Merritt v. Sanbar, L.L.C.

2022 Ohio 2344

• Court: Ohio Court of Appeals
• Decided: July 5, 2022
• Docket: 2021 CA 00029 & 2022 CA 00005
• Status: Published

Opinion

[Cite as Merritt v. Sanbar, L.L.C., 2022-Ohio-2344.]

COURT OF APPEALS FAIRFIELD COUNTY, OHIO FIFTH APPELLATE DISTRICT

KAREN MERRITT JUDGES: Hon. W. Scott Gwin, P.J. Plaintiff-Appellant Hon. William B. Hoffman, J. Hon. Craig R. Baldwin, J. -vs- Case Nos. 2021 CA 00029 & 2022 CA 00005 SANBAR, LLC

Defendant-Appellee OPINION

CHARACTER OF PROCEEDINGS: Appeal from the Fairfield County Court of Common Pleas, Case No. 2021CV220

JUDGMENT: Affirmed

DATE OF JUDGMENT ENTRY: July 5, 2022

APPEARANCES:

For Plaintiff-Appellant For Defendant-Appellee

BRUCE M. BROYLES JEFF J. SPANGLER 134 N. Columbus Street Dagger, Johnston, Miller, Ogilvie & Lancaster, Ohio 43130 Hampson, LLP 144 East Main Street P.O. Box 667 Lancaster, Ohio 43130 Fairfield County, Case Nos. 2021 CA 00029 & 2022 CA 00005 2

Hoffman, J. {¶1} Plaintiff-appellant Karen Merritt appeals the judgment entered by the

Fairfield County Common Pleas Court dismissing her complaint for specific performance

of a contract for the sale of real estate against Sanbar, LLC (Case No. 2021 CA 00029)

and the judgment overruling her motion for Civ. R. 60(B) relief (Case No. 2022 CA 00005).

STATEMENT OF THE FACTS AND CASE

{¶2} Starting in 2014, Appellant leased a residence located in Lancaster, Ohio,

from Appellee. The lease was due to renew on May 31, 2021.

{¶3} In February of 2021, Appellant approached Appellee and offered to

purchase the residence for $168,000. Appellee responded by letter dated February 26,

2021, which provided in pertinent part:

I know that you have expressed an interest in purchasing the

property and we would be happy to have you purchase it. We would be

willing to sell Mondhank at a purchase price of $175,000, on an “as is” basis.

Our offer would include providing an owner’s title insurance policy.

If you would like to proceed with the purchase, please provide us with

a lender qualification letter indicating your approval for a purchase price up

to $175,000, subject to a property appraisal. Once received we will prepare Fairfield County, Case Nos. 2021 CA 00029 & 2022 CA 00005 3

a written purchase agreement for your review and signature. The closing

date must happen on or before May 31, 2021.

Should you choose not to proceed with the purchase of this property,

please recognize that your current lease expires on May 31, 2021.

Therefore, this letter also serves as a notice to terminate your lease

effective May 31, 2021 and to vacate the property by said date. As a

convenience to you, should you choose to vacate the property prior to the

end of your current lease, we will consider releasing you from your lease as

early as April 30, 2021.

Hopefully, we can get the purchase put together for our mutual

benefit.

{¶4} On February 26, 2021, Appellant was approved for a mortgage line of credit

in the amount of $175,000. However, she did not receive the lender qualification letter

until April 9, 2021. She forwarded the letter to Appellee for review. In response, Appellee

sent Appellant an unsigned Real Estate Purchase Contract for Appellant’s signature and

review. Neither party ultimately executed the written purchase agreement. Prior to

signing, Appellee notified Appellant it was withdrawing its offer to sell her the property in Fairfield County, Case Nos. 2021 CA 00029 & 2022 CA 00005 4

order to “complete a renovation and sell at a much higher price.” Barker Letter, April 20,

2021.

{¶5} Appellant filed the instant action seeking specific performance of the sale in

the Fairfield County Common Pleas Court. Appellee moved to dismiss the complaint

pursuant to Civ. R. 12(B)(6) for failure to state a claim on which relief can be granted.

