JDS So Cal, Ltd. v. Dept. of Natural Resources

[Cite as JDS So Cal, Ltd. v. Dept. of Natural Resources, 2018-Ohio-1159.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
JDS So Cal, Ltd., :
Plaintiff-Appellee, :
No. 16AP-665
v. : (C.P.C. No. 14CV-13181)
Ohio Department of Natural Resources, : (REGULAR CALENDAR)
Defendant-Appellant. :
D E C I S I O N
Rendered on March 29, 2018
On brief: Cooper & Elliott, LLC, Rex H. Elliott, Charles H.
Cooper, Jr., and Sean R. Alto, for appellee. Argued: Rex H.
Elliott.
On brief: Michael DeWine, Attorney General, and
Christopher P. Conomy, for appellant. Argued:
Christopher P. Conomy.
APPEAL from the Franklin County Court of Common Pleas
KLATT, J.
{¶ 1} Defendant-appellant, the Ohio Department of Natural Resources ("ODNR"),
appeals a judgment of the Franklin County Court of Common Pleas that granted plaintiff-
appellee, JDS So Cal, Ltd. ("JDS"), summary judgment and denied ODNR summary
judgment. For the following reasons, we reverse that judgment and remand for the trial
court to enter summary judgment in ODNR's favor.
{¶ 2} In 1996, Morno Holding Company ("Morno") deeded to ODNR a 17.85-acre
parcel of undeveloped property abutting Sawmill Place Boulevard (hereinafter "the Sawmill
property"). Morno added to the deed a restrictive covenant that provided that the
No. 16AP-665 2
conveyance was "granted and accepted on the condition that the real property be used and
occupied solely for public purposes." (Pl.'s Ex. 2, June 1, 2016 Pl.'s Mot. for Summ. Jgmt.)
Apparently, Morno included the public-use restriction in the deed to support a charitable
tax deduction.
{¶ 3} After receiving the property, ODNR named it the "Sawmill Wetland
Education Area" and opened it to school groups so students could study the wetlands
contained in the property. The Sawmill property, however, was little utilized for
educational purposes. Moreover, security concerns forced ODNR to fence the property and
only allow access to the general public by reservation.
{¶ 4} Between 2006 and 2011, ODNR repeatedly offered the Sawmill property to
the Columbus Recreation and Parks Department ("Parks Department"). While the Parks
Department expressed some interest in acquiring the Sawmill property, the Parks
Department ultimately declined to take the property. The Parks Department did not want
the responsibility for paying the common-area-maintenance charges imposed on the
property by a restrictive covenant in the original subdivision plat documents.
{¶ 5} In 2012, ODNR entered into a contract with JDS to swap the Sawmill
property for a 43.33-acre property located on the west bank of the Olentangy River
(hereinafter "the Olentangy property"). While JDS did not own the Olentangy property, it
had an option to purchase the property. ODNR wanted the Olentangy property due to its
larger size, proximity to the Olentangy River and Highbanks Metro Park, and the variety
and uniqueness of the wildlife inhabiting the property. JDS wanted the Sawmill property
in order to develop it for commercial use.
{¶ 6} The dispute in this case largely centers on Section 4(d)(1) of the land-swap
contract. Pursuant to that provision, JDS agreed to obtain a release of the public-use
restriction in the Sawmill property's deed prior to the property transfer. ODNR agreed to
work cooperatively with JDS to obtain that release. If JDS did not obtain a release, it could
either terminate the contract or waive the requirement that it obtain a release. If JDS chose
to waive the release requirement, it was bound to indemnify ODNR for any breach of the
public-use restriction.
{¶ 7} In total, the contract included three contingencies to be satisfied prior to the
property transfer. Specifically, the contract stated:
No. 16AP-665 3
(d) Unless waived by [JDS], the following contingencies shall
be satisfied by 5:00 p.m., Eastern Standard Time, on the date
which is Three Hundred and Sixty (360) Days after the
Effective Date (the "Deed Contingency Period").
(1) [JDS] obtaining the release of the current "public
use" restriction encumbering the [Sawmill] Property.
[JDS] and [ODNR] shall both work cooperatively to
obtain the executed release of such encumbrance.
Unless requested by [JDS], all communications with
grantor of the deed in which the "public use" restriction
originates shall be exclusively conducted by [JDS]. To
the extent that this contingency is not timely satisfied,
[JDS] may elect to terminate this Agreement pursuant
to Section 6(a)(iii) in the exercise of its sole and absolute
discretion or waive the contingency. Absent a timely
written notice of termination, [JDS] shall be deemed to
have waived this contingency. In the event that [JDS]
elects to waive the contingency for the release of the
current "public use" restriction or is deemed to have
waived pursuant to the immediately prior sentence,
[JDS] shall indemnify and hold harmless [ODNR] from
any and all claims, losses, liabilities, causes of action,
fines, penalties, or expenses, including, but not limited
to, reasonable attorney's fee[s] and expenses, arising
from or related to the continuation of the "public use"
restriction after the conveyance of the [Sawmill]
Property to [JDS], its successors and assigns. The
foregoing indemnification and hold harmless
agreement of [JDS] shall survive the expiration or
termination of this Agreement.
(2) [JDS] (and/or its valid designee) has taken record
title to the [Olentangy] Property, with any and all costs
as to this pre-condition to be paid for by [JDS].
(3) Any title or survey objection of [ODNR] or [JDS]
shall have been cured.
(Pl's. Ex. 1 at Section 4(d)(1) through (3), June 1, 2016 Pl.'s Mot. for Summ. Jgmt.)
No. 16AP-665 4
{¶ 8} In addition to setting forth contingencies, the contract scheduled a closing, at
which ODNR would assume possession of the Olentangy property and JDS would assume
possession of the Sawmill property. The closing had to occur "on a date determined by
[JDS], not less than ten (10) days after written notice is given to [ODNR] but not later than
thirty (30) days after the end of the Deed Contingency Period." (Pl.'s Ex. 1 at Section 3(a),
June 1, 2016 Pl.'s Mot. for Summ. Jgmt.)
