CNT Constr., Inc. v. Bailey

[Cite as CNT Construction, Inc. v. Bailey, 2012-Ohio-2312.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 97532
CNT CONSTRUCTION, INC., ET AL.
PLAINTIFFS-APPELLANTS
vs.
ANGELA BAILEY, ET AL.
DEFENDANTS-APPELLEES
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-721902
BEFORE: Kilbane, J., Celebrezze, P.J., and Sweeney, J.
RELEASED AND JOURNALIZED: May 24, 2012
ATTORNEY FOR APPELLANTS
Harvey J. McGowan
1245 East 135th Street
East Cleveland, Ohio 44112-2413
ATTORNEYS FOR APPELLEES
For Angela Bailey
Michael L. Nelson
4415 Euclid Avenue, Suite 332
Cleveland, Ohio 44103
For American Eagle Mortgage Corp.
Joshua E. Lamb
Colella & Weir, P.L.L.
6055 Park Square Drive
Lorain, Ohio 44053
For Freedom Mortgage Corp.
Brian C. Lee
Brent S. Silverman
Reminger Co., L.P.A.
1400 Midland Building
101 Prospect Avenue - West
Cleveland, Ohio 44115-1093
MARY EILEEN KILBANE, J.:
{¶1} Plaintiffs-appellants, CNT Construction, Inc. and Charles Ficklin
(collectively referred to as “appellants”), appeal the trial court’s judgments granting
summary judgment in favor of defendant-appellee, Freedom Mortgage Corp. (“FMC”),
and a motion to dismiss in favor of defendant-appellee, American Eagle Mortgage Corp.
(“AEM”). Finding no merit to the appeal, we affirm.
{¶2} In March 2010, appellants filed a complaint against Angela Bailey
(“Bailey”), AEM, and FMC, arising from renovation work appellants performed on
Bailey’s home after she obtained a mortgage loan through the Federal Housing
Authority’s rehabilitation loan program. AEM provided the loan agreement that Bailey
signed. AEM subsequently sold the servicing rights to FMC. FMC sent a check to
Bailey for the third and final installment, but Bailey never paid that amount to appellants.
{¶3} Appellants’ complaint asserted the following causes of action against
Bailey: (1) breach of contract, (2) unjust enrichment, (3) detrimental reliance, and (4)
tortious interference with property rights. Appellants presented the following claims
against AEM and FMC: (1) breach of contract and (2) negligence.
{¶4} Bailey answered appellants’ complaint and asserted a counterclaim for
breach of contract. AEM filed a Civ.R. 12(B)(6) motion to dismiss appellants’
complaint, which the trial court granted in September 2010. In July 2010, FMC
answered the complaint and asserted cross-claims against Bailey for indemnification and
contribution. In October 2010, FMC filed a motion for summary judgment. FMC
supported its motion with several documents, including an affidavit, Ficklin’s deposition
testimony, and a copy of the arbitration award made by the panel in Case No.
CV-671460. 1 Appellants filed an opposition brief that was supported by several
exhibits. The trial court granted FMC’s motion for summary judgment in November
2010. FMC subsequently dismissed its cross-claims against Bailey.
{¶5} The matter proceeded to jury trial in December 2010. At the conclusion of
trial, the court issued an order stating that:
Jury returns a verdict in favor of the Plaintiffs, CNT Construction and
Charles Ficklin, and against the Defendant Angela Bailey on Plaintiffs’
claim of breach of contract in the amount of $20,905.00. Jury returns a
verdict in favor of the Defendant Angela Bailey and against the Plaintiffs
on Defendant’s counterclaim of breach of contract in the amount of
$1,500.00. * * * Final. There is no just reason for delay.
{¶6} Appellants then appealed from this order in CNT Constr. Inc. v. Bailey, 8th
Dist. No. 96292, 2011-Ohio-4640. In that appeal, appellants presented arguments
relating to their original case, Case No. CV-671460, and to orders issued by the trial court
relating to AEM and FMC. However, we dismissed the appeal for lack of a final,
appealable order. Id. at ¶ 29. We found that:
1In Case No. CV-671460, appellants originally filed an action against Bailey only for breach
of contract. This matter proceeded to arbitration and the panel found in favor of appellants.