{¶6} The trial court granted the motion to dismiss, finding: (1) the parties never

entered a legally binding contract, (2) Appellant did not provide evidence she accepted

Appellee’s written offer to sell prior to said offer being revoked, and (3) Appellant failed to

allege any facts which demonstrated she detrimentally altered her position in a way such

as to constitute partial performance sufficient to establish an exception to the Statute of

Frauds.

{¶7} It is from the August 31, 2021 judgment of the trial court Appellant

prosecutes her appeal in case number 2021 CA 00029, assigning as error:

I. THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT

FOR SPECIFIC PERFORMANCE FINDING THAT THE COMPLAINT DID

NOT ALLEGE THE EXISTENCE OF A LEGALLY BINDING AGREEMENT. Fairfield County, Case Nos. 2021 CA 00029 & 2022 CA 00005 5

{¶8} Appellant also filed a motion for relief from the August 31, 2021 judgment in

the trial court pursuant to Civ. R. 60(B)(2), alleging newly discovered evidence. Attached

to her motion was a signed copy of the February 26, 2021 letter she received from

Appellee. The copy of the letter attached to her complaint for specific performance was

not signed by Appellee. On December 23, 2021 this Court stayed the appeal in case

number 2021 CA 00029, and remanded this case to the trial court with instructions to rule

on the Civ. R. 60(B) motion.

{¶9} The trial court overruled the Civ. R. 60(B) motion. The trial court found in

its August 31, 2021 judgment, it considered Appellee’s February 26, 2021 letter to be a

valid offer, despite the fact it was unsigned. The court noted its previous decision

dismissed the complaint not because of the lack of signature on the February 26, 2021,

letter, but because the real estate purchase agreement was never signed. The trial court

held even considering the newly discovered evidence, the bottom line remained the

same: the parties never executed an enforceable written contract for the sale of the

property. It is from the January 4, 2022 judgment of the trial court Appellant prosecutes

her appeal in case number 2022 CA 00005, assigning as error:

I. THE TRIAL COURT ABUSED ITS DISCRETION IN DENYING

THE MOTION FOR RELIEF FROM JUDGMENT. Fairfield County, Case Nos. 2021 CA 00029 & 2022 CA 00005 6

II. THE TRIAL COURT ERRED IN DENYING THE MOTION FOR

RELIEF FROM JUDGMENT WITHOUT CONDUCTING AN EVIDENTIARY

HEARING.

{¶10} This Court sua sponte consolidated the appeals for purposes of merit review

only.

{¶11} We first address Appellant’s assignment of error in case number 2021 CA

00029.

I.

{¶12} In her first assignment of error, Appellant argues the trial court erred in

dismissing her case pursuant to Appellee’s Civ. R. 12(B)(6) motion. Specifically, she

argues the February 26, 2021 letter sent to her by Appellee constituted a valid and binding

contract, which satisfied the Statute of Frauds. She argues the trial court erred in

focusing on her arguments concerning part performance and the revocation of the April

9, 2021 purchase agreement before it was signed, as the February letter constituted a

valid contract for sale of the property.

{¶13} When reviewing a judgment on a Civ.R. 12(B)(6) motion to dismiss for

failure to state a claim upon which relief can be granted, our standard of review is de

novo. Perrysburg Twp. v. Rossford, 103 Ohio St.3d 79, 2004-Ohio-4362, 814 N.E.2d 44, Fairfield County, Case Nos. 2021 CA 00029 & 2022 CA 00005 7

¶ 5. A Civ.R. 12(B)(6) motion to dismiss for failure to state a claim upon which relief can

be granted is procedural and tests the sufficiency of the complaint. State ex rel. Hanson

v. Guernsey Cty. Bd. of Commrs., 65 Ohio St.3d 545, 548, 605 N.E.2d 378 (1992), citing

Assn. for the Defense of the Washington Local School Dist. v. Kiger, 42 Ohio St.3d 116,

117, 537 N.E.2d 1292 (1989). In considering a motion to dismiss, a trial court may not

rely on allegations or evidence outside the complaint. State ex rel. Fuqua v. Alexander,

79 Ohio St.3d 206, 207, 680 N.E.2d 985 (1997). However, where documents are

attached or incorporated into the complaint, the face of the complaint to be evaluated

includes those documents, and may be considered part of the complaint for purposes of

determining a Civ.R. 12(B)(6) motion. Johnson v. Baker, 5th Dist. Stark No.

