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Shrock v. Mullet

Court of Appeals of Ohio, Seventh District, Jefferson

June 28, 2019

LINDA SHROCK, Plaintiff-Appellee,
v.
SAMUEL MULLET, Defendant-Appellant.

          Civil Appeal from the Court of Common Pleas of Jefferson County, Ohio Case No. 16-CV-303

          Atty. Joseph A. Dubyak, for Plaintiff-Appellee and

          Atty. Lawrence T, Piergallini, for Defendant-Appellant.

          BEFORE: Carol Ann Robb, Cheryl L. Waite, David A. D'Apolito, Judges.

          OPINION AND JUDGMENT ENTRY

          Robb, J.

         {¶1} Defendant-Appellant Samuel Mullet appeals the decision of the Jefferson County Common Pleas Court entering judgment in favor of Plaintiff-Appellee Linda Shrock. Appellant raises eight assignments of error concerning his obligation to his daughter under a 1997 oral agreement wherein he sold 80 acres of land but a deed was not presented for his execution until after the complaint was filed. Appellant asks whether Appellee's contractual obligation to obtain a survey in order to present a deed to Appellant was a condition precedent to the contract or merely a condition for obtaining legal title (to support the equitable title that passed when consideration and possession were exchanged). He also contends Appellee failed to perform this condition within a reasonable time.

         {¶2} If these arguments are successful, Appellant states the six-year statute of limitations for oral contracts would have started to run earlier (when a reasonable time to present a deed had passed). He also contests the trial court's captioning of its order as quieting title, noting the court's findings sounded in principles of contract and specific performance and claiming the possession element of quiet title was not met. Lastly, he claims he should not be liable for Appellee's entire claim for her share of the signing bonus paid under an oil and gas lease because the lease was also signed by his now-deceased wife, who was a joint and survivor owner of the property at the time.

         {¶3} For the following reasons, we disagree with the dispositive arguments presented and find others moot. The trial court's judgment is affirmed.

         STATEMENT OF THE CASE

         {¶4} In 1997, Linda and Emanuel Shrock sold their home near Fredericktown, Ohio to move to Bergholz, Ohio. They purchased 16 acres on which they would construct a new home. This land was adjacent to land owned by Linda's parents, Samuel and Martha Mullet. Around the same time, the Mullets agreed to sell the Shrocks approximately 80 acres of their adjoining land. The Shrocks paid the $40, 000 purchase price to the Mullets for the 80 acres in the spring of 1997. Because the 80 acres was carved from other parcels owned by the Mullets, the property had to be surveyed before a deed could be drafted. This was not performed, and in October 2011, the Mullets signed an oil and gas lease for property titled in their name which included the 80 acres purchased by the Shrocks in 1997. The Mullets received a signing bonus of $5, 025 per acre.

         {¶5} On June 24, 2016, Linda Shrock filed a complaint against Samuel Mullet and the Estate of Martha Mullet. She alleged her parents breached the purchase agreement, sought specific performance of the obligation to execute a deed, asked for quiet title, and claimed rights to the signing bonus paid under the lease as compensatory damages or under the doctrine of unjust enrichment. Her former spouse, Emanuel Shrock, was also named as a defendant in case he asserted an interest in the property.

         {¶6} Cross-motions for summary judgment were filed by Samuel Mullet and Linda Shrock, and depositions were submitted. Samuel Mullet's motion set forth various arguments including: his performance was excused because the Shrocks failed to satisfy the condition precedent of obtaining a survey and a deed; if a contract is silent on time for performance of a condition precedent, then a reasonable time is imposed; the condition precedent was not fulfilled within a reasonable time; the six-year statute of limitations should be started a reasonable time after the oral agreement, rather than in 2011 when the first act inconsistent with the contract occurred (as found in the court's prior order overruling a motion to dismiss); and quiet title was unavailable because Linda Shrock was not "in possession" of the 80 acres.

