Rws Bldg. Co. v. Freeman, Unpublished Decision (11-23-2005)

2005 Ohio 6665
CourtOhio Court of Appeals
DecidedNovember 23, 2005
DocketNo. 04CA40.
StatusUnpublished
Cited by3 cases

This text of 2005 Ohio 6665 (Rws Bldg. Co. v. Freeman, Unpublished Decision (11-23-2005)) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law.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
Rws Bldg. Co. v. Freeman, Unpublished Decision (11-23-2005), 2005 Ohio 6665 (Ohio Ct. App. 2005).

Opinion

DECISION AND JUDGMENT ENTRY
{¶ 1} Kent Freeman and Freeman Roofing Construction Company ("Freeman Roofing") (collectively, "the appellants") appeal the trial court's entry of summary judgment in favor of RWS Building Company ("RWS") on its claims for breach of contract and fraud. The appellants contend that Freeman's affidavit creates a genuine issue of material fact concerning the defenses of estoppel by acceptance of benefits and waiver because it establishes that RWS knew that Freeman Roofing was not paying its suppliers as required by the contract but nonetheless made payments to Freeman Roofing for its work. We conclude that neither of these defenses are applicable under the facts of this case. Thus, the court did not err in granting summary judgment on RWS's breach of contract claim.

{¶ 2} The appellants also argue that Freeman's affidavit creates a genuine issue of material fact concerning the fraud claim because it establishes that a RWS representative instructed Freeman to submit false lien waivers to obtain payment for Freeman Roofing's work. The appellants contend that the affidavit demonstrates that they did not intend to defraud RWS, that RWS did not rely on the lien waivers, and that the submission of the waivers could not have proximately caused any damages to RWS. However, Freeman's statements concerning what an RWS employee told him are inadmissible hearsay if they were offered to prove their truth. We also conclude that Freeman's self-serving statements are insufficient to establish a genuine issue of material fact because they fail to specify any facts surrounding his conversation with the RWS employee, including the identity of the employee or when the conversation occurred. And, because the appellants have submitted no additional evidence to rebut RWS's summary judgment motion, the court did not err in granting summary judgment on the fraud claim. Thus, we affirm the trial court's judgment.

{¶ 3} RWS is the general contractor hired to renovate Rock Hill Middle School in Ironton, Ohio ("Rock Hill Project"). RWS retained Freeman Roofing as a subcontractor to perform roofing services on that project. Kent Freeman is the president of Freeman Roofing. Under their subcontract, Freeman Roofing was responsible for providing its own supplies and materials, paying its suppliers for materials provided in connection with the Rock Hill Project, and ensuring that the project remained free of liens.

{¶ 4} After finishing the Rock Hill Project, RWS again hired Freeman Roofing as a subcontractor on the new construction of Meigs Elementary School ("Meigs Project"). The terms of the Meigs Project contract were virtually identical to those of the Rock Hill Project.

{¶ 5} Freeman submitted six invoices and lien waivers to RWS for the Rock Hill Project. Based on the submission of the lien waivers, RWS contends that it believed Freeman Roofing was paying its suppliers, so RWS made payments to Freeman Roofing for work on the project. However, roofing supplier North Coast Commercial Roofing Systems ("North Coast") later notified RWS that Freeman Roofing owed it $109,883.34 for roofing materials used on the Rock Hill Project. As a result of Freeman Roofing's failure to pay for the materials, North Coast filed a lien against RWS's bond on the Rock Hill Project.

{¶ 6} RWS and Freeman Roofing agreed that RWS would pay Freeman Roofing's debts to North Coast so that the lien on RWS's bond for the Rock Hill Project would be removed and work on the Meigs Project could continue. According to RWS, this agreement resulted in payments to Freeman Roofing in excess of the total amount of the contract for the Meigs Project.

{¶ 7} Subsequently, RWS filed a complaint against the appellants alleging breach of contract, fraud, and violation of R.C. 1701.93, which prohibits an officer, director, employee or agent of a corporation from making any false material communications. It also permits violators of the statute to be held personally liable, jointly and severally, for any damages suffered as a result of their actions.

{¶ 8} After the appellants answered the complaint, RWS moved for summary judgment. The appellants failed to respond to the motion and the trial court concluded that there were no material issues of fact. The court found that Freeman Roofing failed to pay its suppliers as required by its contract with RWS and, based on this breach of contract, Freeman Roofing had a duty to reimburse RWS for all costs and expenses associated with any liens that were filed. The court also found that RWS established the elements of fraud and granted judgment against the appellants, jointly and severally, in the amount of $84,039.62, plus interest and costs. The court scheduled a hearing on RWS's punitive damages and attorney's fee requests.

{¶ 9} Prior to that hearing, the appellants filed a motion to set aside the judgment and requested leave to file a memorandum contra the motion for summary judgment. In that memorandum, Freeman admitted that he submitted incorrect lien waivers to RWS, but stated in an affidavit and responses to discovery that he had informed a representative of RWS that he was having financial difficulties and was unable to pay his suppliers. Freeman attested that the RWS representative instructed him to submit the waiver forms anyway so Freeman could receive payment, continue working, and complete the job. Freeman stated that he did not intend to misrepresent the status of the payments to his suppliers and only did so after disclosing the actual status to the RWS representative.

{¶ 10} The trial court granted the appellants' motion for leave to file the memorandum contra, but denied the motion to set aside the judgment. The court found that, even considering the evidence attached to the memorandum contra, summary judgment was appropriate.

{¶ 11} At a hearing, RWS dismissed its claim for punitive damages and presented evidence in support of its claim for attorney's fees. The court awarded RWS $15,031.24 in attorney's fees, plus costs.

{¶ 12} Freeman and Freeman Roofing appeal the trial court's judgment, assigning the following error:

The trial court erred in granting the Plaintiff/Appellee's motion for summary judgment as the trial court failed to recognize genuine issues of material fact existed.

I. Summary Judgment
{¶ 13} When reviewing a trial court's decision regarding a motion for summary judgment, an appellate court conducts a de novo review. See, e.g., Grafton v. Ohio Edison Co.,77 Ohio St.3d 102, 105, 1996-Ohio-336, 671 N.E.2d 241. Accordingly, an appellate court must independently review the record to determine if summary judgment was appropriate and need not defer to the trial court's decision. See Brown v. Scioto Cty. Bd. of Commrs. (1993), 87 Ohio App.3d 704, 711, 622 N.E.2d 1153; Morehead v.Conley (1991), 75 Ohio App.3d 409, 411-412, 599 N.E.2d 786.

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Bluebook (online)
2005 Ohio 6665, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rws-bldg-co-v-freeman-unpublished-decision-11-23-2005-ohioctapp-2005.