{¶ 2} After considering the assignments of error, the record, and the applicable law, we find that the judgment of the trial court should be affirmed. A discussion of the basis for our opinion follows.
{¶ 5} "No action shall be brought whereby to * * * charge a person * * * upon a contract or sale of lands, tenements, or hereditaments, or interest in or concerning them, or upon an agreement that is not to be performed within one year from the making thereof; unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged therewith or some other person thereunto by him or her lawfully authorized."
{¶ 6} According to Craftsmen, there were three separate contracts in this case, and the predominant purpose of all the contracts was a lease for property, which was unenforceable because it was oral. We disagree, because the evidence does not indicate that the parties intended to enter into a contract for a lease. In fact, none of the writings even mention a lease agreement.
{¶ 7} The testimony in this case indicates that Daniel Fox had been self-employed in the kitchen and bathroom remodeling business since 1981. From 1985 through November, 1998, Fox owned Fox Enterprises, which did business as "A Better Kitchen Supply" (Better Kitchen). At all times relevant, Better Kitchen was located in a building at 3810 Dayton-Xenia Road that was leased from Carl and Bellulah Hussong. The front of the building was used for a showroom and offices, and the back was used for storage and shop fabrication for Better Kitchen's counter top and solid surface business. In the showroom were modular kitchen and bathroom displays that could be moved and changed. The displays were intricate and accessorized, including towel bars, soap dishes, wallpaper, and so forth, such that when customers walked in, they would feel like the display was their own kitchen or bathroom. Better Kitchen was very much an upscale business.
{¶ 8} Craftsmen was also in the bath and kitchen business, but was less upscale, so they were not really a competitor of Better Kitchen. For about two years before 1998, Better Kitchen had done counter top fabrication for Craftsmen. Fox had been to Craftsmen's showroom and had seen its displays, which were nothing like what Better Kitchen had.
{¶ 9} At all times relevant to this action, Craftsmen was owned by seven shareholders. The primary stockholders were Doug Readnower, Kevin McCloskey, and Ron Piatt, who were directors, and who each owned 25% of the stock. The remaining stock was owned by four other men — Doug Griffith, Sam Edwards, Doug Piatt, and Daryl Bieser, who each owned about 6% of the stock.
{¶ 10} In September, 1998, Craftsmen heard that Fox was planning to close his business. Subsequently, both Ron Piatt and Doug Readnower checked out Better Kitchen's showroom, and Readnower then met with Fox. The first meeting was on September 17, 1998, and led to a series of meetings in September and October, during which Readnower, McCloskey, and Fox discussed the sale of the business.
{¶ 11} Craftsmen was not interested in purchasing Fox's office equipment, shop material, or shop equipment, nor did Craftsmen want Fox's employees. Instead, Craftsmen was interested in the showroom assets. During one of the meetings, Readnower walked through the showroom and designated what he wanted. Based on this discussion, Fox made up a list of assets that were to be purchased, and set a price of $50,000. There were also discussions about Fox becoming a Craftsmen employee, doing either sales or fabrication. In addition, Fox agreed to give Craftsmen a list of his previous customers and to direct any future business to Craftsmen.
{¶ 12} In a subsequent meeting, Fox told Readnower that he did not want to be part of Craftsmen, and that he did not think they were going to be able to do the deal. Readnower said he had met with the partners and that they had agreed to Fox's price. At a meeting in mid to late October with Readnower and McCloskey, the men shook hands on everything and Readnower said, "We've got a deal." The deal was for $50,000, with $20,000 to be paid up front on December 1, 1998, with the balance to be paid over 36 months, in equal payments.
{¶ 13} Readnower subsequently dropped off two documents that he had prepared. Both documents were dated October 26, 1998. The first document was entitled "Bill of Sale," and included, as Exhibit A, the list of displays Fox had prepared. The bill of sale stated that Better Kitchen and Fox had agreed to sell Craftsmen the list of items in Exhibit A, for $20,000. The second document was entitled "Covenant Not to Compete," and indicated that in consideration of $30,000, payable in 36 monthly payments beginning on December 1, 1998, Fox would not compete with Craftsmen in the field of sales of kitchen or bathroom remodeling services in a five-county area.
