THE WORD OF GOD CHURCH v. JASON STANLEY, et al.
Appellate Case No. 23985
IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT MONTGOMERY COUNTY
April 29, 2011
2011-Ohio-2073
Trial Court Case No. 07-CV-4467 (Civil Appeal from Common Pleas Court)
Rendered on the 29th day of April, 2011.
TERRY L. LEWIS, Atty. Reg. #0010324, Terry L. Lewis Co., LPA, 111 West First Street, Suite 1000, Dayton, Ohio 45402
Attorney for Plaintiff-Appellee
SCOTT G. OXLEY, Atty. Reg. #0039285, Scott G. Oxley Co., LPA, 325 North Main Street, Suite 204, Springboro, Ohio 45066
Attorney for Defendant-Appellant
HALL, J.
{¶ 1} Jason Stanley appeals from a jury verdict in favor of appellee Word of God Church on its claims against him for negligence, breach of contract, and fraud. The claims stemmed from allegedly faulty work performed by Stanley and another contractor, Thomas
{¶ 2} Stanley advances six assignments of error on appeal. First, he contends the trial court erred in granting the church a directed verdict on the invalidity of a release agreement he signed. Second, he claims the jury erred in finding that he had entered into a partnership or joint venture with Hemmelgarn.1 He further claims the trial court erred in prohibiting him from presenting evidence or argument about the partnership or joint venture being dissolved. Third, he argues that the trial court erred in allowing the church to introduce evidence about the existence or non-existence of liability insurance. Fourth, he asserts that the trial court erred in denying his motion for a directed verdict on the issue of whether a partnership or joint venture existed. Fifth, he contends the trial court erred in instructing the jury on the issue of fraud and in failing to sustain his motion for a directed verdict on that issue. Alternatively, he claims the weight of the evidence establishes that he did not commit fraud. Sixth, he argues that the trial court erred in denying his motion for a directed verdict on a proximate cause issue.
{¶ 3} The record reflects that Garnell Crawford, the pastor of the Word of God Church, met with Stanley and Hemmelgarn in the summer of 2006 to discuss their interest in constructing a new worship facility. At that time, church members had acquired a parcel of land, cleared the property, and purchased a large, prefabricated building. Crawford was interested in having Stanley and Hemmelgarn erect the steel frame and assemble the building. After some discussions, Hemmelgarn drafted a proposed labor contract for the project. The
{¶ 4} Later that summer, Stanley and Hemmelgarn informed Crawford that they were having trouble erecting the structural steel. According to Hemmelgarn, labeling and numbering on the steel beams had worn away since the building package had been delivered in 2004. As a result of delays caused by the problem, Stanley and Hemmelgarn asked Crawford for another $20,510 to cover their increased labor expenses. They supported the request with a written amendment to the contract. The church‘s board approved the amendment, raising the total project cost (labor plus equipment rental) to more than $66,000.
{¶ 5} Thereafter, Stanley and Hemmelgarn continued their work on the building. They took weekly draws against the total contract price based on the number of hours worked multiplied by an aggregate sum of $92 per hour. In October 2006, the structural steel had been set and work had begun on sheathing and siding around the steel. By that time, Crawford already had paid Stanley and Hemmelgarn draws of approximately $56,000 against the $66,000 total project bid.
{¶ 6} On October 12, 2006, Stanley met Crawford at a fast-food restaurant and presented him with a written release agreement. Stanley explained that he was having personal and professional problems and claimed that he could not devote the necessary time to the
{¶ 7} Hemmelgarn also signed the release and continued the project from that point on without Stanley‘s help. On December 9, 2006, a severe storm with high winds hit the area. As a result of the storm, Crawford had the building inspected and discovered significant problems beyond anything caused by the wind. In particular, the inspection revealed that the steel frame was not plumb, that the steel had been incompletely and incorrectly assembled, and that other material problems existed. The inspector recommended disassembling the building, straightening the steel, if possible, and then reinstalling new insulation, roofing, siding, and trim. The inspector characterized the building as “unsafe in its current condition,” adding that it “obviously [had] been erected by inexperienced or otherwise unqualified people.” At trial, Crawford presented evidence that it would cost more than $201,000 for labor and new materials to disassemble the building and put it together correctly.
