DeSantis v. Soller

• Decision Date: 08 November 1990
• Docket Number: No. 89AP-1374,89AP-1374
• Citation: 70 Ohio App.3d 226,590 N.E.2d 886
• Parties: DeSANTIS, Appellant, v. SOLLER et al., Appellees.
• Court: Ohio Court of Appeals

Page 226

70 Ohio App.3d 226

590 N.E.2d 886

DeSANTIS, Appellant, v. SOLLER et al., Appellees.

No. 89AP-1374.

Court of Appeals of Ohio, Tenth District, Franklin County.

Decided Nov. 8, 1990.

Enz, Jones & LeGrand, Grey W. Jones and Susan M. Gabriel, Columbus, for appellant Albert J. DeSantis.

Crabbe, Brown, Jones, Potts & Schmidt and Robert J. Behal, Columbus, for appellees James P. Soller and Constance Hope Soller.

Martin & Eichenberger Co., L.P.A., Jerry A. Eichenberger and Dennis L. Pergram, Columbus, for appellees Richard Talbott and C. Robert Talbott.

WHITESIDE, Judge.

Defendant James P. Soller and plaintiff, Albert J. DeSantis, both appeal from a judgment of the Franklin County Common Pleas Court. Defendant Soller raises three assignments of error as follows:

"I. If a trial court, in modifying a referee's report, creates an issue of damages not dealt with by the referee, it is error for the court to make a finding of fact on a disputed issue which is specifically omitted by the referee, without either hearing the matter itself or returning the report to the referee with instructions to make the necessary findings pursuant to Civ.R. 53(E)(2).

"II. The determination of damages by the trial court was against the manifest weight of the evidence.

"III. The trial court erred in finding a binding contract between the plaintiff-appellee, Albert J. DeSantis, and defendant James P. Soller as it is contrary to law and against the manifest weight of the evidence."

Plaintiff sets forth two propositions labeled as "Law and Argument" which we shall treat as assignments of error:

"A. The trial court erred in rejecting certain factual findings made by the referee and in interpolating its own findings of fact.

"B. The trial court erred in rejecting the legal conclusions made by the referee and in its instituting own conclusions of law."

At approximately the end of April or the beginning of May 1986, defendant Soller contacted plaintiff concerning the possible sale to plaintiff of real estate Soller owned. Subsequently, on May 8, 1986, defendant Soller met with plaintiff at the property, which is located at 58 East 17th Avenue. On that date, plaintiff signed a real estate purchase contract in which defendant Soller agreed to convey the property to plaintiff for the sum of $72,500. Although there was a factual dispute as to whether defendant Soller signed the contract that day or the following day, it is conceded that Soller did sign several copies of the contract.

The contract contained a handwritten clause which stated that the contract was contingent upon buyer's approval and inspection of all leases within forty-eight hours of acceptance. The contract also contained language by which defendant Soller was to convey to plaintiff a marketable title by transferring a general warranty deed with release of dower, if applicable. At all times relevant hereto, defendant Soller, although married, was the sole owner of the property. However, the trial court found that defendant Soller indicated to plaintiff that he wanted to talk to his wife about the matter.

On or about May 15, 1986, defendant Talbott contacted defendant Soller regarding the same property. Apparently, defendant Soller told defendant Talbott that he had a written offer from plaintiff, and the parties discussed whether the contract with plaintiff was valid absent Soller's wife's signature. On that same date, defendants Soller and Talbott entered into a real estate contract whereby Soller agreed to convey to Talbott the property at 58 East 17th Avenue, for the price of $75,000. Defendant Soller's wife conveyed her dower interest in the deed executed at the closing, which occurred the same day.

After learning of the transfer of the property to defendant Talbott, plaintiff tendered to defendant Soller the purchase price for the property, which was refused by Soller, who no longer owned the property. Plaintiff subsequently filed the instant action alleging breach of contract against defendant Soller and his wife, and fraudulent and malicious interference with contract against defendant Talbott and his brother, who is also named in the deed. Plaintiff requested that the deed to defendant Talbott be set aside and that he be granted specific performance under the terms of the real estate purchase contract signed on May 8, 1986.

