Premier Const. Co., Inc. v. Maple Glen Apts. & Townhomes, Ltd. ( 2020 )

[Cite as Premier Const. Co., Inc. v. Maple Glen Apts. & Townhomes, Ltd., 2020-Ohio-4779.]
IN THE COURT OF APPEALS
TWELFTH APPELLATE DISTRICT OF OHIO
CLERMONT COUNTY
PREMIER CONSTRUCTION CO., INC., : CASE NO. CA2020-03-011
Appellant, : OPINION
10/5/2020
:
- vs -
:
MAPLE GLEN APARTMENTS AND :
TOWNHOUSES LTD., et al.,
:
Appellees.
CIVIL APPEAL FROM CLERMONT COUNTY COURT OF COMMON PLEAS
Case No. 2018 CVE 00481
Law Office of John H. Forg, John H. Forg, III, 11156 Main Street, Suite D, Sharonville, Ohio
45241, for appellant
Patrick L. Gregory, 717 West Plane Street, P.O. Box 378, Bethel, Ohio 45106, for appellees
M. POWELL, P.J.
{¶ 1} Premier Construction Co., Inc. appeals the decision of the Clermont County
Court of Common Pleas, dismissing its claims against Maple Glen Apartments and
Townhouses, Ltd. For the reasons that follow, this court reverses the trial court's decision
and remands for further proceedings.
Clermont CA2020-03-011
{¶ 2} In 2018, Premier filed suit against Maple Glen and its owner and manager,
Indira Murthy, asserting breach of contract and mechanic's lien foreclosure claims.1 The
matter proceeded to a bench trial, where the evidence revealed that Premier was engaged
in the business of supplying materials for residential construction. Maple Glen is a business
engaged in owning and managing apartments.
{¶ 3} In January 2017, Murthy came to Premier's offices and met with Premier's
owner, Jan Gilkey. Murthy presented Gilkey with blueprints for the construction of an 18-
unit apartment building on Maple Glen's property. Murthy apparently wanted Premier to
provide the materials and labor to construct the building. However, Gilkey informed Murthy
that Premier did not have sufficient workers to construct a building of that size. Instead,
Premier agreed to supply building materials for the project, including lumber for framing,
and trim materials. Premier further agreed to assist Murthy in finding carpenters for the
project.
{¶ 4} Based on Murthy's blueprints, and with some modifications suggested by
Premier, Premier provided Murthy with an initial estimate. Murthy determined that the price
was too high and did not proceed. Later, Premier provided Murthy with a second estimate.
This written estimate was presented to Murthy on a Premier form titled "Estimate" which
appears similar to a standard price quotation form. The form contains four columns,
"Description," "Qty," "Price/Each" and "Total."
{¶ 5} The "Description" column listed the building materials that Premier proposed
to deliver, including framing materials, exterior trim, and interior trim. The "Qty" column was
left blank. The "Price/Each" column listed the unit prices for the materials that Premier
1. Premier filed suit against "Glen Maple Apartments and Townhouses, Ltd" but referred to the defendant in
the body of the complaint as "Maple Glen Apartments and Townhouses, Ltd." Throughout these proceedings
the parties and court have variously referred to the defendant as either "Glen Maple" or "Maple Glen." Maple
Glen points out that its legal name is Maple Glen Apartments and Townhouses, Ltd.
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proposed to deliver. For example, the framing materials were listed at a price of $107,300.
Finally, the "Total" column contained identical figures as the "Total/Each" column. The
grand total for the project was listed at the bottom of the form and was $165,666.08. Murthy
signed the estimate on behalf of Maple Glen on September 6, 2017. Gilkey also signed the
estimate.
{¶ 6} Gilkey testified that after the estimate was signed, the only issue left to resolve
was when to make delivery to the job site. Gilkey said he and Murthy agreed that Premier
would deliver the building materials in stages corresponding to the construction of the
building's floors. Thus, Premier and Maple Glen agreed that the first delivery would contain
the materials necessary to construct the first floor.
