Volovetz v. Tremco Barrier Solutions, Inc.

• Decision Date: 10 November 2016
• Docket Number: No. 15AP–1056.,15AP–1056.
• Citation: 74 N.E.3d 743,2016 Ohio 7707
• Parties: Boris VOLOVETZ et al., Plaintiffs–Appellants, v. TREMCO BARRIER SOLUTIONS, INC. et al., Defendants–Appellees.
• Court: Ohio Court of Appeals

74 N.E.3d 743

2016 Ohio 7707

Boris VOLOVETZ et al., Plaintiffs–Appellants,

v.TREMCO BARRIER SOLUTIONS, INC. et al., Defendants–Appellees.

No. 15AP–1056.

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

Nov. 10, 2016.

On brief: Gillett Law Office, LLC, and Gary A. Gillett, for appellants. Argued: Gary A. Gillett.

On brief: Zeiger, Tigges & Little LLP, Matthew S. Zeiger, and Zachary M. Sugarman, Columbus, for appellee Tremco Barrier Solutions, Inc. Argued: Matthew S. Zeiger.

On brief: Lane Alton, Joseph A. Gerling, Columbus, and Eric S. Bravo, for appellee North Central Insulation, Inc. Argued: Eric S. Bravo.

KLATT, J.

{¶ 1} Plaintiffs-appellants, Boris and Inna Volovetz, appeal judgments of the Franklin County Court of Common Pleas granting summary judgment to defendants-appellees, Tremco Barrier Solutions, Inc. ("Tremco") and North Central Insulation, Inc. ("NCI"). For the following reasons, we affirm in part and reverse in part the judgment granting Tremco summary judgment, and we reverse the judgment granting NCI summary judgment.

{¶ 2} The Volovetzes own a house located at 6883 Jersey Drive in New Albany, Ohio. During construction of the house, Boris Volovetz acted as the general contractor.

{¶ 3} Volovetz contracted with NCI to insulate the Jersey Drive house. Michael White, a salesperson with NCI, proposed that NCI also waterproof the house's basement. Volovetz and White then discussed terms for the purchase of a Tuff–N–Dri basement waterproofing system and installation of that system around the exterior of the house's foundation. The Tuff–N–Dri basement waterproofing system, which is sold by Tremco, consists of two components: a spray-on polymer modified asphalt emulsion called Tuff–N–Dri and fiberglass foundation boards called Warm–N–Dri. Installation of the Tuff–N–Dri system entails applying the Tuff–N–Dri asphalt emulsion to the foundation walls to create a waterproof membrane and placing the Warm–N–Dri boards over the membrane.

{¶ 4} During the initial negotiations between Volovetz and White, Volovetz requested a 50–year warranty on the Tuff–N–Dri system. White informed Volovetz that the manufacturer only offered a 30–year warranty. White assured Volovetz that a 30–year warranty provided him with sufficient protection because "if you have any issues it will occur in the first couple of years." (Ex. 38, Volovetz Dep.) Volovetz then acceded to a 30–year warranty.

{¶ 5} On May 10, 2013, White sent Volovetz an email with two PDF files attached. The first attachment was entitled "6883 jersey dr.pdf" and the second "WP NOTICE —v05–08–12.pdf." (Ex. 6, Volovetz Dep.) The body of the email stated, "Boris[:] Here is you[r] quote and a summary of the waterproofing[.] I need you to sign both and send back[.]" Id. The PDF file entitled "6883 jersey dr.pdf" contained a pre-printed NCI quote form that White had completed with the terms for waterproofing the basement of the Jersey Drive house. The quote provided:

NCI will WATERPROOF THE FOUNDATION of this home by installing Tuff-[N]-Dri Asphalt-based Spray-on Membrane along with 1 3/16? Ri[d]gid Fiberglas[s] Board on the first 12 courses[.]

NCI will spray the top two courses only[.]

This will rate an R-factor of 5 and has a 30–year warrantee.

Prior to this being installed, all drains should be completed before backfilling and the grade line marked with ample visibility.

Parge[t]ing is not required for this application.

TOTAL $2905.00

Id.

{¶ 6} The PDF file entitled "WP NOTICE—v05–08–12.pdf" comprised five pages. The first page stated:

WATERPROOFING INSTRUCTIONS AND NOTICES.

Dear Valued Customer,

We thank you for making NCI your waterproofing contractor of choice. In order to ensure the best possible experience we ask that you read and sign below as well as initial each of the attached documents outlining:

1. The details of what has to be done in order to properly prepare a job for the application of the Tuff–N–Dri waterproofing system.

2. The details of the Tuff–N–Dri warranty.

3. Instructions on what needs to be done after NCI completes the application in order to protect the waterproofing installation from damage.

Id. The next four pages of the PDF file contained the documents described. The second document was entitled "Tuff–N–Dri® Basement Waterproofing Systems 30–YEAR LIMITED WARRANTY" (hereinafter referred to as the "Limited Warranty"). The Limited Warranty stated that it was from Tremco, and it provided:

What Is Covered:

* * *

Under normal use and service, the vertical surface of your foundation wall not obscured or covered by other building materials should be free from water leakage or seepage through the areas that are treated with TUFF–N–DRI Basement Waterproof System product ("Leakage"), EXCEPT FOR EXCEPTIONS, EXCLUSIONS AND LIMITATIONS SET FORTH BELOW.