{¶ 9} The deed contingency period began on April 12, 2012, the date on which the
contract was fully executed. Consequently, JDS had until April 7, 2013 to satisfy the
contingencies contained in Section 4(d). At the very latest, the closing had to occur on
May 7, 2013, provided JDS gave ODNR notice by April 27, 2013.
{¶ 10} By June 2012, news of the land-swap deal had reached the public, and
environmental groups began expressing their opposition to the deal. Also in June 2012,
JDS learned that its title insurer would issue a title commitment without a release of the
public-use restriction from Morno, if ODNR "release[d] the restriction on their end at
closing." (Pl.'s Ex. 10, Ruma Dep.) To address these developments, JDS drafted an
amendment to the parties' contract.
{¶ 11} In the draft amendment, JDS agreed to incorporate into the Sawmill
property's deed a restrictive covenant requiring JDS to preserve 3.08 acres of the Sawmill
property as a wetland. JDS added this change to appease the environmental groups who
objected to any commercial development of the Sawmill property. The draft agreement
also included a provision requiring ODNR to state in the Sawmill property's deed that it
was "releas[ing] and discharg[ing] of record the Use Restriction and any and all rights it
may have to enforce the Use Restriction for the [Sawmill] Property." (Def.'s Ex. 6A at Ex.
C to the Purchase Agreement, Section 1, June 15, 2016 Def.'s Memo in Opp. to Pl.'s Mot. for
Summ. Jgmt.) This alteration of the contract would allow JDS to acquire title insurance
even if it could not obtain a release of the public-use restriction from Morno.
{¶ 12} While ODNR considered whether it would agree to the amendment, JDS
approached Morno and requested that it release the public-use restriction. Morno agreed
to review the matter.
No. 16AP-665 5
{¶ 13} In August 2012, ODNR's director and the attorney general executed the
amendment. The amendment then went to the governor's office, as it was not binding
without the governor's signature.
{¶ 14} From summer 2012 through winter 2012/2013, ODNR officials spoke about
the land-swap deal with representatives of various environmental groups, including the
Ohio Environmental Council, The Nature Conservancy, and the Friends of the Sawmill
Wetlands. These groups opposed the land-swap deal and wanted to work with ODNR to
arrive at an alternate disposition for the Sawmill property. In short, these groups wanted
the Sawmill property preserved in its undeveloped state.
{¶ 15} On December 12, 2012, Karl Gebhardt, then a deputy director of ODNR,
spoke with Kate Hastings, a resident of the Sawmill area. Hastings told Gebhardt that she
had attended a meeting held by the Friends of the Sawmill Wetlands the previous evening.
During that meeting, a representative of the City of Columbus ("City") expressed interest in
acquiring the Sawmill property. Hastings asked Gebhardt if ODNR would speak with the
City about its interest. Gebhardt responded that, if the City "wanted to offer a proposal [to
take possession of the Sawmill property,] [ODNR] would talk with them[,] but it need[ed]
to be an official offer very soon which [ODNR] would evaluate." (Pl.'s Ex. 7, June 1, 2016
Pl.'s Mot. for Summ. Jgmt.) Later, when questioned as to why he expressed openness to an
"official offer" from City, Gebhardt explained that he "didn't think there was any reason
why the City couldn't have [made an offer]. If they wanted to, that was up to them. Whether
we accepted it or what we did with it, I mean, that's a whole different situation. But if the
City was really interested like we heard, then put something on the table." (Gebhardt Dep.
at 99.)
{¶ 16} Two days after Gebhardt's conversation with Hastings, Allen McKnight, the
director of the City's Parks Department sought a meeting with Gebhardt. Gebhardt and
Fred Shimp, an assistant director of ODNR, met with McKnight soon thereafter to
determine if the City actually wanted the Sawmill property. Gebhardt figured, "If they were
or were not [interested], we would be able to convey that * * * if we were * * * asked by the
environmental [groups,] [']Why aren't you working with the City[?'] We could convey to
them we did, we were talking with the City, they're not interested." Id. at 104. According
to Gebhardt, McKnight "said that there could be interest on the part of the City but there
No. 16AP-665 6
were some issues that obviously had to be addressed." Id. at 101. Gebhardt and Shimp told
McKnight "where [ODNR] w[as] with [the deal with JDS], [and] [McKnight] understood it.
He did not want to get really in the middle * * * of this deal that's already been going forward
but he said if * * * something happened where it didn't go forward, they may have an
interest. But it wasn't a real firm commitment on their part." Id.
{¶ 17} Despite McKnight's equivocacy in the meeting, the City joined with The
Nature Conservancy to make a formal offer regarding the Sawmill property. In a letter
dated January 4, 2013, McKnight proposed that the Parks Department would assume
permanent ownership of the Sawmill property and manage it for the public's benefit. The
Nature Conservancy would provide recommendations for protecting the wetlands and
donate up to $50,000 as a match for contributions from individuals, foundations, and
corporations wishing to help preserve the site.
{¶ 18} On January 8, 2013, Josh Knights, the executive director of The Nature
Conservancy, met with James Zehringer, ODNR's director, Shimp, and Gebhardt. After the
meeting, Knights sent Zehringer an email thanking him for the "frank discussion" regarding
the Sawmill property. (Pl.'s Ex. 16, Gebhardt Dep.) Knights also stated:
As mentioned, our intention in submitting a proposal about the
property was to provide you with an additional option as our
impression was that you were "looking at options" prior to the
holidays. My sense from our meeting is that your options are
limited at this point and that preserving the property as it exists
is not one. We understand your decision to divest the property
given its location and resource constraints.
Id. Shimp later confirmed Knights' impression of ODNR's position when he stated in his
deposition that, in January 2013, ODNR was not entertaining any options for the Sawmill
property other than transferring the property to JDS pursuant to the parties' contract.