{¶ 7} Premier delivered the materials for the first floor to Maple Glen's job site in
early October. On October 16, 2017, Premier issued Maple Glen an invoice for $24,331.20,
which constituted payment for the first floor materials. The invoice indicated it was due
upon receipt and that 1.5% interest would accrue per month after 30 days.
{¶ 8} Thereafter, due to a problem with the installation of foundation steel column
supports, Murthy decided to postpone construction until the spring of 2018.2 Murthy asked
Premier to retrieve the delivered materials, store them for her over the winter, guarantee
their pricing, and redeliver the materials in March 2018.
{¶ 9} Gilkey told Murthy that what she was proposing would be expensive and
asked for payment for the delivered materials. However, Maple Glen did not pay. Gilkey
testified that when it became apparent that Maple Glen did not intend to pay for the
materials, he rented heavy equipment and transferred the materials from the job site to
Premier's location.
2. The evidence indicated that without steel columns in place, carpenters could have worked for a few days
before they would need to stop work and wait for the steel column installation.
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{¶ 10} Premier issued a second invoice to Maple Glen that listed charges for the
costs to retrieve the materials from the job site. This included charges for the rental of a
forklift, two truck trips, and labor. This invoice totaled $3,447.00.
{¶ 11} Maple Glen did not pay this invoice. In January 2018, Premier issued two
updated invoices, adding accrued interest. Also, in January 2018, Premier recorded an
affidavit for mechanic's lien on Maple Glen's real property in the amount of $29,516.70. This
amount represented the entire unpaid balance on both updated invoices.
{¶ 12} Gilkey testified that he sought to sell the retrieved building materials. Over
the course of the next year, he was able to recoup approximately $18,000 by selling the
materials. Thus, he was seeking approximately $7,000 from Maple Glen in contractual
damages.
{¶ 13} After hearing the evidence, the trial court issued a decision dismissing
Premier's contract claim. The court analyzed the issue as a "sale of goods" under the
Uniform Commercial Code (UCC) and found that the parties had not validly contracted
because the written estimate did not list the quantity of goods and therefore violated the
statute of frauds as set forth in R.C. 1302.04. The court further noted that it found the
estimate vague as to the goods to be supplied, and lacking a place of delivery, time of
delivery, and terms of payment.
{¶ 14} The court also dismissed Premier's claim to foreclose its mechanic's lien. The
court found that the lien was invalid because it was premised on an invalid contract. The
court further found that the lien was invalid because the materials furnished by Premier
were not used to improve Maple Glen's property and had been removed from the job site.
Premier appeals, raising two assignments of error.
{¶ 15} Assignment of Error No. 1:
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{¶ 16} THE TRIAL COURT ERRED IN RULING THAT PREMIER CONSTRUCTION
AND MAPLE GLEN APARTMENTS DID NOT ENTER INTO A CONTRACT FOR THE
DELIVERY OF MATERIALS FOR THE CONSTRUCTION OF A MULTI-UNIT
APARTMENT BUILDING AND THAT MAPLE GLEN APARTMENTS BREACHED THAT
CONTRACT BY REFUSING TO PAY FOR THOSE MATERIALS.
{¶ 17} Premier argues that the trial court erred in finding that it did not have a valid
contract with Maple Glen because the parties had not agreed to a quantity term. Premier
argues that because the "Total/Each" and "Total" columns were identical, the estimate
necessarily called for a single quantity of each good and there was no ambiguity.
{¶ 18} Appellate review of a decision on the existence of a contract involves a mixed
question of law and fact. McSweeney v. Jackson, 117 Ohio App. 3d 623, 632 (4th
Dist.1996). The appellate court will accept the factual findings of the trial court if supported
by some competent, credible evidence. Id. Purely legal issues are reviewed de novo. Ohio
Dist. Council, Inc. of the Assemblies of God v. Speelman, 12th Dist. Butler Nos. CA2018-
02-025, CA2018-02-031, 2018-Ohio-4388, ¶ 18.