{¶ 14} There was no dispute that the parties valued the assets at $50,000, and that they did not discuss covenants not to compete before Readnower gave Fox the Bill of Sale and Covenant Not to Compete. Readnower said that he decided to structure the transaction in this manner because of tax advantages it would afford Craftsmen. When Fox received the documents, he rejected them because the covenant had not been discussed. The bill of sale also included a warranty that no liens existed, and Fox needed to obtain a release from his bank regarding a lien the bank had on his business assets. Fox testified that the lien was for equipment that was not part of the assets being sold. He also indicated that he was going to pay off the lien with the sale proceeds. Readnower testified that whether the liens were released or were paid was not a problem; Craftsmen simply wanted the liens taken care of. Furthermore, the parties had never discussed liens before Readnower gave Fox the Bill of Sale and Covenant Not to Compete.
{¶ 15} Another written document was presented at trial. This document was dated October 28, 1998, was entitled "purchase agreement," and contained the same terms as the prior writings, except for changes in the covenant not to compete and in the lien clause. Although both sides denied creating this agreement, the magistrate and trial court found that Fox had prepared it. Readnower rejected the purchase agreement because he wanted the transaction written up in two separate documents. The purchase agreement also misspelled Craftsmen's name and incorrectly included the corporation (Better Kitchen) in the covenant not to compete. Readnower stated at trial that certain conditions in the covenant not to compete were also unacceptable. For example, the geographical distance had been decreased to ten miles. The lien provision was also different.
{¶ 16} At trial, Readnower and McCloskey both testified that they were not simply interested in buying fixtures, and that they told Fox that no deal could be struck unless they obtained a satisfactory lease for the building. However, none of the written documents mentioned anything about a lease. Readnower additionally testified that Craftsmen valued the assets at $50,000 only because of their location in the leased premises. However, the magistrate and trial court apparently did not find this testimony credible.
{¶ 17} On October 19, 1998, Fox took Readnower and McCloskey to meet the Hussongs. Fox testified that this occurred after the parties had a deal, while Readnower and McCloskey denied that a deal ever existed. Fox testified that there were no negotiations about a lease at any of the meetings that he had with Craftsmen. When Fox introduced Readnower and McCloskey, Fox told the Hussongs that Craftsmen was going to purchase his business and would like to stay on at the Dayton-Xenia Rd. location. At the time, Better Kitchen had a lease with Hussong that would not have expired until March 31, 2000. However, Craftsmen was not interested in subletting, but instead wanted its own lease. At this meeting, Craftsmen gave Mr. Hussong some specific numbers on a lease, and Mr. Hussong said he would turn the matter over to his attorney and they would discuss it.
{¶ 18} After reaching a deal with Craftsmen, Fox told his employees that he was selling the business to Craftsmen and that the employees would have to look for jobs. Fox also stopped taking orders for Better Kitchen and gave Craftsmen's number to customers who called. Some of Fox's employees left quickly, and a few stayed on to finish existing orders. Craftsmen wanted to come in early to remodel the premises, which would require Fox to leave earlier than anticipated. After Craftsmen agreed to pay one-half of November's rent, Fox gave Craftsmen a key to the building. The rent check was dated November 4, 1998, and was sent on to Mr. Hussong after Fox received it from Craftsmen.
{¶ 19} On Saturday, October 31, 1998, six of the seven stockholders in Craftsmen, representing about 88% of the total stock interest, came to Better Kitchen's showroom and extensively modified the premises. Craftsmen cut a hole in the wall to make a new doorway, removed three or four walls, constructed walls, removed doors from a shower display, removed a sign above a wall with towel bars and paper holders, removed cabinets from a display and from other areas, started to strip off carpet in the office area and tile in the reception area, and replaced a toilet in the employees' bathroom. In addition, at some later point (not on this day), Craftsmen removed display items and placed them in its own showroom. The removed items included a blue Corian counter top, an island, and an angled light bar that matched the island.
