Warthog Mgt., L.L.C. v. Fares

2024 Ohio 2065

• Court: Ohio Court of Appeals
• Decided: May 30, 2024
• Docket: 112905
• Status: Published

Opinion

[Cite as Warthog Mgt., L.L.C. v. Fares, 2024-Ohio-2065.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

WARTHOG MANAGEMENT LLC, :

Plaintiff-Appellant, : No. 112905 v. :

JORDAN HK FARES, ET AL., :

Defendants-Appellees. :

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED RELEASED AND JOURNALIZED: May 30, 2024

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-20-940831

Appearances:

Law Offices of Robert A. Wood and Robert A. Wood, for appellant.

Tayeh Law Offices, LLC, and Ziad Tayeh, for appellees Jordan HK Fares and Angela R. Spano.

Benesch Friedlander Coplan & Aronoff LLP and Michael J. Meyer, for appellees Jeffrey Mohr and Steven Szczepinski. MICHELLE J. SHEEHAN, J.:

The issue in this case is when was earnest money due and payable

pursuant to a residential real estate purchase agreement. The trial court held the

purchase agreement required the earnest money to be paid upon execution of the

agreement and that the failure to timely pay the earnest money breached the

purchase agreement. We agree.

RELEVANT FACTS AND PROCEDURAL HISTORY

Warthog Management LLC (“Warthog”) appeals the trial court’s grant

of summary judgment to Jordan Fares and Angela Spanos (“Sellers”) on Warthog’s

claims that Sellers breached a residential real estate purchase agreement and against

its declaratory judgment action seeking to enforce the purchase agreement.

Warthog also appeals the grant of summary judgment in favor of Jeffrey Mohr and

Steven Szczepinski (“Buyers”) as to their declaratory judgment action to enforce a

subsequent purchase agreement. Because the trial court properly granted summary

judgment, we affirm.

The Purchase Agreement

The following facts are undisputed. By October 23, 2020, Warthog

and Sellers finalized a purchase agreement for real property located on W. 18th

Street, Cleveland, Ohio. The purchase agreement provided Warthog would pay

$38,000 for the property, with $5,000 earnest money payable to Fidelity National

Title. It further provided that all closing funds due under the purchase agreement and documents would be placed in escrow by December 1, 2020. The purchase price

and earnest money were documented in the purchase agreement form as follows:

Warthog did not pay the earnest money due under the purchase

agreement when the agreement was signed.

On October 28, 2020, Sellers entered into a conditional purchase

agreement with Buyers for the property, which agreement was for a sum of $65,000.

On October 29, 2020, Sellers through their agent contacted Warthog’s

representative regarding the earnest money. Sellers’ agent said that if the earnest

money was not delivered by the end of the day, Sellers would execute a mutual

release of the purchase agreement. Warthog’s representative replied that the

earnest money would be delivered the next day. Sellers then sent a copy of a signed

mutual release of the purchase agreement to Warthog. Warthog’s representative

delivered a check for the earnest money, but the check was made payable to “Fidelity

National Bank” not “Fidelity National Title” as required in the purchase agreement.

That evening, Sellers informed Warthog’s representative that they considered the

purchase agreement to be breached by Warthog and cancelled the transaction. On the next day, October 30, 2020, Warthog delivered another check for the earnest

money that was made payable to “Fidelity National Title.”

On November 9, 2020, Sellers and Buyers amended their purchase

agreement to remove the conditional status. On November 30, 2020, Warthog

delivered $31,227.891 to escrow, but the Sellers did not accept the funds or transfer

the property to Warthog under the purchase agreement. On December 3, 2020,

Warthog filed its complaint.

Procedural History

Warthog’s complaint made claims of breach of contract against Sellers

and several other defendants. Warthog also sought specific performance of the

purchase agreement between it and Sellers. During the course of litigation, Warthog

amended its complaint to include claims against Buyers. Buyers filed a counterclaim

asserting a claim of tortious interference with contract against Warthog. In its final

amended complaint, Warthog, having dismissed all other defendants, alleged that

Sellers breached the purchase agreement, sought declaratory judgment that the

purchase agreement between it and Sellers was valid and enforceable, and prayed

for specific performance of the purchase agreement. After Warthog dismissed its

claims against Buyers, Buyers’ counterclaim remained pending.