         {¶7} Linda Shrock's motion sought summary judgment on her claim for quiet title or her claim for specific performance of the contract (leaving the unjust enrichment issue for trial). At the time of her deposition, Linda was unaware whose responsibility it was to obtain a survey and deed. (L. Shrock Depo. 18, 36). Emanuel Shrock testified at deposition: the verbal agreement to purchase 80 acres from the Mullets was made before they purchased the adjacent 16 acres; they paid the $40, 000 purchase price to the Mullets in the spring of 1997 "and then later on we were to survey it if we wanted a deed"; and the Shrocks were responsible for bringing any survey to an attorney to have a deed prepared. (E. Shrock at 9, 12, 29). On the 80 acres, the Shrocks constructed a barn and a pole building, installed a fence, farmed the land, and leased the land to a farmer (who paid the Shrocks, not the Mullets). (E. Shrock Depo. 16-18, 31).

         {¶8} The Shrocks were divorced on February 25, 2016. Emanuel received the house and its 16 acres upon his payment to Linda for her share of said property. The divorce decree did not address the 80 acres, which was not contained in the financial affidavits filed in the divorce action. (E. Shrock Depo. 7, 12). According to Emanuel, he released his claim to the 80 acres in 2015, when Samuel Mullet refunded Emanuel's half of the purchase price. (E. Shrock Depo. 12-14). Linda Shrock moved from the house on the 16 acres on April 15, 2016, and Emanuel did not notice her visiting the 80 acres in the year thereafter. (E. Shrock Depo. 24-25).

         {¶9} At Samuel Mullet's deposition, he acknowledged selling approximately 80 acres to the Shrocks for $40, 000 under a verbal agreement. (Mullet Depo. 10-11, 47). He confirmed the Shrocks farmed part of the land, used another part for horse pasture, installed a barbed wire fence, and constructed a barn and a machinery shed on the land (using the timber cut from the land). (Mullet Depo. 14-15, 30). Samuel testified the Shrocks agreed to survey the property so a deed could be prepared; he said they were asked to do so numerous times. (Mullet Depo. 24-25). He spoke of the oil and gas lease he signed which included the 80 acres. He said they subsequently gave Linda Shrock amounts totaling $30, 000 but acknowledged they gave money to others who were convicted of charges unrelated to this appeal as well. (Mullet Depo. 28-29). He also said the money given to Linda was to finish an addition to her house and suggested this represented the return of her share of the purchase price (as they returned Emanuel's share to him). (Mullet Depo. 52, 62).

         {¶10} Linda Shrock testified at deposition that the purchase money was not returned to her and suggested her mother gifted her family $13, 000 to pay bills so her sons could continue a carpentry business while Emanuel was incarcerated on charges unrelated to this appeal and then paid for a new well for her children who remained in the house while she was incarcerated on the unrelated charges. (L. Shrock Depo. 19, 29-33). (The Shrocks have ten children, five of whom were minors at the time of the 2017 deposition). She explained how her mother would bill them for their portion of the real estate taxes each year, which Emanuel confirmed. (L. Shrock Depo. 41; E. Shrock Depo. 23). According to Samuel Mullet, the Shrocks stopped paying their share of the real estate taxes after the federal criminal case was initiated (against himself, the Shrocks, and others). (Mullet Depo. 26-27).

         {¶11} On July 14, 2017, the trial court denied Samuel Mullet's motion for summary judgment (but dismissed any fraud claim in the complaint, which Linda Shrock argued did not even set forth a claim for fraud). As to matters not at issue on appeal, the court found the divorce proceedings did not give the Mullets the right to assert res judicata or estoppel principles. The court also found the oral contract enforceable applying the statute of frauds exception for substantial performance of an oral contract for the sale of real estate. Next, in addressing Samuel Mullet's contention that the six-year statute of limitations for oral contracts would start a reasonable time after the contract was entered, the court pointed out a contract cause of action accrues on the date of the breach. The court found there was a breach of the contract in 2011, when the Mullets executed the lease over property they sold to the Shrocks, and the 2016 complaint was filed within six years.

         {¶12} The trial court then stated a specific breach by the Mullets for failure to execute a deed may not have occurred yet as a condition precedent to this duty had not yet occurred, i.e., the Shrocks did not obtain a survey and present a deed to the Mullets. The court found this scenario (involving a condition for a promise to execute a deed) was distinct from a condition precedent to the formation of contract (and from the cases involving the failure to tender the consideration). The court found the Shrocks completely and timely performed the consideration required of them, stating: "The contract vested the Shrocks with equitable title and the right to possession and left the Mullets with bare legal title."

