Ohio Valley Bank v. Copley

• Decision Date: 09 June 1997
• Docket Number: No. 96CA582,96CA582
• Citation: 121 Ohio App.3d 197,699 N.E.2d 540
• Parties: OHIO VALLEY BANK, Appellee, v. COPLEY et al., Appellees; Browning et al., Appellants. *
• Court: Ohio Court of Appeals

Page 197

121 Ohio App.3d 197

699 N.E.2d 540

OHIO VALLEY BANK, Appellee, v. COPLEY et al., Appellees; Browning et al., Appellants. ^*

No. 96CA582.

Court of Appeals of Ohio,

Fourth District, Pike County.

Decided June 9, 1997.

Ed Rhoads, Waverly, for appellee Ohio Valley Bank.

John W. Thatcher, Portsmouth, for appellees Jerry L. and Tabitha Copley.

James R. Kingsley, Circleville, for appellants.

KLINE, Judge.

Cliff and E. Marie Browning appeal the judgment finding them liable to the Ohio Valley Bank ("OVB") and Jerry L. Copley and Tabitha Copley for negligent construction and breach of contract. The Brownings contend that the Pike County Court of Common Pleas erred in finding that Cliff Browning had negligently constructed the structure and that Marie Browning was a joint venturer. We disagree. The Brownings next argue that the trial court erred in finding that OVB could bring suit against them. We disagree. The Brownings contend that a release entered into between OVB and the Copleys also released them. We disagree. The Brownings assert that the trial court erred by admitting into evidence a financial statement of Cliff Browning. We disagree. The Brownings argue that the amount of damages was incorrectly calculated. We disagree. Finally, the Brownings contend that they were owed money for services rendered. We disagree. Accordingly, we affirm the judgment of the trial court.

I

The Copleys entertained bids for the construction of a family residence based on blueprint drawings, specifications, and a materials list obtained from a magazine. The Copleys selected Cliff Browning, who had bid $115,600 for the project. Browning prepared the contract and the parties signed the agreement in October 1992. The contract provided that "all materials will be as stated in spec. sheet or like and kind" and referred to attached sheets. However, no plans or specifications were attached to the contract.

The Copleys sought financing for their new home from OVB. OVB required an appraisal, a copy of the contract, and a materials list. Browning prepared a materials list for OVB which was different from the materials list from the magazine plans. OVB had received a financial statement from Browning earlier in 1992 on another home construction project. The financial statement listed assets of $965,000 jointly owned by Cliff Browning and his wife Marie Browning. Cliff and Marie Browning later testified that the financial statement was inaccurate and that nearly all of the assets listed were actually owned by Marie Browning individually.

OVB approved the Copleys for a $102,400 loan, and the loan documents were signed in November 1992. Construction began shortly thereafter. OVB issued three of the four draws on the loan to the Copleys, who then turned the money over to Cliff Browning. The money was deposited in a bank account for which Marie Browning was the sole authorized signer. Marie Browning then paid bills incurred by Cliff Browning in the construction of the Copleys' home.

Problems arose in February 1993 when the Copleys discovered cracks in the perimeter of the basement wall and had difficulty contacting Cliff Browning. In May 1993, Browning assured the Copleys that he would complete their home in thirty days. The Copleys were skeptical of Browning's assurances and hired several other builders to inspect the structure for defects. The chief area of concern was the footer supporting the basement walls as well as Browning's substitution of materials. On June 24, 1993, the Copleys notified Browning not to return to the site. The Copleys also made no further payments to OVB.

OVB sued the Copleys, seeking to recover the sum provided in construction draws and to foreclose. OVB also sued Cliff Browning on the following theories: (1) OVB was a third-party beneficiary of the Browning-Copley contract, (2) negligent construction, and (3) impairment of collateral. Carter Lumber Company was also named as a party, but all claims by and against Carter Lumber Company were eventually dismissed.

The Copleys then brought suit against Cliff Browning for negligent construction and OVB for failure to inspect. Cliff Browning then counterclaimed against the Copleys and OVB seeking compensation for services performed. Browning also sought punitive damages from the Copleys for damage to his reputation.

The trial court ordered that the property be foreclosed in August 1994. At the foreclosure sale, OVB purchased the property and shortly thereafter sold the property for $60,000. OVB had advanced over $80,000 on the project.

