Walters v. Goddard ( 2018 )

[Cite as Walters v. Goddard, 2018-Ohio-5184.]
IN THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
TRUMBULL COUNTY, OHIO
DONALD E. WALTERS, et al., : OPINION
Plaintiffs-Appellants, :
CASE NO. 2017-T-0082
- vs - :
DANIEL GODDARD, et al., :
Defendants-Appellees. :
Civil Appeal from the Trumbull County Court of Common Pleas, Case No. 2015 CV
02097.
Judgment: Reversed and remanded.
Ned C. Gold, Jr., Ford, Gold, Kovoor & Simon, LTD., 8872 East Market Street, Warren,
OH 44484 (For Plaintiffs-Appellants).
Jeffrey V. Goodman, Fowler & Goodman L.P.A., Inc., 119 West Market Street, Warren,
OH 44481 (For Defendants-Appellees).
THOMAS R. WRIGHT, P.J.
{¶1} Appellants, Donald and Kimberly Walters, appeal the trial court’s decision
overruling their objections and adopting the magistrate’s decision in favor of appellees,
Daniel and Melissa Goddard. We reverse and remand.
{¶2} The Walters had their home for sale in 2014 when the Goddards made an
offer, which the Walters accepted. Issues arose following the home inspection, and the
Goddards backed out of the agreement. The Walters filed suit for breach of contract.
{¶3} The case was referred to a magistrate for a bench trial pursuant to Civ.R.
53. Following trial, the magistrate found in the Goddard’s favor, finding that the contract
became null and void since the parties failed to agree in writing what material defects
were to be corrected by the sellers. Thus, it concluded there was no breach.
{¶4} The Walters filed objections to the magistrate’s decision, but did not
secure a trial transcript for the court to review. The trial court overruled the Walters’
objections and adopted the magistrate’s decision in full.
{¶5} The Walters’ first of two assigned errors asserts:
{¶6} “The trial court erred in determining that not all conditions precedent
stated in the contract between seller and buyer leading to a duty on the part of the
buyers to ultimately close on the purchase of the home that was the subject of the
contract had either been performed by the buyers or waived by the sellers.”
{¶7} The Walters first argue that the Goddards breached their agreement since
the parties effectively agreed via email that the sellers would repair all items listed as
marginal and defective on the home inspection report.
{¶8} The Walters also claim that based on the plain language of the contract,
the Goddards were only entitled to have the “material” defects repaired as identified in
the home inspection report, and that their additional action items were superfluous, not
required to be repaired under the parties’ contract. Thus, upon the Walters’ agent’s
emailing the Goddard’s agent of their consent to fix “all” items identified in the inspection
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report, the parties’ actions continued to be governed by the contract. The Walters also
point out that the parties’ communications via email constitute a waiver of the signed
writing requirement amending their purchase agreement and that the Goddards
breached their implied duty of good faith and fair dealing upon demanding additional
repairs not required under the purchase agreement. Thus, the Goddard’s decision to
walk away from the agreement after the Walters agreed to repair all items identified in
the inspection, constitutes a breach. As damages, the Walters seek the difference
between their purchase agreement and the sale price for which their residence was
eventually sold the following spring.
{¶9} As stated, the trial transcript was not filed prior to the trial court’s
consideration of the Walters’ objections. Thus, our review is limited since the duty to
provide a transcript to the trial court rests with the person objecting to the magistrate's
decision, and without a transcript, the trial court is bound to accept the magistrate's
findings of fact as true and only review the magistrate's conclusions of law based upon
the accepted findings of fact. Bayview Loan Servicing, L.L.C. v. Likely, 9th Dist. Summit
No. 28466, 2017-Ohio-7693, ¶12; Akron v. Jackson, 9th Dist. Summit No. 27077, 2014-
Ohio-2036, ¶11.
{¶10} An appellate court is precluded from considering a trial transcript that was
not before the trial court. State ex rel. Duncan v. Chippewa Twp. Trustees, 73 Ohio
St.3d 728, 730, 654 N.E.2d 1254 (1995). Thus, our review is limited to determining
whether the trial court’s application of the law to the accepted facts was proper or an
abuse of discretion. Id.; Petty v. Equitable Prod. & Eastern States Oil & Gas, Inc., 7th
Dist. Mahoning No. 05MA80, 2006-Ohio-887, ¶19.
