptive term under the
circumstances. The agreement specifies that appellees would perform all necessary work
to bring the property into compliance with BUSTR, and appellants would reimburse
appellees for all of those costs. The obligation was not unlimited and did not subject
appellees to indefinite liability. Instead, appellees agreed to pay for "all" of the costs
associated with BUSTR compliance. The parties were both experienced in business and
gas stations; thus, they were aware of the potential costs of BUSTR compliance. Although
the phrase "any other reasonable costs" is less definitive, we find it sufficient to satisfy the
requisites for a valid contract consistent with the statute of frauds. It clearly evinces an
agreement by the parties that appellees would pay any additional costs in procuring the
property, with the limitation that they be reasonable. Again, the parties were both
experienced in business and knew appellees would incur additional costs in obtaining the
property for resale.
{¶ 20} We find Ruhe v. Hemmelgarn, 2d Dist. No. 96-CA-1423 (Aug. 22, 1997),
instructive. In Ruhe, the court found contract language similar to that at bar sufficiently
satisfied the statute of frauds in a case relating to the sale of real property. In that case, the
parties executed no written contract for the sale of land, but the landowner prepared a
receipt when the purchaser paid him $300. The receipt showed the purchase price and
No. 15AP-814 8
balance due and indicated that the purchaser still owed "any other costs to close" and
"[r]easonable survey costs." Id. The court of appeals determined that the receipt satisfied
the statute of frauds, despite that it did not contain a specific statement of agreement or
exact prices for the closing and survey costs. The court found that a reasonable inference
to be drawn from the statements in the receipt, including those as to "any other costs to
close" and "[r]easonable survey costs," was that an agreement of sale was made. Id. The
court concluded that the essential terms were identified with reasonable certainty, since
the receipt contained the parties' names, subject matter, and terms of purchase. Thus, the
receipt satisfied the statute of frauds. Similarly, in the present case, the language "all
costs" and "any other reasonable costs" sufficiently described the terms of purchase and
demonstrated that the parties made an agreement of sale.
{¶ 21} We also note that the court in Ruhe made another finding relevant to the
present case with regard to the identification of the property at issue. The court in Ruhe
found that, although the landowner claimed the receipt did not adequately reference the
property at issue because it generically described a one-acre lot when there were several
lots for sale, the surrounding evidence demonstrated that both parties knew exactly which
property was the subject of negotiations. Likewise, in the present case, despite the
reference in the agreement to "THE BUSINESS KNOWN AS FUEL AMERICA," there was
never any dispute that the parties knew both the gas station/convenience store and the
real property upon which it sat were the subject of the agreement.
{¶ 22} For these reasons, and being mindful that we must construe the evidence
most strongly in favor of appellants in adjudicating appellees' motion for summary
judgment, we find the trial court erred when it granted appellees summary judgment on
the basis that the agreement did not satisfy the statute of frauds.
{¶ 23} In its decision, the trial court also found that appellees were entitled to
summary judgment on appellants' claim for specific performance, money damages for
breach of contract, and anticipatory breach of contract. The trial court reasoned that these
claims were all dependent upon a valid written contract, and the present agreement did
not constitute such. Given our finding above, however, the trial court's basis for rejecting
these claims is no longer valid. Thus, these issues must be returned to the trial court upon
remand for consideration.
No. 15AP-814 9
{¶ 24} The court also found that appellants were not entitled to recover on their
anticipatory breach of contract claim on the additional ground that the undisputed facts
in the record established that at least one of the reasons no written purchase agreement
was presented by appellants within 30 days of March 24, 2011, was that appellants did not
have the $270,000 purchase price, and even if they had such funds, there was no evidence
that appellants were willing to assume potential personal liability to bring the property
into compliance with BUSTR regulations. The court found that Ranjit and Rachpal
challenged appellants to present probative evidence on these issues, but appellees failed
to respond with Civ.R. 56 evidence establishing a genuine issue of material fact.
{¶ 25} " 'An anticipatory breach of contract by a promisor is a repudiation of the
promisor's contractual duty before the time fixed for performance has arrived.' " Metz v.
Am. Elec. Power Co., Inc., 172 Ohio App.3d 800, 2007-Ohio-3520, ¶ 35 (10th Dist.),
quoting McDonald v. Bedford Datsun, 59 Ohio App.3d 38, 40 (8th Dist.1989). To prevail
on a claim of anticipatory breach of contract, a plaintiff must establish that there was a
contract containing some duty of performance not yet due and, by word or deed, the
defendant refused future performance, causing damage to the plaintiff. Id. Thus, "[t]he
repudiation must be expressed in clear and unequivocal terms." Id. A mere request for a
change in terms or for cancellation does not constitute repudiation. Sunesis Trucking Co.,
Inc. v. Thistledown Racetrack, L.L.C., 8th Dist. No. 100908, 2014-Ohio-3333, ¶ 31.