{¶ 19} The trial court found the underlying agreement to be a transaction for the sale
of goods, which the parties do not dispute in this appeal. Accordingly, Ohio's version of the
UCC, found in Revised Code Chapter 1302, applies.
{¶ 20} Premier's written estimate is similar to what courts have characterized as a
price quotation. Price quotations may constitute offers to contract and may be deemed an
offer to form a binding contract "if it is sufficiently detailed, and if it appears from the terms
of the quotation that all that is needed to ripen the offer into a contract is the recipient's
assent." SST Bearing Corp. v. MTD Consumers Group, Inc., 1st Dist. Hamilton No. C–
040267, 2004-Ohio-6435, ¶ 15, citing Dyno Construction Co. v. McWane, 198 F.3d 567,
572 (6th Cir.1999). The determination of whether a price quotation is an offer "is to be
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made based 'upon the intention of the person communicating the quotation as
demonstrated by all of the surrounding facts and circumstances.'" H & M Landscaping Co.,
Inc. v. Abraxus Salt, L.L.C., 8th Dist. Cuyahoga No. 94268, 2010-Ohio-4138, ¶ 9, citing
Dyno Construction at id.
{¶ 21} Here, there appears to be an intention by both parties that Premier's estimate
was intended to be an offer to contract. Murthy initially approached Premier with blueprints
and requested assistance in constructing the building. Premier indicated it could supply
materials but not labor and the testimony at trial indicated that it took Premier some time to
prepare the estimate. This process involved Premier recommending some changes to the
blueprints. Murthy rejected an earlier estimate, because she believed that the price was
too high.
{¶ 22} Murthy signed and dated the written estimate. Murthy testified that she signed
on behalf of Maple Glen. Gilkey also signed the estimate. Premier then had the materials
delivered, which delivery Maple Glen accepted at its job site.
{¶ 23} At trial, Murthy indicated that Maple Glen intended to move forward with the
project as planned until she decided to delay the construction until the spring. Murthy asked
Premier to remove the materials from the job site, not because she had rejected them, but
because Maple Glen did not have facilities to store and secure the materials over the winter
months. Murthy anticipated that Premier would store the materials over the winter and then
redeliver them to the job site for construction to move forward the following spring. Thus,
the circumstances in this case indicate that at the time Murthy signed the estimate, Premier
intended for the estimate to be an offer and Maple Glen intended to be bound to the
agreement. The next consideration is whether the written estimate was sufficiently detailed
to be enforceable under the UCC.
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{¶ 24} "Unlike the common law, the Ohio Uniform Commercial Code does not require
that all essential terms of a contract be definite in order for the contract to be enforceable."
Tubelite Co., Inc. v. Original Sign Studio, Inc., 10th Dist. Franklin No. 07AP–601, 2008-
Ohio-1905, ¶ 20, citing 2 Anderson, Uniform Commercial Code, Section 2–204:210, 477
(3d Ed.1997). With respect to contract formation, the UCC specifies that "[a] contract for
sale of goods may be made in any manner sufficient to show agreement * * *." R.C.
1302.07(A). R.C. 1302.04, which codifies the statute of frauds with respect to transactions
in goods over $500, specifies that a contract is not enforceable "unless there is some writing
sufficient to indicate that a contract for sale has been made between the parties and signed
by the party against whom enforcement is sought or by his authorized agent * * *." R.C.
1302.04(A). "A writing is not insufficient because it omits or incorrectly states a term agreed
upon but the contract is not enforceable under this division beyond the quantity of goods
shown in such writing." Id.
