Premier Const. Co., Inc. v. Maple Glen Apts. & Townhomes, Ltd.

2020 Ohio 4779, 159 N.E.3d 1201

• Court: Ohio Court of Appeals
• Decided: October 5, 2020
• Docket: CA2020-03-011
• Status: Published

Opinion

[Cite as Premier Const. Co., Inc. v. Maple Glen Apts. & Townhomes, Ltd., 2020-Ohio-4779.]

IN THE COURT OF APPEALS

TWELFTH APPELLATE DISTRICT OF OHIO

CLERMONT COUNTY

PREMIER CONSTRUCTION CO., INC., : CASE NO. CA2020-03-011

Appellant, : OPINION 10/5/2020 : - vs - :

MAPLE GLEN APARTMENTS AND : TOWNHOUSES LTD., et al., : Appellees.

CIVIL APPEAL FROM CLERMONT COUNTY COURT OF COMMON PLEAS Case No. 2018 CVE 00481

Law Office of John H. Forg, John H. Forg, III, 11156 Main Street, Suite D, Sharonville, Ohio 45241, for appellant

Patrick L. Gregory, 717 West Plane Street, P.O. Box 378, Bethel, Ohio 45106, for appellees

M. POWELL, P.J.

{¶ 1} Premier Construction Co., Inc. appeals the decision of the Clermont County

Court of Common Pleas, dismissing its claims against Maple Glen Apartments and

Townhouses, Ltd. For the reasons that follow, this court reverses the trial court's decision

and remands for further proceedings. Clermont CA2020-03-011

{¶ 2} In 2018, Premier filed suit against Maple Glen and its owner and manager,

Indira Murthy, asserting breach of contract and mechanic's lien foreclosure claims.1 The

matter proceeded to a bench trial, where the evidence revealed that Premier was engaged

in the business of supplying materials for residential construction. Maple Glen is a business

engaged in owning and managing apartments.

{¶ 3} In January 2017, Murthy came to Premier's offices and met with Premier's

owner, Jan Gilkey. Murthy presented Gilkey with blueprints for the construction of an 18-

unit apartment building on Maple Glen's property. Murthy apparently wanted Premier to

provide the materials and labor to construct the building. However, Gilkey informed Murthy

that Premier did not have sufficient workers to construct a building of that size. Instead,

Premier agreed to supply building materials for the project, including lumber for framing,

and trim materials. Premier further agreed to assist Murthy in finding carpenters for the

project.

{¶ 4} Based on Murthy's blueprints, and with some modifications suggested by

Premier, Premier provided Murthy with an initial estimate. Murthy determined that the price

was too high and did not proceed. Later, Premier provided Murthy with a second estimate.

This written estimate was presented to Murthy on a Premier form titled "Estimate" which

appears similar to a standard price quotation form. The form contains four columns,

"Description," "Qty," "Price/Each" and "Total."

{¶ 5} The "Description" column listed the building materials that Premier proposed

to deliver, including framing materials, exterior trim, and interior trim. The "Qty" column was

left blank. The "Price/Each" column listed the unit prices for the materials that Premier

1. Premier filed suit against "Glen Maple Apartments and Townhouses, Ltd" but referred to the defendant in the body of the complaint as "Maple Glen Apartments and Townhouses, Ltd." Throughout these proceedings the parties and court have variously referred to the defendant as either "Glen Maple" or "Maple Glen." Maple Glen points out that its legal name is Maple Glen Apartments and Townhouses, Ltd. -2- Clermont CA2020-03-011

proposed to deliver. For example, the framing materials were listed at a price of $107,300.

Finally, the "Total" column contained identical figures as the "Total/Each" column. The

grand total for the project was listed at the bottom of the form and was $165,666.08. Murthy

signed the estimate on behalf of Maple Glen on September 6, 2017. Gilkey also signed the

estimate.

