[Cite as Kennedy v. Kunze, 2019-Ohio-372.]
STATE OF OHIO ) IN THE COURT OF APPEALS )ss: NINTH JUDICIAL DISTRICT COUNTY OF SUMMIT )
ELIZABETH A. KENNEDY C.A. No. 28978
Appellee
v. APPEAL FROM JUDGMENT ENTERED IN THE RUSSELL KUNZE COURT OF COMMON PLEAS COUNTY OF SUMMIT, OHIO Appellee CASE No. CV-2017-06-2608
DECISION AND JOURNAL ENTRY
Dated: February 6, 2019
CARR, Judge.
{¶1} Appellant, Elizabeth Kennedy, appeals the judgment of the Summit County Court
of Common Pleas. This Court affirms in part and reverses in part.
I.
{¶2} The instant action stems from a land contract dispute involving a piece of
property located in Tallmadge, Ohio. On October 23, 2013, Kennedy (f.k.a. Betty Shuman) and
Russell Kunze entered into a written contract where Kennedy agreed to sell the Tallmadge
property to Kunze for $160,000, plus interest. Kunze made a $2,000 down payment and agreed
to pay $1,000 per month. The contract specified that the outstanding balance on the purchase
price was to be paid in full by May 1, 2015, meaning that Kunze would be required to make a
balloon payment of up to $150,200.
{¶3} Though Kunze did not make the necessary balloon payment by May 1, 2015, he
remained on the premises and continued to make monthly payments of $1,000. Kennedy and 2
Kunze engaged in several communications regarding Kunze’s ability to make the balloon
payment. In June 2016, Kennedy’s attorney sent Kunze a forfeiture letter indicating that Kunze
was required to either make the balloon payment or vacate the premises. Kunze elected to leave
the premises and he ultimately vacated the premises in July 2016. Kunze was in possession of
the property for 33 months, during which time he made monthly installments totaling $33,000.
{¶4} After finding a different purchaser for the property, Kennedy reached out to
Kunze in September 2016 in order to formally terminate their written agreement. The land
contract was recorded as “cancelled and [] null and void as of * * * September 19, 2016.”
{¶5} On June 23, 2017, Kennedy filed a complaint against Kunze, alleging claims of
breach of contract and unjust enrichment. Kunze filed an answer to the complaint and raised
multiple affirmative defenses.
{¶6} On December 8, 2017, Kennedy filed a motion for partial summary judgment.
Kunze filed a brief in opposition to the motion and Kennedy replied thereto. Kunze also filed a
motion for summary judgment on the complaint. Kennedy filed a memorandum in opposition to
Kunze’s motion. On February 12, 2018, the trial court issued a journal entry denying Kennedy’s
motion for partial summary judgment and granting Kunze’s motion for summary judgment.
{¶7} On appeal, Kennedy raises six assignments of error.
II.
ASSIGNMENT OF ERROR I
THE TRIAL COURT ERRED GRANTING APPELLEE’S MOTION FOR SUMMARY JUDGMENT WHEN THE LOWER COURT IMPLICITLY INTERPRETED THE LAND CONTRACT AS VOID AB INITIO, DESPITE THE VENDEE ASSERTING A COMPLETELY DIFFERENT MEANING FOR THE TERM “VOID.” 3
ASSIGNMENT OF ERROR II
THE TRIAL COURT ERRED GRANTING APPELLEE’S MOTION FOR SUMMARY JUDGMENT WHEN THERE ARE AMBIGUOUS QUESTIONS OF MATERIAL FACT WHETHER THE LAND CONTRACT TERMINATED ALL RIGHTS UNDER THE LAND CONTRACT WHEN IT WAS RECORDED IN THE SUMMIT COUNTY FISCAL OFFICE ON SEPT. 19, 2016.
ASSIGNMENT OF ERROR III
THE TRIAL COURT ERRED DENYING THE STATUTORY REMEDIES AFFORDED TO A LAND CONTRACT VENDOR BY R.C. 5313.10.