1Warthog calculated this amount as being the balance of the purchase price after deducting credit for the earnest money and adjusting for taxes and closing costs. During the course of the litigation, money Warthog paid was deposited

by the escrow agent with the trial court. On March 23, 2021, Warthog moved the

trial court for release of the funds. The trial court granted the motion conditionally

stating that should Warthog dismiss its request for specific performance of the

purchase agreement and injunctive relief, the court would order the funds to be

released to Warthog.

By September 19, 2022, Warthog, Sellers, and Buyers each filed

motions for summary judgment on their respective claims. On May 25, 2023, the

trial court granted summary judgment in favor of Sellers and Buyers and denied

Warthog’s motions for summary judgment on its breach-of-contract claim and

declaratory judgment action.

The Trial Court’s Summary Judgment Ruling

In granting summary judgment in favor of Sellers and Buyers, the trial

court found that the earnest money was due immediately upon execution of the

purchase agreement and that Warthog “breached the purchase agreement with

[Sellers] by failing to pay the earnest money deposit ‘payable to fidelity national title

in the amount of $5,000 in the form of [check box] check [check box] other [blank

line] which shall be redeemed immediately upon receipt of a binding agreement.’”

Further, the trial court found that because Warthog was in breach of the purchase

agreement it could not seek specific performance of the purchase agreement.

After determining Warthog breached the purchase agreement, the

trial court determined that Sellers’ agreement with Buyers was valid and that Buyers became “the rightful purchasers of the property following Warthog’s breach and

[Sellers’] rightful termination of the agreement.” The trial court also granted

summary judgment in favor of Warthog as to Buyers’ counterclaim for tortious

interference.

Disposition of the Money Paid by Warthog

On June 6, 2023, after the trial court ruled on the motions for

summary judgment, Warthog filed a motion for release of the money held by the

trial court. On June 21, 2023, the trial court granted Warthog’s motion, noting that

the motion was unopposed. Warthog filed a notice of appeal two days later, on June

23, 2023.

LAW AND ARGUMENT

Warthog Did Not Waive Its Right to Appeal

On October 25, 2023, Sellers filed a motion to dismiss Warthog’s

appeal, which was referred to the merit panel. Sellers argue that Warthog, by filing

a motion for release of the money held by the court, abandoned its claims under the

complaint for specific performance and thus waived its right to appeal.

In 2021, Warthog sought return of the funds that had been deposited

by the escrow agent with the clerk of courts. At that time, the trial court

conditionally granted the motion, stating “should [Warthog] dismiss” its claims,

then it would order the release of the funds. Sellers do not argue this order was a

final, appealable order or judgment. As such, the trial court’s ruling was an

interlocutory order, which could later be amended, modified, or changed. See Hoenigman v. Ruiz, 8th Dist. Cuyahoga No. 109888, 2021-Ohio-2029, citing Marc

Glassman, Inc. v. Fagan, 8th Dist. Cuyahoga No. 87164, 2006-Ohio-5577. ¶ 11.

After the trial court issued its ruling on summary judgment against

Warthog and disposed of Warthog’s claims, Warthog filed a new motion for release

of the funds. The trial court granted Warthog’s new motion unconditionally,

removing the condition that it would release the funds only upon Warthog’s

dismissal of its claims. Because the trial court removed the condition that Warthog

dismiss its claims to receive the funds, Warthog did not abandon any of its claims or

waive its right to appeal by receiving the funds. We therefore address Warthog’s

assignments of error.

Warthog’s Assignments of Error

Warthog’s assignments of error read:

1. The trial court erred in denying the Motion for Summary Judgment filed by Plaintiff-Appellant, Warthog Management, Inc. (improperly named Warthog Management LLC)(“Warthog”), on its claims for breach of contract and declaratory judgment.

2. The trial court erred in granting the Motion for Summary Judgment filed by Defendants-Appellees Jordan HK Fares and Angelo R. Spano (collectively, the “Sellers”) on Warthog’s claims for breach of contract and declaratory judgment.

