Franklin Mgt. Industries, Inc. v. Far More Properties, Inc.
25 N.E.3d 416
Ohio Ct. App.2014Background
- FMI obtained a $1.1 million arbitration award against Motorcars and related entities in 2009.
- The parties settled by a three-installment payment plan: $350,000 due no later than Jan 5, 2012; Jan 4, 2013; and Jan 4, 2014.
- The settlement contract stated that if any payment was not received by 5:00 p.m. on the due date, FMI could file consent judgments and forego further actions; otherwise FMI would take no action on the judgments.
- 2012 and 2013 payments were timely; for the 2014 payment, the bank delivered a certified check on Jan 3, 2014 but it was not delivered until Jan 6, 2014.
- FMI sought to journalize a consent judgment under Exhibit D; Motorcars moved to compel FMI to file a satisfaction of judgment.
- The trial court held there was reasonable compliance despite the missed deadline and denied journalization while granting the motion to compel satisfaction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the 2014 deadline absolute for payment? | FMI argues the late delivery by a third party should be excused and the payment fulfilled the obligation. | Motorcars contends the deadline was absolute; a late payment breaches the agreement and triggers the consent judgments. | Deadline is absolute; time was of the essence. |
| Did the trial court improperly apply equity to enforce contract terms? | FMI contends the court should enforce the express terms without equity smoothing. | Motorcars argues equitable considerations can justify non-strict enforcement. | Court erred; express terms control and time is of the essence. |
| Did the court correctly resolve FMI's request to journalize the consent judgment and vacate the existing satisfaction order? | FMI sought entry of Exhibit D consent judgment. | Motorcars urged satisfaction of judgment be entered. | Reversed and remanded to journalize the consent judgment; the satisfaction order vacated. |
Key Cases Cited
- Lake Ridge Academy v. Carney, 66 Ohio St.3d 376 (Ohio 1993) (time is of the essence when contract specifies dates and deadlines)
- Master Builders, Inc. v. Hardcore Composites, 2006-Ohio-3729 (8th Dist. Cuyahoga) (upholds express terms when non-payment voids settlement)
- Saunders v. Mortensen, 101 Ohio St.3d 86 (2004-Ohio-24) (contract construction is a matter of law)
- Brown v. Brown, 90 Ohio App.3d 781 (11th Dist. 1993) (time of performance generally not of the essence unless specified)