Maddali v. Haverkamp ( 2022 )

[Cite as Maddali v. Haverkamp, 2022-Ohio-3826.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
MEENA MADDALI, : APPEAL NO. C-210358
TRIAL NO. A-1701584
Plaintiff-Appellee, :
VS. : O P I N I O N.
ADAM MICHAEL HAVERKAMP, :
Defendant-Appellant. :
Civil Appeal From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Affirmed as Modified
Date of Judgment Entry on Appeal: October 28, 2022
Stagnaro, Saba & Patterson Co., L.P.A., and Sean Donovan, for Plaintiff-Appellee,
Heyman Law, LLC, and D. Andrew Heyman, for Defendant-Appellant.
OHIO FIRST DISTRICT COURT OF APPEALS
WINKLER, Judge.
{¶1} After her long-term romantic relationship with Adam Haverkamp
ended, Meena Maddali sued Haverkamp alleging that he owed her money in
accordance with oral agreements entered into during their relationship. Following a
bench trial, the court found for Maddali on breach-of-contract claims. Haverkamp
was ordered to pay Maddali the sum of $63,623.55, which included half of the net sale
proceeds from a home they had purchased, $10,000 in proceeds from Maddali’s
student loan that Haverkamp used to pay off his credit cards, $13,357.27 that
Haverkamp had charged to Maddali’s credit card account, and $1,698.65 that Maddali
had paid for Haverkamp’s vehicle and his son’s childcare. Haverkamp now appeals.
{¶2} In a single assignment of error, Haverkamp essentially challenges the
legal sufficiency and weight of the evidence adduced at trial. Because we determine
his challenge has merit with respect to Maddali’s claims involving the vehicle and
childcare expenses, but not with respect to her other claims, we reduce the amount of
the judgment to $61,924.90, and affirm the judgment as modified.
I. Background Facts and Procedure
{¶3} This is the second appeal involving the dispute between Maddali and
Haverkamp. The record shows that the parties started dating in 2013. Haverkamp
was divorced and had a young son. Several months into their relationship, the parties
decided they wanted to live together and looked at several properties. Maddali wanted
to rent and Haverkamp wanted to buy a home but could not afford to do so on his own.
Haverkamp convinced Maddali to buy a home with him in the Anderson Township
area near Cincinnati by telling her that the homes retain their value and promising her
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that, if their relationship ended, then they would just sell the home and “split the
profits” from the sale.
{¶4} The parties also agreed that Haverkamp would pay the down payment
and the deed and mortgage would be solely in Haverkamp’s name. The reason for this
arrangement was in dispute, with Maddali testifying that Haverkamp thought he could
curtail any future support obligations related to his divorce. Regardless of the reason,
it was undisputed that this arrangement was not meant to eliminate Maddali’s rights
under the agreement. Their agreed-upon arrangement further required each to
contribute equally to the maintenance and upkeep of the home, including paying half
of the monthly expenses.
{¶5} The parties performed under this agreement for over two-and-one-half
years. Maddali paid her half of expenses, represented by the monthly payment to the
mortgage company, which included the mortgage payment and escrowed funds for
insurance and real estate taxes. Maddali also devoted money and labor into improving
the home, such as paying for new windows and gutters and updating the kitchen.
{¶6} The relationship eventually soured. Maddali moved out in April 2016
but offered to continue paying her share of the home’s expenses. Haverkamp told her
she did not need to do so. He further informed her that he would borrow money from
his parents to pay her share of expenses and a “little bit more” to ready the home for
sale. Haverkamp did not tell Maddali that he considered her actions a breach of their
agreement.
{¶7} Haverkamp readied the property for sale and additionally made
improvements to the home, such as finishing the basement, using money borrowed
from his parents and labor contributed by family and friends. At trial, Maddali
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disputed the cost and extent of the improvements, none of which Haverkamp had told
her about.