Similarly, a " 'mere expression of doubt as to willingness or ability to perform is
insufficient to constitute repudiation' of a contract." Id., quoting Farmers Comm. Co. v.
Burks, 130 Ohio App.3d 158, 172 (3d Dist.1998).
{¶ 26} In the present case, appellants' claim for anticipatory breach of contract was
based upon their contention that Khalil was ready and willing to proceed with a purchase
pursuant to the agreement, and appellants expressed such to appellees, but appellees
(1) refused to close the transaction, (2) contended the 30-day deadline to close, as set
forth in the agreement, had passed as of late February 2011, and (3) increased the
purchase price by $100,000 in February 2011. In support of his claim that he was ready
and willing to proceed with the purchase, Khalil submitted with his motion for summary
judgment a bank statement from February 11 through March 10, 2011, showing he
deposited $290,000 into his bank account on February 11, 2011. Khalil also submitted an
No. 15AP-814 10
affidavit indicating that he was ready and willing to proceed with the sale, and further
averred he would have been able to obtain additional monies if necessary to close the sale.
{¶ 27} After reviewing the record, we find the trial court's cited bases were not
valid grounds to support summary judgment in favor of appellees on appellants'
anticipatory breach of contract claim. Initially, there is nothing in the agreement that
specifies appellants were required to show proof of their ability to pay the $270,000
purchase price, plus the other costs specified in the agreement, at any time prior to closing
or that appellants were required to express a willingness to assume potential personal
liability to bring the property into compliance with BUSTR. Thus, because these
conditions were not requirements under the agreement, the alleged violation of these
conditions was not a valid basis to grant appellees summary judgment.
{¶ 28} Notwithstanding, the trial court's reasoning is based upon flawed
evidentiary material. The trial court cited the affidavits of Ranjit and Rachpal that
included clearly erroneous assumptions and irrelevant information. In Ranjit's affidavit
attached to appellees' motion for summary judgment, Ranjit averred that appellants told
him at a February 10-11, 2011 meeting that appellants did not have the money to proceed
with the transaction. Ranjit also averred that Khalil could not have shown him the
February 11 through March 10, 2011 bank statement at the February 10-11, 2011 meeting
because the bank statement had not been generated as of that date.
{¶ 29} However, in their motion for summary judgment, affidavits, and
depositions, Ranjit and Rachpal express the belief that the deadline for appellants to
purchase under the agreement was February 12, 2011. Apparently, Ranjit and Rachpal
believed the agreement required Khalil to perform within 30 days of the execution of the
agreement, which was January 13, 2011. However, the agreement is clear that "THE
CLOSING [between appellants and appellees] WILL BE WITHIN THIRTY DAYS AFTER
R&R PURCHASES IT FROM RECEIVER." Thus, whether appellants expressed to Ranjit
on February 10-11, 2011 that they did not have the money to proceed with the transaction
is not relevant to whether appellants would be able to perform on April 23, 2011, which
would have been 30 days after appellees purchased the property from the receiver.
Furthermore, whether appellants showed Ranjit the bank statement at the February 10-
11, 2011 meeting is irrelevant. Appellees are apparently under the mistaken impression
No. 15AP-814 11
that appellants were required to show them evidence of certified or guaranteed funds
sufficient to cover the price of the transaction, which is nowhere in the agreement.
Nevertheless, contrary to the trial court's finding that appellants failed to present any
evidence that they were ready and willing to proceed with the purchase prior to the 30-
day deadline, the bank statement was probative evidence of such. However, as mentioned,
we need not address these issues, as the agreement did not require that appellants
demonstrate they had the available funds at any particular point prior to the 30-day
deadline. Therefore, the trial court could not have rendered summary judgment to
appellees on appellants' anticipatory breach of contract claim on these grounds. For the
foregoing reasons, we find the trial court erred when it granted summary judgment to
appellees on the bases relied upon in its judgment. Appellants' assignment of error is
sustained.
{¶ 30} Accordingly, appellants' single assignment of error is sustained, the
judgment of the Franklin County Court of Common Pleas is reversed, and this matter is
remanded to that court for further proceedings in accordance with law, consistent with
this decision.
Judgment reversed;
cause remanded.
LUPER SCHUSTER and BRUNNER, JJ., concur.
____________________