2017CA00202, 2018-Ohio-617, ¶ 12,

{¶14} “A contract is generally defined as a promise, or a set of promises,

actionable upon breach. Essential elements of a contract include an offer, acceptance,

contractual capacity, consideration (the bargained for legal benefit and/or detriment), a

manifestation of mutual assent and legality of object and of consideration.” Minster

Farmers Coop. Exchange Co., Inc. v. Meyer, 117 Ohio St.3d 459, 2008-Ohio-1259, 884

N.E.2d 1056, ¶ 28, quoting Perlmuter Printing Co. v. Strome, Inc., 436 F.Supp. 409, 414

(N.D.Ohio 1976); Kostelnik v. Helper, 96 Ohio St.3d 1, 2002-Ohio-2985, 770 N.E.2d 58,

¶ 16. The parties must have a “meeting of the minds” as to the essential terms of the Fairfield County, Case Nos. 2021 CA 00029 & 2022 CA 00005 8

contract in order to enforce the contract. Episcopal Retirement Homes, Inc. v. Ohio Dept.

of Indus. Relations, 61 Ohio St.3d 366, 369, 575 N.E.2d 134 (1991).

{¶15} Additionally, in Ohio agreements for the sale of real estate come within the

statute of frauds and must be in writing and signed by the party to be charged. See

Shimko v. Marks, 91 Ohio App.3d 458, 461, 632 N.E.2d 990 (5th Dist. Stark 1993). R.C.

1335.05, which codifies the statute of frauds, provides in pertinent part:

No action shall be brought whereby to charge the defendant *** upon

a contract or sale of lands, tenements, or hereditaments, or interest in or

concerning them, *** unless the agreement upon which such action is

brought, or some memorandum or note thereof, is in writing and signed by

the party to be charged therewith or some other person thereunto by him or

her lawfully authorized.

{¶16} “Any signed memorandum is sufficient to satisfy the Statute of Frauds so

long as it (1) identifies the subject matter of the agreement, (2) establishes that a contract

has been made, and (3) states the essential terms with reasonable certainty.” Lamkin v.

First Community Bank, 10th Dist. Franklin No. 00AP-935, 2001 WL 300732, *9. Fairfield County, Case Nos. 2021 CA 00029 & 2022 CA 00005 9

{¶17} The copy of the February 26, 2021 letter attached to the complaint was not

signed by Appellee. Therefore, we find the trial court did not err in finding this letter did

not satisfy the Statute of Frauds, and did not form the basis of a contract enforceable

through an action for specific performance.

{¶18} Appellant’s sole assignment of error in case number 2021 CA 00029 is

overruled.

{¶19} We next turn to Appellant’s assignments of error in case number 2022 CA

00005.

{¶20} In her first assignment of error, Appellant argues the trial court erred in

failing to find the signed copy of the February 26, 2021 letter, which she attached to her

motion bfor Civ. R. 60(B) relief from judgment, constituted a valid and enforceable

contract for the sale of the real estate in question.

{¶21} In GTE Automatic Electric v. ARC Industries, 47 Ohio St.2d 146, 150–151,

351 N.E.2d 113 (1976), the Ohio Supreme Court set forth the factors necessary to recover

under Civ.R. 60(B). “[T]he movant must demonstrate: (1) the party has a meritorious

defense or claim to present if relief is granted; (2) the party is entitled to relief under one

of the grounds stated in Civ.R. 60(B)(1) through (5); and (3) the motion is made within a

reasonable time, and, where the grounds of relief are Civ.R. 60(B)(1), (2) or (3), not more Fairfield County, Case Nos. 2021 CA 00029 & 2022 CA 00005 10

than one year after the judgment, order or proceeding was entered or taken.” Where any

one of the foregoing requirements is not satisfied, Civ.R. 60(B) relief is improper. State

ex rel. Richard v. Seidner, 76 Ohio St.3d 149, 151, 1996–Ohio–54, 666 N.E.2d 1134. “A

motion for relief from judgment under Civ. R. 60(B) is addressed to the sound discretion

of the trial court, and that court's ruling will not be disturbed on appeal absent a showing

of abuse of discretion.” Griffey v. Rajan, 33 Ohio St.3d 75, 77, 514 N.E.2d 1122 (1987).