{¶8} Haverkamp listed the property for sale in the summer of 2016 without
notifying Maddali. He sold it in September 2016 for $224,000 and obtained over
$81,000 in proceeds from the sale. Haverkamp did not share any proceeds with
Maddali despite her request.
{¶9} In 2017, Maddali filed a complaint alleging that Haverkamp had failed
to pay her in accordance with their agreement regarding the home. She additionally
alleged that Haverkamp had failed to pay her for other funds she had expended during
their relationship on his behalf with a promise of repayment. Maddali sought damages
under various theories, including breach of contract, promissory estoppel, and unjust
enrichment. Haverkamp filed counterclaims against Maddali.
{¶10} After discovery, Maddali moved for partial summary judgment on her
claims. Haverkamp also moved for summary judgment on Maddali’s claims and
prevailed. In relevant part, the trial court determined that Maddali’s claims sounded
in palimony and therefore failed for lack of consideration. With respect to
Haverkamp’s counterclaims, Maddali moved for and was granted summary judgment.
Maddali appealed. Haverkamp did not.
{¶11} This court reversed the summary judgment for Haverkamp on
Maddali’s claims. See Maddali v. Haverkamp, 1st Dist. Hamilton No. C-180360,
2019-Ohio-1518 (“Maddali I”). With respect to Maddali’s breach-of-contract claims,
we concluded her claims did not sound in palimony because the evidence in support
of summary judgment demonstrated that Maddali was “not seeking to enforce a
contract upon the basis of love and affection” but, rather, her claims arose from “the
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money she spent in maintaining and renovating the household and monetary loans
she made to Haverkamp for his personal obligations.” Id. at ¶ 10.
{¶12} Additionally, we rejected Haverkamp’s argument that, as a matter of
law, the statute of frauds barred enforcement of the agreement related to the sale of
the home due to a lack of a writing. We noted that even if the writing requirement
applied, Maddali, who had paid the mortgage for almost three years and funded some
renovations to the home, could remove the agreement from the statute of frauds by
establishing part performance of the oral agreement. Id. at ¶ 13.
{¶13} This court also affirmed the trial court’s denial of Maddali’s motion for
summary judgment, which was limited to the issue of Haverkamp’s liability. With
respect to the home, we held the evidence undisputedly established that the parties
had “agreed to split the profits from the sale of the * * * home.” Id. at ¶ 12 and 16.
Nonetheless, we determined that genuine issues of fact precluded summary judgment
in Maddali’s favor with respect to liability for breach because “it [wa]s unclear from
the record what the amount of ‘profits’ means.” Id. at ¶ 16.
{¶14} Finally, with respect to Maddali’s claims involving the “personal
expenses,” we concluded that an issue of fact existed “as to whether Maddali had
loaned Haverkamp the money for th[o]se expenses, expecting to be paid back in full,
or whether her payments were a gift to Haverkamp made during the course of a
romantic relationship.” Id. at ¶ 17.
{¶15} We remanded the cause for further proceedings on the remaining
issues. An extensive bench trial was held on several dates between February and April
2021. The parties submitted written closing arguments. Maddali requested damages
for Haverkamp’s failure to pay her half of the net proceeds from the sale of the home,
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which excluded Haverkamp’s $4,200 down payment. She also requested damages for
his failure to repay vehicle and childcare expenses, the proceeds from a student loan,
and charges Haverkamp made to her American Express credit card. These last two
items for which Maddali sought damages were not listed in Maddali’s complaint, but
the trial court permitted Maddali to testify at trial that she had advanced the funds for
those expenses based on Haverkamp’s express promise of repayment.
{¶16} The trial court found Haverkamp liable for breach of contract and
awarded Maddali the damages she requested in her closing argument. This appeal
followed.
II. Analysis
{¶17} In a single assignment of error, Haverkamp contends the evidence does
not support a judgment in Maddali’s favor on any of her breach-of-contract claims.