{¶ 19} Although the environmental groups' lobbying of ODNR did not succeed,
ODNR was not the only entity that the environmental groups targeted. In conjunction with
lobbying ODNR, the environmental groups also appealed to Morno. Both the Ohio
Environmental Council and the Sierra Club requested that Morno enforce the public-use
restriction in the deed to prevent the commercial development of the Sawmill property. In
response to both the environmental groups and JDS, Morno pronounced that it had no
No. 16AP-665 7
interest in the Sawmill property and, thus, had nothing to enforce or release. Morno wanted
nothing to do with the land-swap deal or the controversy over the potential development of
the Sawmill property.
{¶ 20} After Morno announced that it would not release the public-use restriction,
the contract amendment pending before the governor assumed greater importance. JDS
wanted to develop the Sawmill property for commercial use, so it needed to eliminate, or at
least neutralize, the public-use restriction. With Morno refusing to provide a release, JDS
urged ODNR to agree, as stated in the amendment, to release and remove the public-use
restriction from the deed. However, ODNR became concerned that it, alone, lacked the
legal authority necessary to release the public-use restriction.
{¶ 21} In late 2012 or early 2013, Shimp and Paul Baldridge, the chief of ODNR's
office of real estate and land management, met with James Schrim, the managing member
of JDS, and James Samuel, a lobbyist JDS had hired. According to Shimp, he told Schrim
and Samuel that ODNR was conducting a legal analysis into whether it could unilaterally
release the public-use restriction and that analysis "would have a very, very strong impact
whether or not [ODNR] would be able * * * to fully sign the amendment." (Shimp Dep. at
58.) Baldridge recalls Shimp expressing "concerns about the viability of [the land-swap
deal] moving forward" given the legal question that had arisen regarding whether ODNR,
alone, could release the public-use restriction. (Baldridge Dep. at 34.)
{¶ 22} Schrim remembers this meeting very differently. According to Schrim,
Shimp said "that the State did not want the [Olentangy] property, and did not want to go
forward with the [land-swap] transaction." (Schrim Dep. at 8.) Schrim also recalls Shimp
stating, "We're the government, we can do anything we want. We don't want the
[Olentangy] property. But if you find somebody to take it, we might go forward with the
transaction." Id. at 114. Finally, according to Schrim, "ODNR * * * said[,] ['W]e don't want
to close on the transaction and we're killing the deal.[']" Id. at 99.
{¶ 23} Samuel's recollection of the meeting does not fully correspond with Schrim's
recollection. In Samuel's memory, "the feeling of the discussion [was] that the deal might
not be brought to a successful conclusion." (Samuel Dep. at 48.) However, he does not
recall any ODNR representative stating that ODNR would not perform its obligations under
the contract or that ODNR did not want the Olentangy property. He also does not recollect
No. 16AP-665 8
Shimp stating, "We're the government, we can do anything we want," but he does
remember Shimp making a similar statement in a heated moment of the meeting.
{¶ 24} After this meeting, Shimp contacted Samuel and told him that, based on the
legal advice ODNR had received regarding the public-use restriction, ODNR was
recommending that the governor not sign the amendment.1 Although Samuel cannot
specifically remember this conversation, he generally recalls a conversation in which Shimp
communicated to him that "the deal would probably not go through." Id. at 50. Samuel
cannot recollect whether Shimp was referring to the land-swap deal or the execution of the
amendment.
{¶ 25} Based on his meeting with Shimp and Baldridge, Schrim believed that ODNR
had reneged on the parties' contract. JDS, however, continued to pursue the land-swap
deal. In a letter dated March 6, 2013, JDS asked ODNR to grant an extension of the deed
contingency period, which was set to expire on April 7, 2013.
{¶ 26} ODNR responded to JDS' letter with a March 14, 2013 letter. In that letter,
ODNR refused to grant the requested extension. ODNR also stated that it was "not willing
to amend the Agreement to, in any manner, assume any obligations with respect to the
removal and/or release of the 'public-use' restriction." (Def.'s Ex. 24 at 1, June 22, 2016
Def.'s Mot. for Summ. Jgmt.) However, ODNR "st[ood] ready to consummate the
transaction according to the terms of the Agreement." Id. at 2.
{¶ 27} Additionally, in the March 14, 2013 response letter, ODNR referred to the two
options before JDS if it wanted the Sawmill property: (1) obtain a release of the public-use
restriction from Morno or (2) agree to acquire the property "as is." Butler and Samuel
discussed these two options in a text message conversation on March 17, 2013. Butler
texted to Samuel, "The only thing [ODNR] need[s] is a response to the [March 14, 2013]
letter. There are two choices or paths ahead. What's the path that [JDS] think[s] is
viable[?]" (Pl.'s Ex. 45, June 1, 2016 Pl.'s Mot. for Summ Jgmt.) Samuel replied that
"[t]here is an 'as is' path (like in the letter) but it takes a discussion." Id. Butler then stated,
1 By the time ODNR reached this conclusion, the question of whether the governor would sign the
amendment may have become moot. Craig Butler, then an assistant policy director to the governor, had
spoken with the governor regarding the land-swap deal, and the governor had decided that he did not favor
going forward with the deal. Butler, therefore, did not present the amendment to the governor for his
signature.
No. 16AP-665 9
"If [the Sawmill property] is taken [']as is[,'] we will expect it not to be developed and be
forced to protect the deed." Id. Samuel responded, "Ok – then that is the deal killer." Id.
{¶ 28} Five days later, in a letter dated March 22, 2013, JDS formally replied to
ODNR's March 14, 2013 letter. In summarizing JDS' position regarding the public-use
restriction, the letter stated:
[ODNR] and the Governor's staff ha[ve] asked [JDS] to get a
release from Morno Holding Co. * * * of "Morno's interest in
the Deed." [JDS] has repeatedly told them that such a release
is not attainable because Morno has nothing to release and that
what they are asking for is not needed to close the transaction.
Morno has consistently demonstrated that it has no remaining
interest in the [Sawmill] Property, repeatedly communicated
that it has no interest in this transaction, and that it wants to
be left entirely out of this matter. * * * [JDS] sought a
release from Morno, none could be given and they
moved on with trying to close the transaction.
