642 N.E.2d 1124 | Ohio Ct. App. | 1994
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *501 Plaintiffs, Arbor Village Condominium Association, David Morosky, Ronald L. Smith, David Yoder, Carol Kelly, Carla Pomeroy, James and Jacqueline Goldson, Nick Colley, Michael Martinelli, Athena Jones, John Stomps, Helen M. VanHeyde, Clyde Gaston and Jim Miller appeal from a judgment of the Franklin County Court of Common Pleas granting summary judgment for defendants, Arbor Village Limited, Larry Frazier, Max Holzer, Bernard Fultz, Edward Bacome, Real Property Management, Inc., and Dwight Penn. Plaintiffs assert the following eight assignments of error on appeal: *502
"[I.] The trial court erred in not adhering to the stringent standards set forth in Ohio Civil Rule 56.
"[II.] The trial court erred in holding that appellants Smith, Morosky, Yoder and Kelly's claims under R.C. Chapter 5311 were time-barred by holding that their cause of action accrued in 1984.
"[III.] The trial court erred in holding that the appellant Arbor Village Condominium Association had no standing to pursue a cause of action under R.C. §
"[IV.] The trial court erred in holding that the appellant association lacked standing to pursue the fraudulent concealment and fraudulent misrepresentation claims.
"[V.] The trial court erred in granting summary judgment as it related to plaintiffs' claims for fraudulent concealment.
"[VI.] The trial court erred in granting appellees' motion for summary judgment as it relates to the claims against Mr. Fultz.
"[VII.] The trial court erred in granting appellees' motion for summary judgment as it relates to the claims against Mr. Penn.
"[VIII.] The trial court erred in holding that privity was a requirement for the claims of appellants Jim and Jackie Goldson, Pomeroy, Van Hyde, Jones, Stomps and Colley."
In 1979, defendant Arbor Village Ltd., an Ohio limited partnership, was formed to convert existing apartments located at 4991 and 5003 Arbor Village Drive into a condominium development and then sell them. Defendants Max Holzer, Larry Frazier and Bernard Fultz are or have been general partners of Arbor Village, Ltd. Defendant Real Property Management, Inc., the management company responsible for the management of Arbor Village, is owned by defendant Dwight Penn. Defendant Edward Bacome represented Arbor Village, Ltd. in negotiating the sale of sixty-five Arbor Village condominium units to two groups of investors assembled by plaintiff Ronald Smith.
Arbor Village consists of eighty-four units in two separate buildings, 4991 and 5003 Arbor Village Drive. Both buildings were constructed at the same time and in the same manner in 1964. In 1983, repairs were made to the pipes carrying hot water to the units in the 4991 Arbor Village Drive building. These repairs were made by a plumbing company, J.A. Myers, at a cost of $9,000, and involved replumbing the water piping system so that the pipes would be relocated above ground.
In June 1984, plaintiffs Smith, Morosky, Yoder and Kelly purchased thirty Arbor Village condominium units from Arbor Village, Ltd. All of the units *503 purchased in 1984 were located in the 5003 Arbor Village Drive building. In their purchase contracts, each investor acknowledged that they "have inspected the Unit and the Common Areas and are buying the Unit and its interest in the Common Areas in their present condition without warranty or representation of any kind, except as expressly provided therein." The sale of these units closed in August 1984.
Prior to the 1984 sale, Arbor Village, Ltd. provided a disclosure statement to the investors as required by R.C. Chapter 5311. This statement was prepared and distributed by defendant Bacome and represented, among other things, that the "water piping for heating system" was eighteen years old, in "satisfactory" condition, with a remaining useful life of eighteen years. The disclosure statement did not contain any statements regarding the 1983 repairs made to 4991 Arbor Village Drive.
