Coliadis v. Holko Enercon, Inc.

2016 Ohio 8522

• Court: Ohio Court of Appeals
• Decided: December 30, 2016
• Docket: 2016-T-0044
• Status: Published

Opinion

[Cite as Coliadis v. Holko Enercon, Inc., 2016-Ohio-8522.]

IN THE COURT OF APPEALS

ELEVENTH APPELLATE DISTRICT

TRUMBULL COUNTY, OHIO

STEVE COLIADIS, f.d.b.a. : OPINION ROYAL LIGHTING, : Plaintiff-Appellant, CASE NO. 2016-T-0044 : - vs - : HOLKO ENERCON, INC., : Defendant-Appellee. :

Civil Appeal from the Trumbull County Court of Common Pleas, Case No. 2014 CV 00427.

Judgment: Affirmed.

Michael D. Rossi, Guarnieri & Secrest, P.L.L., 151 East Market Street, P.O. Box 4270, Warren, OH 44482 (For Plaintiff-Appellant).

Thomas E. Schubert, 138 East Market Street, Warren, OH 44481 (For Defendant- Appellee).

DIANE V. GRENDELL, J.

{¶1} Plaintiff-appellant, Steve Coliadis, formerly doing business as Royal

Lighting, appeals from the Judgment Entry of the Trumbull County Court of Common

Pleas, ordering judgment in favor of defendant-appellee, Holko Enercon, on Coliadis’

claim for breach of contract. The issue to be determined in this case is whether a

breach of contract occurs when a roof is installed that the purchaser believes should

have prevented all moisture from occurring inside of a building and there is conflicting testimony about the cause of the moisture. For the following reasons, we affirm the

decision of the lower court.

{¶2} On February 26, 2014, Coliadis filed a Complaint in the Trumbull County

Court of Common Pleas. It stated that he paid $39,800 to have a roof installed by

Holko, which “failed to substantially perform its own obligations under the contract,

resulting in a failure of consideration and thereby excusing Plaintiff’s performance

thereof.” Coliadis requested a judgment “declaring a rescission of the parties’ contract.”

{¶3} An attached contract, dated April 2, 2004, referred to the job as “re-roofing

the Royal Lighting building.” Specifically, it stated that a roof would be installed over the

existing “prepared roof surface,” and gave details relating to the installation and

flashing. It also stated: “Entire roof system installed to current GAF [the roofing

manufacturer] specifications for their 15 Year Material & Labor Warranty.”

{¶4} Holko filed an Answer on May 21, 2014.

{¶5} On May 5, 2015, Holko filed a Trial Memorandum, in which it moved the

court to dismiss the Complaint. It argued that, since Coliadis had replaced the roof in

2011, there was a substantial change in the nature of the contract, rescission was not a

proper remedy, and Coliadis failed to seek rescission in a reasonable timeframe.

{¶6} A trial was held on May 5, 2015, before a magistrate. The following

testimony was presented:

{¶7} In 2004, Holko placed a new roof over the existing one on Coliadis’

business, Royal Lighting. Coliadis indicated that, after this roofing work in 2004, he left

the country for a few months and returned to find water on the carpets and moisture

2 within the building. He believed that the water was leaking from the ceiling area, where

there was mold.

{¶8} Coliadis testified that he had no problem with condensation or other water

in the building prior to 2004. Coliadis contacted Holko several times. Holko did not

believe there was an issue with the roof, but installed additional vents between 2007

and 2009. Holko suggested several other problems, such as foundation issues, that

may be the cause of the moisture. Coliadis had work performed based on these

suggestions that did not remedy the problem.

{¶9} In 2011, Coliadis had a new roof installed. Since then, he has not

experienced problems with mold or condensation. He believed the roof installed by

Holko was the problem, since it went over the pre-existing roof and could not “breathe.”

Coliadis testified that Roth Brothers Roofing said water got trapped between the two

roofs, causing the leaking/water problems. No one from that company testified.

Coliadis did not remember making a statement, documented in a GAF inspection report,

that “the building was not venting properly after [the] roof was installed.”

