DeFoe v. Schoen Builders, L.L.C.
2019 Ohio 2255
Ohio Ct. App.2019Background
- John and Jodie DeFoe contracted with Schoen Builders, LLC (SB) on Jan. 18, 2013 to build a custom home; contract price stated $623,317; they moved in April 2014 and paid > $1.3M overall, with final payment on May 9, 2014.
- Appellants sued in 2015 and filed a nine-count amended complaint alleging breach of contract, rescission, negligence, breach of warranty, CSPA and various fraud claims; appellees moved for summary judgment on all counts.
- Trial court granted summary judgment for appellees on Counts 1–5, 7–8 (contract, rescission, negligence, warranties, fraud claims) but denied as to CSPA and NIED; later CSPA was dismissed for lack of standing and NIED was voluntarily dismissed by plaintiffs (but that dismissal was later held improper).
- Appellants appealed the Feb. 20, 2018 summary-judgment order; the Sixth District considered whether the order was final and then reviewed the merits de novo.
- Key factual dispute central to several claims: contract paragraph 5 (possession/occupancy before final payment equals acceptance and limits warranty obligations) and whether latent defects, negligent construction, or fraudulent statements exist.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Jurisdiction / final appealable order | DeFoe says the Feb. 20, 2018 summary-judgment entry is appealable; Civ.R. 54(B) was entered later. | Schoen argues appeal is not from a final order because other claims remained and voluntary dismissal cannot manufacture finality. | Court found the Feb. 20 order affected substantial rights and, with Civ.R. 54(B) language entered later, the appeal was properly before the court. |
| 2. Breach of contract & express warranty (para. 5 possession clause) | DeFoe: para. 5 ambiguous or unenforceable; moving in before final payment did not waive claims for latent defects; R.C. Chapter 4722 limits such clauses. | SB: para. 5 unambiguous — occupancy before payment equals acceptance and relieves contractor of warranty obligations; Kott controls. | Court: para. 5 is unambiguous as to "possession"; DeFoes took possession before final payment, so paragraph 5 bars warranty remedies under paragraph 12. Kott remains valid post-R.C. 4722. Result: summary judgment affirmed in part (limited to precluding paragraph-12 warranty remedies). |
| 3. Negligence & implied workmanlike-warranty claims | DeFoe: engineering report and testimony create genuine issues of fact that SB breached duties/constructed unworkmanlike. | SB: para. 5/acceptance bars further obligations and thus bars negligence/workmanship claims. | Court: SB failed to show entitlement to judgment as a matter of law on negligence and implied-warranty/workmanlike claims; genuine issues of material fact remain. Summary judgment reversed as to Counts 3 and 5. |
| 4. Rescission and fraud (fraudulent misrepresentation/fraud) | DeFoe: defects, misrepresentations about project management, selections coordinator, quality, and overcharging support rescission and fraud claims. | Schoen: plaintiffs did not justifiably rely on alleged statements for contracting; many allegations unproven or speculative. | Court: genuine issues of material fact exist on fraud claims (Counts 7–8); rescission (Count 2) cannot be dismissed because related contract/negligence claims remain. Summary judgment reversed as to Counts 2, 7, and 8. |
Key Cases Cited
- Pattison v. W.W. Grainger, Inc., 120 Ohio St.3d 142, 2008-Ohio-5276, 897 N.E.2d 126 (Ohio 2008) (a plaintiff may not create finality by voluntarily dismissing remaining claims after partial adjudication).
- General Acc. Ins. Co. v. Ins. Co. of N. Am., 44 Ohio St.3d 17, 540 N.E.2d 266 (Ohio 1989) (appellate court jurisdiction requires a final order under R.C. 2505.02).
- Chef Italiano Corp. v. Kent State Univ., 44 Ohio St.3d 86, 541 N.E.2d 64 (Ohio 1989) (finality requires both R.C. 2505.02 and, when applicable, Civ.R. 54(B)).
- Kott v. Gleneagles Prof’l Builders & Remodelers, Inc., 197 Ohio App.3d 699, 2012-Ohio-287, 968 N.E.2d 593 (6th Dist.) (occupancy prior to full payment may constitute acceptance and relieve contractor of further obligation under contract terms).
- Velotta v. Leo Petronzio Landscaping, Inc., 69 Ohio St.2d 376, 433 N.E.2d 147 (Ohio 1982) (distinguishes claims based on already-constructed work from claims arising from future-construction contracts).
- Kishmarton v. William Bailey Constr., Inc., 93 Ohio St.3d 226, 754 N.E.2d 785 (Ohio 2001) (where a sale includes future construction, the implied duty to build in a workmanlike manner arises from the contract).