2020 Ohio 826
Ohio Ct. App.2020Background
- In March 2017 the Stifflers (sellers/trustees) sold 216 W. Wenger Rd. to F.I.O.P. Associates, LLC under a land-installment contract with a $105,000 purchase price. Closing costs reduced the principal to $103,810.75.
- Monthly payment was $908.83, allocated in the contract: first to unpaid interest, next to taxes/assessments/insurance, then to repairs, and any remainder to principal. The contract included an escrow-adjustment clause for taxes and insurance only.
- FIOP paid monthly from March 2017 through March 2019; payments were later increased (to $1,198) after the sellers’ mortgage rate changes and payments reflecting that increase were tendered in Jan–Mar 2019. FIOP stopped paying thereafter.
- Sellers sent a written default/termination notice (May 15, 2019) after missed April–May 2019 payments; FIOP did not cure or vacate. Sellers sought restitution (forfeiture) and damages; the magistrate and trial court cancelled the contract and restored possession to the Trust.
- Central legal dispute on appeal: whether payments allocable to interest, taxes, insurance, or other non‑principal items count toward the statutory 20% threshold in R.C. 5313.07 (which, if met, requires foreclosure rather than forfeiture).
Issues
| Issue | Stiffler's Argument | FIOP's Argument | Held |
|---|---|---|---|
| Whether payments allocated to interest, taxes, insurance, or other non‑principal items count toward the R.C. 5313.07 20% “purchase price” threshold | Only payments applied to purchase‑price (principal) count; contract allocations control | All payments made by the buyer (aggregate sum) should count toward the 20% statutory threshold regardless of contractual allocation | Payments allocable to interest, taxes, insurance, etc., are not included in the 20% calculation unless the contract expressly provides otherwise; trial court affirmed |
| Whether FIOP breached the contract as of April 2019 (entitling seller to terminate/forfeit) | Stifflers: FIOP failed to tender required monthly payments (April–July 2019), so breach and rightful forfeiture | FIOP: earlier overpayments/adjusted payments should have kept account current | Court held FIOP breached by failing to tender required monthly payments and affirmed forfeiture/restoration of possession |
Key Cases Cited
- Smith v. Blackburn, 31 Ohio App.3d 251 (1987) (construed “purchase price” as contract face amount; payments allocable to insurance, taxes, or interest do not count toward 20% absent express contract language)
- Kossoudji v. Stamps, 65 N.E.3d 815 (Ohio Ct. App. 2016) (vendee retains only equitable title until full performance)
- Sec. Bank v. Hawk, 35 Ohio St.3d 1 (1988) (failure to tender contractually required payments constitutes breach)
- Becker v. Direct Energy, LP, 112 N.E.3d 978 (Ohio Ct. App. 2018) (ambiguities in contracts construed against the drafter)