{¶22} As discussed above, any signed memorandum is sufficient to satisfy the

Statute of Frauds if it (1) identifies the subject matter of the agreement, (2) establishes

that a contract has been made, and (3) states the essential terms with reasonable

certainty.” Lamkin, supra.

{¶23} In Riolo v. Oakwood Plaza Ltd., 9th Dist. Lorain No. 04CA008555, the

parties to the action signed an agreement, which outlined in broad terms the Appellant’s

intention to purchase real estate from Appellees for $1,000,000. The agreement

contemplated the parties would reach a formal agreement before a specified date.

Appellant delivered a purchase agreement to Appellees in an attempt to finalize the sale.

However, Appellees refused to sign the purchase agreement. Appellant then filed an

action for breach of contract, arguing the signed letter of intent between the parties was

sufficiently definite as to be enforced by the court. Fairfield County, Case Nos. 2021 CA 00029 & 2022 CA 00005 11

{¶24} The Ninth District Court of Appeals found the letter did not create an

enforceable contract for sale of the real estate. The court first noted the document

Appellant was attempting to enforce was entitled “letter of intent,” not “agreement to sell

real estate,” which was the title of the subsequent purchase agreement Appellees refused

to sign. Id. at ¶9. The court also noted the express language of the letter contemplated

a later formal agreement between the parties, contemplated the purchase might not take

place, and was signed by Appellant as “prospective” buyer. Id. The letter omitted

essential terms of the agreement, such as the down payment and the financing terms,

and the language of the letter made the eventual purchase subject to financing and

completion of a proper due diligence acceptable to the buyer. Id. at 10.

{¶25} In the instant case, the letter from Appellee to Appellant includes a subject

line which says, “lease agreement,” and does not reference sale of the property. Similar

to the letter of intention in Riolo, the purchase was conditioned on Appellant providing

Appellee with a lender qualification letter indicating her approval for a purchase price of

$175,000, and was further made subject to a property appraisal. The letter specifically

stated Appellee would put together a written purchase agreement only after receipt of

Appellant’s qualification letter. In the conclusion of the letter, Appellee expresses a desire

to “get the purchase put together for our mutual benefit.” The terms of the letter clearly

and unambiguously contemplate a further written purchase agreement will be entered Fairfield County, Case Nos. 2021 CA 00029 & 2022 CA 00005 12

detailing the terms of the sale after Appellant has provided notice of her intention to

purchase the property and a lender qualification letter. We find the letter constitutes an

intention to sell, and not an actual sale, and the trial court therefore did not abuse its

discretion in overruling Appellant’s motion for relief from judgment.

{¶26} The first assignment of error is overruled.

II.

{¶27} In her second assignment of error, Appellant argues the trial court erred in

failing to grant an evidentiary hearing on her motion for relief from judgment.

{¶28} A movant for Civ. R. 60(B) must submit factual material with her motion

which demonstrates grounds which, if true, would constitute a defense to the action. See

Matson v. Marks, 32 Ohio App.2d 319, 327, 291 N.E.2d 491 (1972); Adomeit v. Baltimore,

39 Ohio App.2d 97, 103, 316 N.E.2d 469 (1974). As in a summary judgment proceeding,

the movant must support her claim of a defense with evidence of at least affidavit quality.

East Ohio Gas v. Walker, 59 Ohio App.2d 216, 220, 394 N.E.2d 348 (1978). Where the

motion and supporting evidence contain sufficient allegations of operative facts which

would support a meritorious defense to the judgment, the court must assign the matter

for evidentiary hearing. BancOhio Natl. Bank v. Schiesswohl, 51 Ohio App.3d 130, 554

N.E.2d 1362, syllabus 1 (1988). Fairfield County, Case Nos. 2021 CA 00029 & 2022 CA 00005 13

{¶29} In the instant case, the legal issue is whether the February 26, 2021 letter

constituted an enforceable contract for the sale of the property in question in compliance

with the statute of frauds. While both parties submitted affidavits concerning the events

which surrounded the sale, we find the document itself did not comply with the statute of

frauds, and Appellant therefore was not entitled to an evidentiary hearing on her motion.

{¶30} The second assignment of error is overruled.

{¶31} The judgment of the Fairfield County Common Pleas Court is affirmed.

By: Hoffman, J. Gwin, P.J. and Baldwin, J. concur