The issues presented implicate different standards of review. This court reviews de
novo issues of law, including the sufficiency of the evidence. See N. Side Bank & Trust
Co. v. Trinity Aviation LLC, 2020-Ohio-1470, 153 N.E.3d 889, ¶ 17 (1st Dist.).
{¶18} This court reviews fact finding under a deferential standard of review.
When addressing a challenge to the manifest weight of the evidence, this court must
review the entire record, weigh the evidence and all reasonable inferences, consider
the credibility of witnesses, and determine whether, in resolving conflicts in the
evidence, the finder of fact clearly lost its way and created such a manifest miscarriage
of justice that the judgment must be reversed, and a new trial ordered. Eastley v.
Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179, 972 N.E.2d 517, ¶ 20. In weighing the
evidence, we must presume that the findings of the trier of fact are correct, and if the
evidence is susceptible of more than one construction, as a reviewing court, we must
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give it that interpretation that is consistent with the verdict or finding and judgment.
See id. at ¶ 21.
Breach of Contract
{¶19} To prevail on a breach-of-contract claim, a plaintiff must demonstrate
the existence of a contract, performance by the plaintiff, a breach by the defendant,
and damages resulting from the breach. See Fox Consulting Group, Inc. v. Mailing
Servs. of Pittsburgh, Inc., 1st Dist. Hamilton No. C-210250, 2022-Ohio-1215, ¶ 8,
citing White v. Pitman, 2020-Ohio-3957, 156 N.E.3d 1026, ¶ 37 (1st Dist.).
{¶20} Central to contract formation is a “meeting of the minds” on the
essential terms of the agreement. This is usually demonstrated by an offer and
acceptance, and consideration. “An offer is defined as ‘the manifestation of willingness
to enter into a bargain, so made as to justify another person in understanding that his
assent to that bargain is invited and will conclude [the bargain].’ Further, the essential
terms of the contract, usually contained in the offer, must be definite and certain.”
Reedy v. Cincinnati Bengals, Inc., 143 Ohio App.3d 516, 521, 758 N.E.2d 678 (1st
Dist.2001), quoting Garrison v. Daytonian Hotel, 105 Ohio App.3d 322, 325, 663
N.E.2d 1316 (2d Dist.1995), cited in N. Side Bank, 2020-Ohio-1470, 153 N.E.3d 889,
at ¶ 15.
{¶21} Oral promises may be enforceable provided there is “sufficient
particularity to form a binding contract,” notwithstanding an absence of formality.
Kostelnik v. Helper, 96 Ohio St.3d 1, 2002-Ohio-2985, 770 N.E.2d 58, ¶ 15, quoted in
Kodu v. Medarametla, 1st Dist. Hamilton No. C-160319, 2016-Ohio-8020, ¶ 9. An
oral contract must be proven by clear-and-convincing evidence. Kodu at ¶ 9, citing
Clements v. Ohio State Life Ins. Co., 33 Ohio App.3d 80, 85, 514 N.E.2d 876 (1st
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Dist.1986). The words and conduct of the parties disclose the intent to contract and
the terms of the oral agreement. See, e.g., Kodu at ¶ 9, citing Kostelnik; Rutledge v.
Hoffman, 81 Ohio App. 85, 86-87, 75 N.E.2d 608 (12th Dist.1947); Lapoint v.
Templeton, 6th Dist. Fulton No. F-07-014, 2008-Ohio-1792, ¶ 35; Hines v. Kelsch, 1st
Dist. Hamilton No. C-000445, 2001 Ohio App. Lexis 3606, *8-9 (Aug. 17, 2001).
{¶22} “While it is the function of a court to construe a contract, it is the
province of the [fact finder] to ascertain and determine the intent and meaning of the
contracting parties in the use of uncertain or ambiguous language.” See Amstutz v.
Prudential Ins. Co. of Am., 136 Ohio St. 404, 408, 26 N.E.2d 454 (1940).
{¶23} With these standards in mind, we review the asserted arguments.