Specifically with respect to the "public-use" restriction, [JDS]
advised [ODNR] that it had received a title commitment from
Stewart Title on August 16th, 2012, indicating that Stewart
Title would not require a "release" of the "public-use"
restriction from Morno to obtain title insurance and therefore
marketable title. * * * At that time, Stewart Title informed
[JDS] that it would only require [ODNR] to release its interest
(if it has any) in the public-use restriction. Stewart is only
requesting comfort that [ODNR], itself, would not attempt to
enforce the public-use restriction post-swap. * * *
That concept of a "Release" by [ODNR] was incorporated into
the "Release, Declarations of Easements, Covenants and
Restrictions" document provided to ODNR on July 19th, 2012,
as part of the First Proposed Amendment at the request of
[ODNR]. * * * [T]here may be numerous other ways to satisfy
the substance of Stewart Title's request. It really is as simple as
satisfying Stewart Title that [ODNR], itself, has no continuing
or springing right in the Property post-closing.
***
No. 16AP-665 10
[JDS] hereby waives its rights under Section 4(d)(1) of the
Agreement and hereby agrees to indemnify [ODNR] in
accordance with the terms of that provision. In your parlance,
[JDS] is willing to accept the property "as is" with respect to the
public-use restriction, so long as the Governor's Deed is
constructed to allow for Stewart Title to insure marketable title
for [JDS'] intended use of the property.
(Emphasis sic.) (Def.'s Ex. 27 at 3-4, June 22, 2016 Def.'s Mot. for Summ Jgmt.)
{¶ 29} In a response letter dated April 3, 2013, ODNR refused to "waive the
effectiveness, if any, of the 'public use' restriction (without a complete release of the same
from the party who placed the restriction of record and/or the final determination that the
restriction is not effective from a court of appropriate jurisdiction) or waive or condition
[ODNR's] right to enforce the 'public use' restriction." (Def.'s Ex. 28 at 1, June 22, 2016
Def.'s Mot. for Summ. Jgmt.) ODNR also declined to acknowledge JDS' waiver of its
obligation under Section 4(d)(1) because that waiver was "based on [ODNR's] agreement
to execute a Governor's deed that contain[ed] a release of [ODNR's] right to enforce or
recognize the 'public use' restriction, which (as noted above) [ODNR] w[ould] not do." Id.
at 1-2. However, ODNR repeated that it "st[ood] ready to consummate this transaction in
accordance with the terms of the Agreement on the closing date determined under Section
3(a) of the Agreement." Id. at 1.
{¶ 30} JDS did not give ODNR written notice of the closing by April 27, 2013, as
required by Section 3(a) of the contract. On May 1, 2013, ODNR sent JDS a letter stating
that, due to the lack of timely notice, ODNR "consider[ed] [JDS] in breach of its obligations
under the Agreement and the Agreement incapable of being consummated." (Def.'s Ex. 32,
June 22, 2016 Def.'s Mot. for Summ. Jgmt.) The property swap contemplated in the
contract never occurred.
{¶ 31} On December 16, 2014, JDS filed suit in the trial court against ODNR,
alleging a claim for breach of contract.2 JDS sought specific performance for the
conveyance of the Sawmill property from ODNR to JDS free of all liens and encumbrances.
2 JDS also named The Nature Conservancy as a defendant in its suit. However, on January 28, 2016, after
a settlement between JDS and The Nature Conservancy, the trial court entered an order dismissing JDS'
claim against The Nature Conservancy.
No. 16AP-665 11
{¶ 32} After conducting discovery, both JDS and ODNR moved for summary
judgment. JDS argued that ODNR had breached Section 4(d)(1) of the contract because it
failed to work cooperatively with JDS to obtain a release of the public-use restriction.
ODNR disputed this argument and maintained that Section 4(d)(1) did not require it to
unilaterally release the public-use restriction.
{¶ 33} In a judgment entered September 2, 2016, the trial court granted JDS
summary judgment and denied ODNR summary judgment. The trial court ordered ODNR
to transfer, convey, and deliver to JDS the deed to the Sawmill property.
{¶ 34} ODNR appeals the trial court's September 2, 2016 judgment, and it assigns
the following errors:
1. The trial court erred in granting Plaintiff-Appellee's Motion
for Summary Judgment on the issue of breach of contract.
2. The trial court erred in denying Defendant-Appellant's
Motion for Summary Judgment on the issue of breach of
contract.
3. The trial court erred in finding that the contract language
and equity require Defendant-Appellant to transfer valuable
land to Plaintiff-Appellee for nothing in return (denying
Defendant-Appellant's Motion to Dismiss, filed on January 20,
2015, Defendant-Appellant's Motion for Partial Summary
Judgment, filed September 22, 2015, and Defendant-
Appellant's Motion for Summary Judgment, filed June 22,
2016; and granting Plaintiff-Appellee's Motion for summary
judgment, filed June 1, 2016).
{¶ 35} We will begin our analysis with the first two assignments of error, which we
will address together. These two assignments of error challenge the trial court's decision to
grant JDS summary judgment on its breach-of-contract claim and deny ODNR summary
judgment on the same claim. A trial court must grant summary judgment under Civ.R. 56
when 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 when viewing the evidence most strongly in favor of the
nonmoving party, and that conclusion is adverse to the nonmoving party. Hudson v.
Petrosurance, Inc., 127 Ohio St. 3d 54, 2010-Ohio-4505, ¶ 29; Sinnott v. Aqua-Chem, Inc.,
116 Ohio St. 3d 158, 2007-Ohio-5584, ¶ 29. Appellate review of a trial court's ruling on a
No. 16AP-665 12
motion for summary judgment is de novo. Hudson at ¶ 29. This means that an appellate
court conducts an independent review, without deference to the trial court's determination.
Zurz v. 770 W. Broad AGA, L.L.C., 192 Ohio App. 3d 521, 2011-Ohio-832, ¶ 5 (10th Dist.);
White v. Westfall, 183 Ohio App. 3d 807, 2009-Ohio-4490, ¶ 6 (10th Dist.).