{¶ 6} Gilkey testified that after the estimate was signed, the only issue left to resolve

was when to make delivery to the job site. Gilkey said he and Murthy agreed that Premier

would deliver the building materials in stages corresponding to the construction of the

building's floors. Thus, Premier and Maple Glen agreed that the first delivery would contain

the materials necessary to construct the first floor.

{¶ 7} Premier delivered the materials for the first floor to Maple Glen's job site in

early October. On October 16, 2017, Premier issued Maple Glen an invoice for $24,331.20,

which constituted payment for the first floor materials. The invoice indicated it was due

upon receipt and that 1.5% interest would accrue per month after 30 days.

{¶ 8} Thereafter, due to a problem with the installation of foundation steel column

supports, Murthy decided to postpone construction until the spring of 2018.2 Murthy asked

Premier to retrieve the delivered materials, store them for her over the winter, guarantee

their pricing, and redeliver the materials in March 2018.

{¶ 9} Gilkey told Murthy that what she was proposing would be expensive and

asked for payment for the delivered materials. However, Maple Glen did not pay. Gilkey

testified that when it became apparent that Maple Glen did not intend to pay for the

materials, he rented heavy equipment and transferred the materials from the job site to

Premier's location.

2. The evidence indicated that without steel columns in place, carpenters could have worked for a few days before they would need to stop work and wait for the steel column installation. -3- Clermont CA2020-03-011

{¶ 10} Premier issued a second invoice to Maple Glen that listed charges for the

costs to retrieve the materials from the job site. This included charges for the rental of a

forklift, two truck trips, and labor. This invoice totaled $3,447.00.

{¶ 11} Maple Glen did not pay this invoice. In January 2018, Premier issued two

updated invoices, adding accrued interest. Also, in January 2018, Premier recorded an

affidavit for mechanic's lien on Maple Glen's real property in the amount of $29,516.70. This

amount represented the entire unpaid balance on both updated invoices.

{¶ 12} Gilkey testified that he sought to sell the retrieved building materials. Over

the course of the next year, he was able to recoup approximately $18,000 by selling the

materials. Thus, he was seeking approximately $7,000 from Maple Glen in contractual

damages.

{¶ 13} After hearing the evidence, the trial court issued a decision dismissing

Premier's contract claim. The court analyzed the issue as a "sale of goods" under the

Uniform Commercial Code (UCC) and found that the parties had not validly contracted

because the written estimate did not list the quantity of goods and therefore violated the

statute of frauds as set forth in R.C. 1302.04. The court further noted that it found the

estimate vague as to the goods to be supplied, and lacking a place of delivery, time of

delivery, and terms of payment.

{¶ 14} The court also dismissed Premier's claim to foreclose its mechanic's lien. The

court found that the lien was invalid because it was premised on an invalid contract. The

court further found that the lien was invalid because the materials furnished by Premier

were not used to improve Maple Glen's property and had been removed from the job site.

Premier appeals, raising two assignments of error.

{¶ 15} Assignment of Error No. 1:

-4- Clermont CA2020-03-011

{¶ 16} THE TRIAL COURT ERRED IN RULING THAT PREMIER CONSTRUCTION

AND MAPLE GLEN APARTMENTS DID NOT ENTER INTO A CONTRACT FOR THE

DELIVERY OF MATERIALS FOR THE CONSTRUCTION OF A MULTI-UNIT

APARTMENT BUILDING AND THAT MAPLE GLEN APARTMENTS BREACHED THAT

CONTRACT BY REFUSING TO PAY FOR THOSE MATERIALS.

{¶ 17} Premier argues that the trial court erred in finding that it did not have a valid

contract with Maple Glen because the parties had not agreed to a quantity term. Premier

argues that because the "Total/Each" and "Total" columns were identical, the estimate

necessarily called for a single quantity of each good and there was no ambiguity.

{¶ 18} Appellate review of a decision on the existence of a contract involves a mixed

question of law and fact. McSweeney v. Jackson, 117 Ohio App.3d 623, 632 (4th

Dist.1996). The appellate court will accept the factual findings of the trial court if supported

by some competent, credible evidence. Id. Purely legal issues are reviewed de novo. Ohio

Dist. Council, Inc. of the Assemblies of God v. Speelman, 12th Dist. Butler Nos. CA2018-

02-025, CA2018-02-031, 2018-Ohio-4388, ¶ 18.

