2454 Cleveland, L.L.C. v. TWA, L.L.C. ( 2020 )


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  • [Cite as 2454 Cleveland, L.L.C. v. TWA, L.L.C., 
    2020-Ohio-362
    .]
    IN THE COURT OF APPEALS OF OHIO
    TENTH APPELLATE DISTRICT
    2454 Cleveland, LLC,                                :
    Plaintiff-Appellee,                 :
    No. 19AP-157
    v.                                                  :               (C.P.C. No. 17CV-6605)
    TWA, LLC,                                           :             (REGULAR CALENDAR)
    Defendant-Appellant.                :
    D E C I S I O N
    Rendered on February 4, 2020
    On brief: Omar Tarazi, for appellee. Argued: Omar Tarazi.
    On brief: Strip, Hoppers, Leithart, McGrath & Terlecky Co.,
    L.P.A., and A.C. Strip, for appellant. Argued: A.C. Strip.
    APPEAL from the Franklin County Court of Common Pleas
    DORRIAN, J.
    {¶ 1} Defendant-appellant, TWA, LLC, appeals from a judgment of the Franklin
    County Court of Common Pleas granting summary judgment in favor of plaintiff-appellee,
    2454 Cleveland, LLC, on its claim for breach of contract and awarding $50,000 in damages.
    For the following reasons, we affirm.
    I. Facts and Procedural History
    {¶ 2} Appellant owned real estate located at 6380 Nicholas Drive in Columbus,
    Ohio ("the Property"). On June 14, 2017, appellee made an offer to purchase the Property
    using a form real estate document ("June 14th purchase offer"). Appellee offered to pay
    $900,000 for the Property, with appellee putting down 40 percent of the purchase price
    and obtaining financing for the remainder. The offer also included contingencies, including
    an inspection contingency providing that appellee would have 30 days after acceptance of
    the offer to have the Property inspected. The offer stated that if appellee did not provide
    No. 19AP-157                                                                                 2
    written notice to appellant within the relevant time periods that the contingencies were
    satisfied or that appellee wished to terminate the transaction, the contingencies would be
    deemed waived. The offer provided for a closing date of August 31, 2017, or within 20 days
    of all contingencies being removed.
    {¶ 3} Appellant responded on June 19, 2017, with a counteroffer ("June 19th
    counteroffer"), accepting the terms of the June 14th purchase offer with the following
    changes: (1) a purchase price of $975,000, (2) the Property being sold "as is," (3) appellant
    paying prorated taxes and assessments through the date of closing, but not retroactive taxes
    or assessments after closing, and (4) a closing date of July 31, 2017. On June 22, 2017,
    appellee responded with another counteroffer ("June 22nd counteroffer"), with the
    following changes to the June 14th purchase offer: (1) a purchase price of $975,000, (2) the
    purchase being contingent on an inspection of the Property, (3) appellant paying prorated
    taxes and assessments through the date of closing, but not retroactive taxes or assessments
    after closing, and (4) a closing date of July 31, 2017 with the option for one 15-day extension
    to be granted if requested. That same date, appellant accepted the June 22nd counteroffer
    by initialing and signing the counteroffer document.
    {¶ 4} After an inspection of the Property was conducted, appellee sent a proposed
    contract addendum on July 11, 2017, using a form document, requesting a reduction in the
    purchase price to $950,000 ("July 11th addendum"). Appellant responded on July 14, 2017
    indicating it would agree to a new purchase price of $965,000 provided that appellee would
    agree to waive all contingencies, appellee's earnest money deposit would be non-refundable
    to be applied to the purchase price at closing, and that closing would be completed on or
    before July 28, 2017. On July 17, 2017, appellee responded with another proposed contract
    addendum ("July 17th addendum") agreeing to a purchase price of $965,000 and
    indicating it was satisfied with any contingencies related to the property inspection, and
    that all other terms and conditions from the June 14th purchase offer would remain the
    same. On July 19, 2017, appellant responded by sending a termination notice, indicating it
    did not accept the terms contained in the July 17th addendum and that it deemed the
    contract for purchase of the Property to be terminated. That same day, appellant entered
    into a contract to sell the Property to another entity, Todd Real Estate, Inc., for $1,025,000.
