Coldwell v. Moore, 15 CO 0024

• Decision Date: 14 February 2017
• Docket Number: NO. 15 CO 0024,15 CO 0024
• Citation: 85 N.E.3d 262,2017 Ohio 526
• Parties: David COLDWELL, et al., Plaintiffs–Appellants, v. Matthew MOORE, et al., Defendants–Appellees.
• Court: Ohio Court of Appeals

85 N.E.3d 262

2017 Ohio 526

David COLDWELL, et al., Plaintiffs–Appellants,

v.Matthew MOORE, et al., Defendants–Appellees.

NO. 15 CO 0024

Court of Appeals of Ohio, Seventh District, Columbiana County.

Dated: February 14, 2017

Attorney Alan D. Wenger, Attorney Matthew M. Ries, 26 Market Street, Suite 1200, P.O. Box 6077, Youngstown, Ohio 44501–1111, For Plaintiffs–Appellants.

Attorney Robert J. Karl, 41 South High Street, Suites 2800–3200, Columbus, Ohio 43215, For Defendants–Appellees.

JUDGES: Hon. Gene Donofrio, Hon. Cheryl L. Waite, Hon. Mary DeGenaro

OPINION

DONOFRIO, J.

{¶ 1} Plaintiffs-appellants, David and Lisa Coldwell, appeal the judgment of the Columbiana County Common Pleas Court entered against them on their complaint seeking specific performance or damages for breach of contract against Defendants-appellees, Matthew and Lorelei Moore, Michael and Colleen Lester, Blaine and Mary Moore, and Lynette Moore Beeler.

{¶ 2} This case was previously before this court in Coldwell v. Moore, 2014-Ohio-5323, 22 N.E.3d 1097 (" Coldwell I"). In Coldwell I, we set forth the facts:

Plaintiffs-appellants David Coldwell, et al., appeal the decision of the Columbiana County Common Pleas Court rescinding a purchase agreement between themselves and defendants-appellees Matthew Moore, et al., for the sale of mineral rights.

Although this dispute resulted in a bench trial, the facts are generally undisputed on appeal. Plaintiffs-appellants David Coldwell and Lisa Coldwell (collectively, the Coldwells) own and operate a sustainable tree farm that sits atop approximately 600 acres in Salineville, Columbiana County, Ohio. The tree farm is comprised of twelve surface parcels which they own, but they do not own approximately 200 acres of the subsurface parcels.

Defendants-appellees Matthew and Lorelei Moore, Michael and Colleen Lester, Blaine and Mary Moore, and Lynette Moore Beeler (collectively, the Moores) each own an undivided one-quarter interest in four subsurface parcels that total approximately 237.41 acres. Three of their subsurface parcels underlie the Coldwell's tree farm and the other underlies a surface parcel contiguous to the Coldwell's tree farm but owned by Marvin and Juanita Hiltabidle (collectively, the Hiltabidles) who are not parties to this case. The Moores, who reside in Harrogate, Tennessee and collectively have owned the parcels since 2007, had purchased some of the subsurface parcels and the others were received as gifts from previous generations of the Moore family, including David O'Mahen, an uncle by marriage to the Moores.

In 2007, David Coldwell learned about the Forest Legacy Program (FLP). The FLP is a grant program administered by the U.S. Forest Service. The FLP gives landowners money in exchange for restricting the use and development of their land, particularly the surface of the land. When David Coldwell looked into the FLP, a person with the Division of Forestry indicated to him that participation in the FLP was contingent upon the landowner owning all of the mineral rights to the property.

The Coldwells also learned that while the FLP restricted exploitation of the surface minerals, such as surface strip mining for coal, it did not foreclose subsurface mineral exploitation with a limited surface impact. In other words, the FLP did not forbid oil and gas exploration.

As it pertained to the Coldwell's surface parcels that were located above the Moore's subsurface parcels, David Coldwell believed that his surface parcels contained the rights to oil and gas while the Moore's subsurface parcels contained only rights to coal and other mineable minerals. Sometime in 2007 or before, David Coldwell contacted the Moore's predecessor in title, David O'Mahen, about purchasing the four subsurface parcels. After consulting with family members, O'Mahen offered to sell the parcels to him for $50,000, but he declined.

After 2007, defendant-appellee Matthew Moore replaced O'Mahen as the Moore's representative and David Coldwell contacted him several times through 2008 and 2009 about buying the Moore's subsurface parcels. Coldwell told Moore that he thought that the Moore's subsurface parcels were of little value, but that he wanted to buy them to improve his chances with the FLP.

Meanwhile, still believing that they owned the oil and gas rights to all of their property, the Coldwells signed an oil and gas lease with Patriot Energy Partners (Patriot) in 2008. The lease included the Coldwell's surface parcels that were located above three of the Moore's subsurface parcels.