Thereafter, in 1985, plaintiff Smith and a second group of investors decided to purchase the remaining thirty-five condominium units owned by Arbor Village, Ltd. This second group of investors consisted of plaintiffs Smith, Morosky, Yoder, Martinelli and Gaston. Unlike plaintiffs' 1984 purchase, the units purchased in 1985 were located in both the 4991 and 5003 Arbor Village Drive buildings. The 1985 purchase contracts contained language identical to that of the 1984 purchase contracts with regard to inspection and purchasing the units in their present condition. The 1985 disclosure statement prepared and distributed by defendant Bacome on behalf of Arbor Village, Ltd. represented, among other things, that the "water piping for heating system" was twenty-one years old, in "satisfactory" condition, with an "indeterminate" remaining useful life. The sale of these units closed in October 1985.
The remaining individual plaintiffs, James and Jacqueline Goldson, Pomeroy, Colley, Jones, Stomps, Miller and VanHeyde each purchased their units from someone other than Arbor Village, Ltd. Plaintiff Arbor Village Condominium Association is comprised of all owners of units in Arbor Village; however, no units are owned by Arbor Village Condominium Association.
Plaintiffs became aware of a problem in the heating and domestic hot water system in 1988. Plaintiffs filed a complaint in the Franklin County Court of Common Pleas on October 17, 1990, asserting claims for violation of R.C.
Defendants argued in their August 19, 1992 motion for summary judgment that they were entitled to summary judgment on the following grounds: (1) against the individual plaintiffs who purchased their condominium units from someone other than defendants; (2) defendant Penn did not sell or represent a seller in *504
either the 1984 or 1985 sale of the condominium units; (3) defendant Fultz was liable only as a general partner of Arbor Village, Ltd., if and when judgment was rendered against the limited partnership and the limited partnership's assets were insufficient to satisfy the judgment; (4) Arbor Village Condominium Association was not a purchaser of a condominium ownership interest; (5) the R.C.
In its July 16, 1993 decision, the trial court sustained defendants' motion as to all claims except plaintiffs' claim for fraudulent misrepresentation. The court's decision was entered on October 1, 1993. On that same date, plaintiffs filed a "Notice of Dismissal Without Prejudice" as to all claims remaining after the court's decision. Plaintiffs have timely appealed the trial court's judgment.
Civ.R. 56(C), which deals with a trial court's examination and disposition of a motion for summary judgment, provides:
"* * * Summary judgment shall be rendered forthwith if the pleading, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence in the pending case, and written stipulations of fact, if any, timely filed in the action, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. No evidence or stipulation may be considered except as stated in this rule. A summary judgment shall not be rendered unless it appears from such evidence or stipulation and only therefrom, that reasonable minds can come to but one conclusion and that conclusion is adverse to the party against whom the motion for summary judgment is made, such party being entitled to have the evidence or stipulation construed most strongly in his favor * * *."
Pursuant to Civ.R. 56(C), a trial court may grant a motion for summary judgment only when there exists no genuine issue of material fact for the trier of fact and the moving party is entitled to summary judgment as a matter of law. Norris v. OhioStd. Oil Co. (1982),
In a motion for summary judgment, the burden of establishing that the material facts are not in dispute and that no genuine issue of fact exists is on the *505
party moving for summary judgment. Mitseff, supra, at 115,
Summary judgment will be granted only after construing the evidence most strongly in favor of the nonmoving party, and only where the nonmoving party fails to establish an essential element to its case and upon which it will bear the burden of production at trial. Celotex, supra, at 322,
Because the contentions raised in the first assignment of error will be resolved by our disposition of the remaining assignments of error, we will not address this assignment of error individually; rather, we will address it within the context of the other assignments of error.
In the second assignment of error, plaintiffs argue that the trial court erred in holding that their R.C. Chapter 5311 claims were time-barred. Ohio's condominium laws, codified in R.C. Chapter 5311 et seq., clearly make it a statutory violation to fail to provide full and accurate information on a required disclosure statement regarding the sale of condominium property.
