Krlich v. Clemente
2017 Ohio 5633
| Ohio Ct. App. | 2017Background
- Plaintiff Garrick Krlich claimed an oral 1985 agreement with adjacent owner Frank Clemente: Krlich would maintain a vacant lot in exchange for a right of first refusal to buy the lot, and allegedly reimbursement for his services if the right was not exercised.
- Krlich performed maintenance (mowing, tree trimming, drainage work) and later filed a mechanic’s lien for unpaid labor/materials after Frank proposed selling the lot to his nephew John Clemente Jr. and wife Marlene.
- Frank Clemente died during litigation; no claim was filed against his estate and his estate was not substituted as a party.
- Trial court found the oral agreement unenforceable under Ohio’s Statute of Frauds (R.C. 1335.05) and denied foreclosure of the mechanic’s lien.
- Krlich appealed, arguing the contract was divisible so the reimbursement component (payment for services) was enforceable despite the unenforceability of the right-of-first-refusal provision.
- This Court affirmed the trial court; a concurrence would have affirmed on grounds that the estate was not substituted under Civ.R. 25, while a dissent would have reversed and remanded to decide whether the reimbursement alternative could support the lien.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the oral agreement is enforceable despite Statute of Frauds because it is divisible | Krlich: contract is divisible; even if right-of-first-refusal is unenforceable, the separate reimbursement promise is enforceable and supports a mechanic’s lien | Clementes: the oral agreement is within Statute of Frauds and unenforceable; lien based on it fails | Court: contract is not divisible; parts were interdependent and consideration was single and entire, so statute bars enforcement |
| Whether mechanic’s lien foreclosure requires the decedent-contracting owner or his estate to be a party after owner’s death | Krlich: foreclosure can proceed in rem against current owner/property without naming prior owner or estate | Clementes: underlying contract was with Frank and his presence/estate is necessary to establish contract and amount | Majority: did not decide on substitution issue (affirmed on Statute of Frauds); concurrence: would affirm because estate was not substituted under Civ.R. 25 and claim against estate was not pursued |
| Whether the reimbursement alternative constitutes a contract for improvement that avoids Statute of Frauds | Krlich: reimbursement promise is distinct, does not convey realty and can be performed within one year, so not barred | Clementes: reimbursement was part of the same agreement tied to the right-of-first-refusal, thus within the Statute of Frauds | Court: disagreed with divisibility — reimbursement was interdependent with right-of-first-refusal; unenforceable under statute |
| Whether trial court’s credibility findings should be disturbed | Krlich: testimony and submissions showed contract terms; court should have enforced lien on reimbursement theory | Clementes: trial court reasonably found conflicting testimony and rejected Krlich’s claims | Court: appellate court defers to trial court’s credibility findings and finds no error in its conclusions |
Key Cases Cited
- North Coast Cookies, Inc. v. Sweet Temptations, Inc., 16 Ohio App.3d 342 (Eighth Dist. 1984) (explains Statute of Frauds purpose and requirement of a signed memorandum for enforcement of certain real-estate-related agreements)
- DePugh v. Mead Corp., 79 Ohio App.3d 503 (Fourth Dist. 1992) (summarizes doctrine of divisibility and when a contract is divisible versus entire)
- Romito Bros. Elec. Constr. Co. v. Frank A. Flannery, Inc., 40 Ohio St.2d 79 (Ohio 1974) (mechanic’s lien arises by statute and requires a contract, express or implied)
- Mahoning Park Co. v. Warren Home Development Co., 109 Ohio St. (Ohio 1924) (historical statement that a mechanic’s lien is created by statute and predicates include a contract with the owner or authorized agent)
- Jaric, Inc. v. Chakroff, 63 Ohio App.3d 506 (Tenth Dist. 1991) (distinguishes remedies on the debt from remedy upon mechanic’s lien; both may be pursued)
- Janell, Inc. v. Woods, 70 Ohio App.2d 216 (First Dist. 1980) (lien enforcement and separate contract action are distinct remedies)