{¶ 20} Subsequently, Craftsmen was not able to reach agreement with the Hussongs on leasing the premises. Readnower then called Fox and said the deal was off. At that point, Fox had one or two years left on the lease. He had moved out of the premises and had left the displays because they belonged to Craftsmen. Fox had closed his business, had no orders coming in, had no place to put the displays, and had no money to rent another place.
{¶ 21} Ultimately, Fox was able to work out an arrangement with Hussong on the lease, but he was given only fourteen days to remove all the displays. Fox was able to sell some materials for about $8,737.68 (including some items that he returned for credit). However, he had to throw away much of the product because of the short time frame and lack of storage ability.
{¶ 22} There were some factual disputes, as noted above, that the magistrate resolved generally in Fox's favor. The magistrate found that: (1) the proposed written agreements confirmed the oral agreement; (2) the additional terms were objected to and did not become part of the contract; and (3) the terms that the parties did agree on were the list of assets to be purchased and the price of the assets ($50,000). The magistrate also found that the Statute of Frauds did not prohibit enforcement of the contract due to partial performance. These findings were accepted by the trial court.
{¶ 23} Notably, neither the trial court nor the magistrate found that this case involved an oral agreement for the lease of a commercial property. To the contrary, the magistrate noted that Craftsmen was not interested in subleasing the property from Better Kitchen, but instead wanted to secure its own lease with the Hussongs. We agree with that finding, and find the first sub-argument without merit. Since there was no oral contract for the lease of the commercial premises, the Statue of Frauds in R.C.
{¶ 24} We also note that even if a lease had been involved, the "predominant purpose" doctrine cited by Craftsmen does not apply to real estate transactions. In this regard, Craftsmen claims that three contracts existed: an agreement for assumption of the lease; an agreement regarding the fixtures on the premises; and a non-competition agreement. According to Craftsmen, the "predominant purpose" of all these contracts involved the lease of Better Kitchen's showroom.
{¶ 25} The "predominant purpose" test is used to decide if "the predominant factor and purpose of the contract is the rendition of service, with goods incidentally involved, or whether the contract is for the sale of goods with labor incidentally involved." Allied Erecting Dismantling Co. v.Auto Baling Co. (1990),
{¶ 26} Based on the above discussion, the first sub-argument is without merit.
{¶ 28} The conflict between R.C.
{¶ 29} Craftsmen also points out that R.C.
{¶ 30} As the trial court noted, Fox rejected the proposed covenant not to compete, and Readnower thereafter rejected a covenant not to compete that Fox drafted. Accordingly, R.C.
{¶ 31} In view of the preceding discussion, the second sub-argument is without merit.
{¶ 33} "Except as otherwise provided in this section a contract for the sale of goods for the price of five hundred dollars or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this division beyond the quantity of goods shown in such writing."
{¶ 34} Craftsmen raised this defense at trial, but the magistrate found that an exception in R.C.
{¶ 35} "with respect to goods for which payment has been made and accepted or which have been received and accepted in accordance with section
{¶ 36} Various methods of acceptance can be found in R.C.
{¶ 37} We agree with the magistrate that Craftsmen's "acceptance of the goods" under R.C.
{¶ 38} In this regard, Craftsmen argues that the trial court improperly mixed the "use of the premises" with the "sale of goods." We disagree. Craftsmen did make significant alterations to the leased premises, but its stockholders also removed cabinets from the Better Kitchen displays, removed shower doors from a display, removed a sign above a wall with towel bars and paper holders, and took an island, light box, and counter top to Craftsmen's own showroom. These acts were completely inconsistent with ownership of the displays by Fox and Fox Enterprises.
{¶ 39} According to Craftsmen, "complete control" over the assets was lacking because Fox and some of his employees were still about the premises, working, on the day that Craftsmen's owners were there. However, at that time, Fox and Craftsmen had concluded a deal for the sale of the displays, and Fox had given Craftsmen a key so that Craftsmen could enter the premises at will. Fox's presence on the premises that day was not an assertion of ownership over the assets that had been sold; he was merely finishing up fabrication of counter top orders that were placed before he closed his business.
