Areawide Home Bldr. v. Hershberger Constr., Unpublished Decision (2-4-1998)
Areawide Home Bldr. v. Hershberger Constr., Unpublished Decision (2-4-1998)
Opinion of the Court
Elson Hershberger is the president of Hershberger Construction, Inc. (collectively "Seller"), a corporation in the business of building houses. The houses that Seller builds are either contract homes, where a buyer has contracted to buy the house before its construction, or "spec homes," where the house is built before there is a buyer.
In 1995, Seller built three "spec homes" located on Cyprus Avenue in Massillon, Ohio ("the Cyprus properties"). By May 1996, Seller had been unable to sell the Cyprus properties. Seller became aware of Buyer's business and contacted Buyer by telephone on May 14, 1996. Buyer and Seller then met on May 21, 1996.
The parties differ as to what occurred during those two meetings. Buyer asserts that during the May 14 telephone conversation, the parties agreed that Seller would sell the Cyprus properties to Buyer, and that the parties reached agreement on all terms except a price. Buyer also contends that at the May 21 meeting the parties agreed on a price for the Cyprus properties, and that the parties were to sign a contract the next day. Seller, on the other hand, asserts that it never agreed to sell the Cyprus properties to Buyer. Seller also avers that the parties never agreed on a price. The parties agree that Seller gave Buyer the keys to the Cyprus properties at the May 21 meeting.
The parties met again on May 22, 1996, when Buyer contends the parties were to have signed contracts for the sale of the Cyprus properties. However, no contracts were signed, as Seller wanted to make additional changes to any deal between the parties. Buyer and Seller continued to have discussions between May 22 and July 1996. Buyer made no payments to or on behalf of Seller at any time during the parties' discussions.
During the time that the parties were discussing the Cyprus properties, Buyer began to advertise the Cyprus properties as available to buyers. On at least one occasion, Seller told Buyer to continue advertising if Buyer so wished, even though the parties had no written agreement. In addition, on at least one occasion Buyer notified Seller that Buyer had people who were interested in buying two of the Cyprus properties. Buyer contracted with two parties to sell two of the Cyprus properties in July 1996.
On July 11, 1996, Buyer and Seller met at Buyer's office to work out the details of an agreement between the parties; however, no agreement was reached. The next day, Seller met with Buyer at Seller's office. Seller presented Buyer with options to purchase the Cyprus properties. Buyer objected to the option contracts, because the options gave Seller more money than Buyer had originally anticipated under the alleged oral contract. Seller indicated that Buyer could "take it or leave it." Because Buyer had contracted to sell two of the Cyprus properties and feared that the potential buyers would sue if Buyer did not meet its obligations, Buyer signed the option contracts. Buyer included a "U.D." with each signature to note Buyer's belief that the options were signed under duress. Buyer also tendered checks for $1,000 on each option. Buyer never exercised the options, and as of December 1996 Buyer had not been sued by the potential buyers of the Cyprus properties.
Buyer filed suit in the Summit County Court of Common Pleas on August 2, 1996. Buyer alleged two counts. The first count alleged fraud on the part of Seller and demanded that the parties' oral contract be enforced, and the second count sought a declaratory judgment that the option contracts that Buyer signed were invalid. Seller answered and counterclaimed on October 7, 1996.1 Buyer twice amended the complaint. Thereafter, Seller moved for summary judgment, and Buyer opposed.
On April 15, 1997, the trial court granted Seller's motion for summary judgment on both counts of Buyer's complaint2 and set a trial date for Seller's counterclaim. Seller voluntarily dismissed the counterclaim on April 22, 1997. Buyer filed its notice of appeal on May 2, 1997.
(1) No genuine issue as to any material fact remains to be litigated;
(2) the moving party is entitled to judgment as a matter of law; and
(3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party.
Temple v. Wean United, Inc. (1977),
Ohio's Statute of Frauds, R.C.
There are generally three criteria for establishing part performance: "(1) evidence of a change in who possesses the land, (2) payment of all or part of the consideration for the land, and (3) improvements, alterations or repairs upon the land." Id. at 12. Accord 51 Ohio Jurisprudence 3d (1984) 320, Frauds, Statute of, Section 171. Generally, the performance of only one of the three acts is insufficient to establish part performance. Geiger,supra, at 12.
Construing the evidence adduced by the parties in a light most favorable to Buyer, part performance has not been established in the case at bar. Buyer may have established constructive possession by the delivery of keys, but this alone is not enough to show part performance. See 51 Ohio Jurisprudence 3d (1984) 324, Frauds, Statute of, Section 174. There is no evidence that Buyer made any improvements to the Cyprus properties, and it is undisputed that Buyer made no payments to Seller on the Cyprus properties. Buyer argues that the act of marketing and advertising the Cyprus properties creates part performance. However, the rendition of services is generally inadequate to take an oral contract out of the Statute of Frauds. See id. at 339-40, Section 188. The trial court properly granted summary judgment on the issue of part performance. Buyer's third assignment of error is overruled.
The fraud exception to the Statute of Frauds "consists in the refusal to perform an agreement upon the faith of which plaintiff has been misled to his injury, and not a mere refusal to perform an agreement, which, by reason of the Statute of Frauds, cannot be enforced by legal action." Marion Prod. Credit Assn. v. Cochran
(1988),
In the case at bar, Buyer has asserted fraud on the part of Seller by virtue of Seller's refusal to sell the Cyprus properties under the alleged oral contract. Buyer's claim cannot be countenanced under Marion Prod. Credit Assn. Buyer's second assignment of error is overruled.
Judgment affirmed.
The Court finds that there were reasonable grounds for this appeal.
We order that a special mandate issue out of this court, directing the County of Summit Common Pleas Court to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period for review shall begin to run. App.R. 22(E).
Costs taxed to appellants.
Exceptions. _________________________________ JOHN W. REECE
FOR THE COURT
QUILLIN, P. J.
BAIRD, J.
CONCUR
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