    No. 19AP-157                                                                               3
    {¶ 5} Appellee filed a complaint in the Franklin County Court of Common Pleas
    asserting claims for breach of contract, breach of the duty of fair dealing, and fraudulent
    inducement. Appellee alleged the parties had a contract for sale of the Property that
    appellant breached by unilaterally terminating it. Appellee moved for partial summary
    judgment on its breach of contract claim, asserting the parties had entered into a contract
    for sale of the Property based on the June 14th purchase offer, as modified by the June 22nd
    counteroffer, and that there was no genuine issue of material fact as to whether appellant
    breached the contract by unilaterally terminating it on July 19, 2017, and entering into a
    contract for sale of the Property to Todd Real Estate, Inc. Appellant also filed a motion for
    summary judgment, arguing there was no contract between the parties because they never
    came to a meeting of the minds on the essential terms of the purchase.
    {¶ 6} In June 2018, the trial court issued a judgment granting appellee's motion for
    partial summary judgment and denying appellant's motion for summary judgment. The
    court concluded the parties entered into a contract for sale of the Property, based on the
    June 14th purchase offer, the June 19th counteroffer, and the June 22nd counteroffer, and
    the subsequent proposed contract addendums did not constitute termination of that
    contract. The court further concluded appellant lacked authority to unilaterally terminate
    the contract prior to the expiration of the contingencies and that by doing so appellant
    breached the contract. In January 2019, the trial court conducted a damages hearing, and
    subsequently issued a decision concluding that appellee's damages were $50,000,
    determined by the difference between the contract price ($975,000) and the subsequent
    sale price of the Property to Todd Real Estate, Inc. ($1,025,000). The trial court combined
    its decision on the issue of damages with its earlier decision and entered a final judgment
    granting summary judgment in favor of appellee on the breach of contract claim in the
    amount of $50,000, plus interest.
    II. Assignments of Error
    {¶ 7} Appellant appeals and assigns the following two assignments of error for our
    review:
    [I.] The trial court erred when it granted partial summary
    judgment to the Appellee and denied the summary judgment
    motion of Appellant on the issue of whether an enforceable
    contract existed.
    No. 19AP-157                                                                                4
    [II.] The trial court erred in determining damages when it
    used an arbitrary measure of damages for a breach of a real
    estate contract by seller.
    III. Analysis
    A. Determination that Appellant Breached a Contract With Appellee
    {¶ 8} Appellant asserts in its first assignment of error the trial court erred by
    granting appellee's motion for partial summary judgment on the issue of breach of contract
    and denying its motion for summary judgment on all claims. We review a grant of summary
    judgment under a de novo standard. Capella III, LLC v. Wilcox, 
    190 Ohio App.3d 133
    ,
    
    2010-Ohio-4746
    , ¶ 16 (10th Dist.), citing Andersen v. Highland House Co., 
    93 Ohio St.3d 547
    , 548 (2001).      "[D]e novo appellate review means that the court of appeals
    independently reviews the record and affords no deference to the trial court's decision."
    (Internal quotations and citations omitted.) Holt v. State, 10th Dist. No. 10AP-214, 2010-
    Ohio-6529, ¶ 9. Summary judgment is appropriate where "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 and
    that conclusion is adverse to the party against whom the motion for summary judgment is
    made." Capella III at ¶ 16, citing Gilbert v. Summit Cty., 
    104 Ohio St.3d 660
    , 2004-Ohio-
    7108, ¶ 6. In ruling on a motion for summary judgment, the court must resolve all doubts
    and construe the evidence in favor of the non-moving party. Pilz v. Ohio Dept. of Rehab. &
    Corr., 10th Dist. No. 04AP-240, 
    2004-Ohio-4040
    , ¶ 8.