{¶ 40} Other acts of Craftsmen were also consistent with partial performance of the contract. For example, Craftsmen obtained a key to the premises and paid half of Fox's rent for November so that Fox would close his business early and allow Craftsmen to work on the premises. Fox also released his employees in accordance with the agreement and referred customer calls to Craftsmen. And finally, Craftsmen came onto the premises, made significant alterations to the premises, removed cabinets and doors from the Better Kitchen displays, and removed parts of the displays from the premises. Consequently, the record contains ample evidence of partial performance or acceptance of the goods. Compare Mccabe v. Roderer (Nov. 11, 1984), Franklin App. No. 84AP-45,
{¶ 41} As we mentioned, in approving the magistrate's decision, the trial court focused on a traditional definition of part performance, and did not discuss R.C.
{¶ 42} As a final matter, we note that Craftsmen has made a somewhat convoluted argument about "R.C. 1302.04(B)(3)" and the fact that the parties had "agreed" that no goods were exchanged under the contract. First of all, there is no evidence of any such agreement in the record. To the contrary, goods were exchanged. As we said, Fox gave Craftsmen a key to the premises, and Craftsmen took possession of the goods by removing displays from their original locations and by removing display items from the premises. As an additional matter, R.C.
{¶ 43} Based on the above discussion, the third sub-argument is without merit.
{¶ 45} Like the first sub-argument, Craftsmen's position in this regard is based on a faulty premise, i.e., that the parties contracted for a lease. As we mentioned earlier, Craftsmen's own documents do not support this premise. Furthermore, a sub-lease was the only contract in which Fox would have had the ability to participate, and even that would have been contingent upon receiving the lessor's approval for a sub-lease. However, Craftsmen's shareholders testified that they were not interested in a sub-lease.
{¶ 46} As we previously noted, this case involves the sale of goods and is governed by the more specific Statute of Frauds in R.C.
{¶ 47} As a general matter, agreements may be removed from the operation of the Statute of Frauds by partial performance "only where the party relying on the agreement changes his position to his detriment, thereby making it impractical or impossible to return the parties to their original status."Saydell v. Geppetto's Pizza Ribs Franchise Sys. Inc. (1994),
{¶ 48} Because there was no contract for real estate, Fox did not have to prove possession, payment of consideration, and improvements on the land (although all these elements did exist). Furthermore, by focusing on the need to prove more than simply "payment" and "possession," Craftsmen loses sight of the fact that what is important would be whether Fox changed his position to his detriment, making it impractical or impossible to return the parties to their original status.
{¶ 49} In reviewing the evidence, it is clear that Fox changed his position to his detriment and that returning the parties to their original status would have been impractical or impossible. Fox's actions were also exclusively referable to the agreement and the performance cannot be accounted for in any other manner than having been done in pursuance of the agreement.Delfino,
{¶ 50} In this regard, we note that Fox gave Craftsmen a key to the premises, stopped accepting new business, and referred customers to Craftsmen. Fox also told its employees to find other work, and closed its doors. A few employees, including Fox, stayed on to finish fabricating pending orders. Craftsmen came onto the property, made substantial renovations to the premises and to various displays, and took display materials back to its own property. Whether the physical structure might possibly have been put back in place eventually is not the point. The point is that Fox closed its business, referred its customers, and released its employees, thereby relying detrimentally on the fact that Craftsmen had agreed to buy the assets of Better Kitchen. Accordingly, we reject the claim that the requirements for partial performance were not satisfied.
{¶ 51} As we have stressed, R.C.
{¶ 52} Because all the sub-arguments are without merit, the first argument is overruled.
{¶ 54} Both the magistrate and trial court found that the terms of the above agreements were proposals for addition to the contract, but did not become part of the contract under R.C.
{¶ 55} "[c]onduct by both parties that recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case, the terms of the particular contract consist of those terms on which the writings of the parties agree * * *."
{¶ 56} The magistrate and trial court found that the situation outlined in R.C.
{¶ 57} We note that Craftsmen again contends in the context of this argument that any agreement was predicated on Craftsmen obtaining a lease for the premises. However, the trial court noted that this claim was contradicted by Craftsmen's own documents, which failed to mention a lease. Again, we agree.
{¶ 58} Based on the preceding discussion, the second argument is without merit and is overruled.
