Bickham v. Standley , 183 Ohio App. 3d 422 ( 2009 )

[Cite as Bickham v. Standley, 183 Ohio App.3d 422, 2009-Ohio-3530.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
LOGAN COUNTY
BICKHAM,
APPELLEE, CASE NO. 8-09-01
v.
STANDLEY, OPINION
APPELLANT.
Appeal from Bellefontaine Municipal Court
Trial Court No. 08 CVF 159
Judgment Affirmed in Part and Reversed in Part
Date of Decision: July 20, 2009
APPEARANCES:
John D. Bodin, for appellee.
Jeffrey S. Standley, for appellant.
WILLAMOWSKI, Judge.
{¶1} The defendant-appellant, Nigle Standley, appeals the judgment of
the Bellefontaine Municipal Court granting summary judgment in favor of the
Case No. 8-09-01
plaintiff-appellee, Sharon Bickham, as executor of the estate of Leyette Neal. On
appeal, Standley contends that the trial court erred by granting summary judgment,
that the trial court erred by finding that defendant was not authorized to act as he
did, and that the trial court erred by failing to apply the indemnification/hold-
harmless clause of the contract. For the reasons set forth herein, the judgment of
the trial court is affirmed in part and reversed in part.
{¶2} This dispute arises from two contracts: the first contract was an
auction-sale agreement executed between Neal1 and Standley for the auction of
Neal’s personal and real property, and the second contract was a real estate
purchase agreement in which James Snyder agreed to purchase Neal’s real
property. Snyder later refused to perform under the purchase agreement, Bickham
sold the real property to another buyer, and Standley returned to Snyder his $5,000
earnest money. None of these essential facts are in dispute.
{¶3} On February 7, 2008, Bickham filed a complaint against Standley
and Snyder. Bickham sought damages against Standley for breach of the purchase
1
Bickham signed the contract as Neal’s power of attorney; however, there is some evidence that Neal was
participating in the decision-making process.
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agreement and for breach of fiduciary duty, and she sought damages against
Snyder for breach of contract.2 On March 7, 2008, Standley filed his answer and a
counterclaim, in which he sought damages for breach of the auction-sale
agreement and unjust enrichment and sought enforcement of the
indemnification/hold-harmless clause in the purchase agreement. Following the
denial of a motion to dismiss Standley’s counterclaims, Bickham filed her answer
on April 25, 2008.
{¶4} On June 9, 2008, Standley and Bickham entered a joint stipulation in
which Standley agreed to withdraw his claims for breach of contract and unjust
enrichment as they related to his sales commission under the auction agreement.
However, Standley reserved “his right to assert the claim of unjust enrichment as it
relates to his efforts undertaken in his capacity as the auctioneer relative to the
auction which occurred on September 8, 2007.”
{¶5} On July 25, 2008, Standley filed a motion for summary judgment on
Bickham’s claims. On July 25, 2008, Bickham filed a motion for summary
judgment on her complaint and on Standley’s counterclaims. On August 11, 2008,
both parties filed their responses to the summary-judgment motions. Standley
filed the transcript of Bickham’s deposition on August 29, 2008. The trial court
heard oral arguments on the summary-judgment motions, and on December 8,
2
Snyder was dismissed with prejudice by the plaintiff on June 25, 2008, and the trial court filed a judgment
entry dismissing Snyder with prejudice on June 27, 2008.
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2008, the court denied Standley’s motion for summary judgment and granted
Bickham’s motion for summary judgment. Standley appeals the judgment of the
trial court, raising three assignments of error for our review.
Assignment of Error No. 1
The trial court’s granting of summary judgment to Plaintiff
Bickham was improper.
Assignment of Error No. 2
Contrary to the lower court[’s] holding Mr. Standley was
authorized to return the earnest money.
Assignment of Error No. 3
The lower court failed to apply the save harmless clause in
the auction contract to offset any award for the plaintiff.
{¶6} For ease of analysis, we elect to address the assignments of error
together and to answer the question whether the trial court erred in granting
summary judgment to Bickham. Although Standley has set forth three separate
assignments of error, the second and third assignments of error are essentially
separate arguments supporting his first assignment of error—that the trial court
erred in granting summary judgment.
