Williams v. Ormsby
| Citation | 966 N.E.2d 255 |
| Decision Date | 23 February 2012 |
| Docket Number | No. 2010–1946.,2010–1946. |
| Parties | WILLIAMS, Appellee, v. ORMSBY, Appellant. |
| Court | Ohio Supreme Court |
L. Ray Jones, Medina, for appellee.
Laribee & Hertrick, L.L.P., Michael L. Laribee, and Chris D. Carey, for appellant.
{¶ 1} We are asked to determine whether merely resuming a romantic relationship by moving into a home with another can serve as consideration for a contract. We hold that it cannot.
{¶ 2} This case arises in the context of a nonmarital relationship between Amber Williams, the appellee, and Frederick Ormsby, the appellant. In May 2004, Frederick moved into Amber's house on Hardwood Hollow in Medina to which she had received title through her divorce settlement. Frederick began making the mortgage payments in August and paid the 2004 property taxes. He eventually paid the remaining mortgage balance of approximately $310,000. In return, Amber gave Frederick title to the property by executing a quitclaim deed dated December 15, 2004, that was recorded the same day.
{¶ 3} Although the couple had planned to marry, they canceled their plans in January 2005 when Frederick's divorce did not occur. They did, however, continue to live together. After a disagreement in March 2005, Amber left the house, and Frederick obtained a restraining order against her. As a result of this separation, Amber and Frederick signed a document dated March 24, 2005, to immediately sell the Medina house and allocate the proceeds.
{¶ 4} Two months later, the couple tried to reconcile and attended couples counseling. Amber refused to move back into the house with Frederick unless he granted her an undivided one-half interest in the property. On June 2, 2005, they signed a second document, purportedly making themselves "equal partners" in the Medina house and, among other things, providing for property disposition in the event that their relationship ended. Amber then returned to the house, and the couple resumed their relationship. But by April 2007, they were living in separate areas of the house, and although they tried counseling again, Amber ended the relationship in September 2007. The two continued living in separate areas of the house until Frederick left in April 2008.
{¶ 5} The next month, Amber and Frederick filed suit against each other in two separate actions, which the trial court consolidated. Amber sought either specific performance of the contract that she alleged was created in June 2005 to give her a half-interest in the property or damages stemming from breach of that contract. In his complaint, Frederick alleged causes of action for quiet title and unjust enrichment or quantum meruit and sought a declaratory judgment that both the March 2005 and June 2005 documents are invalid for lack of consideration. He also alleged causes of action for breach of contract, partition, and contribution if either or both agreements were held valid.
{¶ 6} Both parties filed motions for summary judgment. On April 16, 2009, the trial court determined that the March 2005 agreement was supported by consideration but that the June 2005 agreement was not. The court granted judgment to Frederick on Amber's complaint and held that title to the property was vested in him exclusively. Amber was granted judgment on Frederick's causes of action for contribution and unjust enrichment. The trial court ruled that the only issue remaining for trial was whether Frederick was entitled to damages for any possible breach of the March 2005 contract.
{¶ 7} Over the next several months, the parties amended their pleadings and attempted to dismiss various claims. A judgment entry was issued in October 2009 pursuant to Civ.R. 54(B) to declare that the court's summary judgment order was final and appealable and that there was no just reason for delay. Amber appealed.
{¶ 8} The Ninth District Court of Appeals reversed the trial court's judgment, concluding that under the facts of this case, "moving into a home with another and resuming a relationship can constitute consideration sufficient to support a contract."
Williams v. Ormsby, 190 Ohio App.3d 815, 2010-Ohio-4664, 944 N.E.2d 699, ¶ 19 (9th Dist.). The court of appeals also held that the June 2005 contract was not conditioned upon marriage, and thus, the consideration had not failed. Id . at ¶ 22.
{¶ 9} Frederick appealed, and we accepted jurisdiction on his sole proposition of law: "Moving into a home with another and resuming a romantic relationship cannot serve as legal consideration for a contract; love and affection is [sic] insufficient consideration for a contract."1
{¶ 10} We must first note that the proposition accepted does not refer broadly to all circumstances of cohabitation. As we have held, "[t]he essential elements of ‘cohabitation’ are (1) sharing of familial or financial responsibilities and (2) consortium." State v. Williams, 79 Ohio St.3d 459, 683 N.E.2d 1126 (1997), paragraph two of the syllabus. In the case before us, the issue is only whether the emotional aspect of resuming a relationship by moving in together can serve as consideration for a contract—separate and apart from the sharing of financial resources and obligations.
