Pappas v. IppolitoPappas v. Ippolito
Lead Opinion
{¶ 1} Plaintiffs-appellants George E. Pappas and 25400 Euclid Avenue, L.L.C., appeal from a summary judgment rendered in favor of defendants-appellees Debbie Piunno and Kenneth Ippolito on appellants’ claims for breach of contract, fraud, conversion, promissory estoppel, and breach of the implied covenant of good faith and fair dealing. Appellants assign four errors for review, challenging the trial court’s granting of summary judgment and the court’s earlier orders limiting discovery and striking evidence from the record. For the reasons stated below, we affirm.
{¶ 2} This case concerns a commercial real estate transaction. On June 10, 2002, appellants аgreed to purchase the Richmond Towers apartment building in the city of Euclid from its owner, Ippolito, for $4,150,000. The transaction was completed on November 19, 2002, and shortly thereafter, appellants took possession of the property.
{¶ 3} Appellants allege that immediately after taking possession, they discovered that the tenant lists and rent rolls provided by Ippolito as part of the prepurchase negotiations contained false information, resulting in more than $15,000 per month less in monthly income than that represented by Ippolito.
{¶ 4} On April 25, 2007, the trial court granted summary judgment in favor of appellees on all but one claim. Appellants then dismissed the remaining claim without prejudice and filed this appeal. We will review appellants’ assignments of error out of order so as to review the evidentiary issues first.
I
{¶ 5} In appellants’ third assignment of error, they argue that “the trial court committed prejudicial error when it entered rulings striking evidence and testimony offered by Plaintiffs/Appellants.”
{¶ 6} Ippolito filed his motion for summary judgment on March 1, 2005. Appellants, with leave of court, filed their opposition brief on April 15, 2005. In support of their opposition to summary judgment, appellants appended 20 exhibits to their brief. These exhibits comprised documents, pages of transcripts from depositions, and affidavits of witnesses.
{¶ 7} On April 29, 2005, Ippolito filed six motions to strike, asking the court to strike from the record five of the affidavits and one of the exhibits. The exhibit, Exhibit XIII, was an unauthenticated letter purportedly written by Joseph Franzese, an architect with Omni Associates, Inc., the firm hired by Pappаs to inspect the property, which referred to problems relating to the inspection of apartments prior to the closing.
{¶ 8} On May 2, 2005, Ippolito filed his reply brief, in which he argued that appellants’ opposition was not supported by admissible evidence, referring to the six motions to strike filed previously. On May 9, 2005, appellants filed a notice with the court stating that they were filing Joseph Franzese’s affidavit authenticating Exhibit XIII.
{¶ 9} Between October 18, 2005, and February 21, 2006, the trial court issued numerous rulings, resulting in certain parts of appellants’ supporting evidence being stricken from the record. These rulings included an order on October 18, 2005, striking the Franzese affidavit and another on February 6, 2006, striking Exhibit XIII.
{¶ 10} On February 21, 2006, the trial court issued its ruling on the admissibility of statements contained in the affidavits of William Pappas, George Pappas,
{¶ 11} Appellants argue that the trial court abused its discretion in making these rulings and striking certain evidenсe. Appellants assert that the trial court struck evidence on highly relevant topics without any basis in fact or law for doing so. Appellants also claim that the court based its rulings on the Franzese affidavit and Exhibit XIII on a procedural rule “made up by the trial judge.” We disagree.
{¶ 12} A review of the record demonstrates that the trial court scrupulously adhered to the rules of civil procedure regarding the motions for summary judgment and appellants’ opposition filed in this matter.
{¶ 13} “The motion shall be served at least fourteen days before the time fixed for hearing. The adverse party, prior to the day of hearing, may serve and file opposing affidavits. Summary judgment shall be rendered fоrthwith if the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence, 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.” (Emphasis added.)
{¶ 14}
{¶ 15} “Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated in the affidavit. Sworn or certified copies of all papers or parts of papers referred to in an affidavit shall be attached to or served with the affidavit.”
