Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Triangle Properties, Inc. v. Homewood Corp.

Court of Appeals of Ohio, Tenth District

September 12, 2013

Triangle Properties, Inc., Plaintiff-Appellee,
v.
Homewood Corporation, Defendant-Appellant.

APPEAL from the Franklin County Court of Common Pleas, C.P.C. No. 08CVH-02-2469.

Zeiger, Tigges & Little LLP, John W. Zeiger and Bradley T. Ferrell, for appellee.

David A. Dye Co., LPA, and David A. Dye, for appellant.

DECISION

TYACK, J.

(¶ 1} Homewood Corporation ("Homewood") is appealing from a $1, 360, 000 judgment obtained against it by Triangle Properties, Inc. ("Triangle").

(¶ 2} Triangle entered into a contract with two homebuilders, Homewood and M/I Homes of Central Ohio, LLC ("M/I Homes") to develop lots upon which the homebuilders could erect single-family dwellings. Apparently, M/I Homes performed its obligations under the contract to the satisfaction of Triangle, because Triangle sued only Homewood in a lawsuit for an alleged breach of contract and significant damages.

(¶ 3} The lawsuit eventually came on for a jury-waived trial before a magistrate over a period of days in June, July, and August 2010. The magistrate rendered a detailed decision on February 25, 2011. Homewood objected to several portions of the magistrate's decision, but the trial court judge assigned to the case overruled the objections and adopted the findings of fact and conclusions of law contained in the magistrate's decision. This appeal then ensued.

Assignments of Error

(¶ 4} Homewood assigns 12 errors for our consideration:

1. THE TRIAL COURT ERRED IN GRANTING $1, 360, 000 IN "LIQUIDATED DAMAGES" TO APPELLEE, BECAUSE BY DOING SO, THE COURT APPLIED THE CONTRACTUAL DAMAGES PROVISION AS A PENALTY.
2. THE TRIAL COURT ERRED WHEN IT FAILED TO APPLY SET-OFFS TO WHICH APPELLANT WAS ENTITLED.
3. THE TRIAL COURT ERRED AS A MATTER OF LAW BY ITS INTERPRETATION OF THE CONTRACT THAT IGNORED THE INTENTIONS OF THE PARTIES.
4. THE TRIAL COURT ERRED, IN THAT IN LIEU OF INTERPRETING THE PARTIES' CONTRACT, IT REWROTE THE CONTRACT.
5. THE TRIAL COURT ERRED BY EXCLUDING ADMISSIBLE EVIDENCE.
6.THE TRIAL COURT ERRED BY INTERPRETING THE CONTRACT TO IMPOSE OBLIGATIONS ON APPELLANT THAT DID NOT EXIST UNDER THE CONTRACT.
7.THE TRIAL COURT ERRED BY FINDING THAT TIME WAS NOT 'OF THE ESSENCE' UNDER THE CONTRACT.
8. THE TRIAL COURT ERRED IN REACHING CONCLUSIONS THAT WERE CONTRARY TO THE MANIFEST WEIGHT OF THE EVIDENCE.
9. THE TRIAL COURT ERRED BY SHIFTING APPELLEE'S BURDEN OF PROOF TO APPELLANT.
10. THE TRIAL COURT ERRED BY GRANTING REFORMATION AS RELIEF FOR A PARTY'S UNILATERAL MISTAKE.
11. THE TRIAL COURT ERRED BY DENYING APPELLANT'S MOTION FOR LEAVE TO AMEND ITS ANSWER.
12. THE TRIAL COURT ERRED IN ITS INTERPRETATION AND APPLICATION OF CIVIL RULE 9(C).

(¶ 5} Many of Homewood's arguments overlap, and therefore cannot be neatly categorized under specific assignments of error. For ease of discussion, we will identify specific assignments of error where practical, and discuss other arguments under subject-matter headings.

Background

(¶ 6} Under the April 27, 2005 purchase agreement, Triangle ("Seller") was required to develop raw land into 172 residential lots located in Section II of the Scioto Reserve Expansion Development in Delaware County, Ohio. The contract price for each developed lot was $68, 000. The project was divided into two phases. Phase I consisted of 118 lots that were successfully completed by Triangle and purchased by Homewood and M/I ("Buyers"), albeit at different times. Phase II consisted of the remaining 54 lots and is the subject of this litigation.

