Eiselstein v. Baluck , 2012 Ohio 3002 ( 2012 )

[Cite as Eiselstein v. Baluck, 2012-Ohio-3002.]
STATE OF OHIO, MAHONING COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
RONALD S. EISELSTEIN, et al., )
) CASE NO. 11 MA 74
PLAINTIFFS-APPELLANTS, )
)
- VS - ) OPINION
)
JAMES BALUCK, et al., )
)
DEFENDANTS-APPELLEES. )
CHARACTER OF PROCEEDINGS: Civil Appeal from Common Pleas
Court, Case No. 09 CV 1839.
JUDGMENT: Affirmed.
APPEARANCES:
For Plaintiffs-Appellants: Attorney Alden Chevlen
5202 Nashua Drive
Youngstown, OH 44515
For Defendants-Appellees: Attorney David Engler
Southwoods Executive Center
100 DeBartolo Place, Suite 315
Boardman, OH 44512
JUDGES:
Hon. Mary DeGenaro
Hon. Cheryl L. Waite
Hon. Gene Donofrio
Dated: June 20, 2012
[Cite as Eiselstein v. Baluck, 2012-Ohio-3002.]
DeGenaro, J.
{¶1} Plaintiffs-Appellants, Ronald and Joanne Eiselstein appeal the May 9, 2011
decision of the trial court overruling their objections to a magistrate's decision; entering
judgment against the Eiselsteins on their breach of contract claim; entering judgment in
favor of Defendants-Appellees James and Joanne Baluck on their counterclaim for
breach; and awarding the Balucks $20,353.51 in damages following a trial before the
magistrate. On appeal, the Eiselsteins challenge various aspects of the trial court's
judgment as being against the manifest weight of the evidence.
{¶2} Because the Eiselsteins failed to file a complete transcript for the trial court
to review with their objections, they have waived all factual challenges on appeal. Since
all of their assignments of error allege that the trial court's decision was against the
manifest weight, which are inherently factual challenges, they have waived their right to
make these arguments on appeal. Accordingly, the trial court's decision is affirmed.
Facts and Procedural History
{¶3} On September 1, 2008, the Eiselsteins entered into a written contract with
the Balucks whereby the Eiselsteins agreed to lease residential property in Poland to the
Balucks for $400 per month for 12 months. The contract contains a provision granting the
Balucks the option to purchase the property at any time during the lease term for $65,000
by providing the Eiselsteins with written notice of their intent to exercise the option. The
Eiselsteins agreed to provide financing for the purchase. The contract further states:
"Other than Landlord's obligation to replat the lot on which the dwelling is situated, there
are no other contingencies which must be satisfied in order to consummate the sale and
transfer of the Premises. * * * Landlord shall convey the Premises to Tenant by warranty
deed with good and marketable title."
{¶4} Further, the contract states:
If Landlord fails to perform or fulfill any obligation under this Lease,
including Landlord's obligation to provide "Landlord Financing" (as defined
in Paragraph 8) after the purchase of the Premises, Landlord shall refund to
Tenant the Security Deposit, the first six month's of Rent (which is being
considered an improvement allowance for purposes of this Paragraph), all
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money invested by Tenant for improvements to the Premises (as evidenced
by paid receipts for materials) plus an additional fifty percent (50%) of the
cost of materials to compensate Tenant for labor costs. * * *
{¶5} The property, which was an historic home, required some renovating, and
thus the contract contains the following provision: "As Tenant will be making significant
improvements to the Premises to make the Premises habitable and compliant with local
building codes, any work in progress at the termination of this Lease shall not be
considered 'damages' to the Premises * * * [.]"