However, because appellants were not able to collect on their judgment, they subsequently entered
into a settlement agreement with Bailey. On this basis, the parties dismissed their claims against
each other in September 2009. When the agreement failed, the trial court took over the case again.
In February 2010, the parties again dismissed that action. See CNT Constr. Inc. v. Bailey, 8th Dist.
No. 96292, 2011-Ohio-4640, ¶ 4.
Appellants * * * attempt to appeal from judgments that do not relate to
Bailey, but Bailey was the only defendant named in the latest order, and
appellants prevailed in that order. Therefore, the phrase “no just reason
for delay” cannot serve to make that order a final one. * * *
Appellants are not prevented from obtaining a judgment on their remaining
claims against Bailey, so any appeal from interlocutory orders that relate to
AEM and FMC is premature. * * * Id. at ¶ 27-28.
{¶7} Upon remand, appellants filed a motion for a final, appealable order against
Bailey, AEM, and FMC. The trial court granted the motion and issued a new order,
stating that:
Jury returns a general verdict in favor of the Plaintiffs, CNT Construction
and Charles Ficklin, and against the Defendant Angela Bailey on Plaintiffs’
claims in the amount of $20,905.00. Jury returns a verdict in favor of the
Defendant Angela Bailey and against the Plaintiffs on Defendant’s
counterclaims in the amount of $1,500.00. * * * Final. There is no just
reason for delay.
{¶8} Subsequently, appellants appealed from this order, in conjunction with the
trial court’s orders of September 1, 2010, granting AEM’s motion to dismiss and
November 30, 2010, granting FEM’s motion for summary judgment.
{¶9} Appellants raise the following 11 assignments of error for our review,
which shall be discussed together where appropriate.
ASSIGNMENT OF ERROR ONE
The trial court erred in granting summary judgment for [AEM and FMC] as
the actions of these dismissed defendant[s]-appellees were in violation of
the 203(k) regulations governing the mortgage loan and the construction
repairs by the plaintiffs.
ASSIGNMENT OF ERROR TWO
The trial court erred in granting summary judgment to [AEM] as
considering the matter most favorably against the moving party, the
defendant-appellee [AEM] was not entitled to judgment as a matter of law
as substantial, unresolved disputed fact existed.
ASSIGNMENT OF ERROR THREE
The trial court erred in granting summary judgment to [FMC] as
considering the matter most favorably against the moving party the
defendant-appellee [FMC] was not entitled to judgment as a matter of law
as substantial, unresolved disputed fact existed.
ASSIGNMENT OF ERROR FOUR
The trial court erred in granting summary judgment to defendant-appellee
[FMC] as there were clearly two interpretations of the disputed language.
The trial court erred in finding that “freedom mortgage did not breach a
contract with CNT Construction as the parties never entered a contract and
hereby grant summary judgment in favor of [FMC] on the breach of
contract claim.”
ASSIGNMENT OF ERROR FIVE
The trial court erred in granting summary judgment to defendant-appellee
[FMC] as there were clearly two interpretations of the disputed language.
The trial court erred in finding that “the court order finds that defendant
freedom mortgage is entitled to judgment as a matter of law on the
negligence claim.” To establish a claim for negligence there must be the
existence of a duty on the part of the defendant. Stanford v. Par–Ruchman
Home Town Motor Sales, Inc., [25 Ohio St.2d 1, 265 N.E.2d 785 (1971)].
ASSIGNMENT OF ERROR SIX
The trial court erred in granting summary judgment to defendant-appellee
[FMC] as there were clearly two interpretations of the disputed language.
The trial court erred in finding that “the HUD contract specifically provides
that [FMC] may make the check in question payable to the borrower and/or
the contractor thereby authorizing freedom mortgage to make the check
payable to Angela Bailey only. Rehabilitation loan agreement, paragraph
4. Plaintiff may not imply a duty to make the check payable to both CNT
Construction and Angela Bailey when there is a specific provision in the
contract allowing [FMC] to make the check payable to Angela Bailey only.”
ASSIGNMENT OF ERROR SEVEN
The trial judge erred in Case No.: CV-671460 by failing to hold the funds
released pursuant to the [court’s] order subsequently vacated. The
transcript thereof was filed and made a part of the court record in Case No.:
CV-10-721902 and is relevant hereto by incorporation thereby.
