2014 Ohio 5125
Ohio Ct. App.2014Background
- Hog Heaven (lessee) and M & M West High Avenue, LLC (lessor) entered a 2002 lease with an option to purchase the premises. The option required appraisal procedures to fix purchase price.
- If the two MAI appraisals differed by more than 10%, the two appraisers were to select a third independent MAI appraiser whose valuation would be the purchase price; the appraisal process had to be completed within 60 days.
- In November 2011 Hog Heaven exercised the option; each party obtained an appraisal and the two appraisals were not within 10%, so the two appraisers were required to select a third appraiser but failed to do so within the 60‑day period.
- Hog Heaven attempted to facilitate selection; M & M rejected Hog Heaven’s proposed selection method. Meanwhile Hog Heaven continued to pay base and percentage (overage) rent that M & M collected.
- Hog Heaven sued for specific performance, declaratory relief, unjust enrichment, and breach of contract; after discovery Hog Heaven moved for summary judgment. The trial court struck M & M’s late dispositive motion, granted Hog Heaven summary judgment, ordered specific performance (directing the appraisers to select the third appraiser) and credited Hog Heaven for rent/overage paid from Jan 3, 2012 until receipt of the third appraisal.
- M & M appealed, raising three assignments challenging (1) the grant of summary judgment and specific performance; (2) existence of genuine issues of fact regarding breach; and (3) the rent credit against the purchase price.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether specific performance directing selection of the third appraiser was proper | Hog Heaven: required to effectuate parties’ agreed appraisal procedure and complete sale | M & M: failure to select third appraiser was not its fault; appraisers reached an impasse | Court affirmed specific performance; ordering selection was within equity to effectuate contract intent |
| Whether genuine factual dispute existed on breach preventing summary judgment | Hog Heaven: no factual dispute; M & M obstructed completion of agreed appraisal process | M & M: there were factual issues about fault for impasse | Court held no reversible error; summary judgment and specific performance appropriate |
| Whether the trial court could grant Hog Heaven a credit for base and overage rent against purchase price | Hog Heaven: entitled to be put in position as if sale had occurred on agreed date, so credit for rents paid during delay | M & M: challenged setoff of rents against purchase price | Court held the credit was proper to restore purchaser’s position and did not abuse discretion |
| Whether any alleged erroneous finding of breach invalidated remedy | Hog Heaven: remedy stands independent of explicit breach finding | M & M: contends court erred in finding breach | Court treated any error on breach finding as harmless because specific performance was not predicated solely on breach |
Key Cases Cited
- Smiddy v. The Wedding Party, Inc., 30 Ohio St.3d 35 (procedural standard for appellate review of summary judgment)
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (de novo review of summary judgment)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden shifting principles)
- Dresher v. Burt, 75 Ohio St.3d 280 (moving party's initial burden in Ohio summary judgment practice)
- Temple v. Wean United, Inc., 50 Ohio St.2d 317 (Civ.R. 56 standard quote)
- Williams v. First United Church of Christ, 37 Ohio St.2d 150 (viewing record in light most favorable to nonmovant)
- Sandusky Properties v. Aveni, 15 Ohio St.3d 273 (purchaser entitled to be placed in position had sale occurred on agreed date)