{¶ 36} The party moving for summary judgment bears the initial burden of
informing the trial court of the basis for the motion and identifying those portions of the
record that demonstrate the absence of a genuine issue of material fact. Dresher v. Burt,
75 Ohio St. 3d 280, 293 (1996). The moving party does not discharge this initial burden
under Civ.R. 56 by simply making conclusory allegations. Id. Rather, the moving party
must affirmatively demonstrate by affidavit or other evidence allowed by Civ.R. 56(C) that
there are no genuine issues of material fact and the moving party is entitled to judgment as
a matter of law. Id. If the moving party meets its burden, then the nonmoving party has a
reciprocal burden to set forth specific facts showing that there is a genuine issue for trial.
Civ.R. 56(E); Dresher at 293. If the nonmoving party does not so respond, summary
judgment, if appropriate, shall be entered against the nonmoving party. Dresher at 293.
{¶ 37} To establish a cause of action for breach of contract, a plaintiff must prove:
(1) the existence of a contract, (2) performance by the plaintiff, (3) breach by the defendant,
and (4) damages or loss resulting from the breach. Lucarell v. Nationwide Mut. Ins. Co.,
__ Ohio St.3d __, 2018-Ohio-15, ¶ 41; Jarupan v. Hanna, 173 Ohio App. 3d 284, 2007-
Ohio-5081, ¶ 18 (10th Dist.). A defendant breaches a contract when it fails, without legal
excuse, to perform a promise that forms the whole or part of the contract. National City
Bank v. Erskine & Sons, Inc., 158 Ohio St. 450 (1953), paragraph one of the syllabus; accord
Jarupan at ¶ 18, quoting Little Eagle Properties v. Ryan, 10th Dist. No. 03AP-923, 2004-
Ohio-3830, ¶ 15 ("In order to prove a breach by the defendant, a plaintiff must show that
the defendant 'did not perform one or more of the terms of a contract.' ").
{¶ 38} This case implicates three theories on which ODNR arguably breached the
contract between the parties: (1) ODNR breached a specific term of the contract, i.e.,
Section 4(d)(1) and/or Section 4(g); (2) ODNR committed an anticipatory breach, or
repudiation, of the contract; and (3) ODNR breached the implied duty of good faith and fair
dealing. We will address each theory in turn.
No. 16AP-665 13
{¶ 39} Section 4(g) of the contract required ODNR to "cooperate in every reasonable
manner with [JDS] in the obtaining of any governmental approvals, wetland mitigation
permits, and grants/project assistance and permits for [JDS'] desired development and use
of the [Sawmill] Property." (Pl's. Ex. 1 at Section 4(g), June 1, 2016 Pl.'s Mot. for Summ.
Jgmt.) In its summary judgment briefing, JDS did not mention Section 4(g), much less
argue that ODNR breached Section 4(g). Nevertheless, the trial court grouped Section 4(g)
with Section 4(d)(1) and concluded that ODNR breached both "cooperation clauses" by
refusing "to assist JDS in resolving" the public-use restriction. (Sept. 2, 2016 Decision &
Entry at 3, fn. 3, and 9.)
{¶ 40} To the extent that the trial court found a breach of Section 4(g), it erred. A
party moving for summary judgment must specifically delineate the basis upon which it
seeks summary judgment to allow the opposing party a meaningful opportunity to respond.
Mitseff v. Wheeler, 38 Ohio St. 3d 112 (1988), syllabus. Granting summary judgment on a
basis not raised deprives the party opposing summary judgment of any opportunity to
respond. Consequently, a trial court commits reversible error if it awards summary
judgment on a ground not specified in the motion for summary judgment. State ex rel.
Sawicki v. Court of Common Pleas, 121 Ohio St. 3d 507, 2009-Ohio-1523, ¶ 27; Mannion v.
Lake Hosp. Sys., Inc., 11th Dist. No. 2016-L-015, 2016-Ohio-8428, ¶ 22; Daily Servs., LLC
v. Ohio Bur. of Workers' Comp., 10th Dist. No. 13AP-509, 2013-Ohio-5716, ¶ 15; Ware v.
King, 187 Ohio App. 3d 291, 2010-Ohio-1637, ¶ 17 (3d Dist.). Here, JDS did not seek
summary judgment on the ground that ODNR breached Section 4(g) of the contract, and,
consequently, the trial court erred in granting JDS summary judgment on that ground.
{¶ 41} Moreover, JDS' failure to argue in the trial court that ODNR breached Section
4(g) has an additional consequence. Generally, a party waives the right to appeal an issue
that the party could have, but did not, raise before the trial court. Columbus City School
Bd. of Edn. v. Franklin Cty. Bd. of Revision, 144 Ohio St. 3d 549, 2015-Ohio-4837, ¶ 14;
Niskanen v. Giant Eagle, Inc., 122 Ohio St. 3d 486, 2009-Ohio-3626, ¶ 34. Because JDS
did not contend in its summary judgment briefing that ODNR breached Section 4(g), it
No. 16AP-665 14
waived its ability to raise that contention on appeal. We, therefore, will not review whether
ODNR breached Section 4(g).3
{¶ 42} As we stated above, Section 4(d)(1) of the contract required JDS to "obtain[ ]
the release of the current 'public use' restriction encumbering the [Sawmill] Property."
(Pl's. Ex. 1 at Section 4(d)(1), June 1, 2016 Pl.'s Mot. for Summ. Jgmt.) It further required
JDS and ODNR to "work cooperatively to obtain the executed release of such
encumbrance." Id. ODNR has consistently argued that Section 4(d)(1) only obligated it to
cooperate with JDS' efforts to obtain an executed release of the public-use restriction from
Morno. In other words, ODNR contends that it agreed to assist JDS in getting Morno to
release the public-use restriction; it did not agree to unilaterally release the public-use
restriction itself.
{¶ 43} JDS never argued below an alternate interpretation of Section 4(d)(1). Now,
on appeal, it has conceded that ODNR's interpretation of Section 4(d)(1) is correct. We
agree with the parties' joint interpretation because it is consistent with the law governing
releases of restrictive covenants.