ASSIGNMENT OF ERROR EIGHT
The trial court erred by not recusing himself in Case No.: CV-10-721902
when the court had been presiding over and was a participant of the
settlement actions (subsequently vacated) in Case No.: CV-671460. The
defendant, Angela Bailey was only able to obtain the funds due to the
plaintiff/appellant by the entry of the court that provided as follows: “* * *
that the parties have agreed Defendant, Angela Bailey[,] shall pay to CNT
Construction, et al. The check from [FMC] ($20,905.50) by Fri 9/18/09
through Defendant Counsel[’s] IOLTA. All other claims and
counterclaims dismissed with prejudice. Parties will sign mutual releases.
Both parties acknowledge they are accepting this settlement with full
understanding and willingly * * *.”
ASSIGNMENT OF ERROR NINE
The trial court erred in granting the summary judgment to either [AEM]
and/or [FMC] for reasons including that the only representative of either
defendant-appellee was their mutual employee, Joe Howard who originated
the control of the mortgage with [AEM] and continued [to control] the
mortgage with [FMC]. The trial court was further in error in not finding
that this was a dual agency leaving both mortgage companies responsible
even though the “dual agency was never disclosed.”
ASSIGNMENT OF ERROR TEN
The trial court erred in granting summary judgment to defendant-appellees’
[AEM] and/or [FMC] holding neither responsible for the actions that
occurred in spite of the facts that the sale of the mortgage documents left
[FMC] responsible to indemnify [AEM] for the liabilities that are addressed
within the litigation in this case.
ASSIGNMENT OF ERROR ELEVEN
The trial court erred in granting summary judgment to defendant-appellees’
[AEM] and/ or [FMC] who released the funds direct to defendant, Angela
Bailey pursuant to an order of the court originating in Case No.:
CV-671460 and subsequently vacated by the court when it was undisputed
that plaintiff[s]/appellants did all of the work on the property and remain
unpaid to date.
App.R. 12
{¶10} We initially note that appellants’ third, fourth, fifth, sixth, ninth, and tenth
assignments of error essentially state that the trial court erred in granting “summary
judgment” to FMC or AEM because there are two interpretations of the disputed
language, there was a dual agency, and appellants completed the work on Bailey’s
property but have not been paid. In these assigned errors, however, appellants either cite
authority without presenting any legal argument, cite to testimony without presenting any
legal argument, or state that “[a]ll arguments presented herein previously presented are
incorporated herein as if fully rewritten.”
{¶11} App.R. 12(A)(1)(b) directs this court to determine the merits of appeals “on
the assignments of error set forth in the briefs under App.R. 16.” App.R. 12(A)(2)
further provides that an appellate court “may disregard an assignment of error presented
for review if the party raising it fails to identify in the record the error on which the
assignment of error is based or fails to argue the assignment separately in the brief, as
required under App.R. 16(A).”
{¶12} It is not the duty of an appellate court to search the record for evidence to
support an appellant’s argument as to any alleged error. State v. McGuire, 12th Dist.
No. CA95-01-001, 1996 WL 174609 (Apr. 15, 1996). “‘An appellate court is not a
performing bear, required to dance to each and every tune played on an appeal.’” State
v. Watson, 126 Ohio App.3d 316, 317, 710 N.E.2d 340 (12th Dist.1998), quoting
McGuire. Because appellants failed to argue these assigned errors, we decline to
address them. See N. Coast Cookies v. Sweet Temptations, 16 Ohio App.3d 342,
343-344, 476 N.E.2d 388 (8th Dist.1984).
{¶13} Accordingly, the third, fourth, fifth, sixth, ninth, and tenth assignments of
error are overruled.
FMC
{¶14} In the first assignment of error, appellants argue that the trial court erred
when it granted FMC’s motion for summary judgment.
{¶15} We review and appeal from summary judgment under a de novo standard of
review. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996);
Zemcik v. LaPine Truck Sales & Equip. Co., 124 Ohio App.3d 581, 585, 706 N.E.2d 860(8th Dist.1998). In Zivich v. Mentor Soccer Club, 82 Ohio St.3d 367, 369-370, 696
N.E.2d 201 (1998), the Ohio Supreme Court set forth the appropriate test as follows:
Pursuant to Civ.R. 56, summary judgment is appropriate when (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 nonmoving party, said party
being entitled to have the evidence construed most strongly in his favor.