A. Agreement with Respect to the Sale of the Home
Existence and Meaning of the Contract
{¶24} Haverkamp contends that the trial court erred in determining there was
a meeting of the minds with respect to what the parties meant by “split the profits,” an
essential term of the contract. Alternatively, he argues that if the court could assign a
meaning to the term, then it erred by finding the parties intended to split the amount
of the net proceeds from the sale, without reference to the cost of improvements.
{¶25} Maddali argues the trial court’s decision is supported by clear-and-
convincing evidence of an enforceable agreement to split the net proceeds of the sale.
Alternatively, she contends the credible evidence presented at trial showed that
Maddali and Haverkamp contributed approximately the same amount of money to
improve the home. As a result, even if Haverkamp’s testimony that “profits” meant
the sale price minus the cost of improving and buying the property, each would be
entitled to the same amount of credit or, as Haverkamp put it, reduction.
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{¶26} We need not consider the validity of Maddali’s alternate reasoning. We
are persuaded that the balance struck by the trial court in weighing the evidence at
trial was not erroneous. Clear evidence supports a determination that, when the
parties entered into their agreement, they intended to split the gain in equity at the
time of sale, measured by the money obtained at the sale minus the mortgage, the
down payment, and closing costs, and that agreement was never modified.
{¶27} Initially, we agree with Haverkamp to the extent he argues that the
parties must express their intent in a manner susceptible of judicial interpretation. If
not, there is no requisite meeting of the minds and no legally enforceable agreement
will result. See Legros v. Tarr, 44 Ohio St.3d 1, 6-7, 540 N.E.2d 257 (1989); Rulli v.
Fan Co., 79 Ohio St.3d 374, 376, 683 N.E.2d 337 (1997); N. Side Bank, 2020-Ohio-
1470, 153 N.E.3d 889, at ¶ 15.
{¶28} In Maddali I, upon our review of the evidence submitted in support of
Maddali’s motion for summary judgment, we noted that “it was unclear from the
record what the amount of ‘profits’ means” despite the “undisputed fact that the
parties agreed to split the profits from the sale” of the home.
{¶29} The technical meaning of “profit” is “[t]he excess of revenues over
expenditures in a business transaction.” Black’s Law Dictionary 1246 (8th Ed.2004).
The parties were undisputedly not involved in a business transaction that resulted in
revenues. The way in which “profit” was used by the parties could not reasonably be
afforded that meaning.
{¶30} The more general meaning of “profits” is “a valuable return: GAIN.”
Merriam-Webster’s Online Dictionary, https://www.merriam-
webster.com/dictionary/profit (accessed Oct. 20, 2022). The way in which the parties
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used the term “profit” could reasonably be understood as (1) the gain in equity,
measured by net proceeds from the sale, or (2) a gain calculated by reducing the
amount earned in selling the property by the amount spent in buying and improving
the property. As we alluded to in Maddali I, the parties proposed different meanings
for the word profits, creating a factual dispute as to what amount the parties
understood and agreed was subject to division at the time of sale.
{¶31} In this case, the trial court implicitly found that the term “split the
profits,” while ambiguous, was not so unclear as to prevent judicial enforcement. The
court determined the parties used the term “profit” in the first sense referenced
above—the gain in equity—and that Haverkamp’s testimony otherwise was contrived.
The evidence in the record concerning the intent of the parties, which includes the
words used and conduct of the parties, amply supports these findings.
{¶32} At trial, Maddali testified that when she and Haverkamp used the term
“split the profits,” they specifically discussed and agreed the term meant they would
split the gain in the home’s value at the time of sale, minus the mortgage, the closing
costs, and Haverkamp’s down payment. In other words, the parties intended to split
the gain in equity without regard to the costs of improvements. The parties’ actions
were consistent with this meaning. Maddali and Haverkamp split the expenses of
home ownership and did not keep track of their contributions in money or labor while
living there.