         {¶13} The court found inapplicable the law that a condition precedent to a contract must be performed within a reasonable time (if the contract does not provide a due date). Still, the court decided a reasonable time standard should be applied to the Shrocks duty to obtain a survey and present a deed (since the contract did not provide a due date). The court reviewed various facts relating to whether the delay in obtaining a survey and presenting a deed to the Mullets would be considered unreasonable but ultimately concluded that issue was a factual one for trial. The court bifurcated that trial from the trial on economic issues.

         {¶14} On August 8, 2017, the trial court filed an order opining that all issues necessary to determine Linda Shrock's motion for summary judgment were resolved in the July 14, 2017 order. The court added that it was not clear she presented Samuel Mullet with a recordable deed which was described as a "condition precedent" to his duty to execute a deed. The court concluded specific performance could not yet be ordered.

         {¶15} On May 2, 2018, the court granted the Estate of Martha Mullet's motion for summary judgment on the specific performance claim. As conceded by Linda Shrock, Samuel Mullet was the only party who could execute a deed since he became the sole legal owner of the property upon Martha's death under the joint and survivorship deed. After finding any recovery of contractual money damages against the Estate was barred due to the failure to present a timely claim to the Estate as required by statute, the court allowed the case to proceed against the Estate on a constructive trust theory.

         {¶16} On June 19, 2018, the court held a bench trial on whether the delay in obtaining a survey and providing a deed was unreasonable. First, the parties stipulated the estate should be dismissed, and the court dismissed the estate as a party before the trial testimony commenced. The deposition of Samuel Mullet was admitted as evidence in lieu of live testimony (as he was in federal prison), and the Shrocks testified at the trial.

         {¶17} Linda Shrock testified they used money received from the sale of their house in another town to buy their 16 acres and to pay the Mullets $40, 000 for the 80 acres. (Tr. 14, 26). After the May 1997 purchase of the property from her father, her husband told her he contacted a surveyor who continually failed to appear at the property. (Tr. 15, 22). She testified that while she was married and Amish, she would not have had authority to order the survey; after she was released from prison, she left the Amish community and received a divorce. (Tr. 31, 33). Just after her divorce and just before filing the complaint, she paid $600 for the preparation of a plat (which ended up just being a map). She thereafter paid $6, 000 for a survey using funds received in the 2016 divorce settlement. (Tr. 16-18, 24, 26-28). Corresponding invoices and checks were admitted to confirm: $600 was paid in April 2016 in response to an invoice for services described as a plat and legal description; $2, 000 was paid to a different company in August 2017 as a down payment for a survey; and the remaining $4, 000 was paid in October 2017.

         {¶18} On cross-examination, it was elicited that she participated in signing an oil and gas lease for the 16 acres in 2011, and they received a signing bonus of $80, 000. (Tr. 24). She testified that she paid her mother the real estate taxes on the 80 acres until her incarceration in 2012. (Tr. 28-29). Her mother gave her $13, 000 in April 2012 in order to help her family (her husband was already incarcerated, she was about to leave her children to start her prison sentence, and two of her children had started a carpentry business and had bills to pay). (Tr. 25-26, 28-30). She said this gift was unrelated to the 80 acres, noting her mother also provided money to other community members who were also sentenced to prison. (Tr. 30).

         {¶19} Emanuel Shrock testified it was their obligation to get a survey and produce a deed. (Tr. 35). Although he disputed that a married Amish woman could not have hired a surveyor, he confirmed the first person he asked to perform a survey failed to follow through; the next person he called said it would "cost thousands of dollars and I didn't have the money to pay that." (Tr. 38, 42). Emanuel acknowledged Samuel Mullet returned $20, 000 to him (from the Bergholz Amish Church fund) in the spring of 2015 (when Emanuel was released from prison) for his share of the original purchase price of the 80 acres "[b]ecause I agreed to let the land go back." (Tr. 40-41, 44-48).

