Justia Contracts Opinion Summaries

The Supreme Court held that the common-law requirements set out in Globe Indemnity Co. v. Schmitt, 53 N.E.2d 790 (Ohio 1944), for determining whether and indemnitee may recover against an indemnitor when the indemnitee has settled a claim without the indemnitor's involvement, do not apply when the parties express a clear intent to abrogate those common-law requirements.The court of appeals in this breach of contract action concluded that the Globe Indemnity Co. requirements apply regardless of the terms of the parties' contract. The Supreme Court reversed, holding that the court of appeals erred by applying the common-law requirements set out in Globe Indemnity Co. without considering whether the parties abrogated those requirements in their contract. The Court remanded this matter to the trial court for further proceedings. View "Wildcat Drilling, LLC v. Discovery Oil & Gas, LLC" on Justia Law

The Supreme Court reversed the judgment of the court of appeals concluding that a cognovit promissory note signed by debtors was defective, holding that the contract, viewed as a whole, put the debtors on notice of the rights they were relinquishing by signing the note.Progressive Polymers, LLC and Darin Bay obtained a loan from Sutton Bank secured by a cognovit promissory note. The note included a confession-of-judgment clause containing a warrant of attorney by which Progressive Polymers and Bay agreed that if they defaulted on the note an attorney could confess judgment against them. Sutton Bank later filed a complaint for a cognovit judgment against Progressive Polymers and Bay, alleging default. The trial court ruled in favor of Sutton Bank and issued the cognovit judgment. The court of appeals vacated the cognovit judgment, concluding that the note did not meet the strict requirements of Ohio Rev. Code 2323.13(D) and was therefore not a valid cognovit note upon which judgment could be entered. The Supreme Court reversed, holding that although cognovit clauses are construed strictly against those seeking to enforce them, courts must still give effect to the clear intent of the parties when interpreting them. View "Sutton Bank v. Progressive Polymers, LLC" on Justia Law

The Supreme Court reversed the judgment of the court of appeals concluding that B.E.B. Properties reserved the right to receive future rental payments for leased land underneath a cell tower when it conveyed the property, holding that the deed did not contain such a reservation.B.E.B. Properties leased a portion of commercial property it owned to a cellular telephone company, and a cellular tower was erected on the site. B.E.B. subsequently sold the property to Keith Baker and Joseph Cyvas. Thereafter, two of the general partners in B.E.B. sold their interests in the partnership to Bruce and Sheila Bird, who believed this transaction included the assignment of the right to receive rental payments for the tower. When LRC Realty, Inc. acquired the property it sought a declaratory judgment that it was entitled to the annual rental payments. The trial court granted summary judgment for LRC Realty. The court of appeals reversed, concluding that the Birds were entitled to rental payments based on the language contained in the deed transferring the property from B.E.B. to Baker and Cyvas. The Supreme Court reversed, holding (1) absent a reservation in the deed conveying the property, the right to receive rents runs with the land; and (2) the deed here did not create such a reservation. View "LRC Realty, Inc. v. B.E.B. Properties" on Justia Law

The Supreme Court reversed the judgment of the court of appeals affirming the trial court's judgment dismissing Plaintiffs' claims for quiet title and declaratory judgment based on their contention that an oil and gas lease had terminated by its terms due to lack of production, holding that the twenty-one-year limitations period in Ohio Rev. Code. 2305.04 applied.In their complaint Plaintiffs alleged that the well at issue did not produce any oil or gas from its inception until 1999 and that the well had been inoperative for enough time to terminate the lease. Defendants asserted a statute of limitations defense to Plaintiffs' claims. The trial court held that Plaintiffs had not presented any evidence to satisfy their burden of proving that the well was no longer profitable and that Plaintiffs' claims were subject to a fifteen-year statute of limitations. Plaintiffs appealed, arguing that the correct limitations period was the twenty-one-year period under Ohio Rev. Code 2305.04. The court of appeals rejected the argument and affirmed the trial court's summary judgment for Defendants. The Supreme Court reversed, holding that the twenty-one-year statute of limitations period applied and that evidence of lack of production prior to 1999 was not irrelevant. View "Browne v. Artex Oil Co." on Justia Law

In this dispute over credit provisions in a real estate purchase agreement, the Supreme Court reversed the decision of the court of appeals reversing the trial court's grant of summary judgment in favor of Plaintiff, the buyer of a franchise business and the real property on which it sat, holding that the court of appeals erred.The parties in this case structured the agreement for the sale of the real property to include adjustments that would be made to the overall purchase price based on circumstances present at the time of the closing. At closing, the parties disagreed how one of the credit provisions - the Rents Credit - should be interpreted. The trial court granted summary judgment to Plaintiff as to its request for declaratory judgment interpreting the Rents Credit clause. The court of appeals ultimately reversed, concluding that the plain language of the Rents Credit clause led to a "manifestly absurd result." The Supreme Court reversed, holding (1) the language of the Rents Credit is plain and unambiguous and supports only the interpretation asserted by Plaintiff; and (2) there is no basis on which to conclude that the plain language of the Rents Credit results in a manifest absurdity. View "Beverage Holdings, LLC v. 5701 Lombardo, LLC" on Justia Law