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{¶11} An abuse of discretion is a term of art reflecting a court’s exercise of
judgment that fails to comport with the record or logic. Ivancic v. Enos, 11th Dist. Lake
No. 2011-L-050, 2012-Ohio-3639, 978 N.E.2d 927, ¶70. “When an appellate court is
reviewing a pure issue of law, ‘the mere fact that the reviewing court would decide the
issue differently is enough to find error (of course, not all errors are reversible. Some
are harmless; others are not preserved for appellate review). By contrast, where the
issue on review has been confined to the discretion of the trial court, the mere fact that
the reviewing court would have reached a different result is not enough, without more,
to find error.’” (Citation omitted.) Id.{¶12} The accepted facts as determined by the magistrate and the trial court
include the following. The purchase agreement was contingent upon a home
inspection, and thereafter, the Goddards could proceed under one of three options set
forth in the agreement.
{¶13} After the Goddards obtained the home inspection report on July 21, 2014,
they elected to proceed under prong B of the purchase agreement, which states:
{¶14} “Within three (3) days after completion of the last inspection, BUYER shall
elect one of the following:
{¶15} “* * *
{¶16} “(B) Accept the property subject to SELLER agreeing to have specific
material defects, that were either previously disclosed in writing by the SELLER or
identified in a written inspection report, repaired by a qualified contractor in a
professional manner at SELLER’S expense; BUYER agrees to provide SELLER with a
copy of all inspection reports and to sign an Amendment to Purchase Agreement
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removing the inspection contingency and identifying those specific material defect(s)
which are to be repaired. SELLER and BUYER shall have three (3) days from
SELLER’S receipt of BUYER’S written request and copies of all inspection reports to
agree in writing which material defects, if any, shall be corrected by SELLER at
SELLER’S expense. If BUYER and SELLER do not agree in writing within those three
(3) days then this AGREEMENT shall be null and void, and SELLER and BUYER agree
to sign a mutual release * * *. SELLER agrees to provide reasonable access to the
property for BUYER to review any such material defects corrected by SELLER. For
purposes of this AGREEMENT, ‘material defects’ DO NOT include minor routine
maintenance * * *.”
{¶17} The home inspection identified 11 marginal items and 6 defects of
concern. The Goddards, “[i]n addition to a demand to repair those marginal and
defective items, * * * noted additional requests. Of the [Goddards’] additional
requests, multiple items were issues discussed within the inspection report, but not
necessarily classified as marginal or defective items per se.”
{¶18} In response, the Walters agreed via email to correct all of the issues
identified in the inspection report. Thereafter, several emails were exchanged between
the parties’ agents “regarding the specific nature of the repairs” before the parties’
communications broke down on July 25, 2014.
{¶19} Upon applying the foregoing facts to the parties’ purchase agreement, the
trial court held that the purchase agreement became null and void because the parties
failed to agree in writing within three days as to what material defects, if any, were to be
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repaired at the seller’s expense. Upon limiting our analysis only to those facts found by
the trial court, we disagree with its application of law to the facts.
{¶20} “In construing the terms of a written contract, the primary objective is to
give effect to the intent of the parties, which we presume rests in the language that they
have chosen to employ. Saunders v. Mortensen, 101 Ohio St.3d 86, 2004-Ohio-24, 801
N.E.2d 452, at ¶9, citing Kelly v. Med. Life Ins. Co. (1987), 31 Ohio St.3d 130, 31 OBR
289, 509 N.E.2d 411, paragraph one of the syllabus. ‘Common words appearing in a
written instrument will be given their ordinary meaning unless manifest absurdity results,
or unless some other meaning is clearly evidenced from the face or overall contents of
the instrument.’ * * * Where the terms are clear and unambiguous, a court need not go
beyond the plain language of the agreement to determine the rights and obligations of
the parties. * * *” In re All Kelley & Ferraro Asbestos Cases, 104 Ohio St.3d 605, 2004-
Ohio-7104, 821 N.E.2d 159, ¶29.
