MOELLERING INDUSTRIES, INC. v. SUCHARITHA NALAGATLA, et al.
CASE NO. CA2012-10-104
IN THE COURT OF APPEALS TWELFTH APPELLATE DISTRICT OF OHIO WARREN COUNTY
9/16/2013
[Cite as Moellering Industries, Inc. v. Nalagatla, 2013-Ohio-3995.]
Robert A. McMahon, 2321 Kemper Lane, Suite 100, Cincinnati, Ohio 45206, for plaintiff-appellant
Peter E. Koenig, 300 Fourth & Walnut Centre, 105 East Fourth Street, Cincinnati, Ohio 45202, for defendants-appellees, Sucharitha Nalagatla and Anil Nalagatla
Phillip F. Cameron, 6539 Harrison Avenue, Suite 124, Cincinnati, Ohio 45247, for defendant-appellee, R.J. Insulation Contractor
Elizabeth A. Carullo, 120 East Fourth Street, Suite 8000, Cincinnati, Ohio 45202, for defendant-appellant, Mortgage Electronic Registration
Edward J. McTigue, 601 Main Street, Third Floor, Cincinnati, Ohio 45202, for defendant-appellee, Garry Brasch Custom Homes, Inc.
Christopher A. Watkins, 500 Justice Drive, Lebanon, Ohio 45036, for defendants, Jim Aumann, Warren County Treasurer and Nick Nelson, Warren County Auditor
Robert H. Welch II, 1019 Main Street, P.O. Box 296, Milford, Ohio 45150-0296, for defendant-appellee, CenterBank
{¶ 1} Plaintiff-appellant, Moellering Industries, Inc. (Moellering), appeals a decision of the Warren County Court of Common Pleas in favor of defendant-appellee, CenterBank, on Moellering‘s promissory estoppel claim.
{¶ 2} This case arises out of the construction of a new home by Garry Brasch Custom Homes, Inc. (GBCH) for Anil and Sucharitha Nalagatla. To finance construction of the home, GBCH received a construction loan from CenterBank. In November 2009, the Nalagatlas chose Moellering, who does business as Sims Lohman Fine Kitchens and Granite, to provide and install kitchen and bath fixtures for the home. However, GBCH encountered problems when it attempted to secure the fixtures on credit from Moellering. Upon learning of GBCH‘s construction loan, Moellering‘s credit manager, James Young, suggested Moellering would accept payment from the construction loan in the form of a two-party check. GBCH agreed to this arrangement and directed Young to contact Cheri Strotman, a senior credit analyst with CenterBank, to work out the details.1
{¶ 3} Thereafter, Moellering, GBCH and CenterBank exchanged correspondence regarding this two-party check arrangement. On December 2, 2009, Strotman sent an e-mail to Young stating: “CenterBank will provide a two party check * * * This is at the request of [GBCH]. If you need any additional information or a formal letter on our letterhead please feel free to contact me.” Moellering requested a formal letter to confirm the arrangement, and on December 7, 2009, CenterBank sent Moellering a letter which stated: “As per Mr. Brasch‘s request[,] CenterBank will be able to cut a dual check upon completion to Sims Lohman for the amount of the invoice you provided which is $36,284.49.” After receiving this
{¶ 4} According to Moellering, the work was completed in May 2010. As a result, Moellering sent final invoices to GBCH. By June 2010, Moellering had still not received payment. Young contacted CenterBank, inquiring about the two-party check. CenterBank informed Young that it had not yet received “paperwork” from GBCH stating that “everything was good” and refused to issue the check at that time. Young then contacted GBCH requesting it authorize the check. Both GBCH and CenterBank informed Young that Moellering should wait until closing for payment, which was scheduled to occur later that month. Moellering, however, did not appear at closing as it was never informed of the actual date of closing or where it was scheduled to take place.
{¶ 5} In July 2010, Young again contacted GBCH and CenterBank for payment. At this time, Young learned that the closing had taken place on June 28, 2010, and all of the funds for the construction of the home had been disbursed at that time. GBCH never paid Moellering for its work. On July 27, 2010, Moellering filed a mechanic‘s lien on the Nalagatlas’ property.