{¶6} On May 19, 2009, the Eiselsteins filed a complaint against the Balucks for
breach of contract and specific performance. According to the Eiselsteins, the Balucks
provided them with written notice of their intent to exercise the purchase option on March
19, 2009. The Balucks then learned that there was already an existing mortgage
encumbering the property that had been taken out by the Eiselsteins, which apparently
could not be released prior to closing. According to the Eiselsteins, the Balucks refused
to accept title for an interim period until the Eiselsteins could obtain a partial release of
the mortgage, allegedly in breach of the contract. The Eiselsteins demanded that the
Balucks be ordered to specifically perform under the contract by completing the purchase
as agreed. Alternatively, the Eiselsteins prayed that monetary damages be awarded for
what they viewed as the Balucks' "extensive demolition" of the interior and parts of the
exterior of the house.
{¶7} The Balucks answered and counterclaimed for breach of contract and
fraudulent inducement. The Balucks claimed that the Eiselsteins failed to perform under
the contract because they were unable to convey clear title when the Balucks informed
them of their intent to exercise the purchase option, and demanded $20,353.51 to
compensate them for the goods purchased to improve the property plus other damages
the Eiselsteins agreed to in the contract. The Balucks also alleged that the Eiselsteins
fraudulently induced them to enter into a contract knowing that they could not perform,
and demanded $20,353.51 in specific damages plus punitive damages and attorney fees.
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{¶8} The case was tried before the magistrate, where the Eiselsteins called six
witnesses and the Balucks called three. Thereafter both sides filed post-trial briefs with
the magistrate, each attaching the transcript of one witness's testimony, Richard
Mastriani, one of the Eiselsteins' experts.
{¶9} The magistrate issued a decision concluding that the Eiselsteins failed to
sustain their burden of proof with regard to their breach of contract claim and thus entered
judgment in favor of the Balucks and against the Eiselsteins on the complaint. Further,
the magistrate found that the Balucks failed to sustain their burden of proof on their fraud
counterclaim and thus entered judgment in favor of the Eiselsteins and against the
Balucks upon that claim. Finally, the magistrate found by a preponderance of the
evidence that the Eiselsteins breached the contract resulting in damages to the Balucks.
Accordingly, the magistrate entered judgment in favor of the Balucks and against the
Eiselsteins in the amount of $20,353.51, plus interest and costs.
{¶10} Findings of Fact and Conclusions of Law were neither requested nor
prepared by the magistrate. The Eiselsteins filed timely objections to the magistrate's
decision, alleging that the magistrate's "factual findings are incorrect based upon the
evidence presented by the Eiselsteins," and also that "the Magistrate erred by not
considering the relevant statutes and case law presented by the Eiselsteins to rebut the
arguments of the Balucks[.]" Notably, the Eiselsteins did not file a transcript to
accompany their objections. The Balucks filed a response to the objections arguing that
the Eiselsteins objections should not be considered for that reason.
{¶11} After a hearing, which was not transcribed for inclusion in the appellate
record, the trial court overruled the objections, stating:
The Court has considered Civil Rule 53 (D)(3)(b) Objections to
Magistrate's Decision and the applicable law. The Court has undertaken
an independent review as to the objected matters to ascertain that the
Magistrate has properly determined the factual issues and appropriately
applied the law in consideration of this matter. Defendants' response to
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Plaintiffs' objection correctly notes that Plaintiff has failed to provide a
transcript of the proceedings herein or an affidavit of evidence as required
by Civ.R. 53(D)(3)(b)(iii). Upon consideration of all the aforesaid, the
Court adopts the Magistrate's Decision in whole without modification as
follows: * * *
{¶12} The Eiselsteins filed a timely notice of appeal with this court on May 10,
2011. The Eiselsteins did file a full trial transcript for inclusion in the appellate record,
however, as indicated, the trial court did not review it when overruling the objections to the
magistrate's decision.
Failure to File a Transcript with Objections to the Magistrate's Decision
{¶13} The Eiselsteins' three assignments of error can be disposed of on the same
grounds and therefore will be discussed together. They assert, respectively:
{¶14} "The trial court erred in finding that Plaintiffs breached the Contract for
failure to perform when Plaintiffs' testimony and exhibits support the fact that Plaintiffs
substantially performed their requirements of the Lease."
