Coldwell v. Moore

[Cite as Coldwell v. Moore, 2017-Ohio-526.]
STATE OF OHIO, COLUMBIANA COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
DAVID COLDWELL, ET AL., )
)
PLAINTIFFS-APPELLANTS, )
) CASE NO. 15 CO 0024V. )
) OPINION
MATTHEW MOORE, ET AL., )
)
DEFENDANTS-APPELLEES. )
CHARACTER OF PROCEEDINGS: Civil Appeal from Court of Common
Pleas of Columbiana County, Ohio
Case No. 2011 CV 131
JUDGMENT: Reversed and Remanded
APPEARANCES:
For Plaintiffs-Appellants Attorney Alan D. Wenger
Attorney Matthew M. Ries
26 Market Street, Suite 1200
P.O. Box 6077
Youngstown, Ohio 44501-1111
For Defendants-Appellees Attorney Robert J. Karl
41 South High Street
Suites 2800-3200
Columbus, Ohio 43215
JUDGES:
Hon. Gene Donofrio
Hon. Cheryl L. Waite
Hon. Mary DeGenaro
Dated: February 14, 2017
[Cite as Coldwell v. Moore, 2017-Ohio-526.]
DONOFRIO, J.
{¶1} Plaintiffs-appellants, David and Lisa Coldwell, appeal the judgment of
the Columbiana County Common Pleas Court entered against them on their
complaint seeking specific performance or damages for breach of contract against
Defendants-appellees, Matthew and Lorelei Moore, Michael and Colleen Lester,
Blaine and Mary Moore, and Lynette Moore Beeler.
{¶2} This case was previously before this court in Coldwell v. Moore, 7th
Dist. No. 13 CO 0027, 2014-Ohio-5323 (“Coldwell I”). In Coldwell I, we set forth the
facts:
Plaintiffs-appellants David Coldwell, et al., appeal the decision of
the Columbiana County Common Pleas Court rescinding a purchase
agreement between themselves and defendants-appellees Matthew
Moore, et al., for the sale of mineral rights.
Although this dispute resulted in a bench trial, the facts are
generally undisputed on appeal. Plaintiffs-appellants David Coldwell
and Lisa Coldwell (collectively, the Coldwells) own and operate a
sustainable tree farm that sits atop approximately 600 acres in
Salineville, Columbiana County, Ohio. The tree farm is comprised of
twelve surface parcels which they own, but they do not own
approximately 200 acres of the subsurface parcels.
Defendants-appellees Matthew and Lorelei Moore, Michael and
Colleen Lester, Blaine and Mary Moore, and Lynette Moore Beeler
(collectively, the Moores) each own an undivided one-quarter interest in
four subsurface parcels that total approximately 237.41 acres. Three of
their subsurface parcels underlie the Coldwell's tree farm and the other
underlies a surface parcel contiguous to the Coldwell's tree farm but
owned by Marvin and Juanita Hiltabidle (collectively, the Hiltabidles)
who are not parties to this case. The Moores, who reside in Harrogate,
Tennessee and collectively have owned the parcels since 2007, had
purchased some of the subsurface parcels and the others were
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received as gifts from previous generations of the Moore family,
including David O'Mahen, an uncle by marriage to the Moores.
In 2007, David Coldwell learned about the Forest Legacy
Program (FLP). The FLP is a grant program administered by the U.S.
Forest Service. The FLP gives landowners money in exchange for
restricting the use and development of their land, particularly the
surface of the land. When David Coldwell looked into the FLP, a person
with the Division of Forestry indicated to him that participation in the
FLP was contingent upon the landowner owning all of the mineral rights
to the property.
The Coldwells also learned that while the FLP restricted
exploitation of the surface minerals, such as surface strip mining for
coal, it did not foreclose subsurface mineral exploitation with a limited
surface impact. In other words, the FLP did not forbid oil and gas
exploration.
As it pertained to the Coldwell's surface parcels that were
located above the Moore's subsurface parcels, David Coldwell believed
that his surface parcels contained the rights to oil and gas while the
Moore's subsurface parcels contained only rights to coal and other
mineable minerals. Sometime in 2007 or before, David Coldwell
contacted the Moore's predecessor in title, David O'Mahen, about
purchasing the four subsurface parcels. After consulting with family
members, O'Mahen offered to sell the parcels to him for $50,000, but
he declined.