The Supreme Court denied the writ of mandamus sought by Alex Penland, an inmate at the Toledo Correctional Institution (TCI), to compel Respondents to make available for inspection the contract under which a vendor was permitted to sell food to inmates confined in Ohio prisons, holding that Penland failed to establish that he was entitled to the writ.Penland brought his complaint against Respondents, the Ohio Department of Rehabilitation and Correction and Sonrisa Sehlmeyer, alleging that he made a public-records request to Sehlmeyer asking to review the contract but did not immediately receive a response to his request. When the subsequent inmate grievance process brought by Penland was not resolved to his satisfaction Penland filed this original action. The Supreme Court denied the writ, holding that Penland did not show that Respondents had a clear legal duty to deliver the contract to TCI for Penland's inspection at no cost to him. The Court further denied Penland's request for statutory damages because Penland did not deliver his request to Sehlmeyer by hand or by certified mail. View "State ex rel. Penland v. Ohio Department of Rehabilitation & Correction" on Justia Law

The Supreme Court reversed the decision of the court of appeals holding that Ohio Rev. Code 1308.16(A) allows a purchaser of a bond to assert a breach-of-contract claim that accrued before the bondholder's purchase because the purchaser acquired the rights of one who held the bond when the breach allegedly occurred, holding that absent a valid assignment of a right to bring a cause of action, the sale of a municipal bond does not automatically vest in the purchaser.This breach-of-contract case came to the Supreme Court on appeal from a judgment finding that the court of common pleas erred by refusing to certify a class action on grounds that the class lacked commonality. Plaintiff asked the trial court to certify a class of bondholders. The trial court concluded that commonality had not been established because each class member would allege a different time and purchase price as the basis for a breach and thus would have different potential damages. The court of appeals reversed. The Supreme Court reversed, holding that absent a valid assignment of claims, the sale of a municipal bond does not automatically vest in the buyer all claims and causes of action of the seller relating to the bond that arose before the transaction. View "Paul Cheatham I.R.A. v. Huntington National Bank" on Justia Law

The Supreme Court reversed the decision of the court of appeals affirming the trial court's judgment granting Plaintiff's motion to certify a class action, holding that when a class-certification case originates with a single named plaintiff and that plaintiff is not subject to an arbitration agreement that was entered into by unnamed putative class members, the defendant need not raise a specific argument referring or relating to arbitration in the defendant's answer.Plaintiff filed a class-action complaint against Defendant, his former employer. When Plaintiff moved to certify the case as a class action Defendant opposed the motion, asserting the defense of arbitration. The trial court granted the motion, concluding that Defendant waived any right of arbitration. The appellate court affirmed, determining that Defendant's failure to assert the arbitration defense in his answer or to seek to enforce the right to arbitration prior to its opposition to the certification was inconsistent with its right to assert the defense. The Supreme Court reversed, holding (1) because arbitration was not available as a defense at the time Defendant submitted its answer, Defendant could not waive a right to assert arbitration at that time; and (2) Defendant had no duty to raise an argument that Plaintiff failed to satisfy Civ.R. 23(A)'s typicality and adequacy requirements. View "Gembarski v. PartsSource, Inc." on Justia Law

The Supreme Court reversed the judgments of the court of appeals in this construction dispute, holding that Ohio's construction statute of repose, Ohio Rev. Code 2305.131, applies to any cause of action, whether sounding in contract or tort, so long as the cause of action meets the requirements of the statute.Plaintiff filed this action against several defendants, companies involved in the design and construction of a public school building, alleging claims for breach of contract. Defendants argued that the statute of repose on section 2305.131 barred Plaintiff's claims because substantial completion of the project occurred more than ten years before the claims were filed. The trial court agreed and dismissed the claims as time barred. The court of appeals reversed, concluding that section 2305.131 does not apply to breach of contract claims. The Supreme Court reversed, holding that section 2305.131 applies to both contract and tort claims. View "New Riegel Local School District Board of Education v. Buehrer Group Architecture & Engineering, Inc." on Justia Law

The Supreme Court answered two state-law questions from the Bankruptcy Appellate Panel for the United States Sixth Circuit Court of Appeals by holding that the failure to identify a person who has initialed, signed, and acknowledged a mortgage agreement by name in the body of the agreement does not render the agreement unenforceable as a matter of law against that signatory.The panel specifically asked whether a mortgage is invalid and unenforceable against a signatory who is not identified by name in the body of the mortgage agreement. The Supreme Court answered in the negative, holding that, as a matter of general contract interpretation, it is possible for a person who is not identified in the body of the mortgage, but who has signed and initiated the mortgage, to be a mortgagor of her interest. View "Bank of New York Mellon v. Rhiel" on Justia Law