Crockett Homes, Inc. v. Hamilton

2012 Ohio 2162
CourtOhio Court of Appeals
DecidedMay 14, 2012
Docket2011-CCA-00222
StatusPublished

This text of 2012 Ohio 2162 (Crockett Homes, Inc. v. Hamilton) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crockett Homes, Inc. v. Hamilton, 2012 Ohio 2162 (Ohio Ct. App. 2012).

Opinion

[Cite as Crockett Homes, Inc. v. Hamilton, 2012-Ohio-2162.]

COURT OF APPEALS STARK COUNTY, OHIO FIFTH APPELLATE DISTRICT

JUDGES: CROCKETT HOMES, INC., ET AL : Hon. Patricia A. Delaney, P.J. : Hon. W. Scott Gwin, J. Plaintiffs-Appellees : Hon. John W. Wise, J. : -vs- : : Case No. 2011-CA-00222 JENNIFER ROHRER HAMILTON, ET : AL : : OPINION Defendants-Appellants

CHARACTER OF PROCEEDING: Civil appeal from the Stark County Court of Common Pleas, Case No. 2010CV02794

JUDGMENT: Affirmed in part; Reversed in part

DATE OF JUDGMENT ENTRY: May 14, 2012

APPEARANCES:

For Plaintiff-Appellee For Defendants-Appellants

GREGORY W. HAPP RICHARD A. PAOLO 238 West Liberty Street EDWARD P. AKIN Medina, OH 44256 2200 U.S. Bank Tower (Counsel withdrew) 425 Walnut Street Cincinnati, OH 45202 ROBERT B. HOLMAN Box 46390 CRAIG PELINI 24262 Broadway Avenue 2848 Carrington Street N.W. Cleveland, OH 44146 North Canton, OH 44720 [Cite as Crockett Homes, Inc. v. Hamilton, 2012-Ohio-2162.]

Gwin, J.

{1} Defendants-appellants Jennifer Rohrer-Hamilton, Jed Rohrer, James

Richard Rohrer, Mohler Lumber Company, Inc., Rohrer Development Company, LLC,

and Jed A. Rohrer, Sr., as Executor of the Estate of Richard G. Rohrer, Deceased,

appeal a judgment of the Court of Common Pleas of Stark County, Ohio, entered in

favor of plaintiffs-appellees Crockett Homes, Inc. and Crockett Construction Company,

Inc. Appellants assign eight errors to the trial court:

{2} “I. THE TRIAL COURT ERRED IN CONCLUDING THAT ANY ACTIONS

OF DEFENDANTS CAUSED CROCKETT TO LOSE ITS ENTIRE REMAINING

PROJECTED PROFITS FROM THE PROJECT.

{3} “II. THE TRIAL COURT ERRED IN CALCULATING DAMAGES, EVEN IF

CROCKETT HAD FULLY PERFORMED AND DEFENDANTS WERE IN BREACH.

{4} “III. THE TRIAL COURT HAD NO RATIONAL BASIS FOR ITS $24,000

PER LOT MONEY DAMAGES AWARD TO CROCKETT.

{5} “IV. THERE WAS NO LEGAL BASIS FOR ASSIGNING ANY JOINT AND

SEVERAL LIABILITY FOR THE DEVELOPMENT AGREEMENT TO MOHLER.

{6} “V. ANY DUTY TO CONVEY A PARTICULAR LOT WAS BREACHED, IF

AT ALL, WITH RESPECT TO CROCKETT HOMES, NOT CROCKETT

CONSTRUCTION.

{7} “VI. THE TRIAL COURT ERRED IN ASSIGNING AND ADVERTISING

COSTS AS DAMAGES TO DEFENDANTS, IN DEROGATION OF THE WRITTEN

DEVELOPMENT AGREEMENT. Stark County, Case No. 2011-CA-00222 3

{8} “VII. ANY DUTY RICHARD ROHRER OWED CROCKETT ARISING

FROM THE DEVELOPMENT AGREEMENT EXPIRED UPON HIS DEATH.

{9} “VIII. THE TRIAL COURT ABUSED ITS DISCRETION BY PARING THE

JUDGMENT OWED BY CROCKETT HOMES BENEATH THE LEVEL DAVID HAYES

ADMITTED TO IN SWORN TESTIMONY.”