{¶ 16} Pursuant to this rule, the trial court could refuse to consider appellants’ Exhibit XIII as evidence for two reasons. First, the letter was not a certified copy, nor was it accompanied by an affidavit attesting to its authenticity; thus, it could not properly be considered under
{¶ 17} However, in its March 23, 2007 entry, the court clarified its earlier rulings on Exhibit XIII and stated: “The Court now clarifies that as originally filed, exhibit 13 to the Plaintiffs’ brief in opposition to summary judgment cannot be considered on summary judgment; as refiled, it can be.” Therefore, since the court decided that it could consider Exhibit XIII as part of appellants’ opposition to appellees’ motion for summary judgment, appellants’ argument on this issue is moot.
{¶ 18} Appellants also contest the trial court’s orders striking portions of the affidavits of George Oulas, George Pappas, William Pappas, and Steven Asbury filed with appellants’ brief in oppositiоn to summary judgment.
{¶ 19} The decision whether to admit or exclude evidence is subject to review under an abuse-of-discretion standard, and absent a clear showing that the court abused its discretion in a manner that materially prejudices a party, we will not disturb an evidentiary ruling. See
State v. Lyles
(1989),
{¶ 20} In this case, the trial court conducted a thorough analysis of each of the statements subject to being stricken. The сourt struck statements, or parts of statements, that it found were not made upon personal knowledge, were not statements of fact but rather stated legal or other conclusions, and those it found simply made no sense. In making its determination whether to admit or exclude statements, the court followed the dictates of
{¶ 21} Appellants’ third assignment of error is overruled.
II
{¶ 22} In appellants’ fourth assignment of error, they argue that “the trial court committed prejudicial error when it precluded Plaintiffs/Appellants from
{¶ 23} It is well established that a trial court enjoys considerable discretion in the regulation of discovery proceedings.
State ex rel. Daggett v. Gessaman
(1973),
{¶ 24} Appellants assert that the trial court abused its discretion when it issued a protective order preventing them from taking the depositions of Mike Ippolito, Richard Murphy, and Michael Murphy. They claim that the depositions would have developed evidence that Ippolito had engaged in a habit and routine practice of defrauding buyers in real estate transactions by inflating rent rolls and concealing defects in his properties. Appellants contend that such evidence is relevant and would have been admissible under
{¶ 25}
{¶ 26}
{¶ 27} As this court has explained in the past, “The rationale for the admission of evidence pursuant to
{¶ 28} “Evidence of habit requires a showing that the person to whom the habit is attributed performs a repeating act, either involuntarily or so consistently that the probabilities are such that in the absence of direct evidence to the contrary, the trier of fact may infer that the character of the person is such that the act actually occurred as it has so often in the past.”
State v. Gaines,
{¶ 29} Appellants’ reliance on this court’s decision in
Gonzalez v. Spofford,
Cuyahoga App. No. 85231,
{¶ 30} We do not find that the trial court abused its discretion in granting appellees’ protective order. Appellants have failed to demonstrate how the proposed testimony of Mike Ippolito, Richard Murphy, and Michael Murphy, regarding past unrelated commercial dealings, is relevant to this action. Neither have appellants demonstrated that the proposed testimony of the three witnesses can rise to the level of “habit” to satisfy the requirements of
{¶ 31} Appellants’ fourth assignment of error is overruled.
Ill
{¶ 32} In appellants’ second assignment of error, they argue that “the trial court erred when it granted Defendant Ippolito’s Motion for Summary Judgment.”
{¶ 33} Appellants assert that the trial court erred in granting summary judgment in favor of Ippolito on the claims of fraud, conversion, breach of contract, promissory estoppel, civil conspiracy, and breach of the implied covenant of good faith and fair dealing.