{¶ 60} In responding to this argument, Fox points out that mutual mistake is an affirmative defense that was neither pled nor tried in the court below. Mutual mistake is not specifically mentioned in Civ. R. 8(C), but it has been held to be an affirmative defense that is waived if not raised in the pleadings. See, e.g., Mayer v. Medancic, Geauga App. Nos. 2000-G-2311, 2000-G-2312, and 2000-G-2313,
{¶ 61} In the present case, Craftsmen did not raise mutual mistake in its answer, nor did it ask to amend the pleadings after the trial to raise the issue. Therefore, we conclude that the matter has been waived. Craftsmen did raise mutual mistake in its objections, but only in connection with the lease, not with regard to any encumbrances on the displays. Assuming for the sake of argument that the matter was sufficiently raised in connection with the lease, we still find the claim without merit.
{¶ 62} "The doctrine of mutual mistake permits rescission of a contract when the parties' agreement is based upon a mutual mistake of either law or fact. * * * A mutual mistake is a mistake by both parties at the time the contract was made as to a basic assumption on which the contract was made, which has a material effect on the agreed exchange of performances." Weberv. Budzar Industries, Inc., Lake App. No. 2004-0L-098,
{¶ 63} The contract in the present case was not based on the assumption that the landlord would grant Craftsmen a reasonable lease. As we stressed earlier, the lease was not even mentioned in the documents that were exchanged. This contradicts Craftsmen's claim that the lease was critical. In addition, Fox testified that no one ever stated that the deal was contingent upon Craftsmen getting a lease with the landlord, thereby indicating that if a mistake existed, it was not mutual. Accordingly, even if we considered the defense of mutual mistake, we would find it without merit.
{¶ 64} Craftsmen did raise the issue of alleged encumbrances, both in its answer and in objections to the magistrate's decision, but in the context of fraud, not mistake. Specifically, Craftsmen claimed that Fox attempted to defraud Keybank and Craftsmen because there were liens outstanding on the goods at the time of the sale. In contrast to this argument, Craftsmen now claims the encumbrances were a "mutual mistake" preventing enforcement of the contract. Even if we were to address this issue, we would find it without merit. Fox testified that he intended to obtain assurances from the bank that any liens did not apply to the displays. He further indicated that he intended to pay off the liens with the sale proceeds. And finally, we note Readnower's testimony that the issue of liens did not arise until after Fox received the Bill of Sale and Covenant Not to Compete. Because the magistrate found that the Bill of Sale and Covenant were generated after the parties reached agreement, the presence of any liens could not have been a mutual mistake about a basic assumption at the time the contract was formed.
{¶ 65} Accordingly, the third argument is without merit and is overruled.
{¶ 67} In Master Consolidated Corp. v. BancOhio Natl. Bank
(1991),
{¶ 68} "[i]n order for a principal to be bound by the acts of his agent under the theory of apparent agency, evidence must affirmatively show: (1) that the principal held the agent out to the public as possessing sufficient authority to embrace the particular act in question, or knowingly permitted him to act as having such authority, and (2) that the person dealing with the agent knew of those facts and acting in good faith had reason to believe and did believe that the agent possessed the necessary authority." Id. at syllabus.
{¶ 69} In Master Consolidated, the court went on to clarify the relationship between estoppel and apparent authority. Specifically, the court said that the two concepts:
{¶ 70} "`are similar in that they are based on the underlying principle that a person shall be bound by his words or deeds. They are distinguished as follows: estoppel is essentially the principle that a person must compensate another for any change of position (loss) induced by reliance on what the person said or otherwise manifested, because it would be unjust to allow him to deny the truth of his words or manifestations; apparentauthority is based on the objective theory of contracts, and arises when a person manifests to another that an agent or third person is authorized to act for him, irrespective of whether the person really intended to be bound, of whether the person told the same thing to the agent, and of whether the other person changed his position.'" Id. at 577, n. 5, quoting from 1 Ohio Jury Instructions (1990) 200, Section 15.10.