After 2007, defendant-appellee Matthew Moore replaced
O'Mahen as the Moore's representative and David Coldwell contacted
him several times through 2008 and 2009 about buying the Moore's
subsurface parcels. Coldwell told Moore that he thought that the
Moore's subsurface parcels were of little value, but that he wanted to
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buy them to improve his chances with the FLP.
Meanwhile, still believing that they owned the oil and gas rights
to all of their property, the Coldwells signed an oil and gas lease with
Patriot Energy Partners (Patriot) in 2008. The lease included the
Coldwell's surface parcels that were located above three of the Moore's
subsurface parcels.
In 2010 and after David Coldwell had fallen ill, his son Jed
Coldwell renewed his family's efforts to buy the Moore's parcels.
Matthew Moore and Jed reached an agreement which Moore
understood to mean that they would reserve royalty interests on all
minerals, not just coal.
The Coldwell's attorney prepared a Purchase Agreement under
which the Moores conveyed to the Coldwells “MINERAL RIGHTS
ONLY” in the four subsurface parcels for $8,000 with the Moores
retaining royalties on coal. The Coldwells signed the agreement and
sent it to the Moores along with a $100 earnest money check. The
Moores cashed the check, signed the agreement and sent it back to the
Coldwells.
The Coldwells' attorney then prepared a deed and sent it to the
Moores. This time, after examining the deed, Matthew Moore noticed
the coal royalties reservation. He called David Coldwell and told him
mistakes had been made but that they would sign the deed if the
mistakes were fixed. David Coldwell conveyed his willingness to pay
the balance of the purchase price, demanded the Moores sign the
deed, but they refused.
On February 14, 2011, the Coldwells sued the Moores in
Columbiana County Common Pleas Court seeking specific
performance of the purchase agreement, or in the alternative, damages
resulting for the alleged breach of that agreement. The Moores
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answered, denying the breach and, in the alternative, contesting the
validity of the agreement. They included with their answer
counterclaims and cross-claims. The counterclaim alleged that they
were fraudulently induced into entering into the Purchase Agreement.
Concerning the lease the Coldwells had signed with Patriot which was
later assigned to Chesapeake, the Moores sought a declaration that
they were the sole owners of all of the mineral rights. Although the
Moores also included a third-party complaint against Patriot and
Chesapeake, the Moores later dismissed their claims against them
without prejudice prior to trial.
On May 21, 2012, the Moores filed a motion for partial summary
judgment on their counterclaim for declaratory relief. Specifically, the
Moores sought a declaration that their mineral rights to the four
subsurface parcels included oil and gas in addition to their undisputed
rights to the coal. The trial court denied the motion, then, upon the
Moores' motion to reconsider, granted the motion. In a January 2, 2013
judgment entry, the trial court declared that the Moores' mineral rights
included oil and gas.
A bench trial was conducted on February 19–20, 2013, to decide
the remaining issues. On May 20, 2013, the trial court filed a judgment
entry entering judgment for the Moores, finding that the Coldwells had
failed to prove the existence of an enforceable contract. Because the
court found that there was no enforceable contract, it did not make any
findings “regarding the other issues presented, including whether time
was of the essence under the Purchase Agreement or whether the
Moores were fraudulently induced to enter into the Purchase
Agreement.”
Id. at ¶ 1-14.
{¶3} In Coldwell I, this court reversed the grant of summary judgment that
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rescinded the Purchase Agreement on the basis of mutual mistake. Id. at ¶ 45. We
affirmed the trial court’s judgment declaring that the Moores' mineral rights included
oil and gas. Id. We remanded the case to the trial court to address what it identified in
its May 20, 2013 decision as “other issues presented, including whether time was of
the essence under the Purchase Agreement or whether the Moores were fraudulently
induced to enter into the Purchase Agreement.” Id.
{¶4} The trial court has now entered judgment finding that time was of the
essence and, therefore, there was no enforceable contract. The trial court entered
judgment against Coldwells on their complaint for specific performance or damages
for breach of contract. The Coldwells filed a timely appeal. The trial court also
concluded that the Moores were not fraudulently induced to sign the Purchase
Agreement and entered judgment against the Moores with regard to this issue. The
Moores have not filed an appeal.
