Kirkwood v. FSD Dev. Corp. , 2012 Ohio 2922 ( 2012 )

[Cite as Kirkwood v. FSD Dev. Corp., 2012-Ohio-2922.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 97371
MILDRED KIRKWOOD
PLAINTIFF-APPELLANT
vs.
FSD DEVELOPMENT CORPORATION
DEFENDANT-APPELLEE
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-704593
BEFORE: Blackmon, A.J., Jones, J., and Keough, J.
RELEASED AND JOURNALIZED: June 28, 2012
ATTORNEY FOR APPELLANT
Joseph A. Pfundstein
29325 Chagrin Blvd., Suite 305
Pepper Pike, Ohio 44122
ATTORNEY FOR APPELLEE
Dennis A. Rotman
1350 Standard Building
1370 Ontario Street
Cleveland, Ohio 44113
PATRICIA ANN BLACKMON, A.J.:
{¶1} Appellant Mildred Kirkwood appeals the trial court’s failure to award
damages in her breach of contract action against FSD Development Corporation (“FSD”)
and assigns the following error for our review:
I. The trial court erred in stating that it was not in a position to award
damages for defendant-appellee’s breach.
{¶2} Having reviewed the record and pertinent law, we affirm the trial court’s
decision. The apposite facts follow.
{¶3} On October 7, 1997, FSD entered into an agreement to purchase land
belonging to Kirkwood and her now deceased husband. Under the terms of the
agreement, FSD was to purchase land located at 5080 Brainard Road in Solon, Ohio, for
the price of $87,500. The land to be purchased consisted of all of permanent parcel
number 951-02-14 (“parcel 14”) and the rear part of parcel number 951-02-15 (“parcel
15”).
{¶4} In addition, the Kirkwoods would retain one acre of parcel 15, specifically
the front portion upon which the home sits, and convey the remainder to FSD. Further,
to complete the conveyance of the rear portion of parcel 15, a lot split was required.
{¶5} However, during the pendency of the transaction, FSD learned that a
mortgage in the amount of $100,000 existed on the subject property. To facilitate the
transfer, FSD paid off the Kirkwoods’ existing mortgage, effectively paying $69,000 for
parcel 14, and retained a mortgage in the amount of $31,000 on parcel 15. Thereafter,
the Kirkwoods conveyed marketable title to parcel 14, began making monthly mortgage
payments to FSD, and sought to obtain the lot split of parcel 15.
{¶6} To effect the transfer, Kirkwood submitted an application to the Solon
Planning Commission to split off 1.26 acres from the rear of parcel 15 and to consolidate
it with parcel 14. Subsequently, FSD brought a foreclosure complaint against Kirkwood
for nonpayment of the mortgage note pertaining to parcel 15, and another complaint for
specific performance to force Kirkwood to obtain the lot split. FSD dismissed the
foreclosure complaint after Kirkwood paid off the mortgage, and also dismissed the
complaint for specific performance.
{¶7} On September 22, 2009, Kirkwood filed suit against FSD for breach of
contract. In the complaint, Kirkwood alleged that FSD breached the contract to purchase
the aforementioned real estate by failing to cooperate in effecting the lot split and
consolidation. In addition, Kirkwood alleged that FSD simply decided it no longer
wanted the property. Kirkwood sought specific performance of the contract or, in the
alternative, judgment in the amount of $30,000.
{¶8} On March 11, 2010, FSD filed a motion for summary judgment, which
Kirkwood opposed. Kirkwood attached an affidavit averring that, despite repeated
assurances from FSD that they would have the plat and survey prepared for the
application to split and consolidate the lots, FSD failed to prepare the documents, and
ultimately indicated that they would not prepare the documents because they no longer
wanted the property.
{¶9} On May 17, 2010, the trial court issued a corrected journal entry granting
summary judgment in favor of FSD, and Kirkwood appealed. In Kirkwood v. FSD Dev.
Corp., 8th Dist. No. 95280, 2011-Ohio-1098, having found that there were genuine issues
of material fact as to whether FSD breached the purchase agreement by failing to
cooperate in obtaining the lot split and consolidation and in deciding that it did not want
the property, this court reversed the trial court’s decision and remanded the case.
