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Guaranteed Construction Services, LLC v. Grand Communities, Ltd.

Court of Appeals of Ohio, Tenth District

December 28, 2017

Guaranteed Construction Services, LLC et al., Plaintiffs-Appellants,
v.
Grand Communities, Ltd. et al., Defendants-Appellees.

         APPEAL from the Franklin County Court of Common Pleas No. 16CV-1087

         On brief:

          Cooper & Elliott, LLC, and Barton R. Keyes, for appellants.

         On brief:

          Kegler, Brown, Hill Ritter, and Catherine A. Cunningham, for appellees.

         Argued:

          Catherine A. Cunningham.

          DECISION

          SADLER, J.

         {¶ 1} Plaintiffs-appellants, Guaranteed Construction Services, LLC, d.b.a. Real Estate Ltd. ("Real Estate Ltd.") and Northgate Centre Development, LLC ("Northgate") (collectively "appellants"), appeal from the judgment entry of the Franklin County Court of Common Pleas granting summary judgment in favor of defendants-appellees, Grand Communities, Ltd. ("Grand") and Fischer Development Company (collectively "appellees"). For the following reasons, we affirm the decision of the trial court.

          I. FACTS AND PROCEDURAL HISTORY

         {¶ 2} Appellants Real Estate Ltd. and Northgate are affiliated entities with the same principal, Pat Shivley. In 2014, Real Estate Ltd. held real estate purchase option contracts for multiple parcels of land in southern Delaware County, Ohio. For purposes of reference in this decision, we will refer to the land covered by the relevant purchase option contracts as the "Price property" and the "Forman property." Real Estate Ltd. paid $106, 000 in earnest money for the option to buy the Price property, which collectively consisted of approximately 183 acres, and paid $10, 000 in earnest money for the option to buy the Forman property, which consisted of approximately 28 acres.

         {¶ 3} Shivley sought a partner to develop the Price and Forman properties and ultimately agreed to work with Grand and its general partner, Fischer Development Company, on the project. Several written agreements, summarized in pertinent part below, memorialize the parties' agreement.

         March 20, 2015 Development Agreement

         {¶ 4} Shivley, on behalf of Northgate, and Todd Huss, on behalf of Grand, agreed to work together to develop the properties for the benefit of both parties. Regarding the Forman property, Northgate agreed to cause Real Estate Ltd. to assign the purchase option on the Forman property to appellees, and Grand agreed to reimburse appellants for the $10, 000 earnest money deposit paid to the owners of the Forman property. Regarding the Price property, appellants agreed to terminate the purchase option with the owners so that Grand could purchase that property. The agreement further provides:

2. Earnest Money. Upon execution of an agreement between Grand and the [Price property] Owners for the Real Estate, Grand shall pay the [Price property] Owners [$35, 000] as earnest money deposit. NorthGate shall reimburse Grand said earnest money at the time of execution of said agreement.
3.Closing. In the event Grand elects to exercise its option and close on the [Price property], which shall occur on or before December 1, 2015, Grand shall reimburse NorthGate for the earnest money previously paid by them to the Owners in the amount of [$106, 000] as well as the [$35, 000] as described in Paragraph 2. Total reimbursement by Grand to NorthGate shall be [$141, 000].

(Mar. 20, 2015 Agreement at 1-2.)

         {¶ 5} The agreement provides that it "constitutes the entire Agreement of the parties and no oral or implied agreement or representation shall be binding on the parties" and that "[n]o agreement shall be effective to add to change, modify, waive or discharge this Agreement in whole or in part unless such Agreement is in writing and executed by all parties." (Mar. 20, 2015 Agreement at 5.) Furthermore, "Grand's performance of its obligations under this Agreement is specifically conditioned upon Grand closing on the Real Estate. In the event Grand elects not to close on the Real Estate, this Agreement shall terminate and neither party shall thereinafter be obligated to the other." (Mar. 20, 2015 Agreement at 6.)

         April 1, 2015 Purchase Option Agreement Between Grand and the Prices

         {¶ 6} Grand entered into a purchase option contract with the Prices for $35, 000. The agreement sets the period for exercising the option and purchasing the property at nine months past the effective date of the agreement and specifies that "but in no event shall Closing be extended past December 1, 2015, except by the mutual agreement of the parties." (Apr. 1, 2015 Purchase Option at 2.) Under the purchase option agreement between Grand and the Prices, the $35, 000 paid by Grand and the $106, 000 previously paid by appellants would be credited to Grand at closing. In the event Grand failed to exercise the option, the Prices would keep all option money paid, including the "already earned consideration" of $106, 000 paid by appellants "for Seller keeping the Real Estate off the market and cooperating in its annexation." (Apr. 1, 2015 Purchase Option at 2.)

         April 1, 2015[1] Assignment Agreement Regarding Forman Property Option (First Assignment Agreement)

         {¶ 7} Real Estate Ltd. assigned to Grand the Forman property purchase option contract. The agreement additionally provides that:

4. In the event that [Grand] elects not to close on the Price Property as required in the Price Property Agreement dated April 1st, 2015, by and between [the Prices and Grand, Grand] shall ...

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