{¶5} The Coldwells’ first assignment of error states:
THE TRIAL COURT ERRED IN FINDING THAT TIME WAS OF
THE ESSENCE.
{¶6} The trial court concluded that time was of the essence, first, because
the express language in the purchase agreement made time of the essence and,
second, because the parties’ actions and the circumstances surrounding their
negotiations compelled the conclusion that time was of the essence.
{¶7} Generally, in contractual relationships, the time of performance is not of
the essence. Brown v. Brown, 90 Ohio App.3d 781, 784, 630 N.E.2d 763 (11th Dist.
1993); Shelton v. Twin Twp., 12th Dist. No. CA2014-07-004, 2015-Ohio-1602, ¶ 40.
The parties to a contract, however, may make time of the essence either expressly or
implicitly. According to the Shelton court, “Ohio courts are split as to whether and
when ‘time is of the essence’ may be implied in a contract.” Shelton at ¶ 40. The
Shelton court explained that some courts have found that “time is of the essence”
may be implied “whenever a definite date is fixed for compliance.” Id., citing Lake
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Ridge Academy v. Carney, 9th Dist. No. 91CA005063, 1991 WL 215024, *4 (Oct. 16,
1991) and Calabrese v. Vukelic, 7th Dist. No. 94-L-37, 1995 WL 750140, *1 (Dec. 14,
1995), citing Domigan v. Domigan, 46 Ohio App. 542,546, 189 N.E.2d 860 (5th Dist.
1933). Shelton explains that other courts hold that the general rule may be altered
implicitly depending on the nature of the contract or the circumstances under which it
was negotiated. Shelton at ¶ 40, citing Green, Inc. v. Smith, 40 Ohio App.2d 30, 37-
38, 317 N.E.2d 227 (4th Dist.1974) and Franklin Mgt. Indus., Inc. v. Far More
Properties, Inc., 8th Dist., 2014-Ohio-5437, 25 N.E.2d 416, ¶ 16. Lastly, according to
Shelton, there are courts that combine these approaches and consider the nature
and circumstances of the negotiation, and the fixed date. Shelton at ¶ 40, citing
Marion v. Hoffman, 3d Dist. No. 9-10-23, 2010-Ohio-4821, ¶ 23 and Nippon Life Ins.
Co. of Am. V. One Source Mgt., Ltd., 6th Dist. No. L-10-1247, 2011-Ohio-2175, ¶ 24.
{¶8} We first address the issue of whether the Purchase Agreement made
time of the essence by including a fixed date for closing. In this regard, the parties
contest the importance of the language in the Purchase Agreement which provides
that “Closing shall take place on or before November 7, 2010.” The trial court, citing
this court’s decision in Vukelic, concluded that the express language of the Purchase
Agreement made time of the essence. The trial court concluded that Vukelic “is
consistent with the general rule that when the provisions of a contract are clear and
unambiguous, a court must enforce it as written.” The trial court also relied upon the
decision in Tiefenthaler v. Tiefenthaler, 5th Dist. No. 02 CA 29, 2002-Ohio-6438, a
case involving a contract for the purchase of real estate that included a statement
that closing was to occur within 30 days. Referring to what it called the “rule of
Vukelic” and the “rule of Tiefenthaler”, the trial court concluded that because the
transaction was not completed by the date set for the closing, the Purchase
Agreement became unenforceable.
{¶9} Vukelic did not involve a contract for the sale of real estate and was not
concerned with the issue of a closing date. Rather, it involved the settlement of civil
litigation in which the defendant orally agreed to pay the plaintiff $5,000.00 within 30
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days. When payment was not made, plaintiff asked that the settlement agreement be
set aside. The trial court denied the motion, indicating that time was not of the
essence to the settlement agreement. This court, citing Domigan, reversed the trial
court and held that time was of the essence and failure to pay the settlement monies
within the 30 days rendered the settlement agreement unenforceable.