In 2010 and after David Coldwell had fallen ill, his son Jed Coldwell renewed his family's efforts to buy the Moore's parcels. Matthew Moore and Jed reached an agreement which Moore understood to mean that they would reserve royalty interests on all minerals, not just coal.

The Coldwell's attorney prepared a Purchase Agreement under which the Moores conveyed to the Coldwells "MINERAL RIGHTS ONLY" in the four subsurface parcels for $8,000 with the Moores retaining royalties on coal. The Coldwells signed the agreement and sent it to the Moores along with a $100 earnest money check. The Moores cashed the check, signed the agreement and sent it back to the Coldwells.

The Coldwells' attorney then prepared a deed and sent it to the Moores. This time, after examining the deed, Matthew Moore noticed the coal royalties reservation. He called David Coldwell and told him mistakes had been made but that they would sign the deed if the mistakes were fixed. David Coldwell conveyed his willingness to pay the balance of the purchase price, demanded the Moores sign the deed, but they refused.

On February 14, 2011, the Coldwells sued the Moores in Columbiana County Common Pleas Court seeking specific performance of the purchase agreement, or in the alternative, damages resulting for the alleged breach of that agreement. The Moores answered, denying the breach and, in the alternative, contesting the validity of the agreement. They included with their answer counterclaims and cross-claims. The counterclaim alleged that they were fraudulently induced into entering into the Purchase Agreement. Concerning the lease the Coldwells had signed with Patriot which was later assigned to Chesapeake, the Moores sought a declaration that they were the sole owners of all of the mineral rights. Although the Moores also included a third-party complaint against Patriot and Chesapeake, the Moores later dismissed their claims against them without prejudice prior to trial.

On May 21, 2012, the Moores filed a motion for partial summary judgment on their counterclaim for declaratory relief. Specifically, the Moores sought a declaration that their mineral rights to the four subsurface parcels included oil and gas in addition to their undisputed rights to the coal. The trial court denied the motion, then, upon the Moores' motion to reconsider, granted the motion. In a January 2, 2013 judgment entry, the trial court declared that the Moores' mineral rights included oil and gas.

A bench trial was conducted on February 19–20, 2013, to decide the remaining issues. On May 20, 2013, the trial court filed a judgment entry entering judgment for the Moores, finding that the Coldwells had failed to prove the existence of an enforceable contract. Because the court found that there was no enforceable contract, it did not make any findings "regarding the other issues presented, including whether time was of the essence under the Purchase Agreement or whether the Moores were fraudulently induced to enter into the Purchase Agreement."

Id. at¶ 1–14.

{¶ 3} In Coldwell I, this court reversed the grant of summary judgment that rescinded the Purchase Agreement on the basis of mutual mistake. Id. at ¶ 45. We affirmed the trial court's judgment declaring that the Moores' mineral rights included oil and gas. Id. We remanded the case to the trial court to address what it identified in its May 20, 2013 decision as "other issues presented, including whether time was of the essence under the Purchase Agreement or whether the Moores were fraudulently induced to enter into the Purchase Agreement." Id.

{¶ 4} The trial court has now entered judgment finding that time was of the essence and, therefore, there was no enforceable contract. The trial court entered judgment against Coldwells on their complaint for specific performance or damages for breach of contract. The Coldwells filed a timely appeal. The trial court also concluded that the Moores were not fraudulently induced to sign the Purchase Agreement and entered judgment against the Moores with regard to this issue. The Moores have not filed an appeal.

{¶ 5} The Coldwells' first assignment of error states:

THE TRIAL COURT ERRED IN FINDING THAT TIME WAS OF THE ESSENCE.

{¶ 6} The trial court concluded that time was of the essence, first, because the express language in the purchase agreement made time of the essence and, second, because the parties' actions and the circumstances surrounding their negotiations compelled the conclusion that time was of the essence.

{¶ 7} Generally, in contractual relationships, the time of performance is not of the essence. Brown v. Brown, 90 Ohio App.3d 781, 784, 630 N.E.2d 763 (11th Dist. 1993) ; Shelton v. Twin Twp., 2015-Ohio-1602, 30 N.E.3d 1047, ¶ 40. The parties to a contract, however, may make time of the essence either expressly or implicitly. According to the Shelton court, "Ohio courts are split as to whether and when ‘time is of the essence’ may be implied in a contract." Shelton at ¶ 40. The Shelton court explained that some courts have found that "time is of the essence" may be implied "whenever a definite date is fixed for compliance." Id. citing Lake Ridge Academy v. Carney, 9th Dist. No. 91CA005063, 1991 WL 215024, *4 (Oct. 16, 1991) and Calabrese v. Vukelic, 7th Dist. No. 94–L–37, 1995 WL 750140, *1 (Dec. 14, 1995), citing Domigan v. Domigan, 46 Ohio App. 542, 546, 189 N.E. 860 (5th Dist. 1933). Shelton explains that other courts hold...