{¶21} “[A] writing * * * will be read as a whole, and the intent of each part will be
gathered from a consideration of the whole.” Foster Wheeler Enviresponse, Inc. v.
Franklin Cty. Convention Facilities Auth., 78 Ohio St.3d 353, 361, 678 N.E.2d 519(1997). “Courts should attempt to harmonize provisions and words so that every word
is given effect.” Christe v. GMS Mgt. Co., 124 Ohio App.3d 84, 88, 705 N.E.2d 691 (9th
Dist.1997).
{¶22} For a plaintiff to successfully prove a breach of contract, he or she must
show “the existence of a contract, performance by the plaintiff, breach by the defendant,
and damage or loss to the plaintiff. * * * The damages awarded for a breach of contract
should place the injured party in as good a position as he would have been but for the
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breach. * * *.” Bertovich v. St. John, 8th Dist. Cuyahoga No. 96619, 2012-Ohio-475,
¶19-20.
{¶23} Pursuant to the parties’ agreement, the Goddards, as the buyers, chose to
have a home inspection. Thereafter, they proceeded under prong B, which provided
them with an opportunity to have the sellers remedy issues with the home identified
during the home inspection. Consistent with prong B, the Goddards agreed to “provide
SELLER with a copy of all inspection reports and sign an Amendment to Purchase
Agreement removing the inspection contingency and identifying those specific material
defect(s) which are to be repaired.”
{¶24} Here, the Goddards provided the Walters with the home inspection report
via email, but they did not proffer a signed amendment identifying the specific defects
that they sought to have the Walters repair. Upon receipt of the signed amendment, the
sellers and buyers had three days to agree in writing which defects the Walters would
repair at their expense. However, this three-day time limit was not triggered because
the sellers never received the signed amendment from the Goddards.
{¶25} Instead of proceeding under the contract formalities as stated under
section B of the purchase agreement, the Goddards communicated via email. As found
by the trial court, “[i]n addition to a demand to repair those marginal and defective items,
the Goddards also noted additional requests. Of the additional requests, multiple items
were issues discussed within the inspection report, but not necessarily classified as
marginal or defective items per se.”
{¶26} Notwithstanding the fact that the Goddards did not proffer the signed
amendment, upon receipt of the Goddards’ email requests and inspection report, the
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Walters via their agent responded by email and agreed to repair “all of the * * * issues
on the inspection report.” As found by the trial court, the parties’ communications
subsequently broke down about the nature of the repairs.
{¶27} Contrary to the trial court’s legal conclusions, the provision rendering the
purchase agreement null and void never became applicable because the plain language
of the agreement provided for these three days for the parties to agree after the sellers
received the signed amendment from the buyers. Thereafter, the seller had three days
to agree in writing which material defects they would correct, if any. This did not occur.
{¶28} The Goddards failed to satisfy their promise to present the Walters with an
amendment to the purchase agreement. The Walters could not have executed an
amendment that the Goddards failed to produce. We disagree with the trial court’s
conclusion that the purchase agreement became null and void due to a lack of formal
written agreement under section B. The null and void provision never became
applicable because the Goddards’ breach preceded the application of this contract
provision.
{¶29} The fact that parties continued to negotiate in an effort to resolve their
differences about the nature of the repairs does not invalidate the fact that the
Goddards failed to proffer an agreed amendment pursuant to their contractual
obligation.
{¶30} Accordingly, we reverse the trial court’s decision and enter judgment in the
Walters’ favor in light of the Goddards’ breach of the purchase agreement. We remand
for the trial court to determine the Walters’ damages based on the evidence presented
at trial.
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{¶31} The Walters’ second assigned errors argues:
{¶32} “The trial court erred in failing to take cognizance of the magistrate’s
arbitrary, capricious and unreasonable instruction the day before the trial and on the day
of trial, just before it was to begin, directing that the trial would last no more than three
hours.”
{¶33} The Walters claim a denial of due process of law based on the
magistrate’s limitation of their presentation of evidence at trial, and the trial court’s
refusal to allow counsel to make a record of the limits placed on their presentation of
evidence at trial.