ASSIGNMENT OF ERROR IV
THE TRIAL COURT ERRED IN GRANTING APPELLEE’S MOTION FOR SUMMARY JUDGMENT BY DENYING APPELLANT STATUTORY DAMAGES FROM THE TIME THE LAND CONTRACT BECAME EFFECTIVE ON NOV. 1, 2013 UNTIL THE TIME THE LAND CONTRACT WAS CANCELLED ON SEPT. 19, 2016.
{¶8} Kennedy’s first four assignments of error pertain to the trial court’s summary
judgment ruling on her breach of contract claim. In her first assignment of error, Kennedy
asserts that the trial court misinterpreted the meaning of the parties’ use of the term “void” with
respect to the contract. In her second assignment of error, Kennedy contends that a question of
material fact remains regarding whether the parties terminated all rights under the agreement
when they cancelled the contract and declared it null and void. In her third assignment of error,
Kennedy contends that the trial court erred in concluding that she was not entitled to the statutory
damages described in R.C. 5313.10. In her fourth assignment of error, Kennedy asserts that she
is entitled to recover for the property damage caused by Kunze prior to the cancelation of the
contract. This Court disagrees with these contentions.
{¶9} This Court reviews an award of summary judgment de novo. Grafton v. Ohio
Edison Co., 77 Ohio St.3d 102, 105 (1996). We apply the same standard as the trial court,
viewing the facts in the case in the light most favorable to the non-moving party and resolving 4
any doubt in favor of the non-moving party. Viock v. Stowe-Woodward Co., 13 Ohio App.3d 7,
12 (6th Dist.1983).
{¶10} The procedure set forth in Civ.R. 56 “represents a shortcut through the normal
litigation process * * *.” AAAA Ents., Inc. v. River Place Community Urban Redevelopment
Corp., 50 Ohio St.3d 157, 161 (1990). Pursuant to Civ.R. 56(C), summary judgment is proper if:
(1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party.
Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327 (1977).
{¶11} While the moving party bears the initial burden of showing that no genuine issue
of material fact exists for trial, once the moving party satisfies its burden, the nonmoving party
may not rest upon the mere allegations or denials of the party’s pleadings. Dresher v. Burt, 75
Ohio St.3d 280, 292-293 (1996). Rather, the burden then shifts to the non-moving party to
respond, with affidavits or as otherwise permitted by Civ.R. 56, setting forth specific facts which
show that there is a genuine issue of material fact for trial. Id. at 293. Civ.R. 56(C) designates
the “pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts
of evidence, and written stipulations of fact, if any, timely filed in the action,” as proper in
demonstrating that there is no genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law. Id. at 292-293. Throughout, the evidence must be
construed in favor of the non-moving party. Temple, 50 Ohio St.2d at 327.
Background
{¶12} In her motion for partial summary judgment, Kennedy argued that she was
entitled to judgment on her breach of contract claim. Kennedy presented evidence showing that 5
she sent a notice of forfeiture pursuant to R.C. 5313.06 in June 2016 and that Kunze vacated the
property the following month.1 Kennedy maintained that the contract was cancelled on
September 19, 2016, in accordance with R.C. 5301.331, by filing the cancelation with the
Summit County Fiscal Office. Though the subject property was eventually sold to a different
buyer for $150,000, Kennedy argued Kunze remained liable for his breach because the
cancellation of the contract was not a release from the agreement. Kennedy also argued that she
was entitled to damages for loss of rental income and destruction to the property pursuant to R.C.
5313.10. In support of this argument, Kennedy presented a market study by a real estate
company suggesting that while Kunze paid Kennedy $1,000 per month, the actual monthly rental
value of the property was $1,390 per month.
{¶13} In response, Kunze argued that after the May 1, 2015 deadline expired, Kennedy
allowed Kunze to stay on the property as long as he continued to pay $1,000 per month as a
month-to-month tenant. This arrangement came to an end in June 2016 when Kunze elected to
vacate the premises. Despite language in the agreement to the contrary, Kunze maintained that it
was Kennedy’s responsibility to record the contract under R.C. 5313.02. Kunze stressed that
Kennedy did not take that step until 32 months after the contract was executed and 13 months
after the deadline for making the balloon payment had passed.