3. The trial court erred in denying the Motion for Summary Judgment filed by Warthog on the counterclaim for declaratory relief asserted by Defendants-Appellees Jeffrey Mohr and Steven Szczepinski (collectively, the “Second Buyers”).

4. The trial court erred in granting the Motion for Partial Summary Judgment filed by the Second Buyers on their counterclaim for declaratory relief. Relevant Law and Standards of Review

A trial court’s grant of summary judgment is reviewed de novo.

Santiago v. Costanzo, 8th Dist. Cuyahoga Nos. 110339 and 110343, 2022-Ohio-611,

¶ 17, citing Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241

(1996). Pursuant to Civ.R. 56(C), summary judgment shall be granted if “the

pleadings, depositions, answers to interrogatories, written admissions, affidavits,

transcripts of evidence, and written stipulations of fact, if any, timely filed in the

action, show 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.” Summary judgment is

appropriate when the record presented provides:

(1) there is no genuine issue of material fact; (2) the moving party is entitled to judgment as a matter of law; and (3) reasonable minds can come to but one conclusion and that conclusion is adverse to the nonmoving party, said party being entitled to have the evidence construed most strongly in his or her favor.

Bohan v. McDonald Hopkins, L.L.C., 8th Dist. Cuyahoga No. 110060, 2021-Ohio-

4131, ¶ 19, citing Horton v. Harwick Chem. Corp., 73 Ohio St.3d 679, 653 N.E.2d

1196 (1995), paragraph three of the syllabus; Zivich v. Mentor Soccer Club, 82 Ohio

St.3d 367, 696 N.E.2d 201 (1998). “The party moving for summary judgment bears

the burden of demonstrating that no material issues of fact exist for trial.” Edvon v.

Morales, 8th Dist. Cuyahoga No. 106448, 2018-Ohio-5171, ¶ 17, citing Dresher v.

Burt, 75 Ohio St.3d 280, 292, 662 N.E.2d 264 (1996). If the party moving for

summary judgment has the initial burden, then the nonmoving party has the burden to set forth specific facts that there remain genuine issues of material fact that would

preclude summary judgment. Id.

A trial court’s determination of matters of

law in a declaratory judgment action is reviewed under a de novo standard of

review. Brown v. Brown, 2017-Ohio-8938, 102 N.E.3d 72, ¶ 20 (3d Dist.).

Meehan v. Meehan, 2023-Ohio-2772, 222 N.E.3d 112, ¶ 11 (8th Dist.) However,

Warthog sought the remedy of specific performance in both its claim for breach of

contract and its claim for declaratory judgment. A trial court’s grant of summary

judgment as to equitable relief is reviewed on appeal for an abuse of discretion. Fry

v. Speelman, 9th Dist. Wayne No. 18AP0012, 2019-Ohio-585, ¶ 18; Checkers Pub,

Inc. v. Sofios, 2016-Ohio-6963, 71 N.E.3d 731, ¶ 20 (6th Dist.).

Warthog Breached the Purchase Agreement

In the first and second assignments of error, Warthog argues it did not

breach the purchase agreement and, as such, the trial court erred in ruling upon the

motions for summary judgment. In the third amended complaint, Warthog alleged

Sellers breached the purchase agreement, sought a declaratory judgment that the

purchase agreement was valid and enforceable, and sought specific performance of

the purchase agreement.

In a declaratory judgment action, R.C. 2721.03 and 2721.04 provide that a party to a written contract is entitled to have the construction and validity of that contract determined by a court and the party may obtain a declaration of rights, status, or other legal relations under it. Drs. Kristal & Forche, D.D.S., Inc. v. Erkis, 10th Dist. Franklin No. 09AP-06, 2009-

Ohio-5671, ¶ 18. By seeking declaratory judgment, Warthog asked the trial court to

interpret the terms of the purchase agreement and order specific performance.

In Aultman Hosp. Assn. v. Community Mut. Ins. Co., 46 Ohio St.3d

51, 51, 544 N.E.2d 920 (1989), paragraph one of the syllabus, the Ohio Supreme

Court held that

[i]n interpreting a contract, a court is to give effect to the language in the contract. Where the parties following negotiation make mutual promises which there-after are integrated into an unambiguous contract duly executed by them, courts will not give the contract a construction other than that which the plain language of the contract provides.