{¶ 11} Although the dissenting opinion takes a rather cynical view of the relationship between the parties and seems to liken it to a business transaction allowing Amber to avoid her creditors, we disagree. Speculation and innuendo are not evidence. While it is not surprising that there was no longer any love or affection between the parties at the time of their depositions, both Amber and Frederick agreed that they began a romantic relationship on April 30, 2004, moved in together the next month, became engaged in July 2004, separated in March 2005, and in June 2005, reunited and "plan[ned] to be married." Furthermore, although there was some evidence that Amber had some outstanding financial obligations from her divorce at the time Frederick moved into the house, there is absolutely no evidence that she was unable or unwilling to meet those obligations.
{¶ 12} Frederick contends that the only consideration offered for the June 2005 agreement was resuming a romantic relationship, which cannot serve as consideration for a contract. He argues that to enforce such a contract is the same as enforcing a contract to make a gift in consideration of love and affection.
{¶ 13} Amber counters that the March 2005 agreement was novated, i.e., legally substituted, by the June 2005 agreement and that Frederick received a benefit that he bargained for. She maintains that the June 2005 agreement was supported by consideration.
{¶ 14} We have stated, " " Kostelnik v. Helper, 96 Ohio St.3d 1, 2002-Ohio-2985, 770 N.E.2d 58, ¶ 16, quoting Perlmuter Printing Co. v. Strome, Inc., 436 F.Supp. 409, 414 (N.D.Ohio 1976).
{¶ 15} In this case, we are concerned with the legal enforceability of the June 2005 writing,2 for a contract is not binding unless supported by consideration. Judy v. Louderman, 48 Ohio St. 562, 29 N.E. 181 (1891), paragraph two of the syllabus.
{¶ 16} Consideration may consist of either a detriment to the promisee or a benefit to the promisor. Irwin v. Lombard Univ., 56 Ohio St. 9, 19, 46 N.E. 63 (1897). A benefit may consist of some right, interest, or profit accruing to the promisor, while a detriment may consist of some forbearance, loss, or responsibility given, suffered, or undertaken by the promisee. Id . at 20, 46 N.E. 63.
{¶ 17} We also have a long-established precedent that courts may not inquire into the adequacy of consideration, which is left to the parties as " ‘the sole judges of the benefits or advantages to be derived from their contracts.’ " Hotels Statler Co., Inc. v. Safier, 103 Ohio St. 638, 644–645, 134 N.E. 460 (1921), quoting Newhall v. Paige, 10 Gray (76 Mass.) 366, 368 (1858). But whether there is consideration at all is a proper question for a court.
Gratuitous promises are not enforceable as contracts, because there is no consideration. * * * A written gratuitous promise, even if it evidences an intent by the promisor to be bound, is not a contract. * * * Likewise, conditional gratuitous promises, which require the promisee to do something before the promised act or omission will take place, are not enforceable as contracts. * * * While it is true, therefore, that courts generally do not inquire into the adequacy of consideration once it is found to exist, it must be determined in a contract case whether any ‘consideration’ was really bargained for. If it was not bargained for, it could not support a contract.
Carlisle v. T & R Excavating, Inc., 123 Ohio App.3d 277, 283–284, 704 N.E.2d 39 (9th Dist.1997).
{¶ 18} Amber argues that the June 2005 agreement is a valid novation of the March 2005 agreement. "A contract of novation is created where a previous valid obligation is extinguished by a new valid contract, accomplished by substitution of parties or of the undertaking, with the consent of all the parties, and based on valid consideration." McGlothin v. Huffman, 94 Ohio App.3d 240, 244, 640 N.E.2d 598 (12th Dist.1994). A novation can never be presumed but must be evinced by a clear and definite intent on the part of all the parties to the original contract to completely negate the original contract and enter into the second. King Thompson, Holzer–Wollam, Inc. v. Anderson, 10th Dist. No. 93APE08–1155, 1994 WL 14791, *2 (Jan. 20, 1994).
{¶ 19} Because a novation is a new contract, it too must meet all the elements of a contract. Therefore, even if the June 2005...
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