Brothers v. Morrone-O'keefe Dev. Co., 06ap-713 (4-24-2007)

2007 Ohio 1942
Ohio Court of Appeals·Decided April 24, 2007·No. No. 06AP-713.·Published·Cited by 20 cases

Opinion

OPINION
{¶ 1} Plaintiffs-appellants, John A. and Paula Brothers, appeal from the judgment of the Franklin County Court of Common Pleas in favor of defendant-appellee, Morrone-O'Keefe Development Company, LLC, on appellants' negligent misrepresentation cause of action. *Page 2

{¶ 2} In July 2001, appellants filed a complaint against appellee alleging fraud, fraudulent misrepresentation, negligent misrepresentation, and mutual mistake. The causes of action concern appellants' real estate transactions in the Marble Cliff Crossing subdivision ("the subdivision"), which appellee was developing. Appellants stated in the factual allegations of their complaint:

3. On or about July 11, 2000, [appellants] entered into an agreement with [appellee] to purchase Lot 90 in a subdivision known as Marble Cliff Crossing * * *

* * *

5. Prior to purchasing the property, [appellants] met with [appellee's] representative, with specific building plans and requested that [appellee] find a piece of property of suitable size and character to meet [appellants'] proposed home. [John Brothers] made it clear that he and his wife required a lot for the construction of their home which would accommodate said plans. After consulting with [appellants], and reviewing the plans, [appellee's] agent represented that Lot 90 was an appropriate lot for the construction of [appellants'] proposed home.

6. [Appellee] was familiar with the design of the home [appellants] planned to build. Another home of the same design had already been constructed elsewhere in the * * * subdivision.

* * *

8. After closing on the purchase of Lot 90 it became known to [appellants] that the house [appellants] intended to construct according to their plans could not fit on Lot 90, largely due to easements and building set back lines applicable to Lot 90, which significantly limited the useable building area within the lot.

9. In an effort to resolve the problem, [appellee] offered to exchange Lot 90 for Lot 88 in [the subdivision]. [Appellee] also assured [appellants] that their proposed home would fit in and be suitable on Lot 88. However, Lot 88 was also *Page 3 unsuitable primarily because of a sewer easement that could not be removed.

{¶ 3} In alleging fraudulent misrepresentation, appellants stated in their complaint:

14. [Appellee] represented to [appellants] that Lot 90 and Lot 88 would each accommodate their proposed home.

* * *

17. [Appellee], aware of both the building plans of the proposed home and the utility and set back lines applicable to Lot 90 and Lot 88, nonetheless knowingly represented that Lot 90 and Lot 88 were suitable for [appellants'] proposed home.

18. [Appellee's] representations were intended to induce [appellants] to purchase Lot 90 and later to exchange Lot 90 for Lot 88.

{¶ 4} In alleging negligent misrepresentation, appellants stated in their complaint:

21. [Appellee's] misrepresentations that Lot 90 was suitable for the construction of [appellants'] proposed home was central to [appellants] being induced to purchase Lot 90. * * *

{¶ 5} Thereafter, appellee moved for summary judgment on appellants' claims of fraud, fraudulent misrepresentation, and negligent misrepresentation. In seeking summary judgment, appellee argued that the parol evidence rule prohibited oral statements that contradicted the terms of the parties' fully integrated written property agreement. Alternatively, appellee argued that it was unreasonable as a matter of law for appellants to have relied on any statements from any agent of appellee.

{¶ 6} The trial court concluded that the parol evidence rule prohibited oral statements that contradicted the terms of the parties' written property agreement, and *Page 4 the trial court granted summary judgment in favor of appellee in regards to the claims of fraud, fraudulent misrepresentation, and negligent misrepresentation. Subsequently, appellants voluntarily dismissed their mutual mistake claim, pursuant to Civ.R. 41(A), and appellants appealed the trial court's summary judgment decision.

{¶ 7} In Brothers v. Morrone-O'Keefe Dev. Co., LLC, Franklin App. No. 03AP-119, 2003-Ohio-7036 ("Brothers I"), at ¶ 33-34, we concluded that the parol evidence rule did not bar appellants from submitting the necessary evidence to prove their claims. We also noted that:

Further, the trial court's decision erroneously includes [appellants'] claims with regard to Lot 88 in its analysis of the purchase contract for Lot 90. [Appellants] claim fraud and misrepresentation not only with regard to * * * assurances [from any agent of appellee] that [appellants'] intended home would fit on Lot 90, but also as to similar statements made in connection with Lot 88. However, the parties did not execute a separate written contract for the purchase of Lot 88. As such, there exists no written provisions or integration clause in connection with the parties' arrangement to substitute Lot 90 for Lot 88. Accordingly, the parol evidence rule cannot apply to [appellee's agents'] statements as to the proposed home fitting on Lot 88. Therefore, [appellants] should have been permitted to adduce such evidence in support of their claims of fraud and misrepresentation as to Lot 88; therefore, summary judgment was inappropriate.

Id. at ¶ 34.

{¶ 8} Lastly, we rejected appellee's argument that it was unreasonable as a matter of law for appellants to have relied on any alleged statements from appellee's agents. Id. at ¶ 35-37. Accordingly, we reversed the trial court's summary judgment decision, and we remanded the matter for further proceedings. Id. at ¶ 38. *Page 5

{¶ 9} On remand, a bench trial ensued. At trial, John Brothers testified, in pertinent part, to the following. Appellants wanted to move into the subdivision. Appellants wanted a house like the one in the subdivision that their friends Wiley and Rita Secrest purchased, except that appellants wanted a three-car garage instead of the two-car garage that was attached to the Secrest house. In early 2000, appellants met with Joseph Morrone ("Morrone"), an agent for appellee, and appellants told Morrone that they wanted to build a house virtually identical to the Secrest house with a three-car garage on it.

{¶ 10} John Brothers also testified that "with our desire for a three-car garage, [Morrone] showed us a few of the wider lots" including "94 and 92, 91, 90[.]" (Vol. I Tr. at 250.) Ultimately, according to John Brothers, Morrone offered to sell to appellants Lot 90, an 80-foot lot. John Brothers testified that Morrone told appellants: "[H]ere's the lot that I'm reserving for you, we will build the Secrest house on it." (Vol. II Tr. at 430.) John Brothers also testified that, when Morrone made that comment, "I think [Morrone] used the words, it will be perfect." (Vol. II Tr. at 430.) John Brothers also testified that "[i]t was a given the Secrest house would * * * fit on Lot 90" and "[i]t was never discussed that there might be a problem with the house fitting on the lot." (Vol. II Tr. at 291, 381.)

{¶ 11} John Brothers then testified as follows.

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Brothers v. Morrone-O'keefe Dev. Co., 06ap-713 (4-24-2007), 2007 Ohio 1942 (Ohio Ct. App. 2007).

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