{¶ 25} Additionally, "[e]ven though one or more terms are left open a contract for sale
does not fail for indefiniteness if the parties have intended to make a contract and there is
a reasonably certain basis for giving an appropriate remedy." R.C. 1302.07(C). "However,
in the absence of some basic terms – such as the description and quantity of the goods –
a contract may not exist." Tubelite at ¶ 20, citing 1 Hawkland, Uniform Commercial Code
Series, Section 2–204:3 (2001). "Quantity is generally the only term that is required for
contract formation." Abraxus Salt, 2010-Ohio-4138, ¶ 12, citing Official Comment One to
R.C. 1302.04 ("The only term which must appear is the quantity term which need not be
accurately stated but recovery is limited to the amount stated. * * * Only three definite and
invariable requirements as to the memorandum are made by this subsection. * * * [T]hird, it
must specify a quantity").
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{¶ 26} Citing R.C. 1302.04, the trial court found that the written estimate violated the
statute of frauds because no quantity for any of the materials was described in the
document. However, despite the blank "Qty" column, the quantity term can be readily
discerned because the "Total/Each" and "Total" columns contained identical figures.
Therefore, the quantity specified was one each for framing materials, interior and exterior
trim, and stairs allowance.
{¶ 27} In its brief, Maple Glen cites Abraxus Salt for a case where the court
concluded that the lack of a quantity term rendered a price quotation unenforceable as a
contract. That case involved a salt purchaser suing a salt distributor after the distributor
raised the per-ton price for salt. The purchaser had earlier been provided with a price
quotation from the distributor for salt at $38 per ton and had prepaid for salt at that rate,
which salt the purchaser received. Id. at ¶ 2-3. Later, the distributor switched to a more
expensive supplier, and, as a result, informed the purchaser that salt would now cost $110
per ton. Id. at ¶ 3. The purchaser sued, claiming that the parties had formed a contract
based on the price quotation. Id. at ¶ 9. The court rejected this argument, finding that
because the parties had not agreed on a quantity of tonnage in the earlier price quotation,
the purchaser could not use the quotation to establish an enforceable contract. Id. at ¶ 20.
{¶ 28} Abraxus Salt is distinguishable as it involved a purchaser of a bulk commodity
attempting to use an old price quote, where no quantity had been specified in the quote, to
secure a favorable rate for a subsequent purchase of the bulk commodity. Here, however,
the estimate presented to Maple Glen was for a one-time purchase of the specific building
materials necessary to construct Maple Glen's apartment. Moreover, the quantity term –
one – was implicit in the estimate.
{¶ 29} Maple Glen also notes that the trial court found the estimate vague in several
respects, including a description of the building materials to be supplied by Premier, the
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place of delivery, the time of delivery, and payment. Again, an agreement under the UCC
does not necessarily fail because it is indefinite in some respects. R.C. 1302.07(C). To the
extent the estimate could be described as vague with respect to the quantity and
specification of building materials, R.C. 1302.05(B) permits it to be "explained or
supplemented by consistent additional terms". Metal Seal v. Good Time Outdoors, Inc.,
11th Dist. Lake No. 2017-L-142, 2018-Ohio-5326, ¶ 46-47. Here, the parties could refer to
the blueprints that formed the basis of the estimate to resolve any ambiguity regarding the
quantity or specification of the building materials that were the subject of the contract. Time
of delivery was not an issue raised by the parties and was separately agreed upon. Place
of delivery was also not an issue and Maple Glen's job site was the implicit delivery location.
Specific terms of payment were not agreed upon but the statutory presumption if not
otherwise agreed is tender of payment upon delivery. R.C. 1302.55(A). Premier's first
invoice was consistent with this presumption. This court does not find that the omission of
these terms rendered the agreement unenforceable.