{¶10} Domigan, in fact, states that “time is considered as the essence of all
contracts.” Domigan at 547. The Domigan court, however, also explained that “courts
of equity are as much bound to see that contracts are executed as courts of law.” Id.The Domigan court explained that its decision was based on the facts of that
particular case. Id. at 546. Domigan was initially instituted by Fannie Domigan
against Horace Domigan. Fannie secured a judgment against Horace, on a cognovit
note, for $3,969.75. Judgment was entered on October 28, 1932. The judgment was
set aside in January 1933, and Horace’s motion for leave to file an answer instanter
was granted. The trial court then held that Horace was entitled to specific
performance of a contract for the sale of real estate from Horace to Fannie. The
Domigan court discussed the agreement for the sale of real estate from Horace to
Fannie. The agreement was dated February 8, 1932. Per the agreement, Horace
was to provide to Fannie a general warranty deed free and clear of all encumbrances
except for a mortgage held by Fidelity Building Association and Loan Company of
Delaware. For consideration, Fannie was to surrender to Horace a mortgage and
note held by Fannie against Horace for $2,797.52. The agreement provided that the
deal be closed on or before the first of March 1932. The deal was never closed and
in October 1932, Fannie obtained judgment on the cognovit note. The judgment was
set aside and the trial court ordered specific performance of the contract.
{¶11} In reversing the trial court, the Domigan court noted that absent from
the record was a marketable title or deed which Horace was to have provided by the
first of March 1932. Id. at 546-547. The court explained that, even assuming Horace’s
testimony that he tendered such a deed on February 2, 1933 is true, this should not
entitle him to specific performance of the contract when the closing was to occur on
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or before the first of March 1932, almost one year prior, and Fannie had now sued on
the cognovit note and secured a judgment. It is under these circumstances that the
Domigan court concluded that, although a court of equity should seek to enforce
contracts in the same manner as a court of law, time was of the essence. Id. at 547.
{¶12} The trial court also indicated that it relied upon the “rule of Tiefenthaler”
to arrive at its conclusion that the language of the agreement in the case sub judice
made time of the essence. Before addressing Tiefenthaler, we consider Wardell v.
Turkovich, 5th Dist. No. 91AP070037, 1992 WL 195480 (July 31, 1992), which is
discussed in Tiefenthaler.
{¶13} Wardell, like Domigan, involved an agreement for the sale of real estate
that included a closing date. The trial court in Wardell concluded that since a closing
date was specified in the contract, time was of the essence and, after that date, there
was no legally enforceable agreement. The court of appeals reversed holding that
while time may be of the essence, it does not mean that performance at the specified
time is necessarily of the essence. In Wardell, the Turkovichs entered into an
agreement to sell real estate to Resort Management on June 18, 1990. The purchase
agreement set forth a closing date of October 31, 1990. On November 3, 1990, the
parties agreed to an addendum extending the closing date to November 15, 1990, at
which time the purchase would be completed or Resort Management would remit an
additional $10,000.00 in earnest money with the remaining portion of the purchase
price to be paid within a reasonable time as determined by the parties. Before
November 15, 1990, Resort Management made the payment. On December 4, 1990,
the Turkovichs entered into an agreement to sell the same parcel of land to Wardell.
The trial court held that, since the agreement with Resort Management contained a
closing date, time was of the essence, and since the agreement was not closed on
the date specified, Resort Management’s contract could not be enforced.
{¶14} On appeal, the Fifth District concluded that where there is a specified
closing date in an agreement to purchase real estate, the failure to perform on the
specified date does not per se terminate the seller’s duty to convey and failure to
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convey does not per se discharge the buyer. Wardell at *2. The court of appeals held
that a specified date for payment or conveyance does not make time of the essence,
or at least not the specified time. Id. Reversing the trial court, the Fifth District
ordered specific performance of the agreement with Resort Management. Wardell,
then, held that, while time is of the essence, inclusion of a specified closing date in a
purchase agreement for real estate does not make performance at the specified time
of the essence. Id.{¶15} We now turn to what the trial court here called “the Tiefenthaler rule.”
Tiefenthaler involved a purchase agreement for real property which included
language requiring closing within 30 days of execution. The purchase agreement was
entered in June 2000. The first closing date was scheduled for August 25, 2000. It
was then rescheduled for September 25, 2000. Neither party thereafter actively
pursued another closing appointment. In August 2001, appellants learned the
property was listed for sale by a realtor. On October 24, 2001, appellants sought
specific performance. A magistrate granted a motion to dismiss concluding that
appellants had failed to perform their end of the contract, thereby excusing appellees’
performance.