{¶10} George Holko, part-owner of Holko Enercon, looked at Coliadis’ roof in

2004, at which time he observed some water damage on the ceiling. He was asked by

Coliadis for a quote to reflash parapet walls on the roof. Holko noted that the roof was

old and would likely need to be replaced, and gave Coliadis an estimate for doing a

“recover” of the roof, placing a new roof over the existing one.

{¶11} While Coliadis complained about the roof and leaks several times

following installation in 2004, Holko and his company found no leaks and he never saw

external water coming through the roofing membrane. Holko believed that temperature

3 fluctuations occurring in the building led to any water/moisture problems. He opined

that since the building was often left closed for several months at a time during Coliadis’

vacations, moisture became trapped inside, causing condensation. This conclusion

was based on observations that the heat is not turned on at all times, with Holko once

noting the temperature inside was 55 degrees, and utilities such as gas were turned off.

When the heat was ultimately turned on, it could have caused sweating at the

ceiling/steel deck.

{¶12} GAF also found no leaks in the ceiling after performing roof investigations.

GAF suggested Coliadis find a design specialist to attain proper ventilation. Holko had

also recommended that Coliadis get ventilation in the building to create air movement.

{¶13} On June 4, 2015, a Magistrate’s Decision entered judgment in favor of

Coliadis for the return of the contract price, $39,800. The magistrate found that the

installation of the roof in 2004 “created a condensation and moisture problem,” finding

that the building had no issues after the new roof was installed in 2011, that it had a

moisture problem between 2004 and 2011, and that a change had occurred between

that time period in the building’s “heating, air movement or closure” due to the roof

installation.

{¶14} Holko filed an Objection to the Magistrate’s Decision on June 10, 2015,

and a Brief in Support on August 18, 2015. Coliadis filed an opposing Memorandum.

{¶15} On April 20, 2016, the trial court issued a Judgment Entry, finding the

objections to the Magistrate’s Decision to be well-taken, rejecting the Magistrate’s

Decision, and entering judgment for Holko. The court found no evidence of a breach of

4 contract, that the evidence showed Holko installed the roof, and noted Coliadis failed to

offer expert testimony to show that the roof was defective so as to constitute a breach.

{¶16} Coliadis timely appeals and raises the following assignment of error:

{¶17} “The trial court erred in rejecting the Magistrate’s Decision and entering

final judgment for Appellee.”

{¶18} “When reviewing an appeal from a trial court’s decision to accept or reject

a magistrate’s decision,” this court has consistently held that “an appellate court must

determine whether the trial court abused its discretion.” Dudas v. Harmon, 11th Dist.

Lake No. 2015-L-060, 2015-Ohio-5218, ¶ 44; Wolkoff v. Bloom Bros. Supply, 11th Dist.

Geauga No. 2012-G-3092, 2013-Ohio-2403, ¶ 32. This court has described an abuse

of discretion as a judgment “which does not comport with reason or the record,” and as

one in which the court failed “to exercise sound, reasonable, and legal decision-

making.” (Citations omitted.) In re Beynenson, 11th Dist. Geauga No. 2012-G-3066,

2013-Ohio-341, ¶ 12. The concurring judge, in applying this standard, has previously

stated that “[a]lthough appellant challenges the weight of the evidence, our standard of

review of a trial court’s decision under Civ. R. 53 is limited to a determination of whether

the court abused its discretion in adopting the magistrate’s decision.” Warren Concrete

& Supply, Inc. v. Strohmeyer Contracting, Inc., 11th Dist. Trumbull No. 2010-T-0004,

2010-Ohio-5395, ¶ 17. Also Hynd v. Roesch, 11th Dist. Ashtabula No. 2015-A-0063,

2016-Ohio-7143, ¶ 26 (“even if [appellant] had filed a manifest-weight objection and

specific objections to the magistrate’s decision, her assignment of error would still lack

merit,” since, “in such circumstances, the standard of review of the trial court’s adoption

of the magistrate’s decision would have been abuse of discretion”).

5 {¶19} In order to set forth a cognizable claim for breach of contract, Coliadis

“was required to allege the following: (1) the existence of a contract; (2) performance by

the plaintiff; (3) breach by the defendant; and (4) damages.” Byers Dipaola Castle, LLC

v. Portage Cty. Bd. of Commrs., 2015-Ohio-3089, 41 N.E.3d 89, ¶ 23 (11th Dist.). Here,

there is no question that there was a contract. The question arises as to whether the

completed roofing job complied with the terms of the contract.