{¶ 44} A "restrictive covenant" is a " 'private agreement, usu[ally] in a deed or lease,
that restricts the use or occupancy of real property, esp[ecially] by specifying lot sizes,
building lines, architectural styles, and the uses to which the property may be put.' " Canton
v. State, 95 Ohio St. 3d 149, 2002-Ohio-2005, ¶ 28, quoting Black's Law Dictionary 371
(7th Ed.Rev.1999). Restrictive covenants create rights and duties between the original
promising parties. 9 Wolf, Powell on Real Property, Section 60.01[2] (2001 Ed.). One
party, the covenantor, agrees to do or refrain from doing something enforceable by the
other party, the covenantee. Lynch v. Pelham, 167 N.H. 14, 20-21 (2014); Waikiki Malia
Hotel, Inc. v. Kinkai Properties Ltd. Partnership, 75 Haw. 370, 382 (1993). Thus, a
restrictive covenant imposes a burden on the covenantor and imparts a benefit to the
covenantee. Waikiki Malia Hotel at 382; accord Powell on Real Property, Section
60.01[2] ("The covenantee's rights are called the 'benefit' of the covenant, while the
covenantor's duties are called the 'burden.' ").
3On appeal, JDS delayed raising an argument based on Section 4(g) until oral argument. Thus, even if we
were inclined to consider this argument, the paucity of the argument would hinder our review.
No. 16AP-665 15
{¶ 45} " 'A person entitled to enforce the benefit of a covenant may extinguish this
right by means of a written and recorded release.' " Ashley v. Kehew, 992 A.2d 983, 987
(R.I.2010), quoting Powell on Real Property, Section 60.10[1]. Termination by release is
based on fundamental principles of contract law, as a person entitled to enforce a promise
may relieve the promisor of his or her obligation. Heltman v. Catanach, 148 N.M. 67, 69
(App.2009), quoting Korngold, Private Land Use Arrangements: Easements, Real
Covenants, and Equitable Servitudes, Section 11.03, at 386-87 (1990). Notably, a release
is a unilateral action taken by the person entitled to enforce the restrictive covenant.
Korngold, Section 11.03, at 386; accord 7 Thomas, Thompson on Real Property, Section
61.07(b)(2)(i), at 627 (2d Ed.2006) ("Those benefiting from a covenant may * * * act
unilaterally (release) in terminating fully or partially the covenant.").
{¶ 46} Here, ODNR, the covenantor, promised to use and occupy the Sawmill
property solely for public purposes. As the other party to this promise, Morno, the
covenantee, had the right to enforce the public-use restriction. Thus, Morno—not ODNR—
had the legal authority necessary to release the public-use restriction. Construing Section
4(d)(1) to correlate with the law, therefore, results in the conclusion that Section 4(d)(1)
solely obligated ODNR to cooperate with JDS to obtain a release from Morno.
{¶ 47} Applying this interpretation of Section 4(d)(1) to the facts of this case, we
must conclude that the trial court erred in finding that ODNR breached the contract.
Because Section 4(d)(1) required nothing of ODNR beyond cooperation in obtaining a
release from Morno, ODNR did not violate that section when it rejected JDS' request that
it unilaterally release the public-use restriction, or when it refused to waive or release any
rights it might have to enforce the public-use restriction. Likewise, ODNR did not breach
Section 4(d)(1) when it informed JDS that it would protect the deed if JDS acquired the
property "as is," i.e., without a release of the public-use restriction from Morno, or when it
declined to waive the effectiveness of the public-use restriction absent a release from
Morno.
{¶ 48} The trial court also found that ODNR breached Section 4(d)(1) when
Gebhardt told Hastings in December 2012 that, if the City "wanted to offer a proposal [to
take possession of the Sawmill property,] [ODNR] would talk with them[,] but it need[ed]
to be an official offer very soon which [ODNR] would evaluate." (Pl.'s Ex. 7, June 1, 2016
No. 16AP-665 16
Pl.'s Mot. for Summ. Jgmt.) The trial court concluded that "encourag[ing] third parties to
purchase the [Sawmill] Property out from under JDS"4 violated ODNR's "specific
obligations to cooperate with JDS under the contract." (Sept. 2, 2016 Decision & Entry at
8-9.) This conclusion, however, too broadly construes Section 4(d)(1). That contractual
term obligated ODNR to cooperate with obtaining a release from Morno. Indicating
willingness to entertain an "official offer" from the City did not contravene that obligation.
{¶ 49} Next, we review whether ODNR committed an anticipatory breach, otherwise
known as a repudiation, of the contract. Before the trial court, JDS repeatedly disclaimed
that it sought to hold ODNR liable for an anticipatory breach of the contract. (June 22,
2016 Pl.'s Reply in Support of its Mot. for Summ. Jgmt. at 1-2 ("ODNR breached the
contract, plain and simple, and JDS is not advancing an anticipatory repudiation
argument."); id. at 6 ("JDS' claim is a straightforward breach of contract claim, not
anticipatory breach."); July 6, 2016 Pl.'s Memo in Opp. to Def.'s Mot. for Summ. Jgmt. at 8
("No matter how many times ODNR says that JDS is arguing anticipatory repudiation, it
does not make it so."); id. at 9 ("JDS' claim is a straightforward breach of contract claim,
not anticipatory breach.")). From these statements, we determine that JDS knew that it
could have claimed that ODNR committed an anticipatory breach, and it intentionally
chose not to advance that claim. JDS, therefore, waived a claim for anticipatory breach of
the contract. See Glidden Co. v. Lumbermens Mut. Cas. Co., 112 Ohio St. 3d 470, 2006-
Ohio-6553, ¶ 49 ("Waiver is a voluntary relinquishment of a known right and is generally
applicable to all personal rights and privileges, whether contractual, statutory, or
constitutional.").
{¶ 50} Even if JDS had not waived a claim for anticipatory breach, that claim would
fail on its merits. An anticipatory breach of contract occurs when one party to a contract
gives notice to the other party that it will not perform a contractual duty due in the future.