The statute at issue, R.C.
"No developer or agent, directly or indirectly, shall sell or offer to sell a condominium ownership interest in a condominium development unless he discloses fully and accurately to each prospective purchaser of the interest all material circumstances or features affecting the development, by preparing and providing to each prospective purchaser a readable and understandable written statement of such circumstances or features. The statement shall not intentionally omit any material fact or contain any untrue statement of a material fact * * *."
R.C.
"In the case of a conversion condominium development a report by the developer stating the age, the condition and the developer's opinion of the remaining useful life of structural elements and mechanical and supporting systems, together with the developer's estimate of repair and replacement costs projected for five years from the date the property is submitted to the provisions of this chapter; the report shall be based on facts reasonably ascertainable by the developer through inspection of relevant drawings and records and to the extent permitted by the physical limits of the site by personal inspection of the elements and systems * * *." *506
It is undisputed that the six-year limitation period set forth in R.C.
Plaintiffs contend that the trial court's holding is in error in two respects. First, plaintiffs assert that the applicable accrual date for their claims arising under R.C.
R.C.
The remedies provided in R.C.
In the instant case, plaintiffs Smith, Morosky, Yoder and Kelly allege that defendants' violation of R.C.
Plaintiffs next assert that the trial court erred in holding that the cause of action arising out of defendants' alleged statutory violation of R.C.
We find plaintiffs' contention to be well taken. The cause of action arising from the alleged statutory violation in 1985 was separate and distinct from the 1984 cause of action. The 1984 and 1985 disclosure statements provided slightly different information. Plaintiffs Martinelli and Gaston were not involved in the 1984 purchase; therefore, it cannot be said that their cause of action arose in 1984. As to those plaintiffs who were involved in both the 1984 and 1985 purchases, we hold that the disclosure statements provided to them in 1984 were separate and distinct from the disclosure statements provided in 1985, thus providing them with two distinct causes of action. Were we to hold otherwise, these plaintiffs would be forever barred from asserting a cause of action for a violation of R.C.
Thus, we find the second assignment of error to be well taken as to the 1985 disclosure statement, but not well taken as to the 1984 disclosure statement.
By the third assignment of error, plaintiffs contend that the trial court erred in holding that Arbor Village Condominium Association lacked standing to pursue a cause of action under R.C.
"Any developer or agent who sells a condominium ownership interest in violation of section
We do not agree with the trial court's construction of R.C.
Furthermore, R.C.
"In any action relating to the common areas and facilities or to any right, duty, or obligation possessed or imposed upon the unit owners association, by statute or otherwise, the unit owners association may sue or be sued as a separate legal entity * * *." (Emphasis added.)
It is apparent from the face of the statute that the General Assembly intended that the unit owners association be empowered to sue or be sued in "any action relating to the common areas and facilities." No language purporting to limit such an association's right to commence an action regarding the common areas appears anywhere in R.C.
The association's claims under R.C.
"(B) `Common areas and facilities' includes * * * the following parts of the condominium property:
"* * *
"(2) All other areas, facilities, places, and structures that are not part of a unit, including, but not limited to:
"* * *
"(d) Installations of central services such as power, light, gas, hot and cold water, heating, refrigeration, air conditioning, and incinerating."
Thus, the association may properly pursue an action under R.C.
Furthermore, in Stony Ridge Assn. v. Auerbach (1979),
In the instant case, defendants' alleged violation of R.C.
In the fourth assignment of error, plaintiffs contend that the trial court erred in holding that the association had no standing to pursue the fraudulent concealment and fraudulent misrepresentation claims. In its decision, the trial court held that the association could not bring suit under R.C.