    {¶ 9} The trial court concluded that appellant entered into a contract to sell the
    Property to appellee and appellant breached that contract through its July 19, 2017 notice
    of termination. The elements of a contract include an offer, acceptance, contractual
    capacity, consideration, a manifestation of mutual assent, and legality of purpose. You v.
    Northeast Ohio Med. Univ., 10th Dist. No. 17AP-426, 
    2018-Ohio-4838
    , ¶ 19. A meeting of
    the minds as to the essential terms of a contract is a requirement to enforcing the contract.
    
    Id.
     "In order to establish a claim for breach of contract, the plaintiff must show the
    existence of a contract, performance by the plaintiff under the terms of that contract, breach
    by the defendant, and damage or loss to the plaintiff." CosmetiCredit, LLC v. World Fin.
    Network Natl. Bank, 10th Dist. No. 14AP-32, 
    2014-Ohio-5301
    , ¶ 13. The existence of a
    contract and its meaning are questions of law. You at ¶ 20.
    No. 19AP-157                                                                               5
    {¶ 10} Based on our review of the record, we find that appellee's June 14th purchase
    offer, as modified by appellee's June 22nd counteroffer and accepted by appellant,
    constituted a contract. All essential elements of a contract were present: appellee made an
    offer to purchase the Property, which was specifically identified, appellant accepted that
    offer, and the agreement involved consideration, in the form of a $975,000 payment for the
    Property. Thus, as of June 22, 2017, when appellant accepted the June 22nd counteroffer,
    the parties had a contract for sale of the Property.
    {¶ 11} Pursuant to the property inspection contingency included in the contract,
    appellee had 30 days after the offer was accepted to have the property inspected. Under
    the terms of the contract, appellee could give written notice within that same 30-day period
    that the contingencies had been satisfied or that appellee wished to terminate the contract.
    If appellee failed to do so, the contingencies would be deemed to have been waived.
    Therefore, appellee had until July 22, 2017 to have the Property inspected and notify
    appellant that the contingencies were satisfied or that it wished to terminate the contract.
    The agreement provided that the transaction would close no later than July 31, 2017 unless
    appellee requested a 15-day extension, which appellant was obligated to grant. As of
    July 19, 2017, when appellant sent its termination notice, the time for appellee to act under
    the inspection contingency had not expired.
    {¶ 12} Appellant argues the July 11th addendum constituted a rejection of the
    parties' agreement and a counteroffer by appellee. Because we have concluded there was a
    contract for sale of the Property as of June 22, 2017, appellant appears to effectively argue
    that the July 11th addendum was a repudiation of the existing contract and an attempt to
    negotiate a new contract on different terms. Repudiation of a contract must be expressed
    in clear and unequivocal terms. Haman Ents. Inc. v. Sharper Impressions Painting Co.,
    10th Dist. No. 15AP-50, 
    2015-Ohio-4967
    , ¶ 23. "A mere request for a change in terms or
    for cancellation does not constitute a repudiation." 
    Id.
     Appellant cites language in the
    July 11th addendum stating it would supersede the contract and claims that use of the term
    "supersede" indicated appellee sought to renegotiate the parties' agreement, rather than
    simply modify the existing agreement. However, the language of the July 11th addendum
    indicated it would only supersede any conflicting provisions in the contract, thus implicitly
    acknowledging the existing agreement formed by the June 14th purchase offer, as modified
    No. 19AP-157                                                                                 6
    by the June 22nd counteroffer. Under these circumstances, we find the July 11th addendum
    did not constitute a repudiation of the contract by appellee or a notice of termination by
    appellee under the contingency provisions of the contract. As of July 19, 2017, when
    appellant sent its notice of termination, the parties had a binding contract which did not
    include provisions permitting appellant to unilaterally terminate the contract. Therefore,
    appellant's July 19, 2017 termination notice constituted a breach of contract.
