2014 Ohio 5678
Ohio Ct. App.2014Background
- Harstone (M & T Electric) contracted with Libby (general contractor) to perform electrical work at 940 E. 72nd St.; initial proposal quoted $30,575 and required written change orders for extra work.
- Harstone submitted an initial invoice for $28,129 (Nov. 20, 2007) and a later invoice for additional labor/materials in the amount of $23,384 (Dec. 26, 2007); work was completed by Jan. 29, 2008.
- On Feb. 25, 2008, Harstone accepted a check from property owner LLLJ for $28,129 with “PAID IN FULL” noted in the memo line, and Harstone’s principal signed a notarized waiver of lien dated that day.
- After cashing the check, Harstone filed a mechanic’s lien for the unpaid $23,384 and sued LLLJ and Libby to foreclose the lien and for breach of contract and unjust enrichment.
- The magistrate found accord and satisfaction and that the waiver discharged Harstone’s lien rights; the trial court adopted the magistrate’s decision. Harstone appealed; the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether acceptance of the check plus memo “PAID IN FULL” created accord and satisfaction of disputed debt | Harstone: payment was partial/progress payment; no meeting of minds on second invoice | LLLJ: check was tendered in good faith as full satisfaction of the claim and was conspicuously marked | Court: accord and satisfaction established — check issued after both invoices and work was completed, memo was conspicuous, and check was negotiated without reservation |
| Whether a bona fide dispute existed about the debt when payment was tendered | Harstone: no bona fide dispute; owner didn’t know of second invoice | LLLJ: second invoice preceded payment; parties disputed amount for extra work | Court: competent, credible evidence supported existence of dispute; factual determination for trial court upheld |
| Whether the signed waiver of lien released claims for the unpaid second invoice | Harstone: waiver tied only to first invoice; no consideration for second invoice | LLLJ: waiver language and consideration (the check) covered all work furnished prior to waiver date | Court: waiver unambiguous and covered “any and all liens … furnished to date hereof”; since work was completed before waiver date, lien rights were released |
| Whether Harstone’s unjust enrichment claim survived given an express contract | Harstone: sought recovery for unpaid extra work | LLLJ: express contract existed and waiver/accord bars recovery | Court: unjust enrichment unavailable where express contract governs and claim was discharged by accord/waiver |
Key Cases Cited
- C.E. Morris Co. v. Foley Constr. Co., 54 Ohio St.2d 279 (Ohio 1978) (weight-of-evidence standard for civil judgments)
- Seasons Coal Co. v. Cleveland, 10 Ohio St.3d 77 (Ohio 1984) (appellate review not a substitute for trial court credibility determinations)
- Allen v. R.G. Industrial Supply Co., 66 Ohio St.3d 229 (Ohio 1993) (definition of accord and satisfaction)
- Univ. Hosp. of Cleveland, Inc. v. Lynch, 96 Ohio St.3d 118 (Ohio 2002) (unjust enrichment not available when an express contract governs)
- BNI Telecommunications, Inc. v. Cybetrnet Communications, Inc., 118 Ohio App.3d 851 (Ohio Ct. App.) (accord and satisfaction by instrument with conspicuous statement)