In the fifth assignment of error, plaintiffs contend that the trial court erred in granting summary judgment regarding plaintiffs' claims for fraudulent concealment. The trial court found "no evidence of any active concealment on the part of defendants as to the alleged defects in the heating and domestic hot water system." The elements necessary to successfully maintain an action for fraudulent concealment were set forth inCrum v. McCoy (1974),
"* * * (1) an actual concealment (2) of a material fact (3) with knowledge of the fact concealed (4) with intent to mislead another into relying upon such conduct (5) followed by actual reliance thereon by such other person having the right to so rely (6) with injury resulting to such person because of such reliance."
Initially, we note that there was no evidence presented to establish that the defendants had taken any steps to actively conceal the repairs made to the heating system in 4991 Arbor Village Drive. If there appears no evidence of an intent to conceal or any evidence of acts performed to effect that intent, a seller cannot be liable for fraudulent concealment. Kaye v.Buehrle (1983),
Plaintiffs contend that defendants' nondisclosure of the repairs made to the heating system in 4991 Arbor Village Drive prior to plaintiffs purchase of the condominium units in 1984 and 1985 amounts to fraudulent concealment. In *511 Miles v. McSwegin (1979),
"* * * If the parties expressly or impliedly place the risk as to the existence of a fact on one party or if the law places it there by custom or otherwise the other party has no duty of disclosure * * *." Id. at 123.
Upon review of the purchase contracts in the instant case, we find that the contracts clearly place the risk upon plaintiffs as to the existence of any defects. Plaintiffs executed purchase contracts containing the following language:
"13. Limited Warranty. In the development statement furnished to the Buyers is a statement of the limited warranties to be given to Unit purchasers. These warranties will be extended to Buyers at the time of the closing. Seller disclaims any and allwarranties other than as set forth in seller's limited warranty. Further, Buyers hereby acknowledge that they have inspected the Unit and the Common Areas and are buying the Unit and its interest in the Common Areas in their present condition without warranty or representation of any kind, except as expressly provided therein." (Emphasis sic.)
It has been stated that the terms "as is" and "in its present condition" are synonymous. Vilk v. Radley (Aug. 18, 1989), Lake App. No. 13-087, unreported, 1989 WL 95775. Plaintiff Smith offered testimony at his deposition that he "understood that he was buying the units as is."
Plaintiff Smith further testified at his deposition that plaintiffs neither hired an expert to inspect the premises nor did they obtain an appraisal of the development prior to the purchase of the units. Accordingly, we find the defendants had no duty to disclose any knowledge of any past repairs made to 4991 Arbor Village Drive. Thus, we find plaintiffs' fifth assignment of error not well taken.
In the sixth assignment of error, plaintiffs contend that the trial court erred in granting summary judgment to Bernard Fultz, the general partner of Arbor Village, Ltd. at the time of the sale. As a general partner of a limited partnership, R.C.
"(A) Jointly and severally for everything chargeable to the partnership under sections
"(B) Jointly for all other debts and obligations of the partnership * * *." R.C.
"Where loss or injury is caused to any person not a partner in the partnership or any penalty is incurred, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of his partners, the partnership is liable therefor to the same extent as the partner so acting or omitting to act."
The trial court determined that, pursuant to R.C.
We reach the same conclusion as the trial court; however, we apply a slightly different rationale to attain that conclusion.
Upon our reading of R.C.
None of plaintiffs' claims in the instant action is based on any "wrongful action or omission" of a partner. Instead, plaintiffs have alleged that the partnership, through the acts of its agent defendant Bacome, have committed a wrong in its alleged failure to disclose certain repairs made to 4991 Arbor Village Drive. However, there is no allegation that defendant Fultz, the only general partner of Arbor Village, Ltd., has committed any wrongful act or omission. As a result, we find that because there is no "wrongful act or omission of any partner" to trigger R.C.