{¶7} An appellate court reviews a trial court’s summary judgment
decision de novo, independently and without deference to the trial court's decision.
Ohio Govt. Risk Mgt. Plan v. Harrison, 115 Ohio St.3d 241, 2007-Ohio-4948, 874
N.E.2d 1155, at ¶ 5, citing Comer v. Risko, 106 Ohio St.3d 185, 2005-Ohio-4559,
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833 N.E.2d 712, at ¶ 8. Summary judgment is appropriate only “when the
requirements of Civ.R. 56(C) are met.” Adkins v. Chief Supermarket, 3d Dist. No.
11-06-07, 2007-Ohio-772, at ¶ 7. The party moving for summary judgment must
establish (1) that there are no genuine issues of material fact, (2) that the moving
party is entitled to judgment as a matter of law, and (3) that reasonable minds can
come to but one conclusion and that conclusion is adverse to the nonmoving party,
said party being entitled to have the evidence construed most strongly in his favor.
Id., citing Civ.R. 56(C); Horton v. Harwick Chem. Corp. (1995), 73 Ohio St.3d
679, 653 N.E.2d 1196, at paragraph three of the syllabus. In ruling on a motion
for summary judgment, a court may not “weigh evidence or choose among
reasonable inferences.” Id. at ¶ 8, citing Jacobs v. Racevskis (1995), 105 Ohio
App.3d 1, 7, 663 N.E.2d 653. Rather, the court must consider the above standard
while construing all evidence in favor of the nonmovant. Jacobs at 7.
{¶8} The party moving for summary judgment must identify the basis of
the motion to allow the nonmovant a “meaningful opportunity to respond.”
Mitseff v. Wheeler (1988), 38 Ohio St.3d 112, 116, 526 N.E.2d 798. In its motion,
the moving party “must state specifically which areas of the opponent's claim raise
no genuine issue of material fact and such assertion may be supported by
affidavits or otherwise as allowed by Civ.R. 56(C).” Id. at 115, citing Harless v.
Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 66, 375 N.E.2d 46, citing
Hamlin v. McAlpin Co. (1964), 175 Ohio St. 517, 519-520, 196 N.E.2d 781;
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Dresher v. Burt (1996), 75 Ohio St.3d 280, 293, 662 N.E.2d 264. If the moving
party fails to meet its burden, summary judgment is inappropriate; however, if the
moving party meets its initial burden, the nonmoving party has a “reciprocal
burden outlined in Civ.R. 56(E) to set forth specific facts showing that there is a
genuine issue for trial.” Dresher at 294.
{¶9} In the third assignment of error, Standley contends that the trial court
erred when it failed to apply the indemnification clause because the plain language
of the auction contract indicates Bickham’s agreement to indemnify and hold
harmless. Bickham contends that R.C. 4735.621 renders the indemnification
clause unenforceable.
{¶10} R.C. 4735.62 sets forth fiduciary duties. R.C. 4735.621 provides for
the waiver of fiduciary duties. In particular, R.C. 4735.621(A) states, “The duties
required of a licensee under section 4735.62 of the Revised Code may not be
waived by a client.” The auction contract states:
1. I (We) hereby grant unto Nigle L. Standley the exclusive
right and authority to sell the following (real) and/or (personal)
property described in the schedule attached hereto and made a part
hereof at PUBLIC AUCTION on the Sept. day of 8th, 2007 for the
highest and best bid.
***
8. I (We) agree not to sell or remove any of such property
from premises after date of this contract. I (We) further agree to
indemnify and save harmless Nigle L. Standley Auctioneer, his or its
employees, against any and all claims, demands, action or causes of
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action whatsoever in any manner arising by the executor of this
contract.
The evidence was undisputed that Snyder arrived and made his offer on the
property after the close of the auction on September 8, 2007. The purchase
agreement does not contain a similar statement. The binding effect of the auction
contract lapsed at the end of the auction and was no longer in effect at the time the
purchase agreement was entered into. Furthermore, even if the contract was still
binding, such a waiver is unenforceable under R.C. 4735.621(A). Accordingly,
summary judgment was not inappropriate in regard to the indemnification/hold-
harmless clause. The third assignment of error is overruled.