{¶33} Haverkamp testified that he understood “profits” to mean an amount
calculated by reducing the amount earned in selling the property by the amount spent
in buying and improving the property. This testimony was undermined by his failure
to provide Maddali with credit for any of the funds she spent in improving the home.
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{¶34} To demonstrate that his understanding of the agreement related to the
cost of improving the property, Haverkamp places great emphasis on his testimony
that he would not have made the improvements to the home after Maddali moved out
if he thought he would have to split with Maddali the increase of the home’s value from
the improvements. However, Haverkamp also testified that he believed the agreement
to “split the profits” was not enforceable after Maddali moved out of the home and
stopped contributing to the home’s maintenance and upkeep.
{¶35} Ultimately, Haverkamp contradicted himself when testifying on several
issues and did not produce credible evidence to support his positions. For instance,
he repeatedly testified that he had repaid his parents $30,000 for the cost of
improvements, asserting that he had paid them periodically in cash withdrawn from
his bank account, but he was unable to produce any documentary evidence in support.
{¶36} In sum, Haverkamp has not demonstrated error by the trial court in
finding the parties had agreed to split the net proceeds upon the sale of the home, and
that Haverkamp had breached that contract when he failed to pay Maddali half of the
net proceeds from the sale.
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Consideration
{¶37} Haverkamp also contends there was no binding contract due to the lack
of consideration. We addressed the issue of consideration in Maddali I and
determined that Maddali had provided consideration to support her breach-of-
contract claim related to the home sale when she spent money maintaining and
renovating the property. See Maddali I, 1st Dist. Hamilton No. C-180360, 2019-Ohio-
1518, at ¶ 10. Thus, this issue was decided in Maddali I, and we have no reason to
depart from our sound reasoning in that opinion, especially where one of Haverkamp’s
positions has been that Maddali breached the agreement involving “the splitting of the
profits” when, after making the mortgage payments for over two-and- one-half years,
she stopped.
Statute of Frauds
{¶38} Haverkamp maintains that Maddali failed to present sufficient evidence
to satisfy the doctrine of part performance. As this court explained in Maddali I, the
doctrine of part performance can remove certain oral contracts from the statute of
frauds when the party seeking to enforce the oral contract shows by “clear and
convincing evidence” that her actions “were exclusively referable to the agreement”
and that she changed her position to her prejudice. Maddali I at ¶ 13, quoting Watts
v. Fledderman, 1st Dist. Hamilton No. C-170255, 2018-Ohio-2732, ¶ 25. Thus,
assuming without deciding that the statute of frauds applied to the agreement, we
rejected Haverkamp’s argument that the lack of a writing warranted judgment in his
favor.
{¶39} Haverkamp contends the evidence did not meet the clear-and-
convincing standard. Maddali contends the evidence supports the trial court’s
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determination that she met her burden. We are unable to find error with the trial
court’s assessment of the evidence.
{¶40} First, Haverkamp admitted at trial that Maddali performed under the
agreement regarding the home until May 2016. Additionally, the evidence
demonstrated that before the parties entered into the agreement, Maddali was not
living in the home or making the mortgage payments. Further, Maddali testified that
her actions in making the mortgage payments and funding over $25,00o in property-
related expenses was not because she was making a gift to Haverkamp or that she owed
him rent, but because of the parties’ oral agreement. Similarly, Haverkamp testified
that Maddali did not make these payments as a gift or as a rent obligation. Finally,
this same evidence showed that Maddali changed her position to her prejudice in
reliance on the agreement. Ultimately, the trial court’s finding that Maddali
established part performance was supported by evidence that meets the clear-and-
convincing standard. Thus, Haverkamp’s challenge is unfounded.
{¶41} In summary, our review of the record discloses that Haverkamp has not
demonstrated that the trial court erred by finding for Maddali on her breach-of-
contract claim related to the sale of the home.