    {¶ 13} Appellant further argues it was excused from performing under the contract
    because appellee did not secure financing for a portion of the purchase price, as provided
    in the June 14th purchase offer. Appellee attached to its complaint a commitment letter
    from a bank arranging for financing of the transaction. Appellant argues this letter was
    insufficient because it was not signed by appellee until July 19, 2017, which was the same
    day the acceptance window for the July 17th addendum closed. However, under the terms
    of the contract the sale would not close until July 31, 2017. Because nearly two weeks
    remained until the closing date, appellee had additional time to secure financing before
    closing. Moreover, appellee's owner testified at the damages hearing that the company had
    sufficient cash to purchase the Property if there were any problems with financing.
    {¶ 14} Based on our review of the record, we conclude the trial court did not err by
    granting appellee's motion for summary judgment because there was no genuine issue of
    material fact as to whether the parties had a contract for sale of the Property and whether
    appellant breached that contract by terminating it and selling the Property to another
    entity.
    {¶ 15} Accordingly, we overrule appellant's first assignment of error.
    B. Determination of Damages for Breach of Contract
    {¶ 16} Appellant claims in its second assignment of error the trial court erred in
    determining the damages due to appellee. The amount of damages to be awarded in a
    breach of contract action is a factual issue; therefore, it is within the factfinder's province
    to determine the amount of damages to be awarded. Mid Am. Constr., LLC v. Univ. of
    Akron, 10th Dist. No. 18AP-846, 
    2019-Ohio-3863
    , ¶ 88. "[A]ppellate courts review an
    award of damages in a bench trial under the manifest-weight-of-the-evidence standard."
    
    Id.
     Under the manifest-weight standard, we must determine whether some competent,
    No. 19AP-157                                                                               7
    credible evidence supports the trial court's damages award. Alternatives Unlimited-
    Special, Inc. v. Ohio Dept. of Edn., 10th Dist. No. 12AP-647, 
    2013-Ohio-3890
    , ¶ 35.
    {¶ 17} One measure of damages for breach of a real estate contract is the difference
    between the original contract price and the fair market value of the property at the time of
    the breach. Triangle Properties, Inc. v. Homewood Corp., 10th Dist. No. 12AP-933, 2013-
    Ohio-3926, ¶ 46. See also Alternatives Unlimited-Special at ¶ 29-31 (discussing
    expectation and reliance damages for breach of contract). "It has been held that when the
    sale of real estate after a breach of contract is made within a reasonable time and at the
    highest price obtainable after the breach, it is evidence of the market value on the date of
    the breach." Triangle Properties at ¶ 46, citing Roesch v. Bray, 
    46 Ohio App.3d 49
    , 50 (6th
    Dist.1988). See also Father's House Internal., Inc. v. Kurguz, 10th Dist. No. 15AP-1046,
    
    2016-Ohio-5945
    , ¶ 19 (noting the general rule that a seller may recover the difference
    between the contract price and the fair market value of property at the time of the breach
    of contract).
    {¶ 18} The trial court concluded the appropriate measure of damages in this case
    was the difference between appellee's contract price to purchase the Property and the fair
    market value of the Property at the time of the breach. Appellee attached to its complaint
    a copy of a real estate purchase contract dated July 17, 2017, and signed by appellant on
    July 19, 2017, providing that Todd Real Estate, Inc. would purchase the Property from
    appellant for $1,025,000. Appellant and appellee stipulated to the accuracy of the contract.
    The trial court relied on the contract between appellant and Todd Real Estate, Inc. to
    establish the fair market value of the Property at the time of the breach, asserting it was a
    sale on the open market within two weeks of the breach of contract. The court held appellee
    was entitled to the difference between its contract price with appellant ($975,000) and the
    contract price between appellant and Todd Real Estate, Inc. ($1,025,000) and, thus,
    awarded appellee $50,000 in damages.