Haman Ents., Inc. v. Sharper Impressions Painting Co., 10th Dist. No. 15AP-50, 2015-
Ohio-4967, ¶ 23; Daniel Terreri & Sons v. Bd. of Mahoning Cty. Commrs., 152 Ohio App. 3d
4 The trial court actually stated that "ODNR encouraged third parties to purchase the Replacement [i.e.,
Olentangy] Property out from under JDS." (Emphasis added.) (Sept. 2, 2016 Decision & Entry at 8.) We
reject ODNR's contention that this statement demonstrates that the trial court misunderstood the evidence.
Rather, reading the statement in context, we conclude that the trial court merely made a typographical error
in referring to the Olentangy property, rather than the Sawmill property.
No. 16AP-665 17
95, 2003-Ohio-1227, ¶ 48 (7th Dist.). To prevail on a claim for anticipatory breach, a
plaintiff must establish that the parties had entered into a contract containing some duty of
performance not yet due and, by word or deed, the defendant refused future performance,
causing damage to the plaintiff. Qutifan v. Shafiq, 10th Dist. No. 15AP-814, 2016-Ohio-
4555, ¶ 25; Haman Ents. at ¶ 23. Anticipatory breach requires "an overt communication of
an intention or an action which renders performance impossible or demonstrates a clear
determination not to continue with performance." Wilson v. Bd. of Trustees, 10th Dist. No.
91AP-144 (Dec. 24, 1991); accord Cambridge Co. v. Telsat, Inc., 9th Dist. No. 23935, 2008-
Ohio-1056, ¶ 8 ("Anticipatory repudiation of a contract has been found where there is an
overt action indicating that performance will not be tendered. * * * Indirect inferences are
not sufficient."). The communication or action must indicate a clear and unequivocal
refusal to perform. Wilson; accord Haman Ents. at ¶ 23 (holding that a repudiation of a
contract must be expressed in clear and unequivocal terms). Mere expressions of doubt as
to willingness or ability to perform do not repudiate a contract. Qutifan at ¶ 25; Haman
Ents. at ¶ 23.
{¶ 51} In the case at bar, JDS argues that ODNR committed an anticipatory breach
of the contract when it refused to perform its penultimate duty—to transfer the Sawmill
property to JDS—prior to the date set in the contract for the property transfer. JDS asserts
five instances wherein it alleges that ODNR repudiated its obligation to transfer the Sawmill
property: (1) the governor's decision not to go forward with the land swap, (2) ODNR's
indication that it was open to an "official offer" from the City to acquire the Sawmill
property, (3) ODNR's internal investigation into whether all parties had performed under
the contract, (4) ODNR's refusal to waive the effectiveness of the public-use restriction and
Butler's statement that ODNR would protect the deed if JDS acquired the Sawmill property
"as is," and (5) Shimp's statements to Schrim and Samuel that ODNR did not want to
proceed with the land swap.
{¶ 52} JDS' first basis for asserting an anticipatory breach fails because JDS did not
present any evidence that a state official or employee communicated the governor's
decision to JDS prior to the time for the transfer of the properties arrived. Without
communication of the governor's decision prior to the transfer date, JDS had no notice of
No. 16AP-665 18
the governor's alleged intention to commit a total breach of the contract. Thus, an
anticipatory breach could not occur.5
{¶ 53} JDS' second and third bases for asserting an anticipatory breach fail because
JDS did not show that ODNR's actions overtly demonstrated an intent to not perform the
property transfer. The record contains no evidence that JDS knew of either action prior to
the time for the property transfer. Moreover, neither action amounts to a clear and
unequivocal refusal to perform at the contractually appointed time.
{¶ 54} JDS' fourth basis for asserting an anticipatory breach fails because ODNR's
position regarding the public-use restriction did not clearly and unequivocally evince an
intent to refuse to transfer the Sawmill property to JDS. Neither ODNR's refusal to waive
the effectiveness of the restriction nor its pledge to protect the deed would have precluded
conveyance of the property. ODNR only denied JDS the ability to acquire the property free
of the complications caused by the public-use restriction.
{¶ 55} JDS' fifth basis for asserting an anticipatory breach requires a more in-depth
analysis. As we stated above, the parties discussed whether ODNR would transfer the
Sawmill property as required by the contract during the meeting between Shimp, Baldridge,
Schrim, and Samuel. According to Schrim, at that meeting, Shimp said, (1) "[T]he State did
not want the replacement property, and did not want to go forward with the [land-swap]
transaction" (Schrim Dep. at 8), and (2) "We're the government, we can do anything we
want. We don't want the replacement property. But if you find somebody to take it, we
might go forward with the transaction" (Schrim Dep. at 114). Finally, according to Schrim,
"ODNR * * * said[,] ['W]e don't want to close on the transaction and we're killing the
deal.[']" Id. at 99.
{¶ 56} Read together, these statements do not express doubt regarding ODNR's
willingness or ability to consummate the land swap; they instead communicate a blatant
refusal to perform. However, the record also contains the testimony of the other attendees
at the meeting, who do not recall Shimp communicating so definitively. Baldridge and
Samuel remember Shimp only expressing concern about the viability of the land swap.
Given this conflicting testimony, we conclude that a question of fact exists as to whether
5 Additionally, during oral argument, JDS conceded that the governor's decision did not constitute an
anticipatory breach.
No. 16AP-665 19
Shimp clearly and unequivocally repudiated ODNR's contractual obligation, then not yet
due, to complete the land swap.
{¶ 57} A pending question of fact normally would preclude summary judgment for
both parties. ODNR, however, resists that outcome. ODNR requests that we assume that
an anticipatory breach occurred. It then argues that, even assuming the existence of an
anticipatory breach, it is entitled to summary judgment because it nullified the anticipatory
breach by retracting its repudiation of the contract. We agree.
{¶ 58} If a party commits an anticipatory breach, the injured party has the option of
(1) immediately terminating the contract and suing on the breach, or (2) continuing the
contract and suing the breaching party after the time for performance has passed. Haman
Ents., Inc., 2015-Ohio-4967, at ¶ 29. If the non-repudiating party decides to continue with
the contract, then the repudiating party has " 'an opportunity to repent and to resume the
contract' " by retracting its repudiation. Vision Entertainment Worldwide, LLC v. Mary
Jane Prods., Inc., S.D.N.Y. No. 13 Civ. 4215 (AT), 2014 U.S.Dist. LEXIS 154099, 2014 WL
5369776 (Oct. 17, 2014), quoting Deforest Radio Tel. & Tel. Co. v. Triangle Radio Supply
Co., 243 N.Y. 283, 293 (1926). A repudiating party may retract its repudiation as long as
the non-repudiating party has not materially changed its position in reliance on the
repudiation or indicated that it considers the repudiation final. Crosspoint Seven, LLC v.