As a result of our determination that defendant Fultz may be held only jointly liable, the Ohio Supreme Court's holding inWayne Smith Constr. Co., Inc. v. Wolman, Duberstein Thompson
(1992),
"Accordingly, the partners who are jointly liable have the right to demand payment of the third party's claim from their joint assets (i.e., partnership assets) before their personal property can be called upon to satisfy that contractual debt. The early common law in Ohio held accordingly: `Equity will not lend its aid to subject the separate property of a partner to the payment of partnership debts while the joint property of the firm is unexhausted.' Hubble v. Perrin (1827),
"* * *
"* * * A partnership creditor in proceedings in execution of a judgment against the partnership must first exhaust partnership property before resorting to the personal assets of partners under R.C.
Accordingly, we find that the trial court was correct in determining that plaintiffs' action against defendant Fultz was premature. Thus, we find plaintiffs' sixth assignment of error not well taken.
In the seventh assignment of error, plaintiffs argue that the trial court erred in finding that defendant Penn acted neither as an agent nor as a developer in the sale of the condominium units.
R.C.
"(T) `Developer' means any person who, directly or indirectly, sells or offers for sale condominium ownership interests in a condominium development. `Developer' includes the declarant of a condominium development and any successor to the declarant who stands in the same relation to the condominium development as the declarant.
"(U) `Agent' means any person who represents or acts for or on behalf of a developer in selling or offering to sell any condominium ownership interest in a condominium development but the term does not include an attorney at law whose representation of another consists solely of rendering legal services."
Upon review of the affidavits and deposition testimony offered by the parties involved in this lawsuit, we find no evidence that defendant Penn was involved directly or indirectly in the sale of the condominium units, nor did he represent or act for or on behalf of the developers. In fact, plaintiff Smith, the only party to offer testimony on behalf of plaintiffs, stated that he had not spoken to defendant Penn, nor did Penn provide him with any written information prior to the sale. *514
Plaintiffs argue in their brief, however, that defendant Penn's attendance at a meeting in which the allegedly misleading disclosure statement was discussed supports their contention that he acted as a developer or agent in this sale. To the contrary, Penn's deposition testimony fully negates this contention. Specifically, defendant Penn testified that he did not recall participating or supplying any information for the disclosure statement. In any event, we find, as did the trial court, that Penn's attendance at this meeting does not rise to the level of either direct or indirect involvement in the sale of the condominiums, nor does it amount to a representation on behalf of the developers. Accordingly, we find that the trial court did not err in determining that defendant Penn was not a "developer" or "agent" involved in the sale of the condominiums pursuant to R.C.
Plaintiffs further contend that, even if we were to find that defendant Penn was neither an agent nor a developer under the statute, there remains a cause of action against him for fraudulent concealment. However, we find that our determination of plaintiffs' fifth assignment of error, in which we found that plaintiffs have no cause of action for fraudulent concealment, is dispositive as to this contention. As there exists no genuine issue of material fact regarding defendant Penn's alleged involvement in the sale of the condominium units, we find summary judgment proper and, thus, plaintiffs' seventh assignment of error is not well taken.
By the eighth assignment of error, plaintiffs contend that the trial court erred in holding that privity was a requirement for the claims of the plaintiffs who did not purchase their condominium units directly from Arbor Village, Ltd. It is undisputed that these plaintiffs did not buy their condominium units from any of defendants named in this lawsuit. Indeed, affidavits filed by the individual defendants in this action conclusively demonstrate that defendants neither supplied information to nor even spoke to any of these plaintiffs prior to their purchases.
Plaintiffs, however, claim that R.C.
Plaintiffs further contend that privity is not a requirement for their claims for fraudulent concealment. However, we find that our determination of the fifth assignment of error, in which we found that plaintiffs have no cause of action for fraudulent concealment, is dispositive as to this contention. Thus, we find plaintiffs' eighth assignment of error not well taken.
For the foregoing reasons, we sustain plaintiffs' first assignment of error as it relates to the trial court's error in granting summary judgment as to the 1985 causes of action under R.C.
Judgment affirmed in part,reversed in partand cause remanded.
BOWMAN and DESHLER, JJ., concur.