{¶16} On appeal, the appellants relied upon Wardell, arguing that time was
not of the essence and that the dismissal of their case for failure to perform was
error. The court, however, in affirming the trial court’s decision, did not affirm by
simply stating that time was of the essence. In fact, the Tiefenthaler court explained
that it was unpersuaded that the trial court denied appellants their requested relief
based upon a “per se” violation of the 30 day closing provision. Tiefenthaler at ¶ 17.
The court explained that after the closing date passed, appellants took no action to
secure the closing for nearly an entire year, despite the fact that the parties were all
blood relatives and all of them resided in Ohio. Id. This decision, in our opinion, is not
inconsistent with Wardell.
{¶17} Lake Ridge Academy, also cited by Shelton, did not involve a purchase
agreement for the sale of real estate. Rather, it involved an Enrollment Contract for
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the payment of charges for tuition, books, and supplies for a full academic year. The
Enrollment Contract provided that if it was not cancelled in writing by August 1, the
full amount for tuition, books, and supplies was due. Defendants cancelled via a letter
postmarked August 7 and received by the Academy on August 14. The Academy
sued seeking full payment. The trial court rendered judgment for defendant finding
that defendant substantially complied with the contract and thus there was no breach.
The court of appeals reversed. After first concluding that payment under these
circumstances was not a “penalty” because the Academy determined its budget
based upon enrollment, the court of appeals, without much further explanation, held
that, although time is generally not of the essence in a contract, the parties may
make it so by express stipulation. Lake Ridge Academy at *4. Since the Enrollment
Contract provided a definite date for compliance, the court concluded that time was of
the essence. Id. (The Ohio Supreme Court subsequently affirmed but, in doing so,
concluded that the issue in Lake Ridge Academy was not whether time was of the
essence since the Academy was not arguing that its obligation to educate the student
was discharged or changed by the defendant’s conduct. Lake Ridge Academy v.
Carney, 66 Ohio St.3d 376, 378-379, 613 N.E.2d 183 (1993), (“Lake Ridge II”).
{¶18} Finally, Shelton involved a barn that presented a safety hazard. Twin
Township sought to persuade the Sheltons to repair or demolish the barn. The
Township passed a resolution requiring the demolition of the barn. The Township had
the legal right to demolish the barn 30 days after providing notice. The parties
entered an agreement allowing the Sheltons 90 days to remove the dilapidated
portion of the barn and repair the salvageable portion. On the 91st day, the Township
commissioned a contractor to demolish the barn. The Sheltons, after various other
proceedings, obtained a judgment from the trial court for wrongful demolition and
breach of contract. After concluding that Ohio courts were divided on the issue of
whether time is of the essence where a date for performance is provided, the Shelton
court used what it called a combined approach, i.e., it considered the nature and
circumstances of the negotiation and the fixed date. Shelton at ¶ 40-41, 45-46. The
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Shelton court held:
Accordingly, we find that the combination of the nature and
circumstances of the negotiation and the fixed date provided in the
contract establish that time for performance was of the essence. Thus,
the Sheltons materially breached the contract when they failed to repair
or demolish the barn within 90 days of March 12, 2011.
Shelton at ¶ 46.
{¶19} The above cases do not suggest an iron-clad rule that, where an
agreement to purchase real estate includes a closing date, the purchase agreement
becomes unenforceable if the deal is not closed on the specified closing date. Here
the Coldwells indicated a willingness to consummate the agreement and the Moores
indicated a willingness to continue if changes were made to the deed about mineral
rights. And this court held in Coldwell I, the inclusion of a closing date by itself did
not mean that time was of the essence so as to render the Agreement void after that
date. Under these facts, based solely on the inclusion of a closing date, time was not
of the essence.
{¶20} The trial court also concluded that the parties’ actions and the
circumstances surrounding their negotiations also compelled the conclusion that time
was of the essence. The trial court referred to two things to support its conclusion
that the actions of the parties and the circumstances surrounding their negotiations
demonstrate that the specified closing date was of the essence: that the closing date
was linked to the Forest Legacy Program (FLP) and that the Coldwells “imposed a
closing date that fit their schedule” because a later date near Thanksgiving would be
too late for the FLP and because the Coldwells had an economic incentive to close
the transaction.