{¶14} Shortly after Kunze filed his response to Kennedy’s motion, Kunze filed his own
motion for summary judgment on the complaint. Kunze set forth a number of arguments, most
notably that Kennedy did not have standing to sue, that there was a mutual release from the
contract, and that the contract was void. Kunze presented evidence that Kennedy reached out to
1 In support of her motion, Kennedy noted that the language of the contract specified that Kunze was responsible for recording the contract. Kunze failed to do so and Kennedy eventually recorded the agreement in June 2016. 6
him in September 2016 and asked him to sign a “release” of the contract so that she could sell
the property to a different buyer. Kunze attached a copy of the contract that contained the
following handwritten notation in the margin:
This contract is cancelled and is null and void as of this date[,] September 19, 2016.
The statement was notarized and signed by both parties. In addition to the “null and void”
language, Kunze argued that the contract was void from the outset because Kennedy failed to
record the contract within 20 days of its execution as mandated by R.C. 5313.02(C).
{¶15} Kennedy filed a memorandum in opposition to Kunze’s motion wherein she
insisted that while the parties agreed to mutually cancel the contract pursuant to R.C. 5301.331,
they did not sign a “mutual release” from the contract. Kennedy maintained that “[c]ancelation
of the land contract was required in order to convey clear title [of] the property to a subsequent
purchaser.” Kennedy further maintained that she had “elected her remedy for the land contract’s
forfeiture under R.C. 5313.10.”
{¶16} On February 12, 2018, the trial court issued an order denying Kennedy’s motion
for partial summary judgment and granting Kunze’s motion for summary judgment on the
complaint. The trial court determined that the language stating that the contract was “cancelled”
and declared “null and void” was clear and unambiguous on its face. The trial court emphasized
that a contract that is null and void “is one that has no legal effect.” Accordingly, the trial court
concluded that Kennedy voluntarily terminated her rights under the contract and was “precluded
from seeking relief for breach of contract and relief under R.C. 5313.10.”
Discussion
{¶17} The common thread that runs through Kennedy’s first four assignments of error is
that the trial court erred when it determined that the parties declared the contract “null and void” 7
on September 19, 2016, and thus terminated all rights relating to the agreement. Kennedy asserts
that she merely cancelled the contract pursuant to R.C. 5301.331 and preserved her right to seek
statutory damages and recover for breach of contract.
{¶18} R.C. 5301.331 addresses cancellation, partial release or assignment of a land
contract. The statute provides, in part:
Except in counties where deeds or other instruments are required as provided in this section, a land contract that is recorded in the office of the county recorder may be cancelled, partially released by the vendor and vendee, or assigned by either of them by writing the cancellation, partial release, or assignment on the original land contract or upon the margin of the record of the original land contract, and by signing it. That cancellation, partial release, or assignment need not be acknowledged, but if written on the margin of the record, the signing shall be attested to by the county recorder. The assignment by the vendee, whether it is on the land contract or upon the margin of the record of that contract, or by separate instrument, shall transfer the right held by the vendee under the land contract in the premises described in the contract unless otherwise stated in the land contract or in the assignment.
R.C. 5301.331. R.C. 5313.01 et seq. governs land installment contracts and addresses remedies
available in cases of default.2 R.C. 5313.05 provides that in the case of default by the vendee,
“forfeiture of the interest of the vendee under the contract may be enforced only after the
expiration of thirty days from the date of the default.” The vendee may cure the default by
making the required payments within the 30-day window. Id. Following the expiration of that
time period, the vendor may initiate forfeiture by serving the vendee with a written notice that,
among other things, “[n]otifies the vendee that the contract will stand forfeited unless the
vendee performs the terms and conditions of the contract within ten days of the completed
2 The statute sets out a foreclosure procedure in R.C. 5313.07 and a forfeiture mechanism in R.C. 5313.08. R.C. 5313.07 provides that a foreclosure action is required when the vendee has made payments under the contract for a period of five years or more. R.C. 5313.07 further notes that “Chapter 5313 of the Revised Code does not prevent a vendor and vendee from cancelling their interest in a land installment contract under [R.C. 5301.331].” 8
service of notice and notifies the vendee to leave the premises.” R.C. 5313.06(C). R.C.