{¶11} The first and second assignments of error essentially allege that the
trial court erred by granting summary judgment to the plaintiff. In her motion for
summary judgment, Bickham argued that the purchase agreement, by its plain
language did not contain a financing contingency. Bickham claimed that under
paragraph 17 of the purchase agreement, Standley was not entitled to return the
earnest money to Snyder without her authorization, which she did not provide.
Bickham alleged that Standley’s actions constituted a breach of contract and a
breach of his fiduciary duties under R.C. 4735.62. As to the unjust-enrichment
claim Standley asserted seeking damages for his time and effort leading up to the
auction held on September 8, 2007, Bickham argued that unjust-enrichment is not
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a viable claim when the same subject matter is covered by an express contract,
such as the auction agreement.
{¶12} In his responsive memorandum, Standley argued that Bickham’s
breach-of-contract claim must fail because Bickham sold the property to the
second buyer without his knowledge, thereby rendering it impossible for him to
perform his fiduciary duties. Standley claimed that “[n]o one knows why the
initial real estate purchase contract did not close” but Snyder may have performed
had he been given the full 30 days to pay the purchase price before closing.
Standley contends that Bickham knew Snyder was having difficulty obtaining
financing, and she never requested retention of the earnest money. Standley
alleges that the financing contingency in the purchase agreement was not crossed
out, and therefore, Bickham was not entitled to sell the property to the second
buyer at the time she did. As to his counterclaims, Standley contends that any
fiduciary duty he owed Bickham was waived once Bickham sold the property to
the second buyer, and Bickham’s “unclean hands in unilaterally selling the
property clearly tip the equitable scales in Mr. Standley’s favor and would,
therefore, result in Plaintiff being unjustly enriched.”
{¶13} In his counterclaim, Standley sought damages for “unjust enrichment
as it relates to his efforts undertaken in his capacity as the auctioneer relative to
the auction which occurred on September 8, 2007.” The auction agreement,
signed on May 7, 2007, stated:
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2. I (We) hereby grant unto Nigle L. Standley the exclusive
right and authority to sell the following (real) and/or (personal)
property described in the schedule attached hereto and made a part
hereof at PUBLIC AUCTION on the Sept. day of 8th, 2007 for the
highest and best bid.
***
4. I (We) agree to pay Nigle L. Standley Auctioneer a
commission of 6 percent of the gross proceeds of such sale of Real
Estate, and 22 percent of the gross proceeds of such sale of
Household, with a minimum commission of $ Ø.
***
7. I (We) agree that auctioneers commission and all expenses
incurred for advertisement, promotion and of conducting said
Auction as above agreed, shall be first paid from the proceeds
realized from said auction before the payment and satisfaction of any
of the above described liens or encumbrances. I (We) further agree
that any checks made payable to said Auctioneer are taken subject to
collection.
The underlined portions of the contract were completed in handwriting. The
undisputed facts pertinent to Standley’s unjust-enrichment claim were that he was
under contract to sell Neal’s real property at public auction on September 8, 2007;
that he received no bids on Neal’s real property; that after the auction closed on
September 8, 2007, Snyder offered to purchase the property, and a purchase
agreement was signed; that Snyder refused to purchase the property because of
financing difficulties; that the parties discussed the possibility of an absolute
auction on September 13, 2007; and that Bickham sold the real property to a
different buyer on September 15, 2007.
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{¶14} Standley claims Bickham was unjustly enriched by the effort and
work he put into preparing the property for auction and for conducting the auction
on September 8, 2007. Unjust enrichment is an equitable doctrine, not based on
contract law but upon quasi-contract. Homan, Inc. v. A1 AG Serv., L.L.C., 175
Ohio App.3d 51, 2008-Ohio-277, 885 N.E.2d 253, at ¶ 21, citing Campana v.
