Myron C. Wehr Props., LLC v. Petraglia

• Decision Date: 16 May 2016
• Docket Number: No. 14 CO 7.,14 CO 7.
• Parties: MYRON C. WEHR PROPERTIES, LLC, Plaintiff–Appellee Cross–Appellant v. James F. PETRAGLIA, Executor of the Estate of Catherine T. Petraglia, Defendant–Appellant Cross–Appellee.
• Court: D.C. Court of Appeals

65 N.E.3d 242

MYRON C. WEHR PROPERTIES, LLC, Plaintiff–Appellee Cross–Appellant

v.James F. PETRAGLIA, Executor of the Estate of Catherine T. Petraglia, Defendant–Appellant Cross–Appellee.

No. 14 CO 7.

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

May 16, 2016.

Timothy A. Barry, Fitch, Kendall, Cecil, Robinson & Barry Co., LPA, Salem, OH, for Plaintiff–Appellee.

Kevin P. Murphy, Matthew M. Ries, Harrington, Hoppe & Mitchell, Ltd., Warren, OH, for Defendant–Appellant.

GENE DONOFRIO, P.J., CHERYL L. WAITE, J., and MARY DeGENARO, J.

OPINION

WAITE, J.

{¶ 1} Appellant, James F. Petraglia ("James"), Executor of the Estate of his mother, Catherine T. Petraglia ("Catherine"), appeals the trial court judgment entry granting a motion to enforce a settlement agreement in favor of Appellee, Myron C. Wehr Properties, LLC ("Wehr").

{¶ 2} In April 2011, the parties signed a contract for the sale of land ("contract") wherein Wehr was to purchase approximately one hundred (100) acres of farmland ("the property") from Catherine for $380,450.00. The property had certain encumbrances, including an oil and gas lease which was scheduled to expire in May of 2012. The contract also included a number of contingencies, including a property survey, acceptance of the survey by Catherine, and transfer at closing by means of a general warranty deed. The survey was performed in April, 2011. A protracted period of back and forth communication ultimately revealed the property was subject to both an IRS tax lien as well as a reverse mortgage encumbrance. Following a lengthy period where Catherine and her counsel failed to respond to Wehr's entreaties to set a date for closing, Wehr filed the underlying breach of contract action. The trial court recommended mediation, and the matter was apparently concluded when the parties reached a settlement agreement ("settlement"). That settlement, memorialized in writing in September of 2012, provided that Catherine would transfer the property pursuant to all of the terms of the 2011 contract, with closing to occur by December 15, 2012. Two weeks prior to the agreed closing date, Wehr received a copy of the title work which reflected that Catherine had negotiated a new oil and gas lease for the property with Chesapeake Exploratory, LLC, in May of 2012, without his knowledge or consent.

{¶ 3} Wehr and Catherine filed separate motions to enforce the settlement. A hearing was held on the matter. The trial court concluded that Catherine had purposefully delayed the closing in order to negotiate the new oil and gas lease and had accepted $391,000.00 as a signing bonus; that Wehr presented evidence that the parties had discussed his ability to negotiate the new, upcoming, oil and gas lease as a basis for Wehr's purchase offer on the property of $380,450.00; and that the signing bonus Catherine received from Chesapeake was intended to be used by Wehr to offset the purchase price set forth in the April, 2011 contract. The trial court denied Wehr's motion for attorney fees in the matter and denied Catherine's motion for enforcement as well as her motion for sanctions and compensatory damages. Catherine timely appeals the trial court order. Wehr filed a cross appeal. Catherine T. Petraglia died in the intervening time period and, by order of this Court, her son James filed a notice of substitution as executor of her estate.

{¶ 4} The evidentiary record in this matter supports the trial court's order. The assignments of error are without merit and are overruled. Moreover, as the trial court did not abuse its discretion in denying Wehr's motion for attorney fees, Wehr's cross-assignment of error is also without merit and is overruled. The judgment of the trial court is affirmed.

Facts

{¶ 5} Appellee Myron Wehr, via Myron C. Wehr Properties, LLC, has been farming the 100 acre parcel of land with the street address of 49763 Heck Road, East Palestine, Ohio, (the "property") since the 1970s. Wehr leased this property from its owner, Catherine Petraglia. In March of 2011 Wehr was contacted by Catherine, who told him he could no longer lease the property because she was putting it up for sale. Catherine indicated she had received an offer of $3,500 per acre to buy the farm. Wehr said that he was interested in purchasing the property. Wehr subsequently engaged in discussions with both Catherine and her son, James, about the sale of the property. Catherine gave Wehr a copy of a 2007 oil and gas lease that was then in effect relative to the property. It was noted that the lease was to expire in May of 2012. Wehr testified at the hearing that the 2007 lease was discussed during the negotiations to purchase the property, as well as the status of oil and gas lease negotiations in general that were ongoing throughout Columbiana County. (Tr., p. 17.) Wehr also testified that Catherine indicated that current leases were offering approximately $2,000 an acre and, as he had offered $3,850 an acre, once he bought the property he could recoup some of his purchase price through the negotiation of a new oil and gas lease. (Tr., p. 17.)