{¶20} Coliadis argues that “he wanted and contracted for a dry building” and not

“a leakproof roof that would create a much greater moisture/condensation problem

inside,” arguing that the failure to provide this constituted a material breach of the

contract.

{¶21} A review of the contract does not show a promise or agreement to prevent

any moisture from developing inside. The contract states that a “roof system” was to be

installed “over [the] prepared roof surface,” and Coliadis received exactly that. While

the installation of a roof over a preexisting one may cause different conditions with

moisture inside of the building, it does not mean that Coliadis did not receive the benefit

of the bargained-for work that was described in the contract. It is also noteworthy that

Coliadis paid Holko $39,800 for this work, while he paid another company $180,426 for

the installation of an entirely new roof in 2011. The work performed by Holko would

likely have a somewhat different outcome than a removal of the old roof and a new

installation, just as repairs may result in a different outcome than a replacement. That

the type of roofing job Holko did may necessitate more or different ventilation does not

change the fact that this is the type of roofing Coliadis chose to have installed.

6 {¶22} Additionally, the evidence presented by Coliadis, solely his own testimony

and exhibits, did not conclusively establish the cause of the condensation/moisture

problem. He did not present expert or any other testimony to corroborate his belief that

the installation of the roof over a preexisting one created the moisture problems.

{¶23} Holko gave contrasting testimony that provided an alternate cause of the

problem. Testimony and reports from both Holko, the installer, and GAF, the

manufacturer, established that they found no leaks in the roof. Testimony about the

conditions within the building, including a lack of air circulation and varying

temperatures, supports the conclusion that ventilation was needed and that the problem

was not the result of a breach of contract. This was not refuted by any expert

testimony. While Coliadis did testify that he only had these problems when this

particular roof was installed, it does not automatically follow that Holko did not provide

the contracted for service or breached, as explained above.

{¶24} There is also some merit to the trial court’s finding that a claim for a

breach of warranty for fitness for a particular purpose could be more appropriate, but

this was neither pled by Coliadis, nor argued on appeal. See R.C. 1302.28 (“Where the

seller at the time of contracting has reason to know any particular purpose for which the

goods are required and that the buyer is relying on the seller’s skill or judgment to select

or furnish suitable goods, there is * * * an implied warranty that the goods shall be fit for

such purpose.”).

{¶25} Coliadis’ brief primarily relies upon his contention that this case is similar

to Yurchak v. Jack Boiman Constr. Co., 3 Ohio App.3d 15, 443 N.E.2d 526 (1st

Dist.1981), which upheld a jury verdict finding that the defendant did not satisfactorily

7 complete waterproofing of the plaintiff’s basement, although the contract provided a ten-

year waterproof guaranty. Yurchak is distinguishable from the present matter. In

Yurchak, the plaintiff contracted for waterproofing and the basement was not

waterproofed. In the present matter, a contract for reroofing was signed and the service

was performed. As noted above, there was testimony, which the court was entitled to

believe, that the moisture problems were caused by Coliadis’ behavior rather than the

roofing job. There was no real question in Yurchak that the lack of waterproofing in the

basement was caused by failure to provide the contracted-for service, which the court

noted was “central to the contract,” while a factual dispute is clearly an issue in the

present matter. Id.

{¶26} It is also important to emphasize that we review the trial court’s decision

for an abuse of discretion, while giving deference to the findings regarding the weight of

the evidence and whether the witness testimony was credible and convincing. Iacovone

v. Selvaggio, 11th Dist. Lake No. 2014-L-090, 2015-Ohio-1493, ¶ 12; Carrocce v.

Shaffer, 11th Dist. Trumbull No. 96-T-5521, 1997 Ohio App. LEXIS 4845, 7 (Oct. 31,

1997). Given the competing versions of the cause of the moisture problem, we do not

find an abuse of discretion in the court’s rejection of the Magistrate’s Decision, nor was

this contrary to the evidence presented at trial.