         {¶20} On July 17, 2018, the trial court issued its decision finding in favor of Linda Shrock on the reasonableness issue. The court recited its prior rulings, such as: the survey and deed preparation may have been conditions precedent to the execution of a deed but were not part of the consideration or conditions precedent to an enforceable real estate sale; and the contract vested the Shrocks with equitable title and the right to possession and left the Mullets with bare legal title. The court then found the delay in obtaining a survey and presenting a deed was reasonable under the circumstances of the case, making various factual findings. The court concluded Linda Shrock was the owner of an undivided one-half interest in the subject 80 acres and Samuel Mullet was the owner of the other half (due to Emanuel Shrock's release and re-conveyance of his half of the equitable title back to Samuel Mullet). The court ordered Samuel Mullet to sign the deed, prepared in accordance with the order, when it is presented to him.

         {¶21} In the order, the court set a hearing on economic issues. Thereafter, the parties waived this hearing and filed a stipulation of facts, agreeing the total paid to the Mullets under the lease for the 80 acres was $398, 693.55. On September 11, 2018, the trial court issued judgment for Linda Shrock in the amount of $199, 346.77, half of the lease signing bonus for this acreage (corresponding to the court's judgment that she owned half of the property). Samuel Mullet (hereinafter Appellant) filed a timely notice of appeal.

         ASSIGNMENTS OF ERROR 1-3: CONDITION PRECEDENT OR COVENANT

         {¶22} Appellant sets forth eight assignments of error. The first three assignments of error, which Appellant improperly combines instead of arguing each separately, [1]contend as follows:

"The trial court erred in ordering specific performance of the contract by Appellant when Appellee failed to perform the conditions precedent for twenty (20) years and four (4) months after the date the contract was entered into."
"The trial court erred in finding that twenty (20) years and four (4) months was a reasonable time for Appellee to perform the conditions precedent."
"The trial court erred in ordering specific performance of the contract by Appellant, when at the time of the filing of the complaint, Appellee had no cause of action because she failed to perform the conditions precedent required of her."

         {¶23} Appellant points out the parties do not dispute the existence or terms of the oral contract. There is no issue presented with regards to the trial court's holding that the contract was enforceable notwithstanding the statute of frauds. See, e.g., Tier v. Singrey, 154 Ohio St. 521, 526, 97 N.E.2d 20 (1951) (in an action for specific enforcement of an oral contract for the sale of land, equity intervenes to render the statute of frauds inoperative where there is part performance which considers possession and change of position to one's prejudice in reliance on the sale; Bear v. Troyer, 5th Dist. Guernsey No. 15 CA 17, 2016-Ohio-3363, ¶ 34 (consideration for the property was paid in 1990 after which the purchaser paid the real estate taxes and made improvements, and the other party never asserted an interest in the property until the purchaser requested the execution of a deed in 2013). It is noted that in these types of cases, no deed was executed.

         {¶24} The trial court found the obligation of the Shrocks to present a prepared deed to the Mullets after obtaining a survey may have been a "condition precedent" to the Mullets' duty to execute a deed, but it was not a condition precedent to the existence of a contract. As there was no time period expressed in the contract for obtaining the survey and deed, the court held a trial on whether a reasonable time had passed. Appellant complains the deed was not presented to him until October 2017, after the complaint was filed and after the trial court issued an order stating specific performance could not be ordered (at the summary judgment stage) as the survey and deed had not been prepared. Appellant urges a reasonable time for performance had long passed. Appellant also argues the deed preparation was a condition precedent to the contract itself.[2]

         {¶25} Appellant emphasizes the law stating: a condition precedent is an uncertain event which must occur before performance under a contract becomes due (unless its non-occurrence is excused); a condition precedent must be performed before the contract is enforceable; and the nonoccurrence of the condition precedent discharges the duty to perform. See, e.g., Little v. Real Living HER, 10th Dist. No. 13AP-924, 2014-Ohio-5664, ¶ 12 (also discussing the effect of repudiation causing the other's performance of a condition precedent to be futile). Appellant notes a reasonable time is imposed if the contract does not specify a time for performance, and a party is excused from further contractual obligations if the other party unreasonably delays performing. See, e.g., Morton Bldgs., Inc. v. Correct Custom Drywall, Inc., 10th Dist. No. 06AP-851, 2007-Ohio-2788, ¶ 16; Park v. Acierno, 160 Ohio App.3d 117, 2005-Ohio-1332, 826 N.E.2d 324, ΒΆ 45 (7th Dist.) ("if the agreement does not contain a date as to when payment is to be made or performance is to be rendered, a reasonable time can ...


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