{¶ 34} We review an appeal of the granting of summary judgment under a de novо standard of review. Accordingly, we afford no deference to the trial court’s decision and independently review the record to determine whether
{¶ 35} Under
{¶ 36} The party moving for summary judgment on the ground that the nonmoving party cannot prove its case bears the initial responsibility of informing the trial court of the basis for the motion and identifying those portions of the record before the trial court that demonstrate the absence of a genuine issue of fact on a material element of the nonmoving party’s claim.
Dresher v. Burt
(1996),
{¶ 37} Once the moving party has met its initial burden, the nonmoving party must produce competent evidence establishing the existence of a genuine issue for trial. Id. at 293,
{¶ 38} In reviewing a grant of summary judgment, we are mindful of the Ohio Supreme Court’s admonition that “[s]ummary judgment is a procedural device to terminate litigation and to avoid a formal trial where there is nothing to try. It must be awarded with caution, resolving doubts and construing evidence against the moving party, and granted only when it appears from the evidentiary material that reasonable minds can reach only an adverse conclusion as to the party opposing the motion.”
Norris v. Ohio Std. Oil Co.
(1982),
FRAUD
{¶ 39} Appellants asserted in their complaint that Ippolito fraudulently misrepresented the condition of the apartment units and deliberately overstated the
{¶ 40} “A claim of common-law fraud requires proof of the following elements: (a) a representation or, where there is a duty to disclose, concealment of a fact, (b) which is material to the transaction at hand, (c) made falsely, with knowledge of its falsity, or with such utter disregard and recklessness as to whether it is true or false that knowledge may be inferred, (d) with the intent of misleading another into relying upon it, (e) justifiable reliance upon the representation or concealment, and (f) a resulting injury proximately caused by the reliance.”
Russ v. TRW, Inc.
(1991),
{¶ 41} Appellees moved for summary judgment on fraudulent misrepresentation of the condition of the apartment units, arguing that the doctrine of caveat emptor applied. They further argued that based on the “as is” clauses in the contract, appellants could not establish justifiable reliance on any representation made by appellees or their agents. They also noted that appellants should not hаve relied upon any alleged representations made about the property’s condition, since appellants employed Capstone Realty Advisors and Omni Associates, two professional firms, to inspect the property.
{¶ 42} Appellants opposed summary judgment and argued that caveat emptor did not apply because Ippolito intentionally limited their inspection of the building to 14 units and fraudulently misrepresented that the condition of the 14 units was representative of all of the units. As evidence in support of their opposition, appellants attached to their brief a letter that Joseph Franzese sent to Harry Giallourakis of Capstonе Realty Advisors, stating that Ippolito refused to allow William Pappas access to the property for the inspection and also that Ippolito limited the number of units that Franzese would be allowed to inspect. Appellants also attached excerpts of deposition testimony from Ippolito’s broker, Gary Cooper, who said that Ippolito chose the units to be viewed and that based upon Ippolito’s representations to him, he represented to appellants that the condition of those 14 units was comparable to the condition of all of the units in the building.
{¶ 43} “The doctrine of caveat emptor precludes recovery in an аction by the purchaser for a structural defect in real estate where (1) the condition
{¶ 44} The trial court did not err in granting appellees summary judgment on this issue. The express language of the purchase agreement places the contractual burden on appellants to inspect and approve the “as is” condition of the property and grants them the right to terminate the contract if an unacceptablе condition is discovered. The agreement further provides, “Buyer agrees and acknowledges that Buyer has not relied upon any representation of Agent in connection with Buyer’s Purchase of the Property.” Even viewing the evidence most strongly in appellants’ favor, as we must, we do not find that there exists a triable issue of material fact on appellants’ claim that appellees fraudulently misrepresented the condition of the apartment units.