What We Will do If the Product Fails:

If the TUFF–N–DRI Basement Waterproofing System fails, we will either repair or have repaired the area in question or provide replacement of the TUFF–N–DRI Basement Waterproofing System as your remedy * * *. We will exercise our judgment and shall have the sole option to select the best method by which to remedy leakage, whether by interior or exterior solution. We will undertake the cost of providing any replacement of the TUFF–N–DRI Basement Waterproofing System necessary, and pay for labor costs necessary to reapply or patch the TUFF–N–DRI Basement Waterproofing System within a reasonable time. Our total responsibility during the life of this Warranty shall not exceed an amount equal to $3.00 per square foot of foundation wall treated with the TUFF–N–DRI Basement Waterproofing System and requiring repair, or a total of $10,000, whichever is lower.

Id.

{¶ 7} After receiving the email from White, Volovetz reviewed the first attachment and determined that the price quoted was higher than the price offered by another contractor with whom Volovetz was negotiating. Volovetz contacted White and told him so. White responded with a second email, also dated May 10, 2013. Like the first email, the second email attached two PDF files. The first PDF file—"6883 JERSEY DR REPRICED.pdf"—contained a revised quote. (Ex. 7, Volovetz Dep.) The revised quote was identical in form to the initial quote, except that the total was listed as $2,815, not $2,905. The second PDF file—"WP NOTICE—v05–08–12.pdf"—contained the exact same content as the file of that name attached to the first email. Id. The body of the second email stated, "Boris[:] This is the best price.... please sign both.... thanks." Id.

{¶ 8} While Volovetz primarily focused his attention on the quotes attached to the two emails, Volovetz also opened the PDF file entitled "WP NOTICE—v05–08–12." However, the first few pages in the file "ma[d]e no sense" to Volovetz. (Volovetz Dep. at 65.) Volovetz stopped his review of the file and contacted White to ask for an in-person meeting. Volovetz requested that White bring to the meeting "whatever he want[ed] [Volovetz] to sign so [they could] both review it." Id. at 141. When White appeared for the meeting, he had with him only the revised quote. White and Volovetz reviewed the terms of the revised quote, Volovetz made handwritten additions, and then Volovetz signed the revised quote.

{¶ 9} Volovetz never signed or initialed the documents contained in the PDF file entitled "WP NOTICE—v05–08–12." Volovetz never saw or read the Limited Warranty prior to contracting with NCI.

{¶ 10} NCI installed the Tuff–N–Dri basement waterproofing system during May and June 2013. Unfortunately, the Tuff–N–Dri system did not keep the Volovetzes' basement waterproof. In November 2013 and May 2014, Volovetz observed water leaking through the foundation walls. Volovetz contacted NCI and informed it that the Tuff–N–Dri system had failed. In May 2014, after Volovetz learned from NCI that it had purchased the Tuff–N–Dri system from Tremco, Volovetz also contacted Tremco to inform it of the system's failure. In response, Tremco offered to apply two coats of Zinsser WaterTite paint to the interior of the foundation walls. Volovetz rejected that remedy.

{¶ 11} On June 30, 2014, the Volovetzes filed suit against NCI and Tremco. The Volovetzes asserted claims against NCI for breach of express warranty, breach of the implied duty to perform in a workmanlike manner, and breach of the implied warranties of merchantability and fitness for a particular purpose. The Volovetzes asserted claims against Tremco for breach of the implied warranty that a product is free of defects and negligence in how Tremco instructed NCI regarding the installation of the Tuff–N–Dri system. The Volovetzes maintained that NCI and Tremco were liable in the amount needed to excavate the foundation; remove the excavated materials; remove the Tuff–N–Dri system; repair the foundation; apply a new exterior waterproofing system; backfill the foundation with gravel and dirt; replace paving, concrete, drain tiles, and landscaping damaged by the excavation; remove and reinstall the electrical panels and low-voltage systems; and treat the inner foundation walls for mold.

{¶ 12} NCI and Tremco each answered the complaint. In addition to answering, Tremco also filed a counterclaim seeking a declaratory judgment that: (1) the Limited Warranty governed and defined Tremco's obligation with respect to the Volovetzes and their Tuff–N–Dri basement waterproofing system, (2) Tremco acted consistent with and fully complied with its obligation under the Limited Warranty, and (3) the Volovetzes could not circumvent the remedies provided in the Limited Warranty by recasting their warranty claims as non-warranty claims.¹

{¶ 13} After conducting discovery, Tremco moved for summary judgment on its claim for declaratory judgment and the Volovetzes' claims against it. In relevant part, Tremco argued that the Volovetzes were bound by the limitations contained in the Limited Warranty because that warranty was expressly incorporated into the contract that Volovetz and NCI executed. Pursuant to...