{¶21} In determining whether these facts support the legal conclusion that the
specified closing date was of the essence, we must remember what the words “time
is of the essence” means:
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when it is said that time is of the essence, the proper meaning of the
phrase is that performance by one party at the time specified in the
contract or within the period specified in the contract is essential in
order to enable him to require performance from the other party.
Lake Ridge II at 378, citing 6 Williston on Contracts (3 Ed.1962) 181, Section 846.
Also see SRW Environmental Servs., Inc. v. Dudley, 12th Dist. No. CA2008-11-282,
2009-Ohio-3681, ¶ 14, and Franklin Mgt. Industries, Inc. v. Far More Properties, Inc.,
8th Dist. No. 101397, 2014-Ohio-5437, ¶ 18.
{¶22} The transaction in this case ended only when the Moores refused to
sign the deed unless the changes regarding the sale of mineral rights other than coal
royalties were made. This court concluded in Coldwell I that those demands were
unjustified as there was, in fact, a meeting of the minds. Thus, the only thing keeping
this transaction from being consummated, at most eleven days after the date set for
closing, was the Moores’ demand that the deed be changed contrary to what they
agreed to sell in the Purchase Agreement.
{¶23} The Moores argue that time was made of the essence by the Coldwells.
The Moores point to the findings of fact that the closing date was linked to the
pending FLP application; that Matthew Moore testified the Coldwells were in a hurry
because the FLP grant was coming up again; that Coldwell testified that the FLP
application was moving very quickly toward completion and submission; that the FLP
was likely to make a decision in December 2010; that the Coldwells were in a hurry to
close the transaction; that Matthew Moore testified that Thanksgiving would be too
late; that the Coldwells believed they had a better chance if they owned all of the
mineral rights for the property; that the likely reason the Coldwells tree farm was not
selected based on applications before 2010 was that the Coldwells did not own all of
the minerals; that David Coldwell testified that that they would like the warranty deed
returned so they could say they owned the coal and mineral rights; and that the
Coldwells had an economic incentive to close the transaction.
{¶24} The trial court concluded that the actions of the parties and the
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circumstances surrounding their negotiations made time of the essence. The facts
must be read in light of the fact that the initial communications between the parties
about this purchase and sale began sometime in 2007, or before, between David
Coldwell and the Moores’ predecessor in title, David O’Mahen. Coldwell I, ¶ 6.
Communications continued through 2008 and 2009. Id. at ¶ 7. The Purchase
Agreement was signed in 2010. Id. at ¶ 10. The Moores cashed the earnest money
check upon signing the Agreement. Id. Upon receiving the deed the Moores
demanded that changes be made and indicated they would proceed if the changes
were made. Id. at ¶ 11. The Coldwells conveyed their willingness to pay the balance
of the purchase price but refused to change that part of the deed relating to mineral
rights. The result was Coldwell I. Thus, after the closing date both parties expressed
their willingness to consummate the Agreement. Coldwell I resolved the issue about
the mineral rights in the agreement. The Moores’ argument that both parties behaved
as if time was of the essence for the November 7, 2010 date is not supported by the
facts.
{¶25} The facts do not support the assertion that either of the parties viewed
the passage of the closing date as an event that prohibited either from being able to
require performance by the other. If the deed had been signed on November 18,
2010, and then delivered to the Coldwells, the injury would have been little or
nothing. The trial court’s conclusion that time was of the essence, either because a
specific closing date was included in the Purchase Agreement or because of the
actions of the parties and the circumstances surrounding their negotiations, was in
error.
{¶26} Accordingly, the Coldwells’ first assignment of error has merit and is
sustained.
{¶27} The Coldwells’ second assignment of error states:
THE TRIAL COURT ERRED IN RULING THAT THE COLDWELLS
HAD TO TENDER PERFORMANCE BEFORE THE MOORES
TENDERED A DEED SO THAT THE TRANSACTION COULD BE
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CONSUMMATED.
{¶28} As a part of its discussion about whether or not time was of the
essence, the trial court found that the Coldwells’ performance was essential in order
to enable the Coldwells to require performance by the Moores. The trial court
concluded that since the Coldwells did not at least tender performance on or before
the closing date, they could not complain that the Moores refused to sign the deed.
The trial court relied upon Lake Ridge II as authority for this proposition. The trial
court does not separate this issue in its judgment entry as a singular reason as to
why there was an unenforceable contract, but includes it as part of its explanation as
to why it concluded that time was of the essence.