The matter was heard before a common pleas court referee, who filed a report containing fourteen findings of fact and four conclusions of law. In essence, the referee found that defendant Soller had entered into a binding contract with plaintiff; that Soller breached that contract; that plaintiff was entitled to specific performance of the contract; that an equitable abatement should be taken from the purchase price in the amount of one-half of the price, or $36,250, representing Soller's wife's inchoate dower interest; that plaintiff had proved fraudulent interference with the contract by defendant Talbott; and that plaintiff was entitled to an order cancelling the deed from Soller to Talbott.

Objections to the referee's report were filed by defendants Soller and Talbott. A hearing was held before the trial judge who rendered a decision adopting most of the referee's findings of fact and making five additional findings. The trial court rejected the referee's conclusion that defendant Talbott fraudulently interfered with the contract between plaintiff and defendant Soller and additionally rejected the referee's recommendation that specific performance be awarded to plaintiff. Instead, the trial court determined that plaintiff had been damaged in the amount of $27,500, arrived at by subtracting the contract price of $72,500 from $100,000, which the trial court determined to be the value of the property. Accordingly, the trial court entered judgment in favor of plaintiff against defendant Soller in the amount of $27,500, and also entered judgment in favor of defendant Talbott. From that judgment, defendant Soller and plaintiff appealed.

Turning initially to defendant Soller's first assignment of error and plaintiff's first assignment of error, Soller contends that the trial court erred in making a finding of fact as to the value of the property when the referee, in awarding specific performance, specifically omitted a finding on that issue. Defendant Soller claims that the proper procedure should have been for the trial court to have either taken testimony on the issue of the value or requested the referee who heard the testimony to recommend a finding. Plaintiff, by his first assignment of error, argues generally that the trial court erred in interjecting its own findings of fact and rejecting those made by the referee who heard the evidence. Specifically, plaintiff contends the trial court erred in rejecting the referee's twelfth and fourteenth findings of fact and in substituting antithetical findings.

Upon the filing of objections to a referee's report, the trial court has options. Specifically, Civ.R. 53(E)(2) states that the court may " * * * adopt, reject or modify the report; hear additional evidence; return the report to the referee with instructions; or hear the matter itself." (Emphasis added.)

Thus, the trial court is empowered by the Civil Rules to modify the referee's report. Moreover, Civ.R. 53(E)(5) provides in part as follows:

"The report of a referee shall be effective and binding only when approved and entered as a matter of record by the court. The referee's findings of fact must be sufficient for the court to make an independent analysis of the issues and to apply appropriate rules of law in reaching a judgment order. * * * " Plaintiff asserts that in those instances in which the case has been fully heard before a referee, the trial court, when considering the report of the referee, acts as a reviewing court. Relying on In re Estate of Woods (1959), 110 Ohio App. 277, 11 O.O.2d 302, 167 N.E.2d 122, plaintiff asserts that the trial court utilizes a manifest weight of the evidence test when deciding to adopt, reject or modify the referee's report. However, as noted by defendant Talbott, plaintiff misapplies the holding of In re Estate of Woods. Plaintiff founds his assertion on the first headnote, which reads as follows:

"Findings of a referee having support in the evidence are to be given the force and effect of a verdict of a jury or the findings of a court in a nonjury case, and, as a general rule, will not be disturbed by a Court of Appeals unless manifestly against the weight of the evidence." (Emphasis added.)

In quoting the above language, however, plaintiff failed to include the phrase "by a Court of Appeals." Reading the first headnote of In re Estate of Woods in the manner suggested by plaintiff would tend to support plaintiff's assertion that the trial court is similarly bound by a standard of manifest weight. However, fully reading the headnote as it is written indicates that the holding of In re Estate of Woods with regard to reviewing the findings of a referee within the parameters of a manifest weight standard applies not to the trial court but to review by an appellate court.

In Normandy Place Assoc. v. Beyer (1982), 2 Ohio St.3d 102, 2 OBR 653, 443 N.E.2d 161, the Ohio Supreme Court stated that " * * * [i]t is the primary duty of the court, and not the referee, to act as a judicial officer. * * * " Moreover, Civ.R. 53(E)(5), as quoted above, contemplates a trial court's making an independent analysis of the underlying issues in the referee's report. Thus, the trial court must undertake the equivalent of a de novo determination, in light of any filed objections, when independently assessing the facts and conclusions contained in the report of a referee. Such de novo determination is based upon the referee's findings of fact unless a transcript of evidence is filed.

Both defendant Soller and plaintiff refer to the referee's better position to determine the credibility of the...