{¶ 6} On September 14, 2010, Moellering filed suit against several parties, including the Nalagatlas and GBCH, to foreclose on the mechanic‘s lien. Moellering subsequently amended its complaint to include claims for breach of contract and unjust enrichment against GBCH and promissory estoppel against CenterBank.2 Moellering subsequently released the mechanic‘s lien against the Nalagatlas’ property. On April 19, 2012, Moellering‘s claims against GBCH and CenterBank came to trial before a magistrate. The magistrate found GBCH liable to Moellering and recommended judgment in the amount of $36,076.80 plus
{¶ 7} Assignment of Error No. 1:
{¶ 8} THE TRIAL COURT ABUSED ITS DISCRETION BY DISREGARDING EVIDENCE, RE-WRITING EVIDENCE, AND MISAPPLYING THE LAW, AND THEN MAKING FINDINGS INCONSISTENT WITH AND CONTRARY TO THE TESTIMONIAL AND DOCUMENTARY EVIDENCE ADMITTED INTO THE TRIAL COURT RECORD.
{¶ 9} As a preliminary matter, we note that Moellering makes two separate arguments with regard to the proper standard of review in this case. Moellering first challenges the trial court‘s review of the magistrate‘s decision. Moellering argues that the trial court‘s decision should be reversed because the trial court failed to conduct a de novo review of the record as required by
{¶ 10}
{¶ 11} In the present case, the record indicates that the trial court conducted an independent review as to the objected matters before overruling the objections and adopting the magistrate‘s decision. The trial court specifically noted that its “review is independent of the Magistrate‘s review.” Prior to overruling the objections, the trial court, in its written decision, reviewed the facts of the case and then enumerated the reasons why it could not find an unambiguous promise in this case. The fact that the trial court did not specifically cite to an exhibit, namely the December 2, 2009 e-mail, without more, does not demonstrate that the court failed to conduct an independent review as to the objected matters. See Hampton at 17. Moreover, contrary to Moellering‘s contention, the record indicates that the trial court did in fact consider the e-mail referencing it as “correspondence.” In its decision, the trial court stated: “Some correspondence was exchanged among plaintiff, GCH, and CenterBank regarding the two-party check proposal, and ultimately, Mr. Young was satisfied by a letter from CenterBank, dated December 7, 2009.” Accordingly, as Moellering has not demonstrated that the trial court failed to conduct an independent review under
{¶ 12} Moellering next argues that this court should review the trial court‘s decision
{¶ 13} In its sole assignment of error, Moellering contends the trial court erred in finding in favor of CenterBank on Moellering‘s promissory estoppel claim. Essentially, Moellering asserts that the trial court‘s judgment was against the manifest weight of the evidence.
{¶ 14} When evaluating whether a judgment is against the manifest weight of the evidence in a civil case, the standard of review is the same as in the criminal context. Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179, 17. In a manifest weight analysis, the reviewing court weighs the evidence and all reasonable inferences, considers the credibility of witnesses and determines whether, in resolving conflicts in the evidence, the finder of fact clearly lost its way and created such a manifest miscarriage of justice that the judgment must be reversed and a new trial ordered. Schneble v. Stark, 12th Dist. Warren Nos. CA2011-06-063 and CA2011-06-064, 2012-Ohio-3130, ¶ 67, citing State v. Thompkins, 78 Ohio St.3d 380, 387 (1997). In addition, “every reasonable presumption must be made in favor of the judgment and the finding of facts.” Volkman at ¶ 21. “If the evidence is susceptible of more than one construction, the reviewing court is bound to give it that interpretation which is consistent with the verdict and judgment, most favorable to sustaining the verdict and judgment.” Id.
{¶ 15} Promissory estoppel is an equitable doctrine for enforcing the right to rely on promises. Rucker v. Everen Securities, Inc., 102 Ohio St.3d 1247, 2004-Ohio-3719, ¶ 6;
{¶ 16} In arguing that the trial court‘s decision was against the manifest weight of the evidence, Moellering attacks the trial court‘s finding that CenterBank did not make a clear and unambiguous promise to pay Moellering. Moellering argues that in determining that there was no clear and unambiguous promise, the trial court ignored evidence and made findings which contradicted the documentary evidence and testimony presented at trial. Specifically, Moellering contends that the trial court failed to consider the December 2, 2009 e-mail and Strotman‘s testimony regarding this e-mail.
{¶ 17} At trial, Young explained that Moellering typically offers an “open account” where it extends credit allowing the customer to take the product and pay 30 days after delivery. After reviewing GBCH‘s credit application, Young discovered GBCH was a credit risk and refused to extend GBCH credit as an “open account.” Young then proposed Moellering‘s standard payment option which requires the customer to forward 50 percent of the quoted amount as a down payment, with the remaining balance to be paid five days prior to the delivery of the fixtures. GBCH refused these payment terms.