{¶15} "The trial court erred in adopting the Magistrate's Decision that the
Defendants/Appellees incurred damages as a result of Plaintiffs'/Appellants' actions."
{¶16} "The trial court erred in ruling that Plaintiffs/Appellants failed to sustain their
burden of proof when all testimony and exhibits supported Plaintiffs substantial
performance under the Lease, which is the requirement for an award of specific
performance."
{¶17} All of the above assignments of error challenge the trial court's decision as
being against the manifest weight of the evidence, and thus present factual challenges to
the decision below. The law is clear that failure to file a transcript waives all factual
challenges on appeal. Civ.R. 53(D)(3)(b)(iii) states that an objection to a factual finding,
whether or not specifically designated as a finding of fact, shall be supported by a
transcript of all the evidence submitted to the magistrate relevant to that finding, by an
affidavit of that evidence if a transcript is not available. With leave of court alternative
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technology or manner of reviewing the relevant evidence may be considered. The
objecting party shall file the transcript or affidavit with the court within thirty days after
filing objections unless the court extends the time in writing for preparation of the
transcript or other good cause. Civ.R. 53(D)(3)(b)(iii).
{¶18} The Supreme Court of Ohio has stated that where the objecting party fails to
provide the trial court with the transcript of the proceedings before the magistrate, an
appellate court is precluded from considering the transcript of the magistrate's hearing
submitted with the appellate record. State ex rel. Duncan v. Chippewa Twp. Trustees, 73
Ohio St.3d 728, 730, 654 N.E.2d 1254 (1995). In such case, the reviewing court is only
permitted to determine if the application of the law was proper or if it constituted an abuse
of discretion. Id. As a result, an appellant cannot rely on evidence from the transcript of
a magistrate's hearing where that transcript was not before the court when ruling on the
objections. Id., citing State v. Ishmail , 54 Ohio St.2d 402, 377 N.E.2d 500 (1978), at
paragraph one of syllabus ("A reviewing court cannot add matter to the record before it,
which was not a part of the trial court's proceedings, and then decide the appeal on the
basis of the new matter.").
{¶19} Thus, if no transcript has been presented to the trial court for ruling on the
objections to the magistrate's decision, then no transcript can be presented to the court of
appeals. Petty v. Equitable Prod. & Eastern States Oil & Gas, Inc., 7th Dist. No. 05MA80,
2006-Ohio-887, ¶ 19, 22. In such a situation, both the trial court and the appellate court
are bound by the magistrate's factual findings. Id. at ¶ 23. The appellate court can thus
review only any legal issues raised. Id. at ¶ 24. See, also, Remner v. Peshek, 7th Dist.
No. 97-C.A.-98, 1999 WL 803441 (Sept. 30, 1999) (holding that trial court did not abuse
its discretion in overruling Appellant's objections on the basis that Appellant failed to file a
transcript of hearing.)
{¶20} Here, only the transcript of one witness's testimony, which was filed along
with the post-trial briefs, was available to the trial court when ruling on the objections;
eight other witnesses testified at the trial before the magistrate, but the trial court did not
have the benefit of reviewing their testimony. Thus, this court is precluded from reviewing
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the full trial transcript filed on appeal. Even though the Eiselsteins make reference to the
testimony of three other witnesses in their brief on appeal, we cannot consider it because
their testimony was not transcribed and filed with the Eiselsteins' objections to be
reviewed by the trial court. In addition, because neither party requested that the
magistrate issue findings of fact in this case, we also lack the benefit of those to review.
As discussed, all of the Eiselsteins' assignments of error attack the trial court's decision
as being against the manifest weight, which is impossible to determine absent a review of
a full trial transcript, or at least, factual findings by the magistrate. Finally, the trial court's
decision to overrule the objections based upon the Eiselsteins failure to file a complete
transcript was reasonable. Accord Remner, supra.
{¶21} Accordingly, the Eiselsteins' assignments of error are meritless, and the
judgment of the trial court is affirmed.
Waite, P.J., concurs.
Donofrio, J., concurs.