Guaranteed Constr. Servs., L.L.C. v. Grand Communities, Ltd.
2017 Ohio 9288
| Ohio Ct. App. | 2017Background
- Plaintiffs (Real Estate Ltd. and Northgate, affiliated entities) held purchase-option contracts on two adjoining parcels: the larger "Price" property (about 183 acres; $106,000 earnest money) and the smaller "Forman" property (about 28 acres; $10,000 earnest money).
- Plaintiffs entered a March 20, 2015 development agreement with Grand (and its GP Fischer Dev. Co.): Grand would pay $35,000 earnest on the Price property, Northgate would reimburse Grand $35,000 at execution, and if Grand closed on the Price property by Dec. 1, 2015 Grand would reimburse Northgate $106,000 plus the $35,000 (total $141,000). The agreement stated modifications must be written.
- On April 1, 2015 plaintiffs assigned the Forman option to Grand via an assignment agreement containing paragraph 4: if Grand did not close on the Price property, Grand "shall assign this Agreement back to [Real Estate Ltd.]"; the assignment document otherwise effected only the Forman option.
- Grand later took an option on the Price property, paid $35,000 to Prices, but did not close by the deadline. Grand assigned the Forman option back to plaintiffs on December 9, 2015 pursuant to paragraph 4. Plaintiffs sued claiming Grand breached by not assigning the Price option back and asserted promissory estoppel and unjust enrichment.
- Grand counterclaimed seeking $35,000 reimbursement from Northgate under the March 20, 2015 agreement. The trial court granted summary judgment to Grand on plaintiffs' claims and on Grand's counterclaim for $35,000 plus interest. Plaintiffs appealed; the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether April 1, 2015 assignment ¶4 obligated Grand to reassign the Price option to Real Estate Ltd. if Grand did not close | ¶4 should be read to require reassignment of the Price option back to plaintiffs so they could protect the $106,000 investment | ¶4 is part of the April 1 assignment that governs only the Forman option; read in context ¶4 requires Grand to assign the Forman option back if Grand did not close on the Price property | Court held the contract language is clear: ¶4 required reassignment of the Forman option back to Real Estate Ltd., not the Price option; no genuine issue of material fact on breach |
| Whether plaintiffs can pursue equitable claims (promissory estoppel / unjust enrichment) to recover or avoid contract terms | Plaintiffs relied on alleged oral promises and conduct to create fact issues and equitable relief | Written contracts are clear and unambiguous and bar equitable recovery on the same subject; parol-evidence clause forbids oral modification | Court held equitable claims fail: promissory estoppel not argued on appeal; unjust enrichment barred where an express written agreement covers the subject |
| Whether Northgate owed Grand $35,000 under the March 20, 2015 agreement and whether defendants waived that right | Plaintiffs claimed Grand orally agreed to remain responsible for the $35,000 during negotiations and waived demand | Contract ¶2 required Northgate to reimburse Grand $35,000 upon execution; the contract bars oral modifications and no valid waiver/ written modification exists | Court held Northgate was obligated to reimburse $35,000; no factual dispute that would defeat judgment on the counterclaim |
Key Cases Cited
- Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64 (summary judgment standard)
- Dresher v. Burt, 75 Ohio St.3d 280 (party moving for summary judgment must identify record showing absence of genuine issue)
- Henkle v. Henkle, 75 Ohio App.3d 732 (nonmoving party must produce evidentiary materials to show genuine issue)
- Kelly v. Med. Life Ins. Co., 31 Ohio St.3d 130 (when contract ambiguous, courts may consider extrinsic evidence)
- Lutz v. Chesapeake Appalachia, L.L.C., 148 Ohio St.3d 524 (examples of admissible extrinsic evidence to interpret contracts)
- Hope Academy Broadway Campus v. White Hat Mgt., L.L.C., 145 Ohio St.3d 29 (plain and ordinary meaning rule for contract terms)
- Marusa v. Erie Ins. Co., 136 Ohio St.3d 118 (contract to be construed to give effect to all provisions)
- Sunoco, Inc. (R&M) v. Toledo Edison Co., 129 Ohio St.3d 397 (definition of unambiguous contract language)
- Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216 (contract ambiguity standards)
- Dugan & Meyers Constr. Co. v. Ohio Dept. of Adm. Servs., 113 Ohio St.3d 226 (courts may not rewrite clear contract provisions)
- Turner v. Turner, 67 Ohio St.3d 337 (credibility determinations improper basis for summary judgment)