{¶34} The Walters seek reversal and remand to permit them to present
additional evidence that they were precluded from presenting based on the three-hour
time limit for their bench trial. The Walters also claim that they did not agree to this
abbreviated time limit for trial and that their attorney was notified only one day before
trial about this time limit.
{¶35} Article I, Section 16 of the Ohio Constitution, Redress for injury; due
process, provides:
{¶36} “All courts shall be open, and every person, for an injury done him in his
land, goods, person, or reputation, shall have remedy by due course of law, and shall
have justice administered without denial or delay. Suits may be brought against the
state, in such courts and in such manner, as may be provided by law.”
{¶37} Section One of the Fourteenth Amendment to the United States
Constitution similarly states that no state shall “deprive any person of life, liberty, or
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property, without due process of law; nor deny to any person within its jurisdiction the
equal protection of the laws.”
{¶38} “Although a trial court may set reasonable time, place, and manner
restrictions on access to the courts and initiate rules regarding the administration of
justice, a trial court should refrain from placing limitations on the party's right to be
heard.” Coburn v. Auto-Owners Ins. Co., 189 Ohio App.3d 322, 2010-Ohio-3327, 938
N.E.2d 400, ¶52.
{¶39} As stated previously, the Walters failed to file the trial transcript with the
trial court before it considered their objections to the magistrate’s decision. Thus, we
are likewise precluded from reviewing the trial transcript upon considering their
appellate arguments. State ex rel. Duncan v. Chippewa Twp. Trustees, 73 Ohio St.3d
728, 730, 654 N.E.2d 1254 (1995); Petty v. Equitable Prod. & Eastern States Oil & Gas,
Inc., 7th Dist. Mahoning No. 05MA80, 2006-Ohio-887, ¶19. We can only review the trial
court’s application of the governing law to its factual findings.
{¶40} The trial court found that the time limit placed on the presentation of their
case was nothing but proper courtroom management. Because there is no record
evidencing the substance of the Walters’ allegations under this assigned error, we
cannot consider whether they preserved this issue for review or if the time constraints
were reasonable.
{¶41} Accordingly, the Walters’ second assigned error lacks merit.
{¶42} The trial court’s decision is reversed and the case is remanded.
COLLEEN MARY O’TOOLE, J., concurs in judgment only,
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DIANE V. GRENDELL, J., dissents with a Dissenting Opinion.
____________________
DIANE V. GRENDELL, J., dissents with a Dissenting Opinion.
{¶43} I respectfully dissent and would affirm the decision of the court below.
The majority not only reverses the judgment of the lower court but orders judgment to
be entered in favor of the appellants as a matter of law. In reaching its desired result,
the majority has exceeded the appropriate scope of appellate review and imposed a
contrived and/or unreasonable interpretation on the parties’ contract.
{¶44} The key provision of the Purchase Agreement provides:
Within three (3) days after completion of the last inspection,
BUYER [the Goddards] shall * * * [a]ccept the property subject to
SELLER [the Walters] agreeing to have specific material defects * *
* repaired * * *. BUYER agrees to provide SELLER with a copy of
all inspection reports and to sign an Amendment to Purchase
Agreement removing the inspection contingency and identifying
those specific material defects which are to be repaired. SELLER
and BUYER shall have three (3) days from the SELLER’S receipt of
the BUYER’S written request and copies of inspection reports to
agree in writing which material defect(s), if any, shall be corrected
by SELLER at SELLER’S expense. If BUYER and SELLER do not
agree in writing within those three (3) days, then this AGREEMENT
shall be null and void * * *.
{¶45} The trial court found as follows:
The Court finds this language is clear and is not ambiguous or
subject to interpretation. * * * [T]he Agreement provided the
Goddards and Walters had three days to ‘agree in writing which
material defects, if any, * * *’ were to be corrected. * * * [T]here is
no evidence the Goddards breached the Agreement since by its
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own terms it became null and void if the parties failed to execute an
additional amendment outlining the repair terms following the
inspection report.