{¶ 19} The trial court found the underlying agreement to be a transaction for the sale

of goods, which the parties do not dispute in this appeal. Accordingly, Ohio's version of the

UCC, found in Revised Code Chapter 1302, applies.

{¶ 20} Premier's written estimate is similar to what courts have characterized as a

price quotation. Price quotations may constitute offers to contract and may be deemed an

offer to form a binding contract "if it is sufficiently detailed, and if it appears from the terms

of the quotation that all that is needed to ripen the offer into a contract is the recipient's

assent." SST Bearing Corp. v. MTD Consumers Group, Inc., 1st Dist. Hamilton No. C–

040267, 2004-Ohio-6435, ¶ 15, citing Dyno Construction Co. v. McWane, 198 F.3d 567,

572 (6th Cir.1999). The determination of whether a price quotation is an offer "is to be

-5- Clermont CA2020-03-011

made based 'upon the intention of the person communicating the quotation as

demonstrated by all of the surrounding facts and circumstances.'" H & M Landscaping Co.,

Inc. v. Abraxus Salt, L.L.C., 8th Dist. Cuyahoga No. 94268, 2010-Ohio-4138, ¶ 9, citing

Dyno Construction at id.

{¶ 21} Here, there appears to be an intention by both parties that Premier's estimate

was intended to be an offer to contract. Murthy initially approached Premier with blueprints

and requested assistance in constructing the building. Premier indicated it could supply

materials but not labor and the testimony at trial indicated that it took Premier some time to

prepare the estimate. This process involved Premier recommending some changes to the

blueprints. Murthy rejected an earlier estimate, because she believed that the price was

too high.

{¶ 22} Murthy signed and dated the written estimate. Murthy testified that she signed

on behalf of Maple Glen. Gilkey also signed the estimate. Premier then had the materials

delivered, which delivery Maple Glen accepted at its job site.

{¶ 23} At trial, Murthy indicated that Maple Glen intended to move forward with the

project as planned until she decided to delay the construction until the spring. Murthy asked

Premier to remove the materials from the job site, not because she had rejected them, but

because Maple Glen did not have facilities to store and secure the materials over the winter

months. Murthy anticipated that Premier would store the materials over the winter and then

redeliver them to the job site for construction to move forward the following spring. Thus,

the circumstances in this case indicate that at the time Murthy signed the estimate, Premier

intended for the estimate to be an offer and Maple Glen intended to be bound to the

agreement. The next consideration is whether the written estimate was sufficiently detailed

to be enforceable under the UCC.

-6- Clermont CA2020-03-011

{¶ 24} "Unlike the common law, the Ohio Uniform Commercial Code does not require

that all essential terms of a contract be definite in order for the contract to be enforceable."

Tubelite Co., Inc. v. Original Sign Studio, Inc., 10th Dist. Franklin No. 07AP–601, 2008-

Ohio-1905, ¶ 20, citing 2 Anderson, Uniform Commercial Code, Section 2–204:210, 477

(3d Ed.1997). With respect to contract formation, the UCC specifies that "[a] contract for

sale of goods may be made in any manner sufficient to show agreement * * *." R.C.

1302.07(A). R.C. 1302.04, which codifies the statute of frauds with respect to transactions

in goods over $500, specifies that a contract is not enforceable "unless there is some writing

sufficient to indicate that a contract for sale has been made between the parties and signed

by the party against whom enforcement is sought or by his authorized agent * * *." R.C.

1302.04(A). "A writing is not insufficient because it omits or incorrectly states a term agreed

upon but the contract is not enforceable under this division beyond the quantity of goods

shown in such writing." Id.