{¶29} The Coldwells argue that after they delivered the deed to the Moores,
and the Moores refused to sign, their tender of performance at that point would have
been futile. (There is a chronological gap between the signing of the Purchase
Agreement and the Moores’ cashing the $100.00 earnest money check, and the
Moores receipt of the deed. In the interim, the closing date passed).
{¶30} In support of their position, the Coldwells refer to Spalla v. Fransen, 188
Ohio App.3d 658, 2010-Ohio-3460, 936, N.E.2d 552 (11th Dist.). Spalla concerned a
purchase agreement that was modified a half dozen times. Shortly before the closing,
the sellers were notified that the buyers were not in possession of a correct deed (the
name of the purchaser was changed after a deed had been prepared and signed by
the sellers with the original name) and that the check for earnest money could not be
cashed due to insufficient funds. Id. at ¶ 21. On appeal, the argument that the sellers
did not timely deliver the deed was not found to be persuasive. The appellate court
explained that the tender of performance was not required when the other party
cannot or will not perform. Id. at ¶ 23, citing Ritchie v. Cordray, 10 Ohio App.3d 213,
216, 461 N.E.2d 325 (10th Dist. 1983).
{¶31} The issue presented in this assignment of error is whether or not some
event had to occur before there was an enforceable Purchase Agreement. “A
condition precedent is a condition which must be performed before the obligations in
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the contract become effective.” Hiatt v. Giles, 2d Dist. No. 1662, 2005-Ohio-6536, ¶
23, quoting Rudd v. Online Resources, Inc., 2d Dist. No. 17500, 1999 WL 397351, *7
(June 18, 1999), quoting Troha v. Troha, 105 Ohio App.3d 327, 334, 663 N.E.2d
1319 (2d Dist.1999). If a condition precedent is not fulfilled, a party is excused from
performing the duty promised under the contract. Id. The question of whether the
provision in a contract is a condition precedent or merely a promise is a question of
the parties’ intent. Id. “Intent may be ascertained by considering the language of a
particular provision, the language of an entire agreement, or the subject matter of an
agreement.” Id. Conditions precedent are not favored by the law. Id. Whenever
possible, courts “avoid construing provisions to be such unless the intent of the
agreement is plainly to the contrary.” Id.{¶32} The Purchase Agreement does not suggest any conditions precedent.
The items in the Purchase Agreement identified by the Moores do not suggest that
they are conditions precedent. Instead, the things the Moores assert were conditions
precedent were promises made as a part of this bilateral contract. There is a dearth
of evidence that the parties agreed that any event in their bilateral contract for the
purchase/sale of the mineral rights involved had to be performed before there would
be an enforceable contract. There are no facts which would lead to the conclusion
that there was a condition precedent in this agreement or that there was some
obligation on the part of the Coldwells to tender performance of some type before the
Moores were required to sign the deed.
{¶33} Accordingly, the Coldwells’ second assignment of error has merit and is
sustained.
{¶34} The Coldwells’ third assignment of error states:
THE TRIAL COURT ERRED IN REQUIRING THE COLDWELLS TO
PROVIDE ADDITIONAL CONSIDERATION TO THE MOORES TO
EXTEND THE CLOSING DATE WHEN THE MOORES WERE
RESPONSIBLE FOR THE CLOSING NOT OCCURRING BY THE
DATE IN THE PURCHASE AGREEMENT AND THEN
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SUBSEQUENTLY DEMANDING THAT THE COLDWELLS CHANGE
THE TERMS OF THE PURCHASE AGREEMENT BEFORE THEY
COULD SIGN THE DEED.
{¶35} The Coldwells argue that, if time was of the essence, then the Moores
waived the requirement that the closing take place on the specified date. In light of
our conclusion that time was not of the essence in this bilateral contract, the
Coldwells’ third assignment of error is moot.
{¶36} The Coldwells’ complaint sought specific performance of the Purchase
Agreement or damages for breach of contract. Since the trial court concluded that
there was no enforceable contract, it made no decision regarding the appropriate
remedy.
{¶37} For the reasons stated above, the trial court’s judgment is reversed and
this matter is remanded to the trial court for purposes of determining the appropriate
remedy, i.e., specific performance or damages.
Waite, J., concurs.
DeGenaro, J. concurs.