{¶ 30} Accordingly, this court concludes that the trial court erred in finding no
enforceable contract between Premier and Maple Glen because the written estimate failed
to expressly specify a quantity term. This court sustains Premier's first assignment of error
and reverses and remands for a determination of whether Maple Glen breached the
contract, and if so, whether the evidence introduced at trial established Premier's
damages.3
{¶ 31} Assignment of Error No. 2:
3. Premier raises two additional issues within this assignment of error, arguing that the trial court erred in
finding that Maple Glen did not breach its contract with Premier by failing to pay for the delivered materials
and that the trial court erred in not awarding damages for the materials unsold by Premier and for the costs
of delivering and removing the delivered materials. However, the trial court found no contract between the
parties and therefore did not address the issues of breach or damages.
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{¶ 32} THE TRIAL COURT ERRED IN RULING THAT PREMIER CONSTRUCTION
WAS NOT ENTITLED TO FORECLOSURE OF ITS MECHANIC'S LIEN ON THE REAL
PROPERTY OWNED BY MAPLE GLEN APARTMENTS.
{¶ 33} Premier next argues that the trial court erred in dismissing its claim to
foreclose a mechanic's lien. Whether Premier demonstrated the validity of its mechanic's
lien is a legal issue that this court reviews de novo. Speelman, 2018-Ohio-4388, ¶ 18.
"Mechanics' lien statutes create rights in derogation of the common law and should
therefore be strictly construed as to the question whether a lien attaches, but their
procedural and remedial provisions should be liberally construed, after the lien has been
created." Robert V. Clapp Co. v. Fox, 124 Ohio St. 331 (1931), paragraph one of syllabus,
reaffirmed by Crock Constr. Co. v. Stanley Miller Constr. Co., 66 Ohio St. 3d 588, 592
(1993).
{¶ 34} The trial court concluded that Premier did not possess a valid mechanic's lien
for two reasons. First, the court noted that no valid contract existed between Premier and
Maple Glen. However, this court has determined that the trial court erred in finding that the
parties had not contracted. Second, the trial court determined that Premier's lien failed to
satisfy R.C. 1311.12(A)(1), because the building materials delivered by Premier were not
used in the course of improvements at Maple Glen's job site and had instead been retrieved
by Premier.
{¶ 35} R.C. 1311.12 provides:
(A) A mechanic's lien for furnishing materials arises under
sections 1311.01 to 1311.22 of the Revised Code only if the
materials are:
(1) Furnished with the intent, as evidenced by the contract of
sale, the delivery order, delivery to the site by the claimant or at
the claimant's direction, or by other evidence, that the materials
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be used in the course of the improvement with which the lien
arises * * *.
{¶ 36} This court does not interpret R.C. 1311.12(A)(1) as requiring proof that the
furnished materials were in fact used in the course of the improvement for which the lien
arose. By its plain language, the statute provides that a lien arises if the materials are
furnished with the intent that they be used in the course of the improvement. Thus, it is the
intent of the mechanic's lien holder, and not the ultimate use that determines when the lien
arises. This reading is bolstered by considering R.C. 1311.12(A)(2), which expressly
provides that a lien arises when materials are "[i]ncorporated in the improvement or
consumed as normal wastage in the course of the improvement * * *." This provision would
be redundant if R.C. 1311.12(A)(1) also required proof that the materials were actually used
to improve the real property. Here, the evidence submitted at trial established that Premier
furnished the building supplies to Maple Glen by delivering the goods to Maple Glen's real
property, and that, through the aforementioned contract and delivery of goods, evidenced
its intent that such supplies would be used by Maple Glen in the course of the improvements
to the property.
{¶ 37} Consequently, this court finds that the trial court erred in its determination that
Premier had not established a valid lien based on the alleged lack of a contract and for a
failure to satisfy R.C. 1311.12(A)(1). Whether the mechanic's lien is otherwise valid and
enforceable will depend upon the trial court's proceedings on remand. This court sustains
Premier's second assignment of error.
{¶ 38} Judgment reversed and the cause remanded for such further proceedings as
the trial court may deem necessary to determine whether Maple Glen breached its contract
with Premier, and if so, to assess damages due to the breach.
RINGLAND and PIPER, JJ., concur.
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