5313.08 sets forth the conditions under which a vendor may bring an action for forfeiture of the
vendee’s rights in the land installment contract and for restitution of the vendor’s property.
Notably, R.C. 5313.08 specifies that when a vendor brings a forfeiture action, the court “may
also grant any other claim arising out of the contract.” Pursuant to R.C. 5313.09, “[a] judgment
for the vendor shall operate to cancel the land installment contract as of a date to be specified by
the court.” In turn, R.C. 5313.10 addresses the exclusiveness of the statutory remedies and
provides as follows:
The election of the vendor to terminate the land installment contract by an action under [R.C. 5313.07] or [R.C. 5313.08] is an exclusive remedy which bars further action on the contract unless the vendee has paid an amount less than the fair rental value plus deterioration or destruction of the property occasioned by the vendee’s use. In such case the vendor may recover the difference between the amount paid by the vendee on the contract and the fair rental value of the property plus an amount for the deterioration or destruction of the property occasioned by the vendee’s use.
{¶19} In this case, there is no dispute that Kunze did not make the required balloon
payment by May 1, 2015. At that time, Kennedy did not attempt to initiate forfeiture
proceedings. Kunze remained on the property for approximately another year and continued to
pay $1,000 per month. While Kennedy suggests that Kunze requested multiple extensions due to
financial hardship, Kunze insists that the parties came to an understanding regarding a month-to-
month tenancy. Regardless, there is no dispute that on June 15, 2016, Kennedy’s attorney sent
Kunze a letter notifying him that he was required to either make the balloon payment within ten
days or the land contract would be forfeited and Kunze would be required to vacate the premises.
Kunze informed Kennedy that he would be leaving. Kunze vacated the premises in July 2016
and Kennedy proceeded to find another purchaser for the property. Notably, Kennedy never
initiated forfeiture proceedings under R.C. 5313.08. Instead, the parties came together on 9
September 19, 2016 and mutually agreed that “[the] contract [was] cancelled and [was] null and
void as of [that] date[.]” Kennedy proceeded to sell the property to a different purchaser later
that year. On June 23, 2017, Kennedy filed the instant action against Kunze alleging claims of
breach of contract and unjust enrichment.
{¶20} “When the terms in a contract are unambiguous, courts will not in effect create a
new contract by finding an intent not expressed in the clear language employed by the parties.”
Shifrin v. Forest City Ents., Inc., 64 Ohio St.3d 635, 638 (1992). This Court has long recognized
that “a void contract means one merely ineffective, of no force and effect; it is no contract
whatever. No rights of any character in favor of anyone vest under it; it is binding on neither
party.” (Internal quotations and citations omitted.) Basile v. Basile, 86 Ohio App. 535, 536-537
(9th. Dist.1948). It is understood that if a contact is void, it is as though the obligation under the
contract never existed. See Bass-Fineberg Leasing, Inc. v. Modern Auto Sales, Inc., 9th Dist.
Medina No. 13CA0098-M, 2015-Ohio-46, ¶ 19.
{¶21} In this case, Kennedy relinquished the right to recover under the parties’ written
agreement when the parties mutually cancelled the contract and further declared it null and void.
Generally speaking, a vendee’s failure to make a required payment under a land installment
contract does not render the contract “null and void.” Sammetinger v. DeBolt, 5th Dist. Knox.
No. 77-CA-13, 1977 WL 200786, *2 (Nov. 7, 1977). Rather, a default by the vendee subjects
him or her to the forfeiture and foreclosure provisions set forth in R.C. 5313.01 et seq. Id.
Under R.C. 5313.08, a vendor may bring an action for forfeiture of a vendee’s rights in a land
installment contract. In such an action, the court may also grant any other claim arising out of
the contract. Id. Here, while Kennedy sent a written notice of forfeiture pursuant to R.C.
5313.06, she never filed a forfeiture action pursuant to R.C. 5313.08. Instead, she took the 10
affirmative step of reaching out to Kunze so that they could mutually cancel the contract and
further declare it “null and void.” Under these circumstances, where the parties agreed to declare
the contract “null and void,” the contract no longer had legal effect and Kennedy was barred
from recovering under its terms. See Basile at 536-537. Moreover, under the plain language of
R.C. 5313.10, recovery for “fair rental value plus deterioration or destruction” is stated as an
exception to the otherwise exclusive remedy of filing an action under either R.C. 5313.07 or R.C.