Ford Motor Co., 8th Dist. No. 88616, 2007-Ohio-4040, at ¶ 18. “‘Liability in
quasi-contract “arises out of the obligation cast by law upon a person in receipt of
benefits which he is not justly entitled to retain.”’” Id., quoting Campana at ¶ 18,
quoting Hambleton v. R.G. Barry Corp. (1984), 12 Ohio St.3d 179, 183, 465
N.E.2d 1298. However, the doctrine of unjust enrichment cannot apply when an
express contract exists. Id., citing Campana at ¶ 18, citing Aultman Hosp. Assn. v.
Community Mut. Ins. Co. (1989), 46 Ohio St.3d 51, 55, 544 N.E.2d 920. See also
Davidson v. Davidson, 3d Dist. No. 17-05-12, 2005-Ohio-6414, at ¶ 19, citing
Ullmann v. May (1947), 147 Ohio St. 468, 479, 72 N.E.2d 63. The auction
agreement, quoted above, set forth the conditions and terms of payment.
Accordingly, Bickham was entitled to summary judgment on Standley’s
counterclaim for unjust enrichment.
{¶15} In her complaint, Bickham alleged that Standley breached the
purchase agreement by returning to Snyder the $5,000 earnest money. Again, the
material facts are not in dispute. Standley was under contract to conduct a public
auction of the real property, which he did, and no bids were received. After the
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auction closed, Snyder presented an offer on the property, which Bickham
accepted, as evidenced by the purchase agreement. On September 13, 2007,
Standley and Bickham discussed Snyder’s refusal to perform, based on difficulty
obtaining financing, and they discussed an absolute auction. On September 15,
2007, Bickham sold the property to a different buyer.
{¶16} The purchase agreement contains the following pertinent language,
with the underlined sections having been completed by hand:
3. PRICE. Purchaser agrees to pay for the Property the sum
of Forty Seven thousand Five hundred dollars ($ 47,500.00), payable
in cash at closing; contingent upon the Purchaser’s ability to obtain
__________ financing in the amount of $___________ _____% at
prevailing rates and terms. Seller shall have the right to cancel this
Contract if Purchaser fails to apply for such financing within
________ (7) days after acceptance of this offer.
***
17. EARNEST MONEY. Purchaser has deposited with
Broker the sum receipted for on page one of this Contract, which
shall be returned to Purchaser upon Purchaser’s request, if no
contract has been entered into. Upon acceptance of this contract by
both parties, Broker shall deposit such amount in its trust account to
be disbursed, subject to collection by Broker’s depository, as
follows: (a) deposit shall be applied on purchase price or returned to
Purchaser when transaction is closed; (b) if Seller fails or refuses to
perform, or any contingency is not satisfied or waived, the deposit
shall be returned; (c) if Purchaser fails or refuses to perform, this
deposit shall be paid to Seller. If the parties are unable to agree upon
the disposition of the deposit, then upon the request of either
Purchaser or Seller for the return or payment of the deposit, the
Broker holding the deposit shall give written notice to the other party
of such request, and shall advise the other party that such deposit
shall be returned or paid in accordance with such request unless the
other party delivers written objection thereto within 20 days after
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receipt of such notice. If the Broker does not receive any written
objection within such 20-day period, or in the event of a dispute over
the disposition of the deposit, Broker shall retain the deposit until (i)
Purchaser and Seller have settled the dispute; (ii) disposition has
been ordered by a final court order; or (iii) Broker deposits said
amount with a court pursuant to applicable court procedures. The
return or payment of such deposit shall not in any way prejudice the
rights of Seller, Purchaser or Broker(s) in any action for damages or
specific performance.
Paragraphs four through seven were crossed out with a hand-drawn line, and the
word “Auction” had been written by hand through the line. The first issue
presented by Bickham’s breach-of-contract claim is whether Bickham was entitled
to the $5,000 earnest money. Therefore, if a financing contingency existed and
failed, Snyder was entitled to return of the money, but if there was no financing
contingency, and if Snyder simply refused to perform despite the contingency,
Bickham was entitled to the money.
{¶17} Neither party has cited any authority concerning the meaning of
spaces left blank in a form contract. In Young v. Louisville Title Agency for N.W.