{¶ 45} As to the allegations of fraud relating to the rent rolls, we find that appellants fail to present evidence as to the inaccuracy of the information at the time the representations were made and fail to present evidence of justifiable reliance. The rent roll that Ippolito prepared on September 20, 2002, represents that the total monthly rent for all units was $64,570. Appellants claim, however, that when they began collecting rent after taking possession of the property on November 19, 2002, they collected between $15,000 and $20,000 less per month than what Ippolito had represented. A careful review of the record shows that the rent roll lists 126 separate units, each with a “monthly amount” and a “renewal date.” It is apparent at a glance that 42 of the 126 units were marked with a double asterisk because their lease-renewal dates had expired or were аbout to expire. We find nothing false about this representation, and appellants offered no evidence to show that Ippolito flagged expired or nearly expired leases with the intent to mislead appellants into relying on that representation. Furthermore, the real estate sales contract between the parties states that the buyer must approve the rent rolls. This clause, coupled with the patent disclosure of expired leases, makes it unreasonable for appellants to assume that they would collect $64,570 monthly in rent, without inquiring further into the financial situation.
{¶ 46} The court did not err in granting summary judgment to Ippolito on appellants’ fraud clаim.
CONVERSION
{¶ 47} In
Tabar v. Charlie’s Towing Serv., Inc.
(1994),
{¶ 49} In their complaint, appellants alleged that Ippolito misappropriated an $8,000 payment check from Cleveland Metropolitan Housing Authority (“CMHA”) in December 2002. Ippolito moved for summary judgment on this claim, arguing that appellants failed to prove the elements of conversion. The trial court rightly pointed out that at this point in the litigation, appellants do not have to
prove
anything. As the party moving for summary judgment, Ippolito carries the initial burden of setting forth specific facts that demonstrate his entitlement to summary judgment.
Dresher,
supra,
{¶ 50} Pursuant to
Dresher,
supra, and
{¶ 51} In the instant case, we agree with the trial court’s analysis that appellants’ “sworn answers in their depositions amounted to mere repetition of the allegations of the complaint.” Appellants failed to produce evidence that the check existed, let alone that Ippolito kept it when he should have turned it over to appellants. Therefore, the court did not err when it granted summary judgment on appellants’ conversion claim.
BREACH OF CONTRACT
{¶ 52} Appellants argue on appeal that Ippolito breached the parties’ contract relating to the failure to disclose accurate rental income information and the apartments’ physical condition. Appellants note that they make this argument as an alternative to their fraud claim. Having found that there are no genuine
PROMISSORY ESTOPPEL
{¶ 53} Count four of appellants’ complaint states that appellees generally made promises and assurances to appellants and should be estopped from denying those promises and assurances. Appellants pleaded this claim as an alternative theory of recovery in addition to the breach-of-contract and fraud claims. In opposing summary judgment on this issue, appellants cite Ippolito’s signature on the rent rolls as promising that the figures contained within were accurate. Appellants claim that they reasonably and foreseeably relied upon this promise to their detriment. As noted above, appellants supported their opposition to summary judgment with
{¶ 54} “The doctrine of promissory estoppel is equitable in origin and nature and arose to provide a remedy through the enforcement of a gratuitous promise.”
Hortman v. Miamisburg,
{¶ 55} “The elements of a claim for promissory estoppel are as follows: (1) a clear, unambiguous promise; (2) reliance upon the promise by the person to whom the promise is made; (3) the reliance is reasonable and foreseeable; and (4) the person claiming reliance is injured as a result of reliance on the promise.”
Rucker v. Everen Secs.,
Cuyahoga App. No. 81540,
{¶ 56} Appellants failed to provide any evidence оf an enforceable “promise,” that is, an intention to do or refrain from doing something in the future.
Hortman,
supra, at
{¶ 57} “Parties to a contract are bound toward one another by standards of good faith and fair dealing. However, this does not stand for the proposition that breach of good faith exists as a separate claim. Instead, good faith is part of a contract claim and does nоt stand alone.”
Dawson v. Blockbuster, Inc.,
Cuyahoga App. No. 86451,
IV
{¶ 58} In аppellants’ final assignment of error, they argue that “the trial court erred when it granted Defendant Piunno’s Motion for Summary Judgment.”
