Judge Kimbler Decision Concerning Oral v Written Contract

Case History

The Plaintiffs filed a complaint setting forth six counts. One of the counts was for unjust enrichment; one of the counts was for conversion; two of the counts were for breach of contract for repairs that were done to a barn and other outbuildings; and two counts were for breach of contract for repairs that were done to the Plaintiffs house. The Defendant filed an answer denying liability.

Both parties have filed various motions. The Court's rulings on those motions have been set forth in a separate journal entry. The Defendant also filed a motion for summary judgment on the grounds that the claims were time barred. The Plaintiffs have filed a response to that motion. This journal entry sets forth the Court's ruling on the Defendant's motion for summary judgment.

Findings of Fact

The parties entered into two contracts in 2001 whereby the Defendant was to perform certain repairs on buildings located on real estate owned by the Plaintiffs. The formation of the contracts was done pursuant to a written proposal by the Defendant for repairs to a barn and outbuildings and a written proposal for repairs to the Plaintiffs' house.

Pursuant to the contracts the Defendant started working on the house in 2001 and the Plaintiffs proceeded to pay him over $49,000.00. The last check from the Plaintiffs to the Defendants was issued on September 18, 2001.

Although the work was paid for, the Plaintiffs were apparently not happy with the work. According to an affidavit filed by Jeanne Theis there was work done by the Defendant and/or workers employed by him on March 13, 2002; August 6, 2003; February 19, 2007; September 28, 2007; June 13, 2008; July 3, 2008; and July 4 and July 7, 2008.

The affidavit filed by Mrs. Theis also states that there were additional times when she spoke to the Defendant either at her home or at other locations regarding the work and when it would be completed.

The affidavit also alleges that in July of 2008 the Plaintiffs came home to find that the Defendant's employees had taken material from their home that was to be used in the repair of buildings on their property.

Conclusions of Law


Standard of Review for Motions for Summary Judgment

Summary judgment is appropriate when (1) there is no genuine issue of material fact, (2) the moving party is entitled to judgment as a matter of law, and (3) after construing the evidence most favorably for the party against whom the motion is made, reasonable minds can reach only a conclusion that is adverse to the non-moving party. Zivich v. Mentor Soccer Club, Inc. (1998), 82 Ohio St.3d 367, 696 N.E.2d 201, Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 364 N.E.2d. 267.

The standard of review for a motion for summary judgment was generally stated in State ex rel. Zimmerman v. Tompkins (1996), 75 Ohio St. 3d 447, 448-449, 663 N.E.2d 639, as follows:

“Civ.R. 56(C) provides that before summary judgment may be granted, it must be determined that (1) no genuine issue as to any material fact remains to be litigated, (2) the moving party is entitled to judgment as a matter of law, and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the nonmoving party, that conclusion is adverse to the party against whom the motion for summary judgment is made.” State ex rel. Parsons v. Fleming (1994), 68 Ohio St. 3d 509, 511, 628 N.E.2d 1377, 1379, citing Temple v. Wean United, Inc. (1977), 50 Ohio St. 2d 317, 327, 4 Ohio Op. 3d 466, 472, 364 N.E.2d 267, 274.

Summary judgment is appropriate where the nonmoving party does not produce evidence on any issue for which that party bears the burden of production at trial. Wing v. Anchor Media, Ltd. of Texas (1991), 59 Ohio St. 3d 108, 570 N.E.2d 1095, paragraph three of the syllabus; State ex rel. Morley v. Lordi (1995), 72 Ohio St. 3d 510, 513, 651 N.E.2d 937, 940.

When a motion for summary judgment is made and supported as provided in Civ.R. 56, the nonmoving party may not rest on the mere allegations of his pleading, but his response, by affidavit or as otherwise provided in Civ.R. 56, must set forth specific facts showing that there is a genuine triable issue. Civ.R. 56(E); Jackson v. Alert Fire & Safety Equip., Inc. (1991), 58 Ohio St. 3d 48, 52, 567 N.E.2d 1027, 1031.

Statute of Limitations for Breach of Contract

The statute of limitations for written contracts is 15 years. R.C. 2305.06.

The statute of limitations for oral contracts is six years. R.C. 2305.07.

What Constitutes a "Contract in Writing?"

"In order for an action to come within the statute of limitations governing actions under R.C. 2305.06, the written instrument must clearly define the unilateral or bilateral obligations of the parties without reference to supplemental evidence to establish the terms of the agreement, contract, or promise. Where such a written instrument exists, the appropriate statute of limitations is fifteen years, as provided in R.C. 2305.06, regardless of whether the agreement, contract, or promise states a sum certain." Claxton v. Mains, 33 Ohio App. 3d 49 (Ohio Ct. App., Franklin County 1986).