THE FACTS

{10} The matter was tried over four days to the bench. The court’s judgment

entry of August 25, 2011 sets out the court’s findings. The court found David Hayes is a

majority shareholder of Crockett Homes, Inc. and Crockett Construction Company, Inc.

(hereinafter “Crockett”). Crockett Homes builds residential houses. In 2004, Hayes

learned a large parcel of land was available in the Tuslaw area of Stark County. Hayes

obtained an option to buy the property. A local lumber company, not Mohler Lumber,

was interested in backing the development with Hayes, but Hayes was a regular

customer at Mohler Lumber. When Mohler Lumber representatives learned of the

project, they approached Hayes to discuss backing the development in return for

providing the lumber for the homes.

{11} Dr. Richard Rohrer was the controlling owner of Mohler Lumber Company.

He was a physician who resided in Morrow County, Ohio, and was not a hands-on

owner. For the most part, the negotiations for the land development project involved

Mohler employees Loomis and Zepp. The court found Hayes did have a few

discussions with Dr. Rohrer, but most often, discussed the matters with Loomis, or

sometimes, Zepp. Stark County, Case No. 2011-CA-00222 4

{12} Eventually the parties struck an agreement where Crockett would sign the

option to buy over to Dr. Rohrer. In return, Dr. Rohrer and Crockett would cooperate on

developing the land in four phases. Dr. Rohrer was to contribute the capital. Crockett

was to act as general contractor supervising the development of the property into

residential lots and then to market the lots. The parties were to split the profits from the

venture 60% to Dr. Rohrer and 40% to Hayes. In addition to the profit-splitting clause,

the agreement provided for a premium on each lot sold, with the parties splitting the

premium depending upon whether Crockett or a third party sold the lot.

{13} Dr. Rohrer’s attorney drafted a contract titled “Development Agreement”,

dated March 23, 2005. Dr. Rohrer and Hayes signed the agreement. The agreement

included an “Exhibit E” attached and incorporated by reference. The exhibit was a

spreadsheet computing the costs of developing the land and preparing the lots, and

explained how the profits would be distributed. Instead of cash, Crockett would receive

lots, transferred in installments as the lots were sold.

{14} Both sides began to perform under the Development Agreement, and

complied with its terms. The first phase of the development was completed and sold

well; most of the lots in phase one were sold. However, two events caused the

development to come to a halt approximately two years after the development was

commenced.

{15} First, the real estate market, to use the trial court’s apt word, tanked. Sales

dropped on existing lots and new construction fell to virtually nothing. Stark County, Case No. 2011-CA-00222 5

{16} The second event was the deteriorating health of Dr. Rohrer. Dr. Rohrer

had participated in a minor way in the on-going development of the property, and

granted a broad power of attorney to Loomis and Zepp to make decisions.

{17} As the doctor’s health worsened, his children Jennifer, Jed and James

began to act on his behalf. The court found no evidence was produced to demonstrate

Dr. Rohrer delegated any right to act to his children, but as a practical matter, they did

become involved in the development. The court found there was no proof that the

Rohrer children had any legal authority to assume their father’s affairs while he was still

alive. Dr. Rohrer died in May, 2010.

{18} At first the parties had a good relationship, but eventually the Rohrer

children felt it was too expensive to complete the Development Agreement because it

had become a losing proposition. The development came to a standstill when the

Rohrer children decided they did not want to put any more of their father’s money into

the development to finish the next phase. At the time, Dr. Rohrer was still alive, but the

Rohrer children indicated they spoke on his behalf.

THE DISPUTE

{19} The Rohrer family contended that Hayes and Crockett went forward with

the completion of phase two by completing roads and other development items even

though the Rohrers told them not to proceed. The court found there were two face-to-

face meetings that occurred prior to the doctor’s death. Present were Loomis and

perhaps Zepp, both of whom had full power of attorney to act for Dr. Rohrer. Also

present were the three Rohrer children, Hayes, and Hayes’ daughter. Dr. Rohrer did

not attend. The court found both sides had different opinions as to the result of the two Stark County, Case No. 2011-CA-00222 6

meetings. The Rohrer children wanted no further cash outlay, but Hayes felt it was time

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