{¶ 25} Additionally, "[e]ven though one or more terms are left open a contract for sale

does not fail for indefiniteness if the parties have intended to make a contract and there is

a reasonably certain basis for giving an appropriate remedy." R.C. 1302.07(C). "However,

in the absence of some basic terms – such as the description and quantity of the goods –

a contract may not exist." Tubelite at ¶ 20, citing 1 Hawkland, Uniform Commercial Code

Series, Section 2–204:3 (2001). "Quantity is generally the only term that is required for

contract formation." Abraxus Salt, 2010-Ohio-4138, ¶ 12, citing Official Comment One to

R.C. 1302.04 ("The only term which must appear is the quantity term which need not be

accurately stated but recovery is limited to the amount stated. * * * Only three definite and

invariable requirements as to the memorandum are made by this subsection. * * * [T]hird, it

must specify a quantity").

-7- Clermont CA2020-03-011

{¶ 26} Citing R.C. 1302.04, the trial court found that the written estimate violated the

statute of frauds because no quantity for any of the materials was described in the

document. However, despite the blank "Qty" column, the quantity term can be readily

discerned because the "Total/Each" and "Total" columns contained identical figures.

Therefore, the quantity specified was one each for framing materials, interior and exterior

trim, and stairs allowance.

{¶ 27} In its brief, Maple Glen cites Abraxus Salt for a case where the court

concluded that the lack of a quantity term rendered a price quotation unenforceable as a

contract. That case involved a salt purchaser suing a salt distributor after the distributor

raised the per-ton price for salt. The purchaser had earlier been provided with a price

quotation from the distributor for salt at $38 per ton and had prepaid for salt at that rate,

which salt the purchaser received. Id. at ¶ 2-3. Later, the distributor switched to a more

expensive supplier, and, as a result, informed the purchaser that salt would now cost $110

per ton. Id. at ¶ 3. The purchaser sued, claiming that the parties had formed a contract

based on the price quotation. Id. at ¶ 9. The court rejected this argument, finding that

because the parties had not agreed on a quantity of tonnage in the earlier price quotation,

the purchaser could not use the quotation to establish an enforceable contract. Id. at ¶ 20.

{¶ 28} Abraxus Salt is distinguishable as it involved a purchaser of a bulk commodity

attempting to use an old price quote, where no quantity had been specified in the quote, to

secure a favorable rate for a subsequent purchase of the bulk commodity. Here, however,

the estimate presented to Maple Glen was for a one-time purchase of the specific building

materials necessary to construct Maple Glen's apartment. Moreover, the quantity term –

one – was implicit in the estimate.

{¶ 29} Maple Glen also notes that the trial court found the estimate vague in several

respects, including a description of the building materials to be supplied by Premier, the

-8- Clermont CA2020-03-011

place of delivery, the time of delivery, and payment. Again, an agreement under the UCC

does not necessarily fail because it is indefinite in some respects. R.C. 1302.07(C). To the

extent the estimate could be described as vague with respect to the quantity and

specification of building materials, R.C. 1302.05(B) permits it to be "explained or

supplemented by consistent additional terms". Metal Seal v. Good Time Outdoors, Inc.,

11th Dist. Lake No. 2017-L-142, 2018-Ohio-5326, ¶ 46-47. Here, the parties could refer to

the blueprints that formed the basis of the estimate to resolve any ambiguity regarding the

quantity or specification of the building materials that were the subject of the contract. Time

of delivery was not an issue raised by the parties and was separately agreed upon. Place

of delivery was also not an issue and Maple Glen's job site was the implicit delivery location.

Specific terms of payment were not agreed upon but the statutory presumption if not

otherwise agreed is tender of payment upon delivery. R.C. 1302.55(A). Premier's first

invoice was consistent with this presumption. This court does not find that the omission of

these terms rendered the agreement unenforceable.