{¶ 18} Young testified that he learned through GBCH‘s office manager, Charity Schober, that GBCH had a construction loan with CenterBank. Young suggested he could
{¶ 19} Young and Strotman spoke by phone regarding this potential arrangement. Young testified that CenterBank indicated it was agreeable to the two-party check as long as GBCH approved it. Schober sent an e-mail to CenterBank on December 1, 2009, confirming that GBCH approved issuing a two-party check to Moellering as it was a “one time supplier for this job.” On December 2, 2009, Strotman e-mailed Young stating:
CenterBank will provide a two party check to Sims Lohman Fine Kitchen and Granite. This is at the request of Garry Brasch Custom Homes Inc. If you need any additional information or a formal letter on our letterhead please feel free to contact me.
During Strotman‘s testimony, she admitted that the e-mail stated that the bank would provide a two-party check and agreed that there were “no ifs, ands, or buts in that e-mail.”
{¶ 20} However, Young was not satisfied by this e-mail and testified that after receiving this e-mail, he contacted Strotman “and said that I would like something on their letterhead, could she send it to me.” In a letter dated December 7, 2009, CenterBank stated: “As per Mr. Brasch‘s request[,] CenterBank will be able to cut a dual check upon completion
{¶ 21} After reviewing the evidence, the trial court found that the alleged promise occurred in the December 7, 2009 letter as Moellering claimed to have relied upon this letter. Moellering asserts that this finding contradicts the evidence. Moellering goes to great lengths to separate the December 2, 2009 e-mail and the December 7, 2009 letter. Moellering contends that these two communications represented separate promises that it reasonably relied on.
{¶ 22} Although, at first blush, the language “CenterBank will provide” as used in the e-mail may seem to be a clear promise, the facts and circumstances surrounding this e-mail indicate that this was not an isolated promise, but rather a step in the negotiation process. CenterBank sent the e-mail in response to Moellering‘s request for “confirmation of a two party check.” Even after receiving this e-mail, Moellering admitted that it did not rely on this statement to order the fixtures. Rather, Young stated that he contacted Strotman and requested the written assurance that she offered in the e-mail. “Once I got the letter from the bank, we set up the account.” The only reasonable inference from this testimony is that Moellering found that this e-mail alone was not sufficient to process the order. As Moellering did not rely on the statement in the e-mail, it cannot be the basis for its promissory estoppel claim.
{¶ 23} In addition, it is apparent from the testimony and the language used in the December 7, 2009 letter that CenterBank did not make a clear and unambiguous promise to Moellering that it was guaranteeing payment for its work. Moellering requested CenterBank
{¶ 24} Even if we consider the language in the e-mail in conjunction with the letter, these statements still only indicate that CenterBank will provide payment, albeit at a later date and at the request of CenterBank‘s customer, GBCH. Moellering argues that the trial court misconstrued the evidence when it found that GBCH had to authorize the two-party check once Moellering completed its work. Moellering contends that GBCH had already authorized the check as evidenced by GBCH‘s December 1, 2009 e-mail to CenterBank. However, Young specifically testified that he understood and was aware that Moellering could not unilaterally request a payment, otherwise known as a “draw” in order to be paid for its work. The evidence presented demonstrated that Moellering recognized that even though GBCH had already authorized the two-party check, in order for the bank to ultimately issue a check for the completed work, the request had to come from CenterBank‘s customer, GBCH.
{¶ 25} Finally, the promise was indefinite and ambiguous in several respects. See Husted at 24. First, the promise was ambiguous as to the manner in which CenterBank would determine the job was “completed.” This is evident from the discussions that occurred among CenterBank, Moellering, and GBCH once Moellering believed its work was complete. There was testimony that Moellering only sent final invoices to GBCH. After failing to obtain
{¶ 26} Moellering had the burden to prove that CenterBank‘s letter was a clear and unambiguous promise or guarantee to pay Moellering. Based on the foregoing, we find that the trial court did not clearly lose its way and create a manifest miscarriage of justice by determining that CenterBank did not make a clear and unambiguous promise to pay Moellering. Moellering, therefore, could not prevail on its promissory estoppel claim. McCroskey at 32 (finding it unnecessary to consider the remaining elements required for promissory estoppel where the court finds that no promise was made).
{¶ 27} As there is no indication in the record that the trial court clearly lost its way or
{¶ 28} Judgment affirmed.
S. POWELL and M. POWELL, JJ., concur.
HENDRICKSON, P.J.