{¶ 6} On April 5, 2011, the parties entered into an Offer to Purchase Real Estate and Acceptance—Vacant Land ("contract"). The document was drafted by Catherine, a retired attorney. (Tr., Exh. B.) The contract contained a number of pertinent provisions including, "Conditions of Sale" which indicated, "1. Sale subject to BUYER'S and SELLER'S acceptance and approval of survey of PROPERTY. (2) The transfer of the PROPERTY shall include the transfer of all mineral rights and all oil and gas rights." Id. Furthermore, the contract contained a clause entitled, "TITLE" which provides:

BUYER agrees to pay the purchase price upon the presentation to BUYER of a general warranty deed conveying the premises free and clear of any encumbrances except zoning ordinances, easements, restrictions, leases, conditions, rights of way of record and real estate taxes and assessments.

{¶ 7} Wehr testified that the survey was completed sometime in May or June of 2011 and that he paid his half of the survey expenses at that time pursuant to the terms of the contract. Wehr contacted Myron Smith at Farm Credit, the banker with whom he had worked with for approximately thirty-five years. Smith testified that he had the loan documents finalized and approved on May 6, 2011. (Tr., p. 77.)

{¶ 8} The contract specified that a specific title agency, Commerce Title Agency of Youngstown, LLC, was to "coordinate and conduct the preparation of the title work, title insurance and closing of [the] transaction." (Tr., Exh. B.) Several weeks passed with no action on the sale. Ultimately, Wehr contacted James in July of 2011 to inquire when the closing would occur. James, who is a licensed Pennsylvania attorney, informed Wehr there were problems with the title, but did not indicate specifically what those problems were. He stated only that they were working to resolve them. Wehr testified that he called again approximately thirty days later in August of 2011 and again in September, and each time was informed there were still issues regarding the title. (Tr., p. 21.)

{¶ 9} Wehr next contacted Heritage Title, an agency that has done real estate work for him in the past. He asked them to do a title search on the property. Their search revealed an IRS tax lien and a reverse mortgage on the property. (Tr., Exh. C, D, and E.) It was then that Wehr sought his own legal counsel to assist in contacting the Petraglias to set closing. Wehr testified that after more "indefinite answers" as to when the closing would occur, he decided to file a breach of contract action in December of 2011. (Tr., p. 22.) In his complaint he sought specific performance of the April, 2011 purchase contract.

{¶ 10} The trial court referred the parties to mediation, which occurred on September 12, 2012. At mediation, the parties agreed to proceed with the terms of the 2011 purchase contract. A written settlement agreement was executed by both parties and dated November 3, 2012. An agreed dismissal entry was issued on November 14, 2012, with the trial court retaining jurisdiction to enforce the terms of the settlement agreement.

{¶ 11} The settlement agreement provided, inter alia, "[u]nless specifically modified by this Settlement Agreement, all terms and conditions set forth in the Purchase and Sale Agreement of April 5, 2011 shall remain in full force and effect." (Tr., Exh. F.) The closing was scheduled to take place on December 15, 2012. Wehr contacted Farm Credit to inform them of the pending closing on the property. He was notified shortly thereafter by Farm Credit that a subsequent title search on the property revealed a new encumbrance, specifically a Paid-up Oil & Gas Lease that was executed on May 3, 2012, between Catherine and Chesapeake Exploration, LLC. It contained a five year lease term commencing May 25, 2012 with an additional five year extension option. The payments provision of the lease reflected that, in addition to the royalty payments, there was a bonus payment paid to Catherine for executing the lease. The amount was not specified in the lease document. James testified at the hearing that the bonus received was $390,000.00. (Tr. p. 84.) The actual bonus amount totaled $391,000.00. Wehr was never informed by either of the Petraglias of the new oil and gas lease or the bonus payment made to the Petraglias at any time leading up to the execution of the lease or after it was executed.

{¶ 12} Upon discovering the existence of the new lease, counsel for Wehr filed a motion for enforcement of the settlement agreement with the trial court on December 14, 2012, asserting that the settlement agreement required both parties to adhere to the April, 2011, contract terms. Catherine filed a cross-motion to enforce the settlement agreement on January 24, 2013, claiming that Wehr was refusing to abide by the terms of the settlement in not closing on the property on December...