{¶ 59} Appellants assert that the trial court erred in granting summary judgment in favor of Piunno on their claims of fraud and civil conspiracy. Additionally, appellants assert that the trial court erred in construing appellants’ allegations that Piunno conspired with Ippolito to commit a fraud against them as stating a cause of action for aiding and abetting fraud rather than a claim for civil conspiracy. Before reviewing the grant of summary judgment, we must first determine whether appellants’ complaint stated a claim for civil conspiracy.
{¶ 60} We note first that the concept of “notice pleading” employed by the Ohio Rules of Civil Procedure does not usually require any great degree of specificity; it requires only that notice be given as to the nature of the action. See
Mills v. Deehr,
Cuyahoga App. No. 82799,
{¶ 61} The elements of a civil-conspiracy claim include (1) a malicious combination, (2) involving two or more persons, (3) causing injury to person or property, and (4) the existence of an unlawful act independent from the conspira
{¶ 62} Even given a liberal interpretation of the notice-pleading requirements of
{¶ 63} As to the claim of fraud, we find that the trial court did not err in granting summary judgment to Piunno. The undisputed evidence in the record discloses that Piunno was employed by Ippolito as property manager of Richmond Towers. She was not a party to the contract. She had no part in the negotiations for the sale of the property. She did not act as a fiduciary. She did not sign or certify the disputed rent rolls. As an employee, Piunno worked under the dirеction and control of Ippolito. Ippolito signed and certified the rent rolls.
{¶ 64} Appellants admit that all of the representations material to the purchase of the property upon which they relied were made by Ippolito, not Piunno. Because the evidence affirmatively demonstrates that appellants cannot support a claim of fraud against Piunno, summary judgment on that claim was properly granted. Appellants’ final assignment of error is overruled.
{¶ 65} In conclusion, the trial court did not abuse its discretion in ruling that various discovery issues were inadmissible, and the court did not err in granting summary judgment to Ippolito and Piunno on all claims before us.
Judgment affirmed.
Notes
. Appellants also alleged in their complaint that Ippolito failed to disclose a $4,100 assessment by the city of Euclid. However, appellants do not raise this allegation as error on appeal. Pursuant to
Dissenting Opinion
concurring in part and dissenting in part.
{¶ 66} I concur with the majority decision on the discovery issues and also concur in part on the issue of summary judgment. I dissent, however, from the majority’s finding that summary judgment was properly granted to Ippolito on all
{¶ 67} On the Euclid assessment claim, a review of Ippolito’s motion for summary judgment shows that Ippolito never moved for summary judgment on that claim. In fact, Ippolito makes no mention of the assessment in his motion. Therefore, the trial court’s granting of summary judgment on that issue is reversible error. Likewise, the trial court erred in granting judgment on the Section 8 check. Ippolito failed to set forth any facts demonstrating an entitlement to summary judgment on this issue other than a general denial of the claim and a broad assertion that appellant had no evidence. This is insufficient grounds for summary judgment under
{¶ 68} Further review of the record finds that triable issues of material fact remain on appellants’ claim that Ippolito misrepresented the value of the rent rolls. Appellants provided evidence showing that it is a standard in the industry for a buyer to rely upon the information in the rent rolls and that the rent rolls are supposed to accurately disclose what the rent receipts are. Appellant provided evidence that showed that he relied upon the rental-stream-of-income method of valuation in determining whether to purchase the property as an investment. He stated that he found the purchase price to be fair based upon the rental income figure of $64,570 per month provided by Ippolito. Appellants provided evidence that showed that the monthly rent roll income figure provided by Ippolito in October 2002 was approximately $16,000 higher than the actual monthly rent income received after appellants took possession of the building in November 2002, one month later.
{¶ 69} Even considering that the trial court struck much of appellants’ evidence in opposition, when viewing the remaining evidence most strongly in appellants’ favor, reasonable minds could reach more than one conclusion as to whether Ippolito misrepresented the actual amount of rental income from the property prior to the sale. Because questions of fact remain, Ippolito was not entitled to judgment as a matter of law, and the trial court erred in granting summary judgment to him on this issue.