{¶10} On August 30, 2011, following our remand, the trial court conducted a
bench trial. At that juncture, Kirkwood abandoned her request for specific performance,
opting to seek only damages based on breach of contract. The evidence presented
established that despite Kirkwood’s willingness to effect the lot split and consolidation,
FSD refused to pay an engineer or surveyor, and effectively stalled the process.
{¶11} At the close of the trial, the court concluded that the evidence established
that FSD had indeed breach the contract, but found that Kirkwood had not presented any
evidence of the fair market value of the property at the time of the breach. The trial court
awarded no damages, and Kirkwood now appeals.
Breach of Contract and Damages
{¶12} In the sole assigned error, Kirkwood argues the trial court erred when it
failed to award damages.
{¶13} Generally, the elements for a breach of contract are that a plaintiff must
demonstrate by a preponderance of the evidence that (1) a contract existed, (2) the
plaintiff fulfilled his obligations, (3) the defendant failed to fulfill his obligations, and (4)
damages resulted from this failure. Anzalaco v. Graber, 8th Dist. Nos. 96761 and 96787,
2012-Ohio-2057, citing Lawrence v. Lorain Cty. Community College, 127 Ohio App.3d
546, 549, 713 N.E.2d 478 (9th Dist.1998).
{¶14} In the instant case, there is no dispute that a contract existed, Kirkwood
fulfilled her obligations, and FSD failed to fulfill its obligations. At trial, Gary Hoffman,
the FSD’s founder’s son was queried about the contract as follows:
Q. Who made the decision on behalf of FSD that they no longer wanted
the property?
A. Robert Hoffman. He specifically said to me, this contract has been
around since 1997. Dad, I told you there is going to be costs here.
And he says, he said, I can’t deal with this any more. We’ve been
doing this for seven years already. Tr. 54.
{¶15} Therefore, the evidence clearly established that FSD breached the
contract. However, damages is the only element missing for Kirkwood to prevail on her
breach of contract claim. The trial court’s opinion stated in pertinent part as follows:
* * * The problem this court faces, however, is that Mrs. Kirkwood
presented no evidence of fair market value of the property at the time
of FSD’s breach. Nor did Mrs. Kirkwood present an alternative
valuation of the property, except for the agreed-upon price of $18,500
for 1.26 acre portion of Parcel 15.
{¶16} The proper measure of damages for a buyer’s breach of contract for the
sale of real property is the difference between the original contract price and the fair
market value of the property at the time of the breach. Snider-Cannata Interests, L.L.C. v.
Ruper, 8th Dist. No. 93401, 2010-Ohio-1927, citing Roesch v. Bray, 46 Ohio App.3d 49,
50, 545 N.E.2d 1301 (6th Dist.1988).
{¶17} Here, as the trial court stated above, Kirkwood presented no evidence of the
fair market value of the property at the time of FSD’s breach and did not present an
alternative valuation of the property. Had Kirkwood presented some evidence of what
the property was worth in 2004, when the breach occurred, the trial court would have
been in a position to determine the measure of damages. Kirkwood failed to do this. As
such, the trial court was unable to determine Kirkwood’s damages.
{¶18} Nonetheless, Kirkwood argues she expended approximately $25,000 in
additional mortgage interest payments as a result of the breach. However, Ohio courts
have held that “a seller is not entitled to damages to compensate for additional property
taxes, interest, utilities, and home maintenance expenses following a buyer’s breach of a
real estate contract.” Hiatt v. Giles, 2d Dist. No. 1662, 2005-Ohio-6536, ¶ 41, citing
Hussey v. Daum, 2d Dist. No. 15434, 1996 WL 220897 (May 3, 1996); Kauder v.
Thompson, 2d Dist. No. 9265, 1986 WL 5424 (May 9, 1986).
{¶19} In light of the above, despite the clear breach, the trial court was unable to
award damages. Accordingly, we overrule the sole assigned error.
{¶20} Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said 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.
PATRICIA ANN BLACKMON, ADMINISTRATIVE JUDGE
LARRY A. JONES, SR., J., and
KATHLEEN ANN KEOUGH, J., CONCUR