2019 Ohio 4597
Ohio Ct. App.2019Background:
- Perdue (vendor) and Jamison (vendee) executed a land installment contract for a Dayton property (contract dated Jan. 2, 2018).
- Contract required the vendee to pay all real estate taxes and to maintain liability insurance benefitting both parties; utilities were not required under the amended contract.
- Perdue served a "Notice of Payment Past Due" dated June 19, 2018 giving 14 days to cure for unpaid taxes, missed installments, and failure to provide proof of liability insurance; it also included a "notice to leave" the premises.
- Jamison admitted taxes were not current as of June 19, 2018, later made partial tax payments in September 2018, and produced a renter’s insurance policy that did not name Perdue. She also testified Perdue returned several of her installment payments.
- The municipal court denied forfeiture and restitution, invoking the equitable doctrine of unclean hands based on Jamison’s testimony about a prior intimate/business relationship and Perdue’s conduct; Perdue appealed.
- The appellate court reversed, holding Jamison breached the contract by failing to pay taxes and by failing to provide the required liability insurance; utilities were not contractually required and thus not a basis for forfeiture.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether vendee’s defaults allow vendor to enforce forfeiture of land contract | Perdue: Jamison failed to cure defaults (real estate taxes, insurance, other fees) within notice periods; unpaid taxes alone justify forfeiture | Jamison: Disputes proper service/notice under statute; contends she was not informed of taxes, cured delinquencies later, and defaults were minor or excused | Court: Reversed trial court; unpaid real estate taxes and failure to provide required liability insurance breached contract and supported forfeiture; utilities not required by contract, so not a basis |
| Whether vendor’s conduct (returning payments, alleged harassment) bars recovery under unclean hands | Perdue: Unclean-hands defense not proven and inapplicable to this legal remedy | Jamison: Perdue acted in bad faith, returned payments, and used suit to harass/retaliate | Court: Trial court mischaracterized the record; equitable unclean-hands doctrine did not bar Perdue’s legal remedy here |
| Whether the notice complied with statutory/formal requirements for initiating forfeiture (R.C. 5313.05–.06) | Perdue: Notice sufficiently identified contract default (taxes, insurance) and provided required cure period | Jamison: Contesting adequacy of notice/service and lack of prior tax statements | Court: Treated notice as sufficient to support forfeiture on tax and insurance defaults (statutory notice requirements met in substance as to identified defaults) |
Key Cases Cited
- Kossoudji v. Stamps, 65 N.E.3d 815 (Ohio Ct. App.) (describing R.C. Chapter 5313 as consumer-protective and limiting vendor remedies on forfeiture)
- Keene v. Schnetz, 468 N.E.2d 125 (Ohio Ct. App.) (statutes R.C. 5313.05 and 5313.06 must be read in pari materia for forfeiture analysis)
- Alexander v. Buckeye Pipe Line Co., 374 N.E.2d 146 (Ohio 1978) (construction of a written contract is a question of law for the court)
- Jackson v. Internatl. Fiber, 863 N.E.2d 189 (Ohio Ct. App.) (de novo review applies to contract interpretation on appeal)
- Discover Bank v. Swartz, 51 N.E.3d 694 (Ohio Ct. App.) (discussing de novo standard for reviewing contract interpretation)
- Marinaro v. Major Indoor Soccer League, 610 N.E.2d 450 (Ohio Ct. App.) (describing the clean-hands equitable defense and its scope)
- Jamestown Village Condo. Owners Assn. v. Market Media Research, Inc., 645 N.E.2d 1265 (Ohio Ct. App.) (equitable defenses do not apply where party seeks strictly legal remedies)