Am. Steel City Indus. Leasing, Inc. v. Bloom Land Co.

187 N.E.3d 35

AMERICAN STEEL CITY INDUSTRIAL LEASING, INC., Plaintiff-Appellant,

v.BLOOM LAND COMPANY, LLC, et al., Defendants-Appellees.

NO. 2021-T-0013

Court of Appeals of Ohio, Eleventh District, Trumbull County.

Decided: March 28, 2022

Thomas C. Nader, Nader & Nader, 7011 East Market Street, Warren, OH 44484 (For Plaintiff-Appellant).

Kevin P. Murphy and Patrick C. Manning, Harrington, Hoppe & Mitchell, Ltd., 108 Main Avenue, S.W., Suite 500, Warren, OH 44481 (For Defendants-Appellees).

OPINION

JOHN J. EKLUND, J.

{¶1} Appellant, American Steel City Leasing, Inc., ("American Steel") appeals the decision granting summary judgment to Appellees, Bloom Land Company, LLC, ("Bloom Land") and Youngstown Bending and Rolling, Inc. ("Youngstown Bending"). We affirm.

{¶2} In 2016, American Steel, owned by William Marsteller, held fee simple title to real property on Hendricks Road in Youngstown, Ohio. A tenant of the property, Youngstown Bending, has operated a manufacturing facility on the property since 2006. Youngstown Bending was owned in equal shares by Mr. Marsteller and Ted Bloom, who is the sole owner of Bloom Land. In 2016, American Steel and Bloom Land entered into an agreement for Bloom Land to purchase the Hendricks Road property upon Mr. Marsteller's death. In 2017, Mr. Marsteller passed away, leaving his wife, Linda Marsteller, the sole owner of American Steel and fifty percent shareholder of Youngstown Bending. In 2018, Bloom Land closed on the purchase of the Hendricks Road property by submitting to American Steel the purchase price, and American Steel provided a warranty deed to Bloom Land in return.

{¶3} Thereafter, a dispute arose as to whether the industrial machinery owned by American Steel and used by Youngstown Bending at the Hendricks Road property was included in the purchase agreement. In 2020, American Steel filed a complaint, attaching a copy of the purchase agreement, and asking the trial court to declare it the owner of all machinery located at the Hendricks Road property and used in the business operations of Youngstown Bending. Bloom Land and Youngstown Bending moved to dismiss the complaint, arguing that the purchase agreement clearly provided for the sale of the industrial machinery along with the real property. Therefore, Appellees argued that any resort to parol evidence to determine the parties’ intent would be improper. Further, Appellees maintained that the complaint contained no allegations that Youngstown Bending asserted an ownership interest in the land or machinery. American Steel opposed the motion, attaching a supporting affidavit of Mrs. Marsteller. American Steel maintained that: dismissal is generally inappropriate in a declaratory judgment action; the purchase agreement was ambiguous as to whether it included sale of the machinery; parol evidence was necessary to clarify the ambiguity; after closing of the sale, Mrs. Marsteller and Mr. Bloom arranged for appraisals of the machinery at issue and negotiated for the sale of the machinery to Youngstown Bending, raising an inference that the machinery was not included in the sale; and the continued negotiations and appraisals raised a reasonable inference that a modification of the agreement or a waiver had occurred.

{¶4} The trial court converted the motion to dismiss to a motion for summary judgment pursuant to Civ.R. 12(B)(6) and permitted the parties additional time to provide supporting documents. Bloom Land provided an affidavit of Mr. Bloom averring that he had ordered appraisal of the machinery due to a pending divorce action wherein Bloom Land was named as a third-party defendant. American Steel responded that Mr. Bloom's affidavit raised a question of fact, because Mrs. Marsteller had averred in her affidavit that Mr. Bloom's accountant had emailed her a copy of the appraisal one month after closing on the real estate, which would have been unnecessary if the appraisal had been conducted solely for purposes of Mr. Bloom's divorce.

{¶5} Thereafter, the trial court found that there existed no genuine question of material fact that the purchase agreement included the industrial machinery at issue, and appellees were entitled to judgment as a matter of law. Accordingly, the trial court granted summary judgment to appellees, determining that Bloom Land owned the machinery at issue. The court did not specifically address issues pertaining to modification or waiver.

{¶6} In its first and second assigned errors, American Steel contends:

{¶7} "[1.] The Trial Court erred in concluding that [the] Purchase Agreement was not ambiguous and therefor[e] barred extrinsic evidence under the Parol Evidence Rule.

{¶8} "[2.] The Trial Court erred in interpreting that the industrial machinery was included in the term equipment."