{¶ 71} Some courts have held that agency by estoppel and apparent authority are equivalent, and are based on the same elements. See Dickinson v. Charter Oaks Tree Landscaping Co.,Inc., Franklin App. No. 02AP-981,
{¶ 72} Notably, Readnower was vice-president and treasurer of Craftsmen, and was a 25% stockholder. Readnower conducted the vast majority of the negotiations, and was present at the meeting in which Fox claimed that a deal was struck. Moreover, the Bill of Sale and Covenant Not to Compete that Readnower gave Fox on behalf of Craftsmen did not list the seven stockholders by name. Instead, these documents contained a single line for a signature that was to be made "by Craftsmen Home Improvements, Inc." The clear implication from this document is that one person (and logically, the person delivering the documents) had the power to act for Craftsmen. As an additional matter, 88% of the stockholders came to Better Kitchen to accept possession of the displays and to remodel. Under the circumstances, it is clear that Craftsmen clothed Readnower with apparent authority to act on its behalf.
{¶ 73} Even if we did not find apparent authority, we would conclude that Fox established agency by estoppel. In GeneralCartage Storage Co. v. Cox (1906),
{¶ 74} "`[w]here a principle [sic] has, by his voluntary act, placed an agent in such a situation that a person of ordinary prudence, conversant with business usages, and the nature of the particular business, is justified in assuming that such agent is authorized to perform on behalf of his principle [sic] a particular act, such particular act having been performed the principle [sic] is estopped as against such innocent third person from denying the agent's authority to perform it'" (citation omitted). We have applied the same theory to find agency by estoppel on the part of a contracting party. See, e.g., EskeProperties, Inc. v. Sucher, Montgomery App. No. 19840,
{¶ 75} Furthermore, while ratification of an agent's acts is not required, the majority of Craftsmen's stockholders entered Better Kitchen and exerted control over the displays. A reasonable interpretation of these actions is that a majority of the stockholders ratified Readnower's authority and agreement to a contract. Foust v. Valleybrook Realty Co. (1981),
{¶ 76} In light of the preceding discussion, the fourth argument is without merit and is overruled.
{¶ 78} R.C.
{¶ 79} "(B) If the measure of damages provided in division (A) of this section is inadequate to put the seller in as good a position as performance would have done then the measure of damages is the profit, including reasonable overhead, which the seller would have made from full performance by the buyer, together with any incidental damages provided in section
{¶ 80} Applying the measure of damages in R.C.
{¶ 81} As we mentioned, Craftsmen claims that the evidence about damages was speculative. Again, we disagree. Both sides assigned a value of $50,000 to the displays. While Readnower testified that the displays were only worth that much because of their location in the premises, the trial court did not find that testimony credible. Instead, the court accepted Fox's testimony.
{¶ 82} As we mentioned earlier, Fox said he had no place to store the goods because he had closed his business and could not afford to maintain the leased premises. When the lessor wanted the premises vacated, Fox had only fourteen days to try to sell the goods. He was able to sell $8,737.68 worth of goods, but ended up throwing most of the rest of the display items into a large dumpster that he had rented. Fox's testimony on this point was substantiated by a witness, who saw Fox and a former partner breaking up the contents of the showroom and throwing displays in a large rollout dumpster during February, 1999. This was around the time the lessor required Fox to vacate the premises. Fox told this witness at the time that he was throwing the goods away because he had nowhere to store the items. There was also testimony from witnesses who corroborated the sale of various items on the list.
{¶ 83} If Craftsmen had paid for the goods as agreed, Fox would have made $50,000 in profit, because the displays had been paid for previously. This was also the agreed-upon price of the contract. Consistent with R.C.
{¶ 84} Craftsmen argues that the damages were not established with certainty, due to some conflicts in Fox's testimony during deposition and at trial about dates when displays were sold. Craftsmen also relies on conflicts that allegedly arise from correspondence. However, the correspondence was not admitted at trial and is not part of the record. We note that there were contradictions in the testimony of various witnesses, including Craftsmen stockholders, as to a number of matters. This is not surprising, since nearly five years elapsed between the sale and the time of trial. Both sides also kept rather poor documentation. The magistrate clearly found Fox more credible, by accepting Fox's testimony as to the amount of goods he was able to sell.