    {¶ 19} Appellant argues the trial court erred by relying on the sale price of the
    Property to Todd Real Estate, Inc. as the fair market value of the property without any other
    evidence that this was a true indicator of fair market value at the time of the breach of
    contract. Citing this court's decision in Mildred Hine Trust v. Buster, 10th Dist. No. 07AP-
    277, 
    2007-Ohio-6999
    , appellant argues appellee failed to satisfy the burden of establishing
    No. 19AP-157                                                                                 8
    that the subsequent sale price was the fair market value of the property at the time of the
    breach.
    {¶ 20} Hine Trust involved a scenario where prospective buyers rescinded an offer
    to purchase a residential property, which had been accepted by the seller, and the property
    ultimately sold for a lower price than the original bid. Hine Trust at ¶ 6. The seller sued
    the prospective buyers to recover the difference between their bid and the resale price. The
    trial court granted summary judgment in favor of the seller and awarded damages equal to
    the difference between the original contract price and the resale price. Id. at ¶ 8. On appeal,
    this court noted that, as a general rule, Ohio courts held that a party seeking to recover
    damages needed to present sufficient evidence to establish that a resale price was a true
    indicator of fair market value at the time of a breach. Id. at ¶ 13. Accordingly, Ohio courts
    held that a trial court generally erred by simply awarding the difference between an original
    contract price and a resale price on the assumption that the resale price constituted the fair
    market value of the property. Id. at ¶ 14. The court noted it was necessary to consider
    factors such as " 'the length of time between the breach and resale, the terms of the original
    contract and the resale, and any evidence as to the stability of the real estate market during
    the months between the breach and resale, along with any other relevant factors, to
    determine if the resale price is sufficient evidence of the fair market value of the property
    on the date of the breach.' " Id., quoting Loft v. Sibcy-Cline Realtors, 1st Dist. No. C-
    880446 (Dec. 13, 1989).
    {¶ 21} Although the seller in Hine Trust submitted only the settlement statement
    from the resale of the property to establish the fair market value, this court affirmed the
    trial court's damages award. The court held that the seller satisfied its burden of proof by
    submitting the resale settlement statement because the resale occurred as a result of
    competitive bidding within one month of the breach on terms identical to those offered in
    the original contract. Hine Trust at ¶ 16. Thus, the court effectively found that under those
    circumstances the resale settlement statement was sufficient and independent evidence
    was not necessary to establish the fair market value of the property.
    {¶ 22} In the present case appellee only submitted evidence of the subsequent sale
    price of the Property to Todd Real Estate, Inc. and did not provide any independent
    appraisal or assessment of the fair market value of the Property at the time of the breach.
    No. 19AP-157                                                                              9
    Appellant claims this was insufficient to satisfy the burden of establishing that the
    subsequent sale price was a true indicator of the fair market value of the Property. As in
    Hine Trust, however, the subsequent sale of the Property in this case occurred close in time
    to the breach of contract, with appellant accepting the subsequent purchase offer the same
    date it notified appellee it was terminating the contract. The terms of both contracts were
    similar, with appellant due to receive the purchase price in cash at closing, although the
    financing details of each transaction were different.     The trial court concluded that
    subsequent sale represented the fair market value of the Property because it occurred on
    the open market shortly after the breach of contract. Thus, similar to Hine Trust, in
    awarding damages the trial court considered the relevant factors of timing and terms in
    ascertaining whether the subsequent sale price established the fair market value of the
    Property. Applying the manifest weight standard, we conclude the subsequent sale contract
    constituted competent, credible evidence to support the trial court's damage award.
    {¶ 23} Accordingly, we overrule appellant's second assignment of error.
    IV. Conclusion
    {¶ 24} For the foregoing reasons, we overrule appellant's two assignments of error
    and affirm the judgment of the Franklin County Court of Common Pleas.
    Judgment affirmed.
    SADLER, P.J., and KLATT, J., concur.