{¶9} In its first and second assigned errors, American Steel argues that the court erred in granting Bloom Land summary judgment because the agreement's use of the term "equipment" is ambiguous, and a genuine issue of material fact remained as to the parties’ intent. American Steel argues that the trial court should have considered extrinsic evidence and applied the interpretative rule of ejusdem generis in determining whether a triable issue of intent remained.

{¶10} "We review decisions awarding summary judgment de novo, i.e., independently and without deference to the trial court's decision." Hedrick v. Szep , 11th Dist. Geauga No. 2020-G-0272, 2021-Ohio-1851, 2021 WL 2201798, ¶ 13, citing Grafton v. Ohio Edison Co. , 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996).

Civ.R. 56(C) specifically 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 party against whom the motion for summary judgment is made, that conclusion is adverse to that party.

Temple v. Wean United, Inc. , 50 Ohio St.2d 317, 327, 364 N.E.2d 267, 274 (1977) ; Allen v. 5125 Peno, LLC , 11th Dist., 2017-Ohio-8941, 101 N.E.3d 484, ¶ 6, citing Holliman v. Allstate Ins. Co. , 86 Ohio St.3d 414, 415, 715 N.E.2d 532 (1999). "The initial burden is on the moving party to set forth specific facts demonstrating that no issue of material fact exists and the moving party is entitled to judgment as a matter of law." Allen at ¶ 6, citing Dresher v. Burt , 75 Ohio St.3d 280, 292-293, 662 N.E.2d 264 (1996). "If the movant meets this burden, the burden shifts to the nonmoving party to establish that a genuine issue of material fact exists for trial." Allen at ¶ 6, citing Dresher at 293, 662 N.E.2d 264.

{¶11} Here, the trial court determined that summary judgment was appropriate based upon the unambiguous contract language. " ‘If a contract is clear and unambiguous, then its interpretation is a matter of law and there is no issue of fact to be determined. However, if a term cannot be determined from the four corners of a contract, factual determination of intent or reasonableness may be necessary to supply the missing term.’ "

Fairport Real Estate LLC v. Nautical Ridge Condominium Owners’ Assn., Inc. , 2018-Ohio-791, 108 N.E.3d 101, ¶ 17 (11th Dist.), quoting Inland Refuse Transfer Co. v. Browning-Ferris Indus. of Ohio, Inc. , 15 Ohio St.3d 321, 322, 474 N.E.2d 271 (1984), citing Alexander v. Buckeye Pipe Line Co. , 53 Ohio St.2d 241, 374 N.E.2d 146 (1978), superseded by statute on other grounds , and Hallet & Davis Piano Co. v. Starr Piano Co. , 85 Ohio St. 196, 97 N.E. 377 (1911).

{¶12} "In all cases involving contract interpretation, we start with the primary interpretive rule that courts should give effect to the intentions of the parties as expressed in the language of their written agreement." Sutton Bank v. Progressive Polymers, L.L.C., 161 Ohio St.3d 387, 2020-Ohio-5101, 163 N.E.3d 546, ¶ 15, citing Sunoco, Inc. (R&M) v. Toledo Edison Co. , 129 Ohio St.3d 397, 2011-Ohio-2720, 953 N.E.2d 285, ¶ 37. "Other primary interpretive rules assist the court in doing this by giving guidance on how to interpret the meaning of certain words." Sutton Bank at ¶ 15. "For example, one rule is that ‘[c]ommon words appearing in a written instrument will be given their ordinary meaning unless manifest absurdity results, or unless some other meaning is clearly evidenced from the face or overall contents of the instrument.’ " Id. , quoting Alexander at paragraph two of the syllabus.

{¶13} In Sutton Bank , the Supreme Court noted that this court had applied "traditional rules of contract interpretation" to some extent to a cognovit note. Id. at ¶ 17. However, the Supreme Court concluded that this court's analysis applying the defined term "you" to a provision of the note "stopped short" of the appropriate analysis by adopting this reading "without considering, as it should have considered, whether the parties intended this reading. " (Emphasis added.) Id. The Supreme Court explained that rules of contract interpretation "must yield to the intent of the parties, and when the parties clearly did not intend [a] * * * definition to apply, a court cannot force that construction upon them." Sutton at ¶ 18, citing In re Adelphia Communications Corp., 368 B.R. 348, 354 (Bankr. S.D.N.Y. 2007) (defined terms must still be interpreted in the context of the entire agreement); Beanstalk Group, Inc. v. AM Gen. Corp. , 283 F.3d 856, 860 (7th Cir. 2002) ("a contract will not be interpreted literally if doing so would produce absurd results, in the sense of results that the parties, presumed to be rational persons pursuing rational ends, are very unlikely to have agreed to seek"). Accordingly, we review contractual language mindful that defined terms and dictionary definitions must yield to the parties’ intent as expressed within the agreement.

{¶14} Here, Bloom Land maintains that the contract...