Further, the trial court is to give common words in a contract their

ordinary meaning unless “‘some other meaning is clearly evidenced from the face or

overall contents of the instrument.’” Id. at 54, quoting Alexander v. Buckeye Pipe

Line Co., 53 Ohio St.2d 241, 374 N.E. 2d 146 (1978), paragraph two of the syllabus.

Warthog argues that the trial court’s construction of the purchase

agreement was errant because the form used included spaces and boxes for check

marks that would detail how the earnest money was to paid and in what form.

Further, Warthog argues that the payment of earnest money was not a material term

to the contract and that by eventually paying the earnest money, it substantially

complied with the purchase agreement and was entitled to specific performance.

By arguing that there is meaning and intent in the purchase

agreement by the absence of check marks, Warthog asks us to ignore the words in the purchase agreement and interpret words not included. A court is to give

meaning to the plain language in a contract, not the absence of language. Aultman

Hosp. Assn., 46 Ohio St.3d 51, at paragraph two of the syllabus. In this regard, we

find, as did the trial court, that the plain language of the purchase agreement

required the payment of earnest money immediately by stating it “shall be redeemed

immediately upon receipt of a binding agreement.” Moreover, because the payment

of a specific amount of earnest money was included in the purchase agreement, we

are not persuaded by Warthog’s argument the payment of earnest money was not a

material term.

It is undisputed that Warthog did not deposit, or attempt to deposit,

the earnest money immediately upon executing the purchase agreement. Warthog

argues that because it eventually paid the earnest money, it substantially complied

with the purchase agreement. However, by failing to pay the earnest money

immediately, it was in breach of a material term of the purchase agreement.

Accordingly, the trial court properly found that Warthog was in breach of the

purchase agreement. Summary judgment in favor of Sellers, and against Warthog,

as to Warthog’s claim Sellers were in breach of the purchase agreement was properly

entered. And because Warthog breached the contract, Buyers were entitled to

summary judgment as to the validity of their purchase agreement with Sellers.

Warthog sought specific performance of the purchase agreement.

This court has held that specific performance is an equitable remedy and stated: Specific performance is defined as the “remedy of performance of a contract in the specific form in which it was made, or according to the precise terms agreed upon.” Black’s Law Dictionary (5th Ed.1979) 1024. “A decree for the specific performance of a contract is not a matter of right, but of grace, granted on equitable principles, and rests in the court’s sound discretion * * * [A] plaintiff, in order to prevail in an action for specific performance, must show that he was ready, willing, able and eager to perform his obligations.” Green, Inc. v. Smith (1974), 40 Ohio App.2d 30, 39. Courts do not allow the remedy of specific performance where the party requesting it has failed to fulfill any prerequisites of performance under the agreement. Luttrell v. Luttrell (1965), 4 Ohio App.2d 303, 305; D’Amato v. Bentley Consultants (Dec. 22, 1988), Cuyahoga App. No. 54465, unreported.

(Emphasis sic.) Hunting Valley Builders, Inc. v. Women’s Fed. Savs. Bank, 8th

Dist. Cuyahoga No. 57439, 1990 Ohio App. LEXIS 3669, 16-17 (Aug. 23, 1990).

Warthog breached the terms of the purchase agreement. As such, we cannot say the

trial court abused its discretion by granting summary judgment to Sellers on

Warthog’s claims for declaratory judgment and specific performance. Further,

because the trial court found that Warthog was not entitled to declaratory judgment

as to the purchase agreement, the trial court properly granted Buyers’ motion for

summary judgment.

The first, second, third, and fourth assignments of error are overruled.

CONCLUSION

Warthog was in breach of the purchase agreement by not immediately

paying the required earnest money. Because of this, the trial court’s denial of

Warthog’s summary judgment motion and grant of Sellers’ and Buyers’ motions for

summary judgment were proper.

Judgment affirmed. It is ordered that appellees recover of appellant costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate issue out of this court directing the

common pleas court to carry this judgment into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27

of the Rules of Appellate Procedure.

____________________________ MICHELLE J. SHEEHAN, JUDGE

KATHLEEN ANN KEOUGH, A.J., and LISA B. FORBES, J., CONCUR