Ohio, Inc. (Jan. 15, 1993), 6th Dist. No. 91WD097, the parties completed a
purchase agreement that contained a financing contingency clause; however, the
top of the form provided a space where the parties could fill in the dollar amount
of “cash by obtaining ________ mortgage.” The blank space was left empty. Id.
at * 3. The trial court determined that the purchase agreement was not contingent
upon the appellant’s obtaining financing. Id. On appeal, the appellant argued that
the blank part of the form indicated that the contract was contingent on financing,
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or in the alternative, that the blank space created an ambiguity in the contract,
which would have prevented summary judgment. Id. at * 4. The appellant
produced evidence showing that financing was a contingency in the agreement.
Id. The court agreed, finding that the financing paragraph, when read in pari
materia with the blank line at the top of the form, created an ambiguity on the face
of the contract. Id. The court held that the trial court could consider extrinsic
evidence to ascertain the parties’ intent. Id., citing West v. Ankney (1956), 73
Ohio Law Abs. 56, 58-59, 60 O.O. 449, 134 N.E.2d 185.
{¶18} In this case, the only financing contingency clause was contained in
paragraph two, as quoted above. Unlike the contract in Young, this contract is
clear and unambiguous. The purchase price was payable in cash subject to
Snyder’s ability to obtain financing. The parties did not write an adjective
describing the type of financing in the space provided, nor did they write in any
specific terms establishing an amount Snyder would seek in financing. By leaving
the blank space, the contract language was clear that if Snyder obtained any
financing, he was required to perform. Although Standley claimed in his motion
that nobody knew why Snyder did not perform, Standley had previously submitted
a copy of Snyder’s letter, which stated:
Per our telephone conversation Wednesday, September 12,
2007 I am unable to proceed with the purchase of the [real estate]
due to unfavorable financing. Therefore, please consider the Real
Estate Purchase Contract dated September 8, 2007 to be null & void,
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please return my check #2540 in the amount of $5,000.00 that was
used as earnest money.
(Emphasis added.) Despite Snyder’s letter referencing unfavorable financing, in
his affidavit, Standley stated, “On September 12, 2007, Jim Snyder informed me
by telephone and later by letter that he was not having success in obtaining
financing for purchase of the property. On September 13, 2007, I informed
Plaintiff Sharon Bickham that Jim Snyder may not be proceeding with the
purchase due to financing problems he was experiencing.” In her deposition,
Bickham stated, “[Standley and I] sat on the front porch and discussed the sale.
He had the literature from the sale, and then he said that Mr. Snyder cannot get
financing for the property. And I said, ‘What about the $5,000?’ He said, ‘He
wants that returned.’” Bickham also discussed her assumption that Snyder had
obtained financing prior to making his offer on the real property.
{¶19} Although the language of the contract is clear, the evidence in this
case is not. If Snyder had been unable to obtain any financing for the property,
then the financing contingency would have failed, triggering paragraph 17(b) of
the purchase agreement, which allowed for the return of the earnest money.
However, Snyder’s letter implies that he was able to obtain some form of
financing; however, he found the terms to be unsatisfactory. If Snyder did obtain
financing that he found to be unfavorable, his refusal to perform would have
constituted an anticipatory repudiation, which would have entitled Bickham to
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cancel the contract and find a new buyer to mitigate damages. Daniel E. Terreri
& Sons, Inc. v. Mahoning Cty. Bd. of Commrs., 152 Ohio App.3d 95, 2003-Ohio-
1227, 786 N.E.2d 921, at ¶ 44 and 47, citing Farnsworth, Contracts (1982) 627-
628, Section 8.20; Farmers Comm. Co. v. Burks (1998), 130 Ohio App.3d 158,
172, 719 N.E.2d 980. In the latter situation, paragraph 17(c) of the purchase
agreement would have been triggered, and Bickham would have been entitled to
retain the earnest money. Because there remains a genuine issue of material fact,
the trial court erred in granting summary judgment in favor of the plaintiff on her
claims for breach of contract and breach of fiduciary duty. The first and second
assignments of error are sustained consistent with this opinion.
{¶20} The judgment of the Bellefontaine Municipal Court is affirmed in
part and reversed in part.
Judgment affirmed in part
and reversed in part.
PRESTON, P.J., and ROGERS, J., concur.
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