"A valid contract involves competent parties, a lawful subject matter, a sufficient consideration, and an actual agreement to do or forebear from doing some particular thing." Griffey v. Rajan, 33 Ohio St. 3d 75, 85 (Ohio 1987).

"In the case of a unilateral contract, as here, the promisor's offer is accepted by the promisee's performance rather than by a return promise to perform. Consequently, when the promisee's performance is executed, enforceable obligations arise without more. Under this analysis, then, appellants' continued employment, as the bargained-for-consideration, rendered the contract to pay severance benefits enforceable, regardless of "mutuality" or a lack thereof."
Helle v. Landmark, Inc., 15 Ohio App. 3d 1, 12 (Ohio Ct. App., Lucas County 1984)

"A contract is generally defined as a promise, or a set of promises, actionable upon breach. Essential elements of a contract include an offer, acceptance, contractual capacity, consideration (the bargained for legal benefit and/or detriment), a manifestation of mutual assent and legality of object and of consideration." Perlmuter Printing Co. v. Strome, Inc. (N.D.Ohio 1976), 436 F. Supp. 409, 414. A meeting of the minds as to the essential terms of the contract is a requirement to enforcing the contract. Episcopal Retirement Homes, Inc. v. Ohio Dept. of Indus. Relations (1991), 61 Ohio St. 3d 366, 369, 575 N.E.2d 134." Kostelnik v. Helper, 96 Ohio St. 3d 1, 3-4 (Ohio 2002).

If a contract is silent as to the time of performance, the law will imply the term that the performance be made within a "reasonable time." Trucks, Inc. v. Valley Ford Truck Sales, 2006 Ohio 1609 (Ohio Ct. App., Cuyahoga County Mar. 30, 2006).

In a construction contract, the term will be implied that the work will be done in a "workmanlike manner. " Terrace Creek Ass'n v. Smith, 2001 Ohio App. LEXIS 2212 (Ohio Ct. App., Montgomery County May 18, 2001)

The law will also imply the term that payment due under the terms of a contract will be paid within a "reasonable time." Hall v. United States Bank Nat'l Ass'n, 2006 Ohio 303 (Ohio Ct. App., Hamilton County Jan. 27, 2006)

"R.C. 2305.08 states, in part, that "if payment has been made upon any demand founded on a contract, an action may be brought thereon within the time limited by sections 2305.06 and 2305.07 of the Revised Code, after such payment." In Canton Oil Well Serv., Inc. v. White, 1985 Ohio App. LEXIS 7196 (Sept. 23, 1985), Stark App. No. CA-6588, unreported, at 1, 1985 WL 6502, the Fifth Appellate District held that HN13partial payment towards an indebtedness removes the case from the six year statute of limitations found in R.C. 2305.07, and extends the running of the statute as provided in R.C. 2305.08…" Slack v. Cropper, 143 Ohio App. 3d 74, 83-84 (Ohio Ct. App., Portage County 2001)

Holding

This Court finds, for reasons set forth below, that the applicable statute of limitations in this case is fifteen years.

Discussion

The proposals that were given to the Plaintiffs by the Defendant were proposals for a unilateral contract. The obligation of the Plaintiffs was to pay once the work was performed. The Plaintiffs, when they issued the first check to the Defendant, accepted his proposals. At that time the contracts between the parties came into existence. The Court finds that the contracts were "unilateral" because the Plaintiffs had no duty to pay until the Defendant had performed. Once they paid, however, they accepted the contract and it became binding on both parties.

Since the Court believes that the contracts were unilateral contracts, what has to be in writing is the offer, not both the offer and the acceptance. In a unilateral contract, the offer is accepted by performance, not by making a reciprocal promise.

It is true that the written proposal made by the Defendant is ambiguous with respect to exactly what repairs were to be made. This lack of specificity does not mean that there was no contract. It may mean, however, that the Court will have to admit parol evidence to explain some of the words used in the proposals, like, for example, "storm damage." The fact that some words are ambiguous doesn't mean that there was no contract.

Further even if this Court found that the contract was a bilateral contract, the Court would still find that the statute of limitations is 15 years. This is because of R.C. 2503.08. When the Plaintiffs wrote the first check to the Defendant, they made a "payment on a demand". Once they did that, even if there was an oral contract, they brought their cause of action under the statute of limitations set forth in R.C. 2503.06.

This Court does believe that there are remaining issues that can be resolved by motions for summary judgment. Those issues include whether or not a cause of action for "unjust enrichment" can exist if there is a contract between the parties and also include whether Ohio recognizes a cause of action for negligent performance of a contact if the only damages are economic. Those issues, however, are not now before the Court.

Each party is expressly granted leave to file motions for summary judgment up until sixty days before trial. This permission continues even after this Court sets this matter down for either a online pretrial or a pretrial in person.

SO ORDERED.