{¶ 8} Following the presentation of evidence, the trial court entered a directed verdict in favor of the church on the invalidity of the release agreement between Crawford and Stanley. The trial court found, for various reasons, that the release was unenforceable against the church. In making this determination, the trial court specifically cited insufficiency of the consideration for the release, the existence of a mutual mistake, and unconscionability. The
{¶ 9} In his first assignment of error, Stanley contends the trial court erred in granting the church a directed verdict on the invalidity of the release agreement.3 In support, he disputes the trial court‘s finding that he failed to provide consideration in exchange for Crawford releasing him from the contracts. Stanley contends his own testimony, if believed, would support a finding that he forfeited compensation for twenty to thirty hours of work in exchange for the release.
{¶ 10} Upon review, we find this assignment of error unpersuasive for at least two independent reasons. First, as set forth above, the trial court declared the release invalid on multiple grounds, including a lack of consideration, mutual mistake, and unconscionability. In his appellate brief, Stanley has addressed only the consideration issue while failing even to mention the other grounds relied on by the trial court. Absent any argument from Stanley challenging the trial court‘s findings of mutual mistake and unconscionability, we have no basis to reverse its ruling.
{¶ 11} Second, with regard to the consideration issue, we find no error in the trial court‘s ruling. “A release is a contract that requires an offer, acceptance, and consideration
{¶ 12} Nevertheless, accepting Stanley‘s testimony as true, the record supports the trial court‘s determination that Stanley actually provided no consideration for the release. As set forth above, Stanley and Hemmelgarn agreed to construct a completed worship facility in exchange for roughly $66,000 (including the initial contract, the amendment, and the cost of renting equipment). Although the two men took weekly draws against this bid amount based on hours worked, they were not hourly laborers. The payments were no more than draws against the contract price. Stanley admitted at trial that when the release was signed he and Hemmelgarn already had received approximately $56,000 despite the fact that the building was only fifty percent completed. Thus, under their agreement with Crawford, they were
{¶ 13} Even setting aside Crawford‘s evidence that the worship facility presently is worthless, the foregoing facts persuade us that Stanley was not entitled to any additional compensation when he allegedly told Crawford that he would forego payment in exchange for the release. At that point, Stanley and Hemmelgarn already had been paid about eighty-five percent of their total bid price but had performed only fifty percent of the work. Nor does the record reflect that Stanley or Hemmelgarn ever actually reduced the total bid price to account for Stanley‘s allegedly forgiven hours. To the contrary, Hemmelgarn proceeded to collect about $35,000 from Crawford in addition to the contract price.
{¶ 14} This court has recognized that a promise to do something a party already is bound to do does not constitute additional consideration. Bourekis v. Saidel & Associates (June 2, 1994), Montgomery App. No. 14105. By the same token, Stanley‘s promise to forego something that he was not entitled to did not constitute consideration for the release. The first assignment of error is overruled.
{¶ 15} In his second assignment of error, Stanley claims the jury erred in finding that he had entered into a partnership or joint venture with Hemmelgarn. He further claims the trial court erred in preventing him from presenting evidence or argument about the partnership or joint venture being dissolved in October 2006.
{¶ 16} With regard to the jury‘s finding of a partnership or joint venture, we see no
{¶ 17} Here the record contains evidence that Hemmelgarn represented to Crawford, in Stanley‘s presence, that the two men were a partnership. Furthermore, the record is replete with evidence that Stanley and Hemmelgarn were acting jointly as general contractors who enjoyed mutual agency, control, and ownership. They also shared between themselves the weekly draws they took. On the record before us, the jury reasonably concluded that Stanley and Hemmelgarn were partners.
{¶ 18} Stanley‘s alternative argument that the partnership dissolved in October 2006 relies on the October 12, 2006 release he signed. Stanley asserts that once his partnership with Hemmelgarn dissolved pursuant to the release agreement, he no longer could be held liable for any of the partnership‘s obligations or liabilities. As a result, he contends the trial court erred in not allowing him to raise the dissolution issue and argue it at trial. In support, he cites
{¶ 20} In his third assignment of error, Stanley contends the trial court erred in allowing the Word of God Church to introduce evidence about the existence or non-existence of liability insurance. This argument concerns a pre-trial motion in limine the church filed. Therein, the church sought permission to inquire at trial about whether Stanley or Hemmelgarn had purchased insurance to cover the performance of their construction work. The church alleged that Stanley and Hemmelgarn had represented to Crawford, before any contract was signed, that they had proper coverage. The church further alleged that the contract at issue required coverage. Finally, the church alleged that Stanley and Hemmelgarn had breached the contract, and committed fraud, in part by failing to carry the necessary coverage. Stanley opposed the motion, relying on Evid.R. 411, which provides: “Evidence that a person was or was not insured against liability is not admissible upon the issue whether the person acted negligently or otherwise wrongfully. This rule does not require the exclusion of
{¶ 21} After reviewing the parties’ arguments, the trial court ruled in the church‘s favor on its motion. The trial court reasoned that evidence about insurance was not being used to show that the defendants had acted negligently or wrongfully. Instead, it was being offered as an element of the church‘s claims and an element of the construction contract. On appeal, Stanley contends the trial court erred in its ruling.