OVB and the Copleys added Marie Browning as a party in 1995, alleging that she was liable as a partner or joint venturer of Cliff Browning. Later, OVB, and the Copleys settled and dismissed all claims against each other.

The court held a trial at which witnesses discussed the footer at length. Testimony revealed that Cliff Browning chose to use a monolithic pour--sometimes referred to as a slab pour--for the basement and footer. A monolithic pour allows a person to pour the basement floor and footer at the same time. The basement wall is then constructed on the floor over the footer area. The trial court found that the standard procedure was to pour the footer separately, erect the walls, and then pour the basement.

Two local general contractors testified that a monolithic pour is inappropriate for a two-story house with a basement such as the one being built for the Copleys. Both contractors testified that they had seen cracks in the Copleys' unfinished home and opined that the structure should be razed due to liability concerns. Civil engineer Loren Pucket testified that a monolithic pour was inappropriate for the Copley project given the soil conditions.

Bruce Davis, the purchaser of the structure from OVB, testified that he finished the house for $47,000 of materials, which translated to costs of $70,000 to $80,000 when his and his partner's labor was considered. Davis stated that he corrected questions about the footer by pouring six inches of concrete in the basement and adding rebars.

The trial court found that (1) Cliff Browning was negligent in the construction of the Copley structure and breached the construction contract; (2) Marie Browning was a joint venturer with Cliff Browning; (3) the specifications and material list referred to in the contract were those from the magazine and not the material list that Cliff Browning submitted to OVB; (4) the Brownings did not establish that the certain substituted materials were adequate to support the structure; (5) the Brownings were paid a total of $86,170: $5,250 by the Copleys and $80,920 in draws; and (6) the value of the improvements the Brownings made to the property was $47,100: the Copleys had paid $12,900 for the land and OVB sold the property after foreclosure for $60,000.

The trial court granted judgment jointly to the Copleys and OVB for $39,070, the difference between the amount expended and the value of the structure. The trial court did not indicate which theory it had used to allow OVB to recover. The trial court also granted judgment in favor of the Copleys for $1,075 for expenses to discover Browning's negligence.

The Brownings now appeal. Cliff Browning asserts the following seven assignments of error:

"I. Did the trial court commit prejudicial error when it granted summary judgment to Ohio Valley Bank upon Cliff Browning's claim as to a third party beneficiary of the loan agreement between Ohio Valley Bank and Copleys?

"II. Did the court commit prejudicial error when it refused to grant Cliff Browning's motion for directed verdict upon the evidence found Ohio Valley Bank was a third party beneficiary of the construction contract between Browning and Copleys?

"III. Were the judgments against Clifford and Marie Browning against the manifest weight of the evidence and/or contrary to law?

"IV. Did the trial court commit prejudicial error when it admitted exhibit 9 and testimony in regard to a false financial statement of Clifford Browning?

"V. Was the judgment against the manifest weight of the evidence when it found Clifford Browning breached the construction contract by negligently constructed [sic ] the Copleys' home?

"VI. Did the trial court commit prejudicial error when it did not find the mutual releases of Copleys and Ohio Valley Bank also released Clifford Browning?

"VII. Did the trial court commit prejudicial error in the amount of damages awarded?"

Marie Browning asserts the following assignment of error:

"Did the trial court commit prejudicial error when it found against E. Marie Browning?"

The Brownings' assignments of error raise the following issues: (1) whether the trial court erred in finding that Cliff Browning negligently constructed the structure and that Marie Browning was a joint venturer, (2) whether the trial court erred in allowing OVB to recover, (3) whether the trial court erred by not finding that the release between the Copleys and OVB also released the Brownings, (4) whether the trial court erred by admitting a financial statement of Cliff Browning into evidence, (5) whether the trial court correctly calculated the damages, and (6) whether the trial court erred in finding that Browning could not recover from OVB for services rendered.

II

We first address the Brownings' two claims that the trial court erred in finding that the structure was negligently constructed and that Marie Browning was a joint venturer. A factual finding of the trial court will be reversed by a reviewing court only if the reviewing court finds that it is against the manifest weight of the evidence. Seasons Coal Co. v. Cleveland (1984), 10 Ohio St.3d 77, 80, 10 OBR 408, 410-411, 461 N.E.2d 1273, 1276. Findings supported by some competent credible evidence will not be reversed as being against the manifest weight of the evidence. Id.

A

The Brownings challenge the trial court's finding that they negligently constructed the structure....