Mfrs. Life Ins. Co., 148 Fed.Appx. 535, 538 (7th Cir.2005) fn. 1; Edwards v. Wyatt, 335
F.3d 261, 274 (3d Cir.2003); Canderm Pharmacal, Ltd. v. Elder Pharmaceuticals, Inc.,
862 F.2d 597, 604 (6th Cir.1988); Restatement of the Law 2d, Contracts, Section 256(1)
(1981); accord 13 Lord, Williston on Contracts, Section 39:42, at 760-61 (4th Ed.2014)
("[T]he repudiating party has the right and the power to retract as long as the other party
has not substantially or materially changed its position in reliance on the repudiation, and
thus, the nonrepudiating party who continues to urge performance by the repudiator is
merely extending the time within which the retraction may occur.").
{¶ 59} "The principal way for a repudiating party to nullify its repudiation is by
making a statement retracting it." Homeland Training Ctr., LLC v. Summit Point Auto.
Research Ctr., 594 F.3d 285, 295 (4th Cir.2010). To be effective, the retraction must be
clear and unequivocal in evincing the repudiating party's intention to honor its obligations
under the contract. Arlington LF, LLC v. Arlington Hospitality, Inc., 637 F.3d 706, 715
No. 16AP-665 20
(7th Cir.2011); Anderson Excavating & Wrecking Co. v. Sanitary Improvement Dist. No.
177, 265 Neb. 61, 69 (2002); Vahabzadeh v. Mooney, 241 Va. 47, 51 (1991). After a
retraction, the contract is reinstated, which nullifies any claim for total breach that arose
with the repudiation. Williston on Contracts, Section 39:42, at 762, and Section 43:19, at
22; Restatement, Section 256(1), Comment a; accord Vision Entertainment Worldwide ("If
the repudiating party retracts its repudiation, the non-repudiating party once again
becomes obligated to perform its obligations under the contract."); Gilmore v. Duderstadt,
125 N.M. 330, 335-36 (App.1998) ("A retraction, if effective, restores the contract to its
original condition and places the parties in the same legal position as before the
repudiation.").
{¶ 60} In the case at bar, JDS admits that, after the meeting between Shimp,
Baldridge, Schrim, and Samuel, it "continued to take whatever steps it could to try and get
the deal done." (Appellee's Brief at 18.) JDS' decision to proceed with the contract gave
ODNR the opportunity to retract its repudiation.
{¶ 61} ODNR points to two statements as evidence of its retraction. First, in the
March 14, 2013 letter, ODNR stated that it "st[ood] ready to consummate the transaction
according to the terms of the Agreement." (Def.'s Ex. 24 at 2, June 22, 2016 Def.'s Mot. for
Summ. Jgmt.) Second, in the April 3, 2013 letter, ODNR reiterated that it "st[ood] ready
to consummate this transaction in accordance with the terms of the Agreement on the
closing date determined under Section 3(a) of the Agreement." (Def.'s Ex. 28 at 1, June 22,
2016 Def.'s Mot. for Summ. Jgmt.) We agree with ODNR that these two statements clearly
and unequivocally indicate that ODNR intended to comply with its contractual obligation
to swap the Sawmill property for the Olentangy property. ODNR, therefore, retracted its
repudiation.
{¶ 62} The trial court determined that ODNR's retraction did not matter because,
concomitantly with the retraction, ODNR breached the contract by refusing to assist JDS
in resolving the public-use restriction. However, as we concluded above, ODNR did not
breach the contract by rebuffing JDS' insistence that ODNR unilaterally release the public-
use restriction or waive whatever rights it had under the restriction. Consequently, ODNR
effectively retracted its repudiation, which nullified JDS' claim for total breach of the
contract.
No. 16AP-665 21
{¶ 63} Next, we must consider JDS' argument that ODNR breached the implied duty
of good faith and fair dealing. Although JDS asserts this argument in its appellate brief, it
did not present it to the trial court. JDS, therefore, waived its right to raise the argument
on appeal. See Columbus City School Bd. of Edn., 144 Ohio St. 3d 549, 2015-Ohio-4837, at
¶ 14; Niskanen, 122 Ohio St. 3d 486, 2009-Ohio-3626, at ¶ 34.
{¶ 64} Moreover, JDS has failed to allege any facts that could establish a breach of
the implied duty of good faith and fair dealing. That duty is not violated "unless there is a
breach of a specific obligation imposed by the contract, such as one that permits a party to
exercise discretion in performing a contractual duty or in rejecting the other party's
performance." Lucarell, __ Ohio St.3d __, 2018-Ohio-15, at ¶ 43. No such breach occurred
here. Consequently, JDS cannot prevail on a claim for breach of the implied duty of good
faith and fair dealing.
{¶ 65} In sum, we conclude that the evidence in the record demonstrates that ODNR
did not breach the parties' contract, and ODNR is entitled to judgment as a matter of law.
The trial court, therefore, erred in granting JDS summary judgment and denying ODNR
summary judgment. Accordingly, we sustain ODNR's first and second assignments of
error.
{¶ 66} By its third assignment of error, ODNR argues that the trial court erred in
awarding JDS specific performance. Our determination that ODNR did not breach the
parties' contract renders the remedy issue moot. Accordingly, we do not decide ODNR's
third assignment of error.
{¶ 67} For the foregoing reasons, we sustain ODNR's first and second assignments
of error, which renders moot the third assignment of error. We reverse the judgment of the
Franklin County Court of Common Pleas, and we remand this case to that court so that it
may enter summary judgment in ODNR's favor.
Judgment reversed;
cause remanded with instructions.
SADLER and BRUNNER, JJ., concur.