Horton v. Harwick Chem. Corp. (1995), 73 Ohio St.3d 679, 653 N.E.2d
1196, paragraph three of the syllabus. The party moving for summary
judgment bears the burden of showing that there is no genuine issue of
material fact and that it is entitled to judgment as a matter of law. Dresher
v. Burt (1996), 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264, 273-274.
{¶16} Once the moving party satisfies its burden, the nonmoving party “may not
rest upon the mere allegations or denials of the party’s pleadings, but the party’s response,
by affidavit or as otherwise provided in this rule, must set forth specific facts showing
that there is a genuine issue for trial.” Civ.R. 56(E); Mootispaw v. Eckstein, 76 Ohio
St.3d 383, 385, 667 N.E.2d 1197 (1996). Doubts must be resolved in favor of the
nonmoving party. Murphy v. Reynoldsburg, 65 Ohio St.3d 356, 358-359, 604 N.E.2d
138 (1992).
{¶17} Appellants argue the trial court misinterpreted Paragraph 4 of the
Rehabilitation Loan Agreement, which provides in pertinent part that:
Lender shall release the escrowed funds by check, payable to the Borrower
and/or the contractor or other appropriate payee who performed the work
and supplied the material in connection with this Agreement, at such times,
as the stages of construction are completed.
{¶18} Appellants claim that Paragraph 4 is subject to more than one interpretation
of the authorization for release of funds. As such, appellants argue summary judgment
was improperly granted. On the other hand, FMC argues the trial court properly granted
summary judgment as no contract ever existed between appellants and FMC. We find
FMC’s argument more persuasive.
{¶19} In granting FMC’s motion for summary judgment, the trial court stated that:
Plaintiff asserted claims against [FMC] for breach of contract and
negligence. Defendants request summary judgment on the breach of
contract claim as [FMC] did not enter any contract with CNT Construction,
rather [FMC] contracted with Angela Bailey only. Plaintiff failed to
oppose the motion for summary judgment as to the breach of contract claim.
The court hereby finds that [FMC] did not breach a contract with CNT
Construction as the parties never entered a contract and hereby grants
summary judgment in favor of [FMC] on the breach of contract claim.
The court further finds that defendant [FMC] is entitled to judgment as a
matter of law on the negligence claim. To establish a claim for negligence
there must be the existence of a duty on the part of the defendant. Stamper
v. Par-Ruchman Home Town Motor Sales, Inc. (1971), 25 Ohio St.2d 1.
Plaintiff argues that there is an implied duty contained in the HUD contract
and that defendant breached that duty by making the check payable to
Angela Bailey only. However, the HUD contract specifically provides that
[FMC] may make the check in question payable to “the borrower and/or the
contractor,” thereby authorizing freedom mortgage to make the check
payable to Angela Bailey only. Rehabilitation Loan Agreement Para. 4.
Plaintiff may not imply a duty to make the check payable to both CNT
Construction and Angela Bailey when there is a specific provision in the
contract allowing [FMC] to make the check payable to Angela Bailey only.
The court finds that no genuine issues of material fact remain to be
litigated and hereby grants summary judgment in favor of the defendant
[FMC].
{¶20} We agree with the trial court. There is no contract between appellants and
FMC. In fact, in their brief in opposition, appellants conceded that they were not a party
to a contract with FMC. Rather, the only contract appellants entered into was with
Bailey. Under this agreement, Bailey and appellants agreed that it is Bailey’s
responsibility to compensate appellants for the work performed.
{¶21} It is also undisputed that FMC did not owe appellants any duty, as no
contract existed between appellants and FMC. In order to be held liable for negligence,
there must be existence of duty and a breach of that duty. Manifee v. Ohio Welding
Prods., Inc., 15 Ohio St.3d 75, 77, 472 N.E.2d 707 (1984). Appellants argue that
Paragraph 4 of the Rehabilitation Loan Agreement between AEM and Bailey is subject to
two interpretations, and as a result, there is an issue of fact. However, the language in
the paragraph is not subject to two interpretations. The loan agreement specifically
provides that the “Lender shall release the escrowed funds by check, payable to the
Borrower and/or the contractor or other appropriate payee who performed the work[.]”
The use of the phrase “and/or” in paragraph 4 does not suggest two interpretations.
Rather, it indicates that the lender can choose between either the borrower or the
contractor or both of them. “If a contract is clear and unambiguous, then its
interpretation is a matter of law and there is no issue of fact to be determined.