{¶ 22} We reject Stanley‘s argument for two reasons. First, this court has recognized that a ruling on a motion in limine is merely preliminary and, therefore, cannot serve as the basis for an assignment of error on appeal. State v. Baker, 170 Ohio App.3d 331, 2006-Ohio-7085, ¶9. We need not review a trial court‘s ruling on a motion in limine unless the error is preserved by a timely objection when the issue is reached at trial. Id. In the present case Stanley complains about the trial court‘s ruling on the motion in limine, but he has not identified (and we have not found) anywhere in the record where he raised the issue at trial.
{¶ 23} Second, even if Stanley did raise the issue at trial, we find his argument to be unpersuasive. The general rule against allowing evidence of liability insurance serves dual purposes. It excludes evidence that usually is not particularly relevant, and it guards against the possibility that a jury will return an excessive award because a “deep pocket” exists. Prymas v. Kassai, 168 Ohio App.3d 123, 2006-Ohio-3726, ¶35. In the present case, however, evidence about the existence or non-existence of insurance coverage was relevant. Indeed, it was impossible for the church to argue that Stanley had breached a contract and committed fraud in part by failing to have proper insurance coverage without introducing evidence about
{¶ 24} In his fourth assignment of error, Stanley asserts that the trial court erred in denying his motion for a directed verdict regarding whether a partnership or joint venture existed. This assignment of error is overruled based on our resolution of Stanley‘s second assignment of error above. Having already determined that the jury properly found the existence of a partnership, we reject his argument that the trial court should have directed a verdict in his favor on the issue. The fourth assignment of error is overruled.
{¶ 25} In his fifth assignment of error, Stanley contends the trial court erred in instructing the jury on the issue of fraud and in failing to sustain his motion for a directed verdict on that issue. Alternatively, he claims the weight of the evidence establishes that he did not commit fraud.
{¶ 27} In reaching the foregoing conclusion, we find Stanley‘s reliance on Fifth Third Bank v. Cope, 162 Ohio App.3d 838, 2005-Ohio-4626, and State v. Warner (1990), 55 Ohio St.3d 31, to be unpersuasive. Cope and Warner both recognized that a duty to disclose arises when a fiduciary or other special relationship exists between the parties. We do not disagree. Neither case held, or even suggested, however, that this is the only time a duty to disclose arises. As set forth above, such a duty also arises when “full disclosure is necessary to dispel misleading impressions that are or might have been created by partial revelation of the facts.” Gator Dev. Corp., at ¶28. The Warner decision, upon which Stanley relies, expressly recognized this fact. There the Ohio Supreme Court observed that “‘a party is under a duty to
{¶ 28} We also reject Stanley‘s argument that the trial court erred in failing to direct a verdict in his favor on the issue of fraud. Stanley contends the basis for the fraud claim was that he and Hemmelgarn allegedly had made misrepresentations to Crawford about their experience, insurance coverage, and warranty. According to Stanley, the record lacks evidence to support a finding of fraud on any of these grounds.
{¶ 29} Having reviewed the record, we believe the trial court properly declined to enter a directed verdict in Stanley‘s favor on the fraud claim. “When a motion for a directed verdict has been properly made, and the trial court, after construing the evidence most strongly in favor of the party against whom the motion is directed, finds that upon any determinative issue reasonable minds could come to but one conclusion upon the evidence submitted and that conclusion is adverse to such party, the court shall sustain the motion * * *.”
{¶ 30} The trial court instructed the jury that the church alleged fraud based on misrepresentations Stanley and Hemmelgarn had made about (1) their experience erecting
{¶ 31} Construing the evidence in a light most favorable to the church, we believe reasonable minds could find fraud based on at least one of the foregoing grounds. When Stanley and Hemmelgarn initially met Crawford to discuss submitting a bid for the construction job, he asked them about their experience. Specifically, he inquired about whether they were qualified to erect a big building and whether they had “ever done anything like this.” According to Crawford, Stanley and Hemmelgarn responded that they were partners and had done “numerous jobs together.” Crawford recalled that Hemmelgarn also mentioned having “worked on the Living Word Church,” which Crawford knew was a huge facility. On cross examination, Crawford reiterated that he specifically asked whether Stanley and Hemmelgarn “had the expertise to put up a building like [his].” According to Crawford, “[b]oth of them [responded] yeah, they‘ve done a lot of projects together.”