(¶ 7} In Section 3 of the purchase agreement under the heading "Deposit, " the agreement provided in pertinent part as follows:

Within fifteen (15) days after execution of this Agreement, Buyers shall deposit with Seller a promissory note, in the form attached hereto as Exhibit B (the "Note"), in the amount of $2, 924, 000.00 to insure closing of the first and second phase of said lots. Deposit shall be reduced to $918, 000.00 as security for Buyers' obligations to close on the remaining lots. Amount owed herein will change based on the final number of lots in each phase.

(¶ 8} The purchase agreement contained the following liquidated damages clause in Section 3(d):

If the purchase and sale of Phase I or Phase II, as the case may be, is not consummated because of Byers' [sic] failure or refusal to perform its obligations hereunder, Seller shall be entitled to all sums due and owing under the Note as liquidated damages which the parties hereto agree is a reasonable and proper amount in light of the circumstances, and which shall be Seller's sole remedy at law and in equity.

(¶ 9} Thereafter, the Buyers executed a Demand Promissory Note for $2, 924, 000, [1] which served as the deposit under the contract. The Buyers' execution of the note led to a side agreement between Homewood and M/I that a defaulting party would indemnify the non-defaulting party against any claims or liability arising from the default.

(¶ 10} Reading the Deposit section and the Liquidated Damages section in tandem, the amount of liquidated damages for lots that were not sold was set at $17, 000 per lot. ($2, 924, 000 ÷ 172 = $17, 000). The Buyers were responsible for executing a reduced substitute promissory note in the appropriate amount after each closing.

(¶ 11} Triangle, Homewood, and M/I amended the purchase agreement a number of times over the course of their dealing. The first three amendments are relevant to this matter. The first amendment extended the time for Triangle to complete certain conditions to close from January 1, until July 15, 2006.

(¶ 12} The second, more substantial amendment took place on August 25, 2006, and included the following terms:

1. Section 2 of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following:
"Purchase Price. The purchase price for each developed lot shall be $68, 000.00, subject to credits, adjustments and prorations provided in this Agreement, and shall be paid by wire transfer of immediately available funds at Closing.
2. Section 3 of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following:
"Deposit. Within fifteen (15) days after execution of this Agreement, Buyers shall deposit with Seller a promissory note, in the form attached hereto as Exhibit B (the "Note"), in the amount of $2, 924, 000.00 to ensure closing of said lots. At each Closing, the deposit shall be reduced by $17, 000.00 multiplied by the number of lots purchased by Buyers. The amount owed herein will change based on the number of lots still to be closed. The Note shall be held by Seller and disbursed as follows:
(a) At the first and second Closings, the Note shall be substituted with a new Note in the amount equal to $17, 000.00 multiplied by the number of lots to be closed by Buyers in accordance with this Agreement. The Note shall be held by Seller to secure Buyers continuing obligation to purchase the lots. The Note shall be returned to Buyers upon completion of the third Closing.
** *
(c) If the purchase and sale of lots is not consummated because any condition of closing set forth in Paragraph 5 is not satisfied within the applicable time period, as provided in paragraph 5, and Buyers refuse to waive such condition, the Note shall be returned to Buyers and thereafter neither Buyers nor Seller shall have any further obligation hereunder with respect to any unpurchased lots.
(d) If the purchase and sale of lots is not consummated because of Buyers' failure or refusal to perform its obligations hereunder, Seller shall be entitled to all sums due and owing under the Note as liquidated damages which the parties hereto agree is a reasonable and proper amount in light of the circumstances, and which shall be Seller's sole remedy at law and in equity."
** *
4. Section 11 of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following:
Closing. After the conditions set forth in Paragraphs 5, 6(c) (d) (e) and (f) and 7 have been satisfied, Seller shall give written notice to Buyers. The conditions set forth in Paragraph 6(a) and (b) have been satisfied by Seller. The purchase of the lots will take place at three closings, each a "Closing". Subject to any extensions contained herein, the first Closing of 60 lots in Phase I shall occur on or before August 25, 2006; the second Closing for the remaining 58 lots in Phase I shall occur on or before February 28, 2o07; and the third Closing for 54 lots in Phase II shall occur on ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.