B. Funds Advanced for Personal Expenses
{¶42} Haverkamp additionally challenges the trial court’s determination that
Maddali proved he had breached several alleged agreements to repay her for funds she
advanced for his personal expenses during their relationship. This included the
proceeds of a student loan and charges Haverkamp made to her American Express
credit card account, and vehicle and childcare payments that Maddali made for
Haverkamp.
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Student Loan Proceeds and Credit Card Charges
{¶43} Initially we focus on the student loan proceeds and the credit card
charges. Maddali testified that Haverkamp had asked her to obtain a student loan and
to provide him with $10,000 of the proceeds so that he could pay off his credit card
debts. She further testified that in September 2016, when she obtained the loan, she
provided Haverkamp the requested proceeds based on his express promise to repay
her.
{¶44} Similarly, Maddali testified that during the relationship Haverkamp
told her he had “maxed out” his credit card accounts and asked if she would make him
an authorized user on her American Express credit card account. She did as he
requested, but per her insistence, he agreed to pay her back for any charges he made.
{¶45} Maddali further testified that when the relationship became unstable
and she asked for repayment, Haverkamp alluded to paying her out of home proceeds.
{¶46} Haverkamp acknowledged that he had used $10,000 from Maddali’s
student-loan proceeds to pay of his credit cards and did not dispute that he had
charged over $12,000 to Maddali’s credit card account. But he contended that he
never promised to repay her and that she should not have expected repayment because
he paid for many of her personal expenses during the relationship. He additionally
argued that Maddali’s actions demonstrated that these amounts were not advanced as
loans, citing such things as her failure to include these items in her complaint and her
failure to send written requests for repayment.
{¶47} We hold that the evidence on the student loan proceeds and the credit
card charges was sufficient to show the existence of oral loan contracts. The
expression of assent necessary to form a contract may be by word, act, or conduct
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which evinces the intention of the parties to contract. Rutledge, 81 Ohio App. 85, 87,
75 N.E.2d 608; Kodu, 1st Dist. Hamilton No. C-160319, 2016-Ohio-8020, at ¶ 9.
Maddali’s testimony and exhibits, combined with Haverkamp’s behavior, were
sufficient to show that Haverkamp accepted these amounts with the understanding
that the money was a loan. Moreover, on this record, we cannot say that the trial court
lost its way when resolving the facts against Haverkamp.
Vehicle and Childcare Expenses
{¶48} Haverkamp additionally contends there was insufficient evidence to
support a finding that he breached an oral agreement to repay Maddali for his vehicle
and childcare expenses. We agree.
{¶49} Maddali testified she had paid some of Haverkamp’s vehicle and
childcare expenses during the relationship. However, she failed to present clear
evidence of an agreement for repayment. In point of fact, she testified that she was
only seeking damages for half of the home sale proceeds, repayment of the student
loan proceeds, and the American Express card charges. Notwithstanding this
testimony, in her written closing argument, submitted months after her testimony, she
requested damages for the vehicle and childcare expenses.
{¶50} We note that Haverkamp’s written closing argument did not bring to the
court’s attention the contradiction in Maddali’s position. Nonetheless, Haverkamp
did argue that Maddali failed to establish a right to recover the funds. Upon our review
of the record, we conclude that there was insufficient evidence for the court to find for
Maddali with respect to the funds advanced for Haverkamp’s vehicle and childcare
expenses. For this reason, we sustain the assignment of error as to the vehicle and
childcare expenses and overrule it in all other respects.
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III. Conclusion
{¶51} The trial court erred by finding for Maddali on her claim related to the
repayment of Haverkamp’s vehicle and childcare expense. Upon our conclusion that
Haverkamp has not demonstrated any other errors in the proceedings below, we
reduce the amount of the judgment accordingly to $61,924.90. This represents
$38,567.63 for Maddali’s half of the net home sale proceeds, $10,000 for the student
loan proceeds, and $13,357.27 in credit card charges. We affirm that judgment as
modified.
Judgment accordingly.
MYERS, P.J., and CROUSE, J., concur
Please note:
The court has recorded its entry on the date of the release of this opinion.
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