{¶46} Rejecting the clear and unambiguous import of this provision, the majority
adopts the interpretation that the signing of an Amendment to Purchase Agreement is a
condition precedent to the Buyer and Seller agreeing in writing as to which material
defects are to be corrected by the Seller at the Seller’s expense. According to the
majority, because the Goddards “did not proffer a signed amendment identifying the
specific defects that they sought to have the Walters repair,” the “three-day time limit
was not triggered” and “[t]he null and void provision never became applicable.” Supra
at ¶ 24 and 28.
{¶47} The essential difference between the lower court’s interpretation and the
majority’s interpretation is in the language “identifying those specific material defects
which are to be repaired.” For the lower court, the material defects to be identified are
the defects which the Buyer and Seller have agreed to be repaired. For the majority,
the material defects are the defects that the Buyer proposes the Seller should repair.
For multiple reasons, the lower court’s interpretation should be affirmed.
{¶48} Neither the lower court, nor the parties themselves understood the failure
to provide an Amendment to Purchase Agreement as a material breach of the contract.
On the contrary, it was the Walters’ position that, despite the failure to provide the
Amendment, they and the Goddards had reached an agreement regarding the defects
to be repaired:
On July 24, Mrs. Goddard acknowledged through her agent * * *
her full understanding that the Walters were “willing to address
the issues that were marked on the inspection report …” * * *
So, at that point, there was an agreement. * * * The Walters had
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completed all they were required [to do] to trigger the Goddards[’]
duty to close on the contract by August 25. But the Goddards did
not. They breached the contract and refused to close.
(Emphasis sic.) Memorandum of Plaintiffs before the Magistrate, at 11-12.
{¶49} In fact, the Walters’ Objections to the Magistrate’s Decision argues a
position directly contrary to the position adopted by the majority: “Their [the Goddards’]
failure to provide the Amendment to the Walters does not terminate their duty to
complete the contract. That makes no legal sense.” Objections to Magistrate’s
Decision, n.p.
{¶50} I agree that such an interpretation makes no legal sense. The provision
requiring the Goddards as buyers to execute an Amendment to Purchase Agreement
“removing the inspection contingency and identifying those specific material defects
which are to be repaired” makes no sense unless the parties have actually identified
and agreed upon the defects to be repaired.
{¶51} Assuming arguendo, that the failure was a breach, there are no convincing
reasons why it should be interpreted as a material breach. “It is well-settled that ‘[a]
material breach of contract’ is a failure to do something that is so fundamental to a
contract that the failure to perform defeats the essential purpose of the contract or
makes it impossible for the other party to perform.’” (Citation omitted.) Price v. KNL
Custom Homes, Inc., 2015-Ohio-436, 28 N.E.3d 640, ¶ 32 (9th Dist.). As the Walters’
own position makes clear, the duty to provide an Amendment to Purchase Agreement
was not so fundamental to the contract that it made it impossible for the parties to agree
regarding the defects to be repaired.
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{¶52} Moreover, the issue of whether the alleged breach identified by the
majority was material so as to excuse further performance would have been a factual
question to be determined by the trier of fact. O’Brien v. Ohio State Univ., Ct. of Cl. No.
2004-10230, 2005-Ohio-3335, ¶ 44 (“the determination whether a material breach of an
agreement has occurred is generally a question of fact,” and “only where a contract is
clear in making a certain event a material breach of that contract * * * must [the court]
respect that contractual provision”); H & H Glass, Inc. v. Empire Bldg. Co., LLC, 1st
Dist. Hamilton Nos. C-150059 and C-150227, 2016-Ohio-3029, ¶ 8.
{¶53} The majority’s resolution of this appeal goes far beyond merely reviewing
the application of law to the facts in the lower court’s decision. The majority raises
issues never contemplated or argued by the parties – issues which lay beyond the
scope of appellate review inasmuch as no hearing transcript was before the trial court
when ruling on Objections to the Magistrate’s Decision. Civ.R. 53(D)(3)(b)(iv) (“[e]xcept
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)”).
{¶54} For the foregoing reasons, I respectfully dissent and would affirm the
decision of the court below.
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