Alexander v. Buckeye Pipe Line Co. (1978), 53 Ohio St.2d 241, 374 N.E.2d 146[.]”
Inland Refuse Transfer Co. v. Browning-Ferris Indus. of Ohio, Inc., 15 Ohio St.3d 321,
322, 474 N.E.2d 271 (1984).
{¶22} Based on the foregoing, we find that there is no genuine issue of material
fact and the trial court properly granted summary judgment in FMC’s favor.
{¶23} Thus, the first assignment of error is overruled.
AEM
{¶24} In the second assignment of error, appellants argue that the trial court erred
when it granted summary judgment in AEM’s favor because substantial, unresolved
disputed facts existed. In support of their argument, appellants rely on the summary
judgment standard of review and testimony of Bailey and Ficklin. The trial court,
however, did not grant AEM summary judgment. Rather, in April 2010, AEM filed a
motion to dismiss pursuant to Civ.R. 12(B)(6), which the trial court granted in September
2010.
{¶25} In its motion to dismiss, AEM argued it owed no duty to appellants because
FMC was responsible for distributing the remaining payments to Bailey. AEM further
argued that appellants’ breach of contract must also fail because they do not identify any
contract between AEM and appellants.
{¶26} In order for a trial court to dismiss a complaint under Civ.R. 12(B)(6) for
failure to state a claim upon which relief may be granted, it must appear beyond doubt
that the plaintiff can prove no set of facts in support of his or her claim that would entitle
the plaintiff to relief. Doe v. Archdiocese of Cincinnati, 109 Ohio St.3d 491,
2006-Ohio-2625, 849 N.E.2d 268, ¶ 11, citing O’Brien v. Univ. Community Tenants
Union, Inc., 42 Ohio St.2d 242, 327 N.E.2d 753 (1975).
In resolving a Civ.R. 12(B)(6) motion, a court’s factual review is confined
to the four corners of the complaint. Within those confines a court
presumes all factual allegations in the complaint are true, and all reasonable
inferences from those facts are made in favor of the non-moving party.
Fahnbulleh v. Strahan (1995), 73 Ohio St.3d 666, 653 N.E.2d 1186; Krause
v. Case Western Reserve Univ., (Dec. 19, 1996), Cuyahoga App. No.
70526.
Grady v. Lenders Interactive Servs., 8th Dist. No. 83966, 2004-Ohio-4239, ¶ 6.
{¶27} In the instant case, appellants seek to reverse the trial court’s judgment
based on Bailey and Ficklin’s testimony and the terms of the loan agreement. However,
appellants did not attach or incorporate the loan agreement and the transcripts to their
complaint. As such, we cannot rely on this information for the purposes of AEM’s
motion to dismiss.
{¶28} Based on the facts contained in appellants’ complaint, AEM entered into a
contract with Bailey only. AEM sold the loan to FMC, who was then required to
finance the loan and make the payments. FMC issued the remaining payments.
Accepting these allegations as true, we conclude that appellants did not enter into a
contract with AEM, and thus, AEM did not breach any contract. We further conclude
that AEM could not have committed any negligence because it did not owe appellants a
duty once it sold the mortgage to FMC.
{¶29} Therefore, the second assignment of error is overruled.
Case No. CV-671460
{¶30} In the seventh, eighth, and eleventh assignments of error, appellants
challenge orders in their original case, Case No. CV-671460. This court, however,
cannot address these assignment of error. As we stated in appellants’ first appeal, under
“App.R. 4(A) and 12(A)(1)(a), appellants cannot appeal from any decision the trial court
entered in CV-671460 because their notice of appeal does not refer to it, and an appeal
from that case would not have been timely filed. Bosco v. Euclid (1974), 38 Ohio
App.2d 40, 311 N.E.2d 870.” CNT Constr., at ¶ 14.
{¶31} Thus, the seventh, eighth, and eleventh assignments of error are overruled.
{¶32} Accordingly, judgment is affirmed.
It is ordered that appellees recover from appellants costs herein taxed.
It is ordered that a special mandate be sent to said court to carry this judgment into
execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
MARY EILEEN KILBANE, JUDGE
FRANK D. CELEBREZZE, JR., P.J., and
JAMES J. SWEENEY, J., CONCUR