{¶27} The sole assignment of error is without merit.

{¶28} For the foregoing reasons, the Judgment Entry of the Trumbull County

Court of Common Pleas is affirmed. Costs to be taxed against appellant.

COLLEEN MARY O’TOOLE, J., concurs in judgment only,

8 CYNTHIA WESTCOTT RICE, P.J., concurs in judgment only with a Concurring Opinion.

___________________________________

CYNTHIA WESTCOTT RICE, P.J., concurs in judgment only with a Concurring Opinion.

{¶29} While I agree with the majority’s disposition, I do not agree that the proper

standard of review is abuse of discretion. In O’Brien v. The Ohio State Univ., 10th Dist.

Franklin No. 06AP-946, 2007-Ohio-4833, a breach-of-contract case that was decided by

the trial court without a magistrate, the Tenth District applied the hybrid standard of

review. The court stated, “we review the trial court’s findings of fact * * * to determine if

the findings are supported by competent, credible evidence.” Id. at ¶10. “If we accept

the facts found in the trial court as true, we must then independently determine - -

without deference to the trial court’s conclusion - - whether those facts satisfy the trial

court’s legal conclusion.” Id. at ¶12.

{¶30} More recently, in Ohio Educ. Ass’n v. Lopez, 10th Dist. Franklin No. 09AP-

1165, 2010-Ohio-5079, a breach-of-contract case that began with a magistrate, the

Tenth District likewise applied the hybrid standard of review, as follows:

“[T]he determination of whether non-compliance with the terms of a contract is material, so as to constitute a breach, is a mixed question of fact and law.” Gilbert v. Dept. of Justice, 334 F.3d 1065, 1071 (Fed.Cir. 2003). Appellate review of a mixed question of law and fact requires an appellate court to accord due deference to a trial court’s factual findings if the factual findings are supported by competent, credible evidence, and to independently review whether the trial court properly applied the law to the facts of the case. O’Brien[, supra,] at ¶10-12 * * *. Lopez, supra, at ¶12.

9 {¶31} Here, although the majority concedes factual issues existed, it applies the

abuse of discretion standard because the case originated with a magistrate. However,

“[a]pplying an abuse of discretion standard of review simply because the case

originated with a magistrate seems illogical when we would not apply this same

standard of review had the case originated with the trial judge * * *.” Woody v. Woody,

4th Dist. Athens No. 09CA34, 2010-Ohio-6049, fn. 1. “[I]t is the trial court’s decision,

not the magistrate’s, that an appellate court reviews.” Id. “We are thus confounded as

to why two different standards should apply when reviewing a trial court’s judgment

depending upon whether it originates with a magistrate or a trial judge.” Id. The Fourth

District said that a judgment, whether it originated with the trial court or a magistrate,

should ordinarily be reviewed under the manifest-weight standard; but, to the extent the

judgment involves a question of law, the appellate court reviews such question de novo.

Id. at fn.1, ¶17.

{¶32} This court has acknowledged that review of a judgment that originated

with a magistrate is not limited to the abuse of discretion standard. In Harkey v. Harkey,

11th Dist. Lake No. 2006-L-273, 2008-Ohio-1027, this court said the abuse of discretion

standard is the appropriate general standard to apply when reviewing a trial court’s

adoption of a magistrate’s decision. Id. at ¶47. However, this court went on to say that

a trial court’s factual findings are reviewed under the manifest-weight standard. Id. at

¶48.

{¶33} The majority’s analysis of the standard of review misses the point because

the issue presented here, i.e., whether Holko breached the contract, involved a legal

issue for which this court’s review is de novo. While this court and others have

10 generally applied the abuse of discretion standard in magistrate cases, the Fourth

District in Woody and the Tenth District in Lopez provide compelling reasons why this

court should revisit this standard when the underlying issue is legal in nature. Legal

issues are simply not discretionary and should not be treated as such simply because

the judgment originated with a magistrate. To do so results in the abandonment of our

duty to independently review the trial court’s legal conclusions.

{¶34} Because the determination of whether Holko breached the contract is a

mixed question of law and fact, we should apply the hybrid standard of review.

{¶35} For these reasons, I concur in judgment only.