{¶ 85} We have stressed many times that credibility decisions belong to the trier of fact, which has the best opportunity to observe the demeanor of witnesses. See, e.g., Green v. Lemarr
(2000),
{¶ 86} Craftsmen contends, as a final point in this context, that the trial court did not specifically address the claim about damages. In ruling on the objections, the trial court discussed the case in detail and found that Craftsmen had breached the contract by not paying any of the $50,000 that was owed. The court also adopted the magistrate's decision and entered judgment in Fox's favor in the amount of $41,262.32, which is the amount found by the magistrate after deducting what Fox received for the goods he was able to sell. However, the trial court did not specifically include a sentence stating that it was overruling the damage objection.
{¶ 87} Although the issue is close, we find that remand is not required under the circumstances of this case, since remand would simply elevate form over substance. Compare H.L.S. BondingCo. v. Fox, Franklin App. No. 03AP-150,
{¶ 88} In McCain v. McCain, Champaign App. No. 02CA04,
{¶ 89} Based on the preceding discussion, the fifth argument is without merit and is overruled.
{¶ 91} In the first place, the testimony of both Readnower and Fox indicates that the subject of liens or encumbrances did not arise until after Readnower gave Fox the Bill of Sale and Covenant Not to Compete. Because the magistrate concluded that the agreement for the sale of assets for $50,000 occurred before these documents were delivered, any language relating to liens or encumbrances was simply a proposal for additional terms that was never accepted. R.C.
{¶ 92} Readnower's Bill of Sale states that:
{¶ 93} "SELLERS warrants [sic] that there are no liens or encumbrances on the goods sold, and that SELLERS' title to the goods is clear and merchantable. SELLERS shall also defend BUYERS from any adverse claims to SELLERS' title to the goods sold."
{¶ 94} The subsequent purchase agreement that Fox submitted to Craftsmen stated that:
{¶ 95} "The SELLER warrants that there are no liens or encumbrances on the goods sold, and the Sellers' title to the goods is clear and merchantable and will be relinquished at the term of the purchase agreement."
{¶ 96} A material alteration is one that would "result in surprise or hardship if incorporated without express awareness by the other party." Comment 4 to R.C.
{¶ 97} Because liens and encumbrances were never discussed, incorporating their release into the Bill of Sale would have resulted in surprise to Fox. Furthermore, although Fox included a lien clause in the purchase agreement, Fox's proposal was materially different from the provision in the Bill of Sale. Specifically, Fox's clause indicates that title to the goods would be relinquished at the term (presumably the termination) of the purchase agreement — which was scheduled to last for three years. Fox's proposal also materially differed from the Bill of Sale because it omitted the "duty to defend."
{¶ 98} The magistrate did not discuss the proposals for liens and encumbrances in detail, beyond noting that Fox had rejected the Bill of Sale and Covenant Not to Compete because he needed to obtain a release of liens. However, based on the magistrate's finding that the only agreed-upon contract terms were for the sale of an agreed-upon list of assets for $50,000, it is clear that the magistrate did not find the lien or encumbrance provisions to be part of the contract. In objecting to the magistrate's decision, Craftsmen asked the trial court to find that an oral contract on which encumbrances exist may not be legally enforced without the assent of a lien holder. Again, the trial court did not explicitly discuss this argument, but its decision necessarily overrules the objection. If the trial court felt that the oral agreement was unenforceable, it would not have found a breach, would not have adopted the decision of the magistrate, and would not have awarded judgment in the amount of $41,262.32.
{¶ 99} As a further matter, Craftsmen's breach of the agreement made the issue of liens or encumbrances irrelevant. In view of Craftsmen's repudiation or non-acceptance, whether KeyBank or any other entity had an interest in the goods was irrelevant. This is particularly true since Craftsmen did not assert the existence of a lien or encumbrance as a reason for the breach, at the time the breach occurred. Instead, as the magistrate and trial court noted, Craftsmen walked away from the agreement. Under R.C.
{¶ 100} Based on the above discussion, the sixth argument is without merit and is overruled.
{¶ 101} Because all the arguments or assignments of error have been overruled, the judgment of the trial court is affirmed.
Fain, J., and Donovan, J., concur.