5313.08. As Kennedy chose to declare the contract null and void instead of filing a forfeiture
action pursuant to R.C. 5313.08, the exception listed in R.C. 5313.10 is inapplicable in this
matter.
{¶22} Kennedy’s first, second, third, and fourth assignments of error are overruled.
ASSIGNMENT OF ERROR V
THE TRIAL COURT ERRED GRANTING SUMMARY JUDGMENT ON APPELLEE’S UNSPECIFIED AFFIRMATIVE DEFENSES.
{¶23} In her fifth assignment of error, Kennedy contends that the trial court erred when
it granted summary judgment on Kunze’s unspecified affirmative defenses. This Court
disagrees.
{¶24} Kunze mentioned a number of defenses in his answer to the complaint, including
comparative negligence, lack of standing, waiver, accord and satisfaction, and latches. Kunze
eventually moved the trial court for summary judgment on “all issues presented in the
Complaint[.]” While the trial court described Kunze’s motion as a “Motion for Summary
Judgment on his affirmative defenses[,]” Kunze’s motion was not necessarily rooted in the
affirmative defenses mentioned in his answer. Instead, the crux of Kunze’s argument in his
motion was that the written contract between the parties no longer had any legal effect. The trial
court granted summary judgment on that basis with respect to the breach of contract claim. As 11
the trial court’s substantive ruling on the breach of contract claim was separate and distinct from
the affirmative defenses set forth in Kunze’s answer, any mention of affirmative defenses in the
trial court’s journal entry was harmless error. See Civ.R. 61. The fifth assignment of error is
overruled.
ASSIGNMENT OF ERROR VI
THE TRIAL COURT ERRED IN ITS SUMMARY JUDGMENT RULING BY SUA SPONTE DENYING APPELLANT’S QUANTUM MERUIT CLAIM.
{¶25} In her final assignment of error, Kennedy argues that the trial court erred in sua
sponte granting summary judgment on her unjust enrichment claim. This Court agrees.
{¶26} In its February 12, 2018 journal entry, the trial court devoted a large portion of its
analysis to the breach of contract claim. Thereafter, the trial court noted that Kennedy had also
filed a claim for unjust enrichment that was based on the same factual allegations. With respect
to that claim, the trial court simply stated that “[t]he existence of a written contract in this case
(albeit a contract that has been cancelled and declared null and void) bars any claim for unjust
enrichment.” Kennedy did not move for summary judgment on her unjust enrichment claim.
While Kunze moved for summary judgment on the complaint, he did not address the impact that
a void contract would have on an unjust enrichment claim. “‘A trial court has no authority to sua
sponte grant summary judgment upon grounds which were not first addressed in a valid motion
submitted by the prevailing party.’” Bentley v. Equity Trust Co., 9th Dist. Lorain No.
14CA010630, 2015-Ohio-4735, ¶ 10, quoting Miller v. Pennitech Indus. Tools, Inc., 9th Dist.
Medina No. 2356-M, 1995 WL 230894, *6 (Apr. 19, 2995). Here, the trial court erred when it
granted summary judgment on the unjust enrichment claim when Kunze did not address the
viability of that claim in his motion.
{¶27} Kennedy’s final assignment of error is sustained. 12
III.
{¶28} Kennedy’s first, second, third, fourth, and fifth assignments of error are overruled.
Kennedy’s sixth assignment of error is sustained. The judgment of the Summit County Court of
Common Pleas is affirmed in part, reversed in part, and the cause is remanded for further
proceedings consistent with this decision.
Judgment affirmed in part, reversed in part, and cause remanded.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed equally to both parties.
DONNA J. CARR FOR THE COURT 13
TEODOSIO, P. J. CALLAHAN, J. CONCUR.
APPEARANCES:
BRADLEY S. LE BOEUF, Attorney at Law, for Appellant.
TRISHA BREEDLOVE, Attorney at Law, for Appellee.