{¶ 32} Crawford further testified that he relied on the representations made by Stanley and Hemmelgarn when he hired them. When considered in light of other evidence in the record, and when construed most strongly in favor of the Word of God Church, the statements Stanley and Hemmelgarn made about their qualifications reasonably could be viewed as materially misleading half-truths. A trier of fact reasonably could infer from Crawford‘s testimony that the two men held themselves out as being experienced in erecting large steel
{¶ 33} In reality, the record supports a finding that Stanley and Hemmelgarn had little experience performing the scope of work Crawford‘s project required. Almost all of what Stanley and Hemmelgarn had done together was residential remodeling. Stanley admitted at trial that he had no experience in the construction of large commercial buildings beyond some heating, ventilation, and air conditioning work. As for Hemmelgarn, the record reflects that he had performed some work on the Living Word Church in Vandalia, Ohio. He admitted at trial, however, that he did not work as a contractor or even as an employee. Rather, he performed volunteer tasks along with many fellow members of the congregation. The only other non-residential experience Hemmelgarn claimed at trial involved working on a commercial job with Stanley to help construct the second floor of a facility known as “The Greene.” In his own testimony, Stanley appeared to deny that he and Hemmelgarn had worked together on the project. In any event, the only experience erecting steel that Hemmelgarn mentioned at trial involved constructing residential “pole barns” and doing volunteer work on “a storage building” for the Living Word Church.
{¶ 34} When evaluating the qualifications possessed by Stanley and Hemmelgarn, a trier of fact also reasonably could take into account the end result. On that issue, commercial construction expert Dean Harlamert described numerous defects in the construction of the worship facility at issue. After estimating that he had examined thousands of buildings, he opined that the facility Stanley and Hemmelgarn had built for Crawford was “without question the poorliest [sic] erected building that [he had] ever inspected.” According to Harlamert, the
{¶ 35} In light of the foregoing evidence, a trier of fact reasonably could find that Stanley and Hemmelgarn made misleading representations about their qualifications and experience and, further, that “full disclosure [was] necessary to dispel misleading impressions that * * * might have been created by partial revelation of the facts.” Gator Dev. Corp., at ¶28. As a result, we cannot say the trial court erred in allowing the fraud claim to go to the jury based on materially misleading representations Stanley and Hemmelgarn made about their qualifications and experience.6
{¶ 36} For much the same reason, we also reject Stanley‘s ultimate argument that the jury‘s finding of fraud is against the weight of the evidence. Under the civil manifest-weight-of-the-evidence standard, a judgment supported by some competent, credible evidence going to all the essential elements of a claim will not be reversed. Sullivan v. Curry, Montgomery App. No. 23293, 2010-Ohio-5041, ¶42.
{¶ 37} “A claim for common-law fraud requires proof of the following elements: (1) a representation or, where there is a duty to disclose, concealment of a fact, (2) which is material to the transaction at hand, (3) 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, (4) with the intent of misleading another into relying upon it, (5) justifiable reliance upon the representation or concealment, and (6) a resulting injury proximately caused by the reliance.” Sutton Funding, LLC v. Herres, 188 Ohio App.3d 686, 697, 2010-Ohio-3645, ¶49.
{¶ 39} In his sixth assignment of error, Stanley contends the trial court erred in denying his motion for a directed verdict regarding proximate cause. In support of his motion below, Stanley claimed the church had failed to present expert testimony establishing that the defendants’ deficient work had proximately caused any damages. As did the trial court, we reject this argument.
{¶ 40} Assuming, arguendo, that expert testimony was necessary in this case,7 the record contains it. As noted above, the Word of God Church presented testimony from construction expert Harlamert. He identified various material defects in the construction of the worship facility and testified that none of the problems he saw were related to a windstorm. According to Harlamert, all of the problems were “installation related.” Although he did not use the words “proximate cause,” he unquestionably conveyed his expert opinion that
{¶ 41} Having overruled each assignment of error, we affirm the judgment of the Montgomery County Common Pleas Court.
FAIN and BROGAN, JJ., concur.
(Hon. James A. Brogan, retired from the Second District Court of Appeals, sitting by assignment of the Chief Justice of the Supreme Court of Ohio).
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Terry L. Lewis
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