{¶ 30} Accordingly, this court concludes that the trial court erred in finding no

enforceable contract between Premier and Maple Glen because the written estimate failed

to expressly specify a quantity term. This court sustains Premier's first assignment of error

and reverses and remands for a determination of whether Maple Glen breached the

contract, and if so, whether the evidence introduced at trial established Premier's

damages.3

{¶ 31} Assignment of Error No. 2:

3. Premier raises two additional issues within this assignment of error, arguing that the trial court erred in finding that Maple Glen did not breach its contract with Premier by failing to pay for the delivered materials and that the trial court erred in not awarding damages for the materials unsold by Premier and for the costs of delivering and removing the delivered materials. However, the trial court found no contract between the parties and therefore did not address the issues of breach or damages. -9- Clermont CA2020-03-011

{¶ 32} THE TRIAL COURT ERRED IN RULING THAT PREMIER CONSTRUCTION

WAS NOT ENTITLED TO FORECLOSURE OF ITS MECHANIC'S LIEN ON THE REAL

PROPERTY OWNED BY MAPLE GLEN APARTMENTS.

{¶ 33} Premier next argues that the trial court erred in dismissing its claim to

foreclose a mechanic's lien. Whether Premier demonstrated the validity of its mechanic's

lien is a legal issue that this court reviews de novo. Speelman, 2018-Ohio-4388, ¶ 18.

"Mechanics' lien statutes create rights in derogation of the common law and should

therefore be strictly construed as to the question whether a lien attaches, but their

procedural and remedial provisions should be liberally construed, after the lien has been

created." Robert V. Clapp Co. v. Fox, 124 Ohio St. 331 (1931), paragraph one of syllabus,

reaffirmed by Crock Constr. Co. v. Stanley Miller Constr. Co., 66 Ohio St.3d 588, 592

(1993).

{¶ 34} The trial court concluded that Premier did not possess a valid mechanic's lien

for two reasons. First, the court noted that no valid contract existed between Premier and

Maple Glen. However, this court has determined that the trial court erred in finding that the

parties had not contracted. Second, the trial court determined that Premier's lien failed to

satisfy R.C. 1311.12(A)(1), because the building materials delivered by Premier were not

used in the course of improvements at Maple Glen's job site and had instead been retrieved

by Premier.

{¶ 35} R.C. 1311.12 provides:

(A) A mechanic's lien for furnishing materials arises under sections 1311.01 to 1311.22 of the Revised Code only if the materials are:

(1) Furnished with the intent, as evidenced by the contract of sale, the delivery order, delivery to the site by the claimant or at the claimant's direction, or by other evidence, that the materials

- 10 - Clermont CA2020-03-011

be used in the course of the improvement with which the lien arises * * *.

{¶ 36} This court does not interpret R.C. 1311.12(A)(1) as requiring proof that the

furnished materials were in fact used in the course of the improvement for which the lien

arose. By its plain language, the statute provides that a lien arises if the materials are

furnished with the intent that they be used in the course of the improvement. Thus, it is the

intent of the mechanic's lien holder, and not the ultimate use that determines when the lien

arises. This reading is bolstered by considering R.C. 1311.12(A)(2), which expressly

provides that a lien arises when materials are "[i]ncorporated in the improvement or

consumed as normal wastage in the course of the improvement * * *." This provision would

be redundant if R.C. 1311.12(A)(1) also required proof that the materials were actually used

to improve the real property. Here, the evidence submitted at trial established that Premier

furnished the building supplies to Maple Glen by delivering the goods to Maple Glen's real

property, and that, through the aforementioned contract and delivery of goods, evidenced

its intent that such supplies would be used by Maple Glen in the course of the improvements

to the property.

{¶ 37} Consequently, this court finds that the trial court erred in its determination that

Premier had not established a valid lien based on the alleged lack of a contract and for a

failure to satisfy R.C. 1311.12(A)(1). Whether the mechanic's lien is otherwise valid and

enforceable will depend upon the trial court's proceedings on remand. This court sustains

Premier's second assignment of error.

{¶ 38} Judgment reversed and the cause remanded for such further proceedings as

the trial court may deem necessary to determine whether Maple Glen breached its contract

with Premier, and if so, to assess damages due to the breach.

RINGLAND and PIPER, JJ., concur. - 11 -